Reports » US

US stock market, economy and companies update (October 08, 2012)

Contributed by Trade The News

- US equity indices are in the red this morning, while fixed income trading is mostly closed due to the Columbus Day holiday. Weakness in Asia and European trading drove US equities into the red before the open and the leading indices remain in negative territory. The World Bank has trimmed its 2012 and 2013 GDP forecasts for Asia, warning there was a risk of a more pronounced slowdown in China. In Europe, the ESM has been made operational. Currently the fund has €200B and will expand to €500B within 18 months. Eurozone finance ministers are meeting today ahead of the Ecofin meeting tomorrow, although no resolution of the Greece issue has been announced. Syria and Turkey are exchanging artillery fire for the sixth day in a row, although front-month WTI crude is still trading below the $90 handle.

- On the deals front, UnitedHealth said it would buy a majority stake in Brazil's Amil Participacoes, the nation's largest health insurer and hospital operator, for $4.9B. The company is also active in a range of other overseas markets, including Australia, the UK and the Middle East. In addition, UNH offered very strong Q3 guidance.

- Prepaid card names Green Dot and NetSpend are down sharply this morning after American Express and Walmart rolled out their new Bluebird card program. The companies are positioning the Bluebird service as a more affordable checking/debit solution for the ranks of the "underbanked" rather than a more conventional pre-paid gift card. On the conference call, a Walmart executive explicitly stated that Green Dot's business would continue to grow and that Walmart had absolutely no plans to end its relationship with Green Dot. Nevertheless, GDOT is down more than 18% while NTSP is down 7% (off the -16% losses seen at the open of cash trading).

- The House of Representatives' Intelligence Committee recommended that Chinese telecom equipment giants Huawei and ZTE pose massive security risks and should be shut out of the US market. At issue is potential Chinese state influence on the two firms, which failed to satisfy the committee's requests for documents and detailed information about formal relationships or regulatory interaction with Chinese authorities. According to the committee, Huawei in particular may be guilty of bribery and corruption, discriminatory behavior and copyright infringement. Huawei is the world's second-biggest maker of network routers and switches after Ericsson, while ZTE is fifth largest.

***Looking Ahead***
- 11:00 (EU) Euro-Area Finance Ministers meet in Luxembourg
- 16:00 (EU) Eurogroup press conference
- 17:00 (CO) Colombia Aug Exports: No est v $4.7B
- 17:30 IMF updates its World Economic Outlook
- 19:50 (JP) Japan Aug Trade Balance: -¥628.6Be v -¥373.6B prior; Total Current Account Balance: ¥421.1Be v ¥625.4B prior

***Economic Data***
- (BR) Brazil Sept FGV Inflation IGP-DI: 0.9% v 0.8%e
- (CL) Chile Sept Trade Balance: -$37M v -$293Me; Total Exports: $6.0B v $5.9B prior; Total Imports: $6.0B v $6.7B prior
- (CL) Chile Sept Copper Exports: $3.5B v $3.0B prior
- (HU) Hungary Sept Budget Balance (HUF): -545.8B v -559.5B prior