JPMorgan to pay $2B to settle Madoff allegations. JPMorgan (NYSE:JPM) is reportedly close to agreeing to a $2B settlement with authorities over allegations that it turned a blind eye to Bernard Madoff's Ponzi scheme. In a first for a major Wall Street bank, JPMorgan will be the subject of a deferred prosecution agreement in which authorities will file criminal charges that would be dismissed after a set period of time if the bank meets certain conditions.
Hilton worth almost $20B in IPO. Hilton Worldwide's (NYSE:HLT) shares are due to start trading on the NYSE today after the hotel operator and its investors raised $2.34B in its IPO. Hilton and its stockholders are selling 117.6M shares at $20 each, giving it a market cap of $19.7B. Expect a few champagne corks to pop at Blackstone (NYSE:BX), which is set to reap paper profits of $8B to mark the second-biggest private-equity payday of all time.
House seen approving budget deal. Despite opposition from right-wing groups, the House is today expected to pass a bipartisan but narrow two-year budget deal that Congressional leaders reached earlier this week, with even some of the more conservative Republicans lining up behind the agreement. Should the chamber approve the deal, the Senate is seen passing it next week.
Top Stock News
Fortis to acquire UNS Energy in $4.3B deal. Canada's Fortis (OTCPK:FRTSF) has agreed to buy Arizona-based utility UNS Energy (NYSE:UNS) in a deal worth $4.3B, including the assumption of $1.8B in debt. Fortis has offered $60.25 a share, a 31% premium to UNS's closing price yesterday. The deal would provide additional capital and new resources for UNS subsidiaries, including Tucson Electric Power and UniSource Energy Services.
World stocks fall on taper concerns. Global equities were lower at the time of writing as anxiety about Fed tapering cranked up again, especially with Congress set to pass a budget deal. Markets are expected to scrutinize retail-sales and weekly jobless data, which are due out this morning, for clues as to what the Fed might do when it meets next week. "It's the uncertainty that's eating into markets right now," says Patrick Latchford of Monex Capital Markets.
Ford board to press Mulally for clarity on future. Ford's (NYSE:F) board of directors reportedly intends to press CEO Alan Mulally on his future amid intense speculation that he is a leading candidate to replace Steve Ballmer at Microsoft (NASDAQ:MSFT). The rumors have caused frustration and a desire for clarity. Even if Mulally doesn't leave for Microsoft, he is unlikely to stay at Ford until the end of next year. The board has confidence in COO Mark Fields, who is the frontrunner to replace Mulally as the carmaker's next CEO.
Liberty back in for Holland's Ziggo. Liberty Global (NASDAQ:LBTYA) is in negotiations to acquire Dutch cable group Ziggo (OTCPK:ZIGGY), which already rejected an offer from the U.S. group in October for being too low. Liberty owns 28.5% in Ziggo, whose market cap is €6.63B. The talks come as Liberty looks to further expand its presence in Europe, having acquired Virgin Media for $16B earlier this year.
Indian court lifts freeze on Nokia factory. An Indian court has agreed to unfreeze a phone-making factory owned by Nokia (NYSE:NOK) so that it can complete the sale of its handset unit to Microsoft (MSFT). Authorities seized the plant following a tax dispute. Nokia will deposit 22.50B rupees ($367.17M) in an escrow account as a condition for lifting the freeze and transferring the factory to Microsoft.
Union makes contract offer to Boeing to keep 777X in Washington. The International Association of Machinists has made a labor-contract offer to Boeing (NYSE:BA) to try to persuade the aircraft manufacturer to build the latest version of its 777 aircraft in the Seattle area. However, despite two days of talks, the sides are not close to an agreement. Boeing has been the subject of offers from numerous states regarding the site for constructing the 777X after Seattle-based machinists turned down an eight-year deal last month.
Facebook, others joining S&P 500. Facebook (NASDAQ:FB) will be joining the S&P 500 following the close of trading on December 20 and it will be added to the S&P 100. The social networking giant will replace test-equipment vendor Teradyne (NYSE:TER) in the larger index and Williams Companies (NYSE:WMB) in the more elite one. Alliance Data Systems (NYSE:ADS) and Mohawk Industries (NYSE:MHK) are also joining the S&P 500, and they'll be replacing Abercrombie & Fitch (NYSE:ANF) and JDS Uniphase (NASDAQ:JDSU).
Mall operators jump into same-day delivery battle. Four major mall owners have agreed to a deal with start-up Deliv to provide same-day delivery to consumers at the operators' shopping centers. Macerich (NYSE:MAC), Westfield and Simon Property Group (NYSE:SPG) are due to unveil the partnership today following a pilot at several General Growth Properties (NYSE:GGP) malls. "Will the average spend go up if customers don't have to carry around the bags? We think so," said General Growth's Scott Morey.
Top Economic & Other News
Israel's Fischer to take number two slot at Fed. Former Bank of Israel Governor Stanley Fischer has reportedly accepted an offer to become the Vice Chairman of the Federal Reserve. At a panel discussion last month, Fischer said: "Without the Fed, we'd have had a much deeper recession...Without the extraordinary things that it's done, the economy would be in much worse shape today." Regarding the taper, Fischer has said: "Precisely how to get out of it, at what speed to get out of it, is a much harder thing to measure and to calculate."
Eurozone industrial output surprisingly falls. The eurozone's recovery continues to remain shaky, with industrial production dropping 1.1% on month in October after falling 0.2% in September and missing consensus for a rise of 0.3%. On year, output increased 0.2%, as in September, but came in well below forecasts of 1.1%. The euro was -0.1% at $1.3773 at the time of writing.
Pension funds enjoy strong recovery. The health of corporate pensions funds has rebounded to cover 96% of future obligations, JPMorgan estimates, boosted by surging stock markets and rising interest rates. The level is up from 77% last year and marks the strongest recovery since 1986. Public funds are also turning things around, with financing levels climbing to 76% from 66%. The figures could continue to improve next year if bond yields keep rising as the Fed finally starts to taper.
Italian PM gains in strength, pledges reform. Italian Prime Minister Enrico Letta comfortably won a confidence vote in parliament yesterday, underscoring the government's new-found stability following the chaos caused by the process to expel former PM Silvio Berlusconi after his conviction for tax fraud in the summer. Letta pledged a sweeping package of reforms whose aim would be to cut debt, bring down rampant unemployment and otherwise revive Italy's moribund economy.
Alpha-Rich Stock Movers and Great Calls
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In Asia, Japan -1.1% to 15342. Hong Kong -0.5% to 23218. China -0.1% at 2203. India -1.2% at 20926.
In Europe, at midday, London -0.8%. Paris -0.2%. Frankfurt -0.6%.
Futures at 6:20: Dow -0.1%. S&P -0.1%. Nasdaq -0.1%. Crude +0.3% to $97.69. Gold -1.15% to $1242.80.
Ten-year Treasury Yield -1bps to 2.85%
Today's economic calendar:
8:30 Retail Sales
8:30 Initial Jobless Claims
8:30 Import/Export Prices
9:45 Bloomberg Consumer Comfort Index
10:00 Business Inventories
10:00 Quarterly Services Report
10:30 EIA Natural Gas Inventory
1:00 PM Results of $13B, 30-Year Note Auction
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
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