by Yigal Grayeff and the Market Currents team
EU banks borrow €489B from ECB. EU markets have given up gains they made after Santa Claus - alias Mario Draghi - provided 523 EU banks a total of €489B ($641B) in the ECB's "longer-term refinancing operation" in which it offered three-year loans at its average benchmark rate of 1%. The figure is well above a consensus of €310B, but while the loans may avoid a liquidity crunch, Capital Economics is "skeptical...that the operation will ease the sovereign debt crisis."
Oracle misses forecasts for first time in ten years. Oracle (NASDAQ:ORCL) shares slumped 8% in post-market trading and took their peers down with them after the company reported results that missed forecasts for the first time in a decade. FQ2 adjusted EPS rose 6% to $0.54 and revenue edged up 2% to $8.8B, with the company suffering weakness in EMEA and the Americas, and in hardware and new software licenses. Given Oracle's reputation as a "safe harbor" during times of economic softening, concerns about slowing IT spending may well be on many investors' minds today.
RIM attracts interest from Amazon, Nokia and Microsoft. RIM (RIMM) shares surged 11.9% premarket on reports that the ailing company was the subject of acquisition overtures from Amazon (NASDAQ:AMZN), and was eyed by Nokia (NYSE:NOK) and Microsoft (NASDAQ:MSFT) for a possible joint bid. RIM spurned Amazon because it prefers to fix its problems on its own, a move that Forbes' Eric Savitz castigated. "I’m actually not sure what is more shocking: the idea that Amazon was interested in buying RIM, or the fact that RIM cut them off and said no," Savitz wrote.
EU court sets up scrap with U.S. over carbon tax. The European Court of Justice has ruled that the EU can make airlines flying to or from the region's airports pay to offset their carbon emissions from January 1. U.S. airlines stand to lose an estimated $3.1B between 2012 and 2020, and are unsurprisingly hostile, as is the U.S., where Congress has proposed legislation that would make it illegal to comply with the EU law. Hillary Clinton has also made threats.
North Korean army backs Kim Jong Un but will share power. North Korea's military looks to be ensuring stability by pledging its allegiance to Kim Jong Un, the son of the late Kim Jong Il, Reuters reports. However, the new ruler will have to share power with the army in a coterie that will also include Kim Jong Un's uncle.
Moody's warns Britain. Maybe trying to get on France's good side, Moody's has fired a shot at the U.K., warning that its deteriorating public finances and growth outlook have seriously crimped its ability to retain a AAA rating. Being outside the euro is no help: "No EU sovereign rating can be considered immune to this crisis," Moody's said.
BOJ gets gloomier... The Bank of Japan has lowered its outlook for the economy for the second month in a row, saying that the pick-up in activity has paused, and that there are spillover risks from the U.S. and the eurozone. Data released earlier showed Japan's exports fell 4.5% in November from a year earlier, the second consecutive month of declines.
...while China tries to stay positive. China's growth momentum is "generally sound," Premier Wen Jiabao said, but the economy is facing several challenges. Additional comments suggest China is bracing for a prolonged downturn in the U.S. and eurozone by boosting domestic demand and focusing on emerging markets.
California sues Freddie and Fannie. California AG Kamala Harris has sued Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC) to force them to comply with a subpoena to hand over documents they refused to provide. Harris' filing also alleges that the mortgage giants may have violated securities laws over the housing-related debt they issue.
Tokio Marine to buy Delphi in $2.7B deal. Tokio Marine Holdings (OTCPK:TKOMY) is to acquire Delphi Financial Group (NYSE:DFG) for $2.7B, including a special dividend. The purchase is part of a larger trend of Japanese firms capitalizing on the strong yen to go shopping abroad, hoping to offset weak growth at home.
HSBC continues to shrink. HSBC (HBC) is pulling out of private banking in Japan as it continues to streamline its operations, and is selling its business in the country to Credit Suisse (NYSE:CS) for an undisclosed sum. The value of the gross assets included in the sale was $2.7B as of the end of October.
Gas costs soar for consumers. Although pump prices have been falling, consumers are spending more money than ever on gasoline. Based on recent demand trends, consumers will have laid out $481B on gas in 2011 vs. $389B last year. Break it down, and each U.S. household will have spent an average of $4,155, 8.4% of an average family's income.
In Asia, Japan +1.5% to 8460. Hong Kong +1.9% to 18416. China -1.1% to 2191. India +3.4% to 15685.
In Europe, at midday, London +0.2%. Paris +0.3%. Frankfurt +0.3%.
Futures at 7:00: Dow +0.3%. S&P +0.2%. Nasdaq +0.25%. Crude +0.3% to $97.53. Gold +0.5% to $1625.
Wednesday's economic calendar:
7:00 MBA Mortgage Applications
10:00 Existing Home Sales
10:30 EIA Petroleum Inventories
1:00 PM Results of $29B, 7-Year Bond Auction
Earnings Results: Companies that beat EPS expectations last night and today include Cintas (NASDAQ:CTAS), Nike (NYSE:NKE), Paychex (NASDAQ:PAYX).
Those in line include Jabil Circuit (NYSE:JBL).
Those that missed forecasts include Oracle (ORCL).
For full real-time earnings coverage, please click here.