General News:
– Producers Price Index rose 0.9%, which is larger than most were expecting. This increase is a reflection of gasoline prices, which rose 10.3%. However, the PPI ex-food and energy was only 0.2%, a modest rise from the flat reading the economy had in April.
– Jobless claims are at 311,000 and continuing claims are 2.487 million. Claims were expected at 312,000 and continuing at 2.503 million.
– Of the sectors tracked in the PPI, autos fell 0.2%, drugs rose 0.4%, tobacco was unchanged, capital equipment rose 0.1%, and food, the biggest surprise, fell 0.2%.
– OPEC says that oil demand will rise 1.5% this year.
– PIMCO’s cash holdings rose to 52% of all assets. This is up from 48% in May and represents the biggest cash holding since June 2000.
– The AAII (American Association of Individual Investors) bear index rose to 43.65 from 42.57 last week. The bull index fell to 37.3 from 40.59.
– Qatar and Dubai have teamed up to create a $1 billion joint venture seeking out international and regional investment opportunities.
– European aerospace company, EADS, is planning a jet designed to take four passengers 62 miles above the Earth at a cost of $265,000. The 90-minute trip is scheduled for 2012.
Asia/Europe:
Asia:
– The Chinese took a record amount of money out of their savings accounts in May; most of it is thought to be invested in the booming stock market.
– Japan reiterated the continued strength of their exports and the weak yen’s contribution to international income, as the Japanese current account surplus rose 50% year over year.
– Chinese Prime Minister, Wen Jiabao, said that monetary policy should be appropriately tightened.
– The Chinese newspaper, Financial News, reported that low rates are driving investment and hurting household savings.
– A Chinese cabinet meeting yesterday communicated a need to slow the economy.
Europe:
– Bank of England reported that inflation expectations were steady in May.
– UK May retail sales rose 0.4%, 0.3% was expected.
– France is in talks about the issue of a 30-year inflation linked bond.
– The Swiss National Bank raised rate 25 basis points. They said that more rate hikes were likely if the economic conditions remained unchanged. There was also a warning that this rate hike would increase volatility in the Forex markets.
Corporate News:
– General Electric’s (GE) largest division is expected to double its sales in emerging markets to up to $30 billion within the next three years.
– Texas Pacific Group lost its bid to buy the Japanese consumer electronics manufacturer, JVC, highlighting the restrictions of foreign private-equity firms to issue takeover bids.
– The Pentagon issued a $2 billion contract to L-3 Communications (LLL) and the US division of Italy’s Finmeccanica to build a joint cargo aircraft for the US Army and US Air Force.
– JP Morgan Chase (JPM) agreed to move its investment banking operations, which employs 6,000 people, to the World Trade Center location in New York City within five years.
– Applebee’s International (APPB) may be bought by IHOP (IHP)
– Symantec Corp. (SYMC) authorizes a $2 billion buyback.
– The Chicago Mercantile Exchange (CME) is rumored to raise the bid for CBOT (BOT).
– Bear Stearns Companies (BSC) reports weaker than expected profits.
– Charles Schwab Corp. (SCHW) reports soft trading volume, down 12% year over year.
– Sanofi-Aventis (SNY) has trouble with the FDA as they block the diet drug, Zimulti.
– Best Buy (BBY) has their EPS cut at Stifel.
– Starbucks (SBUX) discontinues sales of Jones Soda (JSDA).
Favorable Comments:
– Atheros Communications (ATHR) is a buy at Merrill Lynch.
– Expedia (EXPE) and Titanium Metals Co. (TIE) upgraded at Matrix.
– L-3 Communications (LLL) target is up at Friedman Billings.
– Centurytel Inc. (CTL) upgraded at UBS.
– Tim Hortons (THI) upgraded at CIBC.
– Target (TGT) boost its buyback and dividend.
– Kohl’s (KSS) upgraded at Buckingham.
– Oracle (ORCL) and Corning (GLW) upgraded at Pac Crest.
– Apache (APA) has its price target upped at Deutsche Bank.
Negative Comments:
– Martin Marietta Materials (MLM) downgraded at Matrix.
– ITT Education Services (ESI) downgraded at Lehmans.
– SLM Corporation (SLM) downgraded at Bear Stearns.
– Sanofi-Aventis (SNY) downgraded at HSBC.
– Hartford Financial Services Group (HIG) has its EPS cut at Friedman Billings.
