Good morning. Here’s what you need to know.
- Asian indices were mostly down in overnight trading with the Shanghai Composite up 0.18%. European markets, especially Italy, are deeply in the red. US stocks are tanking.
- A European Central Bank source is reported to have said that the existing European rescue fund is not big enough to take on an Italian bailout. Italian stocks are off over 2% and yields on two-year government bonds have widened. Don’t miss: The sad story of how Italy got to be such a wreck >
- It is being reported that European leaders are prepared to accept a Greek default on some of its bonds as part of a new bailout plan. The move is expected to be discussed at a Brussels meeting of Eurozone finance ministers today. Meanwhile two-year Greek bond yields have surged to over 31%. Here are the 15 countries that are buried under the most debt >
- The consumer price index in China surged to 6.4% in June from the previous year. Talks of a Chinese economic slowdown have intensified, as trade surplus widened with import growth falling to 19.3% in June from 28.4% the previous month, and exports falling to 17.9% from 19.4% in May. Check out the 10 countries that will dominate world trade in 2050 >
- Aluminium faint Alcoa will kick off the second quarter earnings season today. Expectations are for revenues of $6.33 billion and earnings-per-share of $0.34.
- Italian bank UniCredit SpA has expressed interest in Libya’s 7.5% stake in the bank. The Central Bank of Libya holds about 5% of the bank, while the Libyan Investment Authority has 2.6%. UniCredit saw major sell-off last week on fears of contagion from the Greek debt crisis.
- French drugmaker Sanofi is selling Dermik dermatology to Valeant Pharmaceuticals for $425 million in cash. The move comes as Sanofi hopes to focus on its core business.
- U.S. listed Arch Chemicals is being acquired by Swiss drugmaker Lonza for $1.2 billion. Lonza will pay $47.20 per share for Arch Chemicals, and the deal is expected to hedge the company against the impact of the strong Swiss franc and give it a larger market share of the ‘microbial control market’.
- Shares of British Sky Broadcasting fell further today over concerns that News Corp. will be unable to take full control of the broadcaster, following the hacking scandal that has plagued Rupert Murdoch.
- The political stalemate on debt ceiling continued as House speaker John Boehner said budget cuts had to exceed the amount by which the debt ceiling is raised and that the deal had to exclude tax hikes. Boehner is said to have abandoned talks of tax increase after he was widely criticised by his party. Click here to see 14 depressing facts about the US deficit >
- BONUS – Kate Hudson gave birth to a baby boy in Los Angeles on Sunday.