Dow lost 2, decliners over advancers 3-2 & NAZ crawled up 1. The MLP index went up 2+ to 448 & the REIT index fell fractionally to 325. Junk bond funds were off slightly & there was selling in Treasuries. Oil & gold hardly budged.
AMJ (Alerian MLP Index tracking fund)
Apple, a Dow stock, got a mixed ruling in its first patent-infringement case against Samsung over mobile phones. The US Court of Appeals
for the Federal Circuit said Samsung infringed on AAPL design patents. But it didn’t violate AAPL trade dress, so
the $930M judgment must be adjusted. The opinion was posted today on the court’s website. The stock rose chump change. If you would like to learn more about AAPL, click on this link:
AMJ (Alerian MLP Index tracking fund)
|CL.NYM||..........Crude Oil Jun 15||...60.11||...0.42||(0.7%)|
|GCK15.CMX||...Gold May 15||...1,228.10||...2.60||(0.2%)|
Greek banks are running short on the collateral they need to stay alive, a crisis that could help force Prime Minister Tsipras’s hand after weeks of brinkmanship with creditors. As deposits flee the financial system, lenders use collateral parked at the Greek central bank to tap more & more emergency liquidity every week. In a worst-case scenario, that lifeline will be maxed out within 3 weeks, pushing banks toward insolvency. European policy makers are losing patience with Tsipras who said as recently as Thurs that he won’t compromise on any of his key demands. He’s planning to force a discussion of Greece at a summit of EU leaders that begins in 3 days, a day after the ECB Governing Council meets in Frankfurt. While talks are centering on whether to give Greece more money, the ECB could decide to raise the stakes as soon as this week if it increases the discount on the collateral Greek banks pledge in exchange for cash under its Emergency Liquidity Assistance program. Such a move might inadvertently prompt a further outflow of bank deposits & pressure Tsipras to choose between doing a deal & putting his country on the road to capital controls. “We are in an endgame,” ECB Executive Board member Yves Mersch said on Sat. “This situation is not tenable.” The arithmetic goes as follows: Greek lenders have so far needed about €80B ($91B) under the ELA program. Banks have enough collateral to stretch that lifeline to about €95B under the terms currently allowed by the ECB. With the central bank raising the ELA by about €2B every week, that could take banks to the end of Jun. A crunch will come if the ECB increases the haircut on Greek collateral to levels not seen since last year. That could be prompted by anything from a complete breakdown in talks to a missed debt payment. A continuation of the current impasse could even be all that’s needed, the official said. An increased haircut would reduce the ELA limit to about €88B. While that gives banks about 4 weeks before hitting the buffers, the leeway is so limited that Greece might need to impose capital controls, limiting transactions such as ATM withdrawals, to conserve the cushion.
Ascena Retail Group, which runs Dressbarn & Lane Bryant women's clothing stores, said it agreed to buy rival Ann Inc, owner of LOFT & Ann Taylor, for $2.15B. Ascena, like Ann, targets women in the 20-40 age group, said it would pay $37.34 in cash & 0.68 of its share for each Ann share. That works out to $47 per share, representing a 21% premium to the closing price for ANN on Fri. Ascena expects the deal to be "significantly accretive" to earnings in the first year after the deal closes & to boost profit by more than 20% after that. "With the addition of the Ann Taylor and LOFT brands, Ascena will become one of North America's largest and most diversified specialty apparel retailers," Ascena CEO David Jaffe said. Ascena expects the deal to close in the H2. The stock jumped 7.95. If you would like to learn more about ANN, click on this link:
ANN INC. (ANN)
There is not a lot happening. A few corp deals are not exciting buyers because of the continued drama about refinancing Greek debt. While that will probably be played out at the last minute, although nobody is quite sure when that will be, odds are growing that the European powers are will NOT extend the Greek bailout. Retail earnings are coming this week which will give some excitement for the stock market.
Dow Jones Industrials