General News:
– There is a potential tax liability for a large number of large-cap companies contained in the tax code FIN 48. The tax code calls on companies to identify their uncertain income tax positions, such as filing income tax returns in a certain state, and to figure out their potential tax liability. Certain companies may regard its operations as immaterial to its overall activities.
– Merck (MRK) has a potential tax liability of $7.4 billion.
– GE, JP Morgan, Pfizer, Exxon, Bank of America, Citigroup and Verizon are all in danger of having to pay.
– Overall, 361 large companies have $141 billion in tax liability. This will hurt hiring and capital expenditures.
– Delinquency rates for credit cards have increased.
– OPEC says it will not boost production. Nigeria is having problems in their oil production because of rebel troops. The instability of the region is causing ripples in the oil industry.
Money Flow:
– M2 fell $1.9 billion last week. M1 was down $5.7 gillion.
– Mutual funds in the US were $3.4 billion last week. US ETFs (Exchange Traded Funds) had an inflow of $1.01 billion.
Asia/Europe:
Asia:
– North Korea test fired a missile. The Japanese are on their feet.
– Japan’s National CPI (Consumer Price Index) was down -0.1%, which is in line with expectations.
– Chinese property prices rose 5.4% year over year as reported in April.
– A recent report states that rising meat prices in China could lead to an inflationary rise above 4%.
– India’s M3 rose 20.2%. However, wholesale prices hit an eight month low.
Europe:
– Bank of England said that rate hikes will keep the CPI under control.
– Germany’s Quarter 1 GDP was in line with expectations.
– German April import prices rose 0.5% when 0% was expected.
– Germany’s lower house approved of a tax cut to 29.8% from 38.7%.
– French consumer spending fell 0.3% when 0.2% was expected.
Corporate News:
– Nasdaq’s $3.7 billion offer for Swedish stock-exchange OMX AB and Coca-Cola’s $4.1 billion purchase of Energy Brands Inc. are the latest of more than $1 trillion in deals announced so far this year.
– The second biggest casino company, MGM Mirage, saw its shares rise after the company hired UBS AG to advise them on a possible breakup being considered by Kirk Kerkorian.
– YRC Worldwide (YRCW) has an article in Business Week which explains how they might be a potential buyout target.
– Burlington Northern Santa Fe Corp., Norfolk Southern, and CSX Corp. all said that declining auto shipments and weakness among homebuilders were the reasons for lower 1st quarter profit.
Favorable Comments:
– Red Robin Gourmet Burgers (RRGB) reported good profits.
– Gap Inc. had good profit news as well.
– Energy East Corp. (EAS0 was upgraded at Merrill Lynch.
– RF Micro Devices (RFMD) was upgraded at Jeffries.
– BMC Software (BMC) was upgraded at Cowen.
Negative Comments:
– Ingersoll- Rand (IR) and Stride Rite (SR) were downgraded at Matrix.
– Apache (APA) and Mariner Energy (ME) were downgraded at Calyon.
Rio Tinto (RTP), GlaxoSmithKline(GSK) and BHP Billiton (BHP) were downgraded at Societe Generale.