HSBC's $9.4B sale of Ping An stake could collapse. HSBC's (HBC) sale of its 15.6% stake in China's Ping An Insurance to Thailand's Charoen Pokphand for $9.4B is reportedly in doubt after China Development Bank changed its mind about providing a large part of the funding for the deal. HSBC had expected to book a profit of $3B on the transaction. Shares were -0.8% premarket.
AIG to discuss joining $25B suit vs government. AIG's (AIG) advertising tagline may be "Thank you America," but its board will today consider joining a $25B lawsuit that's being led by former CEO and major investor Maurice Greenberg against the government. The suit argues that the heavy demands of AIG's rescue, such as the government taking a 92% stake and the high interest rate rates levied, deprived shareholders of tens of billions of dollars and violated the Fifth Amendment.
Samsung expects Q4 profit of $8.3B. Samsung (OTC:SSNLF) expects to have earned a Q4 operating profit of 8.8T won ($8.3B), up 89% on year and above consensus of 8.5T. Sales probably climbed 18% to 56T won as overall smartphone shipments totaled 63M units, or around 500 a minute, vs Apple's (AAPL) 45M. And while sales of the Galaxy S III slipped to 15M from 18M, those of the Galaxy Note II 'phablets' are forecast at 8M.
Top Stock News
GS uses own cash for mid-term trades despite Blankfein comments. Goldman Sachs (GS) has a secretive department called Multi-Strategy Investing (MSI) that uses the bank's funds to invest in stocks and bonds. While MSI doesn't trade in and out of positions on a daily basis, it sells most assets after a few months. The activities seem to somewhat fly in the face of Lloyd Blankfein's assertion in July that Goldman no longer carries out proprietary trading.
Merck confirms Bausch & Lomb interest. Merck (MRK) could be interested in acquiring Bausch & Lomb, with Merck CEO Kenneth Frazier saying "It's something that's worth thinking about." Any bid for Bausch & Lomb, whose owner, Warburg Pincus, hopes to get at least $10B in a sale, would be something of an about-turn for Frazier, as he previously said Merck isn't interested in large pharmaceuticals acquisitions.
Sears Chairman to become CEO. Sears Holdings (SHLD) Chairman Edward Lampert will replace Louis D'Ambrosio as CEO, with the latter resigning due to family health matters. Sears also expects Q4 EPS of $1.25-$2.00, above consensus of $0.86. After D'Ambrosio pushed the retailer into new online channels and bet on technology, analysts now wonder if Lampert will move in a different direction to increase the pace of asset sales.
Anglo American names Mark Cutifani as CEO. As expected, AngloGold Ashanti (AU) CEO Mark Cutifani has been appointed to the top job at Anglo American (OTCPK:AAUKY), effective on April 3. AngloGold CFO Srinivasan Venkatakrishnan and EVP Tony O'Neill will act as joint interim CEOs after Cutifani departs and until the company appoints a new chief executive, although both have indicated that they aren't planning to apply for the position on a permanent basis.
Barrick Gold ends talks to sell African Barrick. African Barrick Gold (OTC:ABGLF) has plummeted 18.85% in London after parent company Barrick Gold (ABX) ended talks to sell the unit, in which it owns 74%, to state-owned China National Gold. Barrick Gold "will only proceed with opportunities that generate acceptable value," CEO Jamie Sokalsky said. African Barrick, which is worth $1.4B, will now conduct a review of its operations in order to improve returns.
Yum shares slide after it warns on KFC's China sales. Yum Brands (YUM) fell 5.1% in post-market trading after the restaurant operator warned that same-store sales in China declined 6% in Q4 vs. an earlier forecast of -4%. The sharper drop is due to the effect on KFC sales in late December from poultry contamination fears. "The trust in KFC was so high that now the anger is high," says market researcher Shaun Rein.
Alcoa seen swinging to net profit. Alcoa (AA) is due to get Q4 earnings season underway after the bell today, with analysts expecting that the aluminum company swung to an EPS of $0.06 from a loss per share of -$0.03 last year but that sales dropped 6.5% to $5.6B. A minor uptick in aluminum prices should have helped the bottom line after price falls hurt results in recent quarters, although RBC Capital doesn't see improvement anytime soon in the market.
Top Economic & Other News
Eurozone unemployment again hits new high. Eurozone unemployment has again a hit a fresh record high, rising to 11.8% in November from 11.7% in October, with over 18.8M people out of work. Youth unemployment edged up to 24.4% from 24.2%. Leading the jobless figures was Spain with a 26.6% rate, while Austria had the lowest unemployment with 4.5%.
Japan plans to buy ESM bonds. Japan intends to purchase bonds issued by the European Stability Mechanism and euro-denominated sovereign debt, Finance Minister Taro Aso said today, although the government hasn't decided on an amount. The idea is to weaken the yen and help support Europe, although forex strategist Marshall Gittler views the move as more political than impactful.
Growth in healthcare expenditure remains slack. Healthcare spending rose at a record low pace of 3.9% to $2.7T in 2011 as patients continued to cut back on medical services amid the economic slump. The growth was the same as in 2010 and 2009, and well below the 8% prior to the financial crisis. However, there are signs that the rise in spending could be speeding up again, with expenditure on drugs increasing by 2.9% in 2011 vs 0.4% in 2010, and on doctors' visits by 4.3%.
In Asia, Japan -0.9% to 10508. Hong Kong -0.9% to 23111. China -0.4% to 2276. India +0.3% to 19743.
In Europe, at midday, London +0.3%. Paris +0.7%. Frankfurt +0.2%.
Futures at 7:00: Dow flat. S&P flat. Nasdaq flat. Crude +0.6% to $93.72. Gold +0.6% to $1655.50.
Today's economic calendar:
7:30 NFIB Small Business Optimism Index
7:45 ICSC Retail Store Sales
8:55 Redbook Chain Store Sales
1:00 PM Results of $32B, 3-Year Note Auction
3:00 PM Consumer Credit
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