Berlusconi considers resigning as bond yields hit more highs. Italian Prime Minister Silvio Berlusconi is meeting family members to discuss whether he should quit, The Wall Street Journal reports. The speculation comes as Berlusconi continues to hemorrhage support ahead of a key budget vote tomorrow. Italian 10-year bond yields hit another new euro-era record of over 6.6% today, rising ever closer to the 7% at which other eurozone nations sought a bailout. A Reuters survey has found that market players reckon Italy's debt prices would recover if the government were to fall, prompting conspiracy theories that the ECB is letting the yields increase to put pressure on Berlusconi to go.
Greek unity government to form following PM's resignation. While the turmoil in Italy intensifies, Greece is inching towards a resolution of its political problems. Outgoing Prime Minister George Papandreou is due to meet opposition leader Antonis Samaras today to discuss who will lead a new interim unity government, which was agreed to last night after Papandreou said he would step down. The accord increases the likelihood that Parliament will pass the latest bailout-austerity bill, and comes as eurozone finance ministers meet to speed up their work on strengthening the bailout fund in order to enhance its market credibility.
BP unworried by collapse of $7.1B divestment. BP (BP) said it was unconcerned by the weekend collapse of a $7.1B deal to sell its 60% stake in Argentine crude firm Pan American Energy to Bridas, a JV involving Cnooc (CEO). Bridas blamed "legal reasons" and "the way BP has acted." The U.K. company said it no longer needs to sell assets to strengthen its financial position, while it said higher oil prices have increased the value of the Argentine holding.
Best Buy to buy out partner in U.S. mobile JV for $1.3B. Best Buy (BBY) has agreed to buy out U.K. company Carphone Warehouse in their 50-50 mobile-phone joint venture in the U.S., with the American retailer to pay $1.3B. The companies will also close their 11 unprofitable Best Buy megastores in Britain, abandoning plans to expand the brand in Europe. However, the firms will continue to focus on their "connectivity" strategy in Europe. This includes accelerating the roll-out of their successful "Wireless World" stores and the enhancement of the unit's online and mobile commerce platforms.
BofA considers further reducing CCB stake. Bank of America (BAC) may further reduce its stake in China Construction Bank (CICHY.PK), a report says, having sold around half its 10% holding in August for $8.3B. The remaining stake is worth about $9.2B based on CCB's market value. The report comes a few days after BofA said it may swap preferred securities for a total of $6B in common stock and debt as it looks to shore up its finances.
Berkshire investments hit 15-year high. Berkshire Hathaway (BRK.A) invested $23.9B in Q3 2011, more than in any quarter in the last 15 years. While the firm hasn't yet filed a statement of stocks owned, industry insiders say it broadened its holdings outside of its traditional sectors of consumer products and finance.
Companies boost capital spending. Major U.S. corporations have increased their capital investment this year, possibly signaling a belief that the U.S. will avoid a double-dip recession. Spending at 140 non-financial companies in the S&P 500 hit $149B in the first nine months of 2011, the highest since 2008. Investment strategist Michael Gayed said, "It’s indicative of some kind of an expectation of a rebound of sorts going on in the next one to two years." Of the companies surveyed, Apple (AAPL) more than doubled expenditures to $1.6B in Q3 2011 from a year earlier, while IBM's (IBM) spending jumped 55% to $1.3B.
CFTC Chairman won't take part in MF Global probe. CFTC Chairman Gary Gensler has recused himself from the MF Global (MFGLQ.PK) probe in order to remove perceptions of a conflict of interest given that he and Jon Corzine had ties at Goldman Sachs (GS) and in the Senate, where Gensler was an aide. Republican Senator Charles Grassley should be pleased.
Worker retirement trusts underfunded by billions of dollars. A United Auto Workers retirement trust fund, which provides health benefits to over 820,000 people, is underfunded by almost $20B, due to rising medical costs and poor investment performance. These trends have also hit other funds, known as VEBAs, including those of the United Steel Workers. To help reduce the gap, the funds are cutting costs and benefits, and asking retirees and companies to increase their contributions.
Japan debt to surpass ¥1 quadrillion. Japan's debt is on course to top ¥1 quadrillion ($12.8T) - or ¥1,000T - by the end of the fiscal year next March, a report says. Debt is rising quicker than expected due to earthquake reconstruction spending and efforts to weaken the yen in the currency markets.
Two more banks close. Regulators shut a bank in Nebraska and one in Utah on Friday, bringing to 87 the number of failures in the U.S. in 2011. That's sharply down from 143 by this time last year. The combined costs to the FDIC's insurance fund of the latest closures are estimated at $62.4M.
In Asia, Japan +1.9% to 8801.4. Hong Kong +3.1% to 19843. China +0.8% to 2528. India +0.5% to 17563.
In Europe, at midday, London -0.3%. Paris -2.3%. Frankfurt -2.7%.
Futures at 7:00: Dow -0.5%. S&P -0.7%. Nasdaq -0.5%. Crude +0.3% to $94.53. Gold +0.8% to $1770.00.
Monday's economic calendar:
8:40 Eric Rosengren speaks at "New England Works" conference
3:00 PM Consumer Credit
Earnings Results: Companies that missed EPS forecasts today include DISH Network (DISH), Targa Resources Partners (NGLS), Quicksilver Resources (KWK). Full real-time earnings coverage here.