Economy
Greek voters have given the left-wing Syriza party the second chance it was asking for, following another high-stakes election that marks the next phase of the country's debt crisis. Syriza leader and former Prime Minister Alexis Tsipras had enraged many Greeks by breaking an election pledge and ignoring the outcome of a referendum, but that did not stop citizens from putting him back in power. Results: Tsipras gathered around 35% of the vote, while New Democracy's Vangelis Meimarakis received 28%.
Federal Reserve policymaker James Bullard said Saturday he argued against holding rates steady during the Fed's policy meeting last week because he believed the economy had recovered enough to begin raising rates. "Why do the Committee's policy settings remain so far from normal when the objectives have essentially been met? The Committee has not, in my view, provided a satisfactory answer to this question." Bullard also described the meeting as "pressure packed," and said the decision to hold rates steady was "a close call."
The U.S. and China are negotiating what could become the world's first arms control agreement for cyberspace, with each country committing not to be the first to use the weapons to cripple the other's critical infrastructure during peacetime. The proposed accord would address attacks on power stations, banking systems, cellphone networks and hospitals, but would not protect against most of the cybercrimes China has been accused of conducting, including the widespread poaching of intellectual property and the theft of millions of U.S. government employees' personal data.
Malaysia's ringgit - Asia's worst performing currency of the year - is expected to show some recovery once issues surrounding indebted state fund 1MDB are resolved, the country's central bank governor Zeti Akhtar Aziz announced today. Prime Minister Najib Razak has been fighting for political survival after leaked documents showed he received some $700M in his private accounts from entities linked to the fund. More probes are also surfacing. The FBI recently opened an investigation into the allegations surrounding 1MDB, although the scope of the review is not known.
Stocks
Apple is cleaning up its iOS App Store to remove malicious iPhone and iPad programs following what is being described as the first large-scale attack on the mobile software outlet. The hackers took aim at popular Chinese apps by convincing developers of legitimate software to use a tainted, counterfeit version of source code known as XcodeGhost. Palo Alto Networks (NYSE:PANW) Director Ryan Olson said the malware had limited functionality, but the attack was still "a pretty big deal" because it showed Apple's (NASDAQ:AAPL) App Store could be compromised if hackers infected machines of valid software developers.
Germany's Dialog Semiconductor has agreed to buy U.S. rival Atmel (NASDAQ:ATML) for $4.6B in cash and stock. For each common share, Atmel stockholders will receive $4.65 in cash and 0.112 of a Dialog ADS, resulting in the "economic equivalent" of $10.42 per Atmel share. Dialog (OTC:DLGNF) sees the transaction resulting in annual savings of $150M within two years, and expects the deal to be completed in first quarter of 2016. ATML +23.7%premarket.
Adding to a wave of tie-ups between Hollywood studios and Chinese partners, Warner Brothers (NYSE:TWX) and China Media (OTCPK:CHND) are forming a joint venture, called Flagship Entertainment Group, to develop Chinese-language movies for the international market. According to the MPAA, box office receipts in the U.S. and Canada fell 5% last year to $10.4B, while receipts in China jumped 34% to $4.8B during the same period. Studios such as Paramount Pictures (VIA, VIAB), DreamWorks Animation (NASDAQ:DWA), Lions Gate (NYSE:LGF) and Walt Disney (NYSE:DIS) have also partnered with local groups.
The lockup on 63% of Alibaba shares ended on Saturday, freeing up the company's largest shareholders to start selling stock beginning today. With Yahoo (NASDAQ:YHOO) still working out what to do with its 15% stake amid tax uncertainties, investors battered by the e-commerce company's $128.5B market slump are bracing for the worst, such as more shares hitting the market and driving prices even lower. Alibaba (NYSE:BABA) founder Jack Ma and Vice Chairman Joseph Tsai have pledged to keep their stock, while analysts expect SoftBank (OTCPK:SFTBY) to hold onto its shares.
Taiwan's Hon Hai Precision Industry is offering to buy Sharp's (OTCPK:SHCAY) struggling liquid panel display business and plans to seek funding from Apple (AAPL) (a key Sharp customer), the Nikkei reports. Tie-up talks between the two firms fell through in 2012 after the Japanese company balked at demands that would have given Hon Hai (OTC:HNHAF) "too much control."
Zurich Insurance has abandoned its proposed takeover bid for British insurer RSA Insurance (OTCPK:RSNAY) after scrutinizing its accounts and forecasting hundreds of millions of dollars in insurance losses. "Discussions with RSA have now been terminated," Zurich (OTCQX:ZURVY) said in a statement. The offer would have valued RSA Insurance at about £5.6B ($8.7B). RSA shares -20.5% in London.
Barron's roundup from the weekend: GoPro - shares could plunge to $25 from a recent $35 as its latest product launch underwhelms consumers and competition comes on strong (GPRO -1.3% premarket). Ralph Lauren - the stock looks like a buying opportunity due to the company's investment in new technology that should lead to rising profit in coming years (RL +1%premarket). Medallion Financial - despite a 65% drop from a recent top hit less than two years ago, the stock is still a Buy, selling for about 6x estimated earnings and at just 60% of book value (TAXI unchanged premarket).
Anheuser-Busch InBev is considering an audacious plan to switch its tax base to the U.K. if it can pull off the proposed £180B takeover of SABMiller (OTCPK:SBMRY). Altria (NYSE:MO), which controls 27% of SABMiller and three board seats, currently collects tax free dividends thanks to a U.S./U.K. treaty, but would see that deal die if the new company were based in Belgium. AB InBev (NYSE:BUD) has been domiciled in the country since its merger in 2008.
Charter Communications and Time Warner Cable shareholders will vote today on their proposed $56.7B merger, a deal that would create the country's second-largest broadband Internet provider and third-largest video service. The decision comes a little more than a week after the FCC started a 180-day "shot clock" to review the acquisition of Time Warner Cable (NYSE:TWC). Charter (NASDAQ:CHTR) shareholders will also vote on the company’s $10.4B deal for Bright House and the sale of $5B in stock to Liberty Broadband (NASDAQ:LBRDA).
Today's Markets
Companies reporting earnings today
In Asia, Japan closed. Hong Kong -0.8% to 21757. China +1.9% to 3157. India -0.1% to 26193.
In Europe, at midday, London +0.5%. Paris +0.8%. Frankfurt -0.7%.
Futures at 6:20, Dow +0.1%. S&P +0.1%. Nasdaq +0.2%. Crude +1.5% to $45.68. Gold -0.1% to $1136.70.
Ten-year Treasury Yield +2 bps to 2.15%
Today's Economic CalendarIn Europe, at midday, London +0.5%. Paris +0.8%. Frankfurt -0.7%.
Futures at 6:20, Dow +0.1%. S&P +0.1%. Nasdaq +0.2%. Crude +1.5% to $45.68. Gold -0.1% to $1136.70.
Ten-year Treasury Yield +2 bps to 2.15%
Companies reporting earnings today
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