Today's Headlines

Bloomberg: 

• Fitch Says Top AAA Sovereign Ratings Under Pressure in 2013. Fitch Ratings said its AAA credit rankings on France, the U.S. and the U.K. are likely to come under pressure this year due to slow economic growth and high debt levels. The three nations, which all have a negative outlook from the company, have seen gross domestic product struggle to recover from the global financial crisis while debt levels have increased amid efforts to spur growth. A failure of U.S. lawmakers to raise the nation’s debt ceiling would prompt a “formal review” of its credit rating, Fitch said in a press release today. “Triple A sovereigns are under threat,” Ian Linnell, Fitch’s analytical group manager, said at a briefing in London as the company published its European Credit Outlook. “Debt-to- GDP ratios are significantly high,” compared with previous periods, he said. “In particular the U.S., France and the U.K. all have negative outlooks, reflecting a combination of a challenging fiscal position and low-to-negligible growth." 
• Euro Extends Losses as Juncker Says Currency ‘Dangerously High’. The euro extended losses against the dollar and yen as Luxembourg Prime Minister Jean-Claude Juncker said the shared currency’s foreign-exchange rate is “dangerously high.” Juncker, who leads the group of euro-area finance ministers, spoke at an event in Luxembourg. Japan’s currency gained earlier for the first time in five days against the dollar and the yen on bets its drops were excessive. The Swiss franc slid to a 13-month low versus the euro as signs Europe’s debt crisis is easing cut demand for the currency as a haven. “If the exchange rate is very high, that’s going to hurt trade and weigh on growth in the euro zone through trade channels,” Sireen Harajli, a foreign-exchange strategist in New York at Credit Agricole SA, said in a telephone interview. 
• German Economy Probably Contracted 0.5% in Fourth Quarter. Germany’s economy, Europe’s largest, probably shrank in the final quarter of 2012 as the sovereign debt crisis and weaker global growth damped exports and company investment. Gross domestic product may have dropped as much as 0.5 percent from the third quarter, the Federal Statistics Office in Wiesbaden said today in a preliminary estimate.
• Renault to Cut 17% of French Jobs on European Car Market. Renault SA (RNO), the automaker whose sales in Europe dropped the most in 2012, will cut 17 percent of its French workforce in the next four years to reduce costs as the region’s market sinks for a sixth straight year in 2013.
• Manufacturing in New York Region Contracts for Sixth Month. Manufacturing in the New York region contracted in January for the sixth straight month as the industry continued to face the effects of fiscal uncertainty in the U.S. and lackluster demand overseas. The Federal Reserve Bank of New York’s general economic index fell to minus 7.8 from a revised minus 7.3 in December. The median forecast of 54 economists in a Bloomberg survey called for a reading of zero, which signals no change in conditions.
• Copper Falls to 2-Week Low After Rio’s Beats Forecasts. Copper dropped to a two-week low as Germany’s economy slowed and U.S. lawmakers struggled to reach an agreement to raise the nation’s borrowing limit. Manufacturing in the New York region contracted for a sixth straight month in January and German growth slowed more than expected last year, separate reports today showed. President Barack Obama said at a White House news conference yesterday that he won’t negotiate over raising the debt ceiling, warning of economic calamity if Congress fails to increase the $16.4 trillion limit. 
• Lennar(LEN) Earnings Beat Analysts’ Estimates as Revenue Jumps. Lennar Corp. (LEN), the largest U.S. homebuilder by market value, reported fiscal fourth-quarter earnings that beat analysts’ estimates as revenue jumped 42 percent and profit margins climbed. Net income for the three months through Nov. 30 rose to $124.3 million, or 56 cents a share, from $30.3 million, or 16 cents, a year earlier, the Miami-based company said today in a statement.
• Intel(INTC) to GE(GE) Stuck in Earnings Slump as U.S. Rebound Stalls. U.S. companies from Intel Corp. to General Electric Co. are caught in an earnings slump that shows few signs of improving until midyear as a weak global economy and gridlock in Congress weigh on profits. Intel, the world’s largest semiconductor maker, is poised to report its biggest quarterly earnings drop in 3 1/2 years this week, based on analysts’ estimates compiled by Bloomberg. GE, the maker of jet engines and electrical generation equipment, may post its slowest profit growth in three quarters.
• India Says ‘No Business as Usual’ With Pakistan After Clash. Indian Foreign Minister Salman Khurshid said Pakistan’s failure to investigate the killing of Indian troops in Kashmir meant an end to “business as usual,” sharpening the country’s diplomatic offensive against its long- time rival. The two governments and their militaries have for more than a week traded accusations of deadly raids across the de facto frontier in the disputed Himalayan region, skirmishes that have become the biggest threat to normalizing ties since peace talks resumed two years ago.
• China Will ‘Gradually’ Implement Property Tax System, Wen Says. China should “gradually” establish a property taxation system that covers trading and ownership, Premier Wen Jiabao said during a visit to the finance ministry today. The comments were published in a statement posted on the central government’s website. In its more than two-year effort to curb the property market, the government has raised down- payment and mortgage requirements, imposed a property tax for the first time in Shanghai and Chongqing, increased building of low-cost social housing, and placed home-purchase restrictions in about 40 cities. Many Chinese cities are preparing to introduce property tax trials, the China Securities Journal reported on Nov. 16, citing unidentified people.

Wall Street Journal:

• IEA Head: Decline in Crude Production Unlikely. The head of the International Energy Agency Maria Van der Hoeven said Monday she doesn't see a further decline in global crude production in 2013, after top oil exporter Saudi Arabia made its deepest cut in almost three years. Saudi Arabia cut its oil production by close to 5% to 9.025 million barrels a day in December in response to lower demand chiefly from Asian customers, and comes amid expectations for lower demand for crude oil from the Organization of the Petroleum Exporting Countries this year. Asked by Dow Jones Newswires in an interview if the market is likely to see further production cuts this year, Mrs. Van der Hoeven said: "I don't think so." 
• Fed’s Plosser Thinks Policy Will Need to Be Curtailed Sooner Than Anticipated. Federal Reserve Bank of Philadelphia President Charles Plosser held firm in his view that the central bank’s loose monetary policy will need to be reined in sooner than anticipated to prevent an acceleration of inflation in the coming years. Mr. Plosser maintained his view that inflation would remain close to the Fed’s 2% target over the medium to long term, but added that “this expectation is based on my assessment that the appropriate monetary policy is likely to tighten more quickly” than the Federal Reserve Open Market Committee indicated in its latest statement.

MarketWatch.com: 

• Facebook(FB) loses 1.4 million active users in U.S. The social network may be reaching a saturation point. 
• ‘Animal spirits’ in full stride: investor appetite for risk rises to 9-year high, survey finds.

CNBC: 

• Why Debt Ceiling Is Far Scarier Than the 'Fiscal Cliff'. 
• First Shots Are Fired in Global 'Currency War'.

Zero Hedge: 

• Core Retail Sales Beat Despite Electronics And Appliance Sales Drop.
• Bridgewater AUM Rises To $142 Billion: Best And Worst Firm Trades Revealed. 
• Forget Previous Bubbles, This Is The Big Lebowski. 
• The Golden Age Of US Corporations Is Ending: S&P 500 Cash Has Peaked And Is Now Declining. (graph)
• Pictet's Four Horsemen Of The Euro-pocalypse. (graphs)

Business Insider: 

• LIVE: Facebook's Big Announcement. 
• REPORT: Obama Will Announce His New Gun Control Proposals Wednesday, And He Already Has A Plan To Get Around Congress. 
• Flailing French Government Is 'Wagging The Dog' In Mali. Normally, the media would have given it priority: French President François Hollande and Prime Minister Jean-Marc Ayrault have become more unpopular than ever before. But the poll was shoved into the background by France’s bombing campaign in Mali—which released an avalanche of positive comments and support from all sides, at least in France.
• America Is Being Directed By Self-Absorbed Single People Who Don't Care About The Next Generation.
• Facebook(FB) Isn't Cool Anymore (And That's What It Has To Fix Today).

Reuters:

• Exclusive: Morgan Stanley to defer bonuses for top earners - sources. Morgan Stanley is deferring 100 percent of bonuses for top-earning employees, according to three sources familiar with the situation. The deferral applies to all employees, except for financial advisers, making more than $350,000 and whose bonuses are at least $50,000 over a three-year period, one source said.
• SAP(SAP) falls short of expectations as Oracle makes running. Quarterly earnings from SAP AG fell short of expectations on Tuesday, showing the German business software maker failed to keep up with arch-rival Oracle Corp and sending its shares sharply lower. SAP's results, released more than a week before they had been scheduled, showed group revenue rose 12 percent to 5.06 billion euros ($6.8 billion), below an average analyst forecast of 5.17 billion, according to Reuters data. Operating profit rose more slowly than revenue, gaining 10 percent to 1.96 billion euros, resulting in SAP's operating margin narrowing by 0.8 percentage points to 38.8 percent in the three months through December.  
• U.S. taxes will rise for more than just the ultra-wealthy. The big numbers under discussion following the American Taxpayer Relief Act of 2012 have been $400,000, the income level where new marginal rates kick in for singles, and $450,000, for married couples filing jointly. But two limitations on tax breaks for high-income earners are returning at much lower income thresholds, amounting to something of a stealth increase. And there are few ways to get around them.
• US condemns comments by Egypt's Mursi in 2010 as Islamist leader. White House spokesman Jay Carney told reporters that the language Mursi had used was "deeply offensive" and that U.S. officials raised concerns with the Egyptian government on the matter. Nearly three years ago, Mursi, as an Islamist political leader, delivered a speech urging Egyptians to "nurse our children and our grandchildren on hatred" for Jews and Zionists, the New York Times reported. In a television interview months later, he described Zionists as "these bloodsuckers who attack the Palestinians, these warmongers, the descendants of apes and pigs," the newspaper said.

Telegraph:

• Fiat boss warns European car industry could 'unravel' unless EU co-ordinates capacity cuts. The boss of Italian carmaker Fiat has warned that Europe's embattled car industry will 'unravel' unless the European Union steps into co-ordinate urgent cuts in capacity across the continent.

DigiTimes: 

• Entry-level iPhone reportedly may adopt plastic chassis. Apple's(AAPL) rumored entry-level iPhone reportedly may adopt plastic for its chassis instead of reinforced glass or unibody metal as in the company's standard iPhone models, to save cost, according to sources from the upstream supply chain.