Market Snapshot
Asia: Japan +1.3% to 20428. Hong Kong +1.2% to 27081. China closed. India +1.5% to 27730.
Europe: London +1.2%. Paris +3.3%. Frankfurt +3.3%.
Futures: Dow +0.9%. S&P +0.9%. Nasdaq +0.9%. Crude +0.8% to $60.47. Gold -0.7% to $1193.70.
Ten-year Treasury Yield +6 bps to 2.33%
Economic News
8:30 Chicago Fed National Activity Index
10:00 Existing Home Sales
Key earnings after the close
SONC
Markets
U.S. stock futures advanced Monday after the latest package of proposals from Greece to its creditors fueled hopes that a bailout deal could be reached. The Wall Street Journal reported that the Greek government’s latest plan makes a potentially major concession on cutting deficits in its pension system. The plan was formally submitted to creditors Monday morning and could be a big step toward ending a deadlock that has spurred talk of a potential Greek exit from the eurozone. Still, eurozone leaders cautioned that an immediate breakthrough was unlikely.
The European Union has extended sanctions against Russia by six months to the end of January, keeping up pressure on the Kremlin to bring peace to eastern Ukraine. The restrictions outlaw financing for major Russian banks, ban the export of sophisticated energy-exploration equipment, and prohibit the sale of weapons and some civilian goods with military uses. Debt-stricken Greece, which has been courting Russian economic aid, shied away from a veto.
The Senate is scheduled to end the debate on “fast-track authority” for trade deals on Tuesday, with a vote that will likely send the Trans-Pacific Partnership to the President’s desk. TPP would create a free trade zone covering 40% of the world economy – making it the largest trade deal since NAFTA.
The Bank of Japan has ample means to hit its 2% price goal, Governor Haruhiko Kuroda announced today, emphasizing that the central bank could keep inflation at that level in a stable manner. Speaking in parliament, Kuroda said raising the 0.1% interest the BOJ pays on excess reserves could be one option if it were to conclude its massive stimulus program, but stressed that it was still premature to debate a specific exit strategy.
Stocks
Advanced Micro Devices is at the initial stage of reviewing whether to split itself in two or spin off a business, and has asked a consulting firm to help it review its options. One possibility said to be under consideration is separating AMD’s (AMD) graphics and licensing business from its server business; AMD had explored such a move in the past and decided against it, but CEO Lisa Sun believes there is merit for AMD to at least consider it again.
Deal talks in the healthcare space were busy over the weekend, with Anthem (ANTM) made a third offer to purchase Cigna (CI) for $54B over the weekend, although the bid was rejected. Aetna (AET) made a takeover offer for Humana (HUM). Those deals, if completed, would shrink the current top five insurers to a powerful big three, each with revenue on paper of more than $100B. UnitedHealth (UNH), the largest industry player by revenue, has also recently jumped on the bandwagon by making a takeover approach for Aetna.
Apple has reversed its policy and said it would now pay artists during the free three-month trial of its new streaming music service, after pop star Taylor Swift threatened to hold back her latest album “1989” from Apple Music. “When I woke up this morning and read Taylor’s note, it really solidified that we need to make a change,” Eddy Cue, Apple’s (AAPL) senior vice president of Internet software and services, said in an interview late Sunday. Apple’s free trial period is seen as a crucial part of the company’s strategy to attract paying subscribers.
Hong Kong’s stock exchange is opening the door to Alibaba (BABA) listing on its home market – returning to the debate of controversial dual class shareholdings. The exchange will re-examine its current bar on China-based companies having a secondary listing of their shares in the city. Earlier this month, Alibaba’s Jack Ma said Hong Kong’s rules were paramount to the company’s 2014 decision to list its shares in New York.
Following three weeks of negotiations, General Electric (GE) has reached tentative agreements on new labor contracts with its two largest unions, the IUE-CWA and the United Electrical, Radio and Machine Workers of America. GE’s existing four-year national contracts with IUE-CWA and UE, which provide improvements in healthcare, wages, pension and job/income security, expire at midnight tonight.
The air bag crisis continues after Honda confirmed an eighth fatal victim of a ruptured Takata (TKTDY) inflator, completing the investigation of a September crash in Los Angeles. Company records show the owners of the car never repaired its air bags, even though the Honda (NYSE:HMC) vehicle had been recalled multiple times.
Williams Companies has rejected an unsolicited buyout offer worth $48B from Energy Transfer Equity (ETE), but has hired banks to explore alternatives, including a merger, a sale of the company or simply continuing on its current path. Williams (WMB) said the $64/share bid, a 33% premium to Friday’s closing price, “significantly undervalued” the company and would not deliver value commensurate with what it “expects to achieve on a standalone basis.”