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Last Call: Ben Bernanke and Star Trek

Photo: Chris Polk | WireImage | Getty Images

Sarek: Speak your mind, Spock.
Spock: That would be unwise.
Sarek: What is necessary is never unwise.

-Star Trek

- Below, instead of going where no man has gone before, Fed Chief Ben Bernanke went where he’s gone many times before: saying the Fed is prepared to do what is necessary but giving little guidance as to what those easing options might be.

Market Musings

  • Disappointing end as financials drag markets lower in final hour of trading
  • S&P 500, Nasdaq close lower, but Dow Industrials manage best 3-day winning streak of the year
  • Dow Industrials, S&P 500 still on pace for best week of the year
  • Dow Utilities Index closes at 3.5-year high

The Word on the Street

NO FED EASING NOW, BUT POSSIBLE IF GROWTH SLOWS: BERNANKE/CNBC – Jeff Cox: “Federal Reserve Chairman Ben Bernanke offered little hope Thursday for anyone looking for more central bank intervention, instead relying on an oft-repeated pledge to step in if necessary. As a result, the stock market, which had been well into its third consecutive strong rally, pared gains as traders weighed where the Fed stands on the economy's late-spring slowdown.”

WHAT BERNANKE IS TRYING TO TELL THE MARKETS: EL-ERIAN/CNBC - By: Mohamed El-Erian: “…He delivered a careful and balanced view of the economy (a gradual healing in the context of a still-muted outlook growth and jobs), re-iterated the improved banking and financial conditions at home (stressing the major additions to bank capital), and referred to the strains in Europe (acknowledging that they act as a drag on the US economy).”

BEST BUY FOUNDER RESIGNS, PUTS LARGE STAKE IN PLAY/Reuters: “Best Buy Co Inc founder and chairman Richard Schulze resigned from the retailer's board on Thursday and said he was exploring options for his 20.1 percent ownership stake, a move seen as a possible precursor of a Schulze-led private takeover.”

AS BEST BUY FOUNDER LEAVES, THOUGHTS OF A LEVERAGED BUYOUT RE-EMERGE/Dealbook – Michael De La Merced: “…It might be a tempting proposition for a potential buyer, like a private equity firm. But at least one analyst doesn’t think such a sale is likely, as potentially attractive as it may be.”

BARNES & NOBLE SAYS E-BOOKS SETTLEMENT HURTS PUBLIC/Reuters – Phil Wahba: “Barnes & Noble Inc has objected to the U.S. government's proposed settlement of its price-fixing lawsuit against top publishers, saying it would harm book sellers and "millions and millions" of book buyers. The top U.S. bookstore chain, which has been battling with Amazon.com Inc in the growing e-books market, said in a complaint filed with the U.S. Justice Department on Thursday that the settlement would lead to "higher overall average e-book and hardback prices and less choice, both in how to obtain books and in what books are available." Barnes & Noble's share price fell 3 percent on Thursday, closing at $15.42.”

FIREWORKS EXPECTED AT CHESAPEAKE ANNUAL MEETING/Reuters – “Chesapeake Energy Corp's annual meeting promises to be raucous, with a vote on executive compensation in the spotlight, but the company's biggest challenge will be convincing investors it is still a good investment despite the turmoil.”

STARBUCKS TO LAUNCH K-CUPS IN CAFES NEXT WEEK/Reuters: "Starbucks Corp says its U.S. stores to start selling K-cups on Tuesday, June 12 Starbucks says K-cup packs have reached 15 percent share of the premium, single-cup coffee market. SBUX was flat on the day. Green Mountain was down almost 1%."

THE BANKS FACING TOUGHER RULES UNDER BASEL III/WSJ Staff: "Banks holding more than $500 million in assets will have to implement tougher capital rules by 2019. The Federal Reserve laid out that requirement with its final rule proposal for implementing the Basel III accords in the U.S. Among the new rules, banks would have to maintain a level of common equity equal to 4.5% of their “risk-weighted assets,” plus an additional 2.5% “capital conservation buffer,” also of common equity. The total 7% common equity cushion compares to current standards of as little as roughly 2%. But the bigger the banks get, the stricter the rules become."

Economic Data

830am et Apr U.S. Trade Deficit

1000am et Apr Wholesale Inventories

Earnings

No significant reports expected.

Key Guests

Julia Coronado, BNP Paribas Chief Economist (620a)

Julian Callow, Barclays Chief European Economist (630a)

Byron Wien, Blackston Advisory Partners Vice Chairman (700a)

Sal Arnuk, Themis Trading Partner (730a)

Joe Saluzzi, Themis Trading (730a)

Manoj Narang, Tradeworx CEO (740a)

Mark Grant, Southwest Securities Managing Director (800a)

William Mack, AREA Property Partners Chairman (815a)

John Taylor, Stanford University (835a), David Dreman, Dreman Value Management Chairman (1000a)

Rep Joe Walsh, R-IL (1120a)

Frank Sennett, Author (1140a)

Richard Repetto, Sandler O'Neill Principal (1230p)

Duncan Niederauer, NYSE Euronext CEO (1230p)

Matthew Ouimet, Cedar Fair CEO (240p)

Howard Dean, Fmr DNC Chairman (700p)

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