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Greece Offers Bondholders a Buyback, US Manufacturing Slumps

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

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MINYANVILLE ORIGINAL Over the weekend, Chinese manufacturing increased slightly back into positive territory, signaling growth on a monthly basis. The manufacturing index rose to 50.5 from last month's 49.5, slightly ahead of the estimates of 50.4. However, Chinese stocks reacted negatively to the release, and the major Chinese indexes fell 1% or more across the board.

US manufacturing data, however, was not as rosy. The ISM's manufacturing index fell to to 49.5 from 51.7, well below consensus estimates of 51.4. The large decline was reflected by a sharp falloff in new orders and inventories. The ISM did not note any major negative influence from Hurricane Sandy.

The Eurogroup of finance ministers met in Brussels today to discuss the ongoing Greek aid package. This morning, Greece offered to buy back private bondholders' holdings of Greek debt for 34.1 cents on the euro, totaling a face value of 62 billion euros of debt. Greece's debt currently trades at prices of about 30 to 35 cents, depending upon the maturity. Greece is expecting about half of bondholders to voluntarily participate in the debt buyback.

Also in Europe news, Spain formerly made a request to the European bailout funds (EFSF/ESM) for aid for its ailing banks. The request should total 40 billion euros, which is the amount previously discussed and agreed upon by both parties over the past six months. Note that this is not the bailout request that would trigger the ECB's involvement via its new OMT program.

After the close, Oracle (NASDAQ:ORCL) announced that it would be accelerating the next three quarters' dividend payments to avert the impending tax increases on dividends and capital gains that will likely be an end result of the budget talks that are going on in Washington.

Tomorrow's Financial Outlook

It will be a light day for economic data in the US. The ISM will release manufacturing data from New York, but this release should not be market moving in any way.

Globally, the Reserve Bank of Australia will make its monthly rate decision with the consensus expecting a easing of the base rate to 3.00% from 3.25%. In last month's minutes, the central bank's committee noted that additional easing was necessary, telegraphing this move. The Royal Bank of Canada will also make its monthly decision, though no change is expected.

In earnings, AutoZone (NYSE:AZO), Pandora (NASDAQ:P), Toll Brothers (NYSE:TOL), and Big Lots (NYSE:BIG) will report.

Twitter: @Minyanville

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The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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