Bloomberg:
- Monti’s Austerity Pushes Italians Toward Parliamentary Upheaval. Elisa Dalbosco says she lost her job when it came time for her former employer, a refugee shelter in much,” said Dalbosco, who at 26 is now unemployed and poised to vote for self-described populist Beppe Grillo in elections on Feb. 24 and Feb. 25. Dalbasco’s disappointment shows why Italy is braced for its biggest political upheaval since 1994. Dalbosco, whose ballot five years ago went to an ally of front-runner Pier Luigi Bersani, won’t vote for anyone tied to incumbent Mario Monti because she says his austerity policies in a shrinking economy put the interests of banks ahead of everyone else’s.
- Spain’s Graft Scandals Reach Palace as King’s Adviser Testifies. The graft allegations roiling the Spanish elite may edge closer to the head of state, King Juan Carlos, when his son-in-law and a senior palace official testify in court on corruption charges. Inaki Urdangarin, a former Olympic handball player married to Princess Cristina, is due to answer questions in Mallorca tomorrow as part of a private prosecution where he has been named as an official suspect on six counts including fraud, embezzlement and money laundering, a court spokeswoman said. Magistrates on the tourist island will also question Carlos Garcia Revenga, the princess’s personal secretary, who is also a suspect, she said.
- Euro Trades Near 6-Week Low Before Italian Vote; Aussie Advances. The euro traded 0.4 percent from the lowest in six weeks before Italy’s parliamentary election starts this weekend. Australia’s dollar rose after the Reserve Bank signaled it will refrain from rapid interest-rate cuts.
- Shanghai Composite Heads for Weekly Loss; Autos Lead Decline. China’s benchmark stock index fell, heading for its steepest weekly loss in five months. Automakers and metal shares slid, while consumer-staples shares advanced. SAIC Motor Corp., the biggest automaker, climbed 2.2 percent, adding to a five-day loss of 9 percent. Chinese stocks dropped this week on concern government policies to curb gains in property prices may damp demand for autos, bank loans to construction materials. New home prices rose in most cities the government tracks in January, a government report today showed. Kweichow Moutai Co. led a rally for liquor makers. The Shanghai measure has dropped 4.4 percent this week, heading for the biggest loss since September.
- China Home-Price Gains May Presage Policy Tightening: Economy. China’s new home prices rose in most cities the government tracks for a third month, adding pressure on leaders to intensify policy-tightening efforts to prevent asset bubbles and inflation as the economy rebounds. Prices climbed in January from December in 53 of the 70 cities, compared with the previous month’s 54, which was the most since April 2011, according to data today from the National Bureau of Statistics. Ten cities showed declining prices and seven were unchanged.
- India Profit Growth Curbed by Slowing Economy, Kotak Says. India’s slowest economic expansion in a decade is limiting profit growth at the biggest companies even as foreigners remain net buyers of the nation’s stocks, according to Kotak Institutional Equities. Earnings-per-share (SENSEX) for the 30 companies making up the benchmark S&P Dow Jones Sensex Index in the year ending March 31, 2014, will probably be 1,320 rupees, 2 percent below previous estimates, Sanjeev Prasad, co-head and senior executive director at Kotak, said yesterday in Mumbai.
- Bombings in India’s Hyderabad Kill as Many as 15 People. Three bombs exploded in the southern Indian city of Hyderabad, home to the local headquarters of Microsoft Corp. (MSFT), killing as many as 15 people, a spokesman for the state’s chief minister said.
- CME(CME) Sued by CFTC for Disclosing Non-Public Information. CME Group (CME) Inc., owner of the world’s largest futures exchange, and two former employees were sued by the U.S. Commodity Futures Trading Commission for disclosing material non-public information on customer trades. William Byrnes and Christopher Curtin, who worked for CME’s New York Mercantile Exchange, broke the law by revealing nonpublic information to an outside commodity broker between February 2008 and September 2010, the CFTC said in a lawsuit filed today in federal court in Manhattan.
- Massachusetts S&P Probe Said to Extend Into Post-Crisis Ratings. Standard & Poor’s practices for rating commercial property bonds since the 2008 credit crisis are under scrutiny by Massachusetts authorities, three people familiar with the matter said. The scope of the probe by state Attorney General Martha Coakley extends beyond the securities and period that are the subject of a lawsuit brought by the Justice Department against New York-based McGraw-Hill Cos. and its S&P unit.
- Italian Voters Face Chances of Chaotic Results. When Italians head to the polls on Sunday for one of the country's most globally watched elections in decades, Silvana Giorgetto and her five million fellow undecided voters will have an important voice. The 61-year-old retired schoolteacher from the southern town of Avellino has cast a ballot in every Italian election since she came of voting age at 18. This time, she is at a loss. "We're all a bit torn—everyone has been such a disappointment."
- Payroll Tax Whacks Spending. Firms Adjust as Resumption of Levy, Expensive Gas, Stagnant Wages Bite Consumers. Wal-Mart Stores Inc. on Thursday joined a parade of retailers, restaurants and consumer-goods companies worried about the economic impact of the recently restored federal payroll tax that has left Americans with less money to spend. The world's largest retailer, Burger King Worldwide Inc., Kraft Foods Group Inc. and others are lowering forecasts and adjusting sales and marketing strategies, expecting consumers with smaller paychecks to dine out less and trade down to less expensive purchases.
- Citi(C) Awards CEO $11.5 Million in Pay. Citigroup Inc. C -2.01% awarded Chief Executive Michael Corbat $11.5 million for 2012, a year in which he took over the third-largest U.S. bank by assets in a surprise October shake-up and set plans to cut 11,000 jobs. The figure puts Mr. Corbat's compensation on par with that of James Dimon, chairman and chief executive of J.P. Morgan Chase JPM -0.74% & Co. For 2012, net income was $7.54 billion at Citigroup and $21.3 billion at J.P. Morgan.
- Noonan: Government by Freakout. Obama's scare tactics aren't much of a long-term strategy.
CNBC:
- Copper Uncoils as Economic Worries Stalk Markets. Copper prices are unraveling as global economic uncertainty returns to haunt risk assets. After an optimistic start to the year, Europe's recovery hopes were dashed by weak manufacturing data; there are fears the U.S. sequestration will undermine growth, and China is showing signs of weakness. And the minutes from the last Federal Reserve policy setting meeting showed divisions about when the central bank may start to wind down its bond-buying program.
- Is This the Start of China's Tightening Cycle? "The very fact that the PBOC (People's Bank of China) conducted the draining operation is a hawkish signal. Clearly, the central bank is trying to send a message that it will not tolerate too easy liquidity conditions," Dariusz Kowalczyk, senior economist and strategist, at Credit Agricole CIB said.
- Hewlett-Packard(HPQ) Earnings, Outlook Top Forecasts. Hewlett-Packard reported fiscal first quarter earnings and revenue Thursday that exceeded analyst predictions. Shares of the world's leading PC maker popped more than 6 percent after the closing bell, following the news.
- AIG(AIG) Posts Net Loss After Unit Sale but Results Beat. Insurer American International Group reported a net loss for the fourth quarter following the sale of its aircraft-leasing business but its operating results topped forecasts.
Business Insider:
NY Times:
Reuters: - The Rise of a Protest Movement Shows the Depth of Italy’s Disillusionment. For months, he has been shouting his way from piazza to piazza, drawing tens of thousands as he rails against tax collectors, corrupt politicians and financial speculation. And when he arrives in Rome on Friday for the final campaign rally of his “Tsunami tour,” Beppe Grillo, the Internet-savvy comedian turned populist rabble-rouser, may lead Italy’s third-most popular party.
- Bundesbank looks ahead to ECB "exit" as LTROs repaid. A bumper return of 3-year loans to the ECB would boost the case for it exiting crisis mode, a top Bundesbank official said ahead of Friday's news on how much banks will hand back at a repayment window next week.
- GM(GM) pledges $7.3 bln investment in S.Korea unit. General Motors Co said it would invest $7.3 billion in its South Korean unit over the next five years -- an amount which will likely help relieve concerns that the U.S. automaker was set to reduce its presence in the country.
- Corzine avoids lifetime futures ban, for now -regulator. A key U.S futures-market regulator said on Thursday it will block Jon Corzine, the former chief executive of failed broker MF Global, from the industry unless he clears an investigation into his fitness as a participant. However, the National Futures Association, which oversees brokers and asset managers, rejected a proposed lifetime ban for Corzine for now.
- Nordstrom(JWN) store expansion, e-commerce plans dent profit forecast. Nordstrom Inc on Thursday said it would spend far more money this year on building out its e-commerce capacity and expanding its chain of discount Rack stores, leading to a profit forecast that disappointed Wall Street.
- Brussels turns up pressure over Libor. The commission can impose a maximum penalty equivalent to 10 per cent of a company’s global turnover for each cartel it is found to be involved with. A bank implicated in all three rate-fixing cases could, for example, face fines of up to 30 per cent of total revenues.
- The Bank of England can’t just go on doing down the pound. Devaluation has now become an end in itself at the Bank of England – but it’s no panacea and we risk a lost decade like Japan.
- China Ministries Consider Steps to Curb Overcapacity. China is considering measures to curb overcapacity and "blind expansion" by companies, including limits on energy consumption and differential power prices, citing a person familiar with the matter. The National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Finance, Ministry of Land and Resources and Ministry of Environment Protection will work together on the measures, according to the report.
- Official austerity hits China's high-end catering business hard. High-end catering companies across China have seen a substantial drop in business since the central government launched new rules to combat extravagance, wastage and corruption in December, said Shen Danyang, spokesman for the Ministry of Commerce on Wednesday at a press conference. Restaurants and function centers in Beijing have seen a 35% decline in revenue, those in Shanghai a 20% decline, and those in Ningbo in the eastern province of Zhejiang, a 30% drop, according to a survey. Sales of prestigious dishes including bird's nest and abalone also saw a 40% fall during the Lunar New Year holiday, known locally as Spring Festival. The sale of shark fin has fallen 70%. Luxury hotels have seen a 45% drop in sales of their gift boxes and sales of premium spirits including Moutai and Wuliangye have also been hit hard.
Piper Jaffray:
- Rated (BRCM) Overweight, target $50.
- Asian equity indices are -.25% to +.50% on average.
- Asia Ex-Japan Investment Grade CDS Index 109.5 +1.25 basis points.
- Asia Pacific Sovereign CDS Index 84.0 +1.5 basis points.
- FTSE-100 futures +.47%.
- S&P 500 futures +.23%.
- NASDAQ 100 futures +.21%.
Earnings of Note
Company/Estimate
- (ANF)/1.96
- (B)/.51
- (IPG)/.53
- None of note
- (DDD) 3-for-2
- The Fed's Powell speaking, German IFO/CPI data, Eurozone GDP and the EU economic forecasts could also impact trading today.
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