Today’s Top Stories
· Europe - Activity in Continental Europe is on the light side today as much of the continent (inc. Germany, France, Austria, Sweden and Switzerland) celebrate the Ascension Day holiday, although most markets are still open for trading.
· The ECB published its monthly bulletin this morning and said that the “latest information has also confirmed that the economic recovery in the euro area continued in the early months of 2010.”
· On the sovereign front, Portugal agreed on tax hikes to help the budget and followed Spain’s announcement of add’l austerity measures yesterday. The FT Alphaville has an article on the ECB bond buys and says that so far, the ECB’s purchases have been mostly Greek, Portuguese, and Irish debt.
· Eurozone eco data out overnight disappointed w/Greece’s unemployment rate increasing in Feb vs. Jan, UK Consumer Confidence making just a small rebound after Apr.’s large drop and the UK trade deficit widening more than expected.
· In Asia, China rose over 2%, shrugging off a number of negative headlines inc. a WSJ story that China’s cabinet has approved proposals by the nation's 4 largest listed banks to raise US$42B and reports that Shanghai’s municipal government may levy additional property taxes. In Australia, employment figures came in better than expected w/the country adding 33.7K jobs vs. St. 22.5K and in Japan the Current Accounts Surplus widened even more than expected.
· Wall St investigations – three articles this morning talking about how inquiries are widening; WSJ and Fox Business say more firms being looked at re CDO practices; NYT says Wall St firms being invesigated to see if they misled rating agencies to secure better ratings (the NYT article may be viewed as a mild pos. for the rating agencies).
· CSCO - some quick takeaways from the Q & call: 1) Q itself fine (revs beat print St but a bit light of actual expectations; EPS, even ex higher tax rate, beat; GMs better w/op margins more inline); 2) outlook a bit disappointing….revs a touch light of actual ests….margins guided a touch light of print ests and received a lot of attention during Q&A (mgmt says margins still within their range and that nothing unusual going on); 3) balance sheet inventory was flattish Q/Q but their inventory purchase commitments were up 30% Q/Q (which may raise worries about OEM inventories building); 4) on Europe, Chambers didn’t sound worried (see below for details); 5) CSCO says lead times for their own products improved in the Q and CSCO says will get better in Jul-end Q.
· Tech M&A – SAP buying SY; IBM says will pick up pace of deals
· DSG Int’l – Europe’s #2 electronics retailer says the World Cup is going to be like Christmas – co says it expects to sell as many televisions for the soccer World Cup as it does in the run-up to Christmas; "Basically in a World Cup we sell the same amount of televisions we sell at peak trading (Christmas)," – Reuters
· foreclosure activity - update from RealtyTrac - foreclosure filings came in -9% M/M and -2% Y/Y; first Y/Y decline in history of survey; signals that foreclosure activity has started to plateau
· Swaps vote – the Lincoln provision that would force banks to spin off their swaps desks hasn’t been introduced as an amendment to the Dodd bill yet and it probably won’t until after Sen Lincoln’s primary on May 18.
· S&P methodology changes – S&P Tues night announced eligibility criteria changes for inclusion in the S&P US index family. The new rules allow companies that are incorporated outside of the US (for tax purposes) to be eligible for inclusion in the S&P US indices. JPMorgan’s M Moon has published a list of companies that could be potential additions to the SP500 as a result of this change.
· BP hopeful it can shut off GOM spill in weeks rather than months. The plan involves a blowout preventer. NYT/CNBC.
· Gold ATM debuts in Abu Dhabi – a hotel there has installed a new ATM that will allow users to withdraw gold instead of paper currency (CNBC)
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