U.S. data released today is expected to show steady job growth, rising in August to 225K from 209K in July, and a slight drop in the unemployment rate to 6.1% from 6.2%. Adding to the ECB's move for a new securities purchase program and cutting its key rates, highlighting an improved labor market will spur debate as to whether the Fed will step back from its commitment to keep rates low for a "considerable period" or hang on to its current policy due to a weak global economy.
The Fed is stepping up efforts to search for an alternative to Libor, in what would be a major transition affecting hundreds of trillions of dollars in U.S. and worldwide contracts and derivatives. Should the current system collapse without a substitute, the result would be "a horrible mess," warns Fed Governor Jerome Powell. The Fed, large financial firms and others will meet over the course of the next year to work toward an alternative benchmark.
The EU will wait to implement a new round of economic sanctions against Russia should Moscow respect a ceasefire agreement to be unveiled this morning between Ukraine and pro-Russian separatists. It is still unclear what agreement President Petro Poroshenko and the main rebel leader will come to, or how long Russia will have to show its commitment before sanctions would be imposed.
Iraq’s oil ministry is beefing up its campaign to restrict the "illegal" export of crude from Iraqi Kurdistan. Baghdad has already filed lawsuits worldwide and most recently halted a tanker from unloading the controversial crude off the coast of Texas. The Iraqi government is now preparing to sue Marine Management Services, a Greek shipping company, for transporting the Kurdish crude from Turkey.
Apple is adding new security features to iCloud, including alerts and additional password protection, following the posting of celebrity photographs on the Internet from hacked accounts. Separately, Apple (NASDAQ:AAPL), Google (GOOG, GOOGL), Intel (NASDAQ:INTC) and Adobe (NASDAQ:ADBE) have appealed the rejection of a proposed $324.5M settlement over a lawsuit which accused the four tech companies of limiting competition by conspiring not to hire each others' workers.
Yelp has no obligation to display positive reviews on business owners' Yelp page, rules Judge Marsha Berzon. The verdict comes after many years of small business owners claiming Yelp (NYSE:YELP) extorted advertising payments from them by threatening to remove positive reviews from their listings. Yelp maintains that it does not engage in hard-ball tactics, although the new ruling states that should the company do so intentionally, it would be perfectly legal under federal law.
Nvidia alleges Qualcomm's Snapdragon processors and Samsung's (OTC:SSNLF, OTC:SSNGY) Exynos processors infringe GPU (graphics processing unit) patents covering technology including programmable shading, unified shaders and multithreaded parallel processing. "Our patented GPU inventions provide significant value to mobile devices. Samsung and Qualcomm (NASDAQ:QCOM) have chosen to use these in their products without a license from us," says Nvidia (NASDAQ:NVDA) CEO Jen-Hsun Huang.
U.S. Federal Judge Denise Cote has ruled that investors may press claims against 12 major banks for violating antitrust law by limiting competition and fixing prices in the $21T CDS market, even though improved liquidity should have driven costs down. The defendants include BofA (NYSE:BAC), Barclays (NYSE:BCS), BNP Paribas (OTC:BNPZY), Citigroup (NYSE:C), Credit Suisse (NYSE:CS), Deutsche Bank (NYSE:DB), Goldman Sachs (NYSE:GS), HSBC (NYSE:HSBC), JPMorgan (NYSE:JPM), Morgan Stanley (NYSE:MS), RBS (NYSE:RBS) and UBS (NYSE:UBS).
IntercontinentalExchange is the next on Wall Street to push back against Bloomberg’s dominance. Following the CME Group (NASDAQ:CME) which has invested in Wickr and Goldman's (GS) Perzo investment, ICE (NYSE:ICE) is now expected to pay $350M for SuperDerivatives, a Tel-Aviv based business that provides data and analytics on OTC derivatives and contains a chat platform. The acquisition also includes the group’s DGX product, which allows traders to analyze theoretical trades before they execute them.
Nebraska's highest court will hear arguments today for TransCanada's (NYSE:TRP) proposed $5.4B Keystone XL pipeline, following five years of wrangling at the federal level. At issue is a 2012 decision that killed legislation allowing the Canadian company to chart the pipeline’s course through Nebraska. While a ruling upholding that decision would add another obstacle to the project, a reversal could immediately send the case to President Obama, forcing him to choose between unions who support the project and environmentalists who don’t.
A new ruling announced yesterday, opens the door for a much bigger fine on BP (NYSE:BP) over its 2010 Deepwater Horizon disaster in the Gulf of Mexico. The new fines might be as large as $4,300/bbl rather than $1,100/bbl, although the amount of oil BP actually spilled net of recoveries has yet to be determined. Based on a worst case scenario of 4.1M barrels, a $17.6B penalty would be issued. BP's shares closed down 5.9% yesterday on the news.
In return for Tesla picking Nevada as the location for its gigafactory, Governor Brian Sandoval has asked for as much as $1.3B in financial incentives, in the form of tax breaks and abatements, to help Tesla (NASDAQ:TSLA) build the plant. Nevada officials and Tesla forecast the new plant to become the biggest lithium ion factory in the world.
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In Asia, Japan -0.1 to 15669. Hong Kong -0.2% to 25240. China +0.9% to 2326. India -0.2% to 27027.
In Europe, at midday, London -0.5%. Paris -0.5%. Frankfurt -0.2%.
Futures at 6:20: Dow -0.4%. S&P -0.4%. Nasdaq -0.3%. Crude +0.4% to $94.87. Gold -0.1% to $1265.
Ten-year Treasury Yield flat at 2.45%
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