Friday Pre-Morning Market News (11/25/11)

Updated on

Every morning the Street of Walls team puts out an update on market levels, today’s top stories, and active M&A deals.

Today’s Top Stories:

  • RBS IBD Could Be Sold: Stephen Hester, chief executive of Royal Bank of Scotland, has conceded for the first time that the state-backed lender could sell its investment banking division
  • Sovereign Debt Crisis Update: “Yesterday, Germany failed to issue the full amount of €6bn 10-year bonds. There were only bids of €3.9bn and an issuance of €3.6bn. As a consequence, the Bundesbank – acting as an agent of the German debt agency – retained €2.4bn, which it is likely to place in the market in coming days. Comment: As our strategists highlighted in a note ahead of the Bund auction yesterday, it is not that uncommon that Germany is not able to issue the full amount of an auction (Euro Rates Strategy: Bund Auction PreviewEuro Rates Strategy: Bund Auction Preview)” (Citi Research)
  • Misconceptions About CDS: ISDA has launched a press offensive aimed at countering what it feels are misconceptions re CDS, esp. ones tied to sovereigns
  • Hedge Fund’ Struggling: This week stock market correlation hit 87% this week: showing it is almost impossible to outperform the broader market
  • Banks Scale Back Mortgage Servicing: US banks scale back mortgage servicing presence in response to heightened regulatory oversight
  • Greece Update: Greece looks like it will finally get its next tranche of bailout money after all the country’s political leaders appear to have met the troika’s request for written austerity/reform commitments.  A decision on releasing the money could come at next week’s 11/29-30 fin min meeting
  • Black Friday Early Read: “Shoppers turned out in full force for retailers’ earlier openings on Black Friday (BF), as retailers attracted younger customers willing to stay up late for hot deals. Consumers took advantage of the aggressive promotions and compelling doorbusters on electronics, toys, and footwear, while sales in the jewelry department were softer than we expected. In addition, we believe that warmer temperatures YOY had a negative impact on apparel sales. All of our retailers experienced strong traffic levels, and we were very impressed with WMT’s ability to manage the crowd and improve the customer experience. Our initial impression of Black Friday gives us increased conviction that sales are off to a strong start” (Citi Research)

Economic Calendar:

  • Monday: New Home Sales, Dallas Fed Survey
  • Tuesday: S&P/CS Home Price Index, Consumer Confidence, House Price Index
  • Wednesday: Fed’s Beige Book, ADP Employment, Nonfarm Productivity, Chicago Purchasing Manager, Pending Home Sales
  • Thursday: Initial Jobless Claims/Continuing Claims, Construction spending, ISM Manufacturing
  • Friday: Nonfarm Payrolls, Unemployment Rate

M&A Watch:

  • Magnitogorsk Iron & Steel Works OJSC agreed to acquire Flinders Mines Ltd for AUD546.4 million (US$531 million) in cash
  • Brightside Group Plc agreed to acquire ESystems Ltd, a unit of Rock e-Systems Ltd and ultimately owned by Rock Holdings Ltd for GBP16 million
  • Brambles Ltd acquired Paramount Pallet Inc for CAD13 million (US$12.4 million)

Disclosure: I do not have a position in any stocks mentioned in this article, do not have a plan to initiate a position within the next 72 hours.

Disclaimer:  The information, opinions, material, and any other content provided in this article is for informational purposes only and is not to be used or considered an offer or solicitation to buy or sell securities, investment products, financial instruments, or to participate in any particular investment strategy. The information, opinions, material, and any other content provided in this article does not constitute as a recommendation or as advice to buy or sell securities, investment products,  financial instruments, or to participate in any particular investment strategy.

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