Bloomberg:
- Spanish Banks to Face Continued Funding Challenges, Moody’s Says. Spanish banks will still face funding and liquidity pressures in coming months even though some were able tap bond markets earlier this year, Moody’s Investors Service said. “We still consider that liquidity and funding will continue to constrain banks’ credit profiles over the coming months,” Pepa Mori, a Moody’s senior analyst and author of a report on Spanish banks published today, said in a statement. “While recognizing the decline in the system’s overall financing requirements, Spanish banks continue to display wholesale funding reliance at a time when accessibility to long- term wholesale markets, while improving, has not normalized.”
- Greeks Hold First General Strike as Samaras Implements Austerity. Greek labor unions are holding their first general strike this year as Prime Minister Antonis Samaras’s coalition government implements a new round of austerity measures amid record unemployment. Schools, ferries, trains and government services will be shut today with protests planned in central Athens by the country’s public and private-sector trade unions. Greek civil aviation workers will hold an eight-hour walkout that is set to cause delays and cancellations at the country’s airports. “We are fighting for measures to halt unemployment, for jobs for all, to protect our democratic and workers’s rights,” the Greek General Confederation of Labor, the country’s largest private-sector union, said in an e-mailed statement.
- China’s Foreign Direct Investment Declines for Eighth Month. China’s foreign direct investment fell for an eighth month in January, a sign that the recovery in the world’s second-largest economy has yet to revive confidence among overseas companies. Inbound investment dropped 7.3 percent from a year earlier to $9.27 billion, the Ministry of Commerce said in a statement today in Beijing.
- China Army May Be Behind Web Attacks, Security Firm Says. China’s army may be behind a computer-hacking group that has attacked at least 141 companies worldwide since 2006, according to a report by a U.S. security firm. The attacks, mainly directed at U.S. companies, were carried out by a group that is “likely government sponsored” and is similar “in its mission, capabilities, and resources” to a unit of the People’s Liberation Army, Mandiant Corp. said in a report today.
- China’s Financial Companies Drop for Fifth Day. Chinese financial stocks headed for their steepest five-day drop in more than two years. “Chinese stocks are in a period of correction,” said Wu Kan, a Shanghai-based fund manager at Dazhong Insurance Co., which oversees $285 million. “Drugmakers are a beneficiary in such times because they’re seen as a defensive stock, while news about tightening measures for property would hurt earnings for banks as housing loans may fall.” The CSI 300 Financials Index sank 1.5 percent, heading for its biggest five-day retreat since November 2010.
- Japan Currency Chief to Join Abe in U.S. Visit Amid Yen Friction. Prime Minister Shinzo Abe will be accompanied by his top currency official when he visits the U.S. to meet with President Barack Obama, as Japan tries to limit international friction over a weakening yen.
- Australian Retail, Office Prices Fall as Rents Decline, NAB Says. Australian retail and office property prices fell in the three months to Dec. 31 as rents declined, a private survey showed. Retail property capital values dropped 1.4 percent in the last quarter of 2012, while industrial property values slipped 1.2 percent and offices weakened 0.6 percent, according to a National Australia Bank Ltd. survey released today. Rents eased in all markets in the period, led by a 2.1 percent decline in retail, NAB said.
- Detroit May Get State Manager as Fiscal Emergency Shown. A fiscal emergency grips Detroit, according to a report that opens a path to a state takeover of General Motors Co.’s home town, citing deficits that have stymied city officials after a $326.6 million gap last year. “It doesn’t have to be adversarial,” state Treasurer Andy Dillon said yesterday at a news briefing about the report, produced by a six-member review team that included Dillon. “Detroit is fixable and brighter days are ahead.”
- Netflix(NFLX) Sued for Allegedly Misleading Investors on Growth. Netflix Inc., the film-streaming and mail-order DVD service, was sued by a shareholder who accuses the company of intentionally misrepresenting subscriber growth.
- Herbalife(HLF) Fourth-Quarter Profit Tops Analysts’ Estimates. Herbalife Ltd., the nutrition company at the center of a battle between hedge-fund managers Bill Ackman and Carl Icahn, posted fourth-quarter profit that topped analysts’ estimates and raised its earnings forecast for this year as sales rose in Asia.
- BofA(BAC) Raises Moynihan’s Compensation 71% to $12 Million in 2012. Bank of America Corp. boosted Chief Executive Officer Brian T. Moynihan’s 2012 compensation by more than 70 percent to about $12 million and agreed to increase his base salary for this year. Moynihan received $11.1 million in stock grants for 2012, almost doubling the amount he got the previous year, according to a regulatory filing yesterday. For 2013, the bank increased his base salary to $1.5 million, compared with $950,000 for each of the previous three years, according to a person briefed on the matter.
- Rhetoric Turns Harsh as Budget Cuts Loom. With less than two weeks to go before the latest fiscal face-off, rhetoric heated up Tuesday as the political parties exchanged fire over whom to blame if looming spending cuts take effect. With Congress in recess this week, Republican and Democratic leaders sent lawmakers home armed with fact sheets about the $85 billion in across-the-board federal spending cuts due to start March 1, and talking points on how to blame the other side. Meantime, the White House and lawmakers are making no progress toward forging a compromise to avoid the reductions, which are known in Washington as the sequester.
- Business Loans Flood the Market. Banks Put Their Liquidity to Work, but Added Competition Puts Pressure on Rates and Elevates Risk. Carl DelPrete, chief executive of suburban New York supermarket chain Uncle Giuseppe's Inc., couldn't be happier with the current lending environment. To fund a recent expansion, he got bids from three banks and calls the terms on the $14 million loan "the best we're ever going to see in our lifetime." The episode reflects a renewed willingness by some banks to lend cheaply and on flexible terms. But with banks not far removed from persistent criticism that they were slow to make business loans that would kick-start an economic recovery, a new concern is emerging: Is the pendulum swinging too far the other way?
- Hearings Possible on 'Whale' Loss. A Senate panel probing J.P. Morgan Chase & Co.'s "London whale" trading losses is wrapping up its report and considering calling witnesses, including the bank's chief, James Dimon, for public hearings, according to people familiar with the investigation. The Senate hearings, which follow months of private interviews with top bank officials, would likely focus on how much top J.P. Morgan officials knew about mounting losses sustained by its massive bets on complex derivative instruments. Public hearings into the trades could prove embarrassing for J.P. Morgan and Mr. Dimon.
- Drone Makers Take Aim at U.S. Market. American firms that make drones are aiming their sights on the U.S. market as the next frontier for the controversial technology. With a declining defense budget expected to limit spending on the vehicles, used primarily to monitor and target combatants on foreign battlefields, manufacturers are seeking opportunities on the domestic front, where universities, police departments and border patrol agencies—as well as commercial enterprises— could use unmanned aircraft, known as drones.
- U.S., China Ties Tested in Cyberspace. Ties between China and the U.S., strained by military rivalries and maritime disputes, may face an even greater test from the newest front in global conflict: cyberspace. U.S. military and homeland security officials quietly have long blamed the Chinese military for the most egregious assaults on U.S. computer networks. Continued hacking and data theft, however, are being met by an increasing willingness by Washington to publicly point the finger at Beijing. Experts say the subtle but significant shift in how the U.S. approaches the face-off carries significant implications for the next steps of U.S.-Chinese diplomacy as the Obama administration sets about engaging a revamped government in Beijing with its second-term national-security lineup.
- Weak Growth Strikes a Blow to French Deficit Goals. The French government on Tuesday said it won't be able to lower its budget deficit to 3% of annual output this year because of weak growth, dropping a key economic pledge by President François Hollande and raising the pressure on the euro zone's second-largest economy to show it can restore its public finances. Mr. Hollande's government had staked its credibility on the commitment to lower the deficit to 3% of gross domestic product in 2013, and introduced tax increases to bolster public coffers when economic growth was insufficient to ensure the target was met.
- John Boehner: The President Is Raging Against a Budget Crisis He Created. Obama invented the 'sequester' in the summer of 2011 to avoid facing up to America's spending problem. A week from now, a dramatic new federal policy is set to go into effect that threatens U.S. national security, thousands of jobs and more. In a bit of irony, President Obama stood Tuesday with first responders who could lose their jobs if the policy goes into effect. Most Americans are just hearing about this Washington creation for the first time: the sequester. What they might not realize from Mr. Obama's statements is that it is a product of the president's own failed leadership.
- China waiting for a crisis: Andy Xie. Government must cut spending or wake up to a messy reckoning. Bank loans and money supply rose sharply in January. The timing of the Spring Festival may have distorted the data. Still, there are signs that many local governments with new leaders want to try an old trick, pushing fixed-asset investment (FAI) to create gross domestic product and fiscal revenue. This would turn bank loans into GDP and fiscal revenue. Local governments are already heavily in debt. Pushing FAI would keep them liquid through new loans. It is essentially a pyramid scheme and can go on as long as the banks are willing and able to lend. But constraints have appeared.
- BHP(BHP) Names New CEO as Profit Slumps. Global miner BHP Billiton appointed the head of its non-ferrous business as its new chief executive on Wednesday to replace Marius Kloppers, as it reported an expected 43 percent drop in half-year profit. Andrew Mackenzie, 56, who joined BHP from rival Rio Tinto in 2008, will move into the top job in May, taking the reins at a time when the company is battling to protect margins by cutting costs amid weaker commodity prices. The announcement came as BHP reported its profit before one-off items tumbled to $5.68 billion for July-December 2012 from $10 billion a year earlier and took $3 billion in writedowns on its aluminium and nickel businesses.
- Gas Creeps Toward $4 a Gallon, Rattling Recovery Hopes. The U.S. economic recovery, already winded by higher payroll taxes and potential budget cuts, has a new challenge – higher prices at the gas pump.
Business Insider:
NY Times:
- Slide at Dell(DELL) Continues as Earnings and Sales Fall. Dell reported another quarter of declining sales and profits on Tuesday, deepening a downturn that has disenchanted its shareholders and culminated in the slumping personal computer maker’s recent decision to go private in a $24.4 billion deal.
Seeking Alpha:
Reuters: - Joe Biden's tip for self-defense: Get a shotgun. Biden, who is spearheading a push for President Barack Obama's gun control proposals, dispensed this off-the-cuff tip for protecting life and property during an online question-and-answer session on Facebook on Tuesday. The vice president has not one but two shotguns that he says he keeps in a locked cabinet at his house in his home state of Delaware, and he has given his wife, Jill, explicit instructions on how to deal with any would-be intruder.
- Nabors(NBR) revenue hit by spending cuts, demand recovery slows. Nabors Industries Ltd, the owner of the world's largest onshore-drilling-rig fleet, reported a 44 percent jump in profit, but revenue fell as its major customers curtailed spending amid the worst slowdown in gas-directed drilling in more than a decade.
- Michael Kors(KORS) to sell big part of stake as shares soar. Fashion designer Michael Kors is planning to sell a big chunk of his stake in his namesake fashion house at a time when the company's shares are at an all-time high. Kors will sell 3 million of his Michael Kors Holdings Inc shares as part of a secondary offering of 25 million shares the company announced in a regulatory filing on Tuesday. Kors' ownership in the company will fall to about 4.8 million shares, or 2.4 percent down from 3.9 percent after the sale.
- Sina(SINA) reports Q4 ad sales at lower end of forecasts. Sina Corp's quarterly advertising revenue grew 7 percent but came in towards the lower end of its own forecasts, as advertisers spent cautiously toward the end of 2012 and new "Weibo" advertising products drew muted sales.
- China’s foreign oil output surges. China is on track to produce enough crude oil outside its borders to rival Opec members such as Kuwait and the United Arab Emirates, after its state-owned oil companies spent a record $35bn buying foreign rivals last year.
- China loves the US dollar again as America roars back. China’s central bank has radically revised its view of US economic and strategic power, predicting that the dollar will remain the world’s paramount reserve currency for decades to come.
- We’ll find out the true value of your risks, banks warned. UK Banks are continuing to hold assets that are wrongly valued, the new financial regulator has told The Times, in a warning that the problems that led to the 2008 financial crisis are not yet resolved.
- The Beijing municipal government will hold meeting Thursday with developers to discuss the property market and possible tightening policies, citing a person from the local housing commission. Tightening may include raising stamp duties and other taxes on transactions, according to the report.
- None of note
- Asian equity indices are -.25% to +.75% on average.
- Asia Ex-Japan Investment Grade CDS Index 108.5 -2.0 basis points.
- Asia Pacific Sovereign CDS Index 83.0 -1.5 basis points.
- FTSE-100 futures -.14%.
- S&P 500 futures +.09%.
- NASDAQ 100 futures +.19%.
Earnings of Note
Company/Estimate
- (DTE)/.86
- (OC)/.16
- (MGM)/-.23
- (DVN)/.75
- (TOL)/.10
- (EV)/.52
- (CAKE)/.52
- (WMB)/.25
- (FLR)/.97
- (JACK)/.39
- (SNPS)/.55
- (DISH)/.50
8:30 am EST
- Housing Starts for January are estimated to fall to 920K versus 954K in December.
- Building Permits for January are estimated to rise to 920K versus 903K in December.
- The Producer Price Index for January is estimated to rise +.3% versus a -.3% decline in December.
- The PPI Ex Food & Energy for January is estimated to rise +.2% versus a +.1% gain in December.
- Fed Minutes from Jan 29-30 FOMC meeting.
- None of note
- The Germany inflation data, BoE minutes, weekly retail sales reports, weekly MBA mortgage applications report, Barclays Industrial Conference and the (TGI) investor day could also impact trading today.
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