- GE pursues asset sales. GE (NYSE:GE) agreed to sell its Hong Kong consumer finance business to Standard Chartered Bank as it works to reduce its assets to around $400B from more than $600B in 2008. The value of the deal was not disclosed. GE is also in talks to sell its 20.85% stake in Turkish lender Garanti Bank (OTCQX:TKGBF) to Banco Santander (STD), according to Turkish media reports. Garanti is Turkey's largest lender and a sale of GE's $3.3B stake would provide a rare opportunity to buy into Turkey's resilient banking sector. Several other potential suitors are also interested in the stake.
- Gunning for Goldman on Greece swaps. Testifying before Congress, Bernanke revealed that the Federal Reserve is examining the role of Goldman Sachs (NYSE:GS) and other banks in arranging swaps deals for Greece. In particular, the Fed will reportedly look at whether Wall Street used complicated financial instruments to hide the debt levels of European countries, a move one lawmaker said is "amplifying a public crisis for what would appear to be for private gain." Separately, the SEC said it's investigating "potential abuses and destabilizing effects" related to credit-default swaps, though a spokesman declined to specify whether the probe was aimed at Wall Street firms' actions in Europe.
- AIG alters repayment plan. AIG (NYSE:AIG) has reportedly changed its payback plan to the New York Federal Reserve, opting not to use proceeds from life insurance policies to repay an $8.5B loan. Instead, AIG expects to repay the loan through other means, such as through asset sales or with cash generated from its insurance businesses. The decision reflects expectations of an improved outlook for AIG's asset sales following a market recovery over the past year. (AIG reports Q4 results this morning before the market opens.) Shares +2.4% premarket (7:00 ET).
- Fighting off foreclosures. The Treasury confirmed that a proposal is being considered to ban all home foreclosures unless the loans have first been screened and rejected by the government’s Home Affordable Modification Program. However, a spokeswoman said it's just "one of the many ideas under consideration" and no immediate announcements are planned.
- GM reaches out to other Hummer bidders. GM is reportedly reaching out to previous bidders for its Hummer unit, talking to at least four Chinese companies to see whether they're still interested. GM's deal to sell its Hummer brand to Sichuan Tengzhong Heavy Industrial Machinery collapsed earlier this week after Chinese regulators blocked the sale, prompting GM to announces plans to wind down the brand.
- Liberty looks to sell U.S. malls. Liberty International, the U.K.'s largest shopping mall owner, is in advanced talks to sell its $560M U.S. shopping center business to Equity One (NYSE:EQY) as the next step in its planned demerger. The deal will likely see Liberty trade the properties in return for a stake in Equity One, rather than for cash.
- U.K. GDP revised up. The U.K.'s GDP expanded by 0.3% in the last quarter of 2009, an upward revision from an initial estimate of 0.1% growth. The extra growth was mainly due to improvements in services and production. Overall, the U.K. economy shrank by 5% in 2009.
- China considers yuan rise. According to a local newspaper, China is "stress-testing" a possible appreciation of the yuan in labor-intensive export sectors to see how much of a rise firms can withstand. The yuan has been frozen against the dollar since mid-2008 and the tests don't necessarily mean an appreciation is imminent. However, the rarity of Chinese media discussing possible yuan appreciation adds to already-growing speculation.
- Lloyd's loss. Lloyds (NYSE:LYG) posted a full-year loss of £6.3B ($9.6B) this morning, worse than the £6.1B loss analysts had expected. Total impairments were "significantly higher" at £24B, though they were down 21% in H2 as compared to H1. The bank forecasts “further significant reductions” in impairments in 2010 and beyond, “assuming current economic expectations.” Shares -7% premarket (7:00 ET).
- Fed firms its footing. Sources say that the Federal Reserve is gaining congressional support as lawmakers try to craft a financial reform bill, and that the negotiations could result in the Fed becoming the primary regulator of the country's largest financial firms. This is a major turnaround for the Fed, as lawmakers had previously sought to limit its authority almost entirely to monetary policy.
- FCIC not done with bank execs. The Financial Crisis Inquiry Commission plans to put bank executives back on the stand, saying last month's questioning of Lloyd Blankfein (GS), John Mack (NYSE:MS), Jamie Dimon (NYSE:JPM) and Brian Moynihan (NYSE:BAC) was not the end of the process for them. The FCIC also plans to interview foreign regulators to determine similarities and differences with U.S. oversight prior to the financial crisis.
- Ex-regulators to buy failed banks. A group of former regulators and bankers are said to be teaming up to raise $1B in order to buy failed lenders. The investment group, named BSE Management LLC, will be led by William Isaac, former chairman of the FDIC; David Moffett, former CEO of Freddie Mac (FRE); and, John Ryan, former regional director of the Office of Thrift Supervision.
- Hedge fund probed on kickbacks. Federal officials are said to be investigating whether hedge fund NIR Group paid kickbacks to outsiders as part of a plot to inflate the value of its holdings. Starting in 2001, NIR Group reported eight years of positive returns in its largest fund, without a single negative month, and an investigation has been ongoing since at least last year.
- Greek cuts aren't enough. EU officials are reportedly pushing Greece to adopt an extra €4B ($5.4B) of austerity measures if the country wants to reach its goal of reducing its budget deficit by four percentage points this year. Greece was considering a package closer to €2B-2.5B, causing EU officials to privately worry that Greece is dragging its heels on purpose in order to improve its finances with the minimum effort. Another worry is that the Greek Parliament may choose to block proposed austerity measures.
Earnings: Friday Before Open
- AES (NYSE:AES): Q4 EPS of $0.22 beats by $0.03. Revenue of $3.8B (+11.1%) vs. $3.3B. (PR)
- Interpublic Group of Companies (NYSE:IPG): Q4 EPS of $0.24 in-line. Revenue of $1.8B (-5.3%) vs. $1.7B. (PR)
- Potomac Electric Power Company (NYSE:POM): Q4 EPS of $0.18 in-line. Revenue of $2.1B (-13.9%) vs. $2.4B. (PR)
Earnings: Thursday After Close
- Assured Guaranty (NYSE:AGO): Q4 EPS of $0.91 beats by $0.12. Revenue of $457M (+271%) vs. $423M. Shares +4.2% AH. (PR)
- Compania Minas Buenaventura (NYSE:BVN): Q4 EPS of $0.83 beats by $0.09. Revenue of $244M (+57%) vs. $268M. Shares +1.8% AH. (PR)
- DryShips (NASDAQ:DRYS): Q4 EPS of $0.23 in-line. Revenue of $218M (+12.6%) vs. $216M. Shares -3.7% AH. (PR)
- Gap (NYSE:GPS): Q4 EPS of $0.51 beats by $0.01. Revenue of $4.2B (+4%) in-line. Same-store sales up 2%. Shares +2% AH. (PR, earnings call transcript)
- Leap Wireless International (LEAP): Q4 EPS of -$0.82 misses by $0.17. Revenue of $599M (+31%) vs. $634M. Added 298K net customers to total 4.95M (+1M from end of 2009). Shares -1.1% AH. (PR)
- Live Nation (NYSE:LYV): Reports adjusted operating income of $3.5M; unadjusted, an operating loss of $54.9M. Q4 revenue of $854M (-5%) vs. $811M. Shares -0.7% AH. (PR)
- Mohawk Industries (NYSE:MHK): Q4 EPS of $0.56 beats by $0.22. Revenue of $1.35B (-9%) vs. $1.28B. Shares +4.9% AH. (PR)
- Novell (NASDAQ:NOVL): FQ1 EPS of $0.07 in-line. Revenue of $202.4M (-6%) vs. $207.6M. Sees Q2 revenue similar to Q1, and non-GAAP operating margin of 12-15%. Shares -1.2% AH. (PR, earnings call transcript)
- NuVasive (NASDAQ:NUVA): Q4 EPS of $0.28 beats by $0.19. Revenue of $107M (+43.3%) vs. $104M. Guides FY10 revenue in-line. Shares +1.9% AH. (PR)
- SandRidge Energy (NYSE:SD): Q4 EPS of $0.14 misses by $0.07. Revenue of $163M (-18.7%) vs. $208M. Shares -4.7% AH. (PR)
- SBA Communications (NASDAQ:SBAC): Q4 EPS of -$0.37 misses by $0.10. Revenue of $145M (+7.9%) vs. $142M. Guides Q1, FY10 revenue in-line. Shares -2.4% AH. (PR)
- Southwestern Energy (NYSE:SWN): Q4 EPS of $0.45 in-line. Revenue of $624M (+24.9%) vs. $475M. Shares -0.3% AH. (PR)
- Universal Health Services (NYSE:UHS): Q4 EPS of $0.62 beats by $0.14. Revenue of $1.3B (+4%) in-line. Sees fiscal 2010 revenue of $5.55B vs. $5.45B. Shares flat AH. (PR)
- Wynn Resorts (NASDAQ:WYNN): Q4 EPS of $0.08 misses by 0.05. Revenue of $809M (+31.7%) vs. $785M. Shares -1.1% AH. (PR, earnings call transcript)
- In Asia, Nikkei +0.2% to 10126. Hang Seng +1.0% to 20609. Shanghai -0.3% to 3052. BSE +1.1% to 16430.
- In Europe at midday, London +0.7% to 5315. Paris +0.9% to 3674. Frankfurt +0.8% to 5574.
- Futures: Dow flat. S&P +0.16%. Nasdaq flat. Crude +0.18% to $78.31. Gold -0.26% to $1108.60.
Friday's Economic Calendar
8:30 GDP Q4
9:45 Chicago PMI
9:55 Reuters/UofM Consumer Sentiment
10:00 Existing Home Sales
1:30 PM Fed's Tarullo: 'Financial Regulation'
3:00 PM USDA Ag. Prices
- Notable earnings before Friday's open: AES, AIG, CNP, DRH, IPG, JRCC, MIR, POM
Seeking Alpha editors Eli Hoffmann and Jason Aycock contributed to this post.
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