Friday, November 27, 2009

Today's Headlines


- Royal Bank of Scotland Group Plc was the biggest underwriter of loans to Dubai World, the state company seeking to reschedule debt, while HSBC Holdings Plc has the most at risk in the United Arab Emirates, according to JPMorgan Chase & Co.

- European stocks advanced, rebounding from biggest drop in seven months for the Dow Jones Stoxx 600 Index, as concern over Dubai’s attempt to delay its debt repayments abated. Royal Bank of Scotland Group Plc, which was Dubai World’s biggest loan arranger since January 2007 according to JPMorgan Chase & Co., climbed 5.2 percent, having plunged to a seven- month low yesterday. Michelin & Cie., the world’s second-largest tiremaker, and Volkswagen AG, Europe’s biggest carmaker, led auto stocks higher after the Stoxx 600 Automobiles and Parts Index sank 4.3 percent yesterday. The Stoxx 600 gained 1.3 percent to 242.85 at 4:40 p.m. in London, having earlier dropped as much as 1.8 percent. “There’s a strong signal that we’re not going to let a country like that fall,” said Kilian de Kertanguy, a fund manager at Cholet-Dupont Gestion SA in Paris, which oversees about $2.3 billion.

- European confidence in the economic outlook improved in November to the highest since the collapse of Lehman Brothers Holdings Inc., suggesting the recovery in the 16-nation euro region is gathering strength. An index of executive and consumer sentiment rose for an eighth straight month to 88.8 from 86.1 in October, the European Commission in Brussels said today. That was the highest since September 2008, when Lehman filed the biggest bankruptcy in U.S. history, compounding the financial crisis.

Wall Street Journal:

- Best Buy Co. (BBY) Chief Executive Brian Dunn said his early reports from the electronics retailer's stores indicate shopper traffic is up over last year and that shoppers are in a buying mood. "In this connected world we live in, I have been getting updates all morning, and our crowds--first in the East and then within the Central part as those stores opened up-- were materially bigger than last year, and the West Coast reports, too, are the same," Dunn said in an interview with Dow Jones Newswires. "The (traffic) numbers are definitely up over last year," he said. "I'm about to close out my third quarter, so I have to be careful what I say, but we are definitely seeing a lot of shoppers." Dunn wouldn't comment more specifically on sales trends so far, but he reiterated his belief that Best Buy has planned inventory and promotions well for the holiday. Last year, retailers had too much inventory and had to make deep discounts as they approached Christmas, he said. But this year, Best Buy has more opportunity to "strategically build our inventory in places that matter to the consumer," he said. "We're not going to disappoint customers and we're not going to disappoint our shareholders."

- Hersey Co. received indications it could raise at least $10 billion from two banks, JPMorgan Chase and Bank of America’s Merrill Lynch unit, towards a possible $17 billion bid for Cadbury Plc.

- Discounters were doing well early Black Friday morning, with door-busters bringing in big crowds, while higher-end and some apparel retailers were seeing somewhat muted traffic despite big discounts. Mass merchants like Wal-Mart Stores Inc. and Target Corp., as well as lower-end department stores like J.C. Penney Co. and electronics retailer Best Buy Inc., saw strong demand for big sales items, with electronics an early winner. But there was some robust demand for tougher-sell items like cookware and jewelry.


- Dubai's debt woes may serve as a catalyst for a correction in stock markets but it does not signal a new crisis, investment manager Mohammed El-Erian told CNBC Friday.

- Contrarians give thanks. Average adviser remains surprisingly pessimistic.

Washington Post:

- In U.S. history, there may have been no better time to own a junk car, a rattling old fridge and a leaking dishwasher. On the heels of its ballyhooed "Cash for Clunkers" program for cars, the federal government is expected to finalize details in the coming weeks of another tax-supported shopping extravaganza, known as "Cash for Appliances." Supported by $300 million from the economic stimulus, the program will offer rebates to consumers who buy energy-efficient refrigerators, dishwashers, air conditioners and other appliances to replace their older models. And like the $3 billion cars program that gave consumers money for swapping their clunkers for more fuel-efficient rides, the appliance initiative seems destined to inspire shoppers, drive up sales for a while and profoundly divide economists over how much lasting good this chunk of government spending will do for the economy.

The Business Insider:

- The California housing market was supposed to have started crashing again by now, according to those who have ridiculed the uptick of the past few months as a head fake.As of October, however, California appears to be hanging in there.

- Black Friday Sales Frenzy Explodes As Americans Kiss Recession Goodbye. Judging from the fire hose of tweets this morning, Walmart is doing some brisk Black Friday business.

- JPMorgan: Stop Freaking Out, The UAE Can Easily Save Dubai.


- Activision Blizzard Inc said on Friday its "Call of Duty" video game franchise pushed past the $3 billion mark in global retail sales.

The Economic Times:

- I think there are some terms been negotiated that if Abu Dhabi does bail out Dubai with a $10 billion emergency loan kind of a thing right now -I think the payment is due on 12th - so then what are the terms and how they would like Dubai’s economy and financials to be manage hereafter. Now the way things stand today already the CDS spread and the sovereign yield they have gone up world over, people are again getting concerned whether the debt obligations will be met on 12th. The majority view is that within UAE Abu Dhabi is still financially strong, this is a very comfortable position to bail out Dubai, so over the weekend some solution will emerge and may be early next week Monday you will see that Dubai Authorities announcing that they are in the position to meet their debt obligations. That is a most likely scenario.

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