Monday, June 23, 2008

Today's Headlines

- The risk of US companies defaulting fell, according to traders of credit-default swaps. Contracts on the Markit CDX North America Investment Grade Index of 125 companies in the US and Canada fell 2 basis points to 122.5, according to broker Phoenix Partners Group.
- The euro dropped the most versus the US dollar in more than a week as German business confidence fell in June to the lowest level since 2005, reducing bets the European Central Bank will increase borrowing costs this year.

- Gold fell in NY by the most in almost two weeks as the US dollar strengthened against the euro, reducing the appeal of the precious metal as an alternative investment.
- Wheat fell to a one-week low on expectations that US production will increase after farmers boosted planting to capitalize on prices that reached a record high in February. US stockpiles may nearly double to 13.3 million tons by May 31, the US Dept. of Agriculture said in a report earlier this month. Global production is expected to rise 8.5% to 662.9 million tons. World Inventories may rise to 132.1 million tons, up from 115.1 million tons the prior year.

- Crude oil is rising another $2/bbl. as historic investment fund speculation continues in the commodity despite decelerating demand, rising supplies and a firmer dollar.
- Bunge Ltd.(BG), the world’s largest oilseed processor, agreed to buy Corn Products(CPO) for $4.2 billion in stock.

- CME Group said it will pay a special dividend of about $350 million and purchase as much as $1.1 billion of its shares.
- Big Lots Inc.(BLI), the best-performing stock in the S&P 500 this year, now finds itself with the highest percentage of investors selling short.
- Rupee Steepest Slide Since ’93 Repels Funds on Prices. The Reserve Bank of India’s first interest-rate increase in 15 months is turning into a case of too little, too late for the rupee.

Wall Street Journal:
- Americans gave a record amount to charity in 2007, topping $300 billion for the first time, despite economic worries.
- Floods in the Midwest are making coast-bound shipments of American corn ethanol nearly impossible, creating an opportunity for ethanol from Brazil. Demand might really jump if a 54-cents-per-gallon import tariff on Brazilian sugarcane ethanol is removed, which may spark another wave of investment in the South American nation. Two US senators proposed such legislation this month as a way to lower ethanol prices in many parts of the country.

- Tribune(TRB) Starts Its Overhaul in Orlando. The Orlando Sentinel landed on newsstands Sunday with a new layout featuring more graphics, quick-read digests of top news, blog summaries and other changes aimed at making the newspaper more appealing to harried readers.
- Federal regulators are beginning an effort to crack down on stealth advertising in television shows, a move aimed at letting consumers know when companies have paid to use their products as props.
- Shares in many regional banks in the US have been the proverbial falling knives, and investors who tried to catch them got sliced. But valuations are now so low on some banks that their share prices reflect risks like sharply higher credit losses, future dilutive equity issuance and questionable management.
- Anti-Americanism Is Mostly Hype.

NY Times:
- ABC Moves to Expand Its Reach on Video Web Sites.
- Power Poll: Should the Government Crack Down on Oil Speculators?

USA Today:
- Roadside bomb attacks and fatalities in Iraq are down by almost 90% over the last year.
- Democratic presidential candidate Barack Obama has a 6 percentage-point lead over Republican John McCain among likely voters, a USA Today/Gallup Poll indicates. However, a majority of voters in the poll also said Obama doesn’t have sufficient experience and are concerned about his relationships with “people who hold radical political views,” citing the poll.

NY Post:
- In another sign that trading on the floor of the nation’s stock exchanges isn’t what it used to be, futures-brokerage giant RJ O’Brien & Assoc. is exiting the floor-trading business on NY’s commodities exchanges.

Lloyd’s List:
- Trading in freight derivatives overtook the physical market for hiring coal, iron ore and grain transporters for the first time, citing Ian Staples, an official at Freight Investor Services Ltd. Traders will buy and sell freight-derivatives contracts representing 2.4 billion metric tons of cargo this year. That’s 20% more than the volume of cargo that will actually be transported.

Financial Times:
- Facebook, the fast-growing social network, has taken a significant lead over MySpace in visitor numbers for the first time.
- Why the London loophole should be closed. Under current law, US traders can execute transactions in look-alike contracts in crude oil contracts on the New York Mercantile Exchange (Nymex) and on London's InterContinental Exchange (ICE), and US regulators have an eye only on what goes on in New York. That means that traders can arbitrage between the two markets, and the CFTC in effect regulates only half of the trading.

Financial Times Deutschland:
- Microsoft Corp.(MSFT) may make a new bid for Yahoo! Inc.(YHOO) if Yahoo’s management changes, citing Kevin Johnson, head of the software maker’s Platform & Services unit.

- Iraq will allow state-run oil companies from six countries to apply for oil exploration and production licenses. Iraq aims to almost double production to 4 million barrels a day by next year with expertise from international companies.

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