Bloomberg:
- Euro Bears Rule in Germany First Time Since August: Currencies. More German companies are bearish on the euro than those that are bullish for the first time since August, showing the luster of Mario Draghi's do-anything pledge to support the 17-nation currency may be dimming. 38% of German companies are positioning for the euro to fall over the next three months, with 23% preparing for a rise, according to a survey by Commerzbank AG, the nation's second-biggest bank. The previous month, 20% forecast a decline and 26% an increase. 41% were bulls in September's survey.
- Global Banking Under Siege as Nations Tighten Local Rules. Global banking, a model promoted for more than 30 years by financial conglomerates cobbled together through cross-border mergers, is colliding with the post-crisis reality of stricter national regulation. Daniel K. Tarullo, the Federal Reserve governor responsible for bank supervision, announced plans last week to impose the same capital and liquidity requirements on the U.S. operations of foreign lenders as on domestic companies. The U.K. and Switzerland also have proposed banking and capital rules designed to protect their national interests.
- Paris Faces Darkness as City of Light Set for Illumination Ban. Paris's legendary label as the "City of Light" may soon lose some of its luster. The French minister for energy and environment unveiled last week a proposal for lights in and outside shops, offices, and public buildings to be turned off between 1 am and 7 am starting in July. The plan, to be applied across French cities, towns and villages is aimed at saving energy and money and showing "sobriety," Minister Delphine Batho said. The move has provoked an outcry from merchants, who say the government is being insensitive to France's image as the world's no. 1 tourist destination. They say the rule, on top of existing bans on Sunday store openings and night shopping, will hurt business at a time when the French economy has barely grown for a year and unemployment is at a 14-year high.
- Medical School Students Shun Primary Care as Demand Rises. More than three-quarters of U.S. medical students continue to shun primary care for higher-paying specialties, setting the stage for a shortage of doctors as the population ages and health care expands, a study found. Among medical residents who aren’t planning a career in surgery or pediatrics, 22 percent said they expect to go into internal medicine or primary care with the rest planning on fields like cardiology or dermatology, a study published today in the Journal of the American Medical Association found. About 20 to 25 percent of students have chosen primary care in the past 10 years, down from about 50 percent in the early 1990s, said Colin West, co-author of the study. If the trend continues, the U.S. could be short 52,000 primary care doctors in 12 years as an aging population requires more complex care and more people get coverage under the health-care law, a study published last month in the Annals of Family Medicine found. “The concern many of us have is that as the baby boomers get older and demand continues to increase, it is going to become progressively more difficult for these patients to find physicians,” said West, who practices internal medicine at the Mayo Clinic in Rochester, Minnesota. “This could be a barrier to achieving the main goal of health reform of creating greater access to health care.”
- China’s Stocks Rise Most in Three Months; Banks, Developers Jump. China’s stocks rose the most in three months after the government allowed insurers to invest more in banks and investors speculated profits at construction and property companies will increase. The Shanghai Composite Index (SHCOMP) surged 3 percent to 2,034.58 at the 11:30 a.m. local-time break, heading for the biggest advance since Sept. 7.
- Altera(ALTR) Falls After Predicting Sales May Drop Further. Altera Corp., a maker of programmable chips used in phone systems, fell after saying fourth-quarter sales may decline more than analysts had estimated, citing weaker demand for its older products. Sales will drop 8 percent to 10 percent from the third quarter’s $495 million, the San Jose, California-based company said in a statement today. The low end of that range would indicate revenue of $445.5 million, compared with an average analyst prediction of $455.2 million according to data compiled by Bloomberg. Shares traded as low as $30.36, down 5.7 percent from their close in New York, in extended trading following the announcement. They had earlier fallen 5 cents, or less than 1 percent, to close at $32.18, leaving them down 13 percent this year.
- UN’s Ban Seeks Details on $100 Billion in Climate Pledges. UN Secretary General Ban Ki-moon joined developing nations to press for more details on how rich nations plan to reach a three-year-old pledge to provide $100 billion in annual aid by 2020 to fight global warming, weighing in on an issue that’s creating a rift at climate talks in Doha. “This is a matter of credibility for member states,” Ban told reporters at a briefing yesterday. “This will be crucially important in facilitating the promotion of a legally binding agreement by 2015.”
- SEC Probe May Spur More Chinese Delistings, Dorsey Says. More U.S.-listed Chinese companies are under the threat of going private or being delisted after U.S. regulators accused accounting firms’ affiliates of blocking probes into potential fraud, Dorsey & Whitney LLP said. Deloitte Touche Tohmatsu CPA Ltd., Ernst & Young Hua Ming LLP, KPMG Huazhen and PricewaterhouseCoopers Zhong Tian CPAs Ltd. have refused to cooperate with accounting investigations into nine companies whose securities are publicly traded in the U.S., the Securities and Exchange Commission said in an administrative order yesterday. BDO China Dahua Co. was also named by the SEC in the action.
- Ackman-Backed CEO Cuts Canadian Pacific(CP) Workforce by 23%. Canadian Pacific Railway Ltd. (CP) plans to cut about 23 percent of its workforce in four years as Chief Executive Officer Hunter Harrison, hired after a proxy fight by hedge-fund manager William Ackman, boosts profitability at the least efficient of North America’s large railroads. The company plans to trim its workforce of 19,500 employees and contractors by 4,500 through 2016, using job cuts and attrition, the railroad said before Harrison outlined his strategy with investors in New York. The new CEO is also closing container-car terminals and re-evaluating assets from the 2007 acquisition of Dakota Minnesota & Eastern Railroad.
- Paulson Said to Blame Bet Against Europe for Most of Loss. John Paulson, manager of $20 billion in hedge funds, told investors that the bulk of his losses this year came on bets that the European sovereign-debt crisis would worsen, according to a person familiar with the matter. Paulson, speaking to clients at his firm’s annual meeting yesterday in New York, said he has reduced those positions following European Central Bank President Mario Draghi’s comments in July that the ECB was committed to preserving the euro, said the person, who asked not to be identified because the meeting was private.
- GOP Deficit Plan Irks Conservatives. Discord Complicates Negotiating Position of Boehner, Who Punished Four House Members; Obama Calls for Higher Taxes. Conservatives on Tuesday took aim at House Speaker John Boehner's deficit-reduction proposal in the fiscal cliff talks, a dispute that was aggravated by Mr. Boehner's decision to remove some conservatives from prized committees. Rep. Jim Jordan (R., Ohio), who heads the Republican Study Committee, an influential group of conservatives, criticized the $800 billion in new tax revenue included in Mr. Boehner's proposal to the White House. "The bad news is that it is a tax increase, and I am not going to vote for a tax increase because it hurts economic growth," Mr. Jordan said.
- Ryan, Rubio Seek Party Rebranding. Two of the Republican Party's most prominent voices, Rep. Paul Ryan of Wisconsin and Florida Sen. Marco Rubio, laid out their visions for broadening the GOP's economic message in dual speeches Tuesday, as conservatives seek new moorings in the aftermath of Mitt Romney's presidential defeat last month. The speeches revealed Mr. Ryan and Mr. Rubio—respectively, the party's most recent vice-presidential nominee and a freshman senator seen as a rising star—moving briskly to rebrand both themselves and their party at a time of debate and introspection over how to steer the GOP in a new direction. The men, both seen as potential 2016 presidential hopefuls, used a packed awards dinner hosted by the Jack Kemp Foundation to lay out their views on the role of government in strengthening the middle class and assisting the poor.
- EU Banks to Repay Cheap Loans. Payments May Be Sign of Health, But Concern That Some Lenders Will Leave the Hospital Too Soon.
- Firms Turn Their Backs On Southern Europe.
- Detroit's Unsold Cars Pile Up.
- Hype Better Than Sales for Target(TGT)-Neiman Marcus Tie-Up.
- Big Lots(BIG) Chief Probed by SEC. The Securities and Exchange Commission launched an inquiry into a $10 million sale of stock by Big Lots Inc. Chief Executive Steven Fishman before the company announced news that sank its stock, a person familiar with the inquiry says. Big Lots said Tuesday that Mr. Fishman, 61 years old, intends to retire in order to spend time with his family. The discount retailer said it hadn't been contacted by the SEC and that the timing of Mr. Fishman's departure was coincidental to any regulatory interest.
- U.S. Oil Output Hits Nearly 15-Year High.
- The Budget Baseline Con. How Washington fools the public about spending 'cuts.' If the fiscal cliff talks make Lindsay Lohan look like a productive member of society, perhaps it's because President Obama and John Boehner are playing by the dysfunctional Beltway rules. The rules work if you like bigger government, but Republicans need a new strategy, which starts by exposing the rigged game of "baseline budgeting."
- Egyptian President Morsi leaves presidential palace as protests turn violent. (video) Egyptian President Mohammed Morsi left the presidential palace Tuesday as violence erupted between police and at least 100,000 protesters gathered in Cairo. In a brief outburst, police fired tear gas to stop protesters approaching the palace in the capital's Heliopolis district. Morsi was in the palace conducting business as usual while the protesters gathered outside. But he left for home through a back door when the crowds "grew bigger," according to a presidential official who spoke on condition of anonymity because he was not authorized to speak to the media.
Zero Hedge:
- China Services PMI Plunges Most In 15 Months To Lowest Since Aug 2011. (graph)
- It's Never Different This Time. (graphs)
- What A Difference Six Years Makes. (table)
- A Wikileaks Cable Explained The Money Laundering Formula That Turned Macau Into A Gigantic Economic Success.
- A Century-Old Rule Is Keeping The US From Becoming A Dominant Force In Global Oil.
NY Times:
CNN: - Global Shipping Industry’s Troubles Are Threat for Biggest German Banks. For all the talk about Germany’s financial
exposure to Greece, it turns out that some German banks have a problem
of more titanic proportions — their vulnerability to the global shipping
trade. Germany’s 10 largest banks have 98 billion euros, or $128 billion, in
outstanding credit or other risks related to the global shipping
industry, according to Moody’s Investors Service. That is more than
double the value of their holdings of government debt from Greece,
Ireland, Italy, Portugal and Spain. And it is more than any other
country’s financial exposure to the shipping industry, which is in the
fifth year of a recession. Moreover,
German banks bear a generous share of the blame for spawning that
recession. By helping to finance and market funds used to build and buy
ships, a popular tax shelter, the banks helped create a glut in large
container ships that has led to a collapse in cargo hauling prices
worldwide.
- Schäuble puts brake on bank union plan. Plans to create a eurozone banking union hit a brick wall on Tuesday after Germany's influential finance minister cautioned over moving too quickly, casting doubts over whether the EU would seal a deal by the end of the year. The objections from Wolfgang Schäuble come just a week before a summit of EU leaders and raise the prospect of a significant delay to establishing a single eurozone banking supervisor, a reform billed as critical to rebuilding confidence in the bloc's shaky financial sector.
- U.S. Senate unanimously passes defense spending bill. The U.S. Senate voted 98-0 on Tuesday to approve a wide-ranging defense bill that authorizes $631.4 billion in funding for the military, the war in Afghanistan and nuclear weapons.
- Tibco Software(TIBX) sees 4th-qtr results below estimates. Business software maker Tibco Software Inc estimated fourth-quarter results below analysts' expectations on poor performance in the Americas. Tibco's shares were down 15 percent after the bell.
- Republicans in capital gains tax fight. Republicans in the House of Representatives are fighting tax increases on capital gains and dividends, ruling out investment income as an acceptable source of additional revenues in increasingly urgent talks to avert the fiscal cliff. The debate on investment income highlights the difficulty in finding common ground in the talks – with less than a month to go before the US economy is otherwise walloped by a $600bn mix of annual spending cuts and tax hikes that could tip it back into recession.
Stifel Nicolaus:
- Rated (HON) Buy, target $72.
- Asian equity indices are unch. to +1.0% on average.
- Asia Ex-Japan Investment Grade CDS Index 114.0 +1.5 basis points.
- Asia Pacific Sovereign CDS Index 85.0 +1.0 basis point.
- FTSE-100 futures +.40%.
- S&P 500 futures +.33%.
- NASDAQ 100 futures +.38%.
Earnings of Note
Company/Estimate
- (FRAN)/.22
- (GIII)/2.35
- (BF/B)/.78
- (TTC)/.01
- (MW)/.97
- (SNPS)/.47
- (FNSR)/.14
8:15 am EST
- The ADP Employment Change for November is estimated to fall to 125K versus 158K in October.
- Final 3Q Non-farm Productivity is estimated to rise +2.8% versus a prior estimate of a +1.9% gain.
- Final 3Q Unit Labor Costs are estimated to fall -1.0% versus a prior estimate of a -.1% decline.
- Factory Orders for October are estimated unch. versus a +4.8% gain in September.
- The ISM Non-Manufacturing Composite for November is estimated to fall to 53.5 versus 54.2 in October.
-
Bloomberg consensus estimates call for a weekly crude oil inventory
decline of -500,000 barrels versus a -347,000 barrel decline the prior
week. Gasoline supplies are estimated to rise by +1,550,000 barrels
versus a +3,865,000 barrel gain the prior week. Distillate inventories
are estimated to rise by 850K barrels versus a -800,000 barrel decline
the prior week. Finally, Refinery Utilization is estimated to rise by
+.5% versus a +1.1% gain the prior week.
- None of note
- The Eurozone Services PMI report, weekly MBA mortgage applications report, (LOW) investor conference, (DOX) investor day and the (ARG) analyst day could also impact trading today.