Spain hits the ceiling at bond auction. Spain's government sold €3.992B of bonds with demand strong across all maturities. The mark falls just short of the maximum target of €4B set for the auction. Yields fell on the five-year bond to 4.77% and 3.28% on the two-year variety.
Greek hopes fade. The odds that Greece will strike a deal with lenders fell lower after officials from the two sides couldn't agree on the pace the economy will contract next year. Finance Minister Yannis Stournaras says a "large gap" in the key figure for calculations still exists.
Chinese private equity firm chases Discovery Metals. In the latest in a series of M&A deals in the mining sector in Asia, a Chinese P-E firm (with state backing) has offered about $850M for Australian copper explorer Discovery Metals. The bidder, Cathay Fortune, says it has a commitment from China Development Bank for an ample credit line to help fund the deal. This comes on the heels of a bid for Australian iron ore miner Arrium as investors/nations try to take advantage of slumping prices by acquiring key resources.
Top Stock News
McDonald's eyes coffee strategy. McDonald's (NYSE:MCD) filed a trademark with the USPTO to use its name for ground and whole-bean coffee products in a move that could signal a plan to sell bagged coffee. The company's McCafe menu has been wildly successful and now contributes more than 6% to total sales. If bagged coffee is in the offing for McDonald's, Dunkin' Brands might need to perk up.
Pace of Macau gambling growth worries. Gambling revenue in Macau rose a weaker-than-forecast 12.3% to $2.99B in September, marking the second lowest tally of the year. Though analysts expect a bounce back in October, casino players in the region such as Las Vegas Sands (NYSE:LVS), MGM Resorts (NYSE:MGM), and Wynn Resorts (NASDAQ:WYNN) will be on edge to see if visitor levels keep trending lower.
H-P gets real and shares suffer. A bleak forecast from Hewlett-Packard (NYSE:HPQ) on its analyst day sent shares spinning. CEO Meg Whitman declared FY13 to be a "fix and rebuild" year that will see a broad-based profit decline (centered around enterprise services), and has again made cautious remarks about European and Chinese demand. Analysts currently expect H-P's FY13 APS to rise slightly. Streamlining H-P's product line is named a priority: The company plans to halve its printer SKUs next year.
Inside the new Apple. Bloomberg Businessweek's talks with Apple (NASDAQ:AAPL) insiders paint a complex picture of the post-Jobs era. Apple is said to have a "singular focus" on proving doubters wrong, and is deemed "happier and even somewhat more transparent" than before. But office politics are higher, and there's less "implicit pressure" on engineers. A peek back also reveals that Steve Jobs reportedly came to "loathe" Google (NASDAQ:GOOG) and considered ending its iOS search deal, but decided not to out of fear of upsetting users.
Tesla pressed for loan payment. Tesla (NASDAQ:TSLA) will make an advance payment on the DOE loan principal payment that's due in March, says CEO Elon Musk in a blog post. Musk's remarks come shortly after Tesla disclosed the politically pressured DOE wants the company to repay its loan at an accelerated pace. Also: Musk claims Tesla is "on the verge of becoming cash flow positive," and defends the company's Q3/Q4 guidance cut by claiming Tesla is "at the steepest portion of our production ramp."
Amazon's e-ink screen a hot seller. Amazon's (NASDAQ:AMZN) Kindle Paperwhite e-reader appears to be sold out until November as the e-commerce giant's site shows a shipping time of 4-6 weeks for both the Wi-Fi and 3G models. Earlier this week, reviewers gushed over the Paperwhite's front-lit display, with nearly all of them calling it superior to that of the Nook Glowlight.
Toys R Us enters the online streaming game. The market for streaming video is getting a bit more crowded as Toys R Us launches its own service to provide movies and TV shows for kids. Powered by Rovi (NASDAQ:ROVI), the store will include over 4,000 titles with movies priced at $2.99 for a 24-hour rental and TV shows at $1.99 a pop. Future plans include apps and streaming content straight to devices.
Skippy Peanut Butter brand for sale. Unilever (NYSE:UL) is reportedly seeking a buyer for its popular Skippy peanut butter brand as it lines up Lazard to help it find potential acquirers. The move makes sense to analysts with Unilever on a path to narrow its focus to personal care products.
Wet Seal in boardroom battle. Wet Seal has appealed to its shareholders to help it end an attempt by Clinton Group to replace the company's board with its own candidates. The struggling retailer has been engaged in a bitter battle with its third-largest investor that has seen biting press releases fly back and forth.
Top Economic & Other News
Food prices forecast to stay elevated. A senior economist at the U.N.'s Food and Agriculture Organization predicts food prices will stay high as volatility increases over the next few months. The FAO Food Price Index currently reads 216 points, up 3 points from August and 16 points since June. Dairy and meat prices paced the recent gains in the index.
Treasurys slip as inflation fears reappear. A month of low yields was broken just before the Fed was to release minutes of the September meeting where it embarked on QE3. “Expectations for U.S. inflation are rising in markets,” says one strategist in explaining how demand for longer-maturity bonds will suffer.
In Asia, Japan +0.9%. Hong Kong +0.1%. China closed. India +0.9%.
In Europe, at midday, London +0.1%. Paris +0.1%. Frankfurt -0.1%.
Futures at 7:00: Dow +0.2%. S&P +0.3%. Nasdaq +0.3%. Crude +0.6% to $88.75. Gold +0.6% to $1790.80.
Today's economic calendar:
7:30 Challenger Job-Cut Report
8:30 Initial Jobless Claims
9:45 Bloomberg Consumer Comfort Index
10:00 Factory Orders
10:30 EIA Natural Gas Inventory
2:00 PM FOMC minutes
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
6:30 PM Fed's Bullard: U.S. Economic and Monetary Policy
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