Last Call: The Future Looks Bright For JPM
"The opportunities for JPMorgan Chase over the next 20 years will equal — or maybe even surpass — those of the last 20 years."
- Jamie Dimon, JPMorgan Chase CEO in his annual letter to shareholders. Below, the future may be looking bright for JPM, but the present isn't looking too bad for Dimon either.
Market Headlines (via Robert Hum)
Dow, S&P have 2nd worst day of 2012
Nasdaq has worst day of year
Highest number of new 52-week lows at NYSE and Nasdaq this year
Gold touches lowest level since January 10
CBOE Gold Index (.GOX) hits 2-year low
Crude oil hits 1.5-month low
What People Are Talking About Tonight
JPMORGAN'S DIMON: MORTGAGE WOES STILL HIT EARNINGS/CNBC.com — Margo Beller: "Last year was a good one for JPMorgan Chase earnings but it would've been even better had the bank not been hit with mortgage-related losses, CEO Jamie Dimon told investors in his annual letter, released Wednesday. "Your company earned a record $19 billion in 2011, up 9 percent from the record earnings of $17.4 billion in 2010," the JPMorgan executive wrote."
JPMORGAN'S DIMON GETS $23 MILLION FOR 2011 AND BRAGGING RIGHTS/Fortune — Stephen Gandel: "Jamie Dimon is still Wall Street's top dog. JPMorgan Chase disclosed on Wednesday afternoon that it paid its CEO $23 million in 2011. That was the same as last year, but it handily made Dimon, for the second year in a row, the best paid CEO in banking in 2011 — a year in which many other top financial executives saw their pay cut. Dimon's pay for instance, was more than double rival Goldman Sachs CEO Lloyd Blankfein, whose pay likely dropped to $9 million for 2011, down nearly $4 million from the year before. The only CEO who was even close to Dimon was Wells Fargo's John Stumpf, who got a total pay package of just under $20 million."
MORGAN STANLEY TRIES TO STAVE OFF RATINGS CUT/FT — Tracy Alloway: “James Gorman, Morgan Stanley’s chief executive, has been in discussions with Moody’s in an attempt to maintain its credit ratings and stave off a downgrade that could diminish the bank’s ability to buy the rest of Citigroup brokerage Smith Barney, according to people familiar with the matter. Morgan Stanley owns 51 percent of Smith Barney, and holds an option, which kicks in at the end of May, to increase its stake to 65 percent. Taking full control of the brokerage is a centrepiece of Mr Gorman’s strategy. Morgan Stanley declined to comment.”
SHELL WEIGHS NATURAL GAS-TO-DIESEL PROCESSING FACILITY FOR LOUISIANA/WSJ — Russell Gold: “Royal Dutch Shell is considering building a giant plant in Louisiana that would convert natural gas into diesel fuel, several people familiar with the company's plans said. The plant, which could cost more than $10 billion, would be similar in size to Shell's Pearl gas-to-liquids facility in the Mideast nation of Qatar, the people said. Pearl, which went into operation last June, turns natural gas into enough diesel to fill more than 160,000 cars a day.”
DELTA EYEING CONOCOPHILLIPS REFINERY FOR MORE THAN $100 MILLION/CNBC.com — Kate Kelly & Phil LeBeau: “Delta Air Lines is in advanced talks to purchase an East Coast oil refinery for more than $100 million, according to people familiar with the matter. The refinery, a ConocoPhillips facility in Trainer, Penn., has the capacity to refine 185,000 barrels of oil per day, according to industry officials. It is one of two refineries in the Philadelphia vicinity that are currently for sale. Delta’s potential purchase of the Conoco plant, which the people familiar with the matter say has yet to be finalized, would be a first such deal for an airline.”
DELTA’S PUZZLING INTEREST IN BUYING AN OIL REFINERY/NY Times — Jad Mouwad: “Running an airline is a tough business. But running an oil refinery can be even more punishing. So refining experts were puzzled this week when Delta Air Lines emerged as a possible buyer of a refinery near Philadelphia that ConocoPhillips is trying to sell. “It’s a little like a rabbi buying a church,” said Tom Kloza, the publisher and chief oil analyst at the Oil Price Information Service, which first reported Delta’s possible interest on Monday. “It’s so counterintuitive.”
FIRST BROKEN BY DAVID FABER: SALE OF AIG-LINKED BONDS WEIGHED/WSJ — Serena Ng & Al Yoon: “The Federal Reserve Bank of New York said it will explore sales of some of its remaining securities from the bailout of American International Group , signaling a move toward exiting from one of its most controversial financial rescues as markets strengthen.”
FACEBOOK’S FINAL PRIVATE TRADE VALUES COMPANY AT $109 BILLION/CNBC.com — Kayla Tausche & Jesse Bergman: "Facebook’s highly-anticipated final private market transaction has priced on SecondMarket at a price of $43.50 (a record for the private market exchange), according to people familiar with the trade. That final trade values Facebook at roughly $109 billion. The transaction, the last of its kind on the secondary markets due to a private market freeze on Facebook shares, will likely be an important psychological level for prospective investors and bankers as the company eyes a price range ahead of its May offering.”
PAULSON HEDGE FUNDS MIXED IN FIRST QUARTER/Reuters — Svea Herbst-Bayliss: "Closely tracked hedge fund manager John Paulson's oldest fund rose and his Enhanced fund scored double-digit gains in the first quarter but his Advantage funds remained in the red, a source familiar with the numbers said on Wednesday. The firm's oldest portfolio, Paulson Partners, gained 6.6 percent during the quarter while the Paulson Enhanced fund jumped 13.3 percent. Both funds' returns were fueled by the Express Scripts' Medco acquisition and gains at Delphi Automotive ."
FALCONE MULLS VOLUNTARY BANKRUPTCY FOR LIGHTSQUARED/Reuters — Matthew Goldstein: “Hedge fund manager Philip Falcone said in an interview on Wednesday he is "seriously considering" filing a voluntary bankruptcy for LightSquared, the struggling telecom startup in which his Harbinger Capital Partners is the majority owner. Falcone said a bankruptcy is one of several options he is considering as he tries to find a way to salvage the company, which reported a $427 million net loss during the first nine months of 2011, and keep its creditors at bay.”
BRAVO TV ANNOUNCES SILICON VALLEY REALITY SHOW/SF Chronicle — Kathleen Pender: Bravo TV is teaming up with Randi Zuckerberg, sister of Facebook CEO Mark Zuckerberg, on a reality show about Silicon Valley. The cable network, home of the Real Housewives reality franchise, says the new docu-series “captures the intertwining lives of young professionals on the path to becoming Silicon Valley’s next great success stories.” The working title is Silicon Valley. It will begin production in the next couple months and tentatively debut later this year. Bravo is still casting the show. It will include entrepreneurs and dot-com people in their 20s and early 30s, according to the network, which is owned by NBCUniversal.
JUDGE TOSSES HAPPY MEAL LAWSUIT AGAINST MCDONALD'S/Reuters — Dan Levine & Lisa Baertlein: “A San Francisco judge on Wednesday dismissed a lawsuit against McDonald's over the restaurant chain's marketing of its signature Happy Meals, according to court documents. McDonald's was accused of unfairly using toys to lure children into its restaurants. The proposed class-action lawsuit in a California state court sought to stop the company from using free toys to promote its Happy Meals in the Golden State.”
WHICH OF COURSE MAKES MCDONALDS…"PLEASED" (you thought I was going to say "Happy" didn’t you?)
McDonald's Statement: “We are pleased with today's decision by the court to grant our motion to dismiss this case in its entirety. As we have maintained throughout these proceedings, we believe this lawsuit is without merit and detracts from the important issue of children’s health and nutrition. We are proud of our Happy Meals and will vigorously defend our brand, our reputation and our food. We stand on our 30-year track record of providing a fun experience for kids and families at McDonald’s.”
GOOGLE TAKES WRAPS OFF WEB-BASED DIGITAL GLASSES/Reuters — Alexei Oreskovic: "Google is getting into the eyewear business with a pair of thin wraparound shades that puts the company's Web services in your face. The experimental "augmented reality" glasses — from the same team that is developing self-driven cars — can snap photos, initiate videochats and display directions at the sound of a user's voice."
Tomorrow's Movers Tonight (via Robert Hum)
Bed Bath & Beyond — Strong Q4 earnings beat ($1.48 vs. $1.33 est.) on better-than-expected 6.8 percent rise in comps. Q1 guidance for the retailer is conservative, but inline with Street expectations ($0.79-$0.83 vs. $0.82 est.).
Ruby Tuesday — Q3 earnings beat ($0.18 vs. $0.16 est.) despite the casual dining operator’s weaker-than-expected revenues. 2012 guidance is very poor ($0.43-$0.48 vs. $0.56 est.).
Cinemark Holdings — The movie theater operator will be added to the S&P 400 Midcap index after the close on Monday, replacing soon-to-be-acquired NSTAR.
Before the bell: CarMax (9 a.m. CC), Constellation Brands (10:30 a.m. CC)
Thursday on CNBC
Byron Wien, Blackstone Advisory Partners: Squawk Box Guest Host — 7-9 a.m. ET
Oliver "Chip" Brewer, Callaway Golf CEO: 12:30 p.m. ET
Blythe Masters, JP Morgan Chase & Co. Head of Global Commodities: 1:30 .p.m ET
Robert Sands, Constellation Brands, President & CEO: 3:10 p.m. ET
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