Bloomberg:
- Greece Wants Special ECB Help While Going ‘Cold Turkey’ on Aid. Greece is counting on the European Central Bank to maintain a financial lifeline while the week-old government in Athens negotiates new terms on its international bailout package, Finance Minister Yanis Varoufakis said. While the country is “desperate” for funds, it will forgo further disbursements of emergency aid until negotiating a “new social contract” with its creditors, he said. He set an end-May deadline for reaching a deal on a revamped rescue with the euro area and the International Monetary Fund.
- Merkel Said to Avoid Meeting Tsipras, Doubt Tax Plans. German Chancellor Angela Merkel wants to avoid being drawn into a direct confrontation with Greek Premier Alexis Tsipras and is unlikely to agree to a bilateral meeting with him at a European Union summit next week, a German government official said. The chancellor’s goal is to show Tsipras that he is isolated in Europe, according to the official, who asked not to be named because the discussions are private. What’s more, she sees little room for maneuver to provide further support for Greece and is skeptical about Tsipras’s claims that he can raise revenue by cutting corruption and increasing taxes on the rich, the official added.
- Greek markets plunge as SYRIZA digs in on challenge to austerity. Greece’s government bonds and stock market plunged in the week after the election of Syriza, the political party whose vow to renegotiate debt obligations and roll back austerity measures has sparked an investor flight. Greek 10-year yields rose 276 basis points, or 2.76 percentage points, to 11.17 percent as of 4:55 p.m. London time Friday, the biggest weekly increase since May 2012. The 2 percent security due in February 2025 fell 12.65, or 126.50 euros per 1,000-euro ($1,129) face amount, to 54.465.
- Poroshenko Urges Ukraine Cease-Fire After Minsk Peace Talks Fail. Ukrainian President Petro Poroshenko called for a truce in the eastern European country after peace talks broke down and violence escalated. Poroshenko, German Chancellor Angela Merkel and French President Francois Hollande insisted during a telephone conversation Sunday on “an unconditional and immediate cease-fire as the conflict is escalating and the number of civilian casualties is growing,” according to a statement on the Ukrainian leader’s website.
- ECB Bond-Buying Plan Has Investors Questioning How It All Works. Mario Draghi’s trillion-euro puzzle is missing some key pieces. When the European Central Bank president announced a program on Jan. 22 to buy 60 billion euros ($68 billion) of assets a month for at least 19 months to avert deflation, he surprised investors with the size of the stimulus. He also provided more details than anticipated. Yet analysts poring over the ECB’s statements are finding that several critical points remain unclear.
- Podemos Seeks to Restructure Public Sector Debt. Pablo Iglesias, the leader of Spanish anti-austerity party Podemos, pledged to restructure the nation’s debt if he can convert his opinion-poll lead into election victory, following the example of his ally, Greek Prime Minister Alexis Tsipras. European officials need to take heed of Nobel laureates who say that Spain needs to reduce its debt before it can properly revive the economy, Iglesias said.
- Dashed Dreams of Sunac Bailout Sends Kaisa Bonds Lower. Kaisa Group Holdings Ltd.’s dollar bonds slid after Sunac China Holdings Ltd.’s announcement it would buy some of the company’s projects in Shanghai damped speculation the troubled developer might be rescued by its peer.
- Wife of Beheaded Reporter `Proud' He Showed War's Tragedy. The wife of journalist Kenji Goto said she was proud of her husband’s passion for conveying the “tragedies of war” after his beheading by Islamic State. “My family and I are devastated by the news of Kenji’s death,” Rinko wrote in a statement published by the Rory Peck Trust, a U.K. group that supports freelance journalists. “I remain extremely proud of my husband who reported the plight of people in conflict areas.”
- China’s Stocks Fall Most in Two Weeks on Manufacturing, Minsheng. China’s stocks fell the most in two weeks after an official manufacturing gauge signaled the first contraction in more than two years and China Minsheng Banking Corp.’s President Mao Xiaofeng resigned. China Minsheng led declines for financial companies, sliding 4.5 percent after Caixin magazine reported that Mao is being investigated by authorities. China Railway Construction Corp. and Air China Ltd. dropped more than 4 percent after the government’s Purchasing Managers’ Index declined to 49.8 last month from 50.1 in December. The nation’s benchmark money-market rates jumped for a fourth day after the securities regulator approved 24 initial public offerings. The Shanghai Composite Index slid 1.9 percent to 3,147.99 at 9:37 a.m. The gauge has fallen 6.8 percent over the past five days as the government stepped up scrutiny of margin lending, while the factory data add to concern the economy is weakening.
- Asia Stocks Drop as China PMIs Miss; Aussie Bonds Advance. Asian stocks slumped, with the regional benchmark index heading for its longest losing streak in four months, as Chinese manufacturing gauges signaled contraction. Crude oil retreated and Australian bond yields slid to records. The MSCI Asia Pacific Index lost 0.4 percent by 11:46 a.m. in Tokyo, as the Hang Seng China Enterprises Index declined 1.7 percent.
- Dollar Rises 7th Month as Global Easing Burnishes U.S. Assets. The dollar pushed its winning streak to seven straight months for the first time in a decade as a wave of easing by the world’s major central banks enhanced the appeal of U.S. assets. The euro posted its biggest monthly decline since September 2011 after the European Central Bank’s announcement of sovereign-bond purchases on Jan. 22. Russia’s ruble plunged after an unexpected interest-rate cut and Canadian dollar fell to an almost six-year low. Treasuries had the best January in 27 years. The U.S. unemployment rate is forecast to remain at a more than six-year low before the Feb. 6 report as the Federal Reserve looks to tighten monetary policy.
- Hedge-Fund Bulls Betting Most on Gold in Two Years: Commodities. Hedge funds are the most bullish on gold in more than two years, betting the metal’s allure will strengthen as slowing economies in Europe and Asia threaten U.S. expansion. Speculators increased their net-long position by 80 percent this year, U.S. government data show. The U.S. economy expanded at a slower-than-forecast pace in the fourth quarter and Federal Reserve officials acknowledged global risks at the end of their policy meeting last week.
- Obama Said to Seek 19% Global Minimum Tax to Aid Road Fund. President Barack Obama will propose that U.S.-based companies pay a minimum 19 percent tax on their future foreign earnings, capturing profits that are now often beyond the government’s reach. Obama will also seek a 14 percent mandatory tax on about $2 trillion in stockpiled offshore profits, said two people familiar with his budget proposals, declining to be named because the document won’t be made public until Feb. 2. Companies would pay that tax regardless of whether they bring the money back to the U.S., the two said, creating a revenue stream the president would use to pay for roads, bridges and other infrastructure projects.
- Oil Workers in U.S. on First Large-Scale Strike Since 1980. The United Steelworkers union, which represents employees at more than 200 U.S. oil refineries, terminals, pipelines and chemical plants, began a strike at nine sites on Sunday, the biggest walkout called since 1980. The USW started the work stoppage after failing to reach agreement on a labor contract that expired Sunday, saying in a statement that it “had no choice.” The union rejected five contract offers made by Royal Dutch Shell Plc on behalf of oil companies including Exxon Mobil Corp. and Chevron Corp. since negotiations began on Jan. 21.
- Walker Surging in Iowa Poll as Bush Struggles. Wisconsin Governor Scott Walker is surging, former Florida Governor Jeb Bush is an also-ran and former Secretary of State Hillary Clinton is dominating in a new poll of Iowans likely to vote in the nation's first presidential nominating contest. The Bloomberg Politics/Des Moines Register Iowa Poll, taken Monday through Thursday, shows Walker leading a wide-open Republican race with 15 percent, up from just 4 percent in the same poll in October. Senator Rand Paul of Kentucky was at 14 percent and former Arkansas Governor Mike Huckabee, who won the Iowa caucuses in 2008, stood at 10 percent. Bush trailed with 8 percent and increasingly is viewed negatively by likely Republican caucus-goers.
- Death Toll Mounts as Ukraine Cease-Fire Talks Break Down. Kiev Says It Expects Surge in Fighting As Russia Sends New Convoy Into Ukraine. Cease-fire talks broke down between Ukraine’s government and Russian-backed rebels while Kiev reported 28 soldiers killed over the weekend in some of the deadliest fighting since a tentative peace deal was signed in September. Artillery duels around a government-held railway hub of Debaltseve in eastern Ukraine squelched hopes to stem a return to full-scale fighting. Both sides accused the other of shelling civilian areas Sunday.
- The Alarming Thing About Climate Alarmism. Exaggerated, worst-case claims result in bad policy and they ignore a wealth of encouraging data. It is an indisputable fact that carbon emissions are rising—and faster than most scientists predicted. But many climate-change alarmists seem to claim that all climate change is worse than expected. This ignores that much of the data are actually encouraging. The latest study from the United Nations Intergovernmental Panel on Climate Change found that in the previous 15 years temperatures had risen 0.09 degrees Fahrenheit.
MarketWatch.com:
- Americans are failing to pump gas-price savings back into the economy. Americans are taking the money they are saving at the gas pump and socking it away, a sign of consumers’ persistent caution even when presented with an unexpected windfall. This newfound commitment to frugality was illustrated this past week when the nation’s biggest payment-card companies said they aren’t seeing evidence consumers are putting their gasoline savings toward discretionary items like travel, home renovations and electronics.
CNBC:
- Spain's anti-austerity Podemos stages show of force before elections. Tens of thousands marched in Madrid on Saturday in the biggest show of support yet for Spanish anti-austerity party Podemos, whose policies and surging pre-election popularity have drawn comparisons with Greece's new Syriza rulers. Crowds chanted "yes we can" or "tic tac tic tac" to suggest the clock was ticking for Spain's scandal-ridden political elite. Many waved Greek and Republican flags and banners reading "the change is now" or "Pablo president".
- Department of Justice probing Moody's pre crisis mortgage ratings: WSJ. Moody's Investors Service is under investigation by the U.S. Justice Department for its actions in advance of the 2008 financial crisis, the Wall Street Journal reported on Sunday, with regulators probing why it issued favorable ratings to mortgage deals that ultimately went bust.
Zero Hedge:
- "We Can't Do This Forever," Fed Admits "Market Will Overwhelm Us". The market forces are going to overwhelm us. We’re not going to be able to hold the line anymore. And then you get that rapid snapback in premiums as the market realizes that central banks can’t do this forever. And that’s going to cause volatility and disruption.
Business Insider:
Financial Times:
Telegraph:- Ukraine appeals for military help in fight with pro-Russian rebels. Ukraine has appealed for urgent international military assistance to combat an “electronic warfare” offensive, which it said is giving pro-Russian rebels a critical advantage in the worsening conflict. Western nations have so far rebuffed Kiev’s calls for direct military assistance in the fight against Moscow-backed separatists in the east of the country.
- Eurozone alarm grows over Greek bailout brinkmanship. Eurozone officials are increasingly worried that Greece’s brinkmanship over its bailout will plunge the country into financial chaos after its finance minister said on Sunday that it would take up to four months to agree a “new contract” with creditors.
- Europe's creditors play with 'political fire' in pushing Greece to the brink. "The creation of the euro was a terrible mistake but breaking it up would be an even bigger mistake. Anything could happen," warns former IMF bail-out chief.
- Schaeuble Warns Tsipras Against a Debt Cut. German Finance Minister Wolfgang Schaeuble says Greek govt should be wary of stocking further discussion about a possible debt cut, citing an interview. Rejects Greek demands for debt forgiveness. Warns against allowing the ECB bond buying program to ease reform pressure in Europe.
- Bundesbank's Nagel Warns Markets Growing Opaque. Financial markets are becoming increasingly fragmented and less democratic, especially as large banks resort to using dark pools, or private trading venues, citing Bundesbank board member Joachim Nagel as saying in Munich.
- None of note
- Asian indices are -.75% to +.50% on average.
- Asia Ex-Japan Investment Grade CDS Index 113.0 +3.0 basis points.
- Asia Pacific Sovereign CDS Index 71.25 +2.25 basis points.
- S&P 500 futures +.23%.
- NASDAQ 100 futures +.17%.
Earnings of Note
Company/Estimate
- (AVY)/.80
- (XOM)/1.34
- (PBI)/.51
- (SYY)/.41
- (TEN)/1.01
- (ADVS)/.37
- (APC)/.85
- (CLF)/.08
- (HIG)/.93
- (OI)/.46
- (RCII)/.61
- (S)/-.24
8:30 am EST
- Personal Income for December is estimated to rise +.2% versus a +.4% gain in November.
- Personal Spending for December is estimated to fall -.2% versus a +.6% gain in November.
- The PCE Core for December is estimated unch. versus unch. in November.
- Final Markit US Manufacturing PMI for January is estimated at 53.7 versus a prior estimate of 53.7.
- Construction Spending for December is estimated to rise +.7% versus a -.3% decline in November.
- ISM Manufacturing for January is estimated to fall to 54.5 versus 55.5 in December.
- ISM Price Paid for January is estimated to rise to 39.8 versus 38.5 in December.
- None of note
- The Eurozone PMI report, UK PMI report, RBA rate decision and the Fed Vice Chair of Atlanta Bank speaking could also impact trading today.
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