Bloomberg:
- China’s Credit Growth Slows. China’s broadest measure of new credit fell in December while money-supply growth and new yuan loans trailed estimates amid a cash crunch and government efforts to curb speculative lending. Aggregate financing was 1.23 trillion yuan ($204 billion), the People’s Bank of China said today in Beijing. That compared with 1.63 trillion yuan a year earlier. China’s foreign-exchange reserves, the world’s largest, rose to a record $3.82 trillion at the end of December from September’s $3.66 trillion. A record decline in new credit in the second half is set to limit the pace of economic expansion this year as policy makers focus on controlling financial risks and implementing the broadest reforms since the 1990s. China’s debt buildup has evoked comparisons to Japan before its lost decade and the run-up to the Asian financial crisis.
- China Stocks Drop as Financial, Utility Companies Lead Retreat. China’s stocks fell, dragged down by financial and utility companies. Data today showed new bank loans and money supply trailed economists’ estimates, while the government’s broadest measure of credit beat projections. Industrial & Commercial Bank of China Ltd. and Huaxia Bank Co. slid at least 0.9 pecent to pace declines for financial companies. Great Wall Motor Co., the biggest maker of sport-utility vehicles, dropped 1.9 percent, extending losses after it delayed the introduction of a model. Anhui Conch Cement Co. (600585), China’s biggest cement maker, climbed 2.3 percent after it estimated profit increased 50 percent last year. The Shanghai Composite Index (SHCOMP) slipped 0.4 percent to 2,018.17 as of 10:19 a.m.
- Asian Stocks Rebound as Yen Drop Fuels Japan; Won Falls. Asian stocks rose, rebounding from the benchmark index’s biggest drop since September, and the dollar appreciated on optimism the global economy is strengthening. Gold fell for a second day. The MSCI Asia Pacific Index gained 0.4 percent at 10:56 a.m. in Tokyo, following yesterday’s 1.5 percent tumble.
- Hollande Faces Investors Deserting French Debt: Euro Credit. President Francois Hollande’s surest supporters since taking office have been buyers of French bonds. Some of them are now deserting the country's debt. The French government debt auction last week drew the weakest demand in a decade as investors piled into Spanish and Italian securities. The yield on France’s benchmark 10-year bonds is at 2.5 percent now from a record low of 1.74 percent in April last year. French and Belgian bonds are the worst performers among the euro region’s major issuers this year.
- Firms Tripling Junk Returns Lure Most Since '07: Credit Markets. Firms that use borrowed money to lend to the smallest and riskiest companies are attracting cash at the fastest pace since before the crisis, wooing buyers with returns that are triple those of the broader junk-debt market. Investors from retirees to wealthy individuals plowed $4.1 billion into publicly traded business development corporations last year, the most since 2007, as the firms known as BDCs gained an average 16.4%. The entities are juicing returns by borrowing about 50 cents for every dollar raised from equity investors, up from 36 cents in 2011. After shunning funds that used derivatives and leverage in the years after the 208 credit crisis, buyers are returning to pad yields that reached record lows last year.
- Apple's(AAPL) China Mobile Deal to Extend Beyond Handsets. Millions of iPhones Already Ordered, Says Asian Wireless Carrier. Speaking in a small media briefing to Chinese media and The Wall Street Journal, Apple Chief Executive Tim Cook said he is "incredibly optimistic" about the outcome of the cooperation with the Chinese carrier. "We've gotten to know each other....today is a beginning, and I think there are lots more things our companies can do together in the future," Mr. Cook said.
- The Benghazi Transcripts: Did White House exaggerate Obama's preparation for 9/11 anniversary? On the eve of the terrorist attacks that killed U.S. Ambassador to Libya Christopher Stevens and three other Americans in Benghazi, the Obama White House may have exaggerated the scope and depth of President Obama's preparation for such attacks, newly declassified documents show. On Sept. 10, 2012 -- the day before Al Qaeda-linked terrorists carried out the bloody assault on the U.S. consulate and a related annex in Benghazi -- the White House Press Office issued a press release entitled "Readout of the President's Meeting with Senior Administration Officials on Our Preparedness and Security Posture on the Eleventh Anniversary of September 11th."
Zero Hedge:
- This Won't End Well. (graph)
Washington Post:
- Border-patrol drones being borrowed by other agencies more often than previously known. Federal, state and local law enforcement agencies are increasingly borrowing border-patrol drones for domestic surveillance operations, newly released records show, a harbinger of what is expected to become the commonplace use of unmanned aircraft by police.
- N.S.A. Devises Radio Pathway Into Computers. The National Security Agency has implanted software in nearly 100,000 computers around the world that allows the United States to conduct surveillance on those machines and can also create a digital highway for launching cyberattacks. While most of the software is inserted by gaining access to computer networks, the N.S.A. has increasingly made use of a secret technology that enables it to enter and alter data in computers even if they are not connected to the Internet, according to N.S.A. documents, computer experts and American officials.
- Senate panel to criticize State Dept. over Benghazi response. A report by the Senate Intelligence Committee to be released on Wednesday was expected to criticize the State Department for inadequate security at the U.S. diplomatic post in Benghazi, Libya, when it suffered a deadly attack on September 11, 2012. Sources familiar with the findings said the report, which had bipartisan approval, found that in the previous months U.S. intelligence agencies repeatedly warned about possible attacks in Benghazi, but the State Department paid too little attention.
- Fannie, Freddie watchdog in probe of alleged Wall St front running. A U.S. government watchdog is involved in an investigation of whether bank traders manipulated markets and engaged in front running of orders from Fannie Mae and Freddie Mac in the interest-rate swaps market, according to an FBI intelligence bulletin reviewed by Reuters. Reuters reported on Monday that the FBI had warned regulators and security officers at financial services firms about potential abuse by traders with advance knowledge of large orders submitted by the U.S. government-owned mortgage giants.
- Intel(INTC) shelves cutting-edge Arizona chip factory. Intel Corp, hit by slumping personal computer sales, has put off opening a major chip factory that President Barack Obama once held up as an example of U.S. manufacturing potential.
- China to Curb Coal-Fired Power Projects to Cut Pollution. China won't approve new coal-fired power plan projects in Shanghai, Tianjin, Hebei province, and the Yangtze River and Perarl River deltas in 2014 to curb air pollution.
- None of note
- Asian equity indices are -.25% to +1.0% on average.
- Asia Ex-Japan Investment Grade CDS Index 140.0 unch.
- Asia Pacific Sovereign CDS Index 108.50 +1.0 basis point.
- FTSE-100 futures +.25%.
- S&P 500 futures -.03%.
- NASDAQ 100 futures -.04%.
Earnings of Note
Company/Estimate
- (FAST)/.34
- (BAC)/.27
- (FUL)/.75
- (CSX)/.43
- (KMP)/.73
- (PLXS)/.61
8:30 am EST
- Empire Manufacturing for January is estimated to rise to 3.5 versus .98 in December.
- The Producer Price Index for December is estimated to rise +.4% versus a -.1% decline in November.
- The PPI Ex Food & Energy for December is estimated to rise +.1% versus a +.1% gain in November.
- Bloomberg
consensus estimates call for a weekly crude oil inventory decline of
-673,000 barrels versus a -2,675,000 barrel decline the prior week.
Gasoline supplies are estimated to rise by +2,495,000 barrels versus a
+6,243,000 barrel gain the prior week. Distillate supplies are estimated
to rise by +1,214,000 barrels versus a +5,826,000 barrel gain the prior
week. Finally, Refinery Utilization is estimated to fall by -.31%
versus a -.1% decline the prior week.
- U.S. Fed's Beige Book release.
- (RLI) 2-for-1
- The Fed's Lockhart speaking, Fed's Evans speaking, Eurozone Trade balance, Australia Unemployment, weekly MBA mortgage applications report and the (DPZ) investor day could also impact trading today.
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