By Yigal Grayeff and the Market Currents team
GM likely to report 2011 profit of $8B. GM (GM) will probably disclose that 2011 net income jumped 70% to a record $8B when it releases its results in ten days' time, The Wall Street Journal reports, with the firm's performance boosted by strength in North America and China. GM aims to increase its profit margin from 6% to 10% over the next few years and earn an annual profit of over $10B.
Greek debt talks drag on and on and on. The three parties in Greece's government last night agreed in principle to more Troika-imposed austerity, including cutting spending in 2012 by 1.5% of GDP, lowering auxiliary pensions, reducing wage and non-wage costs, and re-capitalizing banks without nationalizing them. However, key differences remain over the wages and the banks, and the sides were due to meet PM Lucas Papademos once again today.
Failure of austerity laid bare in debt figures. Eurozone government debt fell to 87.4% of GDP in Q3 from 87.7% in Q2, although it's up from 83.2% in Q3 2010. Showing just how unsuccessful the handling of the debt crisis has been, the sovereign debt of Greece, Portugal and Ireland all rose.
$25B deal over foreclosure abuse in sight. It's taken a year, but states and five banks are on the cusp of finalizing a $25B deal over foreclosure abuse after California returned to negotiations following a four-month absence, and New York - another hold-out state - signalled it could support a settlement. State AGs must indicate today whether they will sign on to the agreement. The banks involved are JP Morgan (JPM), Citigroup (C), Wells Fargo (WFC), Bank of America (BAC) and Ally Financial.
Mortgage-bond investors face hefty writedown. As part of any settlement to resolve foreclosure abuse, investors in mortgage bonds will be forced to write down up to $40B for distressed homeowners. The Obama administration plans to use the threat of litigation against large institutions to obtain additional aid for struggling borrowers.
"Glenstrata" mega merger faces obstacles. European Competition Commissioner Joaquin Almunia could investigate Glencore's proposed $35B acquisition of the shares in Xstrata (XSRAY.PK) it doesn't own, The Daily Telegraph reports. That's despite a 2006 ruling that treated the firms as one for antitrust purposes, due to Glencore’s 34.4% stake in Xstrata. The latter is also facing growing shareholder anger over what's seen as a "cosy stitch-up" and the lack of a significant premium.
Micron appoints Mark Durcan as permanent CEO. Micron (MU) has named company President and COO Mark Durcan as permanent CEO to replace Steve Appleton, who was killed in a plane crash on Friday. Durcan had initially been appointed to the position in a temporary capacity. Micron also named director Robert Switz as Chairman.
Facebook seeks to conquer mobile. Facebook plans to next month start showing ads to cellphone users as it attempts to succeed where Google and Twitter have so far fallen flat, The Financial Times reports. In its IPO filing last week, Facebook admitted it doesn't generate any "meaningful revenue" from its mobile products, which "may negatively affect our revenue and financial results."
IMF warns of China slowdown because of EU debt crisis. As if to underline weekend exhortations by Wen Jiabao to his countrymen that China needs to help the EU, the IMF has warned that the nation's growth could be half of the fund's 8.2% projection for this year should Europe’s debt crisis worsen. "However, a track record of fiscal discipline has given China ample room to respond," the IMF said.
The German economic engine powers back up. German December factory orders rose 1.7% vs. an expected increase of 1% and a decline in November of 4.9%. It's all about overseas business, where orders jumped 12.3%, outweighing a 6.8% decline from within the eurozone and a 1.4% domestic drop.
Romney builds momentum in Nevada. Mitt Romney enjoyed an easy win in Nevada over the weekend in his bid to become the GOP's presidential candidate. The economy ranked as the top issue among voters, with Romney attracting nearly two-thirds of the support of those who named it as their biggest worry. Next up are Minnesota, Colorado and Missouri tomorrow.
Today's Markets:
In Asia, Japan +1.1% to 8929.2. Hong Kong -0.2% to 20710. China flat at 2331. India +0.6% to 17707.
In Europe, at midday, London -0.5%. Paris -1.2%. Frankfurt -0.7%.
Futures at 7:00: Dow -0.4%. S&P -0.5%. Nasdaq -0.4%. Crude -0.9% to $96.95. Gold -0.9% to $1723.90.
Monday's economic calendar:
9:00 Fed's Bullard: 'Inflation Targeting in the U.S.'
10:00 Employment Trends Index
12:15 PM Fed's Fisher: Economic and Monetary Policy Outlook
Earnings Results: Companies that beat EPS expectations today include Nielsen Hld (NLSN), Towers Watson (TW).
Those that missed forecasts include Hasbro (HAS), Humana (HUM).
For full real-time earnings coverage, please click here.
Notable earnings before Monday's open: : HAS, HCA, HUM, L, LAZ, NNN, SOHU, SYY, UDR, USG
Notable earnings after Monday's close: AGNC, AMLN, APC, CSTR, LEG, NCR, PMCS, PXD, SPF, SUN, TMK, UNM, VECO, YUM
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