- U.S. indices were flat Friday. Ten-year notes yield fell 0.1% to 4.1%. Gold gained $11 to $843. Oil fell $0.62 to $96.
- Equity futures are marginally higher at 7:00 AM in extremely light pre-New Year trading.
- Online holiday spending is up 19% to $28B through Dec. 27, on track with previous gains.
- Top economist Robert Shiller says housing losses could triple over the next few years, and represent the biggest threat to U.S. growth. He predicted the U.S. may soon plunge into a 'Japan-style' housing slump with multi-year declining prices. "This is a much bigger issue than sub-prime," he said.
- Asia: Japan was closed. Hang Seng gained 1.62%. Shanghai was closed.
- Europe: Dax is closed. FTSE -0.59%. CAC -0.41%.
- Pakistan's KSE 100 fell 4.8% after being closed for three days following the assassination of former PM Benazir Bhutto. Volume was 1/5 normal.
- Euro-zone money markets are flush with cash after generous injections from the ECB. Overnight rates were well below the ECB's 4% benchmark on Monday.
NEWS OF NOTE FOR MONDAY
- Merrill Lynch (MER) CEO John Thain is in talks with Chinese and Middle Eastern sovereign wealth funds which could lead to the sale of yet another big stake. Sources say Thain needs funds urgently, and is working "around the clock" to bolster Merrill's balance sheet.
- The UK is investigating GlaxoSmithKline (NYSE:GSK) and AstraZeneca (NYSE:AZN) for bribery of Iraqis during the UN's oil-for-food program.
- BHP Billiton (NYSE:BHP) CEO Marius Kloppers may test Rio Tinto's shareholders' resolve by presenting them with an unchanged offer of about $153B ahead of the "put up or shut up" date of Feb. 6, by when BHP must submit a bid to RTP's board or be barred for six months.
- Baidu.com (NASDAQ:BIDU) CFO Shawn Wang died in an accident. Shares down $8.86 to $390 in pre-market.
- The Singapore government, which recently bought a 9% stake in UBS (NYSE:UBS), said it seeks no operational control over the firm.
- Merrill Lynch (MER) and Dutch insurer Aegon finalized a deal to form a strategic relationship. Aegon also completed its acquisition of Merrill's life insurance units for $1.25B cash.
- Kirk Kerkorian's Tracinda Corp. will buy a 35% stake in Delta Petroleum (DTPR) for $19/share, a 23% premium.
- Worldwide chip sales were $23.1B in November, up 2.3% year-over-year and 0.7% From October. Early indications show strong holiday sales of LCD TVs, MP3 players and digital cameras. Pricing pressure continues to impact memory sales, especially DRAM.
- Royal Philips Electronics (NYSE:PHG) will book a €530 million ($780M) Q4 profit on a partial sale of its stake in Taiwan Semiconductor (NYSE:TSM). Philips sold 800M shares for $1.5 billion.
- IBM (NYSE:IBM) is in advanced talks to buy Israeli grid storage systems developer XIV for $300-350M. Since inception in 2002, only $3M has been invested in XIV.
- Magic Software (NASDAQ:MGIC) will sell its Advanced Answers on Demand [AOD] unit to Fortissimo Capital for $17M cash. AOD develops software for the long-term care industry.
- Better Online Solutions (NASDAQ:BOSC) is in advanced talks to buy assets and intellectual rights from Dimex Systems for about $11.5M.
- Penn Treaty American (PTA) retained Friedman, Billings, Ramsey (NYSE:FBR) to assist it in the review of strategic alternatives, including capital structure review, strategic partnerships, business combination transactions or the sale of certain assets.
- Encore Energy Partners (NYSE:ENP) to acquire assets from Encore Acquisition (NYSE:AEC) for $250M.
- StatoilHydro (NYSE:STO) will sell shallow water operations in U.S. Gulf of Mexico to Mariner Energy (ME) for $243M.
NOTABLE ANALYST UPGRADES/DOWNGRADES
- Chicago PMI (prev. 52.9) at 9:45 AM.
- November Existing Home Sales (prev. -1.2%) at 10:00 AM.
- Dallas Fed Manufacturing Production Index (prev. -3.5) at 10:30 AM.
- 3-Month & 6-Month T-Bill Auction at 11:30 AM.
- Earnings: PNY, OCCF, SNEN