Stocks: 4 things to know before the open

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LONDON (CNNMoney)

Here are the four things you need to know before the opening bell rings in New York:

1. Banking bonanza: Investors are expressing their dismay after the European Central Bank revealed that 25 financial firms failed an extensive health check. Shares in about a dozen European banks are tanking Monday morning, with Ireland's Permanent TSB bank tumbling by 24% and Italy's Banca Carige falling 18%.

However, shares in the Greek bank Eurobank are rising by about 10%, even though it also failed the tests -- investors were expecting even more dire results for this particular firm.

"[The ECB] gave the European banking system a reasonably clean bill of health," said Kit Juckes, a market strategist at Societe Generale. "The ECB [is] observing [that] only a smallish number of banks have to raise a modest amount of capital. It's either a reassuring or a naive picture of the banking system, depending on how you want to read it."

Most major European markets were declining by about 0.5% in early trading.

Part of the decline was related to a new report out of Germany showing economic conditions in the nation continued to deteriorate in October.

Related: Fear & Greed Index

2. Market moves: U.S. stock futures were barely budging from their Friday closing levels.

At the close of trading last week, the Dow Jones industrial average jumped up by 0.8%, the Nasdaq rose by 0.7% and the S&P 500 added 0.7%.

Gold prices were declining slightly and oil prices were up a touch.

Related: Fed set to finally get out of the market

3. Earnings: There will be plenty of quarterly results to sort through Monday.

Allergan (AGN), Merck (MRK) and Citizens Financial Group (CFG) will be reporting earnings before the open.

After the close, we'll hear from Twitter (TWTR, Tech30), Buffalo Wild Wings (BWLD), Crocs (CROX) and Denny's (DENN).

4. Economics: At 10 a.m. ET, the government will release data on September pending home sales.

First Published: October 27, 2014: 6:03 AM ET

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Paying thousands before health insurance even kicks in

NEW YORK (CNNMoney)

That's because more employers are offering consumer-directed health plans, which usually come with high deductibles. In 2015, 81% of large employers will offer at least one of these plans, up from 63% five years earlier.

Consumer-directed plans typically carry deductibles of $1,500 for individual coverage, more than three times higher than traditional policies, according to the National Business Group on Health.

And these plans will be the only choice for a growing number of workers. The share of larger employers offering only consumer-directed policies is jumping to 32% for 2015, up from 22% this year.

Deductibles are soaring for traditional insurance policies, too.

Deductibles for individual coverage at all firms have jumped to $1,217, on average, up 47% over the past five years, according to the 2014 Kaiser Family Foundation/Health Research & Educational Trust report. In high-deductible plans, they have hit $2,215.

Employers say they want more accountability, and higher deductibles force workers to take a larger role in their own care while shifting more of the costs to them.

Share your story: Are your health care deductibles going up?

Participants in these plans often have to pay more out of pocket -- not only for deductibles, but for doctors' visits, labs and procedures too.

On the plus side, they benefit from lower monthly premiums. Also, many employers contribute to savings accounts to help workers cover these costs. Annual checkups and preventative exams, such as colorectal screenings and mammograms, are free, as mandated by Obamacare.

Wells Fargo (WFC) switched to only consumer-directed plans in 2012. This year, the bank's employees can choose between two high-deductible policies -- one at $2,000 and the other at $3,000.

Doing so helped Wells Fargo keep plans affordable and allows it to offer a broad network of doctors and hospitals, said spokeswoman Richele Messick. "It gives them greater visibility into the cost of care and how they spend their health care dollars," she said.

Related: 5 ways you pay more for health insurance

Wells Fargo contributes up to $1,000 to workers' accounts, depending on their salary and the plan they choose. Employees can also earn up to $800 by participating in corporate wellness programs, including health screenings and quizzes.

For many, however, high-deductible health plans are a burden. They are nearly twice as likely to skip going to the doctor when sick or injured as those with traditional plans, according to a recent survey by the Associated Press-NORC Center for Public Affairs Research. Also, they are more likely to have difficulty paying other bills and to have decreased the amount they save.

Medical care has become more costly for the Vance family under a high-deductible plan.

Melissa Vance has had to go back to work. Her husband's employer just jacked up the family's deductible from $0 to $5,000. The Columbia, S.C., couple has four children with chronic conditions that require frequent lab work and costly medications.

Last year, Vance estimated she paid $2,000 for the family's health care. This year, the tab will likely surpass $10,000, which she said will take them years to pay off.

"I have a stack of bills I haven't even opened," said Vance, who now works part-time as an administrative assistant. "I get nauseous every time I look at them."

First Published: October 27, 2014: 6:26 AM ET

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Ferrari's invitation-only supercar

LONDON (CNNMoney)

The Ferrari Sergio, produced in partnership with Italian design firm Pininfarina, is a car that's so limited and unique you have to be invited by Ferrari to buy it. The automaker is creating only six Sergios and they're estimated to cost millions each.

Ferrari told CNNMoney it pre-sold all six vehicles to deep-pocketed die-hard Ferrari fans in the U.S., Europe and Asia. If you haven't received a call from Ferrari yet, you're out of luck.

Ferrari, which is owned by Fiat (FIADF), has built a world-class name for itself based on its reputation for exclusivity. It capped production at 7,000 cars per year to ensure demand consistently outstrips supply, making its cars all the more desirable.

However, after a recent management shake-up, the company said it will ramp up production by 5% this year to ensure its waiting list doesn't get out of control.

While vehicle output may be increasing, limited production cars like the Sergio help Ferrari keep its exclusive edge.

Related: Ferrari recalls 3,000 cars for entrapment danger

The automaker also offers a "one-off" program where rich car collectors can buy a completely original car that they help design themselves. Each car costs millions.

"It's as far removed from mass production as you can get," said Ferrari spokesperson Jason Harris.

Ferrari has only created about a dozen of these bespoke cars since the "one-off" program launched a few years ago, but it said the program is gaining traction, which could be helping the company's bottom line.

Ferrari reported record revenue in the first six months of this year, up nearly 15% compared to the same period in the previous year, even as it sold fewer cars. Profits for the period also rose by 10%.

Musician Eric Clapton helped design this original Ferrari. It's one of a kind and estimated to be worth millions.

Clients who signed on to buy the new Sergios have made their commitment before the road-ready car design has even been finalized. Ferrari engineers still haven't figured out how to craft a vehicle that is based on a whimsical concept car that was designed without a windshield and side mirrors.

The concept car was on show in London this month. Deliveries of the six Sergios are expected in 2015.

Related: Steve McQueen Ferrari sells for $10.2 million

Related: Lamborghini Huracan: So good, why spend more?

First Published: October 27, 2014: 4:57 AM ET

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Fed set to finally get out of the market

NEW YORK (CNNMoney)

The Federal Reserve is expected to close a chapter in history this week and announce the conclusion of its massive stimulus program. Known as quantitative easing, the program is widely credited with driving investors back into stocks in the aftermath of the financial crisis.

"I think to some extent quantitative easing has provided an assurance to investors that (has) kept them optimistic," said Bruce McCain, Chief Investment Strategist of Key Private Bank in Cleveland, Ohio. "Now we're going to have to see whether investors can ride without training wheels."

While there has been some chatter on Wall Street that the Fed would delay the expiration of stimulus due to concerns about weak growth and dangerously low inflation abroad, most analysts envision the central bank halting its bond purchases next month as previously signaled by Fed Chairwoman Janet Yellen.

"She hasn't wavered, everything she's said she's going to do, she's done it," stated JJ Kinahan, Chief Strategist at TD Ameritrade, of Yellen. "Her job is not to make the stock market go up. It's to keep the economy stable, and in her view the economy is strong enough."

Fed Chief Janet Yellen is preparing to get off the road of economic stimulus.

Then there's the question of interest rates. About a month ago, investors were trying desperately to guess when the Fed would raise it's key interest rate, which has been near zero since the recession.

But now, those worries about feeble economic and inflationary growth around the world have lead to conviction on Wall Street that rates will stay low for the foreseeable future. Most investors believe the first rate hike won't occur before June 2015, and a good chorus are betting it doesn't happen until the end of next year or later.

Related: Rich-poor gap 'concerns me': Yellen

Of course, the Fed isn't the only game in town this week.

Earnings continue to be on the forefront of investors' minds as they try to gauge how corporate America is faring.

Coming into earnings season, there was anxiety in some corners of the market that the slowdown in Europe could reverberate to U.S. multinational companies that derive a good chunk of their profits from overseas.

Related: Just how sick are Europe's top banks?

So far, however, those fears have yet to materialize.

Caterpillar (CAT)and 3M Company (MMM), two Dow components considered economic bellwethers for their ties to the global construction and industrial sectors, reported stellar results last week and raised their outlook for the rest of the year.

As for the firms that haven't done as well, such as McDonalds (MCD), Coca-Cola (KO), and IBM, (IBM, Tech30) Kinahan believes their woes are specific to their individual situations rather than the economy as a whole.

Related: Investors pour out of Coke

And he noted that CEOs have sounded confident on their quarterly conference calls. "They see North America, particularly the U.S., as being able to hang in there and hopefully help the rest of the world start to grow," he said.

Oh, and what about Ebola? Most market observers say not to freak out, even though the first case of the virus has been confirmed in New York and the disease did spook the markets a few weeks back.

Rather, McCain feels that investors' initial jitters had less to do with Ebola itself and more about overall unease in a market that hadn't taken a breather in quite some time.

"There's that tone of cautiousness that makes us more vulnerable to Ebola or ISIS scares," he asserted. "But they don't have a lot to do with the economic situation."

First Published: October 26, 2014: 9:49 AM ET

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Winners and losers in Europe's bank stress test

Some banks are still feeling the effects of the last financial crisis.

LONDON (CNNMoney)

All told, 25 banks failed the test, although 12 have already taken steps to shore up their finances.

Italy suffered the worst count: 9 of the country's 21 banks examined failed the test. Italy is Europe's fourth-largest economy.

Greece and Cyprus, southern European countries that required international bailouts, were next. In each country, three of four banks examined did not pass muster.

Five of the Italian banks and one Greek bank have since covered their shortfalls.

Only one of the 25 major banks in Germany, Europe's strongest economy, failed the test, but it has since raised sufficient capital.

Officials at the European Central Bank and European Banking Authority had been poring over bank finances for a year, and testing whether the banks had the strength to withstand a nasty shock, such as a spike in loan defaults or unemployment. More than 6,000 analysts reviewed and re-evaluated nearly all -- 81% -- of the banks' assets.

The aim was to weed out the weaklings that are hobbling Europe, or that could spark a new financial crisis in the event of another long recession.

Now the sickly banks will be forced to submit remedies, including possibly raising more money from investors.

The total shortfall was €24.62 billion, or about $31.2 billion.

Related: 'Zombie' firms threaten China's economy

The health of the financial sector is of vital importance for the eurozone, since growth has evaporated again and the specter of deflation looms.

Most European companies rely on bank finance, unlike their U.S. peers who are more likely to issue bonds. Banks with shaky foundations are less likely to take risks with their lending, therefore potentially stifling investment and growth.

Major players such as Deutsche Bank (DB) and Santander (SAN) were among the test subjects.

The results of the health check come just weeks before the European Central Bank assumes responsibility for supervising the eurozone's biggest lenders, a move intended to reduce the risk of future bank failures.

First Published: October 26, 2014: 7:26 AM ET

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Taxes and spending: What happens if Republicans win the Senate

The Senate race in Iowa, in which Republican Joni Ernst is running against Democrat Bruce Braley, could help the GOP retake the Senate majority in the midterm elections.

NEW YORK (CNNMoney)

That would put Republicans in the lead on key budget issues that have been the source of hair-raising drama in the past few years: taxes, spending and the debt ceiling.

What then?

CNNMoney asked seasoned political and policy analysts to give their take.

The most likely scenario, they say, is that Republicans will end up acting more centrist-right than Tea Party-right.

First, they know the next presidential election is right around the corner.

Remember last year's government shutdown -- forced by far right lawmakers and disparaged by Republican leaders?

"The GOP has to show they'll govern and get things done ahead of 2016 to better compete with Hillary Clinton," said Greg Valliere, chief political strategist of the Potomac Research Group.

Second, any Republican majority in the Senate could be slim, falling short of the 60 votes needed to prevent filibusters on key bills.

"If they put forth really radical legislation, the Democrats will have a blocking minority," said Corey Boles, senior U.S. analyst for Eurasia Group.

Related: CNN coverage of the 2014 midterm elections

Taxes: Republicans have been calling for tax reform every chance they get, as have Democrats. But that doesn't mean much.

"The odds of successful tax reform next year are incredibly low," Chris Krueger, a policy analyst at Guggenheim Partners, wrote in a research note.

Eurasia Group analysts agree, but think if there's any chance for it, it's slightly better under a Republican-controlled Congress.

No one believes both individual and corporate tax reform would get done in the next year or two.

But if there's any at all, odds favor corporate tax reform. This despite the fact that tax experts think it's ill-advised to do so on its own, since it won't account for the large partnerships and other business entities that file under the individual income tax code.

Politically it might be dicey too, said William Hoagland, senior vice president of the Bipartisan Policy Center and formerly a top Republican staffer on the Senate Budget Committee for years. That's because Republicans would like to lower tax rates for U.S. corporations, which voters may see as giving a break to big business but not average Americans.

Spending: Come mid-December, the current crop of lawmakers will need to reauthorize spending to avoid a government shutdown. Everyone expects them to do so.

The question is for how long. If they do it through the end of fiscal year 2015, which ends September 30, that "would signal a continued freeze on the budget wars," Krueger said.

But if it's only for a few months, and the Republicans come back as the Senate majority in January, that may "signify the return of governing-by-crisis," he said.

In either case, Congress will also have to pass a budget for fiscal year 2016, which starts next October.

So lawmakers will have to decide what to do about the statutory spending caps imposed by the 2011 budget deal.

"The caps are very, very tight," Hoagland said.

But there likely will be bipartisan pressure to lift them as demands grow to address the wars in the Middle East and to contain Ebola, among other crises, he noted.

Debt ceiling: The 2011 fight over the debt ceiling -- which sets a cap on the nation's borrowing limit -- brought the country to the edge of default, shook markets and earned the United States its first credit downgrade from Standard & Poor's.

It also yielded the deal that created the spending caps and the broad budget cuts known as the sequester.

Since then, lawmakers have gone to the mat several times as subsequent short-term compromises to raise or suspend the debt ceiling faced expiration.

The latest such compromise suspended the borrowing limit until March 15, 2015. But because of "extraordinary" measures that Treasury can take to keep the country's borrowing below the ceiling, lawmakers likely will have until June or July to settle the issue.

In recent years, some conservative Republicans demanded spending cuts that match or exceed any increase to the borrowing limit.

But as the majority party, Republicans may not want to take it so far, especially since it will be nearly impossible to come up with enough palatable cuts.

Yes, they may still demand something from President Obama in exchange for raising the limit, but it's likely to be much less than a dollar-for-dollar offset, Hoagland said.

And Obama may be pressured to go along if it is presented to him in a so-called budget reconciliation bill, which only requires 51 votes to pass.

First Published: October 26, 2014: 10:02 AM ET

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NYC tabloids keep a straight face on Ebola

NEW YORK (CNNMoney)

In the hours before Spencer was diagnosed he had gone bowling, rode the A train and stopped by a meatball shop. But there was not a single pun to be found on New York City newsstands Friday morning. No hysteria and no sensationalism.

Instead newspapers like AM New York went with just the facts. The free daily's front page simply said "Ebola in NYC" and showed a picture of Spencer in a hazmat suit while caring for victims in West Africa:

"We didn't want to be alarmists," said Pete Catapano, executive editor of AM New York. "Obviously it's a scary subject... We wanted to be very direct, very straight-forward."

Related: Syracuse University disinvites journalist over Ebola fears

The Daily News also took a tempered approach with its front page:

The New York Post (which is infamous for its outrageous covers) was a little more brash with its "Ebola Here!" headline, but did stick to just the facts:

"A subject like this... people make jokes about it. That's not our place to do that," Catapano said. "We just wanted to be very respectful, and let the story speak for itself."

Related: EU pledges 1 billion euros to fight Ebola

First Published: October 24, 2014: 5:39 PM ET

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The Ebola stocks: Effect of an outbreak

NEW YORK (CNNMoney)

Some people have considered canceling visits to big theme parks and have aired worries about whether airports and public areas are safe zones.

It's no wonder that investors are assessing Ebola's impact on the economy. Stocks of companies that make drugs that treat the virus have had a wild ride.

It's no small issue. Ebola has killed nearly 5,000 people, mostly in West Africa. The deadly virus has killed one person in the United States and on Friday, a doctor in New York City became the fourth person to have tested positive for Ebola in the country.

One trader, Dave Lutz of Jones Trading, has compiled a list of stocks that are either directly impacted or could be affected by the spread of Ebola.

Canadian biotech firm Tekmira Pharmaceuticals (TKMR)' stock surged in September after the FDA authorized the company's drug for patients with Ebola in the United States. Shares have since pulled back. The company has started limited production of its drug, TKM-Ebola, which will be available in early December.

BioCryst Pharmaceuticals (BCRX) is another small biotech company working on a drug that could be used to treat Ebola. Its stock has been on a roller coaster ride lately.

NewLink Genetics (NLNK) is working with the World Health Organization and other agencies on an Ebola vaccine. Its shares have surged 57% in the past month.

Companies that make protective equipment for healthcare workers or provide services to governments have also seen gains. Lakeland Industries (LAKE) said in September that it was boosting production of the protective suits in response to growing demand. It's stock has surged 76% in the last four weeks.

Alpha Pro Tech (APT) also makes protective equipment for healthcare workers. Its stock jumped 5% on Friday alone.

Some investors believe the airline industry is also vulnerable to the outbreak. Concerns about air travel rose this month after a Dallas nurse, who treated an Ebola patient, flew round trip between Dallas and Cleveland before being diagnosed with the virus.

Though airline stocks were hurt earlier in the month, they are now near all-time highs after reporting record setting profits.

Cruise ship operators have also been in focus after a healthcare worker who handled Ebola test samples was quarantined on a cruise ship earlier this month. Shares of both Carnival (CCL) and Royal Caribbean Cruises (RCL) have been under pressure recently.

Hotel chains could also be at risk if worries about Ebola cause people to curtail their vacation plans.

Hilton Worldwide (HLT) and Starwood Hotels (HOT) are on Lutz's list...

...as are amusement park operator Six Flags (SIX) and movie theater company Regal Entertainment (RGC).

First Published: October 24, 2014: 4:39 PM ET

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25 of Europe's largest banks fail stress test

Some banks are still feeling the effects of the last financial crisis.

LONDON (CNNMoney)

All told, 25 banks failed the test, although 12 have already taken steps to shore up their finances.

Officials at the European Central Bank and European Banking Authority had been poring over bank finances for a year, and testing whether the banks had the strength to withstand a nasty shock, such as a spike in loan defaults or unemployment.

The aim was to weed out the weaklings that are hobbling Europe, or that could spark a new financial crisis in the event of another long recession.

Now these sickly banks will be forced to submit remedies, including possibly raising more money from investors.

Related: 'Zombie' firms threaten China's economy

The health of the financial sector is of vital importance for the eurozone, since growth has evaporated again and the specter of deflation looms.

Most European companies rely on bank finance, unlike their U.S. peers who are more likely to issue bonds. Banks with shaky foundations are less likely to take risks with their lending, therefore potentially stifling investment and growth.

Major players such as Deutsche Bank (DB) and Santander (SAN) were among the test subjects.

The results of the health check come just weeks before the European Central Bank assumes responsibility for supervising the eurozone's biggest lenders, a move intended to reduce the risk of future bank failures.

First Published: October 26, 2014: 7:26 AM ET

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NYC tabloids keep a straight face on Ebola

NEW YORK (CNNMoney)

In the hours before Spencer was diagnosed he had gone bowling, rode the A train and stopped by a meatball shop. But there was not a single pun to be found on New York City newsstands Friday morning. No hysteria and no sensationalism.

Instead newspapers like AM New York went with just the facts. The free daily's front page simply said "Ebola in NYC" and showed a picture of Spencer in a hazmat suit while caring for victims in West Africa:

"We didn't want to be alarmists," said Pete Catapano, executive editor of AM New York. "Obviously it's a scary subject... We wanted to be very direct, very straight-forward."

Related: Syracuse University disinvites journalist over Ebola fears

The Daily News also took a tempered approach with its front page:

The New York Post (which is infamous for its outrageous covers) was a little more brash with its "Ebola Here!" headline, but did stick to just the facts:

"A subject like this... people make jokes about it. That's not our place to do that," Catapano said. "We just wanted to be very respectful, and let the story speak for itself."

Related: EU pledges 1 billion euros to fight Ebola

First Published: October 24, 2014: 5:39 PM ET

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