Bloomberg:
- PBOC Says No Longer in China’s ‘Favor’ to Boost Record Reserves. The People’s Bank of China signaled it no longer benefits China to increase its foreign currency reserves that now exceed a record $3.7 trillion. “It’s no longer in China’s favor to accumulate foreign-exchange reserves,” Yi Gang, a deputy governor with the People’s Bank of China said in a speech organized by China Economists 50 Forum at Tsinghua University yesterday. “The marginal cost of accumulating foreign-exchange reserves has exceeded the marginal gains.”
- China, India Push Rich Countries to Move First on Climate Change. China and India are stepping up pressure on "wealthy countries" to move first on fighting global warming, saying the earliest industrialized nations are the most to blame for rising temperatures. Speaking at talks involving 190 nations that aim to forge a new treaty to limit greenhouse gas emissions, the developing nations said their richer counterparts should provide more details on a pledge to boost climate aid to $100 billion a year and on how they will cut their own emissions before the poorer countries are required to set their own targets. “We think we are the weaker side,” said Xie Zhenhua, the head of China’s delegation at United Nations climate talks in Warsaw. “They need to fulfill these commitments. They have to provide a timetable and also the size of their contribution. They should have a very clear signal to society.”
- China’s Stocks Fall Most in Week on Property Concern, Flash PMI. China’s stocks fell the most in a week after a preliminary manufacturing index trailed economists’ estimates and on speculation the government will announce measures to restrain property-price gains. China Vanke Co. and Poly Real Estate Group Co., the nation’s two biggest developers, slid more than 3 percent. New China Life Insurance Co. dropped the most since July. Shanghai Jahwa United Co. plunged 6 percent to drag down a gauge of consumer-staples producers. Air China Ltd. led a rally for airline companies for a second day. The Shanghai Composite Index (SHCOMP) fell 1.1 percent to 2,183.50 at the 11:30 a.m. break, poised for the biggest loss since Nov. 13.
- Asian Stocks Outside Japan Fall on Fed Concern, China PMI. Asian stocks outside Japan fell after minutes from the Federal Reserve’s last meeting signaled U.S. stimulus may be reduced in coming months and a gauge of China manufacturing fell more than expected. Samsung Electronics Co., a consumer electronics maker that gets 22 percent of its revenue in America, declined 2.1 percent in Seoul. Prince Frog International Holdings Ltd., a maker of baby-care products suspended after its accounting came under scrutiny by a short-seller, tumbled 18 percent in Hong Kong as it resumed trading. Australand Property Group fell 3.7 percent in Sydney, extending yesterday’s loss, as CapitaLand Ltd. sells part of its 59 percent stake in the developer. The MSCI Asia Pacific excluding Japan Index declined 1.1 percent to 469.86 as of 11:32 a.m. in Hong Kong as all 10 industry groups on the gauge dropped.
- Rebar Falls as China Manufacturing Data Signal Weak Demand. Steel reinforcement-bar futures in Shanghai declined as a lower-than-estimated manufacturing gauge for China signaled that demand would weaken. Rebar for May delivery, the most-active contract on the Shanghai Futures Exchange, fell as much as 0.6 percent to 3,623 yuan ($595) a metric ton and was at 3,626 yuan at 10:46 a.m. local time. Prices rose 1.5 percent in the previous two days.
- Goldman(GS) Sees Significant Losses for Iron Ore, Gold in 2014. Iron ore, gold, soybeans and copper will probably drop at least 15 percent next year as commodities face increased downside risks even as economic growth in the U.S. accelerates, according to Goldman Sachs Group Inc. The risks are strongest for iron ore, and follow increases in supplies, analysts including Jeffrey Currie wrote in a report yesterday that identified the New York-based bank’s top 10 market themes for the coming year. Price pressures will mostly become visible later in 2014, the analysts wrote, forecasting that bullion, copper and soybeans will decline to the lowest levels since 2010.
- CFTC’s Chilton Says He’d Vote Against Current Volcker Rule. The Volcker rule that U.S. regulators are trying to complete this year doesn’t do enough to limits banks’ ability to make speculative bets, said Bart Chilton, a member of the U.S. Commodity Futures Trading Commission. “There would be no sense even doing a final rule if what is currently being considered on hedging remains the same,” said Chilton, referring to the rule banning proprietary trading, in a telephone interview today. He said he is prepared to vote against the rule as it’s currently drafted.
- EU Risks Violating Bank-Capital Pact, Basel Member Says. The European Union risks violating international bank-capital standards and its implementing law should face a rigorous review by global regulators, a Swedish member of the Basel Committee on Banking Supervision warned.
- Wells Fargo’s(WFC) Stumpf Dislikes Fed Bond Buys That Punish Savers. John Stumpf, chief executive officer at Wells Fargo & Co., said he dislikes Federal Reserve monthly bond purchases at this point in the economic cycle and that the policy has hurt savers. “I’m not a big fan of QE this late in the recovery,” Stumpf said today at The Year Ahead: 2014, a two-day conference sponsored by Bloomberg LP in Chicago. He was referring to the Fed’s bond purchases, known as quantitative easing. “QE, while it’s helped borrowers, has really punished savers,” he said.
- Anxiety Over Asset Bubbles From Homes to Internet Rising in Poll. Asset bubbles are forming in Internet and social media stocks as well as in the housing markets of London and China, according to the latest Bloomberg Global Poll. Eighty-two percent of the responding investors, analysts and traders who are Bloomberg subscribers said Internet and social media shares are either at or near unsustainable levels. Seventy-three percent said the same of Chinese house prices and 69 percent identified London homes as already or almost frothy. They were less concerned about U.S. housing, with 31 percent seeing prices approaching or at excessive levels. “Liquidity is still plentiful and central banks are reflating,” said Kenneth Broux, a strategist at Societe Generale SA in London and a poll participant. “Property is the obvious bubble candidate.”
- Fed Casts About for Endgame on Easy-Money Policy. Federal Reserve officials, mindful of a still-fragile economy, are laboring to devise a strategy to avoid another round of market turmoil when they pull back on one of their signature easy-money programs in the months ahead. Central-bank officials have been debating for months when to start paring the $85 billion-a-month bond-purchase program. They were surprised during the summer when their discussions and public pronouncements on the potential timing rocked markets, pushing interest rates higher and stock prices down. Minutes of the Oct. 29-30 policy meeting, released Wednesday, showed officials continued to look toward ending the bond-buying program "in coming months." But they spent hours game-planning how to handle unexpected developments and tailoring a message to the public to soften the impact of the program's end.
- Inside-Trading Probe of Height Securities Over Decision on Medicare Payments Hits Wall in Capital. Investigators Are Looking Into How Agency Funding Decision Got to Investors Early.
- BMW, Cadillac Aim to Pull Plug on Tesla(TSLA) With Pricey New Cars. Tesla Motors Inc. is about to get deep pocketed rivals in the luxury electric luxury car market after largely having the business to itself since the 2012 launch of the Model S sedan. BMW AG, General Motors Co.'s Cadillac and Volkswagen AG's Porsche and Audi brands are among the luxury brands using this week's Los Angeles Auto Show to promote new plug-in models aimed at affluent, eco-conscious Californians who make up the heart of Tesla's buyers. While models such as the BMW i3 and i8, the Cadillac ELR or Porsche's plug-in Panamera sedan offer different propulsion technology from the Tesla Model S and different body styles, they are all cars that get much of their energy from the electric grid instead of a gasoline pump.
- Nicole Hopkins: ObamaCare Forced Mom Into Medicaid. My mother preferred to pay for her care rather than be on the government dole. Now she has no choice. My mother is not one to seek attention by complaining, so her recent woeful Facebook FB +0.15% post caught my eye: "The poor get poorer." It diverged from the more customary stream of inspirational quotes, recipes and snapshots from her tiny cottage in Pierce County, Wash.
- Fed sends markets tapering message. The Federal Reserve looks set to move sooner rather than later to taper back its bond buying, once more surprising markets that have been repeatedly confused about when the Fed will begin to step back from its extraordinary easing policy.
- Are the cracks in the euro starting to show? (video) The resilient euro may have bounced back from this month's interest rate cut from the European Central Bank (ECB), but recovering from talk that the ECB is mulling negative deposit rates could be much harder, analysts say.
- Let's Hear It For The Volcker Rule: Goldman Loses Over $1 Billion In FX Trade Gone Bad In Q3. (graph)
The Fiscal Times:
Reuters:
- U.S. could run out of cash in March under debt ceiling - CBO. The United States could start missing payments on its obligations some time between March and June if lawmakers don't raise a legal limit on borrowing by early February, congressional analysts said on Wednesday. The Obama administration was able to bump against the government's debt ceiling for five months this year before it came to the brink of default.
- Green Mountain(GMCR) sees strong revenue in second half of 2014. K-cup coffee pods maker Green Mountain Coffee Roasters Inc said it expected stronger revenue in the second half of its fiscal 2014 as it converts unlicensed coffee pod makers to licensed partners. The company, however, gave a cautious current-quarter forecast, citing a transition to a new brewing system and weakness in U.S. consumer spending. Shares of Green Mountain, which also approved a share repurchase program of up to $1 billion, were up 4 percent in extended trading.
- There is talk of revolution in the air. Pre-revolutionary grievances are simmering in half the world, openly in France and Italy, less openly in Russia and China.
- Schaeuble's Advisers See Up to 1.8m German Jobs at Risk. Country's Finance Minister Wolfgang Schaeuble's experts calculated combined effects of plans from CDU, CSU and SPD amid coalition talks. Plans include pension programs and minimum wage.
- Kim Jong-un ordered propaganda war against Park gov't: official. North Korean leader Kim Jong-un was found to have ordered an intensified propaganda war against the Park Geun-hye administration last month in a possible policy shift, a South Korean government official said Wednesday.
- China to Raise Taxes for Possessing Properties. China will increase taxes for owning properties, Finance Minister Lou Jiwei said in an interview. China will start levying consumption taxes for some resources and high-end consumer goods, according to Lou.
Deutsche Bank:
- Rated (RAD) Buy, target $7.
- Rated (MCK) Buy, target $181.
- Rated (WAG) Buy, target $73.
- Asian equity indices are -1.25% to -.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 132.50 +.5 basis point.
- Asia Pacific Sovereign CDS Index 104.25 +2.5 basis points.
- FTSE-100 futures -.49%.
- S&P 500 futures -.16%.
- NASDAQ 100 futures -.11%.
Earnings of Note
Company/Estimate
- (DLTR)/.60
- (SHLD)/-3.14
- (PDCO)/.48
- (PERY)/-.16
- (DCI)/.39
- (SSI)/-.26
- (ROST)/.80
- (GME)/.57
- (TGT)/.62
- (ANF)/.44
- (BKE)/.89
- (GPS)/.70
- (INTU)/-.09
- (TFM)/.26
- (ADSK)/.39
8:30 am EST
- Initial Jobless Claims are estimated to fall to 335K versus 339K the prior week.
- Continuing Claims are estimated to fall to 2870K versus 2874K prior.
- The Producer Price Index for October is estimated to fall -.2% versus a -.1% decline in September.
- The PPI Ex Food and Energy for October is estimated to rise +.1% versus a +.1% gain in September.
- The Preliminary Markit US PMI for November is estimated at 52.3.
- The Philly Fed for November is estimated to fall to 15.0 versus 19.8 in October.
- None of note
- The Yellen confirmation vote, Fed's Lacker speaking, Fed's Bullard speaking, Fed's Powell speaking, BoJ decision, Eurozone PMI, 10Y Treasury TIPS auction, weekly EIA natural gas inventory report, Bloomberg Economic Expectations Index for November, weekly Bloomberg Consumer Comfort Index, (RIG) analyst day and the (INTC) investor meeting could also impact trading today.
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