Wednesday, June 27, 2012


Wall Street Breakfast: Must-Know News

June 27, 2012  |  includes: AAPL, BAC, BBY, BCS, C, EQM, EQT, GLCNF.PK, GS, JPM, LYG, MS, MSFT, QQQ, SPY,SSNLF.PK, XSRAY.PK



Wall Street Breakfast pictureTop Stories
Judge bans Samsung tablet in U.S., for now. A California judge issued a preliminary injunction yesterday banning Samsung (SSNLF.PK) from making or selling its Galaxy Tab 10.1 in the U.S. The judge said Apple (AAPL) had made a strong case that the Tab's design violates its patents. A trial is set for July 30. In the meantime, analysts are playing it cool and saying the injunction is unlikely to have a significant impact on Samsung.
Stockton to file for Chapter 9. Stockton in California said yesterday that it will file for bankruptcy protection following the breakdown of talks with bondholders and labor unions. Stockton may file for Chapter 9 today, making it the biggest city to do so in U.S. history.
Barclays on verge of Libor deal. Barclays (BCS) could today announce a settlement with the CFTC and the U.K.'s FSA regulator over allegations that its staff tried to manipulate the Libor interbank lending rate, the FTreports, although the paper didn't provide details of what the terms might be. The agreement wouldn't cover the EU's investigation into whether Barclays and its peers acted as a cartel to affect the Euribor rate.
Top Stock News
Microsoft left with massive fine after EU appeal fails. Europe's second-highest court today said it "essentially upholds" a 2008 antitrust ruling against Microsoft (MSFT), but reduced the fine by €39M to €860M. Microsoft said it was disappointed by the decision but didn't say whether it would appeal. The EU imposed the original fine due to Microsoft delaying the sharing of data with its competitors.
Schulze mulls taking Best Buy private. Best Buy (BBY) founder Richard Schulze is reportedly considering taking the company private. Schulze, who abruptly resigned as chairman and director earlier this month, is the retailer's largest shareholder with a stake of around 20%, and is concerned that his holdings will continue to lose value unless major changes are made.
Glencore seen improving Xstrata bid. Glencore (GLCNF.PK) is expected to sweeten its offer for Xstrata (XSRAY.PK) after Qatar's sovereign wealth fund, a key shareholder, unexpectedly opposed the deal terms. However, Glencore is unlikely to fully meet Qatar's demands. The company said today that Xstrata (XSRAY.PK) has proposed tweaks to the terms of the controversial £173M executive retention package that's a condition of their $56B merger, although it didn't comment on Qatar's objections.
Living wills could make banks less complex. JPMorgan (JPM), Bank of America (BAC), Citigroup (C), Goldman Sachs (GS) and Morgan Stanley (MS) are among the banks completing their "living wills" ahead of a deadline on July 1. The exercise could lead to the banks becoming less complex, as the law empowers regulators to order a firm to sell units if it cannot plan an orderly bankruptcy. It could also bring a de facto return of Glass-Steagall.
Lloyds close to selling 630 branches for up to £1.5B. Lloyds (LYG) could announce today that it will sell a network of 630 branches to the Co-op in a deal expected to be worth £1B-£1.5B, the FT reports. Although the Co-op had been named the preferred bidder, negotiations had dragged on due to various problems, including regulatory requirements. Most of these issues have now been resolved.
EQT ends post-Facebook IPO drought. EQT Midstream Partners (EQM) has become the first company to price an IPO since the Facebook fiasco, raising $262M by selling 12.5M common units at $21 a share. Around 35.3% of the limited partner interest in the company is being sold, while parent EQT Corp. (EQT) will hold the remaining amount.
Top Economic & Other News
Appeals court affirms EPA greenhouse rules. An appeals court has unanimously upheld the EPA's proposed rules governing greenhouse gases, stating that the agency's interpretation of the Clean Air Act in regulating CO2 emissions is "unambiguously correct." The verdict appears to clear a path for sweeping rules affecting vehicles, coal-burning power plants and other industrial facilities.
U.S. grapples with natural gas exports. The question, with exports of natural gas, is how much is too much? Both sides of the debate are wary of a public brawl, either for not wanting to be seen as opposing exports in general, or for advocating a policy that would boost consumer prices. It's getting to the point, though, that "it's not going to be economic to produce as much gas here," as one GOP aide puts it.
U.S. weaning itself off Mid-East oil. The growth of new sources of oil, helped by the widening use of fracking, is expected to enable the U.S. to halve its reliance on Middle East oil by 2020 and possibly eliminate it completely by 2035. By the end of the decade, 50% of oil will be produced domestically and 82% on this side of the Atlantic.
Today's Markets:
In Asia, Japan +0.8%. Hong Kong +1%. China -0.2%. India +0.4%.
In Europe, at midday, London +0.6%. Paris +0.4%. Frankfurt +0.3%.
Futures at 7:00: Dow flat. S&P +0.2%. Nasdaq +0.1%. Crude +0.1% to $79.46. Gold -0.3% to $1569.60.
Today's economic calendar:
7:00 MBA Mortgage Applications
8:30 Durable Goods
8:30 Chicago Midwest Mfg. Index
10:00 Pending Home Sales
10:30 EIA Petroleum Inventories
1:00 PM Results of $35B, 5-Year Note Auction
Notable earnings before today's open: CMC, GIS, LEN, MKC, MON
Notable earnings after today's close: PAYX
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