HSBC adjusted pretax profit +10%. HSBC's (HBC) Q3 underlying pretax profit climbed an in-line 10% to $5.1B, with the bank's U.K. and Hong Kong markets contributing over half of the figure. HSBC's underlying revenue was flat at $15.59B. The firm achieved $400M in cost cuts, although the earnings report also includes $428M to compensate U.K. customers for various wrongdoings. And like its peers, the bank is involved in a global investigation into the possible manipulation of forex markets. Still, shares were +1.4% premarket.
Twitter IPO much in demand. Twitter (TWTR) has reportedly attracted enough interest for its IPO to be oversubscribed. The demand comes even though Twitter's management has refrained from outlining how the micro-blogging Web site plans to break even. Twitter intends to sell 70M shares at a price range of $17-20 each, although it could end up selling the stock for more than that and/or increase the number of shares it will offer. The company is due to price its listing on Wednesday and start trading on Thursday.
Tri Pointe in $2.7B deal to combine with Weyerhaeuser unit. Tri Pointe Homes (TPH) has agreed to a $2.7B deal to merge with Weyerhaeuser's (WY) homebuilding division using a tax-efficient structure called a Reverse Morris Trust. Weyerhaeuser will spin or split off the unit, which will then combine with Tri Pointe Homes, with the latter retaining management control. Weyerhaeuser's shareholders will own 80.5% of the new entity and Tri Pointe's shareholders the rest.
Top Stock News
Fairfax has until tea-time for BlackBerry bid. Fairfax (OTCQB:FRFHF) has until 5 pm today to firm up the preliminary $4.7B bid for BlackBerry (BBRY) that the financial-services company made six weeks ago. The deadline comes amid reports that Fairfax, which is BlackBerry's largest shareholder with a 9.9% stake, has struggled to secure financing for the deal. Those who are also reportedly interested in the beleaguered cell-phone maker include a group that could eventually comprise the company's founders, Qualcomm (QCOM) and private-equity firm Cerberus.
Alcatel-Lucent seeks to boost finances with stock and bond issue. Alcatel-Lucent (ALU) intends to raise around €955M by selling 454.7-460M new shares at €2.10 each. The telecom-equipment maker will also launch a $750M high-yield bond offering and put in place a €500M new syndicated revolving credit facility. Alcatel-Lucent intends to use the money to repay 2014 and 2015 debt issuances. Shares were -6.2% at €2.79 at midday in Paris.
DOJ wants broad concessions package from AMR and US Airways. The Department of Justice reportedly wants US Airways (LCC) and AMR (AAMRQ) to sell assets at key airports across the U.S. in order for it to approve the carriers' merger. In a lawsuit opposing the transaction, the DOJ listed over 1,000 city pairings where the airlines dominate and where their tie-up could hurt competition. Reports last week had focused on a proposal from the airlines to divest rights at Washington's Ronald Reagan National Airport, although they have also offered to sell rights in locations other than Reagan. What's not clear is how far apart the sides are in their negotiations.
Top Economic & Other News
Eurozone manufacturing recovery broad-based. Eurozone manufacturing PMI edged up to 51.3 in October from 51.1 in September. The "modest and fragile recovery continues and remains broad-based, with growth seen in all nations bar France and Greece," says Markit. Increasingly "robust gains" in production in countries such as Spain, Italy and Ireland "suggest that structural reforms to boost competitiveness are starting to pay off." The euro was +0.1% at $1.3508 at the time of writing.
Growth in China's services activity accelerates. China's official non-manufacturing PMI grew at the quickest rate in 13 months in October, rising to 56.3 from 55.4 in September. The increase adds to an improving manufacturing sector and provides further evidence that China's economy has stabilized. At a meeting this coming weekend, China's leaders are expected to unveil reforms to strengthen the services sector and open it up to foreign competition.
U.K. construction sector booming. U.K. construction PMI climbed to 59.4 in October from 58.9 in September, marking the sharpest rise in output for just over six years. Residential construction remained the strongest performing area, says Markit, although civil engineering and commercial activity also enjoyed robust growth, while job creation accelerated at the fastest pace in six years. The FTSE 100 was +0.4% at the time of writing, while the pound was +0.2% to $1.5962.
Alpha-Rich Stock Movers and Great Calls
1) On Friday, Dennis Beaudet argued that UR-Energy (URG) had a double in it as macro headwinds fade. The stock is +10.7% since. Read article »
2) On August 13, investment advisor Trading The Spread said that the secular tailwind from America's energy boom would keep Greenbrier Companies' (GBX) growth story on track. The stock is +27.8% to date. Read article »
Alpha-Rich Stocks To Watch
1) Concerns that have weighed on shares of Commerzbank (OTCPK:CRZBY) for years appear to be receding. Catalysts on the horizon suggest a 50% potential upside. Read article »
2) Quebecois institution Group Jean Coutu (OTCPK:JCOUF) is undervalued and flush with cash. With several looming catalysts, including special dividends and growth prospects, the shares offer 20%+ total return upside. Read article »
Alpha-Rich articles are the best long and short ideas on Seeking Alpha. SA PRO subscribers receive early access to these Alpha-Rich articles, which often move markets. For more information about SA PRO and becoming a subscriber, click here.
In Asia, Japan closed. Hong Kong -0.3% to 23190. China flat, India closed.
In Europe, at midday, London +0.4%. Paris +0.3%. Frankfurt +0.3%.
Futures at 6:20: Dow +0.1%. S&P +0.1%. Nasdaq +0.3%. Crude +0.1% to $94.67. Gold +0.1% to $1314.
Ten-year Treasury Yield -2 bps to 2.62%.
Today's economic calendar:
No events scheduled.
Notable earnings after today's close: AEIS, AEL, ANAD, APC, ARI, AWR, BDE, BGC, BKH, BRE, BSFT, CENX, CF, CHMT, CLDT, CRK, CRZO, CSOD, DDR, DNB, DRYS, ED, ELNK, FST, GDP,GIMO, GSM, GST, GTAT, HK, HTZ, IPXL, JMBA, LF, LGCY, LMNX, MDR, MNKD, MR, MRO, NFX, NGLS, OMI, OTTR, PAA, PIKE, PKT, PNG, PPO, PXD,QLYS, RKT, SAAS, SB, SBAC, SGY, SNCR, STAG, TDW, THC, TPC, UNM, VNO, VOLC, WFT, WMGI
See full real-time earnings coverage »
Wall Street Breakfast is sent out by email for free -- Get it now »