Evening Headlines
Bloomberg:
- Russia Set to Hold Main Rate at 17% With No Cut Seen Before June. Russia will probably keep its main interest
rate unchanged this week and is unlikely to cut it from an
emergency level before June as stabilizing the ruble and taming
inflation take precedence over a looming recession, according to
two surveys of economists. The first reduction this year is likely in June or July,
according to a majority of respondents in a survey of 23
economists. The central bank will act once the inflation rate
has dropped to 11.2 percent or less, based on the median of 18
estimates. All but one analyst in a separate survey of 19
economists predict the Bank of Russia will hold its benchmark at
17 percent at a meeting on Friday.
- Russian Consumer Crunch Spurs Tinkoff Stock Volatility. Price swings in TCS Group Holding Plc have
surged to the highest level in eight months as analysts cut
projections for the consumer lender amid a financial crisis
that’s making it more difficult for Russians to pay their debts. Fifty-day historical volatility, a measure of price
fluctuations during the period, jumped to 73 percent Wednesday
as the company’s London-traded shares headed for an eighth
straight monthly decline. The stock has sunk 84 percent from its
October 2013 initial public offering price of $17.50.
- Greece Wants a Debt Break. What About Its Poorer Neighbors? The 40-year-old prime minister’s rise to power has put him on a
collision course with Germany, as he struggles to deliver on his
campaign promises to renegotiate his country’s debt and overturn the
painful austerity demanded by Greece's creditors. But if Tsipras is to bring home the deal he feels Greece deserves, he
will have to more than face down the Germans. He’ll have to win over
skeptical taxpayer in other euro zone countries, reassure European
leaders worried about insurgent challenges of their own and make the
case that – in a Europe still reeling from the 2008 global financial
crisis – Greece is uniquely deserving of assistance.
- Japan’s Retail Sales Unexpectedly Slump in Challenge to Abe. Japanese retail sales unexpectedly fell in
December, underscoring challenges to Prime Minister Shinzo Abe’s
effort to stoke a recovery in the world’s third-biggest economy. Sales slid 0.3 percent from November for a third straight
monthly decline, the trade ministry said Thursday in Tokyo. That
compared with the median estimate for a 0.3 percent gain in a
Bloomberg News survey. Sales increased 1.7 percent in 2014.
- With India Bulls Everywhere, a Rare Look at the Risks. There are times in financial-market rallies
where the gains become so spectacular and the euphoria reaches
such a pitch that it becomes easy to forget about the risks. India, it could be argued, is going through such a moment.
- China Stocks Fall for Third Day as CSRC Starts New Margin Probe. China’s stocks fell for a third day, sending
the benchmark index to a one-week low, amid speculation
increased regulatory scrutiny of margin loans will spur some
leveraged investors to reduce holdings. Citic Securities Co. and Haitong Securities led declines
for financial companies with losses of at least 1.8 percent. The
securities regulator plans a new round of checks into the
margin-lending businesses of brokerages, the Xinhua News Agency
reported Wednesday night. Trainmakers China CNR Corp. and CSR
Corp. rose at least 1.6 percent after the government said it
will promote railway firms’ overseas investments. “The authorities sent a signal that they don’t feel
comfortable,” said Yuliang Chang, Hong Kong-based strategist at
Deutsche Bank AG. The pace of growth in margin lending and
umbrella trusts “is creating a systemic risk in the financial
industry,” he said. The Shanghai Composite Index dropped 0.9 percent to
3,275.18 at 10:28 a.m. local time.
- Asian Stocks Track U.S. Declines After Federal Reserve Statement. Asian stocks fell, tracking declines in U.S.
equities, after the Federal Reserve cited international risks to
the American economy and oil slumped below $45 per barrel. The MSCI Asia Pacific Index slid 0.5 percent to 141.74 as
of 9:01 a.m. in Tokyo. The Fed acknowledged global risks in its
statement Wednesday, saying that it will take into account
readings on “international developments” as it decides how
long to keep key rates near zero. While boosting their
assessment of the economy, policy makers said inflation will
probably slow further. U.S. oil supplies climbed to their
highest level in data going back more than 30 years,
exacerbating concerns over a global supply glut.
- Tesla(TSLA) Bears Rev Engine on Falling Oil, China Skepticism. Slumping oil prices have restored Tesla
Motors Inc.’s status as a favorite among short sellers and
bearish options traders. Speculation that a 58-percent plunge in West Texas
Intermediate crude since June and competition from General
Motors Co. will hurt demand have pushed short sales to a one-year high. The difference in the cost of bearish options versus
bullish ones has almost quadrupled from September, reaching the
highest level since November 2012, data compiled by Bloomberg
show.
Wall Street Journal:
- U.S. Must Return Guantanamo for Normal Relations With Cuba, Raúl Castro Says. Demands Come as Two Nations Move Toward Renewing Full Diplomatic Relations. Cuban President Raúl Castro demanded Wednesday that the U.S. return
the base at Guantanamo Bay, lift the half-century trade embargo on Cuba
and compensate his country for damages before the two nations
re-establish normal relations.
- Islamic State Offshoots Spring Up in Egypt, Other Countries. Egyptian Army Battles a Deadly Sinai Insurgency. The video looks hard to distinguish from the ones filmed in Syria and
Iraq. Islamic State gunmen arrive in a fleet of pickup trucks, set up
checkpoints on a busy highway and start hauling away suspected
collaborators with the “apostate” government. It ends, predictably, with
forced confessions and gruesome, close-up shots of killings.
- Militants Driven From Pakistan Flock to Afghan Towns. Migration to Lawless Regions Pose New Threat to National Security. Arab and Central Asian Islamist militants have moved into Afghanistan
after a military offensive by Islamabad largely eliminated havens in
Pakistan’s tribal areas, Afghan officials and local residents say,
posing a potential new threat to the country’s already tenuous security.
- Up to Six Million Households Facing Penalty for Skipping Health Insurance. The Fine for Not Carrying Insurance in 2014 is $95 per Adult, or 1% of Family Income. The U.S. government estimates as many as six million households may have
to pay a penalty for not having had health-insurance coverage last year
as required under the Affordable Care Act, officials said Wednesday.
- Building Toward Another Mortgage Meltdown. In the name of ‘affordable’ loans, the White House is creating the conditions for a replay of the housing disaster. The Obama administration’s troubling flirtation with another mortgage
meltdown took an unsettling turn on Tuesday with Federal Housing
Finance Agency Director Mel Watt’s testimony before the House Financial
Services Committee.
Fox News:
MarketWatch.com:
- Sands China's quarterly profit falls 18%.
Sands China Ltd. (1928.HK), the Macau unit of Las Vegas Sands Corp.
(LVS), said Thursday fourth-quarter net income dropped 18% from a year
earlier amid a softer gaming market in Macau.
Zero Hedge:
Business Insider:
Reuters:
- Qualcomm(QCOM) says key customer passed on new chip, stock drops. Qualcomm Inc reduced its outlook for fiscal 2015, saying it expects its newest Snapdragon mobile chip will not be used in a major customer's flagship smartphone, sending its shares lower. The San Diego, California, company also warned that
"challenges" with another of its chips had hurt its
competitiveness in China, where Qualcomm has been disappointed
with growth that has fallen short of expectations.
Bild:
- EU's
Schulz Sees Non Majority for Greek Debt Cut. EU Parliament President
Martin Schulz says he will speak frankly to Greek Prime Minister Alexis
Tsipras on trip to Athens and tell him to ask the billionaires who
stashed money abroad to pay their taxes, citing an interview. Sees
coalition with right-wing populist party as problematic, remains to be
seen how the parties will cope with their internal contradictions. Greece's rejection of sanctions against Russia doesn't mark a successful debut; EU sanctions have held together and solo efforts don't go so easily without consultations.
Le Figaro:
- EC President Juncker Says Greece Should Respect Europe. Europe won't provide credit unless Greece sticks to commitments, European Commission President Jean-Claude Juncker says in an interview. No question of forgiving Greek debt, he said. A country can't take "democratic choice" to go against European treaties, Juncker said.
Economic Information Daily:
- China 2014 Tax Revenue Growth Lowest in 20 Years. Tax revenue grew 8.8% to 10.4t yuan, citing data from the State Administration of Taxation.
Evening Recommendations
Night Trading
- Asian equity indices are -1.0% to unch. on average.
- Asia Ex-Japan Investment Grade CDS Index 112.0 +2.0 basis points.
- Asia Pacific Sovereign CDS Index 69.25 -1.25 basis points.
- NASDAQ 100 futures +.13%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
8:30 am EST
- Initial Jobless Claims are estimated to fall to 300K versus 307K the prior week.
- Continuing Claims are estimated to fall to 2405K versus 2443K prior.
10:00 am EST
- Pending Home Sales for December are estimated to rise +.5% versus a +.8% gain in November.
Upcoming Splits
Other Potential Market Movers
- The
Eurozone CPI, Japan CPI, $35B 5Y T-Note auction, $29B 7Y T-Note
auction, weekly EIA natural gas inventory report, weekly Bloomberg
Consumer Comfort Index and the (KATE) conference call could also impact
trading today.
BOTTOM LINE: Asian indices are lower, weighed down by real estate 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 25% net long heading into the day.
Broad Equity Market Tone:
- Advance/Decline Line: Lower
- Sector Performance: Most sectors declining
- Volume: Slightly Below Average
- Market Leading Stocks: Underperforming
Equity Investor Angst:
- Volatility(VIX) 18.44 +7.08%
- Euro/Yen Carry Return Index 139.10 -.67%
- Emerging Markets Currency Volatility(VXY) 9.74 -3.37%
- S&P 500 Implied Correlation 67.66 +2.05%
- ISE Sentiment Index 93.0 -12.28%
- Total Put/Call .95 -12.04%
Credit Investor Angst:
- North American Investment Grade CDS Index 67.75 +1.22%
- America Energy Sector High-Yield CDS Index 737.0 +.06%
- European Financial Sector CDS Index 64.06 +6.96%
- Western Europe Sovereign Debt CDS Index 24.65 +4.18%
- Asia Pacific Sovereign Debt CDS Index 68.47 -2.89%
- Emerging Market CDS Index 398.02 +1.33%
- iBoxx Offshore RMB China Corporates High Yield Index 112.88 +.53%
- 2-Year Swap Spread 25.25 +.25 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -12.5 -.75 basis point
Economic Gauges:
- 3-Month T-Bill Yield .02% unch.
- Yield Curve 124.0 -7.0 basis points
- China Import Iron Ore Spot $63.09/Metric Tonne -.65%
- Citi US Economic Surprise Index -4.0 -.3 point
- Citi Eurozone Economic Surprise Index 1.60 +1.6 points
- Citi Emerging Markets Economic Surprise Index -7.40 +3.6 points
- 10-Year TIPS Spread 1.61 -4.0 basis points
Overseas Futures:
- Nikkei Futures: Indicating -115 open in Japan
- DAX Futures: Indicating -35 open in Germany
Portfolio:
- Slightly Higher: On gains in my tech sector longs, index hedges and emerging markets shorts
- Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my (EEM) short
- Market Exposure: Moved to 25% Net Long
Bloomberg:
- Putin Goes All In as Ukraine Fights for Funding. Vladimir Putin is playing for keeps in
Ukraine and he might bankrupt the country to get what he wants. As fighting flares anew in the 10-month-old conflict and
the death toll mounts, that’s the assessment of analysts in
Ukraine and New York, as well as Moscow. While Kremlin-backed rebels pressure the Ukrainian
government, the U.S. and the European Union are contemplating
tighter economic sanctions on Russia. Putin, however, seems
emboldened in his belief that this is a showdown he must not and
will not lose. “Putin realized that he will never be in the West’s good
graces and this makes him act more decisively,” Igor Bunin,
director of the Center for Political Technologies in Moscow,
with ties to the Kremlin, said Tuesday by phone. “He started
playing all in.”
- U.S. Ready to Push Russia on Ukraine as EU Wrangles on Sanctions. The U.S. said it’s ready to intensify
pressure against Russia for supporting rebels who’ve stepped up
attacks on Ukrainian troops as the European Union tussled over
new sanctions in the face of opposition from Greece. EU states will discuss adding names to and extending the
duration of a black list of Russian and separatist individuals
and companies linked to the conflict at a meeting minister of
the bloc’s foreign ministers on Thursday. U.S. Treasury
Secretary Jacob J. Lew said President Barack Obama’s
administration was prepared to raise pressure on Russia to use
its influence over the separatists to stop the conflict.
- Greece's looming clash in Europe starts with sanctions on Russia. Greece’s new government questioned moves to impose more sanctions on
Russia, adding a foreign-policy angle to its challenge to the status quo
in Europe. Prime Minister Alexis Tsipras’s SYRIZA-led coalition
said it opposed a European Union statement issued in Brussels Tuesday
paving the way to additional curbs on the Kremlin over the conflict in
Ukraine, and complained it hadn’t been consulted. “Greece doesn’t
consent,” the government said in a statement. It added that the
announcement violated “proper procedure” by not first securing Greece’s
agreement.
- Greek Bonds, Stocks Decline as New Government Takes Charge. Greek bonds and stocks slumped for a third
day on concern the nation’s new government will backtrack on
austerity. The yield on three-year notes jumped 268 basis points to
16.71 percent at 5:47 p.m. in Athens and reached its highest
level since Greece completed the biggest-ever debt restructuring
in 2012. The ASE Index fell 9.2 percent to its lowest level
since September of that year, taking its three-day drop to 15
percent as a gauge of lenders extended a record low. Greek sovereign-bond risk jumped, with credit-default swaps signaling
a 70 percent probability the government will fail to meet its
obligations within five years, up from 59 percent on Jan. 23.
- European Stocks Are Little Changed Amid Earnings as ASE Declines. European stocks were little changed as
Nordea Bank AB and Electrolux AB advanced on earnings, while
Greek equities tumbled.
The Stoxx Europe 600 Index added 0.1 percent to 369.08 at
the close of trading, having swung between gains and losses more
than 10 times.
- Iraq Oil Surge to Fan OPEC Rivalry That Triggered Slump. The battle for customers among OPEC members
that helped trigger oil’s collapse is about to escalate. Iraqi crude production is climbing from a 35-year high as
it adds growing Kurdish supplies to its exports, while southern
oilfields remain unscathed by Islamic State militants. Finding
buyers for the new output means offering more attractive terms
than rivals in the Organization of Petroleum Exporting Countries, say Citigroup Inc., DNB ASA and Barclays Plc.
- Bloomberg Brief: Introducing the 'Fed Spectrometer'.
- Fed Stays Patient on Rates Amid Strong Job Gains, Low Inflation. The Federal Reserve maintained its pledge to
be “patient” on raising interest rates and boosted its
assessment of the economy and labor market, even as it expects
inflation to decline further. “Economic activity has been expanding at a solid pace,”
the Federal Open Market Committee said today in a statement in
Washington. “Labor market conditions have improved further,
with strong job gains and a lower unemployment rate.”
- Treasuries Gain as Oil Stockpiles Lower Prices, Growth Outlook. Treasuries rose as a report showing record
U.S. crude inventories damped inflation projections amid signs
the global economic slowdown is catching up with the U.S. The 30-year bond yield approached record lows before the
Federal Reserve ends a policy meeting and provides an update on
plans to raise interest rates later this year. Greek stocks and
bonds slumped on concern the nation’s newly elected government
will seek to overturn austerity measures, fueling haven demand.
The Treasury’s auction of $26 billion of two-year notes
attracted a lower-than-forecast yield.
ZeroHedge:
Business Insider:
Reuters:
- China to relaunch probe into margin trading, bank lending for stock speculation - sources. Chinese regulators will relaunch
an investigation into stock margin trading, and have been given
notice banks to tighten supervision of their lending practices
to ensure loans aren't funnelled into stock markets, sources
with direct knowledge of the matter told Reuters.
The China Securities Regulatory Commission and the China Banking Regulatory Commission did not respond to request from
Reuters seeking comment. The news comes as Beijing moves cautiously to suppress the
excessive use of leverage to make aggressive bets on Chinese
stock markets, which have gained around 40 percent since
November. Reports of previous investigations and regulatory clamp
downs caused a dramatic collapse in stocks on Jan. 19, and
regulators followed up by reassuring the market that they were
not trying to suppress the rally.
- EMERGING MARKETS-Brazil's Bovespa dragged down by Petrobras plunge. Brazil's main stock index sank
on Wednesday as shares of state-run oil company Petrobras
plunged on concerns over potential losses stemming from a
multibillion-dollar corruption scandal.
The benchmark Bovespa index dropped about 1.4 percent and
was on track for its weakest closing level in over three weeks,
while the broader MSCI Latin American stock index
erased the previous session's gains.
- EXCLUSIVE-EU mulls capital markets restrictions among new Russia sanctions. Union
sanctions against Russia could include further capital markets
restrictions, making it harder for Russian companies to refinance
themselves and possibly affecting Russian sovereign bonds and access to
advanced technology for the oil and gas sectors, EU officials said
on Wednesday.EU foreign ministers are set to ask the executive European
Commission on Thursday to prepare a new round of sanctions over Moscow's
role in eastern Ukraine, however officials said the measures may not be
adopted by EU leaders until late March.
- Oil drops on record-high U.S. crude stocks as pressure mounts. Oil prices fell
on Wednesday after the U.S. government reported record-high crude
inventories, adding to anxieties about the global glut that has
pressured the market since last summer. The U.S. Energy Information
Administration (EIA) said domestic crude oil stocks rose by almost 9
million barrels last week to reach nearly 407
million, their highest since the government began keeping records in
1982.
Telegraph:
Macau Business Daily:
-
Macau Official Sees 1H Gaming Revenue Falling. Macau's 1H gaming
revenue is likely to follow the 2H of 2014 and continue to decline,
citing Secretary for Economy and Finance Lionel Leong.
National Business Daily:
- Shanghai Will Continue Home Purchase Restrictions. The city will
continue to implement existing home purchase restrictions "strictly,"
citing Liu Haisheng, head of Shanghai's housing regulatory authority as
saying during a recent political consultative meeting.
Style Underperformer:
Sector Underperformers:
- 1) Oil Service -4.52% 2) Oil Tankers -2.51% 3) Energy -1.88%
Stocks Falling on Unusual Volume:
- ETH, OTEX, IRE, SYRG, RDWR, ACAT, VMW, EZPW, GNTX, INFA, RMAS, EAT, FTK, CVLT, PPC, LXK, COG, AOL, FGP, MBLY, NOAH, WWE, ZU, IMO, RYAM, CRS, DVAX, NOV, MTOR, FTK and PPC
Stocks With Unusual Put Option Activity:
- 1) OAS 2) BRK/B 3) MA 4) VMW 5) HOG
Stocks With Most Negative News Mentions:
- 1) FCX 2) PBR 3) GT 4) AOL 5) NOV
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Networking +.79% 2) Computer Hardware +.69% 3) Defense +.38%
Stocks Rising on Unusual Volume:
- ABMD, FSL, COMM, TUP, X, EA, AAPL, TSS, BA and JNPR
Stocks With Unusual Call Option Activity:
- 1) IDTI 2) HRB 3) EPI 4) OPK 5) LOCK
Stocks With Most Positive News Mentions:
- 1) ABMD 2) FSL 3) LUV 4) AAPL 5) X
Charts:
Evening Headlines
Bloomberg:
- Sanctions Aren't Enough to Stop Putin, and He Knows It. The
European Union wants to tighten sanctions on Russia again, as renewed
fighting in eastern Ukraine causes heavy casualties and raises fears
that Russian-backed separatists will seize control of more territory. The
EU, in a statement issued today, said it saw "evidence of continued and
growing support given to the separatists by Russia, which underlines
Russia's responsibility" for the
bloodshed. On Jan. 29, EU foreign ministers are expected to
consider widening a list of Russians and separatist leaders facing visa
bans and asset freezes.
-
Banks Decline as Stress Tests Heighten Concern: China Overnight.
Chinese banks retreated in New York amid concern credit risks may
increase for lenders as a housing market slowdown in the Asian nation
constrains their ability to recover their advances. Industrial and
Commercial Bank of China Ltd., the world’s largest lender by assets,
fell 2.7 percent to $14.66 in over-the-counter trading, the biggest drop
in seven weeks. China Construction Bank Corp. (939) and Bank of China
Ltd. each slipped at
least 2 percent. The Bloomberg China-US Equity Index declined
1.7 percent to 113.70 after four days of gains.
- China Accuses Alibaba(BABA) of Lax Oversight of Merchants. Alibaba Group Holding Ltd. failed to
properly oversee merchants and allowed the sale of counterfeit
products on its e-commerce platforms, according to a Chinese
government report. Many merchants didn’t apply for a business license and
misled consumers during holiday promotions, including the Nov.
11 Singles’ Day, according to a document published by a media
outlet run by the State Administration for Industry & Commerce.
A meeting was held in July, though the report wasn’t published
until now to avoid affecting Alibaba’s initial public offering,
it said.
- Singapore Dollar Is Weakest Since 2010 on Monetary Policy Shift. Singapore’s central bank unexpectedly eased
monetary policy, sending the currency to the weakest since 2010
as the country joined global policy makers in shoring up growth
amid dwindling inflation. The Monetary Authority of Singapore, which uses the
currency as its main policy tool, said it will reduce the slope
of the policy band for the island’s dollar in an unscheduled
policy statement Wednesday. It also cut the inflation forecast
for 2015, predicting prices may fall as much as 0.5 percent.
- Asian Stocks Slide From Four-Month High as Japan Retreats on Yen. Asian stocks fell, with the regional
benchmark index retreating from a four-month high, as Japanese
shares slid on a stronger yen and U.S. earnings and durable-goods orders disappointed investors.
The MSCI Asia Pacific Index declined 0.4 percent to 141.81
as of 9:00 a.m. in Tokyo after climbing yesterday to its highest
close since Sept. 25. Japan’s Topix index slid 0.7 percent.
- Goldman(GS) Downgrades Commodity Outlook as Energy, Metals Tumble. Goldman Sachs Group Inc. downgraded its
three-month commodity outlook to underweight as mounting global
supply gluts sent energy and metals prices tumbling this year. There
is a greater risk that raw material prices may drop
in the near term than rise, Goldman strategists and analysts including
Christian Mueller-Glissmann, Peter Oppenheimer and Jeffrey Currie wrote
in a research report. The Bloomberg Commodity Index of 22 components
reached a 12-year low this
week, with crude oil, hogs and copper leading losses in 2015.
- Crude at $49 Sinks Big Oil Growth Prospects as Profits Falter. Financial results from a fourth quarter that
saw the collapse of the crude market will provide a window into
how the world’s biggest oil companies are adjusting to a new
reality of slowing growth and low prices. Oil that topped $115 a
barrel as recently as June has been
trading below $50 a barrel since the first week of the year,
portending a bleak 2015 for the world’s five so-called supermajors --
Exxon Mobil Corp., Royal Dutch Shell Plc (RDSA), Chevron Corp., Total SA
(FP) and BP Plc. (BP/) The companies, whose businesses combine oil and
natural gas exploration with refining and chemical manufacturing, have
historically been among the most
resilient players during down cycles. This could be the oil bust that
breaks that pattern.
- Get Ready for the Return of Risky-Mortgage Bonds: Credit Markets. The business of bundling riskier U.S.
mortgages into bonds without government backing is gearing up
for a comeback. Just don’t call it subprime. Hedge fund Seer Capital Management, money manager Angel Oak
Capital and Sydney-based bank Macquarie Group Ltd. are among
firms buying up loans to borrowers who can’t qualify for
conventional mortgages because of issues such as low credit
scores, foreclosures or hard-to-document income. They each plan
to pool the mortgages into securities of varying risk and sell
some to investors this year. JPMorgan Chase & Co. analysts
predict as much as $5 billion of deals could get done, while
Nomura Holdings Inc. forecasts $1 billion to $2 billion.
Wall Street Journal:
- Overseas Forex Trades Laid FXCM Low. Big Bets by Customers Who Aren’t Subject to U.S. Rules Stung Firm. Retail foreign-exchange broker FXCM Inc. was nearly felled by outsize
bets made by foreign customers who aren’t subject to U.S. regulations,
according to people familiar with regulators’ review of the firm.
- Investors Rethink Taking a Leap Into Junk Bin. Slowdown in Debt Sales Comes Amid Concerns About Pace of Economic Growth. U.S. junk-bond investors are showing fresh caution, renewing concerns of
a wholesale retreat that could hobble financing for low-rated companies
and hamstring the economic recovery.
- President Costanza’s Jobs Boom. A new study shows that Mr. Obama needs a ‘Seinfeld’ epiphany. In a 1994 “Seinfeld” episode, George realizes that “every decision that I
have ever made in my entire life has been wrong. My life is the
complete opposite of everything I want it to be.” Jerry replies: “If
every instinct you have is wrong, then the opposite would have to be
right.”
Fox News:
- Obama drops plan to end tax breaks for popular college savings accounts. (video) President Obama has dropped his plan to end tax breaks for popular
college savings accounts known as 529s, sources told Fox News on
Tuesday. The decision comes in the wake of stern criticism from Republicans
and pleas from top Democrats, including House Minority Leader Nancy
Pelosi, to drop the plan.
CNBC:
- Apple(AAPL) posts blowout quarter, will ship Watch in April. (video)
Apple reported a blockbuster quarter on Tuesday, blowing past Wall
Street's most optimistic expectations. The company sold almost 9 million
more iPhones
than expected, while its cash pile ballooned to the point that it could
buy about 480 of the S&P 500 companies outright. Apple also revealed
during a conference call with
analysts that it plans to ship its new Apple Watch wearable device in
April of this year. Shares rose 5 percent in after-hours trading.
- Yahoo(YHOO) to spin off its remaining Alibaba stake. Yahoo on Tuesday said it would spin off its remaining Alibaba stake in a tax-free deal. The stock jumped more than 7 percent after the announcement. Yahoo's 384 million shares of Alibaba, valued at $40 billion, will be wrapped into a newly formed independent entity, SpinCo.
Zero Hedge:
Business Insider:
Telegraph:
Evening Recommendations
Night Trading
- Asian equity indices are -.25% to +.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 110.0 +2.0 basis points.
- Asia Pacific Sovereign CDS Index 70.5 +1.75 basis points.
- NASDAQ 100 futures +1.17%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
10:30 am EST
- Bloomberg
consensus estimates call for a weekly crude oil inventory build of
+4,000,000 barrels versus a +10,071,000 barrel gain the prior week.
Gasoline supplies are estimated to rise by +610,000 barrels versus a
+588,000 barrel gain the prior week. Distillate inventories are
estimated to fall by -1,530,000 barrels versus a -3,272,000 barrel gain
the prior week.
2:00 pm EST
- The FOMC is expected to leave the benchmark Fed Funds rate at .25%.
Upcoming Splits
Other Potential Market Movers
- The
German Consumer Confidence Index, $26B 2Y T-Note auction, weekly MBA
Mortgage Applications report and the (KMI) analyst meeting could also
impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by technology and consumer shares in the region. I expect US stocks to open modestly higher and to maintain gains into the afternoon. The Portfolio is 50% net long heading into the day.
