U.S., EU set to start free-trade talks. After almost two years of preparation, the U.S. and Europe are today due to officially begin talks on what would be the world's largest free-trade agreement, which could boost the regions' economies by an estimated $100B+ a year. However, lurking in the background are accusations that the NSA spied on the EU, and a long-running dispute over subsidies to Airbus (EADSF.PK) and Boeing (BA).
Alcoa's profit seen flat. Alcoa is scheduled to unofficially kick-off the latest earnings season after the bell, with analysts estimating that its Q2 EPS was flat at $0.06 and that revenue slipped 2.3% to $5.83B. "The company has been hit hard in the past six months from both waning manufacturing overseas and a decreasing spot price of aluminum," says SA author Quoth the Raven. Alcoa's share price has badly lagged the broader market this year, but its manufacturing profits are near record levels.
Top Stock News
Design may have saved lives in 777 crash. The design of the Boeing (BA) 777 appears to have helped prevent a greater loss of life when an Asiana jet crashed in San Francisco on Saturday. The plane's flame-retardant cabin ensured that the fire didn't spread too quickly and the engineering ensured that the aircraft didn't break up too much. Investigators are focusing on why the 777 approached the airport at a dangerously low speed, with mechanical failure not appearing to be the problem.
Deadly Quebec crash raises doubts about oil trains. Stocks of railway companies that transport oil may be in focus following the weekend explosion of a runaway train that was carrying tankers of crude in the Quebec town of Lac-Megantic. The blast, which killed at least five people, is the most serious in a series of accidents involving freight trains, including those of Canadian Pacific (CP) and Berkshire Hathaway's (BRK.A) BNSF. The accident could strengthen the case for approving TransCanada's (TRP) Keystone oil pipeline.
Osborne to back reform of U.K. banking sector. U.K. Finance Minister George Osborne will reportedly express his support today for the overwhelming majority of recommendations of a parliamentary report to raise standards at the country's banks. The proposals include making it a crime to manage a bank recklessly and making it easier to claw back bonuses, although Osborne won't back a plan for tighter limits on leverage ratios.
BP due in court over oil-spill payouts. BP (BP) is set for a hearing today over the way claims administrator Patrick Juneau is overseeing payments to businesses affected by the 2010 Gulf oil spill as part of a compensation settlement. The company wants the money transfers stopped while an inquiry is started into the payouts, arguing that Juneau's loose understanding of the terms of the agreement allows unaffected businesses to receive cash they don't deserve.
GSK hit with more bribery claims in China. GlaxoSmithKline (GSK) is reportedly investigating further allegations of bribery in China from an anonymous tipster, who says that sales staff would pay doctors with cash and perks for prescribing Botox. GSK said it has so far found no evidence of bribery or corruption connected to Botox; the company, some of whose Chinese staff were recently arrested for economic crimes, said the same thing last month about similar claims from the tipster.
U.K. receives offers for Lloyds stake. The U.K. government has reportedly attracted proposals for its stake in Lloyds (LYG), including a £10B bid from a consortium led by private-equity fund Corsair. The group could offer to acquire up to half the state's 39% holding at somewhere around Lloyds' share price on Friday of 64.63 pence, which would ensure the government broke even on its financial-crisis bailout of the bank. Lloyds was +2.8% at 66.46 pence at midday in London, giving it a market cap of £47.39B.
AT&T teams up with Chernin to bid for Hulu. AT&T (T) and Chernin Group have reportedly submitted a joint offer to acquire Hulu from Disney (DIS), 21st Century Fox (FOX) and Comcast (CMCSA), although it's not clear if the previous suitors of the Internet video service made bids ahead of the deadline on Friday for binding proposals. Those suitors include DirecTV (DTV), Yahoo (YHOO), Time Warner Cable (TWC) and KKR (KKR). Chernin is led by former News Corp executive Peter Chernin.
Top Economic & Other News
German exports, industrial output slump. German exports dropped at the sharpest rate since 2009 in May, sliding 2.4% vs -1.4% in April and consensus of -0.4%. Imports grew 1.7% vs +1.2% previously, while the trade surplus tumbled 19.4% on month to €14.1B. The factors hurting German exports include the eurozone debt crisis and the slowdown in China. Meanwhile, industrial production dropped 1% in May vs growth of 2% in April and consensus of -0.5%. Despite the poor data, the DAX was +2.2% at the time of writing.
Portugal's PM firms up coalition. Portugal's government is looking a bit more secure after Paulo Portas, the head of the junior partner in the coalition, the Democratic & Social Center Party, returned to the cabinet over the weekend as Deputy Prime Minister. Portas' austerity induced resignation as Foreign Minister on Tuesday, along with that of Finance Minister Vítor Gaspar on Monday, helped send global markets into turmoil last week, although things calmed down on Thursday.