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Joseph McCafferty submits:

• Goldman will agree to pay $27M fine to the U.K. Goldman Sachs (GS) is reportedly settling an investigation by Britain’s Financial Services Authority by agreeing to pay a fine of nearly $27M. The British regulatory authority accused the bank of fraud in April, after the SEC filed civil fraud charges for allegedly misleading buyers of complex mortgage-related investments in 2007. Goldman settled the charges in mid-July by agreeing to pay $550M, the largest penalty against a Wall Street firm in the SEC's history. According to reports, Goldman will concede that it made a mistake in regulatory disclosures about trader Fabrice Tourre.
• 7-Eleven makes bid for convenience store chain Casey’s. According to reports, 7-Eleven is behind a $40 per-share bid for convenience store operator Casey’s General Stores (CASY), which would value the company at $2B. Casey’s, which operates stores in the Midwest, rejected several lower offers from Canada’s Alimentaion Couche-Tard (ANCUF). It also said the 7-Eleven bid was too low, but said it was willing to engage in talks for a potential deal.
• BP looks to share blame for the Gulf oil spill. In its highly anticipated report of the Gulf spill, BP (BP) spread the blame around, saying a sequence of failures involving a number of different parties led to the explosion and the oil spill. Investors bought into the deflection onto rig owner Transocean (RIG) and contractor Halliburton (HAL), moving shares up 3.2%, since it boosts the likelihood that BP will wind up sharing the cost of liabilities. Meanwhile, Fitch upgraded its rating on the firm three notches to A, with a Stable outlook, reflecting "an end to the threat of further leaks from the Macondo well" and BP's progress in building liquidity to address potential lawsuits.
• Aussie regulators block NAB’s bid for AXA. Australian competition regulators ruled against National Australia Bank’s (NAUBF.PK) $12B bid for AXA Asia Pacific (AXAPF.PK) for a second time, likely scuttling the bid which would have been the second largest financial deal ever in Australia. The decision clears the way for Australia’s second biggest fund manager, AMP (AMP.AX), to launch a new bid for AXA. After the decision was announced, shares of AXA slid 10%.
• Barry Callebaut inks sweet deal with Kraft. Swiss chocolate supplier Barry Callebaut (BYCBF.PK) signed a deal with Kraft Foods (KFT) to become its key global cocoa and industrial supplier. The agreement is expected to more than double Barry Callebaut's existing business with Kraft Foods, which owns the Cadbury brand. News of the deal sent Barry shares up 8% in trading in Europe.
• U.S. Slips in competitiveness ranking. The U.S. slipped two places to fourth in an annual ranking of business competitiveness by Geneva-based World Economic Forum. The U.S. fell behind Sweden and Singapore due to huge deficits and pessimism about government, the global economic group said in its report. Switzerland kept the top spot for a second year in a row. The rankings are based on economic data and a survey of more than 13,500 business executives.
• Google launches tool to speed up web searches. Google (GOOG) unveiled an accelerated search tool yesterday called Google Instant, which displays results as soon as users begin typing their search request. The shift means Google users will begin to see an ever-evolving set of search results appearing on their computer screens, potentially changing with each additional character typed. The change might affect the many businesses that have been built around placing search ads on Google and helping Web sites figure out how to climb higher in search results to increase revenue.
• SEC stands behind proposed Citigroup settlement. The SEC defended its proposed $75M settlement with Citigroup (C) over the bank’s alleged misconduct as “fair, reasonable, and adequate.” Citigroup had agreed to the payment to settle charges that it failed to disclose subprime exposure to investors in 2007, but a federal judge decline to approve the settlement and asked the SEC for more information. In a court filing, the SEC said the settlement was “in the public interest and should be approved.”
• Sony Pictures to produce animated series based on Marvel characters. Sony Pictures Entertainment (SNE) is partnering with Disney’s (DIS) Marvel Entertainment to produce a series of animated works based on such characters as Iron Man, X-Men, and Blade and will distribute them worldwide. The characters will be animated by Japanese animation studio Madhouse and broadcast by cartoon channel Animax Broadcast Japan, a Sony Pictures unit. The partnership hopes to create new fans and generate programming and DVD sales worldwide.

Earnings: Wednesday After Close

• Shanda Games Ltd. (GAME): Q2 EPS of $0.16 in-line. Revenue of $163.9M (-3.7%) vs. $165.9M. Shares -2.1% AH. (PR)

Today's Markets

• In Asia, Japan +0.82% to 9098.4. Hong Kong +0.37% to 21167. China -1.44% to 2656. India +0.71% to 18799.66.
• In Europe, at midday, London +0.81. Paris +0.60%. Frankfurt +0.47%.
• Futures: Dow +0.33%. S&P +0.34%. Nasdaq +0.39%. Crude +0.54% to $75.07. Gold -0.16% to $1255.50.

Thursday's Economic Calendar

• 8:30 Trade Balance 8:30 Initial Jobless Claims 10:30 EIA Natural Gas Inventory 11:00 EIA Petroleum Inventories 1:00 PM Results of $13B, 30-Bond Auction 4:30 PM Money Supply 4:30 PM Fed Balance Sheet
• Notable earnings after Thursday's close: NSM

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

Felix Salmon submits: There was a reasonably interesting call today between various bloggers and Jason Furman, an economic policy wonk at the White House. The main message was that the Obama administration’s new economic-stimulus proposals were essentially ways of front-loading attempts to create long-term economic growth, and that unemployment would come down as and when that growth arrived. I wasn’t particularly convinced. There’s a colorable case — made today by Brad DeLong — that all of these proposals, coming as they do halfway into Obama’s four-year term in office, are too little too late, compared to the messages that Larry Summers and others were sending at the beginning of 2009.Complete Story »

Kocherlakota didn’t drop any bombshells (as an inflation guy I note that his forecast of 1.5%-2% inflation next year represents almost a doubling from current levels and is higher than the market’s 0.9% implied 2011 inflation rate, but the real question is what happens after that), but the Beige Book was surprisingly downbeat. It declared that Fed banks saw “widespread signs of a deceleration,” with home sales “very low” or “declining” in most districts and “sluggish in general” consumer lending. As I had expected, the markets mostly ignored the Beige Book, and stocks clocked another very low-volume day. However, they racked up gains as investors – I guess – decided that the failure of nations in the periphery of Europe was old news. The S&P gained 0.6% while the 10y Treasury note sold off to 2.65%. (However, the VIX didn’t drop very much even with the stock market back near four-month highs, so there seems to be someone out there who is concerned.) Stories continue to circulate about how European regulators are still finding new documents concerning Greece’s debt. On the other side of Europe, Anglo Irish Bank Corp is to be split into a “good bank” and a “bad bank.”Complete Story »

The Manual of Ideas submits:Jackson Hewitt (JTX) reported results for the first fiscal quarter ended July 31st today, coming in with a lower-than-expected loss in what is a seasonally weak quarter. Jackson Hewitt is the second-largest tax preparer in the U.S. after H&R Block (HRB).It is no secret that Jackson Hewitt is a "distressed equity," as the company's sub-$30 million market cap attests. Reflecting existing investor fears, Jackson Hewitt shares traded down 10% following the quarterly announcement.Complete Story »

ForexChaser submits:The Bank of Canada decided to increase the Overnight Rate by another 0.25%, up to 1%. This is the third consecutive interest rate hike that the BoC operates in a time span of a little more than 3 months.The Bank’s official statement has remained broadly unchanged from July’s rate hike: the global economy is recovering helped by the emerging economies, while the U.S. economy is advancing at a standstill pace. Turning to the Canadian economy, the BoC notes:Complete Story »

Brian Polino submits:Warren Buffett has proclaimed over the years that See’s Candy is one of the best businesses in Berkshire Hathaway’s (BRK.B) portfolio. Over time, See’s has been able to raise the prices on its chocolate every year while continually growing consumer demand. In the same light, the $10.5 billion market-cap confectionary giant, The Hershey Company (HSY), offers the same inflation protection. Hershey’s principal operations and markets are located in the United States. The total percentage of consolidated net sales outside the United States was 14.3%, 14.4% for 2009 and 2008, respectively. Some of the company’s most popular owned brands include Hershey’s, Reese’s, Kisses, Ice Breakers, Breath Savers, and Twizzlers. In addition, Hershey also licenses and sells the following popular brands: KitKat, Jolly Rancher, York, Milk Duds, and Almond Joy. Recently, Hershey’s bottom line has been both declining and highly sporadic, which is fully reflected in their 5-year compound growth rate of negative 5.14% in Net Income. In February 2007, Hershey announced a three-year supply chain transformation program in addition to other realignment charges. Total pre-tax charges amounted to $629.1 million, and the program was essentially complete as of December 31, 2009. Total pre-tax costs per year were approximately $99.1 million, $130 million, and $400 million, for 2009, 2008, and 2007, respectively. In addition to subpar operating results, these one-time charges coupled with the economic recession, amounted to a rough patch for Hershey. However, now earnings per share are increasing year-over-year for the past three years and returning to pre-recession levels. An interesting fact: In 2009, sales to the McLane Company, a subsidiary of Berkshire Hathaway and one of the largest wholesale distributors in the United States, amounted to approximately 27% of Hershey’s total net sales. McLane Company is the primary distributer of the company’s products to Wal-Mart Stores (WMT). By deduction, Wal-Mart is an essential customer of Hershey, and Hershey’s economic success is highly correlated to that of Wal-Mart’s and thus to the consumer. Moreover, the short-term appreciation outlook for their stock price is limited as their now higher P/E already includes a slight premium reflected in the price. However, the longer-term investor may benefit from Hershey’s increased earnings over time and may justify the purchase of the stock at a slight premium. When the American consumer rebounds, so should Hershey. Coupled effective growth restructuring and Hershey’s price increases, the stock could see substantially new highs. The company also maintains a Standard and Poor’s long-term debt rating grade of A, which illuminates the company’s strong earning power and financial structure. The company’s pension fund is a little underfunded with $942 million in assets and $957 million in obligations; however, that appears to be a liability Hershey’s Board has made a priority to change. Consequently, with a P/E of 22, long-term buyers may see respectable potential in Hershey’s stock in the coming decade. Disclosure: The author has no positions in HSY or WMT but is long BRK.B.Complete Story »

Markos Kaminis (Wall St. Greek) submits: We thought this week's mortgage activity would be worth watching, given the uptick in Purchase Activity in the August 27 period (that came on record low mortgage rates). We thought that perhaps we might be finding a rate level where traction could be found for real estate. Well, in retrospect, given the back-to-school skew that childless folks like "The Greek" sometimes forget about (though I was reminded last night by the crowd in Staples (SPLS)), now might not be the least noiseless moment to measure mortgage momentum.In any event, in the period ending September 3, mortgage rates ticked back up a bit from record lows (since 1990). Contracted rates on 30-year and 15-year mortgages averaged 4.50% (from 4.43%) and 4.0% (3.88%), respectively. Perhaps partly due to the minute change, the Mortgage Bankers Association reported weekly mortgage applications lost ground last week. The Market Composite Index shed 1.5%, driven by a 3.1% decrease in the Refinance Index.Complete Story »

Kevin Parker submits: Apple, Inc. (AAPL) is the most widely followed stock in the world. No company has the fans and the following that Apple has for both its products and its stock. Truly, it's an incredible company. As an investor, I tend to be a bit cautious about any company with such a high degree of popularity. It's tough to get stocks that are so incredibly popular at bargain prices or at a point that represents good value (unless of course you bought below $100 a couple years ago amidst the Steve Jobs health rumors and the depths of the bear market). Today, Apple is trading above $260. The easy money has been made. With Apple still paying no dividends, it is hard to justify an entry point at this level.Complete Story »

Benzinga submits: By Jason RaznickThere's a man for all seasons, but is there a market cap for all seasons? The Claymore/AlphaShares China All-Cap ETF (YAO) would lead us to believe the answer is yes. YAO is a curious creation among Chinese ETFs when considering that the iShares/FTSE Xinhua China 25 Index Fund (FXI) is the dominant ETF when it comes to Chinese large-caps and Claymore's own Claymore/AlphaShares China Small-Cap ETF (HAO) has proven to be popular among investors. Not only that, but HAO's performance this year puts it near the top among long, unleveraged China-specific ETFs.Complete Story »

Michael Krause submits: The size of a fund has little to do with the market value of the index it tracks. For example, the Utilities Sector SPDR (XLU) is almost as large as the Technology Sector SPDR (XLK), at $3.9 billion and $4.3 billion in assets, respectively. However, in the S&P 500 the market cap of the Tech sector is more than six times that of the Utilities sector. Rather, it reflects investors’ propensity to play the Utilities sector using ETFs, whereas single stocks and perhaps actively managed mutual funds are the preferred vehicle for Tech sector investing, at least relatively speaking. The same holds true with Emerging Market ETFs, which now have assets exceeding $112 billion by our count versus $71 billion for ETFs tracking developed foreign markets, despite the much larger size of developed markets (Figure 1). While fund size doesn’t say much about the investment merit of the index it tracks, fund flows and short interest may serve as contrary indicators. Rapid changes in fund assets may indicate “hot money” chasing returns, while short interest—that is the percentage of shares outstanding that have been borrowed for short sales—tells us about levels of skepticism (or lack thereof).Over the past three months while U.S. and European markets stumbled, the S&P 500 SPDR (SPY) and iShares EAFE funds (EFA) also saw declines in the number of shares outstanding of 5.5% and 2.7% respectively, while the iShares Emerging Markets fund (EEM) had a rapid increase of 14% (Figure 2).Also of concern is that short-interest appears to show an unhealthy lack of skepticism about emerging market stocks, with only 5.5% of EEM shares held as short sales, compared to 8.2% for EFA and 48.9% for the SPY. Lastly, we also note that the difference in ALTAR Scores™ -- our rating of an ETF's overall investment merit -- between EEM and SPY of 1.5% (in favor of EEM) is smaller than usual. This is not to say that emerging economies aren't in better shape (in general) than developed ones. Rather it simply appears that emerging market stocks have become relatively richly valued, at least historically speaking, and it seems that buliishness is rampant, a warning sign in our opinion. Figure 1: Equity ETF Assets by Category ($billions)Complete Story »

The Men's Wearhouse, Inc. (MW)
Q2 2010 Earnings Call Transcript
September 8, 2010 5:00 pm ETComplete Story »

Streamline Health Solutions, Inc. (STRM)
Q2 2010 Earnings Call Transcript
September 8, 2010 4:30 pm ETComplete Story »

Collectors Universe Inc. (CLCT)
F4Q2010 Earnings Call Transcript
September 8, 2010 4:30 pm ETComplete Story »

Bondsquawk submits: Treasuries fell on Wednesday and stocks reversed their fall despite the weak federal reports, mainly as concerns about the euro zone eased after Portugal’s debt auction met with a reasonable demand. Bonds across Europe mostly fell as rates increased. The report released by Fed banks suggested that the economy is growing but at a decreasing rate. The Euro retained some of its losses from yesterday, while crude prices rose too. Economic DataComplete Story »

Avi Morris submits:Pitney Bowes (PBI) is a Dividend Aristocrat with the highest yield at 7.3% and 4th highest yield in the S&P 500, so high it approximates yields on junk bonds. It became a Dividend Aristocrat 3 years ago but has only been lifting the annual dividend 2¢ or 4¢ annually in the last decade, reflecting a period of flattish earnings.PBI is well known for providing mail services (both incoming and outgoing) to businesses and has been hurt by substitution of email and computer related services for traditional mail business along with corporate budget cutbacks in the recession. PBI provides software, hardware and services that integrate physical and digital communications to make customers more productive, helping them grow their businesses. PBI works with leading companies, such as Hewlett-Packard (HPQ) and Kodak (EK), to help companies reduce paper volumes and improve productivity. Last year PBI announced a new distribution agreement with Digital China for bringing mailing solutions to businesses though more than 5000 resellers in 600 cities in China (after signing similar agreements in Japan and India).Complete Story »

Kapitall submits:The following is a list of quality companies, as defined by the following screen:

• Return on Assets (5 yr avg) > 20%
• Return on equity (5 yr avg) > 20%
• 5y revenue growth rate > 20%
• 5y EPS growth rate > 20%
• Return on investment (5 yr avg) > 20%
• Gross margin > 20%

In addition, all of these companies have seen significant institutional inflows over the last 3 months. Here is the output of the screen: (Click to enlarge) All data sourced from Reuters.com and Google Finance.Complete Story »

Hickey and Walters (Bespoke) submit:
Since bottoming at the end of July, gold has rallied about $100/ounce.As shown below, the metal is now trying to break through its June highs. Gold got within a dollar and change of that high Wednesday before pulling back about $7.Complete Story »

Felix Salmon submits: If you haven’t yet read Michael Lewis’s fantastic piece on Greece, you should really carve out some time to do so. It’s almost impossible to summarize, but suffice to say that it serves as an utterly convincing and highly entertaining 11,500-word rejoinder to the IMF’s bullish case that Greece can somehow avoid default. Essentially, the only way that Greece can survive its current debt crisis without default and/or devaluation is by a concerted and nationwide pulling-together for the sake of the country as a whole, including an unprecedented willingness on the part of Greece’s citizens to pay their taxes. But that’s not going to happen.Complete Story »