Last ditch effort to avoid fiscal cliff. The President has called for congressional leaders to come to the White House today in hopes of forging an agreement. There is little sign, however, of any movement towards legislation with a chance of being passed. "I don't know timewise how it can happen now," said Senate Majority Leader Reid. "Republicans aren't about to write a blank check for anything the Democrats put forward just because we find ourselves at the edge of a cliff," says Minority Leader McConnell.
Consumer confidence withers. The Conference Board said its consumer confidence index sunk to the lowest level since August as respondents fret over looming tax increases and spending cuts. The gauge matched a similarly large drop in the University of Michigan read several days ago. The last time confidence turned negative so quickly was in August 2011 amid the debt ceiling showdown and U.S. credit rating downgrade.
Banks lose hope for stalling Dodd-Frank. JPMorgan's "London whale" losses have apparently ended any hopes the banks had of holding up a wave of new rules aimed at constraining and monitoring their activities. Our "backs were against the wall" earlier in 2012, says an advocate of tougher regulation. "The London whale blew all of that out of the water." Within days of the loss disclosure, OCC Chief Counsel Julie Williams tried to wave it off as the cost of regular business, but her boss disagreed. Ms. Williams left the OCC soon after.
Top Stock News
Cliff or not, firms win submarine orders. General Dynamics (NYSE:GD) and Huntington Ingalls (NYSE:HII) were awarded submarine contracts worth up to $4.5B from the Navy, which secured the funds even if automatic budget cuts are enacted next year. Connecticut Representative Joe Courtney notes hundreds of engineers and designers have already been hired to work on the program at General Dynamics' New London facility.
Fear of Amazon: Same-day delivery trend grows. Wal-Mart (NYSE:WMT) tested same-day delivery service this holiday season in 5 markets as Amazon (NASDAQ:AMZN) hinted at expanding its same-day shipping service. eBay's (NASDAQ:EBAY) Now iPhone app - available in NYC and San Francisco - allows customers to choose items from physical stores and have them dropped off same-day at an apartment, office, coffee shop, or bar (no health club?) for a $5 fee. "People want it now, they want it fast," says eBay spokeswoman Lina Shustarovich. One issue: Profitability. Does anybody remember Kozmo.com and Webvan?
Hewlett-Packard discloses DOJ investigation. Hewlett-Packard (NYSE:HPQ) confirmed the Justice Department is investigating allegations of accounting improprieties at Autonomy prior to it being acquired by H-P last year. Talking about the $8.8B write-down on Autonomy's value, H-P said it recalculated Autonomy's numbers, but didn't provide details on its claim of accounting errors which make up $5B of the charge. "It is extremely disappointing that H-P has again failed to provide detailed calculation ... or publish any explanation of the serious allegations it has made," says Mike Lynch, the former Autonomy CEO.
Port cliff looms. Christmas comes in spring for Home Depot (NYSE:HD) and Lowe's (NYSE:LOW), so the two may have the most at stake among retailers from a looming port strike threatening to paralyze cargo traffic from Maine to Texas. The International Longshoreman's Association has threatened to walk off the job if a new deal isn't in place upon expiration of its existing contract on Dec. 29. "At this point, we don't expect a settlement," says the NRF. The White House has its eye on the situation, but hasn't said whether the President would use his powers to force strikers back to work for an 80-day cooling off period.
Top Economic & Other News
Chinese rebar rallies. Rebar futures in Shanghai are headed for their best quarterly performance in two years, up 8.9% amid hope of a renewal of the Chinese property boom. New home prices are back on the rise in most Chinese cities, according the the country's statistics bureau. Moving along with rebar prices is iron ore, up 56% this quarter.
In Asia, Japan +0.7% to 10395. Hong Kong +0.2% to 22667. China +1.2% to 2233. India +0.6% at 19445.
In Europe, at midday, London -0.2%. Paris -0.8%. Frankfurt -0.5%.
Futures at 7:00: Dow -0.3%. S&P -0.3%. Nasdaq -0.3%. Crude +0.2% to $91.08. Gold -0.2% to $1661.
Today's economic calendar:
9:45 Chicago PMI
10:00 Pending Home Sales
10:30 EIA Natural Gas Inventory
11:00 EIA Petroleum Inventories
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