Today's Headlines

Bloomberg: 

• Euro Climbs as ECB Sees Recovery. The euro gained the most in five months versus the dollar as European Central Bank President Mario Draghi said the economy should gradually recover and the decision to refrain from cutting interest rates was unanimous. The 17-nation currency climbed to the strongest since July 2011 against the yen after Spain sold more than the maximum target at its first debt auction of the year, adding to signs the region’s financial crisis is easing.
• Consumer Comfort Drops as Americans Brace for Payroll Tax Boost. Consumer confidence in the U.S. slumped last week to the lowest level in a month as Americans prepared to lose a portion of their pay to taxes. The Bloomberg Consumer Comfort Index fell to minus 34.4 in the seven days ended Jan. 6 from minus 31.8 the prior period, the biggest one-week drop since August. All three components of the measure declined. Paychecks will shrink after Congress agreed last week to let the payroll tax that funds Social Security benefits revert to 6.2 percent from 4.2 percent. With spending power diminished, Americans will have to rely on increases in salaries to counter some of the lost income just as the economy is struggling to strengthen.
• Brazil Consumer Prices Rise More Than Forecast in December. Brazil’s consumer prices in December rose more than economists forecast, as government efforts to revive economic growth spark price increases. Prices as measured by the IPCA index rose 0.79 percent in December, the national statistics agency said today in Rio de Janeiro. The median estimate from 34 analysts surveyed by Bloomberg was for a 0.74 percent increase. Annual inflation quickened to 5.84 percent from 5.53 percent in November, compared with a forecast of 5.79 percent from 30 economists surveyed.
• Gold Climbs to One-Week High as Draghi Sees Weakness. Gold rose to a one-week high after European Central Bank President Mario Draghi said economic weakness in the region will continue, boosting speculation that policy makers will do more to revive growth. “The economic weakness in the euro area is expected to extend into 2013,” Draghi said at a press conference in Frankfurt today.
• Oil Rises to Three-Month High as China Exports Accelerate. Oil rose to the highest level in three months as exports from China accelerated in December and European Central Bank President Mario Draghi said “a gradual recovery should start” in the region this year. Crude oil for February delivery gained 86 cents, or 0.9 percent, to $93.96 a barrel at 11:17 a.m. on the New York Mercantile Exchange after climbing to $94.70, the highest intraday level since Sept. 19. Trading volume was 84 percent more than the 100-day average.
• Bats CEO Says Software Problems a Symptom of Too-Complex Market. The software problem that caused Bats Global Markets Inc. to allow trades in violation of rules is a symptom of overly complex market regulations that should be simplified, Chief Executive Officer Joseph Ratterman said. Bats discovered the problem on Jan. 4 through routine inspections conducted by its operations department looking for anomolies in transactions and how the exchange handles orders, Ratterman said in a telephone interview.
• Tiffany(TIF) Sees Profit at Low End of Forecast on Weak Sales. Tiffany & Co. (TIF), the world’s second- largest luxury jewelry retailer, said full-year earnings will be at the low end of its forecast after holiday sales growth slowed in the Americas and Asia. The shares fell. Sales in November and December rose 4 percent to $992 million worldwide, the New York-based company said today in a statement. That was slower than the 7 percent gain Tiffany recorded in the same period a year earlier.
• EU Sees Google(GOOG) Diverting Web Traffic From Rivals, FT Says. European Union antitrust regulators believe Google Inc.'s search engine diverts Web traffic from competitors, the Financial Times reported today, citing an interview with EU Competition Commissioner Joaquin Almunia. Almunia told the newspaper he is convinced that Google diverts traffic and may be abusing its dominant position in the search market.
• Cantor May Face Another Ratings Cut as Fitch Cites Slump. Cantor Fitzgerald LP, the brokerage whose credit rating was cut twice last year, faces another potential downgrade amid a slump in trading, Fitch Ratings said.
• Fed’s Bullard Sees Difficulty Tying QE to Economic Levels. Federal Reserve Bank of St. Louis President James Bullard said it may be difficult to tie the central bank’s $85 billion monthly bond purchases to numerical levels of unemployment and inflation. After settling a debate over how long to hold interest rates near zero, Fed officials are debating when to halt their purchases of Treasuries and mortgage-backed securities. At its December meeting, the Federal Open Market Committee agreed to hold the target interest rate near zero so long as unemployment remains above 6.5 percent and inflation stays below 2.5 percent.

Wall Street Journal: 

• Bombings in Pakistan Kill Over 100. A series of bombings in different parts of Pakistan killed 103 people Thursday, including 69 who died in a sectarian attack on a bustling billiard hall in the southwest city of Quetta, officials said.

MarketWatch.com: 

• Wall Street titans battle over Herbalife. The players and the pivot points in the Herbalife fight.

CNBC:

• Farr: Crying Wolf May Make Markets Complacent. Aggressive monetary and fiscal policies have forced so much money into the economy; it has become impossible to determine how much of our modest economic growth is organic and how much may be the result of the trillions of dollars of government injections.

Zero Hedge:

• Initial Claims Miss Fourth Week In A Row; Prior Week Revised Lower.
• Revision Wipes Outs "Surprising" December Philly Fed Surge. (graph)
• TARGET-2 Imbalances - "The Debt Crisis Is Eating Its Way Ever Further Into Europe's Core".

Business Insider:

• Here Are Some Of The Gun Control Recommendations Joe Biden Is Preparing To Give Obama By Tuesday.

c/net:

• Apple's(AAPL) Cook talks 'cooperation' with iPhone-less China Mobile. Apple CEO Tim Cook is in China talking with the country's largest carrier. A China Mobile spokesman told Reuters today that Cook visited the carrier's headquarters this morning to meet with Chairman Xi Guohua and discuss "matters of cooperation." The person would not divulge the nature of those discussions and what the companies might cooperate on.

WallSt.CheatSheet:

• Optimism rebounded strongly, as pessimism dropped in the latest AAII Sentiment Survey. Bullish sentiment, expectations that stock prices will rise over the next six months, jumped 7.7 percentage points to 46.4%. This matches the short-term high set on December 20, 2012. Bullish sentiment is also above its historical average of 39% for the sixth time in seven weeks. Bearish sentiment, expectations that stock prices will fall over the next six months, fell 9.3 percentage points to 26.9%. Though the magnitude of the increase is steep, it only puts pessimism at a three-week low. Bearish sentiment is also below its historical average of 30.5% for the fourth time in five weeks.

Reuters: 

• US Fed policy might trigger bubbles, inflation -George. The Federal Reserve might be contributing to the next asset price bubble through its aggressive purchase of bonds to spur U.S. growth, while its near-zero interest rates could trigger future inflation, a senior Fed official said on Thursday. Kansas City Federal Reserve President Esther George, in remarks that will clearly stamp her as a hawk on the U.S. central bank's policy-setting committee, went out of her way to make clear she is not comfortable with recent Fed action. "A prolonged period of zero interest rates may substantially increase the risks of future financial imbalances and hamper attainment of the FOMC's 2 percent inflation goal in the future," she said.
• German parliament group warns Britain against "blackmail" on EU. The head of the German parliament's influential European Union Affairs Committee warned Britain on Thursday against trying to "blackmail" other countries in its push to fashion a new relationship with Europe.

Telegraph:

• We cannot let America's tactical interests dictate Britain's sovereign destiny. 
• EU not to blame for austerity, says Jose Manuel Barroso. European Commission President Jose Manuel Barroso has denied that the European Union was behind the tough austerity measures that have swept the continent in recent years.   
• Greek youth unemployment edges toward 60pc. Joblessness among Greek youth edged closer to 60pc in October, figures from the state statistics agency revealed on Thursday, with the country's unemployment rate hitting a new high of 26.8pc in October.

China National Radio:

• Chinese cities including Wuhan, Xi'an and Hefei will introduce a property leasing tax.

Bear Radar

Style Underperformer:

• Small-Cap Growth -.25%

Sector Underperformers:

• 1) Homebuilders -1.40% 2) Alt Energy -1.34% 3) Gaming -.70%
  

Stocks Falling on Unusual Volume:

• TIF, CHK, ABG, PWE, WMT, LVLT, BANR, ASNA, HLF, MSM, UNXL, SSRI, ROG, FBC, HAYN, ATLS, CALL, RRGB, TXI, CUB, WCC, NILE, VECO, USNA, KMT, RGR, TISI, TROX, BIIB, AEO and WCC

Stocks With Unusual Put Option Activity:

• 1) SVU 2) ARO 3) HL 4) NFX 5) TIF
  

Stocks With Most Negative News Mentions:

• 1) MGM 2) CSX 3) WMT 4) TXI 5) CHK
  

Charts:

• ETFs Falling on Unusual Volume
• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Large-Cap Value +.44%

Sector Outperformers:

• 1) Gold & Silver +1.86% 2) Construction +1.06% 3) Oil Tankers +1.04%
  

Stocks Rising on Unusual Volume:

• ARMH, URBN, ISIS and AUY

Stocks With Unusual Call Option Activity:

• 1) AMAT 2) RPRX 3) SVU 4) ETFC 5) FXY
  

Stocks With Most Positive News Mentions:

• 1) ZLC 2) DAL 3) AEO 4) URBN 5) BJRI

Charts:

• ETFs Rising on Unusual Volume 
• Stocks Rising on Unusual Volume

Thursday Watch

Evening Headlines 
Bloomberg: 

• Draghi Spared as Confidence Mood Swing Quells ECB Rate-Cut Talk. Mario Draghi might be spared from having to make the thorniest of interest-rate cuts. Improving confidence indicators have eased pressure on the European Central Bank president to reduce the benchmark rate from a record low, a move fraught with the unknown consequences of possibly pushing the deposit rate below zero. While officials discussed a cut in borrowing costs last month, only five out of 55 economists in a Bloomberg survey predict that outcome today. The rest see the benchmark staying at a record-low 0.75 percent.
• Hollande Faces Having to Force Labor Revamp as Talks Splutter. President Francois Hollande may be forced to unilaterally overhaul French labor rules as employers and unions struggle to find common ground in final negotiations today and tomorrow. Hollande, who called for the talks when he took office last year, wants the parties to find ways to give employers more flexibility when the economy slows while also improving job security sought by unions. The Socialist president has repeatedly said he’ll act on the issue if they fail to reach an accord on their own.
• Peugeot Battles Cash Crunch as European Slump Continues. PSA Peugeot Citroen (UG), more exposed to slumping European auto demand than any other carmaker, will probably see its cash cushion shrink in 2013 with industrywide sales in the region due to contract for the sixth straight year. Peugeot will run through about 1.7 billion euros ($2.2 billion) of its 8 billion euros in cash reserves in 2013, according to estimates by CM-CIC Securities analyst Florent Couvreur. The burn rate may bring the carmaker closer to a liquidity crunch as its market share erodes further. 
• Spain’s Shrinking Bank Network Leaves CaixaBank Top-Heavy. CaixaBank (CABK) SA is among lenders that look increasingly bloated as Spain’s economic slump adds pressure on banks to cut branches after the busted credit boom.
• China Shipyards Set to Spark Price War Among Rigmakers. China’s shipbuilders are set to spark a price war in the oil-rig market. With orders for new ships plunging to an eight-year low in 2012, China Rongsheng Heavy Industries Group Holdings Ltd. (1101) and its local rivals are foraying into the offshore business, lured by a market that will reach about $328 billion in 2017. The new entrants are lowering prices to grab contracts, hurting margins at Singapore-based Keppel Corp. (KEP) and Sembcorp Marine Ltd. (SMM), the world’s two-biggest rig makers. “It’s like moving from one bottomless pit to another,” said Park Moo Hyun, an analyst at E*Trade Securities Co. in Seoul. “Chinese shipyards are competitively trying to get into what they see as a lucrative business. But the consequence of that is they could end up distorting the whole market.” 
• Lew Taking Over at Treasury Puts Perennial Aide at Head.
• U.S. Labor Chief Solis Resigns to Be Closer to Family. U.S. Labor Secretary Hilda Solis, who started her job four years ago when unemployment was at a 15- year high, resigned, saying she wanted to be closer to family and friends. “I have decided to begin a new future, and return to the people and places I love and that have inspired and shaped my life,” Solis, 55, said today in a letter to the more than 17,000 employees in the agency. 
• California Cities Sue Banks Over Libor Rates, Law Firm Says. Eight California counties and public entities sued UBS AG (UBSN), Barclays Plc (BARC) and 20 other banks alleging they lost millions of dollars because the financial institutions manipulated the benchmark Libor rate. The plaintiffs claim they were cheated out of higher interest payments on investments such as interest-rate swaps and corporate bonds tied to Libor.

Wall Street Journal:

• BATS Says 'System Issue' Has Led to Pricing Problems Over Past 4 Years. Stock-exchange operator BATS Global Markets Inc. said Wednesday that a "system issue" has allowed hundreds of thousands of transactions to be executed at prices that weren't the regulator-required best ones available at the time. At issue are transactions in which investors "short" shares, or bet a stock will fall.
• Bank Made Huge Bet, and Profit, on Libor. Deutsche Bank(DB) made at least €500 million ($654 million) in profit in 2008 from trades pegged to the interest rates under investigation by regulators world-wide, internal bank documents show. The German bank's trading profits resulted from billions of euros in bets related to the London interbank offered rate, or Libor, and other global benchmark rates.
• Henninger: Hurricane Christie. The governor howls at the Republicans who were trying to help him.
• Rove: A GOP Strategy for the Debt-Ceiling Fight. The House should pass a bill pairing spending cuts with a dollar-for-dollar debt-ceiling increase.

Fox News:

• Watchdog calls tax code 'unconscionable burden,' asks Congress to reform system. The country’s top taxpayer advocate urged Congress on Wednesday to simplify the tax code, saying it is the most serious problem facing taxpayers and that individuals and businesses spend about 6.1 billion hours annually complying with tax-filing requirements. The analysis and recommendation are included in the 2012 report to Congress by the national taxpayer advocate, the IRS' internal watchdog.

CNBC:

• Natural Gas Prices Should Continue to Cool. 
• Fed Hawks Fly After ECB Meets. Central bankers on both sides of the Atlantic could stir the markets Thursday.

Zero Hedge: 

• Panic In California As Thousands Of Food Stamps Cards Suffer Brief Outage.
• 20 Facts About The Collapse Of Europe That Everyone Should Know.
• Postponement, Draghi, And Accounting.
• Brodsky's Thompsonesque Trip Into The World Of Monetary Idiots Vs Krugman's Barbarians. The trillion dollar coin idea is a marvel of political imagination and public ignorance (and so it seems to have legs!). 
• Small Business Optimism Stagnates (Even Before Higher Taxes). (graph)

Business Insider: 

• There's An Arms Race Going On In Asia Unlike Anything Since The Cold War. 
• There's A Problem With The Recent Rally In Chinese Stocks. 
• CHART: The Major Holders Of The US Stock Market. 
• Today We Saw A Major Turning Point For The Movement To Mint A Trillion Dollar Platinum Coin.

IBD:  

• LinkedIn(LNKD) Job Services Drive Sales And Earnings Growth.

NY Times:

• Deep Cuts Raise Questions About Morgan Stanley(MS).

CNN:

• Doctors looking for an out. Some doctors are quitting medicine after they find a new passion; others are burned out and fed up with shrinking reimbursements or being overloaded with patients.

Morningstar:

• Riskiest Subprime Auto Bonds Shift Into Higher Gear. Santander Consumer USA on Wednesday sold $1.25 billion in asset-backed securities at record low yields for the subprime auto lender, as investors bet eroding loan quality wouldn't produce losses on their bonds, while paying relatively higher yields. Demand was strongest on some of the lowest-rated debt, where investor orders for more than seven times what was available let dealers cut yields during a two-day marketing period.

Reuters: 

• Afghans say total U.S. pullout would trigger disaster. Afghan lawmakers said on Wednesday disaster and civil war would follow if Washington pushed ahead with a suggestion to withdraw all its troops from the country after 2014. The White House said a day earlier it was considering the so-called "zero option" of a complete pullout - despite earlier recommendations from the top military commander in Afghanistan to keep soldiers there to help the government. That option and the angry reaction from Afghan officials are likely to dominate talks between U.S. President Barack Obama and his Afghan counterpart Hamid Karzai in Washington on Friday. The meeting was already likely to be tense, given ongoing strains in their relationship over the war. "If Americans pull out all of their troops without a plan, the civil war of the 1990s would repeat itself," said Naeem Lalai, an outspoken lawmaker from volatile Kandahar province, the birthplace of the Taliban. "It (full withdrawal) will pave the way for the Taliban to take over militarily," Lalai told Reuters.
• China exports pick up more than expected in December.
• Spain starts heavy borrowing year with crisis-clause bond. Spain's first debt sale of 2013 is likely to attract enough investors on Thursday to keep the country's borrowing costs down despite its heavy financing needs and the prospect of sustained economic recession.

Financial Times:

• UBS’s Orcel admits banks must change. Bankers have become too arrogant and the industry must change, the chief executive of UBS’s investment bank told British lawmakers on Wednesday.

Telegraph: 

• Central banks must switch off the printing presses before it’s too late. Only a year to go now. Ben Bernanke, chairman of the US Federal Reserve, has let it be known that he won’t be seeking a third term once his present one expires in January 2014, and few can blame him. 
• 'Disappointing' trade deficit figures a drag on recovery renewing triple-dip fears. Britain's trade deficit narrowed in November as exports rose more than imports, but the fall was below forecasts, which economists warn will act as a drag on growth and further threatens a triple-dip recession. 

Evening Recommendations 
Citigroup:

• Rated (AFL) Buy, target $62.

• Rated (HIG) Buy, target $27.

Night Trading

• Asian equity indices are -.25% to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 105.0 +.5 basis point.

• Asia Pacific Sovereign CDS Index 81.0 unch.

• FTSE-100 futures +.07%.

• S&P 500 futures +.23%.

• NASDAQ 100 futures +.28%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (MSM)/1.00
• (SNX)/1.03

Economic Releases
8:30 am EST

• Initial Jobless Claims are estimated to fall to 365K versus 372K the prior week.
• Continuing Claims are estimated to fall to 3228K versus 3245K prior.

10:00 am EST 

•  Wholesale Inventories for November are estimated to rise +.2% versus a +.6% gain in October.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The ECB rate decision, Fed's Kocherlakota speaking, Fed's Bullard speaking, Fed's George speaking, China New Loan/Money Supply/Trade data, Spanish 10Y bond auction, BoE rate decision, 30Y T-Note auction, Japan Trade data, (HLF) analyst day, weekly EIA natural gas inventory report, JOLTs Job Openings report for November, RBC Consumer Outlook Index for January, Bloomberg Economic Survey for January, weekly Bloomberg Consumer Comfort Index, (KBR) earnings guidance and the (CVX) Q4 interim update could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by industrial and automaker 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.

Stocks Slightly Higher into Final Hour on Debt Ceiling Hopes, Short-Covering, Diminishing Global Growth Fears, Biotech/Homebuilding Sector Strength

Today's Market Take:

Broad Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• VIX 13.92 +2.20%

• ISE Sentiment Index 96.0 -1.3%

• Total Put/Call .85 -11.46%

• NYSE Arms 1.57 -6.68%

Credit Investor Angst:

• North American Investment Grade CDS Index 86.71 +1.37%

• European Financial Sector CDS Index 124.21 +1.05%

• Western Europe Sovereign Debt CDS Index 101.80 +.45%

• Emerging Market CDS Index 207.51 +1.16%

• 2-Year Swap Spread 13.50 unch.

• TED Spread 25.0 +.5 bp

• 3-Month EUR/USD Cross-Currency Basis Swap -20.0 -.25 bp

Economic Gauges:

• 3-Month T-Bill Yield .06% unch.

• Yield Curve 161.0 unch.

• China Import Iron Ore Spot $158.50/Metric Tonne unch.

• Citi US Economic Surprise Index 30.0 -1.1 points

• 10-Year TIPS Spread 2.52 +2 bps

Overseas Futures:

• Nikkei Futures: Indicating +57 open in Japan

• DAX Futures: Indicating -6 open in Germany

Portfolio:

• Slightly Higher: On gains in my medical/biotech/tech sector longs

• Disclosed Trades: None

• Market Exposure: 50% Net Long

Today's Headlines

Bloomberg: 

• Merkel Confronts Growing Skepticism on Bailout Aid to Cyprus. Chancellor Angela Merkel confronted a growing chorus of skepticism from inside and outside Germany’s coalition on bailout financing for Cyprus, possibly endangering her majority among lawmakers who will have to approve any aid. Rainer Bruederle, the parliamentary leader for Merkel’s Free Democratic coalition partner, told Bild newspaper he sees no majority in the lower house as long as German taxpayers have the impression that they’re bolstering tax evaders. He echoed statements from opposition Social Democratic Chairman Sigmar Gabriel, who told Sueddeutsche Zeitung newspaper the SPD won’t support a Cyprus bailout in its current form. “There are too many question marks surrounding Cyprus,” Bruederle told Bild in an interview today. “From what is known currently, I don’t see a majority for financial aid.”

• Morgan Stanley(MS) Said to Cut 1,600 Investment-Banking Jobs. Morgan Stanley, the sixth-largest U.S. bank by assets, plans to eliminate about 1,600 jobs from its investment bank and support staff in coming weeks, a person familiar with the matter said. 

• Fracking Pushes U.S. Oil Production to Highest Level in 20 Years. U.S. oil production exceeded 7 million barrels a day for the first time since March 1993 as improved drilling techniques boosted exploration across the country and reinforced a shift toward energy independence.

• Iron Ore Seen Set for Bear Market as Restocking Rally Fades. Iron ore, which posted the biggest quarterly climb on record in the final three months of 2012, may extend gains from a 14-month high as Chinese mills restock, then tumble into a bear market, according to Deutsche Bank AG. Prices may rise to $170 a ton in the first half on demand in the biggest buyer, before falling to less than $120 as supply expands, Deutsche Bank said in a report.

Wall Street Journal: 

• Once-Lively Square Is a Center of Greek Woe. Once the vibrant commercial heart of Athens, the capital's central Omonia Square now is ringed by shuttered hotels and vacant shops and haunted by drug dealers, addicts and prostitutes, making it a national symbol of despair and social collapse.

• Obama to Nominate Lew as Treasury Secretary. 

• CBO: Ending Corporate Tax Deferral Could Raise $100 Billion. A new Congressional Budget Office study throws some cold water on the idea of overhauling U.S. corporate tax policy to make it more like other developed countries’ tax policies. The study suggests that the current U.S. system is bad enough, but some of the alternatives being advanced by businesses likely would be worse.

Fox News:

• Biden suggests White House could act without Congress as part of gun control plan. Vice President Biden suggested Wednesday that the White House could take unilateral action on gun control, as he kicked off a round of meetings aimed at finding ways to curb gun violence. The vice president met Wednesday with gun-safety and victims groups, saying he is "determined" to take "urgent action" to address gun violence. "This is not an exercise in photo opportunities or just getting to ask you all what your opinions are. We are vitally interested in what you have to say," Biden said. 

• Criticism, concern about Hagel nomination spreads beyond Capitol Hill. The furor over former Sen. Chuck Hagel’s nomination for secretary of defense is rippling beyond Capitol Hill as pro-Israeli and gay-rights groups join in opposition. The former Nebraska senator and decorated Vietnam War veteran is facing criticism for a years-old anti-gay comment and his political views -- including those that suggest some tension with Israel, considered the United States’ closest Middle East ally.

CNBC:

• US Stocks Could See a Correction: Wien. U.S. stocks may have closed at five year highs last week, but a long-time market watcher told CNBC on Wednesday that the S&P 500 Index could see a correction from current levels before recovering by year's end."I have a bearish outlook," said Byron Wien, BlackstoneAdvisory Partners vice chairman. "The market will have a swoon here — trade at 1,300, down 10 percent from where it is right now.

Zero Hedge: 

• Europe's Scariest Heatmap.

• Fed Now Pre-Monetizing: Bernanke Buys $300 Million Of Treasury To Be Auctioned Off Tomorrow. 

• European Stocks Discover VIX Algo; Bonds/EURUSD Ain't Buying It. (graphs)

• Santelli To Congress: Ignore The Market, Focus On Your Country. (video)

Business Insider:

• Wall Street Is Nearing Unanimous Consensus On Stocks, And That Should Scare You.

• THE DEATH OF THE PC: A Full Report From Business Insider. 

• HEDGE FUND WAR: Dan Loeb Buys Stake In Herbalife(HLF), Causes Stock To Soar, Hurting Bill Ackman's Big Short. 

• A Chinese Censorship Scandal Is Spiraling Out Of Control. 

• The European Bailout That Everyone Forgot About Is Running Into Trouble. 

• Furious Republicans Slam 'Mint The Coin' And Say It Would Sink The Titanic.

Reuters:

• EURO GOVT-Bunds in demand as ECB, Spain supply looms.

• Germany may slip into recession, Europe weakens: GM CEO. European auto sales will weaken further this year and Germany may be slipping into recession, General Motors Co's top executive said, making the U.S. automaker's task of turning around its money-losing Opel unit in that region more difficult. However, GM Chief Executive Dan Akerson said on Wednesday the company was cutting losses at Germany-based Opel as it aims to achieve its previously stated target of returning the unit to profits by mid-decade. GM previously said it expected a 2012 operating loss in Europe of as much as $1.8 billion.

Xinhua:

• Commentary: Japan's envisaged "warning shots" dangerous, irresponsible. Japan is reportedly scheming to fire "warning shots" if it encounters China's surveillance plane over the Diaoyu Islands. Such a provocative move is dangerous and irresponsible, and will definitely heighten the tension over the Diaoyu Islands issue and tip Sino-Japanese relations into a disastrous abyss. It is the latest provocation by the the newly installed Shinzo Abe administration to test the response as well as the tolerance of China and of the broader international community. Over the Diaoyu Islands issue, Japan has already made a mistake by attempting to challenge the international order established after the WWII. Now by talking about "warning shots," it slipped further into the wrong direction. There were other steps taken by the Abe administration that have severely damaged the mutual trust between Japan and China.

Asharq al-Awsat:

• The Muslim Brotherhood seeks to undermine Gulf governments and sully the reputation of its rulers while Iran's danger lies in its nuclear program and its interference in Gulf affairs, Dubai Police Chief Dahi Khalfan said.