Evening Headlines
Bloomberg:
- Spain Wins 'Breathing Space' Buoyed by Portugal Debt Auction: Euro Credit. Spain’s first bond auction of 2011 may be buoyed by Portugal’s success selling debt yesterday and European efforts to bolster the region’s sovereign-bailout fund. Spain plans to sell as much as 3 billion euros ($3.9 billion) of five-year bonds today. Securities of similar maturity yielded 4.813 percent yesterday on the secondary market, up from 3.576 percent at the last auction on Nov. 4. Italy, the euro region’s second-most indebted nation, aims to issue as much as 6 billion euros of debt due in 2015 and 2026. The yield on Spain’s benchmark 10-year bond approached an eight-year high last week on concern Europe’s debt crisis was spreading and Portugal would follow Greece and Ireland in seeking European Union aid. Portugal’s 10-year borrowing costs fell at a sale of 1.25 billion euros of bonds yesterday, as European leaders moved to cobble together a package of new measures to stop the contagion. “I don’t anticipate any issues, especially since the Portugal auction went fairly well,” said Pavan Wadhwa, head of European interest-rate strategy at JPMorgan Chase & Co. in London. “The bigger question was Portugal and that came through.” The gap between Spanish and German borrowing costs fell 15 basis points yesterday to 241, the biggest drop since Dec. 2. Spain’s benchmark Ibex 35 stock index rose 5.4 percent, the most since May 10.
- EU's New Drive to Stamp Out Euro Region Debt 'Fire' May Fall Short Again. European leaders enter year two of their fight to contain the euro region’s debt woes still struggling to put out the fire. After committing almost $1 trillion, bailing out Greece and Ireland and asserting their determination to save the euro over the past 11 months, policy makers are returning to the drawing board after those previous efforts failed to pacify investors. Their latest plan, elements of which will be debated when finance ministers meet next week, may extend help to Portugal, increase the size of their aid reserves, lower interest rates on bailout loans, and authorize purchases of outstanding bonds. That still may not be enough, said Barton Biggs, managing partner of New York-based hedge fund Traxis Partners LP, who is “short” European securities, betting on their decline. He said officials should issue joint euro-region bonds, a measure opposed by Germany.
- Winter Storm Warning Posted for Hawaii as 49 of 50 States Report Some Snow. While the U.S. Northeast digs out from under a blizzard, peaks on the big island of Hawaii are expected to receive about a foot of snow, the National Weather Service reported. Snow was on the ground today in every U.S. state except Florida, covering 71 percent of the land to an average depth of 6.9 inches (18 centimeters), according to the National Oceanic and Atmospheric Administration.
- Sinovel Wind Shares Fall in Shanghai Debut on Outlook for Sales Growth. Sinovel Wind Group Co., China’s biggest maker of wind turbines, fell on its first day of trading in Shanghai on concern that rising competition will cut sales growth and the company’s stock is overvalued compared with rivals. The company’s shares dropped 7.1 percent from its offer price to 83.64 yuan as of 11:29 a.m. on the Shanghai Stock Exchange.
- Obama Calls for a More Civil Nation. President Barack Obama called on the nation to resist the temptation to assign blame for a shooting rampage here that may never fully be explained, but to emerge from the tragedy a more thoughtful, civil nation. Concluding a memorial service for the victims of Saturday's violence, Mr. Obama urged: "Rather than pointing fingers or assigning blame, let us use this occasion to expand our moral imaginations, to listen to each other more carefully, to sharpen our instincts for empathy."
- Suspect's Downward Spiral. Police Records Show Accused Killer Growing More Erratic Before College Suspension. Students and faculty at Pima Community College feared for their safety as Jared Lee Loughner's increasingly erratic behavior led to a series of encounters with campus police in the eight months before he was suspended from school last fall, police reports show. After he was accused of shooting 20 people last Saturday, school officials described his behavior while at Pima as odd and disruptive. But police reports show in chilling detail that the behavior frightened students and teachers. In February, a rattled student told school officials she feared he had a knife, after Mr. Loughner upset his Advanced Poetry Writing class by making comments such as, "why don't we just strap bombs to babies." In May, an instructor was so worried about physical violence on Mr. Loughner's part that she requested—and received—a police guard outside her class. By June, a dean told the police that students in Mr. Loughner's math class were "afraid of any repercussions that could exist from Loughner being unstable in his actions."
- Obama Chief of Staff Daley to Have No Contact With J.P. Morgan(JPM) on Official Matters. The White House’s new Chief of Staff William Daley will have no contact on official matters with his former employer J. P. Morgan Chase & Co., a White House official said Wednesday.
- Valero(VLO) to Invest in Ethanol Plant. Oil refiner Valero Energy Corp. plans to invest in one of the first commercial-scale plants to convert wood into ethanol, an unusual vote of confidence by a major oil company in the emerging technology used to produce so-called cellulosic biofuels. The investment may also be a sign that nascent cellulosic-ethanol technology is turning a corner after years of struggling to commercialize new technology, secure financing and drive down operating costs.
- Don't Bank on Hedge-Fund Gold Rush. One sign the financial world may be returning to normal: Hedge-fund start-ups in 2010 reached the highest level since the boom, with 715 new funds launched in the first nine months of the year, according to Hedge Fund Research.
- Auto Makers Seek Help on Fuel Rules. Auto makers are asking newly empowered House Republicans to help fight a proposal under consideration by the Obama administration to boost fuel-economy standards for new cars and trucks to as high as 62 miles per gallon by 2025.
- Prices Soar on Crop Woes. U.S. Cuts Global Grain Supply Outlook; Higher Prices Expected at Grocery Stores.
- A Price for Raising the Debt Ceiling by Arthur B. Laffer. Republicans should attach provisions repealing the worst aspects of ObamaCare and financial reform to spending that the president absolutely needs.
- Biotech Firms Fight Generics. Brand-name drug companies are fighting to weaken a provision of the health overhaul that was designed to open up generic competition in biotechnology medicines and save billions of dollars. The brand-name companies have drawn support from key lawmakers, raising alarms among generics makers who hoped to enter a huge market previously blocked to them.
- Price Rises for Fuel Threat Airline Net. Rising fuel prices threaten to play havoc with U.S. airline profits again this year.
- Australia's Brisbane City Avoids Worst Flood Fears. Flood water in Australia's third-biggest city peaked below feared catastrophic levels on Thursday but Brisbane and other devastated regions faced years of rebuilding and even the threat of fresh floods in the weeks ahead.
- S. Korea Central Bank Unexpectedly Lifts Interest Rate.
- Commercial Real Estate Rallies. Forgive me for being ever so slightly optimistic two days in a row, but we're getting some improving numbers on the commercial real estate market, and it's worth noting.
Zero Hedge:
IBD:
Forbes:
- UAW's Image Makes Organizing Mission A Tough Sell. United Auto Workers’ union President Bob King is in a tough spot. He wants to convince foreign carmakers with plants in the United States that “working with the UAW is a smart business decision.” But anybody looking at the carnage of the past few years — tens of thousands of U.S. autoworkers displaced and two American carmakers forced into bankruptcy — has got to be wondering what he’s talking about.
- The Chinese Auto Bubble Threat. The more than 30% sales growth achieved in China in 2010 -- to more than 18 million vehicles -- is probably unsustainable, especially as government officials are moving to put the brakes on car purchases. Beijing is limiting new vehicle registrations to deal with the congestion that can make what reportedly should be a 30-minute ride from the airport to downturn into a two-hour odyssey most days. Experts expect sales growth in China to slow to 10-15% this year. But many automakers are making investments based on the assumption of continued strong sales gains.
- Court Lets EPA Mess With Texas. For the third time in two months, Texas officials have lost a legal bid to keep the Obama administration from regulating carbon dioxide emissions from power plants in the Lone Star State. Wednesday, a federal appeals court rejected a request from Texas Gov. Rick Perry (R) and state attorney general Greg Abbott to bar the Environmental Protection Agency from taking over the state’s greenhouse gas permitting program.
- Company Earnings Forecast to Grow 27.1% in 2010 4th Quarter. The critical fourth-quarter earnings reporting season is underway, and the early signs are that profits aren't merely recovering, but pouring in. Just a handful of companies in the Standard & Poor's 500 index reported their results by Wednesday, but analysts are calling for 27.1% earnings growth. And that could be conservative. "Earnings season could shape up to be ahead of expectations," says Doug Sandler of RiverFront Investment. "People won't be disappointed."
- Private Weather Network Will Monitor Greenhouse Gases. A private company announced Wednesday that it's launching its own carbon dioxide measuring network to supplement governmental and academic efforts that have tracked greenhouse gas emissions for decades. The new carbon sensor network, which will augment the NOAA sensors, will be overseen in a joint venture between Washington, D.C.-based Earth Networks (formerly AWS Convergence Technologies) and Scripps. Earth Networks is the parent company of the WeatherBug weather network and desktop application used by consumers, schools, government agencies and TV stations. The new sensors will be another possible contributor to the carbon sensor network, says NOAA's Jim Butler, director of global monitoring at NOAA's Earth System Research Laboratory in Boulder, Colo. "We will be looking at their data and analyzing it," he says.
Reuters:
- Shrinking Hedge Fund Harbinger Faces Staff Exits. Prominent hedge fund manager Phil Falcone's $7 billion Harbinger Capital Management has been hit by a series of high profile departures in the past few weeks, according to people familiar with the fund. While some departures were voluntary, others were part of an effort to cut the fund's staff, as the firm's assets have shrunk from a peak of $26.5 billion in 2008, the sources said.
- Banks to Meet on AIG(AIG), Recap to Close This Week. Banks will meet in New York City Thursday to make their case for the right to sell the U.S. Treasury's stake in American International Group, three people familiar with the matter said Wednesday.
- PC Shipment Growth Lackluster in Q4. Global personal computer shipments crept up only slightly in the fourth quarter, a pair of industry trackers said on Wednesday, hurt by weak consumer holiday demand and competition from Apple's (AAPL) iPad tablet. PC shipments rose 2.7 percent to 92.1 million in the October-December period, research group IDC said. IDC had expected growth of 5.5 percent. Separately, researcher Gartner said fourth-quarter shipments rose 3.1 percent.
- Illinois Business Leaders Bristle at Tax Hike Plan. Illinois companies hit by an extended economic downturn say the state's proposed remedy to its own financial crisis - a beefy tax increase - will deplete investment in local businesses, trigger job losses and force companies to leave the state.
- US Housing Prices to Bottom in 2011 - Freddie Economist. U.S. housing prices overall are likely to bottom by spring 2011 and begin a gradual rise in 2012, housing lender Freddie Mac's chief economist Frank Nothaft said on Wednesday. "I do think we'll see these housing prices bottom out, maybe by the spring," Nothaft said.
- Broker Group Supports Investment Adviser Watchdog. The U.S. brokerage industry's lead lobbying group wants the Securities and Exchange Commission to establish a comparable system of regulation for both brokers and investment advisers.
- World Bank: Rich Nations' Growth Lags Need for Jobs. Economic growth in the world's wealthier nations is still too slow to create enough jobs for the tens of millions who lost theirs during the worst global recession since World War Two, the World Bank said on Wednesday. In a report detailing its outlook for 2011, the multilateral lender forecast the global economy would expand 3.3 percent this year, softer than the 3.9 percent expansion seen during 2010.
- List of US Concerns With China Grows. China must reduce unfair subsidies, stop the theft of intellectual property and let its currency appreciate, Tim Geithner has said. The US Treasury secretary, in a speech on Wednesday ahead of next week’s visit by Hu Jintao, Chinese president, widened US concerns about Chinese economic policy well beyond currency, which has been a focus of Capitol Hill’s anger.
- France and Germany Veto Increase in EU Rescue Fund. Mr Barroso said the fund boost was a "precautionary" move, not directed at any one country. The gambit is risky since it may be taken by investors as a sign that Brussels fears imminent contagion to Spain, deemed too big for the current fund. The response in Paris and Berlin was chilly. "We think the fund is big enough," said Francois Baroin, France's budget minister. German Chancellor Angela Merkel said the bail-out mechanism was "nowhere near exhaustion", adding curtly that she did not wish to debate the matter "any further".
- Broadcom Corp.(BRCM) has expressed interest in acquiring Taiwan-based Ralink Technology Corp. in a possible deal that may reach as much as $800 million, citing chip industry officials.
- South Korean FM Links N. Korea's Uranium Program to Nuclear Weapons. South Korea's top diplomat called North Korea's uranium enrichment program an attempt to make nuclear weapons in his clearest characterization yet of the newly acknowledged program that has added to the already serious concern about Pyongyang's atomic capabilities.
Citigroup:
- Reiterated Buy on (OI), target $38 .
- Maintained Buy on (BAC), $18 target, Removed from Top Picks Live list.
- Reiterated Buy on (VZ), target $39.
- Asian equity indices are unch. to +1.0% on average.
- Asia Ex-Japan Investment Grade CDS Index 107.0 -2.5 basis points.
- Asia Pacific Sovereign CDS Index 108.25 -4.25 basis points.
- S&P 500 futures -.08%.
- NASDAQ 100 futures -.03%.
Earnings of Note
Company/Estimate
- (CBSH)/.66
- (INTC)/.53
8:30 am EST
- Initial Jobless Claims for last week are estimated to rise to 410K versus 409K the prior week.
- Continuing Claims are estimated to fall to 4088K versus 4103K prior.
- The Producer Price Index for December is estimated to rise +.8% versus a +.8% gain in November.
- The PPI Ex Food & Energy for December is estimated to rise +.2% versus a +.3% gain in November.
- The Trade Deficit for November is estimated at -$40.5B versus -$38.7B in October.
- None of note
- The Fed's Bernanke speaking and the weekly EIA natural gas inventory report could also impact trading today.
No comments:
Post a Comment