Bloomberg:
- Italy’s Stalemate Jeopardizes Resolution of Crisis, Finland Says. Italy’s political gridlock following its inconclusive elections risks unraveling years of crisis- fighting work, Finnish Prime Minister Jyrki Katainen said. Failure to commit to responsible fiscal policy could reignite market turmoil and result in losses that would be “too terrible,” Katainen said in an interview in Helsinki yesterday. “I don’t even want to consider that.” “In the Italian economy, the challenges are very extensive,” Katainen said. “It’s not possible to close your eyes and forget about them. They need structural reforms, competitiveness reforms, budgetary balancing. They’re hard resolutions, but unavoidable.” The stalemate has added to investor concerns the debt crisis may resurface.
- Constancio Says Barnier Plan Not Enough For Bank Failures. The European Union needs a plan for cross-border bank failures that goes beyond financial services Commissioner Michel Barnier’s proposed cooperation measures, European Central Bank Vice President Vitor Constancio said. Constancio called for a “true European resolution authority” to provide temporary support when necessary, in comments to the Centre for European Policy Studies in Brussels yesterday. He said national regulators on their own can’t work together enough to contain a major cross-border bank emergency.
- German Banks With Record Soured Ship Loans Forgo Seizing Vessels. Deutsche Bank AG (DBK) and two other German lenders providing about 14 percent of credit to ship owners are forgoing seizing vessels even after soured loans to the industry rose to a record. Europe’s biggest bank by assets, as well as HSH Nordbank AG, the largest in the market, and Norddeutsche Landesbank Girozentrale, which finances 1,500 ships, are restructuring loans and setting money aside instead of repossessing vessels, officials from the companies said. They have about $69 billion in loans to the industry out of $500 billion in total, according to data compiled by the banks and Petrofin Research SA, an Athens-based consultant.
- Euro Set for Weekly Drop; Dollar Gains as Spending Cuts Begin. The euro was poised for its longest stretch of weekly declines since June on prospects for lower interest rates in the region with data today forecast to confirm a manufacturing contraction worsened. “Everyone thought that Europe was saved, but looking at the data of late, things aren’t looking that great,” said Richard Breen, a Sydney-based senior consultant at Rochford Capital, a currency and interest-rate risk management company. “Weak manufacturing data there is going to continue to put pressure on the euro.”
- China’s New Home Prices Advance for Ninth Month, SouFun Says. China’s new home prices rose for a ninth month in February, adding to concerns that the government may issue new property tightening policies. Prices climbed 0.8 percent to 9,893 yuan ($1,590) per square meter (10.76 square feet) from January, SouFun Holdings Ltd. (SFUN), the country’s biggest real estate website owner, said in a statement today after a survey of 100 cities. “The risks for the government to add on more tightening measures are increasing,” said Johnson Hu, a Hong Kong-based property analyst at CIMB-GK Securities Research.
- Rubber Falls on Concern Demand May Weaken as China Orders Slow. Rubber extended a decline after falling in February, on concern that demand for the commodity may weaken after manufacturing growth slowed in China and Japan’s consumer prices dropped. The contract for delivery in August lost as much as 2.3 percent to 286.3 yen a kilogram ($3,089 a metric ton) before trading at 286.6 yen on the Tokyo Commodity Exchange at 11:49 a.m. Futures lost 7.2 percent last month, the worst performance since June.
- Rebar Futures Fall in Shanghai on Inventory, Spot-Price Decline. Steel reinforcement-bar futures fell for the first time in three days amid high inventory levels in China, the biggest user, and waning demand in the spot market. Rebar for delivery in October dropped as much as 2 percent to 3,971 yuan ($638) a metric ton on the Shanghai Futures Exchange and traded at 3,982 at the 11:30 a.m. midday break. Inventory jumped 68 percent this year through Feb. 22, according to Shanghai Steelhome Information. The average spot price for rebar fell 0.6 percent to 3,790 yuan a ton yesterday, its fifth straight loss, according to data from Beijing Antaike Information Development Co.
- Singapore Avoids Stimulus as Minister Acts to Curb Bubble Risk. Singapore Finance Minister Tharman Shanmugaratnam said there’s no need for monetary stimulus in a country with full employment, leaving policy makers reliant on unorthodox tools to prevent asset bubbles. “We don’t have an output gap, and evidence of that is in an extremely tight labor market,” Shanmugaratnam, 56, said in a Bloomberg Television interview with Haslinda Amin yesterday. “In that context basically, you can’t have an easy monetary policy, which in our case is an exchange-rate policy.”
- Japan Consumer Prices Fall for Third Month as Deflation Lingers. Japan’s consumer prices fell for the eighth time in nine months, highlighting the challenges facing the Bank of Japan (8301) in reaching a 2 percent inflation target. Consumer prices excluding fresh food fell 0.2 percent in January from a year earlier, the third-straight decline, the statistics bureau said in Tokyo today. The result matched the median estimate in a survey of 26 economists by Bloomberg News.
- Indonesia Inflation Quickens to 20-Month High on Food, Power. Indonesia’s inflation accelerated to a 20-month high in February on higher food prices and power tariffs, reducing scope for the central bank to cut interest rates as exports falter. Consumer prices climbed 5.31 percent from a year earlier, after a previously reported 4.57 percent gain in January, the Statistics Bureau said in Jakarta today. The median estimate in a Bloomberg News survey of 18 economists was 4.81 percent.
- Dollar Beats All Assets in Best Month Since May Amid Budget Cuts. The dollar led gains in world markets last month, beating global measures of bonds, stocks and commodities, as the threat of U.S. budget cuts proved no barrier to investors snapping up American assets. Intercontinental Exchange Inc.’s Dollar Index (DXY), which tracks the currency against those of six major U.S. trading partners, climbed 3.5 percent in February, ending a two-month decline.
- Bair Says Regulators Lack Spine to Name Systemic Firms. Sheila Bair, former chairman of the Federal Deposit Insurance Corp., said U.S. regulators lack the courage to designate non-bank financial companies systemically important and aren’t doing their job. “It’s lack of will, it’s lack of courage, it’s lack of spine,” Bair said in a telephone interview today. “You can quote me on that and they’ll be angry with me, but I don’t care. This is outrageous.”
- Herbalife(HLF) to Add Two Board Members Chosen by Carl Icahn. Herbalife Ltd. (HLF) agreed to add two board members chosen by Carl Icahn and allow him to boost his stake to as much as 25 percent, escalating the billionaire investor’s feud with rival hedge fund manager Bill Ackman.
- Intuitive Surgical(ISRG) Robot Safety Probed by U.S. Regulators. Intuitive Surgical Inc. (ISRG), the provider of robots used in surgery, is being probed over the safety of its products, according to U.S. Food and Drug Administration documents. The regulators have asked surgeons at key hospitals to list any complications they may have seen with Intuitive’s robots, which cost $1.5 million each and were used last year in almost 500,000 procedures. The doctors were also surveyed on which surgeries the robots might be most and least suited for, and asked to discuss their training, according to copies of the survey obtained by Bloomberg News.
- Cuts Roll In as Time Runs Out. No Last-Minute Deal; Spending Reductions Won't Touch Deficit's Biggest Drivers. The federal government enters a controversial new phase of deficit cutting Friday, as an automatic trigger begins slicing budgets in some areas while leaving programs such as Medicare and Medicaid—among the largest drivers of future debt—largely untouched. The $85 billion in so-called sequester cuts push Washington, and the nation's economy, into uncertain waters. The debate over the across-the-board reductions has added to the already-high level of acrimony between Democrats and Republicans on fiscal matters, lowered even further the public's estimation of the capital's leaders and raised consumer fears about the economy, according to polls.
- Leveraged-Loan Market Heats Up. When Berkshire Hathaway Inc. and private-equity firm 3G Capital went looking for a $14 billion loan to finance their purchase of food company H.J. Heinz Co., they got a "yes" from their bankers within days. The fast commitment shows just how heated the market has become for leveraged loans, which are typically used to pay for buyouts. Wall Street appears willing once again to bankroll some buyouts on short notice because bankers are confident they can parcel out to investors chunks of the loans backing the deals. Debt investors are homing in on these loans because of their relatively high yields in a low-interest-rate environment.
- Boeing(BA) Pares Dreamliner Workforce. Boeing Co. plans to cut hundreds of workers at a South Carolina factory where it builds 787 Dreamliners, part of a cost-reduction initiative set in motion before battery problems caused the grounding of the company's flagship jetliner, according to a person familiar with the plan. The cuts, which started recently and are expected to be implemented over the course of 2013, could reduce staffing levels by up to 20%—at least for certain key teams—at its North Charleston, S.C., campus, which Boeing says has at least 6,000 employees.
- Another Big Step in Reshaping Health Care. Hospitals and health insurers are locking horns over how much health-care providers will get paid under new insurance plans that will be sold as the federal health law is rolled out. The results will play a major role in determining how much insurers will ultimately charge consumers for these policies, which will be offered to individuals through so-called exchanges in each state. The upshot: Many plans sold on the exchanges will include smaller choices of health-care providers in an effort to bring down premiums.
- India Plans to Impose a New Tax on the Rich. India said it would seek to impose an additional tax on the country's wealthiest, a move that would put it in the ranks of several developed countries that have raised taxes on the rich. Indian Finance Minister P. Chidambaram, while announcing the federal budget for the financial year starting April 1, proposed a so-called surcharge that would push the effective income-tax rate for a select group of taxpayers to about 34% from the current 30.9%, according to tax experts.
- Bullet Run Leaves Many Low on Ammo. The rush on ammunition sparked by fears of new firearm controls has left gun owners scouring the shelves for bullets. Across the country, demand for ammunition is outstripping supply, causing retailers to ration sales, police departments to alter training practices and some gun owners to shelve their weapons for the time being.
- Noonan: Obama Is Playing a New Game. He seems to think the way to win is by trying not to make a deal.
- Former Clinton aide, columnist joins Woodward in claiming White House threat. Another member of the Washington political media stepped forward Thursday to claim he was threatened by the Obama White House, shortly after the White House denied reports that an adviser threatened famed Watergate journalist Bob Woodward. Fox News Poll: Voters say sequester needed because Congress can't make cuts
- Fox News Poll: Voters say sequester needed because Congress can't make cuts. A new Fox News national poll shows 57 percent of voters think the “only way” to control the deficit is through actions like the automatic cuts because lawmakers are unable to do it on their own. Some 29 percent have confidence that Congress has the know-how and power to make it happen.
- China February Factory Growth Cools to 5-Month Low. Growth in Chinese factories cooled in February to a five-month low after domestic and foreign demand slackened, an official government survey showed on Friday, missing market forecasts and underscoring China's patchy economic recovery. The official Purchasing Managers' Index (PMI) eased to 50.1 after seasonal adjustments, the National Bureau of Statistics said, down from January's 50.4 and theweakest since September 2012.
- Time to End the ‘Monetary Ritalin’: Fed’s Fisher. (video) With the economy starting to improve, the Federal Reserve should begin to end its bond purchases, Richard Fisher, Federal Reserve Bank of Dallas President, told CNBC's "Closing Bell" on Thursday. "I think it's really time to taper this off," Fisher said. "It doesn't mean stop it. We're not going from Wild Turkey to cold turkey. But I do think we've run up to the limits of the efficacy of what we're doing. It's a good time to do it."
- Italy Is Not Spain - It's Worse. (graph)
- IceCap Asset Management: "The Worst Is Over". The worrisome feature of today’s global economy is that despite trillions (we repeat: trillions) in various forms of stimulus, economies around the World have not returned to the pre-2008 growth rates.
NY Times:
Reuters:- Groupon(GRPN) Dismisses Chief After a Dismal Quarter. Andrew Mason, the irreverent programmer and musician who turned a failed social action site into the daily deals phenomenon Groupon, was dismissed Thursday as chief executive.
- Salesforce's(CRM) $835 mln quarterly revenue tops forecasts. Salesforce.com Inc reported better-than-expected quarterly sales of $835 million on Thursday, as its cloud-based services continued to sell well despite an uncertain macroeconomic picture. Its shares gained 4.9 percent after hours to $177.50, after closing up 1.4 percent at $169.22 on the New York Stock Exchange.
- New York investigating BofA(BAC) for mortgages-filing. Bank of America Corp said in a securities filing on Thursday that the New York State Attorney General was investigating the bank over its purchase, securitization and underwriting of home loans.
- Michigan gov. to declare Detroit fiscal emergency -source. Michigan Governor Rick Snyder will officially declare a financial emergency for Detroit on Friday, paving the way for a state takeover of the city, a state government source said on Thursday.
- Wendy's(WEN) keeps 2013 view even as taxes, costs squeeze diners. The Wendy's Co, the second-largest U.S. hamburger chain, reported higher quarterly profit and stuck by its 2013 profit forecast on Thursday, even as its customers face new financial pressures from higher taxes and gasoline costs.
- Diplomatic fallout from EU bonus cap. European parliament’s victory reveals UK’s shifting status. For all the consternation in the City of London about what will happen to bankers’ pay, the bigger question about the bonus cap set to be included in the EU’s capital rules is what it means for the UK’s future relationship with Europe.
- Profit has become a dirty word when it comes to fuel and banks. Britain will pay the price for its 1970s-style war on the energy companies and banks. Who will finance the new power stations?
- None of note
- Asian equity indices are -1.0% to +.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 108.50 +1.5 basis points.
- Asia Pacific Sovereign CDS Index 84.0 +1.5 basis points.
- FTSE-100 futures -.33%.
- S&P 500 futures -.11%.
- NASDAQ 100 futures +.03%.
Earnings of Note
Company/Estimate
- (BBY)/1.53
- (FWLT)/.46
- (SUP)/.25
8:30 am EST
- Personal Income for January is estimated to fall -2.4% versus a +2.6% gain in December.
- Personal Spending for January is estimated to rise +.2% versus a +.2% gain in December.
- The PCE Core for January is estimated to rise +.2% versus unch. in December.
- The Markit US PMI Final for February is estimated at 55.2.
- The Final Univ. of Mich. Consumer Confidence reading for February is estimated at 76.3 versus a prior estimate of 76.3.
- Construction Spending for January is estimated to rise +.4% versus a +.9% gain in December.
- ISM Manufacturing for February is estimated to fall to 52.5 versus 53.1 in January.
- ISM Prices Paid for February is estimated to rise to 57.0 versus 56.5 in January.
- Total Vehicle Sales for February are estimated to fall to 15.1M versus 15.23M in January.
- None of note
- The Fed's Bernanke speaking, Eurozone PMI data and the Eurozone unemployment data could also impact trading today.
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