Hurricane Sandy
NYSE prepares to implement contingency plan. Although stock and bond markets remain closed because of Hurricane Sandy, NYSE Euronext (NYX) has been preparing to carry out a contingency plan this morning as it looks to resume some sort of trading. NYSE intends to offer companies the ability to test opening and closing auctions on its Arca electronic exchange from 8-12 ET. Nasdaq (NDAQ) plans to operate its production system in a testing capacity from 7:30-12.
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Futures carry on trading. CME index futures opened at 6 p.m. ET last night for overnight trading but will close again at 9:15 this morning. Today's market shut-out is the first time the weather has closed the NYSE for consecutive days since an 1888 blizzard.
Wrath of Sandy expected to cost $20B... Hurricane Sandy is still wreaking havoc over the Eastern Seaboard, but that's not stopped insurance experts from estimating how much it will cost. AIG (AIG) CEO Robert Benmosche says, "It will be Irene, plus or minus something," for his company, so a few hundred million dollars. Disaster-research firm Kinetic Analysis and Eqecat estimate total economic damage of around $20B, including $5B-$10B of insured losses.
...but there is a silver lining. "While natural disasters take a large initial toll on the economy, they usually generate some extra activity afterward," Moody's Analytics says, expecting lost output this week to be made up in subsequent weeks and to minimize the impact on Q4 GDP. But the effect is generally spread out over multiple quarters, RBC Capital notes.
Alert declared on New Jersey nuclear plant. Exelon (EXC) has declared an "alert" - the second lowest of four NRC action levels - at its New Jersey Oyster Creek nuclear facility after flood waters caused by Hurricane Sandy rose over two meters and threatened to submerge the pumps that circulate water through the plant. However, the water was expected to recede following high tide.
Top Stock News
Ford profit beats expectations. Ford's (F) Q3 EPS came in at $0.40 and beat consensus by $0.10, but revenue slipped 1% to $32.1B and missed forecasts by $800M. The company's production rose by 1.4M units, up about 24,000 units from a year ago but below its prior guidance due to parts supply issues. In Q4, Ford forecasts total output at 1.5M units.
UBS confirms massive job cuts as it swings to loss. UBS (UBS) has confirmed that it plans to cut 10,000 jobs and close its fixed income business as it looks to save 3.4B Swiss francs ($3.64B) a year. However the restructuring will cost 3.3B francs over the next three years. The bank also said it swung to a Q3 net loss of 2.17B francs from a profit of 1.02B francs a year earlier, badly missing consensus. Earnings were hurt by an impairment charge of 3.1B francs related to goodwill and other non-financial assets.
Cook shakes up Apple's top ranks. Apple's (AAPL) iOS chief, Scott Forstall, will leave the company next year, with the WSJ reporting that he's being moved on following clashes with other execs. Forstall was once seen as a potential successor to Tim Cook but came under fire over iOS 6's Maps app and, to a lesser extent, Siri. Retail boss John Browett is also leaving after only being hired in January.
BP net profit rises almost 8%. BP's (BP) Q3 net profit climbed 7.8% to $5.43B, although underlying profit slipped 5.4% to $5.17B but did beat forecasts. The fall was due to seasonal maintenance in the North Sea and Alaska, and the effect of Hurricane Isaac in the Gulf of Mexico. BP's oil and gas output declined 2.7% and revenue dropped 4.7% to $93.12B. However, the company increased its dividend by 12.5% to $0.09 a share.
Cerberus reunites with property partners to turn around Supervalu. Cerberus is working with real-estate firms on a $5B+ bid for struggling Supervalu (SVU), whose liabilities are $6B, the WSJ reports. A proposal deal would include $800M-$900M to take Supervalu private, well above its market cap of $643M. Cerberus and its partners, which include Kimco Realty (KIM), hope to reprise the turnaround success they achieved with Supervalu peer Albertsons.
Bayer to buy Schiff for $1.2B. Bayer (BAYZF.PK) has agreed to acquire Schiff Nutrition (SHF) for $1.2B in cash, with the $34-a-share offer representing a 47% premium to the latter's close on Friday. The deal strengthens Bayer's presence in the U.S., the biggest market in the world for over-the-counter and nutritional products. Separately, Bayer's Q3 EBITDA edged up to €1.85B as sales rose 12% to €9.67B.
Top Economic & Other News
BOJ bows to pressure to increase stimulus. Facing much pressure amid a contracting economy (see below), the Bank of Japan has increased its asset-purchase program by ¥11T yen ($138B) to ¥66T yen at a policy meeting, the second time in two months that it expanded the scheme. Economy Minister Seiji Maehara attended the meeting, and in a joint statement with Governor Masaaki Shirakawa, said the government "strongly expects" powerful easing until deflation is overcome.
Japanese data points to Q4 contraction. Japanese industrial production slumped 4.1% on month in September vs -1.6% in August and -3.1% consensus. It's one of the largest declines in recent years and the third consecutive drop. Unemployment was unchanged at 4.2%, matching consensus, but household spending unexpectedly fell 0.9% vs a forecast for a rise of 0.9%.
Spain remains mired in recession. Spanish GDP fell for the fifth consecutive quarter in Q3, dropping 0.3% on quarter vs consensus of -0.4%. Meanwhile, CPI rose to +3.5% on year in October from 3.4% in September.
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Today's Markets:
In Asia, Japan -1% to 8842. Hong Kong -0.4% to 21429. China +0.2% to 2062. India flat at 18431.
In Europe, at midday, London +0.9%. Paris +1.1%. Frankfurt +1.1%.
Futures at 7:00: Dow -0.15%. S&P flat. Nasdaq -0.3%. Crude -0.2% to $85.35. Gold +0.3% to $1714.50.
Today's economic calendar:
7:45 ICSC Retail Store Sales
8:55 Redbook Chain Store Sales
9:00 S&P Case-Shiller Home Price Index
10:00 State Street Investor Confidence Index
Notable earnings before today's open: ADM, AGCO, AGN, ALLT, AMTD, ASH, BP, CAH, CBB, CIE, CMI, DB, DLPH, ECL, F, GOV, HCP, HE, IPGP, IPXL, JCI, LLL, MCGC, MPW, NUS, PCS, PNR, SWC, TLM, TRI, TRP, TRW, UBS, VLO, VSH, WM, X, YNDX
Notable earnings after today's close: ACPW, BNNY, CAR, CBG, CENX, DVA, DWA, EA, EQIX, FISV, GERN, GNW, HTGC, ITRI, IVR, JDSU, KIM, LGCY, MIPS, MWA, OKE, OKS, ONXX, PPO,PSMT, QEP, QUIK, SIMG, SSW, STR, STX, TRIP, TTWO, WMB, WPZ, WU
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