Deutsche Bank and the U.S. continued discussions over a possible settlement of charges related to mis-selling mortgage-backed securities after a few days in which the bank's fortunes swung markets. Smaller than rival banks, Deutsche Bank still sits close to the heart of global financial transactions. Shares in Deutsche Bank (NYSE:DB) jumped 14% Friday on a report that a settlement could come closer to $5.4B than $14B, but details remain well in flux and no deal has been presented to decision makers on either side.
Economy
The British pound fell, and stocks rose, in the wake of UK Prime Minister Theresa May's comments that the country would trigger a "hard Brexit" by the end of March, earlier than some observers expected. The PM will work to trigger Article 50 in the Queen's speech next spring. Sterling was down about 0.8% against the dollar and down about 0.6% against the euro.
Meanwhile, the UK's Purchasing Managers Index was up yet again in a continuing rebound from declines in the immediate aftermath of the country's vote to leave the EU. The index came in at 55.4 in September (numbers over 50 indicate growth), better even than the revised August number of 53.4. As the pound declined, stocks were higher; the FTSE 100 up 1%.
Crude prices that were lower during Asian trading hours turned back up later, as markets continued to digest reports last week of an OPEC production cut. The cartel informally agreed to reduce production to 32.5M barrels/day, but such agreements are a ways from firm when it comes to OPEC members, and the organization's impact is lessened in today's crude markets by increased output from nonmembers. WTI crude up 1%, to $48.71/barrel.
Fifteen years after stock trading was decimalized - trading at penny increments - a pilot program kicked off by the SEC will start trading some smaller-cap stocks in nickel increments. The move is a bid to increase trading in those stocks, and could benefit small investors but raise trading costs, as market makers tend to profit from wider spreads.
Stocks
Tesla Motors said it delivered about 24,500 vehicles in Q3, ahead of most analyst expectations as well as Q2's total of 14,402. That number included 15,800 Model S units, and 8,700 Model X SUVs, Tesla (NASDAQ:TSLA) said, noting that the delivery count should be considered conservative (counting only as it transfers the car to customer). The company maintained guidance for 50,000 deliveries in the second half.
Carnival has signed a natural gas supply deal with Shell Western that will help the company move toward "green cruises." Two ships built with Carnival's (NYSE:CCL) design will use Shell infrastructure to refuel with LNG throughout their cruise itineraries.
A Texas jury handed a win to VirnetX (NYSEMKT:VHC), saying that Apple (NASDAQ:AAPL) infringed on two of the smaller company's patents with its FaceTime video calling feature, and ordered Apple to pay $302.4M. That sum matches what VirnetX claimed it was entitled to in opening arguments, while Apple countered with $25M. Next stop: the U.S. Court of Appeals for the Federal Circuit.
Following a track laid by other banks, ING Groep (NYSE:ING) will cut 7,000 jobs over the next couple of years, including 2,300 at home in the Netherlands and 3,500 in Belgium. That's about 13% of the bank's workforce, and the moves are expected to save about $1.01B annually. It's taking a pretax charge of €1.1B tied to the move.
AstraZeneca has signed a deal with Allergan (NYSE:AGN) for up to $1.52B in payments for rights to an antibody for Crohn's disease. Allergan will pay AstraZeneca (NYSE:AZN) $250M up front, but cotingent payments could include $1.27B over a period of up to 15 years.
A "merger of equals" will bring Janus Capital (NYSE:JNS) and Henderson Group (OTCPK:HNDGF) together into a $6B firm: Janus Henderson Global Investors. The combined company will hold $320B in assets and move its listing to the NYSE. The two expect synergies of at least $110M and "double-digit accretion" to earnings over the first 12 months.
Three executives are out at Heron Therapeutics (NASDAQ:HRTX), according to a filing by the company. The moves come in connection with a realignment of goals after the FDA's approval of the company's Sustol (granisetron). Chief Medical Officer Neil Clendeninn and Paul Marshall (SVP of Technical Operations) resigned Friday, while CFO Brian Drazba will leave effective March 31.
Today's Markets
In Asia, Japan +0.9% to 16,598.67. Hong Kong +1.2% to 23,584.43. China+0.2% to 3005.51.
In Europe, at midday, London +1.1%. Frankfurt off (holiday).
Futures at 6:20, Dow +0.9%. S&P +0.8%. Nasdaq +0.8%. Crude +1.1% to $48.75. Gold +0.3%% to $1,320.90.
Today's Economic CalendarIn Europe, at midday, London +1.1%. Frankfurt off (holiday).
Futures at 6:20, Dow +0.9%. S&P +0.8%. Nasdaq +0.8%. Crude +1.1% to $48.75. Gold +0.3%% to $1,320.90.
Monday's economic calendar:
Auto Sales
8:30 Gallup US Consumer Spending Measure
9:45 PMI Manufacturing Index
10:00 ISM Manufacturing Index
10:00 Construction Spending
Companies reporting earnings today »Auto Sales
8:30 Gallup US Consumer Spending Measure
9:45 PMI Manufacturing Index
10:00 ISM Manufacturing Index
10:00 Construction Spending
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