Top Stories
Chinese economy enjoys October cheer. A number of economic reports out of China today showed further signs that the country's economy is recovering. Inflation rose a less-than-expected 1.9%, while industrial production increased 9.2% on year vs 9.2% in September. Nomura economist Zhang Zhiwei says the latest output data indicates that GDP growth could top 8% in Q4 vs 7.4% in Q3.
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HSBC target of yet another probe over client accounts. The U.K.'s HM Revenue & Customs is investigating HSBC's (HBC) offshore accounts in the English Channel island of Jersey held by thousands of British and other citizens. These include a drug dealer, a gun runner, three bankers facing fraud allegations, and suspected tax evaders. The probe adds to stinging U.S. criticism of HSBC for breaking American money-laundering rules.
Oil giants vie for Exxon's Iraqi oilfield stake. Exxon Mobil (XOM) is in talks with BP (BP), Shell (RDS.A), Lukoil, CNPC and Eni (E) about selling its stake in the West Qurna-1 oilfield in Southern Iraq, a senior government spokesman said. Exxon expects to complete a sale of the "super-giant oilfield" by the end of December. The company is getting out so it can concentrate on exploration projects in Kurdistan, which is in a dispute with Baghdad over the region's energy resources.
Top Stock News
Groupon slides 14% after Q3 miss. Groupon's (GRPN) shares slumped 14.8% premarket after its Q3 earnings missed expectations, with EPS coming in at zero and despite revenue climbing 32% to $568.6M. Groupon again used its earnings call to promise that its dismal international performance will get better as it improves the deal mix, personalization, and mobile support. However, Groupon again refused to promise that a big improvement will come next quarter.
Priceline to take a trip with Kayak for $1.8B. Priceline (PCLN) has agreed to acquire travel Web site Kayak Software (KYAK) for $1.8B, or $40 a share. The price represents a 29% premium to Kayak's close yesterday. The news came as Priceline's Q3 earnings beat expectations with EPS of $12.40 and revenues jumping 25% to $1.7B. Kayak rival Expedia (EXPE) was -3.6% premarket following the acquisition news, while TripAdvisor (TRIP) fell 2.05% post-market, but Orbitz (OWW) jumped 12.7% on hopes that it might be an target too.
Diageo to buy India's United Spirits for $2B+. Diageo (DEO) has agreed to acquire a 53.4% stake in India's United Spirits for $2.1B following months of negotiations. The price represents a decent-sized premium, as United Spirits has a market cap of about $3.3B. The transaction should boost Diageo's presence in the world's largest whiskey market.
Disney net profit climbs 14%. Disney's (DIS) FQ4 net profit rose 14% to $1.24B as EPS of $0.68 met expectations, but while revenue increased 4% to $10.8B, the figure missed forecasts. Earnings were boosted by growth at Disney's media networks, with ESPN enjoying record annual profit and sales. CEO Bob Iger expects Disney to be able to initiate projects that will add revenue from Lucasfilm as soon as the deal to buy the company closes. Shares fell 2.6% in A-H trading.
Schulze could drop his price for Best Buy. Reuters has firmed up investor speculation that following a sharp fall in Best Buy's (BBY) share price, founder Richard Schulze could make a lower bid for the retailer than the $24-$26 he suggested in August. That would have valued the deal at $8.16B-$8.84B, or up to $10.9B including debt. P-E firms Apollo, TPG and Leonard Green could join Schulze, although Cerberus has dropped out. A bid is not expected before December.
Icahn plays down making hostile bid for Netflix. Carl Icahn, who recently bought a 9.98% stake in Netflix (NFLX), has told CNBC he has thought about making a hostile bid for the company but said he doesn't think he "would ever get it." Icahn explained that he wouldn't be able to pay as much for Netflix as a "synergistic buyer."
Top Economic & Other News
CBO warns that U.S. could tip over fiscal cliff into recession... The CBO yesterday gave its view of how precipitous the drop from the fiscal cliff would be, forecasting that it would cause GDP to shrink 0.5% next year and unemployment to climb to 9.1% from 7.9%. However, growth would be stronger in the long run. If the cliff is avoided, the economy would expand 1.7% but would still remain "below its potential." President Obama is due to have his say later today.
...and Germany warns of slowdown... Germany's Economy Ministry expects "a noticeably weaker economic dynamic" over winter," but said the slowdown will only be temporary. The forecast follows a week of depressing data, including falling industrial output and exports. Q3 GDP is due out next week, with economists expecting an increase of 0.2% on quarter.
...while France heads for recession. France's GDP will slide 0.1% in Q4, the country's central banks predicts. With the bank also estimating that Q3 GDP fell 0.1%, that would put France in recession. German Finance Minister Wolfgang Schaeuble is so worried about the decrepit state of the French economy that he's asked the government's council of economic advisers to consider writing a report on what France should do to turn it around, Reuters reports.
U.K. ups the ante over eurozone banking union. The U.K. is threatening to block the eurozone's banking union, as it's worried that the members of the union will form a voting majority in the European Banking Authority, where the EU's rules are formulated and disputes resolved, the FT reports. That would enable the eurozone to run the rule over the City of London, and - in the fears of some British euroskeptics - cut its global importance.
Eurozone set to again delay Greek aid. Eurozone finance ministers look increasingly unlikely to agree to unlock the next €31.5B tranche of Greece's aid program at a meeting on Monday, with the FT reporting that the Troika is still divided on how much debt relief Greece needs and who will carry the losses from reduced debt repayments. Greece is fast running out of cash but needs to return €5B to the ECB on Friday, so a stopgap bit of jiggery-pokery wouldn't be a surprise.
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Today's Markets:
In Asia, Japan -0.9% to 8757.6. Hong Kong -0.8% to 21384. China -0.1% to 2069. India -0.9% to 18684.
In Europe, at midday, London -0.5%. Paris -0.3%. Frankfurt -0.9%.
Futures at 7:00: Dow -0.3%. S&P -0.3%. Nasdaq -0.1%. Crude -0.3% to $84.80. Gold +0.3% to $1730.90.
Today's economic calendar:
8:30 Import/Export Prices
9:55 Reuters/UofM Consumer Sentiment
10:00 Wholesale Trade
Notable earnings before today's open: AEE, BAM, COV, FWLT, JCP, LNT, MEA, MHR, MTG, NPSP, VTG, WCRX, XTEX
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