Bloomberg:
- Hollande Seen Unlikely Following Schroeder in Overhaul. “We were sure that nationalization would happen,” said Martin, a representative at the Florange plant for CFDT union, which will lead a protest at the presidential palace on Jan. 23. “We were promised a law to prevent Mittal from shutting the site. Today there’s no law and the blast furnaces are shut. The government’s decision was a slap in the face.” Hollande’s equivocation illustrates the conflicting pressures in restoring his nation’s competitiveness and closing the gap with Germany.
- Telefonica(TEF) Debt Cuts Don’t Fix Spanish Pain. Just before Christmas, top managers of Telefonica SA (TEF) gathering in a Madrid cinema tried to remain upbeat after a year in which the company had scrapped its dividend and sold off assets. While they were quick to point out that those steps had stabilized the company’s finances, they couldn’t avoid the bad news in their biggest market, Spain.
- East European Bankers Warn Bad Debt Is Hampering Credit Recovery. Bad debt in eastern Europe, already exceeding a third of all lending in several countries, will stay at high levels and cast a pall over hopes of restoring credit growth, according to the region’s leading bankers.
- China FDI Shows Full-Year Decline as Economic Expansion Slows. China’s foreign direct investment declined for the first full year since 2009 as economic growth slowed and manufacturers relocated to markets with cheaper labor, contrasting with outbound spending that surged to a record. Inbound FDI dropped 4.5 percent in December from a year earlier to $11.7 billion, the 13th decline in 14 months, according to Ministry of Commerce data released in Beijing today. For the full year, inflows fell 3.7 percent to $111.7 billion, while China’s non-financial investment abroad increased 28.6 percent to $77.2 billion. China is gradually losing its advantages as a destination for workshops and plants as land and labor costs rise, while deploying some of its $3.3 trillion in foreign-exchange reserves in growth opportunities abroad. “It’s an inevitable trend that labor costs will keep rising in China -- not only in coastal areas but also in inland regions,” Shi Lei, a Beijing-based analyst with broker Founder Securities Co., said before the report. “The country will not be an ideal place for low-end manufacturing.”
- Asian Stocks Drop on Overheating Signs; Nikkei 225 Falls. Asian stocks fell, with the regional benchmark index heading for its first loss in three days, amid signs markets are overbought and as Japanese shares retreated as a stronger yen dimmed the outlook for export earnings. Honda Motor Co. (7267), which gets 81 percent of its auto sales overseas, slipped 2.1 percent in Tokyo. Industrial & Commercial Bank Ltd., the world’s biggest lender by market value, fell 1.2 percent in Hong Kong after Premier Wen Jiabao said China should “gradually” establish a property tax system.
- India Banks System Face Worsening Asset Quality, IMF Says. India’s financial system has been made vulnerable by a deterioration in bank assets and a lack of capital as the economy slowed, according to the International Monetary Fund. “The main near-term risks to the financial system are a worsening of bank asset quality and renewed pressures on systemic liquidity,” the Washington-based lender said in a statement today. Stress tests have shown the risks are “manageable” for now, according to the IMF, which concluded its assessment of India’s financial stability in February 2012. Increasing involvement of the state in the financial industry leaves the government exposed to losses at banks and is acting as a brake on economic growth, the IMF said.
- Apple(AAPL) Lets Buyers on China Web Pay in 2-Year Installments. Apple Inc. (AAPL) began allowing users of its Chinese website to pay in installments as the company looks for ways to make iPhones and MacBook laptops more affordable in the world’s largest computer and mobile-phone market.
- Banks Seek Help on Iran Cyberattacks. Major U.S. banks are pressing for government action to block or squelch what Washington officials say is an intensifying Iranian campaign of cyberattacks against American financial institutions. Financial firms have spent millions of dollars responding to the attacks, according to bank officials, who add that they can't be expected to fend off attacks from a foreign government. Defense officials have said Iran's government is behind the assault. Officials from several affected banks, including PNC Financial Services Group Inc., SunTrust Banks Inc. and BB&T Corp., are urging the U.S. government to stop or mitigate the attacks, according to investigators.
- Beyond Herbalife(HLF): The War Between Direct Sellers And Short Sellers. Hedge-fund manager William Ackman’s $1 billion bet against nutritional-products maker Herbalife Ltd. is again shining a light on direct-selling companies, prompting investors to evaluate investing in an industry that seems a magnet for controversy.
- Jeffrey Scott Shapiro: A Gun Ban That Misfired. What I saw as a prosecutor in Washington, D.C., makes me wary of strict firearms laws.
- Richard Vedder: The Wages of Unemployment. Labor-force participation has declined since 2000, and among the reasons are soaring government benefits.
- NY approves sweeping gun control package, owners worry about new rules. New York on Tuesday became the first state to approve a comprehensive set of gun control laws in response to last month’s mass shooting at a Connecticut elementary school, amid concerns among gun owners that the spate of changes to local and state gun laws could make them targets of overzealous politicians and prosecutors.
- Financials Report as Stocks Stall on Key Pivot Point. There's a lot at stake this earnings season, and the financial sector, the biggest stock market winner of the past year, will be put to the test Wednesday.
- Bill Gross Gets It.
- One Year Of Tax Hikes On The Rich Is Promptly Spent As $60 Billion Sandy Relief Aid Bill Passes.
- Exposing Europe's "Syphilitic Structural Core" With MEP Daniel Hannan. (video)
- Presenting The Working Poor Of America.
- Deutsche's Bullish For 2013 Despite These 6 Huge Downside Risks.
- 8 Government Conspiracy Theories That Turned Out To Be Right.
- Rand Paul To Hammer Hillary Clinton On Benghazi: 'It Was A Career-Ending Mistake'.
- Refugees Are Fleeing Mass Rapes In Syria.
- Facebook's(FB) Graph Search Is Awesome For Stalkers And Hookups.
Washington Post:
Chicago Tribune:- U.S. weighs military support for France’s campaign against Mali militants. The Obama administration is considering significant military backing for France’s drive against al-Qaeda-linked militants in Mali, but its support for a major ally could test U.S. legal boundaries and stretch counterterrorism resources in a murky new conflict. The United States is already providing surveillance and other intelligence help to France and may soon offer military support such as transport or refueling planes, according to U.S. officials, who stressed that any assistance would stop short of sending American combat forces to the volatile West African nation.
- Republicans push alternative to default in debt-ceiling battle. Republican lawmakers are preparing to introduce legislation to direct the U.S. Treasury to make interest payments on U.S. bonds first and then prioritize other government outlays in case Congress does not raise the debt ceiling. Supporters of the idea see it as a politically palatable alternative to default, which could rattle markets as occurred in the summer of 2011. The likelihood of another market-unsettling event is challenging Republicans to find another idea as they use the debt ceiling as leverage to extract spending cuts from President Barack Obama.
- World Bank cuts growth outlook as advanced nations drag. A frustratingly slow economic recovery in developed nations is holding back the global economy, the World Bank said on Tuesday, as it sharply cut its outlook for world growth in 2013. The World Bank forecast that global gross domestic product will inch up 2.4 percent this year, from 2.3 percent in 2012. In its last forecast in June, the bank projected global growth would reach 3.0 percent in 2013. The World Bank also cut its forecast for developing countries, which last year grew at their slowest pace in a decade, to 5.5 percent in 2013 from 5.9 percent in the June forecast. It said growth in these countries should slowly pick up, reaching 5.7 percent next year and 5.8 percent in 2015.
- ANA grounds all Boeing 787s for inspections after emergency landing. All Nippon Airways Co is grounding all 17 of its Boeing 787 planes for inspection after one of its Dreamliners made an emergency landing in western Japan on Wednesday, the Japanese air carrier told Reuters. ANA said instruments on a domestic flight early Wednesday indicated a battery error, but all passengers and crew evacuated safely by using the plane's inflatable slides, ANA said.
- Japan's Abe turns to SE Asia to counter China. The last time he was prime minister of Japan, Shinzo Abe's inaugural foreign trip was to China. In the job again 7 years later and relations with Beijing now chilly, Abe is turning first this time to the rising economic stars of Southeast Asia.
- Japan's growth hurt by row with China - World Bank. Japan's economy contracted in the second half of 2012 and is on track for lackluster growth of 0.8 percent this year, hurt in part by a territorial row with China, the World Bank said in a report on Tuesday. Relations between China and Japan, the world's biggest economies after the United States, have deteriorated sharply since September, when the Japanese government purchased islands that China claims in the East China Sea.
- U.S. plays down media report that Syria used chemical weapons.
- US cities short billions for public pensions-Pew. States are not alone in racking up massive public pension bills: U.S. cities need hundreds of billions of dollars to make good on their promises of retirement healthcare and income to workers.
- It is those in love with EU regulations who are destroying UK jobs. By rights, this should have been the time when those who spent the past few years campaigning against the European Union's economic follies were enjoying the bittersweet smell of political vindication.
- Greek opposition warns bail outs are a 'bottomless pit'. Greece's left wing opposition leader has warned Germany that his country is a “bottomless pit” for European taxpayers and claimed Berlin’s austerity drive was “inhuman”.
- Japan May Deploy Jets to Area Near Disputed Islands. Japan Self-Defense Forces consider deploying fighter jets to Sakishima islands, west of Okinawa's main island. The location is closer to the disputed islands than the current air base in Naha.
- The U.S. govt. asked Japan's Self-Defense Force to refrain from firing warning shots if it encounters Chinese surveillance planes over the disputed islands, citing a meeting between U.S. and Japan top govt. officials earlier this month.
- Japan's Transport Ministry recognizes today's emergency landing of ANA B787 as a serious incident that could have led to an accident.
- Shenzhen Sets 2013 Growth Target of 9%, Lowest in Decades. Growth last year was 10%, unchanged from 2011 and lowest since city became a special economic zone in 1979, citing Mayor Xu Qin's remarks to municipal legislators. The city had >27% average annual growth in 1980-2006 period.
- China may ask tier-1 cities to increase land supply this year to stabilize land prices, citing a person from the industry.
- President Hu Jintao expressed support for Hong Kong Chief Executive Leung Chun-ying's measures to curb the rise in housing prices, citing people with knowledge of a meeting between the two.
- None of note
- Asian equity indices are -1.0% to unch. on average.
- Asia Ex-Japan Investment Grade CDS Index 108.0 +4.0 basis points.
- Asia Pacific Sovereign CDS Index 86.0 +2.5 basis points.
- FTSE-100 futures +.13%.
- S&P 500 futures -.03%.
- NASDAQ 100 futures +.15%.
Earnings of Note
Company/Estimate
- (SCHW)/.15
- (CMA)/.65
- (USB)/.75
- (NTRS)/.75
- (MTB)/1.17
- (BK)/.54
- (JPM)/1.22
- (GS)/3.66
- (FUL)/.56
- (KMI)/.35
- (EBAY)/.69
8:30 am EST
- The Consumer Price index for December is estimated unch. versus a -.3% decline in November.
- The CPI Ex Food & Energy for December is estimated to rise +.2% versus a +.1% gain in November.
- Net Long-term TIC Flows for November are estimated to rise to $25.0B versus a $1.3B in October.
- Industrial Production for December is estimated to rise +.3% versus a +1.1% gain in November.
- Capacity Utilization for December is estimated to rise to 78.5% versus 78.4% in November.
- The NAHB Housing Market for January is estimated to rise to 48.0 versus 47.0 in December.
- Bloomberg consensus estimates call for a weekly crude oil inventory build of +2,200,000 barrels versus a +1,314,000 barrel gain the prior week. Gasoline supplies are estimated to rise by +2,700,000 barrels versus a +7,412,000 barrel gain the prior week. Distillate Inventories are estimated to rise by +1,500,000 barrels versus a +6,777,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to fall by -.75% versus a -1.3% decline the prior week.
- Fed Beige Book
- (HEP) 2-for-1
- (SGA) 4-for-3
- The Fed's Fisher speaking, Fed's Kocherlakota speaking, Eurozone CPI data, Australia unemployment data, Iran/IAEA Talks, weekly MBA mortgage applications report and the (SE) analyst meeting could also impact trading today.
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