Bloomberg:
- Japan Current-Account Gap Widens to Record on Weaker Yen. Japan’s current-account deficit widened to a record in November as imports climbed, underscoring challenges for Prime MinisterShinzo Abe as he tries to drive a sustained economic rebound. The 592.8 billion yen ($5.7 billion) shortfall in the widest measure of trade, reported today by the Ministry of Finance in Tokyo, was wider than a median forecast of a 368.9 billion yen deficit in a Bloomberg News survey of 24 economists. Weakness in the yen and extra demand for energy because of nuclear-plant shutdowns are driving up Japan’s import bill, highlighting drags on the recovery that will also include a sales-tax increase in April. A longer-term risk for the nation is any shift to a sustained deficit that would undermine investor confidence in Japanese government debt.
- Great Wall Tumbles After Delaying Haval H8 SUV. Great Wall Motor Co. (2333), China’s biggest sport utility vehicle maker, fell the most in more than five years in Hong Kong trading after delaying its Haval H8 model to address technical deficiencies. Great Wall tumbled 18 percent to HK$32.20 as of 9:31 a.m., the biggest decline since October 2008. Hong Kong’s benchmark Hang Seng Index dropped 1.1 percent. The company’s Shanghai-traded shares fell 9.1 percent.
- Chinese Stocks to Trail World for Fifth Year: Chart of the Day. Chinese stocks may trail global peers for a fifth straight year as higher borrowing costs hurt earnings and a flood of ipos divert funds from existing shares, according to Bank Julius Baer & Co.
- Top Samsung Analyst Predicts Wipeout Will Deepen: Korea Markets. The slump in Samsung Electronics Co. (005930) that wiped out $28 billion of market value in six weeks will deepen as Apple Inc. (AAPL:US) and Chinese rivals take market share in handsets, according to the stock’s most-accurate forecaster.
- Asian Stocks Fall First Time in 3 Days, Pacing U.S. Loss. Asian stocks fell, with the regional benchmark index on course for its first loss in three days as it paced the biggest drop in U.S. stocks since November amid concern over valuations. Great Wall Motor Co., China’s biggest maker of sport utility vehicles, plunged 11 percent in Hong Kong after delaying the introduction of its Haval H8 model for three months to address technical deficiencies. Honda Motor Co. (7267), a Japanese carmaker that gets 47 percent of its sales in North America, lost 3.3 percent. Dainippon Sumitomo Pharma Co. fell 6 percent in Tokyo after the head of its New York-based partner Intercept Pharmaceuticals Inc. said he may need the help of a larger drugmaker to bring a liver-disease treatment to market. The MSCI Asia Pacific Index lost 1 percent to 139.25 as of 12:28 p.m. in Tokyo.
- Rubber Touches Five-Month Low as Chinese Stockpiles Expand. Rubber futures in Tokyo reached a five-month low as stockpiles in China continued expanding, deepening concern that demand from the largest user is slowing. The contract for delivery in June on the Tokyo Commodity Exchange dropped as much as 3.9 percent to 246.4 yen a kilogram ($2,385 a metric ton), the lowest level since Aug. 8, and was at 247.1 yen at 10:14 a.m. local time. Futures extended last week’s 6.6 percent drop, the most since the five days through April 19. Markets in Tokyo were closed yesterday for a holiday.
- Rebar Rises Amid Expectation Chinese Mills Will Cut Production. Steel reinforcement-bar futures climbed in Shanghai amid expectations that Chinese steel mills will continue to cut output to reduce emissions and as demand slows in winter. Rebar for May delivery on the Shanghai Futures Exchange gained as much as 0.7 percent to 3,486 yuan ($577) a metric ton, before trading at 3,473 yuan at 10:41 a.m. local time.
- Fed Said to Release Plan to Limit Banks’ Commodities Activities. The Federal Reserve is poised to take a preliminary step toward limiting banks’ activities with commodities amid Congressional scrutiny, according to three people briefed on the discussions. The Federal Reserve is planning to release a notice seeking information on ways to curb banks’ ownership and trading of some commodities as it tries to cut risk for deposit-taking banks, said the people, who requested anonymity because the talks are private. Regulators and lawmakers have said raw-materials assets could lead to catastrophic losses, collapses and public bailouts.
- ECB Sees Bad-Debt Rules as Threat to Credible Bank Review. The European Central Bank is concerned that national differences in how bad debt is classified could cripple its probe into the health of euro-area banks, according to an internal ECB document. Bad-debt classification practices across Europe show “material differences that, if not considered, would severely affect the consistency and credibility of the exercise,” according to the undated document obtained by Bloomberg News. A person familiar with the text said it was drawn up in late November and contains the ECB’s latest thinking on the subject. An ECB spokeswoman declined to comment.
- Hensarling Seeks More Constraint on Fed’s Emergency Loan Power. The committee chairman, Texas Republican Jeb Hensarling, outlined objections to the Fed’s proposed regulations in a letter today to Fed Chairman Ben S. Bernanke. Fed officials drew up the rules on its emergency lending power to meet requirements of the Dodd-Frank Act intended to prevent bailouts of individual institutions in danger of failing. “Disappointingly, the proposed rule does not provide any real or binding constraints on the Federal Reserve’s discretion to conduct bailouts of failing financial firms,” Hensarling wrote in today’s letter, according to a copy obtained by Bloomberg News.
- Loan Standards Slide to Deepen in CMBS Deals Rush, Moody's Says. Underwriting standards on commercial mortgages packaged into bonds are poised to slide this year as surging sales of the securities allow landlords to pile more debt onto properties, according to Moody's Investors Service.
- Obamacare Customers Skew Older as Young Wait for Shakeout. About 70 percent of Obamacare’s customers are 35 years of age or older, indicating that U.S. health-care overhaul is initially attracting a less healthy population that may drive up insurance premiums. The federal- and state-run insurance exchanges signed up 2.2 million people for private health plans in the three months ended Dec. 28, the U.S. Department of Health and Human Services said in a report released today. About 24 percent were 18- to 34-year-olds, and about one-third were 55 or older.
- Apple(AAPL) Loses Bid to Block Antitrust Monitor in E-Book Case. Apple Inc. (AAPL) lost a bid to stop a monitor appointed in an electronic books price-fixing case from continuing to interview top company officials, including Chief Executive Officer Tim Cook and board member Al Gore, the former U.S. vice president.
- Google(GOOG) Buying Nest for $3.2 Billion to Expand in Devices. Google Inc. (GOOG:US) is buying digital thermostat maker Nest Labs for $3.2 billion as the Internet search company moves deeper into Web-connected devices.
- House, Senate Negotiators Seal $1 Trillion Spending Deal. Controversial EPA, Abortion Riders Dropped. House and Senate negotiators Monday unveiled a $1.012 trillion bill to fund the federal government for the next 8½ months, a compromise that marks a temporary ceasefire in the budget wars that have rocked Congress and the economy in recent years. The compromise restores some of the funding cut last year from domestic programs such as the National Institutes of Health and Head Start, but keeps overall discretionary spending lower than when President Barack Obama took office in 2009, when it totaled $1.013 trillion.
- Thai Protesters Turn Focus to Stock Exchange. Antigovernment Activists Seek to Escalate Efforts After Clogging Central Bangkok. After turning central Bangkok into a flag-waving sea of protest Monday, antigovernment activists now say they are preparing to take their campaign to the next level by seizing Thailand's stock exchange. The protesters' drive to force Prime Minister Yingluck Shinawatra from office and eliminate the influence of her brother, billionaire former leader Thaksin Shinawatra, has been marked by a series of escalating protests, each more ambitious than the last. Monday's rally was touted as a bid to shut down Bangkok for a week or more and reboot Thailand's democracy, this time without the Shinawatra clan in command.
- For-Profit College Probe Expands. State Attorneys General Join CFPB in Review of Lending Practices. The Consumer Financial Protection Bureau and state attorneys general are expanding a probe of for-profit colleges and their student- lending practices, according to government officials and regulatory filings. Kentucky Attorney General Jack Conway, who chairs a group of 32 state attorneys general investigating for-profit colleges, said states are working with the CFPB to ferret out unfair or deceptive student lending and other practices. "I expect in 2014 you'll see action by the CFPB in coordination with states in coming months," Mr. Conway said in an interview.
- Fighting Among Rebels Boosts Syrian Regime. Assad's Forces Benefit From Northern Conflict Between Opposition, al Qaeda-Linked Group. Pro-regime forces have consolidated recent gains in and around the northern city of Aleppo, Syria's economic hub. These forces are also geared up to recapture more territory around the city, in a potential major setback for rebels after 18 months of battles to oust the regime from parts of the city that have remained under its control.
- Ex-Citigroup(C) Executive to Serve as Hedge Fund Chairman. John Havens Was Citi's President in 2011 and 2012.
- Charter Makes Offer for Time Warner Cable. Bid of $37.4 billion Aimed at Bringing Cable Company to the Table.
- America's Dwindling Economic Freedom. Regulation, taxes and debt knock the U.S. out of the world's top 10. (rankings)
- Stocks Crater Most In Over 4 Months. (graph)
Business Insider:
LA Times:
- New Iran agreement includes secret side deal, Tehran official says. Key elements of a new nuclear agreement between Iran and six world powers are contained in an informal, 30-page text not yet publicly acknowledged by Western officials, Iran’s chief negotiator said Monday. When officials from Iran and the world powers announced that they had completed the implementing agreement, they didn’t release the text of the deal, nor did they acknowledge the existence of an informal addendum. In the interview, Araqchi referred to the side agreement using the English word “nonpaper,” a diplomatic term used for an informal side agreement that doesn’t have to be disclosed publicly. The nonpaper deals with such important details as the operation of a joint commission to oversee how the deal is implemented and Iran’s right to continue nuclear research and development during the next several months, he said.
Real Clear Politics:
- Freezing Is the New Warming. Now we can see what they mean when the warmthers say that global warming is supported by an ironclad scientific consensus. The theory is so irrefutable that it's unfalsifiable! Which is to say that it has become a cognitive spaghetti bowl full of ad hoc rationalizations, rather than a genuine scientific hypothesis.
- Japanese stocks tumble as yen hits 4-week high. Asian shares came under pressure on Tuesday, with Japanese stocks tumbling more than 2 percent as the yen hit a four-week high against the dollar after last week's surprisingly weak jobs report raised concerns about the U.S. growth outlook.
- Yum's(YUM) China sales fall short on weakness at Pizza Hut. Yum Brands Inc on Monday said December sales at established restaurants in China, its top market, rose a smaller-than-expected 2 percent after weakness at its Pizza Hut Casual Dining chain weighed on a recovery at KFC, which is recovering from a food safety scare and avian flu worries. Yum's China same-restaurant sales for December included a 5 percent increase at KFC and a 3 percent decline at Pizza Hut. Analysts polled by Consensus Metrix expected same-restaurant sales to rise 6 percent at KFC and 5.7 percent at Pizza Hut.
- Russia May Boost Dividend Tax to 13% From 9%. Dividend tax will be made equal to income tax on salary, citing Deputy Finance Minister Sergei Shatalov.
- China Shouldn't Stop IPO Reform. High prices and other problems with Chinese IPOs shouldn't derail market-oriented reforms after a freeze on IPO approvals was ended, according to a front-page editorial.
- China Faced With 'Unconventional' Security Threats. China faces with "unconventional" security threats from computer network safety, extremist forces, ideology and culture, citing National Defense University professor Gong Fangbin.
RBC:
- Rated (SSYS) Outperform, target $175.
- Rated (DDD) Outperform, target $118.
- Asian equity indices are -1.50% to -.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 140.0 +2.5 basis points.
- Asia Pacific Sovereign CDS Index 107.50 -1.0 basis point.
- FTSE-100 futures -.49%.
- S&P 500 futures +.07%.
- NASDAQ 100 futures +.04%.
Earnings of Note
Company/Estimate
- (JPM)/1.37
- (CBSH)/.71
- (WFC)/.98
- (LLTC)/.50
7:30 am EST
- The NFIB Small Business Optimism Index for December is estimated to rise to 93.1 versus 92.5 in November.
- Retail Sales Advance for December are estimated to rise +.1% versus a +.7% gain in November.
- Retail Sales Ex Autos for December are estimated to rise +.4% versus a +.4% gain in November.
- Retail Sales Ex Autos and Gas for December are estimated to rise +.3% versus a +.6% gain in November.
- The Import Price Index for December is estimated to rise +.4% versus a -.6% decline in November.
- Business Inventories for November are estimated to rise +.3% versus a +.7% gain in October.
- (RLI) 2-for-1
- The Fed's Fisher speaking, Fed's Plosser speaking, UK inflation data, weekly retail sales reports, Needham Growth Conference and the Deutsche Bank Auto Industry Conference could also impact trading today.
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