Bloomberg:
- Weber in Davos Joins Dimon to Spotlight Easy Money Danger. The central bankers who saved the world economy are now being told they risk hurting it. Even as the International Monetary Fund cuts its global growth outlook, a flood of stimulus is running into criticism at the World Economic Forum’s annual meeting in Davos. Among the concerns: so-called quantitative easing is fanning complacency among governments and households, fueling the risk of a race to devalue currencies and leading to asset bubbles. “Central banks can buy time, but they cannot fix issues long-term,” former Bundesbank President Axel Weber, now chairman of UBS AG, said in the Swiss ski resort yesterday. “There’s a perception that they are the only game in town.”
- Cameron Picks Up Thatcher’s Gauntlet in 50 Years of EU Friction. Before he was elected prime minister in 2010, David Cameron presaged the latest breach in Britain’s fraught relationship with Europe. Cameron announced his intention to abandon allies in the European Parliament including Germany’s Angela Merkel before being elected to lead the opposition Conservative Party in 2005. He sought partners with the same vision for a Europe with looser ties and formed a new group in 2009.
- Japan Exports Plunge -5.8%. Shipments dropped 5.8 percent in December from a year earlier, compared with a median estimate for a 4.2 percent decline in a Bloomberg News survey of 23 economists. The annual deficit was 6.93 trillion yen ($78 billion), the finance ministry said in Tokyo today. “Foreign officials are becoming increasingly vocal over the possibility that Japan’s policy actions have the potential to prompt a currency war,” said Izumi Devalier, a Japan economist at HSBC Holdings Plc in Hong Kong. “I think the government will avoid taking the rhetoric too far.” With imports rising 1.9 percent and exports falling for seven months, the nation’s trade shortfall in December was 641.5 billion yen, the sixth month in deficit. Japan’s export slide comes as Europe’s crisis drags on shipments and a diplomatic dispute with China over islands claimed by both nations hurts demand for products such as Toyota Motor Corp.’s cars. Exports to China fell 15.8 percent from a year earlier, while those to the U.S. dropped 0.8 percent. Shipments to the European Union were 11.1 percent lower. “These are bad numbers for the economy,” said Junko Nishioka, chief economist at RBS Securities Japan Ltd. and a former BOJ official. “The positive impact of the yen’s decline on exports has yet to be seen, but it is already boosting import values.”
- Dimon: Expect Five More Years of Finger-Pointing at Banks. JPMorgan Chase & Co.(JPM) Chief Executive Officer Jamie Dimon Wednesday deflected blame from the banking industry for causing the financial crisis and predicted more accusations for years to come. “It’s going to be another five years of pointing fingers, scapegoating, using misinformation” and people thinking they have improved the system, Dimon said during a panel discussion at the World Economic Forum’s annual meeting in Davos, Switzerland. Dimon, 56, has led financial-industry executives in warning that new rules meant to curtail risk in the wake of the financial crisis may result in unintended consequences and hurt the economy. At the forum in 2011, the CEO sparred with France’s then-President Nicolas Sarkozy over “bad policies” that Dimon said would impede growth. “We’re trying to do too much too fast,” Dimon said Wednesday. He and UBS AG Chairman Axel Weber, speaking on the same panel, criticized global regulators for making capital and liquidity rules for banks too complicated across different jurisdictions. Weber, 55, said the lack of worldwide standards has made bank regulations too “complex.”
- Boeing(BA) 787 to Stay Grounded as U.S. Can’t Explain Fires. The top two U.S. aviation regulators said they don’t know what led to battery flaws that prompted them to ground Boeing Co. (BA)’s 787, and defended their decision to not let the plane fly until the cause is found.
- Mali Exposes Flaws in West's Security Plans. France's attack on Islamic extremists in Mali this month is exposing major strains in the Western world's security strategy. As the French assault gained steam in West Africa, France sought help from its allies—only to find that the U.S. and other North Atlantic Treaty Organization states either weren't ready or couldn't offer much. Canada and the U.K. quickly ponied up three cargo planes, two of which broke down en route. By far the biggest breakdown, however, played out between the U.S. and France, as Washington sent what Paris saw as mixed messages about U.S. levels of commitment to taking on an al Qaeda affiliate in Mali before and after the French attack began.
- Passing Debt Bill, GOP Pledges End to Deficits. The House defused one potential debt crisis Wednesday, while a top Republican set the stage for a far broader debate over whether it is possible to actually balance the U.S. budget in coming years. The House resolved Washington's most immediate fiscal problem by passing a short-term extension of federal borrowing authority. The Senate is expected to follow suit in coming days, which would set aside for now the potentially explosive question of whether the U.S. government might be unable to borrow money to pay its bills.
- Leaked UN climate report slammed for citing WWF, Greenpeace. Critics are blasting a draft U.N. climate change report that combines studies by advocacy groups like the World Wildlife Fund and Greenpeace alongside scientific research papers -- the same issue that led independent auditors to slam the U.N.'s last report. “You'd think that the IPCC would have learned its lesson, that it would have told its authors not to rely on these sorts of publications,” said Donna Laframboise, the head of nofrakkingconsensus.com, an investigative website skeptical of the scientific consensus on global warming. “The report currently includes, amongst its list of references, nine separate publications produced wholly or in part by the WWF,” Laframboise told FoxNews.com.
- China manufacturing capacity utilization in 2012 below 2008 level: UBS. The overcapacity problem in China created by booming economic growth in recent decades resulted in even lower utilization in the manufacturing sector in 2012 than during the global financial crisis in 2008.
- Netflix(NFLX) Posts Surprise Profit, Outlook; Shares Jump. Netflix surprised the market Wednesday with unexpected profit and an outlook that topped forecasts.The streaming video provider's shares jumped more than 30 percent after the closing bell, following the news.
- Apple(AAPL) Earnings Hit Could Whack Tech. Apple's disappointing earnings could rattle the market Thursday, as investors assess the damage to the stock and the broader tech sector. Apple dropped 10 percent in late trading after its revenues came up short of estimates and sales of its macs and iPhones were not what the street expected. Still, Apple sold 47.8 million iPhones, a record, and 22.9 million iPads. The company also projected a softer-than-expected revenue range of $41 billion to $43 billion for its current quarter, below the more than $45 billion expected by analysts.
- China Factory Growth Quickens. The HSBC flash purchasing managers' index (PMI) rose to 51.9 in January, the highest since January 2011 and above the 50-point level that shows accelerating growth in the sector from the previous month.
Business Insider:
- North Korea Threatens 'All-Out Confrontation' Against US. Citing North Korea'a KCNA, Bloomberg reports that North Korea is threatening "all out confrontation" against the U.S. and others. More from Yonhap News: "In the new phase of our century-long struggle against the United States, we do not hide the fact that various satellites, long-range missiles that we will continue to launch and high-level nuclear test we will conduct will target our sworn enemy, the United States," the North's National Defense Commision said in a statement carried by the communist nation's Korean Central News Agency.
- Homeland Security Is Researching A Huge New Public Surveillance System. These systems can also record conversations, which raises questions about the limits of police surveillance. Indeed, one murder case in New Bedford, Mass. is expected to hinge on a recorded argument, according to the Times.
- Performance pushes hedge fund assets to record in 2012. Aggregate single and multistrategy hedge fund assets rose to a record $2.25 trillion as of Dec. 31, up 12.5% from a year earlier, according to year-end analysis from Hedge Fund Research.
- Wells Fargo(WFC) sued by German agency for $160 million in CDO losses. Wells Fargo Bank, N.A. was sued Wednesday by a German government agency that accused it of mismanaging a collateralized debt obligation, resulting in more than $160 million in losses. Wells Fargo and Collineo Asset Management GMBH, a German financial services company, allowed investments of overly risky assets not permitted under the contracts governing House of Europe Funding I Ltd, a Cayman Islands CDO issuer, according to the lawsuit filed in Manhattan federal court. The German agency, Erste Abwicklungsanstalt, and the CDO itself both sued Wells as trustee and Collineo as asset manager for allowing the ineligible purchases. House of Europe Funding I's investments in other CDOs far exceeded the limit of 15 percent of the portfolio, the lawsuit said.
- Top House tax writer to outline financial instruments. The top Republican tax writer in the House of Representatives is close to releasing a draft on ways to revamp corporate taxes levied on complex financial products, a committee aide said on Wednesday.
- Logitech swings to Q3 loss on weak global PC market. Logitech, the No. 1 maker of computer mice, swung to a third-quarter loss from a year earlier and said it would divest non-strategic products, as it continues to be hit hard by weakness in the global PC market.
- Former officials tell hedge funds: Be ready for the regulators. U. S. securities regulators are watching hedge funds more closely than ever, and former Securities and Exchange Commission officials and industry experts are urging managers to be ready when federal examiners come knocking.
- SanDisk's(SNDK) modest revenue forecast prompts selloff. Chipmaker SanDisk Corp's modest revenue outlook disappointed investors looking for a recovery in memory chips widely used in smartphones and tablets, sending its shares down 4 percent.
- Money printing 'amounts to theft from our children'. Money printing is theft from our children and may merely be storing up problems for an even bigger crisis, top economists and investors have warned.
BMO Capital:
- Rated (SPLK) Outperform, target $39.
- Asian equity indices are -.50% to +.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 108.0 +.5 basis point.
- Asia Pacific Sovereign CDS Index 85.25 -.25 basis point.
- FTSE-100 futures -.13%.
- S&P 500 futures -.39%.
- NASDAQ 100 futures -1.60%.
Earnings of Note
Company/Estimate
- (BC)/-.08
- (ESI)/1.90
- (SWK)/1.28
- (LUV)/.07
- (KEY)/.21
- (BAX)/1.26
- (RTN)/1.31
- (ABC)/.66
- (LMT)/1.82
- (MMM)/1.41
- (ARG)/1.07
- (BMY)/.42
- (CELG)/1.32
- (UNP)/2.16
- (PCP)/2.47
- (CY)/.04
- (JBHT)/.69
- (MXIM)/.41
- (CVD)/.71
- (MSFT)/.75
- (FII)/.40
- (SBUX)/.57
- (JNPR)/.22
- (KLAC)/.56
- (T)/.45
- (CBE)/1.12
8:30 am EST
- Initial Jobless Claims are estimated to rise to 355K versus 335K the prior week.
- Continuing Claims are estimated to fall to 3200K versus 3214K prior.
- Preliminary Markit US PMI for January is estimated to fall to 53.0 versus 54.0 in December.
- Leading Indicators for December are estimated to rise +.4% versus a -.2% decline in November.
- Kansas City Fed Manufacturing Activity for January is estimated to rise to 1.0 versus -2.0 in December.
- Bloomberg consensus estimates call for a weekly crude oil inventory build of +2,150,000 barrels versus a -951,000 barrel decline the prior week. Gasoline supplies are estimated to rise by +1,250,000 barrels versus a +1,910,000 barrel gain the prior week. Distillate inventories are estimated unch. versus a +1,686,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to fall by -.6% versus a -1.2% decline the prior week.
- None of note
- The Eurozone PMI data, Japanese inflation data and the weekly Bloomberg Consumer Comfort Index could also impact trading today.
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