Wall Street Breakfast: Must-Know News

by: Wall Street Breakfast
Wall Street Breakfast
Seeking Alpha's flagship daily business news summary, gives you a rapid overview of the day's key financial news. It is published before 7:00 AM ET every market day and delivered to over 900,000 email subscribers.

Top Stories
NSA demands consumer records from Verizon. The Foreign Intelligence Surveillance Court has ordered Verizon (NYSE:VZ) to provide the National Security Agency with records of all calls made within the U.S. or originating in the U.S. for a three-month period ending on July 19. Verizon, which has tens of millions of customers, has to hand over the numbers of the parties on a call, location data, call duration and unique identifiers. However, the contents of the conversation are not covered.

Microsoft, FBI take on massive cybercrime ring. Working in partnership with the FBI and authorities in over 80 countries, Microsoft's (NASDAQ:MSFT) Digital Crimes Unit has launched a successful attack on one of the world's biggest cyber-crime rings. Microsoft forced the closure of at least 1,000 out of an estimated 1,400 malicious networks known as Citadel Botnets, which are believed to have stolen over $500M from accounts at financial companies such as American Express (NYSE:AXP), PayPal (eBay) and JPMorgan (NYSE:JPM).

Pepsi denies talks to buy SodaStream for $2B. PepsiCo (NYSE:PEP) CEO Indra Nooyi has professed ignorance about speculation that her company is in negotiations to acquire SodaStream (NASDAQ:SODA) for $2B or more, saying that it was the "first time" she was hearing about the talks. Israel's Calcalist reported that Pepsi is willing to pay as much as $95 a share, or 37% more than SodaStream's close of $69.35 yesterday. Coca-Cola (NYSE:KO) is also apparently interested in the Israeli company. SodaStream's shares surged 26% following the report but were merely +12.4% at the time of writing.

Top Stock News
Nikkei sinks towards bear territory. The Nikkei (NYSEARCA:EWJ) swung between gains and losses before closing -0.8%, dragged down by Wall Street's declines overnight in the wake of a weak ADP jobs print yesterday. The Nikkei has lost over 19% since hitting a 52-week high on May 23 - a drop of 20% would put the index in a technical bear market. Chinese shares fell for the sixth day in a row, hurt by fears about the economy.

European shares higher after delayed open. Trading on Euronext (NYSE:NYX) exchanges in France, Belgium, Portugal, the U.K. and the Netherlands opened late because of technical problems, although the glitch isn't expected to affect the NYSE. Most European indices have shrugged off the delay and the losses in Asia, and were higher at the time of writing. U.S. futures were also in the green.

Amazon: Publishers forced us to abandon pricing structure. Amazon (NASDAQ:AMZN) executive Russell Grandinetti has testified in Apple's (NASDAQ:AAPL) e-book trial that the company was delivered an ultimatum by publishers that they would withhold books if it didn't abandon its pricing structure. After some tense negotiations, Amazon relinquished control of its pricing and went to the model that the Justice Department maintains Apple helped force upon the e-book industry.

Procter & Gamble announces reorganization. As expected, Procter & Gamble (NYSE:PG) plans to reorganize into four business units, which are to be named Global Baby, Feminine, and Family Care; Global Beauty; Global Health & Grooming; and Global Fabric & Home Care. The heads of each unit are probably prime candidates to replace new/old CEO A.G. Lafley.

Top Economic & Other News
BOE leaves monetary policy unchanged. The Bank of England has left its benchmark rate at 0.5% and its QE program on hold at £375B. The decision is the last before Bank of Canada Governor Mark Carney takes over the top spot at the BOE.

U.S. oil output surpasses imports. U.S. crude oil production exceeded imports last week for the first time in 16 years. Since January 1997, weekly U.S. crude imports averaged around 9.2M bpd, topping domestic output by 3.5M bpd. But by late 2014, U.S. crude oil output should surpass imports by nearly 2.5M bpd. A slow shift, 16 years in the making, is set to become a flood in little more than 16 months.

Fredriksen pessimistic about tanker market. Shipping magnate John Fredriksen expects the tanker market to remain depressed for at least two more years, but is more optimistic about the outlook for other arms of his empire. The rig market looks strong for another three to five years, he says, something that bodes well for Seadrill (NYSE:SDRL), which has an aggressive growth strategy with 19 new rigs incoming.

Greek unemployment keeps heading higher. Greek unemployment edged up to a fresh record of 26.8% in March from a downwardly revised 26.7% in February. The data comes a day after the IMF reportedly admitted major missteps in its prescriptions of austerity for Greece, including underestimating the damage it would do. While Greece's jobless figure is double the eurozone average of 12.2%, there is at least one place in the country where it's not a problem: the farming village of Anavra - population 500 - which actually has negative unemployment.

Alpha-Rich Stock Movers and Great Calls
1) Move, Inc. (NASDAQ:MOVE) closed +2.8% Tuesday after Money Investor cited the online real estate company's heavy undervaluation to peers and a looming operational adjustment that could send the business and stock higher.
2) After Nick Ghattas noted Brazil Fast Food's (OTCPK:BOBS) impending earnings growth, debt paydown, and capital returns, the stock jumped as much as 8% Tuesday before closing +1.8%. The stock gained another 3% yesterday.

Alpha-Rich Stocks To Watch
1) ExOne (NASDAQ:XONE). Brian Smith Jr. says limits to XONE's sales and business model don't mesh well with a sky-high valuation. The stock should be valued 67% lower even if the company meets its targets.
2) Superior Industries (NYSE:SUP). Investment advisor Tim Travis thinks the recent pullback in wheel manufacturer SUP is unwarranted; he sees over 40% potential upside based on valuation, cost reduction, and growth reignition.

Alpha-Rich articles are the best long and short ideas on Seeking Alpha. SA Pro subscribers receive early access to these Alpha-Rich articles, which often move markets. For more information about SA Pro and becoming a subscriber, click here.

Today's Markets:
In Asia, Japan -0.8% to 12904. Hong Kong -1.1% to 21838. China -0.1% to 2271. India -0.3% to 19519.
In Europe, at midday, London +0.1%. Paris +0.4%. Frankfurt +0.3%.
Futures at 7:00: Dow +0.2%. S&P +0.3%. Nasdaq +0.2%. Crude +0.5% to $94.22. Gold +0.3% to $1403.10.

Today's economic calendar:
Chain Store Sales
7:30 Challenger Job-Cut Report
8:30 Initial Jobless Claims
9:45 Bloomberg Consumer Comfort Index
10:00 Quarterly Services Report
10:30 EIA Natural Gas Inventory
4:30 PM Money Supply
4:30 PM Fed Balance Sheet

Notable earnings before today's open: ANN, BRLI, CIEN, FGP, SJM, TITN

Notable earnings after today's close: ZQK

See full real-time earnings coverage »

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