Here is what you need to know.
Dow Chemical and DuPont are merging. The two chemical giants have agreed to an all-stock deal that would value the combined company at about $130 billion. The new company, DowDuPont, will divide ito three separate businesses: material sciences, specialty products, and agrochemicals businesses. Both Dow and DuPont shareholders will own about 50% of the new company, according to Reuters.
A Chipotle in Seattle was closed for health violations. A Chipotle restaurant in Seattle has been closed for repeated food-safety violations, according to the Seattle Times. The announcement is the latest black eye for the fast-casual burrito chain, which is struggling with an both an E. coli outbreak and the norovirus. First, an E. coli outbreak sickened 52 Chipotle diners in nine states and then 120 Boston College students contracted the norovirus from eating at one of the chain’s restaurants.
Ford wants to compete with Uber. Ford’s vice president of research, Ken Washington, said, “Our vision is to be a mobility service provider, beyond building a vehicle that would be in somebody else’s fleet.” He continued, “We see this as a business we want to be in.” In addition, the auto giant announced it would invest $4.5 billion in an electric vehicle fleet by 2020.
United Technologies is restructuring. The company announced a $1.5 billion restructuring plan that will last through 2018. The plan will focus on “structural cost reductions in high-cost locations, which is expected to result in $900 million of annualized run-rate savings when completed.” In addition, United Technologies announced it was raising its 2016 adjusted earnings per share to $6.60 from $6.30. The stock was little changed in after-hours trade following the announcement.
The Senate has delayed a government shutdown. On Thursday, the Senate delayed a government shutdown until Wednesday, December 16 by voice vote and without debate. ABC News says Congress is closing in on a $1.1 trillion spending bill before heading home for the holidays. “We’re not going to get everything we want in negotiations. The Democrats aren’t going to get everything they want in negotiations,” House Speaker Paul Ryan told reporters.
Crude oil is at its lowest level since 2008. The International Energy Agency says the oil glut is going to last into 2016 as OPEC continues to pump out more oil. The IEA suggests there’s evidence Saudi Arabia’s plan of pumping more oil is working. “Lower prices are clearly taking a toll on non-OPEC supply, with annual growth shrinking below 0.3 mb/d in November from 2.2 mb/d at the start of the year,” the report said. West Texas Intermediate crude oil is down 1.5% at $36.21 per barrel.
Russia’s central bank kept policy on hold. Russia’s central bank held its benchmark interest rate at 11.00%, as expected. In its statement, the Bank of Russia said it expects inflation to fall to 6% by the end of 2016 and 4% by the end of 2017 and that “As inflation slows down in-line with the forecast and on condition inflation risks recede, the Bank of Russia will continue with a downward revision of its key rate.” Russia’s ruble is weaker by 1.5% at 69.7891 per dollar and threatening the key 70.00 level.
New loans in China jumped. New loans in China totaled 708.9 billion yuan ($109.8 billion) in November as the economy responded to the recent rate cut. According to CNBC, traditional loans saw solid growth while riskier products continued to see a drop in demand. However, outstanding loans fell short of estimates, printing up 14.9% year-over-year, compared to economists expectations of a 15.3% jump.
Stock markets around the globe are mostly lower. Germany’s DAX (-1.7%) leads the drop in Europe after Hong Kong’s Hang Seng (-1.1%) paced the decline in Asia. Japan’s Nikkei (+1%) outperformed. S&P 500 futures are down 14.25 points at 2035.00.
US economic data is heavy. PPI and retail sales will be released at 8:30 a.m. ET before business inventories and University of Michigan Consumer Sentiment cross the wires at 10 a.m. ET. The US 10-year yield is lower by 3 basis points at 2.20%.