- U.S. Companies Added 297,000 Jobs in December, ADP Says. Companies in the U.S. boosted payrolls in December by the most since records began in 2001, showing a stronger labor-market recovery at the end of last year, data from a private report showed today. Employment increased by 297,000, exceeding the highest projection in a Bloomberg News survey, after a revised 92,000 rise in November, according to figures from ADP Employer Services. The median estimate in the Bloomberg survey called for a 100,000 gain last month. Faster job growth will fuel the income gains necessary to further spur consumer spending, which accounts for about 70 percent of the economy. “The headwinds for the recovery are fading,” said Jim O’Sullivan, global chief economist at MF Global Ltd. in New York. “Companies have been pretty cautious and they’ve accumulated a lot of spending power, and we’ve seen that in purchases of equipment and software. Now they need more workers to man the equipment.” “There is certainly a strong signal in the ADP data,” Joel Prakken, chairman of Macroeconomic Advisers LLC, which produces the figures with ADP, said in a conference call with reporters. “It has accelerated in each of the last three months and the gains that we reported this morning were widespread.” Today’s ADP report showed an increase of 27,000 workers in goods-producing industries, which includes manufacturers and construction companies. It was the biggest gain since February 2006 and the second straight rise. Service providers added 270,000 workers, the 11th straight gain and the most since record-keeping began. Employment in construction was little changed, the first time without a decline since June 2007, while factories added 23,000 jobs, ADP said. Companies employing more than 499 workers expanded their workforces by 36,000 jobs. Medium-sized businesses, with 50 to 499 employees, created 144,000 jobs and small companies increased payrolls by 117,000, ADP said. Employers in the U.S. announced plans in December to cut 32,004 jobs, the fewest since June 2000, according to Challenger, Gray & Christmas Inc. The Chicago-based outplacement company said firings were down 29 percent from December 2009.
- U.S. Services Expand at Fastest Pace Since 2006. Service industries expanded in December at the fastest pace since May 2006, showing the U.S. economic recovery is picking up and broadening beyond manufacturing. The Institute for Supply Management’s non-factory index, which covers about 90 percent of the economy, rose to 57.1, exceeding the median forecast of economists surveyed by Bloomberg News, from 55 in November. “We’re coming into 2011 with some good momentum,” said Ken Mayland, president of ClearView Economics LLC in Pepper Pike, Ohio, who projected the ISM index would climb to 57. “We’re going to be entering a better business climate.” The ISM non-manufacturing measures of new orders and business activity increased to the highest levels since August 2005. The group’s employment gauge fell to a three-month low, damping some of the optimism raised by the ADP report.
- Portugal Pays More to Borrow in First Test of Investor Demand: Euro Credit. Portugal sold six-month bills today, the first of Europe’s high-deficit nations to test investor demand in 2011 after the threat of default forced Greece and Ireland to seek bailouts last year. The government debt agency, known as IGCP, auctioned 500 million euros ($665 million) of bills repayable in July. The yield jumped to 3.686 percent from 2.045 percent at a sale of similar maturity securities in September, with investors bidding for 2.6 times the amount offered. A year ago, the country paid just 0.592 percent to borrow for six months. “We have a long year ahead, and one auction is not going to answer any questions,” said Padhraic Garvey, a strategist at ING Groep NV in Amsterdam.
- PBOC Extending Biggest Cash Crunch Since Lehman: China Credit. Borrowing costs for China’s banks will rise to the highest in more than two years in the first quarter as policy makers curb supplies of cash to fight inflation, according to a survey of bond analysts. The seven-day repurchase rate, which measures interbank funding availability, may average 2.9 percent in the first quarter, compared with 2.75 percent in the previous three months, according to the median estimate in a Bloomberg survey of eight analysts. Both levels were the highest since the third quarter of 2008, when Lehman Brothers Holdings Inc.’s bankruptcy caused global credit markets to seize up. Central bank Governor Zhou Xiaochuan’s tolerance of the funding shortage shows his determination to curb the fastest inflation in two years in a country where 150 million people live on less than $1 a day. The seven-day repo rate has doubled in the past year to 3.26 percent, as the one-week U.S. dollar Libor remained little changed at around 0.25 percent.
- At Least 40% of LME Copper Shorts in March Held by One Company, Data Show. One unidentified company held a short position in copper for March delivery on the London Metal Exchange that equaled at least 40 percent of the contract’s open interest, according to bourse data. The short position, which could be a bet on price declines or a hedge against a long position elsewhere, was dated Dec. 30, according to the exchange. Open interest for March amounts to 42,856 lots (1.1 million metric tons), the most in any copper futures contract. As of the same date, one unnamed firm held 50 percent to 79 percent of LME copper stockpiles, bourse data show.
- World Food Prices Jump to Record on Sugar, Oilseeds. World food prices rose to a record in December on higher sugar, grain and oilseed costs, the United Nations said, exceeding levels reached in 2008 that sparked deadly riots from Haiti to Egypt. An index of 55 food commodities tracked by the Food and Agriculture Organization gained for a sixth month to 214.7 points, above the previous all-time high of 213.5 in June 2008, the Rome-based UN agency said in a monthly report. The gauges for sugar and meat prices advanced to records.
- Crude Oil Rises as U.S. Service Industries Expand, Companies Add Employees. Crude oil rose after reports showed that U.S. service industries expanded and companies added workers in December, signaling that fuel demand may increase in the world’s biggest oil-consuming country. Futures climbed as much as 0.8 percent after the Institute for Supply Management’s non-factory index, which covers about 90 percent of the economy, rose to 57.1.
- Birinyi's Projected 322% S&P 500 Advance Beats '90s Tech Rally. Laszlo Birinyi says the U.S. stocks rally that began in March 2009 may produce bigger gains than the technology boom of the 1990s, if history is a guide. Birinyi, who was one of the first money managers to advise buying American equities as they bottomed almost 22 months ago, said yesterday that the Standard & Poor’s 500 Index may increase to 2,854 on Sept. 4, 2013, based on the average size of advances. That requires a 322 percent surge from the low of 676.53 in March 2009, beating the 302 percent rally during the bull market of October 1990 to July 1998.
- Qualcomm(QCOM) Agrees to Buy Atheros(ATHR) for About $3.2 Billion. Qualcomm Inc., the world’s largest maker of mobile-phone chips, agreed to buy Atheros Communications Inc. for about $3.2 billion in cash, broadening its lineup of Wi-Fi networking technology. Atheros investors will get $45 a share, Qualcomm said today in a statement. That’s 22 percent more than Santa Clara, California-based Atheros’s closing price on Jan. 3, before reports about the purchase emerged.
- Fear 'Mindless' U.S. Deficit Spending, Pimco's Gross Says. Pacific Investment Management Co.’s Bill Gross said investors should favor emerging market corporate and sovereign debt as “mindless” U.S. deficit spending may result in higher inflation, a weaker dollar and the eventual loss of America’s AAA credit rating. “The problem is that politicians and citizens alike have no clear vision of the costs of a seemingly perpetual trillion dollar annual deficit,” Gross wrote in a note on Pimco’s website today. “As long as the stock market pulsates upward and job growth continues, there is an abiding conviction that all is well and that ‘old normal’ norms have returned. Not likely. There will be pain aplenty.” The U.S. deficit was $150.4 billion in November, exceeding the median estimate of economists surveyed by Bloomberg News, compared with $120.3 billion in November 2009, according to a Treasury Department budget statement released last month. “All investors should fear the consequences of mindless U.S. deficit spending.” wrote Gross, a founder and co-chief investment officer at Pimco. Like a female mantis who eats the head of her mate while reproducing, policy makers are “munching on the theoretical heads of future generations, while paying no mind to the wretches that will eventually be called upon to pay the bills,” he wrote. Stimulus measures that have been designed to maintain current consumption instead of working to make America a more competitive nation in the long run will be a drag on real income growth as reflationary policies set in, Gross wrote.
- Sears(SHLD), Urban Outfitters(URBN) Said to Weigh J. Crew Bids. Sears Holdings Corp. and Urban Outfitters Inc. are weighing rival bids for clothing retailer J. Crew Group Inc. in a potential challenge to TPG Capital and Leonard Green & Partners LP’s $3 billion buyout, said three people with knowledge of the matter. Sears and Urban Outfitters are studying J. Crew’s books, said the people, who asked not to be identified because the matter is private. Neither company has indicated whether it will actually counter TPG and Leonard Green’s $43.50-per-share offer, the people said. At least two other private-equity firms are also receiving confidential data on the New York-based retailer, said the people. J. Crew’s go-shop period, in which a public company solicits competing offers, expires Jan. 15 so any bid must be made before then. TPG and Leonard Green’s Nov. 23 offer for the company was 29 percent higher than J. Crew’s average closing share price in the month prior to the announcement.
- Cuomo Freezes Wages, Taxes in Plan to Close New York's $10 Billion Deficit. New York Governor Andrew Cuomo announced a plan to close a $10 billion budget gap by freezing wages and taxes and limiting spending growth to the rate of inflation.
- Ford(F) Rises to Top of Consumer Reports Survey, Tying Toyota. Ford Motor Co. matched Toyota Motor Corp. as the most favorably viewed auto brand by U.S. consumers in a survey released today by Consumer Reports magazine. Ford has climbed 35 percentage points in the last two years, while Toyota has fallen 46 points, leaving the automakers “in a statistical dead heat” with scores of 144 and 147 respectively, the Yonkers, New York-based consumer magazine said. Ford excelled in “factors that consumers say matter most: safety, quality and value,” the magazine said in a statement.
Wall Street Journal:
- As Speaker, Boehner Vows to Make 'Tough Decisions'. Ohio Republican John Boehner was elected speaker of the U.S. House of Representatives Wednesday, completing a decade-long comeback after being cast from leadership when House Republicans suffered election losses in the late-1990s.
- Obama to Address Chamber on Feb. 7. In the latest example of the White House’s renewed outreach to U.S. business, President Barack Obama will address the U.S. Chamber of Commerce Feb. 7 on jobs and the economy, an administraion official said.
- Starwood(HOT) Again Circles Condo Carcasses. Barry Sternlicht's Starwood Capital Group is moving to expand its investments in distressed condominiums, leveraging the experience it has gained in the 15 months since it led a group that bought the assets of the failed Corus Bank. The same group of investors that bought the $4.5 billion Corus portfolio from the Federal Deposit Insurance Corp. is now bidding on other distressed residential assets at a time when condo markets are showing signs of stabilizing in some parts of the country.
- Google(GOOG) Was the Busiest Startup Acquirer of 2010. Google Inc. missed out on prized daily discounter Groupon in 2010, but it still acquired far more start-ups owned by venture capital firms than any other company last year. In fact, it’s the first time that Google has topped the annual list of most venture-backed acquisitions, according to research firm Dow Jones VentureSource.
- Google(GOOG) Wins One Against Microsoft(MSFT). Inc. has won a key ruling in its lawsuit against the U.S. Interior Department, two months after the Web giant accused the agency of improperly favoring rival Corp. in a contract bid to provide a new email system. Susan Braden, a federal judge in Washington, on Monday issued a preliminary injunction that prevents the Interior Department from deciding to use Microsoft's email and collaboration tools for its 88,000 employees as part of the federal government's move to Web-based software, sometimes known as cloud computing.
- IMF Considers Expanded Overseer Role of Global Capital Flows. The International Monetary Fund is considering expanding its role as the overseer of global capital accounts and controls, people familiar with the plan said Wednesday. The IMF is expected to publish as soon as Wednesday a preliminary executive board review examining how the fund could be more involved in supervising capital flows between countries.
- US Small Business CEOs in More of a Hiring Mood. U.S. small business owners are finally in a better hiring mood as they grow more confident about both the economy and their own business prospects, a survey released Wednesday showed. For the first time in three years, a majority of chief executive officers polled by small business group Vistage said they planned to add employees in 2011. The quarterly poll of 1,729 CEOs was conducted between Dec. 14 and Dec. 24. In the previous installment of the poll, conducted in September, just 46 percent of CEOs said they planned to add jobs in the next 12 months. In the December poll, 58 percent thought economic conditions had improved from a year earlier, and roughly the same percentage thought things would get better still over the next 12 months. That was a significant improvement over September's survey, which found just 40 percent thought economic conditions would improve in the coming year.
- Seeing Firm Growth, Fed's Hoenig Saw 'Duty' to Dissent. The Federal Reserve's most vocal internal critic Wednesday pushed back against the U.S. central bank's effort to control a sometimes-dissonant message, saying it is the duty of those who disagree to vote their conviction. Thomas Hoenig, president of the Kansas City Fed and a known inflation hawk, said the U.S. economy is recovering remarkably well given the depth of the economic downturn, and repeated his view that the Fed's loose monetary policy risks sparking bubbles or inflation in the future. The bank's lone dissenter, who has repeatedly and openly opposed the Fed's policy of ultra-low interest rates, not only stuck to his views but also took a jab at those at the Fed who are concerned about the divergence of view on policy.
- Will Innovative, New Electronics Revive Economy?
- Gold Settles at 3-Week Low.
- AT&T(T) Lays Out Plan for 4G Network, Devices. AT&T laid out an aggressive plan to roll out its next-generation wireless network in 2011, including a slate of devices that will include tablets and the market’s first dual-core smartphone.
- 9 Potential Tech Takeover Targets.
- Crude and Commodity Bullishness are at Dangerous Highs and a Pullback is Near.
- How the Huge Currency Hedge Fund FX Concepts Delivered Stellar Returns in 2010.
- Hands On With A Fake Chinese iPhone (photos). From far away, it looks pretty real -- never mind that Apple hasn't actually started selling the white iPhone 4 yet, because of some manufacturing problems. But after holding it for five seconds, and trying to use the software, you get a real sense of appreciation for the real thing. This "SciPhone" is not only a fake, but a crappy fake.
- SHIBOR: We Have A Liquidity Problem. In a nutshell: there is no marginal liquidity left in the world's fastest growing economy.
- Is China Green Agriculture(CGA) The Next Chinese Fraud?
- Simons' Medallion Up More Than 30% in 2010. Jim Simons’ Medallion Fund finished 2010 strongly, posting a better than 30 percent return, according to investors. This, of course, is net of a 5 percent management fee and 44 percent performance fee. The performance, however, still put it below its net return range of between 40.5 percent and 84.1 percent in each of the prior four years. Remember, for years Medallion has only been open to partners, employees and friends. Simons’ two newer public funds also posted strong performance. Renaissance Institutional Futures fund (RIFF) — introduced in October 2007 — finished up 22.7 percent after climbing just 3.8 percent last year and losing 12 percent in 2008. The Renaissance Institutional Equities fund (RIEF) fell by more than 1 percent in December 2010, and finished the year up 16.5 percent.
- Crispin Odey Remains Optimistic on Stock Markets: Latest Commentary and Outlook. Crispin Odey, founder of hedge fund firm Odey Asset Management, is out with his latest market commentary and outlook. Back in September, he noted that equities were attractively priced but unloved. Since then, equities have rallied furiously. So, what's his latest take? See below for his outlook penned on the 30th of November:
- In House, New Republican Majority Plans to Act Fast to Undo Obama's Agenda. Almost as soon as they take control of the House at noon Wednesday, Republicans will embark on a 20-day plan aimed at undoing major aspects of President Obama's agenda as they seek to take advantage of the weeks before the Senate's return and the president's State of the Union address.
Cult of Mac:
- Apple(AAPL) is Granted its First Liquidmetal Patent. Apple has been granted its first patent related to Liquidmetal, a space-age metal alloy. But the patent isn’t for a new iPad enclosure or iPhone antenna, as experts have predicted. Instead Apple’s Liquidmetal patent is for an internal component of a fuel cell. Apple’s new patent describes “amorphous alloy” collector plates for fuel cells, an electrochemical battery that uses hydrogen to generate electricity. Although the patent doesn’t reference the Liquidmetal trademark, the material is an amorphous alloy or “ metallic glass.”
- BP(BP) Shuts Down Part of Alaska Oil Field in Wake of Court Ruling. BP shut down a small portion of the Prudhoe Bay oil field last week after a judge ruled that federal regulators failed for years to get approval from the Inupiat Eskimo family that owns the land. The shutdown affects less than 1 percent of production from the nation's largest oil field, but so far it's the most visible consequence of a significant legal victory for the Native family, which has battled lawyers for the federal Bureau of Indian Affairs and BP in federal court over the oil production from its land. Federal claims court Judge Nancy Firestone ruled this fall that the Oenga family is owed millions in unpaid rent because the BIA improperly allowed BP to tap three offshore oil deposits from the family's allotment on the northern edge of the vast Prudhoe oil field.
- Daily Presidential Tracking Poll. The Rasmussen Reports daily Presidential Tracking Poll for Wednesday shows that 25% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as president. Forty-one percent (41%) Strongly Disapprove, giving Obama a Presidential Approval Index rating of -16 (see trends).
- Netflix(NFLX) Button Coming to Remote Controls. Several hardware manufacturers will begin building in a red Netflix button on their remote controls. The button will allow viewers to access Netflix's online movie rental service and rental queue with a single button click. Blu-ray Disc players, Internet-connected televisions and other related media hardware devices such as set-top boxes will include the Netflix button. Sony, Sharp and Toshiba have unveiled plans to include the button on their Internet-connected televisions in 2011, while Roku, Boxee and Iomega are adding it to their set-top box remotes. Other hardware manufacturers that will add the Netflix buttons to remotes include Panasonic, Memorex, Dynex (Best Buy's brand) and Haier. The first remotes with the Netflix buttons are due in stores this spring.
- John Boehner Elected Speaker of the House. Capping a two-decade House career, Rep. John Boehner was elected at the 61st speaker of the House, becoming the first Ohio Republican to hold the post in nearly 80 years. The vote was 241-173, with Boehner handily beating Rep. Nancy Pelosi (D-Calif.), who had served as speaker for the last four years. As he walked up the center aisle of the House chamber to receive the gavel from Pelosi, Boehner — well known for being emotional — teared up and wiped his eyes.
- Rockefeller Takes Aim at EPA. Firing the first salvo in what is expected to be a top energy issue in the new Congress, Sen. John Rockefeller said Wednesday that he’s raring to go in his controversial bid to handcuff the Environmental Protection Agency’s climate regulations for two years. The West Virginia Democrat told POLITICO that he’ll soon introduce the same piece of legislation he tried unsuccessfully to get a vote on throughout 2010.
- EU Targets Senior Creditors at Ailing Banks. All bondholders should be forced to take losses in an ailing bank under draft European Union proposals which aim to avoid taxpayers again having to fund bailouts in the next crisis. The EU's executive Commission is due to publish the consultation paper as soon as this week to shape its crisis management legislative proposals later in the year. The paper obtained by Reuters said writing down a bank's stock and subordinated debt may not be enough at times and that national resolution authorities will need "additional writeoff" powers. The EU executive proposes a tiered model beginning with writedowns of equity and subordinated debt, with senior debt next in line.
- Glu Mobile(GLUU) to Develop Games for Tablets With Nvidia(NVDA) Chips. Mobile game developer Glu Mobile Inc (GLUU) said it would partner with graphics chip giant Nvidia Corp (NVDA) to develop games for tablets that run Google's (GOOG) Android, sending its shares up as much as 18 percent. Glu is working with Nvidia to develop games that will use the advanced capabilities of Tegra processors, it said in a statement. Tegra chips help speed up Internet browsing and accelerates graphics on mobile devices. Nvidia has a partnership with Google and expects tablet-like devices that use Tegra chips and run on the Android operating system to be released early next year.
- Brazil Pledges to Stop US 'Melting the Dollar'.Brazil has sounded a new note of warning in the international "currency war" by pledging not to allow the United States to "melt the dollar".
- France is seeking to cut spending by a further 30 billion euros in 2012 to reduce the country's budget deficit to 4.6%, citing Budget Minister Francois Baroin.
- The euro currency could disappear unless additional steps are taken to ensure its long-term stability, Nobel economics laureate Joseph Stiglitz said. Stability funds established by euro-region governments provide only "temporary relief for small countries," Stiglitz said. The fiscal situation of larger countries, including Spain and Italy, remains "precarious," he said, adding that further weakening will intensify pressure on the common currency. Without "appropriate policies and balanced institutions," such as a solidarity fund for long-term stability, the euro may not survive, Stiglitz said.
Macau Daily Times:
- Sands China Appeals to Court on Plots 7 and 8. Local gaming operator Sands China has already submitted an appeal to the courts over the Government’s decision to reject its application for Cotai plots 7 and 8.
- Gap Inc.(GPS), Nike(NKE) and Adidas AG are giving more orders to Turkish firms and reducing production in China. The extra orders mean Turkish textile companies may export $8.8 billion of products this year compared with $6.6 billion in 2010, said Ismail Gulle, head of Instanbul-based textile association Itkib. China has become more expensive because of an increase in input prices, Gulle said.