Mobile payments company Square, founded by Twitter (TWTR) CEO Jack Dorsey, is set to make a high-profile debut on the NYSE today, pricing its IPO below a "range of $11-$13" at $9 per share ($2.9B valuation). It's one of the year's most highly anticipated listings as investors worry about how Dorsey will split his time between Square (SQ) and Twitter. Going head-to-head with Square will be Match Group (MTCH), the owner of dating services such as Tinder, OkCupid and Match.com. Amid a cooling tech IPO market, Match also priced its offering on the low end of a "$12-$14 range" at $12 per share (also a $2.9B valuation).
Economy
World shares are continuing their climb higher after minutes from the Fed's most recent policy meeting strengthened expectations for a rate hike in December, a move that would remove lingering uncertainty in the financial markets. "It may well become appropriate to initiate the normalization process at the next meeting," according to the FOMC's October get-together. Officials from the gathering are likely to further comment on the statement later this afternoon, with speeches from Atlanta Fed President Dennis Lockhart and Fed Vice Chairman Stanley Fischer.
Japanese exports fell for the first time in more than a year in October, exacerbating concerns for an economy already in recession and struggling to boost inflation. Government data released Thursday showed that exports slumped 2.1% last month, while imports fell 13.4%, hit by soft demand in China and other Asian economies. Despite the weakness, the Bank of Japan held its current pace of monetary stimulus steady at its policy meeting today, though many still suspect it will have to ease again in the near future to kickstart the economy.
Saudi Oil Minister Ali al-Naimi is calling for sustained investment in new output capacity despite the slump in world prices. "The oil industry is required to add new production capacity of 5M bpd to compensate for the natural loss in production and meet the growth in global demand," he told an energy conference in Manama. The announcement is yet another indication Saudi Arabia is determined to stick to its policy of pumping enough oil to protect its market share, suggesting that the country is in no mood to change tack ahead of OPEC's Dec. 4 meeting in Vienna. Is crude bound to head back into the $30s?
India's central bank ground to a halt today as 17,000 staff went on strike to protest against a proposed overhaul of the country's monetary policy framework that would curb the bank's independence. The one-day strike was also aimed at raising the stakes in a long-running battle over the RBI's pension scheme, with retirees complaining that their benefits have been severely eroded by years of high inflation.
Stocks
Activist investor Starboard Value is putting new pressure on Yahoo (YHOO), calling on the company to halt the more than $20B spinoff of its stake in Alibaba (BABA) and instead sell its beleaguered Internet business, WSJ reports. The change in Starboard's position follows the federal government's decision not to rule on whether the Alibaba spinoff would incur billions of dollars in taxes, a move the investor now feels "carries too much risk."
Volkswagen is expected to announce substantial spending cuts on Friday, the day the carmaker must inform U.S. regulators of how it plans to bring its diesel cars into compliance with air-quality standards. The news comes after law firm Maurice Blackburn said it will launch a class action lawsuit on behalf of Australian owners of scam-tainted VW vehicles seeking total damages "well north" of A$100M ($72M). Volkswagen (VLKAY) has also disclosed that 120K U.S. owners have signed up for its $1,000 goodwill package - or about one quarter of the 482K vehicle owners covered by the emissions scandal.
A proposed four-year labor contract between Ford (F) and the United Auto Workers appears to be in trouble after more than half of those voting so far have rejected the pact and only two days remain for workers to cast ballots. Newer UAW members are providing the most resistance over the length of time it takes for younger workers to reach the top wage level. There's also some worry that the group doesn't fully understand that a rejected contract will reset all the negotiating points when talks resume.
TransCanada is now the latest Canadian energy producer to announce new job cuts, but did not say how many jobs are being lost or what parts of the business are bearing the brunt. TransCanada (TRP) says it's taking action to remain competitive and that it plans to pursue its projects "more efficiently and strategically," less than two weeks after President Obama rejected its Keystone XL pipeline.
Australia's competition watchdog has approved Royal Dutch Shell's (RDS.A, RDS.B) proposed $70B takeover of BG Group (BRGYY). "The ACCC's view is that the proposed acquisition would be unlikely to substantially lessen competition in the wholesale natural gas market," Chairman Rod Sims said in a statement. The deal still needs approval from China and Australia's Foreign Investment Review Board to go ahead as planned in early 2016.
BHP Billiton defended its progressive dividend policy at the company's shareholder meeting today despite this year's stock price slump amid slowing growth in China and the recent mine disaster in Brazil. "Our starting point is to maintain the strength of the balance sheet through the cycle," Chairman Jac Nasser told investors. "The balance sheet must always come first." Although he was "disappointed" with BHP's (BHP) share price (which has fallen over a third year-to-date) he noted that the resources business is a cyclical one.
The SEC has decided to propose new rules requiring "dark pools" and other alternative trading systems to make public detailed information about their operations, activities and potential conflicts of interest. Dark pools were originally designed to help institutional investors transact large orders anonymously without tipping the market to their intentions, but they have become accessed by many types of traders. According to Rosenblatt Securities, the venues have grown to represent 16% to 18% of U.S. equities trades today, compared with just 4% in 2008.
More pain across the investment management industry: Bill Ackman's Pershing Square Holdings portfolio has lost 24.5% YTD, extending its fall this week as its biggest holding, Valeant Pharmaceuticals (VRX), declined further. Bigger asset managers are also seeing red. BlackRock (BLK) has now become the latest investment house to close a macro hedge fund after its $1B Global Ascent Fund suffered its worst-ever performance. According to fund data provider Preqin, 2015 is set to be the shoddiest year of returns across the hedge fund industry since 2011 as managers struggle with the uncertainty of Chinese monetary policy and a U.S. interest rate hike.
Canadian Pacific's proposal to buy Norfolk Southern (NSC) for $28.4B would create a rail network stretching across most of North America, but the pact also needs to satisfy the U.S. Surface Transportation Board's rules on mergers, which could be a tough sell. What are the concerns? The deal raises serious antitrust risks as it could trigger further industry consolidation as well as less incentives for railroad companies to invest in their infrastructure. Whatever the case may be, Canadian Pacific (CP) will likely have to come up with more than $28.4B, after Norfolk Southern rejected the cash and stock offer as an "unsolicited, low-premium."
The attacks in Paris may have finally spurred a brand change for Isis Pharmaceuticals (ISIS), a drugmaker that until now has held on to its name despite the terrorist group's rise in the Middle East. Named after Isis, the Egyptian goddess associated with good health, the company has had the moniker since its founding 26 years ago. Its ticker symbol is also under review.
The U.S. Treasury Department is set to announce new rules this week against tax inversion deals that would likely focus on "earnings stripping." The notice of action comes as Pfizer (PFE) considers a merger with Allergan (AGN) that would see the U.S. drug giant redomicile in Ireland. A potential $380/share deal would value Allergan at nearly $150B, marking the biggest healthcare deal ever as well as the largest acquisition of 2015. AGN +2.1% premarket.
In Asia, Japan +1.1% to 19860. Hong Kong +1.4% to 22499. China +1.4% to 3617. India +1.4% to 25842.
In Europe, at midday, London +1.7%. Paris +1.4%. Frankfurt +0.9%.
Futures at 6:20, Dow +0.4%. S&P +0.4%. Nasdaq +0.4%. Crude +0.9% to $42.32. Gold +0.4% to $1073.
Ten-year Treasury Yield flat at 2.26%
8:30 Initial Jobless Claims
8:30 Philly Fed Business Outlook
9:45 Bloomberg Consumer Comfort Index
10:00 Leading Indicators
10:30 EIA Natural Gas Inventory
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
