Evening Headlines
Bloomberg:
- Rajoy
Stealth Order Adds to Off-Balance Sheet Debt: Euro Credit. Spanish
Prime Minister Mariano Rajoy added more than 3 billion euros to his debt
load in the closing hours of 2012 with a New Year's Eve order removing a
cap on utilities' government-guaranteed losses. The decision, announced
in the official gazette, added to the snowballing power-tariff debt,
which isn't included in the public accounts. The shortfall exceeded 20
billion euros at year end, according to government filings.
- More Gloom for Britain’s Shrinking High Streets.
Britain’s shrinking shopping streets
are poised to become smaller still, thinning out what have long been
Europe’s densest retail districts. With U.K. consumers spending more
online and making fewer trips to the high street, the number of store
closings is set to double this year, according to real estate researcher
Local Data Company. The country’s 500 busiest retail locations will
lose a net 4,000 outlets this year, versus about 2,000 in 2012, Local
Data predicts. “We clearly have tens of thousands too many retail stores
out there,” said Bryan Roberts, director at market research
firm Kantar Retail in London.
- Asian Stocks Drop for Second Day as Japan Exporters Fall. Asian
stocks fell, with the regional benchmark index heading for its second
day of decline, as Japanese exporters dropped after the yen’s advance
dimmed the outlook for overseas earnings. Mazda Motor Corp. (7261),
which gets about 72 percent of its sales outside of Japan, sank 3.9
percent. Aozora Bank Ltd. (8304) declined 2.4 percent, extending losses
for a second day, after the Japanese lender confirmed Cerberus Capital
Management LP will sell most of its holdings. HTC Corp. slipped 3.8
percent in Taipei after Asia’s second-largest smartphone maker posted
fourth-quarter operating income that missed analystestimates.
- Emerging
Market Puts Drop to Cheapest Ever on Economy: Options. Options dealers
are charging the lowest prices ever to protect against declines in
emerging market equities. Implied volatility for three-month options
closest to the iShares MSCI Emerging Markets Index has fallen 41% in the
past year and reached a record of 18.18 on Jan. 4. The key gauge of
options prices reached its lowest level ever relative to the SPDR
S&P 500 ETF Trust on Dec. 27, according to data complied by
Bloomberg.
- China Should Boost Local Brands to Be Auto Superpower, CAAM Says. China
should strive to become an “automotive superpower” to maintain economic
growth, by increasing investment in research and encouraging official
use
of local brands, the head of the nation’s carmakers group said.
- China Paper Anti-Censorship Push Backed by Celebrities, Protests. Some
of China’s most famous celebrities and executives declared their
support for a group of Chinese newspaper journalists protesting what
they called the unprecedented censorship of a New Year editorial.
More than a hundred people lingered late into the night yesterday
outside of the Southern Weekly offices in the southern city of
Guangzhou. Some laid flowers at the building’s entrance
while others pushed their children in baby carriages amid a
police presence, according to television footage and an employee
who requested anonymity.
- Sears(SHLD) Names Edward Lampert CEO as D’Ambrosio Steps Down.
Sears Holding Corp. (SHLD) said Edward Lampert, the hedge-fund manager
who controls the retailer, will become chief executive officer,
replacing Louis D’Ambrosio. D’Ambrosio will step down for family
health matters at the end of the company’s fiscal year on Feb. 2, 2013,
the Hoffman Estates, Illinois-based company said today in a statement.
- Paulson Said to Pare Advantage Plus 2012 Loss Last Month. John Paulson, the hedge-fund manager
overseeing $19 billion, pared losses in his Advantage Plus fund
after gaining 4.5 percent last month, according to a person with
knowledge of the returns.
The performance left the fund down 19 percent in 2012, said
the person, who asked not to be identified because the
information is private.
- Merck(MRK) CEO Says ‘Worth Thinking About’ Bausch & Lomb Deal.
Merck & Co. Chief Executive Officer Kenneth Frazier said the
drugmaker may be interested in buying Bausch & Lomb, the eye-care
company for sale by Warburg Pincus
LLC for at least $10 billion.
Wall Street Journal:
- Obama Security Picks Court Controversy. Hagel for Defense, Brennan for CIA Expected to Face Grilling.
President Barack Obama, accepting the certainty of at least one bitter
confirmation battle with Senate Republicans, rounded out his national
security team Monday by
picking nominees who likely see eye-to-eye with him on ending the Afghan
war and using drones and special-operations forces to fight terrorism.
- Fiscal Cliff: Live Stream.
- Another Fire Hits a Boeing(BA) Dreamliner. U.S.
aviation safety officials are probing an electrical fire that hit a
three-week-old Boeing Co. BA -2.01% 787 Dreamliner on Monday just after
passengers and crew had left a Japan Airlines Co. 9201.TO +1.07% flight
at Boston's Logan International Airport.
- Could Verizon(VZ), AT&T(T) Follow T-Mobile in Ending Subsidies? The biggest U.S. wireless carriers are watching T-Mobile USA’s
experiment with ending smartphone subsidies, but they aren’t sure if
subscribers are ready to make the change.
- TD Ameritrade to Launch Behavior-Based Index to Track Investor Sentiment. In a bid to shine a light on the trading habits of retail investors and
attract new clients along the way, TD Ameritrade Holding Corp. on Tuesday will
roll out a behavior-based index that reveals investors’ moods by tracking buying
and selling by TD Ameritrade’s customers.
- Japan Executives Warn Yen May Get Too Weak.
Some Japanese executives, after months of demanding the government
take action to weaken the yen, are now warning that such weakness could
go too far if the currency loses value too fast and for the wrong
reasons, or if it leaves the country exposed to soaring fuel costs that
would undermine the economy.
The executives, who gathered at an annual New Year's reception held
by Japan's three biggest corporate lobbies, praised Prime Minister
Shinzo Abe's new government for its proposals to boost the economy and
tame the strong yen, which erodes exporters' profits and makes it harder
to sell Japan-made goods overseas. But they also cautioned that if the economy stays weak, or if the
government doesn't take steps to get its bloated finances under control,
investors could lose confidence in Japan and flee, sending the yen into
free fall.
Fox News:
- Graham seeks delay to confirmation of Brennan until Benghazi questions answered. A top Republican senator called Monday for a delay in the
confirmation of President Obama's pick for CIA director until more
questions are answered on the deadly attack last year on a U.S.
consulate in Libya. Sen. Lindsey Graham of South Carolina didn't single out Obama's
nominee, John Brennan, for criticism, but he accused the administration
of ignoring requests for more information about the Sept. 11 attack,
which also targeted a CIA annex in Benghazi. "I have not forgotten about the Benghazi debacle and still have many
questions about what transpired before, during and after the attack on
our consulate," Graham said.
CNBC:
- Oops! This Earnings Season Comes With Plenty of Excuses.
Fourth quarter earnings growth was tepid at best, as Sandy and the
"fiscal cliff" gave companies plenty of excuses for sluggish revenue
growth and weak profits. The S&P 500 companies are expected to post earnings growth of 2.8
percent for the fourth quarter, up from the barely positive 0.1 percent
growth in the third quarter, according to Thomson Reuters. Some analysts
say that after the market's big run, earnings could provide an excuse
for profit taking, as investors assess the forward comments of companies
that have so far been fairly quiet about the outlook for 2013.
Zero Hedge:
Business Insider:
NY Times:
- Chemical Weapons Showdown With Syria Led to Rare Accord. In the last days of November, Israel’s top military commanders called
the Pentagon to discuss troubling intelligence that was showing up on
satellite imagery: Syrian troops appeared to be mixing chemicals at two
storage sites, probably the deadly nerve gas sarin, and filling dozens
of 500-pounds bombs that could be loaded on airplanes.
Reuters:
- Verizon(VZ) CEO says 'planning on 2013 being relatively flat'. Verizon
Communications Inc
Chief Executive Lowell McAdam said, 'We are planning on 2013
being relatively flat.' He also said, "I don't think many people in the
business community are enthusiastic about what's going on in Washington
now."
- Fitch: won't change Japan's rating based on campaign promises.
Fitch Ratings will not change its sovereign rating on Japan based on
promises made by the ruling Liberal Democratic Party ahead of its
election victory last month, a Fitch official said on Tuesday. Andrew
Colquhoun, head of Asia-Pacific sovereign rating at
Fitch, told reporters on a conference call that the ratings
agency would evaluate the actions the new government takes from
now.
- Yum Brands(YUM) warns China sales fell more than expected. KFC parent Yum Brands Inc warned
on Monday that sales in its top market of China shrank more than
expected in the fourth quarter, citing bad publicity from a
government review of its chicken supply. China sales fell 6 percent in the quarter, worse than its
earlier forecast of a 4 percent decline, Yum said in a
regulatory filing. The media coverage associated with the government's
review had a "significant impact" on KFC sales in China in the last two
weeks of December, it said. Yum, which also owns the Taco Bell and Pizza
Hut fast-food chains, repeated a full-year earnings forecast that was
below
Wall Street's expectations and its shares fell more than 5
percent in after-hours trading.
- Plan to curb volatility in US stock markets likely to be delayed. A pilot program to limit volatility in the U.S. stock markets scheduled to be implemented next month is not likely to be rolled out until April as
exchanges and financial industry groups take more time to
prepare.
- Deloitte opposes SEC move to re-start action seeking China audit papers. Accounting giant Deloitte has asked a
federal judge to reject a request from the U.S. securities
regulator to resume a court case in which it is trying to force
the auditor to hand over work papers from its audit of an
allegedly fraudulent Chinese IT company.
forexlive:
- Fitch: China & HK comments. Anecdotal
evidence that China has a debt problem that is building. China needs to
rebalance towards consumption-led growth. HK rating likely to be
unchanged over 1-2 years.
Telegraph:
Evening Recommendations
Night Trading
- Asian equity indices are -1.0% to -.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 101.5 +1.0 basis point.
- Asia Pacific Sovereign CDS Index 78.25 -1.0 basis point.
- NASDAQ 100 futures -.13%.
Morning Preview Links
Earnings of Note
Company/Estimate
- (IHS)/1.10
- (AYI)/.83
- (RPM)/.42
- (LNN)/.75
- (SCHN)/.06
- (MON)/.36
- (WDFC)/.55
- (AA)/.06
- (GPN)/.87
- (APOL)/.90
Economic Releases
7:30 am EST
- The NFIB Small Business Optimism Index for December is estimated to fall to 87.2 versus 87.5 in November.
3:00 pm EST
- Consumer Credit for November is estimated to fall to $12.75B versus $14.16B in October.
Upcoming Splits
Other Potential Market Movers
- The Fed's Lacker speaking, Eurozone retail sales/unemployment rate/confidence data, Germany trade data, 3Y T-Note auction, Goldman Sachs Energy Conference, IBD/TIPP Economic Optimism Index for January and the weekly reatail sales reports could also impact trading today.
BOTTOM LINE: Asian indices are lower, weighed down by financial and technology shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.
Today's Market Take:
Broad Market Tone:
- Advance/Decline Line: Lower
- Sector Performance: Mixed
- Market Leading Stocks: Performing In Line
Equity Investor Angst:
- ISE Sentiment Index 124.0 +10.7%
- Total Put/Call .88 +4.76%
Credit Investor Angst:
- North American Investment Grade CDS Index 85.06 -.58%
- European Financial Sector CDS Index 122.61 -2.46%
- Western Europe Sovereign Debt CDS Index 99.97 -1.52%
- Emerging Market CDS Index 195.97 +1.16%
- 2-Year Swap Spread 13.0 -.5 bp
- 3-Month EUR/USD Cross-Currency Basis Swap -19.75 -.75 bp
Economic Gauges:
- 3-Month T-Bill Yield .06% -1 bp
- China Import Iron Ore Spot $153.90/Metric Tonne +.39%
- Citi US Economic Surprise Index 31.90 -2.2 points
- 10-Year TIPS Spread 2.52 +4 bps
Overseas Futures:
- Nikkei Futures: Indicating +46 open in Japan
- DAX Futures: Indicating +3 open in Germany
Portfolio:
- Slightly Higher: On gains in my medical/biotech sector longs and index hedges
- Disclosed Trades: Added to my (IWM)/(QQQ) hedges
- Market Exposure: Moved to 50% Net Long
Bloomberg:
- U.S. Debt May Rise as D.C. Dysfunction Draws Downgrade, UBS Says. Treasury
yields, now at almost eight- month highs, are set to reverse course as
political wrangling in Washington and a “likely” U.S. credit downgrade
drive investors to the safety of government debt, according to UBS AG.
“Treasuries are likely to rally over the next month or two,” Mike
Schumacher, head of global-rates strategy at UBS, said in a Bloomberg
Television interview on “Market Makers” with Erik Schatzker and
Stephanie Ruhle. “The market doesn’t
know how the political risk plays out.”
- Draghi Seeks Extended Calm in 2013 on Fading Euro Economy. European Central Bank President Mario Draghi will turn his attention to nursing the euro region back
to economic health this week as the urgency to deploy emergency
crisis measures recedes after three years.
- European Stocks Decline on Valuation.
- Copper Falls as Report May Show Weaker German Factory Orders. Copper fell for a third session in London before a report that may show German factory orders slid
for a third month in four, fanning concern about the euro-zone
crisis debt threatening to choke demand.
The Economy Ministry in Berlin may say tomorrow orders
dropped 1.4 percent in November, according to economists
surveyed by Bloomberg.
- Gold Drops for Third Straight Session on Fed’s Stimulus Signals. Gold futures declined for the third
straight session on signs that Federal Reserve policy makers may end monthly purchases of U.S. debt this year.
The drop today followed the longest run of weekly declines
since May 2004.
Wall Street Journal:
- Obama Nominates Brennan for CIA, Hagel for Pentagon.
President Barack Obama nominated longtime counterterrorism chief John
Brennan to serve as director of the Central Intelligence Agency, placing
a trusted aide at
the helm of the spy organization. The announcement Monday afternoon came in conjunction with Mr. Obama's
pick for defense secretary, former Republican Sen. Chuck Hagel. In choosing Mr. Brennan to succeed David Petraeus, who resigned last
year after admitting to an affair, Mr. Obama is returning to a model of
having a CIA director with close White House ties. Mr. Petraeus, a
decorated four-star general, wasn't considered part of Mr. Obama's inner
circle.
- China Censorship Protests Widen. Protests by journalists over alleged heavy-handed censorship at one of
China's most daring newspapers have garnered high-profile support in the
media and blogosphere, with prominent academics, bloggers and even
movie stars joining in.
Fox News:
- Obama Antagonizes with Hagel Pick. It’s an antagonistic selection, to be sure. Hagel is disliked by Republicans for his foreign policy attacks on
the party during the Bush years and strongly opposed by pro-Israel
groups for his seemingly neutral stance on the Arab-Israeli conflict. Hagel’s swaggering talk in a post-Senate interview about the “Jewish
lobby” and its undue influence on American foreign policy is a huge red
flag for Jewish Americans who work very hard to make the U.S. alliance
with Israel something beyond the reach of culture and religion.
Reuters:
Style Underperformer:
Sector Underperformers:
- 1) Education -3.70% 2) Alt Energy -2.30% 3) Disk Drives -1.63%
Stocks Falling on Unusual Volume:
- QEP, WNR, ELP, AES, NIHD, DIS, MAKO, DNDN, MNST, RJET, ARAY, UAL, ESI, ILMN, NGVC, ANIK, NOW, HMC, SYNT, HLF, HAIN, DSW, CAJ, KSU, TLLP, SODA, POL, FIO, MCY, EHTH, FII, WTW, PPO and KKD
Stocks With Unusual Put Option Activity:
- 1) BKS 2) P 3) DTV 4) BX 5) XHB
Stocks With Most Negative News Mentions:
- 1) CREE 2) KSU 3) VLO 4) AMAT 5) WMT
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Homebuilders +1.03% 2) HMOs +.66% 3) Networking +.40%
Stocks Rising on Unusual Volume:
- AMZN, IRE, WIN, EPOC, UNXL, NSM, VVUS, WAC, IMAX, ALKS, MPEL, DDD, GGC, MCP, TWI, HAR, VHC, SCTY, WLT, SLCA, VPHM and RNF
Stocks With Unusual Call Option Activity:
- 1) ACAS 2) P 3) NSM 4) SWKS 5) LVS
Stocks With Most Positive News Mentions:
- 1) NSR 2) BABY 3) MGP 4) BA 5) XOM
Charts:
Weekend Headlines
Bloomberg:
- Senate Minority Leader McConnell Says Spending Must Be Cut. Senate
Minority Leader Mitch McConnell said now is the time for the U.S.
Congress to cut government spending. Speaking in an interview on ABC’s
“This Week” program, the Kentucky senator said Congress has finished
dealing with taxes. “The tax issue is finished, over, completed,”
McConnell said on ABC. “Now the question is what are we going to do about
the biggest problem confronting our country and our future and
that’s our spending addiction.”
- Lagarde Says Debt Ceiling, Euro Crisis Threaten Global Growth. Failure
to find a solution to the
U.S. debt-ceiling debate and matters in Europe will result in a
“major world economic crisis,” International Monetary Fund
Managing Director Christine Lagarde said. Without a resolution, there
will be a crisis “due to the size of the economies of these two and
their relationship with other countries in terms of trade and
investment,” she told reporters in the Malawian capital, Lilongwe,
today. While the U.S. Congress approved a deal to avoid raising taxes on
most Americans in the so-called fiscal cliff, policy makers need to
agree on raising the $16.4 trillion debt ceiling, which it reached on
Dec. 31, according to the Treasury Department. Extraordinary measures
the agency is taking will be exhausted as early as mid-February, the
Congressional Budget Office said.
- Plosser Says Fed Must Defend 2% Explicit Target for Inflation. Federal
Reserve Bank of Philadelphia President Charles Plosser said the central
bank should take the steps necessary to ensure inflation stays near its
goal of 2 percent. “It is important that the Fed credibly commit to
defending that target either on the upside or the downside,” Plosser
said today to a meeting of economists in San Diego. “Right now, it would
not be good either for our credibility or for the economy
for us to have deflation. For the Fed at this point, we have
established a target and we need to defend that target.”
- China Stock Rally May End Without Reform, Shanghai Alliance Says.
China’s new leaders need to push ahead with reform of state-owned
companies to extend the biggest monthly gain for Chinese stocks in two
years, according to the Shanghai government’s investment arm. The new generation of Communist Party leaders headed by Xi Jinping needs to break the monopoly of government enterprises by
introducing more competition and to ease financing for smaller
companies to keep economic growth at about 7 percent to 8
percent over the next 10 years, Pang Yang, chief executive
officer with the financial-service advisory unit of Shanghai
Alliance Investment Ltd., said in an interview at a Bloomberg
hedge-fund forum in Shanghai on Jan. 5.
- Banks Win Watered Down Liquidity Rule to Prevent Lending Squeeze. Global central bank chiefs agreed to water down and delay a planned
bank liquidity rule to counter warnings that the proposal would strangle
lending and stifle the economic recovery. Lenders
will be allowed to use an expanded range of assets including some
equities and securitized mortgage debt to meet the so-called liquidity
coverage ratio, or LCR, following a deal struck by regulatory chiefs
meeting yesterday in Basel, Switzerland. Banks will also have an extra
four years to fully comply with the measure.
- Hedge Funds Squeezed With Shorts Beating S&P 500 by Most in Year.
Speculators are abandoning money- losing bets that stocks with the
closest links to the U.S. economy will fall as America’s most-hated
shares stage the best rally in a year relative to the broader market. The
20 stocks with the highest short sales in the Standard & Poor’s 500
Index (CYC) rose an average of 5.1 percent in December,
compared with 0.7 percent for the full gauge, according to data
compiled by Bloomberg. The performance gap is the widest since
January 2012.
- Bulls Boost Wagers as Prices Rally for Fourth Week: Commodities. Speculators
increased their bullish commodity wagers for the first time since
November as signs of accelerating growth in China and the U.S. drove
prices higher for a fourth consecutive week. Hedge funds and other
money managers raised their net-long positions across 18 U.S. futures
and options by 2.4 percent to 691,832 contracts in the week ended Dec.
31, the first gain since Nov. 27, U.S. Commodity Futures Trading
Commission data
show. Cotton holdings climbed to the highest since September
2011, and those for sugar reached a nine-week high. Gold wagers
rose for the first time in three weeks.
Wall Street Journal:
- U.S. Tax Bonanza May Be Tapped Out. Windfall (wĭnd'fôl,): an unexpected, unearned, or sudden gain or advantage.
All the talk about the fiscal cliff and the inadequacy of the
last-minute deal to avert it obscures one fact: It probably provided the
government with tens of billions of dollars in unexpected tax receipts. The bad news: This bonanza didn't come free. It may have robbed the
Treasury Department of significant future revenue. Its daily reports may
soon begin to make that clear.
- Fiscal Cliff: Live Stream.
- Bank-Foreclosure Settlement Nears. Federal Reserve's Acquiescence Clears Way for Agreement Valued at $10 Billion.
- Defiant Assad Rules Out Talks With Rebels. Syrian President Bashar al-Assad issued a defiant call to war to
defend the country against what he called a foreign-inspired rebellion,
ruling out talks with rebels and rejecting international peace efforts
for a political plan of his own that keeps him in power.
The proposal, made Sunday in Mr.
Assad's first national address in six months, dims any chance of a quick
resolution to the longest, deadliest and most complicated of the Middle
East's Arab Spring revolts.
After the speech to a cheering audience
of supporters in Damascus, international critics repeated calls for Mr.
Assad, whose family's four-decade rule of Syria sparked an uprising in
2011, to step down. A U.S. State Department spokeswoman called his
proposal for political reforms "another attempt by the regime to cling
to power."
- For Newly Minted M.B.A.s, a Smaller Paycheck Awaits. Like many students, Steve Vonderweidt hoped that a master's degree in
business administration would open doors to a new job with a higher
paycheck.
But now, about eight months after
receiving his M.B.A. from the University of Louisville, Mr. Vonderweidt,
36 years old, hasn't been able to find a job in the private sector, and
continues to work as an administrator at a social-service agency that
helps Louisville residents obtain food stamps, health care and other
assistance. He is saddled with about $75,000 in student-loan debt—much
of it from graduate school.
- White House to Go on Offense for Hagel Pick. Aides Say Obama to Stand Firm on Defense Secretary Choice Despite GOP Criticism of Ex-Senator's Stance on Israel, Iraq.
- Law-Firm Partners Face Layoffs.
- Inconvenient Truths About Al Jazeera. Al
Gore's due diligence must have missed the on-air party, with cake, for a
deadly terrorist. Al Gore and his co-investors just sold liberal cable
channel Current TV to Al Jazeera, the network bankrolled by the emir of
Qatar. How much in carbon offsets does Mr. Gore need to balance his
estimated $100 million from the sale to an oil sheik? But there's a more serious issue here than hypocrisy. Current's
owners could have simply said they sold to the highest bidder, with the
emir paying an estimated $500 million for a network with viewership of
only 22,000. Instead they glorified Al Jazeera.
- The Education of John Boehner. Leverage
for the next clash: GOP willingness to let the spending sequester take
effect. What stunned House Speaker John Boehner more than anything else
during his prolonged closed-door budget negotiations with Barack Obama
was this revelation: "At one point several weeks ago," Mr. Boehner
says, "the president said to me, 'We don't have a spending problem.' "
Fox News:
- Pelosi says upcoming fiscal deals should include greater tax increase. House Minority Leader Nancy Pelosi said Sunday that recent tax
increases are “not enough” to solve the country’s fiscal problems and
argued that additional hikes should be included in upcoming
deficit-reduction deals. "The president had originally said he wanted $1.6 trillion in
revenue," the House’s top Democrat told CBS’ "Face the Nation." "He took
it down to $1.2 (trillion) … but that is not enough on the revenue
side."
- Budget watchdogs extend campaign, say recent fiscal deal doesn't cut it.
Budget watchdogs are warning that the hard-fought, highly touted fiscal
deal doesn’t cut it – literally. Sure, President Obama signed a
last-minute deal crafted by the Senate and finally passed by the
Republican-controlled House that avoided tax increases for most
middle-class earners. But the agreement failed to cut the country’s
estimated $16.4 trillion debt or resolve other major fiscal concerns,
the watchdog groups argue. “We don’t think it’s time for a standing
ovation and slaps on the back,” says the bipartisan group Fix the Debt.
Washington lawmakers “haven’t actually solved anything yet. In fact,
they punted on the most difficult issues.”
CNBC:
Zero Hedge:
Business Insider:
Washington Examiner:
- Feud over Obama health care reforms to intensify in coming months. The spotlight on President Obama's health care
overhaul will intensify in coming months as states and businesses gear
up for sweeping changes that could determine whether the public embraces
the president's signature legislative achievement or decries it as
government overreach.
Reuters:
Passauer Neue Presse:
- Wolfgang Ischinger, organizer of the Munich Security Conference,
says annual investment in defense has been cut by 6% in Europe due to
the financial crisis, threatening the continent's safety.
YLE:
- Half
of Finns are ready to stop financial aid to crisis-stricken euro
countries even at the risk of a break-up of the single currency, citing a
poll. 50% say no to bailouts even at the risk of a euro break-up, 33% say bailouts should continue. 67% of Finns think the worst of the crisis isn't over, 18% say the worst is past.
Il Messaggero:
- Berlusconi party PDL is close to agreement with Northern League
to run jointly at next elections, citing interview with PDL head
Angelino Alfano.
corriere.it:
- Former Italian Prime Minister Silvio Berlusconi ruled out any
future collaboration with Prime Minister Mario Monti, saying his image
has collapsed.
Weekend Recommendations
Barron's:
- Bullish commentary on (D), (SO), (DUK), (EMC), (BP), (FCX), (MCP), (WFT), (POT) and (DAL).
- Bearish commentary on (ASYS), (STP), (TSL), (MBTN), (YGE), (PPO) and (FSLR).
Night Trading
- Asian indices are -.25% to +.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 100.5 -1.0 basis point.
- Asia Pacific Sovereign CDS Index 79.25 +.5 basis point.
- NASDAQ 100 futures -.18%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
Upcoming Splits
Other Potential Market Movers
- The Eurozone PPI, JPMorgan Healthcare Conference, CES and the Citi Internet/Media/Telecom Conference could also impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and commodity shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the week.
