China ups the ante in islands dispute with Japan. A senior Chinese government advisor, Jin Baisong, has called for an attack on Japan's bond market to spark a funding crisis and for a trade war as methods to persuade Japan to back down over the nationalization of the disputed Senkaku/Diaoyu islands. Meanwhile, Fitch has threatened ratings downgrades for a range of Japanese exporters if the spat drags on.
BOJ to ramp up the money printing. The Bank of Japan has joined the Fed and ECB in announcing further easing. Noting that "the pick-up in economic activity has come to a pause," the BOJ unexpectedly said it will increase its asset-purchase program to ¥80T ($1.01T) from ¥70T, and lengthen the scheme by six months to the end of 2013. The BOJ also kept its key interest rate unchanged at 0.0%-0.1%.
Anschutz to sell AEG sports-entertainment ops. U.S. conglomerate Anschutz yesterday said it intends to sell its AEG sports-and-entertainment unit, which could reportedly fetch several billion dollars. AEG's assets include a 30% stake in the LA Lakers, sports teams, stadiums and music festivals, as well as the world's second-largest concert promoter. Potential buyers could include News Corp. (NASDAQ:NWS) and Liberty Media (NASDAQ:LMCA), the owner of a 21% stake in AEG ticket rival Live Nation (NYSE:LYV).
Top Stock News
Blackstone to buy Vivint for $2B. Blackstone (NYSE:BX) has agreed to acquire Vivint for $2B from initial investors Goldman Sachs (NYSE:GS), Jupiter and Peterson, Vivint CEO Todd Pedersen has told Bloomberg, confirming earlier speculation. The company provides home-security, energy-management and solar-power leases to over 670,000 North American households.
BP in talks to sell $2.5B Texas refinery to Marathon. BP (NYSE:BP) is in sustained negotiations to sell its Texas City refinery to Marathon Petroleum (NYSE:MPC) for as much as $2.5B, the FT reports. A sale of the third-largest refinery in the U.S. would rid BP of the site of a 2005 explosion that killed 15 people and bring the company closer to its target of $38B in asset disposals by the end of 2013.
Goldman Sachs CFO to retire. Goldman Sachs (GS) has named Harvey Schwartz, the global co-head of its securities arm, as its next CFO. Schwartz will replace David Viniar, who is retiring at the end of January after a 12-year stint. Goldman added that Viniar will join the bank's board and that it expects to appoint additional directors in the near-term.
AMR job losses to be far fewer than feared. AMR (AAMRQ.PK) is sending notices to over 11,000 employees that their jobs might be at risk, although it expects to lay off only around 4,400. That's far less than the 14,000 jobs that American said in February that it would need to cut.
Green Mountain CEO projects confidence. Despite Green Mountain's (NASDAQ:GMCR) travails, CEO Larry Blanford has given an upbeat interview to the WSJ, pointing out that while sales growth is falling, it's still going to be 15%-20%, which few other companies in GMCR's sector achieve. Blanford's also not worried about Starbucks' (NASDAQ:SBUX) single-serve brewing machines, as they're espresso products while GMCR's are for filtered coffee.
Apple, publishers back down in EU over e-books. Amazon (NASDAQ:AMZN) is set for another win in the e-book wars after Apple (NASDAQ:AAPL) and four major publishers offered to allow retailers to sell the books at discounts for two years in order to end an EU antitrust probe. The publishers include CBS's (NYSE:CBS) Simon & Schuster and News Corp's (NWS) HarperCollins. The offer follows a similar deal in the U.S. with publishers, although not with Apple.
Critics rave over iPhone 5. The first iPhone 5 (AAPL) reviews are out and they mostly gush with praise. Walt Mossberg: "Apple has taken an already great product and made it better." Engadget: "An amazing performer with great battery life wrapped in a delicious shell." CNET: "You're going to be shocked at how light this phone is." Still, two features receive a bit of criticism: the Maps app and the Lightning dock connector.
Illumina: Effect of fiscal cliff to be "short-lived." Illumina (NASDAQ:ILMN) CEO Jay Flatley has told Bloomberg that while the fiscal cliff will affect a third of the gene-sequencing company's customers, "it's going to probably be pretty short-lived." Flatley also said that Roche going public in January with its $6.7B offer for Illumina stopped the board from properly discussing the offer and possibly put paid to the deal.
Top Economic & Other News
Capital flight exacerbates eurozone divide. Money transfers from the eurozone periphery to the core are exacerbating the divide in the bloc and hurting prospects for growth. Bloomberg calculates that €326B was withdrawn from Spain, Portugal, Ireland and Greece in the year through July, and that €300B was deposited in seven core countries, including Germany and France. The capital flight is worse when ECB LTRO financing is excluded.
Retailers upbeat about Christmas. Retailers appear to be optimistic about the Christmas holiday season despite the gloom in other sectors because of the global economy. Department store Kohl's (NYSE:KSS) expects to add 10% more workers this year, while a poll by the Hay Group found that 57% of retailers were keeping holiday hiring at about the same level as a year ago, and 36% said they planned to hire more. That's up from 10% last year.
In Asia, Japan +1.2%. Hong Kong +1.2%. China +0.4%. India -0.3%.
In Europe, at midday, London +0.1%. Paris -0.1%. Frankfurt -0.1%.
Futures at 7:00: Dow +0.2%. S&P +0.1%. Nasdaq +0.2%. Crude -0.6% to $94.71. Gold +0.3% to $1776.
Today's economic calendar:
7:00 MBA Mortgage Applications
8:30 Housing Starts
9:45 Fed's George: 'The Future of Workforce Development'
10:00 Existing Home Sales
10:30 EIA Petroleum Inventories
7:00 PM Fed's Fisher: U.S. Economic and Monetary policy
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