10 things you need to know before the opening bell
The Reserve Bank of Australia kept policy on hold. The Reserve Bank of Australia held its benchmark interest rate at 2.00%, as expected. The RBA noted, "...the prospects for an improvement in economic conditions had firmed a little over recent months...," but also made note that "the outlook for inflation may afford scope for further easing of policy." Other topics discussed included the slowdown of the price gains in housing and an improvement in both the labor market and business confidence. The Australian dollar is stronger by 0.4% at .7171.
UK Construction PMI slipped. Britain's construction sector slowed in October for the first time since July, slipping from 59.9 to 58.8. A fall to 58.9 was expected. The sector recorded its strongest growth in six months during the month of September. The British pound is weaker by 0.2% at 1.5387.
Activision Blizzard is buying King Digital. Video game giant Activision Blizzard is buying King Digital, the maker of Candy Crush, for $5.9 billion in cash. "The combined revenues and profits solidify our position as the largest, most profitable standalone company in interactive entertainment," Activision CEO Bobby Kotick said in a statement. The deal allows Activision to establish a foundation in the mobile gaming business as just 5% of its revenue is currently generated from the space.
The list of 'too big to fail' banks is out. The Financial Stability board, a group designed by the G20 to identify "global systemically important banks," has released its updated list. The list was broken down into five buckets, but not one bank ended up in the 5th bucket, which would have required it to hold the most capital. HSBC and JP Morgan Chase were the only banks in the 4th bucket, making them the most GSIBs. The only change this year was the addition of China Construction Bank, which replaced Spanish lender BBVA in the first bucket.
AIG had an awful quarter. The insurer announced a loss of $0.18 per share. and $500 million in restructuring charges. "This quarter's restructuring actions mark the latest significant, visible steps in our transformation toward becoming more efficient, less complex, and able to respond to our clients' needs with greater agility," Peter D. Hancock, AIG President and Chief Executive Officer, said in the earnings release. Last week, activist investor Carl Icahn announced a big stake in the company, and said it should be split into three as it was "too big to succeed."
FitBit is selling more stock. The fitness tracker maker announced diluted earnings of $0.19 per share, which topped the Bloomberg consensus estimate of $0.10. Revenue surged 168% to $409.3 million, easily topping the $359 million that was expected. However, the stock came under pressure after the company announced it would sell 7 million shares in addition to certain shareholders looking to unload 14 million shares. FitBit was down as much as 8% in after-hours action.
Cuba is open for business. Cuba's first annual trade fair had 600 companies from 70 countries around the world in attendance. According to Reuters, Sprint locked up a roaming agreement after landing an interconnection agreement with state-run Etecsa back in September. Pepsi was another one of the 30 or so US companies in attendence.
Stock markets around the world are mixed. Hong Kong's Hang Seng (+0.9%) outperformed in Asia and Germany's DAX (-0.3%) paces the decline in Europe. S&P 500 futures are down 3.50 points at 2092.00.
US economic data is light. Factory orders are due out at 10 a.m. ET and auto and truck sales will be announced throughout the day. The US 10-year yield is at a six-week high, up 1 basis point at 2.18%.
Earnings reporting is heavy. Archer Daniels Midland, Emerson, Hyatt Hotels, Kellogg, Office Depot and Sprint are among the names set to report ahead of the opening bell. Activision Blizzard, Cablevision, CBS, Devon Energy, Herbalife, Papa John's, Tesla Motors and US Steel highlight the companies scheduled to release their quarterly results when markets close.