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World News You Don’t Want to Miss [17-Oct-2011]

By on October 17, 2011
  • Asian markets were mostly up in overnight trading with the Nikkei rising 1.5%. Europe and the US were both much higher, but have completely reversed course after leaders downplayed expectations of a big solution coming next weekend.
  • German finance minister Wolfgang Schaeuble said EU leaders will agree to a capital ratio of 9% for systemically important financial institutions (SIFIs) to limit contagion. The European rally however faded, after comments from Schaueble and German chancellor Angela Merkel suggested that there wouldn’t be a complete resolution to Europe’s debt crisis at next week’s EU summit.
  • G20 leaders asked the IMF to propose ways in which it could help prevent a full-blown crisis in Eurozone economies. The IMF has said it could extend aid to Italy and Spain, only if EU leaders have a concrete plan by October 23. Meanwhile, China is reportedly willing to inject money into Europe.
  • Singapore’s non-oil domestic exports fell 4.5% from a year ago, against expectations of a 3.5% gain. This comes after the country lowered its growth forecast last week, because of a drop in demand for Singaporean goods amid the the European debt crisis and slow U.S. recovery.
  • In earnings news, Citigroup and Wells Fargo will post earnings before the bell today. Citi is expected to post 15% increase in Q3 profits to $2.5 billion or $0.82 per share, and Wells Fargo is expected to post 18% rise in earnings to $3.9 billion or $0.72 per share. Meanwhile, Halliburton announced Q3 earnings of $0.94 per share from continuing operations, on revenue of $6.5 billion.
  • The Empire State manufacturing survey for October will be released at 8:30 AM ET and industrial production for September will be released at 9:15 AM ET. Consensus is for business conditions index reading of -3.25, and a 0.2% month-over-month change in industrial production.
  • The Occupy Wall Street movement which began in New York, has gained traction around the world. There have already reportedly been arrests in London, while protests in Rome got violent, with demonstrators torching cars and smashing shop windows.
  • Andarko Petroleum has agreed to pay BP $4 billion to settle claims relating to the oil spill in the Gulf of Mexico last year. As part of the settlement, US-based Andarko will drop its allegations of gross negligence against BP and give up its 25% interest in the site.
  • Royal Philips Electronics NV posted an 86% drop in Q3 profits. Net profits fell to €74 million and revenues declined 1.3% to €5.39 billion. In response, the company is cutting 4,500 jobs from which it expects to save €800 million annually.
  • U.S. oil and gas company Kinder Morgan has agreed to a $38 billion deal to buy El Paso Corporation. The deal is worth about $21 billion in cash and stock, and $17 billion in debt. Kinder Morgan shareholders will own 68% of the company, and the new company will continue to be known as Kinder Morgan.