Wall Street Breakfast: Growth in China Slows Down

April 13, 2012  | includes: BBY, BKS, DOW, GOOG, JPM, KMP, TLB

Top Stories
Growth in China cools down. Chinese Q1 GDP grows 8.1% Y/Y vs. expectations for 8.3% and 8.9% growth in 2011 Q4. Industrial production: +11.9% Y/Y vs. estimates of 11.4%, and retail sales +15.2% vs. 15.1%. The weaker-than-expected measure could prompt the Chinese central bank to ease policy action further, possibly by lowering bank reserve requirements.

Bank borrowing in Spain pops. Spanish banks' borrowings from the ECB jumped nearly 50% in March to €227.6B, as they took up 29% of the central bank's late-February LTRO. "A consequence of the (LTRO) is that the correlation between sovereign risk and banking risk increased all over Europe." That's not some EMU permabear speaking; that's Spain's Economy Minister Luis de Guindos. (Source: Bloomberg BusinessWeek)

Google effectively splits itself. Google (GOOG) beat on Q1 EPS, and effectively announced a 2-for-1 stock split with a new class of nonvoting shares. The new Class C shares will trade under a different ticker, and be identical to Class A/B shares save for the lack of voting rights. Larry Page, Sergey Brin, and Eric Schmidt will maintain the same link between their voting and economic interests that exists today, even if they sell some of their non-voting Class C shares. Pundits have already begun expressing their concerns. (Source: Google PR, Kid Dynamite's World)

Top Equities News
Barnes & Noble launches a new device. Barnes & Noble (BKS) announced a new version of its Nook, which will include the world’s first E Ink device with patent-pending lighting technology. The product is said to be "optimized for low-light conditions," and will be sold for $139. Amazon (AMZN), whose Kindle Touch goes for $99, is reportedly working on a front-lit Kindle. (Source: Yahoo Finance)

Kinder Morgan invests in expansion. Kinder Morgan (KMP) announced it will spend $5B to expand its west-coast Canada oil pipeline, doubling the capacity of crude it can ship to Vancouver and Washington's Puget Sound. The expansion would increase the volume shipped from Alberta to Vancouver to 850K barrels per day from 300K, allowing Asian buyers to load Canadian crude in significant volumes.

JPMorgan results on deck. JPMorgan Chase (JPM) is slated to report first-quarter earnings before the opening bell. The company is expected to earn $1.12 per share on revenue of $24.37B, both lower than in the same period last year. S&P Capital IQ raised its rating on the shares to Buy from Hold with a $49 target price from $42 on expectations of a mostly positive report and an attractive valuation. (Source: Barron's)

Amazon overstates streaming titles. Amazon (AMZN) may be inflating the size of its streaming library by counting each episode of a TV series as a separate show. The 17K mark the company boasts of in advertising only represents approximately 1,745 movies and 150 TV shows. Netflix (NFLX) is reported to count individual episodes in its total as well, although it doesn't actively promote the inflated count. (Source: Fast Company)

Rovio looks to China. Angry Birds maker Rovio is in talks with Chinese firms Renren (RENN), Baidu (BIDU), and Sohu.com (SOHU) to help it find strategic ways to take advantage of the forecast for "explosive" growth of game downloads in the nation. The Finnish firm seeks to turbocharge advertising and merchandising around its games to China's +500M Internet users. (Source: Bloomberg)

Best Buy starts its search. Best Buy (BBY) says its Board will lead the global search for a new CEO, two days after Brian Dunn abruptly stepped down from the post. Shares +0.2% premarket.

Dow Chemical hikes its dividend. Dow Chemical (DOW) says its Board of Directors has declared a 28% increase in its Q2 dividend, from $0.25 per share to $0.32 per share, reflecting growing confidence in its ability to continue to achieve higher and more sustainable earnings.

Talbots earnings report disappoints. Talbots (TLB) Q4 EPS results miss consensus estimates but beats on revenue. Revenues fell 1.1% Y/Y as restructuring and executive retirement costs, as well as promotions, pressured results for the women's apparel retailer. The company also Q1 revenue is guided lower to around $272M, below the Street's $284M consensus.

Top Economic & Other News

Job indicator looks rosy. The "take this job and shove it" indicator may indicate strengthening consumer confidence, as the number of people quitting their jobs outnumbers the amount of workers laid off for the first time since Sept. 2008. The reading seems inconsistent with the measly 120K jobs created last month, a report that more analysts are seeing as a one-off. (Source: CNBC)

North Korean rocket fizzles. North Korea's much ballyhooed long-range rocket launch ended in apparent failure today, dealing a blow to the prestige of the reclusive and impoverished state that's continually defied international pressure to push ahead with the plan. The Unha-3 rocket broke up and crashed into the South China Sea just moments after it launched. (Source: CNBC)

Three Breakfast Reads
Google's Split: A Potential Mess In The Options Market
Can Anything Scare This Bull?
4 Tech Stocks Ready To Leap Higher

For more Opinion & Analysis, go to seekingalpha.com

Today's Markets:
In Asia, Japan +1.2%. Hong Kong +1.8%. China +0.4%. India -1.4%.
In Europe, at midday, London -0.3%. Paris -0.2%. Frankfurt -0.9%.
Futures at 7:00: Dow -0.4%. S&P -0.4%. Nasdaq -0.4%. Crude -0.2%to $103.44. Gold -0.3% to $1675.25.

Friday's economic calendar:
8:30 Consumer Price Index
9:55 Reuters/UofM Consumer Sentiment

Earnings Results: 
For full real-time earnings coverage, please click here.

Notable earnings before Friday's open: INFY, JPM, SJR, WFC