U.K. scrutinizes how price of gold is fixed. The benchmark rate for the $20T gold market has become the latest focus of regulator scrutiny, with the U.K.'s Financial Conduct Authority reportedly looking at how the "London fix" is set. The rate is published twice a day following a telephone call between five banks, including Barclays (NYSE:BCS) and Deutsche Bank (NYSE:DB). The process can last up to over an hour, with participants trading gold and its derivatives while the discussion is taking place.
Illinois Tool Works could sell industrial pack unit for $3B+. Illinois Tool Works (NYSE:ITW) has reportedly received bids from at least six private-equity firms for its industrial packaging unit, which could fetch over $3B. The firms who have advanced to a second round of bidding include Carlyle (NASDAQ:CG), Blackstone (NYSE:BX) and Apollo Global Management (NYSE:APO). ITW put the subsidiary up for sale in September as part of a strategy to streamline.
Top Stock News
H-P's earnings seen falling. H-P's (NYSE:HPQ) FQ4 results are due out after the bell, with analysts expecting that EPS dropped to $1 from $1.16 last year and that revenue slid 6.8% to $27.91B. SA author Trefis notes that while H-P has launched new products and services "to reinvigorate its business lines," the company is "still plagued by a weak enterprise demand and a slowing PC market." Joe Panettieri is looking for Meg Whitman to address five "key areas," including channel partners, networking, 3-D printing and the cloud.
Level 3 considered possible entry point in NSA spying. With Google (NASDAQ:GOOG) and Yahoo (NASDAQ:YHOO) wondering how the National Security Agency was able to eavesdrop on the communications of their members without breaking into the companies' data centers, the suspicion is that the NSA tapped the fiber-optic cables that connect those centers. Level 3 Communications (NASDAQ:LVLT) has reportedly been a particular focus of concern - the company is the world's largest Internet backbone provider, and Google and Yahoo use its infrastructure.
Intel asking for $500M for TV business, Verizon thinking big. Intel (NASDAQ:INTC) has reportedly set an asking price of $500M for the assets of its would-be Web TV service, and it is hoping to reach a deal by the year-end. Though lacking revenue, the business has potentially valuable IP and software assets. Verizon (NYSE:VZ) is looking to use the Intel unit as a springboard to offer its own Web TV service and expand its reach.
Bayer bids $2.41B for prostate-cancer drug partner. Bayer (OTCPK:BAYZF) has offered 14.76B Norwegian kroner ($2.41B) to acquire partner Algeta (OTCPK:ALGZF), with the bid of 336 kroner a share representing a 27% premium to the latter's last closing price. Earlier this month, Bayer and Algeta received EU marketing approval for prostate-cancer treatment Xofigo.
Repsol to consider YPF compensation offer from Argentina. Repsol's (OTCQX:REPYF) board is due to decide tomorrow whether to accept a compensation proposal from Argentina for the nationalization of the oil company's 51% stake in YPF (NYSE:YPF) in April 2012. Repsol would receive "liquid assets", with Spanish publication El Confidencial reporting that the offer includes $5B of Argentina-backed debt. Repsol initially demanded $10.5B in compensation. The firm's shares were +4% in Madrid at the time of writing.
Retailers build discounts into initial prices. Consumers who think they'll be getting huge discounts on Black Friday might want to think again. In the words of the WSJ's Suzanne Kapner, "those bargains will be a carefully engineered illusion." Retailers and suppliers first work out the lowest price they can sell a product at and still make the profit they want, and then they jack up the "suggested retail price" so that the retailer can later offer a big discount.
Top Economic & Other News
Concern grows within BOJ over inflation goal. Some members of the Bank of Japan's board believe it will be "difficult" for the BOJ to achieve its 2% inflation goal within two years, as pledged in April. The minutes of the last meeting in October show that three out of nine policy makers voted against a statement which said that the bank expects inflation to hit 1.9% in FY 2015. The skepticism contrasts with the optimism of BOJ Governor Haruhiko Kuroda.
Rise in Chinese bond yields sparks concern. Chinese government-bond yields have remained high after hitting a nine-year peak last Wednesday, when the rate on 10-year debt reached 4.72%. Today, the yield closed flat at 4.71%. The spike has come as the government tightens monetary policy in order to try to rein in soaring lending, and it has led to higher interest rates in the broader economy. That has sparked concerns that China's rebound could be at risk.
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In Asia, Japan -0.7% to 15515. Hong Kong flat at 23681. China -0.1% to 2183. India -0.9% to 20425.
In Europe, at midday, London -0.4%. Paris -0.2%. Frankfurt flat.
Futures at 6:20: Dow -0.05%. S&P flat. Nasdaq flat. Crude +0.3% to $94.35. Gold +0.75% to $1250.90.
Ten-year Treasury Yield -1 bps to 2.73%.
Today's economic calendar:
7:45 ICSC Retail Store Sales
8:30 Housing Starts-Sep
8:30 Housing Starts-Oct
8:55 Redbook Chain Store Sales
9:00 FHFA House Price Index
9:00 S&P Case-Shiller Home Price Index
10:00 Consumer Confidence
10:00 State Street Investor Confidence Index
10:00 Richmond Fed Mfg.
1:00 PM Results of $35B, 5-Year Note Auction
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