Bloomberg:
- Italy Renews Market Jitters as Voters Reject Monti Austerity. Italy’s inconclusive election triggered renewed market jitters over Europe’s debt crisis as recession-scarred voters repudiated budget rigor and established former comedian Beppe Grillo as a political force. In the four-way race, pre-election favorite Pier Luigi Bersani led for control of the lower house by less than a half percentage point. Silvio Berlusconi, the former premier fighting a tax-fraud conviction and charges of paying a minor for sex, called for a recount and won a blocking minority in the Senate. In its first national contest, Grillo’s group got 25 percent support and was probably the most-voted party in the lower house. “The political situation across Europe is effectively a race between austerity and reforms on the one hand and the rise of populist movements on the other.” said Alberto Gallo, head of European macro credit research at Royal Bank of Scotland Group Plc. “Austerity is painful, and if reforms are not implemented in time, you run the risk of social unrest and populism. It hasn’t happened so far in Greece, it hasn’t happened in Portugal or Spain, but we are very close in Italy.”
- Grillo’s Anti-Austerity Wave Crashes Into Italian Parliament. Beppe Grillo, the comic banned from Italian television two decades ago for ridiculing a corrupt cadre of ruling lawmakers, had his political satire rewarded yesterday with about 180 seats in Parliament. Grillo’s parliamentary list filled with political neophytes amassed enough votes in yesterday’s election to deny a majority to front-runner Pier Luigi Bersani and a comeback to three-time Premier Silvio Berlusconi. As his competitors seek to cobble together a make-shift alliance, the 64-year-old Grillo is keeping his distance and preparing for a new vote. “They can’t hold us back any longer,” Grillo said late yesterday in a video posted to his website. “They might go on another seven or eight months and produce a disaster, but we will be watching and working to keep it under control.”
- Spanish Graft Distracts Rajoy From Fixing Economy: Euro Credit. Prime Minister Mariano Rajoy's battle to curb borrowing and revive the Spanish economy is being thrown off track by corruption scandals rocking his party. "The government is so distracted defending itself against accusations that it isn't getting on with the job of getting the economy on track, meeting the huge disgruntlement of the general public and trying to hold the country together," said Marc Ostwald, a strategist at Monument Securities Ltd. in London.
- U.S. 10-Year Yield Falls Most Since November on Italy’s Vote. Treasuries rose, pushing 10-year yields down the most since November, as polls indicated the euro area’s third-largest economy, Italy, may be left with a hung parliament, stoking refuge demand. “The move today is all about the Italian elections, which is giving a bid to Treasuries,” said Larry Milstein, managing director in New York of government-debt trading at R.W. Pressprich & Co. “When there is concern about one of the largest economics in Europe with one of the largest debt loads in the region, you will see a flight to quality.”
- Singapore to Raise Property Tax Rates for Luxury Homeowners. Singapore plans to raise property levies for luxury homeowners as it seeks to tax the wealthy residents in the island state after the government imposed more measures to curb property speculation last month.
- Gillard Slips in Australia Poll as Tax Damages Credibility. Prime Minister Julia Gillard slipped behind opposition rival Tony Abbott as Australia’s preferred leader for the first time since August after her credibility was dented when a mining tax she helped design brought in less revenue than forecast.
- Stagflation Sparks BRIC-Worst Default Risk Surge: Brazil Credit. Brazil’s creditworthiness in the swaps market is eroding at the fastest pace among the biggest developing nations as inflation in Latin America’s largest economy exceeds growth by the most in three years. The cost to protect Brazil’s dollar-denominated government bonds against losses rose 21 basis points in the past month to 128 basis points, increasing the price of credit-default swaps on $10 million of debt to $128,000.
- Moody’s Promises Caps on Mortgage-Bond Ratings as Terms Loosen. Moody’s Investors Service said it won’t assign its top ratings to certain residential mortgage- bond deals with issuer-friendly terms, signaling a potentially tougher stance than competitors as the market revives. Home-loan securities without government backing probably will be able to get rankings only as high as Moody’s Aa tier if “significant” limits are placed on when and how repurchases can be forced of mortgages that fail to match their stated quality, the New York-based firm said today in a report.
- Fed Faces Explaining Billion-Dollar Losses in Stress of QE3 Exit. Federal Reserve Chairman Ben S. Bernanke’s efforts to rescue the economy could result in more than a half trillion dollars of paper losses on the central bank’s books if interest rates rise abruptly from recent levels. That sum is the difference between the value of securities in the Fed’s portfolio on Dec. 31 and what they may fetch in three years, according to data compiled by MSCI Inc. of New York for Bloomberg News.
- Messy Italian Election Shakes World Markets. In a national election meant to push Italy further down a path of economic reform, voters delivered political gridlock that could once again rattle Europe's financial stability. Markets in Europe and the U.S. gyrated even in response to early returns. The Dow Jones Industrial Average swung nearly 300 points, ending with its worst day in almost four months, as the prospects of a stable government appeared to drop.
- Why the Corporate Pension Gap Is Soaring. Companies Struggle as Low Rates, Other Forces Inflate Funding Needs.
- Banks Face Key Hurdle in Libor Fight. Banks suspected by regulators around the world of manipulating interest rates are trying to escape another mire: more than 30 lawsuits filed by borrowers, lenders and other plaintiffs who claim they were cheated by the same financial institutions.
- China Has Its Own Debt Bomb. Not unlike the U.S. in 2008, China is at the end of a credit binge that won't end well.
- America's Red State Growth Corridors. Low-tax, energy-rich regions in the heartland charge ahead as economies on both coasts sing the blues.
- Republicans urge Obama to end 'road show,' work with Senate to avert automatic cuts. House Republican leaders on Monday urged President Obama to "stop campaigning" and hunker down with Congress to find an alternative to the bludgeon of spending cuts set to hit Friday, saying now is not the time "for a road-show president." The plea came as the president prepared to head Tuesday to Newport News, Va., a major military community, to highlight the impact of Pentagon cuts on a shipbuilding facility. Obama's Cabinet secretaries also continued to issue dire warnings about the impact of so-called sequestration if the $85 billion in cuts begin to take effect March 1. House Speaker John Boehner and his deputies, emerging late Monday to field a few questions from the press, said the Virginia stop shows Obama is more interested in scoring political points than making a deal. "This is not time for a road-show president," House Republican Whip Kevin McCarthy, R-Calif., said. House Republican Leader Eric Cantor, R-Va., whose state Obama is visiting, repeatedly accused the president of offering a "false choice" -- between passing tax increases and allowing steep cuts to take effect. The president has blamed Republicans for holding up a deal, which under Obama's terms would include a mix of cuts and revenue increases through closing tax loopholes. Republicans suggest there's still time to replace the sequester with cuts -- not tax hikes -- that makes sense. "If the president was serious, he'd sit down with (Senate Democratic Leader) Harry Reid and begin to address our problems," Boehner said. Boehner was not backing off his insistence that it's the Senate's turn to act.
- Autodesk(ADSK) declines after hours following outlook. ‘Fear index’ tracker extends its dayside rally. Stock in Autodesk was down 2.7% at $35.63 after the company forecast first-quarter adjusted earnings of 41 cents to 46 cents a share and sales of $570 million to $590 million. Analysts polled by FactSet were expecting, on average, earnings of 51 cents a share on revenue of $588.7 million.
- Bernanke Speaks as Italy Becomes New Market Headwind. Fed Chairman Ben Bernanke is expected to provide soothing words about the Fed's easy money policies Tuesday, but markets may react more to new bearish concerns out of Europe.
Business Insider:
Forbes:
The Detroit News:
- GM(GM) proposes to pay CEO $11.1 million in '13. General Motors Co. wants to pay its chief executive $11.1 million in total compensation this year — an increase of more than 20 percent over 2012— and offer raises to most of its highest paid executives, according to a document turned over to Congress. The Detroit automaker, which received a $49.5 billion bailout in 2008 and 2009, must get approval for the pay packages for its top 25 executives from the Treasury Department, as a condition of its government bailout. According to a copy of the proposal obtained by The Detroit News from a source familiar with the documents, GM is proposing raises for 18 of its top 25 executives for 2013, with each of those making at least $1.8 million.
- Fed's Lockhart sees chance of surprisingly strong U.S. growth. U.S. economic growth could surpass expectations this year, but an anemic labor market requires ongoing support from monetary policy, a top Federal Reserve official said on Monday.
- California pension liabilities may swell to $328.6 bln -report. New credit evaluation standards for public pension liabilities proposed by Moody's Investors Service would swell unfunded liabilities for California's state and local public pension plans to $328.6 billion from $128.3 billion, according to a report released on Monday.
- Illinois' unpaid bills could soar to $21.7 bln in 5 yrs-report. Illinois' stack of overdue bills could nearly triple to $21.7 billion in five years unless the state takes action to curb its public pension costs, a financial watchdog group said on Monday.
- U.S. standing still on financial transaction tax as EU proceeds. Much of Europe is speeding toward a tax on financial transactions, but the idea is going nowhere fast in the United States, as the Obama administration reaffirmed its opposition.
- US oil imports from Middle East increase. The US was more reliant on the Middle East for its oil imports last year, underscoring the critical importance of the politically unstable region for the country despite the growing energy independence its shale gas revolution is bringing.
- Euro debt crisis looms again as Italians defy EU austerity demands. The eurozone’s debt crisis strategy was in chaos on Monday night after anti-austerity parties appeared on track to win a majority of seats in the Italian parliament, vastly complicating efforts to forge a government able to carry through EU-imposed reforms.
- Trillion pound cash mountain to the rescue? It’s unwise to bank on it. Meaningless though it might otherwise be, the downgrade in Britain’s credit rating at least acts as a reminder of just how deeply mired in post-crisis gloom the UK economy really is, and quite how difficult extracting the country from the ruination of more than a decade of banking excess and burgeoning social spending commitments is proving.
- Japan Your Party Tells Abe It Opposes Kuroda as BOJ Head. Yoshimi Watanabe, head of Japan opposition Your Party, told Prime Minister Shinzo Abe today.
- Ping An, Minsheng Bank Curbs Mortgage Lending. Ping An Bank and China Minsheng Bank have stopped mortgage lending in Beijing, citing people from the banks. Minsheng has halted second-home mortgages, according to the report. Ping An will stop mortgage lending for the next year.
- Beijing has completed a draft of property control measures, which will be released after the central government issues more detailed policies, citing a person familiar with the matter.
- China May Tighten Monetary Policy. China may tighten monetary policy because of excessive liquidity in the market and rising property prices, according to a front-page commentary written by a reporter Ren Xiao. China may manage liquidity in 1H by selling repos or reverse repos, the commentary said. Home prices rose for a third month adding pressure to intensify policy-tightening efforts.
- None of note
- Asian equity indices are -1.25% to -.50% on average.
- Asia Ex-Japan Investment Grade CDS Index 111.5 +3.0 basis points.
- Asia Pacific Sovereign CDS Index 83.25 +.25 basis point.
- FTSE-100 futures -1.52%.
- S&P 500 futures +.01%.
- NASDAQ 100 futures +.01%.
Earnings of Note
Company/Estimate
- (EXPD)/.43
- (THC)/.67
- (UNFI)/.50
- (AZO)/4.76
- (HD)/.64
- (AMT)/.77
- (CBRL)/1.25
- (M)/1.99
- (SKS)/.15
- (PCLN)/6.53
- (FSLR)/1.77
- (EIX)/1.05
- (DWA)/-.10
- (VNO)/1.08
9:00 am EST
- The S&P/CS 20 City MoM% SA for December is estimated to rise +.65% versus a +.63% gain in November.
- Richmond Fed for February is estimated to rise to -4 versus -12 in January.
- Consumer Confidence for February is estimated to rise to 62.0 versus 58.6 in January.
- New Home Sales for January are estimated to rise to 380K versus 369K in December.
- None of note
- The Fed's Bernanke Senate Testimony, weekly retail sales reports, 5Y T-Note auction, UK Housing prices, (JPM) investor day, (WBSN) analyst day, RBC Healthcare Conference, Robert Baird Business Solutions Conference, Goldman Ag Conference and the Wells Fargo Real Estate Conference could also impact trading today.
No comments:
Post a Comment