Monday Morning Prepper
Apple will launch a legal challenge this week against the EU's €13B tax order, as Ireland readies its defense, accusing Brussels of infringing on its sovereignty. "Apple (NASDAQ:AAPL) is not an outlier in any sense. Apple is a convenient target because it generates lots of headlines," according to General Counsel Bruce Sewell. "It allows the commissioner [Margrethe Vestager] to become Dane of the year for 2016."
Donald Trump is set to seal his Presidential victory today as the electoral college meets for a vote that is usually routine but takes place this year amid allegations of election hacking by Russia. Its 538 members are due to cast their official votes and - despite attempts to persuade electors to vote against Trump - a reversal of November's result is not expected.
The President-elect has also given investors a road map to his administration, tweeting "two simple rules" over the weekend: Buy American and hire American. China relations are also in focus again following the seizure of a U.S. underwater drone in the South China Sea. It now appears Beijing will hand back the unmanned vehicle, but the media is still poring over Trump's tweets.
Australia downgraded its growth forecasts overnight and predicted larger than expected budget deficits over the next four years, heightening concerns the country could lose its AAA credit rating. The resources-driven economy has enjoyed more than 20 years of growth but is now transitioning out of an unprecedented mining investment boom.
Indonesia's central bank is looking to revive a previously shelved plan to slash three zeroes off the face value of its rupiah notes. Bank Indonesia Governor Agus Martowardojo told President Joko Widodo the proposal would make the currency "more efficient and simpler." The largest rupiah denomination is currently 100,000 and the smallest note is 1,000.
Looking to avoid the "national disaster" of a "hard Brexit," Scotland will publish proposals tomorrow for how it can remain in the European single market after Britain leaves the EU. The plans are expected to outline new and substantial powers for the devolved parliament in Edinburgh, allowing for free movement of goods, services and people.
Federal Reserve Chairwoman Janet Yellen is set to speak in Baltimore on the state of the job market and could possibly provide more insight on the Fed's direction heading into 2017. The speech comes just days after the central bank raised its benchmark interest rate for the first time in a year and signaled it would continue to up rates faster than previously anticipated.
Rogue One: A Star Wars Story has scored the second largest December opening in history and the second largest launch of the year, opening to a massive $155M. Globally, the film earned $290.5M. The first spinoff produced by Disney (NYSE:DIS) since it bought Lucasfilm for $4B in 2012, follows a band of rebel fighters who play a key role leading up to the events of the original 1977 Star Wars.
Barclays is preparing to tell 7,000 clients to do more trading with the firm or find another bank, the latest move in an industry-wide trend of winnowing down customer lists to the ones that produce significant profits. The British bank launched a new computer system, called Flight Deck, this month that ranks every customer of its trading unit by the return they generate on the firm's capital. BCS -1.5% premarket.
Creating an insurance and investment giant, Canada's Fairfax Financial (OTCPK:FRFHF) has agreed to buy Switzerland's Allied World Assurance (NYSE:AWH) in a $4.9B cash-and-stock deal. Allied World will operate within the Fairfax group on a "decentralized basis" after the merger closes, according to CEO Prem Watsa. The transaction has been approved by the boards of both companies, but still needs shareholder and regulatory approval.
Banca Monte dei Paschi shares opened down around 8.5% this morning as the Italian lender launched a last-ditch cash call to avoid a state bailout. According to people familiar with the matter, the price and total number of shares to be sold will be determined based on investor demand and on the outcome of the separate debt-to-equity swap. BMPS's (OTCPK:BMDPY) offer will run from today until Thursday.
Ukraine has declared PrivatBank insolvent and said bringing it under state ownership was the only way to protect money of 20M clients and stave off threats to the financial system. The country will support its biggest lender with liquidity if needed, adding that it did not see the nationalization process as significantly impacting the currency market or inflation levels.
Adding to Friday’s 4.2% slump, Nintendo (OTCPK:NTDOY) shares plunged 7.1% in Tokyo following the debut of Super Mario Run, which marked the company's first full foray into the world of mobile gaming. The title has an average rating of only two and a half stars on Apple's app store and Nintendo fans appear to be upset over a $10 price for the game after only three levels of free play.
Samsung Electronics is in talks with LG Chem to make it one of its smartphone battery suppliers, a move that would diversify its supplier base after the failure of its Galaxy Note 7. The company currently procures Note batteries from group firm SDI and China's Amperex Technology. Samsung (OTC:SSNLF) shares closed at 1,795,000 won on the news, recording a new record high in Tokyo.
Praxair and Linde are closing in on a deal. According to various media reports, an agreement on their $65B merger could be announced as early as Wednesday. Initial discussions collapsed in September due to internal disputes over personnel, headquarters and other details, but Linde (OTCPK:LNEGY) is said to have revived talks after Praxair (NYSE:PX) provided new assurances over corporate governance and jobs.
It's one of the last big oil concessions in the Middle East, and BP is swapping a 2% stake in the company for a 10% interest in an onshore oil block in Abu Dhabi. The all-stock $2.2B deal gives BP access to onshore oil fields with 20B-30B barrels of oil equivalent over a 40-year term. The firm also announced a partnership with Kosmos Energy (NYSE:KOS), saying it will invest nearly $1B in the firm.
Saudi Aramco plans to commission its wind turbine pilot project next month after taking delivery of the first wind turbine in the country supplied by General Electric (NYSE:GE). The kingdom produces very little renewable energy, but expects to change that with its reform plan known as Vision 2030, designed to free it from dependence on oil exports.
Iran has finalized an agreement with Airbus (OTCPK:EADSY) to acquire 100 jetliners, the first of which is tentatively expected to be delivered in mid-January. "Although the nominal value of the contract for 118 Airbus planes had been announced at $25B, the A380 planes have been dropped from this contract, so the value will not be more than $10B," IranAir CEO Farhad Parvaresh declared.
Traffic is frustrating Elon Musk to the extent that he's going to start yet another firm called The Boring Company. The venture, which Musk says "will actually happen," plans to disrupt traffic on American roadways by digging tunnels underground. He even updated his Twitter bio to read, "Tesla (NASDAQ:TSLA), SpaceX (Private:SPACE), Tunnels (yes, tunnels) & OpenAI."
Meanwhile, Tesla plans to charge a fee at its Supercharger station to drivers who don't move their cars within five minutes of their vehicle becoming fully charged. The fee will be $0.40 per minute and will be retroactive to include the first five minutes. "One would never leave a car parked at a gas station right at the pump and the same rule applies with Superchargers," Tesla (TSLA) said in a statement.
BlackBerry will open an autonomous driving research center today, as subsidiary QNX turns its focus from reinventing the now-discarded BlackBerry OS to the self-driving car race. Prime Minister Justin Trudeau will attend the launch by the Ontario-based company, but a Blackberry (NASDAQ:BBRY) spokeswoman deferred any comment on the project until later today.
Amazon is building an app that matches truck drivers with shippers, a new service that would deepen its presence in the $800B trucking industry, a source told Business Insider. Amazon's (NASDAQ:AMZN) app, scheduled to launch next summer, is designed to make it easier for truck drivers to find shippers that need goods moved, much in the way UBER connects drivers with riders.
Volkswagen's costs in its diesel-emissions scandal could rise by another $1B as it nears a deal to resolve claims connected to larger and luxury diesel vehicles, WSJ reports. VW's (OTCPK:VLKAY) new bill would add to the roughly $10B deal reached last summer with U.S. authorities to compensate drivers of 2-liter engine cars, but the parties have yet to reach an agreement over 3-liter diesel vehicles.
In Asia, Japan -0.1%. Hong Kong -0.9%. China -0.2%. India -0.4%.
In Europe, at midday, London +0.1%. Paris -0.1%. Frankfurt flat.
Futures at 6:20, Dow +0.2%. S&P +0.1%. Nasdaq +0.1%. Crude +0.4% to $53.18. Gold +0.3% to $1141.10.
Ten-year Treasury Yield -1 bps to 2.58%