€30B austerity package sends Italian yields tumbling. Italian bond yields have fallen sharply to 6.16% after the government yesterday unveiled a €30B ($40.3B) austerity package of tax hikes and spending cuts. The measures also contain steps to fight tax evasion, including a ban on cash transactions of above €1,000. The hope is that the reforms will create a balanced budget in 2013 despite a recession in 2011-2012. The measures were all loaded into an emergency decree, meaning they'll go into effect before parliamentary approval.
Merkozy seek to resolve differences. Nicolas Sarkozy and Angela Merkel are due to meet for lunch in Paris today as they look to overcome their differences on closer fiscal integration ahead of yet another EU summit on Friday. The problem, argues Ambrose Evans-Pritchard, is that while Merkel insists on increased power to police the budgets of sinner states, she offers precious little in return. In the end, "we may just have to...wait for Germany to blink at last, or detonate the fuse," Evans-Pritchard writes.
SAP flies further into the cloud with $3.4B deal. SAP (NYSE:SAP) is to buy SuccessFactors (NYSE:SFSF), a provider of online HR software, for $3.4B. The price of $40 a share represents a 52% premium to SuccessFactors' Friday close. The acquisition comes six weeks after Oracle's (NYSE:ORCL) deal to purchase cloud customer support firm RightNow (NASDAQ:RNOW), and a month after SAP said it was forming a plan to expand its cloud offerings.
Commercial Metals spurns $1.73B Icahn offer. Commercial Metals (NYSE:CMC) has rejected an unsolicited $1.73B bid from Carl Icahn, saying that the $15 a share offer is opportunistic and fails to reflect CMC's true value. Icahn's company said it would "take matters into our own hands" if CMC failed to respond by today.
Are we nearing the end of parsing Fedspeak? The Fed is preparing a new system for signaling its policy plans to the public, with the dual goal of being more explicit about its inflation and employment targets, and being clearer about its interest-rate strategy to meet those goals. Officials hope to roll out the plan early next year.
MF Global used customer money for longer than thought. MF Global (OTC:MFGLQ) had been using client cash for "several days if not weeks" before its bankruptcy rather than, as previously thought, just a few days prior, Reuters reports. If true, it would pose the question of why CME (NASDAQ:CME) reviewed MF's books a week before the bankruptcy and found no problems.
GM acknowledges Opel failure. GM (NYSE:GM) Vice Chairman Steve Girsky has admitted that Opel's turnaround strategy has been a failure, saying that "our plan for making Opel profitable this year did not work."
Olympus hid $1.67B of losses. An investigative panel has found that Japan's Olympus (OTCPK:OCPNY) hid up to $1.67B in losses from investors, Reuters reports, but it will probably say there is no proof of a much-rumored link with Japan's "yakuza" gangsters. The panel will also stop short of recommending criminal charges against executives. The report is due to be released as soon as tomorrow.
Unreliable forecasts cause corn market volatility. Corn futures were +0.25% premarket, a relatively small bump that doesn't reflect the recent volatility in the commodity's price. According to a Wall Street Journal analysis, increasingly unreliable government reports are partly to blame for the gyrations, with officials saying unpredictable weather has made forecasting difficult.
Companies could face massive fines under EU privacy rules. Large multinational corporations could be fined billions of dollars under potential EU privacy rules that would penalize firms up to 5% of their overall revenue for mishandling customer, supplier or employee data, The Financial Times reports. The Commission is drawing up the rules, although Germany could be reluctant to lose oversight on privacy matters to Brussels.
ETF pioneer puts company on block for $1.6B. Graham Tuckwell, who created the first ETFs for gold and oil, is looking to sell his company, ETF Securities, for a potential price of £1B ($1.6B), The Financial Times reports. Tuckwell's decision comes as money pours into gold ETFs and scrutiny increases on the market for the funds.
SEC probes Marlins stadium bonds. The SEC is investigating nearly $500M in municipal bonds sold to fund the Miami Marlins' new ballpark and another related deal, and has requested information from the city of Miami and Miami-Dade County. The probe may focus on the Marlins' claims that it needed help because it could not afford to pay for the stadium.
Shell, Qatar to develop $6.4B petrochemicals plant. Shell (NYSE:RDS.A) and Qatar Petroleum yesterday signed a heads of agreement to build a $6.4B petrochemicals plant in the Gulf country, with the latter to take an 80% stake in the project and Shell the rest. The companies hope to sign a final JV pact by the end of next year or early 2013, and complete the facility in 2017.
Reports of S&P's lost decade greatly exaggerated. Although the S&P 500 has dropped 19% since the technology bubble burst in 2000, the benchmark index has jumped 66% when excluding adjustments for market capitalizations, which gives equal credit to Exxon (NYSE:XOM), which is worth $382.5B, and Monster (NYSE:MWW), whose value is $945.6M. "Corporate America repaired itself," says U.S. Trust's Chris Hyzy. "On an equal-weighted basis, it hasn’t been a lost decade."
In Asia, Japan +0.6% to 8696. Hong Kong +0.7% to 19180. China -1.2% to 2333. India -0.3% to 16805.
In Europe, at midday, London +0.5%. Paris +1.4%. Frankfurt +0.6%.
Futures at 7:00: Dow +0.9%. S&P +1%. Nasdaq +0.8%. Crude +0.5% to $101.46. Gold -0.45% to $1743.40.
Monday's economic calendar:
10:00 Factory Orders
10:00 Employment Trends Index
10:00 ISM Non-Manufacturing Index
1:10 PM Fed's Evans: Economic Outlook
Earnings Results: Companies that beat EPS expectations today include Dollar General (NYSE:DG). For full real-time earnings coverage, please click here.
Notable earnings before Monday's open: DG
Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.