Wall Street Breakfast
ECB To Decide On QE In First Quarter
Nov. 26, 2014 6:32 AM ET | Includes: BT, DFS, DTEGY, HSBC, HTZ, MAG, MSFT, NFLX, ORAN, QQQ, SKIS, SPY, SSNGY, SSNLF, TCKGY, TEF, TWTR, V, WAIR, YHOO
Economy
The European Central Bank will be able to gauge in the first quarter of next year whether it needs to start buying sovereign bonds to stimulate the euro zone economy, announced ECB Vice President Vitor Constancio this morning. The new comments are the clearest indication yet to the exact timing of future QE. The ECB has already begun buying covered bonds and ABSs, aiming to increase the size of its balance sheet to levels seen in early 2012 - around €1T higher than its level today.
Talks between Saudi Arabia, Venezuela and oil powers Russia and Mexico yesterday did not yield an agreement on how to address the growing oil glut ahead of OPEC's meeting tomorrow, Reuters reports. Venezuelan Foreign Minister Rafael Ramirez told reporters after the talks that while all sides agreed current prices were "not good," no coordinated output cuts were arranged. Brent crude is up 0.4% at $78.63 a barrel, with West Texas Intermediate up 0.1% at $74.15.
The House subcommittee on energy and power, chaired by Representative Ed Whitfield, will hold a hearing on Dec. 11 over whether Washington should lift its nearly 40-year crude oil export ban. "We need to take a comprehensive look at where we came from, where we are today, and where we want to go from here," said Whitfield. The debate will come into sharper focus in January, when Republicans take over leadership of both the House and Senate.
In the latest attempt to curb emissions of ground-level ozone (i.e. smog), the Obama administration will introduce new legislation today which is expected to force power plant and factory owners to install expensive technology to clean the pollutants from their smokestacks. Next year, the EPA planning on making two more Clean Air Act rules final, aimed at cutting greenhouse gas emissions from coal-fired power plants.
Stocks
Thomas Cook CEO Harriet Green is stepping down effective immediately, two years after overhauling the company. More than £400M was wiped off Thomas Cook’s (OTCPK:TCKGY) market value following the news, with shares in London down 20%. The company also warned that growth would slow to "a more moderate pace" in 2015. COO Peter Fankhauser will now replace Green.
Just a day after it was revealed that Samsung Electronics is planning a major management shake-up next month, Samsung affiliates, including Samsung Electronics (OTC:SSNLF, OTC:SSNGY), have announced that they will sell controlling stakes in the conglomerate's chemical and defense units for 1.9T won ($1.7B). Samsung says it will also buy back shares valued at 2.19T won ($2B) following the sale.
The DOJ is investigating whether an HSBC employee leaked confidential client information to a major hedge fund. The alleged leak is believed to have taken place in March 2010, while HBSC (NYSE:HSBC) was advising Prudential on a huge acquisition and was working on a related multibillion-dollar currency transaction. The probe comes as the bank pleads guilty to charges that its Swiss private banking unit helped Americans evade taxes. HSBC will pay $12.5M to settle those claims.
Netflix is suing its former vice president of IT operations Mike Kail, who left the company in August to become chief information officer at Yahoo (NASDAQ:YHOO). The suit says that Kail arranged Netflix (NASDAQ:NFLX) contracts with IT service companies Vistara and NetEnrich, and then pocketed commissions of 12%-15% of the monthly fees Netflix paid each company.
CNBC reports that Twitter has held talks with Shots, a Justin Bieber-backed developer of iOS/Android apps for taking and sharing selfies. The report comes a day after Twitter (NYSE:TWTR) CFO Anthony Noto accidentally tweeted out an apparent direct message about M&A talks. Noto: "I still think we should buy them. He is on your schedule for Dec 15 or 16 -- we will need to sell him. I have a plan."
Discover is suing Visa over anti-competitive practices in its debit card business and is seeking compensation for lost profit. While Visa's (NYSE:V) debit cardholders typically use a signature to authorize transactions, Discover's (NYSE:DFS) Pulse Network uses a PIN. Discover is challenging a Visa rule that requires Visa signature debit card issuers to also include Visa's PIN services, which limits the competition of other PIN networks like Pulse.
Activist investor Carl Icahn has raised his stake in Hertz (NYSE:HTZ) to 10.8% from 8.5%, now owning 49.3M shares. Icahn landed three Hertz board seats in September, and has backed the recent hiring of John Tague as CEO. HTZ +1.5% premarket.
State-owned Xinhua reports that Microsoft's Chinese subsidiary has agreed to pay RMB840M ($137M) in back taxes and interest, as well as over RMB100M/year in taxes going forward. Microsoft (NASDAQ:MSFT) is still dealing with a Chinese antitrust probe amid intense post-NSA scrutiny of U.S. tech giants in general. The company has long complained about the huge impact of piracy on its Chinese sales.
Deutsche Telekom and Orange have confirmed that they are in talks to sell their U.K. wireless carrier EE to BT (NYSE:BT), in a move that could combine the U.K.’s biggest fixed-line operator and largest mobile operator. The news comes after Monday's report that BT was in talks to buy EE or Telefonica’s (NYSE:TEF) U.K. mobile business O2. Deutsche Telekom (OTCQX:DTEGY) and Orange (NYSE:ORAN) valued EE at about $19B in October.
Top Ideas
Peak Resorts (NASDAQ:SKIS) - new article by Ian Bezek »
Wesco Aircraft Holding (NYSE:WAIR) - new article by Early Retiree »
Magnetek (NASDAQ:MAG) +18.3% since Nov. 19 Dane Capital Management, LLC article »
Orange (ORAN) +26.1% since Oct. 11 '13 Mike Arnold article »
SA PRO subscribers get an early look at Top Ideas and access to the SA PRO research library. Learn about SA PRO »
Today's Markets:
In Asia, Japan -0.1% to 17384. Hong Kong +1.1% to 24112. China +1.5% to 2605. India +0.2% to 28386.
In Europe, at midday, London +0.2%. Paris +0.1%. Frankfurt +0.7%.
Futures at 6:20: Dow +0.1%. S&P +0.1%. Nasdaq +0.2%. Crude +0.1% to $74.15. Gold -0.2% to $1195.60.
Ten-year Treasury Yield flat at 2.26%
Today's economic calendar:
7:00 MBA Mortgage Applications
8:30 Durable Goods
8:30 Initial Jobless Claims
8:30 Personal Income and Outlays
9:45 Bloomberg Consumer Comfort Index
9:55 Reuters/UofM Consumer Sentiment
10:00 Pending Home Sales
10:00 New Home Sales
10:30 EIA Petroleum Inventories
12:00 PM EIA Natural Gas Inventory
1:00 PM Results of $29B, 7-Year Note Auction
3:00 PM USDA Ag. Prices
News 
Market Data 
Discover 
