Wall Street Breakfast: Must-Know News
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EU finmins agree on banking supervisor. EU finance ministers last night finally agreed to a deal in which the ECB will become the banking supervisor for the eurozone, a move that's a first step towards a banking union. From 2014, the ECB will oversee at least 150 of the bloc's largest institutions and intervene in smaller banks if problems arise. It's now up to EU leaders to approve the deal at a parley today and tomorrow.
EU finmins agree on banking supervisor. EU finance ministers last night finally agreed to a deal in which the ECB will become the banking supervisor for the eurozone, a move that's a first step towards a banking union. From 2014, the ECB will oversee at least 150 of the bloc's largest institutions and intervene in smaller banks if problems arise. It's now up to EU leaders to approve the deal at a parley today and tomorrow.
Sprint offers to acquire rest of Clearwire. As oft speculated, Sprint (S) has offered to buy the 48.3% of Clearwire (CLWR) it doesn't already own for $2.90 a share, or 5.45% above the latter's close yesterday. The bid values Clearwire at $4.23B. Its shares were +6.9% in premarket trading.
Canada presses reset on F-35 plans as costs soar. In another blow to the F-35 program, Canada is reconsidering plans to buy 65 of the Lockheed Martin (LMT) fighter jets after an audit found it would cost $45.8B to acquire and operate the planes over their expected lifespan of 42 years. That's way above forecasts, and while the government might still buy the F-35, it will also look at purchasing alternative aircraft such as Boeing's (BA) Super Hornet.
Top Stock News
Wal-Mart eyes some Turkish delight. Wal-Mart (WMT) is reportedly in talks to acquire an 80% stake in leading Turkish retailer Migros from U.K. private-equity firm BC Partners in a deal that would value Migros at over $4B including debt. Wal-Mart could possibly face competition, though, with France's Carrefour (CRRFY.PK) and Britain's Tesco (TSCDF.PK) also having shown interest.
Wal-Mart eyes some Turkish delight. Wal-Mart (WMT) is reportedly in talks to acquire an 80% stake in leading Turkish retailer Migros from U.K. private-equity firm BC Partners in a deal that would value Migros at over $4B including debt. Wal-Mart could possibly face competition, though, with France's Carrefour (CRRFY.PK) and Britain's Tesco (TSCDF.PK) also having shown interest.
SkyWest to buy $4.2B in jets from Mitsubishi. SkyWest (SKYW) has finalized an agreement to acquire 100 Mitsubishi Regional Jets in a deal worth $4.2B at list prices and has taken an option for another 100. Mitsubishi Aircraft expects to start delivering the 70-90 seat planes, which will be fitted with Pratt & Whitney (UTX) engines, in 2017.
Mittal confirms interest in Alabama steel plant. Arcelor-Mittal (MT) CEO Lakshmi Mittal has confirmed that the company could be interested in acquiring ThyssenKrupp's (TYEKF.PK) steel plant in Alabama. Credit Suisse's Michael Shillaker reckons that buying the facility, which is likely to fetch $1-1.5B, "could be a smart move," but would probably add to Arcelor-Mittal's high net debt. On France, where the firm has had its problems, Mittal said it's still a "place we can do business" in.
Dish wins approval for phone network. Dish Network (DISH) has won approval with U.S. regulators to offer a smartphone service. A battle over the limited power of the planned network due to interference concerns is only a minor consideration to Guggenheim Securities' Paul Gallant, who calls the decision a "transformative outcome." A curiosity to watch will be the reaction of DirecTV (DTV) to its rival's entry into the wireless business.
Apple and co back down over book prices in Europe. Amazon (AMZN) has chalked up another victory in the global book wars after the EU accepted an offer from Apple (AAPL) and four publishers to ease price-cutting restrictions in exchange for ending an antitrust investigation. The publishers include CBS's (CBS) Simon & Schuster and News Corp. (NWS) unit HarperCollins. Interestingly, Apple didn't accept a similar deal in the U.S. and is going to trial.
Barclays plans to cut up to 2,000 jobs. Barclays (BCS) is reportedly planning to cut up to 2,000 out of 23,000 positions at its investment bank as part of a company wide overhaul that could see the firm reduce jobs at other divisions as well. Any downsizing of Barclays' investment bank would add to tens of thousands of job cuts in the sector, including reductions at UBS (UBS) and Citigroup (C).
Dispute between Wynn, ex-shareholder ratchets up some more.Japan's Universal Entertainment has filed a criminal complaint against Wynn Resorts (WYNN) CEO Stephen Wynn in the Philippines as the bitter dispute between Wynn and former shareholder Kazuo Okada - who is Universal's majority owner - keeps ratcheting higher. For shareholders of Wynn, nothing in the legal wrangling suggests Okada is likely to get back his 20% stake in the casino operator.
Google releases new Maps app for the iPhone. Nearly three months after Tim Cook apologized for the fiasco that is Apple's (AAPL) iOS 6 Maps, Google (GOOG) has released its new Maps app for the iPhone, with an iPad version due later. Expect the app, which should give Google plenty of ways to integrate local ads, to rocket up Apple's App Store leaderboards in short order. (NYT review)
Top Economic & Other News
Greece finally to get some more aid money. The Eurogroup has finally agreed to release the long-delayed latest tranche of Greece's bailout. The country will receive €49.1B between now and March, including €34.3B in the coming days. The money will help Greece finance a bond buyback that retired $41.5B worth of government debt, and which, along with other measures, should cut Greece's debt burden to a mere 124% of GDP by 2020.
Greece finally to get some more aid money. The Eurogroup has finally agreed to release the long-delayed latest tranche of Greece's bailout. The country will receive €49.1B between now and March, including €34.3B in the coming days. The money will help Greece finance a bond buyback that retired $41.5B worth of government debt, and which, along with other measures, should cut Greece's debt burden to a mere 124% of GDP by 2020.
Fed targets may not be all that. While the Fed's decision to set unemployment and inflation targets for its monetary policies is historic, RBS forex strategist Greg Gibbs says the goals aren't all that aggressive. "These threshold figures are consistent with the economic forecasts and rate guidance that have been in the Fed's quarterly economic projections since last year," Gibbs says, adding that the aims are "a bit less dovish" than expected.
FHA slammed for risk-taking that could lead to $20B in losses. The Federal Housing Administration's insurance of mortgages in 2009-10 -after the sub-prime blowout - was too risky and could generate losses of $20B, an analysis of 2.4M FHA-insured loans shows. The study, by Edward Pinto of the conservative American Enterprise Institute, follows the recent FHA annual report, which showed projected losses of $16.3B, increasing the likelihood of a bailout of the agency.
Cash-rich farmers buying more land. The sale of cropland appears to be increasing, spurred by possible tax rises in the new year due to the fiscal cliff, low interest rates and increased land values. In addition, farmers, who tend to be the buyers, are flush with cash following surging corn and soybean prices, as well as from insurance payouts in the wake of the summer drought.
Today's economic calendar:
8:30 Producer Price Index
8:30 Retail Sales
8:30 Initial Jobless Claims
9:45 Bloomberg Consumer Comfort Index
10:30 EIA Natural Gas Inventory
1:00 PM Results of $13B, 30-Year Note Auction
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
8:30 Producer Price Index
8:30 Retail Sales
8:30 Initial Jobless Claims
9:45 Bloomberg Consumer Comfort Index
10:30 EIA Natural Gas Inventory
1:00 PM Results of $13B, 30-Year Note Auction
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
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