Today's Headlines

Bloomberg: 

• China’s Record Number of IPOs to Curb Small-Cap Equities. The number of Chinese initial public offerings will accelerate to a record pace in coming months, dragging down small-company stocks, according to UBS AG. There will be some 60 to 80 IPOs each month from March to June, Chen Li, chief China equity strategist at UBS, said at a briefing in Shanghai. Increased stock supply will hold back share prices of smaller companies on the ChiNext Index after they surged last year, he said. The regulator approved about 50 companies to sell stock in China following new rules in November aimed at strengthening investor protection and stamping out price manipulation. The ChiNext gauge of Shenzhen-listed companies with an average market capitalization of $1.5 billion is more than four times more expensive than the Shanghai Composite Index. “The sales pace is unprecedented,” Chen said. “Starting March, that’ll pose a big challenge to the valuation of ChiNext companies.” 

• Brazil Swap Rates Rise on Outlook for Inflation; Real Advances. Brazil’s shorter-term swap rates climbed to a six-week high as economists increased their inflation forecast for 2014, adding to speculation that the central bank will extend borrowing cost increases. Swap rates on the contract maturing in January 2015 rose for a fourth straight day, increasing 12 basis points, or 0.12 percentage point, to 10.73 percent at 1:56 p.m. in Sao Paulo. The real appreciated 0.6 percent to 2.3443 per U.S. dollar, the strongest level since Dec. 27. 

• Rise of 'Common Man' in India Threatens Stability of Government Coalition. The sudden popularity of India’s anti-graft Aam Aadmi Party is prompting concern at companies such as Maruti Suzuki India (MSIL) Ltd. that this year’s general election will fail to create a stable government. Arvind Kejriwal’s one-year-old Aam Aadmi plans to contest as many as 300 seats after taking power in the national capital last month, according to senior party leader Yogendra Yadav. That threatens to reduce the chances of the ruling Congress Party or main opposition Bharatiya Janata Party emerging with a majority in the election, which is due by May. 

• European Stocks Advance Second Day as Bank Shares Climb. European stocks advanced for a second day, after the Stoxx Europe 600 Index posted its first full-weekly gain of 2014, as a global banking-supervision body eased rules linked to minimum-capital requirements for lenders. A gauge of banking shares climbed to its highest level since April 2011 after the Basel Committee on Banking Supervision’s announcement on capital requirements. UBS (UBSN) AG added 3.1 percent as Chief Executive Officer Sergio Ermotti said the lender won’t spin off its investment-banking business. ICAP (IAP) Plc fell 1.1 percent as Goldman Sachs Group Inc. downgraded the world’s biggest interdealer broker. The Stoxx 600 climbed 0.2 percent to 330.72 at the close of trading.

• WTI Crude Drops. WTI for February delivery fell 85 cents, or 0.9 percent, to $91.87 a barrel at 1:36 p.m. on the New York Mercantile Exchange. The volume of all futures traded was 12 percent below the 100-day average. Oil is down 6.7 percent so far this year.

• Federal Reserve Said to Probe Banks Over Forex Fixing. The Federal Reserve is investigating whether traders at the world’s biggest banks rigged benchmark currency rates, raising the risk that firms will be penalized for lax controls as regulators look for wrongdoing.

• Priced Out: Where Higher Rates Could Hurt Home Buyers Most.

• Elizabeth Warren’s War on Job Creators. Senator Elizabeth Warren is drawing praise from progressives for her legislation that would bar companies from requiring prospective hires to submit to a credit check as a condition of employment.

• Lululemon(LULU) Falls After Cutting Revenue, Earnings Forecast. Lululemon Athletica Inc. (LULU) shares dropped the most in seven months after the yogawear retailer cut its revenue and earnings forecast for the quarter ending Feb. 2. Lululemon fell 15 percent to $50.86 at 9:41 a.m. in New York and earlier fell as much as 16 percent for the largest intraday decline since June 11.

• Suntory to Buy Beam(BEAM) in $16 Billion Deal. Suntory Holdings Ltd., the closely held Japanese whiskey and beer maker, agreed to buy Beam Inc. (BEAM) for $16 billion including debt to gain brands such as Maker’s Mark whiskey and create the world’s third-largest premium spirits company.

• SodaStream(SODA) Plunges Most Since 2011 After Earnings Data. SodaStream International Ltd. (SODA), the Israeli maker of home soda machines, fell the most since 2011 in New York after the company reported preliminary earnings that missed analyst estimates. Shares of Lod, Israel-based SodaStream dropped 22 percent to $39.07 at 11:52 a.m. in New York, the biggest decline since August 2011.

Fox News:

• Obama backer leading IRS probe visited White House in ’09, records show. The Justice Department attorney leading the probe into whether the IRS improperly targeted Tea Party groups visited the White House in 2009 as a guest of President Obama, according to official visitor logs.  The visit raises more questions about possible ties between Barbara Kay Bosserman and Obama, after Republican lawmakers complained last week she should not be leading the probe into the IRS.

CNBC:

• Without rebirth, malls face extinction: Developer. (video)

• Retailers' present to Wall Street? A lump of coal. A few weeks after consumers finished unwrapping presents, a wave of retailers are gifting Wall Street with lumps of coal. On Monday, Lululemon Athletica and Express became the latest retailers to warn investors of disappointing earnings in the holiday quarter. These negative forecasts follow similar warnings last week from a range of retail companies, including American Eagle Outfitters and Zumiez. In response, Lululemon stock shed 16 percent and Express shares dropped about 2.5 percent. 

• Scared? This could be the perfect time to get protection. Even as stocks see a soft start to the year, investors don't seem to be getting too fearful. In fact, the market's "fear gauge" fell Monday to a low touched only once in the past 10 months, and that could give investors a great chance to get protection.

ZeroHedge:

• After Seven Lean Years, Part 1: US Residential Real Estate: The Present Position And Future Prospects. (graph)

• Chart Of The Day: Labor Force (Lack Of) Participation Or "We'll Just Make It Up As We Go Along".

• Baltic Dry Index Crashes 18% In 2 Days. (graph)

• Polar Vortex - The Sequel: Coming To A Frozen US City Near You.

• BofAML Warns USDJPY Trend Has Turned. (graph)

• Lockhart "Positive" Hawkishness Sparks Tapering Tumble In Stocks (Dow At Lows Of Year).

• Japanese Stocks Lose All Post-Taper Gains As USDJPY Dives.

ValueWalk:

• The Valuation Question: Rich By Any Measure? The forward P/E ratio for the S&P 500 during the past 5-year, 10-year, and 35- year periods has averaged 13.2x, 14.1x, and 13.0x, respectively. At 15.9x, the current aggregate forward P/E multiple is high by historical standards.

Business Insider:

• The Average Hedge Fund These Days Is Basically An Overpriced Index Fund. According to this chart from Morgan Stanley's Adam Parker, "hedge funds in aggregate are essentially long the S&P 500."

• Goldman(GS) Sounds The Alarm On Stocks. 

• 'One Thing That Could Go Wrong Is China'.

• One Chart That Shows How Big Of A Disaster The Fed's New Communication Strategy Has Been.

• Justice Scalia Rips Into Obama's 'Self-Interested' Use Of His Power.

SeekingAlpha:

• Commercial Loans: A Bubble About To Burst?

The Federalist:

• Why Is Religion Invisible To The Media? A 12-year-old girl wrote herself a note before she died. It contained an amazing message of hope and redemption. That was before the media got to it.

Reuters:

• FOREX-Dollar tumbles vs yen after jobs shock prompts stimulus rethink. The dollar tumbled to its lowest in almost a month against the yen on Monday, as investors caught out by Friday's soft U.S. jobs data reassessed how quickly the Federal Reserve might scale back its stimulus.The dollar's weakness also helped push the Australian dollar to a one-month high and the New Zealand dollar to a near-two-month high against the greenback. The U.S. dollar slid 0.7 percent to 103.37 yen, having fallen to 103.26 at one point, its lowest level since Dec. 18. The greenback's losses accelerated after it breached Friday's intraday low of 103.83 yen.

• Low interest rates may spur asset bubbles -German ECB candidate. A prolonged period of accommodative monetary policy brings risks and low interest rates may spur asset price bubbles, said Sabine Lautenschlaeger, Germany's candidate for a vacant seat on the European Central Bank's board. Speaking to a European parliament committee on Monday as part of her vetting, Lautenschlaeger said economic data from the euro zone suggested "we have seen the trough in economic activity, even in the member states hit hardest by the crisis." "A period of prolonged monetary policy accommodation with interest rates being low for a long period is not without its risks," she added. "In fact low interest rates may be associated with spurring asset price bubbles", she told the committee in Strasbourg. 

• TREASURIES-Yields at 3-week lows as economic expectations fall.

• Merck(MRK) shares jump on early filing for skin cancer drug. Shares of Merck & Co Inc rose as much as 6.5 percent Monday after it filed the first part of an application to market its experimental drug, MK-3475, for advanced melanoma, putting the treatment on track to become the first in a new class of promising cancer drugs to reach the market.

Nikkei:

• Japan to Tax Online Content Sales in 2015. Govt will implement tax on sales of electronic books, digital music and other online products from abroad as early as fiscal 2015.

Bear Radar

Style Underperformer:

• Small-Cap Growth -1.07%

Sector Underperformers:

• 1) Retail -2.62% 2) Oil Service -1.70% 3) Homebuilding -1.64%

Stocks Falling on Unusual Volume:

• SODA, ICPT, LULU, BONT, CNAT, PGEM, GALT, ASNA, BTI, AAN, ORMP, CELG, NDLS, SIMO, PUK, EXPR, BPT, ISRG, SHLD, CCIH, CLUB, AYI, KSS, HAWK, ETN, OII, ZLC, AFSI, FIVE, SNI, KLIC, PMC, SFLY, ISRG, AAN, VOLC, ECYT, ASNA, OMED, QSII and CREE

Stocks With Unusual Put Option Activity:

• 1) JIVE 2) CZR 3) KSS 4) COH 5) EWJ
  

Stocks With Most Negative News Mentions:

• 1) SODA 2) TSO 3) CREE 4) PVH 5) SBUX
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Large-Cap Growth -.11%

Sector Outperformers:

• 1) Networking +2.25% 2) Biotech +.98% 3) Internet +.68%
  

Stocks Rising on Unusual Volume:

• BEAM, TKMR, NPO, CLVS, ALNY, JNPR, CADX, ARWR, CLDX, MGAM, TWI, EXAS, ONVO, MRK, CBST, BCRX, FFIV, SEM, FINL and SWKS

Stocks With Unusual Call Option Activity:

• 1) FOXA 2) NIHD 3) XOMA 4) MRK 5) NVAX

Stocks With Most Positive News Mentions:

• 1) TWTR 2) MRK 3) JNPR 4) BEAM 5) GOOG
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Monday Watch

Weekend Headlines 
Bloomberg:

• China Peer-to-Peer Loan Sites Fail as Fraud Climbs, Xinhua Says. Some Chinese peer-to-peer lending websites collapsed last year and others may need restructuring in 2014 to curb fraud in an industry that has grown rapidly with little regulatory oversight, Xinhua News Agency said. About 800 such online operations emerged in China just last year with outstanding loans of 26.8 billion yuan ($4.4 billion), Xinhua reported, citing industry data from Wangdaizhijia.com, China’s biggest peer-to-peer lending site. Meanwhile, 74 websites were either shut down or their users were unable to withdraw cash, according to the report. 

• Fed-Fueled Inflation May Cost India’s Congress, Ex-Minister Says. Indian Prime Minister Manmohan Singh’s ruling party would lose a national election if it were held today because of voter anger over the highest inflation in Asia, a former member of his cabinet said. “On inflation I have no defense to offer -- none,” Aiyar, a lawmaker and senior party member, said in a Jan. 9 interview at his New Delhi home. “If there were an election today, we would do very badly.”

• Zegna Sees Luxury Revenue Growth Under Pressure Until Mid-2014. Ermenegildo Zegna said he expects revenue growth at the namesake luxury goods maker will remain under pressure for at least another six months as demand moderates in China and the yen’s weakness persists. “October and November were not good months overall,” the chief executive officer of the Italian company said yesterday in an interview in Milan. “The first half of 2014 will still see this lower pace, which I hope will come back in the second half,” he said, forecasting growth of less than 10 percent for the full year. 

• Yen Touches Strongest in 3 Weeks as Traders Trim Bearish Wagers. The yen touched the strongest in three weeks after bearish bets slid to a six-week low and as investors weigh the outlook for a reduction in Federal Reserve monetary stimulus before policy makers speak this week. The yen climbed 0.7 percent to 103.46 per dollar as of 11:43 a.m. in Singapore after earlier touching 103.26, the strongest since Dec. 18. It gained 0.6 percent to 141.52 per euro. The shared currency added 0.1 percent to $1.3680 following a 0.6 percent gain last week. The Australian dollar rose 0.4 percent to 90.28 U.S. cents after advancing to 90.35, the highest since Dec. 12.

• Asia Stocks Rise as Dollar Falls; Metals Rally on Ore Ban. Asian stocks rose for a second day and the dollar weakened after U.S. payrolls increased at the slowest pace since January 2011. Nickel led gains by metals and the rupiah climbed after Indonesia banned mineral ore exports. The MSCI Asia Pacific excluding Japan Index increased 0.5 percent at 11:34 a.m. in Hong Kong. 

• Rebar Falls as Steelmaker Cuts Prices on Weaker Demand. Steel reinforcement-bar futures fell in Shanghai after Jiangsu Shagang Co., China’s biggest maker of the commodity, was reported to have lowered prices amid weakening demand. Rebar for May delivery on the Shanghai Futures Exchange declined as much as 0.8 percent to 3,463 yuan ($573) a metric ton, and traded 3,469 yuan at 10:53 a.m. local time. The most-active contract dropped for a fifth week in the five days through Jan. 10.

• Bullish Bets Fell Most in Seven Weeks Before Slump: Commodities. Hedge funds cut their bullish commodity wagers by the most in seven weeks before prices dropped to an eight-month low on signs of surplus supply and slowing economic growth in China. The net-long position across 18 U.S.-traded commodities fell by 11 percent to 678,885 futures and options in the week ended Jan. 7, U.S. Commodity Future Trading Commission data show. Investors are the most bearish on wheat ever and anticipate lower prices for corn, coffee, sugar and soybean oil. Bullish gold wagers rose to the highest since mid-November.

• Bond Rally Gives Italy Free Pass Skirting Reforms: Euro Credit. Europe’s periphery-nation bond rally is giving Italy a free pass, raising concern that the pressure for reforms will dissipate. The drop in borrowing costs, spurred by gains in euro-area manufacturing and retail sales, threatens to halt a two-year push to restore growth that has made scant progress in eight months under Prime Minister Enrico Letta. “Italy lacks the self-discipline to truly overhaul its economy, unless placed under extreme market pressure,” said Raj Badiani, an economist at IHS Global Insight in London. “The fall in Italian bond yields has decoupled from the grim realities facing the country.”

• Crisis Hangover Traps Best-Rated Euro Nation as Jobs Disappear. As the euro area surfaces from its worst crisis on record, the bloc’s best-rated member and a key proponent of austerity is losing jobs and gaining debt. The challenges facing Finland -- a stable AAA rated economy -- are “historic,” Finance Minister Jutta Urpilainen said Jan. 10 in Helsinki. “I would like to promise that the euro crisis will end this year, that Finnish structural change in industry will stop and government-debt growth will halt. Unfortunately, I can’t.”  

• Basel Regulators Ease Leverage-Ratio Rule for Banks. Global regulators diluted a planned debt limit for banks amid warnings that the measure would penalize low-risk financial activities and curtail lending. The measure, known as a leverage ratio, was adjusted after “thoroughly analyzing bank data,” the Basel Committee on Banking Supervision said in a statement following a meeting of regulators in Basel, Switzerland, yesterday. The group also modified a liquidity rule to make it easier to count a certain type of central bank loan against regulatory standards.

• Fed Seen Sticking to Gradual Tapering Plan After Payrolls Miss. The Federal Reserve will stick to its plan for a gradual reduction in bond purchases, economists said after a government report showed that U.S. employment rose at the slowest pace in three years in December. The Fed will reduce purchases by $10 billion at each of the next six meetings this year before ending the program in October, according to the median forecasts of 42 economists in a Bloomberg survey. 

• Bonds Captivate $16 Trillion of Pensions Seen Unloading Equities. Bond buyers stung by the first losses in more than a decade can look to pension funds from companies such as Ford Motor Co. (F) for a measure of redemption. “Companies are now getting on the bandwagon,” Ford Treasurer Neil Schloss said in a Jan. 9 telephone interview from the company’s headquarters in Dearborn, Michigan. U.S. pensions, which control $16 trillion, shifted out of equities and into bonds in the third quarter at the fastest rate since 2008, latest data compiled by the Federal Reserve show.

• Neiman Marcus to Target Data Breaches Imperil U.S. Retailers. Neiman Marcus Group Ltd. said yesterday that some unauthorized purchases may have been made with customer cards, the second retailer after Target Corp. (TGT) to be struck by hackers during the important holiday season. Credit-card processors alerted Neiman Marcus to the breach in mid-December and the Dallas-based luxury chain is working with federal authorities and investigating the matter, Ginger Reeder, vice president of corporate communications, said yesterday in an e-mail statement. Reeder declined today to elaborate. The Wall Street Journal, citing unidentified people familiar with the incident, said fewer than 1 million cards were compromised.

Wall Street Journal:  

• Gates Defends Criticism of Obama. Former Defense Secretary Robert  Gates, in his first interview broadcast since details of his new book were made public, defended his decision to write a candid memoir and restated his criticism of President Barack Obama’s handing of the Afghanistan war.

• Christie Not Sure When He Learned of Bridge Lane Closures. New Jersey Governor Said He Didn't Remember Where He First Read About Traffic Problems.

• Ag Firms Sue to Block Anti-GMO Law. Kauai Measure Would Prohibit Open-Air Pesticide Tests. 

• How to Fight Income Inequality: Get Married. In families headed by married couples, the poverty level in 2012 was just 7.5%. Those with a single mother: 33.9%. 

Fox News:

• Former Israeli Prime Minister Ariel Sharon dies at 85. Former Israeli prime minister and storied general Ariel Sharon, who was at the height of his power when he suffered a stroke in 2006 and fell into an irreversible coma, died Saturday at the age of 85. Sharon died at Tel Hashomer hospital just outside Tel Aviv, where his family had gathered at his bedside over the past several days as his vital organs reportedly deteriorated. His death was first reported by Israeli Army radio.

• White House fights Iran sanctions bill as nuclear deal start date announced. Iran and six world powers announced Sunday that they've agreed on the terms for implementing a recently struck nuclear deal -- but the Obama administration continued to battle a bipartisan push for new U.S. sanctions which it claims could jeopardize the pact.

• ‘Impeachment’? Dems escalate NJ bridge probe, while some defend Christie. Democrats sharpened their swords Sunday over the New Jersey bridge scandal, with one state lawmaker suggesting impeachment is an option for Gov. Chris Christie -- even as other prominent politicos said they were inclined to believe the governor's side of the story.

CNBC: 

• Volatility could come back big-time—here's why. (video) "There's definitely a different tone in the market this year as compared to last year," Peter Boockvar, chief market analyst at the Lindsey Group, said Friday. "We got a disappointing jobs number, but people still think the Fed is going to taper, despite an uneven recovery."

• Fed’s hazardous visual navigation.

Zero Hedge:

• 5 Things To Ponder: Markets, Valuations & Investing.

• Did Goldman(GS) Just Kill The Music? - "The S&P500 Is Now Overvalued By Almost Any Measure".

• "All Yours Janet": JPM Warns Fed About Using "Arguably Flawed Statistics".

• Are Stocks Cheap? (graph)

• People Not In Labor Force Soar To Record 91.8 Million; Participation Rate Plunges To 1978 Levels. (graph)

• US Issues Terrorism Warning For Winter Olympics.

• Humana(HUM) Warns Of "Adverse Obamacare Enrollment Mix".

• Obamacare "Approval" Drops To Record Low. (graph)

• How Twitter Algos Determine Who Is Market-Moving And Who Isn't.

• From Non-GAAP To Non-Sense: David Stockman Slams The "Earnings Ex-Items" Smoke-Screen.

• Government Spent $224,863 On "Custom-Fit" Condoms.

• Guest Post: The Greatest Myth Propagated About The Fed: Central Bank Independence (Part 1).

• Rolling Stone Resurrects Karl Marx (And No - It Was Not Satire).

• The Great Buyback Surge Is Over: Corporations Are Once Again Net Sellers Of Shares.

• French First Girlfriend Hospitalized After Francois Hollande Affair With Actress Exposed.

• China Plans To Seize South China Sea Island From Philippines, Says "Battle Will Be Restricted".

• HFT Scourge Exposed (Again): Options Quote Spam At The Open Has Quadrupled In 3 Years.

• China's Peer-To-Peer Lending Bubble Bursts As Up To 90% Of Companies Expected To Default.

• Meet "Smart Restaurant": The Minimum-Wage-Crushing, Burger-Flipping Robot.

ValueWalk:

• John Mauldin – Forecast 2014: The Killer D’s.

Business Insider:

• RECALL: General Motors Identifies 370,000 Trucks As Possible Fire Risk.

• The Cops Really Could Use Data From Your Car's GPS To Convict You Of A Crime.

• Healthcare Employment Dropped In December For Only The Second Time In Nearly 25 Years. (graph)

• This Sharp Legal Argument May 'Eviscerate' The President's Appointment Power. 

• There Are Much Bigger Problems In Turkey That Could Derail Its Alliance With America.

• Obamacare Will Cost Much More If Young Americans Don't Start Signing Up.

• The US Is Getting Skunked In Pope Francis' Cardinal Appointments.

• Thailand Is Heading Towards A Civil War.

• America's Big Bank Earnings Announcements Will Be Highlighted By Tumbling Revenue.

Wall Street All-Stars: 

• Indicator Update: Will Earnings Growth Keep the Stock Rally Rolling?

New York Times: 

• The Next Data Privacy Battle May Be Waged Inside Your Car. Cars are becoming smarter than ever, with global positioning systems, Internet connections, data recorders and high-definition cameras. Drivers can barely make a left turn, put on their seatbelts or push 80 miles an hour without their actions somehow, somewhere being tracked or recorded.

The Blaze:

• ‘They Died For Nothing?’: Marcus Luttrell Hits Back at CNN Host In Tense Interview. (video)

Reuters:

• Exclusive: U.S. investigating Honeywell(HON) over export, import controls. The U.S. Justice Department is investigating export and import procedures at Honeywell International Inc after the firm included Chinese parts in equipment it built for the F-35 fighter jet, three sources familiar with the matter said. Reuters last week reported that the Pentagon twice waived laws banning Chinese-built components in U.S. weapons in 2012 and 2013 for parts supplied by Honeywell for the $392 billion Lockheed Martin Corp F-35 program. 

• Exclusive: Iran to get first $550 million of blocked $4.2 billion on February 1. Iran would receive the first $550 million installment of a total of $4.2 billion in previously blocked overseas funds on or about February 1, a senior U.S. official said on Sunday. Under a November 24 nuclear agreement, six major powers agreed to give Iran access to $4.2 billion in revenues blocked overseas if it carries out the deal, which offers sanctions relief in exchange for steps to curb the Iranian nuclear program. 

• GM(GM) close to reintroducing common stock dividend, CFO says. General Motors Co's chief financial officer said on Sunday that the U.S. automaker is close to reintroducing a common stock dividend, but he declined to provide any details on timing.

• Indonesia bans mineral ore exports, all eyes on nickel impact. Indonesia, among the world's biggest suppliers of natural resources, halted all mineral ore exports on Sunday to try to promote domestic processing, but threatening the country's nickel and bauxite industries worth more than $2 billion in annual shipments. Halting exports of nickel ore could spark the biggest shake-up in the global nickel industry in more than five years, with Chinese stainless steel factories that make everything from kitchenware to cars and buildings set to hurt the most.

Financial Times:

• US subprime car loans return with a bang. Sales of risky pools of securities backed by car loans are accelerating at the start of 2014 as investors snatch up the higher-yielding bonds that were popular in the build-up to the financial crisis. This week alone, about $2bn in deals that bundle car loans made to subprime borrowers have hit the US debt capital markets, following a 20 per cent jump last year to $21.5bn. Demand for the securities is forecast to increase further in 2014, helping push sales to the $25bn mark, according to Deutsche Bank estimates.

Jiji:

• Tepco Detects Record Radiation at Fukushima Dai-Ichi Plant. Co. detects beta radiation levels of 2.2 million becquerels per liter in water sample from monitoring well at Fukushima Dai-Ichi plant, citing co. Previous record was 2.1 million becquerels per liter detected in December last year.

Asahi:

• Japan May Draft Collective Self-Defense View in April. The administration of Japan's Prime Minister Shinzo Abe may compile a draft in April of a new government interpretation of the constitution to allow the notion of the right to collective self-defense.

Focus Taiwan:

• Japan curriculum move over Diaoyutais does not change facts: MOFA. Taiwan has announced its "serious concern" over a reported decision by Japan to list the Diaoyutai (Senkaku) Islands in junior and senior high school books as integral Japanese territories, saying the move does not change historical facts. The Ministry of Foreign Affairs (MOFA) said the unilateral move by Japan "does not contribute" to regional stability.

China Daily:

• Beijing Tourists Drop on Global Economy, Pollution. Tourists visiting the Chinese capital dropped "sharply" because of a weak global economy, strong yuan and the city's pollution problems, citing a Beijing Tourism Development Commission report. Jan.-Nov. visitors declined -10.3% y/y to 4.2m, the newspaper said.

China Securities Journal:

• China A-Share Market to Likely Stay Weak. China's A-share market will very likely stay weak in 1H because of tight liquidity and economic growth of 7%-7.5% for 2014, according to a front-page commentary by reporter Long Yue.

Hexun:

• CIC's Xie Says China Local Govts Won't Default. China's local governments won't default and central government won't allow them to go insolvent either, CIC's deputy general manager Xie Ping said at an event Jan. 11. China should have a ceiling for total amount of local government debt before allowing local authorities to issue bonds directly, Xie said.

Weekend Recommendations

Barron's:

• Bullish commentary on (CSCO), (TWI), (F), (SLB), (JPM), (BAC), (AWI), (HD), (DKS), (LOW), (M), (TGT), (TJX) and (WSM).

• Bearish commentary on (SHLD).

Night Trading

• Asian indices are -.25% to +1.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 137.50 -3.0 basis points.

• Asia Pacific Sovereign CDS Index 108.5 +1.0 basis point.

• FTSE-100 futures +.09%.

• S&P 500 futures -.22%.

• NASDAQ 100 futures -.22%.

Morning Preview Links

Earnings of Note
Company/Estimate

• None of note

Economic Releases 
2:00 pm EST 

• The Monthly Budget Statement for December is estimated at $44.0B versus -$135.2B in November.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Lockhart speaking, Germany Wholesale Price data, JPMorgan Healthcare Conference and the (YUM) Brands China Dec. SSS could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by consumer and industrial shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the week.

Weekly Outlook

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 mixed as earnings concerns, a stronger yen and increasing emerging markets debt angst offsets lower energy prices, lower long-term rates and short-covering. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 50% net long heading into the week.

Market Week in Review

S&P 500 1,842.37 +.60%*




The Weekly Wrap by Briefing.com.

*5-Day Change