Top 10 Market Factors before the stock market opens today:
- Zynga priced 100 million shares at $10 each in IPO which means the company is raising $1 billion in its IPO. Last week it had set a price range of $8.50 – $10.00 per share. Zynga will start trading on the NASDAQ under the symbol ZNGA. With Zynga relying on Facebook for 95% of its $1B annual revenue, the IPO provides an opportunity to invest in the latter’s growth and a tea-leaf reading on its own potential offering.
- Asian markets were mixed in overnight trading, with the Shanghai Composite up 2.02%, reversing a 5-day decline. Europe is higher and U.S. futures are moderately higher ahead of the market open. There’s also a major rally in French, Spanish, and Italian short term yields today.
- Blackberry maker Research In Motion (RIMM) reported Q3 earnings of $1.27 per share, on revenue of $5.2 billion, missing expectations. The company expects Q4 revenue in the range of $4.6 billion – $4.9 billion. Shares plummeted after the company said that a new generation of BlackBerrys aimed at helping the brand make a comeback won’t be released till the latter part of 2012. The misery continues for RIM (RIMM), whose shares sunk 7.6% postmarket after it gave FQ4 EPS, revenue and BlackBerry shipment forecasts below analyst expectations. Adjusted FQ3 EPS fell 27% to $1.27 as revenue slipped 5.5% to $5.17B, and RIM took a big charge on its woeful PlayBook tablet launch. One bright spot was a 35% lift in RIM’s subscription base, a sign that it’s still attracting new customers for its core product, especially in emerging markets.
- Congressional lawmakers have reached an agreement to avoid a government shutdown. Democrat and Republican leaders will now push for a final vote on the $1 trillion spending bill Friday morning. The final version of the bill excludes provisions that President Obama disagreed with. Lawmakers will continue to work towards a consensus on the payroll tax today.
- Germany’s upper house of parliament, the Bundesrat, has backed Chancellor Angela Merkel’s 2012 federal budget. The budget passed the lower house of parliament and expects to borrow €26.1 billion to help finance spending of €306.2 billion. Meanwhile, Italian Prime Minister Mario Monti survived a confidence vote in the lower house of parliament on a €30 billion emergency budget plan which has now moved on to the Senate.
- The Irish economy contracted 1.9% in the third quarter, from the previous quarter when it increased a revised 1.4%. The economy slowed as consumer spending and investment declined. Finance minister Michael Noonan has lowered the country’s 2012 growth forecast twice in the last six weeks.
- Fitch cut the viability ratings of banks that are considered “systemically important”, because of their sensitivity to challenges in the financial markets. The banks include Goldman Sachs (NYSE: GS), Bank of America (NYSE: BAC), Barclays, BNP Paribas (OTCBB: BNPQY.PK), Credit Suisse (NYSE: CS), Deutsche Bank (NYSE: DB), Societe Generale, (OTCBB: SCGLY.PK) and UBS (NYSE: UBS). Fitch also cut Citigroup’s IDR to A from A+ with a stable outlook.
- M&A Activity: Holding company United Rentals (NYSE: URI) is acquiring rival RSC Holding (NYSE: RRR) for about $1.9 billion in a cash and stock deal. The deal that will create a leader in the North American equipment rental industry, United Rentals (URI) is to acquire RSC Holdings (RRR) in a cash-and-stock transaction for a total enterprise value of $4.2B, including $2.3B in net debt. The $18 a share offer represents a 58% premium to RSC’s closing price of $11.37 yesterday. Meanwhile, Deutsche Bank (NYSE: DB) has launched the sale of its global asset management business and is looking for €2 billion – €3 billion.
- Consumer price index for November will be released at 8:30 AM ET. Consensus is for 0.1% month-over-month change in CPI.
- India’s central bank (RBI) held rates for the first time in eight meetings. The repurchase rate was held at 8.5%, as inflation eased for the first time in 28 months. The Indian economy has slowed because of global economic uncertainties, and the rupee has weakened this year, but jumped on the news.