Diamond Offshore Signs a $1.8 Bn Deal With Anadarko

“Diamond Offshore Drilling Inc. (DO), the largest U.S. deep-water oil driller, signed contracts worth as much as $1.8 billion with Anadarko Petroleum Corp. (APC) for two new drillships and settled a dispute over a third rig stemming from a Gulf of Mexico drilling moratorium last year.

Anadarko will lease two drillships for five years, starting in 2013 and 2014, Houston-based Diamond Offshore said in a statement today. Hyundai Heavy Industries Co. Ltd. is preparing to build the two rigs in South Korea, Diamond Offshore said.

The companies have also agreed to dismiss all claims related to the Ocean Monarch rig, according to the statement. Anadarko, based in The Woodlands, Texas, filed suit to void its contract for the rig last year after the U.S. government halted deep-water drilling in the Gulf following BP Plc (BP/)’s record offshore oil spill.

The announcement was made before regular trading began on U.S. markets. Diamond Offshore rose 85 cents, or 1.2 percent, to $71.17 at 7 a.m. in New York. Anadarko fell 66 cents to $73.40 yesterday in New York Stock Exchange composite trading.”

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“Home Depot Inc.’s first-quarter profit rose 12% as the retailer saw a surprise drop in sales, though costs declined.

The company raised its current-year earnings forecast to $2.24 from its February view of $2.20. The updated prediction includes the company’s share-buyback activity year-to-date.

The largest home-improvement retailer reported strong results last year as a multiyear decline in sales halted. Moody’s Investors Service and Fitch Ratings raised their respective outlooks on the company in March, following strong fourth-quarter results.

Smaller rival Lowe’s Cos. on Monday reported a surprise drop in first-quarter sales and reduced its guidance for the year.

For the quarter ended May 1, Home Depot reported a profit of $812 million, or 50 cents a share, up from $725 million, or 43 cents a share, a year earlier. The year-earlier result included a two-cent charge related to the extension of a loan guarantee.

Sales dipped 0.2% to $16.82 billion. Same-store sales decreased 0.6% and were 0.7% in the U.S.

Analysts polled by Thomson Reuters most recently forecast earnings of 49 cents on $17.02 billion in revenue.”

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“S&P 500 (NYSE:SPY) component Wal-Mart Stores, Inc. (NYSE:WMT) reported its results for the first quarter. Wal-Mart Stores, Inc. operates Walmart discount stores, supercenters, Neighborhood Markets and Sam’s Club. Are Walmart and McDonald’s Saving Capitalism?>>

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Wal-Mart Stores Earnings Cheat Sheet for the First Quarter

Results: Net income for Wal-Mart Stores, Inc. rose to $3.4 billion (97 cents/share) vs. $3.33 billion (88 cents/share) in the same quarter a year earlier. A rise of 3% from the year earlier quarter.

Revenue: Rose 4.4% to $104.19 billion YoY.

Actual vs. Wall St. Expectations: WMT beat the mean analyst estimate of 95 cents/share. Estimates ranged from 90 cents per share to $1 per share.”

Full report

“Wheat crops in the U.S. Great Plains are showing signs that production may plunge even more than the government forecast last week as hot weather and a lack of rain erode plant quality and force farmers to harvest early.

As of May 15, U.S. winter-wheat was in the worst condition since 1996, with 44 percent of fields rated poor or very poor by the government. The National Weather Service estimates rainfall in the past two months was less than half of normal in much of Texas, Oklahoma and Kansas, where insurance adjuster David Reed said he’s had 300 farmer claims for drought damage in his area this season, already 10 times more than last year.

“I went out to look at fields, and it looked like the tips of the heads were burnt” after temperatures last week topped 100 degrees Fahrenheit (38 degrees Celsius), said Reed, an area claims supervisor in Stockton, Kansas, for Rural Community Insurance Services, a unit of Wells Fargo & Co. “It’s kind of scary. I would think that the abandonment numbers probably are going to be fairly high.”

After a Russian drought led to a drop in global output in 2010, the prospect of smaller crops in the U.S., the world’s largest exporter, has sent wheat futures up 56 percent in the past year. Goldman Sachs Group Inc. on May 11 raised its price forecast, citing “persistent adverse weather” in many growing areas. Dry spells in Europe and excessive rain in the northern U.S. and Canada also fueled prices, boosting costs for food makers including General Mills Inc. (GIS)and Panera Bread Co.

Declining Output”

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“European stocks drifted between gains and losses after officials endorsed a bailout for Portugal and raised the idea of extending Greece’s debt repayments. Asian shares slid, while U.S. futures rose.

Bouygues SA (EN) paced declining shares after reporting a slump in profit. ARM Holdings Plc (ARM) and ASML Holding NV (ASML) led technology shares lower as Hewlett-Packard Co. said it faced “another tough quarter.” Vodafone Group Plc (VOD) limited declines after posting better-than-estimated earnings.

The benchmark Stoxx Europe 600 Index rose less than 0.1 percent to 280.23 at 11:50 a.m. in London. The measure has swung between gains and losses at least 15 times today. The Stoxx 600 has retreated for the past two weeks after a selloff in commodity producers and renewed sovereign-debt concern outweighed increased company profits.

“Competing factors are really forcing investors to tread water in a market that looks pretty range bound,” said Jeremy Batstone-Carr, head of research at Charles Stanley & Co. in London. “Corporate news flow seems to have been taken rather positively to help steady the ship, but profound macroeconomic uncertainties remain very much in evidence.”

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“Copper rose for a fourth day in New York before reports that may show builders in the U.S. broke ground on more houses and industrial production continued to expand, signaling steady demand.

Housing starts climbed 3.6 percent to a 569,000 annual rate last month, according to economists surveyed by Bloomberg News. Industrial production probably gained for a sixth consecutive month, increasing 0.4 percent, a separate survey showed. Prices also advanced on signs of stronger buying interest in China, the world’s biggest copper consumer.

“There is the air of greater confidence around in the market,” said Steve Hardcastle, head of client services for industrial commodities at Sucden Financial Ltd. in London. “The price now more closely resembles the fundamental picture for copper. In the last couple of days, we have seen a little bit of Chinese physical interest.””

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“Oil dropped for a second day in New York on concern Greece’s debt crisis will curb European growth and as analysts predicted U.S. fuel inventories will rise, signaling lower demand.

Futures fell as much as 0.6 percent after declining to the lowest in more than a week yesterday.Europe will consider extending Greece’s debt-repayment schedule as part of a package including deeper spending cuts, Luxembourg Prime Minister Jean- Claude Juncker said in Brussels. An Energy Department report tomorrow may show U.S. crude stockpiles rose for a fourth week.

“The concerns in Europe are going to create a lack of confidence again,” said Jonathan Barratt, managing director of Commodity Broking Services Pty in Sydney, who predicted oil will average $100 this year. “People will pull the horns in from spending. That feeds back into the demand prospects for crude. We’ve also still got a fair few barrels in the U.S.”

Crude for June delivery slipped as much as 61 cents to $96.76 a barrel in electronic trading on the New York Mercantile Exchange and was at $97.19 at 12:48 p.m. Singapore time. Oil fell $2.28, or 2.3 percent, yesterday to $97.37, the lowest since May 6. Prices are 39 percent higher in the past year.

Brent Premium”

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“Gold gained for the first time in three days in London as physical buying and concern aboutEurope’s debt boosted demand for the metal.

European finance officials endorsed a bailout for Portugal as Luxembourg Prime Minister Jean-Claude Juncker said the region’s ministers floated the idea of extending Greece’s debt- repayment schedule. Billionaire investor George Soros sold 99 percent of his bullion-backed SPDR Gold Trust assets and all 5 million shares in the iShares Gold Trust, a filing showed. Hedge-fund manager John Paulson kept his SPDR Gold Trust stake.

“There’s still a lot of uncertainty in the euro zone” and some physical buyers consider the price “relatively cheap,” said Bernard Sin, the head of currency and metal trading at MKS Finance SA, a bullion refiner in Geneva. “It’s a trading market and it’s no surprise that big investors liquidated positions. They may reinstate positions at a certain point and it doesn’t necessarily mean that others are going to follow.”

Immediate-delivery gold rose $6, or 0.4 percent, to $1,495.30 an ounce by 11:45 a.m. inLondon. Gold for June delivery was 0.3 percent higher at $1,495 an ounce on the Comex inNew York.”

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“Goldman Sachs Group Inc. (GS), Deutsche Bank AG (DBK)and JPMorgan Chase & Co. (JPM), which bundled and sold billions of dollars of mortgage loans, now want to help investors bet on people’s deaths.

Pension funds sitting on more than $23 trillion of assets are buying insurance against the risk their members live longer than expected. Banks are looking to earn fees from packaging that risk into bonds and other securities to sell to investors. The hard part: Finding buyers willing to take the other side of bets that may take 20 years or more to play out.

“Banks are increasingly looking to offer derivative solutions,” said Nardeep Sangha, 43, chief executive officer of Abbey Life Assurance Co., a London-based Deutsche Bank unit that helps pension funds manage the risk of retirees living longer than expected. “Making the long maturity of the risks palatable for investors, including sovereign wealth funds, private-equity firms and specialist funds, is the challenge.””

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“German investor confidence declined for a third month in May as faster inflation threatened to curb consumer spending and Europe’s sovereign-debt crisis worsened.

The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict developments six months in advance, fell to 3.1 from 7.6 in April. Economists expected a drop to 4.5, according to the median of 31 estimates in a Bloomberg News survey.

Germany’s benchmark DAX share index has lost 3 percent this month as investors fret about Europe’s fiscal crisis and whether Greece will need a bigger bailout from its euro-area partners. While the German economy, Europe’s largest, expanded a more- than-forecast 1.5 percent in the first quarter, faster inflation may curb growth and prompt further interest-rate increases from the European Central Bank.”

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“U.K. inflation accelerated more than economists forecast in April to the fastest since October 2008, forcing Bank of EnglandGovernor Mervyn King to explain publicly why officials haven’t raised interest rates yet.

Consumer prices rose 4.5 percent in April after a 4 percent increase in March, data today showed. The median forecast of 32 economists in a Bloomberg News survey was 4.1 percent. Core inflation quickened to the fastest in at least 14 years. King said in a letter to Chancellor of the Exchequer George Osbornethat the surge is being driven by higher sales tax and increases in energy and import prices.

The pound rose after the London-based Office for National Statistics reported the inflation data. While King said inflation is likely to rise further in the next few months, he sees it easing toward the bank’s 2 percent target next year. The central bank signaled last week it may need to raise the key interest rate from a record low to control “uncomfortably high” price growth.”

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“Australia’s Treasury secretary said the local currency will stay elevated “for some time,” a rise the central bank signaled would help contain inflation spurred by the nation’s biggest mining-investment boom.

“The Australian dollar, which is currently at record levels, can be expected to move roughly in line with the terms of trade over the longer term,” Martin Parkinson, the Treasury’s top bureaucrat, said in a speech today in Sydney, referring to a measure of export income. “It is therefore expected to also remain persistently high for some time.”

Reserve Bank of Australia Governor Glenn Stevens has kept the benchmark interest rate at 4.75 percent after seven increases in the overnight cash rate target from October 2009 to November last year, moves that contributed to a 21 percent gain in the currency in the past 12 months.

“If economic conditions continued to evolve as expected, higherinterest rates were likely to be required at some point if inflation was to remain consistent with the medium-term target,” RBA policy makers minutes said in minutes of their May 3 meeting released in Sydney today.”

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(Reuters) – Former California Governor Arnold Schwarzenegger has acknowledged that he fathered a child more than ten years ago with a member of his household staff, the Los Angeles Times reported on Tuesday.

In a statement made in response to questions from the newspaper, Schwarzenegger said: “After leaving the governor’s office I told my wife about this event, which occurred over a decade ago.”

“I understand and deserve the feelings of anger and disappointment among my friends and family. There are no excuses and I take full responsibility for the hurt I have caused. I have apologized to Maria, my children and my family. I am truly sorry.”

FULL STORY HERE

Pacific Investment Management Co., which runs the world’s largest bond fund, said “deteriorating debt dynamics” will stoke faster inflation and financial repression in the U.S. as well as at least one sovereign-debt restructuring in Europe.

In a report aimed at establishing a worldview for investors in the next three to five years, Pimco Chief Executive Officer Mohamed El-Erian raised the prospect of U.S. policy makers trying to force savers to accept returns below the rate of inflation as the government grapples with a budget deficit the White House reckons will reach $1.6 trillion this year.

“It is a world where several governments in advanced economies, and the U.S. in particular, opt for financial repression and mild inflation as the major way to accommodate their deteriorating debt dynamics,” Newport Beach, California- based El-Erian wrote in a report published today on the firm’s website. “It is a world that heals slowly and unevenly and remains structurally impaired.”

Full news story here

Pimco report (pdf)

The problem facing euro zone policy makers as we head into what could be another eventful summer for the global markets is surprisingly simple, yet very unpalatable.

Angela Merkel, Jean-Claude Trichet and to a lesser extent Nicolas Sarkozy have to answer the following question: do we bailout the banks or do we throw more money at highly-indebted nations like Ireland, Portugal and more urgently, Greece?

Since January the euro zone debt crisis has been overshadowed by events in the Middle East, Japan and fears over the health of US finances but over the coming months the problems facing the euro zone will have to be addressed, or – if history teaches us anything – at least fudged.

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(Reuters) – Annual inflation hit a 2-1/2 year high last month and core prices rose at a record pace, deepening the policy dilemma for the Bank of England as it keeps interest rates low to support a sluggish economy.

Consumer prices rose a bigger-than-expected 4.5 percent year-on-year, the fastest pace on increase since October 2008, propelled by soaring travel costs around Easter and higher duty on alcohol and tobacco.

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Speculators cut bets on copper

Seems financial investors have become far less optimistic on copper in recent weeks:

Full article at FT Tilt here

The president and First Lady Michelle Obama had assets valued between $2.8 million and $11.8 million in 2010.

And between $2 million and $10 million of their assets are invested in super-safe U.S. Treasury securities, according to the disclosure form. That’s up from $1.5 million to $6 million reported invested in Treasury notes and bills in 2009.

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Judge Melissa Jackson sent the IMF boss to Rikers Island due to her belief that he was a flight risk. Melissa Jackson was also the presiding judge when rapper Foxy Brown was prosecuted for violating her probation. At one point during her trial, she told  a court officer to “hit her” , as she (Foxy Brown) was being handcuffed.