Good morning. Here’s what you need to know.
- Asian indices were down in overnight trading with the Hang Seng down 3.06%. After major selling earlier, markets have come back quite a bit.
- Grappling with contagion risks, Italy has sold €6.75 billion of treasury bills but yields jumped by 150 basis points to 3.67%. The FTSE MIB index moved up after falling in early hours of trading. Meanwhile, Italian finance minister Giulio Tremonti left a meeting of EU finance ministers early to continue working on his €40 billion budget-cutting plan. Don’t miss: The 6 reasons Italy has come under attack >
- European Union finance ministers met to address contagion fears in the eurozone debt crisis. The officials are said to be receptive to selective Greek default promising cheaper loans or extending debt maturities. Contagion fears had dragged down the French and German markets but they’re moving up now. Check out 10 issues that should keep you up at night >
- Six Spanish banks are reported to have failed the European stress tests, including five savings banks and one medium-sized bank. The European Banking Authority is expected to announce the results of the tests this Friday. Meanwhile, German banks have attacked the publication of the stress data saying it would only serve to worsen the sovereign debt crisis in the eurozone. Click here for a complete guide to the Spanish debt crisis >
- UK inflation eased in June for the first time in three months. Consumer prices increased 4.2% from a year ago but were down from 4.5% in May. Core inflation eased to 2.8% in June from 3.3% the previous month.
- U.S. international trade deficit came in wider than expected at $50 billion >
- Peabody Energy and ArcelorMittal are expected to succeed in their $5 billion takeover bid for Macarthur Coal according to investors. This comes after Peabody’s bid was rejected last year.
- In earnings news, Alcoa’s Q2 earnings excluding items rose to $0.32 a share from $0.13 a year ago. Revenue surged 27% to $6.59 billion from $5.19 billion a year ago. Meanwhile, Indian tech giant Infosys reported a lower than expected 15.4% increase in Q1 profit to $387 million. Margins were hit by higher wages and shares fell on the news.
- Two key Republican Senators have opposed a deficit reduction plan that includes cuts to Medicare and Medicaid and have instead endorsed cutting corporate subsidies. President Obama and congressional leaders are expected to meet again today to break the deadlock on debt ceiling talks.
- Cisco systems is reported to be laying off 10,000 people, about 14% of its workforce, to boost earnings growth. As many as 7,000 jobs are expected to be cut by the end of August and the company is said to be providing early retirement packages to another 3,000 workers. Now here are 15 stocks that everyone is shorting right now >
- BONUS – A man believed to be Halle Berry’s repeat stalker was nabbed and turned over to the LAPD.