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Research Recap submits:
Credit default swaps on oil and gas companies tightened nearly 3.7% last week, signaling that perhaps some confidence is gradually returning to the energy markets, according to Fitch Ratings. Recent CDS spread tightening, along with a fall in theaverage relative differential, indicates that credit markets have stopped pricing in additional risk for the oil and gas industry for the time being. The equity markets also showed some positive sentiment, as the five-year probability of default index for oil and gas companies fell nearly 3%.Complete Story »

Research Recap submits:
Credit default swaps on oil and gas companies tightened nearly 3.7% last week, signaling that perhaps some confidence is gradually returning to the energy markets, according to Fitch Ratings. Recent CDS spread tightening, along with a fall in theaverage relative differential, indicates that credit markets have stopped pricing in additional risk for the oil and gas industry for the time being. The equity markets also showed some positive sentiment, as the five-year probability of default index for oil and gas companies fell nearly 3%.Complete Story »

Hickey and Walters (Bespoke) submit:
Below is a list of the best performing Russell 1,000 stocks since the July 2nd correction low. As shown, Hewitt Associates (HEW) is up the most with a 40% gain, followed by MBIA (MBI) (26.56%), Anadarko (APC) (24.01%), priceline.com (PCLN) (22.37%), and Marshall & Ilsley (MI) (22.37%). Hewitt and a few other stocks on the list are trading in overbought territory, but most are not. This shows just how oversold stocks were before we got this bounce.click to enlargeComplete Story »

• Saudis eye strategic BP stake. Unnamed Saudi investors are looking to buy a 10-15% stake in BP (BP), according to a Saudi newspaper, and will be sending a delegation to London for direct talks with the company. The report comes as BP CEO Tony Hayward is due to meet investors and oil industry officials in Abu Dhabi, though BP said it is "not preparing an equity offering." Meanwhile, the U.S. Justice Department has asked BP for advance notice of any planned asset sale or deal involving significant cash transfers; BP confirmed that it had received the request, but has not yet agreed or responded. Shares of BP rose 8.7% yesterday after the company ruled out a share issue, and are +2.3% premarket (7:00 ET).
• OECD sees possible unemployment peak. Unemployment in rich nations may have peaked, according to a new OECD report, but those countries need to create another 17M jobs to bring employment back to pre-crisis levels. For the 31 OECD countries as a whole, there are 47M unemployed people, a rate of 8.6%, and the unemployment rate could remain above 8% by the end of 2011. The report also warned governments not to let austerity measures exclude people from the job market.
• Google faces EU antitrust scrutiny. Google (GOOG) is facing antitrust scrutiny in Europe, where regulators are looking "very carefully" at allegations that Google unfairly demotes rivals' sites in search results. There has been some indication that regulators accept Google's argument that the fluid nature of the internet makes it hard to behave as a monopoly, but officials also stressed the "importance of search to a competitive online marketplace." The investigation is still in an early stage.
• BNY Mellon gets JV approval. Bank of New York Mellon (BK) said it has been granted regulatory approval in China to establish a fund management joint venture in the country with Western Securities. BNY Mellon will own 49% of the new company, BNY Mellon Western Fund Management, which will initially manage domestic Chinese securities in a range of local retail fund products.
• KKR to start trading on NYSE. Federal regulators approved Kohlberg Kravis Roberts & Co. to list its shares on the NYSE, marking the end of KKR's three-year campaign for a public listing. According to yesterday's securities filing, co-founders Henry Kravis and George Roberts each own a 13% stake worth a combined $1.65B, as measured by the price of KKR shares trading in Europe. The shares will begin trading on July 15 under the ticker KKR.
• Anadarko triggers circuit breaker. Anadarko Petroleum (APC) was halted for five minutes during yesterday's trading by the NYSE's new circuit breakers. The halt followed a trade of 200 shares for $99,999.9999 each, just a wee bit higher than the stock's prior trade of $39.14. The erroneous trade was canceled, and Anadarko closed +1.5% to $38.64.
• RBS to sell real estate loans. Royal Bank of Scotland is planning to sell up to £3B ($5B) of real estate loans as it continues to shed non-core assets, with further loan sales likely if this one is successful. The loans are part of a portfolio that has been reduced to £194B from £258B, but around 25% of the remaining portfolio consists of hard-to-offload property assets. Premarket: RBS -1.1% (7:00 ET).
• China imposes resource tax. China's resource producers are taking a hit after the country said it plans to impose a tax on coal, oil and gas extraction in western provinces. The move will reduce profits for firms like PetroChina (PTR) and Sinopec (SNP).

Earnings: Wednesday Before Open

• Family Dollar Stores (FDO): FQ3 EPS of $0.77 beats by $0.01. Revenue of $1.9B (+8.4%) in-line. (PR)

Today's Markets

• In Asia, Japan -0.6% to 9280. Hong Kong -1.1% to 19857. China +0.5% to 2421. India -0.8% to 17471.
• In Europe, at midday, London -0.7%. Paris -1.0%. Frankfurt -0.8%.
• Futures: Dow -0.2%. S&P -0.2%. Nasdaq -0.2%. Crude +0.1% to $72.04. Gold -0.6% to $1187.40.

Wednesday's Economic Calendar

• 7:00 MBA Mortgage Applications 7:45 ICSC Retail Store Sales 8:55 Redbook Chain Store Sales 3:30 PM Fed's Kocherlakota: 'Taxing Risk' 7:15 PM Fed's Lacker: Economic Outlook
• Notable earnings before Wednesday's open: FDO

Seeking Alpha's Market Currents team contributed to this post.Complete Story »

Frederic Ruffy submits: SentimentThe end of the second quarter is wrapping up in uninspired fashion Wednesday. After a 269-point tumble yesterday, the Dow Jones Industrial Average opened steady despite another dose of disappointing economic news. ADP reported early Wednesday that the US economy added just 13,000 private sector jobs during the month of June. The number fell well short of economist estimates, which called for an increase of 61,000. In addition, the bad news comes two days before the Labor Department releases its monthly report. Economists expect Friday’s data to show the economy losing 100,000 jobs and the unemployment rate edging up to 9.8 from 9.7 percent. The underlying tone of trading might remain cautious ahead of Friday’s numbers and the three-day Fourth of July weekend. Indeed, with an hour left to trade, the Dow Jones Industrial Average is flat. The CBOE Volatility Index (.VIX) lost 1.63 to 32.50. Trading in the options market was brisk early in the day, but has since slowed to well below normal pace. About 4.7 million calls and 4.3 million puts traded so far. Bullish Flow Mosaic (MOS) is up 45 cents to $39.80 and trying to battle back from a grueling 36.2 percent loss sustained since mid-March. In options action, some traders are taking a longer-term view. One player paid $2.50 for the January 2012 $65 call. 3500X. 13.2K now traded vs. 120 in open interest. The call buying seems ambitious, because the contract is 63.3 percent out-of-the-money and it would require a move to $67.50 just to breakeven at expiration. On the other hand, the contract doesn’t expire for a year and a half and MOS was trading above that (67.5) level as recently as January of 2010.Complete Story »

Kurt Wulff (McDep Associates) submits: Buy recommendations Occidental Petroleum (OXY), Devon Energy (DVN) and EOG Resources (EOG) along with other covered independents Southwestern Energy (SWN), Chesapeake Energy (CHK) and Anadarko Petroleum (APC) have sturdy resource potential enhanced by the technology of horizontal multistage fracturing. DVN appears most undervalued at a McDep Ratio of 0.65 and it is nearly debt-free. It also trades at the lowest cash flow multiple (EV/Ebitda) despite a competitive reserve life. Only EOG stock is in an uptrend currently as compared to its 200-day average. Like the stock market as a whole, long-term oil and gas prices are also in a downtrend, at least for now. Oil price measured by six-year futures at $83 a barrel is close to the 40-week average of $86. Natural gas price measured by six-year futures at $6.01 a million btu is close to the 40-week average of $6.40. We believe the long-term trends are up for patient investors.Complete Story »

David Moenning submits: The BP (BP) accident is far and away the worst disaster to ever befall drilling companies, from both an economic and environmental perspective. Entire industries in the Gulf are on extended hiatus. It goes without saying that after oil leaking continuously into the Gulf for more than two months, natural habitats for fish and other marine life have been ruined. BP, which, prior to the incident was a giant of industry and enjoyed $7 billion revenue streams per quarter, is now on the verge of bankruptcy. Clearly, the circumstances are special. Never before in the history of the deep sea drilling industry have we seen such a fiasco. But as investors, we need to recognize that special circumstances create special opportunities.Now, before you label me a greedy, uncaring self-beneficiary, I must say that I do have extreme sympathy for this environmental disaster. I have sympathies for the locals living near the gulf, their businesses, the animals, even BP to some extent. The reality of it is that investors everywhere recognize that situations like this do not happen every year (or even every 20). Everyone is wondering where we go from here.Complete Story »

• Valeant merges with Biovail. Specialty pharmaceutical companies Valeant Pharmaceuticals International (VRX) and Biovail (BVF) agreed to merge to expand their presence and focus on neurological products, dermatology and generic medicines in Canada and emerging markets. The deal's terms represent a 15% premium for Biovail stockholders, based on the stock's last 10 trading days. Premarket: VRX +0.8% (7:00 ET).
• Corn Products buys National Starch. Corn Products International (CPO) agreed to buy AkzoNobel's (AKZOY.PK) National Starch business for $1.3B in cash. For Corn Products, the deal will create a new sugars-and-starch giant with $5B in revenues, and will be the company's first major deal since its aborted attempt to sell itself two years ago. AkzoNobel plans to use the proceeds "for both selective acquisitions and organic growth."
• BP: Lawsuits, liability caps, and a new pointman. BP (BP) Managing Director Bob Dudley will take over as point man on BP's spill response, ostensibly to let CEO Tony Hayward focus on running the company but more likely because of Hayward's disastrous public relations gaffes, including his attendance at a yachting race over the weekend. Responding to a media report that BP plans to sue Anadarko (APC), a minority partner in the leaking Gulf well, for shirking responsibility for its share of the liabilities, BP said it hasn't yet reached a decision (though Anadarko is said to be considering a counter-suit already). According to a separate media report, BP is apparently preparing to raise $50B from a bond sale, asset sales and from banks to help cover spill costs, which continue to rise along with estimates of the spill's size (costs to date at $2B, and the spill rate as high as 100,000 barrels of oil per day according to BP's worst-case scenario). Ken Feinberg, the independent administrator of BP's newly created $20B fund, said investors should take some comfort from the fund's existence, as it partially limits the company's liability and is "a way for BP to avoid lawsuits in the end." Premarket: BP -3.4% (7:00 ET).
• China pledges yuan flexibility. On Saturday, ahead of this week's G-20 summit, China released a statement pledging to "increase the renminbi’s exchange-rate flexibility" following an improvement in the economy. China didn't set a timeline for the change, and ruled out a one-off revaluation, saying there is no basis for “large-scale appreciation." The announcement should buy China some time, effectively shifting the focus of the G-20 meeting from currency policy to the burgeoning budget deficits of developed nations. Asian stocks climbed the most in seven months in today's trading (see below), on speculation that a more flexible yuan will help boost China's growth, while the yuan rose the most in five years, though the reference rate for the day's trading remained the same as Friday's.
• BASF ready to move on Cognis. Chemical giant BASF (BASFY.PK) is said to be poised to buy German specialty chemicals maker Cognis for at least €3.3B ($4.1B), after Cognis reportedly rejected a higher offer from Lubrizol (LZ) over the weekend. A deal, which is expected to be announced this week, would be BASF's biggest since September 2008, and comes as deal-making in Europe begins to recover from the global slowdown. Cognis is owned by Goldman Sachs (GS) and Permira Advisors.
• Liberty Media to spin off units. Liberty Media (LINTA) plans to spin off two of its units, partly in response to criticism that its structure is too opaque. The units are investment arm Liberty Capital (LCAPA) and pay TV and Hollywood studio unit Liberty Starz (LSTZA), and the goal of the spin-off is to create more transparency and to help the company "better pursue our strategic objectives, including acquisitions using stock."
• China, Australia load up on commercial deals. China and Australia signed commercial deals worth more than $8.8B today. Australian Prime Minister Kevin Rudd noted that as the majority of the deals are in the mining sector, Australia's controversial new mining tax has obviously not deterred investments. "It is important to separate the facts of what's going on from some of the fear that is being pushed by some companies who object to paying a bit more tax," said Rudd.
• JPMorgan in talks on Brazilian fund. JPMorgan (JPM) is said to be in advanced talks to buy Brazilian hedge fund and private equity group Gavea Investimentos. The deal for Gavea could still collapse, but the fact that JPMorgan is pursuing the deal at all signals its confidence that the final financial reform bill won't prevent banks from owning hedge funds. An announcement could come as soon as next month.
• Saudi news helps boost gold. News that Saudi Arabia's central bank is holding nearly twice as much gold as previously thought helped lift the metal to a fresh high of almost $1,265 per troy ounce. Though analysts suggested that an accounting revision is partially responsible for the rise in Saudi Arabia's holdings to 322.9M tons compared to the 143M tons reported in March, the disclosure comes as emerging economies are increasingly adding gold to their reserves and private investors are piling into the metal.
• Barclays execs testify in Lehman suit. Barclays' (BCS) top two executives, John Varley and Bob Diamond, will take the stand today in a lawsuit brought against the British bank by Lehman Brothers (LEHMQ.PK). Lehman claims that Barclays underpaid by at least $11B for its North American brokerage. Lehman is also suing former clearing agent JPMorgan (JPM), as the failed bank tries to recover the $50B-75B of value it claims was lost during its chaotic winddown.
• Friday's failure. A bank closure in Nevada brings this year's total failures to 83 so far. The closure will cost the FDIC's insurance fund an estimated $80.9M.

Today's Markets

• In Asia, Japan +2.4% to 10238. Hong Kong +3.1% to 20912. China +2.9% to 2586. India +1.7% to 17877.
• In Europe, at midday, London +1.1%. Paris +1.6%. Frankfurt +1.5%.
• Futures: Dow +1.3%. S&P +1.5%. Nasdaq +1.5%. Crude +1.75% to $78.53. Gold +0.1% to $1259.50.

Monday's Economic Calendar

• 10:00 Quarterly Retail Trade Report

Seeking Alpha's Market Currents team contributed to this post.Complete Story »

Zacks.com submits:
The federal government’s Energy Information Administration (EIA) reported a slightly lower-than-expected increase in natural gas supplies, reflecting warmer-than-normal temperatures, the deepwater drilling moratorium in the Gulf of Mexico (GoM), and the start of the hurricane season.Stockpiles held in underground storage in the lower 48 states rose by 87 billion cubic feet (Bcf) for the week ended June 11, 2010. The latest build was about 4% higher than the 5-year (2005-2009) average, though it was 23% short of the year-ago injection.Complete Story »

H.W. Daniel submits: In a follow-up to a very recently published article of mine, I felt it only necessary to share some positive thoughts regarding the BP (BP) situation from Bruce Lanni of Nollenberger Capital Partners. Consider the following analysis:

• Total expenses are estimated at $30 billion (approximately $6 billion via the cleanup and roughly $24 billion from punitive and civil claims), well under several estimates of $50-100 billion!

Complete Story »