Top Stories
Greece to get new aid. European officials are set to approve a long-delayed €2.8B tranche of bailout money for Greece after the country's parliament passed a reform law Sunday which calls for the dismissal of 15,000 workers by the end of 2014 and the extension of a property tax assessed through citizens' electric bills. The next obstacle for Greece is winning approval for a €6B disbursement it needs by May 20 in order to repay a maturing bond held by the ECB.
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Italy's new government takes office. Italian stocks (EWI) rallied the day after the country's new prime minister Enrico Letta was sworn in amid gunfire. The country struggled to install a government and teetered on the edge of political deadlock following fractious elections in February and five inconclusive presidential votes earlier this month. New economic minister Fabrizio Saccomanni has ambitious plans for lowering the country's borrowing costs. Yields were lower on the ten-year benchmark bond after the Italian Treasury auctioned €3B of the notes at 3.94%.
Bayer buys Conceptus. Bayer AG (BAYZF.PK) said it will acquire Conceptus (CPTS) for $1.1B in a deal that will pay CPTS shareholders $31 per share in cash, a near 20% premium to Friday's close. The acquisition gives Bayer CPTS' surgery free, permanent birth control method, expanding its portfolio of contraceptive offerings.
Top Stock News
Herbalife readies earnings report. Herbalife (HLF) is set to report earnings after the bell and investors will be watching closely to see if the company can continue to post strong results in the face of unprecedented fanfare stemming from the high profile war of words between Bill Ackman and Carl Icahn. Analysts expect HLF to earn $1.06 per share on revenue of $1.11B.
Co-COO leaves JPMorgan. A top JPMorgan (JPM) executive has left the company, marking the ninth high profile departure in the past eighteen months. Co-chief operating officer Frank Bisignano, a long-time associate of Jamie Dimon, will become chief executive of First Data Corp. in Atlanta, WSJ said. Matt Zames, who helped clean up the chief investment office after last year's $6B trading blunder, has been promoted to sole COO.
Vodafone shareholders may push for full Verizon merger. Vodafone (VOD) is "sitting with a rather ugly set of assets once you lose the Verizon Wireless stake," a UK fund manager told Reuters, explaining why six big VOD stockholders who control ~1.3B shares between them would likely prefer a merger with Verizon (VZ) rather than sell the stake for what they consider to be a paltry $100B. These and other shareholders are ultimately concerned that VOD's "exposure to troubled European markets" will take center stage once the Verizon stake is gone.
Valeant/Actavis merger talks collapse. A rumored merger between Valeant Pharmaceuticals (VRX) and Actavis (ACT) is on hold after the premium VRX offered to pay caused ACT to hesitate. Talks subsequently collapsed but could resume in the future. Should the deal eventually come to fruition, the combined market value of the two firms would be $35B.
China set to approve 787s. Chinese airlines may finally get the 35 Boeing (BA) 787s they ordered as China's aviation regulator looks set to approve the plane for commercial service in May. Deliveries of the aircraft, originally scheduled for last year at China Southern Airlines, were delayed when the lithium-ion battery problems surfaced.
Top Economic & Other News
IMF cautiously optimistic on Asian growth. Policy makers must "stand ready to respond early and decisively to any prospective risks of overheating," the IMF said in its annual report on Asia. The fund sees heavy capital inflows driving 5.75% regional growth. This is a good thing — until it's not. Record property values in Hong Kong, soaring stock prices in some Southeast Asian markets, and sharply rising local currencies (Philippine peso and Thai baht) are some of the risk factors flagged in the report.
Industrial profits slide in China. Profits at Chinese industrial firms rose only 5.3% year-over-year in March, down markedly from the 17.2% pace logged in January and February. Overall, industrial profits rose 12.1% during the three month period. The slowdown mirrored that witnessed in Chinese auto sales which grew 11% year-over-year in March after rising 15% in each of the two previous months. Some worry the slower pace of growth could discourage capital spending and hiring. China's official PMI is due Wednesday.
Economic confidence falls in Europe. The Cyprus debacle dented optimism among Europeans this month as the European Commission says an index of executive and consumer confidence dipped to 88.6 in April, down 1.5 points from March. The new reading is the lowest in five months and missed economists' expectations of 89.3, Bloomberg said.
Flight delays drop as furloughs end. Delayed flights and cancellations fell below the 30-day average Sunday evening as the FAA ended furloughs of air-traffic controllers that have caused the delay of thousands of flights since last Sunday. The FAA's move follows Congress' passage of legislation that allowed the agency to redirect up to $253M of its airport improvement budget to fund staffing and operations.
Editors' Picks
SA Pro: Silicon Motion, Sifting Through The Wreckage
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Today's Markets:
In Asia, Japan: Closed. Hong Kong +0.2% to 22580. China: Closed. India +0.52% to 19387.
In Europe, at midday, London +0.1%. Paris +0.7%. Frankfurt +0.3%.
Futures at 7:00: Dow +0.29%. S&P +0.29%. Nasdaq +0.3%. Crude +0.43% to $93.39. Gold +1.14% to $1470.50.
Today's economic calendar:
8:30 Personal Income and Outlays
10:00 Pending Home Sales
10:30 Dallas Fed Manufacturing Outlook
Notable earnings before today's open: AUDC, AUXL, BWP, CMP, CYOU, EDR, ETN, FVE, L, MCY, ROP, SNH, SOHU, TEN
Notable earnings after today's close: ANAD, ANH, BWLD, CBL, CRK, CSE, CYH, DTLK, ESRX, GGP, HIG, HLF, HTZ, IDTI, JEC, MAS, MSTR, NEM, PCL, QGEN, RGR, RJET, RVBD, SBAC, SSW, SU, TXRH, VECO
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