Bloomberg:
- Putin Out to Ease ‘Panic’ at Reeling Economy as Oil Sinks Ruble. President Vladimir Putin will try to persuade Russians today that panic isn’t the answer to their economic pain. His annual speech to both houses of parliament and other officials, delivered in a chandeliered ceremonial hall of the Grand Kremlin Palace in Moscow, is taking on added importance this year. The ruble is near a record low, the economy is headed for a recession and banks are pleading for state aid. “He’ll seek to soothe nerves” in the face of “some panic,” Alexey Panin, deputy director of the Center for Political Information, said by phone from the Russian capital. “But he’ll have to be realistic and present facts and figures that will convince people that all’s well.”
- China’s Commitment to Freedoms in Hong Kong Questioned by U.S. The U.S. State Department’s top official for Asian affairs questioned whether China will keep its promises to preserve Hong Kong’s autonomy amid street protests demanding open elections. “We are concerned by signs that China’s commitment to the ‘One Country, Two Systems’ model,as well as to maintaining a high degree of autonomy, are eroding,” Assistant Secretary of State Daniel Russel told a Senate subcommittee yesterday that questioned the Obama administration’s willingness to prod China.
- China Government Control Endures Through Xi’s Embrace of Market. A year after China’s Communist Party vowed to give markets a decisive role in allocating resources, state intervention in the economy remains pervasive.
- Brazil Doubles Pace of Rate Increase to Meet Inflation Vow. Brazil doubled the pace of the interest rate increases as the government of re-elected President Dilma Rousseff pledges to slow inflation to its 4.5 percent target, a level unseen for more than four years. The bank’s board, led by its President Alexandre Tombini, voted unanimously today to raise the benchmark Selic by half a point to 11.75 percent after a quarter-point increase Oct. 29, as forecast by 31 of 55 economists surveyed by Bloomberg. (BZSTSETA) Twenty-four analysts forecast a quarter-point increase.
- Honda’s Escalating Air-Bag Crisis Frays Half-Century Partnership. Honda Motor Co. signaled a growing rift in its more than 50-year relationship with air-bag maker Takata Corp., as the automaker struggles to contain a crisis that’s killed five motorists in its cars. Honda turned to Stockholm-based Autoliv Inc. to supply replacement parts for recalled vehicles and is negotiating with Japan’s Daicel Corp. on securing more of the components. The carmaker also volunteered to a nationwide recall to replace driver-side safety devices, hours after Takata snubbed a deadline set by the U.S. auto regulator to take similar action.
- Asia Stocks Gain, Led by Japan on Yen; Oil Advances. Asian stocks rose, as Japanese shares extended gains with the dollar near its strongest level since 2007 versus the yen. South Korea’s won slipped while oil climbed in New York and London. The MSCI Asia Pacific Index added 0.4 percent by 11:01 a.m. in Tokyo, as Japan’s Topix index rose 0.8 percent toward the highest level since December 2007.
- Sub-$50 Oil Surfaces in North Dakota Amid Regional Discounts. Oil market analysts are debating if oil will fall to $50. In North Dakota, prices are already there. Crude sold at the wellhead in the Bakken shale region in North Dakota fell to $49.69 a barrel on Nov. 28, according to the marketing arm of Plains All America (PAA) Pipeline LP. That’s down 47 percent from this year’s peak in June, and 29 percent less than the $70.15 paid for Brent, the global benchmark.
- Canada’s Oil Dividends Threatened as $70 Crude Hurts Cash. The ability of Canadian oil producers to lure investors with generous dividends is being tested as cash flow is squeezed by crude trading near five-year lows. Canadian Oil Sands Ltd. (COS) will cut its quarterly dividend 42 percent to 20 cents a share in late January, the Calgary-based company said in a 2015 budget forecast statement today after the close of North American markets. Companies will have to choose between reducing spending or payments to shareholders, said Sprott Asset Management LP’s Eric Nuttall.
- Dollar’s Rise Causes Pain Abroad. A surging dollar and falling commodities prices are delivering a windfall to American shoppers and confounding central bankers by widening the gap between the expanding U.S. economy and struggling countries in Europe and Asia.
- GOP lawmakers, Benghazi survivors fume over House report. A recent report by a GOP-led committee that was seen as going easy on the Obama administration's Benghazi response is drawing stinging complaints from a number of Republicans on the panel, as well as survivors of the attack. Some GOP members on the House Intelligence Committee grumble that the final product "might as well have been written by the minority," while other House Republicans say they are frustrated with the committee's decision to release a report with so many "holes."
- Stock-market correction imminent. (graph)
- Texas AG: 17 states to sue Obama over immigration executive order. Texas is leading a 17-state coalition that sued the Obama administration on Wednesday over its executive order to ease the threat of deportation for some 4.7 million undocumented immigrants, Texas Attorney General Greg Abbott said.
- OPEC won't stop US oil production growth. (video) U.S. oil production could increase next year to levels not seen since the 1970s, despite OPEC's efforts to muscle out American shale producers. While U.S. oil production is predicted to rise by another million barrels a day during 2015 from the current 9 million barrels a day, forecasts are coming down on expectations that OPEC's unwillingness to cut production will keep a lid on prices well into next year. Lower prices limit new drilling and hit high-cost wells first.
Business Insider:
Reuters:
- Brazil steps up monetary tightening to regain investor confidence. Brazil raised its key interest rate on Wednesday to a three year high, accelerating monetary tightening in a bold move to quell inflation and reinforce President Dilma Rousseff's shift toward more business-friendly policies. In a unanimous vote, the central bank's monetary policy committee raised its benchmark Selic rate by 50 basis points to 11.75 percent, its highest since August 2011. The size of the rate increase surprised many analysts who had expected the bank to opt for a second straight 25-basis-point hike to lower inflation that remains above the 6.5 percent ceiling of the official target.
- Plosser says Fed at risk of getting behind curve on rate hikes. The Federal Reserve is at risk of letting too much data put it "behind the curve" on raising interest rates, a top Fed official said on Wednesday, adding that inflation pressures would build the longer the central bank waited for "lift-off." "We're always going to get more data. Maybe it will be good data, maybe bad ... And if you allow that to freeze your policy-making process, you're always going to be stuck behind the curve," Philadelphia Federal Reserve Bank President Charles Plosser said to reporters after a speech at a luncheon here.
BofA:
- Cut (RIO) to Underperform.
- Asian equity indices are -.25% to +.75% on average.
- Asia Ex-Japan Investment Grade CDS Index 100.0 -1.0 basis point.
- Asia Pacific Sovereign CDS Index 61.75 -.75 basis point.
- FTSE-100 futures n/a.
- S&P 500 futures -.01%.
- NASDAQ 100 futures +.03%.
Earnings of Note
Company/Estimate
- (KR)/.61
- (CBK)/.21
- (EXPR)/.15
- (UNFI)/.63
- (SHLD(-3.31)
- (DG)/.80
- (TTC)/.15
- (BKS)/.31
- (COO)/2.03
- (ULTA)/.84
- (AEO)/.22
- (SWHC)/.07
- (FNSR)/.25
- (ZUMZ)/.53
7:30 am EST
- Challenger Job Cuts for November.
- RBC Consumer Outlook Index.
- Initial Jobless Claims are estimated to fall to 295K versus 313K the prior week.
- Continuing Claims are estimated to rise to 2318K versus 2316K prior.
- None of note
- The Fed's Meyer speaking, ECB rate decision, Draghi press conference, BoE decision, weekly EIA natural gas inventory report, weekly Bloomberg Consumer Comfort Index, Goldman Automotive Conference, RBC Telecom/Media/Tech Conference, (LSTR) mid-quarter conference call, (HUM) investor day, (URI) analyst day, (SBUX) investor day, (ALK) investor meeting and the (ARG) analyst meeting could also impact trading today.
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