Still No Eurozone Rescue. The rescue of the financially weak eurozone nations becomes more confused by the day. U.S. Treasury Secretary Geithner continues to tour the region. He wants to convince area finance ministers they have run out of time. He is right, but that has not prompted progress toward a resolution. The European Central Bank will drop the interest rate it charges region banks to 1%. That may help those financial firms that carry a burden of sovereign debt. It does not help any of the nations, however. At the same time that the ECB takes action, France and Germany seek changes to the treaties that formed the union. These would impose sanctions on countries that do not follow budget rules. Weak eurozone nations will not approve such changes.
How to Annoy Macy’s. The Martha Stewart (NYSE: MSO) merchandising and license deal with JCPenney (NYSE: M) may face a lawsuit by Macy’s (NYSE: M). The joint venture includes a JCPenney investment that would leave it with 16.6% of Martha Stewart Living Omnimedia stock. The Wall Street Journal reports that the deal “appears to have annoyed Macy’s, which has sold an exclusive Martha Stewart line since 2007. In a statement Wednesday, Macy’s said it will review its Martha Stewart product line for ‘potential changes’ in light of ‘the proliferation of Martha Stewart-branded product in the marketplace.’” Martha Stewart and JCPenney are such weak companies that the venture probably will not help either anyway.
AT&T Does Not Surrender. AT&T (NYSE: T) Chief Financial Officer John Stephens told a conference that his company’s pursuit of a deal to buy T-Mobile for $39 billion has not ended. That will be news to the FCC, which has effectively blocked that transaction. The Justice Department may be shocked as well. It has set a suit to block the buyout. But Stephens says AT&T has access to the capital, and while it does, it must close a deal. AT&T has a powerful incentive. It owes T-Mobile parent Deutsche Telekom a $4 billion break-up fee if the buyout does not close. DT could use the money to strengthen T-Mobile’s position in the U.S. market, which would turn it into a more powerful competitor to AT&T, as well as Verizon Wireless and Sprint-Nextel (NYSE: S).
Grand Central Apple. Apple (NASDAQ: AAPL) continues it aggressive retail expansion. It will open a store in one of the busiest transportation hubs in America — Grand Central Station in New York City. Apple already has locations on Fifth Avenue and Soho. Grand Central offers such tremendous foot traffic as people come and go from trains and subways that it is hard to imagine the store will not do well. The stores compete with those of Apple’s wireless carriers and Apple’s own effort to sell its products online. But, as long as the demand for the iPhone 4S and iPad 2 remain at extraordinary levels, it hardly seem a concern about the number of outlets through which they are available.
Douglas A. McIntyre