Monday, January 7, 2013

Wall Street Breakfast: Must-Know News

Top Stories
Regulators ease Basel bank-liquidity rules. The Basel committee has approved far easier liquidity rules for banks than those that were proposed two years ago. Lenders will now be allowed a wider range of assets that qualify as capital buffers, a lower assumed rate of fund outflows in a crisis, and they'll be given until 2019 rather than 2015 to implement the new regime. The news has sent European and U.S. banks higher.

Nvidia to launch gaming console. Nvidia (NVDA) - best known for its graphic chips and circuit boards - has surprised this year's Consumer Electronics Show, which is due to officially kick off in Las Vegas tomorrow, by unveiling a games console. Called Project Shield, the device will operate on Android, sport an Xbox 360-like controller, and, unusually for such consoles, stream PC games. Project Shield will also run on a new version of Nvidia's Tegra processor line that the company has announced as well.

Top Stock News
Banks close to $10B foreclosure settlement. A $10B settlement between 14 large banks and regulators over abusive foreclosure practices could reportedly be announced today after the Fed gave its approval. The central bank had held up the deal over the weekend over an extra $300M that it wanted the firms to pay, but backed down when they balked.

AngloGold CEO tops Anglo American shortlist. AngloGold Ashanti (AU) CEO Mark Cutifani reportedly heads the shortlist to replace Cynthia Carroll in the top job at Anglo American (AAUKF.PK), which may announce the recruitment within the next two weeks. "Mark is a pretty energetic guy," says portfolio manager Caesar Bryan. "He's someone that's very focused on return on invested capital and he seems to have an open mind to doing things differently."

Severe lack of Harmony threatens future of gold mine. Harmony Gold (HMY) was -5.4% premarket after saying that it could permanently shut its South African Kusasalethu mine - which accounted for 18% of the company's production profit in the September quarter - or at least place the mine in "care and maintenance" status. Harmony gave the warning after managers received death threats and police were shot at. Harmony closed Kusasalethu in December following violent labor unrest.

J&J trial over implants set to start. Jury selection is due to begin today in the first trial over Johnson & Johnson's (JNJ) Gynecare Prolift vaginal mesh implant, which a South Dakota woman says has caused her constant pain and has led to 18 operations. The complaint is one of 1,800 against Prolift, while other manufacturers of similar implants also face lawsuits. J&J has said it will stop selling its device.

Disney explores cost savings. Disney (DIS) is reportedly carrying out a cost-cutting review that could include reducing staff at its studio and other operations. Disney is particularly looking at jobs that aren't needed anymore because of technological improvements, and at redundant operations. At Disney's studio, the strategy has changed to focus on fewer films and to use outside production companies more.

Roche walks away from Illumina - again. Roche (RHHBY.OB) has abandoned its $6.8B bid for Illumina (ILMN) for a second time. "They were not willing to abandon the totally unrealistic price they were asking for...There are several alternatives to get hold of gene-sequencing technology," Roche Chairman Franz Humer said. Meanwhile, Illumina has agreed to acquire Verinata Health, a provider of non-invasive tests for the early identification of fetal chromosomal abnormalities, for up to $450M.

Top Economic & Other News
Illinois forges plan to solve massive pension woes. Illinois legislators yesterday unveiled a plan that has bipartisan support and that aims to solve the state's massive pension crisis. Illinois has an eye-watering $96B in unfunded liabilities, which is threatening the state's A2 rating and hurting its ability to finance basic services. The proposals include limiting pensionable salaries and raising retirement ages, although unions have vowed to fight the measures.

Japan plans extra $136B of stimulus. Japan's new government reportedly intends to announce an extra ¥12T ($136B) in stimulus spending for the fiscal-year through March as it looks to turn around the moribund economy. Prime Minister Shinzo Abe hopes to formulate the plan this week, with ¥5-6T to be spent on public works. Abe is clearly not overly worried about Japan's insanely high debt.

Editors' Picks
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Today's Markets:
In Asia, Japan -0.8% to 10599. Hong Kong flat at 23330. China +0.4% to 2285. India -0.5% to 19691.
In Europe, at midday, London -0.3%. Paris -0.6%. Frankfurt -0.6%.
Futures at 7:00: Dow +0.5%. S&P +0.2%. Nasdaq -0.1%. Crude -0.5% to $92.64. Gold +0.3% to $1654.30.

Today's economic calendar:
10:00 Employment Trends Index

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