Wall Street Breakfast: Russian Sanctions, Glaxo Guilty, VW-Fiat Rumor

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Includes: BAC, BX, FCAU, FQVLF, GSK, HIHO, JBAXY, KO, MA, MSFT, NSANY, OGZPY, QQQ, SPY, UBS, V, VLKAY
by: Wall Street Breakfast
Wall Street Breakfast
Seeking Alpha's flagship daily business news summary, gives you a rapid overview of the day's key financial news. It is published before 7:00 AM ET every market day and delivered to over 900,000 email subscribers.

Economy
The IMF praised the formation of the New Development Bank and reserves fund launched by BRICS countries (Brazil, Russia, India, China and South Africa) yesterday, and announced that it would like to work together with the monumental project. So far the new fund has pooled together $100B in reserves from the five countries with the intention of reshaping the Western-dominated international financial system.

Prior to its takeover of European bank supervision on November 4, the ECB will release collections of data on the euro zone's 128 most important lenders to publicize the banks' abilities to withstand future crises. The published review in the second half of October will outline leverage measures, standardized ratios of non-performing loans and other statistics, giving the banks only two weeks to come up with plans to deal with capital shortfalls.

In response to the new U.S. sanctions on Russia, Vladimir Putin now warns that the widening restrictions will harm the political interests of the U.S. and will result in a serious international divide. "Sanctions have a boomerang effect and without any doubt they will push U.S.-Russian relations into a dead end, and cause very serious damage," says the Russian President.

Stocks
GlaxoSmithKline has confessed to a 2001 scandal in which staff were caught bribing Chinese officials. The admission does not fare well for the company which is also involved in a similar current lawsuit - accused of bribing doctors and officials to boost drug sales in China. The DOJ is presently investigating GlaxoSmithKline's (NYSE:GSK) recent allegations, and if a pattern is found the Justice Department will likely take a tough stance towards the company.

Microsoft is expected to announce over 6,000 job cuts today, as it looks to slim its Nokia phone business and Xbox game and entertainment unit. Should the giant layoff exceed 5,900, it would be the largest cut in Microsoft's (NASDAQ:MSFT) history. The company has also started taking requests from EU citizens who want to be removed from Bing search engine results as part of the EU's "right to be forgotten".

Blackstone has purchased a €6.4B pool of property loans owned by Spain's bailed-out Catalunya Banc for €3.6B ($5B). Almost half of the mortgage portfolio is in default. Spain's bank restructuring fund - the FROB - put €572M into the Blackstone (NYSE:BX) deal, hoping to trim the size of the bank and make it easier to sell.

Gazprombank, the financial arm of Russia's natural gas producer Gazprom (OTCPK:OGZPY), declares that the new U.S. sanctions placed on its operations yesterday are not affecting its day-to-day business. The bank reported stable operations, including its international payment systems. Visa (NYSE:V) and MasterCard (NYSE:MA) have also announced that they are expecting the new sanctions to not affect their payment operations in the country.

UBS has taken a far lead ahead of Bank of America (NYSE:BAC) as the world's largest private bank and is close to securing $2T under its wealth management business. UBS (NYSE:UBS) took over Bank of America's top spot last year after the latter sold its private bank outside the U.S. to Switzerland's Julius Baer (OTCPK:JBAXY). Private banking is on the rise worldwide, with the industry managing $20.3T in total, up from $18.5T last year.

The Coca Cola Company has announced that it will continue to invest approximately $1B a year into its Mexican operations. "For the last 10 years the Coca Cola (NYSE:KO) System has invested an average of $1B a year and we are reaffirming that promise until 2020," says President of Coca Cola Mexico Francisco Crespo. Mexico is the company's largest market outside the U.S.

Volkswagen is looking into buying Italian rival Fiat, German Manager Magazin reported on its website this morning. The publication stated that Fiat's owners want to shift their focus to the Ferrari brand and exit the traditional automotive business. VW (OTCPK:VLKAY) is hoping to gain access to Chrysler's U.S. distribution network by the Fiat-Chrysler (FIATY) purchase, which would be a contributing factor in turning around auto sales.

Nissan is stepping up its automated driving offerings, and intends to deliver cars that park themselves and autonomously navigate congested highways by 2016. By 2018, Nissan (OTCPK:NSANY) expects to introduce cars that can change lanes automatically - ending in its 2020 finale of fully automatic vehicles. "You need to be first with very significant features," says CEO Carlos Ghosn. "There’s always a premium with those who come first."


Highway Holdings (NASDAQ:HIHO) +13.3% since Apr. 1 Lares Capital article »
First Quantum Minerals (OTCPK:FQVLF) +45.5% since Dec. 16 Stephen Simpson, CFA article »

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Today's Markets:
In Asia, Japan -0.1% to 15370. Hong Kong flat at 23521. China -0.6% to 2056. India flat at 25561.
In Europe, at midday, London -0.4%. Paris -0.6%. Frankfurt -0.4%.
Futures at 6:20: Dow -0.2%. S&P -0.4%. Nasdaq -0.3%. Crude +1% to $102.20. Gold +0.3% to $1303.
Ten-year Treasury Yield -2 bps to 2.51%

Today's economic calendar:
8:30 Housing Starts
8:30 Initial Jobless Claims
10:00 Philly Fed Business Outlook
10:30 EIA Natural Gas Inventory
1:35 PM Fed's Bullard: U.S. Economic Outlook and Monetary Policy
4:30 PM Money Supply
4:30 PM Fed Balance Sheet

Notable earnings before today's open: ADS, AN, BAX, BHI, BX, CP, CY, DHR, DOV, FCFS, FCS, FITB, GWW, HLSS, KEY, MAT, MS, MTB, NEO, NTCT, NVS, ORB, PM, PPG, PVTB, SAP, SHW, SNA, SON, SYNT, TSM, TZOO, UNH, UTEK, WBS, WSO

Notable earnings after today's close: AMD, ASBC, ATHN, BGS, CE, COF, CPHD, CYT, EFII, GOOG, GRT, IBM, PBCT, SLB, STX, SWKS, SYK, VMI, WAL

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