Today’s Top Stories -$BAC – the co wants to be removed a MOU-$KFT – Reports Q210 Earnings

Today’s Top Stories

·         Quiet morning all around with little newsflow and stocks again trading flattish for the most part. China is the major outperformer overnight (rallying 1.4%), after China Banking regulators issued a statement saying the dn 50-60% housing stress test does not mean the government’s assessment of market trends or policy has changed, providing some reassurance to the market.

·         In Japan, a few articles out discussing whether the BoJ would ease policy further w/a former BoJ official saying they may ease if the yen rises to under 80 however a separate Bloomberg article says the BoJ is probably not ready to ease further yet despite the rise in the Yen.

·         In Australia, the RBA released its quarterly Statement on Monetary Policy (SoMP) with a similar tone to that offered by the RBA on Tuesday in the statement accompanying the Board’s decision to leave the cash rate unchanged.

·         European eco data – weak June IP reports from UK and Germany (although people’s focus on the Jul releases, which have shown an uptick vs. June around the world). 

·         European equities - after taking a breather for the last 2 sessions, EU financials are back to outperforming today (up >1%); once again, French banks are leading (SocGen, Agricole, BNP are some of the best performing large stocks in Europe).  In London, RBS rallies >2% after earnings (rounds out earnings for the big UK banks) while BP jumps another 2% (they said they have successfully finished the "static kill" cementing process earlier than expected.  Commodities stocks also strong in London (BHP, Rio), although Lonmin dips ~4% after the S African gov't imposed some bans on its sales practices. 

·         On the downside in Europe, as wheat prices continue to rally, European food/brewers get hit (fear of higher input costs) - Carlsberg -4.5%, Heineken -3%, Anheuser -4%, SABMiller -1.7%; food companies also weak (Nestle, Danone).  Unilever falls another 2.5% (neg. sell-side reports out today following the co's disappointing earnings Thurs morning).  Ag names continue to rally around the world - in the US, ADM, MON, CF, AGU, etc, were all strong on Thurs while in Europe Syngenta is up another ~3% this morning.

·         BAC – the co wants to be removed a MOU forced upon it during the height of the financial crisis; the sanction imposes restrictions on what moves the co can and cannot make (like raising its dividend); so far, regulators have been reluctant to set BoA free, wanting to ensure it first made permanent adjustments to certain business practices (WSJ)  

·         KFT – Reports Q210 Earnings, Q beats w/organic topline light; Raising Synergies guidance; Reit FY eps target but tweaking down FY organic revs guidance.