Moody's downgrade of France leaves investors unperturbed. Moody's yesterday carried out its long-awaited threat to downgrade France, cutting its rating to Aa1 from Aaa and maintaining its negative outlook. "The predictability of France's resilience to future euro area shocks is diminishing in view of the risks to economic growth," Moody's said. These downgrades have long lost the ability to shock, and French 10-year OAT yields were just +4 bps to 2.115% midday in Europe.
BOJ resists political pressure for more easing. As expected, the Bank of Japan has resisted political pressure and refrained from further easing measures at its latest policy meeting. The bank maintained its key interest rate at 0-0.1%, its asset fund at ¥66T ($812B), monthly purchases of government bonds at ¥1.8T, and a credit-lending facility at ¥25T. However, the bank is expected to announce stronger measures at its next meeting in December.
Tiger buys 9.9% stake in Groupon at big discount to IPO. Tiger Global Management has provided a big vote of confidence to Groupon (NASDAQ:GRPN) - and exploited an 84% post-IPO fall in its share price - by acquiring a 9.9% stake in the struggling daily deals provider. Based on the company's closing price of $3.11 yesterday, the holding is worth $201.8M. Tiger also has stakes in a couple of other Internet plays that have lost much value: Yahoo (NASDAQ:YHOO) and Facebook (NASDAQ:FB).
Top Stock News
Archstone hopes to raise up to $3.45B in IPO. Apartment company Archstone (ASN) said it plans to raise as much as $3.45B in its IPO on the NYSE, which would make it the largest ever commercial real-estate public offering in the U.S. While the Lehman Brothers (OTC:LEHMQ) unit didn't say how many shares it intends to sell, nor at what range, analysts estimate Archstone could be worth up to $16B. The company plans to organize itself as a REIT.
Xstrata's shareholders expected to OK Glencore deal. Glencore's (OTCPK:GLCNF) shareholders have unsurprisingly backed the company's mega-merger with Xstrata (OTC:XSRAY). The main action will come later today, though, when the latter's investors have their say, with a first meeting scheduled for 08:00 ET. Xstrata's shareholders are expected to support the deal, as number two investor Qatar Holdings has said it will vote in favor, although it will abstain from a fat management retention plan.
Judge stays execution of Twinkies. Hostess Brands will hold mediation talks today with union leaders to resolve a strike that the company said has forced it to seek liquidation. The sides acceded to a request at a hearing yesterday from bankruptcy judge Robert Drain, who denied the company's filing to liquidate, for now. Hostess will also meet with its lenders. Following the hearing, CEO Gregory Rayburn said there's a chance Hostess could be saved.
Cnooc accepts Canadian conditions on Nexen acquisition. Cnooc (NYSE:CEO) has reportedly accepted conditions set by the Canadian government as it decides whether to approve the Chinese company's $15.1B acquisition of Nexen (NXY). The government adopted many of the terms requested by Alberta Premier Alison Redford, which include guarantees that at least half of Nexen’s board and management be Canadian, and that staff levels be maintained for at least five years.
NY to sue Credit Suisse over mortgage bonds. New York Attorney-General Eric Schneiderman reportedly plans to sue Credit Suisse (NYSE:CS) for allegedly misleading investors who lost over $11.2B on mortgage bonds. The civil lawsuit will accuse Credit Suisse of misrepresenting the quality of the loans it bundled into the securities. The suit will follow a similar case involving JPMorgan (NYSE:JPM) and its Bear Stearns unit.
Credit Suisse forms new wealth-management division. Credit Suisse (CS) intends to merge its asset-management operations with its private bank to create a new division called Private Banking & Wealth Management in a move that will result in a new executive board structure. The revamp comes three weeks after Credit Suisse said it plans to cut an extra 1B francs ($1.1B) of costs.
Judge allows FHFA case against Barclays to proceed. A federal judge has allowed a lawsuit from the Federal Housing Finance Agency to go forward against Barclays (NYSE:BCS) over the sale of $4.9B in questionable mortgage bonds to Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC). It's no surprise as the same judge allowed similar suits to move ahead against five other banks.
Schulze continues to work on Best Buy options. Richard Schulze is now reportedly working separately with P-E firms Cerberus, TPG Capital and Leonard Green on a bid for Best Buy (NYSE:BBY) despite previous speculation saying Cerberus had dropped out. Apollo (NYSE:APO) and KKR (NYSE:KKR) are unlikely to collaborate with Schulze on an offer. He's asked Best Buy for a 30-day extension on an upcoming deadline to complete his due diligence so he can see how well the holiday sales go.
GM to cut jobs in South Korea. General Motors (NYSE:GM) will reportedly reduce its staff in South Korea through a voluntary retirement program open to almost 7,000 employees, although there's no word on how many jobs the car maker wants to cut. The move follows a deeper concentration of assets by GM into China.
Top Economic & Other News
Eurozone again expected to delay approving Greek aid. European finance ministers are due to meet in Brussels today, when, it was once hoped, they'd finally authorize more bailout money for Greece, but that prospect is apparently looking unlikely. Ministers will also have to work out how to plug another €15B hole in the country's finances, over and above the bailout already agreed. The gap was created by giving Greece another two years to cut its budget deficit.
Obama wants "clear rules" in trade with China. President Obama has told Chinese Premier Wen Jiabao that their two countries must "establish clear rules" for trade and investment. Obama was speaking prior to a summit of Asia-Pacific nations in Cambodia. Late yesterday, Obama and Southeast Asian leaders launched the U.S.-ASEAN Expanded Economic Engagement initiative, which is designed to help countries from the region join the Trans-Pacific Partnership trade group.
In Asia, Japan -0.1% to 9143. Hong Kong -0.2% to 21228. China -0.4% to 2009. India -0.1% to 18329.
In Europe, at midday, London -0.2%. Paris -0.2%. Frankfurt +0.3%.
Futures at 7:15: Dow +0.05%. S&P +0.1%. Nasdaq +0.2%. Crude -0.2% to $89.13. Gold -0.1% to $1733.30.
Today's economic calendar:
7:45 ICSC Retail Store Sales
8:30 Housing Starts
8:55 Redbook Chain Store Sales
9:00 Fed's Lacker: 'The Fed's Monetary Policy Adrift'
12:15 PM Bernanke: ‘The Economic Recovery and Economic Policy'
Notable earnings after today's close: CRM
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