Home prices to post first annual gain since 2006. Case-Shiller data through the end of October showed home prices up 6.9% since January. Should the gains hold, 2012 will be the strongest year for prices since 2005. Slowed construction over the past few years combined with banks holding off foreclosures to leave inventories at historically low levels just at the time when deep-pocketed investors like Blackstone leapt into the market. Traditional buyers are back as well, drawn in by attractive prices and record-low mortgage rates. Real estate is "no longer taboo," says Ivy Zelman, "and that change in sentiment could have a very powerful effect."
Fourth-quarter sees M&A surge. Companies announced $691.9B in purchases in Q4, the most activity since 2008 Q3, according to Bloomberg. It's a big finish to an otherwise slow year where transactions of $2.19T were off about 10% from 2011. "Wait and see," has been the attitude of executives, says Goldman M&A Chief Gene Sykes, but with a $3.5T cash hoard (and Mr. Sykes in their ear), they can only hold off on purchases for so long.
CFTC staffers in demand. After two years of nights and weekends crafting the long complicated rules necessary to make Dodd-Frank regulations workable law, CFTC staffers are hot commodities. The demand comes from the firms who will need to follow and interpret what the staffers just wrote. At least 9 staffers have left since June, including 6 who were directly involved in rule making. "If I'm going to work this hard I might as well make three times as much," says former CFTC General Counsel Dan Waldman.
Top Stock News
Marvell hit with $1.17B judgement. The slide continues for Marvell Technology (MRVL) after a jury ordered the company to pay $1.17B for infringing patents held by Carnegie Mellon University. The judgement amounts to more than 25% of Marvell's current market cap, but there's a good chance the amount will be reduced upon appeal. Combining the regular and after-hours sessions yesterday, the shares fell more than 13% and are now down about 50% year-to-date.
Toyota to pay $1.1B to settle suit. Toyota (TM) avoids a potentially costly jury trial after it agreed to pay about $1.1B to settle a class-action lawsuit over complaints of unintended acceleration in its cars. Not previously reserving for the loss, the company said it will take a $1.1B pretax charge to earnings this quarter. Company officials said now was a good time to settle as the company image has recovered from the scandal. U.S. sales this year are up 29% through November, and the automaker has gained 2 points of market share.
Ford to invest $773M on Michigan facilities. Ford (F) said it intends to invest more than $773M to upgrade and expand 6 Michigan manufacturing plants. It's part of a pledge to invest $6.2B in U.S. facilities through the end of 2015. The company said this particular phase will result in the creation of 2,350 new hourly positions and the retention of 3,240 others.
TD Ameritrade backs Knight Capital takeover. Getco's $1.4B bid for Knight Capital (KCG) got a key backer after TD Ameritrade (AMTD) - an owner of about 7% of Knight - pledged its support for the deal. Combined with Jefferies' previously announced support and Getco's current stake, this brings about 45% of the shares now committed to the acquisition. Also, Knight's board unanimously approved the deal, and on the board sits Blackstone's Martin Brand. With Blackstone, a 15.6% owner of Knight, it's safe to say the deal will get the backing of a majority of company shares.
Top Economic & Other News
U.K. bank lending slides. Lending by U.K. banks to companies fell £3.1B ($5B) in November, the largest decline since June, and more than triple the average £900M slide of the previous 6 months. The contraction comes amid the Bank of England's late-summer launch of the Funding for Lending Scheme, which promised a cheap source of funds for banks as long as they lent the money out. Bankers say there's little borrowing demand from firms who instead remain in debt reduction mode.
In Asia, Japan +0.9% to 10323. Hong Kong +0.4% to 22506. China -0.6% to 2206. India -0.5% at 19324.
In Europe, at midday, London +0.3%. Paris +0.6%. Frankfurt +0.3%.
Futures at 7:00: Dow +0.2%. S&P +0.3%. Nasdaq +0.3%. Crude -0.1% to $90.86. Gold -0.3% to $1656.
Today's economic calendar:
8:30 Initial Jobless Claims
9:45 Bloomberg Consumer Comfort Index
10:00 New Home Sales
10:00 Consumer Confidence
11:00 EIA Petroleum Inventories
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
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