septiembre 29, 2009
septiembre 28, 2009
septiembre 24, 2009
- Fed stays put, stretches mortgage support. As expected, the central bank left its interest-rate unchanged at 0-0.25%, saying the fed funds target would remain low “for an extended period,” and noting consumer spending “remains constrained by ongoing job losses, sluggish income growth, lower housing wealth and tight credit.” The Fed also extended its $1.25T program to buy mortgage-backed securities, a move applauded by homebuilders for its potential to keep mortgage rates at record lows. (read the FOMC statement)
- World leaders stuck between a rock and a hard place. G-20 leaders begin their two-day Pittsburgh summit today, having already warned that the recovery is still too fragile to ponder pulling back on governments’ massive liquidity injections. The challenge will be when to start pulling back, and how to do so without sending the global economy into a double-dip tailspin. Economists say soaring sovereign debt is the world’s number-one economic vulnerability emerging from the recession, and could very likely trigger the next crisis.
- Citi mulls shrinking retail footprint. Sources say Citigroup (C) may sell or shutter some of its 1,001 North American branches in an effort to downsize and focus on areas with the highest branch concentrations – New York, Washington, Miami, Chicago, San Francisco and Los Angeles. “The smaller-but-smarter approach is the latest attempt by Citi to mend a business dogged by underinvestment, strategic miscues and management turnover.” In January, when CEO Vikram Pandit said Citi would sell or shut some non-core businesses, retail banking was among the ones he wanted to keep.
- Tech cos. catch a break. The FASB approved a tweak to accounting regulations that could benefit some high-tech companies, allowing them to recognize more revenue when products are sold. Previously, devices such as smartphones that combine hardware and software, were governed by accounting rules that applied to software which requires the revenue to be recognized over a product’s expected life cycle, typically years. Analysts say the accounting change could be impactful for Apple (AAPL), which hasn’t fully reflected iPhone sales in its quarterly results. (FASB statement)
- White House pares financial reform plan. In an effort to find a middle ground between proponents and opponents of a proposed consumer financial protection agency, Rep. Barney Frank announced a modified plan Wednesday that would see the new regulator focus on protecting consumers from deceptive or abusive credit cards, mortgages and other loans, while abandoning President Obama’s proposal to force banks and other financial services companies to offer ‘plain vanilla’ products, like 30-year fixed mortgages and low-interest, low-fee credit cards. Speaking at a House hearing, Tim Geithner praised Frank’s initiative, saying it provided “a better balance of choice and protection.”
- U.K. almost had two Lehmans. On one day in early October, 2008, two major British banks – Royal Bank of Scotland (RBS) and HBOS – were within hours of collapsing, Bank of England Governor Mervyn King told the BBC, explaining the government’s emergency pledge of about £50B to stave off disaster. “Individuals would not have had access to the money in that bank. Their deposits would have been frozen. The accounts would have not been there for salaries to be paid in to so many people would not have been paid their salary. In turn they wouldn’t have been able to pay bills to businesses so the businesses would have found that their flow of payments would have come to an end.”
- Germany cuts Q4 debt sales. Germany lowered its planned Q4 debt issuance by 22% to €59B, citing improved funding conditions and reduced borrowing requirements. After the revision, Germany is set to issue €329B in 2009, still an all-time high. (BDF statement)
- Wii little price. Nintendo (NTDOY.PK) said it will cut the price of its popular Wii game console by 20%, a response to similar cuts by rivals Sony (SNE) and Microsoft (MSFT). In the U.S., a Wii will now set you back $199.99, $50 less than before. PS3 and Xbox each cost about $300. Nintendo has so far outsold its rivals in this generation of consoles, but sales have tailed off in recent months.
- Mass layoffs jump. The Labor Department reported 2,690 layoff events (at least 50 workers) in August that affected 259,000 workers. That’s 533 more layoff actions than July, and 803 more than August 2008.
Earnings: Before Open
Earnings: Wednesday After Close
- Bed Bath & Beyond (BBBY): Q2 EPS of $0.52 beats by $0.04. Revenue of $1.92B (+3%) vs. $1.9B. Shares -2.3% AH. (PR)
- Copart (CPRT): FQ4 EPS of $0.41 misses by $0.02. Revenue of $184M (-11%) vs. $185M. Shares -7.2% AH. (PR)
- Cintas (CTAS): FQ1 EPS of $0.43 beats by $0.04. Revenue of $892M (-11%) vs. $880M. Shares +2.6% AH. (PR)
- Paychex (PAYX): FQ1 EPS of $0.34 in-line. Revenue of $500M (-6%) vs. $503M. Sees full-year revenue down between 2% and 5% Y/Y. Shares -2.7% AH. (PR)
- Red Hat (RHT): Q2 EPS of $0.20 beats by $0.05. Revenue of $184M (+12%) vs. $179M. Tax benefit added $0.04 to EPS. Shares +4.7% AH. (PR)
Asia markets were mixed, with Tokyo rising strongly after a three-day hiatus. Europe has recovered most of its early losses, and U.S. futures are hovering around breakeven.
- Asia: Nikkei +1.67% to 10,544. Hang Seng -2.52% to 21,051. Shanghai +0.38% to 2,854. BSE +0.37% at 16,781.
- Europe at midday: London -0.1%. Paris -0.3%. Frankfurt -0.3%.
- U.S. futures: Dow -0.2% to 9698. S&P -0.2% to 1057. Nasdaq flat. Crude -0.8% to $68.44. Gold flat at $1,015. Treasurys are marginally higher. Euro +0.2% vs. dollar. Yen +1%. Pound -0.9%.
Thursday’s Economic Calendar
- 8:00 G-20 Pittsburgh Summit
8:30 Jobless Claims
9:00 Paul Volcker Speaks on Systemic Risk
9:30 Senate Banking Committee, Emergency Economic Stabilization Act: One Year Later
10:00 Existing Home Sales
10:30 EIA Natural Gas Inventory
10:30 Chicago Fed Conference: Have the Rules of Finance Changed?
11:00 KC Fed Mfg. Survey
1:00 PM $29B 7-Year Note Auction
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
septiembre 22, 2009
- Bank bailout with a twist. Regulators are seriously considering a plan to have healthy banks lend billions of dollars to the FDIC’s bank insurance fund, which is rapidly running out of cash amid a wave of bank failures. The plan appeals to banks, because it would forestall yet another across-the-board emergency assessment on them, which could erode $5-10B of their profits. And it appeals to FDIC head Sheila Bair, who bankers say “would take bamboo shoots under her nails” before turning to the Treasury to tap the FDIC’s $100B emergency credit line.
- BofA spurns Congress… Bank of America’s (BAC) chief marketing officer will meet with Rep. Edolphus Towns today after it defied his request to supply documents detailing BofA’s buyout of Merrill Lynch by a noon deadline Monday. According to a spokesman, the meeting will focus on how BofA “can meet their needs without violating attorney-client privilege.” In a statement Monday, Rep. Dennis Kucinich, who heads the domestic policy subcommittee, said there is “considerable evidence that BofA violated securities law” in neglecting to tell shareholders about mounting losses at Merrill Lynch. “The question remains whether BofA executives willfully chose to violate securities laws, or received advice from outside counsel” to do so.
- … as it looks to bid farewell. Bank of America (BAC) said it will pay the government $425M for unused federal guarantees against losses at Merrill, likely the first move of a wider effort to extricate itself from Washington’s grip. Sources say BofA is also trying to convince regulators it’s sound enough to repay billions in federal aid. Also on Monday, the bank named Charles O. Holliday Jr. to its 15-person board, part of a continuing effort to break with its troubled past. Analysts characterized it as a day of progress, despite the nagging troubles over Merrill.
- Google wins keyword challenge. A top EU adviser backed Google’s (GOOG) right to sell trademarked brand names as keyword searches. Luxury good maker LVMH and others have fought such advertising, which they say allows makers of cheap imitations to piggyback on their brand power by appearing on the same search page. A ruling against Google could have severely impacted its business in the EU. (read the CVRIA’s statement (.pdf))
- Cadbury softens opposition to Kraft bid. Cadbury (CBY) CEO Todd Stitzer struck a more conciliatory tone about Kraft’s (KFT) unsolicited $16.9B takeover bid, saying a combination makes “some strategic sense,” but noting shareholders would not agree unless the deal were sweetened. In an open letter to Kraft on Sept. 12, Stitzer called Kraft’s proposal “an unappealing prospect which contrasts sharply with our strategy to be a pure play confectionery company.” Sources say Cadbury has asked the U.K. Panel on Takeovers and Mergers to issue an order demanding Kraft make a formal bid with committed financing.
- Asia rebounding rapidly. Asian economies slumped steeply when exports plunged, but most of the region is already recovering, the Asian Development Bank said in a report today. The group now sees China growth at 8.2% this year, 1.2 points above its previous outlook, and 8.9% next year. It also raised its India growth outlook to 6% from 5%, and developing Asian countries to 3.9% from 3.4%. “Developing Asia is proving to be more resilient to the global downturn than was initially thought.”
- AIG jumps on hopes of rescue restructure. Shares of AIG (AIG) gained 21% Monday after Rep. Edolphus Towns, leader of the House Oversight and Government Reform Committee, said he’s seriously considering a proposal from former AIG head Hank Greenberg to ease the terms of AIG’s bailout package. Greenberg suggests cutting the government’s stake in AIG from 80% to about 20%, and giving it more time to repay its debt while trimming interest rates. Meanwhile, in a report Monday, the U.S. Government Accountability Office said federal assistance has helped stabilize AIG’s financial condition, but that its ability to restructure its business and repay the government remains unclear.
- To out or not to out. Sources say Finra – in the midst of lobbying Congress to expand its power beyond brokerages to investment advisers – is debating whether to release an internal report of its examinations of Madoff and Stanford. Earlier this month, the SEC was embarrassed when its inspector general released a detailed report on missed opportunities to catch Madoff.
- Singapore’s GIC shrinks Citigroup stake. Government of Singapore Investment Corp. (GIC) pared its stake in Citigroup (C) to below 5% – from an estimated peak of 11.1% in February – through open-market sales, turning a profit of $1.6B. GIC said in a statement that a “stake below 5% reflects GIC’s goals and desire to be a portfolio investor, and that, “GIC will continue its investment in Citigroup as we are confident of its long-term prospects.”
- Deutsche Bank plot thickens. Then-Deutsche Bank (DB) chairman Clemens Börsig had detailed knowledge of the bank’s 2006 effort to spy on a litigious shareholder, according to a confidential report, which seems inconsistent with the bank’s July 28 statement that “questionable methods used were not authorized by members of the supervisory board.”
- Squeezing more out of life. Life insurers, hit hard by soured real-estate investments, are trying to recoup their losses by boosting prices on life insurance while selling less of it, and by charging higher premiums for risk factors like obesity and hypertension. The moves, along with a more frugal consumer, contributed to a 23% drop in sales in H1, the largest drop in nearly 70 years.
- Leading Indicators rise for fifth month. Conference Board’s Leading Indicators rose 0.6% in August, just short of the Street consensus of 0.7%, the fifth straight positive month. July’s index was revised to +0.9% from +0.6%. “These numbers are consistent with the view that after a very severe downturn, a recovery is very near,” Conference Board said in a statement. “But, the intensity and pattern of that recovery is more uncertain.”
Earnings: Before Open
- FactSet Research Systems (FDS): FQ4 EPS of $0.74 in-line. Revenue of $155M (+1.1%) vs. $154M. (PR)
- Lowe’s (LOW): Sees full-year EPS of $1.13-1.21 vs. consensus of $1.20, and 2010 EPS of $1.24-1.34 vs. $1.34. Sees full-year sales down 3%, and same-store sales down 7-9%. (PR)
China was hit with a wave of selling, but markets elsewhere in Asia were up. Europe bourses are broadly higher at midday, and futures are firmly in the green.
- Asia: Hang Seng +1.06% to 21,701. BSE +0.87% to 16,886. Shanghai -2.34% to 2,898. Nikkei closed.
- Europe at midday: London +0.9%. Paris +0.9%. Frankfurt +1.3%.
- Futures: Dow +0.7% to 9782. S&P +0.7% to 1068. Nasdaq +0.7%.
Crude +1.5% to $71. Gold +1.3% at $1,018. Treasurys are flat.
Euro +0.9% vs. dollar. Yen +0.6%. Pound +0.8%.
Tuesday’s Economic Calendar
- 7:45 ICSC Retail Store Sales
8:55 Redbook Chain Store Sales
10:00 FHFA Housing Price Index
10:00 Richmond Fed Mfg.
10:00 $75B, 28-Day TAF Auction
10:30 Analytic Chapters of IMF’s World Economic Outlook
12:00 PM FOMC begins two-day meeting
1:00 PM $43B 2-Year Note Auction
5:00 PM ABC Consumer Confidence Index
5:00 PM Richmond Fed hosts panel on Moving Forward in the New Economy
septiembre 15, 2009
15 de Sept, siguen bien las cias de Energy en USA, yo le entré a energy y en especial a Gas Natural a través de CRZO, CHK, RRI, DYN, VLO, HES,…están hechas cornetas por mucha deuda. Precaución eso si…
Citigroup looks to cut U.S. stake. Sources say Citigroup (C) is working on a plan to pare the government’s 34% stake in the bank, including a multibillion-dollar public stock sale followed by a buyback of some of the government’s shares. Citi spoke briefly with the Treasury over the weekend, which said it has no objections as long as the bank first raises offsetting capital. Any move would give a clearer picture of how the government plans to balance its desire to wind down financial system intervention against its continued concerns over the health of the banking industry.
Overseas stocks posted modest gains Tuesday, while U.S. futures are down a drop ahead of today’s retail sales data (full calendar).
- Asia: Nikkei +0.15% to 10,218. Hang Seng -0.31% to 20,866. Shanghai +0.23% to 3,034. BSE +1.48% to 16,454.
- Europe at midday: London +0.2%. Paris +0.3%. Frankfurt -0.1%.
- Futures at 7:00: Dow -0.1% at 9542. S&P -0.1% to 1042. Nasdaq -0.1%.
Crude +0.6% to $69.28. Gold flat at $1001. 30-year Tsy -0.08%.
Euro -0.1% vs. dollar. Yen -0.5%. Pound -0.5%.
Tuesday’s Economic Calendar
septiembre 14, 2009
Lunes 14 de Septiembre, a destacar: 1) tensión China/USA por alza impuesto 35% a neumatico Chino, 2) seguir el Gas Natural, se puede disparar (UNG)…
- Escalating trade tensions. On Friday, the U.S. announced a tariff on Chinese tires in a move some say may actually be a precursor to a campaign to reduce trade barriers. Each of the four presidents that served before Obama moved to protect domestic industries early in their term before making a push for freer trade. Whatever the end goal may be, China ‘strongly opposes’ the tariffs and said it may turn to the WTO to intervene, and yesterday announced it’s initiating antidumping procedures against imported U.S. chicken and auto products.
- Obama renews push for financial reforms. Just ahead of the one year anniversary of Lehman Brothers’ collapse, Obama is heading to Wall Street to explain how the government plans to unwind its involvement in the financial sector and to renew his push for regulatory reform. Obama is expected to ask for the support of the financial community in implementing new market regulations and will call for greater global coordination on financial oversight. In conjunction with Obama’s remarks, the Treasury will release a document called “The Next Phase” (.pdf), outlining ways in which emergency measures are being reduced.
- Deutsche Telekom sprints for next deal. Just days after announcing plans to merge U.K. operations with France Telecom (FTE), Deutsche Telekom (DT) is reportedly considering a bid for Sprint Nextel (S). Deutsche Telekom, a distant fourth in the U.S. market behind Sprint, Verizon Wireless (VZ) and AT&T (T), has apparently been researching a possible Sprint tie-up for over a year, but began serious due diligence three months ago. A potentially costly offer could be submitted in the next few weeks. DT -1.4%, S +10.1% premarket (7:00 ET).
- J&J renegotiates Elan deal. Johnson & Johnson (JNJ) is reportedly in talks to cut the price of its $1.5B deal with Elan (ELN), following a court order that the J&J tie-up violates a partnership between Elan and Biogen Idec (BIIB). J&J wants to reduce the deal’s price tag by at least $100M, and new terms could be announced in the coming days.
- Plenty of suitors for JAL. American Airlines (AMR) and Delta Air Lines (DAL) are both said to be considering rival investments in Japan Airlines, with Delta prepared to inject up to ¥50B in a tie-up that would include code sharing on international flights. American Airlines is looking to buy equity in JAL in part to prevent it from switching over to a rival airline network, though both American and Delta also see this as a way to grow revenue from Asia. JAL is Asia’s largest airline by revenue but lost $1B last quarter and is under pressure to cut costs and raise money.
- BIS: Higher taxes for larger banks. The Bank for International Settlements [BIS] published its Quarterly Review (.pdf) yesterday, expressing ‘cautious optimism’ on the state of the global economy but noting that interbank lending fell $812B during the previous quarter. The BIS recommended that big banks pay higher taxes to offset the disproportionately large systemic risks they pose.
- BlackRock plans internal trading platform. BlackRock (BLK) is set to create its own global trading platform, allowing BlackRock clients to conduct deals with one another through internal trades that completely bypass Wall Street. BlackRock says it’s not trying to marginalize Wall Street, though the move is certainly a sign of increased resistance to paying fees for securities trades that have small margins and rely on large volumes to achieve profitability. The plan is still in early stages, and will probably be introduced for stocks first, followed by fixed income.
- Gas firms give go-ahead on Gorgon. Chevron (CVX), Exxon Mobil (XOM) and Royal Dutch Shell (RDS.A) approved development of the Gorgon liquefied natural gas project in Australia, paving the way for a venture that could earn A$300B ($258B) in gas sales to China, India and Japan in its first twenty years. The project’s first phase will cost A$43B with the first LNG exports expected in 2014.
- China in power-plant talks with AES. Sovereign wealth fund China Investment Corp. is said to be in talks to take a significant minority stake in power-plant developer AES Corp. (AES). Sources said the two sides are also discussing a possible joint venture in which China Investment Corp. would contribute capital to fund AES’ plans to develop power plants around the globe.
- Friday failures. Three more bank failures on Friday, bringing this year’s total to 92 and costing the FDIC’s insurance fund around $2B. Most of those losses come from the seizure of Corus Bank, whose 11 branches and $7B in deposits will be assumed by MB Financial (MBFI). (Read the FDIC’s press releases: I, II, III)
Asia closed mostly down. European markets and U.S. futures start the week in the red.
- In Asia, Nikkei -2.3% to 10,202. Hang Seng -1.1% to 20,932. Shanghai +1.2% to 3,027. BSE -0.3% to 16,214.
- In Europe at midday, London -0.7%. Paris -1%. Frankfurt -0.8%.
- Futures: Dow -0.6%. S&P -0.7%. Nasdaq -1%. Crude -1.1% to $68.53. Gold -0.8% to $998.80.
Monday’s Economic Calendar
septiembre 11, 2009
- Probe into TARP influence on SEC fines. SEC Inspector General David Kotz has launched an inquiry into whether the SEC’s imposition of fines on financial firms may be influenced by TARP, since the fines it assesses on TARP recipients could be passed along to hurt U.S. taxpayers. In particular, Kotz will look at the SEC’s decision to settle with Bank of America (BAC) for $33M. Rep. Elijah Cummings requested the investigation, and said that in addition to Bank of America, “it is conceivable to expect that additional violations of securities laws will be revealed” at other banks that took aid.
- China to allow foreign listings. China is gearing up to transform Shanghai into a major finance center and to become a larger player on the international financial stage. In its most recent move, it plans to finally start allowing foreign companies to list on the Shanghai stock exchange. Foreign listings will begin with a pilot phase, with the first few companies expected to be listed early next year. China is also nearing a deal that would open Taiwan’s stock exchange to mainland investment. Earlier this week, the finance ministry announced a small but groundbreaking step earlier this week by saying it plans to sell 6B yuan ($878M) of bonds in Hong Kong as part of a strategy to “improve the international status” of its currency.
- Magna wins Opel bid. After months of deliberation, General Motors decided to sell a 55% stake in its Opel unit to the consortium of Magna International (MGA) and Russia’s Sberbank, while keeping a 35% stake for itself and a 10% stake for employees. The deal is a victory for Germany’s Angela Merkel, who had lobbied for Magna’s bid and could get a boost in the upcoming elections, as well as for Russia, which has aggressively pushed for a role in the consolidating global car market. Details of German financing for the deal will be finalized in the next few weeks. (Read GM’s press release)
- More signs of a China recovery? China’s industrial output rose at a faster pace than forecast in August (+12.3%), new lending spiked to 410B yuan ($60B, vs. consensus of 320B yuan), and retail sales were up a robust 15.4%, sending the Shanghai Composite up 2.2%. Strategists say policy stimulus is driving the robust growth, and note the biggest challenge Beijing now faces is how to take its foot off the gas before it’s too late.
- Geithner: Time to start unwinding gov’t support. Testifying before the Congressional Oversight Panel, Geithner said the economy is strengthening, which leaves room for the government to begin unwinding some of its emergency support measures. Though the economy still has problems to correct, “it is clear that we have stepped back from the brink and that we are pointed in the right direction.” As a result of this improvement, “we are now in a position to evolve our strategy as we move from crisis response to recovery.” (Read Geithner’s prepared testimony (.pdf))
- Ex-AIG exec to face grand jury. Federal prosecutors are reportedly preparing to impanel a grand jury to consider the indictment of former AIG (AIG) executive Joseph Cassano on charges of securities fraud. Cassano led the AIG Financial Products unit that nearly caused the insurer to collapse a year ago, and the Justice Department and SEC have been investigating whether Cassano misled investors by overstating the value of mortgage-related contracts and by failing to disclose material facts to AIG’s external auditor.
- Heightened scrutiny on Microhoo deal. The Justice Department has expanded its review of the search deal between Microsoft (MSFT) and Yahoo (YHOO) and has asked both firms for more details on the proposed partnership. Though this means the deal will be subject to extensive examination rather than immediate approval, a Microsoft spokesman said the company expected as much when it announced the deal in July.
- Morgan Stanley gets new chief. Morgan Stanley (MS) CEO John Mack plans to step on January 1 and will be replaced by co-president James Gorman. Mack will retain his position as chairman. (Read the press release)
- Jobless claims decline. Initial jobless claims came in at 550K, down 26K from a week ago (revised) and better than the 565K consensus. Continuing claims fell 159K to 6.088M.
- International trade. July’s trade balance was -$32B vs. consensus of -$27.3B. June’s balance was revised to -$27.5B from -$27B. Exports rose to $127.6B from $124.9B in June, while imports were up to $159.6B from $152.4B.
Earnings: Thursday After Close
- National Semiconductor (NSM): FQ1 EPS of $0.13 beats by $0.06. Revenue of $314M (-33%) vs. $300M. (PR)
Most overseas markets moved higher Friday, led by sharp gains in China. Futures are marginally higher.
- Asia: Nikkei -0.66% to 10,444. Hang Seng +0.44% to 21,161. Shanghai +2.22% to 2,989. BSE +0.29% to 16,264.
- Europe at midday: London +0.7%. Paris +0.9%. Frankfurt +0.6%.
- Futures: Dow +0.1%. S&P +0.2%. 30-year Tsy +0.1%. Euro +0.1% vs. dollar. Yen +1.1%. Crude flat at $71.90. Gold +0.6% to $1,002. Natural gas +0.5% to $3.272.
Friday’s Economic Calendar
septiembre 10, 2009
Sept 10 -Noticias Relevantes – Apertura Mercado – Entrega de Datos (Acaba de salir bien dato de empleo y futuros para arriba)
- BoA bites back against Cuomo. Bank of America (BAC) said it’s ‘surprised and disappointed’ by accusations that’s it’s hiding behind attorney-client privilege, and called New York Attorney General Andrew Cuomo’s allegations ‘spurious’ and ‘simply wrong.’ Meanwhile, Bank of America and the SEC are making their third attempt to convince Judge Jed Rakoff to approve a $33M settlement over disclosures of Merrill Lynch bonuses. The SEC called the settlement ‘fair’ and ‘reasonable,’ and Bank of America said it’s prepared to litigate if the settlement isn’t approved.
- Phasing out debt guarantees. The FDIC is considering a six-month, emergency-only extension to its debt guarantee program and is seeking public comment on the proposal, with FDIC’s Sheila Bair noting “it has been a successful program but we would like to end it.” The guarantee program had around $320B in outstanding debt guaranteed as of the end of July, and whether it expires Oct. 31 as planned or is extended by six months, the phase-out should provide an early indicator for how banks fare once emergency government support measures have been removed.
- U.S. levies duties on Chinese steel. In the largest countervailing duty case to date against Chinese-made products, the U.S. Commerce Department decided to impose preliminary duties of up to 31% on Chinese steel pipe because of unfair subsidies, bringing average duties on the $2.8B of annual imports to 21.3%. China ‘strongly opposes’ the ruling, which is only the latest in a series of events contributing to escalating trade tensions.
- Beige Book: Signs of slow improvement. In the Federal Reserve’s latest Beige Book, most districts reported the economy was firming up overall and stability increasing, though many sectors still show weaknesses. In particular, despite some improvements in residential real estate, commercial real estate remains weak and non-residential construction activity is down. Credit remains tight, loan demand is down and retail sales are soft. (Read the Beige Book summary)
- OPEC holds steady. As expected, OPEC agreed to keep its oil production quotas unchanged, betting a recovery in the global economy will help keep prices near the current $72/barrel. The decision comes even as the Energy Information Administration’s latest forecast calls for weaker oil demand and higher supply, which is projected to result in a daily world surplus of 70,000 barrels.
- Beijing Automotive steers for Saab. After a failed bid for Opel, Beijing Automotive is joining Koenigsegg Group’s offer to buy General Motors’ Saab. Beijing Automotive will become a minority shareholder in the bidding team, with the hope that a successful bid will allow it to spur model development and sales growth. (Read the memorandum of understanding)
- Apple’s iPod refresh fails to dazzle. Investors were generally unimpressed at Apple’s (AAPL) “Let’s Rock” event yesterday, where Apple introduced a new version of iTunes, updated iPhone software and an iPod Nano with video camera and FM radio. Many had been hoping to see a camera on the iPod Touch and there was no sign of a much-talked-about tablet device. With no major product surprises, much of the attention was focused on CEO Steve Jobs, who made his first public appearance since returning from medical leave.
- Foreclosures remain elevated. U.S. foreclosure filings topped 300,000 for the sixth month in a row, coming in at 358,471 in August, according to RealtyTrac Inc. The number is just 0.5% below July’s record all-time high, and is up 18% from August 2008. Nevada had the highest foreclosure rate, followed by Florida and California. With unemployment hovering at 9.7%, RealtyTrac expects foreclosures to rise for another year.
- Google preps for micropayments. Google (GOOG) plans to introduce a micropayments platform within the next year to help newspapers charge for their content. The move would create a direct competitor for Journalism Online, a site launched by media executives that aims to provide one-stop subscriptions for newspapers and magazines that want to charge for online content. (Read Google’s micropayments plan (.pdf))
- Retail sales inch up. Chain store sales rose 0.2% in the first week of September, Redbook reported, better than the -0.3% expected. According to ICSC, weekly sales rose 0.6% from the previous week but dipped 0.1% vs. the previous year. Sales for September are expected to be down 2% vs. the previous year.
Asia locked in some gains but European markets and U.S. futures are trading down.
- In Asia, Nikkei +1.95% to 10,514. Hang Seng +1.05% to 21,070. Shanghai -0.7% to 2,925. BSE +0.2% to 16,217.
- In Europe at midday, London -0.6%. Paris -0.5%. Frankfurt -0.1%.
- Futures: Dow -0.2%. S&P -0.3%. Nasdaq -0.2%. Crude +0.7% to $71.80. Gold -0.95% to $987.60.
Thursday’s Economic Calendar
- 7:00 BoE Announcement
8:30 International Trade
8:30 Jobless Claims
9:00 RBC CASH Index
9:00 Bank of Canada Announcement
10:30 EIA Natural Gas Inventory
11:00 EIA Petroleum Status
12:30 PM Fed’s Lockhart speaks on the global economy
1:00 PM Geithner testifies on TARP
4:15 PM Fed’s Kohn speaks on unconventional monetary policy
4:30 PM Fed Balance Sheet
4:30 PM Money Supply