Bloomberg:
- Obama Urged by Former Officials to Arm Ukrainians Against Rebels. Eight top former U.S. officials urged the White House on Monday to start sending lethal weaponry to Ukraine in its battle against pro-Russian rebels, adding to the pressure on the administration as fighting there has escalated again. Administration officials say they are focused on a diplomatic solution but are examining all options. The call by the eight former officials came in a new report that urges the administration and NATO to send $3 billion of military aid, including anti-armor missiles, to bolster Ukrainian forces over the coming three years.
- Greece is seeking a third debt restructuring: Who’s on the hook? Greek Prime Minister Alexis Tsipras is asking the rest of the euro area to reduce his country’s debt burden. So who’s on the hook if he succeeds? Tsipras has already pledged to repay in full Greece’s obligations to the International Monetary Fund and the European Central Bank. He’s also said private investors won’t be asked to shoulder additional losses after taking the hit for two restructurings since the start for the European crisis. That leaves European taxpayers in the firing line.
- Greece Said to Retreat on Debt Writedown Amid EU Opposition. Greece retreated from its call on the euro area to write down its debt, and instead proposed to exchange existing borrowings for new bonds linked to the country’s growth. Speaking to about 100 financiers in London late on Monday, Finance Minister Yanis Varoufakis outlined plans to swap some Greek debt owned by the European Central Bank and the European Financial Stability Fund for the new securities, according to a person who attended the meeting and asked not to be identified because they weren’t authorized to speak publicly. Varoufakis indicated that the move would allow Greece to avoid imposing a formal haircut on creditors, the person said.
- Lenovo Profit Beats Estimates on Smartphone Share. (video) Lenovo surged the most in a year in Hong Kong trading after posting profit that beat analysts’ estimates as its Motorola Mobility acquisition helped capture a larger share of the global smartphone market. Bloomberg's Ed Lococo reports on "On The Move Asia."
- Asia Stocks Follow U.S. Shares Higher as Oil Rises to Month High. Asian stocks rose, tracking a jump in U.S. equities, as energy shares led gains after oil rebounded to a one-month high. The MSCI Asia Pacific Index rose 0.2 percent to 140.62 as of 9:00 a.m. in Tokyo. Crude gained on speculation investors bought contracts to close out bearish bets amid a falling rig count. Shares in Australia climbed before the central bank reviews its benchmark interest rate.
- Islamic State Reach Cited by Pentagon Gloomier Than Obama’s View. Islamic State extremists are expanding their international footprint in the Mideast and North Africa, the U.S. military’s top intelligence official said, offering a far bleaker security assessment than have President Barack Obama and his political appointees. The Sunni extremist group is extending its reach beyond Iraq and Syria using “ungoverned and under-governed areas” to establish affiliates in Algeria, Egypt and Libya, Marine Lieutenant General Vincent Stewart, director of the Defense Intelligence Agency, said in prepared testimony obtained in advance of a House Armed Services Committee hearing Tuesday.
- Fed Says Some Banks Tightened Oil Loans, Saw Auto Loan Risk. The Federal Reserve said some banks tightened standards or terms to energy-industry borrowers in the fourth quarter, after the price of oil plunged. U.S. banks “reported little change in their standards” for commercial and industrial loans overall, the Fed said today in its Senior Loan Officer Opinion Survey, conducted Dec. 30 to Jan. 13 with 73 domestic banks and 23 U.S. branches of foreign banks. “Banks which reported having tightened either their standards or terms on C&I loans predominantly pointed to industry-specific problems as the main reason for having tightened their lending policies to non-financial businesses,” the Fed said. “Some survey respondents specifically noted their concerns about the oil and gas sector resulting from the sharp decline in the price of oil as a reason that they had tightened their lending policies.” Banks anticipated more risk with sub-prime car loans, with 71 percent saying they expect loan quality to be unchanged while 29 percent said “loan quality is likely to deteriorate somewhat,” according to the Fed survey.
- FCC to Propose Strong ‘Net Neutrality’ Rules. Agency Would Regulate Broadband Providers Tightly Like Telecommunications Firms. The Federal Communications Commission is about to fundamentally change the way it oversees high-speed Internet service, proposing to regulate it as a public utility. Chairman Tom Wheeler is reaching for a significant expansion of the agency’s authority to regulate broadband providers, according to multiple people familiar with the matter.
- What Democrats and the CBO Don’t Get. The numbers reveal that a robust economy, not higher taxes, is the most reliable way to increase federal revenue. The recent rule change by House Republicans to incorporate the macroeconomic impact of major legislation into official budget estimates—“dynamic scoring”—has triggered heated criticisms. But three decades of hard accounting data, in addition to supporting the rule change, should prompt Washington to reconsider the way it thinks about what drives federal revenues.
- Stratasys(SSYS) Plunges 27%: Q4, ’15 View Miss on MakerBot; Steps Up Spending. The stock has deepened its decline, now down $21.33, or almost 27%, at $58.76. Shares of 3-D printer maker Stratasys (SSYS) are down $15.08, over 18%, at $65, and fell as much as 22%, in late trading, after the company this afternoon warned its revenue in Q4 will miss analysts’ expectations, owing to problems getting new product out the door within its consumer MakerBot unit. Shares of competitors are also trading down: 3D Systems (DDD) is off $2.70, or almost 9%, at $27.55; Voxeljet (VJET) is down 43 cents, or 5%, at $7.99; and ExOne (XONE) is down 33 cents, or 2.3%, at $14.14.
- China debt party nears the end of road. Despite an interest-rate cut late last year, China’s economy has got off to a slow start, with weak factory and service-sector readings. The typical response to such data is to expect more monetary stimulus. But have we reached the point where rate cuts are no longer able to lift China’s debt-heavy economy? As China enters its third year of slowing growth, there is growing concern the debt reckoning cannot be kicked down the road any longer. Credit has been growing faster than the economy for six years, and there has always been a recognition this cannot continue indefinitely.
- Persistently Over-Optimistic Fed Admits There Is Persistent Over-Optimism About The US Economy. (graph)
- A top US Navy intelligence official is warning of future China conflict. China’s ruling Communist Party is “rejuvenating” and preparing for a military conflict in Asia, the outgoing intelligence chief of the Navy’s Pacific Fleet is warning.
- More Greeks Approve of Russia's Leadership Than EU's. More than one in three Greeks (35%) in 2014 approved of Russia's leadership, while fewer than one in four (23%) approved of the EU's leadership.
- None of note
- Asian equity indices are -.25% to +.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 110.0 -3.0 basis points.
- Asia Pacific Sovereign CDS Index 70.0 -1.25 basis points.
- S&P 500 futures -.21%.
- NASDAQ 100 futures -.19%.
Earnings of Note
Company/Estimate
- (AET)/1.22
- (AGCO)/.66
- (ARG)/1.23
- (ADM)/.96
- (AN)/.91
- (BP)/.08
- (ETN)/1.20
- (EMR)/.72
- (GCI)/1.01
- (HCA)/1.23
- (JLL)/3.85
- (LYB)/2.16
- (NOV)/1.60
- (PNR)/1.03
- (R)/1.60
- (UPS)/1.28
- (AFL)/1.28
- (CMG)/3.79
- (CVD)/.97
- (GILD)/2.16
- (IACI)/.85
- (LSCC)/.06
- (MYGN)/.34
- (TTWO)/1.52
- (DIS)/1.07
- (WYNN)/1.45
9:45 am EST
- ISM New York.
- Factory Orders for December are estimated to fall -2.4% versus a -.7% decline in November.
- The IBD/TIPP Economic Optimism Index for February is estimated at 51.5 versus 51.5 in January.
- Total Vehicle Sales for January are estimated to fall to 16.6M versus 16.8M in December.
- None of note
- The Fed's Kocherlakota speaking, Fed's Bullard speaking, UK Construction PMI, weekly US retail sales reports, (DAL) January traffic data, (EMR) annual meeting, (SAP) investor day and the (WEN) investor day could also impact trading today.
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