Evening Headlines
Bloomberg:
- Japan’s Price Gauge Rises Most Since 1998: Economy.
A gauge of Japan’s prices rose the most in 15 years as higher energy
costs fueled broader inflation pressures, in a sign Prime Minister
Shinzo Abe is making progress in stamping out deflation. Prices
excluding energy and fresh food rose 0.3 percent in October on year,
boosted by a weaker yen and electricity costs that have risen 22 percent
since March 2011, when an earthquake led to the shutdown of Japan’s
nuclear industry. The gain exceeded a 0.2 percent forecast in a Bloomberg News survey.
- Zhou Risks Turmoil With Easing of China Rate Controls.
China central bank Governor Zhou Xiaochuan faces an obstacle in his
efforts to tame financial market volatility: his own plans to free up
interest rates. The benchmark money-market rate remains above the
average for January even after the People’s Bank of China this week
injected more than $62 billion following the biggest jump since June. At
the same time, Zhou’s planned removal of interest-rate controls may
make volatility tougher to prevent, with Standard Chartered Plc
economist Stephen Green saying that crisis is a
“rule of financial liberalization.”
- Investors Protest at ICBC on Concerns of Trust Default.
Investors in a troubled trust
product distributed by Industrial & Commercial Bank of China Ltd.
gathered outside the lender’s private-banking branch in Shanghai,
demanding their money amid concerns of a default. Individuals were
asked to sink at least 3 million yuan ($496,000) in the 3 billion-yuan
Credit Equals Gold No. 1 product amid guarantees that it was “100
percent safe,” said Fang Ping, who was among 20 investors due to meet
ICBC officials
at the branch. The product, which comes due on Jan. 31, raised
funds for a coal mining company that collapsed after its owner
was arrested.
- Australians in Record Loan Spree as House Prices Soar: Mortgages. Australian
homebuyers are borrowing at the fastest pace in four years amid record
prices, straining debt levels already among the developed world’s
highest as interest rates are set to climb. The value of new mortgage
approvals jumped 25 percent in November from a year earlier, the fastest
annual pace since
September 2009, to a record A$26.9 billion ($23.8 billion),
according to the statistics bureau. Ten out of 29 economists
surveyed by Bloomberg News forecast the Reserve Bank of
Australia will raise its benchmark rate by the fourth quarter
and the median forecast is for a 25 basis-point increase in the
first three months of next year.
- China’s Stocks Drop as Manufacturing Report Signals Contraction.
China’s stocks fell for the first
time in three days as money-market rates rose and a
steeper-than-estimated decline in a manufacturing index heightened
concern economic growth is decelerating. Jiangxi Copper Co. and
PetroChina Co. paced declines for
metal and oil companies. China Construction Bank Corp. dropped 1
percent as a gauge of financial companies slid the most among
industry groups. Inner Mongolia Yili Industrial Group Co. surged
4.7 percent after reporting an 80 percent jump in 2013 net
income. Hebei Huijin Electromechanical Co., one of eight companies
trading today after initial public offerings, surged 45 percent in
Shenzhen before being suspended. The Shanghai Composite Index (SHCOMP) slipped 0.5 percent to
2,041.27 at the 11:30 a.m. local-time break.
- Asian Stocks Drop After China’s Flash Manufacturing PMI.
Asian stocks fell, with the regional benchmark index heading for its
first drop in three days, after a gauge of China’s manufacturing
unexpectedly contracted. China Construction Bank Corp. (939) dropped 2
percent in Hong Kong, pacing losses among Chinese lenders. Insurance
Australia Group Ltd. dropped 4.2 percent after the company lowered its
growth forecast for gross premiums. Nidec Corp. increased 3.7 percent in
Tokyo after the precision-motor manufacturer boosted
its full-year profit forecast and announced a share buyback.
The MSCI Asia Pacific Index fell 0.6 percent to 139.16 as
of 11:53 a.m. in Tokyo, with all 10 industry groups on the gauge
dropping.
- Rebar Trades Near 7-Month Low After China Manufacturing Weakens.
Steel reinforcement-bar futures in Shanghai traded near a seven-month
low as investors weighed a Chinese manufacturing index showing a
slowdown against
improvement in short-term money supply. Rebar for May delivery on the Shanghai Futures Exchange was
at 3,426 yuan ($566) a metric ton at 11:00 a.m. local time.
Futures touched 3,403 yuan yesterday, the lowest intra-day level
for a most-active contract since June 14.
- Rubber Reaches 5-Month Low as China Manufacturing Index Declines.
Rubber extended losses for a fifth
day to the lowest in five months after China’s manufacturing index
(EC11FLAS) fell below analyst estimates, deepening concern that demand
from the largest user may weaken. The contract for delivery in June on
the Tokyo Commodity Exchange retreated as much as 1.3 percent to 245 yen
a kilogram ($2,342 a metric ton), the lowest intraday level since Aug.
8.
Futures traded at 245.9 yen at 11:25 a.m., dropping 10 percent
this year.
- Davos Bankers Struggle to Convince Elite That Markets Are Safer. Top bank executives are struggling
to convince the world’s business elite in Davos the financial
system is safer, more than five years since it fell into crisis. In
what has become a yearly sparring match between bankers
and their critics, HSBC Holdings Plc (HSBA) Chairman Douglas Flint and
Barclays Plc (BARC) Chief Executive Officer Antony Jenkins, two of
Britain’s top bankers, faced criticism yesterday from Paul Singer, the
billionaire hedge-fund manager who runs New York-based Elliott
Management Corp., and Stanford University
professor Anat Admati at a debate at the World Economic Forum. “It can’t be that safer comes from relatively modest
improvements in certain metrics plus private and policy maker
half-steps,” said Singer, whose New York-based hedge fund
manages $24 billion. “Because of the inability of investors to
understand the financial condition of the major financial
institutions, they aren’t able to stand on their own in the next
financial crisis.”
- Hard-to-Sell Junk Debt Lures Oaktree
to JPMorgan: Credit Markets. Bond investors are losing their aversion
to difficult-to-trade corporate debt that handed them some of the
biggest losses in the credit crisis. The extra yield not buyers demand
to own older, smaller junk bonds that trade infrequently has shrunk to
an average .25 percentage point this month from more than 1 percentage
point a year ago, according to Barclays Plc data. The evaporating
premium for illiquid assets is showing the depths to which money
managers are reaching to boost returns after a five-year rally that
pushed relative yields on junk bonds to the least since August 2007.
Wall Street Journal:
- Gregory Hicks: Benghazi and the Smearing of Chris Stevens. Shifting blame to our dead ambassador is wrong on the facts. I know—I was there. Last week the Senate Select Committee on Intelligence issued its report
on the Sept. 11, 2012, terrorist attacks in Benghazi, Libya. The report
concluded that the attack, which resulted in the murder of four
Americans, was "preventable." Some have been suggesting that the blame
for this tragedy lies at least partly with Ambassador
Chris Stevens,
who was killed in the attack. This is untrue: The blame lies
entirely with Washington.
Fox News:
MarketWatch.com:
CNBC:
Zero Hedge:
Business Insider:
Reuters:
- Western Digital(WDC) sees weak third quarter on cautious spending.
Western Digital Corp, the world's No. 1 hard-disk drive maker, forecast
a tepid third quarter as it expects cautious spending and a decline in
the PC market to hit sales. Shares of the company fell 2 percent in extended trade after closing at $88.08 on the Nasdaq on Wednesday.
- VW's labour chief says U.S. operations a 'disaster'. Volkswagen AG's top labour representative has
dubbed the carmaker's U.S. operations a "disaster" and called for more
models and swift decisions to revive the German group's declining
fortunes in the world's second-largest auto market.
Financial Times:
- Brazil considers the cost of welfare as growth slows. In
a television campaign by Brazil’s ruling Workers Party, the country’s
former president Luiz Inácio Lula da Silva joins his successor,
President Dilma Rousseff, to warn voters that the opposition is planning
the “unthinkable”.
Telegraph:
People's Daily:
- China Plans Industry Overcapacity Warning System. China plans to
set up an industrial data platform to warn about possible overcapacity,
citing Chen Bin, director-general of the National Development and Reform
Commission's industry coordination department.
Time-Weekly:
- China Credit, ICBC, Local Gov't May Bail Out Trust. China Credit
Trust and ICBC may each take responsibility for 25% of payments for a
troubled 3b yuan trust product known as Credit Equals Gold No. 1, citing
a person as saying.
Evening Recommendations
Night Trading
- Asian equity indices are -1.0% to -.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 142.0 -1.0 basis point.
- Asia Pacific Sovereign CDS Index 111.50 unch.
- NASDAQ 100 futures -.08%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
8:30 am EST
- The Chicago Fed National Activity Index for December is estimated to rise to .9 versus .6 in November.
- Initial Jobless Claims are estimated to rise to 330K versus 326K the prior week.
- Continuing Claims are estimated to fall to 2925K versus 3030K prior.
8:58 am EST
- The Preliminary Market US PMI for January is estimated to rise to 55.0 versus 54.4 in December.
9:00 am EST
- The House Price Index for November is estimated to rise +.4% versus a +.5% gain in October.
10:00 am EST
- Existing Home Sales for December are estimated to rise to 4.92M versus 4.9M in November.
- The Leading Index for December is estimated to rise +.2% versus a +.8% gain in November.
11:00 am EST
- The Kansas City Fed Manf. Activity for January is estimated to rise to 2 versus -3 in December.
- Bloomberg consensus estimates call for a weekly
crude oil inventory build of +830,000 barrels versus a -7,658,000
barrel decline the prior week. Gasoline supplies are estimated to rise
by +2,035,000 barrels versus a +6,183,000 barrel gain the prior week. Distillate inventories are estimated to fall by -561,000 barrels versus a -1,023,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to fall by -.39% versus a -2.3% decline the prior week.
Upcoming Splits
Other Potential Market Movers
- The Eurozone PMI, 10Y TIPS auction, weekly EIA natural gas inventory report and the weekly Bloomberg Consumer Comfort Index could also impact trading today.
BOTTOM LINE: Asian indices are lower, weighed down by financial and commodity 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 Equity Market Tone:
- Advance/Decline Line: Modestly Higher
- Sector Performance: Mixed
- Volume: Slightly Below Average
- Market Leading Stocks: Outperforming
Equity Investor Angst:
- Volatility(VIX) 13.0 +1.01%
- Euro/Yen Carry Return Index 147.56 +.02%
- Emerging Markets Currency Volatility(VXY) 8.65 -1.48%
- S&P 500 Implied Correlation 52.75 +5.4%
- ISE Sentiment Index 153.0 +53.0%
- Total Put/Call .82 +9.33%
Credit Investor Angst:
- North American Investment Grade CDS Index 65.75 +.62%
- European Financial Sector CDS Index 88.39 +.78%
- Western Europe Sovereign Debt CDS Index 48.0 -4.0%
- Emerging Market CDS Index 301.86 +3.64%
- 2-Year Swap Spread 14.0 +.5 basis point
- TED Spread 20.75 +.25 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -2.0 unch.
Economic Gauges:
- 3-Month T-Bill Yield .03% unch.
- Yield Curve 246.0 +1.0 basis point
- China Import Iron Ore Spot $123.50/Metric Tonne +.24%
- Citi US Economic Surprise Index 63.40 -.7 point
- Citi Emerging Markets Economic Surprise Index 4.8 +.3 point
- 10-Year TIPS Spread 2.25 +1.0 basis point
Overseas Futures:
- Nikkei Futures: Indicating +45 open in Japan
- DAX Futures: Indicating +21 open in Germany
Portfolio:
- Slightly Higher: On gains in my tech/biotech sector longs
- Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
- Market Exposure: Moved to 75% Net Long
Bloomberg:
- Abe’s Yen Exporting Deflation Risks Davos Tension: Currencies. Shinzo Abe’s debased yen is leaving
other nations to pay the price for faster Japanese inflation. As Japan’s prime minister addresses the global financial
elite today in Davos, Switzerland, the yen is within 3 percent
of a five-year low against both the euro and dollar, with
analysts forecasting further declines. “When your currency falls heavily like the yen did, you
create inflation for yourself but disinflation for others,”
David Bloom, the global head of currency strategy at HSBC
Holdings Plc in London, said in a Jan. 20 phone interview. “If
we get to the point where inflation falls and growth looks like
it’s going to be incredibly weak again, then the background for
a currency war is growing.”
- Merkel Aide Says Obama Spying Curbs Fall Short as Damage Sticks.
An ally of German Chancellor Angela Merkel said President Barack
Obama’s pledge to limit global surveillance by spy agencies isn’t
persuasive, leaving U.S.- European relations at the lowest ebb since the
Iraq war. Leverage to pressObama for further changes includes a pact
that gives U.S. anti-terrorism investigators access to bank
transaction data, which the European Union should suspend,
Philipp Missfelder, the foreign-policy spokesman for Merkel’s
Christian Democratic Union in parliament, said in an interview.
- European Stocks Are Little Changed.
European stocks were little changed, with the Stoxx Europe 600 Index at
a six-year high, as a rally in ASML Holding NV offset a decline in ABB
Ltd. ASML jumped the most in a year after saying it plans to increase
its 2013
dividend. Rautaruukki Oyj soared 33 percent after SSAB AB offered to buy
the Finnish steelmaker. ABB Ltd. retreated 3.6 percent after saying
charges from project delays and operational issues will hurt profit. The Stoxx 600 added 0.1 percent to 336.06 at the close of trading.
- WTI Crude Rises a Third Day on Distillate Supply Forecast.
WTI for March delivery increased $1.83, or 1.9 percent, to $96.80 a
barrel at 1:38 p.m. on the New York Mercantile Exchange. Futures touched
$96.89, the highest intraday price since Jan. 2. Volume of all
contracts was 14 percent above the
100-day average.
- Singer Says Derivatives He ‘Loves Trading’ Hurt Society. Billionaire hedge-fund manager Paul Singer said derivatives have been a “net negative” for society
and that the touted hedging benefits have been overstated by
financial companies. “I love trading them,” Singer, whose Elliott
Management Corp. manages $23.9 billion, said during a panel discussion
at the World Economic Forum in Davos, Switzerland, today. “On balance,
there’s been a net negative to society from this particular type of
invention.” While banks say that derivatives allow companies in industries from energy to agriculture to hedge their risks, the
resulting increase in leverage and complexity to balance sheets
hasn’t been worth it, said Singer, 69. He also said that the
banking industry remains too dangerous to global stability five
years after the financial crisis.
Wall Street Journal:
- Clashes in Ukraine Turn Deadly. Medic Says Two Protesters Shot and Killed Amid Clashes With Police. Two protesters died from gunshot wounds amid clashes with police, a
medic said Wednesday, raising the stakes in two-month antigovernment
protests that exploded into violence in recent days. One dead protester suffered four gunshot wounds, and the second was shot in the heart, said the medic,
Oleh Musiy.
The names of the victims weren't released immediately.
- Copper Eases After Mixed China Data. Copper futures eased a bit on Wednesday in thin trade as investors
weighed mixed Chinese economic data and a coming holiday that may limit
trading activity in the top consumer. The most actively traded copper contract, for March delivery, recently
traded down 1.6 cents, or 0.5%, at $3.335 a pound on the Comex division
of the New York Mercantile Exchange.
Fox News:
- Taking a hit: Anti-drug groups rebuke Obama over marijuana remarks. President Obama is taking a hit from anti-drug groups for downplaying
the effects of marijuana use, as some point out his recent comments
appear to clash with statements by his own health and law enforcement
agencies. The president, in a recent interview with The New Yorker, likened pot to cigarettes and alcohol.
MarketWatch:
- Kennedy says Obama’s wrong about pot, and more must-reads. Former Rep. Patrick Kennedy says President Barack Obama is wrong about
the dangers of marijuana, “because the new marijuana is not the old
marijuana.” Kennedy, a former eight-term Rhode Island Democrat, made the
remarks in a televised interview in response to Obama’s statement that
pot isn’t worse than alcohol. Kennedy said if Obama were to talk to his
National Institutes of Health director in charge of drug abuse, she
would tell him today’s modern, genetically modified marijuana is much
stronger than what he acknowledged smoking as a young person.
CNBC:
ZeroHedge:
Business Insider:
Reuters:
Financial Times:
- Davos leaders: Shinzo Abe on WW1 parallels, economics and women at work. Here at Davos, I’ve just had the opportunity to moderate a discussion
between the Japanese prime minister, Shinzo Abe, and a group of
international journalists. I asked Mr Abe whether a war between China
and Japan was “conceivable”. Interestingly, he did not take the chance to say that any such
conflict was out of the question. In fact, Mr Abe explicitly compared
the tensions between China and Japan now to the rivalry between Britain
and Germany in the years before the first world war, remarking that it
was a “similar situation”.
Telegraph:
- Trying to deleverage China without blowing up the system. China is walking a tightrope without a net. There is an acute cash
crunch. Credit at a viable cost is being fiercely rationed. Foreign
buyers with money in hand can – and are – buying up nearly completed
buildings from distressed developers for a song. The shadow banking system has risen to 30pc of all lending from 20pc
in barely more than a year. The growth generated by each extra yuan of
credit has fallen by three quarters from 1.0 to 0.25 in five years,
evidence of credit exhaustion.
Echoing fears that
European policymakers remain in a state of cognitive dissonance –
recognizing the need for root-and-branch overhaul of peripheral banks,
but backtracking on joint liability plans – Christopher Flowers, the
legendary FIG investor who now runs the £2.3 billion ($3.5 billion)
private equity group JC Flowers, sounded the alarm over the negative
sovereign-bank feedback loop.
In a shot across the bows of market bulls, who cite the return of
capital flows to weaker eurozone states, Flowers issued a stark warning:
"There is a scenario where we have a Lehman-type event: we wake up some
Thursday and a big country is in trouble.
"And the ECB will have to decide to support banks x, y, z. And then the
ECB will, in fact, decide to own bank x, y, z.
While we want you to share, we ask you use the functions on-site rather than copy/paste. See T's & C's for details. http://www.euromoney.com/Article/3211790/CurrentIssue/88924/Restructuring-Flowers-slams-Europe-over-inaction.html?copyrightInfo=true
Nikkei:
- Sharp to End U.S. Solar Panel Production by April. Decision
prompted by lower cost competition. To cut about 300 jobs at Tennessee
plant.
Yomiuri:
- Japan Creates Web Site Devoted to Disputed Islands. Govt will
this week launch site justifying its ownership of disputed islands that
have been source of disagreement with South Korea and China. Site will
explain basis of Japan's ownership of islets as dictated by
international law, also to cite efforts govt agencies have taken to
protecting territories.
Style Underperformer:
Sector Underperformers:
- 1) Gold & Silver -2.31% 2) Computer Services -2.12% 3) Gaming -2.03%
Stocks Falling on Unusual Volume:
- CEO, COH, QSII, CEC, SAP, AMAG, PETS, ARCO, IBM, BMS, RSE, KERX, PH, PDH, ATI, MSI, CGX, CSTE, ABB, CCJ, MPEL, TSCO, TJX, AGN and ABT
Stocks With Unusual Put Option Activity:
- 1) BSX 2) FFIV 3) HTZ 4) BBT 5) IBM
Stocks With Most Negative News Mentions:
- 1) COH 2) SNDK 3) AGN 4) MOS 5) DLTR
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Computer Hardware +2.27% 2) Homebuilders +1.71% 3) Road & Rail +1.31%
Stocks Rising on Unusual Volume:
- EVOK, SMCI, VISN, NUS, ASML, BBRY, NUAN, EAT, CALD, NSC, CCIH, TXT, TEL, ICPT, CREE, BCRX and UPL
Stocks With Unusual Call Option Activity:
- 1) BSX 2) ABT 3) COH 4) CREE 5) IBM
Stocks With Most Positive News Mentions:
- 1) VMW 2) TXT 3) UTX 4) BK 5) AAPL
Charts:
Evening Headlines
Bloomberg:
- Bank of Japan Sticks to Record Easing as Inflation Picks Up. The
Bank of Japan maintained its record easing, as accelerating price gains
mark progress in its bid to end 15 years of deflation. Governor
Haruhiko Kuroda’s board stuck to its pledge to expand the monetary base
by an annual 60 trillion to 70 trillion yen ($671 billion) today after a
two-day meeting in Tokyo, in line with the forecasts of all 36
economists surveyed by Bloomberg News. The BOJ maintained its forecast
that core inflation will reach 1.9 percent in the year starting April
2015, excluding the effects of sales-tax increases. With the BOJ’s
preferred inflation gauge at more than half of its target 2 percent
pace, analysts from HSBC Holdings Plc. to Daiwa Securities Co. have
pushed back forecasts for when the central bank may add to easing. Kuroda’s
policy makers may wait to assess trends in wages and the effects of the
sales-tax increase in April before deciding on any extra stimulus.
- China Bailout Costs Jump Seen in Policy Bank Yield Surge. Doubts over the Chinese government’s ability to cope with escalating
debt are showing up in record borrowing costs for the nation’s policy
banks. The average yield premium over the sovereign for five-year
debt sold by China Development Bank, Export-Import Bank of China and
Agricultural Development Bank of China widened 90 basis points from an
August low to 142 basis points on Jan. 17, the highest in Chinabond data
going back to 2007. The gap was 138 basis points yesterday. Yields
have climbed on safer assets, including CDB’s, as delays in
restructuring bad loans are stretching the central government’s ability
to guarantee debt, Bank of America Merrill Lynch wrote in a report this
week.
- China Money Rate Plunge Is No Relief for Bonds: Chart
of the Day. Borrowing costs for the most creditworthy Chinese companies
are climbing toward a 19-month high relative to the government, a sign
the easing of the country's cash crunch is failing to quell concern that
corporate defaults could mount. Yields on five-year AAA-rated corporate
bonds traded at 1.80 percentage points above government securities. The
gap, a proxy for broader Chinese corporate credit risk, is within .04
percentage point of a 23-month high set Dec. 30 and is up from 1.17
percentage points in July, according to Bloomberg data and Chinabond.
- Australia Inflation Accelerates Above RBA Midpoint; Aussie Gains. Australian inflation unexpectedly
accelerated above the mid-point of the central bank’s target
range last quarter, reducing scope for policy makers to lower interest rates further. The
trimmed mean gauge of core prices rose 2.6 percent in the three months
through December from 12 months earlier, the Bureau of Statistics said
in Sydney today, compared with the median forecast of 23 economists for a
2.3 percent gain. The consumer price index advanced 2.7 percent, compared with
economists’ forecast for a 2.4 percent increase.
- Asia Stocks Fluctuate as Yen Gains on BOJ; Gas Climbs.
Asian stocks fluctuated as gains by
Chinese shares on lower money-market rates were offset by
declines in Tokyo equities as the yen rose after the Bank of Japan left
policies unchanged. The Australian dollar jumped the most in a week
after inflation data dimmed rate-cut prospects. The MSCI Asia Pacific
Index was little changed as of 1:22 p.m. in Tokyo. China’s Shanghai
Composite Index surged the most in two months and Japan’s Topix index
fell 0.5 percent.
- Rubber in Tokyo Declines for Fourth Day on China Demand Concerns.
Rubber in Tokyo extended losses for a fourth day as concerns grew that
abundant supply in China will slow purchases from the largest consumer. The contract for delivery in June on the Tokyo Commodity
Exchange fell as much as 1.4 percent to 246 yen a kilogram
($2,357 a metric ton), the lowest level for a most-active
contract since Aug. 8. Futures traded at 247.9 yen at 10:37 a.m.
local time.
- Rebar Advances as Investors Weigh Improved China Money Supply.
Steel reinforcement-bar futures in Shanghai climbed for the first time
in five days as investors assessed improvement in China’s money markets
and as iron ore futures rose. Rebar for May delivery on the Shanghai
Futures Exchange gained as much as 0.9 percent to 3,439 yuan ($568) a
metric ton and traded at 3,429 yuan at 11:19 a.m. local time.
- Loan
Surge Above Par Putting Investors at Risk: Credit Markets. More
speculative-grade U.S. loans are trading above par than at any time
since May, exposing investors who are funneling record amounts of cash
into the debt to greater risks as rising prices encourage borrowers to
refinance at lower interest rates.
Wall Street Journal:
- Australia's Housing Boom Spreads Beyond Sydney. Prices Fuel Debate Over Whether Central Bank Should Act. This once-downtrodden Sydney suburb is on the rise, an emblem of Australia's booming housing market. Dilapidated
cottages and housing estates are giving way to large homes and modern
multistory apartments. Vacant land for residential development here
goes
for as much as A$400,000 ($352,574) per acre, compared with about
A$200,000 five years ago, according to Australand Property Group, a developer in the area.
- The President Inhales. Mr. Obama is now the President, not a stoned
teenager riffing with his Choom Gang, and he might have set a better
example. Parents trying to teach their kids to make better choices than
getting high are at a disadvantage when the person in charge of
upholding the law says breaking the law is no big deal.
Fox News:
MarketWatch.com:
- Analysts forecast a corrosive year for copper prices. The outlook for copper isn’t very bright, with analysts expecting prices for the metal to fall this year. Goldman Sachs analysts on Tuesday said they expects copper prices on
the London Metal Exchange to average $6,850 per metric tons, or about
$3.11 a pound this year. That’s down from an estimated average of $7,328
per metric ton, or $3.32 a pound in 2013.
The analysts see a surplus of 385,000 metric tons in 2014.
CNBC:
- Texas Instruments(TXN) to cut 1,100 jobs in restructuring. Texas
Instruments Inc plans to cut 1,100 jobs worldwide as part of a
corporate restructuring intended to help it save $130 million by the end
of 2014. The
U.S. chipmaker, which in 2012 announced it would lay off 1,700 people
as it wound down its mobile processor business, said on Tuesday it
wanted to reduce expenses in its embedded-processing division and in
Japan.
Zero Hedge:
Business Insider:
Washington Post:
Reuters:
- Citi(C) warns against Britain's exit from the EU -FT. Citigroup Inc. has warned against
the United Kingdom opting out of the European Union, saying such
a move could hurt the British economy and reduce investment from international companies, the Financial Times reported on
Tuesday.
- LED maker Cree's(CREE) profit jumps 75 pct. LED maker Cree Inc reported a 75 percent rise in second-quarter profit, driven by higher sales in its lighting products business, sending its shares up 5 percent
in extended trading.
- In 2013, Brazil added fewest net payroll jobs in a decade.
Brazil's economy added the fewest net payroll jobs in a decade last
year, a sign that three consecutive years of weak economic growth had
weighed down profit margins and hiring at shops and services firms,
government data showed on Tuesday. Excluding seasonal adjustments, farms, industrial factories and retail firms created a net 730,687 payroll jobs in 2013, the
smallest number since 2003, the labor ministry said.
China Securities Journal:
- China's Tight Liquidity Unlikely to Change in 2014. China's tight
liquidity situation is unlikely to change in 2014, according to a
front-page commentary. PBOC will continue to strictly control financial
risks and push for de-leveraging, commentary says.
Evening Recommendations
Night Trading
- Asian equity indices are -.25% to +.50% on average.
- Asia Ex-Japan Investment Grade CDS Index 143.0 -1.0 basis point.
- Asia Pacific Sovereign CDS Index 111.50 +5.0 basis points.
- NASDAQ 100 futures +.20%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
Upcoming Splits
Other Potential Market Movers
- The HSBC China PMI, Bank of Canada rate decision, weekly retail sales reports, weekly MBA mortgage applications report and the CIBC Institutional Investor Conference could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by real estate and technology shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.
