Wall Street Breakfast: Must-Know News
Top StoriesBP mulls sale of TNK-BP stake. BP (BP) could sell its lucrative but headache-inducing 50% share in its TNK-BP Russian joint venture after receiving approaches from potential suitors. While BP has received $19B in dividends from TNK-BP since the company's formation in 2003, and its stake is worth at least $15B, the U.K. giant has endured an increasingly fractious relationship with its partners in the JV, who are four Soviet-born tycoons. Opinion: Wait until BP drops below $30 to buy.
Jobs growth seen back on track. Unemployment data for May is due out this morning, with economists estimating that nonfarm payrolls rose by 150,000 vs. 115,000 in April, which may have been skewed by weather and seasonal issues. The jobless rate is seen holding steady at a three-year low of 8.1%. All the gains are expected to have come in the private sector as manufacturing continued to rise and construction rebounded. Opinion: What to watch for in employment report.
EU data stays gloomy but at least Britain has QE2. Eurozone unemployment remained unchanged at 11% in April, with Austria having the lowest rate (3.9%) and Spain the highest (24.3%). Meanwhile, final PMI figures confirmed contraction in the eurozone as a whole, as well as in Germany, while the U.K. reading fell sharply also. Still, the Brits can forget it all during a four-day weekend to celebrate Queen Elizabeth II's 60 years on the throne. Opinion: Win two ways: Short Spanish stocks.
Top Stock News
Sanofi MS treatment passes Phase III. Sanofi's (SNY) Aubagio drug for multiple sclerosis showed positive results in a Phase III trial, significantly reducing the annual relapse rate in patients. While Aubagio has its pros and cons, Cheuvreux analyst Marcel Brand forecasts it will earn peak sales of $1.8B in 2018. Opinion: Liver cancer drug could be game changer for Sanofi.
Top Stock News
Sanofi MS treatment passes Phase III. Sanofi's (SNY) Aubagio drug for multiple sclerosis showed positive results in a Phase III trial, significantly reducing the annual relapse rate in patients. While Aubagio has its pros and cons, Cheuvreux analyst Marcel Brand forecasts it will earn peak sales of $1.8B in 2018. Opinion: Liver cancer drug could be game changer for Sanofi.
Exxon looks to exploit cheap natural gas. Exxon Mobil (XOM) plans to build a multi-billion dollar chemical plant in Texas to take advantage of cheap North American shale gas, Reuters reports. The facility could be online as soon as 2016 and would sharply boost Exxon's chemical production capacity, helping it better compete with rival Dow Chemical (DOW). Opinion: Exxon's Rosneft deal will reward investors.
Wal-Mart execs set to face shareholder grilling. There may be fireworks at Wal-Mart's (WMT) annual meeting today, with some large investors and employee shareholders calling for the company's CEO and its chairman to be removed from the board because of their alleged involvement with the Mexican bribery scandal. Opinion: No news is good news for Wal-Mart.
WebMD steals Pfizer exec for top job. Health information company WebMD (WBMD) has named Cavan Redmond as its new CEO, hiring the executive away from Pfizer (PFE), where he served as a Group President.Opinion: WebMD is an attractive takeover target.
Global IPO crunch leaves F1 stalled in the pits. Formula One may or will delay its $2.5B-$3B Singapore listing, becoming the latest victim of the IPO crunch as volatile markets and Facebook's troubles scare off investors and companies alike. Formula One would join three other firms that pulled Asian IPOs this week, including Graff Diamonds, while Kayak may back off from its U.S. offering. Opinion: Safe havens and investor paralysis.
CFTC uses new Dodd-Frank powers in JPMorgan probe. The CFTC is using new authority it gained from the Dodd-Frank Act, which allows the agency to oversee the derivatives market, to widen its inquiry into JPMorgan's (JPM) $2B+ trading loss, the WSJ reports. As per the CFTC's new powers, the investigation is focusing on whether traders deceived their managers as things started to go wrong, and therefore committed fraud. Opinion: JPMorgan may be eroding shareholder value with asset sales.
Google's product search results to be based on pay. Google (GOOG) could soon have another search controversy on its hands. Starting this fall, results shown by the company's product search engine will be influenced by how much retailers and advertisers pay. Currently, the engine only generates income from ads that are clearly distinct from the search results. The FTC might not be thrilled. Opinion: Google: Stuck in a range can still be profitable.
Top Economic & Other News
China leads Asian slowdown in manufacturing... The drumbeat for more stimulus in China has continued after official May PMI fell to 50.4 from 53.3 in April, staying just the right side of neutral but suffering the largest drop in well over two years and missing expectations of 52.2. Adding to the general gloom are falling PMI readings in South Korea and Australia. Opinion: Focus on China, not Europe.
Top Economic & Other News
China leads Asian slowdown in manufacturing... The drumbeat for more stimulus in China has continued after official May PMI fell to 50.4 from 53.3 in April, staying just the right side of neutral but suffering the largest drop in well over two years and missing expectations of 52.2. Adding to the general gloom are falling PMI readings in South Korea and Australia. Opinion: Focus on China, not Europe.
...although Japan brings some cheer. Japanese Q1 capital spending excluding software rose 3.5% on year vs. consensus of -0.1% and +4.9% in Q4. "Shipments to the U.S. are staying solid and it's clear that Japan's major companies are recovering" from last year’s earthquake, RBS economist Junko Nishioka tells Bloomberg. Opinion: Will Tokyo take the gold?
Zombies continue to suck investor cash. Of the 10,000 P-E funds raised over the last decade, at least 200 are now zombie funds, nearly-dead vehicles that tie up investor money on assets unlikely to ever turn a profit while continuing to charge client fees, the WSJ reports. As much as $100B of the $1.5T sector is sitting in such funds. Opinion: Trying to handicap the June markets.
Student debt rises to $904B. Americans owed $904B in student loans at the end of Q1, nearly 8% higher on year, with 8.7% of the loans more than 90 days past due, the NY Fed says. And with many loans in deferment or grace periods, the actual situation could be even worse.Opinion: Why the student loan rate hike should go through.
Irish say yes to austerity. As expected, the Irish look to have voted in favor of the EU fiscal compact by 60% to 40%, Reuters reports, citing sources that have access to polling data. The official results are due later today. With that bonfire dealt with, it's onto the blazing building.Opinion: Austerity needs spending cuts, not tax hikes.
Today's Markets:
In Asia, Japan -1.2%. Hong Kong -0.4%. China +0.1%. India flat at 15965.
In Europe, at midday, London -0.9%. Paris -1.5%. Frankfurt -2.5%.
Futures at 7:00: Dow -0.8%. S&P -1.1%. Nasdaq -1.05%. Crude -2% to $84.78. Gold -0.6% to $1554.80.
Today's economic calendar:
Auto sales
Monster Employment Index
8:30 Personal Income and Outlays
8:30 Nonfarm payrolls
9:00 PMI Manufacturing Index
10:00 ISM Manufacturing Index
10:00 Construction Spending
Today's Markets:
In Asia, Japan -1.2%. Hong Kong -0.4%. China +0.1%. India flat at 15965.
In Europe, at midday, London -0.9%. Paris -1.5%. Frankfurt -2.5%.
Futures at 7:00: Dow -0.8%. S&P -1.1%. Nasdaq -1.05%. Crude -2% to $84.78. Gold -0.6% to $1554.80.
Today's economic calendar:
Auto sales
Monster Employment Index
8:30 Personal Income and Outlays
8:30 Nonfarm payrolls
9:00 PMI Manufacturing Index
10:00 ISM Manufacturing Index
10:00 Construction Spending
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