Evening Headlines
Bloomberg:
- Hollande Hostility Fuels Charm Offensive to Show He’s No Sarkozy. President Francois Hollande, the
most-unpopular French leader in more than 30 years, is
struggling to show supporters he’s not dipping into predecessor
Nicolas Sarkozy’s playbook to reverse an economic slump. The European debt crisis, which is in its fourth year, and
France’s stagnating economy are preventing the Socialist
president from veering too far from efforts advocated by Sarkozy
and Germany’s Angela Merkel to cap the budget deficit, shrink
government spending and push through structural changes.
- Britain Loses to Germany as CDS Rise Most in World: U.K. Credit.
Confidence in U.K. credit is declining the most in the global
sovereign-debt market on concern the economy will fall into its third
recession in five years and force the government to increase borrowing.
Credit-default swaps insuring gilts rose 76% from a more than four-year
low of 26 basis points on Nov. 1, the most among 67 governments tracked
by Bloomberg.
- Donilon Says China Cyber Attacks Hurt Bid for Better Ties. China
is waging a campaign of cyber espionage against U.S. companies that is
threatening to derail President Barack Obama’s second-term effort to
improve ties, National Security Adviser Thomas Donilon said. The widespread theft of intellectual property and trade
secrets through “cyber intrusions emanating from China at a
very large scale” has become a point of contention with the
Chinese government, Donilon said yesterday in a speech at the
Asia Society in New York.
- India Inflation Fight Hampered as Debt Role Hinders RBI. The
biggest critic of India’s $100 billion budget deficit is also one of
the largest purchasers of the debt that finances it: the central bank.
The Reserve Bank of India faults government expenditure for stoking
inflation even as its sovereign-bond holdings have risen to $91 billion
from negligible amounts in 2008. While it has a mandate for price
stability -- like counterparts in the U.S., Europe and Japan -- the RBI
has another charge its peers lack: ensuring the government achieves its
borrowing program.
- U.S. Calls North Korean Threats Hyperbolic. North
Korea’s threats of preemptive nuclear strikes are “hyperbolic,” U.S.
National Security Adviser Thomas Donilon said, as the totalitarian
state’s leader Kim Jong Un told troops to prepare for war. Kim
yesterday told front line units that “every day is a state of war,”
official media reported. North Korea shut down a border hot line and
declared the 1953 armistice ending the Korean War nullified as the U.S.
and South Korea began annual military drills.
- Zinc Declines to 15-Week Low on Chinese Industrial Output. Zinc
prices fell to a 15-week low after industrial output posted the weakest
start to a year since 2009 in China, the world’s biggest user of
industrial metals. Production rose 9.9 percent in the two months ended Feb.
28, trailing estimates by economists, and retail sales fell
short of forecasts. Zinc dropped below its 200-day moving
average, and aluminum, lead, and tin also declined in London.
- Rebar in Shanghai Declines Amid High Inventories, Property Curbs. Steel reinforcement-bar futures in
Shanghai declined as high inventories and property curbs
increased concern that demand may wane. Rebar for delivery in October on the Shanghai Futures
Exchange fell as much as 0.5 percent to 3,890 yuan ($626) a
metric ton and traded at 3,901 yuan at 10:44 a.m. local time.
Wall Street Journal:
- CIA Ramps Up Role in Iraq. As al Qaeda Fighters Cross Over From Syria, Agency Fills Void Left by U.S. Military. The Central Intelligence Agency is ramping up support to elite Iraqi
antiterrorism units to better fight al Qaeda affiliates, amid alarm in
Washington about spillover from the civil war in neighboring Syria,
according to U.S. officials. The stepped-up mission expands a covert U.S. presence on the edges of
the two-year-old Syrian conflict, at a time of American concerns about
the growing power of extremists in the Syrian rebellion.
- Paul Ryan: The GOP Plan to Balance the Budget by 2023. The goal can be reached, with no new taxes, while increasing spending 3.4% annually instead of the current 5%. America's national debt is over $16 trillion. Yet Washington can't
figure out how to cut $85 billion—or just 2% of the federal
budget—without resorting to arbitrary, across-the-board cuts. Clearly,
the budget process is broken. In four of the past five years, the
president has missed his budget deadline. Senate Democrats haven't
passed a budget in over 1,400 days. By refusing to tackle the drivers of
the nation's debt—or simply to write a budget—Washington lurches from
crisis to crisis.
Fox News:
- Dozens of WH senior staffers making six-figure salaries amid sequester woes. After closing the doors to public tours in an effort to save money,
White House officials haven't yet said if sequester cuts will result in
furloughs or layoffs for its senior staffers -- as is happening with
rank-and-file in other executive branch agencies. But there are dozens of senior employees and other presidential
"assistants" to choose from if the administration were to look at
cutting the six-figure salaries from its payroll. In the field of energy and climate change alone, President Obama in
2012 employed three advisers making at least $100,000 -- though one has
since left. The president kept on staff a "deputy assistant" for energy and
climate change, Heather Zichal, making $140,000; a "special assistant"
for energy and environment, Nathaniel Keohane; and a "deputy director"
for energy and climate change, Dan Utech. Together, their salaries totaled over $370,000 last year, according to White House records. Climate blogger Steven Goddard said it's unlikely the administration
will scale back its circle of advisers, at least on this issue.
- Lawmaker looks to rein in program after free cell phones sent to dead people. That’s the message Rep. Tim Griffin of Arkansas wants to send Congress,
after he says a controversial government-backed program that helps
provide phones to low-income Americans ended up sending mobiles to the
dead relatives of his constituents. Griffin has introduced a bill that
targets the phone hand-out program, which has ballooned into a fiscal
headache for the government.
CNBC:
- This Could Spark China's Arab Spring. With half a billion and counting registered users on China's
Twitter-like micro blogging website Sina Weibo, the country's
increasingly vocal army of netizens could be among the biggest
challenges facing the world's second largest economy's new leadership,
which officially assumes power this month.
Zero Hedge:
Business Insider:
NY Times:
- On the Brink in Italy. Businesses of all sizes have been going belly up at the rate of 1,000 a
day over the last year; especially hard hit among Italy’s estimated six
million companies are the small and midsize companies that represent the
backbone of Italy’s $2 trillion economy.
Economists worry that the pace of business closings may accelerate as long as the country lacks a functioning government.
DealBreaker:
Reuters:
- China politics keep central bank hawks at bay, for now. Intense
lobbying by central government agencies and debt-laden local
governments is keeping People's Bank of China hawks in check after
inflation jumped to a 10-month high, forcing the central bank to keep
its monetary policy setting in neutral.
- U.S. Congress urged to pass vote changes for IMF. More than 130 academics and
global policy pundits urged the U.S. Congress on Monday to enact
delayed changes in voting powers in the International Monetary
Fund and warned that failure to do so would diminish U.S.
influence in the global financial lender.
Financial Times:
- Facebook(FB) reveals secrets you haven’t shared.
The increasing amount of personal information that can been gleaned by
computer programs that track how people use Facebook has been revealed
by an extensive academic study. Such programmes can discern undisclosed private information such as
Facebook users’ sexuality, drug-use habits and even whether their
parents separated when they were young, according to the study by
Cambridge university academics.
Telegraph:
Globe and Mail:
- Sales of subprime car-loan securities soar. Sales of risky pools of securities backed by car loans have jumped
this year as investors’ search for yield takes them to corners of the
market that boomed in the build-up to the financial crisis. Sales
of subprime auto asset-backed securities have increased year-to-date to
nearly $4-billion (U.S.), almost double the volume during the same
period of 2012, according to Deutsche Bank data. Subprime auto sales now
account for 34 per cent of all auto ABS issuance, surpassing levels
last seen in 2007.
Shanghai Securities News:
- China's Jiangsu Shagang Group Cuts Steel Prices. Co. cuts prices
for its threaded steel products by 250 yuan a ton to 3,800 yuan a ton as
construction-use steel product prices dropped substantially after the
State Council announced detailed property curbs. The newspaper also
cited rising inventories at steel companies.
Evening Recommendations
Night Trading
- Asian equity indices are -.50% to unch. on average.
- Asia Ex-Japan Investment Grade CDS Index 100.0 unch.
- Asia Pacific Sovereign CDS Index 79.75 +.5 basis point.
- NASDAQ 100 futures -.10%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
7:30 am EST
- The NFIB Small Business Optimism Index for February is estimated to rise to 90.0 versus 88.9 in January.
10:00 am EST
- JOLTs Job Openings for January are estimated to rise to 3670 versus 3617 in December.
Upcoming Splits
Other Potential Market Movers
- The German CPI report, Greece Industrial Production report, weekly
retail sales reported, 3Y T-Note auction, Piper Jaffary
Tech/Media/Telecom Conference, Barclays Healthcare Conference, BofA
Consumer/Retail Conference and the (CVX) analyst meeting could also
impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by commodity and industrial 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.
Broad Market Tone:
- Advance/Decline Line: About Even
- Sector Performance: Mixed
- Market Leading Stocks: Performing In Line
Equity Investor Angst:
- ISE Sentiment Index 129.0 +14.16%
- Total Put/Call .91 +1.11%
Credit Investor Angst:
- North American Investment Grade CDS Index 79.5 -1.32%
- European Financial Sector CDS Index 138.99 +.16%
- Western Europe Sovereign Debt CDS Index 97.63 +1.29%
- Emerging Market CDS Index 238.42 -.24%
- 2-Year Swap Spread 14.25 -.25 bp
- 3-Month EUR/USD Cross-Currency Basis Swap -16.5 unch.
Economic Gauges:
- 3-Month T-Bill Yield .09% unch.
- China Import Iron Ore Spot $144.10/Metric Tonne -1.5%
- Citi US Economic Surprise Index 21.0 -.1 point
- 10-Year TIPS Spread 2.58 unch.
Overseas Futures:
- Nikkei Futures: Indicating +85 open in Japan
- DAX Futures: Indicating unch. open in Germany
Portfolio:
- Slightly Higher: On gains in my retail/medical sector longs and emerging markets shorts
- Disclosed Trades: None
- Market Exposure: 50% Net Long
Bloomberg:
- French Industrial Output Tumbles as Recession Looms. French industrial production fell
more than expected in January as Europe’s second-largest economy
teetered on the brink of its third recession in four years. Output from factories, mines and utilities fell 1.2 percent
in the month from December, national statistics office Insee
said today. Economists had expected a 0.2 percent drop,
according the median 25 estimates in a Bloomberg survey. The decline
underlines difficulty President Francois Hollande faces in trying to
revive an economy that fell back
into recession early last year and shrank again in the fourth
quarter. Factory output fell 1.4 percent in January and 4.6
percent in the three months through January, led by a slump in
car production. “France remains stuck in a recessionary mode,” said
Philippe Gudin, an economist at Barclays in Paris. “The
unemployment rate is flirting with historical highs and
household income is hit by higher taxes. The stabilization we
had expected from the beginning of 2013 does not seem to have
taken place.”
- Italy’s Grillo Threatens to Quit Politics If Members Support PD. Beppe
Grillo, the comedian-turned politician whose Five-Star Movement won 25
percent of the vote in last month’s Italian elections, said he would
quit politics if his party members support a government led by Pier
Luigi Bersani’s Democratic Party. “If there were a confidence vote
by the parliamentary group of the Five-Star Movement in favor of the
ones that have destroyed Italy, I
would retire from politics,” Grillo said late yesterday in a post
on Twitter.
- China's Inflation Fight Starts to Squeeze Consumers.
While Japanese leaders have been making headlines by trying to end
years of deflation and achieve an inflation target of 2 percent, their
counterparts in China have a different fight on their hands. Far from
promoting inflation, the Chinese are fighting to contain it—and the
battle may get rougher in the months ahead. Consumer prices in China
rose 3.2 percent last month, up from 2 percent in January.
- Florida Lawmakers Reject Obama Medicaid Program Sought by Scott.
Florida legislative committees rejected an expansion of Medicaid for
the poor under President Barack Obama’s health-care law, a defeat for
Republican Governor Rick Scott from members of his own party. A Senate
panel voted today against expanding Medicaid, an option for states under
Obama’s Patient Protection and Affordable Care Act. A House
committee made the same decision on March 4.
Wall Street Journal:
- Pressure Rises on Korean Peninsula. North Korea cut off a phone hot line to the South and "declared
invalid" the Korean War armistice as the South Korean and U.S.
militaries began Monday a second phase of their annual joint winter
exercises. Later Monday, the U.S. Treasury put new sanctions on North Korea's
primary foreign-exchange bank to step up pressure on the country's
nuclear-weapons programs.
- SEC Charges Illinois Over Pension Funding. Brazil's Vale Shelves $5.9 Billion Potash Project.
MarketWatch:
CNBC:
- 'Major Political Storms' Holding Back US: GE's Immelt. The explosion of new regulations on business and the "unprecedented"
level of uncertainty about Washington's budget negotiations will keep
the the U.S. from achieving its "full growth potential," General Electric CEO Jeff Immelt said in a letter to shareholders Monday.
- Why Italy Could Be the Next 'Bad Boy of Europe'. Italy could see its borrowing costs rise above those of troubled
Spain this week, analysts told CNBC on Monday, with a credit rating
downgrade on Friday and continued political deadlock posing an ever
larger threat. "Italy is really going to blow it up this week,"
Joe Rundle, head of trading at ETX Capitol, told CNBC. "There is the
downgrade that happened on Friday but now there is the Italian yield and
the spread narrowing to the Spanish yield and there is the possibility
that Italy gets more expensive than Spain. The last time we saw that we
were in the middle of a euro zone crisis," Rundle told CNBC Europe's
"Squawk Box".
Zero Hedge:
Business Insider:
Reuters:
- Paper Trail Goes Cold in Case Against S&P. In early 2007, as signs of distress began
appearing in securities backed by residential mortgages, executives at
Standard & Poor's began advising analysts responsible for rating
mortgage bonds that they should put the phrase "privileged and
confidential" on emails to one another.
- Banks halt European share rally on Italian debt scare. Banking stocks held European
shares below 4-1/2 years highs on Monday, depressed by a
worsening outlook for Italy's public finances.
The STOXX euro zone banking index shed 0.8 percent, as a downgrade of Italy's sovereign
debt rating late on Friday triggered a selloff in the country's banks,
which own much of Rome's public debt.
Milan-listed Mediobanca, BP Emilia and
Banco Popolare led sector fallers, shedding between 3
percent and 5 percent, after Fitch warned that inconclusive
elections last month threatened to delay much-needed economic
reforms.
Style Underperformer:
Sector Underperformers:
- 1) Steel -1.10% 2) Alt Energy -.50% 3) Telecom -.41%
Stocks Falling on Unusual Volume:
- HAFC, BSBR, VLO, CVI, BCS, CNSL, SBGI, DKS, BCOR, BAM, AKAM, KORS, FRC, TUP, BRFS, HIBB, ETE, JOBS, INGR, MYGN, CVI, INTU, GORO, FANG, EW, DB, BAP, SLW, UA, HFC, CLDX and TUP
Stocks With Unusual Put Option Activity:
- 1) SCHW 2) JNK 3) CIM 4) EEM 5) PETM
Stocks With Most Negative News Mentions:
- 1) INTU 2) EXP 3) CTSH 4) BXP 5) GDI
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Gaming +1.55% 2) Education +.98% 3) Hospitals +.72%
Stocks Rising on Unusual Volume:
- REN, IRE, PGH, BVSN, GNW, WPRT and BBRY
Stocks With Unusual Call Option Activity:
- 1) GNW 2) ACT 3) HOT 4) EMC 5) NRG
Stocks With Most Positive News Mentions:
- 1) HRB 2) BBY 3) DELL 4) GPC 5) T
Charts:
Weekend Headlines
Bloomberg:
- EU Chiefs Seeking to Stave Off Euro Crisis Turn to Cyprus. European
leaders grappling with
political deadlock in Italy and spiraling unemployment in France will
turn to a financial rescue for Cyprus in an effort to stave off a return
of market turmoil over the debt crisis. European Union leaders will
meet for a March 14-15 summit in Brussels to discuss terms for Cyprus,
including the island nation’s debt sustainability and possibly imposing
losses on depositors. That comes as Italy struggles to form a government
after an inconclusive Feb. 24-25 election and as concern over the
French economy mounts with unemployment at a 13-year high. “We haven’t turned the corner yet,
but we’re on a good path,” German Finance Minister Wolfgang Schaeuble
told Austria’s Der Standard newspaper in a March 8 interview. “It
would be wrong at this point to change course.”
- Merkel’s FDP Partner Says ‘Hands Off ECB’ in Election Vow. German Economy Minister Philipp Roesler said he’ll fight attempts across Europe to weaken the
euro, pledging that his Free Democratic Party will stand up for
central-bank independence before federal elections on Sept. 22. Roesler, whose FDP is Chancellor Angela Merkel’s junior
coalition partner, warned in a speech to a party convention in
Berlin of a “new danger” emerging in Europe as governments
resist austerity and policies to boost competitiveness and
instead discuss artificially devaluing the euro. Such moves risk
spurring inflation, hurting those on middle incomes, savers and
retirees, he said today. “That’s why we’re fighting so hard for a stable
currency,” Roesler said. “That’s why we view attempts to
impose political influence on the independence of the European
Central Bank as lethal. That’s a threat to stable money. That is
why we as Free Democrats say: ‘Hands off our ECB.’”
- Li Says 'Hard to Say' Whether China Rate Boost Will Be Needed.
CPI to be "relatively well' controlled at around 3% this year, Bank of
China President Li Lihui said in an interview in Beijing.
- China’s Economic Data Show Weakest Start Since 2009. China’s retail sales and industrial output had their weakest
combined start to a year since the global recession in 2009, adding to
signs of a moderating rebound in the world’s second-biggest economy. Retail
sales increased 12.3 percent in the first two months of 2013 from a
year earlier and industrial production rose 9.9 percent, the National
Bureau of Statistics said yesterday in Beijing. Both numbers trailed
economists’ estimates. February inflation, distorted by a weeklong
holiday, accelerated to 3.2 percent. “The time is still
way off for an explicit policy change” such as raising interest rates or
banks’ reserve requirements, Liu Li-Gang, chief Greater China economist
at Australia & New Zealand Banking Group Ltd. in Hong Kong, said in
a note. The recovery is being led by “fast investment growth” and
“could falter once monetary policy becomes tight on concerns of rising
risks of inflation” and a property bubble. The gain in retail
sales was below the lowest economist projection of 13.8 percent and was
the smallest for a January- February period since 2004. The increase in
factory output compared with the 10.6 percent median estimate in a
Bloomberg survey and was the weakest for the first two months since
2009.
- China Streamlines Maritime Law Enforcement Amid Island Disputes. China
brought the law-enforcement arms of its maritime agencies under one
body, a move aimed at protecting the country’s interests as it presses
territorial claims in the East and South China Seas. The State Oceanic Administration will oversee the coast guard, fisheries law-enforcement and the smuggling police, which
now fall under separate ministries, a report to the National
People’s Congress, the country’s legislature, said yesterday.
The administration also has a law enforcement arm.
- Rebar Falls to Two-Month Low as China Shows Weaker Start to 2013. Steel reinforcement-bar futures
fell to the lowest in more than two months after China’s
industrial output had the weakest start to a year since 2009. Rebar
for delivery in October on the Shanghai Futures
Exchange fell by as much as 1.6 percent to 3,867 yuan ($622) a metric
ton, the lowest level for a most-active contract since Dec. 27, and was little changed at 3,928 yuan at 10:40 a.m.
local time. The contract declined for a third week last week.
- China’s Stocks Drop for Third Day as Data Spurs Economy Concerns. China’s
stocks fell, heading for their longest losing streak in three months,
as the country’s industrial output had the weakest start to a year since
2009 and
lending and retail sales growth slowed. Ping An Bank Co. led lenders
lower after the nation’s new
loans last month trailed analyst estimates. Liquor maker Sichuan
Swellfun Co. dropped among consumer companies after the country’s retail
sales growth in the first two months was the smallest for that period
since 2004. “The economic recovery is weaker than expected,” said Wang
Zheng, Shanghai-based chief investment officer at Jingxi Investment
Management Co., which manages $120 million. “Investors are worried
that stocks may already have moved ahead of fundamentals.” The Shanghai
Composite Index (SHCOMP) dropped 0.8 percent to
2,299.17 at 9:39 a.m. local time.
- Japan Machinery Orders Fall 13% in Sign of Limits on Investment. Japan’s
machinery orders plunged 13 percent in January, the biggest decline in
eight months, signaling limits on corporate investment as Prime Minister
Shinzo Abe tries to drive an economic revival. The decline from the
previous month, announced by the Cabinet Office today in Tokyo, compared
with the median estimate
in a Bloomberg News survey of 26 economists for a 1.7 percent
fall. Today’s
data are a reminder that business investment will not drive the
recovery, said Izumi Devalier, a Japan economist at HSBC
Holdings Plc in Hong Kong. “Looking ahead, we expect accelerating
consumption, residential and public investment,” Devalier said. “But given
that exports are trending at still-weak levels, it will take
more time before we see the improved business environment
spurred by the weak yen and increased manufacturer optimism
translate into robust corporate investment.”
- Abe's Quadrillion Yen Debt Risk at Pre-Quake Level: Japan Credit. Two years after a record earthquake devastate Japan's northeast,
Prime Minister Shinzo Abe has driven the nation's bond risk to levels
from before the disaster with a plan that will add to the world biggest
debt burden. The cost to insure Japan's government bonds from non-payment for five years decreased to 61 basis points on March 7, the lowest close since November 2010 and down from as much as 155 in October 2011. Abe's nominee for Bank of Japan Governor, Haruhiko Kuroda, plans to boost buying
of longer-term JGBs to stimulate growth, dismissing concerns of his
predecessor that doing so risks creating a debt crisis. Outstanding JGBs
will swell to 1,014.9 trillion yen($10.7 trillion) in fiscal 2022 from
732.2 trillion yen in the 12 months starting April 1, according to
government estimates. Total public debt including borrowings amounted to 997 trillion yen at the end of last year, closing in on the quadrillion level.
- Fukushima Toxic Waste Swells as Japan Marks Mar. 11. Every morning, 3,000 cleanup
workers at the Fukushima disaster site don hooded hazard suits,
air-filtered face masks and multiple glove layers. Most of the
gear is radioactive waste by day’s end. Multiply those cast-offs by the 730 days since a tsunami
wrecked the Dai-Ichi nuclear station two years ago and the trash
could fill six Olympic swimming pools. The tens of thousands of
waste bags stored in shielded containers illustrate the dilemma
of dealing with a nuclear accident: Everything that touches it
becomes toxic.
- North Korea Threatens South’s Defense Minister Nominee. North
Korea threatened to target the South Korean defense minister nominee
after he vowed to respond to attack by the North by toppling the regime.
A retired general and former deputy commander of the U.S.- South Korea
Combined Forces, Kim Byung Kwan will be the “first target in the great
war for national reunification” should he
continue his criticisms, a spokesman for the North Korea-based
Committee for the Peaceful Reunification of Korea said in a
statement carried by the Korean Central News Agency March 9.
- Australian Central Bank Hacked by China Malware, AFR Says. The
Reserve Bank of Australia was repeatedly and successfully hacked in a
series of cyber-attacks with malicious software developed in China,
the Australian Financial Review reported. Australia’s central bank has
responded by hiring a private security firm to carry out penetration
testing, or authorized hacking of its computer networks, to assess its
security, the newspaper said.
- Karzai Accuses U.S. of Taliban Collusion as Hagel Visits.
Defense Secretary Chuck Hagel was
greeted on his first visit to Afghanistan since taking office by suicide
bombs, threats and Afghan President Hamid Karzai’s accusation that the
U.S. is colluding with the Taliban. As Hagel prepared to leave a U.S. military compound in
Kabul on March 9, a Taliban suicide bomber blew himself up
outside the Ministry of Defense, and another suicide bomb
detonated in Khost province. Yesterday, Karzai said that those
attacks, which together killed 19 people, aided U.S. goals.
Wall Street Journal:
- Job Numbers Are Good, but Some Perils Loom. No jobs report is without its disappointments, and this one was no
exception: The drop in the unemployment rate was driven in part by job
seekers who gave up their search, and the employment gains were
concentrated among part-time workers. What is worse, long-term unemployment, which had been showing signs of
improvement, rose in February. The average unemployed American has been
out of work for more than eight months, and more than a quarter have
been looking for at least a year.
- Silver Spring Networks Looks to Tap 'Smart Grid'. Energy-technology company Silver Spring Networks Inc. plans to bring an initial
public offering to market this week, a deal from a once-hot sector that has been
largely dormant this year. The IPO market has produced big trading gains from companies in the
financial, industrial, health-care, consumer and energy sectors. But flotations
in the technology field have been unusually tame. Silver Spring's modest $66.7
million offering will be the sector's second, and largest, this year, according
to Ipreo, a market-intelligence firm.
- A New Obama? The Republican response should be don't trust but verify.
Fox News:
- White House suspends public tours, but first family trips in full swing. Visitors to the nation's capital looking for a White House public
tour are out of luck starting this weekend, courtesy of what the Secret
Service says is its own decision to deal with the sequester cuts. But while the agency said it needed to pull officers off the tours
for more pressing assignments, the budget ax didn't swing early or deep
enough to curtail a host of recent Secret Service-chaperoned trips like
President Obama's much-discussed Florida golf outing with Tiger Woods
and first lady Michelle Obama's high-profile multi-city media
appearances.
CNBC:
Zero Hedge:
- Meet The New US Petroleum Pipelines. (graph) Still confused why crony capitalist #1, the "rustic" Octogenarian of Omaha, and Obama tax advisor #1,
Warren Buffett has been aggressively attempting to corner the railroad
market, while the administration relentlessly refuses to allow assorted
new, and very much competing petroleum pipelines from
America's neighbor to the north to cross through the US (in gratitude
for the former's generous "tax advice" and pedigree by association)?
Hint: it's not concern about the environment. The answer is the chart
below.
Business Insider:
Reuters:
- Egypt protesters torch buildings, target Suez Canal. Egyptian
protesters torched buildings in Cairo and tried unsuccessfully to
disrupt international shipping on the Suez Canal, as a court ruling on a
deadly soccer riot stoked rage in a country beset by worsening
security. The ruling enraged residents of
Port Said, at the northern entrance of the Suez Canal, by confirming
the death sentences imposed on 21 local soccer fans for their role in
the riot last year, when more than 70 people were killed. But
the court also angered rival fans in Cairo by acquitting a further 28
defendants whom they wanted punished, including seven members of the
police force, reviled across society for its brutality under deposed
autocrat Hosni Mubarak.
- Nigerian forces say they have killed 52 Islamists, arrested 70. Nigerian security
forces said on Saturday they had killed 52 Islamist militants over 10
days of fighting in the northeasterly Borno state, at a cost of only two
of their own men, with no civilian deaths. The announcement came a day
after President Goodluck Jonathan paid a visit to the state in which he
rejected the idea of an amnesty for the Islamist sect Boko Haram, which
has killed hundreds in gun and bomb attacks in the past two years. The
Islamists are seen as the main security threat to Africa's top energy
producer, although their sphere of influence is far from the crucial oil
fields in the south.
Telegraph:
- Germany's anti-euro party is a nasty shock for Angela Merkel. Political revolt against the euro construct has spread to Germany. A new party led by economists, jurists, and Christian Democrat rebels will
kick off this week, calling for the break-up of monetary union before it can
do any more damage. "An end to this euro," is the first line on the webpage of
Alternative für Deutschland (AfD). "The introduction of the euro
has proved to be a fatal mistake, that threatens the welfare of us all. The
old parties are used up. They stubbornly refuse to admit their mistakes."
They propose German withdrawl from EMU and return to the D-Mark, or a
breakaway currency with the Dutch, Austrians, Finns, and like-minded
nations.
- Greece should still leave the euro. Greece still remains the biggest risk for the euro and would be better off to
leave the single currency, a close ally of German chancellor Angela Merkel’s
has said.
Le Temps:
- Patek Philippe SA Chairman Thierry Stern expects 2013 to be a more difficult year for global watchmakers, he says in an interview.
El Economista:
- Spain
May Cut 2013 GDP Forecast to 1% Decline. Government may change current
forecast for .5% contraction, which analyst don't consider credible.
Govt may announce shift around March 25-31 Easter holiday, citing people close to the government.
Korean Central News Agency:
- North Korea Military Holds Rallies in 2 Provinces. Armed forces hold rallies in North Phyongan and South Hwanghae provinces today. It is the "final conclusion and will" of North Korea to "settle accounts with the U.S.," said Ri Man Gon, chief secretary of the North Phyongan Provincial Committee of the Workers' Party of Korea, and Pak Yong Ho, chief secretary of the Southern Hwanghae Provincial Committee of the WPK, in a joint statement.
Xinhua:
- S. Korea's Defense Ministry warns DPRK to "vanish from earth". The
government of the Democratic People's Republic of Korea (DPRK)
will"vanish from the earth" if it wages a nuclear attack on South Korea,
the South Korean Defense Ministry here said Friday. "I am telling
you this as a member of the human race: If North Korea (DPRK) attacks
South Korea with nuclear weapons, the Kim Jong Un regime will vanish
from the earth by the will of the humanity,"ministry spokesman Kim
Min-seok told reporters. The remark came shortly after the DPRK saidit would sever a military
hotline with South Korea and nullify non-aggression agreements between
the two countries, a response to newly expanded sanctions approved by
the UN.
China Securities Journal:
- China Economic Recovery May Slow on Property Curbs. China's economic recovery may slow on uncertainties about investment growth, according to a front-page commentary written
by reporter Ni Mingya. Recent recovery driven by property investment
growth from 4Q last year, the commentary said. Government property
market control will limit property investment growth, it said.
Weekend Recommendations
Barron's:
- Bullish commentary on (KSU), (NSC), (UNP), (LYV), (GNW), (DELL), (FFIV), (BBBY) and (CP).
Night Trading
- Asian indices are -.25% to +.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 100.0 -3.0 basis points.
- Asia Pacific Sovereign CDS Index 79.25 -1.25 basis points.
- NASDAQ 100 futures +.04%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
Upcoming Splits
Other Potential Market Movers
- The
Eurozone industrial production data, Italian gdp report, Portugal gdp
report, BoJ minutes, India rate decision, CSFB Services Conference and the (TREX) analyst day could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by real estate and consumer shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the week.
