General News:– GDP is 3.4% with the Price Index at 2.7%, 3.4% was expected.
– Breakdown of GDP numbers: PCE rose 1.3%, Non-residential investment rose 8.1%, led by structures up 22.1%, equipment and software rose 2.3%, residential fell 9.3%, exports rose 6.4%, imports fell 2.6% (a sign of economic weakness), government rose 4.2% and defense was up 9.5%.
– Pimco’s Bill Gross said that the Fed will not cut rates as stocks are fairly valued and the high yield is where it should be.
– KKR may postpone their IPO.
– Moody’s Economy.com says that there will be 2.5 million defaults on mortgages this year.
– Money data: M2 rose $14.2 billion, foreign central bank holdings of treasuries rose $6.9 billion, US equity funds had an outflow of $6.4 billion with ETFs outflow of $8.6 billion, non-US equity funds had an inflow of $1.8 billion with ETFs outflow of $19 million.
Asia/Europe:
Asia:
– Asian stocks fell the most in four months, extending a rout that wiped out $1.3 trillion of global market value yesterday, as investors shun riskier assets because of a deepening U.S. housing recession.
– China said that inflation will ease as pork supplies increase. However, there is no evidence of price pressures on production materials.
– Beijing professor, Wei, says that the yuan should be re-valued to 6.50.
– Toshiba Corp., Japan’s biggest chipmaker, said first-quarter profit surged fivefold on image sensors and semiconductors used in game consoles and a one-time gain from the sale of a Japanese music venture with EMI Group Plc.
Europe:
– European stocks had their biggest weekly decline in almost five months on mounting concern financing difficulties in the credit markets will stifle mergers and acquisitions.
– Cadbury Schweppes Plc became the first company to delay an acquisition because of “extreme volatility” in debt markets this month that has hampered leveraged buyouts.
– Volkswagen AG, Europe’s largest carmaker, raised its earnings forecast after second-quarter profit surged 42% because German job cuts reduced costs, and new Audi and Skoda models increased sales.
Corporate News:
– Pharmacy benefits manager Medco Health Solutions Inc. said its second-quarter profit grew 26% on increased dispensing of generic drugs, and the company raised its outlook for the full year.
– A federal judge ordered former Qwest Communications (Q) chief executive Joe Nacchio, convicted of insider trading, to forfeit $52 million in assets he gained in illegal stock sales.
– Medical device maker Medtronic Inc. (MDT) said it would acquire device maker Kyphon Inc. (KYPH) for $3.9 billion in a bid to expand its spinal products business.
– Chevron Corp.’s (CVX) profits surged to a new high during the second quarter as the nation’s second largest oil company cashed in on higher gasoline prices and cashed out of a major investment.
– Radio and billboard giant Clear Channel Communications Inc. (CCU) earned $236 million during the second quarter, 19% more than the same period last year, as outdoor advertising continued to post strong growth.