Dell confirms Icahn stake and opposition to buyout. Dell (DELL) has confirmed that Carl Icahn has taken a substantial stake in the company, although the activist investor hasn’t revealed the size of the holding. Icahn opposes the Michael Dell-led $13.65-a-share buyout offer and is instead seeking a $9-a-share special dividend as part of a leveraged re-capitalization. Meanwhile, Blackstone (BX), H-P (HPQ) and Lenovo (LNVGY.PK) have reportedly been studying Dell’s (DELL) books during its go-shop period, with H-P and Lenovo speculated to be more interested in getting a peek at a rival’s confidential information than in making a bid.
Silver to average $36 per ounce in 2013: Thompson Reuters GMFS. Worldwide QE one of the reasons why. — Read more here »
BOJ leaves monetary policy unchanged ahead of new governor. As widely anticipated, the Bank of Japan has left its key interest rate at 0-0.1% and its asset-purchase program at ¥101T. The decision was made at Masaaki Shirakawa’s last policy meeting as governor; the real action is expected to come at the bank’s next meeting in early April, which is set to be led by Shirakawa’s prospective replacement – and uber dove – Haruhiko Kuroda.
BofA profited from Constellation options while financing Crown deal. The WSJ has highlighted how Bank of America (BAC) made a net profit of around $1.14M on trading options in Constellation Brands (STZ) in the summer, around the time the latter said it was acquiring Crown Imports from AB InBev (BUD) as part of the Belgian brewer’s acquisition of full control of Modelo. BofA was an adviser on the Modelo deal and played a crucial role in the funding of both transactions. BofA says that the Chinese wall between different parts of the bank was maintained.
Top Stock News
Time Warner to spin off magazine operations. Time Warner (TWX) plans to spin off Time Inc. into a publicly-traded company, with the goal of completing the transaction by the year-end. Division CEO Laura Lang will leave after the process is completed. Time Inc. publishes the namesake magazine, Sports Illustrated, Fortune, and dozens of other magazines, along with related web sites and mobile apps. Time Warner had been evaluating options for the unit, including some sort of tie-up with Meredith (MDP).
BHP responds to Chinese iron-ore rigging accusations. BHP Billiton (BHP) has become the first of the world’s top three miners to respond to Chinese allegations that they and some traders had manipulated the market for iron ore to bring about a rebound in prices. "We aim to improve transparency by increasing liquidity in the spot market," BHP said. Rio Tinto (RIO) and Vale (VALE) have yet to respond to the accusations.
LaHood travels at taxiing speed in 787 battery process. Transportation Secretary Ray LaHood wants more information about Boeing’s (BA) redesign of the batteries of its 787 before he’ll allow the jet to resume commercial flights. While the FAA is moving towards allowing Boeing to restart test flights – possibly this month – LaHood is taking a go-slow approach and is encouraging additional engineering reviews. The NTSB is due to release its interim report this morning on its probe into the battery problems.
GM developing EV with 200-mile range. GM (GM) is working on an electric car that will have a range of up to 200 miles, CEO Dan Akerson said yesterday. "There will be breakthroughs in battery technology, they’re on the horizon," Akerson said. GM also intends to cut the average weight of its vehicles 15% and average fuel consumption 10% by 2017, and hopes to have 500,000 vehicles on the road using some form of electrification.
Green Mountain set for investor meeting. Shares of Green Mountain Coffee Roasters (GMCR) are on watch with the company’s annual meeting scheduled for today. In the past, Green Mountain has used the event to make product announcements.
Top Economic & Other News
BOE follows BOJ in leaving policy unchanged. The Bank of England has kept its benchmark lending rate at 0.5% and its QE program dormant. The decision was expected by most, although the minutes of the bank’s previous meeting had prompted speculation that it is beginning to lean towards additional asset purchases. The pound shot higher after the BOE decision and was +0.4% at the time of writing.
House passes bill to fund government. Absent the usual last-minute drama and factional disputes, the House yesterday approved a bill to finance federal programs until the end of the fiscal year in September. The vote came well ahead of the deadline of March 27 and averts a government shutdown. The measure, which includes the $85B of sequestration, is due to be voted on in the Senate next week, when it is expected to pass.
Detroit to appeal against State of Emergency declaration. The Detroit City Council has voted to appeal Rick Snyder’s decision to put the city in a State of Emergency and appoint an outside manager to clean up its finances. The Michigan Governor is now scheduled to hold a hearing on Tuesday next week, and will decide whether or not to appoint the manager soon afterwards. Tellingly, Mayor Dave Bing doesn’t back the appeal.
French jobless rate hits 13-year high. French unemployment rose to a 13-year record of 10.6% in Q4 from 10.2% in Q3, due to companies laying off workers amidst an economy that appears to be sinking into recession. Excluding France’s overseas territories, the jobless rate was 10.2% vs consensus of 10.1%.
Chinese property sector not heading for blowout – JPM. China’s real-estate sector is not on track for a crash, as demand is high and leverage is low, says JPMorgan’s Fang Fang, who’s also a member of the Chinese People’s Political Consultative Conference. It’s that demand rather than bank lending, which is limited, that has caused property prices to rise and prompted government measures to cool the sector. Those efforts have in turn led to volatility in Chinese stocks this week.
In Asia, Japan +0.3% to 11968. Hong Kong flat at 22771. China -1% to 2324. India +0.8% to 19414.
In Europe, at midday, London +0.5%. Paris +0.6%. Frankfurt +0.3%.
Futures at 7:00: Dow +0.2%. S&P +0.2%. Nasdaq +0.2%. Crude +0.3% to $90.74. Gold +0.4% to $1581.90.
Today’s economic calendar:
Chain Store Sales
7:30 Challenger Job-Cut Report
8:30 International Trade
8:30 Initial Jobless Claims
8:30 Productivity and Costs
9:45 Bloomberg Consumer Comfort Index
10:30 EIA Natural Gas Inventory
3:00 PM Consumer Credit
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
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