Here is what you need to know.
Deutsche Bank announced a huge writedown. German investment bank Deutsche Bank announced a €5.8 billion writedown of goodwill and a €600 million writedown on its 20% stake of Hua Xia Bank in China. The writedown has the bank projecting a
€6.2 billion loss in the third quarter. Deutsche Bank’s board of directors says it will recommend a cut to, and possible elimination of, its dividend. The stock price is swinging wildly.
Dell is reportedly in talks to buy EMC. A source close to the matter told Reuters PC maker Dell is in talks to buy cloud-computing giant EMC. The takeover chatter comes amid ongoing pressure on EMC from activist investor Elliott Management to spin-off the remainder of its VMware unit. According to Reuters, if a deal were to occur, it would be one of the largest ever in the technology space. Terms of the possible deal haven’t been disclosed. Currently, EMC has a market cap of almost $US50 billion.
The Bank of England kept policy on hold. In an 8-to-1 vote, the Bank of England held its key interest rate at 0.50% for a 79th consecutive month. The central bank also held its asset purchase program at £375 billion pounds. The British pound is little changed near 1.5350.
German exports cratered. Exports from Germany tumbled 5.2% month-over-month in August, posting their worst monthly performance since January 2009. The weak export data dropped Germany’s trade surplus to €19.6 billion, which was below the €20.2 billion that economists were forecasting. The August data wasn’t impacted by the Volkswagen emissions scandal as that wasn’t discovered until late-September. The euro is stronger by 0.5% at 1.1293.
Japan’s core machinery orders unexpectedly fell. August core machinery orders tumbled 5.7% compared to July, missing the 3.3% gain that economists were anticipating. According to the Japanese government’s assessment, orders are “at a standstill” after posting their third consecutive monthly decline. The Japanese yen is weaker by 0.2% at 119.82 per dollar.
Hillary Clinton wants to rein in Wall Street. Democratic presidential candidate front-runner Hillary Clinton is set to announce her plans to rein in Wall Street. Thursday, Clinton is expected to announce her plan, which is will propose taxing high-frequency trading and strengthening the “Volcker Rule,” according to Reuters. Earlier this week, when speaking about the financial crisis, Clinton said,”People should have gone to jail.”
Stock markets around the world are mixed. Britain’s FTSE (+0.2%) leads a choppy session higher in Europe and Japan’s Nikkei (-1%) paced the decline in Asia. China’s Shanghai Composite (+3%) posted a nice gain after reopening following its week-long holiday. S&P 500 futures are down 8.50 points at 1978.75.
The September FOMC minutes are coming. The minutes from the September FOMC meeting will be released at 2 p.m. ET. Traders hope the minutes will provide clues as to when the Fed will raise rates for the first time since June 2006. Currently, the market is pricing in an 8% probability of an October rate hike and a 37.4% chance of a December move.
US economic data remains light. Initial and continuing claims are due out at 8:30 a.m. ET and natural gas inventories crosses the wires at 10:30 a.m. ET. Treasury will reopen $US13 billion 30-year bonds at 1 p.m. ET. The US 30-year yield is down 3 basis points at 2.87%.
Earnings season unofficially begins after the close. Domino’s Pizza reports ahead of the opening bell before Alcoa unofficially kicks of earnings season with its quarterly report following the closing bell.