100 BP rate cut? Fed fund futures now imply a 90% chance that the Fed will slash its base rate to 2% on Tuesday.
Short-term yields plummet. Yields on three-month T-bills fell below 1% Monday, a level not seen in 50 years, as investors pulled money out of equities and commodities. Three-month bills traded at 0.84%, down 36 BP from Friday's close, after hitting an intra-day low of 0.63%.
Salesforce.com may be in play. A senior source says Salesforce.com (NYSE:CRM) CEO Marc Benioff recently met with Cisco (NASDAQ:CSCO), possibly to gauge interest in a buyout. Last week it was rumored Salesforce made an approach to Oracle (NYSE:ORCL) for about a $75/share buyout. Other potential suitors include Microsoft (NASDAQ:MSFT), IBM (NYSE:IBM), SAP (NYSE:SAP), Hewlett-Packard (NYSE:HPQ) and even Google (NASDAQ:GOOG).
GM to make cheaper cars in India. A top official says General Motors (NYSE:GM) will make lost-cost cars in India over the next few years. The new model will not compete directly with the Tata Motor's (NYSE:TTM) Nano; it will be cheaper than GM's lowest-priced car in the country.
Bidz.com reporting raises red flag. A close study of BIDZ.com's (NASDAQ:BIDZ) inventory disclosures in its recent 10-K report indicates the company may not be in compliance with GAAP protocols with regard to inventory valuation.
Builders project in default. Two massive joint-venture housing developments in Las Vegas, which involve Toll Brothers (NYSE:TOL), KB Home (NYSE:KBH) and Lennar (NYSE:LEN), received default notices on about $765M in debt. Last week Toll told investors it could be hit with "significant" losses if JV partners failed to meet obligations. Builders often used joint ventures to keep riskier investments off their balance books.
eBay may go out on its own. eBay (NASDAQ:EBAY) is looking to make its affiliate marketing an in-house venture. If it succeeds, eBay could dump ValueClick's (VCLK) Commission Junction. Using its own eBay Partner Network would give eBay a cut of its sales, and a foothold online advertising.
The downside of hedging. Some gold miners are not reaping the benefits of $1,000/ounce gold due to years-old hedging programs that have them selling the metal at prices hundreds of dollars below today's price. They're doing their best to exit the hedging agreements, prodded by "extremely vocal" investors. Companies affected include Barrick (NYSE:ABX), AngloGold Ashanti (NYSE:AU), Newcrest Mining (OTCPK:NCMGY), and Newmont (NYSE:NEM).
Australia will honor $4.6B Boeing deal. Despite accusations that previous officials sealed a deal with Boeing (NYSE:BA) for "political reasons," the Australian government will not cancel the $4.6B contract to buy 24 F/A-18 Super Hornet jets.
Shell's reserves slide. Royal Dutch Shell (NYSE:RDS.A) pumped far more oil than it discovered in 2007, lowering its reserve replacement ratio to 80%, vs. more than 150% in 2006. Complications in Russia and Nigeria depleted the company's reserves.
Shell questioned in bribery investigation. The DoJ has questioned Royal Dutch Shell (RDS.A) about possible violations of the U.S. Foreign Corrupt Practices Act, which may lead to fines. The probe centers around Shell's use of freight firm Panalpina, which is suspected of bribery in Nigeria, Kazakhstan and Saudi Arabia.
International Paper debt insurance surges. Credit default swaps for International Paper (NYSE:IP), which agreed Monday to acquire Weyerhaeuser's (NYSE:WY) packaging business for $6B, surged to 2.95% from 2.27%, meaning the cost to insure $10M of IP's debt went from $227,000 to $295,000 per year.