Evening Headlines
Bloomberg:
- Hedge Funds More Optimistic About U.S. Stocks, Survey Shows. Hedge funds have become more optimistic about U.S. stocks, with the percentage of managers saying they’re upbeat rising to the highest level in at least seven months, according to TrimTabs Investment Research and BarclayHedge Ltd. About 46 percent of the 92 hedge-fund managers surveyed in the past week were bullish on the Standard & Poor’s 500 Index, compared with 31 percent in November, the firms said today in a report. The share of managers who said they were pessimistic about U.S. stocks fell to 19 percent from 39 percent, and both readings were the most extreme for the survey that began in May. “An inflationary growth consensus has emerged heading into 2011,” said Vincent Deluard, global equity strategist in New York for Sausalito, California-based TrimTabs. “Managers are betting aggressively on the economic recovery.” The funds, with worldwide assets of about $1.8 trillion, gained an average of 5 percent this year through November, according to Bloomberg’s aggregate index, compared with a 7.9 percent rally in the S&P 500, including dividends. A majority of managers said precious metals were the most “overbought” asset, meaning they could be poised for a decline, according to the report.
- U.S. Loans Make Comeback as New Issuance Doubles. Leveraged-loan issuance in the U.S. more than doubled this year, as private-equity firms sought funds for buyouts and borrowers refinanced debt amid a rebound from the worst financial crisis since the Great Depression.
- Chavez Says He's Ready for U.S. to Expel Venezuela Ambassador, Break Ties. President Hugo Chavez said he’s ready for the U.S. to expel his ambassador and break off diplomatic ties in retaliation for Venezuela’s five-month refusal to welcome the Obama administration’s choice to be its next envoy to Caracas. “If the U.S. government is going to expel our ambassador there, then do it. If the U.S. government is going to break off diplomatic relations -- do it,” Chavez said in comments carried on state television yesterday. “It’s not my fault. It’s theirs for naming an ambassador who immediately goes to the press to rant against the country where he is going as ambassador.” State Department spokesman Philip J. Crowley said Dec. 20 “there will be consequences” to Venezuela’s decision to protest President Barack Obama’s nomination of diplomat Larry Palmer as the next American ambassador to Caracas.
- Passenger Outrage Rises as Winter Storm Snarls U.S. Air Travel. Anger mounted over passengers stranded on airport tarmacs and in terminals as flight delays threatened to stretch into the weekend following the worst December snowstorm to hit New York City in six decades.
- China Squeezes Foreigners for Share of Global Riches. Foreign companies have been teaming up with Chinese ones for years to gain access to the giant Chinese market. Now some of the world's biggest companies are taking a risky but potentially rewarding second step—folding pieces of their world-wide operations into partnerships with Chinese companies to do business around the globe. General Electric Co. is finalizing plans for a 50-50 joint venture with a Chinese military-jet maker to produce avionics, the electronic brains of aircraft. The deal with Aviation Industry Corp. of China would give GE access to a Chinese government project aimed at challenging Boeing Co. and Airbus in the civilian-aircraft market.
- Death Panels Revisited. At a stroke, Medicare chief Donald Berwick has revived the "death panel" debate from two summers ago. Allow us to referee, because this topic has been badly distorted by the political process—and in a rational world, it wouldn't be a political question at all. On Sunday, Robert Pear reported in the New York Times that Medicare will now pay for voluntary end-of-life counseling as part of seniors' annual physicals. A similar provision was originally included in ObamaCare, but Democrats stripped it out amid the death panel furor. Now Medicare will enact the same policy through regulation. We hadn't heard about this development until Mr. Pear's story, but evidently Medicare tried to prevent the change from becoming public knowledge.
- Citigroup(C) to Exceed New Rules, Shrink Bad Assets: CEO. Citigroup is on track to exceed expected regulatory requirements and shrink its worst assets to less than 20 percent of its balance sheet, Chief Executive Vikram Pandit told employees in an end-of-year internal memo on Monday.
- Europe's Economic Pain Re-Opens Debate on Currency. A noisy band of dissenters, many of them economists from outside the Continent, issued a warning: the euro was doomed to struggle, they proclaimed, maybe not immediately but certainly before long. Different countries would pursue such different economic policies, they argued, that it would ultimately place an unbearable strain on the currency and some of its members.
- Glenview's Larry Robbins Sets The World's Most Bullish Target: DOW 20,000. He predicts P/E multiples will expand by 45% by the end of 2013. This means the Dow Jones Industrial Average (DJIA) will surpass 20000 level in three years, assuming earnings will grow by a modest 5% per year.
- Groupon Prepares To Raise As Much As $950 Million. Groupon just filed a certificate to authorize an astounding $950 million fundraise at a $6.4 billion valuation, VC Experts reports.
- Defense Work Is The Big Revenue Generator For This Chipmaker. In his first remarks after his chip company's earnings report in mid-November, Microsemi (MSCC) CEO Jim Peterson expressed his appreciation to the country's troops.
- 2011 Will Be The Year of M&A. Companies sitting on piles of cash will look to leap-frog competitors with strategic acquisitions.
- Bull vs. Bear: How High Will Oil Go in 2011? The already fragile economic recovery would be vulnerable to rising oil prices. Where will the price of a barrel go in 2011? Analysts argue both sides.
- $50 Billion So You Can Watch YouTube. Wireless carriers are spending $50 billion a year to improve their networks to deal with rising data demands from smartphones and tablets. Here's a look at what they're spending that on.
- Top Chinese Blogger's Magazine Shut Down. One of China's most popular bloggers announced Tuesday he was forced to shut down his freewheeling print magazine after just one issue because government officials appear to have blocked the printing of any new editions. Han Han, a novelist and race car driver, has amassed a huge readership with his sly online critiques of China's social problems and hoped to tap that audience with an arts and literature magazine, Party. Han wrote in a blog post that it appeared that the government was behind the closure, but he's unsure which department and why it objected to the magazine.
- "Big Push" Could Be Over for California Solar. After record solar-plant approval in 2010, the California Energy Commission believes its "big push" in solar-thermal projects is over. Because so many developers were rushing to meet a Dec. 31 deadline for federal incentives, CEC staff are expecting a slower year in 2011. In hindsight, the rush was overdone, given that Congress has now extended that deadline for federal funding by another year.
- China Says Undecided on 2011 Rare Earth Export Quotas. China has not decided full-year rare earth export quotas for 2011, the Ministry of Commerce said in a short statement, in an apparent move to soothe market concerns.
- Some luxury cosmetics may raise retail prices in China by as much as 20% from Jan. 1, citing market rumors.
- None of note
- Asian equity indices are unch. to +.75% on average.
- Asia Ex-Japan Investment Grade CDS Index 104.0 -1.0 basis point.
- Asia Pacific Sovereign CDS Index 102.5 -1.0 basis point.
- S&P 500 futures +.06%
- NASDAQ 100 futures +.15%.
Earnings of Note
Company/Estimate
- None of note
- None of note
- None of note
- The $29 Billion 7-Year Treasury Notes Auction could also impact trading today.
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