Wall Street Breakfast: Must-Know News

by: SA Editor Yigal Grayeff
SA Editor Yigal Grayeff
Seeking Alpha's flagship daily business news summary, gives you a rapid overview of the day's key financial news. It is published before 7:00 AM ET every market day and delivered to over 900,000 email subscribers.

North Korean dictator Kim Jong Il dies. U.S. stock futures and EU shares were higher midday in Europe despite Asian bourses mostly falling following the death of North Korean dictator Kim Jong Il over the weekend. In a brief note, Stratfor said his heir apparent, son Kim Jong Un, still lacks the know-how for the job. His uncle, Jang Song Thaek, will probably rule behind the scenes while on-the-job-training takes place. S&P and Fitch said there would be no immediate effect on South Korea's rating, although S&P said that could change if the succession doesn't go smoothly.

Exxon eyes Gulf Keystone at £7B valuation. Exxon (NYSE:XOM) has approached Gulf Keystone Petroleum (OTCQX:GUKYF) about a deal that could value the company at about £7B ($10.8B), nearly five times its market cap on Friday, The Independent reports. Gulf is sitting on a huge crude discovery in Kurdistan, but the government is thought to want an oil giant involved to develop the field. Other majors - including Chevron (NYSE:CVX) and Sinopec (NYSE:SNP) - may also be interested. Gulf's shares were +25% midday in London.

AT&T looks to be giving up on T-Mobile. AT&T's (NYSE:T) talks to sell T-Mobile (OTCQX:DTEGY) assets have gone cold, sources say, the strongest sign to date that the $39B deal may fall apart. A divestiture could have helped push the transaction past regulators, so AT&T will probably have to choose now between fighting the DoJ in court or settling for a scaled-back arrangement such as a JV or minority stake.

EU to discuss €200B IMF funding. EU finance ministers will hold a conference call today to discuss €200B ($261B) in additional funding through the IMF, and to begin working out the details of new budget rules as part of the eurozone's proposed tighter fiscal union. However, don't expect the U.K. to easily part with the £25B ($38.8B) that the EU wants it to contribute.

GOP divided over payroll tax cut extension. A House vote today on a two-month extension to the payroll tax cut is in doubt after Republicans expressed strong objections to the bill despite their colleagues helping to pass the measure in the Senate following a deal with the Democrats. House Speaker John Boehner wants a year's extension, saying the shorter time period would create uncertainty for workers and employers. However, there is major disagreement over how to pay for the longer extension.

U.K. to accept bank panel's recommendations. U.K. Finance Minister George Osborne is expected to say today that he will accept most of the Vickers Commission's bank reform proposals, including a firewall between their retail and wholesale businesses. However, plans for strengthened capital rules will probably be delayed to fit in with an EU timetable, and, in a major boost for HSBC (HBC) and Standard Chartered (OTCPK:SCBFF), could be limited to a bank's British operations.

Iran embargo talks stepped up. The U.S. and EU are seeking assurances from major oil states, such as Saudi Arabia, Kuwait and the UAE, that they would increase exports in order to keep markets calm if an embargo is placed on Iranian oil and its central bank. Officials from 11 countries are due to meet tomorrow in Rome.

Eldorado to buy European Goldfields for $2.6B. Eldorado Gold (NYSE:EGO) said yesterday that it will acquire European Goldfields (OTC:EGFDF) for around C$2.5B ($2.41B). The deal enhances Eldorado's project pipeline and creates a "premier high growth, low cost intermediate gold producer" with a market cap of C$11B.

Iraq, American troops face uncertainty as U.S. leaves. The last U.S. troops left Iraq yesterday, leaving the OPEC country facing the continued threats of a Sunni Islamist insurgency, rival Shi'ite militias and foreign meddling, and overspill from Syria. The government is also in dispute with the semi-autonomous Kurdish region over oil and territory. Young U.S. veterans returning from Iraq can expect to face a tough time finding work should they rejoin civilian life: the jobless rate for those aged 20-24 averages 30%, more than double that of their peers.

Money runs from EU and China. The capital flight out of the eurozone continues, with investors turning to forex, real estate and investments overseas to protect themselves in the event of a eurozone break-up or a series of bank failures. Unsurprisingly, the trend is more pronounced in Greece, Portugal and Italy. In China, capital flowed out in November for the second month in a row - the first back-to-back decline in over a decade. Economist Ren Xianfang said this is just the beginning.

Saab runs out of gas as GM rejects reorganization. Saab Automotive has filed for bankruptcy in Sweden, hours ahead of a planned hearing. The longtime carmaker's proposed plans for a restructuring were rejected over the weekend by former owners GM (NYSE:GM).

Employment picture looking up - Manpower. Businesses expect to increase staff by a seasonally adjusted net 9% in Q1 2012, a study from Manpower (NYSE:MAN) shows, the most positive number in over a year. The industries with the best outlook are mining, and hospitality and leisure, while even weak sectors such as construction and government reported slight improvements.

House to legislate on insider trading early next year. After recently delaying measures to ban Congressmen from insider trading, the House will take up legislation on the issue early next year, said Eric Cantor. The bill, called the Stop Trading on Congressional Knowledge, or STOCK Act, has the support of over 230 members; a Senate panel passed a similar measure last week.

Two banks shut on Friday. Regulators closed two banks on Friday, one in Florida and the other in Arizona, bringing to 92 the number of failures this year. The estimated cost to the FDIC's deposit-insurance fund will be $68.8M.

Today's Markets:
In Asia, Japan -1.3% to 8296. Hong Kong -1.2% to 18070. China -0.3% to 2218. India -0.7% to 15379.
In Europe, at midday, London +0.1%. Paris +1.0%. Frankfurt +1.0%.
Futures at 7:00: Dow +0.5%. S&P +0.7%. Nasdaq +0.8%. Crude +0.3% to $93.83. Gold flat at $1597.80.

Monday's economic calendar:
10:00 NAHB Housing Market Index
1:15 PM Fed's Lacker: Economic Outlook

Notable earnings after Monday's close: RHT

For full real-time earnings coverage, please click here.

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