Bloomberg:
- Bank of Russia Picks New Monetary Policy Chief as Ruble Plunges. Russia’s central bank replaced its head of monetary policy after a series of emergency measures failed to contain the ruble’s decline, drawing criticism from President Vladimir Putin. Dmitry Tulin, a former central bank official who also worked at the International Monetary Fund and Deloitte LLP, will take on Ksenia Yudaeva’s role as first deputy governor in charge of monetary policy, the Bank of Russia said in a statement yesterday. Yudaeva, who remains a first deputy to Governor Elvira Nabiullina, will focus on forecasting, strategy and financial stability, she told reporters in Moscow.
- China's Credit Growth Surges; Shadow Banking Stages a Comeback. China’s shadow banking industry staged a comeback in December as equity investors and local governments contributed to a surge in credit, underscoring challenges for a central bank trying to revive growth without exacerbating risks. Aggregate financing was 1.69 trillion yuan ($273 billion), the People’s Bank of China said in Beijing today, topping the 1.2 trillion yuan median estimate in a Bloomberg survey. While new yuan loans missed economists’ forecasts, shadow lending rose to the highest in monthly records that began in 2012.
- China Regulators Watching Online Loans as Risks Multiply. Rising failures in China’s peer-to-peer lending industry may pressure authorities to regulate a segment of Internet finance that almost quadrupled in size last year. The number of platforms that went bankrupt or had difficulty repaying money climbed to 275 in 2014 from 76 a year earlier, according to Yingcan Group, which tracks China’s more than 1,500 online lending sites. Last month, police started investigating the originator of two Sina Corp. (SINA) wealth products for illegal fundraising.
- China Adds 3.5 Million Investors as Funds Exit: Chart of the Day. Chinese brokerages welcomed more individual investors the past six weeks than any similar period in seven years. Those 3.5 million new customers are being greeted by some fund managers on the way to the exits.
- India Cuts Rates in Unscheduled Move After Inflation Drop. Reserve Bank of India Governor Raghuram Rajan unexpectedly cut interest rates to help revive growth in Asia’s third-largest economy after a slide in the inflation rate. In an unscheduled review, Rajan lowered the benchmark repurchase rate to 7.75 percent from 8 percent, he said in a statement today, the first reduction since May 2013.
- Bank of Korea Cuts 2015 Forecasts for Inflation, Economic Growth. South Korea’s central bank cut its forecasts for consumer prices and economic expansion this year following a policy meeting at which it kept the benchmark interest rate unchanged at a record low. Inflation will slow to 1.9 percent, from a previous estimate of 2.4 percent, Governor Lee Ju Yeol said today after the bank held the seven-day repurchase rate at 2 percent. Gross domestic product growth is expected to ease to 3.4 percent, compared with an earlier projection of 3.9 percent.
- Most Asian Stocks Advance as Japan Rebound Outweighs U.S. Sales. Most Asian stocks rose as a rebound by Japanese energy companies and exporters outweighed disappointing U.S. retail sales. About two shares rose for each that fell on the MSCI Asia Pacific Index (MXAP), which lost 0.1 percent to 137.35 as of 9:16 a.m. in Tokyo, before markets opened in China and Hong Kong.
- U.S. Output Gains Bolster Concern Over Oil Glut Sending Prices Back Down. Oil resumed its decline after the biggest gain since June 2012 as U.S. crude production increased, bolstering speculation a global supply glut that spurred last year’s price collapse may persist. Futures dropped as much as 0.9 percent in New York. U.S. output surged to 9.19 million barrels a day last week, the fastest pace in weekly records dating back to January 1983, the Energy Information Administration reported yesterday. Crude may fall below a six-month forecast of $39 a barrel and rallies could be thwarted by the speed at which lost shale production can recover, according to Goldman Sachs Group Inc.
- U.S. Oil Output Will Grow Even When Rigs Are Idle: Chart. “We are still riding the wave of the drilling activity that took place when prices were higher,” said Michael Cohen, an analyst at Barclays Plc in New York. Oil production may grow even as the rig count falls due to “the rapid productivity gains in many different places,” he said.
- Nowhere to Hide for Miners as Copper Joins Commodity Rout. Copper’s plunge is leaving the world’s largest mining companies with nowhere left to hide from the rout engulfing commodities and increasing pressure on them to cut spending and dividends. Copper fell as much as 8.7 percent yesterday in London, triggering a selloff in mining equities including BHP Billiton Ltd. (BHP), Glencore Plc (GLEN) and Rio Tinto Plc. (RIO) The metal is down 12 percent on the London Metal Exchange this year amid concern about a slowdown in China, the biggest consumer of metals.
- Iron Ore Forecasts Cut by UBS on Supply Growth and Oil Rout. Iron ore will extend losses as the biggest producers expand low-cost supply and demand growth stays weak, according to UBS Group AG, which cut price forecasts and listed the commodity as its least-favored metal. Miners’ shares fell, with Fortescue Metals Group Ltd. (FMG) down 17 percent this week. Cheaper energy prices are lowering the cost of mining and shipping metals including iron ore, according to the bank, which forecast a rising global glut. The raw material will average $66 a metric ton this year, 22 percent less than previously forecast, and $65 in 2016, down 21 percent, it said. Surging low-cost supplies from BHP Billiton Ltd. (BHP), Rio Tinto Group and Vale SA are outpacing demand growth in China, spurring a 47 percent plunge in prices last year. UBS’s price-forecast cuts follow similar reductions yesterday from Citigroup Inc., which cited rising supplies and cheaper oil. Among projects set to start output this year amid the bear market is the A$10 billion ($8.2 billion) Roy Hill mine in Australia’s Pilbara.
- Global Gold Demand Seen Rising 15% by HSBC on Asia-to-ETP Buying. Gold demand will rebound in 2015 as bullion consumption in Asia increases and investors return to exchange-traded products backed by the metal, according to HSBC Securities (USA) Inc. Global demand may rise 15 percent to 4,127 metric tons this year, analysts James Steel and Howard Wen wrote in a report dated Jan. 14. Consumption reached a record 4,582.3 tons in 2011, when prices climbed to a peak of $1,921.17 an ounce, according to data from the World Gold Council.
- Months of Airstrikes Fail to Slow Islamic State in Syria. Militant Group Has Gained Territory Despite U.S.-Led Strikes, Raising Concerns of the Obama Administration’s Mideast Strategy. More than three months of U.S. airstrikes in Syria have failed to prevent Islamic State militants from expanding their control in that country, according to U.S. and independent assessments, raising new concerns about President Barack Obama’s military strategy in the Middle East.
- French Jews Face Hate They Left Africa to Escape. France Was Supposed to Be a Safe Haven for Jews Fleeing North Africa Decades Ago.
- RadioShack Prepares Bankruptcy Filing. Struggling Electronics Chain, in Talks with Lenders, Could File as Soon as Next Month. RadioShack Corp. is preparing to file for bankruptcy protection as early as next month, people familiar with the matter said, following a sputtering turnaround effort that left the electronics chain short on cash.
- Apache(APA) to Lay Off Roughly 5% of Staff. Houston Energy Company to Lay Off As Many As 250 This Week.
- Why We’re Losing to Radical Islam. Fourteen years after 9/11, we still lack a strategy. Congress should lead with hearings on the enemy and how to prevail.
- Lawmakers urge new US strategy as Boko Haram rampages through Africa. (video) One of the most brutal and murderous Islamist militant groups has been steadily gaining ground, inflicting a streak of atrocities shocking by even their standards -- and it's not Al Qaeda or the Islamic State.
- How to defend your money from the emerging bear market. Another trading day, another bout of volatile stock market action. Yet most investors nowadays aren’t too concerned about the market. This is what happens at market tops. Skeptics are ridiculed as “naysayers,” “permabears” or “doom-and-gloomers.” As the bull market goes higher, many investors think that maybe it really is different this time. Maybe central banks have the power to keep markets levitated indefinitely. Meanwhile, the bubble gets bigger and bigger, until complacent investors accept the bubble as the “new norm.” Nowadays, uber-bulls believe this market is unstoppable, while some experts have made predictions of Dow 20,000 in 2015.
- Skyscraper Index Goes Global. (graph)
- Lottery Sales Are Collapsing. (graph)
- What Happens To High-Wage Jobs Next? (graph)
Reuters:
- Carlos Slim becomes NY Times(NYT) largest shareholder. New York Times Co said Mexican billionaire Carlos Slim has increased his stake to 16.8 percent, becoming the largest shareholder of the company.
- Rural India slowdown threatens Modi's promise of "better days". Sugarcane grower Nilesh Kadam has abandoned plans to buy a tractor. He doesn't have enough money, like many Indian farmers hit by erratic weather and sliding prices for the cotton, soybean and rubber they produce.
- Nasdaq(NDAQ) plans challenge to CME(CME) and ICE(ICE) in energy derivatives. Exchange operator Nasdaq OMX Group is considering entering the energy derivatives market in a challenge to CME Group and Intercontinental Exchange Inc, according to documents seen by Reuters.
- Europe's imperial court is a threat to all our democracies. The European Court of Justice has this time departed a long way from the rule of the law, even by its own elastic standards. The European Court of Justice has declared legal supremacy over the sovereign state of Germany, and therefore of Britain, France, Denmark and Poland as well. The ECJ's advocate-general has not only brushed aside the careful findings of the German constitutional court on a matter of highest importance, he has gone so far as to claim that Germany is obliged to submit to the final decision. "We cannot possibly accept this and they know it," said one German jurist close to the case.
- German Politician Sees Conflict Over EU Court Bond Ruling. Klaus-Peter Willsch, economics adviser for Germany's CSU/CDU parliamentary faction, says European Court of Justice ruling on European Central Bank's bond-buying plan may provoke a legal conflict with the Federal Constitutional Court, citing interview. The Karlsruhe-based constitutional court designated the OMT program as incompatible with existing law and the European court ruling can't simply wipe away those concerns. Two institutions heading into a legal conflict unless the ECJ plausibly explains why their ruling isn't contrary to European law. Says a rift has opened up in Europe over the ECB's crisis management strategy. ECB monetary, financial and economic policies have become entangled in a Gordian knot.
- German Industry Official Warns of 'Artificial' Inflation. Martin Wansleben, managing director of the DIHK national industry and trade chambers, says that low inflation in 2014 and decline in oil prices will result in a real wage gain of EU5b. European Central Bank's bond purchase program will lead to contrived rise in inflation rates. ECB needs to be cautious about increasing inflation at any cost, he said.
- None of note
- Asian equity indices are -.25% to +1.0% on average.
- Asia Ex-Japan Investment Grade CDS Index 118.5 -.5 basis point.
- Asia Pacific Sovereign CDS Index 75.75 unch.
- S&P 500 futures +.05%.
- NASDAQ 100 futures +.08%.
Earnings of Note
Company/Estimate
- (BLK)/4.68
- (LEN)/.96
- (FAST)/.40
- (BAC)/.31
- (C)/.09
- (PPG)/1.99
- (INTC)/.66
- (SLB)/1.46
8:30 am EST
- Empire Manufacturing for January is estimated to rise to 5.0 versus -3.58 in December.
- PPI Final Demand for December is estimated to fall -.4% versus a -.2% decline in November.
- PPI Ex Food & Energy for December is estimated to rise +.1% versus unch. in November.
- Initial Jobless Claims are estimated to fall to 290K versus 294K the prior week.
- Continuing Claims are estimated to fall to 2400K versus 2452K prior.
- Philly Fed Business Outlook Index for January is estimated to fall to 18.7 versus 24.5 in December.
- None of note
- The China FDI report, weekly EIA natural gas inventory report, Bloomberg US Economic Survey for January, weekly Bloomberg Consumer Comfort Index and (BBY) holiday results could also impact trading today.
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