Today's Headlines

Bloomberg:

• Emerging Stocks Fall on Data as Brazil Leads World Losses. Emerging-market stocks fell to a five-month low as a manufacturing slowdown in China and the U.S. bolstered concern global growth will falter. Brazil’s Ibovespa led losses in world equities as Petroleo Brasileiro SA tumbled. The MSCI Emerging Markets Index dropped 1.1 percent to 926.18 at 1:32 p.m. in New York. Brazil’s Ibovespa posted the biggest decline among the 94 global equity gauges tracked by Bloomberg as oil producer Petrobras sank to an eight-year low. Turkey’s lira extended its worst start to a year since 2009 after inflation quickened to the highest level in three months. Ukrainian bonds rallied on speculation the European Union will offer financial aid to rival emergency loans from Russia. “When both the U.S. and China show slowing growth in manufacturing, it’s a really big deal,” Paul Zemsky, the head of multi-asset strategies at ING U.S. Investment Management, which oversees $200 billion, said by phone from New York. “There is no place in the world right now that investors are comfortable about economic growth.” All 10 groups in the measure for developing-nation equities decreased, led by commodity companies. The iShares MSCI Emerging Markets Index exchange-traded fund fell 2.4 percent to $37.27 today. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, advanced 7.1 percent to 30.96.

• Emerging-Market Rout Seen Enduring on Low Real Rates. Inflation-adjusted interest rates are still too low in developing nations for Citigroup Inc. and Goldman Sachs Group Inc. to foresee an end to the worst emerging-market currency selloff in five years. One-year borrowing costs in Turkey are 3.6 percent, less than half of the average in the three years before the 2008 global financial crisis, even after the central bank doubled its benchmark rate last week, according to data compiled by Bloomberg. The real yield for Mexico is almost zero, while South Africa’s is 1.4 percent, compared with an average of 2 percent over the past decade. Central-bank rate increases in Turkey, India and South Africa last week failed to contain January’s 3 percent selloff in emerging-market currencies. Citigroup says yields aren’t high enough to attract the capital needed to finance current-account deficits in some of those nations. Competition for capital is intensifying with the Federal Reserve paring monetary stimulus, while the International Monetary Fund is calling for “urgent policy action.” 

• Europe Stocks Drop as Lloyds Falls on Compensation Costs. European stocks declined, following their worst start to a year since 2010, as Lloyds Banking Group Plc dragged a gauge of banks lower and a report showed U.S. manufacturing expanded at the slowest pace in eight months. Lloyds posted its biggest drop since September 2012 after saying it set aside 1.8 billion pounds ($2.9 billion) in the fourth quarter to cover the cost of compensating customers for mis-sold payment protection insurance. Colruyt SA tumbled the most in more than two years after cutting its annual profit forecast. Ryanair Holdings Plc (RYA) rallied the most in eight months after saying more people have booked flights for this summer than at this stage a year ago. The Stoxx Europe 600 Index fell 1.3 percent to 318.21 at the close of trading, dropping to its lowest level in six weeks. The benchmark slid 1.8 percent in January. It has slumped 5.3 percent from a six-year high on Jan. 22 as the Argentinian government’s decision to allow the peso to devalue triggered a rout in emerging-market currencies. 

• Gold Posts Biggest Gain in More Than Week on Rising Haven Demand. Gold futures for April delivery advanced 1.6 percent to settle at $1,259.90 an ounce at 1:41 p.m. on the Comex in New York, the biggest gain since Jan. 23.

• ISDA Says Credit Derivatives Overhaul Postponed to September. The biggest overhaul of the $21 trillion credit derivatives market in more than a decade has been postponed until September, according to the International Swaps & Derivatives Association.

• Yellen Sworn in as Fed Chairman as Bernanke Joins Brookings. Janet Yellen was sworn in today as the chairman of the Federal Reserve’s Board of Governors in Washington, while her predecessor, Ben S. Bernanke, joined the Brookings Institution as a distinguished fellow in residence.

Wall Street Journal:

• U.S. Banks Eased Lending Standards in Late 2013.

MarketWatch:

• Retail investors help drive contagion from emerging markets to global stocks: SocGen’s Juckes. (graph)

• Dollar drops to more than 2-month low vs. yen. The dollar dropped to its lowest level against the yen in more than two months on Monday after data showed a sharp slowing in the pace of U.S. manufacturing-sector expansion.

CNBC:

• After swearing in, Yellen's next hurdle is GOP scrutiny. The Janet Yellen era officially began with the new Fed chair's swearing in at the central bank Monday morning. But Yellen's real challenges start next week, when she faces the House Financial Services Committee on Tuesday and the Senate Banking Committee on Thursday. 

• The 10 worst states for taxes in 2014.

• Watch Art Cashin: Why stocks are getting slammed. (video)

ZeroHedge:

• Deutsche Bank: "We've Created A Global Debt Monster". (graph)

• Ford(F), GM(GM) Car Sales Tumble: Weather Blamed As Usual.

• ISM Has Biggest Miss On Record, New Orders Plunge Most Since 1980. (graph)

• One-Chart Update Of Global Manufacturing.

• Emerging Market FX Hits Fresh 5-Year Low - Contagion Unfixed. (graph)

• GM(GM) Channel Stuffing Second Highest Ever In January. (graph)

• Abenomics & How The Nikkei Writes The News. (graph)

• Latin American Currencies Plunge To 2003 Lows, Argentine BONARs Shrink. (graph)

ValueWalk:

• EM Outflows Just Getting Started: Societe Generale.

Business Insider:

• A 1993 Law That Democrats Loved Could Kill A Key Part Of Obamacare. 

• EEK: Look What Just Happened To The Economic Surprise Index. (graph)

Reuters:

• Brazil posts widest trade deficit ever in January. Brazil's trade deficit in January was the biggest on record, after a rise in raw material exports failed to offset greater imports of consumer and capital goods, the Trade Ministry said on Monday. 

• METALS-Copper hits 2-month low; China, U.S growth concerns drag. Copper fell to a two-month low on Monday, with slowing factory growth in top consumer China and the United States compounding a deteriorating demand outlook for the metal. China's factory growth eased to an expected six-month low in January, hurt by weaker local and foreign demand, heightening worries of an economic slowdown. Also, growth in China's services sector slowed to a five-year low in January.

• GLOBAL ECONOMY-China, U.S. drag on global manufacturing revival. Slower growth in the Chinese and U.S. factory sectors raised worries about global growth on Monday, even though European manufacturers enjoyed a solid start to the year. Data showed growth in China's manufacturing sector slowed to a six-month low, while its service sector grew at its slowest pace in five years.

Financial Times:

• Investors turn wary on US earnings growth. There is one certainty in the stock market: companies usually beat their lowballed earnings forecasts. At least, that is what equity bulls say. Others have turned wary.

Telegraph:

• US could start defaulting on debt 'very soon' warns Lew. US Treasury Secretary calls on Congress to raise debt ceiling immediately to prevent the issue from harming the economic recovery. 

• Emerging markets risk repeating eurozone blunder of synchronised tightening. Where have seen this screenplay before? A string of countries tighten policy at the same time – some drastically – in order to prevent capital flight and show investors how tough they can be.