U.S. stock futures rise as Americans head to the polls. U.S. stock futures and EU shares were higher this morning (U.S. time) as Americans headed to the polls. The gains came despite the uncertainty caused by the tightness of the presidential race and the strong chance that Congress could again end up divided and deadlocked. Stocks that could apparently do well if Barack Obama wins include healthcare services, homebuilding, and food and staples retailing, although banks could sell off. "Mitt Romney stocks" include coal, specialty retail, managed care and telecommunications services.
Germany heading for contraction. Germany's composite PMI fell to 47.7 in October from 49.2 in September, which, says Markit, "raises the likelihood of an outright GDP contraction during the final quarter of the year." Meanwhile, the eurozone figure of 47.7 is consistent with a quarterly fall of 0.5% in GDP, and the pace of decline in France's private sector in the past two months "has been the sharpest since the post-Lehman slump in early 2009."
Defense agency OKs $7.6B in Lockheed arms sales to Qatar, UAE. The Defense Security Cooperation Agency (DSCA), which oversees foreign arms sales, has approved requests from Qatar and the United Arab Emirates to acquire a total of $7.6B worth of missile-defense systems from Lockheed Martin (NYSE:LMT). Congressional legislators have 30 days to block the bookings, although it's unlikely they'll do so given that they scrutinize such deals before the DSCA gives its authorization.
Top Stock News
Big pharma makes progress on Lipitor successor. A year after Lipitor lost its patent protection, pharmaceutical companies are making headway on the next generation of medicines for reducing LDL, or "bad cholesterol." Much interest focuses on the cholesterol-regulating gene PCSK9 in the liver, with Amgen (NASDAQ:AMGN) and Pfizer (NYSE:PFE) yesterday presenting data showing that their drugs performed well in mid-stage trials. Sanofi (NYSE:SNY) and partner Regeneron (NASDAQ:REGN) announced a massive Phase III trial for their treatment.
Apple lawsuit against Motorola dismissed with prejudice. A federal judge has thrown out an Apple (NASDAQ:AAPL) lawsuit against Motorola Mobility (NASDAQ:GOOG) with prejudice over the latter's alleged abuse of standards-essential patents in licensing talks. The judge apparently wasn't amused with Apple's offer last week to pay a royalty of less than $1 per iPhone unit for the IP. Microsoft (NASDAQ:MSFT) and the FTC are also involved in potential or actual suits against Motorola over the matter.
Apple mulls using ARM-based chips for Macs instead of Intel. Apple (AAPL) is thinking of abandoning the use of Intel's (NASDAQ:INTC) CPUs in its Mac computers in favor of internally developed ARM-based (NASDAQ:ARMH) processors, such as the ones that power its iOS hardware, Bloomberg reports. Apple's engineers have "grown confident" their power-efficient chips will eventually be strong enough for Macs, although the company is "unlikely to switch in the next few years." SA author Ashraf Eassa is mightily skeptical about the report (see Editors' Picks below).
Suzuki blames yen, regulation as it ends U.S. car sales. Suzuki (OTCPK:SZKMF) will stop selling cars in the U.S. after 27 years, and after its operations in the country entered bankruptcy protection yesterday. The Japanese firm was hit by the strong yen, a limited line-up and strict regulation. Suzuki isn't exiting the U.S. altogether, though, and will now focus on motorbikes, all-terrain vehicles and marine equipment such as outboard motors.
Top Economic & Other News
Japanese economic picture gets gloomier. Japan's coincident composite index, which consists of 11 key indicators, dropped 2.3 points on month in September to 91.2. That's the sixth consecutive month of declines and prompted the government to say the economy is at a "turning point" toward the downside rather than "pausing," as was the case in August. The data strengthens the fear that Japan is on the verge of recession.
France eschews business pleas for "shock" therapy. France's government has unveiled measures designed to help industry and exporters, including €20B in tax credits over three years, an extra €10B in public spending cuts and a €10B hike in consumer taxes. However, despite the dramatic fall in private sector activity, the measures fall short of the "shock" therapy called for in a report by industrialist Louis Gallois, who wants payroll taxes to be slashed by €30B over two years.
EU more pessimistic than Spain over economy. The EU Commission is less hopeful - or less delusional, if you prefer - than Spain's government over its economic prospects, the El Pais newspaper reports, possibly increasing the pressure on the country to request a bailout. The EU expects GDP to fall 1.6% this year and 1.5% in 2013 before growing 0.5% in 2014, while Spain predicts -1.5%, -0.5% and +1.2% respectively. The EU also believes Spain will have a much bigger deficit than the government estimates.
Greeks strike ahead of latest austerity vote. Tens of thousands of Greeks are taking part in a two-day general strike to protest the latest austerity and labor reforms, which are expected to be passed by parliament tomorrow. That, said EU Commissioner Olli Rehn, would keep Greece on track to achieve a deal with the troika next week to receive the latest tranche of its bailout. However, the eurozone and the ECB can't agree on who should help pay for Greece to receive more time to repay its loans.
In Asia, Japan -0.4% to 8975. Hong Kong -0.3% to 21944. China -0.4% to 2106. India +0.3% to 18817.
In Europe, at midday, London +0.7%. Paris +0.7%. Frankfurt +0.7%.
Futures at 7:00: Dow +0.3%. S&P +0.4%. Nasdaq +0.5%. Crude +0.85% to $86.38. Gold +0.6% to $1692.60.
Today's economic calendar:
7:45 ICSC Retail Store Sales
8:55 Redbook Chain Store Sales
1:00 PM Results of $32B, 3-Year Note Auction
Notable earnings before today's open: AKRX, AMED, AMSC, AOL, CPN, CRIS, CRZO, CSC, CVC, CVS, DISCA, DISH, DNR, DTV, DWRE, EMR, EXPD, FOSL, FTR, FUN, GEL, HCN, HL, HPT, ISIS, KWK, MFA, NYX, ODP, OMX, OXF, POM, SCG, SRE, VVUS
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