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Good morning. Here’s what you need to know.
- Asian markets started the week off lower, with Hong Kong’s Hang Seng shedding 1.7%. Shares in Europe are also in the red, while U.S. futures point to a modestly lower open.
- Portuguese credit-default swaps rose to a record 39.5%, signaling a 71% chance of default over the next five years, as investors remain concerned about debt talks and the upcoming E.U. summit. Greek bond talks, which have yet to conclude, could offer the best idea of what haircut debt holders are willing to take. Here’s why Portugal could be the trigger that sends the Eurozone into crisis.
- Germany has proposed that Greece hand control of its finances over to a eurozone budget commissioner before the newest terms of its bailout are agreed upon. The idea has been sharply rebuffed by Greek leaders. E.U. leaders will likely discuss the proposal at a meeting today in Brussels.
- A reading of business and consumer confidence increased less than forecast in the eurozone, the European Commission said. The index came in at 93.4, above the 92.8 reading in December, but shy of the 93.8 economists were looking for. Manufacturer sentiment remained negative as the region looks at possible contraction.
- Bank of America will reshuffle the leadership of its investment bank, the Wall Street Journal’s Dan Fitzpatrick and David Enrich, report. Christian Meissner is expected to be named to lead the unit. Meissner, a Goldman Sachs veteran, would become the sole head of the capital markets unit after sharing the post with Michael Rubinoff and Paul Donofrio since 2010. Click here to see who else may be out of the financial industry >
- Exxon Mobil agreed to sell its Japanese business to TonenGeneral Sekiyu for $3.9 billion, after new requirements that oil refiners upgrade their oldest plants nears effect. Tonen will fund the purchase through cash on hand and financing from lenders.
- Stephen Hester, the chief executive of the Royal Bank of Scotland, will forgo his £963,000 bonus amid intense public backlash. The leader of the government-owned bank as well as the company’s chairman, both waived 2011 awards as unemployment in the U.K. sits at a 17-year high.
- Personal income grew by 0.5% in December, outpacing analyst expectations, while spending was flat in the U.S., the Bureau of Economic Analysis announced this morning. The reading presents a mixed picture, as economists polled by Bloomberg forecast personal spending increasing 0.1%. The next economic announcement of the day comes at 10:30 a.m., when the Dallas Federal Reserve will announce manufacturing activity in the region. It is expected to increase to 0.5 from -3. Follow the report live on Money Game.
- Ex-UBS trader Kweku Adoboli pleaded not-guilty in a packed London court this morning. Adoboli spoke only to say his name and say he was not guilty on fraud and false accounting charges that cost the Swiss-bank some $2.3 billion. The trial is set to begin on Sept. 3.
- Earnings season continues this morning, with announcements from Wendy’s and Gannett. Wendy’s reported earnings per share of $0.04, in line with estimates. Gannett EPS beat by four cents, at $0.72 a share, even as profits slipped for the fourth consecutive quarter. Click here for a complete guide to this week’s big earnings announcements.