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Senate says Apple used Irish subsidiaries to avoid taxes. A Senate report purports to show Apple (AAPL) used three Irish subsidiaries that have no tax residency in either Ireland or the U.S. to avoid paying taxes on some $74B in profits from 2009-2012. Although the practice was legal and is to a certain extent commonplace, the report says AAPL's scheme was unprecedented in terms of both its complexity and its brashness in the "use of multiple affiliates that had no semblance of a physical presence." The most glaring example is an Irish affiliate which reported profits of $30B over the period in question but paid no taxes whatsoever. Tim Cook will defend the company (which he says has done nothing wrong) before Congress today.

Cohen, SAC square off with prosecutors. A settlement between SAC Capital and the federal government regarding allegations of insider trading was likely within reach as late as last Monday — and then prosecutors decided to subpoena founder Steve Cohen. Now all bets are off so to speak. For prosecutors, it's indict or go home, as the statute of limitations expires in late July. Meanwhile, Cohen and SAC have hunkered down and are facing client redemptions, including withdrawals from the Blackstone Group. Rumors surfaced late Monday that Cohen may exchange an admission of wrongdoing and a promise to shutter SAC to outside investors for a government pledge not to prosecute unless the firm breaks the law in the future.

Top Stock News
Dimon to learn his (non-binding) fate. Mercifully, speculation surrounding a highly anticipated (albeit non-binding) shareholder vote on Jamie Dimon's dual role as chairman and CEO of JPMorgan (JPM) will be put to rest Tuesday as results are set to be announced at the bank's annual meeting in Florida. The vote, which according to some will be close, has been debated and analyzed nearly to the point of exhaustion over the past several weeks as critics hope last year's London Whale fiasco (and Dimon's perceived arrogance in the Whale's wake) may be enough to tip sentiment in favor of splitting the roles. At the last such vote, 40% of shareholders voted for the split.

Key revenue measure falls at Vodafone, dividend stays home. Vodafone (VOD) reported a record 4.2% drop in organic service revenue for FQ4, in line with expectations but still disappointing, as weakness in Spain and Italy (organic service revenue declines of -11.5% and -12.8% respectively) weighed on results. The company also took an impairment charge of £1.8B in Italy, bringing total impairments for Spain and Italy to £7.7B for the full year during which sales were down 4.2% to £44.4B and core earnings fell 3.1% to £13.3B. Adjusted operating profit did beat estimates, rising 9.3% to £12B. The company also said it would pocket its dividend payment from Verizon (VZ) to prop up results rather than return it to shareholders.

Best Buy beats on bottom line, revenue misses. Best Buy (BBY) reported non-GAAP EPS of $0.32 per share, beating estimates although revenue came up short by $1.26B. Comparable store sales dipped 1.1% during the period, even as the retailer got a strong bounce (+16.3%) from online sales. If the shift of the Super Bowl and the impact from the decision to cut back on certain non-core businesses are backed out, comp sales were flat. Gross profit was down 190 bps to 23.4% due to the retailer's increased investment in pricing and higher promotional stance. The company noted Samsung Experience shops will be a focus in Q2. Shares fell 3.39% premarket.

Home Depot beats estimates. Home Depot (HD) reported better-than-expected Q1 earnings as both revenue (+7.4% Y/Y) and EPS beat estimates. A "seasonal timing change" added $574M to sales and comps growth came in at 4.3% (4.8% in the U.S.). "Less favorable" weather conditions were more than offset by a "recovering housing market," CEO Frank Blake said. HD also raised its FY13 outlook, saying it sees 2.8% sales growth, 4% comps growth, and EPS of $3.52 (consensus is $3.54). Shares rose +4% premarket.

Urban Outfitters beats on EPS, misses on revenue. Urban Outfitters (URBN) posted earnings that beat expectations Monday evening as net profit rose 39% Y/Y and margins widened to 36.8% from 35.6% on fewer markdowns at Anthropologie. Comp retail sales, including catalog and online businesses, rose 9%, including 6% growth at the company's namesake brand, 8% at Anthropologie, and 44% at Free People. Direct-to-consumer comp net sales were 14% higher, while sales at the company's wholesale business jumped 16%. Nevertheless, revenue came up short, sending the shares 4.47% lower in AH trading.

Justice Department says "puffery" defense isn't valid for S&P. "It would no doubt come as some surprise to many … that S&P's repeated assurances that its ratings were objective … were entitled to no more weight than an infomercial hawker's claim that his knife will outlast any other," the Justice Department said Monday, referencing S&P's (MHFI) assertion that because statements about the independence of its ratings were described as "mere puffery" in a previous judgement, they can't form the basis for a lawsuit. The Justice Department asked a federal judge to allow a suit against the ratings agency to move forward yesterday, after S&P filed for dismissal last month.

Top Economic & Other News
Evans says "escape velocity" coming soon. Noted dove and Chicago Fed Chief Charles Evans sounded upbeat about the prospects for the U.S. economy at a speech Monday, saying he sees improvement in the labor market as "appropriate monetary policy" works its magic. Critically, Evans claimed that the U.S. will generate "self-sustaining growth" in 2014 at which time the economy will "hit escape velocity." Meanwhile, the measuring stick for policy effectiveness seems to be akin to the physician's "first do no harm" principle: "It’s very difficult to argue that things are not functioning at least as well as they were before we undertook our asset purchasing programs," Evans noted. A relief to be sure.

Inflation below forecasts in U.K. Inflation in the U.K. rose just 2.4% in April, a seven month low and down from 2.8% in March. Economists were expecting a reading of 2.6%. Core inflation came in at 2%, the lowest level in three and a half years. Some economists now say consumer price increases may peak at 3% this summer rather than the forecasted 3.5% and note that inflation may hit the Bank of England's 2% target by H1 2015.

Goldman lifts S&P targets. Goldman Sachs lifted its forecasts for the S&P 500 (SPY) Monday, as David Kostin and company now say they expect the index to gain 5% by year-end to 1,750, 9% to 1,900 in 2014, and 10% to 2,100 in 2015. The rationale: expectations of above-trend real GDP growth beginning next year coupled with P/E multiple expansion to 16x. Furthermore, dividends should rise ~30% over the next two years, bolstering the bank's claim that dividend-paying equities are one of the only places investors can look to for income-generation.

Monti confident in Italian government, bonds. Italy's former technocratic leader Mario Monti doesn't agree with George Soros and others who say the stability in the Italian bond market (ITLY, ITLT) is merely the proverbial calm before the storm. Monti said Tuesday that the ECB is better equipped now than previously to handle disruptions in the sovereign debt market and noted that in his opinion, the steep decline in yields on Italian sovereign debt is sustainable. Monti also predicted that another election is not imminent in Italy as electoral law reform will take at least six months to complete.