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.
- Berkshire(BRK/A) Said to Face Start of U.S. Systemic-Risk Scrutiny. Regulators are starting to scrutinize Warren Buffett’s Berkshire Hathaway Inc. to determine whether it is important enough to the financial system to require Federal Reserve supervision, according to two people with knowledge of the matter.
- West Explores Plan B for Forces in Afghanistan. Kabul Diplomats Conclude Karzai Won't Sign Security Deal With U.S.
- 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.
- Administration fears part of health care system so flawed it could bankrupt insurance companies. While the administration publicly expresses full confidence in its health care law, privately it fears one part of the system is so flawed it could bankrupt insurance companies and cripple ObamaCare itself.
- Ex-EPA official told lawmakers of project to 'modify the DNA' of capitalism. A former high-ranking EPA official who recently was sentenced to prison for fraud told lawmakers last month that, before he left the agency, he was working on a "project" examining ways to "modify the DNA of the capitalist system."
- Japan’s Abe talks Abenomics, but China comments spark most interest. Japanese Prime Minister Shinzo Abe vowed once again to be a “drillbit” who will break through the “solid rock of vested interests” as he implements the so-called third arrow of “Abenomics” — his effort to rid Japan of chronic deflation.
- EBay(EBAY) shares soar 7 percent as Icahn takes stake. (video) Activist investor Carl Icahn wants eBay to spin off its PayPal business, but the company doesn't seem to like the idea.
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.
- Japan business mood up, sales tax hike weighs on outlook -Reuters Tankan. Japanese business sentiment improved for a third straight month in January but it is expected to slide after a sales tax hike in April, a Reuters poll showed, reflecting worries about the tax's impact on private consumption.
- 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.
- F5(FFIV) forecasts strong revenue after first-quarter beat. Network gear maker F5 Networks Inc forecast current-quarter revenue above Wall Street estimates, helped by strong sales of its data traffic management products, pushing its shares up 11 percent in extended trading.
Obama takes on coal with first-ever carbon limits
Read more at http://www.philly.com/philly/news/politics/20130919_ap_0f857b20e0c144a5a1e1b9dddc9f9d72.html#YRThyDOhArykUeYy.99
Read more at http://www.philly.com/philly/news/politics/20130919_ap_0f857b20e0c144a5a1e1b9dddc9f9d72.html#YRThyDOhArykUeYy.99
Financial Times:
Telegraph:- 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”.
- Davos: despite the optimism, there are serious questions about where the recovery is leading. Almost everywhere, renewed growth remains highly dependent on artificial stimulus.
- 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.
- 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.
- None of note
- 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.
- FTSE-100 futures -.18%.
- S&P 500 futures -.35%.
- NASDAQ 100 futures -.08%.
Earnings of Note
Company/Estimate
- (LUV)/.29
- (KEY)/.25
- (BGG)/.09
- (LMT)/2.11
- (ABC)/.78
- (FITB)/.42
- (BAX)/1.25
- (JCI)/.69
- (MCD)/1.39
- (UNP)/2.49
- (PCP)/3.03
- (MXIM)/.40
- (ALTR)/.31
- (KLAC)/.80
- (MSFT)/.68
- (ISRG)/4.02
- (DFS)/1.18
- (JNPR)/.36
- (SBUX)/.69
- (IGT)/.30
- (JBHT)/.79
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.
- The Preliminary Market US PMI for January is estimated to rise to 55.0 versus 54.4 in December.
- The House Price Index for November is estimated to rise +.4% versus a +.5% gain in October.
- 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.
- 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.
- None of note
- The Eurozone PMI, 10Y TIPS auction, weekly EIA natural gas inventory report and the weekly Bloomberg Consumer Comfort Index could also impact trading today.
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