Late-Night Headlines
Bloomberg:
- Alcoa Inc.(AA), the largest U.S. aluminum producer, reported fourth-quarter profit that trailed analysts’ estimates as the company faced higher energy and currency costs. Profit excluding certain items was 1 cent a share, trailing analysts’ average estimate for earnings of 6 cents. The net loss of $277 million, or 28 cents a share, narrowed from a loss of $1.19 billion, or $1.49, a year earlier, Alcoa said today in a statement. Sales fell 4.5 percent to $5.43 billion. Profit was hurt by higher energy prices and the dollar’s decline against the euro and the Brazilian real, Deutsche Bank AG analyst Jorge Beristain said.
- Hedge fund and other investors have made record bets on higher crude and fuel prices as freezing weather boosts consumption. The total net number of long positions held by so-called large speculators in NY crude, heating oil and gasoline futures is at an all-time high. "The CFTC data is showing large speculators are behind the current oil rally from $70 a barrel," said Olivier Jakob, managing director of Petromatrix GmbH in Zug, Switzerland. "Large speculators are now holding all time record net length in WTI, record net length in gasoline, record net length in heating oil."
- The U.S. Securities and Exchange Commission should investigate whether employees of the Federal Reserve Bank of New York violated laws on corporate disclosure when they asked American International Group Inc. to withhold information from public filings, a Republican lawmaker said. “I urge you to investigate the apparent violations of the securities laws regarding AIG disclosures,” including the actions of New York Fed staff, U.S. Senator Jim Bunning of Kentucky wrote in a letter today to SEC Chairman Mary Schapiro.
- China’s central bank guided its benchmark one-year bill yield higher for the first time in 20 weeks to curb lending, causing banking stocks to decline. “The central bank may be seeking a stronger tightening policy than expected,” said Jiang Chao, a fixed-income analyst in Shanghai at Guotai Junan Securities Co., the nation’s largest brokerage by revenue. “We expect the central bank will raise the reserve-requirement ratio one time in March.”
Wall Street Journal:
- Democrats Weigh New Tax on Investment Income. Health-Bill Negotiators Consider Extending Medicare Levy as They Face Pressure to East Proposed Hit on Generous Insurance Plans. House and Senate negotiators are considering applying for the first time the Medicare payroll tax to investment income as part of a compromise to pay for a health overhaul. The extra Medicare tax would apply only to the wealthy and could allow congressional Democrats to reduce the sting of a tax on high-cost insurance plans, said Democratic aides and others briefed on the negotiations. Labor leaders complained directly to President Barack Obama on Monday about the tax on high-value plans, which would hit some union members who have negotiated generous health benefits. At least one union is threatening to oppose the underlying legislation if the tax remains, and the president of the AFL-CIO suggested in a speech that Democrats who took unions for granted risked losing support in congressional elections later this year. "Politicians who think that working people have it too good ... are inviting a repeat of 1994," when Republicans took control of the House after decades in the minority, said AFL-CIO chief Richard Trumka.
- New Breast Screening Limits Face Reversal.
NY Times:
- In Leno Fiasco, a Window to the Midlife Crisis of NBC.
PCMag.com:
- How 3D Video Will Impact Storage.
Crain's Detroit Business:
- Michigan state revenue is expected to grow marginally in the next fiscal year, but not enough to overtake the loss of federal stimulus money and spending pressures that could contribute to a budget shortfall of more than $1.7 billion, based on state economists’ projections Monday.
Business Insider:
- The Case Against Tim Geithner by Dylan Ratigan.
- Chart of the Day: How Fox Conquered Cable News.
Politico:
- Sen. Russ Feingold (D-Wisc.) has told a Milwaukee-area TV station he's not sure whether to heed GOP calls for Harry Reid's resignation -- or stick with the nearly unanimous chorus of Democrats who say he should stay. "I'm thinking about that and we're going to be getting together as a caucus next week and the topic will come up. I have not decided whether these comments merit that or not. They're very unfortunate. They should have never been said. So, I need to think about it," Feingold said.
- A new book is out with a highly critical but unsourced portrait of Hillary Clinton. This familiar occurrence — it’s happened too many times to count over the years — has usually been greeted with an equally familiar response: A fast and furious counterattack from the Clinton inner circle. What’s notable about the highly publicized release of “Game Change,” however, is the virtual silence from the Clinton camp. The lack of public outrage seems to mark the sputtering end of what was once known as the Clinton political machine and underlines a fact that onetime Clinton loyalists acknowledge: The book’s primary sources about the former candidate and current secretary of state are her own former staffers and intimates. As a result, there is no campaign of veteran Clintonites spinning the press corps and trying to pre-emptively discredit the book’s scathing depiction of Hillary Clinton as a rudderless candidate and a cheerleader for vicious tactics against eventual winner Barack Obama. There is no team of Clinton proxies going on cable television to denounce authors Mark Halperin and John Heilemann as scurrilous and unworthy of belief.
LA Times:
24/7 Wall St.:
- The 24/7 Wall Street Corporate Power Rankings of the 32 most important companies in America.
InformationWeek SMB:
Market News International:
- The US dollar is unlikely to fall further this year, citing Peng Junming, an official at China Investment Corp., the nation's sovereign wealth fund. The outlook for the yen isn't promising, said Peng, who works in the asset allocation and strategic research department of CIC.
Reuters:
- McDonald's Corp (MCD) plans to offer free Wi-Fi service at most of its U.S. restaurants, starting on Jan. 15, a spokeswoman said on Monday.
- The top executives of two of the largest U.S. auto dealership groups said on Monday that Ford Motor Co's (F) turnaround was gaining momentum after three full years under former Boeing executive Alan Mulally. "It shows you the difference that one individual can make," AutoNation Inc (AN) Chief Executive Mike Jackson told Reuters on Monday. Jackson's comments came just hours after a panel of about 50 U.S. and Canadian automotive journalists named the Ford Fusion Hybrid the car of the year and the Ford Transit Connect the truck of the year at the Detroit auto show.
- Former AIG (AIG) chief Maurice "Hank" Greenberg is campaigning for the U.S. government to cut its stake in the insurer to less than 20 percent, saying this would attract new capital to AIG and help taxpayers fully recoup bailout money it received, a source said on Monday.
- Storage networking company Emulex Corp (ELX) expects second-quarter results to come in higher than its prior estimate and top analysts' expectations, sending its shares up 9 percent. The company said the results were driven by strong demand for its products, that are used to connect computers to remote storage equipment and servers to fiber channel networks.
Financial Times:
- The cost of assembling personal computers will rise this year for the first time in six years because of shortages in some key components, industry analysts have forecast. The cost of semiconductor components in computers has fallen by an annual average of 7.8 per cent since 2000, but they are set to rise this year by 2.8 per cent, according to data from Gartner research consultancy. This is almost entirely attributable to a 23 per cent increase in the price of D-Ram memory chips. Those chips, needed in every computer, make up about 10 per cent of a PC’s overall cost.
- The Obama administration is planning to impose a new levy on top US banks, to pay for the financial bail-out as part of the budget to be presented in February. The surcharge will aim to recoup the full cost of the Tarp bail-out fund, which the administration estimates at $120bn, although officials expect the ultimate cost will be less than $100bn.
Evening Recommendations
Citigroup:
- Reiterated Buy on (OMX), Added to Top Picks Live list, target $17.
- Reiterated Buy on (SPLS), (WSM) and (BBBY) .
- Reiterated Buy on (PVH), Added to Top Picks Live list, raised target to $55.
- Reiterated Buy on (FL), (WWW), (VFC) and (NKE).
- Reiterated Buy on (HUM), target $56.
- Reiterated Buy on (VZ), target $34.
- Upgraded (AMAG) to Buy, target $60.
- Reiterated Buy on (ENDP), target $27.
Night Trading
Asian indices are -.25% to +.50% on avg.
S&P 500 futures -.23%.
NASDAQ 100 futures -.19%.
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Company/Estimate
- (SVU)/.40
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Economic Releases
8:30 am EST
- The Trade Deficit for November is estimated to widen to -$34.6B versus -$32.9B in October.
Upcoming Splits
- None of not
Other Potential Market Movers
- The Fed's Fisher speaking, Fed's Plosser speaking, NFIB Small Business Optimism Index, Detroit Auto Show, ABC consumer confidence reading, weekly retail sales reports, IBD/TIPP Economic Optimism Index, Treasury's 3-Year Note auction, API weekly energy inventory report, Cowen Consumer Conference, Needham Growth Conference, Kaufman Tech Trends Conference, Goldman Energy Conference, JPMorgan Healthcare Conference and the (PCS) analyst day could also impact trading today.
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