Bloomberg:
- Shanghai Glut Rises With Tallest Tower: Real Estate. When completed in 2015, the Shanghai Tower will be China’s tallest building. The 632-meter (2,074-feet) skyscraper will also deepen a glut of offices in the city, putting pressure on rents. The project, in the Lujiazui financial district, will add 220,000 square meters (2.4 million square feet) of office space, or more than 10 percent of the new supply forecast for the city in 2015, according to RET Property Consultancy Ltd. About 2 million square meters of grade-A offices will be added between 2014 and 2015, more than double the supply in the previous two years, according to broker Savills Plc.
- North Korea Marking Kim’s Death Offers Post-Purge Insight. North Korean leader Kim Jong Un is set to commemorate the death of his father Kim Jong Il, an event that may give insight into the country’s new power lineup after the execution of his uncle and deputy for treason. The ouster of Jang Song Thaek came two years after Kim Jong Un inherited power from his father who died of a heart attack in December 2011. Believed to be about 30, the young leader has purged a series of senior officials, including Jang and former general chief staff Ri Yong Ho, since taking over the 24-million nation and its 1.2-million-strong army. North Korean troops rallied yesterday in Pyongyang, pledging to “become human bullets and bombs” protecting Kim Jong Un, the official Korean Central News Agency reported.
- InterDigital(IDCC) Says China Made Threats Over Patent Dispute. InterDigital Inc. (IDCC) Chief Executive Officer William Merritt said the Chinese government is threatening his company over its bid to collect patent royalties from phonemaker Huawei Technologies Co. China’s antitrust agency, the National Development and Reform Commission, said it “couldn’t guarantee the safety of people” sent on behalf of the CEO or the company’s U.S. lawyers to a meeting scheduled for later this week, Merritt said in a telephone interview.
- China Swaps Climb Toward Six-Month High on Rate Liberalization. China’s one-year interest-rate swaps rose toward a six-month high on bets the nation’s move to free up borrowing costs will make funding more expensive. The People’s Bank of China said the price of money will settle at a relatively high level following rate liberalization because of large demand, Caijing reported yesterday, citing an interview with Governor Zhou Xiaochuan on Dec. 6. Raising caps on savers’ returns would be a key reform after the PBOC ended a floor on borrowing costs in July, according to Andy Ji, a foreign-exchange strategist at Commonwealth Bank of Australia.
- China’s Stocks Fall for Sixth Day as Consumer Companies Decline. China’s stocks fell, sending the benchmark index towards a sixth day of losses, led by consumer companies reliant on economic growth. Qingdao Haier Co. and Gree Electric Appliances Inc. paced losses for consumer-discretionary companies with declines of more than 3 percent. Property developers China Vanke Co. and Gemdale Corp. retreated at least 1 percent. Tasly Pharmaceutical Group Co., a traditional Chinese medicine company, climbed 3 percent as drugmakers advanced. The Shanghai Composite Index (SHCOMP) slipped 0.6 percent to 2,148.06 at the 11:30 a.m. break. The measure, which is heading for its longest losing streak since June, fell the most in a month yesterday after a policy conference ended without announcing economic growth targets and a manufacturing index from HSBC Holdings Plc and Markit Economics unexpectedly slid. China’s one-month Shanghai Interbank Offered Rate rose the most in seven weeks today, surging 68 basis points to 6.2350 percent.
- Asian Stocks Rise as Index Rebounds From Three-Month Low. Asian stocks rose, with the regional benchmark index rebounding from a three-month low, as investors await the outcome of a Federal Reserve meeting after reports showed manufacturing growth accelerated in Europe and the U.S. Honda Motor Co. (7267), a Japanese carmaker that gets 80 percent of sales abroad, climbed 1.6 percent. Dai-ichi Life Insurance Co. (8750) rose 2.4 percent in Tokyo after Barclays Plc advised buying shares of the insurer. Daewoo Engineering & Construction Co. (047040) slumped 8.7 percent after South Korea’s financial services regulator began inspecting the Seoul-based engineering firm’s accounting processes. The MSCI Asia Pacific Index gained 0.5 percent to 137.72 as of 11:13 a.m. in Hong Kong, with nine of the 10 industry groups on the gauge rising.
- Rebar Swings as Investors Weigh Lower Output, Iron Ore Prices. Steel reinforcement-bar futures in Shanghai swung between gains and losses as a decline in iron ore prices countered output cuts from the nation’s steel mills. Rebar for May delivery on the Shanghai Futures Exchange was little changed at 3,672 yuan ($605) a metric ton at 10:15 a.m. local time, after gaining 0.4 percent and dropping 0.1 percent. The contract lost 0.7 percent last week, the first drop in four weeks.
- Budget Deal Lauded by Lawmakers Belies U.S. Fiscal Rigors. Members of Congress are congratulating themselves on a budget accord set to win final passage this week. Business leaders aren’t celebrating, saying the deal leaves too much unfinished business. The budget plan doesn’t extend unemployment insurance for the chronically jobless. It doesn’t continue more than 50 tax breaks that will lapse on Dec. 31 including the research and development tax credit used by companies such as Intel Corp. (INTC). It won’t prevent the next debt limit fight after borrowing authority is set to lapse in February. And it does little to fix a broken process that hasn’t produced a formal budget in four years and has led the government to be funded primarily through stopgap spending bills since 2011.
- 'U.S. Banks Face New Stress-Test Hurdle as Fed, Firm Data at Odds. U.S. banks seeking regulatory approval to boost payouts to shareholders will face a new hurdle next year as the Federal Reserve begins making its own projections for lenders’ balance sheets in annual stress tests. The Fed, using its own model for how banks will fare in an economic slump, may project lower capital ratios for the nation’s largest lenders than what firms calculated, according to a letter issued today by the central bank. That’s because Fed estimates will rely on historical data showing industry assets rose in the last three recessions. In past tests, the examiners used bank estimates that typically predicted a drop in asset balances, according to the letter.
- China's Sprawling Cities Bet Their Future on Getting Even Bigger. Local Governments Approve Steps Such as Cutting Down Hills to Open New Space.
- Judge Deals Blow to NSA Phone Spying. Says Program Is 'Almost Certainly' Unconstitutional. A federal judge ruled Monday that the National Security Agency's collection of phone records "almost certainly" violates the Constitution, setting up a larger legal battle over long-secret counterterrorism programs. U.S. District Judge Richard Leon's sharply worded opinion labeled as "almost Orwellian" the NSA's bulk phone-surveillance program, one of several shots the judge took at the spying and its legal justifications.
- CFTC Is Poised to Expand Its Reach Overseas. U.S. Agency Moving to Impose Swaps Rules on Foreign Financial Firms.
- Republicans Gird for Debt-Ceiling Fight. Budget Deal Nearly Done, Focus Turns to Next Flashpoint.
- Tech Firms Push to Control Web's Pipes. Google(GOOG), Facebook(FB) Raise Tensions With Telecoms in Power Struggle for Internet's Backbone.
- Small businesses claim U.S. government stealing their ideas. "They stole all my stuff and used taxpayer money to do it," John Hnatio, a Maryland small business owner, says of the U.S. government. Hnatio claims the government has put his company, FoodquestTQ, nearly out of business by stealing his firm's software that was designed to be licensed to the Food and Drug Administration to monitor food safety. The FDA "took our ideas, plagiarized my doctoral dissertation on which a patent was based, and then they infringed on our patent. The result was that it decimated our business," he adds.
CNBC:
- Boeing(BA) announces $10 billion share buyback, boosts dividend. Boeing authorized a $10 billion share buyback, and said it would raise its dividend by 50 percent to 73 cents a share, the company said Monday. Shares jumped 1.83 percent in the after-hour trade after the announcement.
- Feds probe JPMorgan(JPM) interference in Madoff case. U.S. authorities are investigating whether JPMorgan Chase tried to impede their investigation of the Bernard Madoff Ponzi scheme, CNBC has learned. The bank is in the final stages of negotiating a $2 billion settlement involving a variety of allegations of misconduct in its role as Madoff's primary banker, according to sources. But before the settlement talks took hold in recent weeks, the bank was aggressively fighting regulators' requests for information.
- Is a 'panic taper' the real risk to markets? Markets have been obsessed with the timing of the dreaded 'taper' for most of 2013, but according to Wells Capital's Jim Paulsen, the real focus shouldn't be on timing, but on whether the Fed will conduct a controlled taper or a 'panic taper.'
- Camden, New Jersey: One Of Hundreds Of U.S. Cities That Are Turning Into Rotting, Decaying Hellholes.
- Glaxo(GSK) Says It Will Stop Paying Doctors to Promote Drugs. The British drug maker GlaxoSmithKline will no longer pay doctors to promote its products and will stop tying compensation of sales representatives to the number of prescriptions doctors write, its chief executive said Monday, effectively ending two common industry practices that critics have long assailed as troublesome conflicts of interest.
- U.S. Oil Production Projected to Surge, Leading to Lower Prices at Gas Pump. Domestic oil production will continue to soar for years to come, the Energy Department predicted on Monday, scaling to levels not seen in nearly half a century by 2016.
- Washington Post Releases 10 ‘Biggest Pinocchios’ of the Year…Guess How Many Belong to Obama. President Barack Obama netted three of the 10 “biggest Pinocchios of 2013” as judged by The Washington Post’s Fact Checker, including the assertion that “If you like your health care, you can keep it.” The other misleading statements from the president were over the Benghazi terrorist attack and the sequester.
- Australia sees 2013/14 budget deficit ballooning to A$47 bln. Australia's government forecast its budget deficit would swell to A$47 billion ($42 billion) in the year to June as a slowdown in mining investment saps tax revenues and other parts of the economy struggle to pick up the slack. The government now expects tepid gross domestic product growth of 2.5 percent persisting through 2014/15, a downgrade from forecasts of 3.0 percent just four months ago.
- Bank of America(BAC) advises China default contracts to hedge debt storm. Chinese bond yields have already risen to the highest in a decade yet markets remain “complacent” about the implications. Bank of America has advised clients to take out default insurance against Chinese debt, warning that monetary tightening by China’s central bank risks setting off a bout of serious credit stress in 2014. Bin Yao, the bank’s credit strategist in Asia, said Chinese bond yields have already risen to the highest in a decade as the authorities seek to rein in rampant growth of the M2 money supply and excess credit, yet markets remain “complacent” about the implications. He recommends buying credit default swaps (CDS) on five-year Chinese debt as the easiest way to “hedge the China tail risk”. These contracts spiked to 266 after the Lehman crisis and again to 206 during the ‘hard-landing scare’ of late 2011. They have since settled down to stable levels, trading this week near 66.
- Fresh recession risk in France threatens political crisis. The threat of recession is a major upset for President François Hollande, who has talked up recovery and confidently declared the crisis over.
- Japan PM Abe's Cabinet Support Drops 9.3 Percentage Points to 47.4%. Prime Minister Shinzo Abe's cabinet support rate in December dropped 9.3 ppts to 47.4% from a month earlier, according to a survey conducted by Sankei and Fuji News Network Dec. 14-15.
- Hebei to Cut Steel Capacity Even If It Hurts GDP. The northern Chinese province of Hebei will ensure the task of cutting steel overcapacity even if the province has to "sacrifice" GDP growth, People's Daily reports on front page, citing Zhou Benshun, the provincial party secretary, as saying.
- None of note
- Asian equity indices are -.25% to +.75% on average.
- Asia Ex-Japan Investment Grade CDS Index 128.5 -.5 basis point.
- Asia Pacific Sovereign CDS Index 101.50 -.5 basis point.
- FTSE-100 futures -.10%.
- S&P 500 futures -.03%.
- NASDAQ 100 futures unch.
Earnings of Note
Company/Estimate
- (FDS)/1.22
- (SAFM)/2.19
- (PAY)/.26
- (JBL)/.54
- (CTB)/.71
8:30 am EST
- The Consumer Price Index for November is estimated to rise +.1% versus a -.1% decline in October.
- The CPI Ex Food & Energy for November is estimated to rise +.1% versus a +.1% gain in October.
- The 3Q Current Account Deficit is estimated at -$100.2B versus -$98.9B in 2Q.
- The NAHB Housing Market Index for December is estimated to rise to 55.0 versus 54.0 in November.
- None of note
- The Eurozone Inflation data, China Housing Price data, Germany ZEW Index, $32B 2Y T-Note auction, weekly retail sales reports, (AGCO) analyst meeting, (WY) investor meeting and the (HON) 2014 Outlook could also impact trading today.
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