General News:
– Bloomberg notes that the CDO market is grinding to a halt. CDO sales were $3.7 billion in July compared to $42 billion in June.
– Wells Fargo (WFC) will no longer offer 1-year adjustable rate mortgages and dropped offering 2/28 mortgages.
– The US Treasury is rumored to be thinking about cutting corporate taxes from 35% to 27%.
– Iran and the IAEA are beginning talks on nuclear inspections. Iran is also willing to pump more oil.
– The International Council of Shopping Centers reported that sales fell 0.2% last week. Sales up 3.0% y/y. Noted that consumers were waiting for tax holidays to buy. Tax holidays start ramping up in August in which sales are expected to rise 3.0% for the month. Yesterday, Target (TGT) said it was track to meet July expectations
Asia/Europe:
Asia:
– Asian stocks rose, driving a regional benchmark to a high, after Samsung Heavy Industries Co. reported better-than-expected earnings and Ping An Insurance (Group) Co. said profit may have doubled.
– Nissan Motor Co., Japan’s third- largest carmaker, said profit fell for the third consecutive quarter as domestic demand slumped, it sold fewer light trucks in the U.S. and paid more in taxes.
– Thailand’s Cabinet agreed to scrap a 15-day deadline requiring exporters to convert foreign-exchange earnings into baht to help curb strength in the currency.
– Basis Capital Fund Management Ltd., the Australian hedge fund manager battered by losses in the U.S. subprime mortgage market, hired Blackstone Group LP as an adviser to help avoid a fire sale of assets.
Europe:
– German import prices rose 1.3% y/y. 1.1% expected.
– French consumer spending rose 1.6% m/m. 0.7% expected.
– Italian consumer confidence rose 0.2 to 107.4. 108.0 expected.
– Italian retail saels rose 0.2% y/y in May. 0.9% expected.
– ECB’s Stark says that the ECB will have no choice but to act if it sees inflation risks. No planned date for a rate hike. He also says China shows signs of overheating and that Japan has a problem of being near deflation.
– Bank of France says that monetary policy must take globalization into account. The BOF noted abundant global liquidity and that globalization is seen in higher asset prices.
Corporate News:
– Eli Lilly and Co. (LLY) said its second-quarter profit fell 19% on charges related to acquisitions, but adjusted earnings beat Wall Street expectations and the drug maker raised its outlook for the full year.
– PepsiCo Inc. (PBG), the world’s second-largest soft drink maker, said its second-quarter profit rose 13% on the strength of international sales and raised its full-year earnings outlook.
– Lockheed Martin Corp. (LMT), the world’s largest defense contractor, said that second-quarter earnings rose 34% on higher sales in most of its businesses, including fighter jets, missile defense and information technology.
– JetBlue Airways Corp.’s (JBLU) second-quarter profit grew 50% on growing passenger volumes, but the company announced plans to slow its growth in the wake of a February debacle in which an ice storm forced the cancellation of 1,700 flights and cost Chief Executive David Neeleman his job.
– AT&T Inc. (ATT) posted a 61% increase in second-quarter earnings, lifted primarily by its buyout of BellSouth Corp. but also aided by gains in wireless subscribers and revenue.
– Chemical giant DuPont Co. reported flat second-quarter earnings as higher sales were offset by the cost of energy and accelerated biotech research.
– McDonald’s Corp. (MCD) posted its second-ever loss Tuesday — its first in nearly five years — losing $711.7 million in the second quarter because of a hefty one-time charge.