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Stock futures drop as Washington gridlock seems set to continue. U.S. stock futures were lower premarket (see below) following Barack Obama's re-election as President, although European shares were mostly higher. While the uncertainty that so distracts investors is over, the gridlock in Washington appears set to continue after the Republicans retained the House and the Democrats the Senate. And now the election is over, attention turns to the fiscal cliff, which is less than eight weeks away.

Pfizer's potential blockbuster arthritis drug wins FDA approval. The FDA has authorized Pfizer's (PFE) Xeljanz pill for the treatment of adults with rheumatoid arthritis. The medicine will compete with Abbott Laboratories' (ABT) top-selling injection Humira and could generate estimated annual sales of $2.3B by 2018.

German industrial output slumps. German industrial output fell 1.8% in September, far greater than expectations for a 0.5% decline. The drop was led by a 2.3% fall in manufacturing output. Noting a 3.3% slide in monthly orders, the economy ministry warned of continued declines in Q4. A longer-term chart shows that this sort of print is 2008-09 territory.

Top Stock News
BHP starts CEO succession planning. BHP Billiton (BHP) has quietly started looking for a successor to CEO Marius Kloppers, the FT reports, in what could herald a further shake-up in the leadership of the global mining industry. BHP probably wants to avoid a situation similar to that of Anglo American, where Cynthia Carroll announced her departure and the company has only just started to look for a new CEO (OTCPK:AAUKF).

Exxon confirms plans to sell Iraqi field stake. Exxon Mobil (XOM) has called the bluff of the Iraqi government, informing Baghdad that it is in talks to sell its share in the West Qurna-1 oilfield in the southern part of the country. It's the first time Exxon has confirmed speculation of its intention to pull out of the $50B project after it signed exploration contracts with Kurdistan, which upset Iraq because it lays claim to the autonomous region's oil reserves.

JPM, SEC near deal over mortgage bonds. JPMorgan (JPM) is reportedly nearing a deal with the SEC to end a probe into mortgage bonds issued by the bank's Bear Stearns unit. Any settlement isn't expected to surpass the $550M that Goldman Sachs paid in 2010 over CDOs. However, JPM would still have to face another investigation by the SEC into mortgage bonds, as well as lawsuits from New York and the Federal Housing Finance Agency.

Chevron, others may have hit jackpot in Alberta. A new study has identified immense oil and gas resources in Alberta's emerging shale prospects, including 3,324MMcf of natural gas, 58.6B barrels of gas liquids and 423.6B barrels of oil. The find suggests that a string of recent takeovers and land buys will yield impressive production gains for major oil companies, such as Encana (ECA), Chevron (CVX) and Talisman (TLM).

Pearson intends to keep FT. Pearson (PSO) has denied a Bloomberg report that it's considering selling the Financial Times, maintaining that the newspaper is a valuable piece of its portfolio. The FT is thought to be worth £1B, although it could fetch up to £2B as a "trophy asset" despite its declining readership.

Could China overturn gaming console ban? A Chinese safety standards body has granted a certification of quality to Sony's (SNE) PlayStation 3, prompting speculation that China may overturn its ban of gaming consoles. However, consultant Lisa Hanson points out that any repeal is the purview of the Ministry of Culture, and even if the ban is ended, Sony, Microsoft (MSFT) and Nintendo (OTCPK:NTDOF) would face huge competition from online and mobile games.

Microsoft developing gaming tablet. While speculation grows that China could repeal its console ban, the Verge reports Microsoft (MSFT) is building a 7" gaming tablet meant to complement the Xbox. Rumors of such a tablet floated around shortly before Microsoft introduced the Surface; a new Xbox and refreshed Kinect are expected late next year.

Companies seen issuing debt at lower rates than Uncle Sam. A fall in the short-term bond yields of Exxon Mobil (XOM) and Johnson & Johnson (JNJ) to below those of comparable Treasurys recently is prompting some investors to predict that top-rated companies could soon be able to issue debt at cheaper rates than the government. "It's only a matter of time," says Carret's Jason Graybill. Still, corporate bond yields undercutting Treasurys remains a rare phenomenon.

Top Economic & Other News
Greeks strike ahead of the latest crucial austerity vote. Thousands of Greeks are holding a second day of a general strike to protest the latest round of austerity, which the country's parliament is expected to authorize this evening in a vote. The approval of the €13.5B of wage cuts and tax hikes by 2016 is vital for Greece to receive the latest €31B tranche of its bailout before it runs out of money. Also critical is a vote on the 2013 budget, due on Sunday.

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Today's Markets:
In Asia, Japan flat at 8973. Hong Kong +0.7% to 22100. China flat at 2106. India +0.5% to 18902.
In Europe, at midday, London +0.2%. Paris flat. Frankfurt +0.3%.
Futures at 7:00: Dow -0.25%. S&P -0.2%. Nasdaq -0.2%. Crude -1.1% to $87.76. Gold +0.3% to $1720.50.

Today's economic calendar:
7:00 MBA Mortgage Applications
10:30 EIA Petroleum Inventories
11:00 Results of $24B, 10-Year Note Auction
3:00 PM Consumer Credit

Notable earnings before today's open: AES, AGU, ARIA, BDX, CLH, CNP, CTSH, CWH, DVN, ENB, FNP, GOLD, HFC, HSP, JRCC, LAMR, LEAP, M, MNTA, MPEL, NIHD, PRGO, SODA, SONS, STWD, TAP, THC, TICC, TWX, VICL, WFR, WLP, WRES

Notable earnings after today's close: ARAY, ATO, ATVI, AWK, BONE, CBS, CLR, CODI, CPE, CPNO, CTL, CXO, ETE, ETP, EXEL, FTK, GMXR, GSS, HIMX, HNSN, ITMN, KGC, MAKO, MBI, MDLZ, MNST, MWE, NQ, OAS, ONTY, OSUR, PAAS, PANL, PRI, PRU, QCOM, SGEN, SLXP, SNTS, SRZ, SSRI, SXL, TCAP, TIE, TS, WFM

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Source: Wall Street Breakfast: Must-Know News