Bloomberg:
- ECB Masks Crisis as Italy Revives Austerity Debate: Euro Credit. The bond market, aided and abetted by the European Central bank, is letting politicians slide on economic reforms. The drop in Spanish and Italian borrowing costs since the ECB said in September it would support troubled euro members took the heat off governments without tying them to the conditions of the mooted bond-buying program, said Mike Turner, head of strategy at Aberdeen Asset Management Plc. "It's been revealed that the emperor has no clothes," said Turner.
- Central Banks Spewing Cash Must Consider Exit Timing, Rohde Says. Central bankers across the globe need to plan for monetary tightening to avoid feeding asset bubbles, Danish central bank Governor Lars Rohde said. “Beyond the short horizon, central banks have to be vigilant of the effects, including the effect of negative real interest rates, and they have to plan for an exit as normalization progresses,” Rohde said in an e-mailed reply to questions. Asked whether such policies could fuel asset bubbles, Rohde said, “Yes.” The warning from the head of Denmark’s central bank, which has kept its deposit rate below zero since July, comes as policy makers from Japan to Europe to the U.S. commit to unprecedented monetary stimulus to jolt their economies into recovery mode.
- Australia Business Investment Unexpectedly Fell Last Quarter. Australian business investment unexpectedly declined last quarter amid weakness in manufacturing, while mining companies pared spending plans. Capital spending fell 1.2 percent from the third quarter, when it rose a revised 1.1 percent, the Bureau of Statistics said in Sydney today. That compares with the median forecast for a 1 percent gain in a Bloomberg News survey of 19 economists.
- J.C. Penney(JCP) Posts Wider Fourth-Quarter Net Loss. J.C. Penney Co. (JCP) said its fourth- quarter net loss widened to $552 million and posted its lowest annual sales in more than two decades as Chief Executive Officer Ron Johnson’s turnaround plans falter. The net loss in the quarter ended Feb. 2 expanded to $2.51 a share, from a loss of $87 million, or 41 cents, a year earlier, the Plano, Texas-based company said today in a statement. Revenue slid 28 percent to $3.88 billion as sales at stores open at least a year fell 32 percent. Analysts estimated revenue of $4.08 billion, on average.
- Vale Has Record Quarterly Loss on $5.66 Billion Writedowns. Vale SA (VALE3), the world’s largest iron- ore producer, posted a record quarterly loss after writing down the value of some of its assets. Profit missed analysts’ estimates on an adjusted basis.
- Jockeying Stalls Deal on Cuts. Obama, Republicans Bet They'll Have a Stronger Hand After Deadline Expires. With mandatory across-the-board spending cuts set to begin Friday, the White House and congressional Republicans are poised to let the deadline pass, each calculating that their hand in negotiations only grows stronger if they scorn a quick compromise. The first face-to-face meeting on the issue between President Barack Obama and congressional leaders won't happen until Friday—the deadline for Mr. Obama to set in motion $85 billion in broad spending cuts. None of the participants expect the morning meeting at the White House to produce a breakthrough. In the run-up, with no serious talks under way, each side is maneuvering to ensure the other catches the blame if the cuts kick in.
- Islamists Gain Momentum in Syria. Extremists intent on establishing an Islamist state in Syria have gained power within the rebel insurgency, while moderates have lost clout since moves by Washington late last year aimed at the opposite result, U.S. officials and rebel fighters say. On the eve of the most recent gathering of the Friends of Syria international opposition support group in December, the Obama administration designated Syrian jihadist group Jabhat al-Nusra a terrorist organization, and on the same day, officially endorsed the moderate face of the rebellion, the umbrella Syrian Opposition Coalition.
- Gas Boom Projected to Grow for Decades. U.S. natural-gas production will accelerate over the next three decades, new research indicates, providing the strongest evidence yet that the energy boom remaking America will last for a generation. The most exhaustive study to date of a key natural-gas field in Texas, combined with related research under way elsewhere, shows that U.S. shale-rock formations will provide a growing source of moderately priced natural gas through 2040, and decline only slowly after that. A report on the Texas field, to be released Thursday, was reviewed by The Wall Street Journal.
- EU Reaches Deal to Curb Bank Bonuses. The European Union moved to slap a strict limit on bank executives' bonuses in the latest effort to curb what is seen by many as corporate and banking excess. Negotiators for the European Parliament and EU states said they reached a preliminary deal on a measure that would forbid bonuses that exceed a bankers' fixed salary. Flexible pay could increase to twice fixed salary, but only with explicit shareholder approval. The initiative, part of a broader law that forces lenders to build up more-robust financial cushions, is designed to reduce incentives for the type of risky behavior widely blamed for contributing to the 2008 financial crisis.
- Henninger: The Obamaian Universe. A place where everything revolves around the fixed planet of public spending. It may be that we have to move beyond politics alone to explain events in Washington. We are in the fifth year of the Obama presidency, and Washington is still dead in the water. Four straight years in which the government of the United States of America fails to enact a budget is, well, amazing.
Zero Hedge:
- German FinMin Warns "I Never Said The Euro Crisis Was Over".
- Wal-Mart(WMT) Situation "Getting Worse" New Leaks Reveal.
- Moroccan Pottery Classes, Shrimp On Treadmills And Obamaphones - Bernanke's Biggest Bloopers Tie It All Together.
- Bernanke's 'Inflation' Record. (graph)
- Rand Paul To CIA: "Can You Kill With Drones In The USA?"
- BOB WOODWARD: A 'Very Senior' White House Person Warned Me I'd 'Regret' What I'm Doing.
- Chinese Cyberspies Attacked Natural Gas Pipeline Operators For Six Months Straight.
- Australia's Central Bank Says Its Currency Is Way Overvalued.
- GROUPON(GRPN) GETS DESTROYED AFTER EARNINGS WHIFF.
- Sturm Ruger(RGR) fourth-quarter sales jump 52 percent. Gun maker Sturm Ruger Inc reported a 52 percent jump in quarterly sales as people rushed to stock up on firearms amid debates over implementing stricter gun laws, sending its shares up 3 percent after market. Recent concerns over possible changes to gun laws following mass shootings, unease over the economic backdrop and the increased acceptance of gun ownership among women and older people have driven up sales over the last few months. Data from the FBI's National Instant Criminal Background Check System (NICS) -- commonly used to gauge the industry's performance -- show background checks for firearm sales rose nearly 50 percent in December.
- White House, Republicans dig in ahead of budget talks. Positions hardened on Wednesday between U.S. President Barack Obama and Republican congressional leaders over the budget crisis even as they arranged to hold last-ditch talks to prevent harsh automatic spending cuts beginning this week.
- Japan govt nominates Kuroda for BOJ governor. Japan's government nominated Asian Development Bank President Haruhiko Kuroda to be the next Bank of Japan governor on Thursday, aiming to install an advocate of aggressive monetary easing who has extensive international experience.
- Fed's Fisher would start tapering of QE3 immediately. An outspoken policy hawk at the Federal Reserve on Wednesday upped the ante on his criticism of the U.S. central bank's bond-buying program, arguing he would like to see the purchases of Treasury and mortgage securities tapered immediately. Richard Fisher, president of the Federal Reserve Bank of Dallas, had not previously been explicit about when the Fed should begin tapering its $85 billion in monthly asset buys.
- Limited(LTD) forecasts profit for quarter and year below estimates. Limited Brands Inc on Wednesday forecast profit for the current quarter and fiscal year below analysts' expectations, and its shares fell 1.3 percent in after-market trading.
- Compared with the eurozone, the UK economy is not that bad. Beggars can’t be choosers, and George Osborne – under attack on virtually all sides – must gladly seize on whatever support he can find.
- U.S. may levy countervailing duties on hardwood, decorative plywood from China. The U.S. Commerce Department on Wednesday announced its preliminary affirmative determination in the countervailing duty (CVD) investigation against imports of hardwood and decorative plywood from China, signaling that it may pose punitive duties on the products. The department said that Chinese producers and exporters of hardwood and decorative plywood had received countervailing subsidies of 0.22 percent to 27.16 percent. The Commerce launched antidumping (AD) duty and CVD investigations against imports of hardwood and decorative plywood from China on Oct. 18, 2012, alleging that these products were sold at less than fair value in U.S. market, with a dumping margin of 298.36 percent and 321.68 percent and additional subsidies. The department is scheduled to make its preliminary determination of AD investigation at the end of April 2013.
- China May Tighten Liquidity in Short Term, ICBC Says. China's central bank may tighten liquidity in the short term on rising inflation and capital inflow pressure, Industrial and Commercial Bank of China said in a research report published today. China may also raise interest rates if 2H inflation is higher than expected, the report said.
- None of note
- Asian equity indices are +.50% to +1.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 107.0 -3.0 basis points.
- Asia Pacific Sovereign CDS Index 82.5 -1.75 basis points.
- FTSE-100 futures +.51%.
- S&P 500 futures +.05%.
- NASDAQ 100 futures +.09%.
Earnings of Note
Company/Estimate
- (RDC)/.48
- (CVC)/.09
- (SHLD)/.97
- (KSS)/1.62
- (DPZ)/.60
- (BID)/1.09
- (GPS)/.71
- (DECK)/2.58
- (JOE)/.01
- (MDR)/.23
- (CRM)/.40
8:30 am EST
- 4Q GDP is estimated to rise +.5% versus a prior estimate of a -.1% decline.
- 4Q Personal Consumption is estimated to rise +2.3% versus a prior estimate of a +2.2% gain.
- 4Q GDP Price Index is estimated to rise +.6% versus a prior estimate of a +.6% gain.
- 4Q Core PCE is estimated to rise +.9% versus a prior estimate of a +.9% gain.
- Initial Jobless Claims are estimated to fall to 360K versus 362K the prior week.
- Continuing Claims are estimated to fall to 3143K versus 3148K prior.
- Chicago Purchasing Manager for February is estimated to fall to 54.0 versus 55.6 in January.
- Kansas City Fed Manufacturing Activity for February is estimated to rise to -1 versus -2 in January.
- None of note
- The Fed's Evans speaking, Fed's Fisher speaking, 7Y T-Note auction, China Manufacturing PMI Official, weekly EIA natural gas inventory report, Germany inflation/unemployment/consumer confidence data, NAPM-Milwaukee for February, weekly Bloomberg Consumer Comfort Index, (STT) Analyst Forum, (DUK) analyst meeting, (HBI) Investor Day, (WLP) investor day and the (COP) analyst meeting could also impact trading today.
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