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US stock market, economy and companies update (January 07, 2013)

Contributed by Trade The News

- The three leading US indices traded off in the premarket this morning and opened down 0.5% a piece this morning. With plenty of bubbly tech news emerging out of the Consumer Electronics Show in Las Vegas, the Nasdaq has bumped up to -0.2%, while the DJIA and S&P500 remain down 0.4% a piece.

- EUR/USD surged from around 1.3030 to above 1.3100 on news that Ireland will shortly be returning to public financing markets in earnest with the sale of a 2017 syndicated bond, marking the next step in the nation's emergence from bailout purgatory. USD/JPY pair broke a nine-session string of dollar gains with the yen strengthening slightly to 87.81.

- Unlike European banking names, US banks are not surging today on the Basel news. On Sunday, Switzerland's Basel Committee gave banks four more years and extra flexibility to reach Basel III targets, allowing lenders to put some of their reserves to work. Recall that back in November, the Fed abandoned its prior Jan 1st, 2013 date for making the Basel III rules effective for US institutions and said it would continue to study the rules.

- Bank of America announced $11.6 billion in settlements with Fannie Mae and a $1.8 billion sale of rights on home loans. The deals go a long way toward moving BoA past its disastrous 2008 purchase of Countrywide. BoA said it would still make money in Q4, however the settlements wipe out most of the banks profits for the quarter. Nationstar Mortgage bought the MSRs, sending its shares up nearly 12%.

- Shares of Illumina are down more than 7% after Roche's Chairman said his company is no longer considering a bid for Illumina. He accused Illumina of not being willing to abandon the totally unrealistic price they were asking for. Roche's last bid was bid was $51/share and Illumina was said to be demanding up to $66.

- Commercial Metals Q1 net income slid 54 percent, however it still beat expectations and shares of CMC are up more than 3%. The CEO said there are signs that the domestic construction end markets are starting to recover.

- In M&A news, Nuclear waste management company EnergySolutions will be bought by a unit of private equity firm Energy Capital Partners II LLC for $338.5 million in cash.

- ITT Educational Services is down more than 13% after disclosing that a settlement deal in litigation with Sallie Mae will result in after-tax charge to net income will reduce its EPS by approximately $0.56 in Q4, after a one-time payment of $46M.

***Looking Ahead***
- 11:30 (US) Treasury to sell combined $60B in 3-Month and 6-Month Bills
- 13:30 (EU) ECB chief Draghi speaks in Berlin, Germany
- 19:30 (AU) Australia Nov Trade Balance: -A$2.3Be v -A$2.1B prior

***Economic Data***
- (IE) Ireland Nov Retail Sales Volume M/M: -1.1% v +1.7% prior; Y/Y: -0.5 v +3.0% prior
- (ZA) South Africa Dec Electricity Production Y/Y: -0.6% v -1.9% prior; Electricity Consumption Y/Y: -1.7 v -3.9% prior
- (CL) Chile Nov Economic Activity Index M/M: 1.3% v 0.4%e; Y/Y: 5.5% v 5.2%e
- (CL) Chile Dec Trade Balance:$1.5B v $0.2Be; Total Exports: $7.7B v $6.7B prior; Total Imports: $6.2B v $6.1B prior
- (CL) Chile Dec Copper Exports: $4.7B v $3.9B prior
- (RO) Romania Central Bank leaves Interest Rate unchanged at 5.25%; as expected
- (BR) Brazil Nov Vehicle Production: 259.4K v 301.7K prior; Vehicle Sales: 359.4K v 311.8K prior; Vehicle Exports: 41.2K v 36.5K prior
- (PL) Poland Dec Official Reserves: €108.9B v €107.5B prior
- (CA) Canada Dec Ivey Purchasing Managers Index (Seasonally Adj: 52.8 v 47.5 prior; PMI Unadj: 43.1 v 46.2 prior