It's finally here: Decision day for the Fed. Will they turn off the spigot? And how will markets react? Plus, a multi-billion dollar deal involving some of the biggest bold-face names in Hollywood. And a busy morning for earnings. We have it all covered.
But first, this morning's business headlines
Will they or won't they? Stock futures moved higher this morning ahead of the much-anticipated Fed decision on whether to begin cutting back the $85 billion-a-month bond-buying program. Improvements in employment numbers and economic growth in recent months have many market watchers speculating the Fed could announce a cutback today. Short of that, they could choose to offer guidance on when the taper may begin. Ben Bernanke will speak in a press conference after the policy decision comes out. Or of course, the Fed could choose to do nothing today and wait for more evidence of stabilization in the economy. Advocates for waiting point to inflation rates that are still low.
In banking litigation, the Justice Department is preparing to file civil fraud charges against Citigroup (C) and Bank of America's (BAC) Merrill Lynch unit, according to Reuters. This is over flawed mortgage securities sold to investors ahead of the financial crisis. For example, investigators have evidence allegedly showing investors lost tens of billions of dollars on securities Citi marketed as safe.
Meanwhile, JP Morgan (JPM) has sued the FDIC over the bank's purchase of Washington Mutual at the height of the financial crisis. JP Morgan bought WaMu at the encouragement of regulators in 2008, and since then has been fighting with the FDIC over who has to pay the bills for litigation stemming from WaMu's bad behavior before the deal. JP Morgan alleges the FDIC has not honored its obligations.
And a couple of media deals are looking likely this morning. First, the talent agency William Morris Endeavor - whose clients include Oprah Winfrey, Charlize Theron and Christian Bale - and one of its key investors, private equity Silver Lake Partners, are close to a deal to buy the sports and talent agency IMG for about $2.4 billion. IMG represents athletes like Peyton Manning and Novak Djokovic - and models like Gisele Bundchen. Also, Bloomberg reports Charter Communications (CHTR) is preparing a bid to acquire Time Warner Cable (TWC), the country's second-largest cable company. The price tag? Less than $135 a share. Time Warner Cable closed Tuesday at just over $133 a share. Charter, the country's fourth-largest cable company, could generate as much as $1 billion in annual cost savings as a result of the deal, according to an analyst.
Now here's a look at four hot stocks The Yahoo Finance team will be watching for you today.
First up, FedEx (FDX). The company reported earnings this morning of $1.57 per share, missing on estimates of $1.64. It also reported revenues of $11.4 billion, just shy of estimates for $11.43 billion, but up from the $11.11 billion it posted a year ago. For the year, FedEx is up over 47%.
Next, General Mills (GIS). The company reported profits of $0.83 a share missing estimates of $0.88. It also missed on revenue coming in at $4.88 billion when estimates were for $4.94 billion. The American food giant has seen shares rise 20% for the year. The rise in stock price can be attributed to its focus on international expansion where its products like Cheerios, Haagan-Dazs and Betty Crocker can be found in more than 100 countries.
Next, homebuilder Lennar (LEN) which reported profits of $0.73 a share beating estimates of $0.62, and up from last year's $0.56. Revenue rose 42% to $1.92 billion up from $1.35 billion from a year ago and beating estimates of $1.88 billion. Deliveries of homes jumped 27% while new orders rose 13% in the period. For the year, Lennar has seen shares drop close to 12%.
Finally, Oracle (ORCL) which is expected to report earnings later today. The company is expected to post earnings of $0.67 a share, up from last year's $0.64. Revenue is also expected to improve with analysts estimates at $9.19 billion, up from last year's $9.11 billion. According to one Wall Street analyst, Oracle could be reorganizing its U.S. sales force, as well as be close to a $150 million agreement with rival Hewlett-Packard (HPQ). Oracle stock is down over 3% since the beginning of the year.
Will they or won't they? That is the question we're all awaiting to hear from the Fed this afternoon regarding tapering its bond-buying program. We've heard what all the experts think, but we want to hear from you - Do you think the Fed will announce any plans to taper today? Vote below and leave a comment telling us when you think the Fed will begin to taper.
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