Evening Headlines
Bloomberg:
- Bank of Japan Sticks to Record Easing as Inflation Picks Up. The
Bank of Japan maintained its record easing, as accelerating price gains
mark progress in its bid to end 15 years of deflation. Governor
Haruhiko Kuroda’s board stuck to its pledge to expand the monetary base
by an annual 60 trillion to 70 trillion yen ($671 billion) today after a
two-day meeting in Tokyo, in line with the forecasts of all 36
economists surveyed by Bloomberg News. The BOJ maintained its forecast
that core inflation will reach 1.9 percent in the year starting April
2015, excluding the effects of sales-tax increases. With the BOJ’s
preferred inflation gauge at more than half of its target 2 percent
pace, analysts from HSBC Holdings Plc. to Daiwa Securities Co. have
pushed back forecasts for when the central bank may add to easing. Kuroda’s
policy makers may wait to assess trends in wages and the effects of the
sales-tax increase in April before deciding on any extra stimulus.
- China Bailout Costs Jump Seen in Policy Bank Yield Surge. Doubts over the Chinese government’s ability to cope with escalating
debt are showing up in record borrowing costs for the nation’s policy
banks. The average yield premium over the sovereign for five-year
debt sold by China Development Bank, Export-Import Bank of China and
Agricultural Development Bank of China widened 90 basis points from an
August low to 142 basis points on Jan. 17, the highest in Chinabond data
going back to 2007. The gap was 138 basis points yesterday. Yields
have climbed on safer assets, including CDB’s, as delays in
restructuring bad loans are stretching the central government’s ability
to guarantee debt, Bank of America Merrill Lynch wrote in a report this
week.
- China Money Rate Plunge Is No Relief for Bonds: Chart
of the Day. Borrowing costs for the most creditworthy Chinese companies
are climbing toward a 19-month high relative to the government, a sign
the easing of the country's cash crunch is failing to quell concern that
corporate defaults could mount. Yields on five-year AAA-rated corporate
bonds traded at 1.80 percentage points above government securities. The
gap, a proxy for broader Chinese corporate credit risk, is within .04
percentage point of a 23-month high set Dec. 30 and is up from 1.17
percentage points in July, according to Bloomberg data and Chinabond.
- Australia Inflation Accelerates Above RBA Midpoint; Aussie Gains. Australian inflation unexpectedly
accelerated above the mid-point of the central bank’s target
range last quarter, reducing scope for policy makers to lower interest rates further. The
trimmed mean gauge of core prices rose 2.6 percent in the three months
through December from 12 months earlier, the Bureau of Statistics said
in Sydney today, compared with the median forecast of 23 economists for a
2.3 percent gain. The consumer price index advanced 2.7 percent, compared with
economists’ forecast for a 2.4 percent increase.
- Asia Stocks Fluctuate as Yen Gains on BOJ; Gas Climbs.
Asian stocks fluctuated as gains by
Chinese shares on lower money-market rates were offset by
declines in Tokyo equities as the yen rose after the Bank of Japan left
policies unchanged. The Australian dollar jumped the most in a week
after inflation data dimmed rate-cut prospects. The MSCI Asia Pacific
Index was little changed as of 1:22 p.m. in Tokyo. China’s Shanghai
Composite Index surged the most in two months and Japan’s Topix index
fell 0.5 percent.
- Rubber in Tokyo Declines for Fourth Day on China Demand Concerns.
Rubber in Tokyo extended losses for a fourth day as concerns grew that
abundant supply in China will slow purchases from the largest consumer. The contract for delivery in June on the Tokyo Commodity
Exchange fell as much as 1.4 percent to 246 yen a kilogram
($2,357 a metric ton), the lowest level for a most-active
contract since Aug. 8. Futures traded at 247.9 yen at 10:37 a.m.
local time.
- Rebar Advances as Investors Weigh Improved China Money Supply.
Steel reinforcement-bar futures in Shanghai climbed for the first time
in five days as investors assessed improvement in China’s money markets
and as iron ore futures rose. Rebar for May delivery on the Shanghai
Futures Exchange gained as much as 0.9 percent to 3,439 yuan ($568) a
metric ton and traded at 3,429 yuan at 11:19 a.m. local time.
- Loan
Surge Above Par Putting Investors at Risk: Credit Markets. More
speculative-grade U.S. loans are trading above par than at any time
since May, exposing investors who are funneling record amounts of cash
into the debt to greater risks as rising prices encourage borrowers to
refinance at lower interest rates.
Wall Street Journal:
- Australia's Housing Boom Spreads Beyond Sydney. Prices Fuel Debate Over Whether Central Bank Should Act. This once-downtrodden Sydney suburb is on the rise, an emblem of Australia's booming housing market. Dilapidated
cottages and housing estates are giving way to large homes and modern
multistory apartments. Vacant land for residential development here
goes
for as much as A$400,000 ($352,574) per acre, compared with about
A$200,000 five years ago, according to Australand Property Group, a developer in the area.
- The President Inhales. Mr. Obama is now the President, not a stoned
teenager riffing with his Choom Gang, and he might have set a better
example. Parents trying to teach their kids to make better choices than
getting high are at a disadvantage when the person in charge of
upholding the law says breaking the law is no big deal.
Fox News:
MarketWatch.com:
- Analysts forecast a corrosive year for copper prices. The outlook for copper isn’t very bright, with analysts expecting prices for the metal to fall this year. Goldman Sachs analysts on Tuesday said they expects copper prices on
the London Metal Exchange to average $6,850 per metric tons, or about
$3.11 a pound this year. That’s down from an estimated average of $7,328
per metric ton, or $3.32 a pound in 2013.
The analysts see a surplus of 385,000 metric tons in 2014.
CNBC:
- Texas Instruments(TXN) to cut 1,100 jobs in restructuring. Texas
Instruments Inc plans to cut 1,100 jobs worldwide as part of a
corporate restructuring intended to help it save $130 million by the end
of 2014. The
U.S. chipmaker, which in 2012 announced it would lay off 1,700 people
as it wound down its mobile processor business, said on Tuesday it
wanted to reduce expenses in its embedded-processing division and in
Japan.
Zero Hedge:
Business Insider:
Washington Post:
Reuters:
- Citi(C) warns against Britain's exit from the EU -FT. Citigroup Inc. has warned against
the United Kingdom opting out of the European Union, saying such
a move could hurt the British economy and reduce investment from international companies, the Financial Times reported on
Tuesday.
- LED maker Cree's(CREE) profit jumps 75 pct. LED maker Cree Inc reported a 75 percent rise in second-quarter profit, driven by higher sales in its lighting products business, sending its shares up 5 percent
in extended trading.
- In 2013, Brazil added fewest net payroll jobs in a decade.
Brazil's economy added the fewest net payroll jobs in a decade last
year, a sign that three consecutive years of weak economic growth had
weighed down profit margins and hiring at shops and services firms,
government data showed on Tuesday. Excluding seasonal adjustments, farms, industrial factories and retail firms created a net 730,687 payroll jobs in 2013, the
smallest number since 2003, the labor ministry said.
China Securities Journal:
- China's Tight Liquidity Unlikely to Change in 2014. China's tight
liquidity situation is unlikely to change in 2014, according to a
front-page commentary. PBOC will continue to strictly control financial
risks and push for de-leveraging, commentary says.
Evening Recommendations
Night Trading
- Asian equity indices are -.25% to +.50% on average.
- Asia Ex-Japan Investment Grade CDS Index 143.0 -1.0 basis point.
- Asia Pacific Sovereign CDS Index 111.50 +5.0 basis points.
- NASDAQ 100 futures +.20%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
Upcoming Splits
Other Potential Market Movers
- The HSBC China PMI, Bank of Canada rate decision, weekly retail sales reports, weekly MBA mortgage applications report and the CIBC Institutional Investor Conference could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by real estate and technology shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.
Broad Equity Market Tone:
- Advance/Decline Line: Modestly Higher
- Sector Performance: Mixed
- Market Leading Stocks: Performing In Line
Equity Investor Angst:
- Volatility(VIX) 12.84 +3.22%
- Euro/Yen Carry Return Index 147.49 +.16%
- Emerging Markets Currency Volatility(VXY) 8.70 +1.05%
- S&P 500 Implied Correlation 50.95 -1.14%
- ISE Sentiment Index 105.0 -20.45%
- Total Put/Call .75 +7.14%
Credit Investor Angst:
- North American Investment Grade CDS Index 65.69 +.43%
- European Financial Sector CDS Index 87.70 +.96%
- Western Europe Sovereign Debt CDS Index 50.0 +3.62%
- Emerging Market CDS Index 291.62 -.12%
- 2-Year Swap Spread 13.5 +.25 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -2.0 -1.0 basis point
Economic Gauges:
- 3-Month T-Bill Yield .03% unch.
- Yield Curve 245.0 +1.0 basis point
- China Import Iron Ore Spot $123.20/Metric Tonne -1.28%
- Citi US Economic Surprise Index 64.10 -2.5 points
- Citi Emerging Markets Economic Surprise Index 4.5 -.3 points
- 10-Year TIPS Spread 2.24 unch.
Overseas Futures:
- Nikkei Futures: Indicating +33 open in Japan
- DAX Futures: Indicating +29 open in Germany
Portfolio:
- Slightly Lower: On losses in my index hedges
- Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
- Market Exposure: Moved to 50% Net Long
Bloomberg:
- UBS Tells Davos Leverage Ratio Over-Reliance Threatens Stability.
UBS AG (UBSN), Switzerland’s biggest bank, said a shift in emphasis to
leverage ratios from risk-based capital measures could endanger
financial stability. “We caution against over-reliance on leverage
ratios as a regulatory tool,” UBS said in a report, which the
Zurich-based bank prepared for release
at the World Economic Forum in Davos, Switzerland, and made available to
Bloomberg. Such a focus “could lead to further deleveraging by banks
and pose risks for financial stability.”
- German ZEW Investor Confidence Unexpectedly Fell in January. German investor confidence unexpectedly fell for the
first time in six months, signaling caution over the outlook for the
euro area’s economic recovery. The ZEW Center for European Economic
Research in Mannheim said its index of investor and analyst
expectations, which aims to predict economic developments six months in
advance, slid to 61.7 in January from a seven-year high of
62 in December. Economists predicted an increase to 64, according to
the median of 40 estimates in a Bloomberg News survey.
- Russia Mounts Security Sweeps to Choke Insurgency Near Sochi. Russia sent troops across Dagestan
today as the government pressed an offensive against insurgents
and new threats emerged weeks before the Winter Olympics kick
off in the Black Sea resort of Sochi. Two counter-terrorism operations were under way in
Dagestan, a Muslim-majority region on the Caspian, east of
Sochi, said Alexander Polyakov, a spokesman for the National
Anti-Terrorist Committee. Security forces also embarked on a
third mission, surrounding a group of suspected militants in a
house, Interfax reported, citing an unidentified local official.
- Alstom Cuts Margin and Cash Flow Outlook as Demand Falls.
Alstom SA (ALO), the French maker of trains and power equipment, cut
its forecast for operating margins for the second time in nine months
because of weaker-than-expected sales of thermal-power equipment. The operating margin will remain at about 7 percent this fiscal year ending March, and “may slightly decline next year,”
the company based near Paris said in a statement today. Alstom
previously forecast this year’s margin to be little changed from fiscal
2013’s 7.2 percent, before gradually rising over the next two to three
years to about 8 percent of sales. Alstom shares fell as much as 14
percent. “Confidence is broken,” said Gael de Bray, an analyst at Societe Generale. (GLE) He cut his target price for Alstom shares to
26 euros from 32 euros. “The expected deleveraging process was
the main support to the shares but is further postponed.”
- EU Must Contain Energy Costs or Risk ‘Deindustrialization’: EU. Europe must get a grip on energy prices to protect growth and stop
its industry from fleeing abroad, according to two top policy makers.
The region needs to reduce the cost gap with the U.S., where a
shale-gas revolution has slashed prices, European Union Energy
Commissioner Guenther Oettinger told a conference in Berlin via a video
link from Brussels.
- European Shares Are Little Changed as Unilever Advances. European stocks were little changed, erasing earlier gains, as a rally in food and beverage makers offset a decline in mining stocks. Unilever gained 2.3 percent after the maker of Magnum ice cream and TRESemme shampoo reported fourth-quarter sales growth that exceeded estimates. Rio Tinto Group and BHP Billiton Ltd., the world’s biggest miners, each declined at least 1.7 percent. Alstom SA (ALO) tumbled 14 percent after the French maker of trains and power equipment reduced its operating-margin outlook. The Stoxx Europe 600 Index climbed less than 0.1 percent to
335.76 at the close of trading, paring an earlier rally of as
much as 0.6 percent.
- Rebar in Shanghai Drops as Iron Ore, Coke Prices Slump. Steel reinforcement-bar futures in Shanghai fell to a 16-month low as prices of steel-making materials slumped. Rebar for May delivery on the Shanghai Futures Exchange retreated by 1.2 percent to 3,410 yuan ($564) a metric ton.
That’s the lowest closing price for a most-active contract since
Sept. 7, 2012.
- Syria Uses War Crimes to Crush Rebels, Human Rights Watch Says. The Syrian regime has been using a
“strategy of war crimes” that’s killing 5,000 people a month
to crush the armed opposition and peace negotiators must focus
more attention on the deaths, Human Rights Watch said. Roth also upbraided U.S. Secretary of State John Kerry for
not wanting to “rock the boat” in his effort to bring both
sides to the negotiating table in Switzerland tomorrow. “You
don’t even see the U.S. government speaking about the mass
atrocities.”
- Global Hedge Funds Assets Climb 17% to a Record $2.63 Trillion. Global assets rose by $376 billion, including $63.7 billion
in net inflows from investors and $312 billion in investment
gains, the Chicago-based data provider said in a report today.
The fourth quarter was the sixth in a row that the industry saw
a growth in assets, it said.
Barron's:
MarketWatch:
CNBC:
ZeroHedge:
Business Insider:
NY Times:
Real Clear Politics:
Reuters:
- Illinois budget gap to grow despite pension reform -study. A reform package passed late
last year will make improvements to Illinois' woefully
underfunded public pension system, but the state's budget gap
still will increase to $13 billion by 2025 if current policies
remain in place, according to an independent analysis released
on Tuesday.
Financial Times:
Telegraph:
Style Underperformer:
Sector Underperformers:
- 1) Steel -4.01% 2) Hospitals -2.65% 3) Homebuilders -1.12%
Stocks Falling on Unusual Volume:
- LIVE, CEO, EXPE, LKQ, RENT, NUS, SKX, TFM, MDLZ, STML, TRV, PUK, EDU, FEYE, PETS, HAL, FLT, SGNT, VALE, CHSP, ALV, VZ, TJX, XON, DB, ATI, RGR, ONVO and CLF
Stocks With Unusual Put Option Activity:
- 1) CREE 2) EWH 3) TXN 4) CLF 5) EWZ
Stocks With Most Negative News Mentions:
- 1) SBUX 2) COST 3) EXPE 4) TOLL 5) XOM
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Gold & Silver +1.2% 2) Tobacco +.90% 3) Education +.85%
Stocks Rising on Unusual Volume:
- VGR, SBNY, IQNT, DOW, IRWD, AMTD, AA, NAT, AMPE, CENX, BCRX and CADX
Stocks With Unusual Call Option Activity:
- 1) STSI 2) PETM 3) RMD 4) BSX 5) GERN
Stocks With Most Positive News Mentions:
- 1) DOW 2) INTC 3) IBM 4) PEP 5) GOOG
Charts:
Weekend Headlines
Bloomberg:
- China Workforce Slide Robs Xi of Growth Engine.
China's second straight annual drop
in its working-age population is robbing President Xi Jinping of an
engine of three decades of growth, underscoring the need to close the
gap between his achievements and ambitions. Xi and Premier Li
Keqiang, who in November unveiled the broadest policy shifts since the
1990s, are facing a labor force decline that the United Nations
estimates will total almost 30
million in the decade through 2025. China’s working-age
population, or people age 16 to 59, fell by 2.44 million in
2013, the National Bureau of Statistics said yesterday.
- Crunch Escalates as Money Funds Rival Shadow Banks: China Credit. A doubling in China’s money-market funds in the past six months is
draining bank deposits and raising the risk of financial failures during
cash crunches, according to Fitch Ratings. The assets under
management of such plans surged to a record 737 billion yuan ($122
billion) on Dec. 31 from 304 billion yuan on June 30, said Roger
Schneider, senior director at Fitch’s Fund and Asset Manager Rating
Group. Yu’E Bao, managed by Tianhong Asset Management Co. and sold
online by Alibaba Group Holding Ltd., offers an annualized return of 6.7
percent, compared with the 3 percent official one-year savings rate. Some funds are offering higher rates,
with news portal Eastmoney.com marketing a product that targets 10
percent.
- China’s 2013 New Home Sales Hit $1.1 Trillion, Record High.
China’s new home sales last year exceeded $1 trillion for the first
time as property prices in cities the government considers first tier
surged in the absence of more nationwide property curbs. The value of
new homes sold in 2013 rose 27 percent from
2012 to 6.8 trillion yuan ($1.1 trillion), National Bureau of
Statistics said in a statement today. New-home prices in
December climbed 20 percent in Guangzhou and Shenzhen from a
year earlier, and jumped 18 percent in Shanghai and 16 percent
in Beijing, the bureau of statistics said Jan. 18.
- Bird Flu Kills Health Worker, Stokes Transmission Concern. A medical worker at a Shanghai
hospital died from bird flu, stoking concern that the influenza
virus known as H7N9 may have spread from person to person. The
31-year-old man died on Jan. 18, according to a statement on the
Shanghai Municipal Commission of Health and Family Planning website
yesterday. The city has identified seven
cases of infection with the virus this year, the statement said.
- Thai Default Risk Soars as Funds Pull $4 Billion: Southeast Asia. The cost of protecting the country’s debt soared after
investors including Wells Fargo Inc. pulled more than $4 billion
from Thai stocks and bonds since Oct. 31, as rallies clogged up Bangkok roads and clashes left nine dead with about 550 injured.
Pacific Investment Management Co., Goldman Sachs Group Inc. and
Kokusai Asset Management Co. reduced holdings before protests
erupted in late October, regulatory filings show. Credit-default
swaps insuring Thai debt against non-payment for five years rose to 158
as of 10:37 a.m. in London, versus 150 on Jan. 17, according to data
compiled by Bloomberg. They touched 160 earlier today in Asian trading,
according to CMA prices, the highest since June 2012. The spread has
widened 53 basis points since anti-government protest broke out on Oct.
31, compared with increases of 30 for Indonesia and 19 for the
Philippines.
- Asian Stocks Rise as China Acts to Pare Rates; Yen Drops.
Asian stocks climbed as China’s money-market rates fell the most in
four weeks after the nation’s central bank injected funds into the
financial system. The yen slid against major peers as policy makers meet
to review Japan’s monetary policy and oil retreated. The MSCI Asia Pacific Index gained 0.4 percent by 11:18 a.m. in Tokyo.
- Rubber Trades Near 5-Month Low on Concern Chinese Demand to Slow.
Rubber futures in Tokyo traded near a five-month low amid concern that
slowing economic growth in China may weaken demand from the world’s
largest consumer of the commodity used in tires. The contract for delivery in June on the Tokyo Commodity Exchange was at 252.2 yen a kilogram ($2,413 a metric ton) at
10:42 a.m. local time after swinging between 251.8 yen and 254.6
yen. Futures settled at 252.3 yen yesterday, the lowest
settlement for a most-active contract since Aug. 7.
- Copper Drops as Economic Growth Slows in Leading Consumer China.
“The base metals have made a fairly subdued start to the week,
digesting the Chinese data,” Leon Westgate, an analyst at Standard Bank
Plc in London, said in a report today. Copper for delivery in three months dropped 0.4 percent to
$7,314 a metric ton on the London Metal Exchange. Copper for
delivery in March dropped 0.2 percent to $3.3375 a pound on the
Comex in New York.
- European Banks Face $1 Trillion Gap Before Review, Study Shows. European
banks have a capital shortfall of as much as 767 billion euros ($1
trillion) before the European Central Bank’s probe into the financial
health of the region’s lenders, according to a study. French banks
show the biggest gap of 285 billion euros, followed by German lenders
with as much as 199 billion euros, Sascha Steffen of the European School
of Management and Technology in Berlin and Viral Acharya at New York
University said in their study dated Jan. 15. The figures assume a
benchmark capital ratio for other book measures of leverage of 7
percent, they wrote. “A comprehensive and decisive AQR will most likely reveal
a substantial lack of capital in many peripheral and core
European banks,” the authors wrote, referring to the central
bank’s Asset Quality Review stage of the Comprehensive
Assessment.
- OECD Says Denmark Ignores Debt at Own Risk as Higher Rates Loom.
Denmark needs to put in place
policies that help households deleverage before central banks
start raising interest rates, according to the Organization for Economic
Cooperation and Development. “Sooner or later rates in Denmark and the
rest of Europe will go back to more normal levels,” Robert Ford, deputy
director at the Paris-based OECD, said in an interview in
Copenhagen. The nation’s household debt level is “a risk. It’s
very high compared to any other.”
At 321 percent of disposable incomes, Denmark boasts the
world’s highest private debt burden.
- Spain’s Worst Year for Work Leaves Rajoy Counting Cost.
Spanish Prime Minister Mariano Rajoy can count the social cost of the
economy’s slump when data this week show how 2013 was probably the worst
year for work in its democratic history. Economists predict the
unemployment rate in Spain, home to almost a third of the euro region’s
jobless, stayed above 25 percent for the sixth quarter in a row. The
National Statistics
Institute in Madrid will release the report for the final three months
of the year on Jan. 23.
- Ukrainian Clashes Intensify After Night of Violence in Kiev. Ukrainian activists battled police
for a second night in the capital, defying new laws to subdue
anti-government rallies that began two months ago. By 8:45 p.m. today in Kiev, protesters throwing Molotov
cocktails at police were met by rubber bullets and smoke bombs.
Activists also began building a catapult to launch projectiles.
The two sides exchanged smoke and sound bombs yesterday in
subzero temperatures as police vehicles were burned. More than
200 people were injured.
- Taliban Bombs Kabul Restaurant to Kill 21 ‘Invaders’ for Parwan. The Taliban claimed responsibility
for an attack near a Lebanese restaurant in Kabul that killed 21
people including the International Monetary Fund’s senior
official in Afghanistan and three United Nations workers. Three suicide bombers armed with heavy and light weapons
stormed the restaurant on Jan. 17 in retaliation for a strike by
U.S. forces in Parwan province, north of the capital, Taliban
spokesman Zabihullah Mujahed said in e-mailed statements. La
Taverna du Liban was targeted because it’s where “invaders used
to dine with booze and liquor in the plenty,” Mujahed said,
according to a statement in English.
- CEO earnings skepticism backs weakest S&P 500 forecast in decade. Investors who want to know why U.S. equity strategists are the most
pessimistic in a decade need look no further than statements by chief
executive officers. For every company predicting in January that earnings that will beat
analyst estimates, 2.5 are projecting results that fall short, matching
the worst ratio since the rally began in March 2009, according to data
compiled by Bloomberg. While analysts say Standard & Poor’s 500
Index profits will rise 8.8 percent in 2014, that’s almost the same
estimate they generated a year ago for 2013, when earnings ended up
increasing at about half that rate, the data show.
Wall Street Journal:
- Next Cut in Fed Bond Buys Looms by Jon Hilsenrath. Reduction to $65 Billion Could Be Announced on Jan. 29. The Federal Reserve is on track to trim its
bond-buying program for the second time in six weeks as a lackluster
December jobs report failed to diminish the central bank's expectations
for solid U.S. economic growth this year, according to interviews with
officials and their public comments. A
reduction in the program to $65 billion a month from the current $75
billion could be announced at the end of the Jan. 28-29 meeting, which
would be the last meeting for outgoing Chairman Ben Bernanke.
Fox News:
- 'I’ve got a pen': Obama raises hackles with executive actions. With his newly announced overhaul of National Security Agency
surveillance activities, President Obama has once again hit a nerve with
members of Congress on both sides of the aisle. The president, as he often does when facing a nettlesome problem,
used his executive powers to implement changes. In his address on
Friday, Obama said he's approved a "new presidential directive for our
signals intelligence activities both at home and abroad."
ValueWalk:
Business Insider:
CNN:
- Warships part of U.S. contingency plan for Sochi Olympics. The U.S. military will have up to two warships and several transport
aircraft on standby under a contingency plan to help evacuate American
officials and athletes from the Winter Olympics in Sochi, Russia, if
ordered, a U.S. official said. The State Department would take the lead in organizing and evacuating
Americans, if necessary, the official with direct knowledge of the plan
told CNN.
Reuters:
- EMERGING MARKETS-Brazil stocks fall nearly 1 pct on China data, Mexico steady. Brazilian stocks fell nearly 1 percent on Monday, hurt by economic data from China suggesting an impending slowdown in the world's No. 2 economy. On a day of light trading due to the Martin Luther King Jr. national holiday in the United States, Mexico's IPC index rose slightly, while Chile's bourse ended a three-day rally. Brazil's benchmark Bovespa stock index closed the day down 0.96 percent.
Telegraph:
Bild:
- NSA Monitors Merkel Advisers After Obama Reassurances. The NSA
will continue to spy on advisers to Chancelor Angela Merkel even after
U.S. President Barack Obama said the U.S. isn't observing the
chancellor, citing intelligence employees. NSA has analyzed with whom
Merkel telephoned, had e-mail conversations, discussed decisions.
AsianInvestor:
China Securities Journal:
- China's Economic Slowdown Risk Rises. China's risk of a future
economic slowdown has risen under continuous relatively tight monetary
conditions in early 2014, according to a front-page commentary by
reporter Ren Xiao.
Shanghai Securities News:
- China
2013 Insurers' Investment Yield 5.04%. Chinese insurers' 2013
investment yield rose to 5.04%, highest in 4 years, citing an annual
meeting of China Insurance Regulatory Commission.
Weekend Recommendations
Barron's:
- Bullish commentary on (DNR), (DF), (MRO) and (GPS).
- Bearish commentary on (NAV).
Night Trading
- Asian indices are +.25% to +.75% on average.
- Asia Ex-Japan Investment Grade CDS Index 144.0 +4.0 basis points.
- Asia Pacific Sovereign CDS Index 110.75 +4.25 basis points.
- NASDAQ 100 futures +.66%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
Upcoming Splits
Other Potential Market Movers
- The Germany ZEW Index and the Bank of Japan decision could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by financial and industrial shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 25% net long heading into the week.
Wall St. Week Ahead by Reuters.
Stocks to Watch Monday by MarketWatch.
Weekly Economic Calendar by Briefing.com.
BOTTOM LINE: I expect US stocks to finish the week modestly lower on earnings
concerns, a stronger yen, increasing emerging markets debt angst,
profit-taking, more shorting and technical selling. My intermediate-term
trading indicators are giving neutral signals and the Portfolio is 25% net long heading into the week.
