Bloomberg:
- Yen's Role in Abenomics Threatened by Tokyo Vote: Currencies. Tokyo's gubernatorial elections this weekend could hardly come at a worse time for Japanese Prime Minister Shinzo Abe and his efforts to boost the economy by depreciating the yen. Among the frontrunners is Morihiro Hosokawa, an opponent of the premier's pro-nuclear stance whose victory would undermine faith in the government's Abenomics policy and may push up the currency, according to firms from Sumitomo Mitsui Banking Corp. to Nomura Securities Co. The economic plan is already being tested by the yen's 4.3% jump this year as investors fleeing emerging markets seek havens for their cash.
- Fukushima Wash-Up Fears in U.S. Belie Radiation Risks: Energy. Seaborne radiation from Japan’s wrecked Fukushima nuclear plant will wash up on the West Coast of the U.S. this year. That’s raising concerns among some Americans including the residents of the San Francisco Bay Area city of Fairfax, which passed a resolution on Dec. 6 calling for more testing of coastal seafood.
- Japanese Banks' Record Earnings Mask Prospects for Profit Growth. Japan's biggest banks, poised to achieve record annual earnings after last year's stock-market surge, may still disappoint investors as the equity rally fades, leaving them reliant on a lending recovery for profit.
- Japan Sees Worst Developed-Stock Rout as Nikkei 225 Drops. What a difference a year makes. At the end of January 2013, Japanese stocks trailed only Portugal for the biggest rally among developed markets. Now the Nikkei 225 Stock Average is leading declines, slumping 8.5 percent last month and yesterday capping a 10 percent drop from its Dec. 30 peak.
- Lenovo Slumps on Analyst Downgrades After Buying Spree. Lenovo Group Ltd. (992), which announced $5 billion of deals last month to bolster its server and smartphone businesses, plunged the most in five years in Hong Kong after the stock was downgraded by at least five brokerages. Lenovo fell as much as 15 percent to HK$8.55, headed for its biggest decline since January 2009. The world’s biggest maker of personal computers was cut at UBS AG (UBSN), Morgan Stanley (MS), Jefferies Group LLC, JI-Asia Research Ltd. and Kim Eng Securities Ltd., according to data compiled by Bloomberg.
- RBA Shifts to Neutral as It Signals Comfort With Aussie’s Level. Australia’s central bank signaled the end of a two-year easing cycle and foreshadowed stronger economic growth, sending the nation’s currency higher.
- Asian Stocks Extend Rout With Copper; Credit Risk Rises. Asian stocks tumbled, extending a global selloff, with Japanese and Hong Kong shares dragging the regional index toward its lowest close in five months. Copper headed for its longest losing streak in 28 years and Australia’s currency surged as the country’s central bank held rates. The MSCI Asia Pacific Index lost 2.4 percent by 12:46 p.m. in Tokyo, the most since June. Japan’s Topix index plunged toward a correction and the Hang Seng Index slid 2.3 percent in Hong Kong. Copper fell as much as 0.3 percent in London, a 10th straight decline. The so-called Aussie climbed 1.1 percent. Asian credit risk rose to the highest in five months.
- Copper Heads for Longest Slump in 27 Years on Factory Outlook. Copper dropped for a 10th day, heading for the longest losing streak since at least April 1986, on signs of weakening demand after manufacturing slowed in China and the U.S., the world’s top metals consumers. Copper for delivery in three months on the London Metal Exchange slid as much as 0.3 percent to $7,016 a metric ton, the lowest intraday level since Dec. 4, and was at $7,028.75 at 10:51 a.m. in Tokyo.
- Rubber Falls to Near 17-Month Low as U.S. Factory Growth Slows. Rubber futures in Tokyo declined to the lowest level in almost 17 months after signs of slowing global industrial output boosted demand for the Japanese currency as a haven. The commodity for delivery in July fell as much as 2.3 percent to 221.8 yen a kilogram ($2,192 a metric ton) on the Tokyo Commodity Exchange, the lowest intraday price for a most-active contract since Sept. 6, 2012. Futures traded at $223.3 yen by 10:25 a.m. local time, down 19 percent this year after entering a bear market last week.
- Banks to Corporates Prepare for Big Bang of EU Swaps Rules. Companies from banks and technology firms to energy suppliers are set to face European Union swaps rules, amid warnings from some businesses that they may not have all the systems in place to meet this month’s deadline. Starting Feb. 12, firms in the EU must begin systematic reporting of their derivatives transactions to data banks known as trade repositories. The measure marks the EU’s implementation of a global agreement targeted at preventing any repeat of the financial crisis that followed the collapse of Lehman Brothers Holdings Inc.
- U.S. Said to Probe Banks Over Sovereign Wealth Fund Dealings. The U.S. Justice Department is investigating whether financial firms made improper payments to secure investments from sovereign wealth funds, according to two people familiar with the matter. The probe, which grew out of a Securities and Exchange Commission inquiry, looks at firms including Goldman Sachs Group Inc.(GS) that sought business from Libya’s sovereign wealth fund before Muammar Qaddafi’s regime was toppled in 2011, said one of the people, who asked not to be identified because the investigation isn’t public.
- Firms Pinched by Pressure to Hold Down Their Prices. Intense Competition, Cost-Conscious Consumers Keep a Lid on Revenue Growth.
- Fractures Emerge Between Obama, Congressional Democrats. Coming Midterms Complicate White House's Agenda on Trade, Energy, Health Care.
- O'Reilly v Obama, Round 2 : Keystone, poverty and veterans. President Obama told Bill O’Reilly Monday on “The O’Reilly Factor” that he was waiting to get an official recommendation from Secretary of State John Kerry before proceeding with the Keystone Pipeline. Obama also took issue with the number of jobs the pipeline would create after supporters said it would create tens of thousands.
- Look out – Technicians see more selling. The S&P 500 broke below an important trend line Monday, and technicians see more selling ahead.
Business Insider:
Washington Post:
- House GOP finalizes debt-limit playbook. Several House members told The Washington Post on Monday that Republican leaders have narrowed their list of possible debt-limit strategies to two options: trading a one-year extension for approval of the Keystone XL pipeline, or trading a one-year extension for repeal of the Affordable Care Act’s risk corridors.
- Emerging market crisis not caused by U.S. Fed taper -Credit Suisse. A rout in emerging market assets is not the result of the U.S. Federal Reserve's decision to scale down years of monetary stimulus, a senior Brazil-based fund manager for Credit Suisse Group AG said on Monday.
- Central banks can only offer sticking plasters, yet their power grows by the day. The central bank mandate just keeps on growing; these latter day lords of finance are progressively moving in where governments fear to tread.
- China 2014 Job Market Needs to Absorb 7.3m Graduates. Job market will face pressure this year to absorb 7.3m college graduates, citing Yuan Guiren, Minister of Education.
- None of note
- Asian equity indices are -2.25% to -1.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 157.0 +6.0 basis points.
- Asia Pacific Sovereign CDS Index 119.25 +3.25 basis points.
- FTSE-100 futures -.53%.
- S&P 500 futures +.40%.
- NASDAQ 100 futures +.35%.
Earnings of Note
Company/Estimate
- (ADM)/.84
- (GCI)/.65
- (BSX)/.13
- (IP)/.86
- (AGCO)/1.34
- (EMR)/.67
- (HCA)/.86
- (BDX)/1.29
- (IDXX)/.81
- (CME)/.67
- (R)/1.29
- (CL)/.91
- (CVD)/.84
- (GILD)/.50
- (CHRW)/.68
- (BWLD)/1.06
- (AFL)/1.39
- (TDW)//1.11
- (CERN)/1.39
- (DV)/.73
10:00 am EST
- Factory Orders for December are estimated to fall -1.8% versus a +1.8% gain in November.
- The IBD/TIPP Economic Optimism Index for February is estimated to fall to 44.5 versus 45.2 in January.
- None of note
- The Fed's Evans speaking, Fed's Lacker speaking, UK Construction PMI report, weekly retail sales reports, ISM New York for January, (MBT) investor day and the (SAP) investor day could also impact trading today.
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