Congress drilled Tim Cook with Q’s Tuesday… and the poor Apple CEO didn’t know what was about to hit him
Maybe it’s the “Two-4-Tuesday” pastrami deal at the corner bodega (thanks, Omar) or maybe it’s just post-Monday enthusiasm. Either way, investors pumped up stocks for the 19th straight Tuesday – The Dow jumped 53 points on a big day of corporate drama (we’re looking at you, Apple & JPMorgan).
#1. Fed Presidents Calm “End-Of-Stimulus” Fears
Relax… Remember when investors got all heated Monday that the central bank might be ending its stimulus policies early? Well the Fed President from the St. Louis Branch, James Bullard, effectively told Wall Street to chug a huge chill pill (Businessweek).
Mr. Bullard… made 2 key points. First, that the quantitative easing policy(in which the Fed buys long-term bonds monthly to keep interest rates low and encourage economic lending/growth) has been working — and second, that he’d support more stimulus given the slower-than-expected recovery. Not too shabby.
Wednesday, Wednesday, Wednesday… Investors were aroused to hear the pro-stim news, but all eyes (and wallets) are now on the Fed Chairman Ben Bernanke’s speech Wednesday afternoon, when he also releases details from the Fed’s last meeting. What’s the QE plan, Benji?
#2. Apple’s Testy Congressional Testimony
At MarketSnacks HQ… we’re jamming to the new Daft Punk album on our MacBooks, iPhones, and iPad minis. But on Capitol Hill, (the government’s HQ) a flurry of bitter Senators celebrated Memorial Day a tad early by grilling… grilling Apple CEO Tim Cook that is. #SnapbacksandHorseshoes
Here’s the haps, Uncle Phil… For years, Apple has been the Money Mayweather heavyweight champ of avoiding the 35% US corporate tax rate and penetrating every loophole in the often-criticized complicated American tax code. Estimates figure that Apple saved between six and seven billion dollars in 2011 by doing the international tax revenue Harlem Shake.
Guinness, corned beef and cabbage, potatoes… tax haven? Two years ago, Apple recorded 64% of its global pretax income in Ireland, where only 4% of its employees and 1% of its customers were located (NYT). Although Apple hasn’t broken any laws, politicians from both sides were upset with the questionable tax evasion practices, except for Rand Paul that is, who suggested “we should have brought in a giant mirror.” #QuotesTakenOutofContext #RandPaulforSeniorClassPresident
#3. JPM CEO Jamie Dimon Keeps Job(s)
Mr. Dimon… you win. The CEO of JPMorgan Chase Bank (JPM), the top-gun at the most powerful investment bank in the world, won a major vote Tuesday to retain his title of both CEO and Chairman of the Board of Directors. He’s Yoda and the Emperor all at once. At the annual shareholder meeting in Tampa FL, many votes were held but the question of whether to strip the CEO of his second title as Chairman was a doozy for Wall Street gossip…
Remember that $6 billion trading mistake?… Shareholders do. When JPM lost all that money on a series of foolish trades last year shareholders were pissed. Where’s the oversight? The thought was that Mr. Dimon needed a powerful body to reign him and control his pursuit of profit. Typically that’s the Board of Directors – oh shoot – Dimon is the Chairman of the board. Many investors thought he should lose his dual role, but not enough…
67.8%… is the number of the day. That’s the amount of shareholders who voted not to split the role of CEO/Chairman for Dimon. Bottom line is Mr. Dimon is too important for the gargantuan bank, and taking away his chairman role could have caused Jamie to walk away altogether (Dealbreaker). When your man’s made $60 billion of profits in the last 3 years for JPM, you give him a mulligan on that $6 billion slip.
Wednesday:
- Chairman Bernanke’s eagerly anticipated speech (plus juicy details from the Fed’s last meeting)
- April Existing Home Sales
