- Employers plan hiring uptick in 2010. U.S. employers expect to hire more new workers in 2010 than they did in 2009, according to CareerBuilder.com's 2010 Job Forecast released this morning. Twenty percent of employers plan to add full-time positions next year, up from 14% in 2009, while just 9% plan to cut head count in 2010, down from 16%. Still, 61% said they have no plans to change staffing levels, indicating ongoing caution. "Employers are waiting to see what the economy does and what the new year brings," CareerBuilder's Michael Erwin said. While the job market appears to be on the mend, the firm said it doesn't expect a return to growth until at least Q2 2010.
- Fed floats new exit tool. The Federal Reserve proposed the creation of a new term-deposit facility, through which it will pay eligible institutions interest on deposits ranging from one month to one year; the Fed already pays interest on banks' overnight reserves. In its crisis-fighting efforts, the Fed has extended nearly $2.2T in credit to the banking system, fueling concern sabout the possibility of an inflation spike. The new proposal would be another tool in the tightening arsenal, along with reverse repurchase agreements and outright asset sales.
- Specs go bullish on dollar. For the first time since May, speculators went long the dollar, according to CFTC data released Monday. Net long dollar positions in the week ending Dec. 22 were +$700M, up from -$1.98B in the prior week, and a peak short position of $20.7B. The shift comes in a month that has seen the dollar rally sharply after spending most of 2009 under pressure.
- GM's year-end fire sale. GM is offering huge incentives to its dealers to speed up the sales of leftover inventory from its defunct Saturn and Pontiac brands. Until Jan. 4, GM will pay dealers $7,000 for each new Saturn or Pontiac on their lots that is moved to their rental-vehicle or service-vehicle fleets. Dealers would then be forced to classify the cars as used, resulting in fire-sale prices for customers. The tactic could inflate GM's December sales, and cut the cost to car buyers by as much as 46%.
- Ex-worker accuses Seagate of cover-up. A decade-long dispute between tiny Convolve and Seagate Technology (STX) took an unexpected turn after an ex-employee claimed Seagate had appropriated Convolve technology and destroyed the evidence. According to court documents, the whistle-blower, Paul A. Galloway, provided an eyewitness account accusing Seagate of incorporating Convolve's hard-drive technology into its products. Convolve has been seeking $800M from Seagate and Compaq over technology that reduces the noise and vibration generated by hard-disk drives.
- Hong Kong chief warns of double dip. Hong Kong leader Donald Tsang said Tuesday he is pessimistic about the pace of the city's economic recovery, and warned of a double dip in 2010. Yesterday, a weak sale of two waterfront sites raised concerns the Hong Kong real-estate bubble - fueled largely by short-term capital inflows - may be bursting. Last month, Tsang expressed concern that money flowing into Asia because of low U.S. interest rates could spark another financial crisis in the region. (ETF: EWZ)
- Pilgrim's Pride exits bankruptcy. Chicken producer Pilgrim's Pride (PGPDQ.PK) emerged from bankruptcy protection just over a year after beginning the process. The exit deal includes the sale of a majority stake to Brazilian meat company JBS for $800M. Pilgrim's Pride, one of the largest chicken producers, has the authority to issue 800M shares of common stock and 50M shares of preferred stock in the reorganized company, some of which will go to current stockholders in exchange for their old shares. Shares begin trading today on the NYSE under the symbol PPC.
- Investors bet on emerging markets. Emerging-market equity funds inflows tripled last week as the outlook improved for developing-nation exporters, according to EFPR. Emerging-market stock funds have attracted a record $80.3B in 2009, compared with outflows of $48B in 2008, amid a 73% rally in MSCI's Emerging Markets Index. U.S. equity fund inflows of $11.1B made for the strongest week since June, 2008, helping to improve the record YTD outflow to $69B.
- Corporate bonds likely to be winners in 2010. Corporate bonds - especially bank bonds - will be big winners in 2010, benefiting from a combination of stronger balance sheets, growing demand and shrinking debt issuance, according to Pimco, the world's largest bond manager. "As the corporate sector de-levers while the federal government re-levers, bond market technicals should increasingly turn positive for corporate bonds and negative for Treasurys," Pimco's Mark Kiesel told investors Monday.
- Consumer advocates oppose Google/AdMob deal. Two consumer rights groups - Consumer Watchdog and the Center for Digital Democracy - asked the FTC to block Google's (GOOG) acquisition of AdMob, saying the merger "would substantially lessen competition in the increasingly important mobile advertising market," and that the deal "raises substantial privacy concerns" because both "gather tremendous amounts of data about consumers' online behavior." The FTC has already signaled that it wants to take a closer look at the $750M deal, announced in November. AdMob's ad network runs across mobile sites and applications, and critics worry the company will make it easy for Google to extend its dominant share of the search ad market into the fast-growing mobile space.
- Morgan Stanley plots pay overhaul. Morgan Stanley (MS) plans to overhaul the compensation of its top executives, deferring more of their pay over time and benchmarking compensation against rival firms. Sources say senior executives may receive as little as 25% of their 2009 pay in cash, with the rest coming as deferred stock, but the plan stops short of the approach taken by Goldman Sachs (GS), whose top execs will receive only stock for 2009 bonuses. One proposal would see top executives submit 65% or more of their pay to clawbacks, which would be returned in the event of future losses. Morgan's 2009 compensation is projected to be $14B, short of the $20B payday expected at Goldman, but Morgan may end up losing money on the year, while Goldman is expected to post a profit of $11.1B.
- AIG lawyer quits over money, gets big payday. AIG's (AIG) general counsel, Anastasia Kelly, will receive several million dollars in severance after she resigned over federal pay curbs. Under the company's severance plan, certain executives can resign and collect severance if their pay is reduced significantly. The news is likely to again call into question the wisdom of pay caps imposed at TARP recipient firms; critics of pay czar Kenneth Feinberg say high-level executives will leave companies like AIG and move to banks and hedge funds that are not subject to pay caps.
Monday recap: Stock markets hit fresh closing highs on a year-end bout of optimistic position building. Bonds edged lower as new supply hit the market. The dollar gained on the yen, but was weaker elsewhere, leading to a rise in gold prices, and oil touched a five-week high.
Overseas markets posted modest gains Tuesday, and U.S. futures are higher on very light volume.
- Asia: Nikkei +0.0% to 10638. Hang Seng +0.1% to 21499. Shanghai +0.7% to 3212. BSE +0.2% to 17402.
- Europe at midday: FTSE +0.7% to 5440. CAC +0.5% to 3966. DAX +0.2% to 6017.
- Futures at 7:00: Dow +0.3% to 10519. S&P +0.4% to 1027.50. Nasdaq +0.3%.
Crude -0.5% to $78.38. Gold -0.2% to $1,105.40.
30-year Tsy flat at 115-00. 10-year -0.12%. 5-year -0.13%.
Euro +0.4% vs. dollar. Yen flat. Pound flat.
Tuesday's Economic Calendar
- 7:45 ICSC Retail Store Sales
8:55 Redbook Chain Store Sales
9:00 S&P Case-Shiller Home Price Index
10:00 Consumer Confidence
10:00 State Street Investor Confidence Index
1:00 PM Results of $42B, 5-Year Note Auction
5:00 PM ABC Consumer Confidence Index
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