Tuesday Watch

Weekend Headlines 
Bloomberg:

• Japan Growth Trails Forecasts as Sales-Tax Increase Looms. Japan’s economy grew at less than half the forecast pace in the fourth quarter, underscoring risks to the nation’s recovery as a sales-tax increase looms in April. Gross domestic product expanded an annualized 1 percent from the previous quarter, the Cabinet Office said today in Tokyo, less than the median projection of 2.8 percent in a Bloomberg News survey of 37 economists where the lowest estimate was 1.1 percent. 

• BOJ Boost to Loan Programs Signals Room for More Easing: Economy. The Bank of Japan boosted lending programs while sticking with a plan for unprecedented asset purchases, as the central bank tries to support a recovery and stamp out 15 years of deflation. The BOJ doubled a funding tool to 7 trillion yen ($68 billion) and said individual banks could borrow twice as much low-interest money as previously under a second facility. It left unchanged a pledge to expand the monetary base by 60 trillion to 70 trillion yen per year.

• BOJ Said to Consider Refraining From 2015 Monetary-Base Forecast. The Bank of Japan is considering refraining from issuing a monetary-base forecast for 2015 to avoid signaling a commitment to its unprecedented easing for a specific time period, according to people with knowledge of the matter. In April last year, the BOJ said the monetary base will rise to 270 trillion yen ($2.65 trillion) by the end of 2014. Now, the central bank may avoid issuing any update for coming years, said the people, who asked not to be named because the talks were private. The BOJ is forecast to leave policy unchanged at a meeting ending tomorrow.

• Asian Stocks Advance for Third Day Before BOJ Statement. Asian stocks rose, with the regional benchmark index poised for a three-week high, as the yen weakened before the Bank of Japan issues a policy statement, boosting the outlook for the nation’s exporters. Nissan Motor Co. (7201), a carmaker that gets about 80 percent of sales outside Japan, increased 1.6 percent in Tokyo. BHP Billiton Ltd., the world’s biggest mining company, rose 2 percent in Sydney after first-half profit jumped more than analysts expected. Coca-Cola Amatil Ltd. dropped 6 percent after Australia’s largest drinks maker reported full-year profit that missed estimates. The MSCI Asia Pacific Index added 0.5 percent to 136.93 as of 9:39 a.m. in Tokyo, heading for its highest close since Jan. 24.

• Gold Rises to 3-Month High; Silver Has Longest Rally Since ’68. Gold for immediate delivery rose 1 percent to $1,331.50 at 4:32 p.m. New York time. Earlier, the price reached $1,337.93, the highest since Oct. 31. 

• Natural Gas Rises to Nine-Day High as Storm Crosses U.S. Midwest. Futures for March delivery rose 23.7 cents, or 4.5 percent, to $5.451 per million British thermal units at the 1:15 p.m. close of electronic trading on the New York Mercantile Exchange. Volume was 80 percent below the 100-day average. Prices are up 29 percent this year.

• Hedge Funds Raise Gold Bull Bets as Paulson Holds: Commodities. Hedge funds raised bullish gold wagers to a three-month high as signs of slowing U.S. economic growth spurred demand for haven assets. Billionaire John Paulson maintained his bullion holdings last quarter. The net-long position climbed 17 percent to 69,291 futures and options in the week ended Feb. 11, U.S. Commodity Futures Trading Commission data show. Long wagers rose 8.8 percent, the most since March. Net-bullish holdings across 18 U.S.-traded commodities rose 18 percent to 1.07 million contracts, the highest since October 2012, led by silver and coffee. 

• Ibovespa Falls as Natura Drops Amid Brazil Growth Concern. The Ibovespa dropped for the third time in four sessions as companies that sell domestically including cosmetics seller Natura Cosmeticos SA sank after analysts cut Brazil’s economic growth estimates. BR Malls Participacoes led declines among real estate stocks, while utility Centrais Eletricas Brasileiras SA fell the most on the benchmark gauge. Homebuilder Brookfield Incorporacoes SA (BISA3) rallied after saying its corporate parent will offer to buy all outstanding shares for as much as 1.60 reais each to take it private. The Ibovespa fell 1.3 percent to 47,576.33 at the close of trading in Sao Paulo, with 63 stocks lower and eight higher.

Wall Street Journal:

• Suspected Islamic Militants Kill at Least 90 in Nigerian Village. Suspected Islamic militants stormed a village along Nigeria's mountainous border with Cameroon, a local official and a witness said Sunday, killing at least 90 people. Several hundred fighters screaming "Allah akbar," or "God is great," ran through the village of Izge Saturday night, said local resident Ibrahim Musa. The town is a predominately Christian enclave in Nigeria's largely Muslim northeast, the homeland to Islamist insurgency Boko Haram. "They started shooting sporadically, killing everyone on sight," said Mr. Musa, who fled into the surrounding countryside. When he returned Sunday, he counted 90 bodies, "littered everywhere in our town." 

• Charges Open New Front in Libor Probe. Investigation Into Alleged Rigging of Libor Broadens. British prosecutors filed criminal charges against three former bank traders for alleged fraud, opening a new front in a global investigation into alleged rigging of benchmark interest rates, with more charges in the pipeline.

• Bitcoin’s Crisis Is Turning Point for Currency.

• Stephens: Climate Prophets and Profiteers. The most cynical part of John Kerry's climate-change speech. 

MarketWatch.com:

• Soros doubles a bearish bet on the S&P 500, to the tune of $1.3 billion.

Fox News:

• US Navy ready to deploy laser system this summer; rail guns aren't far behind. Some of the Navy's futuristic weapons sound like something out of "Star Wars," with lasers designed to shoot down aerial drones and electric guns that fire projectiles at hypersonic speeds. That future is now.

CNBC:

• Carmakers may be on the verge of an incentives war. When General Motors announced it would offer more than $7,000 in discounts on some of its big Silverado pickups, the news sent many shoppers rushing to showrooms. But it also sent shivers racing down the spines of automotive investors increasingly worried that slowing sales may trigger the sort of incentive wars that trashed industry profits during the years leading up to the recent recession.

Zero Hedge:

• Chinese Capital Markets Frozen As Bad Loans Soar To Highest Since Crisis. (graph)

• 5 Things To Ponder: Cash, QE, Investing & 1929.

• Western Banks And China: "Interesting Times" Are Coming.

• Bank Of America(BAC) Asks "Do Obamacare Costs Exceed The Benefits?".

• The Chart That Really Has The Fed Worried.

• Don’t Be Fooled: North Korea Is Getting Ready To Provoke.

• The True State Of The Economy: Record Number Of College Graduates Live In Their Parents' Basement.

• 20 Signs That The Global Economic Crisis Is Starting To Catch Fire.

• US Organized Labor Humiliated After Volkswagen's Tennessee Workers Vote Against Unionizing.

• Spot The Real Liquidity Bubble. (graph)

• Felix Zulauf Warns Of "Another Deflationary Episode" As "The Mother Of All Bubbles" Pops. (graph)

• Dan Ariely: Why Humans Are Hard-Wired To Create Asset Bubbles.

• UNREST IS SPREADING: Bosnia Hasn't Been This Chaotic Since The War.

• U.S. Plunges To 46th In World Press Freedom Index... Below Romania.

• How Healthy Is The Real Estate Market?

• "Off The Charts" How China Fooled The World.

• China Folds On Reforms - Bails Out 2nd Shadow-Banking Default After "Last Drop Of Blood" Threats.

• 5 Years Later - What Did Obama's "American Recovery & Reinvestment Act" Achieve?

• Chinese Iron Ore Stockpiles Rise To Record As End Demand Plummets. (graph)

Business Insider:

• Russia And Germany Butt Heads Over 'Powderkeg' Ukraine.

• One Little Stat From January Has Economists Worried The Bad Data Is About More Than Just Weather.

• Foreclosures Suddenly Jump 57% in California (And Soar In Much Of The Country). (graph)

• UNREST IS SPREADING: Bosnia Hasn't Been This Chaotic Since The War.

• ART CASHIN: Central Banks Have Built Up 'A Very, Very Dangerous Situation'.

• These Maps Show The Wildly Overlapping Territory Claims That Could Lead To Conflict In The South China Sea.

LA Times:

• Fed district chief expects central bank's stimulus cuts to continue. Despite recent soft jobs data, John C. Williams, president of the Federal Reserve Bank of San Francisco, sees positive momentum in the economy and no need to stop tapering the Fed's stimulus program.

San Francisco Chronicle:

• Apple(AAPL) exploring cars, medical devices to reignite growth.

Reuters:

• Weak spending shows Japanese consumer doubts about Abenomics. Japanese consumers ended last year with a whimper instead of the bang many had expected, reinforcing a nagging worry that the prime minister's aggressive policies are struggling to find support among those key to its success. Economic growth figures on Monday added to evidence that concern about job security is holding back consumers, trumping the urge to spend before a rise in the national sales tax rate in April makes goods more expensive.

• Economists cut Brazil 2014 growth view to 1.79 pct. Economists slashed their forecasts for Brazil's economic growth in 2014 to 1.79 percent from 1.90 percent previously, a weekly central bank survey showed on Monday.

Financial Times:

• Bankers play funding trick with subprime car loan deals. Pre-funding is like spending winnings before cards have been dealt. While millions of Americans have fallen out of love with their cars, Wall Street has been swept off its feet by loans used to finance sales of Volkswagens, Hondas and Fords. Car ownership rates in the US have slumped to their lowest in more than 15 years – at the same time that sales of auto asset-backed securities (auto ABS) – or bonds backed by loans that fund car purchases – have surged.

Telegraph:

• Turkey in eye of emerging market storm as everything goes wrong at once. Hedge funds close in on countries with the worst current account profiles and Turkey is looking naked with a deficit of 7.6pc of GDP.

China Securities Journal:

• Chinese Govt Guarantee on Trusts to Harm Pricing. Chinese governments and banks shouldn't continue to tolerate trust products that have "no risk" because of implicit guarantees, according to a front-page commentary. Government guarantees on off-balance-sheet wealth management products from state-owned companies and banks will harm market pricing, according to the commentary.

Weekend Recommendations

Barron's:

• Bullish commentary on (EPL), (CVS), (SJM), (NPO) and (AAL).

Night Trading

• Asian indices are -.25% to +1.0% on average.

• Asia Ex-Japan Investment Grade CDS Index 132.0 unch.

• Asia Pacific Sovereign CDS Index 101.75 -2.0 basis points.

• FTSE-100 futures +.15%.

• S&P 500 futures +.22%.

• NASDAQ 100 futures +.24%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (WWW)/.20

• (GPC)/.91

• (CPLA)/.77

• (FDP)/-.16

• (DUK)/.95

• (MDT)/.91

• (KO)/.46

• (OII)/.84

• (PNRA)/1.94

• (FLS)/1.05

• (TEX)

• (CRMT)/.70

• (FLR)/.98

• (CF)/4.41

• (ADI)/.49

Economic Releases 
8:30 am EST

• Empire Manufacturing for February is estimated to fall to 9.0 versus 12.51 in January.

9:00 am EST

• Net Long-Term TIC Flows for December are estimated to rise to $30.0B versus -$29.3B in November.
  

10:00 am EST

• The NAHB Housing Market Index for February is estimated at 56 versus 56 in January. 

Upcoming Splits

• (ANDE) 3-for-2

• (OTEX) 2-for-1

Other Potential Market Movers

• The BoJ decision, Reserve Bank of Australia Minutes, German ZEW Index and UK Inflation data could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by consumer and industrial shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the week.

Weekly Outlook

Wall St. Week Ahead by Reuters.
Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week modestly lower on rising global growth fears, increasing emerging markets debt angst, technical selling, a stronger yen and profit-taking. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 50% net long heading into the week.

Market Week in Review

S&P 500 1,838.63 +2.32%*




The Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Indices

• S&P 500 1,838.63 +2.32%

• DJIA 16,154.33 +2.28%

• NASDAQ 4,244.02 +2.86%

• Russell 2000 1,149.21 +2.92%

• S&P 500 High Beta 30.54 +2.48%

• Wilshire 5000 19,355.70 +2.43%

• Russell 1000 Growth 866.31 +2.38%

• Russell 1000 Value 920.48 +2.40%

• S&P 500 Consumer Staples 429.19 +2.03%

• Morgan Stanley Cyclical 1,463.66 +2.78%

• Morgan Stanley Technology 922.82 +2.55%

• Transports 7,306.69 +.89%

• Utilities 519.51 +3.1%

• Bloomberg European Bank/Financial Services 111.39 +1.48%

• MSCI Emerging Markets 39.43 +2.1%

• HFRX Equity Hedge 1,167.91 +2.1%

• HFRX Equity Market Neutral 961.21 +.09%

Sentiment/Internals

• NYSE Cumulative A/D Line 205,116 +2.53%

• Bloomberg New Highs-Lows Index 376 +390

• Bloomberg Crude Oil % Bulls 29.41 +8.81%

• CFTC Oil Net Speculative Position 382,334 +6.14%

• CFTC Oil Total Open Interest 1,646,415 +5.46%

• Total Put/Call .82 +1.23%

• OEX Put/Call .70 -16.67%

• ISE Sentiment 96.0 -24.41%

• NYSE Arms 1.0 +36.99%

• Volatility(VIX) 13.57 -11.25%

• S&P 500 Implied Correlation 50.80 -3.75%

• G7 Currency Volatility (VXY) 7.79 -.76%

• Emerging Markets Currency Volatility (EM-VXY) 8.65 -7.59%

• Smart Money Flow Index 11,796.86 +2.76%

• ICI Money Mkt Mutual Fund Assets $2.713 Trillion +.30%

• ICI US Equity Weekly Net New Cash Flow -$1.564 Billion

• AAII % Bulls 40.2 +43.9%
• AAII % Bears 27.3 -24.9%

Futures Spot Prices

• CRB Index 293.24 +1.19%

• Crude Oil 100.30 +.16%

• Reformulated Gasoline 280.53 +2.23%

• Natural Gas 5.21 +9.22%

• Heating Oil 307.82 +1.05%

• Gold 1,318.60 +4.17%

• Bloomberg Base Metals Index 190.73 +.55%

• Copper 326.45 +.57%

• US No. 1 Heavy Melt Scrap Steel 397.73 USD/Ton -.32%

• China Iron Ore Spot 123.20 USD/Ton +1.90%

• Lumber 362.40 +2.29%

• UBS-Bloomberg Agriculture 1,383.67 +.85%

Economy

• ECRI Weekly Leading Economic Index Growth Rate 3.3% -90 basis points

• Philly Fed ADS Real-Time Business Conditions Index -.1192 +2.85%

• S&P 500 Blended Forward 12 Months Mean EPS Estimate 120.35 +.02%

• Citi US Economic Surprise Index 19.70 -3.9 points

• Citi Emerging Markets Economic Surprise Index 20.10 +9.7 points

• Fed Fund Futures imply 32.0% chance of no change, 68.0% chance of 25 basis point cut on 3/19

• US Dollar Index 80.14 -.66%

• Euro/Yen Carry Return Index 145.42 -.08%

• Yield Curve 243.0 +5 basis points

• 10-Year US Treasury Yield 2.74% +6 basis points

• Federal Reserve's Balance Sheet $4.077 Trillion +.25%

• U.S. Sovereign Debt Credit Default Swap 27.17 -8.76%

• Illinois Municipal Debt Credit Default Swap 152.0 -2.79%

• Western Europe Sovereign Debt Credit Default Swap Index 54.0 +1.89%

• Asia Pacific Sovereign Debt Credit Default Swap Index 105.17 -5.29%
  

• Emerging Markets Sovereign Debt CDS Index 270.0 +3.85%
  

• Israel Sovereign Debt Credit Default Swap 93.50 -2.83%

• South Korea Sovereign Debt Credit Default Swap 67.0 -5.57%

• China Blended Corporate Spread Index 354.44 -2.06%

• 10-Year TIPS Spread 2.17% unch.
  

• TED Spread 22.5 +7.25 basis points

• 2-Year Swap Spread 13.25 +1.0 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -5.25 -.5 basis point

• N. America Investment Grade Credit Default Swap Index 64.25 -5.89%
  

• European Financial Sector Credit Default Swap Index 88.29 -5.87%
  

• Emerging Markets Credit Default Swap Index 329.27 +2.57%
  

• CMBS AAA Super Senior 10-Year Treasury Spread  to Swaps 100.0 -10.0 basis points

• M1 Money Supply $2.795 Trillion +4.07%

• Commercial Paper Outstanding 991.0 +.10%

• 4-Week Moving Average of Jobless Claims 336,800 +2,800

• Continuing Claims Unemployment Rate 2.3% unch.

• Average 30-Year Mortgage Rate 4.28% +5 basis points

• Weekly Mortgage Applications 397.20 -1.97%

• Bloomberg Consumer Comfort -30.7 +2.4 points

• Weekly Retail Sales +2.80% -20 basis points

• Nationwide Gas $3.34/gallon +.07/gallon

• Baltic Dry Index 1,097 +.55%

• China (Export) Containerized Freight Index 1,170.59 +.49%

• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 37.50 +25.0%

• Rail Freight Carloads 246,114 -.40%

Best Performing Style

• Small-Cap Value +3.1%

Worst Performing Style

• Large-Cap Growth +2.4%

Leading Sectors

• Gold & Silver +10.6%

• Computer Hardware +6.8%

• Biotech +4.7%

• Semis +4.4%

• Hospitals +3.7%

Lagging Sectors

• Restaurants +1.0% 

• Retail +.7%

• Road & Rail +.5%

• Homebuilders +.1%

• Oil Tankers -.6%

Weekly High-Volume Stock Gainers (40)

• RTRX, LGND, SUPX, FPRX, MRIN, LCI, CADX, MODN, GTT, MPAA, DWCH, TRIP, CTRL, FSL, KFRC, TAHO, SN, SCOR, LVNTA, ACO, OPHT, OUTR, IRBT, SALE, UVV, CAP, AAN, CYNO, PHH, NEWP, AFSI, NX, ZIGO, TWC, EXL, CNA, RKUS, KS, WCN and CLFD

Weekly High-Volume Stock Losers (17)

• CHTR, CAB, WCG, EEFT, DF, ECHO, BGS, CI, MDCO, BNNY, EGOV, RAX, ITRI, LNKD, NSP, RLOC and BLOX

Weekly Charts
ETFs

• High-Volume Gainers

• High-Volume Losers

Stocks

• High-Volume Gainers

• High-Volume Losers

*5-Day Change

Stocks Rising into Final Hour on Central Bank Hopes, Short-Covering, Less Eurozone Debt Angst, Metals & Mining/Healthcare Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Slightly Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Slightly Below Average

• Market Leading Stocks: Underperforming

Equity Investor Angst:

• Volatility(VIX) 13.52 -4.38%

• Euro/Yen Carry Return Index 145.57 -.15%

• Emerging Markets Currency Volatility(VXY) 8.65 -2.59%

• S&P 500 Implied Correlation 50.64 -1.92%

• ISE Sentiment Index 118.0 +18.0%

• Total Put/Call .82 +3.80%

• NYSE Arms .96 +6.77% 

Credit Investor Angst:

• North American Investment Grade CDS Index 63.51 -1.57%

• European Financial Sector CDS Index 88.29 -2.89%

• Western Europe Sovereign Debt CDS Index 54.0 unch.

• Asia Pacific Sovereign Debt CDS Index 105.47 -2.53%

• Emerging Market CDS Index 331.07 +4.84%

• China Blended Corporate Spread Index 354.44 +.16%

• 2-Year Swap Spread 13.25 +.25 basis point

• TED Spread 22.50 +1.5 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -5.25 +.5 basis point

Economic Gauges:

• 3-Month T-Bill Yield .01% -2.0 basis points

• Yield Curve 243.0 +1.0 basis point

• China Import Iron Ore Spot $123.20/Metric Tonne +.98%

• Citi US Economic Surprise Index 19.70 -3.4 points

• Citi Emerging Markets Economic Surprise Index 20.10 +.2 point

• 10-Year TIPS Spread 2.17 -2.0 basis points

Overseas Futures:

• Nikkei Futures: Indicating +157 open in Japan

• DAX Futures: Indicating +13 open in Germany

Portfolio: 

• Slightly Lower: On losses in my biotech sector longs and emerging markets shorts

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges, then added them back

• Market Exposure: 50% Net Long

Today's Headlines

Bloomberg:

• State Bank of India Shares Drop as Profit Falls on Defaults. State Bank of India shares dropped to the lowest in five months after the country’s largest lender posted a bigger decline in third-quarter profit than analysts had estimated amid rising bad loans. Net income fell 34 percent to 22.3 billion rupees ($359 million), or 32.66 rupees a share, for the three months ended Dec. 31, from 34 billion rupees, or 50.61 rupees, a year earlier, the Mumbai-based lender said in an exchange filing today. The lowest profit in nine quarters missed the 25.2 billion-rupee median of 38 estimates compiled by Bloomberg. 

• Russia Holds Rate as Ruble Drop Compounds Inflation Above Target. Russia’s central bank refrained from cutting borrowing costs for a 17th month as the ruble’s record drop frustrates efforts to relax monetary policy. The one-week auction rate, the benchmark introduced in September, was kept at 5.5 percent at a meeting today, Bank Rossii in Moscow said in a website statement. That matched the forecasts of all 22 economists in a Bloomberg survey. The central bank said it “will be ready” to tighten policy if inflation risks worsen and the ruble depreciates further.

• Obama Bid for Russia Reset Slips Amid Cold War Iciness. If mounting U.S. frustration with Russia wasn’t clear enough after President Barack Obama blamed Moscow on Feb. 11 for the starvation of Syrian civilians, this week offered plenty of other signals. Director of National Intelligence James Clapper told Congress that “an assertive Russia” poses a risk to the U.S. and aired his anger over damage to national security caused by Edward Snowden, who’s in Russia under asylum after exposing classified American spy programs. Elsewhere on Capitol Hill, lawmakers voiced concern that Russia may have violated a nuclear-arms treaty and is undermining U.S. influence in the Middle East.

• European Banks Avoiding Risky-Loan Disclosure Face Review. A dark corner of European finance is about to be illuminated by European Central Bank inspectors who are sifting through loans that banks restructure for clients and don’t fully disclose. “What’s scaring investors is the question of whether banks are giving money to companies that deserve to go bankrupt and keeping them alive to avoid recording losses,” Mascia Bedendo, an assistant professor of finance at Bocconi University in Milan, said in a phone interview. “The amount of forborne and nonperforming loans is still very obscure.”   

• Europe Stocks Rise on Euro-Area GDP, U.S. Confidence Data. European stocks advanced, posting their biggest weekly gain this year, as better-than-forecast euro-area economic growth and U.S. consumer-confidence reports outweighed worse-than-estimated U.S. industrial output data. ThyssenKrupp AG rose the most since May after Germany’s largest steelmaker reported first-quarter profit that beat analyst predictions. Fresnillo Plc led a gauge of commodity producers higher as gold and silver prices increased. Schindler (SCHP) Holding AG dropped 1 percent after the maker of elevators said annual profit fell 37 percent. The Stoxx Europe 600 Index gained 0.6 percent to 333.32 at the close of trading.

• Gold Heads for Biggest Weekly Gain Since August on Haven Demand. Gold futures for April delivery rose 1.3 percent to $1,316.80 an ounce at 12:08 p.m. on the Comex in New York. Prices headed for a 4.3 percent weekly gain, the biggest such increase since the week ended Aug. 16.

• Fisher Backs QE Tapering Even With Weather Hurting U.S. Growth. Federal Reserve Bank of Dallas President Richard Fisher said the central bank should stick to its strategy of gradually reducing bond purchases even as harsh winter weather slows U.S. economic growth. “I am not persuaded continuing to taper should be altered,” Fisher said today in a Bloomberg Radio interview in Dallas with Kathleen Hays and Vonnie Quinn. “Obviously weather is playing a significant role here.”

• Treasury Lets Banks Offer Accounts to Pot Businesses. The Treasury Department today said it would allow banks to accept accounts from marijuana businesses, letting an industry that is illegal in a majority of U.S. states open business checking accounts and accept credit cards.

Wall Street Journal: 

• Jos. A. Bank to Acquire Eddie Bauer for $825 Million. Deal Adds to Takeover Battle Between the Suit Retailer and Men's Wearhouse.

Barron's:

• Trulia(TRLA) Drops 14%: Q4 Rev Beats, EPS Misses; Q1, Year Rev Views Beat.

Fox News:

• De Blasio digs in on liberal agenda, runs into pushback from fellow Dems.

MarketWatch:

• When push comes to shove, many think Cleveland Fed’s new president will be hawkish.

ZeroHedge:

• The Crisis Circle Is Complete: Wells Fargo Returns To Subprime. (graph)

• The "Sick Man Of Europe" Is Back - German Economy Barely Grows In 2013. (graph)

• Industrial Production Plunges, Fed Blames Weather. (graph)

• "Catastrophic" Winter Storms Send Consumer Confidence Outlook To 6-Month Highs. (graph)

• Peak Employment? (graph)

• The US Participation Rate Is At A 35 Year Low: This Is How It Looks Broken Down By State. (map)

ValueWalk: 

• Prem Watsa “China Reminds Me Of US Housing In Boom". China takes almost 40% to 50% of every commodity so of course China will have an impact on Canada and we’ll have an impact on many of the commodity producing countries like Australia and Brazil, other countries in the world. So we are focused on protecting ourselves first and foremost. Reminds me what happened in the housing crisis in 2003, ’04, ’05 the boom in housing reminds me of takes me back to the tech boom where companies big companies like Northern Telecom and others were buying companies small little companies for $10 billion and $20 billion with no sales, no revenues and nothing other than a few engineers together.

Business Insider:

• Venezuela's Central Bank Is Increasingly Disconnected From Reality.

• Foreclosures Suddenly Jump 57% in California (And Soar In Much Of The Country). (graph)

CNN:

• Snow burying parts of the Northeast in massive winter storm.

• Top 10 cities people are moving to. Whether it's the warm weather, jobs or cheap cost of living, these are the top 10 cities Americans are moving to, according Penske Truck Rental's annual list.

Reuters:

• Italy won't have leeway on investment spending in 2014-EU source. Italy will not be allowed to make use this year of a so-called "investment clause" which allows some flexibility on public spending because it failed to present a document requested by the European Commission, an EU source said on Friday. 

• Weak Brazil activity index raises specter of recession. Economic activity in Brazil fell sharply in December, raising the specter that Latin America's largest economy may have slipped into recession as the government phased out massive economic stimulus to battle inflation. The Brazilian central bank's IBC-Br economic activity index declined 1.35 percent in December from November in seasonally adjusted terms, more than most economists expected, central bank data released on Friday showed. The index, a rough reflection for gross domestic product data, rose 2.57 percent in 2013 as a whole but fell for two straight quarters, which characterizes a technical recession. It dropped 0.17 percent in the fourth quarter and fell 0.21 percent in the third quarter.

• U.S. to pursue trade dispute over Chinese, Taiwanese solar imports. The United States took a step on Friday towards potentially extending import duties on Chinese solar energy products to also cover panels made with parts from Taiwan in a case that could have a major impact on the fast-growing U.S. solar market.

Telegraph:

• Eurozone crisis is just getting started. The project to impose political union is bringing economic ruin, making the legitimacy of the EU project ever more vulnerable. 

• Why China's banking system is in so much trouble. The full transcript of the Telegraph interview with China expert Charlene Chu.