Good morning! Here are the big news stories moving markets.
Europe Is Sluggish. Eurozone GDP climbed by just 0.2% in Q3. While this is incredibly low, it’s a bit better than the 0.1% growth rate expected by economists. “Growth in the euro area is still very low, but a slight beat of the consensus and an upward revision to last quarter’s data indicate that the economy is further from recession than a gloomy consensus was expecting,” Pantheon Macroeconomics’ Claus Vistesen said.
European Inflation Could’ve Been Worse. Prices climbed by just 0.4% year-over-year in October, which was a bit higher than the 0.3% forecast by economists. “The drag from deflation in the energy component and low food prices were slightly lower in October which contributed to the higher inflation reading,” Pantheon’s Vistesen said. “This is positive, but signs of deflation in the core industrial goods component is worrying.”
Speaking Of Energy Prices… Oil prices tumbled to new multi-year lows earlier today before coming back. “I think the market is basically coming to the conclusion today that this latest price drop has actually increased the likelihood of action from OPEC,” Saxo Bank’s Ole Sloth Hansen told Bloomberg.
Stock Markets Aren’t Doing Much. US futures are up a hair with Dow futures up 7 points and S&P futures up 0.5 points. Europe is in the red with Britain’s FTSE down 0.2%, France’s CAC 40 down 0.2%, and Germany’s DAX down 0.4%. Asia closed in the green with Japan’s Nikkei up 0.5% and Hong Kong’s Hang Seng up 0.3%.
France And Greece Are Looking Up. French GDP came in slightly better than expected. Europe’s second biggest economy registered a 0.3% expansion in the third quarter, a slightly higher figure than economists thought. Greece is finally out of recession after 6 horrible years. The economy expanded by 1.7% in Q3, compared to the same quarter last year.
Germany And Italy Are In Trouble. Germany has avoided recession by a hair. The German economy grew by 0.1% in the third quarter. That’s as weak as growth gets. Italy remains in recession. Italian GDP dropped 0.1% in Q3. That’s following a 0.2% drop in Q2 and another 0.1% decline in Q1, capping nine months of recession for Europe’s third-largest economy.
An Energy Industry Mega-Deal Is In The Pipeline. “Halliburton Co. is in talks to buy Baker Hughes Inc., according to people familiar with the matter,” reports the Wall Street Journal’s Dana Mattioli, Liz Hoffman and Dana Cimilluca. “Talks between the two oil-field-services companies are moving quickly, and they could reach an agreement soon, said two of the people.”
RBS Is Exiting The US Mortgage Business. Royal Bank of Scotland Plc’s securities unit will now exit its US mortgage trading business after originally planning to shrink it by two-thirds.
US Retail Sales Are Coming. That’s the biggest data release from the US today, at 8.30 a.m. ET. Analysts are expecting a 0.2% boost for October, after an unexpected 0.3% fall in September.
PIMCO Bosses Made A Lot Of Money Last Year. Here’s Barry Ritholtz for BloombergView: “According to documents provided to Bloomberg View by someone with knowledge of Pimco’s bonus policies, the numbers break down like this: Gross earned $US290 million as his year-end bonus for 2013. Mohamed El-Erian, Pimco’s former chief executive officer and one-time heir apparent to Gross, received $US230 million.”