Cantor Morning News | Morning @ Cantor

· It is a heavy data week in the U.S., with ISM manufacturing index due Tuesday, pending home sales due Wednesday, and the key nonfarm payroll data due Friday.

· Europe dn 2.4% - slightly off lows…Asian Markets: Nikkei (0.58%); Hang Seng (1.36%); Shanghai Composite (0.92%)

o German stocks declined for the first time in five days, led by steelmakers, as the rate of expansion in Chinese manufacturing slowed

o Euro Falls To Fresh 4-Year Low – near $1.21 – of lows at 7am

o Euro Erases 50 Percent of Its October 2000 to July 2008 Rally

o ECB news on bank write down hurt sentiment

o rumors that France's credit rating is at risk (DJ)

§ François Baroin, the French Budget Minister, told local television stations that holding on to the country’s AAA rating would be a “stretch”.

o China short date repo spikes 50 bps higher on funding fear squeeze

o An adviser to the Chinese central bank warned of the dangerous state of the domestic property market

o Reports of a potential real-estate tax trial in China also worried the markets (DJ)

o political eruptions in Germany and Japan

§ Japanese stocks declined, dragging the Nikkei 225 Stock Average lower for the first time in five days, amid concerns over Prime Minister Yukio Hatoyama’s future.

§ as currencies traders also digested news of German President Horst Köhler's unexpected resignation.

o Euro-Zone Jobless Rate Highest Since June 1998

o reports of a delay in Argentina debt restructuring also hurts sentiment (DJ)

o An Israeli commando raid sparked a diplomatic crisis..Diplomatic pressure on Israel is “another theme that might be giving the gold market a bit of support” today

o Israel prepares to intercept next Gaza aid ship due Wednesday. – TTN

o Iran has amassed over two tons of enriched uranium, enough for two nuclear warheads, the IAEA said. WSJ

o BP was the biggest decliner, slumping 13%

o RBA left interest rates unchanged; as expected. Bank of Canada later today with chance of 25bps rate hike

o Asian stock markets were lower Tuesday

o China's economy (PMI data disappoints)

§ China’s stocks fell for a third day after manufacturing grew slower than expected last month and property transactions dropped in major cities

o The People’s Bank of China pushed up yields on one-year bills for the first time in four months. The central bank sold one-year bills at a yield of 2.0096 percent, from 1.9264 percent last week

o reports of a delay in Argentina debt restructuring also hurts sentiment (DJ)

o BP was the biggest decliner, slumping 13%

· The CAD was firmer following its GDP data and ahead of Tuesday's interest rate decision by the BOC.

· Rates: A consensus is emerging that yields on U.S. Treasury debt have only limited room to fall, despite worries about the euro zone. WSJ

· Fed Speak:

o Bernanke: Timing Of Stimulus Exit To Vary Among Central Banks - DJ

§ Speaking at a Bank of Korea conference, Bernanke suggested a coordinated exit from stimulus policies is unlikely, noting that central bank actions should reflect conditions in each economy.

o Upbeat comments overnight Monday from two top U.S. Federal Reserve officials. U.S. Fed officials Charles Plosser and Charles Evans, speaking in South Korea, said Monday the European debt crisis hasn't had a big impact on the U.S. economic recovery. They added, however, that surprises could yet emerge that would prompt the Fed either to delay or to hasten its eventual exit from its extraordinary economic stimulus policies. DJ

o Plosser: Unclear If Dollar Rise Vs Euro To Hurt US Economy

o Fed's Evans: Central Banks Must Guard Against 'Black Swans'

§ Central banks must watch for unlikely but potentially huge economic shocks, even though predicting such "black swan" events or assessing the impact of extraordinary policy measures is murky, senior Federal Reserve official Charles Evans said Tuesday.

o Evans said "the jury is still out" on the precise monetary-easing impact of the Fed's purchases of $1.7 trillion in such assets as U.S. government-agency debt, mortgage-backed securities and long-term Treasurys.

· South Korea proposes permanent currency-swap arrangement

o Kim Choong Soo, governor of the Bank of Korea, proposed that central banks establish a permanent arrangement for foreign-currency swaps to address funding shortages such as those that contributed to the financial crisis. Kim suggested "broadening and institutionalization" of a system to create "a global financial safety net." The proposal comes days before finance chiefs from the Group of 20 are scheduled to meet to discuss ways to avoid future crises. Bloomberg (30 May.)

· Argentina said it will extend by two weeks the deadline of swap deals in billions of dollars in defaulted Argentina bonds--a step that should ameliorate the country's fiscal problems. DJ

o Economy Minister Amado Boudou said the country allowed the delay because European investors have had "burdensome" technical difficulties that have slowed their ability to participate in the swap.

· Data/ int’l speakers

o China’s Purchasing Managers’ Index slid to 53.9 from 55.7 in April, the Federation of Logistics and Purchasing said today. That was less than the median 54.5 estimate

o German Jobless : Germany May Unemployment Change: -45K v -17Ke; Unemployment Rate: 7.7% v 7.8%e

o Eurozone May Final Manufacturing PMI 55.8 vs consensus 55.9.

o Germany May Unemployment Rate 7.7% vs consensus 7.8%.

o Germany May Final Manufacturing PMI 58.4 vs consensus 58.3.

o Germany Apr Retail Sales (3.1%) y/y vs consensus (0.7%).

o Euro-Zone Jobless Rate Highest Since June 1998

§ The unemployment rate increased to 10.1% in April from 10.0% in March, matching a level last seen in June 1998. Economists were expecting the rate to hover at 10.0%,

o Canada, first-quarter gross domestic product data beat expectations, bolstering already-solid expectations that the Bank of Canada will raise interest rates Tuesday

o RBA stands pat at 4.5% as expected

o AUSTRALIA APR BUILDING APPROVALS M/M: -14.8% V -5.0%E (multi-year low);

o S&P Reports Europe's House Prices May Not Have Stopped Sagging

o Japan April industrial production +1.3% m/m vs survey +2.5%. April housing starts +0.6% y/y vs survey +6.6%

o India's gross domestic product increased 8.6% in the first quarter compared with the same period last year, the government's statistics office said. The increase followed a revised 6.5% gain in the fourth quarter. Bloomberg (31 May.)

o Japanese industrial output rose at a slower-than-expected pace in April on weak demand for flat-screen TVs and computers.

o China Premier Wen Jiabao vowed on Monday to keep housing prices "at a certain range," while also cautioning that it was too early for China to adopt an exit strategy due to global uncertainties, the China Daily

o China PM Wen: Second global downturn possible but China's growth remains on track. – – S&P

o China's Wen: International Sovereign Debt Risks May Not Be Over –Reuters

o China's PBoC stated that it would tighten lending to industries with excess capacity – TTN

o PBOC Adviser: China Running Risk Of Overheating – FT

§ A Chinese central bank adviser warned that China is running the risk of overheating, but that "the situation is not out of control,"

o PBoC Adviser Li Daokui: Property market problems in China are worse than those in the US/UK before the financial crisis - FT interview- Sees combined risk of a bubble as well as social discontent.

o In China’s capital Beijing property signings slumped nearly 70 percent to 3,357 in May from April, the Shanghai Securities News reported

o BoJ Gov Shirakawa reiterated the view that Bank of Japan to maintain an extremely accommodative policy – TTN

o Moody's reaffirmed South Korea's "A1" sovereign ratings and stated the country was in a strong position in face of rising challenges

o Nouriel Roubini said the Brazilian, Chinese and Indian economies may be overheating and developing asset bubbles. BBG

· downgrade of the UK's AAA sovereign rating would cost £50B - Evening Standard

o If the US lost its AAA status it could cost £685B.

· EU stories:

o Hitachi Ltd. fell 3.5 percent after the Financial Times cited the company’s president as saying that business had been affected by the European debt crisis.

o Germany suspects ECB is buying bonds to rescue France, not Greece

§ The ECB's intervention in European debt markets is exacerbating tensions with Germany's Bundesbank, where officials worry that the program is being used for a stealth bailout of euro-zone banks holding Greek debt. WSJ

o ECB warns of ‘hazardous contagion’ - FT

§ The eurozone’s financial sector and economy are facing ‘hazardous contagion’ effects from the region’s debt crisis, according to the European Central Bank, which has also predicted another €195bn in bank write downs this year and next

§ http://link.ft.com/r/LVA6WW/0GZVNR/GEFOF/1848RS/NSNA13/KI/h

o European banks: Ecb Warns Write-Downs Could Reach $239 Billion - WSJ

§ In the latest indication that European banks are in ill health, the European Central Bank warned late Monday that euro-zone banks face 195 billion euros ($239.26 billion) in write-downs this year and the next due to an economic outlook that remained "clouded by uncertainty."

§ The ECB news, part of its semiannual financial-stability report, comes on the heels of a campaign by governments and central banks to ease sovereign-debt problems in southern Europe.

o European banks: WSJ(6/1) US To Push Europe On Disclosing Stress Tests

§ The U.S. intends to urge Europe to disclose publicly the results of bank stress tests as a way to calm jitters over the health of the Continent's financial system, U.S. officials said.

o ECB President Trichet hit back at the bank's critics, saying that its new program to buy government bonds in the market doesn't represent any weakening of its policy or independence. WSJ

o ECB warns of effect of governments' heavy funding needs

§ The European Central Bank said bond issuance by commercial banks could be crowded out by heavy funding needs of European governments. The situation could heighten rollover-financing risk for some financial institutions, according to the ECB's Financial Stability Report. "The risk that this implies for bank funding costs also raises the possibility of a setback to the recovery in banking sector profitability," according to the report. The report also warns that eurozone banks face write-downs of as much as €195 billion this year and next. Bloomberg (01 Jun.) , The Wall Street Journal (01 Jun.) , The New York Times (free registration) (31 May.) , The Times (London) (01 Jun.)

o ECB official's comments appear to widen rift with Germany

§ Lorenzo Bini Smaghi, a member of the European Central Bank Executive Board, appears to have added to a dispute between the ECB and Germany through a recent speech. He said "in one large euro-area country, it was thought that public support for swift action could be achieved only by dramatizing the situation, for instance, by telling the public that 'the euro is in danger' or by considering the possibility of expelling a country from the euro area." Bini Smaghi didn't identify Germany, but insiders said the implication was clear. The Wall Street Journal (29 May.)

o Deutsche Bundesbank President Axel Weber continues to have misgivings about the European Central Bank's program of purchasing state debt, saying Monday that limits should be put on the program to control its impact. DJ

o Greek Finance Minister George Papaconstantinou rejected suggestions that the country eventually will be forced to restructure its sovereign debt. An assistance package from the EU and the International Monetary Fund, combined with the Greek government's austerity plan, will be sufficient to cope with the debt crisis, he told Greek newspaper Eleftherotypia. Google/Agence France-Presse (30 May.)

o Trichet Dismisses Plot Talk, Hails "Credible" Euro

§ Jean-Claude Trichet Monday hit back at critics of his bank's new program to buy government bonds, and hailed the "remarkable" stability of the euro in testing circumstances

§ in an interview with French newspaper Le Monde, Europe's top monetary official dismissed suggestions of an "Anglo-Saxon plot" against the euro

o French Budget Minister Francois Baroin said it would be 'a stretch' for France to maintain its triple-A rating – S&P

o British Chamber of Commerce: UK at risk of double dip. Fiscal cuts should wait. – TTN

o In an interview with French daily Le Monde, Trichet reiterated his call for a "budgetary union" to complement the eurozone's monetary union.

o Trichet sd that he did not see a debt restructuring in Greece and noted that there was no plan B for country – TTN

o ECB's Nowotny commented that the ECB bond purchase program did not break 'taboo' and reiterated that he saw no threat of inflation nor anticipatipated deflation - TTN

o ECB's member Makuch commented that he was satisfied with euro exchange rate as it aided exports for the region. He added that the euro now reflected its fundamentals. – TTN

o ECB's Gaspari also commented that the short term euro weakness was welcomed and added that the wide-scale austerity measures might hurt European growth outlook – TTN

o The Greek government will hold an urgent, cabinet level-meeting Tuesday to discuss pension reforms as it struggles to fulfill tough conditions set by the European Union and International Monetary Fund, a Greek newspaper reports. DJ

o Greece could have a T bill auction in July-Finmin

o Spain to toughen rules governing short selling – FT

§ Effective 10-Jun, the National Stock Market Commission (CNMV) is requiring short sellers to disclose positions exceeding 0.2% of capital in any company to the regulator, and greater than 0.5% to the public. The current rules only require disclosure if a short-seller has a position exceeding 0.25% in financial stocks.

o Spanish Savings Banks Bow To Inevitable Deals – WSJ

o Spain Labor Min Corbacho that Labor market reform discussions were in the in final stages and would be finalized by middle of next week at the latest. He noted that Spain to make an effort to avoid harming workers' rights and there were no plans to change existing open-ended job contracts - TTN

o Investors In Spanish Bonds May Face Hot Summer – DJ

o Spanish unions, employer groups and the government Monday will continue to try to reach a deal to reform the country's labor laws, after weeks of unsuccessful talks. Talks Saturday again failed to reach an agreement, a person familiar with the negotiations said Sunday. Monday in theory is the last day to reach a deal or have a labor reform decreed by the government. But if positions by the various sides become closer, the government may grant an extension of a couple of days to the negotiations, DJ

o Dow Jones)--Greek Finance Minister George Papaconstantinou said Monday the country is shy of meeting its revenue targets, and one of the main answers to its budget-deficit woes is to crack down on tax evasion.

o German Economics Minister Rules Out Tax Hikes- Frankfurter Allgemeine Zeitung

o German President Koehler Has Stepped Down – DJ

§ a member of Chancellor Angela Merkel's conservative party

§ following his controversial comments about Germany's commercial interests and its military participation in Afghanistan.

§ In Germany, the president, who has only limited power in this mostly ceremonial post, doesn't get elected by popular vote but by the federal assembly.

· Money raising: Where Have All The IPOs Gone? DJ

o The U.S. IPO market has been rough lately, with a half-dozen offerings scrapping their plans last month because of volatile markets.

o The only company to go public last week, genetic-test maker GenMark Diagnostics (GNMK), closed at $5.40 a share, down 10%, on its first day of trading Friday.

o In two of the last three weeks, only two IPOs priced.

o Over the next few weeks, banks expect to price only three new issues per week

o In March and April, four to six deals priced each week.

o it could be long period of fewer and lower-quality IPOs, market watchers say.

· Money raising: The single IPO expected to debut in the U.S. this week focuses on renewable energy in China, Nobao Renewable Energy Holdings..WSJ

· Money raising: Debt sales by investment-grade companies shrank to $27.7 billion, the lowest total since October 2008.

· M&A: EVVV ev3 to be acquired by Covidien COV for $22.50 per share in cash..EVVV closed $18.92

· M&A: RSH Initial bids for RadioShack are in –NY Post

· M&A: BP a takeover target? FT Aphaville

o http://ftalphaville.ft.com/blog/2010/06/01/248181/bp-a-takeover-target/

· Demand: Baltic Dry was down 1.9% on Friday..the Baltic Dry was up 6% on the week, up 22% in the month of May

· Miners: Aussies Rudd says mining tax is a long way off; want to get it right; Rudd ‘fully committed’ to 40% tax

· Vale to raise iron ore prices 35% as part of the switch to quarterly pricing

· Alcoa and steel workers union extend contract deadline talks to noon today

· BP Stories:

o BP dn 14% tues....probe going criminal? A Turning Point in Oil Spill Response – WP

§ the Obama administration is taking steps to distance itself from BP and is dispatching Attorney General Eric H. Holder Jr. to the Gulf Coast to meet with federal and state prosecutors. The Holder trip could signal that the environmental calamity might become the subject of a criminal investigation.

o BP facing multimillion-dollar legal claim from British pension fund

§ http://www.guardian.co.uk/business/2010/may/30/bp-prudhoe-bay-spill-lothian-pension-fund-claim

o Obama admin: 'Prepared For The Worst' On Spill – Browner - WSJ

§ oil might keep leaking into the Gulf of Mexico until August, when relief wells are expected to be completed.

o After the failure of the "top kill" operation to plug the gushing well, BP is moving to contain the well while it works on building two relief wells to catch the spewing oil. The containment operation could result in a temporary 20% increase in the volume of oil spilling from the well, Browner said. She said government experts believe the increase could last four to seven days.

o US Rep. Markey: BP May Be Guilty Of Criminal Activity

o US Rep. Markey: BP May Have Lied About Early Spill Estimates

o Documents Show Earlier Worries About Safety Of BP Rig – NYT

§ http://www.nytimes.com/2010/05/30/us/30rig.html?hp

o BP's managing director, Bob Dudley, dismissed higher estimates by other experts in the range of 70,000 to 100,000 barrels of oil of day as "alarmist."

o Joint Chiefs Head: Industry Has Better Tech For Oil Spill – ABC

o (AP) - BP PLC CEO Tony Hayward is disputing claims by scientists that there are large undersea plumes from the Gulf oil spill.

o Reports of illness among oil cleanup crews worry officials ( Central Utah Daily Herald)

· Steel mills are ramping up production quickly, prompting concern that supply will outpace demand and restrain prices. WSJ

· China appears to be eating into some of its commodities reserves, a potentially worrying trend for commodities producers and investors. WSJ

· GOOG Google to suggest compromise to European data authorities this week - FT

· GOOG vs MSFT: Google ditches Windows on security concerns - FT

o Google is phasing out the internal use of Microsoft’s ubiquitous Windows operating system because of security concerns, according to several Google employees.

o http://link.ft.com/r/0QSDPP/26MASM/GEFOF/IYUYUX/NSNAFO/36/h

· AIG dn 2% tues….Prudential Shares Up 4.8% As AIG Rejects Revised AIA Offer

· AIG: Prudential Reviews AIA Deal As AIG Rejects New Bid

o Prudential PLC continues discussions to lower the price of its deal to buy AIG's largest Asian life-insurance unit to as low as $30 billion, people familiar with the matter tell The Wall Street Journal.

o U.K. insurer Prudential PLC's (PRU.LN) attempt to seal the biggest-ever insurance takeover suffered a major setback Tuesday after it failed to lower the cost of its $35.5 billion agreement to buy American International Group Inc.'s (AIG) largest Asian life-insurance unit.

o Analysts said the deal appears to be over after Prudential said it is considering its position following AIG's rejected of a proposal to slash the value of the deal to $30.375 billion

o AIG said in a separate statement that, "after careful consideration, the company will adhere to the original terms of its previously announced agreement with Prudential PLC for Prudential to acquire AIG's wholly owned pan-Asian life insurance subsidiary AIA Group Limited. The company will not consider revisions to those terms."

· Citigroup Qatar is looking into taking a stake in Citigroup , the country's prime minister said in comments carried Sunday by Qatari daily Al Sharq.

· AAPL AFP)--Apple Inc. (AAPL), now the largest U.S. technology company by value, said Monday that it had sold two million of its iPad tablet computers, outdoing even the iconic iPhone on its launch.

· MDT: WSJ: Medtronic Discloses Payments Made To US Doctors

· Summer Movie Sales Hit Rough Patch – WSJ

o as two big movies posted soft openings in an even weaker showing than last year's disappointing Memorial Day results.

· advertising Publicis CEO Says Ad Market Rebound Continues - DJ

o -French advertising company Publicis Groupe could finish 2010 with 3% organic revenue growth on the year if the current improvement in advertising markets continues, Chief Executive Officer Maurice Levy told Dow Jones Newswires Monday.

o "First-quarter figures were largely confirmed in April and we have the impression that May will be pretty good too," Levy said, speaking in his office on the fabled Champs-Elysees, a day ahead of the group's annual general meeting. "There are good chances that we will be able to maintain first-quarter figures throughout the year," he said.

o Publicis, the world's third-largest advertising company by revenue

· Business will drive strong demand for summer air travel

o Because of expanding world trade and the return of business confidence, travelers this summer can expect to see full airplanes and high fares, according to the International Air Transport Association. Commercial travelers and tourists will find themselves fighting for seats because many flights were canceled during the recession, industry analysts said. The New York Times (free registration) (31 May.)

· Drydocks World negotiates for $1.7 billion debt restructuring

o Drydocks World, a manufacturer of oil rigs and ships, said it is talking with lenders about restructuring $1.7 billion in debt that matures in November 2011. The company is owned by Dubai World, but its debt wasn't included in the parent company's debt-settlement negotiations. Maktoob/Reuters (31 May.)

· British Airways PLC (BAY.LN) and Unite, the union representing cabin crew, Tuesday will return to the negotiating table

o (Dow Jones)--British Airways PLC's (BAY.LN) cabin crew Sunday kicked off another five days of strikes after talks between the airline and Unite union negotiators broke down last Friday without a deal being reached.

o Union Warns Of More Strikes This Summer At British Airways

· Ryanair Opens Up 7.4% In London After Earnings, Dividend News

· Chemring Shares Open Down 2.3% After US Deal Hits Snag

o Chemring Re-Examines ADG Acquisition After US Probe Widens

o Chemring in a statement said its board wouldn't proceed with the $59 million acquisition of U.S.-listed Allied Defense Group Inc. (ADG) on the terms agreed and was reviewing its options.

· 30,000 Quit Facebook In Protest – AFP

· Shipping Rates Draw Official Scrutiny – WSJ

o A U.S. regulator and the European Union's competition watchdog are monitoring the world's top container shipping lines for any evidence of price fixing

o The scrutiny comes as the prices shipping lines charge have kept rising even as the industry's supply of new ships has continued to increase sharply.

o The shipping lines, including industry leader AP Moeller-Maersk AS, deny they are operating a cartel.

o The Federal Maritime Commission in the U.S., where carriers enjoy broad antitrust immunity, has opened a "fact finding" investigation into shipping rates. It is due to submit an interim report on June 15 and a final report on July 31.

· MIDEAST CRISIS: Over 10 Dead In Israel Raid On Flotilla; EU Seeks Probe – WSJ, DJ

o UN Security Council Condemns Violence in Israeli Raid – meeting today

o Israeli commandos boarded a flotilla carrying aid and activists to the blockaded Gaza Strip early Monday, with the Israeli military saying more than 10 activists were killed in a skirmish aboard one vessel during the operation

o The incident triggered strong condemnation from Israel's friends and foes alike, and plunged Prime Minister Benjamin Netanyahu into his worst diplomatic crisis since taking power early last year.

o Cancelled: Netanyahu was scheduled to meet U.S. President Barack Obama in Washington this week

o 10,000 Protest In Istanbul Against Israeli Flotilla Raid

o Turkey To Call Emergency UN Meeting On Israeli Raid

o Israel To Stop All Aid Ships Reaching Gaza - Defense Official

o AFP)--Israel has detained 480 pro-Palestinian activists captured in its deadly commando raid on a Gaza-bound aid flotilla and will expel 48 others, public radio reported Tuesday.

· US Missile Strike Likely Killed Al Qaeda No 2 In Afghanistan - NYT

· Koreas Crisis:

o The U.S. military is planning a long-term program to bolster South Korea's naval defenses after the sinking of a South Korean warship, allegedly by North Korea, The New York Times

o China's Wen--Need To Ease Tensions Between Koreas (AFP)

§ China's Premier Wen Jiabao said Sunday there is an "urgent" need to avoid clashes and ease tensions following the sinking of a South Korean warship

§ But Wen, speaking after a summit with the Japanese and South Korean leaders, gave no indication that China is ready to join them in blaming North Korea for the incident.

o Japan,S Korea Agree To Boost Cooperation On N Korea-Kyodo

o China and South Korea should focus on long-term goals and speed up the development of a free-trade zone between the two countries, state-run Xinhua News Agency said Saturday, citing visiting Chinese Premier Wen Jiabao.

o AFP)--North Korea has mounted a cyber campaign--using stolen identities of South Korean Internet users--to spread its claim that Seoul faked evidence on the sinking of a warship, a report said Tuesday.

· Russian Vessel To Take Part In NATO Naval Exercises – DJ

· US Considers Options For Strike In Pakistan

o U.S. military planners are looking at options for a unilateral strike in Pakistan for use if a successful attack on U.S. soil is traced to Pakistani tribal areas, the Washington Post

· Iran heats up? Taliban train in Iran; Iran Has Produced 5.7Kg Of High-enriched Uranium

o Iran has amassed over two tons of enriched uranium, enough for two nuclear warheads, the IAEA said. WSJ

o UN Report Shows Iran Fails To Comply On Nuclear Program – US

o NATO general in Afghanistan: Taliban train in Iran (AP) - The commander of NATO and U.S. forces in Afghanistan said Sunday there is "clear evidence" that some Taliban fighters have trained in Iran

o AFP)--China on Tuesday called on Iran to improve its cooperation with the U.N. nuclear watchdog, after the agency said in a report that Tehran was pressing ahead with its controversial atomic program.

o US Officials: Pushing For Iran Sanctions Without Turkey, Brazil - AFP

§ The Obama administration forged ahead Friday with plans for U.N. sanctions against Iran without the involvement of Turkey and Brazil, senior U.S. officials said

o The officials, speaking to reporters on condition of anonymity, repeated strong objections to a nuclear fuel swap deal brokered by Turkey and Brazil.

Economics:

May ISM Manufacturing, Apr Construction Spending at 10:00 ET
May Dallas Fed Manf. Activity at 10:30 ET
API Crude Inventories at 16:30 ET
ABC Consumer Confidence at 17:00 ET

Earnings:

There are no major companies reporting this session

TODAY’S BIG STORIES

· Credit Markets: Debt Sales Take Holiday - DJ

o After a steady climb since 2008, credit markets stumbled in May as Europe's troubles escalated, sending bond prices reeling and choking off new issuance for everything from U.S. corporate bonds to emerging-market sovereign debt

o Debt sales by investment-grade companies shrank to $27.7 billion, the lowest total since October 2008.

o Just 20 junk-rated companies sold bonds, the lowest number since April 2009

o Just $6.7 billion of speculative-grade bond issuance came to market in May, compared with $34.5 billion in April and a record $36.7 billion in March

o In emerging markets, only one sovereign sold bonds, the first time only one deal was completed in a month since December 2000.

o Even the relatively robust asset-backed securities market suffered, with sales slowing to a trickle in the final days of the month.

· Market valuations, Analysts are still sanguine..WSJ

o If the recovery is in danger, it is news to analysts.

o They have maintained a surprisingly rosy view of U.S. corporate earnings despite the market's recent pullback on growth concerns.

o Current estimates put the S&P 500 on track for earnings per share of $85.26 this year according to Thomson Reuters, a return to 2007 levels.

o Analysts' $96.61 forecast for 2011 earnings would mark a record that surpasses the 2006 peak.

o If that pans out, stocks look like a buy going into the end of the second quarter. After May's sell-off, the S&P 500 is trading at about 12.8 times estimated 2010 earnings, compared with a historical average of about 15 times.

· Analysts Forecasts See 25% Stock Gain - BBG

o The biggest monthly drop in the Standard & Poor’s 500 Index since February 2009 is ratifying Mohamed El-Erian’s prediction for a new normal of below-average returns. Analysts say not so fast.

o Combined price estimates from more than 2,000 forecasters tracked by Bloomberg show the S&P 500 will rise 25 percent in the next year, the fastest projected rate since February 2009, data compiled by Bloomberg show.

o The rally above 1,350 will be led by industries most tied to the economy, according to analysts who boosted individual share projections by an average of 0.9 percent in May, the 14th straight monthly increase.

· Commodities collapse undermines Wall Street growth forecasts

o The biggest slump in commodities since Lehman Brothers Holdings Inc. collapsed is undermining Wall Street forecasts for accelerating economic growth and higher prices for everything from copper to crude oil.

o The Journal of Commerce commodity index that includes steel, cattle hides, tallow and burlap plunged 57 percent in May, two years after a decline that foreshadowed the worst recession in half a century. The index of 18 industrial materials declined the most since October 2008 as Europe's debt crisis widened and China took steps to curb growth.

o From The Detroit News: http://www.detnews.com/article/20100601/BIZ/6010363/1001/biz#ixzz0pauDZPmI

· Macro pos: World Trade Flows Rose 3.5% In March – CPB

o Figures released by the Netherlands Bureau for Economic Policy Analysis, also known as the CPB, Monday showed trade volumes rose 3.5% in March from the month earlier, having risen 1.7% in February.

o "Trade volumes increased worldwide, with the notable exception of Japanese imports," the CPB said. "Both exports and imports of the euro area grew remarkably fast."

o The CPB's figures are closely watched by policy makers, including a number of central banks, because they provide the earliest available measure of global trade.

· OECD Econs Had First Year-on-Year Growth In 1Q – DJ

o Figures released Monday by the Organization for Economic Cooperation and Development showed economic output in its 31 members was 0.7% higher than in the three months to the end of December, and 2.5% higher than in the first quarter of 2009

o It was the first year-on-year rise in gross domestic product since the third quarter of 2008, and is a further sign that the global economy is in recovery. OECD members account for 61.3% of world GDP

o However, growth was by no means uniform, with the European Union lagging both the U.S. and Japan, a feature of the recovery that is expected to persist.

· Trichet, Bernanke say emerging economies are key

o Ben Bernanke, chairman of the U.S. Federal Reserve, and Jean-Claude Trichet, president of the European Central Bank, separately said in videotaped comments that emerging economies are crucial to the stability of the global financial world. "One distinctive aspect of this crisis has been its originating in industrial economies," Trichet said. "Emerging countries have also been severely affected but as a group remained a source of strength for the world economy." Reuters (31 May.)

· Central Bankers Still Seeing Tame Inflation Data - WSJ

o Strains in European financial markets have made it more likely that the Federal Reserve will refrain from raising interest rates until as late as next year.

· Inflation: ThyssenKrupp CEO Warns On Bubble In International Raw Materials Markets

o ThyssenKrupp Chief Executive Officer Ekkehard Schulz warns that a substantial bubble in the international raw materials markets could develop, possibly bigger than the real-estate problems in the U.S. two years ago, weekly magazine Der Spiegel reported Sunday.

o He called for a regulation of derivatives trade in raw materials by investment funds and banks, saying speculative trades in raw materials could "become a serious threat for the steel industry and the global economy," if not countered.

o Magazine Web site: www.spiegel.de

· Inflation: China's inflation is close to out of control, bank chief says

o A rapid expansion of China's money supply strongly suggests that the economy is overheating, said Guo Shuqing, chairman of China Construction Bank, the nation's second-biggest bank. The government's effort to cool off the housing market might be ineffective because property developers are holding so much cash, he said. "Sales are falling but prices are not," Guo said. Telegraph (London) (30 May.) , Reuters (30 May.)

· Inflation??: ECB focuses on inflation, but deflation could be bigger threat

o The European Central Bank is focused on keeping inflation in check as Europe struggles with debt woes and other issues. Some economists, however, said deflation could be the bigger issue. The central bank's effort to to keep inflation at bay after it bought government bonds is fueling criticism. "It's nuts: How can they be concerned about the inflationary impact of this?" said Carl B. Weinberg, chief economist of High Frequency Economics. "If I were the head of the ECB, I would be printing money to avert the decline in the money supply." The New York Times (free registration) (30 May.)

· Inflation: China: Current Agricultural Prices Rise To Have Limited Impact On CPI-Xinhua

o Current agricultural prices rise in China, driven by various factors including speculative funds which quit the property and stock markets, will only have limited impact on the consumer price index, a key inflation gauge, the state-run Xinhua News Agency reported Sunday quoting vice chairman of the country's economic planning agency

o The comments apparently attempted to cool down inflation expectations after latest April CPI posted growth of 2.8%, which was mainly driven by growth in agricultural product prices, got close to Beijing's target of 3% for 2010.

· Inflation: Mahindra 4Q Net Rises 36%; To Increase Vehicle Prices - DJ

o India's biggest maker of sport-utility vehicles

o Saturday posted a higher-than-expected 36% rise in its fiscal fourth-quarter net profit due to strong sales of utility vehicles and farm equipment

o said it will raise prices in the current quarter because of higher raw-material costs.

· Inflation, Labor: Honda Says 'Some Progress' In Talks With China Strikers - AFP

o Japan's Honda Motor Co. (HMC) said Monday it had "made some progress" in negotiations with workers at its auto parts factory in China, where a strike has halted the company's vehicle production in the country. "Production lines are not back in operation yet. But we have made some progress in talks," Honda's Beijing-based spokesman Zhu Linjie said, adding that he hoped production will resume "as soon as possible."

o Chinese media have reported that Honda's workers are seeking higher wages, which currently average less than CNY1,500 ($220) per month.

· US pension fund eyes commodity investments - FT

o The US second-biggest public pension fund is to make its first investment in commodities as a hedge against the risk of inflation, in a sign of growing investor appetite for raw materials

o http://link.ft.com/r/LVA6WW/0GZVNR/GEFOF/1848RS/26VS71/KI/h

· ETFs WSJ(5/29) Danger: Falling ETFs

o the flash crash showed that ETFs can be far more complex -- and risky --than their mutual-fund cousins. Worse, ETF investors were burned at the verymoment they craved safety most

o On May 6, when investors were counting on ETFs to provide diversification, the funds got walloped. While the Dow Jones Industrial Average fell as much as 9.2% during the trading session, many ETFs momentarily lost almost all their value, dropping to mere pennies per share.

· Money Funds WSJ(5/29) Euro Pain Hits Money Funds

o The European debt crisis has rippled into one of the last redoubts of safety for U.S. investors: money-market funds

o Money funds are thought to be low-risk because they invest in high-quality short-term debt issued by governments and big corporations. But many funds are holding big slugs of European bank debt. As of March 31, nine of the top 10 corporate issuers of short-term debt held by Moody's-rated U.S. prime money funds were big European firms.

· EU Says China's Trade Policies Still Too Opaque – AFP

o The European Union on Monday criticized China during a World Trade Organization review of Beijing's trade policies, complaining that they remain somewhat opaque

o "There remain important transparency deficiencies in China's trade regime," the head of the E.U. delegation John Clarke said in a statement.

· China To Allow More Stocks In Margin Trading, Short-Selling Trial – DJ

· China postpones CDS launch- FT

o China has postponed a plan to introduce credit default swaps to its domestic market after regulators objected and senior officials vetoed the proposal

o http://link.ft.com/r/YIQXNN/GKRQ29/324F4/S30NEL/NSN2UN/E4/h

· Yields increase for China's dollar-denominated property bonds

o Indicating that China's property bubble is closer to collapse, the market is demanding higher yields on real estate companies' debt. The average spread above U.S. Treasuries on the debt of nine major property companies widened by 2.26 percentage points as of last week, according to data compiled by Bloomberg. Among nonfinancial U.S. dollar-denominated bonds in Asia, those from China's property companies are the worst performers. Bloomberg (31 May.)

· China, Labor: WSJ(5/29) Hon Hai To Raise Workers' Pay

o Hon Hai Precision Industry Co. has decided to increase wages for its factory workers in China by an average of 20%, but the manufacturing giant emphasized the raise isn't related to a recent spate of employee suicides.

· China, Labor: WSJA(6/1)Heard On The Street:Chinese Workers Gaining Leverage

o Workers pushing for higher wages at one of Honda Motor's coastal Chinese plants could well be setting a trend.

· China, Labor: WSJ: Chinese Official Calls For Better Conditions After Hon Hai Deaths

o The top Communist Party official of Guangdong called for companies to improve conditions for workers after a spate of suicides by employees of Hon Hai Precision Industry Co. (2317.TW) in the southern Chinese province, state media reported

o The comments Saturday by Wang Yang, provincial party secretary, are the highest-level statement about the spate of worker deaths at Hon Hai, the world's largest contract manufacturer of electronics. Ten workers have jumped to their deaths this year, and three more been injured in suicide attempts, for reasons the company and outside experts have struggled to explain.

· China Police Free 24 From Brick Kiln In Latest Slave Scandal – AFP

o Police in southwestern China said Monday they had freed 24 people forced to work at a brick kiln--the second such rescue in a week in a nation rocked by a huge slave labor scandal in 2007.

o The workers in Yunnan province had been lured into working for the kiln in Shilin county, where they were kept captive and beaten up if they refused to do manual labor, state media reported.

o The news follows a similar rescue operation in the northern province of Hebei on May 21, when police freed 34 people forced to work 14- to 18-hour days at a brick kiln and given electric shocks if they protested.

· China has issued new rules saying evidence obtained through torture and threats cannot be used in criminal prosecutions and said such evidence would be thrown out in death penalty cases that are under appeal, according to an Associated Press report

o This is the first time Beijing has explicitly stated that evidence obtained under torture or duress is illegal and inadmissible in court.

· Novo Nordisk Pulls Diabetes Drugs From Greece Over Price Cut - AFP

o Danish pharmaceutical group Novo Nordisk (NVO) said Saturday it was pulling 17 types of medication for treating diabetes from the Greek market following a government decree to lower prices of drugs

o "The products that are pulled from the market are the latest generation of insulin products in the pen system," Mike Rulis, Novo Nordisk's head of corporate communications, told AFP.

o The company, the world's largest producer of insulin to treat diabetes, said it will not stop selling the 17 products but insists on keeping their prices at the level before the Greek decree took effect on May 3, forcing it to lower prices by about 25%.

· US Task Force: Most Guantanamo Detainees Low-Level Fighters –WP

· US politics: Former eBay Inc. (EBAY) Chief Executive Meg Whitman recovered a wide lead over her rival for the Republican nomination in California's governor race after the pair stepped up their costly television campaigns accusing each other of being too liberal, a poll showed Sunday.

o According to a Reuters with less than two weeks before the June 8 primary, Whitman led state Insurance Commissioner Steve Poizner by 53 percent to 29 percent, according to a poll organized by the Los Angeles Times and the University of Southern California.

· US politics: Uncertainty Brews In GOP Challenge To Reid – WSJ

o Republican Sue Lowden was expected to pose a stiff challenge to Majority Leader Harry Reid of Nevada this fall, in one of the nation's most closely watched Senate races

o But Mr. Reid, facing a tide of unpopularity in his home state, began pounding Ms. Lowden in the past few months. The negative campaigning, along with a series of other missteps from the Lowden campaign, may have contributed to an erosion of support for a candidate the Republican establishment once had seen as its best hope for toppling Mr. Reid

o With the June 8 Republican primary approaching, support for a tea-party favorite, former GOP Assemblywoman Sharron Angle, is surging.

COMPANY NEWS WITH MACRO IMPLICATIONS

· Barron's summary

o Cover: 10 Great European Stocks: FME.GR, SAP.GR, BMW.GR, SIE.GR, BAYN.GR, SU.FP, MC.FP, RI.FP, ASML.NA and LUX.IM.

o Interview: Ray Dalio, CIO of Bridgewater Associates, talks about the reaction to the financial crisis, he doubts printing money will cause inflation and says their portfolio is most skewed towards Treasury bonds, gold and emerging market currencies, especially Asian currencies.

o HAR Positive on Harman International, recent decline is a buying opportunity.

o IEP Positive on Icahn Enterprises, it is trading for below the estimated asset value of $44.

o GOLD Other Voices is cautious on gold saying there is a premium built into the price from ETFs and it is not a very good hedge as it doesn't pay interest and costs money to insure. Eventually the fast money will look for someplace else to invest.

o Editorial says the latest 'jobs' bill shows exactly what is wrong with Washington today.

o The Trader is positive on emerging market companies like ABV, BIDU, AMX and BAP; positive on Argon ST (STST) on a possible buyout.

o European Trader is positive on Turkey, positive on ISCTR.TI, FROTO.TI, TOASO.TI and HALKB.TI; TKF and TUR.

o The Striking Price considers the coming IPO of the Chicago Board Options Exchange (CBOE) and the history of CEO Bill Brodsky.

o Commodities Corner says Europe and high supplies are getting a lid on oil prices.

o Current Yield looks over the bond action of the past week.

o Preview says the positive trend for silver is likely to continue.

o Follow Up is positive on British Airways (BAY.LN) as it handles the strike well, mixed on Denny's (DENN) following the board elections.

o Up and Down Wall Street discusses the possible impact of a Chinese real estate bubble collapse or economic slowdown on the global economy.

o Streetwise talks about the recent correction, BP (BP) appears to be a 'deep value' with a potential $13 rise in the share price over the next couple of years and a 7% dividend that appears secure.

o D.C. Current notes the political risk to BP from an angry Washington seeking to appease voters over the oil spill, the bill could be much higher than the current estimate of $10B.

o Economic Beat says 'Gambling with Other People's Money' is a mini-book on the financial crisis worth reading, it is available for free online.

o Technology Trader argues that both Microsoft (MSFT) and Apple (AAPL) belong in your portfolio, Apple is the ultimate tech growth company while Microsoft is a great value stock.

o Plugged In is positive on NetApp (NTAP) saying its results may mean that corporations want best of breed storage solutions and not one-stop shopping for all tech.

· Changes in the latest IBD 100 List: Added: DGIT, CAAS, AAPL, WPZ, TPX, VIT, CXO, WYNN, TSCO, CTSH, PVH, JOSB, JCG, SWKS, PAY, WHR, VMW, FFG, LXK, PNRA, HSNI, XRTX, BMA, IAG, NUAN, ALB. Deleted: ULTA, WCRX, ABC, ESRX, DISCK, RMD, FDO, ANN, ROST, SLH, AGP, FSRV, LSTZA, FMCN, BPI, XEC, IMAX, EVVV, HITK, CREE, VCI, EZPW, NCMI, INFA, CAKE, BBBY.

· TRANSPORTS

Business will drive strong demand for summer air travel

Because of expanding world trade and the return of business confidence, travelers this summer can expect to see full airplanes and high fares, according to the International Air Transport Association. Commercial travelers and tourists will find themselves fighting for seats because many flights were canceled during the recession, industry analysts said. The New York Times (free registration) (31 May.)

Drydocks World negotiates for $1.7 billion debt restructuring

Drydocks World, a manufacturer of oil rigs and ships, said it is talking with lenders about restructuring $1.7 billion in debt that matures in November 2011. The company is owned by Dubai World, but its debt wasn't included in the parent company's debt-settlement negotiations. Maktoob/Reuters (31 May.)

o British Airways PLC (BAY.LN) and Unite, the union representing cabin crew, Tuesday will return to the negotiating table

§ (Dow Jones)--British Airways PLC's (BAY.LN) cabin crew Sunday kicked off another five days of strikes after talks between the airline and Unite union negotiators broke down last Friday without a deal being reached.

§ Union Warns Of More Strikes This Summer At British Airways

o Ryanair Opens Up 7.4% In London After Earnings, Dividend News

o Chemring Shares Open Down 2.3% After US Deal Hits Snag

§ Chemring Re-Examines ADG Acquisition After US Probe Widens

§ Chemring in a statement said its board wouldn't proceed with the $59 million acquisition of U.S.-listed Allied Defense Group Inc. (ADG) on the terms agreed and was reviewing its options.

o 30,000 Quit Facebook In Protest – AFP

o Shipping Rates Draw Official Scrutiny – WSJ

§ A U.S. regulator and the European Union's competition watchdog are monitoring the world's top container shipping lines for any evidence of price fixing

§ The scrutiny comes as the prices shipping lines charge have kept rising even as the industry's supply of new ships has continued to increase sharply.

§ The shipping lines, including industry leader AP Moeller-Maersk AS, deny they are operating a cartel.

§ The Federal Maritime Commission in the U.S., where carriers enjoy broad antitrust immunity, has opened a "fact finding" investigation into shipping rates. It is due to submit an interim report on June 15 and a final report on July 31.

o Airbus' A380 to be in profit by 2015 -- Handelsblatt citing interview with CEO

o BABWF British Airways CEO Willie Walsh offers to go to Manchester to resume strike talks - FT

· INDUSTRIALS

o Boeing Beats Airbus With Plane Orders From Russian State Firm (Dow Jones)--Boeing Co. (BA) is set to get orders for midrange, narrow-body planes from Russian Technologies, a state-owned firm that owns part of carrier OAO Aeroflot (AFLT.RS), the Russian company said in a statement late Monday.

o Container shipping linesare being monitored by a U.S. regulator and the EU's competition watchdog for any evidence of price fixing. WSJ

o FLEX Flextronics to build 10K-staff power-supply production complex in Ganzhou, Jiangxi, China - South China Morning Post

o BWY BWAY Holding holder ValueAct has sold entire remaining stake -- 13D

· HEALTHCARE

o CBMX CombiMatrix instructs bankers to stop work on identification annd pursuit of potential purchasers of company or its assets

o COV Covidien to hold conference call at 08:00 ET ($42.39)

§ No reason or agenda is given. 800-299-7098 (US), +1-617-801-9715 (international), access code 56418613, or http://investor.covidien.com.

o LIFE Life Technologies amends credit agreement; provides for a $500M revolver

o MDT: WSJ: Medtronic Discloses Payments Made To US Doctors

o DNA Sanoma sells Welho to DNA for €200M

o AMGN Amgen looking to buy things - FT

o PFE Pfizer sells local IP of RespiSure, its swine-flu vaccine, to Harbin Pharmaceuticals - FT

o GE Cysview (hexaminolevulinate HCl) approved by the FDA for cystoscopic detection of papillary bladder cancer

o SNTS Santarus enters distribution and supply agreement with Prasco for generic Zegerid

o SHPGY Shire receives Paragraph IV letter from Zydus Pharmaceuticals regarding filing of ANDA for generic LIALDA

o HEB Hemispherx Biopharma enters sales agreement with Maxim Group under which may offer up to 32M shares of common stock

o IRIS IRIS International holder Gamco discloses a 5.33% stake in a 13D filing; up from 4.08% disclosed on 31-Mar

o JNJ 4 more children's medicines made at Johnson & Johnson plant are recalled in precautionary measure -- WSJ

Energy

o BP BP says 'Top Kill' attempts have failed to stop leak, will try new approach -- NY Times

o BP BP and government officials say Gulf leak could continue until August -- Washington Post

o ABB ABB Limited, Helsinging Energia, Nokia Siemens Networks to develop, build low-emission smart power grid in Helsinki - wires

o RDSA expected to bid for Royal Dutch Shell's European LPG unit 1-Jun - FT

o US House Votes To More Than Quadruple Per-Barrel Oil Tax – DJ

o The U.S. House of Representatives on Friday voted to more than quadruple a tax on the oil industry that finances a federal oil-spill trust fund, setting the stage for greater funding amid focus on an oil spill in the Gulf of Mexico

o The tax would increase to 34 cents per barrel from 8 cents currently under the measure, which was included in a broader bill to extend jobless benefits and provide temporary tax breaks. The broader bill cleared the House on Friday by 215-204. The Oil Spill Liability Trust Fund is a source of funding for oil-spill cleanups

o The U.S. Senate will take up the measure when it returns after the Memorial Day recess. Little opposition to the per-barrel tax increase suggests that the measure has a good chance of passing

o BP Gulf of Mexico oil spill is providing further impetus for a U.K. pension fund suit against the company that came out of a previous environmental disaster in Alaska, The Observer reports Sunday citing comments from the fund's lawyers.

· WSJ(6/1) Oil Trade Creates Boom In Storage Market

o A global scramble for oil-storage facilities is boosting profitability and the share prices of both storage operators and the companies that build new capacity.

· India's Suzlon Energy 4Q Swings To Loss, COO Quits

· VLO Valero Energy, Aruba agree to resolve tax issues on refinery - Reuters (

· Despite concerns scientists will back the continued use of dispersants in Gulf of Mexico oil spill – WSJ

o http://online.wsj.com/article/SB20001424052748703406604575278662019860160

Tech/media/ telecom sectors

· Conferences: A pair of technology conferences kick off on opposite sides of the Pacific this week as tech companies grapple with issues ranging from Internet privacy and regulatory concerns to the effects of a sputtering global economy that could slow down electronics spending- WSJ

· NTAP, - barrons pos

· The All Things Digital conference will be held June 1-3

· The Computex electronics trade show will be held June 1-5

· AAPL: Two Months, Two Million iPads sold. Outdoing its iconic iPhone launch - All Things digital

· AAPL: DoJ's probe into Apple expanding beyond music- AppleInsider

· AAPL, Foxconn: Apple rumored to begin paying Foxconn employees direct wages- Engadget

· Foxconn: Fire strikes Shenzhen plant (no one was hurt and the company should not see any impact to its capacity or shipments) - Digitimes

· AAPL, GOOG: fight is expected over future of TV- LATimes

· http://www.latimes.com/business/la-fi-apple-tv-20100529,0,5439277.story

· GOOG: said to be moving away from Windows internally, Mac and Linux systems on tap instead (blames China hacking incident)- Engadget

· GOOG: to suggest compromise to European data authorities this week – FT

· http://www.ft.com/cms/s/0/82f3d320-6d15-11df-921a-00144feab49a.html

· GOOG: Google's YouTube has a plan to keeping people watching- NYT

· http://www.nytimes.com/2010/05/30/business/30digi.html?ref=todayspaper

· GOOG: Federal judge is the latest to order Google to turn over data collected from WiFi networks- NY Post

· NVDA, GOOG: Nvidia backs Google Android for tablets- Techworld

· http://news.techworld.com/mobile-wireless/3225252/nvidia-backs-google-android-for-tablets/

· Facebook: Google Crowns Facebook King Of Internet Visits with the release of web traffic data- DJ

· MSFT: A report says Microsoft's search would replace Google as the default option on the iPhone.- CNET

· 4G wireless: It's fast, but outstripped by hype- AP

· http://hosted.ap.org/dynamic/stories/U/US_TEC_4G_HYPE?SITE=OKOKL&SECTION=HOME&TEMPLATE=DEFAULT

· RSH Radioshack bids in- NYPOST

· http://www.nypost.com/p/news/business/radioshack_bids_in_NwMQ7jeaqQZauIYV06xrMN

· Hynix to buy $437 mln China unit stake from Numonyx- Reuters

· Hynix: to raise 2010 spending by 33% as chip demand increases- FT

· http://link.ft.com/r/19JYUU/ZBAC2S/007S7/3OXOAI/A7WU20/SN/h

· Hitachi to pursue M&A, focus investments- Reuters

· Hitachi fell 3.5 percent after saying that business had been affected by the European debt crisis- FT

· Telefonica threatens to push PT bosses out- Diario Economico

· Lenovo's parent eyes HK list in 5-7 years- South China Morning Post

· INTC: Unveils Chips for Tablets- WSJ

· INTC: Plans Supercomputer Chips- WSJ

· Supercomputers: China duels U.S. on supercomputer speed list- CNET

· http://news.cnet.com/8301-1001_3-20006399-92.html?part=rss&subj=news&tag=2547-1_3-0-20

· Online Gaming: 105 million users of web games in China in April- CNNIC

· Semis: April global semiconductor sales $23.6B, +2.2% m/m and +50.4% y/y- SIA

· Semis: Global chip sales up for fourth straight quarter in 1Q10- iSuppli

· Solar: Solar module makers shocked by solar cell price hike- Digitimes

· Computex 2010: Tablet PCs, e-book readers and 3D products are the spotlights- Digitimes

· http://www.digitimes.com/news/a20100531PD219.html

· Components: Passive component demand to remain strong in 3Q10- Digitimes

· Asustek joins tablet PC race; launches app store- Reuters

· AMZN: Working On Thinner, Faster Kindle for August- Silicon Valley Insider

· Movies: Summer Movie Sales Hit Rough Patch- WSJ

· http://online.wsj.com/article/SB20001424052748703406604575278651932698986.html

· FIS: "Heard on the Street" comments on FIS' share repurchase plan. According to analysts, the repurchase may increase FIS earnings per share- WSJ

· Advertising Publicis CEO Says Ad Market Rebound Continues - DJ

o French advertising company Publicis Groupe could finish 2010 with 3% organic revenue growth on the year if the current improvement in advertising markets continues

o "There are good chances that we will be able to maintain first-quarter figures throughout the year," he said.

o Publicis is the world's third-largest advertising company by revenue

· Advertising: Networks seek upfront uptick on ad gain$- NYPOST

· http://www.nypost.com/p/news/business/networks_seek_upfront_uptick_on_JX9itK9X4gGFyVFjggTSKP

· Cable wars loom- NYPOST Both TWC Time Warner Cable and CVC Cablevision are facing the expiration of agreements to carry some of TV's most popular channels, setting the stage for another round of public battles

· http://www.nypost.com/p/news/business/cable_wars_loom_X4qcUDW8mlPzTOraNvAvjP?CMP=OTC-rss&FEEDNAME#ixzz0pb6ZexRX

Miners/ steel sectors etc

· AA Alcoa, United Steelworkers extend contract-negotiation deadline

o The current contract was set to expire at 01:00 and has been extended by 11 hours. A union spokesman says the union will make a statement on what the company calls its "last, best, and final offer" after 09:00. 5,400 employees at ten factories are covered by the contract in question.

· Rudd ‘Fully Committed’ to 40% Australia Resource Tax - BBG

o Australia’s government is committed to its planned additional tax on natural resource companies and the 40 percent rate is “right” because firms aren’t paying a fair amount, Prime Minister Kevin Rudd said

o “We do not expect to land an agreement with the mining industry any time soon,” Rudd told reporters in Canberra today.

o “The government remains fully committed” to the tax and “is not surprised that it is meeting fierce resistance.”

· Miners want more iron ore price rises – FT

o Global miners BHP Billiton, Rio Tinto and Vale will demand further price increases for steelmaking commodities iron ore and coking coal, as strong Chinese demand and supply disruptions keep the market tight

o http://link.ft.com/r/YIQXNN/GKRQ29/324F4/S30NEL/5CZR54/E4/h

· China appears to be eating into some of its commodities reserves, a potentially worrying trend for commodities producers and investors. WSJ

· FT reported the top three biggest miners - BHP, Rio Tinto, and Vale - would move ahead with price hikes as part of the new quarterly schemes. Iron ore prices were said to go up 30-35% and coking coal to rise 10-15%. A separate story from Estado also said VAle would increase iron ore prices by about 35% beginning in July.

· Major Japanese steelmakers have accepted a 13% hike in the price of coking coal to be supplied by British-Australian resources giant BHP Billiton Ltd. (BHP) in the July-September quarter from the price for the April-June period, industry sources said Monday, the Kyodo News reported.

o The July-September price of iron ore produced in Australia is also expected to go up by more than 30% from the April-June quarter to around $160 per ton

· Analysts are turning gloomy on Europe's steel industry due to economic problems and a slowdown in buying from big customers. WSJ

o The world's steel mills are ramping up production so quickly that prices in some markets are expected to fall 5% or more in June, and inventories aregrowing

o Mills in China, the biggest driver of global steel prices, and Eastern Europe are churning out record amounts of steel. The surging output comes amid signs that the world's economies may not be on a strong upswing, prompting concern that supply will outpace demand and restrain prices just as they were beginning to rise.

· BHP Billiton: Berth To Be Closed From July 7 To Aug 10

· JFE Agrees to 12.5% Coking Coal Price Gain With BHP - BBG

· Cliffs Natural Resources (NYSE: CLF) (Paris: CLF) today announced that its wholly-owned subsidiary 7557558 Canada Inc. has commenced a formal offer (the "Offer) for the common shares ("Common Shares") of Spider Resources Inc. ("Spider") (TSXV: SPQ) at a price of Cdn.$0.13 in cash per CommonShare. The Offer expires July 6, 2010 at 5:00 p.m. (Eastern Time) unless extended or withdrawn

· Inflation: ThyssenKrupp CEO Warns On Bubble In International Raw Materials Markets

o Magazine Web site: www.spiegel.de

· Bloomberg) -- The planned initial public offering by Coal India Ltd., the world’s largest producer, may be delayed by at least two months to September, according to two people with direct knowledge of the sale.

· MUSA Standard & Poor's Ratings Services raised its speculative-grade rating on Metals USA Holdings Corp. (MUSA) up a notch, saying growth in demand has boosted the metals-service center's sales volume and pricing.

· CLF Cliffs Natural Resources commences formal offer for Spider Resources

· RPM RPM subsidiaries move to permanently resolve Bondex asbestos liability; conference call: Tuesday, June 1 at 9 ET: 866.730.5762 or 857.350.1586.

· AA.US Alcoa facing Russian competition probe -- Bloomberg

· MT ArcelorMittal planning to expand into power generation in India -- DNA India

· Miners raising prices for Q3 - FT

· VALE Vale SA to increase iron ore prices by 35% starting in July -- Reuters

· KRO Kronos Worldwide announces price increases for all titanium dioxide products sold in Europe

· FRD Friedman Industries increases quarterly dividend by 300.0% to $0.04 from $0.01

· CXDC China XD Plastics Co approves $2.9M investment

Autos sector:

· AUTOS

· HMC Some Honda Motor employees in China return to work on promise of 24% rise in starting pay - South China Morning Post

· Renault in talks with Nissan and other potential partners on future production at its factory in Sandouville

· F Changan Ford Mazda to recall 236,643 Focus vehicles, says China government - wires

· HMC Honda Motor to keep Chinese factories shut through 31-May - Nikkei

· GM Canada To Make Announcement At St. Catharines Plant At 11 AM Tuesday

· German Steering Committee Against State Aid For Opel – Germany's government steering committee is unanimously against the idea of providing aid for restructuring General Motors Co.'s German unit Adam Opel GmbH, the daily Handelsblatt reports

· Ford WSJ(5/29) Ford Expects Recovery To Continue

o Ford Motor Co.'s sales analyst on Friday said the U.S. auto industry will continue its current pace and finish May on track for an annual sales rate of slightly more than 11 million new cars and trucks.

· Daimler WSJ(5/29) Mercedes Delivers Bullish Forecast

o Daimler AG, buoyed by rising sales in China and a weakening euro, said 2010 operating earnings at its Mercedes luxury-car division would reach the high end of its full-year outlook and announced that the unit expected to achieve a 10% profit margin in the second half of 2012.

· Inflation: Mahindra 4Q Net Rises 36%; To Increase Vehicle Prices - DJ

o India's biggest maker of sport-utility vehicles

o Saturday posted a higher-than-expected 36% rise in its fiscal fourth-quarter net profit due to strong sales of utility vehicles and farm equipment

o said it will raise prices in the current quarter because of higher raw-material costs.

· Japanese press said domestic production by Toyota could fall 14% m/m in October to about 12K vehicles on end of govt subsidies for auto sector – TTN

· Honda appears to have put the worker strikes at its Chinese plants in rearview mirror, with most of the workers accepting an over 20% wage hike offered by the company - TTN

· Honda Says 'Some Progress' In Talks With China Strikers - AFP

· Subaru Fuji Heavy Industries Ltd., the maker of Subaru-brand cars, may offer vehicles in emerging markets through its partnership with Toyota Motor Corp., a company executive said Monday – WSJ

· China Car Sales Growth Slows on ‘Diminishing Wealth’- BBG

o China’s monthly passenger-car sales growth slowed in May as falling stock prices eroded wealth and consumer prices rose in the world’s largest automobile market

o Demand for cars, sport-utility vehicles and multipurpose vehicles rose 25 percent from a year earlier to 885,800 last month, the China Automotive Technology & Research Center said in an e-mailed statement today. That compares with 34 percent growth in April, according to the center.

· Global marque still eludes the Chinese - FT

o As the balance of power in the car industry shifts to the east, motor manufacturers are watching closely for the emergence of a globally competitive Chinese car brand

o http://link.ft.com/r/LVA6WW/0GZVNR/GEFOF/1848RS/A7W1YB/KI/h

Financials:

· Five US Banks Closed By Regulators - DJ

o State and federal regulators closed five banks in Florida, California and Nevada, bringing the nationwide total of failed institutions so far this year to 78, with 13 in Florida, six in California and two in Nevada.

· BOFL EverBank Acquires Banking Operations of Bank of Florida ( Houston Chronicle )

· BreakingViews likes most banks at current prices - Reuters

o Many are profitable and look well capitalized, and loan losses are going down. But with the recent sell-off, JPMorgan Chase (JPM) and other heavyweights are at or below book value. Lower loan-loss provisions could result in Bank of America (BAC)'s nearly doubling its share price. PNC (PNC) may only rise 10-35%, and Regions Financial (RF) and SunTrust (STI), which aren't profitable, seem to be restructuring plays. But a doubling of their share prices is still possible. The column notes that results are not guaranteed, and a double-dip recession means most bets would be off.

o http://www.nytimes.com/2010/06/01/business/01views.html?ref=todayspaper

· LCH.Clearnet to offer US option for US-based swaps customers - FT

o CEO Roger Liddell tells the FT of the plan, for which he does not provide a timetable, in an interview. The company is battling International Derivatives Clearing Corp (NDAQ) and CME Group (CME) for "client" swap-clearing business.

· CM, BK CIBC Mellon puts transfer business on the block - Globe and Mail

· AXA National Australia Bank nearing agreement to allow AXA deal to proceed -- SMH

· NDAQ Nasdaq OMX Group completes Nord Pool

· RBS Three banks left in battle for Royal Bank of Scotland branches - Daily Mail

· HBC Chairman of HSBC Holdings says will review pay and bonus policies -- London Independent

· TAYC Taylor Capital completes previously announced capital transaction

· CYN City National Bank acquires banking operations of Sun West Bank of Nevada in purchase and assumption ag TCBK Tri Counties Bank acquires assets and deposits of Granite Community Bank, Granite Bay, California, from the FDIC

· BUSE First Busey files $175M mixed shelf

· GNV GSC Investment reports Q4 EPS

· FITB Fifth Third elects William Issac non-executive chairman effective immediately

· Credit cards: States join the fight against proposed limits to credit card fees

o State governments have become an unlikely ally of the banking industry in a fight against putting limits on the fees that credit and debit card issuers can charge to retailers

o Treasurers from at least eight states are considering sending a letter to lawmakers this week over concerns that proposed limits on the fees card issuers charge for processing purchases could endanger state programs that use prepaid cards to dispense crucial benefits such as unemployment insurance

o http://www.washingtonpost.com/wp-dyn/content/article/2010/05/31/AR2010053103275.html?wpisrc=nl_cuzhead

· WSJ(6/1) A Surprising Climb By Credit Suisse

o The financial crisis upended the world of mergers-and-acquisitions advice.But few might have expected that the Wall Street arm of Credit Suisse Group would end up near the top of the heap.

o The firm has shot up to the second spot from sixth in global M&A rankings this year, right behind M&A titan Goldman Sachs Group Inc. The Swiss bank has advised on $211 billion of announced deals since January, including four of the year's largest deals

o Credit Suisse bankers said they are feeling optimistic about staying near the top for the rest of 2010, as clients search out more-ambitious cross-border deals.

· Economist: Banks Exaggerating Effect Of Possible Regulations -FT

o Banks are exaggerating the impact of regulations they may face in coming years, according to Stephen Cecchetti, chief economic advisor to the Bank for International Settlements

o "Doomsday scenarios" from the banks were based on "the maximum impact of the maximum change with the minimum behavioral change," Cecchetti said

· China has begun approving a series of multibillion-dollar fund raisings by banks, though market conditions are worsening. More lenders are lining up. WSJ

· MS: WSJ(5/29) Morgan Stanley Gives Mack Bump In Salary

· MS: Morgan Stanley To Hire Bankers, Lays Off Support Staff - DJ

o Morgan Stanley (MS) plans to hire more than 150 private bankers and 35 professionals for its capital markets desks to work with financial advisers in its branches

o The investment bank also laid off hundreds of employees within Morgan Stanley Smith Barney and reorganized its complex structure as part of its integration with Citigroup Inc.'s (C) legacy Smith Barney brokerage.

· MA: WSJ(5/29) Banga To Be MasterCard's Protector

o Ever since he joined MasterCard Inc. last August as president and chief operating officer, Ajay Banga has been the company's cheerleader, shaking up its low-key corporate culture with hugs and fistbumps in the hallways.

o But as he prepares to take over as chief executive on July 1, Mr. Banga's role has switched to protector. He is defending the second-largest credit- and debit-card processor against lawmakers who are taking aim at the industry, including the 357 million U.S. pieces of plastic that bear MasterCard's name.

· AIG: Prudential PLC continues discussions to lower the price of its deal to buy AIG's largest Asian life-insurance unit to as low as $30 billion, people familiar with the matter tell The Wall Street Journal.

· Citigroup Qatar is looking into taking a stake in Citigroup , the country's prime minister said in comments carried Sunday by Qatari daily Al Sharq.

· European banks: Ecb Warns Write-Downs Could Reach $239 Billion – WSJ

o In the latest indication that European banks are in ill health, the European Central Bank warned late Monday that euro-zone banks face 195 billion euros ($239.26 billion) in write-downs this year and the next due to an economic outlook that remained "clouded by uncertainty."

o The ECB news, part of its semiannual financial-stability report, comes on the heels of a campaign by governments and central banks to ease sovereign-debt problems in southern Europe.

· European banks: WSJ(6/1) US To Push Europe On Disclosing Stress Tests The U.S. intends to urge Europe to disclose publicly the results of bank stress tests as a way to calm jitters over the health of the Continent's financial system, U.S. officials said.

· Standard Chartered PLC (STAN.LN) has priced its Indian Depositary Receipt offering at INR104 per IDR, enabling it to raise about INR24.9 billion ($530 million) from the issue, the bank said Sunday in a statement. The bank's offering was covered 2.2 times when its books closed Friday. DJ

· HSBC is to launch a formal review of its executive pay policies following increasing shareholder agitation over the awards given to senior directors, the Financial Times in London reported Saturday, citing Guy Jubb, head of corporate governance at Standard Life, one of the largest shareholders in HSBC.

· The Swiss government failed to take swift action to prevent a credit and tax crisis that endangered the survival of UBS (+0.71%) in 2008 and 2009, a key parliamentary report says, calling on financial regulator FINMA to find out to what extent UBS executivesknew of the US tax violations carried out at their bank. In other news pertaining to the bank, UBS expects the number of its client advisers to rise in 2H10, indicating the end of client money outflows, head of wealth management Juerg Zeltner told the Saturday edition of Finanz & Wirtschaft.

· SANTANDER (-0.77%) and National Australia Bank are though to the next round of bidding for the RBS branches that are up for sale, but BBVA (-1.52%) has been asked to improve its offer, Reuters reports.

· WSJ: Spanish Savings Banks Bow To Inevitable Deals

o In a tumultuous seven days, 12 of Spain's 45 savings banks have begun merger talks and a 13th has been rescued by the central bank.

o The troubled sector, which had long resisted government pressure to merge, now is bowing to the inevitable, hastened by the Bank of Spain's willingness to take over ailing lenders and by new rules it has proposed that would require all Spanish banks to speed up the recognition of losses from bad loans.

· HURN Huron Consulting to take Q2 charge of approx $4.8M as part of legal settlement in case brought by Gray & Associates -- SEC filing

· CYN City National expects acquisition of Sun West Bank to be accretive to EPS in 2010

· Barclays PLC (BARC.LN) is looking to sell half its French life insurance business, a stake that is valued at around EUR65 million, La Tribune newspaper reports Tuesday.

· ECB Noyer: Dependence On Rating Agencies 'Absolutely Unsatisfactory' - DJ

o European Central Bank policymaker Christian Noyer lambasted credit rating agencies Tuesday, saying central banks were too dependent on the companies' faulty judgments.

o The dependence on rating agencies is "absolutely unsatisfactory," Noyer, a member of the ECB's Governing Council, told a roundtable discussion at a Bank of Korea conference in Seoul.

· Nomura Holdings Inc., Japan’s biggest securities firm, more than tripled pay to top managers last fiscal year as it returned to profit from a record loss, according to a financial report sent to shareholders. BBG

Real Estate sector

· MICA releases Apr statistical data

o Mortgage Insurance Companies of America ("MICA") released its monthly statistical report for Apr with member companies reporting a total of $811,830M in primary insurance in force for the month vs $828,619.8M in Mar

o Dollar Volume: The dollar volume of primary new insurance written on newly originated conventional mortgage loans totaled $4,803.9M in Apr vs $4,509.1M in Mar

o Certificates Issued: MICA’s members reported that 23,608 borrowers used private mortgage insurance to buy or refinance a home in Apr vs 22,153 in Mar

o Applications: The number of private mortgage insurance applications received in Apr by MICA’s members totaled 29,948 vs 28,720 in Mar

o Defaults and Cures: MICA’s members reported 60,656 defaults and 66,170 cures in Apr vs 63,126 defaults and 77,909 cures in Mar

o The statistics in this month’s report include data from the following MICA member companies: Genworth Mortgage Insurance Corporation (subsidiary of GNW), Mortgage Guaranty Insurance Corporation (MTG), PMI Mortgage Insurance (PMI), Radian Guaranty (RDN), Republic Mortgage Insurance company (subsidiary of ORI) and United Guaranty Corporation.

· S&P Reports Europe's House Prices May Not Have Stopped Sagging

· NYC: WSJ(6/1) Durst, Related In WTC Bid

o Two well-respected but very different New York developers are going head to head for the right to buy into One World Trade Center, the 1,776-foot-tall office tower that will define the rebuilding of Ground Zero.

o Six of the country's biggest developers submitted bids in the competition launched in January by One World Trade's current builder, the Port Authority of New York and New Jersey. But when Boston Properties Inc., led by Daily News publisher Mortimer Zuckerman, dropped out of the bidding last week, only two finalists remained.

o In one corner, the family-run Durst Organization, which has focused on apartment and office projects in Midtown for nearly a century, most recently completing the Bank of America Tower at One Bryant Park.

o In the other, Related Cos., an international real-estate developer that counts Goldman Sachs Group Inc. and the Kuwait Investment Authority as investors and is best known in New York for building Time Warner Center at Columbus Circle.

o Picking the winner is up to the board of the Port Authority, which is building One World Trade Center -- formerly known as the Freedom Tower -- but is seeking a private-sector partner for managing and marketing the building. Durst or Related would invest at least $100 million under the Port Authority's guidelines.

o The board is expected to meet with the two finalists in the next two weeks, and come to a decision by June 22, according to Port Authority Chairman Anthony Coscia.

· NYC: WSJ(6/1) Developer Tests East Village, Chelsea - Atlantic Development Group

o A New York developer is about to test the strength of the rebound in the rental apartment market by simultaneously opening luxury rental-buildings in the East Village and Chelsea.

o Atlantic Development Group, which owns or manages 48 rental buildings in the city, plans to open next month 2 Cooper, at East Fourth Street near the Bowery. The 15-story, amenity-rich building is charging the highest rents ever in this rapidly gentrifying neighborhood, brokers say. Three-bedroom apartments run as high as $20,000 per month.

o At the same time Atlantic is launching Port 10, at 10th Avenue and West 28^th Street, near the High Line. The 13-floor building, which offers a 24-hour concierge service, doorman and fitness center, hopes to attract recent college grads that have traditionally flocked to cheaper apartments in Murray Hill or the Upper East Side. One-bedrooms start at $3,000 per month.

· Finra Steps Up Probe of Nonlisted REIT Sales Amid Complaints - BBG

o Regulators are examining brokers who sell unlisted REITs, which have raised $59 billion since 2000, as investors such as the Wendorfs complain they weren’t properly informed of the risks. The Financial Industry Regulatory Authority has stepped up its scrutiny by opening formal investigations into “marketing, advertising, disclosure, suitability analyses and more,” according to an e-mailed statement.

· Russians boost top London house prices

o Demand from Russian buyers has helped push the prices of prime central London houses close to peak levels even as those of less expensive homes in the UK appear to be weakening

o http://link.ft.com/r/LVA6WW/0GZVNR/GEFOF/1848RS/NSNA1Z/KI/h

· U.S. Loan Guarantees Proposed For Home Building, Despite Glut - DJ

o Home builders, despite near-record inventories of unsold homes, are pushing for a new $15 billion federal program to unlock credit for more home building They complain that banks have shunned such loans even where the proposed projects are sound and located in parts of the country that weren't overbuilt during the housing boom

o "There may be an overhang of homes in some markets, but some markets are experiencing a shortfall," National Association of Home Builders President and CEO Jerry Howard said. "There's no credit out there for people to build viable projects."

o Economists are skeptical.

o "The program could risk the stability in housing prices," said Thomas Lawler, a housing economist based in Leesburg, Va. He said the slow pace of housing construction is one of the few bright spots that, along with the improving job market, would help absorb the excess supply and boost home prices.The number of vacant homes is still about 1.5 million higher than

o normal, according to Lawler.

· BofA Talking To Investors About Selling Loans It Made To Foxtons -FT

o Bank of America Corp. (BAC) is talking with investors about selling loans it made to the real estate company Foxtons, The Financial Times reports Friday.

o The FT says Foxtons borrowed GBP260 million from BofA and Mizuho Financial Group (MFG) in 2007, as part of a GBP360 million buyout by BC Partners. The loan increased to GBP300 million after the company exercised its right to roll over some interest payments rather than pay them in cash. The FT quotes sources who say Mizuho isn't selling its share of the debt.

o Full story at:

o http://www.ft.com/cms/s/0/9c9d7068-6a92-11df-b282-00144feab49a.html

· REITS

o NHI National Health Investors files mixed shelf of indeterminate amount

Consumer sector:

· SKS WSJ(6/1) Heard On The St: Weak Euro May Not Boost Saks Appeal

· RSH Initial bids for RadioShack are in - NY Post

· SBUX Starbucks to enter South Africa

· WMT Wal-Mart's Sam's Club is customizing bargains for individual members

· DF Dean Foods thought to have put Rachel's Organic on the block - Guardian

· PETM WSJ is longer term positive on PetSmart

· GAMING LODGING & LEISURE

o TFDI The Film Dept files post-effective amendment; to offer 5M shares at $6 per share through Merriman and Girard; the new information is the size and the range, which were each reduced from prior 5.5M shares in a $10-12 per share range.

o MTN Vail Resorts acquires Mountain News Corp

From our EU/London desk

· Oils

· BP (-13%). Stock falls as 'Top-Kill' procedure fails to stem Gulf leak. Company now moving into a containment phase as relief wells are drilled.

· Metals and Miners

· Voestalpine (-2.1%). 4Q figures come out ahead of analyst expectations, but a cut in dividend and well as a less confident outlook weighs on the stock.

· Utilities

· GDF Suez (-1.9%). Company have won a deal worth $1.17bn to build two new power stations in Oman

· MOELLER MAERSK CEO says confident sector on path to recovery

· ALMIRALL sees FY10 results lower

· CLARIANT announces price hikes in emulsion business

· BHP BILLITON agrees on price with Japanese steelmakers

· PRUDENTIAL: AIG will not consider revision to deal

· WHITBREAD denies cash call reports – S&P

· ST IVES GROUP sees FY results ahead of expectations

TODAY’S EVENTS

CONFERENCES

Tuesday June 1:

o All Things Ditigal Conference (June 1-3)

o Adam Smith Conferences: Transport Infrastructure Conference - Jun 01, 2010 - Jun 03, 2010

o Bolsas y Mercados Españoles (BME) Foro MedCap

· CODEF.PK

o Credit Suisse Group Conference

· HOLN.S

o Computex Tapai Information Tech show

o D.A. Davidson & Co. Technology Forum - Jun 01, 2010 - Jun 02, 2010

· LAVA , MENT

o EBD Group EuroMedtech Conference - Jun 01, 2010 - Jun 02, 2010

o HSBC Luxury Conference

· ADDDF , BUL.MI

o National Securities Corporation Annual Stem Cell Investor & Executive Networking Conference Event

· 2:00 ASTM

· STEM

o Natural Gas Conversion Board's Novel Gas Conversion Symposium - May 30, 2010 - Jun 03, 2010

o Red Herring, Inc. North America Conference - Jun 01, 2010 - Jun 03, 2010

o The CWC Group Rio Gas Forum - May 31, 2010 - Jun 02, 2010

o UBS Business Services Conference - Jun 01, 2010

· ITRK.L

o WBR TradeTech India Conference - Jun 01, 2010

COMPANY MEETINGS/OTHER DAILY EVENTS

· Tuesday June 1:

o Shareholder Meetings

§ CTSH, ADG, CHSI, TRAD, CIA, PCS, BBX, FSLR, GXDX, CALD, SCIL

o President Barack Obama meets leaders from Israel and Peru.

o The hurricane season begins

o Apple CEO Steve Jobs is among tech titans at The Wall Street Journal's All Things Digital Conference.

o Auto makers report May sales, which are generally expected to rise- Barron’s

ECONOMICS

· Tuesday June 1:

o 0945 Dow Jones Econ Sentiment Index

o 1000 Construction Spending

o 1000 ISM Mfg Index

o 1030 Dallas Fed Mfg Outlook Survey

o 1700 ABC/Washington Post Consumer Confidence Index

EARNINGS

o Materials

· Friday June 4: HWKN, KMGB

o Industrials/Homebuilders

· Tuesday June 1: CCLTF

o Consumer/Retail/Education

· Tuesday June 1: BRID

o Tech/Telecom

· Tuesday June 1: GAME, SNDA, MDVX

o Healthcare

· Tuesday June 1: COO, OCLS, TCM

o Media

· Tuesday June 1: LGF

INVESTMENT BANKING WRAP

M&A

· BP a takeover target?- FTA

o amid rising costs of the containment effort and an intensifying backlash — from investors, the US government, environmentalists and, increasingly, from the Gulf of Mexico states – come growing mutterings that BP itself might be a takeover target.

o Indeed, the oil giant is beginning to look cheap — and vulnerable

o http://ftalphaville.ft.com/blog/2010/06/01/248181/bp-a-takeover-target/

· AIG dn 2% tues….Prudential Shares Up 4.8% As AIG Rejects Revised AIA Offer

· Prudential Reviews AIA Deal As AIG Rejects New Bid

o Analysts said the deal appears to be over after Prudential said it is considering its position following AIG's rejected of a proposal to slash the value of the deal to $30.375 billion

o AIG could pursue an initial public offering for AIA, which was considered before the Prudential deal, or it may keep the unit if the deal falls through

· Prudential Demands Lower Price For AIG Asia Arm- DJ

o Prudential PLC (PUK) is demanding that American International Group Inc (AIG) lower a $35.5 billion price tag for its Asian life-insurance business to ease shareholder concerns, as talks continue this weekend to rescue the takeover

· Regulatory Requirements On Prudential's AIA Buy Would Hurt Dividends - CLSA

o Prudential is better off on its own than adhering to solvency requirements imposed by U.K. regulators that will hurt dividends for its investors, independent brokerage CLSA Asia-Pacific Markets said in a note Monday

· US Ambassador Encourages Qatar Investment In C Citigroup- DJ

o S. Ambassador to Qatar Joseph Evan Lebaron said Sunday that Washington would welcome investment from the Persian Gulf state into Citigroup

o "We encourage this kind of foreign investment," Lebaron said here when asked about reports of Qatar's interest in acquiring a stake in the U.S. bank.

· RSH Radioshack bids in- NYPOST

o An auction of RadioShack is heating up fast, with big private-equity firms including BX Blackstone Group squaring off against at least one potential corporate acquirer

o An initial round of bids was completed last week, and Blackstone is a leading participant, according to sources familiar with the matter. Kohlberg Kravis Roberts & Co. is seen as a likely rival bidder, with private-equity shops Bain Capital and TPG also likely in the mix.

o http://www.nypost.com/p/news/business/radioshack_bids_in_NwMQ7jeaqQZauIYV06xrMN?CMP=OTC-rss&FEEDNAME=#ixzz0paloujQo

· NAB and AXA extend takeover talks- Reuters

o National Australia Bank (NAB.AX), AXA SA (AXA.AX) and takeover target AXA Asia Pacific (AXA.AX) have extended their $11.5 billion acquisition agreement to July 15, giving NAB time to overcome regulatory hurdles to close the five-month saga

o http://www.reuters.com/article/idUSTRE64U4T520100601

· Credit Suisse's Surprising M&A Climb- WSJ

o The financial crisis upended the world of mergers-and-acquisitions advice. But few might have expected that the Wall Street arm of CS Group would end up near the top of the heap.

o http://online.wsj.com/article/SB10001424052748703957604575272542483786142.html?mod=rss_Deals_and_Deal_Makers

· EU opens in-depth probe into Unilever, SLE Sara Lee deal- Reuters

o The European Commission said on Tuesday it had opened an in-depth investigation into the $1.3 billion bid by Anglo-Dutch consumer goods giant Unilever's (ULVR.L) for Sara Lee Corp's (SLE.N) personal care brands

o http://www.reuters.com/article/idUSBRQ00987320100601

· Reliance Media to form JV with CBS Corp- Economic Times

o The companies have reached an agreement on the joint venture and an announcement is expected this week, the newspaper said, citing a person familiar with the development. Officials at Reliance Media and CBS could not immediately be reached for comment

o http://www.reuters.com/article/idUSSGE64U02020100531

· Egypt's OT expects clarity on MTN talks within days- Reuters

o "The ongoing negotiations around the acquisition by South Africa's MTN of some of Orascom Telecom's African units will be determined within a week," the Egyptian daily al-Mal reported

o http://www.reuters.com/article/idUSTRE64T12X20100530

· MTN Vail Resorts buys portal operator Mountain News- Reuters

o Vail Resorts Inc (MTN.N) acquired privately held Mountain News Corp, which operates the popular snow sports portal OnTheSnow.com.

o http://www.reuters.com/article/idUSSGE64R0EY20100528

· U.S. DoJ questions ORCL Oracle's PFWD Phase Forward buy- Reuters

o The U.S. government has asked for more information on Oracle Corp's (ORCL.O) $685 million purchase of rival specialty software maker Phase Forward Inc (PFWD.O), extending an antitrust review to give the deal closer scrutiny.

o http://www.reuters.com/article/idUSN2812104720100528

· Battle on for Healthscope, after 2 more takeover offers- Reuters

o private-equity bidding war broke out for Healthscope on Monday as Australia's 2^nd largest hospital owner received two more takeover approaches, both valuing it at A$1.84b ($1.56b).

o Buyout firm Kohlberg Kravis Roberts & Co was one of the new bidders, according to two sources familiar with the situation. One of the sources said KKR was bidding alone at this stage

o http://www.reuters.com/article/idUSSGE64U00N20100531

· CVC in talks to join KKR bid for Healthscope- Reuters

o A private equity bidding war for Healthscope erupted on Monday when KKR and another unnamed firm -- reported by Australian media as U.S-based Tenet Healthcare Corp (THC.N) -- made two separate offers, both valuing Healthscope at A$1.84 billion ($1.54 billion).

o http://www.reuters.com/article/idUSSGE65001C20100601

· PFE Pfizer sells China swine vaccine unit to Harbin Pharma- Reuters

o Pfizer Inc (PFE.N), the world's biggest drugmaker, is selling its swine vaccine business in China to Harbin Pharmaceutical Group for $50 million

o A spokeswoman from Pfizer's Singapore office confirmed the divestment of its China swine vaccine business to Harbin Pharmaceutical but gave no details on the value of the deal or further comments.

o http://www.reuters.com/article/idUSTOE64U04L20100531

· Ritchie, OnGate May Bid For Newsweek- BBG

o Thane Richie, the chief executive of Ritchie Capital Management LLC, said he is thinking about bidding for Newsweek magazine

o OpenGate Capital LLC, a private-equity firm that owns TV Guide, is also interested in acquiring the news magazine

o http://www.bloomberg.com/apps/news?pid=20601087&sid=ahwzL57KVY10&pos=4

· Japan's IIJ says to buy part of T AT&T's Japan ops- Reuters

o Internet access service provider Internet Initiative Japan (3774.T) said it would buy AT&T Inc's (T.N) Japan network outsourcing service business for 9.17 billion yen ($100.7 million)

· Brazil's VALE Vale to sell stake in Oman pellet plant- Reuters

o Brazilian mining giant Vale on Saturday said it has agreed to sell a 30 percent stake in an iron pellet plant in Oman with 9 million tonne annual output to the Oman Oil Company (OOC) for $125 million.

o http://www.reuters.com/article/idUSN2922867120100529

· Hynix to buy $437 mln China unit stake from Numonyx- Reuters

o The deal is to buy out Numonyx's entire stake in a Chinese production plant, majority owned by Hynix, following Micron Technology Inc's (MU.O) acquisition of Numonyx. The transaction is expected to take about three months to close, pending the Chinese government's approval

o http://www.reuters.com/article/idUSSEL00310720100530

· RDS Shell has buyer interest for Montreal refinery- Reuters

o Shell, which has operated the refinery for 76 years, put the Montreal East plant up for sale last year, saying it did not fit into its long-term strategy. It opted in January to close the plant after a seven-month search for a buyer came up dry

o http://www.reuters.com/article/idUSN3121260120100601

· Bidders line up for RDS Shell LPG assets- FT

o Brazil's Ultrapar (UGPA4.SA) is set to submit an offer for Royal Dutch Shell's (RDSa.L) European liquefied petroleum gas (LPG) arm alongside a string of private equity bidders

o http://www.reuters.com/article/idUSTRE64T2CF20100530

· Hitachi to pursue M&A, focus investments- Reuters

o Hitachi Japan's largest electronics maker, said it would pursue acquisitions and focus spending on a group of key businesses, seeking to more than double its profit over the next three years

o Hitachi, a sprawling conglomerate of 900 group firms, has been trying to narrow its focus to give it a better chance of competing globally with more profitable rivals such as Germany's Siemens (SIEGn.DE) and General Electric Co (GE.N).

o http://www.reuters.com/article/idUSTOE64U02720100531

· Telefonica threatens to push PT bosses out- Diario Economico

o Spain's Telefonica (TEF.MC) is considering a proposal to seek a change of management at Portugal Telecom (PT) (PTC.LS) if the Portuguese company does not agree to sell its stake in Brazilian joint venture Vivo

o http://www.reuters.com/article/idUSLDE64U0LD20100531

· Centerbridge Snares Extended Stay- WSJ

o group led by Centerbridge Partners LP prevailed in an 18-hour marathon auction to take Extended Stay Inc. out of bankruptcy protection, offering nearly $4 billion to clinch the purchase of the distressed hotel chain

o The investor consortium, which includes Paulson & Co. and BX Blackstone Group, put up $3.93 billion for Extended Stay, topping a rival $3.88 billion bid from a group led by Starwood Capital Group

o http://online.wsj.com/article/SB10001424052748704596504575272051736257916.html

· Geothermal developer Ram Power plans to buy SRA Sierra- Reuters

o Ram Power Corp (RPG.TO) plans to acquire tiny Sierra Geothermal Power (SRA.V), the two geothermal-power companies said on Monday, in a deal that continues the consolidation trend in this money-hungry segment of the green energy sector.

o http://www.reuters.com/article/idUSN319984120100531

· NZ's Pyne Gould Corp in talks to create new bank- Reuters

o New Zealand investment and finance firm Pyne Gould Corporation (PGC.NZ) said on Tuesday it is in merger talks with two other savings firms to form a retail bank.

o The bank would be listed on New Zealand's stock exchange with assets of about NZ$2.2 billion ($1.5 billion), and focus on providing banking services to rural customers and small businesses.

o http://www.reuters.com/article/idUSSGE64U0I320100531

· CKXE confirms takeover bid from American Idol creator- Reuters

o CKX Inc (CKXE.O), which owns the rights to the American Idol shows, said it received a takeover offer from an investor group led by Simon Fuller, creator of the televised pop contest.

o http://www.reuters.com/article/idUSSGE64R0DO20100528

· SSE does not plan to buy major stake in EDF networks- Reuters

o Scottish & Southern Energy Plc said it does not plan to acquire a major stake in the UK electricity distribution networks owned by French utility EDF that would require raising equity

o SSE, the second-largest supplier of energy in the UK, added that it was in talks that could result in it taking a small interest in the networks

o http://www.reuters.com/article/idUSTRE6500VN20100601

· Parkway up on $835 million bid- Reuters

o Parkway Holdings shares jumped 25 percent after Malaysian sovereign fund Khazanah offered $835 million for control of Singapore's biggest private healthcare group, leaving India's Fortis Healthcare (FOHE.BO) to make the next move in a potential takeover battle

o http://www.reuters.com/article/idUSTRE64U0FH20100531

· CLF Cliffs Natural Resources Commences Formal Offer for Spider Resources- BBG

· Santander, NAB progress in RBS branch sale- Reuters

o Santander (SAN.MC) and National Australia Bank (NAB.AX) are through to the next round of bidding for 300 branches being sold by Royal Bank of Scotland (RBS.L), pulling ahead of rival suitor BBVA

o http://www.reuters.com/article/idUSTRE64T16220100530

· CIBC Mellon puts transfer business on block- Globe & Mail

o CIBC Mellon has put its transfer agent business on the block and rival Computershare Inc. is viewed as the leading bidder

o http://www.theglobeandmail.com/globe-investor/cibc-mellon-puts-transfer-business-on-block/article1586938

· Eurotunnel buys GB Railfreight for £30m- FT

o The company that runs the Channel Tunnel will today take a significant step forward in its efforts to boost cross-Channel rail freight with the acquisition of the UK's third-largest operator.

o http://www.ft.com/cms/s/0/298c93bc-6d15-11df-921a-00144feab49a.html

· SABMiller Unlikely to Buy Foster’s Beer Assets, Bernstein Says- BBG

o “It very unlikely that SABMiller will get dragged into a bidding war” if another brewer is willing to pay about $10 billion for Foster’s beer assets

o Low growth in Australia, where Foster’s has the biggest beer market share, 49 percent, and limited opportunities outside the country make a deal less likely

· Avaya To Sell Its 59% AGC Networks Stake To Essar Group- DJ

o Under the offer, the Essar Group affiliate will offer to buy at least 20% of the voting capital of AGC Networks. The process is expected to take between 3 and 5 months to complete

· Nissan-Renault Group Submits Offer for Ssangyong- BBG

o Pyeongtaek, South Korea-based Ssangyong, which entered bankruptcy protection in February 2009, offers buyers access to Asian and Russian markets, sale advisers Samjong KPMG Advisory Inc. and Macquarie Group Inc. said in a document sent to investors

o The advisers said May 28 that seven parties expressed interest in a controlling stake, reported by MoneyToday to be worth at least 700 billion won ($572 million).

· Magna Still Hopes For Karmann Deal Despite Antitrust Veto- DJ

o Magna International Inc. (MGA) still hopes to be able to buy a majority in the convertible roof systems unit of auto parts supplier Wilhelm Karmann GmbH

o He declined to provide details, but signaled there could be other ways than putting the Karmann unit under the Magna roof

$ RAISING

IPOs

· Where Have All The IPOs Gone? DJ

o In two of the last three weeks, only two IPOs priced.

o Over the next few weeks, banks expect to price only three new issues per week

o In March and April, four to six deals priced each week.

o it could be long period of fewer and lower-quality IPOs, market watchers say.

· Canada IPO market luring action, tech cos- Reuters

o More than a few Canadian companies are ready to go public, though only a handful - some gutsy tech start-ups with heavy backing -- are likely to brave the recent market turbulence and take the final step.

o Over the past weeks, initial public stock offerings by Canadian companies have not fared so well, raising less cash than expected in some cases and dropping below their IPO price soon after trading began in others

o http://www.reuters.com/article/idUSN3126627420100531

· Coal India Said to Delay Nation’s Largest Offering- BBG

o The planned initial public offering by Coal India Ltd., the world’s largest producer, may be delayed by at least two months to September, according to two people with direct knowledge of the sale.

o Coal India intended to sell shares by July or the first week of August

· Ply Gem files for up to $300 mln IPO- Reuters

o The North Carolina-based company told the U.S. Securities and Exchange Commission in a preliminary prospectus that J.P. Morgan Securities, Goldman Sachs, Credit Suisse, UBS Securities and Deutsche Bank were underwriting the IPO.

o http://www.reuters.com/article/idUSSGE64R0EZ20100528

· Ocado appoints five more banks to run IPO- Reuters

o The banks - Barclays (BARC.L), Lloyds Banking Group (LLOY.L), HSBC (HSBA.L), Numis and Jefferies - will work alongside Goldman Sachs (GS.N), UBS (UBSN.VX) and JP Morgan Cazenove, who have already been lined up to handle Ocado's listing

o http://www.reuters.com/article/idUSTRE64T13D20100530

· Bank of Shanghai to issue 1.2 billion shares- China Business News

o The bank has not yet submitted its listing application to the banking regulator, the China Business News said, meaning that the timing and many other details of the potential IPO are still uncertain

o http://www.reuters.com/article/idUSTRE64U04Z20100531

· Mideast sovereign funds eye China's AgBank IPO- China Business News

o Several Middle Eastern sovereign wealth funds are holding talks with the Agricultural Bank of China ABC.UL about investing in its IPO in Shanghai and Hong Kong this year

o The newspaper also said an institutional investor from the United Arab Emirates was holding talks, but it did not name the other sovereign wealth funds involved in the discussions

o http://www.reuters.com/article/idUSTRE64U00V20100531

· Lenovo's parent eyes HK list- South China Morning Post

o Legend Holdings, parent of the world's No.4 PC maker Lenovo Group (0992.HK), plans to seek a Hong Kong listing in the next five to seven years

o Legend, also a major shareholder of Digital China Holdings, aims a listing in the city in a bid to raise sufficient funds for its diversified businesses. It also plans to list it property unit Raycom Real Estate in the mainland

o http://www.reuters.com/article/idUSTRE64U0GS20100531

· Tripwire Files For IPO, Hopes To Raise Up To $86 Million- DJ

o Tripwire Inc., a provider of IT security and compliance-automation software, has filed a registration statement with the Securities and Exchange Commission for a proposed initial public offering of its common stock

· China wind power group (GoldWind) in $1.2 billion IPO- Reuters

o The offering will test the appetite for renewable energy firms in a market heavy with property and financial companies. The Hong Kong stock exchange said earlier this year it would mine mainland Chinese and international markets to keep its listing momentum.

o http://www.reuters.com/article/idUSTRE64U18F20100531

· Bilfinger close to finalizing Australia IPO- Reuters

o German construction group Bilfinger Berger (GBFG.DE) is close to finalizing plans for the $1.2 billion float of its Australian arm and could start marketing the issue within two weeks

o A final decision was still in the hands of the vendors but could come within days and a prospectus was expected to be lodged in the next two weeks, one source said

o http://www.reuters.com/article/idUSTRE65011420100601

PRICINGS

o Initial Offerings

o NRE Nobao Renewable Energy 18m share IPO expected to price 6/03/10 via UBS and Citi: Price Talk $8-10

o WLS Welsh Property Trust 17.5m share IPO expected to price 6/03/10 via UBS and JPM: Price Talk $19-21

o Secondary Offerings

o No secondary pricings currently expected next week

NEWS

· Chinese Regulator Approves Big Fund Raisings- WSJ

o China's government has started approving a series of multibillion-dollar fund raisings by its banks despite souring market conditions—even as more domestic lenders line up to tap investors for much-needed capital

o The approvals come as even more lenders put forth capital-raising plans—adding to concerns that there may more demand for funds than investors can supply

o http://online.wsj.com/article/SB10001424052748703957604575272112730474720.html

· Texas Rangers lenders sue to force bankruptcy- Reuters

o The involuntary bankruptcy petitions, filed in Fort Worth against Rangers Equity Holdings LP and Rangers Equity Holdings GP by four hedge funds, comes days after the team put itself voluntarily into bankruptcy to ease a proposed $575 million sale to a group led by team president and Hall of Fame pitcher Nolan Ryan

o http://www.reuters.com/article/idUSN2919671920100529

· GM: Germany's CDU,CSU To Hold Conference At Opel HQ Jun 28- DJ

o Germany's Christian Democrats and Christian Socialists will hold a conference at the headquarters of Adam Opel GmbH in Ruesselsheim June 28, signaling the two government parties are ready to approve state aid for Opel

***All eco data from Bloomberg and DJ

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