Monday Watch

Weekend Headlines 
Bloomberg:

• Samaras Warns of Euro Exit Risk as Greek Campaign Starts. Greece’s political parties embarked on a flash campaign for elections in less than three weeks that Prime Minister Antonis Samaras said will determine the fate of the country’s membership in the euro currency area. Samaras used a Jan. 2 speech to warn that victory for the main opposition Syriza party would cause default and Greece’s exit from the 19-member euro region, while Syriza leader Alexis Tsipras said his party would end German-led austerity. Der Spiegel magazine reported Chancellor Angela Merkel is ready to accept a Greek exit, a development Berlin sees as inevitable and manageable if Syriza wins, as polls suggest.

• China’s Cities Face Judgment Day on Debts as Costs Soar. China’s local government bond issuers face judgment day as authorities in the world’s second-largest economy decide which debt they will or won’t support. Borrowing costs soared by a record amount last month before today’s deadline for classifying liabilities, on speculation some local government financing vehicles will lose government support after the finance ministry starts reviewing regional authorities’ debt reports. Yield premiums on one-year AA notes, the most common ranking for such issuers, jumped a record 98 basis points in December. Premier Li Keqiang has stepped up curbs on local borrowings just as LGFVs prepare to repay 558.7 billion yuan ($89.7 billion) of bonds this year amid economic growth that’s set for the slowest pace in more than two decades.

• Shanghai Rally Widens Valuation Premium to 5-Year High. Chinese stocks in Shanghai are poised for a temporary retreat after their valuation premium over Hong Kong-traded counterparts surged to a more than five-year high, according to Janney Montgomery Scott LLC.

• Dubai Shares Lead Gulf Declines as Oil Rout Extends Into 2015. Dubai and Abu Dhabi stocks fell on speculation sliding oil prices will curb revenue for a region that accounts for about a third of the world’s crude reserves. Dubai’s DFM General Index (DFMGI) dropped 2.3 percent to close at 3,689.06, its lowest in more than two weeks, as markets reopened after the end-of-year holidays. Emirates NBD PJSC (EMIRATES) and Dubai Islamic Bank PJSC (DIB) led Dubai’s drop. The ADX General Index (ADSMI) in Abu Dhabi, home to about 6 percent of the world’s proven oil reserves, lost 1.7 percent while Qatar’s gauge declined 0.5 percent. Saudi Arabian stocks fell 0.6 percent in Riyadh. 

• Euro Extends Slide on ECB Outlook; Asian Stocks, Oil Slip. The euro weakened to an almost nine-year low, Asian stocks fell and U.S. index futures dropped amid concern Greece will exit the currency union. Oil slumped to its lowest level since 2009, while silver climbed. The euro depreciated 0.4 percent to $1.1957 at 11:01 a.m. in Tokyo, after touching its weakest level since March 2006. The dollar gained against 14 of its 16 major peers, while the yen advanced. The MSCI Asia Pacific Index (MXAP) declined 0.8 percent.

• Euro Drops to Lowest Since March 2006 as ECB Splitting From Fed. The euro slumped to the weakest in almost nine years after the European Central Bank signaled it will embark on large-scale government-bond purchases as the Federal Reserve moves closer to raising interest rates. The 19-nation common currency extended declines today after falling for a third week as ECB President Mario Draghi said he can’t rule out deflation in the euro area. The greenback strengthened versus all 10 major developed-market peers. The Australian dollar fell to a 5 1/2 year low as the yield on the nation’s 15-year bonds dropped to an all-time low.

• Copper Trades Near Four-Year Low on Weaker China Demand Concern. Copper for delivery in three months on the London Metal Exchange slid 0.1 percent to $6,250 a metric ton at 10:25 a.m. in Shanghai. Prices fell 0.7 percent to $6,255 a ton on Jan. 2, the lowest since June 2010. The metal dropped 14 percent in 2014, the biggest annual loss in three years. In New York, copper futures for March declined 0.2 percent to $2.813 a pound. The March contract on the Shanghai Futures Exchange dropped 1.2 percent to 45,250 yuan ($7,276) a ton.

• Mester Says Pace of Tightening More Important Than Liftoff Date. Federal Reserve Bank of Cleveland President Loretta Mester said that while interest rates could rise in the first half of this year, the pace of tightening is more important than the date of the initial increase. “In some sense, when exactly liftoff is -- a meeting here or a meeting there -- is probably not the right question,” she said in an interview in Boston. Mester, who doesn’t vote on policy this year, said she expects the benchmark federal funds rate to rise to 3.75 percent -- the level that fed officials forecast for the longer run -- over the next three years. 

• New York City Police Turn Backs on Mayor at Second Funeral. Police officers again protested against New York Mayor Bill de Blasio by turning their backs as he paid tribute to slain cop Wenjian Liu as a man who represented “the very best” of New York City, at a funeral attended by thousands of mourners.

Wall Street Journal: 

• CFPB Sets Sights on Payday Loans. U.S. officials are taking their first crack at writing rules for payday loans, responding to concerns that the short-term, high-rate debt can trap consumers in a cycle of borrowing they can’t afford.

• Hedge Fund Founder Thomas Gilbert Fatally Shot. Police Official Says Victim’s 30-Year-Old Son Is Being Investigated.

• As Fed Prepares to Raise Rates, Economists Caution of Potential Bumps. As Central Bank Debates Rates, Experts Discuss Possible Fallout at American Economic Association Meeting in Boston.

Fox News:

• FBI chief Comey says at Liu's funeral that number of 2014 police deaths is 'shocking'.

Zero Hedge:

• US Debt Soars By $100 Billion On Last Day Of 2014, Hits Record $18.14 Trillion. (graph)

• China's "Illusion Of Prosperity" Exposed: Forget Ghost Cities, Meet Ghost Factories. (video)

• Why The Stock Market Casino Is Dangerous: The Case Of Looney Tunes In the Sand Dunes. (graph)

• Mario Draghi's Statement: A Fistful Of Keynesian Fallacies.

• Oil & The Looming Canadian Housing Bubble Crash. (graph)

• The Death Of A Nation: Japanese Births Drop To Lowest Ever, Deaths Hit All Time High. (graph)

• US Ally Saudi Arabia Starts Gender Segregation On National Airline.

• The Gloves Come Off: Germany Says Grexit "Manageable" As Tsipras Demands Greek Debt Writeoff.

• What Does The Big Drop On The Last Day Of The Year Mean? (graph_

• The Real Reason Macau's Casinos Are Suddenly Empty.

• "We're Going To Need A Bigger Chart"-Of-The-Day: Bullish Sentiment Edition. (graph)

• Knowing It Will End Badly And Turning A Blind Eye.

• Arctic Polar Blast Coming: Midwest Temperatures To Plunge 35 Below Average, Chicago Facing Record Lows.

• Gundlach Sees 10Y Treasury Testing 1.38% In 2015, Warns Of "Trouble Ahead". (graph)

• "Some Folks Were Overpaid..." Over 3 Million Obamacare Subsidy Recipients Will Owe IRS.

Business Insider:

• 'The Government Is Watching Every Citizen:' The BBC Just Reported From The Most Oppressive Place In China.

• This May Be The Final Straw That Gets The US To Stop Funding Palestine. In initiating a war crimes probe against Israel with the International Criminal Court, Palestinian Authority President Mahmoud Abbas may fall afoul of US legislation that would mandate defunding the PA. The US funds the PA to the tune of some $400 million per year.

• GUNDLACH: The Consensus Is Wrong — Interest Rates Could Sink To Levels We Haven't Seen In Decades.

• Here's What 13 Top Wall Street Pros Are Predicting For Stocks In 2015. 

• Lakshman Achuthan Isn't Encouraged By The Recent Spate Of Improving Economic Data.

• Corruption in Brazil: The big oily.

• The Euro Crisis Is Entering A New, Highly Dangerous Phase.

• Here Comes The Saudi Dynasty Succession Crisis ...

• China's 2014 Slowdown In 7 Charts.

• Fresh Russian Vehicles Are Showing Up In Eastern Ukraine. (video)

• Why The US Forgetting About Crimea Would Be A Huge Mistake.

Financial Times:

• ECB Quantitative Easing May Fail in Euro Area, Economists Tell FT. Growth, inflation to remain weak even with quantitative easing, FT says, citing survey of 32 euro area economists, mainly working in financial sector.

Telegraph: 

• Ten warning signs of a market crash in 2015. Stock markets opened lower on the first day of trading of 2015, and the credit markets that forewarned the 2007 crash are showing signs of strain.

• China's slowdown will see commodities falling 10pc in 2015. IHS forecasts another tough year for commodities prices as China misses economic growth targets.

• Greece must stand by bailout conditions, Germany warns. A spokesman for Chancellor Angela Merkel said the German government expects Greece to abide by bailout terms, whatever the outcome of the looming general election.

Welt:

• Merkel Adviser Bofinger Says Greek Exit Risk to Euro Area. Greek exit from euro area would mean "very high risk" for stability of currency union, citing Peter Bofinger, an economic adviser to German Chancellor Angela Merkel, as saying in an interview. While the situation in Greece isn't comparable to that in other states, an exit would result in a situation that would be difficult to manage, Bofinger says.

Estado:

• Brazil Vehicle Sales Drop 7.1% in 2014, Worst in 12 Years.

Night Trading

• Asian indices are -.5% to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 109.0 unch.

• Asia Pacific Sovereign CDS Index 68.25 +1.0 basis point.

• S&P 500 futures +.04%.

• NASDAQ 100 futures +.11%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (SD)/.04

Economic Releases
Afternoon:

• Wards Total Vehicle Sales for December are estimated to fall to 16.9M versus 17.08M in November.

Upcoming Splits

• None of note

Other Potential Market Movers

• The China HSBC PMI, Australia Trade Balance report, RBC Consumer Outlook Index for January, ISM New York for December, (F) Dec. sales conference call and the Citi Internet/Media/Telecom conference could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by real estate and financial shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing modestly lower. The Portfolio is 25% net long heading into the week.

Weekly Outlook

Week Ahead by Bloomberg. 
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 modestly lower on global growth worries, rising European/Emerging Markets/US High-Yield debt angst, earnings concerns, profit-taking, technical selling and yen strength. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 25% net long heading into the week.

Market Week in Review

• S&P 500 2,058.20 -1.14%*

The Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Indices

• S&P 500 2,058.20 -1.14%

• DJIA 17,832.99 -1.10%

• NASDAQ 4,726.81 -.98%

• Russell 2000 1,198.80 -.66%

• S&P 500 High Beta 34.05 -1.16%

• Wilshire 5000 21,411.70 -1.02%

• Russell 1000 Growth 960.28 -1.08%

• Russell 1000 Value 1,028.78 -1.03%

• S&P 500 Consumer Staples 497.83 -2.14%

• Solactive US Cyclical 140.80 -1.17%

• Morgan Stanley Technology 1,014.75 -1.85%

• Transports 9,098.98 -.87%

• Utilities 621.61 -1.10%

• Bloomberg European Bank/Financial Services 103.96 -.39%

• MSCI Emerging Markets 39.10 +.24%

• HFRX Equity Hedge 1,181.31 +.21%
• HFRX Equity Market Neutral 987.26 -.14%

Sentiment/Internals

• NYSE Cumulative A/D Line 231,214 -.34%

• Bloomberg New Highs-Lows Index -208 -261

• Bloomberg Crude Oil % Bulls 25.0 -20.46%

• CFTC Oil Net Speculative Position 281,649 -.86%

• CFTC Oil Total Open Interest 1,428,829 -3.19%

• Total Put/Call 1.20 +66.67%

• OEX Put/Call 2.33 +13.11%

• ISE Sentiment 71.0 -26.04%

• NYSE Arms 1.28 +8.48%

• Volatility(VIX) 17.79 +23.80%

• S&P 500 Implied Correlation 65.82 -2.01%

• G7 Currency Volatility (VXY) 9.82 +.82%

• Emerging Markets Currency Volatility (EM-VXY) 10.76 -.28%

• Smart Money Flow Index 17,085.11 -1.60%

• ICI Money Mkt Mutual Fund Assets $2.733 Trillion +.72%
• ICI US Equity Weekly Net New Cash Flow -$1.063 Billion

• AAII % Bulls 51.7 +1.6%

• AAII % Bears 19.3 +2.3%

Futures Spot Prices

• CRB Index 228.41 -2.94%

• Crude Oil 52.69 -5.66%

• Reformulated Gasoline 143.34 -6.42%

• Natural Gas 3.0 -1.0%

• Heating Oil 179.57 -6.69%

• Gold 1,186.20 +.94%

• Bloomberg Base Metals Index 180.15 -.46%

• Copper 281.75 -1.07%

• US No. 1 Heavy Melt Scrap Steel 308.33 USD/Ton -.2%

• China Iron Ore Spot 71.26 USD/Ton +5.8%

• Lumber 327.60 -3.45%

• UBS-Bloomberg Agriculture 1,208.39 -3.85%

Economy

• ECRI Weekly Leading Economic Index Growth Rate -3.9% -60 basis points

• Philly Fed ADS Real-Time Business Conditions Index .6752 -5.02%

• S&P 500 Blended Forward 12 Months Mean EPS Estimate 125.74 +.10%

• Citi US Economic Surprise Index 28.30 -10.3 points
• Citi Eurozone Economic Surprise Index 9.0 +5.7 points

• Citi Emerging Markets Economic Surprise Index -11.90 +2.0 points

• Fed Fund Futures imply 50.0% chance of no change, 50.0% chance of 25 basis point cut on 1/28

• US Dollar Index 91.08 +1.28%

• Euro/Yen Carry Return Index 151.03 -1.35%

• Yield Curve 145.0 -6.0 basis points

• 10-Year US Treasury Yield 2.11% -14.0 basis points

• Federal Reserve's Balance Sheet $4.470 Trillion +.17%

• U.S. Sovereign Debt Credit Default Swap 16.77 +4.57%

• Illinois Municipal Debt Credit Default Swap 171.0 -5.76%

• Western Europe Sovereign Debt Credit Default Swap Index 24.97 -6.43%

• Asia Pacific Sovereign Debt Credit Default Swap Index 68.39 +6.13%
  

• Emerging Markets Sovereign Debt CDS Index 319.76 +6.28%
  

• Israel Sovereign Debt Credit Default Swap 77.24 +3.22%

• Iraq Sovereign Debt Credit Default Swap 367.79 -2.50%

• Russia Sovereign Debt Credit Default Swap 482.65 +9.97%

• China Blended Corporate Spread Index 342.45 +1.17%

• 10-Year TIPS Spread 1.71% +3.0 basis points

• TED Spread 24.0 -1.5 basis points

• 2-Year Swap Spread 22.75 +4.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -14.75 -.5 basis point

• N. America Investment Grade Credit Default Swap Index 66.62 +4.17% 
• America Energy Sector High-Yield Credit Default Swap Index 648.0 +2.30%

• European Financial Sector Credit Default Swap Index 63.07 +1.25%
  

• Emerging Markets Credit Default Swap Index 345.25 +6.05%
  

• CMBS AAA Super Senior 10-Year Treasury Spread  to Swaps 89.0 +1.0 basis point

• M1 Money Supply $2.908 Trillion +.56%

• Commercial Paper Outstanding 1,007.40 -4.20%

• 4-Week Moving Average of Jobless Claims 290,750 +500

• Continuing Claims Unemployment Rate 1.8% unch.

• Average 30-Year Mortgage Rate 3.87% +4 basis points

• Weekly Mortgage Applications 363.10 n/a

• Bloomberg Consumer Comfort 42.7 -.4 point

• Weekly Retail Sales +4.70% +30 basis points

• Nationwide Gas $2.23/gallon -.09/gallon

• Baltic Dry Index 782.0 -3.93%

• China (Export) Containerized Freight Index 1,064.42 +2.70%

• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 32.50 unch.

• Rail Freight Carloads 181,238 -33.60%

Best Performing Style

• Small-Cap Value -.5%

Worst Performing Style

• Large-Cap Growth -1.1%

Leading Sectors

• Gold & Silver +5.9%

• Airlines +2.9%

• Biotech +2.2%

• Homebuilders +1.5%

• REITs +.2%

Lagging Sectors

• Hospitals -2.5% 

• Oil Tankers -2.6%

• Software -2.9%

• Computer Hardware -3.2%

• Education -3.3%

Weekly High-Volume Stock Gainers (3)

• IPHI, REMY and ADMS

Weekly High-Volume Stock Losers (0)

• None

Weekly Charts
ETFs

• High-Volume Gainers

• High-Volume Losers

Stocks

• High-Volume Gainers

• High-Volume Losers

*5-Day Change

Stocks Reversing Lower into Final Hour on Rising Global Growth Fears, Emerging Markets Debt Angst, Technical Selling, Gaming/Homebuilding Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Below Average

• Market Leading Stocks: Underperforming

Equity Investor Angst:

• Volatility(VIX) 18.31 -4.64%

• Euro/Yen Carry Return Index 150.95 -.29%

• Emerging Markets Currency Volatility(VXY) 10.76 -.37%

• S&P 500 Implied Correlation 66.59 -1.97%

• ISE Sentiment Index 64.0 +10.34%

• Total Put/Call 1.23 +30.85%

• NYSE Arms 1.45 -24.82% 

Credit Investor Angst:

• North American Investment Grade CDS Index 67.09 +1.11%
• America Energy Sector High-Yield CDS Index 641.0 +1.3%

• European Financial Sector CDS Index 62.87 -6.73%

• Western Europe Sovereign Debt CDS Index 24.97 -8.47%
• Asia Pacific Sovereign Debt CDS Index 68.39 +1.64%

• Emerging Market CDS Index 346.75 +2.51%

• China Blended Corporate Spread Index 342.45 +3.32%
• 2-Year Swap Spread 22.75 -.25 basis point

• TED Spread 22.50 -1.5 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -14.75 -.25 basis point

Economic Gauges:

• 3-Month T-Bill Yield .02% -2.0 basis points

• Yield Curve 146.0 -5.0 basis points

• China Import Iron Ore Spot $71.26/Metric Tonne unch.

• Citi US Economic Surprise Index 28.30 -6.4 points
• Citi Eurozone Economic Surprise Index 9.0 -1.2 points

• Citi Emerging Markets Economic Surprise Index -11.90 +.5 point

• 10-Year TIPS Spread 1.71 +3.0 basis points

Overseas Futures:

• Nikkei Futures: Indicating +25 open in Japan

• DAX Futures: Indicating +3 open in Germany

Portfolio: 

• Higher: On gains in my biotech/tech sector longs, index hedges and emerging markets shorts 

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges

• Market Exposure: Moved to 25% Net Long

Today's Headlines

Bloomberg:

• U.S. Slaps New Sanctions on North Korea in Response to Sony Hack. President Barack Obama today tightened U.S. sanctions on North Korea, targeting 10 individuals and three state agencies in response to the hacking of Sony Corp. and threats of violence against theaters and movie-goers. In an executive order, Obama authorized the Treasury Department to block the individuals and agencies from accessing the U.S. financial system and banning U.S. citizens from engaging in business with them. The sanctions represent the first official measures taken by the U.S. government in response to the cyber-assault on Sony Pictures Entertainment’s computer system, an attack that Obama promised last month to address “in a place and time and manner that we choose.”
• Macau Suffers Worst Year for Casinos Amid China Crackdown. Macau’s casinos recorded their worst year, ending a decade of expansion that turned the former Portuguese enclave into the world’s biggest gambling hub. More tough times are ahead. Casino revenue in the city fell 2.6 percent to 351.5 billion patacas ($44 billion) in 2014, after a record 30.4 percent monthly drop in December, according to figures from Macau’s Gaming Inspection and Coordination Bureau today. Analysts projected a 2 percent annual decline, based on the median of nine estimates in a Bloomberg News survey. 
• Russia and Iraq Supply Most Oil In Decades Amid 2015 Glut. Oil supplies in Iraq and Russia surged to the highest level in decades, signaling no respite in early 2015 from the glut that has pushed crude prices to their lowest in five years. Russian oil production rose 0.3 percent in December to a post-Soviet record of 10.667 million barrels a day, according to preliminary data e-mailed today by CDU-TEK, part of the Energy Ministry. Iraq exported 2.94 million barrels a day in December, the most since the 1980s, said Oil Ministry spokesman Asim Jihad. The countries provided 15 percent of the world’s oil in November, according to the International Energy Agency.
• Draghi Prepares to Act Against Risk of Deflation. Mario Draghi gave his strongest signal yet that the European Central Bank is likely to start large-scale government-bond purchases by saying he can’t rule out deflation in the euro area.
• Euro Forecasters See Pain After Worst Year Since 2005. Midway through European Central Bank President Mario Draghi’s May press conference in Brussels, the euro rose to its strongest level during his tenure. Then he said the ECB was ready to introduce more stimulus measures, sending it into a slide that strategists say will extend into 2015. Europe’s common currency, which appreciated to $1.3993 that May day, ended last year down 12 percent against the dollar, its biggest loss since 2005. Strategists, who were too timid with their call for a decline in 2014 to $1.28, now see a slump to $1.18 by the end of this year. The euro set a four-year low of $1.2009 today. 
• Emerging Stocks Drop as Brazil Slump. Emerging-market stocks fell as a probe of Brazil’s state-run oil company pushed the Ibovespa to its steepest drop in three weeks, outweighing a rally in Chinese shares traded in Hong Kong. Petroleo Brasileiro SA plunged 5.9 percent after Brazil’s securities regulator on Dec. 30 opened an inquiry into the company, which is already at the center of the biggest corruption investigation in the country’s history. China Vanke Co. (2202) jumped 11 percent to lead the Hang Seng China Enterprises Index in Hong Kong to a 2011 high. India’s stock gauge advanced 1.4 percent as the government pledged to build more roads. The MSCI Emerging Markets Index fell 0.4 percent to 952.46 at 2:03 p.m. in New York. The Ibovespa tumbled 3.1 percent.
• Europe Stocks Fall After Posting Smallest Year Gain Since 1992. European stocks declined on the first trading day of the year after completing the smallest annual advance since 1992. The Stoxx Europe 600 Index slipped 0.4 percent to 341.33 at the close of trading, paring earlier losses of as much as 0.7 percent. The gauge had earlier risen as much as 0.6 percent before falling as a measure of euro-area manufacturing expanded less in December than initially estimated. The number of shares changing hands in Stoxx 600-listed companies was 36 percent lower than the average of the past 30 days, data compiled by Bloomberg showed. The Swiss market was closed for a holiday.
• Oil Falls to 5 1/2-Year Low as Russia, Iraq Boost Output. Oil dropped to the lowest since May 2009 amid growing supply from Russia and Iraq and signs of manufacturing weakness in Europe and China. Futures headed for a sixth weekly loss in New York and London. Oil output in Russia and Iraq surged to the highest level in decades in December, according to data from both countries’ governments. Euro-area factory output expanded less than initially estimated in December. A manufacturing gauge in China, the world’s second-largest oil consumer, fell to the weakest level in 18 months, government data showed yesterday. Brent for February settlement fell 67 cents, or 1.2 percent, to $56.66 a barrel on the London-based ICE Futures Europe exchange at 1:28 p.m. in New York. It declined to $55.48, the lowest since May 7, 2009.
• Copper Drops to 4-Year Low as China Manufacturing Slows. Copper for delivery in three months dropped 0.7 percent to settle at $6,255 a metric ton ($2.84 a pound) at 5:50 p.m. on the London Metal Exchange. The commodity touched $6,218, the lowest since June 2010. Prices capped a third-straight weekly loss, the longest slump since Oct. 3. 
• Treasuries Climb as Yield Advantage at Almost Highest Since 1999. Treasuries rose, poised for their first weekly gain in three weeks, as U.S. 10-year notes yielded almost the most in 15 years versus their German-government peers. U.S. bonds extended gains after a gauge of American manufacturing fell more than forecast and construction spending unexpectedly dropped. German 10-year bund yields slid to a record after European Central Bank President Mario Draghi said he can’t exclude the risk of deflation, fueling speculation the ECB will soon start buying government bonds. The dollar rose versus all 16 major peers and reached parity with the Swiss franc for the first time since 2010.

ZeroHedge: 

• The Elephant Dragon In The Room: China's Hard Landing, In 21 Charts. (graph)
• Another Shale-Bubble Bursts: Oil's Plunge Is Not 'Unequivocally Good" For This Group. (graph)
• Low Prices Lead To Layoffs In The Oil Patch.
• These 19 States Just Hiked The Minimum Wage: Here Come The "Unintended Consequences".
• Turkmenistan Devalues Currency By 18%, Armstrong Warns Of "Economic Collapse On A Global Scale". (graph)
• Contrarianism And The Danger Of Taking Hugh Hendry's "Blue Pill".
• 5Y German Bond Yield Goes Negative For First Time Ever. (graph)
• ISM Manufacturing & Construction Spending Collapse To 6-Month Lows. (graph)
• Decoupling Just Died: December New Orders Plunge Below Polar Vortex Level, Optimism Plummets To 2012 Levels. (graph)
• Un-Decoupling? US Manufacturing PMI Tumbles To 11-Month Lows. (graph)

Business Insider: 

• Aviation Experts Think The AirAsia Flight Landed Safely In The Sea Before Sinking.
• Greece's Upcoming Election Just Got More More Complicated.
• Greece's Political Crisis Might Force It Out Of The Euro.

Reuters: 

• EMERGING MARKETS-Brazil's real sinks as central bank reduces intervention.

Telegraph: 

• French 'rock star' economist Thomas Piketty refuses highest honour. Author of Capital in the 21st Century says it is not the government's role to "decide who is honourable". 
• House price concerns grow as mortgage approvals hit a 17-month low. Data from the Bank of England is the latest to suggest weakening demand in the property market. 

Deutsche Welle:

• Soaring dollar hurts emerging markets. (video) The US dollar is soaring and that's hurting emerging economies with debt denominated in dollars. At the same time, the global decline in commodities prices means they earn fewer dollars to pay down that debt.