Nelson Mandela passes away; economic legacy at risk. South African markets were calm following the passing of Nelson Mandela, who was instrumental in the country's peaceful transition from apartheid. Another of Mandela's great achievements was enacting policies that paved the way for GDP to grow for 15 years. These policies included embracing the free market, cutting costs and attracting foreign investment. With Mandela's death and the economy now not in good shape - unemployment is 24.7% - the question is whether South Africa will feel free to abandon the policies and conciliation that Mandela espoused. The FTSE/JSE Top 40 was +0.6%, while the USD-ZAR was +0.1% at 10.47 rand.
FCC commissioner doubts Comcast-TWC merger would be approved. The Obama administration probably wouldn't authorize any attempt by Comcast (NASDAQ:CMCSA) to acquire Time Warner Cable (NYSE:TWC), FCC Republican commissioner Ajit Pai has told the WSJ. Precedents such as the government's blocking of AT&T's (NYSE:T) purchase of T-Mobile US (NYSE:TMUS) suggest a Comcast-TWC deal "could face a number of hurdles in the Obama administration," Pai said. Bloomberg reports that Time Warner would accept an offer of $150-160 per share, well above its close of $132.53 yesterday. The carrier's market cap was $37.87B.
Markets await U.S. jobs data. Financial markets were in what Reuters calls "a state of suspended animation" ahead of U.S. employment figures for November, which are due out this morning. Economists estimate that the number of nonfarm payrolls increased by 180,000 and that the unemployment rate edged down to 7.2% from 7.3% in October. A strong payroll number would "increase speculation that tapering could still be on the cards for December," says investment analyst Luke Bartholomew. "So, perversely, a strong number could be damaging for stocks and other risk assets."
Top Stock News
J.C. Penney discloses SEC inquiry. J.C. Penney (NYSE:JCP) has received a letter of inquiry from the SEC regarding its "liquidity, cash position, and debt and equity financing," as well as about its recent stock offering. The retailer said it's co-operating by providing the SEC with requested materials. Shares were -3.4% premarket.
Total in deal worth up to $3.6B for InterOil LNG interests. Total (NYSE:TOT) has agreed to acquire a 61.3% holding in InterOil's (NYSE:IOC) Papua New Guinea natural-gas fields for as much as $3.6B as part of a plan to develop the reserves. Total will pay $613M up front, with the extra money dependent on the size of the resources and a final investment decision on building an LNG export facility.
Statoil, ExxonMobil make another big gas find off Tanzania. Statoil (NYSE:STO) and joint-venture partner ExxonMobil (NYSE:XOM) have made another big gas discovery off Tanzania - their fifth in the region - confirming the country's emergence as a new energy player of note. Today's find contains 2-3T cubic feet (tcf) of gas, or 360-540M barrels of oil equivalent (boe).
Nestle continues streamlining with $1.2B sale. Nestle (OTCPK:NSRGY) is selling its 10% holding in flavors and fragrances maker Givaudan (OTCPK:GVDNY) via a private placement to institutional investors such as pension funds. The sale of the stake, which is worth up to 1.08B Swiss francs ($1.2B), comes as Nestle reviews its businesses and offloads under-performing assets. The company recently sold weight-loss firm Jenny Craig and is reportedly searching for a buyer for its PowerBar energy bars brand.
Leukemia drugs in focus at hematology meeting. The annual meeting of the American Society of Hematology is due to start today in New Orleans, where new treatments for chronic lymphocytic leukemia from Gilead Sciences (NASDAQ:GILD), Pharmacyclics (NASDAQ:PCYC), Infinity Pharmaceuticals (NASDAQ:INFI), Roche (OTCQX:RHHBY) and others will be a focus. Analysts forecast that the drugs could collectively generate up to $9B a year in revenue by 2020.
House OKs bill to stop frivolous patent lawsuits. The House has overwhelmingly passed legislation designed to discourage patent trolls from filing frivolous lawsuits by requiring them to disclose more information about who owns the IP involved and so who would ultimately benefit from them. The measure, known as the Innovation Act, also requires judges to decide early on in the proceedings of a case whether a patent is valid, thereby potentially saving companies millions of dollars on discovery. The legislation now needs authorization in the Senate.
States look to attract Boeing with incentives. States are lining up to offer Boeing (NYSE:BA) incentives to build the 777X in their jurisdictions, including tax breaks, job training and debt financing. Boeing (BA) has invited over a dozen states to make proposals, with those in the running including South Carolina, where Boeing constructs the 787, Alabama, California and Georgia, as well as Washington state. A leaked copy of the bid request shows that Boeing could invest as much as $10B in a 4.2M-square-foot factory, while the company also wants cheap land.
Top Economic & Other News
Bundesbank ups growth forecasts. Germany's Bundesbank has increased its growth outlook and now expects the country's economy to expand 0.5% this year and 1.7% in 2014. Previously, the central bank had projected growth of 0.3% and 1.5% respectively. The Bundesbank also forecast that GDP will increase 2% in 2015. The bank said growth is being mainly driven by domestic demand, helped by low interest rates and rising incomes.
Alpha-Rich Stock Movers and Great Calls
1) On Wednesday, fund manager Dr. Hugh Akston said a strategic review could finally unlock value at Cbeyond (NASDAQ:CBEY). Shares are +14.4% since. Read article »
2) On September 16, Igor Novgorodtsev wrote that temporary top-line struggles had left Top Image Systems (NASDAQ:TISA) sharply undervalued. The stock is +68.1% to date. Read article »
Alpha-Rich Stocks To Watch
1) The expiration of the post-IPO lockup should be a catalyst for shares of overpriced electronic music promoter SFX Entertainment (NASDAQ:SFXE) to fall significantly, argues Brian Smith Jr. Read article »
2) Helix Investment Research says the post-earnings selloff at Tilly's (NYSE:TLYS) was overdone; with shares now at a discount to peers, upside in 2014 seems likely. Read article »
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In Asia, Japan +0.8% to 15300. Hong Kong +0.1% to 23743. China -0.4% to 2237. India +0.15% to 20989.
In Europe, at midday, London +0.4%. Paris +0.1%. Frankfurt +0.5%.
Futures at 6:20: Dow +0.3%. S&P +0.4%. Nasdaq +0.3%. Crude -0.1% to $97.24. Gold -0.2% to $1229.60.
Ten-year Treasury Yield -1 bps at 2.87%.
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