Wall Street Breakfast: GoPro IPO, Valeant Confidence, Condensate Exports

by: Wall Street Breakfast
Wall Street Breakfast
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U.S. and euro zone inflation expectations seem to be heading in opposite directions, as investors wager on opposing consumer price outlooks. The break-even rates are at about 2.3% in the U.S., which greatly differs from the euro zone, where Germany reports a rate of 1.3%. TIPs are expected to gain in popularity over the next year, as break-evens are estimated to stay on the rise in the United States.

U.S. law will now allow some exports of ultra-light crude oil, after the government issued a permit to two companies to export condensate that could be turned into jet fuel or diesel. Pioneer Natural Resources (NYSE:PXD) and Enterprise Products Partners (NYSE:EPD) have been given clearance to export condensates, after a new approach redefined some light oil as fuel. The first shipments may begin as soon as August.

An extension is now being discussed between Argentina and holdout investors, allowing the country to pay other bondholders first if the litigation between the two makes good progress before July 30. Without a suspension on the order or a court stay, Argentina will have to pay the $1.3B it owes to holdout creditors, before making another $900M bond payment next Monday. A 30-day grace period will take place before an actual default can be declared.

GoPro's IPO is on its way, with $427M of company stock estimated to be sold later this afternoon. The company shares will begin trading Thursday on the Nasdaq. Share price is estimated at $21 to $24, which would value the company at as much as $3.6B. GoPro's (NASDAQ:GPRO) cameras were the number one selling camcorders nationwide by sales and units in 2013. Net profit rocketed 88% last year to $61M, and revenue soared 87% to $986M.

Valeant CEO Michael Pearson is confident he can round up enough shareholder support for an Allergan (NYSE:AGN) bid. The company is still looking to use its $53B offer, but will still need to get 25% of Allergan shareholders on board just to convene the vote. "Both sides know how this will come out," says Pearson, in reference to a potential future ballot. The Allergan board rejected Valeant's (NYSE:VRX) previous bid, citing risks and uncertainties for stockholders.

Amazon's drone delivery program faces another hurdle, after the Federal Aviation Administration released a report stating that delivering packages to people for a fee will remain illegal. In December, CEO Jeff Bezos announced his vision to launch an Amazon (NASDAQ:AMZN) drone delivery service that would carry packages of up to five pounds. The FAA has a deadline of September 15, 2015 to incorporate commercial drones into airspace operations.

European Union antitrust regulators will now determine if Apple's (NASDAQ:AAPL) last month $3B acquisition of Beats Music will need to include regulation, or can be approved unconditionally. The committee can also open up an investigation probing additional concerns, and is expected to decide the outcome by July 30. Apple announced the deal on May 28 to strategically pivot itself into the streaming music industry.

BNP Paribas is moving its U.S. sanctions compliance operations to New York from Paris. The move comes at a time when BNP (OTCQX:BNPQF) is under fire for breaching U.S. sanctions violations, and faces a possible $9B fine. The U.S. has already received hundreds of millions of dollars in sanction violations from foreign banks Credit Suisse (NYSE:CS), Standard Chartered (OTCPK:SCBFF), Barclays (NYSE:BCS), and others.

Google will unveil a new TV set-top box at its developer conference today, as it looks to not fall far behind Amazon's new Fire TV and Apple TV. The device will use new Android TV software, although the box will carry another company's brand. Google (GOOG, GOOGL) has made previous attempts in recent years to launch a set-top box, such as the 2012 Nexus Q, and the 2010 Google TV.

Whole Foods will pay $800k after a year-long probe revealed one of its Californian stores charged more than the posted price on various items. Civil penalties of $630k will be paid to the city attorneys of Los Angeles, San Diego and Santa Monica, $100k will be given into a consumer trust fund, and $68k will be paid toward costs. Whole Foods Market (NASDAQ:WFM) will also implement a five-year monitoring period that insures correct pricing and includes random audits.

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Today's Markets:
In Asia, Japan -0.7% to 15267. Hong Kong -0.1% to 22867. China -0.4% to 2026. India -0.2% to 25314.
In Europe, at midday, London -0.6%. Paris -0.6%. Frankfurt -0.4%.
Futures at 6:20: Dow -0.1%. S&P flat. Nasdaq -0.1%. Crude +0.6% to $106.64. Gold -0.6% to $1313.40.
Ten-year Treasury Yield flat at 2.58%

Today's economic calendar:
7:00 MBA Mortgage Applications
8:30 Durable Goods
8:30 GDP Q1
8:30 Corporate Profits
9:45 PMI Services Index Flash
10:30 EIA Petroleum Inventories
1:00 PM Results of $13B, 2-Year FRN Auction
1:00 PM Results of $35B, 5-Year Note Auction

Notable earnings before today's open: APOL, BKS, GIS, LNN, MON

Notable earnings after today's close: BBBY, CWST, MLHR

See full real-time earnings coverage »

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