Couch commerce to drive Cyber Monday after record weekend. Deep discounts and midnight openings seem to have worked: despite the economic gloom, retail sales over the Thanksgiving weekend jumped 16.4% to a record $52.4B. The number of consumers who visited stores or Internet shopping sites rose 6.6% to 226M, also a record. The bumper weekend has sent U.S. stock futures higher premarket. As for Cyber Monday today, "couch commerce" is expected to hit new highs, with ComScore forecasting that online sales will reach $1.2B.
Italian yields hit 7.3% in auction. Yields on Italian bonds jumped to a massive 7.3% in an auction of €567M ($758.4M) of inflation-linked paper that is set to mature in 2023. That's up from 2.9% in a previous sale in March 2010. The horror story could get worse tomorrow, when Italy will try to sell up to €8B in various bonds. The auction today came after the IMF dismissed a report that it was considering loaning Italy up to €600B ($797B).
Eurozone ponders plan to speed integration. To restore market confidence, eurozone nations are exploring a plan to speed up fiscal integration whereby they would sign bilateral deals with each other and so negate the need for cumbersome treaty changes, reports say. The hope is that the ECB would boost its bond intervention, although it's not clear whether the bank would acquiesce. Officials also want to make budget discipline legally binding and enforceable by European authorities.
Fed committed $7.77T to saving financial system during crisis. Bloomberg continues to mine the 29,000 pages released by the Fed about transactions made during the financial crisis, discovering that the central bank had committed $7.77T as of March 2009 to rescuing the financial system. Commercial banks secretly took massive loans while reassuring investors that they were in a good state, while they also exploited the Fed's below-market rates to make $13B of income.
Could the Fed save Europe? Having rescued the financial system in 2008-2009, and with events moving faster than Europe can react to, there are some who are calling on the Fed to save the eurozone. "The Fed has the authority to buy foreign government debt," said Ben Bernanke in 2002. Berkeley’s Brad DeLong believes that "The Fed (now) needs to buy up every single European bond owned by every single American."
EU banks face $241B shortfall. With bond investors spooked, European lenders are facing a funding gap of $241B in 2011. Though some deleveraging is to be expected, banks are "being sent on a crash diet that will have wider implications," said Morgan Stanley's Huw van Steenis, and a European credit crunch would have a "knock-on effect" on the U.S. and Asia.
AT&T mulls massive T-Mobile concessions. AT&T (T) may offer to sell up to 40% of T-Mobile USA’s assets to salvage their $39B (OTCQX:DTEGY) deal, Bloomberg reports. The divestment would be far higher than AT&T's initial expectations, but with a small pool of potential buyers, Macquarie analyst Kevin Smithen is skeptical the carrier will find a "successful divestiture solution."
Anadarko's Mozambique gas finds are double initial estimates. Anadarko's (APC) gas discoveries off the Mozambique coast appear to be twice as big as initial estimates with recoverable reserves of 15T-30T+ cubic feet of natural gas. The news strengthens hopes that other firms might find large amounts of gas off East Africa - those exploring in the region include BP (BP), Statoil (STO) and Exxon (XOM).
Business seeks to water down foreign bribery law. With corporations paying around $4B in penalties over the past five years for bribing foreign officials, the Chamber of Commerce is lobbying for a clarification of the Foreign Corrupt Practices Act, and for the use of incentives that would lead to lighter fines. The chamber has support from two Democratic senators, who plan to introduce legislation.
Wall Street pay on the decline. A sharp drop in profits at Wall Street firms means that the annual compensation of employees could fall 27%-30%, with bonuses set to plummet 35%-40%. The hardest hit are likely to be those on fixed-income desks, although a bond trader who is a managing director at a top securities firm will still probably take home $1.7M-$1.8M in 2011.
In Asia, Japan +1.6% to 8287. Hong Kong +2.0% to 18038. China +0.1% to 2383. India +3.0% to 16167.
In Europe, at midday, London +2.2%. Paris +3.8%. Frankfurt +3.3%.
Futures at 7:00: Dow +2.2%. S&P +2.8%. Nasdaq +2.5%. Crude +3.1% to $99.74. Gold +1.7% to $1713.80.
Monday's economic calendar:
8:30 Chicago Fed Midwest Manufacturing Index
10:00 New Home Sales
10:30 Dallas Fed Manufacturing Outlook
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