By Yigal Grayeff and the Market Currents team
Fitch warns on U.S. rating as debt tops 100% of GDP. Fitch has again warned that rising U.S. debt is not consistent with maintaining an AAA rating, but said it probably will not reach a decision on a downgrade before 2013. Fitch said at least $3.5T of further deficit reduction measures will be needed to bring debt down to 90% of GDP by the second half of the decade. The warning comes as Zero Hedge calculates that U.S. debt now exceeds 100%.
Yahoo mulls sale of Asian ops in $17B deal. Yahoo’s (NASDAQ:YHOO) board is expected to meet today to discuss selling its holdings in Alibaba (OTC:ALBCF) and its Japanese affiliate back to their owners in a tricky tax-free deal valued at $17B, The New York Times reports. Given Yahoo's $19.8B market cap, the company's core U.S. ops could be worth only about $100M if you strip out its $2.7B in net cash and investments.
Greek creditors agreement looking shaky. Greece's creditors are resisting IMF pressure to take bigger losses on their holdings, Bloomberg reports. Vega Asset Management - which was one of the key negotiators in Greece's debt restructuring - has already threatened to sue if the losses are too steep, and walked away from the table earlier this week after reportedly (among other things) complaining about the ECB's refusal to take any losses on its holdings of Greek paper.
Toyota set to lose crown but forecasts 2012 recovery. Toyota (NYSE:TM) has forecast that sales will jump next year to a record 8.48M vehicles as it recovers from the Japanese earthquake and the Thai floods. Those disasters will lead to a 6% drop this year to 7.9M units, which will probably cause Toyota to lose its crown to GM (NYSE:GM) as the world's largest auto company by sales.
Chevron, Transocean staff face criminal charges in Brazil. Federal police in Brazil have recommended that criminal charges be brought against several Chevron (NYSE:CVX) and Transocean (NYSE:RIG) officials involved in November's oil spill. This is in addition to an $11B civil suit brought against the companies. The response to what looks to be a relatively minor spill is certain to give investors second thoughts before plowing into drilling off the Brazilian shore.
Deutsche Boerse, NYSE merger hitting the skids. NYSE (NYSE:NYX) and Deutsche Boerse (OTCPK:DBOEY) may have to directly lobby European Commissioners to obtain approval for their merger after being unable to assuage the concerns of EU antitrust officials about the deal's effects on the derivatives market, Reuters reports. The exchanges are likely to focus their arguments on the benefits to the EU of the transaction at a time the region is facing a deep crisis.
China warns of trade war over EU's carbon tax on airlines. China's state-run Xinhua News Agency has warned that it will be "difficult to avoid a trade war" in aviation after the EU's highest court said the bloc could impose carbon taxes on flights to and from the region. "This is a trade barrier in the name of environmental protection," Xinhua wrote.
Yanzhou Coal nears $2B purchase of Australia's Gloucester. Trading in Australia's Gloucester Coal was suspended today, as China's Yanzhou Coal (NYSE:YZC) is expected to make a takeover bid of at least $2B. Sources say an announcement could come today or early tomorrow.
Hedge funds sue Deutsche Bank over $1B Madoff claims deal. Two hedge funds are suing Deutsche Bank (NYSE:DB) for dragging its feet on a $1B deal to buy their claims for Madoff-related losses. Prompting the firms to action were recent court decisions limiting the ability of trustee Irving Picard to further recover money.
SEC criticized over Koss settlement. The SEC has received another wrist slap for its weak enforcement actions, this time in connection to a proposed settlement with Koss Corp. (NASDAQ:KOSS) over alleged accounting fraud. District Judge Rudolph Randa said the SEC was "vague" and failed to prove that penalties against the former CEO were fair, and cited Judge Jed Rakoff's Citi ruling last month.
Roche open to $3B deal. Roche (OTCQX:RHHBY) CEO Severin Schwan has said the Swiss drugmaker is open to an M&A of more than $3B, as well as to smaller purchases also. Schwan wants deals that would fit Roche's focus on medicines which can be sold with diagnostic tools that facilitate tailored treatments for patients.
Oshkosh steps up fight to ward off Icahn. Truck maker Oshkosh (NYSE:OSK) has sent shareholders a proxy card asking them to ignore Carl Icahn's efforts to install his own board members. Icahn, who has a 10% stake, is pushing for a tie-up with Navistar (NYSE:NAV).
FTC reviews EMI sales. The FTC is reportedly taking the lead in reviewing Citi's (NYSE:C) break-up sale of EMI to Universal Music (OTCPK:VIVHY) and Sony (NYSE:SNE), with sources saying the agency has to play point because the Justice Department has been too busy cracking apart the AT&T/T-Mobile deal.
In Asia, Japan -0.8% to 8395. Hong Kong -0.2% to 18378. China -0.2% to 2186. India +0.8% to 15813.
In Europe, at midday, London +1.2%. Paris +1.4%. Frankfurt +1.1%.
Futures at 7:00: Dow +0.4%. S&P +0.5%. Nasdaq +0.5%. Crude +0.3% to $98.98. Gold +0.1% to $1614.50.
Thursday's economic calendar:
8:30 GDP Q3
8:30 Initial Jobless Claims
8:30 Chicago Fed National Activity Index
8:30 Corporate Profits
9:55 Reuters/UofM Consumer Sentiment
10:00 FHFA Housing Price Index
10:00 Leading Indicators
10:30 EIA Natural Gas Inventory
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
Earnings Results: Companies that beat EPS expectations last night and today include Bed Bath & Beyond (NASDAQ:BBBY), Tibco Software (NASDAQ:TIBX).
Those that missed forecasts include Micron Technology (NASDAQ:MU).