Today's Headlines

Bloomberg:

• Brazil 2013 Inflation Exceeds All Estimates and 2012 Level. Brazil’s consumer prices in 2013 exceeded every analyst estimate and accelerated from last year, boosting pressure on the central bank to extend the world’s biggest cycle of raising interest rates. Swap rates increased. Inflation in the year through December as measured by the benchmark IPCA index accelerated to 5.91 percent from 5.84 percent in 2012, the national statistics agency said today in Rio de Janeiro. That was higher than all estimates from 34 economists surveyed by Bloomberg, whose median forecast was for 5.81 percent. Monthly inflation accelerated to 0.92 percent from 0.54 percent in November, also higher than all forecasts and the fastest increase in more than 10 years. 

• Treasuries, Gold Rally as Dollar Drops After Jobs Growth Slows. Treasuries rallied with gold and the dollar retreated after U.S. payrolls rose less than forecast in December, easing concern stimulus cuts would accelerate. The Standard & Poor’s 500 Index fell, extending a yearly loss. The 10-year Treasury yield fell nine basis points to 2.88 percent at 11:38 a.m. in New York. The S&P 500 dropped 0.3 percent. The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 of its major peers, reversed a gain to fall 0.4 percent. Gold futures rose 1.2 percent to $1,243.56 an ounce.

• SAP Fourth-Quarter Software Sales Hurt by Strengthening Euro. SAP AG (SAP), the largest maker of business-management software, reported a decline in software license sales and slowing growth of its Hana data-processing engine, hurt by a strengthening euro.

• European Stocks Advance as Investors Weigh U.S. Payrolls. European stocks climbed, completing their first weekly rally of 2014, as investors weighed data that showed the U.S. unemployment rate unexpectedly fell in December while hiring slowed. Swatch Group AG advanced the most in 11 months after forecasting “dynamic growth” in 2014. Metro AG gained 2.8 percent as a report that was later denied claimed the retailer’s biggest shareholder may push for selling some units. Brenntag AG fell 2.4 percent after UBS AG downgraded the shares. The Stoxx Europe 600 Index advanced 0.5 percent to 329.95 at the close of trading, extending its highest level since May 2008.

• Dollar Drops Versus Major Peers as Jobs Decline Damps Taper Bets. The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 of its major counterparts, decreased 0.5 percent to 1,023.51 at 2:13 p.m. New York time, after earlier rising 0.2 percent to 1,030.38. Yesterday it touched 1,030.42, highest since Sept. 9. The dollar fell 0.8 percent to 104.03 yen after rising to 105.44 on Jan. 2, the strongest since October 2008. The U.S. currency weakened 0.5 percent to $1.3670 per euro. The yen added 0.3 percent to 142.20 per euro.

• Gross Says Fed on Course to End QE Even With Slowing Job Growth. Pacific Investment Management Co.’s Bill Gross, manager of the world’s biggest bond fund, said the Federal Reserve is on course to end its bond buying this year even with job growth at the slowest pace since January 2011. “I do believe that by the end of 2014, the Fed wants to be out,” Gross said in a radio interview.

• VW Said to Favor Tennessee Factory to Build New U.S. SUV. Volkswagen AG (VOW), Europe’s largest carmaker, will add a mid-sized sport-utility vehicle in the U.S. and probably produce it in Chattanooga, Tennessee, two people familiar with the matter said.

• VW Passes GM in China for First Time in Nine Years. Volkswagen AG (VOW) outsold General Motors Co. (GM) in China for the first time in nine years to recapture the lead among foreign automakers in the world’s largest car market. VW’s 2013 deliveries in the country climbed to at least 3.27 million vehicles, according to delivery figures released in the last two days by the German automaker’s VW, Porsche, Audi and Skoda brands. Detroit-based GM said earlier this week that the U.S. automaker sold 3.16 million cars in the country.

CNBC:

• Nasdaq reopens options trading after brief halt. Nasdaq OMX said it has reopened trading at its Nasdaq options market after a brief halt that affected trading in stocks A through M. At approximately 11:42 am ET, Nadsaq OMX experienced an issue with options pricing data that affected one of the exchange group's three U.S. options markets, Nasdaq Options Market (NOM), for trading in symbols A through M.  

• Tesla(TSLA) upgrading wall adapters after garage fire reports.

• Supply squeeze push US 'choice' beef price to new high.

• As bulls run, Deutsche Bank isn't so sure. (video)

ZeroHedge:

• Fed's Lacker Admits "Asset Bubble" - Reluctant To Pop It.

• It's Official: The US Created Less Jobs In 2013 Than 2012. (graph)

• Real Unemployment Rate Of 11.5% Means Difference To Reported Rises To Record. (graph)

• Goldman's(GS) Payrolls Postmortem: Weak Job Report But Fed Still Tapers Another $10 Billion In January.

• Obama To Nominate Former Bank Of Israel Head As Fed Vice Chairman Today. 

• Market Bulls Should Consider These Charts. (graph)

• $292 Million Down The Drain: White House Fires Main Obamacare IT Contractor.

• The Fed Is Playing Global Pump-And-Dump.

ValueWalk:

• Target(TGT) Warns Data Breach Hits Sales, 70 Million People Affected.

Business Insider:

• Eddie Lampert And His Hedge Fund Have Lost Over $290 Million Combined On Sears Since Yesterday.

• US Spooks Worried 'Virtual Osama Bin Laden' Is A Real Threat.

• Elizabeth Warren's Going To Call Out JP Morgan(JPM) CEO Jamie Dimon On TV This Weekend.

• The Most Damning Chart That Shows How Far The Economy Still Has To Recover.

• In Another Bad Sign For Microsoft(MSFT), HP(HPQ) Aims Its New Android PC At The Enterprise.

NY Times:

• Falluja’s Fall Stuns Marines Who Fought There. “I don’t think anyone had the grand illusion that Falluja or Ramadi was going to turn into Disneyland, but none of us thought it was going to fall back to a jihadist insurgency,” he said. “It made me sick to my stomach to have that thrown in our face, everything we fought for so blatantly taken away.” The bloody mission to wrest Falluja from insurgents in November 2004 meant more to the Marines than almost any other battle in the 12 years of war in Iraq and Afghanistan. Many consider it the corps’ biggest and most iconic fight since Vietnam, with nearly 100 Marines and soldiers killed in action and hundreds more wounded.

The Blaze:

• Dad ‘Furious’ After He Switches to Obamacare Only to Find It Didn’t Cover His Children.

Real Clear Markets:

• President Obama's Legacy Of Economic Failure.

Reuters:

• India's industrial output shrinks, trade gap widens. India's economic woes worsened on Friday with a surprise contraction in industrial production and a wider trade deficit, adding to troubles of the ruling alliance as it heads into a tough national election seeking a third term. Production at factories, mines and utilities shrunk for the second straight month in November, by 2.1 percent, data from the Statistics Ministry showed, dragged down by a contraction in consumer goods output. Analysts polled by Reuters had predicted output to grow 1.0 percent. "The November industrial production figures continue to show that the Indian industrial sector remains in recession, with clear evidence that domestic consumption remains weak," wrote Rajiv Biswas, Asia-Pacific chief economist at His.

• For QE cuts, Fed's Bullard not focused on December jobs. A top Federal Reserve official said he is "disinclined" to focus on December's jobs data alone as he considers whether the U.S. central bank should continue to trim bond purchases. 

• Fed's Lacker sees $10 bln taper on table at next meeting. U.S. Federal Reserve policymakers will likely discuss another $10 billion reduction in the monthly pace of bond buying at their next meeting, said a senior Fed official on Friday, who warned against reading too much into a weak jobs report for December. 

• Contrarians bet against European periphery's stocks rally.

Financial Times:

• US subprime car loans return with a bang. Sales of risky pools of securities backed by car loans are accelerating at the start of 2014 as investors snatch up the higher-yielding bonds that were popular in the build-up to the financial crisis. This week alone, about $2bn in deals that bundle car loans made to subprime borrowers have hit the US debt capital markets, following a 20 per cent jump last year to $21.5bn. Demand for the securities is forecast to increase further in 2014, helping push sales to the $25bn mark, according to Deutsche Bank estimates.

TheGuardian:

• Chris Christie was a ticking time bomb as a politician. It was only a matter of time before he blew up. The bridge scandal is just one of many instances where Christie couldn't control his temper. He lacks discipline for higher office.