Good morning. Here’s what you need to know.
- Markets largely sold off in overnight trade in Asia, with Japan’s Nikkei down 0.75 per cent. European shares are rallying and U.S. futures point to a positive open.
- Greek leaders are close to forming a coalition government today. New Democracy leader Antonis Samaras and Pasok leader Evangelos Venizelos have made some inroads and agreements on the coalition. The rival parties both support the country’s bailout. CITI: Our Greek exit opinion is unchanged at 50 to 75 per cent.
- China agreed to contribute some $43 billion to the IMF as leaders of the G-20 meet in Los Cabos, Mexico, boosting total funding commitments to $456 billion. Other emerging markets also added to the bailout fund, with Mexico, Brazil, Russia, and India all pledging $10 billion. The U.S. and Canada pledged no new funding.
- German business expectations fell by their greatest pace in 13 years, new data out of the Zew Sentiment Survey shows. The expectations index declined 27.7 points to -16.9. Economists had expected a reading of +2.3.
- Yields on Spanish 12-month debt surged to 5.074 per cent in morning trade. That’s up from just 2.985 per cent at a May auction. Meanwhile, Denmark recorded its first negative yields on two-year debt when it sold notes at an auction this morning. Take a look at this Spanish yield chart that gives the middle finger.
- J.P. Morgan Chief Jamie Dimon is scheduled to speak in front of the U.S. House Financial Services Committee today. Expectations are for a tougher round of questions for Dimon, after the Senate offered hours of compliments. Mike Mayo: Fix the banking system, Mr. Dimon, or we will do it for you >
- Bank of America could sell its non-U.S. Merrill Lynch wealth management business to Julius Baer, Switzerland’s largest private bank. The deal could be worth more than $2 billion and other firms are reportedly interested in the purchase as well.
- Oracle beat earnings expectations yesterday and said it would buy back as much as $10 billion in shares. The company posted quarterly results of $0.82 per share on revenue of $10.9 billion, above forecasts for earnings per share of $0.78.
- Microsoft formally unveiled its first tablet offering yesterday, circumventing its traditional stance of providing the software to hardware manufacturers. The Surface, which will go on sale later this year, runs Windows 8, has a 10.6 inch screen and a kickstand. Here are the first photos of the tablet >
- U.S. economic announcements kick off at 8:30 a.m. with housing starts and building permits. Starts are seen improving slightly to an annual pace of 720,000, while permits hit 730,000. Earnings on deck for the day include Barnes & Noble and FedEx, with expectations for the book retailer to post a loss of $0.91 per share. FedEx beat consensus by seven cents, hitting $1.99 in the fourth quarter. Follow it all live on Money Game >