Moody's this morning informed France it will downgrade its government rating to AA2 from AA1. (L'Opinion)
Citigroup analyst Peter Goves said earlier this week he expected the ratings agency to put France on review for a possible downgrade tomorrow. Still, the move was not unanticipated, and there is no immediate reaction apparent in French or EU securities.
Toshiba (OTCPK:TOSBF) is moving forward with the restructuring of its PC business, cutting 900 jobs and exiting its business-to-consumer operations in some regions.
The Japanese conglomerate expects the restructuring to slash operating profit by ¥45B ($414M), but did not change its earnings forecast for the current year to March, as better-than-expected earnings in electricity and other operations offset the impact.
Toshiba will also cut fixed costs by more than ¥20B vs. the previous fiscal year and reduce the number of sales bases around the world to 13 from 32.
The U.S. House of Representatives has approved President Barack Obama's plan to train and arm Syrian rebels in the fight against Islamic State, although the amendment did not include the $500M the White House says it needs for the training.
The spending bill, including the training plan, will only go to Obama to be signed once it passes in the Senate, which can come as early as today.
Though most of the polls give the "No" (to breaking away from the U.K.) camp the lead, the pound (NYSEARCA:FXB) is behaving a bit nervously. It's now slightly lower on the session after being up nicely this morning following a larger-than-expected decline in unemployment.
Independence would be "an economic trapdoor down which we go, from which me might never escape," says former U.K. PM Gordon Brown in the sort of fear-mongering comment becoming fairly typical from politicians who support the status quo.
“Secession would be a catastrophe for Scotland,” says Spanish foreign minister Garcia-Margallo. “It would start a process of Balkanization that nobody in Europe wants.” Spain, of course, has its own secession issues in Catalonia.
The U.K. banks are showing little nervousness, with Barclays (BCS +0.8%), RBS (RBS +0.8%), and Lloyds (LYG +1.5%) all in the green, and HSBC (HSBC) just marginally lower.
The move percolated somewhat positively through Asian equity markets overnight, but fell short of something more sweeping - say a cut in interest rates - out of Beijing. Some warn the move won't do a whole lot as bank liquidity isn't the issue, but instead slow loan demand from businesses and consumers.
The PBOC's action is in the form of 3-month, low-rate loans to banks, according to a bank executive briefed on the action. While there are no explicit conditions attached to the money, says the executive, the PBOC wants to see credit channeled into areas Beijing's central planners have deemed important to the economy.
Among the recent evidence pointing to a slowing economy: Industrial production growth hit a six-year low in August, and foreign direct investment hit a four-year low.
The unemployment rate fell to 6.2% from 6.4% in the three months ending in July, the lowest level in six years. A separate gauge, the claimant measure fell to 2.9%, also the lowest since 2008. Wages remain sluggish though, with basic pay rising an annual 0.7% during the quarter, matching a record low.
The one thing holding back rate hikes in the U.K. is that slow wage number, according to Bank of England chief Mark Carney.
In separate news, the BOE minutes show MPC members again split 7-2 on keeping the benchmark rate at 0.5% (2 wanted a hike).
The pound is higher by 0.3% vs. the dollar and buying $1.6320.
Sky Deutschland's (OTC:SKDTF) supervisory and executive boards have advised shareholders against a takeover offer by British Sky Broadcasting (OTCPK:BSYBF), saying the offer "doesn't reflect the long-term potential nor the internal value of Sky Deutschland."
Previously, BSkyB agreed to acquire 21st Century Fox's (NASDAQ:FOX) Sky Italia and 57% stake of Sky Deutschland for £4.9B ($8.3B) in cash, to create a European pay-TV giant with approximately 20M subscribers.
Hours after Kiev granted "special status" to eastern regions of the country and granted them limited self rule, Ukraine and the EU ratified their long awaited association and free trade agreement, which sparked the Ukrainian revolution last February.
Following the signing, President Poroshenko announced that by ratifying the agreement, the country had set course for its membership into the EU. However, Ukraine postponed the deal's implementation until December 2015, facing immense pressure from Russia.
"Investors are watching election polls very closely, and people are betting that Dilma’s support is losing momentum," says one fund manager as the Bovespa jumps 3.5%. The latest polls suggest opposition candidate Marina Silva has a 70% chance of winning, says Nomura's Tony Volpon.
Shares of Anheuser-Busch InBev (BUD -0.8%) are lower after some of the buzz over a potential merger with SABMiller (OTCPK:SBMRY) wears off. In Europe, shares of SBMRY are also tilting lower.
Analysis of the combination of the two beer giants is nearly evenly split. Some analysts think the regulatory hurdles are too high to clear, while others maintain that outside of the U.S. and China there's not a huge amount of overlap that would draw in regulators.
Stifel Nicolaus and Buckingham Research have both raised their price target on BUD, moving to $130 and $137 respectively.
MillerCoors (TAP -1%) is in a holding pattern. If the mega-merger goes through, the company is nearly assured of a new owner.
The wildcard: There's also still the chance that A-B could have the rug pulled out from under it if SABMiller improves its offer to Heineken (OTCQX:HEINY) to a level which wins over the controlling family.