Senate leaders near deal but will Congress pass it? European shares and U.S. stock futures were mostly higher at the time of writing as markets bought into optimistic noises that Senate leaders are close to a deal that would extend the U.S.'s borrowing authority until February 7, fund the government until January 15, and force Washington to hold budget talks. However, the agreement seems to contain few of the demands of the Tea Party Republicans, raising the question as to whether Congress will pass it.
Apple taps Burberry chief to head retail and online ops. Apple (NASDAQ:AAPL) has named Burberry (OTCPK:BBRYF) CEO Angela Ahrendts to the newly created position of Senior VP of Retail & Online Stores. Under Ahrendts' seven-year tenure as head of the British fashion house, its sales almost tripled and its share price nearly quadrupled. Apple has been without a retail head since John Browett was shown the door a year ago, leaving CEO Tim Cook in charge of the division on an interim basis.
Top Stock News
U.K. court hearing landmark Libor cases. The U.K.'s Court of Appeal was due to begin a three-day hearing today over whether the attempted rigging of Libor rates can be used as a reason to void loans and other deals, and whether banks mis-sold products that were based upon the rates. The court is considering two separate cases, one against Barclays (NYSE:BCS) and the other against Deutsche Bank (NYSE:DB). A loss for the banks could leave the sector exposed to claims of billions of dollars.
Chevron set for trial over Ecuadorean award. Chevron (NYSE:CVX) is due to go to trial today in a bid to convince a U.S. judge that a group of Ecuadorean villagers and their lawyer used bribery to win a $19B judgment against the oil giant from a court in Ecuador. The case is the latest chapter in a dispute over environmental contamination at an Ecuadorean oil field operated by Texaco, which Chevron bought in 2001.
Intel, Yahoo earnings seen falling. Intel (NASDAQ:INTC) and Yahoo (NASDAQ:YHOO) are due to release their Q3 results today, with both expected to report lower EPS. Intel's earnings are seen dropping to $0.53 a share from $0.58 even though revenues are estimated to have edged up 0.1% to $13.47B. Analysts expect that Yahoo's EPS slipped to $0.33 from $0.35 as revenue dropped 0.6% to $1.08B. The company will take the unusual step of letting the public ask questions for executives to answer on its earnings call.
Amazon shipping goods from inside P&G. Amazon (NASDAQ:AMZN) has ensconced its workers in several Procter & Gamble (NYSE:PG) warehouses, where they ship consumer staples such as Pampers diapers directly to consumers. Under a program called Vendor Flex, Amazon is also located inside, or is in talks to enter, the warehouses of other suppliers, including Kimberly Clark (NYSE:KMB). The deal between Amazon and P&G enables the former to cut costs and the latter to boost its online sales.
Energy Future's creditors unable to agree on restructuring debt. Energy Future Holdings' hopes of a relatively fast and orderly bankruptcy have been thrown into doubt after creditors were reportedly unable to agree on restructuring the Texas power utility's finances. Energy Future owed $43.6B at the end of June. A major deadline is November 1, when the company has to make a junior loan payment of $270M. However, senior creditors don't want that payment to be made because of its status.
Forex manipulation probe looks at JPMorgan trader. Better tack another billion or two on to JPMorgan's (NYSE:JPM) legal tab, as the U.K. - in its investigation of the potential manipulation of currency markets - is looking at the activities of former RBS (NYSE:RBS) trader Richard Usher, who is now in the employ of the House of Dimon. When at RBS, Usher took part in chat sessions with top traders at other firms. The group was known by various monikers, including names a prosecutor would love to get in front of a jury, like "The Bandits' Club" and "The Cartel."
BlackBerry bids to reassure customers. With smartphone shipments plunging, workers being sacked and M&A options under consideration, BlackBerry (NASDAQ:BBRY) is taking out full-page ads in major newspapers to soothe worried customers. "You can continue to count on BlackBerry," the ads say. "We have substantial cash on hand and a balance sheet that is debt free." The strong whiff of desperation about it all may serve to have the opposite effect of what BlackBerry intends.
Top Economic & Other News
German investors remain confident. The German ZEW survey of investor confidence has climbed to 52.8 in October from 49.6 in September and topped consensus. The current situation print slipped and missed forecasts, although sentiment for the eurozone rose. "At present a greater impact of the debate on the debt ceiling in the USA is not visible," says ZEW President Clemens Fuest. The euro took a tumble and was -0.4% at $1.3507 at the time of writing.
U.K. inflation holds steady. U.K. inflation was unchanged at 2.7% on year in September, slightly above forecasts of 2.6%. The largest upward contribution came from air fares, although this was offset by lower gasoline and diesel prices. The reading is well above the Bank of England's target of 2%, although because of the high unemployment rate, the BOE is holding off from raising interest rates.
Start-up aims to revolutionize inflation tracking. A start-up backed by Google (NASDAQ:GOOG) is today due to unveil a methodology to measure inflation in real time rather than on a monthly basis, as has been the way for decades. Premise Data employs 700 people from around the world to photograph store shelves and product carts using their smartphones. Premise then uses the pictures, along with information from Internet sites, to track consumer prices.
Alpha-Rich Stock Movers and Great Calls
1) On October 2nd, Inflection Point Investing said Ubiquiti Networks (NASDAQ:UBNT) had margin expansion and new markets as pending catalysts to continue its run. The stock is +8.3% since. Read article »
2) On September 9th, Amit Ghate argued that Inovio's (NYSEMKT:INO) big move up left it liable to another drop in share price. The shares are -25.5% since. Read article »
Alpha-Rich Stocks To Watch
1) Telecom consolidation and fading regulatory issues are two reasons to light up about Orange (NYSE:ORAN). The French firm could run another 25% while remaining an acquisition target. Read article »
2) Cott Corporation (NYSE:COT) has faced headwinds in the soft drink market and with a key supplier, but there's still plenty of juice left in the company. Cott has 30% upside as the turnaround continues. Read article »
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In Asia, Japan +0.3% to 14442. Hong Kong +0.5% to 23337. China -0.2% to 2233. India -0.3% to 20548.
In Europe, at midday, London +0.8%. Paris +0.5%. Frankfurt +0.7%.
Futures at 6:20: Dow +0.2%. S&P +0.1%. Nasdaq +0.2%. Crude -0.6% to $101.79. Gold -1.6% to $1256.20.
Ten-year Treasury Yield +3 bps to 2.73%.
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