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What In The World Is Happening To The Nasdaq?

All of a sudden, the Nasdaq is absolutely tanking.  On Monday, it fell more than 1 percent after dropping 3.6 percent on Thursday and Friday combined.  At this point, the Nasdaq is off to the worst start to a year that we have seen since 2008, and we all remember what happened back then.  So [...]

Nasdaq indexes resume trading after reported glitch

CNBCOctober 29, 2013 A NASDAQ ticker on Times Square. Credit: whale05 via FlickrThe Nasdaq was...

Dow Jones and Nasdaq down sharply as US government shutdown looms

Dominic Rushe, Dan Roberts and Paul LewisThe GuardianSeptember 30, 2013 US stock markets fell sharply on...

Silicon Valley ‘working homeless’ sleep in cars as tech titans live like kings —...

At the fringes of this dazzling techno mecca nestled on the Pacific coast of California, home...

Dow To Fall 97% Against Gold?

Pentagon fears hackers could crash the stock market — RT America

Published time: 17 Oct, 2017 21:30 The US Department of Defense is concerned that hackers could...

U.S. Congress and Media Push for War Against Russia

Eric Zuesse On Wednesday, September 6th, Reuters bannered "Facebook says likely Russian-based operation funded U.S. ads with political message”, and reported: Facebook Inc said on Wednesday...

US vs hackers: America’s crusade against cybercrime

Cyberattacks across the world have grown ever-larger in scale, inflicting billions of dollars of damage –...

Cash Out and Run for Cover?

Renowned investor Marc Faber has made another dire prediction for the stock market: It may fall by as much as 40% or even more. Financial...

Why Controversy Over Trump Sends Shockwaves Through US Stock Markets

The US stock market has plummeted over US President Donald Trump’s alleged attempt to stop former FBI Director James Comey from investigating former National...

Twitter Shares Crash Following Quarterly Earnings Report Release

Twitter shares crashed on Thursday following the release of the company’s 4th quarter earnings report. CNBC reports that the social media company...

New York Stock Exchange faces lawsuit over 2015 blackout

The Securities and Exchange Commission (SEC) has indicated that it will file a lawsuit against a 2015 outage on the New York Stock Exchange...

Corruption, Socialism, and Banksterism

This article was submitted by Shubhendu Pathak, a finance professional working in the Bay Area. Past: Capital One Shubhendu earned his Bachelors (B.Tech) and Masters...

Private Prisons Are Far From Ended: 62 Percent of Immigrant Detainees Are in Privatized...

Prisoners walk across the prison yard of Saguaro Correctional Center, a private prison in Eloy, Arizona, on October 16, 2009. (Monica Almeida...

Dow plunges 600+ points following historic Brexit vote

Investor panic over the United Kingdom’s withdrawal from the European Union has been felt across the Atlantic as well. The Dow, the S&P 500...

OpIcarus: Anonymous hackers shut down Bank of England, call for ‘online revolution’

Hacktivist collective Anonymous has launched cyber-attacks on major financial institutions across the world, including the...

Major pro-EU campaign donor holds big stake in firm behind Israel’s segregation wall

A major donor to the campaign for Britain to remain in the EU is also...

Corporations Are Defaulting On Their Debts Like It’s 2008 All Over Again

Michael Snyder (RINF) - The Dow closed above 18,000 on Monday for the first time since July.  Isn’t that great news?  I truly wish that...

These Corporations Have Pillaged the Land and Robbed the People

(Photo: Parolan Harahap; Edited: LW / TO) Join the movement for independent media -- no ads, no sponsored content, just uncensored news and...

How a Candidate’s Mega-Donors Get Served After the Election

Eric Zuesse, updated from strategic-culture.org An example will be described here of a way in which corrupt Presidential candidates load up their campaigns’ advertising budgets...

Dot-Com Bubble 2.0 Is Bursting: Tech Stocks Are Already Down Half A Trillion Dollars...

Michael Snyder (RINF) - Do you remember how much stocks went down when the first dot-com bubble burst?  Well, it is happening again, and tech...

Wall Street falls on global growth fears

By Nick Beams Wall Street fell sharply yesterday despite the fact that the US Federal Reserve left interest rates on hold after a 0.25 percentage rate...

How Candidates’ Mega-Donors Get Served After the Election

Eric Zuesse, updated from strategic-culture.org The prison industry provides a good example: One recent article at Vice News criticized the legislation proposed by Presidential candidate...

The Financial Apocalypse Accelerates As Middle East Stocks Crash To Begin The Week

By Michael Snyder (RINF) - It looks like it is going to be another chaotic week for global...

Bear Market: The Average U.S. Stock Is Already Down More Than 20 Percent

Michael Snyder (RINF) - The stock market is in far worse shape than we are being told. As you will see in this article, the...

Collapsing global industry leads to massive stock selloff in China and the U.S

Stock prices around the world took a nosedive on Monday, January 4, 2016 — the first trading day of the year — signaling an...

Don’t Be a Fossil-Foolish Investor

Investors who choose to steer clear of oil, gas, and coal are protecting their portfolios in the short term and the long run. Who has...

27 Major Global Stocks Markets That Have Already Crashed By Double Digit Percentages In...

Michael Snyder (RINF) - Anyone that tries to tell you that a global financial crisis is not happening is not being honest with you. Right...

4 Harbingers Of Stock Market Doom That Foreshadowed The 2008 Crash Are Flashing Red...

Michael Snyder (RINF) - So many of the exact same patterns that we witnessed just before the stock market crash of 2008 are playing out...

Wall Street Panics Over Global Recession Fears

Wall Street plunged Tuesday after investors feared weak data from China, the world’s second-largest economy, would lead to a global recession. China’s manufacturing sector suffered...

More signs of global downturn send stocks plunging again

By Andre Damon Global stock markets staged yet another selloff Tuesday following the release of negative economic data in the US and China and downbeat assessments...

We Have Already Witnessed The First 1300 Points Of The Stock Market Crash Of...

Michael Snyder (RINF) - What has been happening on Wall Street the past few days has been nothing...

The Stock Market Will Start To Fall In July? The Dow Plummeted More Than...

By Michael Snyder (RINF) - Was last week a preview of things to come? There are quite a few people out there that believe that...

Parasitism and the economic crisis

(WSWS) - The US Commerce Department released figures Friday showing that the US economy contracted sharply, shrinking at an annualized rate of 0.7 percent in...

Who Owns Agricultural Land in Ukraine?

The fate of Ukraine's agricultural sector is on shaky ground. Last year, the Oakland Institute reported that over 1.6 million hectares (ha) of land in Ukraine...

The 90,000 Square Foot, 100 Million Dollar Home That Is A Metaphor For America

Michael Snyder (RINF) - Just like “America’s time-share king”, America just keeps on making the same mistakes over and over again. Prior to the financial...

If Anyone Doubts That We Are In A Stock Market Bubble, Show Them This...

Michael Snyder RINF Alternative News The higher financial markets rise, the harder they fall. By any objective measurement, the stock market is currently well into bubble...

While you were sleeping: US dollar rebounds

Wall Street declined, while the US dollar regained its footing following Wednesday’s tumble, as investors reposition in the wake of the Federal Reserve’s latest...

US economy in deflation and slump

Andre Damon This piece was reprinted by RINF Alternative News with permission or license. The US Commerce Department said Friday that gross domestic product, the broadest...

US economic output tumbled by 2.9 percent in the first quarter

Andre Damon The US economy contracted at a 2.9 percent annual rate in the first three months of this year, the sharpest quarterly fall in...

Interest Rate Puzzle – Paul Craig Roberts and Dave Kranzler

Interest Rate Puzzle Paul Craig Roberts and Dave Kranzler One of the biggest puzzles in the financial markets this year has been the considerable fall in interest rates despite the Fed’s program of tapering or cutting back the Fed’s bond…

The post Interest Rate Puzzle — Paul Craig Roberts and Dave Kranzler appeared first on PaulCraigRoberts.org.

Is “Dr. Copper” Foreshadowing A Stock Market Crash Just Like It Did In 2008?

Is the price of copper trying to tell us something?  Traditionally, "Dr. Copper" has been a very accurate indicator of where the global economy is heading next.  For example, back in 2008 the price of copper dropped from nearly $4.00 to under $1.50 in just a matter of months.  And now it appears that another [...]

Why the Lousy Jobs Report Boosted Wall Street

The stock market surged yesterday after the lousy jobs report. The Dow soared 160 points Friday, while the S&P 500, and Nasdaq also rose.

How can bad news on Main Street (only 113,000 jobs were created in January, on top of a meager 74,000 in December) cause good news on Wall Street?

Because investors assume:

(1) The Fed will now continue to keep interest rates low. Yes, it has announced its intention of tapering off its so-called “quantitative easing” by buying fewer long-term bonds in the months ahead. But it will likely slow down the tapering. Instead of going down to $55 billion a month of bond-buying by April, it will stay at around $60 billion to $70 billion.

(2) The slowdown in the Fed’s tapering will continue to make buying shares of stock a better deal than buying bonds – thereby pushing investors toward the stock market.

(3) Continued low interest rates will also continue to make it profitable for big investors (including corporations) to borrow money to buy back their own shares of stock, thereby pushing up their values. Apple and other companies that used to spend their spare cash and whatever they could borrow on new inventions are now focusing on short-term stock performance.

(4) With the job situation so poor, most workers will be so desperate to keep their jobs, or land one, that they will work for even less. This will keep profits high, make balance sheets look good, fuel higher stock prices.

But what’s bad for Main Street and good for Wall Street in the short term is bad for both in the long term. The American economy is at a crawl. Median household incomes are dropping. The American middle class doesn’t have the purchasing power to keep the economy going. And as companies focus ever more on short-term share prices at the expense of long-term growth, we’re in for years of sluggish performance.

When, if ever, will Wall Street learn?

The Dow Has Already Fallen More Than 1000 Points From The Peak Of The...

That didn't take long.  On Monday, the Dow was down another 326 points.  Overall, the Dow has now fallen more than 1000 points from the peak of the market (16,588.25) back in late December.  This is the first time that we have seen the Dow drop below its 200-day moving average in more than a [...]

Senate confirms Janet Yellen as Fed Chair

Move signifies continued free money...

Marc Faber’s 2014 Predictions

Zero HedgeDecember 28, 2013 Marc Faber has 3 very contrarian predictions for 2014 that we are...

Mexico Sets Controversial Plan to Open Border to Foreign Oil Companies

Taylor Muckerman and Joel South fool.comDecember 18, 2013 | Comments (0) This segment is from...

Don’t be Fooled by Mainstream Media Journalists, “Independent” Experts and the CIA

Image: Anthony Freda “Under CIA manipulation, direction and, usually, their payroll, were past and present presidents of Mexico, Colombia, Uruguay and Costa Rica, “our minister...

US stocks surge after jobs report

AFPDecember 6, 2013 US stocks surged Friday after a better-than-expected labor report showed solid job creation in November and boosted prospects that the Federal Reserve...

The Stock Market Bubble

Wall Street is buzzing, and it's all about bubbles. In fact, according to Google Trends, interest in the term “stock bubble” was higher in...

Drop in holiday sales reflects US social crisis

By Andre Damon 3 December 2013 US retail sales over the Thanksgiving weekend dropped for the first time in seven years, reflecting the impact of falling...

How Wall Street Has Turned Housing Into a Dangerous Get-Rich-Quick Scheme – Again

Laura Gottesdiener You can hardly turn on the television or open a newspaper without hearing about the nation's impressive, much celebrated housing recovery. Home prices...

15 Signs That We Are Near The Peak Of An Absolutely Massive Stock Market...

One of the men that won the Nobel Prize for economics this year says that "bubbles look like this" and that he is "most worried about the boom in the U.S. stock market."  But you don't have to be a Nobel Prize winner to see what is happening.  It should be glaringly apparent to anyone [...]

The Real Black Friday

Black Friday shares its namesake with an event that occurred on Tuesday, October 29, 1929 Kurt Nimmo Black Friday opened with a predictable boom that resounded...

Thanksgiving in America — Shocking Poverty and New Records for the Stock Market

This year's Thanksgiving holiday, coming more than five years after the Wall Street crash, highlights the devastating impact of mass unemployment and budget cuts...

Thanksgiving in America

28 November 2013 This year's Thanksgiving holiday, coming more than five years after the Wall Street crash, highlights the devastating impact of mass unemployment...

How Wall Street’s New Empire of Rental Homes Could Blow Up the Economy

Wall Street is at it again—this...

Blowing Bubbles With Paul Krugman

America's “highest profile economist” thinks we need more asset bubbles to battle negative real interest rates and persistent secular stagnation. In a controversial post on...

Dow hits new record amid deepening world slump

By Andre Damon19 November 2013 The Dow Jones Industrial Average stock index broke 16,000 for the first time Monday before falling back slightly to...

Nominee to head US Federal Reserve reassures Wall Street in Senate testimony

By Andre Damon15 November 2013 Janet Yellen, President Obama's nominee to replace Ben Bernanke as chairman of the Federal Reserve Board early next year,...

Obama: “I Am Sorry” Americans Will Lose Their Existing Health Plan Because Of Obamacare

Zero HedgeNovember 8, 2013 Remember all those YouTube clips (the same medium used to nearly justify World War III) that caught the president lying again...

Poll Reveals Majority Of Wash. State Voters Approve GMO Labeling Initiative

As people across the country eagerly await the results of Washington state's GMO labeling initiative, several polls reveal the majority of the state's voters...

RINFORMATION

USA Topics 9/11 Agenda 21 Assassinations Banks Bush, George Jr Boston Bombings Bohemian Grove CIA Cointelpro Corruption DARPA Democrats Disinformation Congress Drones Eugenics FBI Federal Reserve Guantanamo HAARP ...

Wall Street cheers weak jobs report

Stocks climbed on Wall Street Tuesday following a weaker than expected jobs report. The Wall Street cheers a weaker than expected jobs report as renewed...

US stocks fall as debt deadline looms

US stock index futures sank on Monday.US stock index futures fell on Monday after the last ongoing talks to avert US default broke up...

US stocks fall as debt deadline looms

US stock index futures sank on Monday.US stock index futures fell on Monday after the last ongoing talks to avert US default broke up...

Stocks sink as D.C. budget paralysis continues

AFPOct. 8, 2013 US stocks, led by the tech-rich Nasdaq, tumbled Tuesday as a Washington budget...

US stocks suffer broad losses

A specialist looks at a screen at his post on the floor of the New York Stock Exchange Wednesday, Oct. 2, 2013.Stocks fell broadly...

US stock markets drop sharply

US stocks drop amid fears of govt. shutdown Monitors above the S&P 100 Stock Index Options (OEX) pit at the Chicago Board Options Exchange...

Market anxieties turn to debt ceiling

How Congress and President Barack Obama deal with the debt ceiling is likely to determine market volatility for the rest of the year. Now that...

Is The Fed Ready To Cut America’s Fiat Life Support?

It is undeniable that America is thoroughly addicted to fiat stimulus. Every aspect of our economy, from stocks, to bonds, to banks, and by...

Sabotage: Special Forces To Target U.S. Economy, Infrastructure, Railways, Power Plants, Waterworks, and Refineries...

If you were under the impression that the brewing conflict with Syria is over or that it would be a simple one sided affair...

US stocks fall as drums of war beaten

US stocks declined on Friday after US Secretary of State John Kerry outlined Washingtonâ„¢s case for taking military action against Syria. In a nationally televised...

U.S. Web Attacks Skyrocket Ahead of Mid East Action: 81% Above Normal

Mac Slavo SHTFplan.com August 28th, 2013 Outgoing Department of Homeland Security secretary Janet Napolitano ominously warned of a coming “cyber event” in an open...

European stocks fall over Syria tension

European stocks have fallen sharply amid the escalating rhetoric of war against Syria over allegations that the Syrian government has used chemical weapons. On Tuesday,...

US stocks sink on Syria, debt limit

Worries of a US-led military intervention in Syria sent US stocks lower on opening Tuesday. The reaction came after US Secretary of State John...

5 Wildly Offensive Comments and Actions by Rich Jerks

“The poor we shall always have with us,” said the Bible, and lately there are more of the poor than ever–over 50 million at...

Report: War Looms: Hundreds of American Troops and CIA Operatives Have Entered Syria

While the media panicked over the halting of NASDAQ stock trading due to a reported bug in the system (more on that shortly), one...

They Actually Expect Us To Have Faith In These Financial Markets After This Week?

What in the world is happening to our financial markets? Trading on the Nasdaq was halted on Thursday for more than 3 hours, and...

BlackBerry, Vical, Steinway, Alliance One, Zoltek

online.wsj.comAugust 12, 2013 U.S. stocks traded mixed Monday as the Dow Jones Industrial Average recently lost...

Gag Me With Lawrence Summers

http://www.truthdig.com/report/item/gag_me_with_lawrence_summers_20130729/ Posted on Jul 29, 2013 ...

US indicts 4 Russians in biggest hacking

The United States has charged four Russian nationals and a Ukrainian with stealing and selling at least 160 million credit and debit card numbers...

Worldwide Unemployment Crisis: There Are 93 Million Unemployed Workers In G20 Nations

Did you know that the total number of unemployed workers in G20 counties is now up to 93 million and that it is increasing...

10 Reasons Why The Global Economy Is About To Experience Its Own Version Of...

Have you ever seen a disaster movie that is so bad that it is actually good? Well, that is exactly what Syfy's new television...

11 Signs That Italy Is Descending Into A Full-Blown Economic Depression

When you get into too much debt, really bad things start to happen. Sadly, that is exactly what is happening to Italy right now....

Dow, S&P 500 slip as second quarter nears close

Alison Griswoldreuters.comJune 28, 2013 The Dow and the S&P 500 slipped on Friday as the end...

Japanese Stock Market Bust

Recently by Peter Schiff: Tapering ...

Price of Gold Plunged, Panic Deepens on World Financial Markets

Global stocks plunged Thursday in the biggest one-day sell-off so far this year, after Federal Reserve Chairman Ben Bernanke said the US central bank...

Panic deepens on world financial markets

  By ...

Market Buzz: US Fed’s policy meeting to set course

Russian floors opened Monday with gains on mixed sentiment on the foreign markets and anticipation of signals from the US. ...

Central Banks’ Bubble Bursting, Sending Markets Down Worldwide

When the Japanese stock market lost more than six percent of its value on Wednesday in a massive sell-off, pundits jumped on the move to...

Market Buzz: Rebound on US news

On Thursday most global stocks stepped into the bear market territory. Selloffs are likely to continue on Friday, however much will depend on the...

Central Banks’ Bubble Bursting, Sending Markets Down Worldwide

When the Japanese stock market lost more than six percent of its value on Wednesday in a massive sell-off, pundits jumped on the move to...

Market Buzz: Global stimulus concerns drag stocks down

On Thursday Russian floors opened significantly lower, following the negative trend on foreign floors and concerns over global stimulus. Russian indices are rewriting this...

Government Spying on Americans … and then Giving Info to Giant Corporations

You’ve heard that the government spies on all Americans. But you might not know that the government shares some of that information with big corporations. In...

Government Spying on Americans … and then Giving Info to Giant Corporations

You’ve heard that the government spies on all Americans. But you might not know that the government shares some of that information with big corporations.

Market Buzz: Falls on negative economic news backdrop

Russian floors started off Tuesday lower on negative international outlook. A lower close on Wall Street, falling oil and weaker performance in Asia influenced...

The Collapse of the Hourly Wage

“If we care about building a fast growing economy that provides opportunity for every American, then we must enact policies that build it from...

Market Buzz: World stocks rally following upbeat data from US

Russian floors started off Monday trading higher, following gains on Wall Street on Friday after the government released better-than-expected jobs data. ...

Market Buzz: Investors look to US for end-of-week updates

Russian stocks opened Friday in positive territory in anticipation of a batch of important data from the US as the week comes to a...

Global Stock Sell-off amidst Signs of Deepening Slump

Global stock markets plunged Wednesday following the release of negative economic indicators pointing to a deepening slump in the United States, Europe and Asia...

Market Buzz: Pessimism prevails as key economies disappoint

Russian stocks are expected to trade lower on Thursday due to negative sentiments on major floors worldwide, including weak data on US private jobs...

Market Buzz: Investors look to EU and US for drivers

Following losses on US floors and negative sentiment in Asia, Russian stocks started off Wednesday in the red. Later in the day, investors will...

Market Buzz: Concerns escalate over slow China growth, US mfg data

Russian stocks started off Tuesday in positive territory following a high close on Wall Street. ...

Computers can't hear you scream when stocks collapse

<!--Max Keiser-->Max Keiser, the host of RT's ‘Keiser Report,’ is a former stockbroker, the inventor of virtual specialist technology and co-founder of the Hollywood...

Computers can't hear you scream when stocks collapse

<!--Max Keiser-->Max Keiser, the host of RT's ‘Keiser Report,’ is a former stockbroker, the inventor of virtual specialist technology and co-founder of the Hollywood...

Market Buzz: Starting summer lower

Russian stocks start the week lower, on a moderately negative international outlook. Investors will be looking at the US for drivers in the second...

Market Buzz: Starting summer lower

Russian stocks start the week lower, on a moderately negative international outlook. Investors will be looking at the US for drivers in the second...

Market Buzz: Slow start awaiting numbers, gains to follow

Investors around the world are set to receive abundant statistics on which to reflect on Friday, but Russian stocks are expected to show slow...

Market Buzz: Focus on global growth, US Fed plans

On Thursday analysts expect Russian floors to open with moderate gains as buybacks of the biggest Wednesday losers occur. However with negative international sentiment...

Market Buzz: Focus on global growth, US Fed plans

On Thursday analysts expect Russian floors to open with moderate gains as buybacks of the biggest Wednesday losers occur. However with negative international sentiment...

Market Buzz: Cheered by resumed trade in US and UK

Waiting for the macroeconomic news to follow later on Wednesday from the West, Russian floors have opened neutrally, slightly up. ...

Market Buzz: No movement as US, UK floors closed for holiday

Last week’s losses on Russian floors are expected to continue on Monday. Still, Russian stocks opened higher despite the neutral international outlook and lack...

Market Buzz: Panic cooling as week ends

Investors expect Russian stocks to bounce back slightly on Friday, with floors opening the day in the black. ...

Market Buzz: Stocks down on Fed news, China’s flash PMI indicates contraction

Russian stocks started Thursday in the red following news yesterday from the US that the Fed has not yet come to a consensus on...

Market Buzz: World waiting to see if US Fed will end stimulus

Russian floors started off Wednesday’s session in the black following positive performance on Wall Street. Investors expect upward momentum to prevail during the day,...

Market Buzz: Little news, little change

Russian floors opened mixed on Tuesday on a relatively neutral international outlook. Investors expect no big macroeconomic news on May 21, and stocks will...

YouTube Censors Video Exposing Angelina Jolie Gene Patent Link

A video produced by Infowars contributor and radio host Mike Adams, covering facts surrounding the patenting of human genes by huge corporations, has been censored by YouTube on the grounds that it is “commercially deceptive”.

Market Buzz: Japan’s GDP wows and gold hits 9-yr low

Despite other emerging markets performing well, Russian markets hit their lowest close in two weeks. Rosneft fell and the ruble weakened against the dollar...

Market Buzz: Japan’s GDP wows and gold hits 9-yr low

Despite other emerging markets performing well, Russian markets hit their lowest close in two weeks. Rosneft fell and the ruble weakened against the dollar...

Market Buzz: Record low yen and record high Nikkei to dictate floors

Russian markets declined for the fourth day in New York as oil slid and the Finance Ministry announced the Kremlin is considering a plan...

Market Buzz: Awaiting US import and eurozone industrial data

Russian markets declined the most in two weeks as crude oil, which accounts for about half of export revenue, retreated on decreased output. The MICEX...

Market Buzz: Chinese macro data to drive floors

With little news expected from Europe and the US on Monday, macroeconomic data from China is expected to be the main driver of global...

The 15,000 Dow

  9 May 2013 On Tuesday, Wall Street celebrated a new milestone. The Dow Jones Industrial Average crashed through the 15,000 plateau, setting yet another record...

Market Buzz: Eurozone GDP woes bring everyone down

AFP Photo / Spencer Platt

AFP Photo / Spencer Platt

News of another consecutive contraction in Europe for Q4 2012 depressed major indices around the world on Thursday, as investors grow increasingly doubtful about a recovery in 2013.

The eurozone’s GDP contracted 0.9% year-on-year during the last quarter of 2012, while most expected it to lose only 0.7%. “This fall turned out to be a maximum one since 1Q 2009, when the world financial crisis was at its full swing. Given this the perspective, a further recovery in 2013 becomes more uncertain,” Investcafe analyst Darya Pichugina wrote in an email.

In quarter-on-quarter terms, the eurozone GDP shrank 0.6% in Q4 2012, marking the third consecutive quarter of declining growth.

Russian stocks ended Thursday trading in the red. The RTS lost 1.51% to 1,588.31 and the MICEX was down 1.22% to 1,519.22.

The contraction in Europe’s biggest economies such as Germany and France “acted as a reminder that no one is immune to the eurozone debt crisis,” said Angus Campbell, head of market analysis at Capital Spreads.

Germany’s GDP fell 0.6% quarter-on-quarter Q4 2012, but in annual terms the economy grew 0.4%. In France, the GDP was down 0.3% both from the last quarter and from a year earlier.

European markets finished broadly lower on Thursday, with shares in Germany leading the slide. The DAX lost 1.05%, while France's CAC 40 fell 0.78% and London's FTSE 100 slipped 0.50%.

On Wall Street, major indices traded mixed. The Dow Jones Industrial Average lost 0.1%, while the S&P 500 and Nasdaq grew 0.1%.

Better-than-expected figures from the US labor market almost lost their allure in the wake of the disappointing news from Europe. The Labor Department reported that the number of people in the US filing for first-time unemployment claims fell by 27,000 to 341,000 in the most recent week. Economists had predicted 365,000 claims.

Japanese shares are lower today as the Nikkei 225 fell 1.60%. Stock markets in Hong Kong and Shanghai are closed.

Market Buzz: Numbers game

RIA Novosti / Ruslan Krivobok

RIA Novosti / Ruslan Krivobok

Thursday trading is expected to be intense: Russian stocks likely to grow amid positive signs from Asia and the rising price of crude, while later in the day statistics will run the show.

­On Wednesday, Russian indices were in a bullish mood amid a positive economic background and growing oil prices. Europe’s January manufacturing statistics were published during the day, reporting an increase of 0.7%, significantly higher than market players had expected. As a result, Russian indices ended the day in positive territory, with the MICEX adding 1.7% up to 1,537.90 and the RTS growing 1.9% to 1,612.70.

Thursday will also see the release of some important news: The eurozone’s GDP for Q4 2012 and the entire last year are going to be published, as well as the GDPs of most individual eurozone countries. It is expected that in October through December of 2012, the economies of eurozone countries shrank 0.4% – up from a 0.1% contraction in the previous quarter – losing 0.7% over the year. Greek unemployment data for November is also expected, though it likely won’t bring any good news.

US stocks finished an uninspired day of trading Wednesday amid slowing retail sales and slightly upbeat earnings reports, resulting in the Dow Jones declining 0.3%, the S&P 500 rising 0.1% and the Nasdaq growing 0.3%. On Thursday, US stocks will react sharply to the forthcoming employment data. Initial unemployment claims are likely to continue their downward trend and decline 6,000 to 360,000, with official statistics to be published later in the day. Fresh data on natural gas reserves is also expected on Thursday.

Asian stocks traded in the black amid new Japanese GDP data, which decreased 0.4% in Q4 2012 compared to 3.8% in Q3. Despite expectations that the GDP figures would improve, the reaction was generally positive, and growth was also given a potential boost by decisions by the Bank of Japan on key interest rates. 

Oil prices continued to climb upwards after Wednesday’s data on US oil reserves, which saw significantly lower than expected growth. Brent closed at $118, and will likely grow on Thursday, supporting Russian stocks.

Market Buzz: Looking for positive stats from Europe and the US

AFP Photo / Daniel Roland

AFP Photo / Daniel Roland

Investors in Russia are expected to remain positive on Wednesday, with analysts expecting solid manufacturing data from Europe and retail figures from the US.

“… One should expect a minor growth of Russian shares at the start of trading, as well as significant dynamics after important macro statistics from Europe and the USA comes,” Investcafe analyst Grigoriy Birg wrote in an e-mail.

On Tuesday, Russia's key indices finished in the black: The RTS rose 0.03% to 1,582.35 and the MICEX went up 0.23% to 1,515.49.

Among important data set to be released on Wednesday are the figures for December industrial production in the eurozone, with month-to-month dynamics largely expected to show a 0.2% growth. “However, after a November 0.3% contraction this should support the markets,” Birg explained.

The US is also scheduled to produce its January retail sales figures, not including car sales. “Any information, proving growth of consumer demand in the US will cause positive investor reaction,” Birg said.

US stocks finished trading mixed on Tuesday. The Dow edged closer to a record high, underpinned by strong earnings from beauty products direct seller Avon, and luxury clothing and accessories seller Michael Kors. The Dow Jones Industrial Average rose 47.46 points to 14,018.70. The broader Standard & Poor's 500 index inched up 2.42 points to 1,519.43. The tech-laden Nasdaq composite index fell 5.51 points to 3,186.49.

The Obama Administration made it clear that the Democrats were ready to produce a game plan to escape the 'fiscal cliff,' including a combination of higher taxes and lower government spending.

“Overall, a systematic approach to resolving the problem of an excessive budget deficit and state debt is better than the alternative of an automatic $1.2trln spending cuts in the US, which could lead to catastrophic economic aftermath not just in the US but in the world,” Birg said.

European markets finished higher on Tuesday, with shares in France leading the region. The CAC 40 was up 0.99%, while London's FTSE 100 gained 0.98% and Germany's DAX added 0.35%.

Japanese shares are lower today as the Nikkei 225 fell 1.10%. Stock markets in Hong Kong and Shanghai are closed at this time.

Oil Pops, Apple Drops, And Stocks Take Out More Stops

Another low volume, low range, low average trade size day in stocks as recent high (stops) were run again with FX markets ruling the day in terms of volatility. The G-7's initial statement fell on deaf ears , after Draghi's early comments (on a higher...

Frontrunning: February 12

  • The Man Who Killed Osama bin Laden... Is Screwed (Esquire)
  • G7 fires currency warning shot, Japan sanguine (Reuters)
  • North Korea Confirms It Conducted 3rd Nuclear Test (NYT)
  • Italian Police Arrest Finmeccanica CEO (WSJ)
  • Legacy, political calendar frame Obama's State of the Union address (Reuters)
  • China joins U.S., Japan, EU in condemning North Korea nuclear test (Reuters)
  • Wall Street Fading as Emerging-Market Banks Gain Share (BBG)
  • Berlin Conference 2.0: Drugmakers eye Africa's middle classes as next growth market (Reuters)
  • Barclays to Cut 3,700 Jobs After Full-Year Loss (BBG)
  • US Treasury comment triggers fall in yen (FT)
  • ECB Ready to Offset Banks’ Accelerated LTRO Payback (BBG)
  • Fed's Yellen Supports Stimulus to Spur Jobs (WSJ)
  • Libor Scrutiny Turns to Middlemen (WSJ)
  • Samsung Girds for Life After Apple in Disruption Devotion (BBG)

Overnight Media Digest

WSJ

* North Korea appeared to have exploded a nuclear device Tuesday, its third experimental detonation in a long effort to build weapons of mass destruction that the U.S. and other countries consider a serious threat.

* Pope Benedict XVI will become the first pontiff in six centuries to resign, marking the end of a transitional papacy that focused more on theological and internal renewal and less on the broader challenges that face the Roman Catholic church at the start of its 21st century of existence.

* U.S. regulators are widening their probe of global interest-rate-rigging by scrutinizing what they claim is a pivotal role of two U.K. brokerage firms in the scandal, people close to the investigation say.

* The regulator that oversees the professional conduct of Britain's accountants has launched a probe into the past financial reports of Autonomy Corp, the U.K. software company that Hewlett-Packard Co purchased for $11 billion in 2011 and later accused of having made outright financial misrepresentations ahead of the deal.

* Hedge-fund manager David Einhorn has proposed that Apple Inc issue a special class of stock that would carry a high dividend yield.

* Nasdaq OMX Group Inc, long on the hunt for a partner, has ramped up its conversations about strategic options ranging from joint ventures to a sale, according to people familiar with the talks, as rival NYSE Euronext moves ahead with a merger that will form an even-bigger competitor.

* U.S. regulators told the world's biggest maker of insulin, Denmark's Novo Nordisk, that they couldn't approve a potential blockbuster diabetes drug, delaying its U.S. introduction and sending the company's shares tumbling.

* Hostess Brands Inc won permission to place a selection of its cake and bread assets, including the Twinkie brand, on the auction block as the baking company continues to sell off its business piece by piece.

FT

EDF Energy is seeking state support to guarantee the new nuclear reactors it plans to build in the UK. EDF is asking the government to underwrite some of the project's financing. Nasdaq OMX Group was in talks with private equity firm Carlyle Group about taking the trans-Atlantic exchange operator private, but the talks broke down because of disagreements over valuation.

Britain's accountancy regulator said it was investigating the financial reports of British software firm Autonomy before it was bought by Hewlett-Packard, a deal that was later subject to accusations of fraud. Goldman Sachs has promoted Gregg Lemkau to jointly head its global mergers and acquisitions (M&A) team.

Telefonica has put off plans to list its Latin American business.

BlackRock sold a large stake in oil services group Saipem - a unit of Italy's Eni, in deal that is under the scrutiny of Italian and British regulators.

Lion Capital, a big investor in Findus - the UK-based frozen food company engulfed in the horse meat scandal, has called on management to explain how the adulteration took place.

Dutch retailer Ahold sold its 60 percent stake in its Nordic joint venture - ICA - to co-owner Hakon Invest for 2.5 billion euros ($3.34 billion) in cash.

NYT

* British accounting regulators said on Monday that they would investigate the financial reporting at the British software maker Autonomy before its $11.1 billion acquisition by Hewlett-Packard Co in 2011.

* Concern over the euro moved to the forefront Monday as finance ministers of the countries using the currency held their monthly meeting. But this time, with the European Union's recession continuing, the topic was the strength of the euro rather than its many weaknesses.

* The Swedish investment company Hakon Invest agreed on Monday to buy the remaining stake in the Nordic retailer ICA it did not already own for $3.1 billion.

* A new 24-hour news and entertainment channel, Fusion, has powerful backers in Univision and ABC News, a unit of the Walt Disney Co, and underscores the growing influence of the burgeoning Hispanic audience.

* Mary Jo White, who has been nominated to run the U.S. Securities and Exchange Commission, has also disclosed that her husband would relinquish his partnership at Cravath, Swaine & Moore, converting his interest in the firm from an equity to non-equity status.

* Pope Benedict XVI's surprise announcement on Monday that he will resign on Feb. 28 sets the stage for a succession battle that is likely to determine the future course of a church troubled by scandal and declining faith in its traditional strongholds around the world.

* It will be four years on Tuesday since the last fatal crash in the United States, a record unmatched since propeller planes gave way to the jet age more than half a century ago. Globally, last year was the safest since 1945, with 23 deadly accidents and 475 fatalities, according to the Aviation Safety Network, an accident researcher.

Canada

THE GLOBE AND MAIL

* The Harper government will not resurrect its controversial Internet surveillance bill, and will not introduce new legislation to monitor the activities of people on the web.

* Former school trustee Liz Sandals inherited one of Ontario's most difficult files Monday, taking on the post of Education Minister and the ambitious task of resolving a dispute with Ontario's teachers and restoring sports teams, clubs and other after-school activities.

Reports in the business section:

* Genivar Inc, one of Quebec's biggest engineering firms, uncovered "inappropriate conduct" after investigating the company's role in financing political parties and bidding on municipal contracts, another sign of corruption in the province's engineering and construction industry.

NATIONAL POST

* A federal report on military procurement to be released Tuesday will recommend bidders be required to explicitly outline how they will spur innovation and long-term economic growth in Canada, a source familiar with the file told the National Post.

FINANCIAL POST

* WestJet Airlines Ltd will launch its new regional carrier Encore in Western Canada this summer starting on June 24, the company said Monday.

* Following the grilling in London last week, outgoing Bank of Canada governor Mark Carney may be in for a second round of tough questioning Tuesday, this time from Canadian Ministers of Parliament.

Fly On The Wall 7:00 AM Market Snapshot

ANALYST RESEARCH

Upgrades

Alexandria Real Estate (ARE) upgraded to Overweight from Equal Weight at Evercore
Boston Properties (BXP) upgraded to Outperform from Sector Perform at RBC Capital
DCT Industrial (DCT) upgraded to Market Perform from Underperform at Wells Fargo
Digital Realty (DLR) upgraded to Overweight from Equal Weight at Evercore
Gold Fields (GFI) upgraded to Neutral from Sell at Citigroup
J.M. Smucker (SJM) upgraded to Outperform from Market Perform at Bernstein
Nortel NetApp (NTAP) upgraded to Buy from Hold at Brean Capital
Novo Nordisk (NVO) upgraded to Buy from Neutral at Nomura
Royal Gold (RGLD) upgraded to Buy from Neutral at UBS
Suburban Propane (SPH) upgraded to Buy from Neutral at BofA/Merrill
Walgreen (WAG) upgraded to Buy from Neutral at Mizuho

Downgrades

Boyd Gaming (BYD) downgraded to Sell from Neutral at Goldman
Capstead Mortgage (CMO) downgraded to Market Perform from Outperform at JMP Securities
Corporate Office (OFC) downgraded to Equal Weight from Overweight at Evercore
Cubic (CUB) downgraded to Hold from Buy at Benchmark Co.
Facebook (FB) downgraded to Market Perform from Outperform at Bernstein
General Growth (GGP) downgraded to Underperform from Sector Perform at RBC Capital
Macerich (MAC) downgraded to Sector Perform from Outperform at RBC Capital
Piedmont Office (PDM) downgraded to Underperform from Outperform at RBC Capital
Qualcomm (QCOM) downgraded to Neutral from Overweight at JPMorgan
Questar (STR) downgraded to Neutral from Buy at UBS

Initiations

Cincinnati Bell (CBB) initiated with a Hold at Deutsche Bank
CyrusOne (CONE) initiated with a Buy at Deutsche Bank
CyrusOne (CONE) initiated with a Neutral at BofA/Merrill
Idenix (IDIX) initiated with a Neutral at RW Baird
Legacy Reserves (LGCY) initiated with an Overweight at Barclays
Manchester United (MANU) initiated with an Outperform at Raymond James
Navios Maritime Partners (NMM) initiated with a Buy at Citigroup
Theravance (THRX) initiated with an Outperform at RW Baird

HOT STOCKS

Barclays (BCS) to reduce headcount by at least 3,700 this year
Rexnord (RXN) hired Goldman Sachs (GS) to explore possible sale
JANA Partners rejected Agrium's (AGU) settlement offer, director appointments
Arris (ARRS), Google (GOOG) received second DOJ request for more information about Arris' proposed acquisition of Motorola Home business from Google
American Express (AXP), Twitter signed online purchasing agreement
Procter & Gamble (PG), Verix Business initiated strategic partnership
VMware (VMW) acquired Virsto, terms not disclosed
Groupon (GRPN) acquired MashLogic, terms not disclosed
Laclede Group (LG) announced sale of New England Gas Co. (SUG) to Algonquin Power
Masco (MAS) sees “repair and remodel” to grow modestly in FY13
Titan International (TWI) announced offer for Wheels of India
Nielsen (NLSN) initiated dividend policy, declared 16c per share dividend

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Otter Tail (OTTR), American Financial Group (AFG), Masco (MAS), Nielsen (NLSN), Tesoro Logistics (TLLP), Lionsgate (LGF)

Companies that missed consensus earnings expectations include:
Owens & Minor (OMI), Dun & Bradstreet (DNB), Rexnord (RXN), Danaos (DAC), tw telecom (TWTC), Cubic (CUB)

Companies that matched consensus earnings expectations include:
DynaVox (DVOX)

NEWSPAPERS/WEBSITES

  • Fed Vice-Chairwoman Janet Yellen offered a vigorous defense of the central bank's easy-money policies, suggesting she favors continuing them amid a slow economic recovery and disappointing job market, the Wall Street Journal reports
  • Behind David Einhorn's protestations on Apple (AAPL) is a novel way to return cash to shareholders. Einhorn, of hedge fund Greenlight Capital, proposed that Apple issue a special class of stock, which he called "perpetual preferred," that would carry a high dividend yield. But with some investors feeling more confident about the future, shareholder pressure is growing to put that cash to work, the Wall Street Journal reports
  • The NTSB is investigating whether tiny fiber-like formations, known as dendrites, inside lithium-ion batteries could have played a role in battery failures on two Boeing (BA) 787 Dreamliners last month, Reuters reports
  • The shifting nature of Africa’s disease burden is luring Big Pharma (SNY, GSK) as new opportunities open up for treating chronic diseases afflicting the middle classes, rather than just fire-fighting infection.European companies, in particular, hope to reap rewards by investing early in a region where many of them already have historic commercial ties, Reuters reports
  • Global investment banks based in Europe and the U.S., facing regulatory and cost-cutting pressures at home, are losing market share (CS, MS, C) in emerging economies to smaller domestic competitors, Bloomberg reports
  • In 2007, Wal-Mart Stores (WMT) planned to open as many as 2,000 in-house medical clinics by mid-2012. Today, they have fewer than 130 clinics and is closing locations faster than it’s opening them. CVS Caremark (CVS) has about 630 MinuteClinics and aims to have 1,500 within four years, Bloomberg reports

SYNDICATE

ARCA Biopharma (ABIO) files to sell 3.48M shares of common stock for holders
American Capital Mortgage (MTGE) to offer 18M shares of common stock
ConnectOne Bancorp (CNOB) 1.6M share IPO priced at $28.00
DryShips (DRYS) announces offering of 5M common shares of Ocean Rig UDW
Gulfport Energy (GPOR) 7.75M share Secondary priced at $38.00
HCA Holdings (HCA) files to sell 50M shares of common stock for holders
Kosmos (KOS) commences offering of 30M shares of common stock
Motricity (MOTR) requests withdrawal of registration statement
Newcastle Investment (NCT) files to sell 20M shares of common stock
Team Health (TMH) files to sell 9.63M shares of common stock for holders
Warburg Pincus agrees to sell 2.5M shares of Primerica (PRI)

Your rating: None

Market Buzz: Looking for reference points

Russian traders are likely to be indecisive on Tuesday, as no significant news is expected that could change current economic trends.

­“Taking into account Monday’s decline, today we can expect that Russian stocks will show slight growth in the beginning, but later they can return to negative figures,” Yulia Voitovich from Investcafe said.

With no significant developments on Monday, the main indices in Moscow flipped between positive and negative territory, finishing in the red by the end of the day. The MICEX lost 0.26% and the RTS was down 0.51%. Severstal and Gazprom were among the companies that took the biggest losses.

The Russian Central Bank is holding a meeting on key interest rates on Tuesday, but no changes are expected to be made. Despite calls from both politicians and businesses, interest rates in Russia will remain high as the Central Bank fights inflation.

Deputy CEO of the Central Bank of Russia Aleksey Ulyukaev said in Davos in January that there was no point using monetary stimulation to boost the economy, as the current level of growth more or less matched the economy's potential – cutting rates would therefore produce few economic benefits.

The rates will stay unchanged, and the government statements are just a message to manufacturers and companies to support their optimism,” Natalia Orlova, chief economist at Alfa-Bank, told Finmarket earlier.

The main US stock indices ended the Monday session slightly in the red. The Dow Jones declined 0.16%, while the S&P 500 and NASDAQ fell just 0.06%.

In Europe,  the UK's FTSE100 went up 0.21%, the German DAX slid 0.24% and the CAC40 rose 0.56%.

The UK and Switzerland's Consumer Price Index (CPI) for January are set to be released on Tuesday, with a slight decline expected from last month figures, at 0.3% and 0.5% respectively. The UK will also release its Producer Price Index (PPI) for January, which is likely to rise 0.9%.

At Monday’s euro group meeting it was decided that conducting a speedy, independent audit of how banks in Cyprus were implementing anti-money-laundering laws might be on the table before a decision is made on providing an aid package.

Asia's main stocks are trading in black, with the Hang Seng growing 0.16%, the Nikkei adding 2.39% and the Shanghai Composite going up 0.57%.

Market buzz: Getting back on track

RT Photo / Irina Vasilevitskaya

RT Photo / Irina Vasilevitskaya

Russian stocks are likely to open in the black on Monday after Friday’s correction, depending though on news from European stocks. Global stocks showed moderate growth on Friday.

Taking into consideration moods at the foreign stocks, the Russian market will try to recover from Friday’s correction on Monday, and Russian stocks are very likely to start the day in the black,” Yulia Voitovich from Investcafe says. However, Monday’s dynamic will be highly dependent on incoming news and European markets’ performances.

Both key Russian indices finished the Friday session in the red. The RTS was down 0.33% to 1,590.13, and the MICEX declined 0.39% to close at 1519.91. Russia’s Transneft was among leaders of the decline, while Sberbank managed to show some growth.  Gazprom lost over 1% on Friday, as investors are still worried about decline in exports and the monopoly’s revenue, and the company’s preliminary results for 2012 are not optimistic enough.

Meanwhile, the Brent price reached its maximum in over than six months on Friday, up to US$118 a barrel, following reports on China’s trade balance and decline in production by OPEC countries. At the moment oil price indications show a minor correction, with Brent falling slightly by 0.22% and Light 0.04%.

In Europe, the Managers' Index (PMI) for France for December is expected to show 0.3% decline compared to the previous month. And the Monday’s euro group meeting, to be attended by International Monetary Fund Managing Director Christine Lagarde, will focus on the economic situation in Greece and financial aid to Cyprus. The finance ministers of the eurozone are also expected to discuss EU monetary policy.

American indices inched up on Friday with DJIA going up 0.35%, S&P500 adding 0.57% and NASDAQ – 0.91%, while major European stocks also showed positive dynamics, with FTSE100 of the UK up 0.57%, German DAX 0.81%, French CAC40 – 1.35%.

Markets got a positive lead from the US government, as record petroleum exports helped shrink the US trade deficit in December to the smallest in almost three years. The Commerce Department’s figures showed that US trade deficit narrowed to $38.5 billion in December from a revised $48.6 billion in November, versus forecasts for a deficit of $46.0 billion. According to the report, it is the smallest US trade deficit since the $37.1 billion deficit in January of 2010, and it can allow an upward revision to the disappointing Q4 GDP data. The initial report on Q4 GDP showed a 0.1% contraction compared to estimates for an increase of 1.0%.

Asian stocks are mostly up in early Monday trading, as Shanghai Composite is going up 0.57%, Hang Seng rising 0.16%, and only the Nikkei 225 dipping 1.8%.


Tale Of Two Markets (Again)

The US equity market continues to boldly go where no other market is willing to go (Dow outperforming EuroStoxx by 850bps this year). European stocks and bonds (+30-45bps) are down notably on the week (and year in some cases); Treasury yields are 4-6b...

Frontrunning: February 6

  • Tunisian opposition politician shot dead, protests erupt (Reuters)
  • China says extremely concerned after latest North Korea threats (Reuters)
  • Postal Service to cut Saturday mail to trim costs (AP)
  • Debt Rise Colors Budget Talks (WSJ)
  • Obama proposes short-term budget fix, Republicans swiftly object (Reuters)
  • S&P Analyst Joked of Bringing Down the House Before Crash (BBG)
  • Dell’s Bigger Challenge Ahead in Turnaround After Buyout (BBG)
  • Some of the Mark Carney Gloss Is Coming Off (WSJ)
  • Japan Official Says BOJ Tools Sufficient as Shake-Up Looms (BBG)
  • S&P Lawsuit Undermined by SEC Rules That Impede Competition (BBG)
  • Heavy Clashes Erupt in Syrian Capital (WSJ)
  • Carmakers Use Aluminum Over Steel in Boost for Rio (BBG)
  • Beijing vows to raise minimum wages (FT)
  • China Port Operators Step Up Overseas Investment (WSJ)

Overnight Media Digest

WSJ

* A slowly improving U.S. economy and recently enacted tax increases will help bring down the federal deficit for the next few years, the Congressional Budget Office said Tuesday, but it will take another $2 trillion in belt-tightening over the next decade to begin to move the federal debt closer to historic levels.

* The U.S. government wants Standard & Poor's Ratings Services to pay more than $5 billion - roughly what its parent company has earned in the past seven years - for giving its seal of approval to bundles of subprime mortgages that eventually crumbled, costing investors billions and helping sink the economy.

* Nasdaq OMX Group's missteps during last year's debut of Facebook Inc shares cost Wall Street an estimated $500 million. In the end, U.S. securities regulators may end up fining the exchange group 1 percent of that.

* Pinterest is in talks to raise a new round of financing that would value the online scrapbooking site at $2 billion to $2.5 billion.

* Regulators leading the world-wide probe into rate-rigging allegations are expected to announce Wednesday a settlement of around 400 million pounds ($626.72 million) with Royal Bank of Scotland, according to people close to the investigation.

* John Malone's international cable business Liberty Global Inc has agreed to acquire U.K. cable-television and Internet provider Virgin Media Inc for $16 billion, in a deal that may create a stronger rival to market leader British Sky Broadcasting Group Plc.

* Walt Disney Co's net income weakened in the latest quarter, even as revenue grew, reflecting slimmer profits at the movie studio, where home-video titles were less lucrative than those released in the final months of 2011.

* Chipotle Mexican Grill Inc and Panera Bread Co have posted solid results even as traditional fast-food chains like McDonald's Corp and Yum Brands Inc are struggling with waning consumer confidence.

FT

John Malone's Liberty Global Inc struck a deal to buy British cable group Virgin Media for $23.3 billion in a cash and stock deal, a move that would put the U.S. billionaire up against old rival Rupert Murdoch.

Michael Dell struck a deal to take Dell Inc private for $24.4 billion in the biggest leveraged buyout since the financial crisis, partnering with the Silver Lake private equity firm and Microsoft Corp to try to turn around the struggling computer company without Wall Street scrutiny.

Business secretary Vince Cable is expected to revive a radical plan to return state-owned Royal Bank of Scotland to private sector hands by distributing free shares to the public.

BP Plc is facing demands of more than $34 billion in damages from states and local government in the United States over its 2010 Deepwater Horizon disaster. The claims could significantly increase its potential bill for the Gulf of Mexico spill.

Swiss bank UBS said it was cutting bonus payments to its staff in a move to appease regulators and investors and recoup a large part of its $1.5 billion Libor fine.

Boeing said it sought permission from U.S. aviation authorities to start test flights of its 787 Dreamliner jet as part of its effort to identify the cause of battery failures that forced the plane to be grounded.

European aerospace and defence company EADS plans to bring an American on its board for the first time as the company plans to boost its credentials in the lucrative US market. The Airbus parent has nominated Ralph Crosby, a former executive at Northrop Grumman, to join its board.

Jim O'Neill, chairman of Goldman Sachs' asset-management division and the man who coined the acronym 'BRIC', will retire from the bank later this year.

NYT

* Court documents offer a look at the inner workings of Standard and Poor's, which the U.S. government says inflated credit ratings with dire consequences for the entire economy.

* Dell Inc, seeking to revive itself after years of decline, said on Tuesday it had agreed to go private in a deal led by its founder and the investment firm Silver Lake.

* U.S. President Barack Obama on Tuesday called on Congress to quickly pass a new package of limited spending cuts and tax increases to head off substantial across-the-board reductions to domestic and military spending set to begin on March 1, but his appeal for more revenue was dismissed by Republicans.

* Liberty Global Inc, the international cable company owned by American billionaire John Malone, agreed on Tuesday to buy the British cable company Virgin Media Inc for about $16 billion.

* Law firm Debevoise & Plimpton's move to get out of the estate-planning business comes as the legal industry continues to emphasize more profitable practices.

* Twitter confirmed on Tuesday that it was acquiring Bluefin Labs, a company that analyzes online chatter about TV shows and companies and sells its findings.

* Jim O'Neill, the economist who a decade ago coined the term "BRICs" - the acronym for the emerging growth economies in Brazil, Russia, India and China - plans to retire from Goldman Sachs Group Inc later this year, the firm announced on Tuesday.

Canada

THE GLOBE AND MAIL

* The Canadian government is prepared to knock holes in the hefty tariff walls shielding dairy producers from foreign competition and admit more European cheese into the country in return for greater access to EU markets for Canada's beef and pork.

* The Conservative government is preparing to commit long-term cash for infrastructure in its 2013 budget in an effort to squeeze more projects - including partnerships with the private sector - out of limited public funds.

Reports in the business section:

* Suncor Energy Inc has taken a writedown of nearly C$1.5 billion on its Voyageur project, a massive oil sands plant that is now at serious risk of cancellation.

* Kathleen Taylor spent years preparing for the top job at Four Seasons Hotels Ltd, but the company said on Tuesday that she will be replaced only three years after she finally sat down in the corner office.

NATIONAL POST

* Prime Minister Stephen Harper would seek a constitutional amendment to give the House of Commons primacy over any future elected Senate, said Harper's point-person on reform in the Senate.

FINANCIAL POST

* Car loans drove Canadians to record debt in the fourth quarter of 2012 as the pace of consumer borrowing began to pick up after a brief lull, according to a survey released on Tuesday.

China

CHINA SECURITIES JOURNAL

-- Top Chinese steel maker Baoshan Iron & Steel Co said it had so far bought back 424 million shares in response to a regulatory call last year for listed companies to buy back their own shares to support the stock market.

CHINA DAILY (www.chinadaily.com.cn)

-- Chinese health authorities have launched a campaign to address abusive practices in the country's growing assisted reproductive technology industry.

-- Beijing weather authorities have launched a "fireworks index" to inform residents celebrating the upcoming Spring Festival holiday whether conditions are appropriate for setting off fireworks.

SHANGHAI DAILY

-- Ten people who illegally detained citizens trying to take complaints to the central government have been jailed. The defendants allegedly intercepted people coming to Beijing to complain about land seizures. The practice is believed to be common in China, the report said.

-- Clothing retailer H&M has been fined by the Shanghai city market watchdog for selling substandard shoes.

PEOPLE'S DAILY

-- China will announce the names of the 10 most polluted cities in the country every month, said Wu Xiaoqing, vice minister of environmental protection.

Fly On The Wall 7:00 AM Market Snapshot

ANALYST RESEARCH

Upgrades

Allergan (AGN) upgraded to Outperform from Market Perform at JMP Securities
Carlyle Group (CG) upgraded to Buy from Neutral at Citigroup
Dell (DELL) upgraded to Neutral from Sell at Citigroup
Express (EXPR) upgraded to Overweight from Neutral at JPMorgan
Gannett (GCI) upgraded to Buy from Neutral at Citigroup
Marsh & McLennan (MMC) upgraded to Buy from Neutral at Goldman

Downgrades

Arch Coal (ACI) downgraded to Neutral from Overweight at JPMorgan
Ashford Hospitality (AHT) downgraded to Neutral from Outperform at RW Baird
C.H. Robinson (CHRW) downgraded to Underperform from Buy at BofA/Merrill
Centene (CNC) downgraded to Neutral from Buy at Citigroup
Charter (CHTR) downgraded to Market Perform from Outperform at Raymond James
Expedia (EXPE) downgraded to Sector Perform from Outperform at RBC Capital
Hologic (HOLX) downgraded to Neutral from Buy at BofA/Merrill
Intercontinental Hotels (IHG) downgraded to Neutral from Outperform at RW Baird
Marcus (MCS) downgraded to Neutral from Outperform at RW Baird
McClatchy (MNI) downgraded to Neutral from Buy at Citigroup
Minerals Technologies (MTX) downgraded to Neutral from Overweight at JPMorgan
Pebblebrook Hotel (PEB) downgraded to Neutral from Outperform at RW Baird
SandRidge Permian Trust (PER) downgraded to Sector Perform at RBC Capital
Silgan Holdings (SLGN) downgraded to Neutral from Buy at Citigroup
Sirius XM (SIRI) downgraded to Neutral from Outperform at Macquarie
Sohu.com (SOHU) downgraded to Neutral from Outperform at Macquarie
Trimble Navigation (TRMB) downgraded to Neutral from Overweight at JPMorgan
Validus (VR) downgraded to Neutral from Conviction Buy at Goldman
Vascular Solutions (VASC) downgraded to Hold from Buy at Benchmark Co.

Initiations

Advanced Energy (AEIS) initiated with a Buy at Citigroup
Finish Line (FINL) initiated with a Neutral at RW Baird
First Solar (FSLR) initiated with a Buy at Citigroup
Foot Locker (FL) initiated with an Outperform at RW Baird
Global Eagle (ENT) initiated with an Overweight at Piper Jaffray
MEMC Electronic (WFR) initiated with a Buy at Citigroup
SunPower (SPWR) initiated with a Buy, added to Top Picks Live at Citigroup
Suntech (STP) initiated with a Sell at Citigroup
Tesaro (TSRO) initiated with a Buy at Deutsche Bank
Thor Industries (THO) initiated with an Outperform at BMO Capital
Trina Solar (TSL) initiated with a Neutral at Citigroup
Yingli Green (YGE) initiated with a Neutral at Citigroup

HOT STOCKS

Liberty Global (LBTYA) to acquire Virgin Media (VMED) for $23.3B
Silver Wheaton (SLW) acquired some gold production from two Vale (VALE) mines for $1.9B
Biogen (BIIB) to acquire full rights and control of Tysabri from Elan (ELN)
Disney (DIS) said confident about FY13, ability to create long-term growth
Ford (F) announced 900 dealers to be certified to sell plug-in EVs by spring
Home Depot (HD) to hire 80,000 associates for spring season
Chipotle (CMG): Confident in continued ability to drive sales growth in 2013
Sees 2013 comparable restaurant sales flat to low single digits
3M Company (MMM) authorized $7.5B share repurchase program
Moody's affirmed MetLife's (MET) ratings, long-term ratings' outlook to negative
Fitch: Yum! Brands (YUM) ratings not immediately impacted by China weakness
Equity Residential (EQR) sees Q1 FFO 62c-66c, consensus 66c
Zynga (ZNGA) sees FY13 EBITDA margin 0%-10%
Said no full year 2013 year guidance, cites platform transition
Netflix (NFLX), Queen Latifah's Flavor Unit Entertainment announced multi-year deal

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Elan (ELN), W.R. Grace (GRA), KKR Financial (KFN), Horace Mann (HMN), Genworth (GNW), Jive Software (JIVE), Take-Two (TTWO), Hanesbrands (HBI), Panera Bread (PNRA), Hain Celestial (HAIN), Zynga (ZNGA)

Companies that missed consensus earnings expectations include:
AU Optronics (AUO), C.H. Robinson (CHRW), Stanley Furniture (STLY), Chipotle (CMG), Expedia (EXPE)

Companies that matched consensus earnings expectations include:
Myriad Genetics (MYGN), Aflac (AFL), Fiserv (FISV), CME Group (CME), Thoratec (THOR)

NEWSPAPERS/WEBSITES

U.S. stock exchanges, banks, trading firms and mutual funds want the SEC to study the effect of pricing some small stocks in nickels and dimes, rather than in pennies, the Wall Street Journal reports
Microsoft’s (MSFT) contribution to the Dell (DELL) buyout is a $2B gamble that the software firm can boost up one of its major customers without upsetting all the others, the Wall Street Journal reports
The Federal Reserve said that one of its internal websites had been briefly breached by hackers, though no critical functions of the U.S. central bank were affected by the intrusion, Reuters reports
Softbank (SFTBF) will issue $3.2B in corporate bonds, the biggest ever by a non-financial Japanese firm to retail investors, to convert part of the $17.7B in short-term loans used to purchase Sprint Nextel (S) to longer term debt, sources say, Reuters reports
With Michael Dell’s (DELL) deal to take his company private, he now faces the larger challenge of turning a business falling behind in personal computers into a provider of high-margin cloud-computing tools and services, Bloomberg reports
Automakers from Ford (F) to Audi (VLKAY) and Jaguar Land Rover (TTM) are using record amounts of aluminum to replace heavier steel, providing relief to producers of the metal facing excess supplies and depressed prices, Bloomberg reports

SYNDICATE

Boise Cascade (BCC) 11.765M share IPO priced at $21.00
Celldex (CLDX) 12M share Secondary priced at $7.50
MagnaChip (MX) 5M share Secondary priced at $14.50
NCI Building Systems (NCS) files to sell 54.14M shares of common stock for holders
Rose Rock Midstream (RRMS) files to sell 2M common units for holders
Silver Bull (SVBL) proposes public offering of units
TICC Capital (TICC) files to sell 3M shares of common stock
WNS Holdings (WNS) files to sell 12.6M ADSs for Warburg Pincus

Your rating: None

UK Deficit To Be £64bn Above Osborne’s 2015 Target

The UK will borrow £64bn more than expected by 2015 despite Chancellor George Osborne's repeated attempts to control the country's deficit, a report warned today.

As a result, spending on services like the police, defence, transport and justice could be cut by a third by 2017/18 under current Government spending plans, .

The plans suggest 1.2 million job losses in the public sector by that date, 300,000 more than predicted by the Government's official forecasters, according to the Green Budget published by the Institute for Fiscal Studies.

The respected economic think-tank said Chancellor George Osborne's failure to hit deficit reduction targets means tax rises or "substantial" additional cuts in welfare benefits are likely after the 2015 general election to avoid "hard to contemplate" cuts in Whitehall budgets.

The fiscal position may force the Chancellor to raid pensioner benefits, the NHS, schools or overseas aid, hitherto protected from cuts, said the report.

"Over the last 30 years, tax rises announced in the year after a general election have averaged £7.5 billion," said the IFS.

"Considering this trend, and in the context of the current fiscal situation, further tax rises following the next election would not be surprising."

With the public finances failing to come into balance as quickly as Osborne had hoped, IFS director Paul Johnson questioned whether the Chancellor can continue to shield the NHS, schools and overseas aid from cuts.

The Government has said it will continue to protect these three areas from cuts in the spending review for 2015/16, now being negotiated.

But Johnson said extending the protection further would mean spending on other departments - like the Home Office, Defence and Environment - falling by a third by 2017/18.

If the budget for defence equipment was protected, as Prime Minister David Cameron has suggested, that figure would rise to 35%.

Whitehall departments have so far relied heavily on job losses to meet the Chancellor's austerity demands, and if they continued to do so at the same rate, 1.2 million public sector jobs could go by 2017/18, compared with the 900,000 forecast by the Office for Budget Responsibility, said the IFS.

Johnson said: "As economic performance and forecasts have worsened, the Chancellor has followed a dual strategy. He is allowing borrowing to increase substantially in this Parliament - allowing the automatic stabilisers to work - whilst promising another dramatic dose of public spending cuts in the next Parliament.

"The effects of concentrating all those cuts on currently unprotected areas of public service spending look hard to contemplate. A more likely scenario perhaps is that other choices will be made after the next election.

"Taxes could rise, hitherto protected elements of public spending, like the NHS and pensions, could be hit, or the date at which we reach fiscal balance will be pushed further out."

TUC general secretary Frances O'Grady said: "The IFS is right. If the Government does not change course then there could be well over a million job losses in the public sector and savage cuts to vital services.

"This is the direct consequence of austerity policies that have shrunk the economy and cut living standards for millions.

"Even policies designed to boost investment are failing; now we learn that the Bank of England's lending boost has failed to help business and instead gone to mortgages.

"The Chancellor needs a budget for growth, jobs and families. His medicine is failing to cure the patient, and has toxic side effects. As the IMF now recognises, it's time for a new approach."

“The Winners Of The New World”, Circa February 2000

Because humor is always the best and only cure to pervasive central planning that has made a mockery of traditional investing and capital allocation, and because nobody delivers unlimited sheer, unadulterated humor quite as well as one James J. Cramer when he is "recommending" stocks, here is the full text of Jim Cramer's "The Winners of the New World" speech delivered in February 2000. Because it really never is different this time.

James J. Cramer is the keynote speaker at the 6th Annual Internet and Electronic Commerce Conference and Exposition, held at the Jacob Javits Center in New York City. From TheStreet.com

February 29, 2000

The Winners of the New World

You want winners? You want me to put my Cramer Berkowitz hedge fund hat on and just discuss what my fund is buying today to try to make money tomorrow and the next day and the next? You want my top 10 stocks for who is going to make it in the New World? You know what? I am going to give them to you. Right here. Right now.

OK. Here goes. Write them down -- no handouts here!: 724 Solutions, Ariba, Digital Island, Exodus, InfoSpace.com, Inktomi, Mercury Interactive, Sonera, VeriSign and Veritas Software.

 We are buying some of every one of these this morning as I give this speech. We buy them every day, particularly if they are down, which, no surprise given what they do, is very rare. And we will keep doing so until this period is over -- and it is very far from ending. Heck, people are just learning these stories on Wall Street, and the more they come to learn, the more they love and own! Most of these companies don't even have earnings per share, so we won't have to be constrained by that methodology for quarters to come.

There, now that that's done with, can we talk about the methodology that produced those top 10 so that you can understand how, in a universe of a gazillion stocks, we arrived at those, so you too can figure it out? I hope we can because I have another 10 and still another 10 and another. They all do the same thing: They make the Web faster, cheaper, better and easier to access anywhere, anytime. They allow you to get on the Web securely anywhere in the world. They make the Web economy the only economy that matters. That's all they do.

We try to own every one of them. Every single one. And if I had my druthers, I wouldn't own any other stocks in the year 2000. Because these are the only ones worth owning right now in this extremely difficult, extremely narrow stock market. They are the only ones that are going higher consistently in good days and bad. I love every one of them, just as I loathe the rest of the stock universe.

How did this stock market get like this, to where the only people who can make a dime in it are the people who are interested in the most arcane subject, the moving of data from one space to another, via strange new machines and software? How did it get to the point where nothing else matters, most particularly the 90% of the stock market I have studied for the last 20 years? How did all of that knowledge become totally irrelevant and the only stocks that work are the stocks of companies that didn't exist five years ago and came public in the last two or three years?

Let's start with the world in the early 21st century, a world where capital is abundant for a chosen few and nonexistent for just about everybody else. It is a world where the whole of Wall Street and Silicon Valley is at your fingertips if you are creating the infrastructure for the New Economy, and a world where neither Wall Street nor Silicon Valley could give a darn about you if you are using that infrastructure.

Or in other words, we don't care if General Motors (GM_) and Ford (F_) are going with Oracle (ORCL_) or with i2 (ITWO_) for their new parts procurement process. We don't want to own GM or Ford on any occasion. In fact, we would rather own the loser in that tech bake-off than the winner in nontech, because in this new world, there is so much business to be done for the i2s and the Oracles that the capital will remain plentiful for them, win or lose a particular piece of business.

Just yesterday I found myself wishing I had bought i2 when it lost out to Oracle for the giant business-to-business contract for the Big Three automakers. Others had the same idea because i2, the loser Friday, was up much more Monday than GM and Ford could be this year. i2 can own the world because the company with the access to cheap capital always wins. And the companies with no access have to lose.

Or, closer to home. We in the stock market don't care that The Street.com Inc., a company I helped create, has built a compelling new brand, has more than 100,000 paid subscribers and has $100 million in the bank. We just want to know which companies TheStreet.com employs to publish each day. We want to know who the host is, which publishing tool works best, which wireless strategy TheStreet.com is adopting and how does it automate its email? (By the way, the answers are Exodus, Vignette, Motorola and Kana  -- all at or near their 52-week highs as TheStreet.com languishes at its 52-week low, a triumph of the arms merchants over the combatants if there ever were one.)

How did this bizarro world where nine-tenths of the companies I have followed as a stock picker for the last 20 years are losers and one-tenth are winners? To answer that question, you have to throw out all of the matrices and formulas and texts that existed before the Web. You have to throw them away because they can't make money for you anymore, and that is all that matters. We don't use price-to-earnings multiples anymore at Cramer Berkowitz. If we talk about price-to-book, we have already gone astray. If we use any of what Graham and Dodd teach us, we wouldn't have a dime under management.

So how do we sort through which stocks get bought and which stocks get assigned to the waste bin?

We have a phrase on Wall Street. It's called raising the bar. If you can raise the bar, or brighten the outlook for your company, if you can see your growth accelerating, your stock will go higher and you will be given the currency to expand, acquire and do whatever you want. That's the secret of the quintessential New Economy stock: Cisco (CSCO_). This giant networker has the ability to control its own destiny. It can, as my colleague Adam Lashinsky says at TSC, buy any company it wants to. It can pay any price. Because it has a currency that it better than U.S. dollars: It has Cisco stock. It can do that because it raises the bar every quarter!

But what about the Old Economy stocks? Can Merck raise the bar? Can Pfizer? Can U.S. Steel? Or Phelps Dodge? Union Pacific? No, no, no, no, no and no. So what happens to them? Despite the billions in buybacks and the plethora of strong buys that the Street has put out about these companies, their stocks have no traction. They just stumble along, rising and falling haphazardly with every whim and quizzical speech of the Federal Reserve chairman that still controls their destiny. If Greenspan indicates that there is more tightening ahead, these traditional companies, the ones that you measure with traditional matrices, get pole-axed as we worry about where the capital will ultimately come from if credit gets choked off, while the arms merchants in the Web war, with capital to burn, just go higher.

It is no secret that the Dow, made up principally of companies that can't raise the bar, is down 12% while the Nasdaq, which is made up of companies that can raise the bar, is up 12%. And in the self-fulfilling jungle that is Wall Street, only growth can maintain growth!

So how do we find what are the great growth companies, knowing that growth and not cheapness of stock to company is what matters? We have to look for the fastest-growing industries and then select the companies that can make the infrastructure happen the fastest and the cheapest in those industries. The growth must be positively organic, if not viral. There must be heavy technological barriers to entry. And there must be an ability to scale without any thought to human cost. These companies must be able to dominate their businesses or be willing to become part of a larger institution that dominates.

So, whom does that eliminate? First, any company that is a commodity producer simply can't be owned, no matter what. The New Economy makes those be simply a function of low-cost producer with no ability ever to raise price. This, of course, is the crying shame of the way the Fed is trying to break the economy because the only place that could stand for a little inflation is in the deflationary commodity industries. But their inflation revolves around the ability to build inventory to anticipate future price hikes and the Fed is taking short rates to a height that makes it uneconomic to stockpile.

Second, it eliminates any bricks-and-mortar company that doesn't embrace the Net. To not embrace the Net is to give a cost edge to a competitor who does. It does so because the Net removes the middleman that was a product of the regional economy. There is $4 trillion worth of wholesaling that gets instantly eliminated by the Net. Before only the largest orders could be processed by the biggest companies because it was too expensive otherwise. Now all orders can be processed by the biggest companies through the Web. There is no need for the jobber or the wholesaler. Obviously, if you are still using that old distribution network, you can't compete against those who do.

Third, it eliminates any industry that does not have a proprietary brand. This is one of those weird features of the Web that people haven't woken up to yet, but it will seem obvious a few months from now. In the New World's economy, the desire to "name your own price" is too great to squelch. An outfit like priceline will change the very nature of brands in this country. It won't destroy the premium brand, but it will force everyone else out of the market. Why? Because the way priceline works is that we are trying to buy the premium brand for the price of the off-price brand. That means the off-price brands, whether they be Colgate or Dial or Hunt's or Ralston, are simply doomed by the Web. Why would you ever buy the second- or third-best when you can get the best via priceline for the same price as the lower tier? Ahh, that's a real killer. It leaves only the top brands to vie for supermarket space. The others won't be worth carrying. They won't move! Oh yeah, same goes for the airlines and the hotels and just about everybody else.

Fourth, it just destroys retail as we know it. Why? Because the companies that embrace the Web more vigorously will eventually be pitted against other companies that embrace the Web more vigorously, creating a virtual constant price war, the kind of war that Marx, of all, actually predicted would happen to capitalism. It will happen to retail once everyone realizes that Amazon recreated Wal-Mart online because it will forever have access to cheap capital. Why do I say forever? Because at a certain point, it will be done with its buildout and will effectively be able to cherry-pick whomever it wants to destroy while having it be subsidized by other areas. It will be Home Depot vs. Wal-Mart vs. Amazon in the end. Nobody else. And that's only if Home Depot figures out it better get on the Web and fast.

Fifth, it wipes out everybody who straddles the Old and New Worlds. Let's take the brokerage industry. If you are trying to preserve a price point, because you need those margins, you can't and you become roadkill. Same with journalism. If you are free online and cost offline, you will eventually not be able to charge offline. Why not? Because the Hewlett-Packards and Intels and Ciscos are bent on making the online version far superior to the offline version. And they will do it. They, too, have the access to capital to make it happen.

I can tell you from TheStreet.com that we have substantial cost advantages over our printed cousins. We can come out around the clock. We don't require paper, ink, delivery people or trucks. In that sense, we are much more like television, personal television, which is why we were wrong initially to think we could charge for basic news, and right to think we can charge a huge amount for proprietary analysis that can make you money.

The struggle between the offliners and the onliners in banking will also pan out just like these other industries, with huge wins for those with a fresh online culture and hideous losses for those who don't see it coming or are slow to adjust. If you have to preserve your giant branch network and the costs that come with it while someone else perfects secure wireless Internet transactions, you can forget about it. You can't afford to compete. How can Bank of America compete with Nokia as a way to bank? How can Goldman Sachs compete with Yahoo! as a way to invest? Isn't Nokia, with its wireless machine that goes everywhere a better bank than one that needs branches? Isn't Yahoo!, with its access to all of the information and quotes in the financial world a better place to buy stocks than Goldman?

Of course they are.

So, if you can't own the retailers, and you can't own transports, and you can't own banks and brokers and financials and you can't own commodity makers and you can't own the newspapers, and you can't own the machinery stocks, what can you own?

A-ha, that just leaves us with tech. That's why we keep coming back to it. That's why, despite the 80% increase in the Nasdaq last year, we are looking at another record year now. It is by that process of elimination that I have picked my top 10. And my next 10 and my next 10 after. Only those companies are worth owning. The rest?

You can have them.

Thank you.

Your rating: None

“The Winners Of The New World”, Circa February 2000

Because humor is always the best and only cure to pervasive central planning that has made a mockery of traditional investing and capital allocation, and because nobody delivers unlimited sheer, unadulterated humor quite as well as one James J. Cramer when he is "recommending" stocks, here is the full text of Jim Cramer's "The Winners of the New World" speech delivered in February 2000. Because it really never is different this time.

James J. Cramer is the keynote speaker at the 6th Annual Internet and Electronic Commerce Conference and Exposition, held at the Jacob Javits Center in New York City. From TheStreet.com

February 29, 2000

The Winners of the New World

You want winners? You want me to put my Cramer Berkowitz hedge fund hat on and just discuss what my fund is buying today to try to make money tomorrow and the next day and the next? You want my top 10 stocks for who is going to make it in the New World? You know what? I am going to give them to you. Right here. Right now.

OK. Here goes. Write them down -- no handouts here!: 724 Solutions, Ariba, Digital Island, Exodus, InfoSpace.com, Inktomi, Mercury Interactive, Sonera, VeriSign and Veritas Software.

 We are buying some of every one of these this morning as I give this speech. We buy them every day, particularly if they are down, which, no surprise given what they do, is very rare. And we will keep doing so until this period is over -- and it is very far from ending. Heck, people are just learning these stories on Wall Street, and the more they come to learn, the more they love and own! Most of these companies don't even have earnings per share, so we won't have to be constrained by that methodology for quarters to come.

There, now that that's done with, can we talk about the methodology that produced those top 10 so that you can understand how, in a universe of a gazillion stocks, we arrived at those, so you too can figure it out? I hope we can because I have another 10 and still another 10 and another. They all do the same thing: They make the Web faster, cheaper, better and easier to access anywhere, anytime. They allow you to get on the Web securely anywhere in the world. They make the Web economy the only economy that matters. That's all they do.

We try to own every one of them. Every single one. And if I had my druthers, I wouldn't own any other stocks in the year 2000. Because these are the only ones worth owning right now in this extremely difficult, extremely narrow stock market. They are the only ones that are going higher consistently in good days and bad. I love every one of them, just as I loathe the rest of the stock universe.

How did this stock market get like this, to where the only people who can make a dime in it are the people who are interested in the most arcane subject, the moving of data from one space to another, via strange new machines and software? How did it get to the point where nothing else matters, most particularly the 90% of the stock market I have studied for the last 20 years? How did all of that knowledge become totally irrelevant and the only stocks that work are the stocks of companies that didn't exist five years ago and came public in the last two or three years?

Let's start with the world in the early 21st century, a world where capital is abundant for a chosen few and nonexistent for just about everybody else. It is a world where the whole of Wall Street and Silicon Valley is at your fingertips if you are creating the infrastructure for the New Economy, and a world where neither Wall Street nor Silicon Valley could give a darn about you if you are using that infrastructure.

Or in other words, we don't care if General Motors (GM_) and Ford (F_) are going with Oracle (ORCL_) or with i2 (ITWO_) for their new parts procurement process. We don't want to own GM or Ford on any occasion. In fact, we would rather own the loser in that tech bake-off than the winner in nontech, because in this new world, there is so much business to be done for the i2s and the Oracles that the capital will remain plentiful for them, win or lose a particular piece of business.

Just yesterday I found myself wishing I had bought i2 when it lost out to Oracle for the giant business-to-business contract for the Big Three automakers. Others had the same idea because i2, the loser Friday, was up much more Monday than GM and Ford could be this year. i2 can own the world because the company with the access to cheap capital always wins. And the companies with no access have to lose.

Or, closer to home. We in the stock market don't care that The Street.com Inc., a company I helped create, has built a compelling new brand, has more than 100,000 paid subscribers and has $100 million in the bank. We just want to know which companies TheStreet.com employs to publish each day. We want to know who the host is, which publishing tool works best, which wireless strategy TheStreet.com is adopting and how does it automate its email? (By the way, the answers are Exodus, Vignette, Motorola and Kana  -- all at or near their 52-week highs as TheStreet.com languishes at its 52-week low, a triumph of the arms merchants over the combatants if there ever were one.)

How did this bizarro world where nine-tenths of the companies I have followed as a stock picker for the last 20 years are losers and one-tenth are winners? To answer that question, you have to throw out all of the matrices and formulas and texts that existed before the Web. You have to throw them away because they can't make money for you anymore, and that is all that matters. We don't use price-to-earnings multiples anymore at Cramer Berkowitz. If we talk about price-to-book, we have already gone astray. If we use any of what Graham and Dodd teach us, we wouldn't have a dime under management.

So how do we sort through which stocks get bought and which stocks get assigned to the waste bin?

We have a phrase on Wall Street. It's called raising the bar. If you can raise the bar, or brighten the outlook for your company, if you can see your growth accelerating, your stock will go higher and you will be given the currency to expand, acquire and do whatever you want. That's the secret of the quintessential New Economy stock: Cisco (CSCO_). This giant networker has the ability to control its own destiny. It can, as my colleague Adam Lashinsky says at TSC, buy any company it wants to. It can pay any price. Because it has a currency that it better than U.S. dollars: It has Cisco stock. It can do that because it raises the bar every quarter!

But what about the Old Economy stocks? Can Merck raise the bar? Can Pfizer? Can U.S. Steel? Or Phelps Dodge? Union Pacific? No, no, no, no, no and no. So what happens to them? Despite the billions in buybacks and the plethora of strong buys that the Street has put out about these companies, their stocks have no traction. They just stumble along, rising and falling haphazardly with every whim and quizzical speech of the Federal Reserve chairman that still controls their destiny. If Greenspan indicates that there is more tightening ahead, these traditional companies, the ones that you measure with traditional matrices, get pole-axed as we worry about where the capital will ultimately come from if credit gets choked off, while the arms merchants in the Web war, with capital to burn, just go higher.

It is no secret that the Dow, made up principally of companies that can't raise the bar, is down 12% while the Nasdaq, which is made up of companies that can raise the bar, is up 12%. And in the self-fulfilling jungle that is Wall Street, only growth can maintain growth!

So how do we find what are the great growth companies, knowing that growth and not cheapness of stock to company is what matters? We have to look for the fastest-growing industries and then select the companies that can make the infrastructure happen the fastest and the cheapest in those industries. The growth must be positively organic, if not viral. There must be heavy technological barriers to entry. And there must be an ability to scale without any thought to human cost. These companies must be able to dominate their businesses or be willing to become part of a larger institution that dominates.

So, whom does that eliminate? First, any company that is a commodity producer simply can't be owned, no matter what. The New Economy makes those be simply a function of low-cost producer with no ability ever to raise price. This, of course, is the crying shame of the way the Fed is trying to break the economy because the only place that could stand for a little inflation is in the deflationary commodity industries. But their inflation revolves around the ability to build inventory to anticipate future price hikes and the Fed is taking short rates to a height that makes it uneconomic to stockpile.

Second, it eliminates any bricks-and-mortar company that doesn't embrace the Net. To not embrace the Net is to give a cost edge to a competitor who does. It does so because the Net removes the middleman that was a product of the regional economy. There is $4 trillion worth of wholesaling that gets instantly eliminated by the Net. Before only the largest orders could be processed by the biggest companies because it was too expensive otherwise. Now all orders can be processed by the biggest companies through the Web. There is no need for the jobber or the wholesaler. Obviously, if you are still using that old distribution network, you can't compete against those who do.

Third, it eliminates any industry that does not have a proprietary brand. This is one of those weird features of the Web that people haven't woken up to yet, but it will seem obvious a few months from now. In the New World's economy, the desire to "name your own price" is too great to squelch. An outfit like priceline will change the very nature of brands in this country. It won't destroy the premium brand, but it will force everyone else out of the market. Why? Because the way priceline works is that we are trying to buy the premium brand for the price of the off-price brand. That means the off-price brands, whether they be Colgate or Dial or Hunt's or Ralston, are simply doomed by the Web. Why would you ever buy the second- or third-best when you can get the best via priceline for the same price as the lower tier? Ahh, that's a real killer. It leaves only the top brands to vie for supermarket space. The others won't be worth carrying. They won't move! Oh yeah, same goes for the airlines and the hotels and just about everybody else.

Fourth, it just destroys retail as we know it. Why? Because the companies that embrace the Web more vigorously will eventually be pitted against other companies that embrace the Web more vigorously, creating a virtual constant price war, the kind of war that Marx, of all, actually predicted would happen to capitalism. It will happen to retail once everyone realizes that Amazon recreated Wal-Mart online because it will forever have access to cheap capital. Why do I say forever? Because at a certain point, it will be done with its buildout and will effectively be able to cherry-pick whomever it wants to destroy while having it be subsidized by other areas. It will be Home Depot vs. Wal-Mart vs. Amazon in the end. Nobody else. And that's only if Home Depot figures out it better get on the Web and fast.

Fifth, it wipes out everybody who straddles the Old and New Worlds. Let's take the brokerage industry. If you are trying to preserve a price point, because you need those margins, you can't and you become roadkill. Same with journalism. If you are free online and cost offline, you will eventually not be able to charge offline. Why not? Because the Hewlett-Packards and Intels and Ciscos are bent on making the online version far superior to the offline version. And they will do it. They, too, have the access to capital to make it happen.

I can tell you from TheStreet.com that we have substantial cost advantages over our printed cousins. We can come out around the clock. We don't require paper, ink, delivery people or trucks. In that sense, we are much more like television, personal television, which is why we were wrong initially to think we could charge for basic news, and right to think we can charge a huge amount for proprietary analysis that can make you money.

The struggle between the offliners and the onliners in banking will also pan out just like these other industries, with huge wins for those with a fresh online culture and hideous losses for those who don't see it coming or are slow to adjust. If you have to preserve your giant branch network and the costs that come with it while someone else perfects secure wireless Internet transactions, you can forget about it. You can't afford to compete. How can Bank of America compete with Nokia as a way to bank? How can Goldman Sachs compete with Yahoo! as a way to invest? Isn't Nokia, with its wireless machine that goes everywhere a better bank than one that needs branches? Isn't Yahoo!, with its access to all of the information and quotes in the financial world a better place to buy stocks than Goldman?

Of course they are.

So, if you can't own the retailers, and you can't own transports, and you can't own banks and brokers and financials and you can't own commodity makers and you can't own the newspapers, and you can't own the machinery stocks, what can you own?

A-ha, that just leaves us with tech. That's why we keep coming back to it. That's why, despite the 80% increase in the Nasdaq last year, we are looking at another record year now. It is by that process of elimination that I have picked my top 10. And my next 10 and my next 10 after. Only those companies are worth owning. The rest?

You can have them.

Thank you.

Your rating: None

Weekly Bull/Bear Recap: Jan. 28-Feb. 1, 2013

From Rodrigo Serrano of Rational Capitalist Speculator,

This objective report concisely summarizes important macro events over the past week.  It is not geared to push an agenda.  Impartiality is necessary to avoid costly psychological traps, which all investors are prone to, such as confirmation, conservatism, and endowment biases.

Bull

U.S. Economic Activity is beginning to reaccelerate:

+  The global economy is set to reaccelerate in the coming months according to JP Morgan’s Global Manufacturing PMI, led by a reacceleration in China (due to domestic demand) and firming U.S. activity.  Improvement in these countries is spilling over into Europe…

+  …Germany’s Markit Manufacturing PMI is now just a smidgen below 50, which delineates between contraction and expansion, at 49.8 (an 11-month high).  Furthermore, Consumer climate, reported by the Gesellschaft für Konsumforschung (Gfk) group, reveals an improving state of confidence.  Perhaps this is due to a recovering job market.  Meanwhile, while still contracting, the majority of country-specific PMIs (Spain, Italy, Hungary, and Czech Republic) indicate the worse is over of the region’s recession.  The improvement in the global economy can also be seen in Brazil, where the unemployment rate has fallen to a record low.

image

(Source: Markit Economics

 

Bear

- Investors have piled into bullish bets (but earnings have flatlined since Q2 2011), economists all agree that the economy is poised to expand, the VIX is at 2007 levels before the crisis struck, and the bears are capitulating.  All are signs of extreme complacency in the face of festering bearish macro trends……  

image

(Weekly Readings —— Solid Line = 32-week average)

- …..and why are investors giddy?  Because stocks keep on rising.  But smart investors know to use REAL, not Nominal gains to correctly value wealth.  “Zimbabwe’s stock market was the best performer this decade — but your entire portfolio now buys you 3 eggs.” — Kyle Bass

- The U.S. Economy is extremely vulnerable and is on the cusp of recession: 

  • Bull are doused with a bucket of cold water as 4th quarter U.S. GDPprints negative for the first time since Q2 2009.  The negative print is a crystal clear indication of how weak and vulnerable this recovery is.  Curtailing government expenditures, higher taxes, and rising gas prices as the summer approaches will be too much for the economy to bear.
  • U.S. Consumer confidence, as per the Conference Board Consumer Confidence survey, plunges again in January, erasing all of 2012’s gains.  Furthermore, the Bloomberg Consumer Comfort Index falls for the fourth straight week.  Weekly sales metrics, such as Goldman ICSCand Redbook, reveal weakening consumption trends.  This ongoing trend casts a cloud over the direction of consumer spending as worries over reduced incomes due to the expiring 2-yr payroll tax holiday ferment.
  • The Household Survey, embedded beneath the widely touted headline jobs number this morning, has not confirmed the improving job market for the third successive month.  
  • The FOMC meeting reveals that Fed officials are worried about a stalling economy (confirmed by Q4 numbers) as well as creeping disinflation.  Monetary policy is powerless to arrest continued sluggish in the economy; worse, as investors appreciate the negative impact of reduced consumer incomes, there will be a crisis of confidence.  ”Don’t Fight the Fed” will be a maxim of the past.  

- Europe’s troubles lurk in the background, receiving very little press.  The budget scandal in Spain is quietly picking steam and Retail Sales in the country fell for the 30th consecutive month in December.  Spanish 10-yr borrowing costs advance roughly 5% this week.  Looking at a 3-month view, we now see a higher high.  Meanwhile, car sales throughout the periphery remain in a distinguishable downtrend and retail sales throughout the region signal consumer retrenchment.  Moreover, Italian Consumer Confidence slumps to a 17-yr low and Business Confidence unexpectedly falls.

- If China has really bottomed and is on the brink of a sustainable recovery, try telling that to the Australians.  Straya’s mining-based economy is signaling a red flag for global recovery enthusiasts.

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Facebook profits drop 79% but mobile ad revenue takes off

(AFP Photo / Lionel Bonaventure) Social network Facebook has reported earnings and revenue higher than expectations but with sharp drop in profit. Fourth quarter 2012 results show a huge slide in the company's net income to $64 million from $302 mil...

Market Buzz: Waiting with bated breath ahead of jobs reports

RIA Novosti / Ruslan Krivobok

RIA Novosti / Ruslan Krivobok

Global investors are currently holding off on making any drastic moves as they await a series of labor reports later this week.

"People are reluctant to pull the trigger one way or the other until we get more clarity," J.J. Kinahan, chief derivatives strategist at TD Ameritrade, told CNN Money.

A Federal Reserve meeting scheduled for this week may also serve as another motivating factor for investors, Liliya Brueva of Investcafe added.

On Monday, Russian stocks closed on a positive note: The RTS rose 1.03% to 1,635.50 and the MICEX moved up 1.22%to finish at 1,562.93.

“Our [Russian] trading received a growth impulse from the positive news from China, where industrial companies have registered increased income for the fourth consecutive month,” Brueva explained.

Industrial earnings in China surged 20.4% in Q4 after negative growth over the first three quarters, according to the country’s National Bureau of Statistics.

Trading on Wall Street was mixed on Monday: The Dow Jones declined 0.1% and the S&P 500 lost 0.2%, while the Nasdaq added 0.1%.

Earlier gains on US floors, which hit new five-year highs on the back of strong corporate earnings, were hampered by “some conflicting economic data showing worse than expected pending home sales data, which came after some strong durable goods data that had initially given markets a bit of a boost,” explained Angus Campbell, head of market analysis for Capital Spreads.

The Census Bureau reported that orders for durable goods rose 4.6% in December, an increase over the 1.6% growth forecast by economists. The index of pending home sales also fell 4.3% during the same period; the index is based on the number of hosing contracts signed in a month, but does not measure actual closings.

European stocks closed mixed on Monday: The FTSE 100 gained 0.16%, the CAC 40 rose 0.07% and the DAX lost 0.32%.

Asian markets also finished mixed: The Shanghai Composite added more than 2%, closing at its highest level since June, while the Nikkei lost about 1%. The Hang Seng in Hong Kong also traded slightly higher.

Market Buzz: US ‘stats of the nation’ drive bourses

Russian investors are expected to be looking overseas, where the US stats are set to be a major newsmaker during the entire week. On Monday the world’s biggest economy will release its December durables figures.

“During the day Russian floors will be mostly focusing on an overall news environment and the way foreign investors behave,” according to Yulia Voitovich, an analyst at Investcafe.

As for the US durable report, analysts expect a 1.8% month-to-month increase of the December figure. “Excess of the actual reading above the expected could support the world stock indicators,” she added.

And given positive closure of Friday trading in the US and mostly in Asia, Russian stocks may also open higher on Monday, Voitovich said.

Domestic markets were positive on Friday. The RTS added 0.01% to 1, 618.84 and the MICEX was up 0.88% to 1,618.84.

Asian stocks are mostly up in early Monday trading, with Shanghai Composite going up 1.5%, Hang Seng rising 0.51% and just Nikkei going down 0.08%.

In Wall Street news, the most anticipated block of unemployment data is set to be released on Friday. The Labor Department releases its first monthly employment report for 2013.

Overall, unemployment is now one of the key economic issues the US authorities target. So far the unemployment rate has remained above and beyond a desirable figure. Last year it held steady at about 7.8%, while 6.5% serves is the target.

Stocks in the US ended last week on a positive note, with the Dow Jones adding 1.8%, the S&P rising 1.1% and Nasdaq going up 0.5%.

European markets finished broadly higher on Friday, where Germany leads the region. The DAX was up 1.42% while France's CAC 40 added 0.69% and London's FTSE 100 rose 0.31%.

Weekly Bull/Bear Recap: Jan. 21-25, 2013

From Rodrigo Serrano of Rational Capitalist Speculator,

This objective report concisely summarizes important macro events over the past week.  It is not geared to push an agenda.  Impartiality is necessary to avoid costly psychological traps, which all investors are prone to, such as confirmation, conservatism, and endowment biases. 

Bull

+ Existing home sales may have underperformed the consensus forecast, but for good reason.  A lack of homes for sale (supply), particularly at the low-value end, was the culprit.  This development will help maintain upward momentum in home prices throughout 2013.  Moreover, New Home Sales may have printed a negative MoM growth-rate, but this was due to a huge upward revision in November and doesn’t deter the bigger picture of continued growth for the sector in 2013.  Overall, inventory levels remain very lean.  Higher home prices will result in a positive wealth effect for consumers and help support consumption.  Furthermore, low inventory levels will act as an incentive for homebuilders to hire, buttressing economic activity.

+ The U.S. job market is clearly on the mend from the looks of the jobless-claims data.  At roughly 352K, the 4-week average is now at its lowest level in almost 5 years.  This development is a harbinger for a solid January payrolls report, due in a week from today.  

+ The bears’ strongest point, a stalling manufacturing sector, isn’t confirmed at all by Markit’s latest preliminary PMI reading.  For January, the overall index rose from 54 to 56.1, a 10-month high.  Furthermore leading indicators in the report, such as New Orders, point to further expansion in the months ahead.  

+ The world’s largest economic bloc, the European Union, is clearly stabilizing.  Germany’s manufacturing PMI rises to the highest in almost a year, while consumer confidence in the European region expands for the second month in a row.  Both reports are for January.  Meanwhile, the ZEW Center for European Economic Research reports that investor confidence in Germany skyrocketed 24.6 pts, hitting a level not seen in more than 2.5 years (same story for Euro-area confidence).  Finally on the financial front, investors are giving the thumbs up at recent reforms in Spain and Portugal; both countries issue bonds to strong demand —- meanwhile, many banks that participated in the LTRO at the zenith of the crisis, are now repaying their loans quicker than expected, a sign of confidence that the worse is over.  

+ China continues to surprise to the upside.  The country’s manufacturing PMI, released by HSBC, hits a 2-year high in January.  Furthermore, Copper is about to break out of its multi-year triangle to the upside (see 3-yr view).  

+ The Conference Board’s U.S. leading indicator points to strengthening economic growth in the months ahead, rising 0.5% in December. “Housing, which has long been a drag, has turned into a positive for growth and will help improve consumer balance sheets and strengthen consumption,” says Conference Board economist Kenneth Goldstein.  

Bear

- Manufacturing has stalled and is looking to contract soon, as the Federal Reserve Bank of Richmond reports that its manufacturing index slumped to a 6-month low in January.  This report follows news of weakness in the sector from the New York and Philly Federal Reserve Banks.  Housing, which now only accounts for only 3% of U.S. GDP economy will not be able to pick up the slack (manufacturing accounts for 12% according to the National Association of Manufacturers)…  

- …furthermore consumption, which accounts for roughly 70% of the economy is set to shift down a gear as consumers hunker down as they face an expiring 2-year payroll tax holiday.  Bloomberg’s Consumer Comfort, which confirms recent falls in the University of Michigan and Conference Board consumer confidence surveys, falls to a 3-month low.   

- Complacency reigns in Euroland as Draghi states that the darkest times have passed.  Are we really out of the woods?  Investors are ignoring worrisome developments.  Spanish unemployment hits a record high while stories of corruption within the country’s government swirl about, creating political uncertainty at the flashpoint of the debt crisis.  Meanwhile in France, Europe’s second largest economy, recession is knocking on the door and could result in another flashpoint.

- From a technical perspective, stocks are very overbought at these levels.  Now is not the time to make risk-on bets as the S&P 500 also approaches multi-year resistance and many macro risks remain lurking in the background.

image  

—(Source Bespoke Investment Group)

- Common sense says that constant intervention and warping of financial markets by central banks will inevitably come back to haunt investors and the global economy.  Warnings grow of a credit bubble as rampant central bank intervention has masked the true cost of money.  The subsequent adjustment will undoubtably be painful.

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Overnight Futures Ramp Right On Schedule

At this point it has gotten painfully tedious, and the one phrase to describe trading is - Same Pattern Different Day. With equity futures closing decidedly weak on earnings reality after US market close, the slowly, steady overnight ramp seen every single day for the past month has returned as always, this time on yet another largely expected German confidence indicator beat (following the just as irrationally exuberant ZEW some time ago, and yesterday's far better than expected PMI), this time the IFO Business Climate, which printed at 104.2, on expectations of 103 and up from 102.4. This was driven by both the current assessment rising from 107.1 to 108 and the Expectations rising from 97.9 to 100.5. Naturally, all confidence indicators will be skewed in a way to prevent the market from doubting for a second that Germany may actually succumb to the same recession that has gripped all other European countries (which Germany is an inch away from after its negative Q4 GDP). In other words: there is hope. As for reality, UK Q4 GDP came in at -0.3% on expectations of a far lower drop to -0.1%, and down from the olympics-boosted 0.9% in Q3. The UK certainly can't wait for Mark Carney to come and show them how cable devaluation is really done, cause this time it will be different, if only it wasn't different for everyone else.

But the most anticipated news of the day was the previously reported LTRO repayment, which came in far "stronger" than expected. Initially this was taken as positive as it means the ECB's balance sheet will shrink at a time when everyone else is engaging in open balance sheet busting FX warfare, even if in reality this is a deflationary outcome leading to even more appreciation for the EURUSD, and even more pain for both the European trade and current account balance. As Deutsche Bank explained, "the market will likely continue to have some focus on the fact that the ECB balance sheet is likely to be steadily shrinking for a period at a time when the Fed is effectively increasing its by $85bn/month and where Japan is seen by many to be set to notably increase its interventions. So while the repayments are not a big deal in themselves the contrast between the ECB and many other central banks means that the Euro is probably biased to appreciate for the foreseeable future. This might provide an unwelcome headwind for growth in Europe later in the year." And, naturally, a few hours before the LTRO announcement, none other than Italy's Monti said that a strong EUR could harm exports, something we already showed for Spain.

More from Deutsche Bank:

Today is the day the ECB unofficially starts to exit from unconventional monetary policy as Euro-area banks now have the option to repay some of the 1 trillion Euros of LTRO money afforded to them last year. Banks can now hand back money with one week's notice, and today at 11am London time is the first announcement of what they have initially done. It’s likely that any repayment will be biased towards stronger banks and as such there's no real immediate systemic risk from this story. However the market will likely continue to have some focus on the fact that the ECB balance sheet is likely to be steadily shrinking for a period at a time when the Fed is effectively increasing its by $85bn/month and where Japan is seen by many to be set to notably increase its interventions. So  while the repayments are not a big deal in themselves the contrast between the ECB and many other central banks means that the Euro is probably biased to appreciate for the foreseeable future. This might provide an unwelcome headwind for growth in Europe later in the year. Despite the promise of the OMT, Europe is in danger as being seen as the least active in the near-term in the currency war skirmishes that are focusing investors minds at the moment. Maybe actions elsewhere and a higher Euro will eventually lead to the ECB balance sheet expanding again after some market stress but this is further down the road.

While on European matters, Draghi is expected to speak at Davos today at 930am London time so it'll be interesting to hear if he continues to give off an air of increased confidence and whether he discusses the currency at all. Data wise Europe had a mixed day yesterday but the US was strong. In terms of the flash PMIs, Germany (48.8 vs 47.0 expected for Manufacturing, and 55.3 vs 52.0 for Services) was strong but weakness in France (42.9 vs 44.9 expected for Manufacturing, and 43.6 vs 45.5 expected for Services) was notable. The overall European number beat expectations but Germany played a large part in this. Our European economists think that these numbers are consistent with a flat Italian and Spanish composite reading when the data comes out next Friday. The Flash Markit US PMI number was very strong (56.1 vs 53.0). This release is still in its infancy with little track record but if it’s close to being consistent with the official ISM then US markets are not mis-priced at current levels. Indeed in our ISM/S&P 500 simple regression model, at current levels US equities are broadly pricing in an ISM of 54.7. The last ISM was at 50.7 though so the flash PMI is well ahead for now and a bit of caution is required. In Europe the market is much more ahead of the economy as our simple model suggests that equities are broadly pricing in a French, German and Euro-area PMI of 54.5, 56 and 54, respectively (against yesterday’s flash manufacturing numbers of 42.9, 48.8 and 47.5). This is all quite sweeping but in general the US economy is showing signs that it might be living up to some of the faith the equity market has recently shown in it whereas Europe still has a long way to go.

As we said in the 2013 outlook, liquidity and the benefit of the doubt will likely dominate in Q1 and market should generally be in decent shape. However we do need to see Europe show more consistent and broad growth for European markets not to have a set-back in Q2. The jury is still out on this and a steadily increasing Euro won't help.

Moving on to the market, yesterday saw the S&P 500 breach the symbolic 1500 mark for the first time since 2007 before chatter of a Financial Transactions Tax helped reverse all of those earlier gains. US data flow was generally positive supported by a larger-than-expected drop in initial jobless claims (330k v 355k) and the stronger preliminary PMI as mentioned above. Although we should note that the regional manufacturing surveys from the Kansas Fed yesterday (-2 vs +1) and the Richmond Fed on Tuesday (-12 v +5) were both disappointing.

The S&P 500 finished the day virtually unchanged with the NASDAQ (-0.74%) being a standout underperformer amongst major  indices as sentiment for Tech stocks softened on the back of Apple’s results.

Turning to Asia and overnight markets are mixed. The Nikkei (+2.5%) is leading the pack as the continued fall in consumer prices probably added further easing optimism. Core CPI fell - 0.6% yoy in December which is a touch more than expected (-0.5% yoy).

The JPY fell to 90.5 against the Dollar and is now 2.7% off the intra-week highs. Elsewhere the Hang Seng (- 0.3%) and the KOSPI (-1.1%) are both lower with the latter particularly being impacted by the renewed weakness in JPY.

In other news EU’s Olli Rehn said that he is unsure that the Euro is overvalued now but would not want to see a currency war of competitive devaluations which would have a negative effect on the Euro. On the peripheral countries, Rehn said there are several options under consideration to help Dublin and Lisbon return to markets including possibly extending the maturity of bailout loans or providing a new precautionary credit line.

In terms of today, Germany’s IFO survey and UK GDP for the fourth quarter will be the data highlights in Europe. The New home sales report is the only major release in the US. So all eyes will be on the ECB’s LTRO prepayment announcement and Draghi’s speech at Davos today.

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Apple Earnings Shock Offset By Good Cop/Bad Cop Macro Data

While the main topic of conversation overnight was the Apple implosion after earnings (which was mercifully spared inbound calls from repo desk margin clerks who had all gone home by the time the stock hit $460), there was some macro data to muddle up the picture, which, like everything else in this baffle with BS new normal came in "good/bad cop" pairs.

In early trading, all eyes were focused on Japan, whose trade and especially exports imploded when the country posted a record trade gap of 6.93 trillion yen ($78.27 billion) in 2012 and the seventh consecutive monthly drop in exports which showed that improved sentiment has yet to translate into hard economic data. Finance ministry data on Thursday showed that exports fell 5.8 percent in the year to December, more than economists' consensus forecast of a 4.2 percent drop. Trade with China was hit particularly hard following the ongoing island fiasco, which means that all the ongoing Yen destruction has largely been for nothing as organic growth markets simply shut off Japan. This ugly news was marginally offset by a tiny beat in the HSBC China manufacturing PMI which came slightly above consensus at 51.9 vs exp. 51.7, the highest print in 24 months, but as with everything else coming out of China one really shouldn't believe this or any other number in a country that will not allow even one corporate default to prevent the credit-driven illusion from popping.

Moving to Europe it too was a good/bad news story: shortly before 3 am the BIS FX team was summoned to defend the 1.33 support after French manufacturing PMI plummeted from 44.6 to 42.7, on expectations of a rise to 45.1 and the realization that the recession has fully engulfed Europe's core. However, this disturbing print was promptly offset by German PMI which in turn rose from 46.0 to 48.8, on expectations of a 46.8 print. Whether this modest bounce will be enough to push Germany out of what is now the first leg of a recession remains to be seen.

Judging by the fact that leading German bank announced plans to fire 4,000-6,000 earlier, we doubt there is much hope for a quick rebound in Germany.

Elsewhere, Spain reported its last depressionary data point, which was the Q4 unemployment, and which as expected rose to above the expected 26%, or a record 26.02% to be precise in the last quarter, and well above the 25.02% in Q3. Finally, completing the sad European picture were Italian November retail sales which too were worse than expected at -0.4%, on expectations of a -0.1% print, and the prior was revised further down from -1% to -1.3%.

Finally, in bad news for socialists everywhere, France has fully abandoned plans for its 75% tax rate, Europe1 reported.

More on the overnight events from DB's Jim Reid:

China's PMI and Apple's results are the two competing stories overnight with the latter weighing on sentiment in the Asian session. Indeed besides Japan (+1.2%), major bourses in Hong Kong, China and South Korea are down -0.1%, -0.3% and -0.9% respectively. Before we take a closer look at Apple’s disappointing results, the HSBC manufacturing PMI in China came in slightly above consensus (51.9 v 51.7) this morning. This was the highest print in 24 months with the series having gradually recovered from the lows of 47.6 in August of last year. Away from China, other Asian data flow overnight has generally been on the soft side. Korea’s Q4 GDP (+1.5% yoy v +1.8% yoy expected) fell short of market consensus while Japan posted a wider-thanexpected trade deficit (JPY641.5B v JPY-522.8B) in December. For Korea this is the slowest quarterly yoy growth since September 2009 and the Japanese trade deficit in 2012 is the widest on record on an annual basis.

Turning to Apple, the company managed to beat EPS consensus ($13.81 v $13.53) but revenue fell short of market expectations ($54.5bn v $54.9bn). More importantly forward looking revenue and gross margin guidance also came in light relative to street estimates. In terms of product performance in the latest quarter, our US colleagues noted that iPhone sales were largely in line but iPad sales were lighter than expected and Macs sales sharply disappointed. Apple’s shares plunged around 10% in after hours trading and have now lost a third of their value from the peak in September last year. Apple’s after market move is also dampening the performance of the S&P 500 Futures (-0.4%) and NASDAQ 100 Futures (-1.5%) overnight. It will be interesting to see how US markets trade throughout today after what proved to be a positive finish to yesterday’s trading session.

Indeed the S&P 500 edged higher (+0.15%) for its 6th consecutive session yesterday as sentiment was boosted by news that the US House of Representative has voted (285 v 144) to suspend the debt ceiling for three months. The earnings scorecard before the closing bell was also generally positive with 65% and 81% of companies that reported yesterday coming ahead of analysts’ EPS and revenue expectations, respectively. IBM’s better results helped drive the Dow (+0.49%) up to just less than 1% away from its all time highs. For the record the S&P 500 is also just 5pts away from the symbolic 1,500 mark.

On the fixed income side, its quite interesting to note that the Dell-driven LBO theme is pushing the skew on the CDX IG index to negative territory. The index edged a tad tighter yesterday and now trades about 5bps ‘rich’ to intrinsic value as some single names are seeing demand for protection on LBO concerns. Overall January continues to be a good month for risk, continuing the theme from the back end of 2012. However the growth outlook isn’t necessarily much better than where we were 3 months ago. The IMF published its updated global growth forecasts yesterday and now expects global GDP to grow by 3.5% this year. This is a touch lower than the 3.6% forecast they had in October last year. This is still ok but we'll need some upward momentum in the data to reach this level still.

In terms of the day ahead, flash PMIs from France, Germany and the Eurozone will be the key European data print today. As we said in our outlook, these readings need to get into the low 50s to justify current levels of markets rather than just above the mid-40s they generally are in Europe at the moment.

They have a few months grace to get there without upsetting the party but these prints
along the way will be informative. Elsewhere Merkel and Cameron will both speak at day-2
of the Davos conference today. On the other side of the pond we also get the preliminary
Markit PMI in the US as well as the usual weekly jobless claims. 3M and Microsoft are
some of the bigger names reporting today.

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Market Buzz: Russia looks outwards

Reuters/Jose Manuel Ribeiro

Reuters/Jose Manuel Ribeiro

Russian indices are expected to grow further on Thursday following a successful trading day earlier. The RTS grew by 1.3% and the MICEX gained 0.8%.

­The majority of Russian blue chips were also on the rise with Norilsk Nickel in the lead with +1%, Sberbank, Gazprom and Lukoil stocks rose 0.95%, 0.55% and 0.09% respectively.

No major corporate events are expected today in Russia and stocks will primarily focus on foreign colleagues when determining the motion vector for the day.

European stock exchanges closed in the mix on Wednesday. The FTSE 100 gained 0.30% and the DAX rose 0.15%, the CAC 40 lost 0.40%.

Markets in Asia are also in mixed territory. The Nikkei 225 is higher by 0.81%, while the Shanghai Composite is leading the Hang Seng lower. They are down 0.17% and 0.16% respectively.

North American stocks showed positive trading with the Dow Jones gaining 0.49%, the S&P rising by 0.15% and the NASDAQ climbing up by 0.33%. American indices gained support from the ongoing season of annual corporate reports. Data posted by Google, IBM and McDonalds came in higher than expected, which stimulated the trading of some indices. Miscrosoft, Starbucks and Xerox are expected to deliver their reports later today. Also the US is to publish unemployment index and oil reserve data on Thursday.

Market Buzz: Looking for an upside

(Reuters / Mohamed Abd El Ghany)

(Reuters / Mohamed Abd El Ghany)

Russian markets are most likely to open with slight decline after finishing in negative territory on Tuesday.

­Both Russian indices closed in the red, with the RTS dropping 0.7% and the MICEX sliding down 0.8%.

European markets finished lower as well on Tuesday, despite some good news being released. Germany posted its Zew Indicator of Economic sentiment, which came in higher than expected, and eurozone finance ministers approved the next tranche of emergency aid for Greece. The DAX is down 0.68%, France's CAC 40 is lower by 0.59% and London's FTSE 100 is lower by 0.03%.

North American stocks closed in mixed territory with the Dow Jones and the S&P gaining 0.5% and 0.4% respectively, with the NASDAQ dropping 0.1%.

Asian markets are trading low today with all the key indices in red territory. Hong Kong’s Hang Seng is down 0.2%, Japan’s Nikkei is sliding more than 1% and China’s Shanghai Composite is lower by 0.4%.

Brent crude oil is reduced to $ 112.1 this morning, after it overcame a price of $ 112.5 per barrel on the previous day’s trading. An improved macroeconomic situation in Europe, as well as expectations of growth in US oil and petroleum reserves supports the price.

These Should be on Your Radar Screen

The US dollar begins the week mostly firmer.  The notable exception is the Japanese yen, which has seen some position adjustment ahead of the outcome of the BOJ meeting tomorrow.  In Asia, and Europe thus far, the dollar has found support near its five day moving average and the 38.2% retracement of its latest leg up (from Jan 16), both of which come in near JPY89.30.  The recovery of the yen took a toll on Japanese stocks.  The Nikkei lost 1.5% and posted an outside down day (trading on both sides of Friday's ranges and finishing below Friday's low).

The euro has been confined to an exception narrow range of about 15 ticks on either side of $1.3315.  A break of support in the $1.3260-80 area would lend credence to our argument that a top of some import is being carved out, with a potential double top at $1.34.   Sterling saw follow through selling on top of the pre-weekend losses.  The euro traded at 10-month highs against sterling above GBP0.8400, but is reversing lower near midday in London.  A modest bounce in cable seen in the European morning ran out of steam near $1.5900, which likely now marks the upper end of the new range.

Equity markets are mixed, with the MSCI Asia-Pacific seeing a 0.2% decline, dragged down by Japanese shares, and to a lesser extent Taiwan, Korea and Malaysia.  European bourses are higher with the Dow Jones Stoxx 600 advancing almost 0.5%, led by utilities, basic materials and technology.  While the US market is closed today, before the weekend the three main gauges, Dow, NASDAQ, and S&P 500 closed at 5-year highs.  This week's earnings feature technology giants Apple, Google, IBM, and United Technologies.

There was a potentially important development in the US fiscal drama.  Some Republicans in the House of Representatives are proposing a three-month extension on the debt ceiling to give more time to negotiate a long-term deal.  It is not yet immediately clear if the measure has sufficient Republican support--remember Bohener's Plan B?--or if Obama will agree to it, after having the lack of interest in a short-term fix.  Still it shows some fluidity of the situation and should ease what little concern that had really been that the US would default.

In a very tight election in Lower Saxony, the real winner, regardless of the formation of the new state government is the Free Democrat Party, and by extension German Chancellor Merkel.  Merkel's CDU party depends on a coalition with the FDP, but over the past year, the FDP has been trounced in most state elections.  The conventional view that the national election later with year would result in another grand coalition was predicated on the inability of the FDP to deliver.  Some feared it would not even meet the 5% threshold to secure parliamentary membership.  In Lower Saxony, the FDP defied expectations and received almost 10% of the vote, more than twice what the opinion polls suggested.  Yet, FDP party head and Economics Minister Roesler offered to resign and threw his support toward Bruederle, the head of the party's parliament caucus, who is regarded as more dynamic and with some hope he can revive the party's fortunes.  A formal leadership decision in May.    The SPD and Greens eked out a surprise victory, but  Steinbrueck, the SPD candidate for Chancellor,  apologized for his gaffes in the national campaign, which may have cost the SPD votes in the local contest.     

The most anticipated event of the week is tomorrow's conclusion of the BOJ meeting.  The pressure on the BOJ from the new Abe government is widely recognized and with its recent economy assessment, in which most regions were downgraded, the BOJ cannot be content either.  There is, therefore, little doubt the BOJ will take action.  However, the impact of some of the measures that have been discussed like open-ended QE or a 2% inflation goal is questionable.  What does open-ended QE mean when the BOJ has increased the amount of assets it is buying repeatedly ?  How is a 2% inflation goal credible when it has failed to achieve its 1% goal?    Similarly, a cut in the interest paid on reserves is possible, but it is not clear how that would be inflationary or stimulative.   Our fundamental and technical analysis warns that the market is vulnerable to disappointment or a "sell the rumor buy the fact" type of activity. There has been some position adjustment today as the dollar still has not been able to sustain a move above JPY90. In terms of intent, the imagery we still think apropos is blowing (hot) air underneath the (yen's) parachute to increase the likelihood of a soft landing and reduce the antagonism that its strategy engenders.  

There are two aspects of the technical condition of that are worth underscoring.  First, we think there was significant deterioration of the major foreign currencies, with sterling convincingly violating a 7-month uptrend line, the dramatic weakness of the Swiss franc, and new multi-week lows for the Australian and Canadian dollars.  The euro has fared best, but technically appears vulnerable.  Second, we note that implied volatility in the currency markets has trended higher in recent weeks. Before the weekend, 3-month euro vol reached its highest level since Oct.  It reached a low in late Nov near 6.4% and now is near 8.6%.  3-month yen vol is at its highest level since Sept 2011 near 11.2%.  On the eve of the election announcement in mid-Nov, it was near 7%, having bottomed a month earlier near 6.55%.  Sterling vol is at its highest level in four months near 7.3%.  It bottomed in middle of last month near 5.25%.

The euro area finance minister meet today.  Cyprus aid package is not ready and it won't be for at least a couple more months.  Greece is progressing towards another tranche amid fresh call from the IMF than even if the country stays on track, it will need another 9 bln euros of assistance (perhaps in the form of further official sector concessions, Merkel has hinted in the latter years of its current program).  There may also be some discussion of Spain.  Perhaps the one notable action from the Eurogroup is that Juncker who has been the leader, with mixed reviews, including last week's gaffe about the euro, is stepping down.  His likely replacement, the new Dutch Finance Minister Dijsselbloem, has been widely tipped.  

A more pressing issue for investors is the implication of the repayment of LTRO funds by the banks starting next week.  Speculation that it would tighten financial conditions saw euribor yields rise sharply.    ECB's Coeure tried to calm market anxiety by indicating that he did not expect an impact on Eonia from the settlement.    The implied yield of the  March 13 Euribor futures contract has been trending higher since early December. The backing up in money market rates in Europe did not coincide with a stronger euro. We anticipate some stabilization in euribor in the days ahead, awaiting indications of the size of the repayments.  Forecasts generally seem to range between 100-200 bln euros of the roughly trillion euros outstanding.

In addition, we draw your attention to the following events and data:  Australia's Q4 CPI on Tuesday could sway expectations for the RBA meeting in early February.  Presently there is about a 40% chance of a 25 bp rate cut discounted.  Although the headline pace of inflation likely accelerated, the core rate appears stable and has not been an obstacle to easier RBA policy.  The release of the BOE minutes will likely reaffirm market expectations that a resumption of QE is not imminent, even though the economy appears to have contracted in Q4 (first estimate released on Friday, Jan 25).  Europe reports the flash PMI readings in Thurs.   A critical issue is if Germany, which appears to have contracted in Q4, is in a recession (as defined by two consecutive quarters of contracting GDP (though note that technically, a recession in the US is determined by National Bureau of Economic Research and it uses a broader definition).   I

In emerging markets, we note that the tone of Mexico's central bank statement was more dovish than expected before the weekend.    It effectively removed any lingering threat of a hike, though we do not expect a rate cut either.  Israel goes to the polls and barring a significant surprise, we do not expect much of a market reaction, though note that the dollar has found bids ahead of 1-year lows near ILS3.70.   Three emerging market central banks meet this week, Turkey, the Philippines and South Africa.   The only action we expect is a 25 bp rate cut by South Africa.  The rand has been the weakest since the start of the year, losing 4.5% against the dollar, but many have their sights on the ZAR9.0, the high from October and again in November.

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Market Buzz: A rather laid-back Monday

No sudden moves are expected today on the markets as investors worldwide will mainly focus on general news background.

­Russian markets are expected to open in the red despite having closed in positive territory on Friday. Two key Russian indices finished in the green, with the RTS gaining 1.14% and the MICEX up 1.10%.

Asian markets are higher today as Chinese and Hong Kong shares show gains. The Shanghai Composite is up 0.23% and the Hang Seng rose 0.01%. The Nikkei 225 is closed for a holiday.

Oil prices slid on Monday, with Brent losing 0.27% and Light down 0.34%.

“Weak dynamics in Asian markets and a decline in world oil prices traditionally affect Russian stock exchanges, so I expect Russian indices to open with losse,” Yulia Voytovich of Investcafe explained.

However, European markets traded mixed. The FTSE 100 gained 0.36%, while the DAX dropped 0.43% and the CAC 40 lost 0.07%.

North and South American stocks also failed to show positive dynamics, but managed to finish mainly in green. The Dow Jones and the S&P 500 gained 0.39% and 0.34%, respectively, while the NASDAQ slid 0.04%.

“Today will not bring much in macroeconomic statistics, so no sudden moves on the markets are expected. Investors worldwide will mainly focus on general news background,” Voytovich said.

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Market Buzz: Small gains expected worldwide as positive signs emerge

Traders work on the floor of the New York Stock Exchange (NYSE) in New York.(AFP Photo / Stephen Chernin)

Traders work on the floor of the New York Stock Exchange (NYSE) in New York.(AFP Photo / Stephen Chernin)

Russian indices are expected to make slight gains on Friday after macroeconomic data from the US and China inspired investors the previous day.

­

“[The] Friday trading session in Russia is most likely to show a mild growth. Given positive dynamics in Asian floors and a close of US trading in the ‘green zone,’ one could expect Russian markets to open in the black, with falling oil prices still pressing the indices,” Darya Pichugina of Investcafe wrote in an email.

On Thursday, both key Russian indices finished trading in positive territory. The RTS rose 0.91% to 1,585.44 and the MICEX was up 0.59% to 1,523.74. This upbeat sentiment came mostly on the back of positive statistics from the US, Pichugina added.

Despite the upbeat macroeconomic data from China and the US, as well the military conflict currently raging in north Africa, oil prices are declining: Brent lost 0.14% and the WTI dropped 0.32%, Pichugina said.

China reported better-than-expected economic growth for Q4 2012, with its GDP rising 7.9% during the period compared to a 7.4% growth in the previous quarter.

The number of new homes being built in the US in December rose sharply, according to official figures. Investors were also cheered by good news in the job market, where first-time claims for unemployment benefits fell to a five-year low last week. The declining number of unemployment claims sowed hopes that the world’s largest economy is gaining traction, CNN Money reported, quoting Chief Market Strategist Doug Roberts of Channel Capital Research.

Corporate earnings in the US offered a mixed picture, with Bank of America posting quarterly earnings slightly better that analysts had expected, while Citigroup fell short of expectations.

Asian markets have generally risen today, with Japanese shares leading the region. The Nikkei 225 is up 2.46%, while Hong Kong's Hang Seng added 0.75% and China's Shanghai Composite went up 0.56%.

The Dow Jones, the S&P 500 and the Nasdaq all rose more than 0.6%, with the S&P 500 closing at a five-year high.

European markets finished higher on Thursday with shares in France leading the region. The CAC 40 is up 0.96%, while Germany's DAX is up 0.58% and London's FTSE 100 is up 0.46%.

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Market Buzz: Protracted uncertainty prevails

AFP Photo / Yoshikazu Tsuno

AFP Photo / Yoshikazu Tsuno

Global floors remain sluggish as traders register disappointment with the World Bank’s forecast of weaker-than-expected economic growth in 2013, and as US debt ceiling negotiations draw nearer.

Russian indices are expected to produce another day of slow trading on Thursday, as uncertainty prevails on international floors, according to Darya Pichugina of Investcafe. Russian stocks traded mixed Wednesday, with the RTS declining 0.34% to 1,571.15, and the MICEX rising 0.12% to 1,516.67.

Asian floors also began Thursday trading with mixed sentiments: The Nikkei has gained 0.15% and the Shanghai Composite has gone down 0.78%, Pichugina added.

The debate over the US debt ceiling is heating up as Washington is expected to reach its borrowing limit in February. Should the country fail to resolve the issue, the world’s largest economy could default, Fed chief Ben Bernanke and US Treasury Secretary Timothy Geithner have warned.

The debt ceiling is expected to dominate investor attention after the reporting period in the US concludes, J.J. Kinahan, chief derivatives strategist at TD Ameritrade, told CNN Money.

"We may have a bit of a pause after earnings season ends and we head into debt ceiling negotiations," Kinahan said. "That's when you might see people start to hold back. For now, people are trading earnings as if it's a normal market."

The World Bank report was another point of concern for investors, as the Washington-based bank projected that the world economy would expand 2.4% in 2013, down from a June forecast of 3%, after growing 2.3% in 2012. The lowered expectations are due largely to austerity measures, high unemployment and low business confidence weighing down economies in developed nations, the World Bank said.

“Doubts have been growing that the strength in equities can be sustained as fears of the outlook for the global economy re-emerged after the World Bank downgraded its forecast for global GDP leading to some investors banking recent profits,” Angus Campbell, Head of Market Analysis at Capital Spreads, wrote in an email.

On Wall Street, the Dow Jones fell 0.2% on Wednesday, with Boeing leading the decline. The S&P 500 closed almost flat, while the Nasdaq gained 0.2%. Boeing shares fell 3.4% as its ‘Dreamliner’ jet continued to disappoint. Two Japanese airlines grounded their fleets of the 787 aircraft after one of All Nippon Airways' Dreamliners had to make an emergency landing.

European markets traded mixed as of the most recent closing prices. The CAC 40 gained 0.30% and the DAX rose 0.20%, while the FTSE 100 lost 0.22%.


Market Buzz: No major moves as world awaits US corporate earnings reports

AFP Photo / Stephen Chernin

AFP Photo / Stephen Chernin

Global investors are expected to hold off on major action until corporate reports from the US give an indication of the state of the world’s largest economy. Uncertainty around the US debt ceiling has added to an overall market malaise.

“In the near future they expect quarterly reports of American banks to be released, with their success now likely to become the only notable growth stimulus. And so far a Russian market seems to freeze up pending developments on global floors,” Liliya Brueva of Investcafe wrote in an email to RT.

Russian stocks closed mixed after Tuesday’s session: The RTS lost 0.86% to end at 1,576.54, and the MICEX climbed 0.11% to 1,516.92.

International investors generally held off on big moves until a clearer picture emerges of US corporate profits. Goldman Sachs and JPMorgan Chase will report their results Wednesday, while Intel, Bank of America and General Electric are due later in the week.

The unresolved issue of raising the US debt ceiling is another source of investor uncertainty. Fed chief Ben Bernanke and US Treasury Secretary Timothy Geithner offered sharp commentaries on the issue; Geithner argued that unless the debt ceiling is raised, the US may default on its debts as early as the end of February, Brueva said.

“If you thought the US fiscal cliff worries were over think again, as markets were shrouded in more uncertainty about the outcome of future negotiations in respect of the US debt ceiling,” said Angus Campbell, head of market analysis at Capital Spreads.

The Dow Jones Industrial Average and S&P 500 closed up between 0.1% and 0.2% on Tuesday. The Nasdaq dipped 0.2%.

Asian markets also traded mixed: Japan's Nikkei advanced 0.7% after being closed Monday for a holiday, the Shanghai Composite added 0.6% and the Hang Seng declined 0.1%.

European markets finished mixed as of the most recent closing prices. The FTSE 100 gained 0.15%, while the DAX led the CAC 40 lower, falling 0.69% and 0.29% respectively.

Market Buzz: Apple and the Fed in the limelight

Traders work on the floor of the New York Stock Exchange (NYSE) in New York.(AFP Photo / Stephen Chernin)

Traders work on the floor of the New York Stock Exchange (NYSE) in New York.(AFP Photo / Stephen Chernin)

Russian markets are expected to react sharply to comments by US Federal Reserve Chair Ben Bernanke, while gains in China are likely to boost indices.

­Russian indices moved higher Monday, supported by strong corporate results in the retail and resource sectors. The MICEX and the RTS both jumped 1.2%.

European stock markets closed in the red Monday as investors awaited a speech by US Fed Chief Ben Bernanke on the country’s monetary policy. The Stoxx Europe 600 fell 0.4% and the German DAX 30 rose 0.2%, led by gains of chemicals group BASF SE. The French CAC 40 rose 0.1%, supported by banking.

US stocks closed mostly lower on Monday after Apple announced a cut in iPhone production. Bernanke’s pledge that the Fed’s easing policy has a low risk of inflation also failed to cheer investors. The Dow Jones itched 0.1%, the S&P 500 shed less than 0.1% and the Nasdaq Composite lost 0.3%. Shares of Apple fell 3.6% in a $17bn selloff after the WSJ reported that LCD panel producers cut output for Apple amid slower-than-expected global sales of the iPhone 5.

Asian stocks traded mixed Tuesday, supported by Japanese gains on the weaker yen; losses by Apple also hit the tech sector. Japan’s Nikkei rose 0.7% to its highest level since the end of April 2010. Hong Kong’s Hang Seng Index shed 0.3% and the Shanghai Composite added 0.4%, extending gains on speculation that mainland China would open stock markets to foreign investors. Australia’s S&P/ASX 200 declined 0.3%, and South Korea’s Kospi shed 0.9%.

Market Buzz: Results season sows hope

Traders work on the floor of the New York Stock Exchange.(AFP Photo / Spencer Platt)

Traders work on the floor of the New York Stock Exchange.(AFP Photo / Spencer Platt)

Corporate results – both Russian and foreign – will be have a major impact on markets on Monday. Economic data from overseas will add to the trading mix, analysts say.

In corporate Russia, coal miner Raspadskaya and Uralkali, the world’s largest potash producer, are set to produce their 4Q 2012 operational results. Both companies suffered from lower prices for their produce in the previous periods.

On Wall Street, the Bank of America, JPMorgan Chase, Citigroup , Goldman Sachsand Morgan Stanley are all on tap to report this week, following the period of corporate reporting in the US.

Among foreign news due out on Monday is the December index of wholesale prices in Germany, which is expected to add 0.5% to November’s result. November industrial production figures for Italy will also have its say in market movements on Monday, with the figure expected to lose about 0.1% from the previous month. However, November industrial production in the eurozone as a whole is set to go up 0.2%, according to Julia Voitovich of Investcafe.

Given all the above, “I expect the Russian share market to open slightly higher,” Voitovich said.

On Friday Russian floors closed trading mixed. The RTS was down 0.02% to 1, 571.73, with the MICEX adding 0.24% to 1,510.84.

Asian markets are higher today as Chinese and Hong Kong shares show gains. The Shanghai Composite is up 2.06% while the Hang Seng is up 0.68%. The Nikkei 225 is not trading.

European markets finished higher on Friday with shares in London leading the region. The FTSE 100 was up 0.33% while Germany's DAX added 0.09% and France's CAC 40 increased 0.08%.

In the US, the Dow and the Nasdaq rose 0.1%, while the S&P 500 shed less than 1 point. In weekly terms, all key indices were up for the second consecutive week, with the Dow and S&P 500 adding 0.4% for the week, and the Nasdaq rising 0.8%. That’s after Wells Fargo, the first major bank to report quarterly results, produced a profit during the period, exceeding expectations.

Market Buzz: ECB and China fail to stir things up

RT Photo / Irina Vaseivitskaya

RT Photo / Irina Vaseivitskaya

Russian stocks are expected to open slightly higher on Friday amid driving oil prices, but mixed statistics from China would cap the indices.

­Russian indices showed mixed picture Thursday in low-volume trading with the MICEX shed 0.3% and the RTS itched 0.2%.

European stocks traded mixed Thursday as the European Central Bank and the Bank of England both left monetary policy unchanged, while successful debt auctions in Spain and Italy supported the indices. The Stoxx Europe 600 fell 0.3%. France’s CAC 40 shed 0.4% and Germany’s DAX 30 lost 0.2%, while Italy’s FTSE MIB gained 0.7% and Spain’s IBEX 35 index  rose 0.2%.

US stocks rose on Thursday after December exports data from China beat expectations, bolstering investor sentiment. The Dow Jones gained 0.6%, the S&P 500 added 0.8% and the Nasdaq Composite rose 0.5%.

Asian stocks mostly moved lower Friday after data showed an increase in Chinese inflation. Hong Kong’s Hang Seng slipped 0.1%, erasing early gains of 0.2%, while the Shanghai Composite declined 0.5% consumer prices’ data slightly exceeded consensus estimates. South Korea's Kospi slipped 0.5%, while Australia’s S&P/ASX 200 index gave up 0.15%.But Japan’s Nikkei Stock added 1.5% supported by the tech sector and a weaker yen.

Market Buzz: Russia back in the ranks

(Reuters / Brendan McDermid)

(Reuters / Brendan McDermid)

Russian stocks, back to normal trading schedule after New Year holidays, are expected to be looking westward for good news. That’s after the country’s key indices went up on Tuesday, upbeat about developments over the ‘fiscal cliff’ issue.

The November index for industrial production in Germany will become the most important market driver on Wednesday, Grigory Birg of Investcafe told RT via email. The indicator lost 2.6% in October, with a further decline likely to have a negative impact on a share market.

Tuesday marked the first working day for Russian floors in 2013 after a 10–day pause for traditional New Year celebrations. Both the RTS and the MICEX had a good start to the year, rising 3.22% and 2.72% respectively. This is because the floors were winning back the news that the US has so far managed to escape the fiscal cliff.

In the early hours of 2013, US politicians finally agreed a deal on tax and spending, stipulating raising income tax for individuals making $400,000 and coupling earning $450,000 from 35% to 39.6%, as well as permanently extending Bush-era tax cuts for those earning less than $400,000 annually.

On top of that, the legislation proposes a one-year extension on unemployment insurance benefits, which are about to expire for 2 million people. The bill doesn’t include any cuts to entitlement programs such as social security or Medicare. It also does not tackle the issue of raising the debt ceiling from the current limit of $16.4 trillion, which the US is about to cross. At present, the US national debt stands at $16.438 trillion.

In the US, the stocks were in the red for the second consecutive day on Tuesday. That’s at a time when aluminum giant Alcoa opened a reporting season for corporate America with better-than-expected quarterly results. The company reported sales of $5.9 billion in Q4, above analysts' estimates of a drop to $5.6 billion. The Dow Jones Industrial Average, S&P 500, and Nasdaq closed down between 0.2% and 0.4%, bouncing back from steeper declines ahead of the close.

European markets finished mixed as of the most recent closing prices. The CAC 40 gained 0.03%, while the DAX led the FTSE 100 lower. They fell 0.48% and 0.18% respectively.

Asian markets were mixed on Tuesday. The Nikkei 225 was up 0.89% while the Hang Seng gained 0.36% and the Shanghai Composite lost 0.03%.

Market Buzz: Russia back in the ranks

(Reuters / Brendan McDermid)

(Reuters / Brendan McDermid)

Russian stocks, back to normal trading schedule after New Year holidays, are expected to be looking westward for good news. That’s after the country’s key indices went up on Tuesday, upbeat about developments over the ‘fiscal cliff’ issue.

The November index for industrial production in Germany will become the most important market driver on Wednesday, Grigory Birg of Investcafe told RT via email. The indicator lost 2.6% in October, with a further decline likely to have a negative impact on a share market.

Tuesday marked the first working day for Russian floors in 2013 after a 10–day pause for traditional New Year celebrations. Both the RTS and the MICEX had a good start to the year, rising 3.22% and 2.72% respectively. This is because the floors were winning back the news that the US has so far managed to escape the fiscal cliff.

In the early hours of 2013, US politicians finally agreed a deal on tax and spending, stipulating raising income tax for individuals making $400,000 and coupling earning $450,000 from 35% to 39.6%, as well as permanently extending Bush-era tax cuts for those earning less than $400,000 annually.

On top of that, the legislation proposes a one-year extension on unemployment insurance benefits, which are about to expire for 2 million people. The bill doesn’t include any cuts to entitlement programs such as social security or Medicare. It also does not tackle the issue of raising the debt ceiling from the current limit of $16.4 trillion, which the US is about to cross. At present, the US national debt stands at $16.438 trillion.

In the US, the stocks were in the red for the second consecutive day on Tuesday. That’s at a time when aluminum giant Alcoa opened a reporting season for corporate America with better-than-expected quarterly results. The company reported sales of $5.9 billion in Q4, above analysts' estimates of a drop to $5.6 billion. The Dow Jones Industrial Average, S&P 500, and Nasdaq closed down between 0.2% and 0.4%, bouncing back from steeper declines ahead of the close.

European markets finished mixed as of the most recent closing prices. The CAC 40 gained 0.03%, while the DAX led the FTSE 100 lower. They fell 0.48% and 0.18% respectively.

Asian markets were mixed on Tuesday. The Nikkei 225 was up 0.89% while the Hang Seng gained 0.36% and the Shanghai Composite lost 0.03%.

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