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Good morning. Here’s what you need to know.
- Asian indices were down in overnight trading with the Bombay Stock Exchange falling 2.27%. Europe is lower after a failed German bond auction and weak PMI data, and U.S. futures are moderately lower.
- Eurozone manufacturing contracted further to 46.4 in November, from 47.1 in October. The decline in manufacturing was led by Germany, the strong arm of Europe, where PMI fell to 47.9 in November, from 49.1 the previous month. Service PMI however was up at 47.8, from 46.4 in October. The weak data added to fears the Eurozone is looking at another recession. Now here are 10 crucial dates you need to watch in Europe >
- Germany sold €3.65 billion of 10-year government bonds and demand at the sale was below the year’s average. The Bundesbank had to retain 39% of the issue amid investor concerns that Europe’s crisis could be spreading to Germany. Check out the 19 countries most likely to default >
- HSBC Flash PMI for China fell to a 32-month low of 48 in November, from 51.1 the previous month, adding to chatter about a Chinese soft landing. Now here is an awesome presentation on China and the European debt crisis >
- October durable goods orders declined 0.7%, while capital goods orders were down 1.8%. Meanwhile, personal income grew 0.4%, while spending grew just 0.1% >
- The Federal Reserve is planning stress tests for the nation’s 31 largest banks against a market shock, including a hit by exposure to European debt. The banks will have to post 2012 capital plans by mid-January, along with projected revenues and losses on four scenarios. Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, Goldman Sachs and Morgan Stanley will also have to complete the ‘trading’ scenario.
- French and Belgium government bonds fell further on talks that Dexia’s bailout might collapse, and that Belgium is trying to negotiate a break-up plan for the bank. Yield on 10-year French bonds was up to 3.64%, while the Belgian 10-year government bond rose to 5.12%. Now here is everything you need to know about Dexia, the Belgian bank that everyone is freaking out about >
- Eurozone industrial new orders plummeted 6.4% in September, compared with August, missing expectations of a 2.5% fall. Orders of capital goods, which measures investment in new machinery, fell 6.8%. Italy posted a 9.2% drop in new orders, and Spain reported a 5.3% decline. Even Germany saw new orders tumble 4.4%. Now here are 15 companies that will get slammed if Europe goes bust >
- In earnings news, the world’s largest farm-equipment maker Deere & Co. posted Q4 net income of $669.6 million or $1.62 per share, on revenue of $8.61 billion. Profits were boosted by increase in farm income. Meanwhile, retailer Guess? is expected to post earnings of $0.73 per share.
- Initial jobless claims rose to 393K, against expectations of 390K claims. Meanwhile, consumer sentiment data for November missed expectations coming in at 64.1 >
- BONUS – Rihanna designed a capsule collection for Emporio Armani. The collection includes lingerie, jeans and t-shirts.