Good morning. Here’s what you need to know.
- Asian indices were mixed in overnight trading with the Nikkei up 0.07%. Major European indices are mixed and U.S. futures indicate a lower open.
- S&P has warned that the next phase of the bailout process would likely count as a default. The European Central Bank meanwhile has a Plan B in place that would take on Greek debt unless all major rating agencies that it uses declare Greece to be in default. Refresher: A quick guide to who gets crushed if Greece defaults >
- With progress in Greece focus has shifted to Italy. Yield on Italy’s 2-year government bond yield widened moderately and today its services PMI fell to 47.4 below expectations of 49.6 and from previous reading of 50.1, showing contraction. Click here to see th 10 countries LEAST likely to default >
- Services PMI missed expectations in Europe. France saw a reading of 56.1 versus expectations of 56.7 and German PMI came in at 56.7 against expectations of 58.3. Now here are the hardest working countries in the world >
- OM Group is set to acquire German magnetic materials maker Vacuumschmelze GmbH & Co KG for $1 billion. OM Group will acquire it from One Equity Partners, the private investment arm of JPMorgan Chase & Co, and will get $50 million in equity as part of the deal.
- Moody’s has said that China’s local government debt may be $540 billion larger than auditors had suggested. Last week it was reported that China’s local governments had drawn up 10.7 trillion yuan of debt. Check out Gary Shilling’s guide to the collapse coming to China >
- General Motors’ Chinese operations sold 1.27 million vehicles in the six months from January to June. Sales by GM and its local ventures rose 5.3% from a year ago for the first half of the year, while June sales were up 9.9% from a year before.
- President Obama is considering $340 billion in cuts to Medicare and Medicaid over 10 years as part of a deal to raise the debt ceiling. These cuts would however be contingent on Republicans agreeing to revenue increases. Now here is a guide to President Obama’s plan to cut the deficit >
- Factory orders missed expectations in May, growing 0.8% against expectations of 1% >
- While it is being reported that prosecutors expect to drop charges against Dominique Strauss-Kahn in the U.S., French writer Tristane Banon is expected to file sexual assault complaint against the former IMF chief today. Check here for the fabulous life of DSK >
- BONUS – Jennifer Garner was spotted with her family at a fourth of July parade near her Pacific Palisades home.