Bloomberg:
- Abe Support Falls Below 50% for First Time Amid Secrecy Drive. Prime Minister Shinzo Abe’s public support dropped below 50 percent for the first time amid a campaign to strengthen Japan’s secrecy laws, a decline that risks eroding his political capital to enact economic reforms. The cabinet’s approval rating fell to 49 percent, according to a Nov. 30 to Dec. 1 survey by the Asahi newspaper, down 4 percentage points from a month earlier. It showed 50 percent of those surveyed opposed a bill passed by the Diet’s lower house last week that boosts penalties for leaking confidential government information. The upper house may vote this week.
- China Sets IPO Reform Plan Signaling End of Freeze on Listings. China’s securities regulator issued a reform plan for initial public offerings, as the government prepares to lift a more than one-year freeze on new listings in the world’s second-biggest economy.
- Australian Banks’ Risky Loans Fueling House Price Gains. Australia’s biggest banks, whose lending standards helped the nation avoid a property crash during the global credit crisis, are raising concern with home loans helping to fuel record house prices. The proportion of mortgages that represented more than 80 percent of a home’s value -- the loan-to-value ratio -- rose in the third quarter to the highest since the second quarter of 2009, data from the banking regulator show. Mortgages in which borrowers pay only interest also increased to the highest in at least five years, according to the figures.
- S. Korea Exports Slow as Southeast Asia Demand Declines. South Korea’s exports slowed last month as demand from Southeast Asian nations fell and the won’s advance weighed on exporters’ price competitiveness. Overseas shipments rose 0.2 percent in November from a year earlier, down from a revised 7.2 percent gain the previous month, the Ministry of Trade, Industry and Energy said in an e-mailed statement today. The median estimate in a Bloomberg News survey of 12 economists was for a 3 percent increase.
- China Stocks Fall as Small-Caps Drop by Record on IPO Resumption. China’s stocks fell, dragged down by a record tumble in smaller-company shares, amid concern the government’s plan to restart initial public offerings will divert funds from existing equities. Software maker Neusoft Corp. dropped 8.5 percent as a gauge of technology companies dropped the most among industry groups. Leshi Internet Information & Technology Co. retreated the most in a month. Suning Commerce Group led declines for consumer companies, slumping 8.7 percent. Eight out of 10 industries in the CSI 300 Index slid at least 1.8 percent. Citic Securities Co. paced gains for brokerages after Goldman Sachs Group Inc. said financial companies will benefit from IPO reform. The Shanghai Composite Index (SHCOMP) fell 2.1 percent to 2,173.78 at 11:07 a.m., heading for the biggest loss since July. The ChiNext index of small-caps plunged 8.1 percent.
- Worst Raw-Material Slump Since ’08 Seen Deepening: Commodities. The commodity slump that spurred bear markets in everything from gold to corn to sugar this year will deepen by the end of December as prices head for their first annual loss since 2008, if history is any guide. The Standard & Poor’s GSCI Spot Index of 24 raw materials fell in December 83 percent of the time since 1971 when the benchmark gauge was posting losses for the year through November, data compiled by Bloomberg show. The average December loss was 3.9 percent, which if it happened this time would mean a 7.8 percent drop for the year.
- Rebar Rises as China Manufacturing Gauges Boosts Demand Outlook. Steel reinforcement-bar futures in Shanghai rose as Chinese manufacturing growth beat analysts estimates in November, boosting the demand outlook for the building material. Rebar for May delivery, the most-active contract on the Shanghai Futures Exchange, added as much as 0.7 percent to 3,695 yuan ($606) a metric ton before trading at 3,688 yuan at 10:14 a.m. local time. The contract closed on Nov. 29 at the highest in more than two weeks.
- Aluminum Trades Near Four-Year Low as Global Stockpiles Climb. Aluminum fell, trading near a four-year low, as stockpiles in London and Shanghai increased, indicating global supply exceeded demand for the metal used in everything from beverage cans to airplanes. The contract for delivery in three months on the London Metal Exchange retreated as much as 0.5 percent to $1,747 a metric ton and traded at $1,749.75 by 10:45 a.m. in Tokyo. The metal fell 5.6 percent last month, touching $1,741.25 on Nov. 29, the lowest since July 2009. Today’s drop brought losses this year to 16 percent. Copper was little changed at $7,060 a ton.
- Shoppers Spent Less During Black Friday Weekend, NRF Says. The average U.S. shopper spent less during the Black Friday weekend than last year, according to a survey commissioned by the National Retail Federation. Consumers spent $407.02 on average, a 3.9 percent decline from $423.55 last year, Washington-based NRF said in an e-mailed statement. From Thanksgiving Day through planned trips today, the number of Americans who shopped at stores and websites rose 1.4 percent to 141 million for total spending of $57.4 billion, according to the survey of more than 4,400 people by Prosper Insights & Analytics.
- Citigroup(C) to BofA(BAC) Spurn Treasuries to Hoard Cash on Taper Risk. Never before have America’s banks been so wary of risking their cash deposits on U.S. government debt. After holdings of U.S. debt surged to a record $1.89 trillion in 2012, lenders from Citigroup Inc. to Bank of America Corp. and Wells Fargo & Co. (WFC) are culling for the first time in six years and amassing dollars. Banks’ $1.8 trillion of the bonds now equal less than 70 percent of their cash, the least since the Federal Reserve began compiling the data in 1973.
- Metro-North Train Derails in NYC, Killing Four. New York’s Metro-North Railroad is shut down along the Hudson River after a train derailment caused the first passenger fatalities in the line’s 30-year history, renewing scrutiny of safety on one of the city’s major mass-transit arteries. Four people were killed and 63 injured in the accident today in the Riverdale section of the Bronx. Red and silver railcars flipped onto their sides, with the lead car coming to rest on the bank of the Harlem River. The crash marked the third time in a year that service to New York on the railroad, which provided 83 million rail rides in 2012, has been forced to shut down because of an accident.
- OPEC Rift Emerging Over Iraq Output, Possible Return of Iran. Some Members of the Cartel May Have to Decide to Cut Output in the First Half of Next Year. Tensions are emerging within the Organization of the Petroleum Exporting Countries over which member countries should trim oil production to make room for a resurgence in Iraqi exports and the possible return of more Iranian crude to world markets if sanctions are eased. There is no expectation of a decision to cut back at the OPEC cartel's meeting in Vienna on Wednesday. The group of 12 of the world's largest producers, though long riven by squabbling, has kept its overall production ceiling at 30 million barrels a day since December 2011.
- Fed Eyes Financial System's Weak Link. Move to Rein In Short-Term-Funding Market Carries Risks of Its Own.
- Web Companies Embrace TV Ads. New Media Find the Reach of Television Commercials Hard to Resist.
- Franco's Legacy Rattles Spain. A series of headline-grabbing incidents in recent months has prompted soul-searching among Spaniards over dictator Francisco Franco's enduring legacy—and the disruptive potential for extremism to flare at a time of deep economic distress. Over the summer, several Spaniards posted pictures of themselves holding fascist flags or giving Nazi salutes on social-media sites. In September, a self-described fascist group assaulted a cultural center in Madrid representing Catalonia, a region that was repressed by Franco and is now home to a growing political movement seeking independence from Spain.
- Insurers Seek to Bypass Health Site. Administration Officials Acknowledged 'More Work to Be Done'.
- ObamaCare Mission Accomplished. The system isn't working and the website isn't fixed. Great news: The White House says that Healthcare.gov and the 36 federally run insurance exchanges are finally good to go. The only thing missing from Sunday's relentlessly upbeat progress report was President Obama in front of a "Mission Accomplished" banner.
Fox News:
Business Insider:- US warns airlines to take precautions over disputed islands claimed by China. The State Department said Wednesday it is advising U.S. airlines to take necessary steps to operate safely in China's newly declared air defense zone in the East China Sea, a day after two American B-52 bombers flew through the contested airspace. State Department spokeswoman Jen Psaki told reporters at a daily press briefing that the U.S. is attempting to determine whether China's new air defense zone rule requiring foreign aircraft to identify themselves applies to commercial airlines, Reuters reported. "In the meantime, U.S. air carriers are being advised to take all steps they consider necessary to operate safely in the East China Sea region," Psaki said.
- Playing with fire? Margin debt most since crisis. As investors feel emboldened by the seemingly unstoppable stock market rally, they're borrowing money at record levels to keep things going.
- $3 trillion headache on the way for corporations. Borrowing money at bargain basement interest rates may seem now like a nice way to pad profits and share prices, but it may not be as much fun in a few years. Companies face three consecutive years where more than $1 trillion each will come due in the form of maturing bond issues that have been used during the free-wheeling, zero-interest days courtesy of the Federal Reserve.
New York Times:
- Turning to Public to Back Investigative Journalism. If you suspect your local town government is corrupt, would you pay a journalist to investigate? Uncoverage, a website that will be announced on Monday, will test whether the public cares enough about investigative journalism to pay for it. The site, to be at Uncoverage.com, will allow journalists and nonprofits to seek crowdsourced funding for both articles and topics like, for example, the Syrian war. Money for general topics will be split up among projects by the site’s editors.
Reuters:
- Japan: no change to airlines' notification policy when flying in East China Sea zone. Japanese Chief Cabinet Secretary Yoshihide Suga said on Monday there was no change to Japan's policy of not notifying Chinese authorities when its commercial aircraft fly through China's new air defense identification zone.
- Investors poured $31.6 bln into equity funds in Nov -TrimTabs. Investors poured $31.6 billion into all equity mutual funds and exchange-traded funds in November, favoring equities over bonds for a sixth straight month, data from TrimTabs Investment Research showed on Sunday.
- Amazon(AMZN) testing delivery by drone, CEO Bezos says. It would speed up delivery of online orders, but the technology is at least three or four years away.
- Thousands Of Trucks Block French Motorways In Tax Protest. (pics) Thousands of trucks block major motorways across France in protest at a proposed 'ecotax' on heavy goods traffic.
- CMBS issuance at highest since before the crisis. Worldwide issuance of securities backed by revenues from commercial mortgages has nearly doubled this year to the highest levesince 2007 as US and European banks pile back into property lending. Issuance of commercial mortgage-backed securities has reached $92.9bn so far this year, up from $48.7bn in the same period in 2012, according to Dealogic, the data provider.
- Germany's Gauweiler Says Euro Area Like Soviet States. Euro area is comparable to socialist states a quarter of a century ago, doubts it will last, Peter Gauweiler, vice-chairman of Merkel's CSU Bavarian sister party, says in an interview. "The more irreversible one considers a conglomerate, the faster it dissolves," Gauweiler said.
- Merkel Adviser Says German Minimum Wage Risks Jobs. Minimum wage of EU8.50/hr planned by new German govt coalition endangers a "six digit figure" of jobs, Christoph Schmidt, head of Angela Merkel's council of economic advisers said in an interview.
- S. Korea nears finalization of expanded air defense zone. South Korea has nearly finalized plans for a new air defense zone that includes an ocean research station built on an underwater reef and southern islands, Seoul's officials said Monday. The latest move comes after China last week declared an Air Defense Identification Zone (ADIZ) over the East China Sea and demanded all foreign aircraft passing through the zone to identify themselves to Chinese authorities. The area overlaps those of South Korea and Japan and has sharply raised tensions in Northeast Asia.
- U.S., Japan to Issue Statement Decrying China Air Zone. U.S. and Japan will issue a joint statement next week calling on China to retract its newly established air-defense zone. Statement calls the zone an extremely dangerous experiment that will unilaterally change the situation in the East China Sea.
- NDRC Officials Say China Faces Price Pressures. China may face larger upward price pressure in 2014 compared to this year, according to an article by Xu Lianzhong and He Xiaoying, officials at the National Development and Reform Commission's price monitoring center. China can't relax on price controls next year. China should be cautious about using expansionary monetary tools to ensure the continuity of macroeconomic policies. China should expand property tax as soon as possible to curb property prices from rising too quickly, he said.
Weekend Recommendations
Barron's:- Bullish commentary on (DAL), (GM), (HPQ), (OI), (PBI), (SWY), (CHS), (DRI), (ARCP), (BHI) and (COF).
- Asian indices are -.75% to +.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 131.0 -1.0 basis point.
- Asia Pacific Sovereign CDS Index 106.5 -.75 basis point.
- FTSE-100 futures -.25%.
- S&P 500 futures +.07%.
- NASDAQ 100 futures +.17%.
Earnings of Note
Company/Estimate
- (KKD)/.15
- (SCVL)/.52
- (THO)/.71
8:58 am EST
- The Markit US PMI Final for November is estimated at 54.3 versus a prior estimate of 54.3.
- ISM Manufacturing for November is estimated to fall to 55.1 versus 56.4 in October.
- ISM Prices Paid for November is estimated to fall to 55.0 versus 55.5 in October.
- Construction Spending for October is estimated to rise +.4%.
- None of note
- The Eurozone Manufacturing PMI, Australia rate decision, China Non-Manufacturing PMI, Cowen Energy Conference and the CSFB Tech Conference could also impact trading today.
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