- China's Christmas rate hike. China raised interest rates by 25 basis points on Saturday. The one-year lending rate will now be 5.81% and the one-year deposit rate will be 2.75%. It's the second hike since mid-October as the country moves to combat inflation and slow credit growth, and some analysts believe China may front-load its monetary tightening to the first half of 2011. Chinese shares closed -1.9%.
- Hon Hai buys Hitachi display stake. Taiwan's Hon Hai Precision Industries (OTCPK:HNHAF) is buying a majority stake in a Hitachi (HIT) display unit for around $1.2B, reported the Nikkei newspaper. The deal will make Hon Hai the world's top producer of LCD panels, with a marketshare of 17.3%, bumping Sharp (OTCPK:SHCAY) to the No. 2 spot. It's also a testament to Hitachi's "continuing commitment to business restructuring and exits from non-core businesses," wrote one analyst, though Hitachi shares lagged the broader Nikkei index this morning.
- Danger signs from bailed-out banks. Nearly 100 banks that received federal bailout funds are slipping towards failure, with smaller institutions hit hardest by souring loans and eroding capital levels. The 98 banks, up from 86 in Q2, collectively received more than $4.2B in TARP funds. Seven TARP recipients have already failed, causing more than $2.7B in TARP losses.
- In Asia, Japan +0.8% to 10356. Hong Kong closed. China -1.9% to 2781. India -0.2% to 20029.
- In Europe, at midday, London closed. Paris -1.1%. Frankfurt -1.1%.
- Futures at 7:00: Dow -0.2%. S&P -0.3%. Nasdaq -0.1%. Crude -0.2% to $91.31. Gold +0.2% to $1383.40.
Monday's Economic Calendar
The SA Currents team contributed to this post.
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