Bank-card delinquencies fall to 18-year low. Delayed repayments of bank-card loans dropped to the lowest level since 1994 in Q3, falling to 2.75% of all accounts from 2.93% in Q2, the American Bankers Association said today. Delinquencies in a composite ratio of eight installment-loan categories, which doesn't include bank cards or mortgages, fell to 2.16% from 2.24%. However, the ABA warned that weak hiring and the expiration of the payroll tax cut could make it harder for consumers to repay debt.
German jobless numbers continue rising. German unemployment grew for the ninth consecutive month in December, increasing by 3,000 to 2.942M, although the rise was less than the 10,000 that was expected. The jobless rate was unchanged at 6.9%. "The German economy is strong and it is only a question of time until businesses start expanding again," says Commerzbank's Ulrike Rondorf. Still, "German companies are reluctant to hire," due to the uncertainty in the eurozone.
BofA ramps up lending. Bank of America (BAC) CEO Brian Moynihan has instructed his staff to be "more aggressive" in lending to companies and has predicted that the bank should surpass JPMorgan (JPM) in direct-to-consumer mortgage loans in the next half year. Moynihan also wants to settle lawsuits against BofA as soon as possible, while he's cautious about predicting when the bank will be able to return money to shareholders.
Top Stock News
Equities suffer after-party hangover. U.S. stock futures were suffering a bit premarket after partying hard yesterday following the fiscal cliff deal, as were European shares. Asian stocks were mixed, with accelerated growth in China's services industries adding to any positive sentiment. (See below)
Apple seeks new Waze to strengthen maps app. Apple (AAPL) is reportedly in talks to acquire Israeli traffic/navigation app Waze, with Apple offering $400M up-front and $100M in incentives. Waze, though, is holding out for $750M. Buying the company won't eliminate the huge data edge Google Maps has over Apple Maps, but it will give the latter a unique information source whose value would grow following iOS integration.
AbbVie debuts on a high. AbbVie (ABBV) closed at $35.12 yesterday after opening at $34.40 following its spin-off from Abbott Labs (ABT), giving it a market cap of $55.8B vs Abbott's $50.7B. AbbVie faces plenty of challenges, not least reducing its dependence on its $9B-per-year arthritis treatment Humira, which accounts for at least 70% of the company's profit but which will lose its patent protection in 2017.
Family Dollar's net profit stalls. Family Dollar Stores' (FDO) net profit was flat at $80.3M in FQ1, and while EPS of $0.69 missed consensus, revenue climbed 12.7% and beat forecasts. "We are driving more traffic, and we are increasing our market share," says CEO Howard Levine. "While the near-term economic environment remains difficult to predict, I continue to be excited about the long-term opportunity."
Judge reiterates ban on Rambus patents. A judge yesterday confirmed her ruling that memory chip company Rambus (RMBS) can not use 12 of its patents to demand royalties from Micron Technology (MU). The verdict is a punishment for Rambus improperly destroying documentary evidence related to a lawsuit involving Micron. Judge Sue Robinson's verdict came after an appeal court asked her to explain more fully her initial ruling.
Safeway chief to retire after 20 years. Safeway (SWY) Chairman and CEO Steve Burd will retire at the company's May 14 shareholder meeting. Burd, 62, has held the top job for 20 years. He leaves at a time when the grocery chain is facing stiff high-end and low-end competition.
Logitech president becomes CEO. Logitech (LOGI) President Bracken Darrell has taken over as CEO as part of a planned transition. Darrell, who joined the computer-accessories company in April after running Whirlpool's (WHR) EMEA operations, has stepped in for Chairman Guerrino De Luca, who was acting CEO since July 2011. As boss, Darrell faces a long list of industry and company specific challenges.
California sues ConocoPhillips, Phillips 66 over gas storage. California's Attorney General has sued ConocoPhillips (COP) and spin-off company Phillips 66 (PSX) for allegedly violating state law by failing to properly inspect and maintain underground gasoline storage tanks at over 560 outlets. The lawsuit accuses the companies of improperly handling and disposing of hazardous waste and materials, as well as tampering with leak detection systems.
Top Economic & Other News
Growth in China's services industries speeds up. China's non-manufacturing PMI rose to 56.1 in December from 55.6 in November, with the construction services sub-index increasing to 61.9 from 61.3. That's consistent with a recovery in the property sector, which supports 40 other industries. However, the transport index slumped, as is consistent with falling demand for China's exports.
British banks to up lending. British banks intend to increase loans to companies and consumers after having already provided more mortgages in Q4, a Bank of England survey has found. The government will no doubt be happy given that banks cited its funding-for-lending scheme, which offers banks cheap loans for re-lending to businesses and individuals, as a major factor in the increased availability of credit.
Spanish unemployment falls. Increased hiring for the holiday season during December helped Spanish registered unemployment drop for the first time since July as the number of people claiming jobless benefits fell by 59,094 to 4.8M. It's a "welcome surprise" says Reuters' Jamie McGeever, but he points out that the July decline proved to be a "false dawn."
In Asia, Japan closed. Hong Kong +0.4% to 23399. China closed. India +0.3% to 19765.
In Europe, at midday, London flat. Paris -0.7%. Frankfurt -0.3%.
Futures at 7:00: Dow -0.2%. S&P -0.25%. Nasdaq -0.2%. Crude -0.6% to $92.60. Gold -0.4% to $1682.30.
Today's economic calendar:
Chain Store Sales
7:00 MBA Mortgage Applications
7:30 Challenger Job-Cut Report
8:15 ADP Jobs Report
9:45 ISM New York Business Index
9:45 Bloomberg Consumer Comfort Index
2:00 PM FOMC minutes
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
Notable earnings before today's open: FDO