Today - Thursday, December 12, 2013
6:53 PMU.S. House overwhelmingly passes two-year budget deal
- The U.S. House overwhelmingly approves (332-94) a two-year budget framework spearheaded by Paul Ryan and Patty Murray that would remove the threat of a shutdown during the period. The eye-to-eye across the aisle comes as somewhat of a surprise and a rarity amid the rancor that has gripped budget battles in the past 2 years.
- John Boehner noted that the measure amounted to a small step toward the GOP's goal of deficit reduction: "Is it perfect? Does it go far enough? No, not at all," he said, while urging colleagues to support the plan. Democrat Chris Van Hollen: a "small positive step forward."
- The deal now goes to a Democratic Senate, which is expected to sign off as early as next week.
- Treasury ETFs: TBT, TLT, TIP, TMV, SHY, IEF, TBF, PST, EDV, TTT, TMF, VTIP, IPE, TLH, ZROZ, SBND, IEI, SCHP, DLBS, TYO, LTPZ, DTYS, STPZ, VGLT, TIPZ, UST, BIL, SHV, STIP, PLW, GOVT, UBT, TBX, TLO, VGSH, VGIT, RINF, DTYL, GSY, LBND, SCHR, TYD, SCHO, ITE, TYBS, TPS, TRSY, TENZ, INFL, SST, DTUL, TDTT, TUZ, FIVZ, DTUS, TBZ, FINF, DFVL, UINF, DEFL, DLBL, DFVS, TDTF, TIPX, TYNS, SINF
4:15 PMStocks post third straight loss, Dow down 104
- The Dow fell by triple-digits for a second straight day and tumbled to a one-month low, as investors weighed big YTD gains for stocks against the potential of reduced Fed stimulus.
- In a reversal, the Dow underperformed the other indexes after outpacing them yesterday; the Russell 2000, which has been a chronic laggard, finished with a gain.
- Defensive utilities, healthcare and telecom stocks - the same groups that were hit hard earlier this year after the Fed hinted it could pare its stimulus efforts - have trailed this week.
- Gold took another hit on taper worries, dropping $32.30 to settle at $1,224.90 in its biggest loss since October; crude oil closed with a slight gain, while natural gas prices logged their highest close in more than two years as freezing temperatures throughout much of the U.S. boosted the demand outlook.
- The U.S. dollar rose vs. other global currencies, and the yield on the benchmark 10-year Treasury added 2 bps to 2.88%.
1:07 PMAIG reportedly in ILFC sale talks with AerCap
- Moving nicely ahead in a bright red market is AIG (AIG +2.2%) which is now in talks to sell ILFC to AerCap Holdings (AER +4%), according to a Bloomberg report. "We never comment on rumors," says AerCap CEO Aengus Kelly when reached by telephone.
- Based in the Netherlands, AerCap - a former holding of Cerberus Capital - is the largest independent aircraft lessor with $15B in assets, and - recently reporting a debt/equity ratio of 2.5x - said it could increase the load to 3.5x-4x "if extremely attractive opportunities are found."
- Of course, AIG's effort to sell ILFC to a Chinese consortium for about $4.2B isn't formally dead, but the insurer is free to pursue other sales avenues.
10:46 AMInstagram launches private photo/video-messaging service
- Instagram Direct, a new service being launched at the mobile photo-sharing platform's NYC event (previous), allows Instagram (FB +3.9%) users to privately send photos and videos to up to 15 users. The photos can be accessed via Instagram's main feed, and are complemented by a group chat feature.
- Om Malik previously reported Instagram was prepping a private messaging service. Though much attention is being given to how Direct compares to Snapchat, which Facebook reportedly tried to buy for $3B+, it's arguably more a response to the rise of mobile messaging platforms such as WhatsApp, Kik, Line, and Viber, particularly in international markets.
- Those messaging platforms are viewed as a threat to Facebook's mobile engagement rates, particularly as they develop app/services ecosystems around them. WhatsApp alone has 350M+ monthly active users (MAUs); Instagram reached 150M in September, and Facebook proper is at 1.19B.
- Direct is also arguably a response to Twitter (TWTR -1.3%), which recently updated its apps to support private photo-sharing, and to place greater emphasis on private messaging in general. Twitter also recently began showing image previews in its Timelines.
- Instagram hasn't announced a printing service, as was expected by many.
- Previous: Instagram focused on discovery, international growth, ecosystem
7:04 AMStocks set to add to yesterday's loss at the open
- Stocks look to add to yesterday's big losses - at least at the open - as major index futures are all off about 0.2%. Initial jobless claims are due at 8:30 ET and expectations are for the number to bounce back to 320K after whooshing down below 300K last week.
- Europe's down about 0.5% and Asia - led by a 1.1% drop in Tokyo - was lower overnight.
- The 10-year Treasury yield is off one basis point at 2.85% and gold is off 1.5% to $1,238 per ounce.
- Index ETFs: SPY, QQQ, IVE, SH, DIA, SSO, SDS, PSQ, IVV, SPXU, UPRO, VOO, QID, TQQQ, DOG, RSP, SQQQ, DXD, QLD, RWL, EPS, UDOW, SDOW, IVW, DDM, SPYG, RPG, SPYV, BXUB, RPV, QQEW, VOOG, QQQE, VOOV, TRND, SFLA, BXUC, QQXT, FTA, BXDB, TNDQ
7:00 AMIndian court lifts freeze on Nokia factory
- An Indian court has agreed to unfreeze a phone-making factory owned by Nokia (NOK) so that it can complete the sale of its handset unit to Microsoft (MSFT).
- Authorities seized the plant following a tax dispute. Nokia will deposit 22.50B rupees ($367.17M) in an escrow account as a condition for lifting the freeze and transferring the factory to Microsoft.
- The tax case will continue separately. If Nokia loses, it could face a bill of up to $3.4B.
5:38 AMWorld stocks fall on taper concerns
- Global equities are lower as anxiety about Fed tapering cranks up again, especially with Congress set to pass a budget deal.
- Markets are expected to scrutinize retail-sales and weekly jobless data, which are due out this morning, for clues as to what the Fed might do when it meets next week.
- "The jury is still out as to whether the announcement to start the tapering of QE will be made then," says Patrick Latchford of Monex Capital Markets. "Arguably it's the uncertainty that's eating into markets right now."
- Japan -1.1%, Hong Kong -0.5%, China -0.1%, India -1.2%.
- EU Stoxx 50 -0.4%, London -0.6%, Paris -0.2%, Frankfurt -0.5%, Milan -0.65%, Madrid -0.4%.
- U.S. stock futures: Dow -0.1%. S&P, Nasdaq flat-to-lower.
5:07 AMEurozone industrial output surprisingly falls
- The eurozone's recovery continues to remain shaky, with industrial production dropping 1.1% in October after falling 0.2% in September and missing consensus for a rise of 0.3%.
- On year, output increased 0.2%, as in September, but came in well below forecasts of 1.1%. (PR)
- The euro is -0.1% at $1.377.
- ETFs: FXE, VGK, EUO, FEZ, ERO, EU, EPV, IEV, EZU, DRR, HEDJ, FEU, EUFX, UPV, ULE, FEP, ADRU, URR, FEEU, DBEU, FIEU
4:53 AMItalian PM gains in strength, pledge reform
- Italian Prime Minister Enrico Letta comfortably won a confidence vote in parliament yesterday, underscoring the government's new found stability following the chaos caused by the process to expel former PM Silvio Berlusconi after his conviction for tax fraud in the summer.
- Letta pledged a sweeping package of reforms whose aim would be to cut debt, bring down rampant unemployment and otherwise revive Italy's moribund economy. Measures would include lowering taxes and proposals to attract foreign investment.
- Meanwhile, Italy's CPI dropped 0.3% on month in November, as in October, and came in above consensus of -0.4%.
- On year inflation, inflation +0.7% vs +0.7% and +0.6%.
- The FTSE MIB is -0.2% and the euro is -0.1% at $1.3771. (PR)
- ETFs: EWI, ITLY, ITLT
4:35 AMFord board to press Mulally for clarity on future
- Ford's (F) board of directors reportedly intends to press CEO Alan Mulally on his future amid intense speculation that he is a leading candidate to replace Steve Ballmer at Microsoft (MSFT).
- The board will discuss the matter at a meeting that is due to take place today. The rumors have caused frustration and a desire for clarity, and an end to what is seen as a distraction, especially with some major product launches due next year.
- "It's drowning out the rest of the story," says a source. "People don't write about Mustang, they don't write about earnings, they write about Mulally."
- Even if Mulally doesn't leave for Microsoft, he is unlikely to stay at Ford until the end of next year despite this being the current oft-repeated plan. The board has confidence in COO Mark Fields, who is the frontrunner to replace Mulally as the carmaker's next CEO.
4:21 AMLiberty back in for Holland's Ziggo
- Liberty Global (LBTYA) is in negotiations to acquire Dutch cable group Ziggo (ZIGGY), which already rejected an offer from the U.S. group in October for being too low.
- Liberty owns 28.5% in Ziggo, whose market cap is €6.63B.
- The talks come as Liberty expands its presence in Europe, having acquired Virgin Media for $16B earlier this year.
4:09 AMMall operators jump into same-day delivery battle
- Four major mall owners have agreed to a deal with start-up Deliv to provide same-day delivery to consumers at the operators' shopping centers.
- Macerich (MAC), Westfield and Simon Property Group (SPG) are due to unveil the partnership today following a pilot at several General Growth Properties (GGP) malls.
- The companies will initially offer same-day delivery at nine malls in Los Angeles, San Francisco, Chicago and San Jose, after which they intend to expand the service to more properties next year.
- "Will the average spend go up if customers don't have to carry around the bags? We think so," said General Growth's Scott Morey. However, the malls don't expect to make money from the service, said Simon's Mikael Thygesen.
3:56 AMUnion makes contract offer to Boeing to keep 777X in Washington state
- The International Association of Machinists has made a labor-contract offer to Boeing (BA) to try to persuade the aircraft manufacturer to build the latest version of its 777 aircraft in the Seattle area.
- However, despite two days of talks, the sides are not close to an agreement.
- Boeing has been the subject of offers from numerous states about the site for constructing the 777X after the Seattle-based machinists turned down an eight-year deal last month.
- The rejection came despite union leaders agreeing to the contract; perhaps the thought of losing 20 years worth of job security has focused minds.
3:42 AMJPMorgan to pay $2B to settle Madoff allegations
- JPMorgan (JPM) is reportedly close to agreeing a $2B settlement with authorities over allegations that it turned a blind eye to Bernard Madoff's Ponzi scheme.
- In a first for a major Wall Street bank, JPMorgan will be the subject of a deferred prosecution agreement in which authorities will file criminal charges that would be dismissed after a set period of time if the bank meets certain conditions.
- Authorities plan to use a large part of the fine to compensate Madoff's victims.
- The settlement will add to a series of agreements that JPMorgan has reached with authorities over its various misdeeds, including a $13B deal that the bank agreed over the sale of problematic mortgage bonds. (Previous)
2:44 AMHouse seen approving budget deal
- The House is today expected to pass a bipartisan but narrow two-year budget deal that Congressional leaders reached earlier this week despite opposition from right-wing groups, with even some of the more conservative Republicans lining up behind the agreement.
- However, the GOP-controlled Rules Committee didn't let Democrats include an amendment to extend federal unemployment benefits that are set to expire on December 28.
- Should the chamber approve the deal, the Senate is seen passing it next week.
2:32 AMAustralian unemployment rate inches higher
- As expected, Australia's jobless rate edged up to 5.8% in November from 5.7% in October as more people entered the labor force.
- However, the number of people in work rose by 21,000 - the largest increase in seven months - after a fall of 700 and topped consensus of 10,000.
- The number of full-time jobs increased by 15,500 following a drop of 31,100, while that for part-time positions grew 5,500 vs +28,900.
- The S&P/ASX 200 is -0.7%, while the AUD-USD is -0.3%. (PR)
- ETFs: FXA, EWA, AUD, AUSE, CROC, KROO, EWAS, GDAY, FAUS
Wednesday, December 11, 2013
5:24 PMFacebook, Alliance Data, Mohawk joining S&P 500
- Better a week late than never. Facebook (FB) will be joining the S&P 500 following the Dec. 20 close, and will also be added to the S&P 100. The social networking giant is replacing test equipment vendor Teradyne (TER).
- Alliance Data Systems (ADS) and Mohawk Industries (MHK) are also joining the S&P 500 following the Dec. 20 close. They're replacing Abercrombie & Fitch (ANF) and JDS Uniphase (JDSU).
- FB +3.9% AH. MHK +2.4%. ANF -0.8%. JDSU -0.6%.