10 Things You Need To Know Before The Opening Bell

Tuesday, December 11, 2012


Good morning. Here's what you need to know.

• Asian markets were mostly lower in overnight trading, with the Nikkei falling 0.1 percent and the Shanghai Composite down 0.4 percent. European markets are higher across the board, led by Italy, up 0.9 percent, and Spain, up 0.8 percent. In the United States, futures point to a positive open.

• In China, new yuan loans rose in November to 522.9 billion, missing forecasts of 550 billion. Credit Agricole economist Dariusz Kowalczyk said that “the data point to a more subdued recovery going forward,” as Chinese leadership signals that perhaps they are comfortable with a more gradual pace of funding expansion.

• Chinese copper production rose 2.1 percent in November to a record 531,000 metric tons. The robust activity in copper, a key input of industrial activity, points to a strengthening Chinese economy.

• Australia business confidence collapsed in November to levels not seen since the global financial crisis four years ago, with the NAB survey index falling to a reading of -9 from the previous month's reading of -1 as the mining boom there recedes. "Confidence did not rise in any sector and fell especially hard in manufacturing. Firms may be concerned about a soft global economy, fiscal tightening, a soft labour market and high Australian dollar," said NAB economist Alan Oster.

• The German ZEW survey of economic sentiment surged to an index reading of 6.9 in December from -15.7 last month, well exceeding expectations of a milder rise to -11.5, indicating investors have a positive outlook over the medium term. "Although the cooling down of the economic activity will last until the beginning of 2013, Germany will not have to face a recession. However, this only applies if the crises in the eurozone do not deepen once again,” said ZEW President Dr. Wolfgang Franz.

• The Dutch and Belgian central banks both slashed their 2013 growth forecasts, the former to -0.6 percent from +0.6 percent, and the latter revised down to 0.0 percent from 1.4 percent. The numbers highlight that elsewhere in the euro area "core," countries are still feeling the weight of the euro crisis.

• Global oil giant Exxon, in its latest long-term energy outlook to be released today, says that North America is set to become a net energy exporter by 2025, joining the view that American energy is set for a big period of outperformance ahead. Exxon VP Bill Colton, who led the study, said, "The economics of natural gas in the power-generating sector continue to look even better over time."

• Fiscal cliff negotiations between Congressional leaders and the White House appear to have taken a new turn. In the latest development, both sides have agreed to a moratorium on public comments about the negotiations, a marked difference from the previous status quo in which most negotiating was being conducted strictly via public comments. However, markets don't seem convinced.

• The U.S. Treasury said it will sell its remaining stake in AIG, the insurance giant that was partly nationalized during the financial crisis. The Treasury stake amounts to 234.2 million shares, or roughly a $7.8 billion position at yesterday's closing price. The stock is sliding in pre-market trading.

• At 8:30 AM, trade balance data is released in the United States. The trade deficit is projected to have widened to $42.6 billion in October from September's deficit of $41.5 billion.