IEA: U.S. to become world's top oil producer by 2017. The U.S. will surpass Saudi Arabia and Russia to become the world's largest oil producer by 2017 and become "all but (energy) self-sufficient" by 2030, the IEA predicts in its annual World Energy Outlook. The forecast highlights how the U.S. shale revolution is changing the energy sector, although analysts warn that the nature of shale production means that the growth the IEA predicts isn't guaranteed.
Japan may be in recession as GDP contracts in Q3. Japan's GDP shrank 0.9% on quarter in Q3, as expected, deteriorating from +0.1% in Q2. The economy was hurt by sharp declines in capital expenditure and exports, as well as by a more moderate drop in private consumption. Economics Minister Seiji Maehara said Japan may have fallen into recession, and reiterated his call for the Bank of Japan to pursue more easing. However, the BOJ is expected to leave policy unchanged at a review next week.
JPM staff to escape charges in latest SEC deal. The SEC doesn't plan to indict any JPMorgan (NYSE:JPM) employees in a deal to resolve the alleged fraudulent sale of mortgage bonds by the bank's Bear Stearns unit, the WSJ reports. That's despite SEC Commissioner Luis Aguilar last month saying that the lack of individual accountability for financial-crisis wrongdoing has led to a "significant amount of public concern, and understandably so."
Top Stock News
HTC to pay Apple licensing fees as part of IP settlement. Apple (NASDAQ:AAPL) and HTC have ended their patent fight by signing a 10-year cross-licensing deal that addresses existing and future patents, and which includes the dismissal of all litigation. Terms are confidential, although the WSJ reports that HTC will pay Apple licensing fees. The deal is a mite surprising given Steve Jobs' declaration that he was willing to spend $40B to wage "thermonuclear war" on Android. You can read analysis from market currents here.
Microsoft, Motorola head to court in closely watched IP case. Microsoft (NASDAQ:MSFT) and Motorola are due in court this week over Microsoft's claim that the Google (NASDAQ:GOOG) unit tried to overcharge it for standards-essential patents for Motorola's streaming technology. The case is being widely watched, as the judge, James Robart, will write an opinion about what constitutes a reasonable and nondiscriminatory license offer, which could guide future licensing.
Mark Thompson to begin as CEO of NYT under cloud of BBC scandal. Former BBC Director-General Mark Thompson is set to start as CEO of The New York Times (NYSE:NYT) today, as planned, despite questions about his accountability in a gale-force child-abuse scandal at the broadcaster connected to star TV presenter Jimmy Saville, who died last year. At the NYT, challenges Thompson faces include falling print advertising, considerable pension liabilities and calls for a dividend payout.
Lockheed subject of suspicious trades prior to CEO news. Trading in bearish options on Lockheed Martin (NYSE:LMT) soared to a record 57,000 puts on Friday, with most of the transactions coming before the defense contractor said COO Christopher Kubasik would not become CEO, as planned, due to an inappropriate relationship with a subordinate. "This is either a one in 1,000 random event or an egregious example of improprietous trading based on non-public information," says options analyst Ophir Gottlieb.
Cost of Exxon LNG project jumps by $3.3B. The costs of an LNG project in Papua New Guinea in which Exxon Mobil (NYSE:XOM) is playing a major part have soared by $3.3B to $19B. The increase is due to unfavorable forex fluctuations, delays caused by discontented employees and landowners, and above-average rainfall in the past two years. On the bright side, the project is on schedule to start delivering gas in 2014, while its estimated annual production capacity has risen 5% to 6.9M tons.
U.K. parliament to quiz Google and co. on massive tax avoidance. The U.K. parliament's Public Accounts Committee [PAC] is due to question executives from Starbucks (NASDAQ:SBUX), Google (GOOG) and Amazon (NASDAQ:AMZN) today about how they use loopholes and offshore subsidiaries to pay so little in tax despite generating huge sales. Google, for example, last year paid just £3.4M on revenue of $4B despite a group-wide margin of 33%, while Amazon paid under £1M on sales of $5.3B-$7.2B.
Brink's secure in value of staying independent. Brink's (NYSE:BCO) has responded to a call from investor Shamrock Holdings to sell itself by saying that now is "not an appropriate time" for such a deal. The security-services company, which is worth $1.3B, said that to improve its performance, it's cutting costs, investing in Latin America, and overhauling its European ops. Shamrock reckons a sale of Brink's could bring $40 a share vs Friday's close of $26.71.
Top Economic & Other News
Eurozone seen delaying Greek aid despite budget approval. Greece's parliament last night passed the country's 2013 austerity budget, which the government hopes will clear the way for the Troika to release the latest €31B tranche of its bailout. Eurozone finance ministers are due to discuss the issue at a meeting today, although they're not expected to approve the funds as they first want to agree on how to make Greece's debt more sustainable. The agony continues.
Chinese trade surplus increases by 16%. China's trade surplus widened to a larger-than-expected $32B in October from $27.7B in September, helped by an 11.6% annual gain in exports and a weaker-than-expected 2.4% increase in imports. Political tensions showed up in the numbers as imports from Japan slumped 10.1%. Exports to the U.S. rose 9.1%, while those to recession-wracked Europe declined 8%.
Iraq has big dreams for oil output. While the IEA expects major things from the U.S., Iraq believes it can boost oil production to 9M bpd by 2018 from 3.25M bpd currently and even exceed 12M bpd, Oil Minister Abdul Kareem Luaiby said at a conference. Luaiby reckons reaching that capacity would require investment of $130B-$150B, which "could be shouldered by the foreign companies developing our fields."
In Asia, Japan -0.9% to 8676. Hong Kong +0.2% to 21430. China +0.5% to 2079. India -0.1% to 18670.
In Europe, at midday, London +0.3%. Paris flat. Frankfurt +0.3%.
Futures at 7:00: Dow +0.1%. S&P +0.2%. Nasdaq +0.3%. Crude -0.2% to $85.88. Gold +0.3% to $1736.30.
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