Volatility rules as Monti forms government. Italian and Spanish bond yields have continued to experience volatility today, dropping sharply earlier on due to ECB buying, and to expectations that Mario Monti will form his government and outline structural reforms. However, yields were on the rise again premarket, with the gyrations having a knock-on effect on EU shares. Comments from EU Commission President Jose Manuel Barroso that the eurozone faced a systemic crisis can't have helped, nor can cracks already appearing in Greece's national unity coalition.
Dell profit tops expectations but it warns on revenue. Dell's (DELL) Q3 EPS rose 20% to $0.54 and beat forecasts but slightly lower revenue of $15.37B missed expectations, with a fall in consumer and government sales offsetting increased income from higher-margin corporate customers. Dell warned that the shortage of hard drives due to the Thai floods and the sluggish economy could hurt FY revenue.
Postal Service warns of cash shortage as losses hit $5.1B. The Internet age continues to wreak its havoc on the Postal Service, which said it could run out of cash by the end of FY 2012 after making a loss of $5.1B last FY. The USPS appears to operate in a dichotomy: it's an independent government entity that barely receives federal cash but it can't undertake major reform without Congressional approval.
MF Global trustee seeks to free clients from purgatory. With over 30,000 MF Global (OTC:MFGLQ) clients suspended in a kind of purgatory, the trustee overseeing its bankruptcy last night sought court permission to release $520M in 21,000 accounts out of almost $900M that has been frozen for over two weeks. The freeze has prevented many customers from trading, and along with decreased confidence, has helped cause commodity trading volumes to fall.
Citigroup mulls 3,000 job losses. Citigroup (C) could join the growing list of major banks that are cutting staff, with The Wall Street Journal reporting that the bank is considering slashing 3,000 jobs, or around 1% of its workforce. This would include 900 positions at its securities and banking arm, where revenue has fallen because of market volatility.
Equity Residential offers $2.5B for Archstone. Equity Residential (EQR) has offered over $2.5B to buy a 53% stake in Archstone from BofA (BAC) and Barclays (BCS), The Wall Street Journal reports. The proposal puts Equity ahead of AvalonBay (AVB), Blackstone (BX) and Brookfield (BAM), and highlights the increased interest in rental apartments as home ownership falls. The rest of Archstone is owned by the bankruptcy estate of Lehman.
Google to launch online music service. Google (GOOG) is expected to today launch an online service in which it will sell music from Sony (SNE), EMI (C), and Universal (OTC:VIVHY). The service will work in tandem with Google+, but as with the social network, the question is whether Google is too late to challenge a dominant rival.
Nokia to launch Windows tablet. Nokia (NOK) plans to introduce a tablet that runs on Microsoft's (MSFT) Windows operating system in the summer of 2012, Paul Amsellem, the head of Nokia France, has told French news site Les Echos.
Apple names Levinson as Chairman. Apple (AAPL) has appointed board member Arthur Levinson as non-executive chairman to replace Steve Jobs. Additionally, Disney (DIS) CEO Bob Iger joins the board, where he will serve on the audit committee.
Inflation expected to have been tamed. October inflation data is due out this morning, and economists estimate that monthly CPI growth fell to zero from +0.3% in September, with prices restrained by falling energy costs. Core CPI is projected to have risen 0.1% for the second month in a row, the smallest back-to-back gains this year. Meanwhile, the growth in industrial output, also scheduled for this morning, is predicted to have increased to 0.4% from 0.2% in September.
BOJ cuts economic assessment but leaves rates unchanged. As expected, the Bank of Japan has kept interest rates at 0%-0.1%, and left its asset-buying fund unchanged at ¥20T ($260B). However, the BOJ cut its economic assessment, saying that activity has continued picking up but at a more moderate pace, while the global slowdown, the strong yen and the Thai flooding will hurt Japan.
Delphi, Angie's List to lead busy week of IPOs. Delphi Automotive (DLPH) and Angie's List (ANGI) are due to price their IPOs today in what could be the busiest week of the year for listings, with nine due to take place. Delphi is looking to raise $578M on the NYSE at a market cap of nearly $8B, while Angie's List has a $114M offering on Nasdaq.
Applied Materials' earnings seen slumping. Applied Materials (AMAT) is forecast to report that FQ4 EPS fell 41% to $0.21 when it releases its earnings today, with revenue sinking 25% to $2.16B. In August, Applied cut its Q4 outlook due to the uncertain economy and an oversupply of solar capacity. However, shares have risen nearly 30% since early October, so any positive news today might already be priced in.
In Asia, Japan -0.9% to 8463. Hong Kong -2.0% to 18961. China -2.5% to 2467. India -0.6% to 16776.
In Europe, at midday, London -0.9%. Paris +0.3%. Frankfurt -1.3%.
Futures at 7:00: Dow -0.5%. S&P -0.9%. Nasdaq -0.4%. Crude -0.5% to $98.87. Gold -0.4% to $1774.80.
Wednesday's economic calendar:
7:00 MBA Mortgage Applications
8:30 Consumer Price Index
9:15 Industrial Production
10:00 NAHB Housing Market Index
10:30 EIA Petroleum Inventories
Earnings Results: Companies that beat EPS expectations last night and today include Agilent Technologies (A), Autodesk (ADSK), Dell (DELL), Sally Beauty (SBH), Tyco International (TYC).
Those that missed forecasts include Abercrombie & Fitch (ANF).