Bundesbank: Germany faces possible recession. The Bundesbank has warned that Germany may be entering recession, saying that the economy could contract in FQ4 and FQ1. The bank also cut its 2012 and 2013 GDP predictions to +0.7% and +0.4% respectively from prior forecasts of +1% and +1.6%. In addition, it lifted its 2013 unemployment outlook to 7.2% compared with 6.8% this year, but said the labor market "will come through the economic slowdown in good shape."
Regulator may have known about Deutsche Bank's losses. BaFin, the German bank supervisor, reportedly attended audit committee meetings at Deutsche Bank (NYSE:DB) during 2008-09, when the firm failed to recognize up to $12B of trading losses that could have forced it to seek a bailout. News that BaFin may have known about the alleged hidden losses could spark tensions with the SEC and make it more difficult for the U.S. agency to bring a case against Deutsche Bank.
Indian parliament opens the way for Wal-Mart. The Indian government has won a vote in the upper house of parliament on a controversial proposal that will allow foreign retailers such as Wal-Mart (NYSE:WMT) to own majority stakes in Indian supermarkets. The victory adds to one that the government gained in the lower house on Wednesday and is a massive boost in its attempts to implement policies that it believes will turn around slowing growth. Next up are financial-sector reforms.
Top Stock News
AIG in talks to sell control of $5.5B air-leasing unit. AIG (NYSE:AIG) is reportedly in negotiations to sell a controlling stake in its aircraft-leasing unit, International Lease Finance, to a group that includes New China Trust, China Aviation Industry Fund, and Industrial & Commercial Bank of China. A deal could value ILFC, which AIG has said it wants to take to IPO, at $5.5B.
Google taking final bids for set-top box unit. Google (NASDAQ:GOOG) has reportedly set today as the provisional deadline for the last round of bidding for Motorola's set-top box business, which could bring in offers of $1.5-2.5B. Potential suitors include cable-equipment maker Arris (NASDAQ:ARRS), Britain's Pace, France's Technicolor (OTCQX:TCLRY) and private-equity firms. Despite its TV software, Google is selling the unit due to costs and because cable companies might be wary of doing business with it.
Alcatel-Lucent mulls mortgaging best assets. Alcatel-Lucent (ALU) is reportedly considering using its fast-growing Internet-routing business and/or its massive patent portfolio as collateral for up to €1B of loans. The money will give the company time to implement €1.25B of cost cuts as it looks to turn around its fortunes. Other options Alcatel-Lucent is exploring include asset sales and issuing new stock. The speculation follows news that the company is being kicked out of France's CAC-40.
Supreme Court may review "pay for delay" pharma case. The Supreme Court could say today whether it will review a case involving a "pay for delay" agreement in which a pharmaceutical company pays generic rivals tens of millions of dollars to hold off from launching copycat versions of medicines. The FTC says the practice costs customers $3.5B a year, while drug firms argue that it protects innovation. Companies that could be affected include Abbott (NYSE:ABT), Watson (WPI), Merck (NYSE:MRK), Bristol-Myers Squibb (NYSE:BMY) and Teva (NYSE:TEVA).
FBI joins probe into Big Lots CEO. The FBI has reportedly joined the SEC in investigating retiring Big Lots (NYSE:BIG) CEO Steven Fishman for selling $10M of the company's stock in March, just over a month before the firm disclosed slowing Q1 sales, which sent shares plunging 24% in one day. Big Lots has confirmed an earlier report that the SEC is probing Fishman and said that it's received a grand-jury subpoena from the U.S. attorney's office.
SEC may sue Netflix and its CEO over disclosure. Netflix (NASDAQ:NFLX) has received a "Wells notice" from the SEC indicating that the agency will probably take action against the company and CEO Reed Hastings over a Reg-FD violation. The notice is related to a July Facebook post in which Hastings bragged that Netflix had streamed over 1B hours of video in June. Shares fell 1.2% in post-market trading.
P-E fund buys into Aston-Martin. London-based private-equity fund Investindustrial has agreed to purchase a 37.5% stake in Aston Martin for €190M, giving the sports car manufacturer a needed capital injection. Aston Martin is the only luxury automaker without the support of a larger group, making it hard to keep up with the likes of BMW, Bentley, and Fiat's Ferrari in key areas.
Top Economic & Other News
Employment growth seen slowing. Employment data for November is due out this morning, with economists expecting that the rise in nonfarm payrolls slowed to 85,000 from 171,000 in October and that the jobless rate was unchanged at 7.9%. Superstorm Sandy was likely to be have been a key factor that held back hiring, while the uncertainty engendered by the U.S. meandering its merry way towards the fiscal cliff probably also didn't help.
Shippers, retailers brace for another port strike. Just days after an eight-day strike at Californian ports ended, shippers and retailers are bracing for a potentially more disruptive stoppage at ports along the East and Mexican Gulf coasts, which would leave fewer options for diverting cargo. Union representatives, management and federal mediators are due to meet on Monday to continue what have been fractious talks to replace an existing labor contract that expires on December 29.
Russia furious despite U.S. vote to lift trade limits. Russia has threatened that a new U.S. law which seeks to punish human rights violators will "adversely affect the prospects of bilateral cooperation" between the two powers. The Senate passed the measure yesterday as part of a bill that grants Russia "permanent normal trade relations" by lifting Cold War-era restrictions. The bill will now go to President Obama for his signature.
Strong earthquake hits Japan's east coast. An earthquake with a preliminary magnitude of 7.3 has struck off the coast of northeastern Japan, shaking buildings in Tokyo and sending a 1-meter high tsunami to the Miyagi Prefecture, which was badly damaged by the earthquake in March 2011. Tokyo Electric (OTCPK:TKECF) said it hasn't detected irregular radiation levels at its Fukushima Daiichi nuclear plant. The yen briefly spiked against the dollar following the quake.
In Asia, Japan -0.2% to 9527. Hong Kong -0.3% to 22191. China +1.6% to 2062. India -0.3% to 19424.
In Europe, at midday, London -0.1%. Paris -0.2%. Frankfurt -0.1%.
Futures at 7:00: Dow -0.1%. S&P -0.1%. Nasdaq -0.1%. Crude -0.2% to $86.07. Gold -0.2% to $1698.30.
Today's economic calendar:
Monster Employment Index
8:30 Nonfarm Payrolls
9:55 Reuters/UofM Consumer Sentiment
3:00 PM Consumer Credit
Notable earnings before today's open: BNS
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