Friday Morning Market Prepper
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— ReutersBreakingviews (@Breakingviews) December 23, 2016
— Sean Brodrick (@SeanBrodrick) December 23, 2016
European banks will be hoping for a fresh start in 2017 after settling claims relating to the sale of toxic MBSs before the financial crisis. The DOJ has reached a $7.2B provisional deal with Deutsche Bank (NYSE:DB) and a $5.3B agreement in principle with Credit Suisse (NYSE:CS). Barclays (NYSE:BCS) is also feeling the heat from U.S. federal prosecutors after the British lender balked at paying the amount the government sought in negotiations. DB +2.6%; CS -1%; BCS -1% premarket (see news on Monte Paschi below).
The U.K. economy grew faster than previously thought in the three months following June's vote to leave the EU, according to fresh estimates that suggest there was no significant post-referendum slowdown. GDP growth rose 0.6% compared with initial estimates of 0.5%. On an annualized basis, the figure was revised to 2.3%, up from 2% previously.
Speaking at an annual end-of-year news conference, Vladimir Putin said Russia's economic contraction is slowing, capital flight is fading and real wages are starting to recover. The country has no plans to "isolate itself from the world" and "should be part of the global economy," he added.
Saudi Arabia will gradually link domestic energy prices to international benchmarks over the next few years as the kingdom seeks to deepen economic reform and balance its budget by the end of the decade. Energy Minister Khalid al-Falih said poorer Saudis hit hard by the end to subsidies on utilities and fuel would be compensated with monthly cash deposits.
With the evacuation of the last rebel fighters, the Syrian army has taken back control of Aleppo, marking a major turning point in the country's six-year civil war and a big victory for President Bashar al-Assad. The government now has control of the country's four major cities, but fighting continues in other regions still controlled by rebel groups and Islamic State.
The suspect in the Berlin Christmas market truck attack has been killed in a shoot-out in Milan, according to Italy's interior ministry. Anis Amri was shot dead around 3 a.m. after being stopped by police near a rail station during a routine patrol in the Sesto San Giovanni area.
It's hard to find a pulse in the currency market today as dealers pack up for the holidays, though the mood remains bullish for more dollar gains in the New Year. "Yields spreads should attract more capital into the USD," said Ray Attrill, global co-head of forex at NAB. The dollar index is marginally higher at 103.05 and within striking distance of the week's 103.65 peak.
However, the price of Bitcoin just topped $900, taking its gain this year to 107%, beating every major currency, stock index and commodity contract in 2016. The last time it was at such levels was in January 2014, when Bitcoin (COIN, OTCQB:BTCS) was tumbling from its record price of $1,137 following the implosion of the MtGox exchange and tightening Chinese controls.
"Today marks an important day for Monte Dei Paschi, a day that sees it turn a corner and able to reassure its depositors," said Prime Minister Paolo Gentiloni, as the Italian government approved a decree to rescue the embattled lender. As a result, trading in Monte Dei Paschi (OTCPK:BMDPY) shares, derivatives and bonds will be halted today, according to the Italian exchange.
Five members of Congress are urging the SEC to stop the planned sale of the Chicago Stock Exchange to a Chinese group led by Chongqing Casin Enterprise after it won approval from the Committee on Foreign Investment in the U.S. The lawmakers say the investors are involved in market sectors in China that suggest close ties to the state, while the government is "the No. 1 state-sponsor of cyber-espionage."
Months after American Airlines flight attendants first started complaining their new uniforms were causing a whole host of health issues, the union that represents the workers has filed a formal grievance with the airline. The conflict at American (NASDAQ:AAL) is at least the second time that supplier Twin Hill, a unit of Tailored Brands (NYSE:TLRD), has raised hackles at an airline. Some flight attendants at Alaska Air (NYSE:ALK) complained several years ago of adverse reactions to their uniforms.
Shares of Lockheed Martin and Boeing made diverging moves in extended trading on Thursday after President-elect Donald Trump tweeted about the companies. "Based on the tremendous cost and cost overruns of the Lockheed Martin F-35, I have asked Boeing to price-out a comparable F-18 Super Hornet!" LMT fell over 2%, while BA rose almost 1% AH.
Starbucks aims to drum up holiday sales with promises of free espresso drinks this season. Starting today, select stores will host 1,000 Pop Up Cheer Parties over 10 days (from 1-2 p.m. local time), where customers can enjoy free tall handcrafted beverages. The locations will change daily and will be listed on starbucks.com/cheer and Twitter. SBUX +1.1% premarket.
Two groups of companies in which Philippine conglomerate Ayala (OTCPK:AYALY) has stakes are acquiring Chevron's (NYSE:CVX) geothermal assets in Indonesia and the Philippines. Reuters valued the holdings at about $3B. Chevron has been selling assets, cutting jobs globally and slashing capital spending to save cash in a bid to preserve its dividend amid weak oil prices.
Bribery inquiries are taking place across Latin America as investigators demand more information from Brazil-based construction company Odebrecht and Braskem (NYSE:BAK), the petrochemical firm it jointly owns with Petrobras (NYSE:PBR), after they admitted to a decade of immense kickbacks in the region. "This is going to be a political earthquake in many of these countries," said Jose Ugaz, a former Peruvian prosecutor who believes the revelations represent the tip of a broader scheme.
Pfizer has completed the acquisition of AstraZeneca's (NYSE:AZN) antibiotics business, primarily outside the U.S., for an upfront payment of $550M. The drugmaker will then pay another $175M for the unit in January 2019, up to $250M in commercial, regulatory and manufacturing milestones, and up to $600M for sales-related payments and recurring royalties. PFE+1.1% premarket.
Shooting down recent rumors, Baidu (NASDAQ:BIDU) said it's not currently pushing for an IPO of its video streaming site iQiyi.com and it doesn't have a timetable for a listing. The Wall Street Journal reported yesterday that the Chinese internet giant was considering a listing in Hong Kong or the U.S. next year that could raise about $1B.
Uber is moving a test of its self-driving cars to the friendlier environs of Phoenix, Arizona, after suffering a regulatory defeat in San Francisco. The announcement came less than a day after the California Department of Motor Vehicles said it would revoke the registrations of 16 UBER vehicles because the company refused to apply for a $150 permit for autonomous cars.
Volkswagen has reached an agreement in principle to provide "substantial compensation" to the owners of about 80,000 3.0-liter polluting diesel vehicles, a key hurdle to resolve the automaker's emissions scandal. U.S. District Judge Charles Breyer didn't disclose the amount of owner compensation, which is separate from a $1B settlement announced earlier this week between VW (OTCPK:VLKAY) and U.S. regulators.
"The United States must greatly strengthen and expand its nuclear capability until such time as the world comes to its senses regarding nukes," President-elect Trump said in a tweet. It wasn't clear what prompted the comment, but earlier yesterday, Vladimir Putin said Russia needed to "strengthen the military potential of strategic nuclear forces." Related tickers: BW, HON, ACM, JEC, SAIC, URRE, OA, COL, LMT, BA, NOC, GD, AJRD, HII
In Asia, Japan closed. Hong Kong -0.3%. China -0.9%. India +0.3%.
In Europe, at midday, London -0.1%. Paris flat. Frankfurt flat.
Futures at 6:20, Dow flat. S&P flat. Nasdaq -0.1%. Crude -0.8% to $52.55. Gold +0.2% to $1132.80.
Ten-year Treasury Yield flat at 2.54%.