Wall Street Breakfast: Must-Know News

by: Wall Street Breakfast
Wall Street Breakfast
Seeking Alpha's flagship daily business news summary, gives you a rapid overview of the day's key financial news. It is published before 7:00 AM ET every market day and delivered to over 900,000 email subscribers.

Top Stories
Eurozone enters double-dip recession. Eurozone GDP contracted by an expected 0.1% on quarter in Q3 after falling 0.2% in Q2, marking the bloc's entry into its second recession since 2009. Germany's growth fell to 0.2% from 0.3%, signalling that the eurozone's debt crisis is fast catching up with the country, with Commerzbank economist Joerg Kraemer forecasting that GDP will shrink in Q4. On the bright side, France's economy expanded 0.2% vs expectations for zero growth.

BP, DOJ near deal over Gulf oil spill. BP (NYSE:BP) has confirmed that it's in talks with the Department of Justice to settle all criminal charges and claims by the SEC in connection with the 2010 Gulf oil spill. BP may reportedly pay a record criminal fine - i.e., at least $1.3B - and admit criminal misconduct. However, the deal, which could be announced today, isn't expected to cover federal civil claims, including damages under the Clean Water Act, and private claims.

CPI seen falling. CPI data for October is due out this morning, with economists expecting that inflation fell to +0.1% on month from +0.6% in September, while the core figure stayed at +0.1% for the fourth month in a row. "There isn’t much pricing power,” says economist Russell Price. "Inflation is a second-tier concern for the Fed right now. Growth is by far their biggest focus." Yesterday, FOMC minutes showed that the debate is growing over using the specific triggers of inflation and unemployment for for guiding monetary policy.

Top Stock News
GrainCorp rebuffs ADM's $2.8B bid. GrainCorp (OTCPK:GRCLF) has rejected Archer Daniels Midland's (NYSE:ADM) $2.8B acquisition offer, saying that the bid "undervalues" the Australian grains handler but that it will consider new proposals. GrainCorp reportedly wants 15%-20% more than what ADM has offered. GrainCorp's hand has been strengthened by FY net profit rising 19% to a record A$205M ($214M), but analysts expect net profit to fall in the next two years.

Texas Instruments to cut 1,700 jobs. Texas Instruments (NYSE:TXN) plans to lower its headcount by 1,700, or 5% of its workforce, as it focuses its OMAP processor and wireless connectivity chip development on "embedded applications with long life cycles." TI expects savings of $450M a year but will record a total of $325M in charges from the restructure. The company had already telegraphed its plans to retreat from mobile app processors, leaving Qualcomm (NASDAQ:QCOM), Nvidia (NASDAQ:NVDA) and Intel (NASDAQ:INTC) as the main suppliers.

Honeywell, Rockwell Collins in line for 737 contracts. Honeywell (NYSE:HON) and Rockwell Collins (NYSE:COL) are reportedly poised to receive significant contracts to supply systems to Boeing's (NYSE:BA) next-generation 737 Max jet, with an announcement expected today. The value of the agreements isn't clear, although they're important because of the sales Boeing is racking up for the Max - the company has received 969 orders so far, making it the firm's fastest-selling model.

Boeing 737 orders pass 1,000 for the year. Singapore Airlines' SilkAir has finalized an order for 54 Boeing (BA) 737 jets, including 31 737 Max 8 planes, in a deal worth $4.9B at list prices. The booking represents SilkAir's transition to Boeing aircraft and brings the total number of 737s ordered in 2012 to 1,031, the first time in the plane's history that it has passed 1,000 bookings in one year.

House panel blames Corzine for MF Global collapse. A House oversight committee has put the blame squarely on Jon Corzine for the collapse of MF Global (OTC:MFGLQ) and its "failure to protect customer funds." However, in a report that's due to be released today, Corzine is not accused of breaking the law. While the panel's Republican members led the attack on Corzine, the Democrats declined to endorse the report, saying they want more time to study its conclusions, although they did support large amounts of it.

AIG in talks to become cornerstone investor in $4B PICC IPO. AIG (NYSE:AIG) is reportedly in negotiations to become a cornerstone investor in the $4B Hong Kong IPO of Chinese state-owned insurer PICC Group. China Life, utility State Grid Corp and French reinsurance firm Scor are also potential cornerstone investors, as are other Asian insurance companies and a number of large Chinese state-owned enterprises.

News Corp eyes stake in NY Yankees home channel. News Corp (NASDAQ:NWS) is reportedly in advanced talks to buy a stake - possibly almost 40% - in YES, the cable channel that televises New York Yankees games. News Corp is likely to acquire most of the holding from Goldman Sachs (NYSE:GS) and Providence Equity Partners. The potential deal will probably value YES at $3B.

FTC poised to OK Hertz / Dollar Thrifty deal. The FTC is reportedly ready to authorize Hertz's (NYSE:HTZ) long-awaited $2.6B acquisition of Dollar Thrifty (NYSE:DTG) after Hertz offered to sell 15 more airport outlets than it originally proposed. The agency is circulating a draft approval announcement among its commissioners.

Apollo, Guggenheim lead race for Aviva's U.S. insurance ops. Apollo Global Management (NYSE:APO) and Guggenheim Partners are reportedly in the lead in a combined bid to acquire Aviva's (NYSE:AV) U.S. life insurance and annuities unit, which is expected to be sold at a "substantial discount" to its book value of £2.4B, excluding debt. Also in the hunt is Philip Falcone's Harbinger Group (NYSE:HRG).

Vodafone constantly thinks about what to do with Verizon stake. Vodafone (NASDAQ:VOD) CEO Vittorio Colao said that the company regularly reviews what to do with its 45% stake in Verizon Wireless and that he can't rule out a sale of the asset. Such a move would tie in with Vodafone's global strategy of divesting minority stakes that it holds in carriers, but Verizon contributes over half the U.K. group's adjusted operating profit and is a major growth engine.

Top Economic & Other News
Japan, China, Korea to hold trade talks. Japan and China could be about to put aside their dispute over the Senkaku-Diaoyu islands: along with South Korea, the countries may reportedly announce talks to finalize a trilateral free trade agreement when they meet at the East Asia Summit in Cambodia next week. The spat over the islands has harmed Japanese exports, particularly car sales.

FHA could need bailout. The Federal Housing Administration is expected to report this week an even slimmer buffer of reserves than the 0.12% of loan guarantees it had last year (the law requires a 2% cushion - so much for that). It's a development that could prompt the agency to request a bailout for the first time ever.

ECB's Coene appears to break ranks over Greek debt. ECB Governing Council member Luc Coene has reportedly said that Greece will need to write down debt in order to help resolve its problems. With the private sector already having taken haircuts on their Greek bonds, that seems to indicate that Coene is referring to debt held by public entities, such as EU governments. While that would put him in line with the IMF, it would put him at odds with the EU consensus, and particularly Germany.

China formalizes transfer of power. Xi Jinping has formally replaced Hu Jintao as head of China's Communist Party, while the Politburo Standing Committee has been cut to seven from nine. The conservative nature of the committee means that hopes for economic reform are low. One new member, Zhang Gaoli, presided over fast growth as head of the Tianjin region but racked up huge debts and built dozens of buildings that now stand empty - a model that many feel China needs to wean itself off from.

Editors' Picks
Big-Picture Forecasts Are Usually Nonsense
Watch Coal, But Do Not Buy Now
Xerox Is Simply Too Cheap To Ignore

Today's Markets:
In Asia, Japan +1.9% to 8830. Hong Kong -1.6% to 21109. China -1.2% to 2030. India -0.8% to 18471.
In Europe, at midday, London -0.4%. Paris -0.4%. Frankfurt -0.5%.
Futures at 7:00: Dow +0.1%. S&P +0.2%. Nasdaq +0.2%. Crude +0.15% to $86.45. Gold -0.45% to $1722.40.

Today's economic calendar:
8:30 Consumer Price Index
8:30 Empire State Mfg Survey
8:30 Initial Jobless Claims
09:00 Fed's Lacker: U.S. Economic Outlook
9:45 Bloomberg Consumer Comfort Index
10:00 Philly Fed Business Outlook
10:30 EIA Natural Gas Inventory
11:00 EIA Petroleum Inventories
1:20 PM Bernanke: 'Housing and Mortgage Markets'
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
4:30 PM Fed's Plosser: 'Money, Markets and Government'

Notable earnings before today's open: BKE, CSIQ, DANG, DLTR, GME, HP, NM, ROST, SBH, SPH, STP, TDG, TGT, WMT

Notable earnings after today's close: ADSK, AMAT, ARUN, ATW, DELL, DOLE, FMCN, GPS, INTU, MRVL, SHLD, SINA

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