Good morning. Here’s what you need to know.
- More talk of recapitalization of European banks has caused markets to rally. Asian markets were mixed in overnight trading with the Bombay Stock Exchange rising 2%. Europe is moderately higher and U.S. futures are sharply higher ahead of the open. U.S. bond markets will remain closed for Columbus day, and the volume of stocks trading is expected to be low.
- German Chancellor Angela Merkel and French President Nicolas Sarkozy pledged to recapitalize troubled European banks. They also promised that the European debt crisis would be solved before the month was over. Meanwhile, a Slovakian panel voted to endorse the expansion of the EFSF, but it may have needed one more vote to pass. A constitutional court will rule on the legitimacy of the vote. Don’t Miss: 10 key dates to watch in the Eurozone debt crisis >
- EU, IMF and ECB officials that form the troika, met with Greek finance minister Evangelos Venizelos today in the hopes of concluding negotiations on the next tranche of Greek aid. The officials are expected to issue a joint statement today or tomorrow. Now here’s who will get crushed if Greece goes bust >
- Some positive economic data out of Europe. German trade balance for September came in at €11.9 billion. Exports grew 3.5%, against expectations of 1.1% growth, at a time when German industrial growth was fairly weak. And industrial output in Italy climbed 4.3% in August from July, rising at its fastest pace in over a decade.
- Superior Energy Services Inc. is buying Complete Production Services Inc. in a cash-and-stock deal valued at $2.7 billion. Superior will pay 0.945 shares and $7 in cash, for each share of Complete’s stock. The merged company will operate under Superior’s name.
- Printed Circuit Board manufacturers reported Q4 orders cut by 15% with specific orders for smartphone parts cut as well. The report said it received fewer-than-expected orders from Apple, because of sluggish economic growth in Europe and the U.S. This comes after JP Morgan released a report last month claiming that Apple had cut its Q4 orders for iPads by 25%.
- In an effort to boost job creation, President Obama is unveiling a scheme to attract $1 trillion in foreign direct investment over the next five years. That would boil down to about $50 billion per quarter, a target that is met frequently.
- China’s yuan posted its biggest daily increase since July 2005, on speculation that officials would tolerate appreciation, after the U.S. said China keeps its currency undervalued. The yuan rose 0.6% to 6.3486 dollar. After a week-long holiday, the Shanghai Composite fell 0.61%. Check out 15 currency trades you should make right now >
- Belgium will buy the national subsidiary of Dexia for €4 billion as part of a wider bailout of the bank. The part-nationalization was spurred on by the reluctance of other banks to lend to Dexia because of its exposure to Greece and Italy. Meanwhile, Belgium, France and Luxembourg together are expected to provide an additional €90 billion in funding guarantees for up to 10 years. Check out the 13 banks with the most exposure to PIIGS >
- The Russian government reportedly talked of buying Spanish sovereign debt at a meeting between finance minister Elena Salgado, Russian foreign minister Sergei Lavrov, and former finance minister Alexei Kudrin. BRICS nations have previously pledged their support, but maintained that the resolution must come from within Europe. Now here is what’s really happening with the BRIC’s economies >
- BONUS – Demi Moore is reportedly looking to divorce Ashton Kutcher after allegations that he cheated on her.