White House opening bid asks for $1.6T in tax hikes. President Obama has called for a $1.6T tax increase, a $50B economic-stimulus program, and the power to raise the federal debt limit without congressional approval as part of a deal to avert the fiscal cliff. It's a "step backward," says Mitch McConnell. Or its the White House's opening gambit.
Eurozone unemployment keeps marching higher. Eurozone unemployment climbed to a fresh record high of 11.7% in October from 11.6% in September. Another 173,000 people are without a job, taking the total to 18.7M. The north-south divide remains as stark as ever, with Austria's jobless rate 4.3% while Spain's is 26.2%. "It's a measure of just how bad things have got in the eurozone that market sentiment is still irrationally upbeat," says forex specialist Jason Conibear.
Detroit staring at bankruptcy. With 2-3 weeks to receive $30M of state aid from Michigan in order not to run out of cash, Detroit is again teetering on the brink of bankruptcy. The aid is contingent on the city implementing the provisions of a deal in April, when Michigan agreed to provide $137M, but those measures haven't been enacted. Financial mismanagement, political corruption, and a massive population hemorrhage are among the causes of Detroit's woe.
Top Stock News
Teva falls after earnings warning. Teva Pharmaceutical (NASDAQ:TEVA) has dropped 5.5% premarket after forecasting 2013 EPS of $4.85-$5.15 versus Street consensus of $5.63. Total revenue is expected at $19.5B-$20.5B.
Mason stays as CEO of Groupon. Groupon CEO Andrew Mason won't be replaced as CEO in the near-term, the company said following a board meeting yesterday. There has been speculation that some Groupon directors want to bring in a more experienced executive to lead the struggling daily deals firm. Shares slid 5.1% premarket in reaction.
Offers come in "fast and furious" for Hostess' brands. Hostess Brands, which yesterday received court approval to liquidate, has received interest from 110 potential buyers for its brands, which include Twinkies, CupCakes, Ding Dongs and Ho Hos. Suitors include at least five national retailers, such as supermarkets. "Not only are these buyers serious, but they are expecting to spend substantial sums," says a financial adviser.
Duke CEO Jim Rogers to retire at end of next year. Duke Energy (NYSE:DUK) CEO Jim Rogers plans to retire by the end of 2013, consistent with the expiration of his contract. Rogers' departure is part of a settlement with North Carolina regulators over the firing of Bill Johnson just after Duke's merger with Progress Energy.
Supervalu still reviews options as funding hitch hits Cerberus. Supervalu (NYSE:SVU) has said that its review of strategic alternatives is still proceeding, with the comments following a report that potential acquirer Cerberus is having funding problems. It comes down to the post-acquisition debt-revenue mix - and if Supervalu has to sell assets on its own, big tax payments lie ahead.
Barclays to fight FERC over power-manipulation allegations. Perhaps tired of the never-ending regulatory scrutiny, Barclays (NYSE:BCS) plans to go to court to fight the Federal Energy Regulatory Commission if the agency insists on fining the bank about $470M over alleged electricity-market manipulation. "It will establish precedent," says a former FERC official, who can't ever remember the agency being challenged like this.
Car makers to unveil over 20 new vehicles at auto show. The L.A. Auto Show is due to open today for the public, with over 20 new models from major automakers set to be unveiled. The showcase for electric vehicles will get even closer attention as the field of players becomes more crowded. Look for the Fiat 500e (FIATY.PK), the Chevrolet Spark (NYSE:GM), and BMW's (OTCPK:BAMXF) powerful Concept series to grab a lot of the EV spotlight.
Top Economic & Other News
Japanese industrial output unexpectedly rises. Japanese industrial production figures for October have provided a bit of unexpected cheer, rising a monthly 1.8% vs consensus of -2%. On year, output fell 4.3%, but that still wasn't as bad as the -8% that was forecast. Meanwhile, unemployment came in an expected 4.2%, although Japan remains in deflation, with core CPI flat on year and non-core inflation down 0.4%.
Bundestag OKs latest Greek debt deal. Germany's Bundestag has approved by 473-100 the latest Greek debt deal, which the Troika agreed to earlier this week. The vote is a further step towards Greece receiving €44B in bailout cash and staving off eurogeddon, for now. The overwhelming approval comes despite the lack of details provided about the deal and concerns that eurozone countries will be forced to take losses on their Greek debt.
German retail sales suffer biggest fall in two years. German retail sales dropped a monthly 2.8% in October, with the fall the sharpest in almost two years. The decline was worse than the drop of 0.1% that was expected and the rise of 0.5% in September.
Californian port strike threatens holiday season cargo. A strike at Californian ports is threatening to delay the delivery of some holiday season cargo after longshoremen and clerical workers began action on Tuesday due to an impasse in contract talks. As of yesterday, seven of eight terminals at the Port of Los Angeles were closed, as were three of six in Long Beach. Ships have started to divert to other ports, including Mexico.
Eurozone inflation drops to 2.2%. Helped by a sharp slide in energy prices, eurozone inflation fell to the lowest level in almost two years in November, declining to 2.2% from 2.5% in October and vs consensus of 2.4%. Still, inflation remains above the ECB's target of just under 2%.
Indian FQ2 GDP slows to three-year low. India's GDP growth declined to a three-year low of 5.3% on year in FQ2 vs +5.5% in Q2 and consensus of +5.2%. The slowing growth comes as the government battles to implement reforms that it sees as vital to reviving the economy. These include allowing foreign companies to control supermarkets, and easing limits on non-Indian investments in the insurance, pensions and aviation sectors.
In Asia, Japan +0.5% to 9446. Hong Kong +0.5% to 22030. China +0.8% to 1980. India +0.9% to 19340.
In Europe, at midday, London +0.2%. Paris +0.3%. Frankfurt +0.4%.
Futures at 7:00: Dow +0.2%. S&P +0.1%. Nasdaq +0.3%. Crude +0.1% to $88.12. Gold +0.15% to $1732.10.
Today's economic calendar:
8:30 Personal Income and Outlays
9:45 Chicago PMI
3:00 PM USDA Ag. Prices
5:00 PM Fed's Kocherlakota: Macro-Finance Linkages
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