General News:
– The Wall Street Journal ran a story that half of this year’s IPOs are from unprofitable companies.
– John Berry says that the Fed is worried about the potential for another Russian crisis. The worry comes from too much liquidity leading to some type of destabilization.
– Orders to U.S. factories posted a weaker-than-expected gain in April as declines in demand for cars, planes and boats offset strength in business investment. The Commerce Department that factory orders increased by 0.3 percent in April, the weakest showing in three months. It was less than half of the 0.8 percent increase that analysts had been expecting.
Asia/Europe:
Asia:
– China is again the big story of the day. The Chinese markets were off their mark as the sate owned China Securities Journal carried an editorial which indicated that stock price gains were extremely unusual and noted a structural bubble.
– Chinese press reports suggest there will be new measures to cool the real estate sector.
– The Financial Times reported that the Chinese stamp tax is expected to create $40 billion for the government if volume maintains at current levels.
– China’s bank regulator said that banks should take steps to minimize credit risk because of the chance for further credit tightening.
– Japan’s Prime Minister, Abe’s, approval rating fell to a new low of 30%.
– India’s Commerce and Industry Minister, Mr. Nath, said that the Indian rupee’s strength is hurting competitiveness. There could be a full impact starting in July and that companies need to increase productivity.
– The Federation of Korean Industries said that its business confidence index fell to 105.6 from 110.9, citing rising oil and commodity prices along with a strong won as the reasons.
– Speaking of the won, South Korean Commerce Ministry said that it needs to stabilize the currency because the won rise over the yen is hurting exports.
– Asian stock breakdown: China’s CSI 300 was down -7.7%, India fell -0.5%, Vietnam fell -1.4%, South Korea rose +1.5%, Thailand rose +2.2% and the Japanese Nikkei Average was flat.
Europe:
– European Central Bank’s, Mr. Trichet, said that economic developments were very encouraging. The current reforms could add 0.5% to EMU GDP (European Monetary Union Gross Domestic Product).
– A German press report says that the European Central Bank’s staff forecast for the 2007 EZ (Enterprise Zones) growth will be revised upward when it is released on June 6th.
– European EZ PPI rose 0.4% month over month when 0.3% was expected.
– UK construction PMI fell 1.8 to 58.0. 59.5 was expected.
Corporate News:
– Bank of America is projecting mixed results in the chain store sales area.
– There are rumors that Dow Chemicals (DOW) is interested in buying BASF Ag (BASF).
– Smartphone maker Palm Inc. (PALM) will sell a 25 percent stake to private equity firm Elevation Partners for $325 million, the company said Monday, and announced that the former technician behind the iPod, Jon Rubenstein, will become chairman.
– Apple Inc.’s (AAPL), iPhone, will be available June 29, according to both TV commercials broadcast Sunday night and a company spokesman. The combination cell phone, media player and wireless Web-surfing device will retail for $499 and $599, depending on configuration. It will be offered exclusively by AT&T Inc.’s wireless division, formerly known as Cingular.
– Singapore’s Flextronics International Ltd. (FLEX) will buy rival contract electronics maker Solectron Corp. (SLR) for about $3.6 billion in cash and stock. Solectron shares climbed more than 14 percent in morning trading.
– Gas and electric company Dominion Resources Inc. (D) said Monday it will sell most of its U.S. onshore oil and gas exploration and production operations through two transactions for a combined $6.5 billion. Loews Corp. (LTR), which charters offshore drilling rigs to oil and gas explorers, will buy Dominion’s operations in Michigan, Alabama and the Permian Basin of Texas for $4.03 billion. XTO Energy Inc. (XTO) based in Fort Worth, Texas, will acquire Dominion’s operations in the Rocky Mountains, Gulf Coast, New Mexico’s San Juan Basin and South Louisiana for $2.5 billion.
– Accredited Home Lenders Holding Co. (LEND) will be bought by Lone Star for $15/share or $400 million.
– Digene Corp. (DIGE) will have a $1.6 billion merger with fellow molecular diagnostic company, Qiagen (QGEN).
– New York Times’ Barron’s says it may go private or be bought out by Google Inc. (GOOG).
Favorable Comments:
– Bayer AG (BAY), Onyx Pharmaceuticals (ONXX) and Bristol-Myers Squibb (BMY) received favorable comments from ASCO.
– Cognizant Technology Solutions Corp. (CTSH), Infosys Technologies (INFY) and Wipro Ltd (WIT) receive good comments from BofA.
– National Semiconductor Corp. (NSM) upgraded at JP Morgan
– Universal Health Services Inc. (UHS) upgraded at Bear Sterns.
– NaviSite Inc. (NAVI) upgraded at Weisel.
– Wal-Mart Stores (WMT) upgraded at both JP Morgan and HSBC.
– Genzyme Corp. (GENZ) upgraded at Merrill Lynch.
– Motorola Inc. (MOT) upgraded at CIBC.
– Royal Dutch Shell (RDS-A) upgraded at CitiBank.
Negative Comments:
– Apollo Group Inc. (APOL) and True Religion Apparel Inc. (TRLG) downgraded at Matrix.
– SunTrust Banks (STI) downgraded at BofA.
– Hovnanian Enterprises Inc. (HOV) price but at JP Morgan.
– Washington Group International Inc. (WNG) and Deutsche Bank AG (DB) downgraded at JP Morgan.
– British Petroleum (BP) downgraded at CitiBank.