Samsung set to introduce new flagship smartphone. Samsung (SSNLF.PK) is due to unveil the Galaxy 4S today following a marketing blitz that analysts fear may have over-hyped the device. Still, sales of 10M units are expected in the first month alone. The company is thought to have worked hard to avoid the supply problems that cost it 2M units of lost sales in just one month last year after it launched the Galaxy S III in May.
China’s cold may be the world’s pneumonia: What are the impacts of a Chinese economic slowdown? — Read more here »
S&P eyes record high. U.S. stock futures were higher premarket, setting the S&P 500 up to make a fresh challenge on its all-time high today after it closed just 11 points shy of the mark yesterday, and for the Dow Jones to continue its record run. Asian stocks rose and Europe was in the green at midday on the continent, helped by better-than-expected retail sales in the U.S. (See below for more details)
SandRidge CEO under threat as TPG wins battle with management. SandRidge Energy (SD) has reached an agreement with activist investor TPG-Axon that could lead to the dismissal of CEO Tom Ward, who has come under fire for problems with governance and strategic mistakes. Four of the hedge fund’s nominees are joining the oil and gas company’s board immediately, while an independent firm will look at land deals by Ward and his family. COO Matthew Grubb intends to resign.
Top Stock News
Heinz to load up on debt to fund buyout. Heinz (HNZ) plans to sell $2.1B worth of bonds and take $12B in loans in order to help fund its acquisition by 3G Capital and Berkshire Hathaway (BRK.A). The food company thinks the 7.5-year senior notes will be floated in the next couple of weeks.
ENI to sell Mozambique stake for $4.21B. Italy’s ENI (E) has agreed to sell a 28.6% stake in Eni East Africa to China National Petroleum Corp. for $4.21B. The deal will enable CNPC to indirectly acquire a 20% holding in the Area 4 natural gas field in Mozambique, after which Eni East Africa will retain a 50% stake in the field. Eni’s shares were +1.7% in Milan at midday in Europe.
SEC lets big banks avoid votes on break-up studies. The SEC has ruled that JPMorgan (JPM), Bank of America (BAC), Morgan Stanley (MS) and Citigroup (C) don’t have to hold votes at their annual meetings on motions that would require them to consider "extraordinary transactions," including being broken up. The proposals came from labor and religious groups, with a motion from the AFL-CIO, for example, saying that JPM’s $6B whaling loss had shown that it had become too big to manage.
Credit Suisse to cut $141M from Q4 profit after lawsuit deal. Credit Suisse (CS) has settled a lawsuit with the bondholders of National Century Financial Enterprises, which collapsed in 2002 following a $2.9B fraud, in a deal that will reduce the bank’s Q4 net profit by 134M Swiss francs ($141M). The investors – the state of Arizona, AllianceBernstein (AB), Lloyds (LYG), MetLife (MET) and Pimco – argued that as placement agent, Credit Suisse should have known about the fraud.
Vodafone, France Telecom look for growth in Spain. Vodafone (VOD) and France Telecom’s (FTE) Orange unit plan to invest €1B in a fiber-optic cable broadband network in Spain, indicating that the country’s fixed-line Internet market is an area of growth despite its dire economic situation, which has caused Vodafone to write off over £16B since 2010. The company’s investment appears to be part of a strategy to move into the fixed-line sector across Europe.
Top Economic & Other News
Germany sends message to EU with €5B cuts. Germany intends to cut 2014 spending by €5B to €300B and balance its budget by 2015, a year ahead of schedule. Germany brought forward publication of its plans to before an EU summit today, when France and Italy may lead the charge for a relaxation of austerity. Germany wants to make the point that "consistent sustainable budgeting and growth are not mutually exclusive."
CFTC looks at possible gold and silver manipulation. Moving on from Libor, the Commodity Futures Trading Commission is reportedly having an informal look at whether gold and silver prices in London are open to manipulation. Gold is set twice daily by five banks via teleconference and silver by three institutions, with the fixings then used worldwide as benchmarks for any number of transactions. The banks involved include Barclays (BCS), Deutsche Bank (DB) and HSBC (HBC).
Americans back on the move. Americans seem to be on the move again after staying put because of the housing bust, with the 50 fastest-growing metropolitan areas last year located in the West, the South, or in energy boom states such as North Dakota. "There is the beginning of a shift back to the Sunbelt," says demographer William Frey. "Many Snowbelt movers who were frozen in place are now moving to South and West metropolitan areas."
Chinese Congress formally elects Xi President. China’s National People’s Congress has formally elected Xi Jinping as the country’s new President after he was appointed Communist Party chief in November. The Congress also chose Li Yuanchao, who’s seen as somewhat of a reformer, as VP. The rubber-stamping is due to continue tomorrow, when Vice Premier Li Keqiang is set to be officially named as Premier Wen Jiabao’s successor.
Cities consider taking over local power provision. Cities across the country, such as Boulder in Colorado, Minneapolis and Santa Fe, are exploring the option of taking over the provision of electricity from private utilities. Reasons include cities wanting clean-tech to play a greater part in power generation, and the ability to respond to disruptions. Xcel Energy’s (XEL) unit in Boulder is among the companies affected.
BOJ picks clear lower hurdle. As expected, Japan’s lower house has authorized the appointment of Haruhiko Kuroda as the new Governor of the Bank of Japan, and Kikuo Iwata and Hiroshi Nakaso as Kuroda’s deputies. A biggish test is set to come tomorrow in the upper house, where the government will need help from the opposition to gain approval for the men. They should receive it, although it’s not 100% certain Iwata will be authorized.
In Asia, Japan +1.2% to 12381. Hong Kong +0.3% to 22619. China +0.3% to 2270. India +1.1% to 19570.
In Europe, at midday, London +0.3%. Paris +0.5%. Frankfurt +0.6%.
Futures at 7:00: Dow +0.1%. S&P +0.1%. Nasdaq +0.2%. Crude -0.2% to $92.36. Gold -0.3% to $1583.80.
Today’s economic calendar:
8:30 Producer Price Index
8:30 Initial Jobless Claims
8:30 Current Account
9:45 Bloomberg Consumer Comfort Index
10:30 EIA Natural Gas Inventory
1:00 PM Results of $13B, 30-Year Note Auction
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
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