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Good morning. Here’s what you need to know.
- Asian markets were mostly up in overnight trading on reports of a leveraged EFSF. The Hang Seng jumped 1.29%, after selling-off hard yesterday. Europe is higher and U.S. futures are lower.
- Reports that France and Germany are in agreement on a comprehensive plan that would boost the EFSF to €2 trillion, were shot down. German finance minister Wolfgang Schaeuble said €1 trillion would be the maximum liability of the EFSF. Now here’s what to expect at the EU summit this weekend >
- European banks plan on shrinking by €775 billion in the next two years, by selling assets and cutting lending. This comes amid concerns that European banks can’t raise money fast enough, and to comply with tougher capital requirements. Meanwhile, the European Commission carried out unannounced checks on major European banks on suspicion that they collaborated to manipulate euro interest rate derivatives. Now here are the European banks praying for the PIIGS to be saved >
- There are massive protests in Greece today, ahead of the parliament’s austerity vote. Protestors were calling for the downfall of Papandreou’s socialist government and the 48-hour strike will shut down public services, government offices and businesses. Check out who will get slammed if Greece goes bust >
- Moody’s cut Spain’s government bond ratings by two notches to A1 with a negative outlook, after it put Italy and Belgium on review. Moody’s attributed the downgrade to a lack of resolution to the Eurozone crisis, a slowdown in the economy and the resulting difficulty for Spain to meet its fiscal targets.
- Housing starts beat expectations jumping 15% to 658K. Meanwhile, core CPI for September grew less than expected 0.1% month-over-month.
- Apple missed estimates when it reported earnings of $7.05 per share, on revenue of $28.3 billion. Weaker than expected iPhone sales were the main reason for the surprising miss, and CFO, Peter Oppenheimer blamed rumours of the iPhone 5. Meanwhile, Yahoo reported adjusted earnings of $0.21 per share, on revenue of $1.07 billion ex-traffic acquisition costs . In other tech news, Groupon will begin its IPO roadshow next week. Don’t Miss: The highest quality stocks in the world >
- In more earnings news, Morgan Stanley reported Q3 income of $1.14 per diluted share, on net revenue of $9.9 billion, beating estimates on accounting gains. After the markets close, American Express is expected to announce earnings of $0.96 per share, and eBay is expected to report earnings of $0.48 per share. Now here are five things we’ve already learned from the latest earnings season >
- South Korea and Japan have agreed to expand their currency swap deal and to resume free trade. This highlights an effort by both countries to improve “financial and currency cooperation to preemptively stabilise the financial market.”
- Seven Republican presidential contenders met in Las Vegas last night. Herman Cain was attacked from the start for his 9-9-9 tax plan, while Michele Bachmann fell flat on questions about foreclosures. The most heated debate was between frontrunner Mitt Romney and Texas Gov. Rick Perry who sparred over jobs records, healthcare reform and immigration. Meanwhile, there will be a GOP debate on just foreign policy in November.
- BONUS – Emma Watson has just started at Oxford University though she intends to return to Brown University next year.
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