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Greece Bank Stocks Implode on Bank Recapitalization Plan


Today's financial recap and tomorrow's financial outlook.

MINYANVILLE ORIGINAL US bond markets and banks were closed today for the Veterans' Day holiday, so trading volume was much lighter than usual. Average trading volume on the NYSE was more than 50% below the 10-day average.

It was a busy day on the news front. Greece successfully passed its 2013 budget in a parliamentary vote. The vote passed with a much wider margin than the austerity vote last week, temporarily alleviating any concerns that the Greek government was imploding. However, Greece must roll over 5 billion euros this week to successfully redeem the 3-month bills that are due on Friday. Also in Greece, the Greek government announced the final plan to recapitalize Greek banks, which bore the brunt of the debt writedown earlier this year, to raise common equity rates. Greek banks were under considerable pressure today; National Bank of Greece's (NYSE:NBG) stock fell by more than 10%.

Mortgage REIT Annaly Capital (NYSE:NLY) announced its intention to purchase CMBS financing and servicing company Crexus for $839 million. However, the stock fell by about 0.75%, which was its second fall; the first fall occurred after the firm announced a $1.5 billion common share buyback last month.

Also in M&A action, investment bank Jefferies (NYSE:JEF) was acquired by private equity firm Leucadia in a $2.8 billion merger, roughly 24% over the closing price from Friday. Leucadia will acquire the remaining 71.4% of Jefferies to complete the deal.

Tomorrow's Financial Outlook

This week is pretty quiet on the economic front in the US. Notable tomorrow is the monthly Treasury budget, which is expected to widen to -$115.0 billion from -$98.5 billion last month. However, with the US trade balance narrowing last week, it is possible that the budget gap may not widen as much as expected.

Globally, Japan will release industrial production data and Greece will sell bills in the morning. If Greece cannot raise 5 billion euros from the bill sale, there may be advanced discussions of a Greek default.

In earnings, Dick's Sporting Goods (NYSE:DKS), Home Depot (NYSE:HD), and Cisco (NASDAQ:CSCO) will report.

Twitter: @Minyanville

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No positions in stocks mentioned.

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