>>> Greece seeking €53.5B in new bailout package

Greece seeking €53.5B in new bailout package, primary GDP surplus of 1% in 2015, 2% in 2016; Vat rate for hotels at 13%; Vat rate for restaurants and catering of 23%; To eliminate Vat tax breaks for islands by end of 2016; to Implement pension reform starting in October; zero deficit clause on pensions will be suspended until Oct 2015; Proposes raising corporate tax rate in 2015 to 28% from 26%; Debt restructuring includes €35B growth package

- (GR) Greece PM Tsipras said to have indicated to the Govt to prepare for a compromise; will bring together Syriza party leaders for a meeting on Friday morning - press
-(GR) Cabinet in Greece gave a majority approval of the proposals but it was not a unanimous decision - Greece press
- (GR) Greece parliamentary members confirm that they intend to provide proposals to the creditors soon
- (GR) Germany Fin Min Schaeuble: Leeway for debt reprofiling is very small

>>> US After Hours Summary: CUDA -16.9%, PTC -9.3%, HELE -5.4%, DOV -4

After Hours Summary: CUDA -16.9%, PTC -9.3%, HELE -5.4%, DOV -4.3%, JRJC -3.2%, PSMT -2.1% following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to news: ISNS +2.7% (announced sale of its Automatic Number Plate Recognition business to TagMaster AB for $4.2 mln in cash), CY +1.7% (Soros Fund Management disclosed 5.32% passive stake in 13G filing), NSPH +0.7% (filed for ~3.51 mln share common stock offering by selling shareholders)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings: CUDA -16.9%, PTC -9.3%, HELE -5.4%, DOV -4.3%, JRJC -3.2%, PSMT -2.1%, VOXX -2.0%, GPS -0.9%

Companies trading lower in after hours in reaction to news: Z -4.4% (announced CFO Chad Cohen will resign effective August 7, 2015), MIK -2.2% (announced offering of 12.5 mln shares of common stock by selling shareholders), RLJE -1.8% (filed for offering of ~31.05 mln shares of common stock issuable upon the exercise of convertible preferred stock and for offering of ~9.31 mln shares of common stock issuable upon the exercise of warrants), SJM -1.7% (announced offering of ~4.92 mln shares of common stock for a selling shareholder), AERI -1.6% (disclosed that Brian Levy, Chief Medical Officer, has left the company, effective July 7, 2015), UAL -0.3% (reported June consolidated traffic increased 1.3% and consolidated capacity increased 2.2% from the prior year)

>>> US Close Dow+0.19% S&P+0.23% Nasdaq+0.26% Russell+0.43%

Closing Market Summary: S&P 500 Settles Below 200-Day Average After Daylong Retreat From Opening High

The major averages registered gains on Thursday, but not before enduring a daylong retreat from their opening highs. The S&P 500 was up more than 1.3% at the start, but narrowed its advance to 0.2% by the closing bell.

Equity indices charged out of the gate after the overnight session featured a rebound in China's Shanghai Composite, which climbed 5.8%. The advance occurred as officials in China continued introducing measures aimed at halting the recent market plunge with reports indicating a special taskforce targeting "hostile short-sellers" will be established by China's Public Security Ministry and China Securities Regulatory Commission.

Elsewhere, optimistic-sounding remarks from top Eurozone officials also contributed to the opening strength as European Council President Donald Tusk said he expects Greece to submit concrete, realistic reform proposals today. Mr. Tusk continued, saying the proposals must be matched by an offer from creditors that focuses on debt sustainability.

The opening spike sent the S&P 500 above its 200-day moving average (2,056), but the index returned below that mark during the afternoon. Cyclical sectors displayed broad strength in the early going, but the top-weighed technology sector (-0.3%) faded from its high during the afternoon, ending among the laggards. In general, large cap names held up well, but the largest stock by market cap—Apple (AAPL 120.07, -2.50)—surrendered 2.0%, contributing to the sector's afternoon pullback. In addition, high-beta chipmakers continued their recent woes with the PHLX Semiconductor Index falling 1.3% to extend this week's decline to 5.7%.

Meanwhile, the remaining cyclical sectors also pulled back from their highs, but they managed to end the day ahead of the broader market. The financial sector (+0.8%) had the best showing, settling in the top half of its trading range. The sector likely drew some strength from higher market rates as Treasuries retreated throughout the day with the 10-yr yield jumping 11 basis points to 2.31%.

Also of note, the industrial sector (+0.4%) finished among the leaders thanks to relative strength among transport stocks. The Dow Jones Transportation Average rose 0.6% to narrow this week's loss to 0.9%. JB Hunt (JBHT 84.02, +1.77) was a standout performer, rallying 2.2% after Longbow upgraded the stock to ‘Buy' from ‘Neutral.'

With the Q2 earnings season about to heat up, investors received the first few reports with Alcoa (AA 10.59, +0.09) climbing 0.9% after reporting a bottom-line miss on better than expected revenue. The company reaffirmed its global aluminum demand growth forecast of 6.0%.

Over on the countercyclical side, the consumer staples sector (+0.1%) ended among the laggards with PepsiCo (PEP 94.59, -1.02) surrendering 1.1% despite beating estimates and raising its earnings growth forecast.

Despite the higher finish, there were plenty of investors seeking downside protection today with the CBOE Volatility Index (VIX 19.91, +0.25) climbing above yesterday's session high.

Today's participation was ahead of average with more than 800 million shares changing hands at the NYSE floor.

Economic data was limited to weekly Initial Claims, which increased to 297,000 for the week ending July 4 from an upwardly revised 282,000 (from 281,000) while the consensus expected a decrease to 276,000. Today's reading represented the highest level since the end of February when claims briefly surpassed 300,000.

The Department of Labor reported that there were no special factors that impacted the latest claims reading, but it is possible that the Independence Day holiday factored into the increase.

Tomorrow, the Wholesale Inventories report for May will be released at 10:00 ET (consensus 0.3%).
  • Nasdaq Composite +3.9% YTD 
  • Russell 2000 +2.4% YTD 
  • S&P 500 -0.4% YTD 
  • Dow Jones Industrial Average -1.5% YTD

WSJ : Porsche on Track to Hit Profit Target

Porsche on Track to Hit Profit Target
Sports-car maker benefiting from strong sales, currency gains

STUTTGART, Germany—German sports car maker Porsche AG expects to meet its 15% pre-tax profit targets this year, said Chief Finance Officer Lutz Meschke.
The Stuttgart-based sports car maker expects a “significant triple-digit million” windfall from currency gains to boost pretax earnings this year, allowing the company to meet its target, Mr. Meschke said in an interview.

“We’ve taken the currency gains in the first half of the year and have continued to record orders at a high level. That’s why I expect that we will have higher profit at the end of the year.”

Mr. Meschke went beyond previous statements about the company’s performance in 2015. Until now, Mr. Meschke has said the company would have to work “damn hard” to achieve a 15% pre-tax return. Now, he expects currency gains and higher sales to allow the company to meet its target.

Though hugely profitable, Porsche’s margins have been hit in recent years, falling from 19% just a few years ago, on higher costs to meet European emissions standards and its expansion into less profitable sport-utility vehicles.

Porsche, which is owned by Volkswagen AG, reports earnings for the first half of the year on July 29.

Mr. Meschke, who is also responsible for the company’s information technology, said Porsche is accelerating development of digital businesses and could make acquisitions of technology startups to acquire expertise or technology.

At the Frankfurt Motor Show in September, Porsche will unveil an updated version of its 911 sports car with new engines and a new communication system. It will pre-install Apple Inc.’s CarPlay in the 911 sports-car upgrade and install CarPlay in all future Porsche models.

“We’ve realized that 80% of Porsche customers are Apple iPhone users,” said Mr. Meschke.

Porsche has no current plans to install Android Auto in its cars, Mr. Meschke said.

So far this year, Porsche new car sales are up 30% to 113,984 vehicles world-wide, driven by strong sales of the 911 and the company’s Cayenne and Macan SUVs. This is the first full year of availability of Macan compact SUV. Last year, Porsche sold 189,949 new cars world-wide.

“We will sell more than 200,000 new cars in 2015,” Mr. Meschke said.

Porsche posted hefty sales gains in the U.S., Europe and China in the first half of the year. But Mr. Meschke warned that conditions in China are changing significantly.

Chinese government pressure on car makers to cut prices and customer preferences for fewer features and less powerful engines are hitting profits. Porsche has felt the pressure on sales of its Panamera sedan. Dealers this year have had to cut Panamera prices in China between 15% and 20%, Mr. Meschke said. Prices for other Porsche models have remained stable.

“Profits in China are clearly declining and will continue to decline in the future,” he said. “These are trends that no one saw coming two years ago. You have to react and so we are developing other markets faster than we had expected to do two or three years ago.”

Porsche is expanding its dealerships in Taiwan and South Korea even though it still expects strong growth in China.

FT : UK watchdog drops case against ‘London whale’

UK watchdog drops case against ‘London whale’

A view of US banking giant JP Morgan's offices in Canary Wharf are pictured in London, on May 11, 2012. US banking giant JPMorgan Chase said Thursday it had lost $2 billion on derivatives since March in what chief executive Jamie Dimon called a "flawed" and "poorly executed" hedging operation. In a unscheduled conference call, Dimon also said the bank could face another $1 billion in losses through the end of June due to market volatility. AFP PHOTO/CARL COURT©AFP
The UK financial watchdog has dropped its investigation of Bruno Iksil, the former JPMorgan trader known as the “London Whale” whose trades led to $6.2bn in losses, clearing him in the three-year probe.
The Financial Conduct Authority’s enforcement division sought to bring a civil action against Mr Iksil for failing to prevent or detect mismarking within JPMorgan’s chief investment office.

But its internal panel of independent experts, the Regulatory Decisions Committee, ruled that the watchdog did not have a strong enough case to proceed.
“We can confirm that the FCA will not be taking any further action,” the authority said.
Mr Iksil, who lives in France, has already avoided criminal charges in the US by striking an immunity deal with prosecutors there in exchange for his co-operation.
His lawyer, Michael Potts, at Byrne and Partners, said: ​​“It is rare for the RDC to dismiss an FCA enforcement case at this very initial stage of the disciplinary process. Mr Iksil has fully co-operated throughout the FCA investigation and will continue to co-operate as a witness in the ongoing criminal and civil proceedings in the USA.”​
Julien Grout, a junior derivatives trader on the desk, and Mr Iksil’s former boss, Javier Martin-Artajo, who was a managing director at the bank, are both being prosecuted in the US for their roles in the affair. They deny wrongdoing. The FCA is not seeking to bring a case against either man.
The only person still being investigated by UK authorities in connection with the 2011 losses is Achilles Macris, who ran the London office of the bank’s chief investment office and oversaw its synthetic credit portfolio team. It was in that division where trades in credit derivatives ultimately led to the trading losses in 2012.
JPMorgan was fined $920m by four US and UK regulators and its management was found to have withheld information from its audit committee, including the fact that it had hired an outside law firm to examine “significant control issues” surrounding the disclosure and valuation of credit derivatives. The bank declined to comment on the FCA decision.
London-based executives in the CIO “deliberately misled” regulators examining the derivatives positions, “deliberately reassuring” officials that they were “simply” adjusting a hedging position while internally admitting to being “in crisis mode” over mounting losses, the regulators found.
In April, a Spanish court rejected the US’s request to extradite Mr Martin-Artajo, who has been charged with wire fraud in connection with the scandal. Spain’s national court in Madrid ruled that US authorities had no jurisdiction over him. He is accused of helping to hide hundreds of millions of dollars in trading losses.
Macris won a challenge against the FCA at the UK Court of Appeal in May. The court found the watchdog had improperly identified him in its report when it fined the New York-based bank £138m as part of the broader settlement.

FT : France rows back on coal export subsidies amid job loss fears

France rows back on coal export subsidies amid job loss fears

Paris is considering watering down a climate change commitment to stop support for companies exporting coal technology amid fears that it might lead to job losses at power company Alstom.
The French government said in November it would “remove all export credits” for coal technology to developing countries. Paris also said it would be pushing at a European level for the broader removal of fossil fuel subsidies.

But in a working paper, seen by the Financial Times, the government has laid out five exemptions under review, citing concerns that the full withdrawal of export credits could cost jobs at Alstom, which employs 750 people providing coal technology to other countries.
The U-turn highlights tension between environmental commitments and safeguarding jobs that countries face in the run-up to a UN-sponsored climate change summit in Paris in December.
Germany said last month it would scrap plans to raise emissions charges for older, coal-fired power stations, bowing to pressure from the industry, which warned that the levy would result in the closure of mines and power plants.
While the number of export credits issued by France for coal technology is low, environmental campaigners say the issue has a symbolic significance as it is the host country for this year’s summit, where the west is pushing emerging countries to accept stricter rules on controlling harmful carbon emissions.
Lucie Pinson, of environmental campaigners Friends of the Earth, said the exemptions being considered would “undermine the credibility and persuasiveness of France in its role as chair of [the summit].”
Paris is also key to talks at the OECD — a group of countries that aims to promote sustainable growth, which has been charged with regulating credit export agencies — about whether to limit their use for coal technology.
The French exemptions — some of which could delay the ban until after 2020 — were laid out in a June 25 memo to the French National Council for Ecological Transition, which includes non-governmental organisations, politicians, and local communities. The final decision is set to be made as early as this month.

In the working paper the government cited the need for France to “continue hosting an important industrial activity,” adding that this business provided not just 750 jobs at Alstom’s plants in Belfort and Massybut supported another 2,000 jobs indirectly and produced exports worth €700m a year.
Alstom said it took “note of the willingness of the French government to set a timetable for the withdrawal of export credits” but stressed that coal was going to continue to be part of the global energy mix for years. Through its technologies, Alstom was helping to bring about “significant improvements in efficiency and reduced CO2 emissions”, for example through carbon capture storage, which can help to “reduce the impact on global warming of electricity production based on coal.”

>>> Greece PM Tsipras said to have indicated to the Govt to prepare for a compro

Greece PM Tsipras said to have indicated to the Govt to prepare for a compromise; will bring together Syriza party leaders for a meeting on Friday morning - press 

- Follow up 1400ET: Subsequent reports indicate the draft proposals do not include direct pension cuts, but could raise pensioner contributions to the health program. Will maintain the 30% discount in VAT for many of the islands but will exclude the big islands that are frequent tourist destinations. VAT for food industry is increased to 23% (matching creditors' demand), but VAT on hotels at 13% would be maintained. 
- Shipping industry, higher income earners, and gambling will also have higher taxes levied against them.