Tag: news

UPDATE: Some chatter that the earlier drop occurred around a story on the overhauling the London Gold fix (amid all the manipulation talk).

With no apparent news – who needs news – the precious metals market participants have decided that now is the time to sell, sell, sell in huge volume and all of a sudden… Gold is down 1.3% – its biggest drop in a month; and silver is down 2.8% – its biggest drop in 5 weeks. Gold has dropped back down to test its 50DMA and silver has crossed back down through it. Bonds are modestly bid, stocks ar enot moving on this collapse and the USD is hardly budging.

 

 

 

via Zero Hedge http://ift.tt/1ijlMK7 Tyler Durden

The Syrian peace talks – much heralded by investors and politicians worldwide as a brave step towards a better future – are on the ropes this morning. Following the UN acquiescence to the US demand that they rescind Iran’s invite to the so-called Geneva II conference,and yet another suicide bombing in Lebanon, this morning’s incredible SNAFU is thanks to the Greeks:

• GREECE REFUSES TO REFUEL SYRIAN GENEVA TEAM AIRCRAFT: SYRIA TV
• SYRIAN AIRCRAFT DELAY CANCELS MEETING WITH UN’S BAN: STATE TV

The peace accord set to begin tomorrow will be delayed and are in further jeopardy as CNN reports further evidence of Syrian President al-Assad systematically killing and torturng around 11,000 people.

 

Via Reuters,

…

 

U.N. Secretary-General Ban Ki-moon’s unexpected, last-minute decision on Sunday to invite President Assad’s main foreign backer Iran – only to withdraw the invitation a day later – proved a diplomatic fiasco, undermining talks that are already given little chance of success.

…

The peace conference set to begin on Wednesday will include the first talks between Assad and his opponents. But hopes of a breakthrough are negligible at a time when fighting has escalated and neither side shows any sign of retreating from its demands or being able to end the war with a victory.

…

 

It has been 18 months since a previous international peace conference in Geneva ended in failure, and all other diplomatic initiatives have also proven fruitless.

 

“At best, Geneva 2 will reconfirm agreements made during the first Geneva conference, call for ceasefires, maybe prisoners swap and so on,” said one Western diplomat.

 

“At the same time, those taking part in the talks are de facto giving legitimization to Damascus. They are talking to Assad’s government on the other side of the table.

 

“And so the show would go on while Assad stays in power.”

Via The Times of India,

Former international prosecutors said Tuesday they have evidence from a defector proving that the regime of Syrian President Bashar al-Assad has systematically killed and tortured around 11,000 people.

 

A report by three top investigators commissioned by Qatar, which backs the Syrian rebels, examined thousands of pictures said to have been smuggled out by a former military police photographer.

 

The report, which was first released in Guardian and on CNN, shows evidence of starvation, strangulation and beatings, and features pictures of emaciated corpses with livid wounds.

So amid all of this one has to wonder if those warships that the US moved into position to “rescue stranded US citizen if a Sochi even happened” is nothing more than cover for a build up in front of Syria.

via Zero Hedge http://ift.tt/1kTKjaq Tyler Durden

The last time we pointed out an ECB bond sterilization failure as part of its legacy SNP program was on December 30 of last year (the third in a row), when a liquidity glut led to the biggest sterilization shortfall, one amounting to €39 billion, when only 89 banks submit bids to absorb paper in exchange for a paltry tip. Moments ago, the ECB reported that in just the third such sterilization auction of the new year there was once again a failure to absorb all the €177.5 billion in outstanding toxic peripheral bonds, when an impressive 126 bidders showed up and yet were only able to generate only €152.1 billion in bids, leaving a €25 billion shortfall.

As can be seen on the chart below, this is the fourth failed sterilization since mid-December (and last week was on the margin with just a €1 billion surplus).

Adding this morning’s MRO into the picture in which €116 billion was allotted, there was roughly €50 billion in net liquidity injected into the system and confirming that Europe is largely pressed for every incremental spare Euro.

Finally, recall what we said in our last sterilization failure post:

Remember when the ECB’s bond purchases were quote unquote sterilized? If this pace continues, in early 2014 the ECB’s bond purchases may remain on its balance sheet fully unsterilized. But that’s ok – now even Germany is slowly starting to habituate to central bank activity with no fears what this may mean for future inflation. Because it, like subprime, is contained. Finally, since even the theatrics of ECB’s bond buying sterilization are fading, can it be long before the ECB proceeds to monetize debt outright, and unsterilized? According to BNP, the answer is a resounding no.

Indeed, judging by the feverish pace of purchases of every peripheral bond available, is this merely just another indication how little the ECB cares about sterilization, and is just a hint at an upcoming full-blown and unsterilized bond monetization about to be launched by Mario Draghi? For now the market has responded with a resounding “hell yeah” especially when one considers a headline that just crossed the wires:

DEUTSCHE BANK’S HOOPER SAYS ECB ‘MAY MOVE TO QE’

Well, if anything it sure would explain the Fed’s willingness to taper… and pass the baton to the BOJ and now, the ECB.

 

via Zero Hedge http://ift.tt/1mokJWI Tyler Durden

Searching for that extra spark in your trading ideas that will give you a change? Sometimes, you need to look under the rock to find what you need. Look beyond China these days and start extending your horizons. It’s Sri Lanka that is the next on the list for investors. The darling of Southeast Asia, the gem of the Indian Ocean is the one of the few that didn’t get dragged down by the downturn in the markets. Its start to the year was and still is a cause for celebration.

When the Federal Reserve hinted at tapering back last year in 2013, the world rushed back to the States with their dollars, fleeing the other markets around the world. But, Sri Lanka never suffered from that outflow of capital from its economy. The economy seems as if it will be able to get over Quantitative Easing being removed when (or if) it actually happens.

• In fact, last year it saw an inflow (net) of capital to the value of nearly 23 billion Sri Lankan rupees. That’s roughly $175 million. 
• The 2012 in flow was double that almost at 40 billion Sri Lankan rupees. 
• The main exchange of Sri Lanka, the Colombo Stock Exchange (CSE), was the highest performing index in the world; in the aftermath of the Sri Lankan Civil War it actually rapidly increased, by a staggering 125.2% in2009.
• It is set to increase by at least 15% this year. 
• The economy saw its Gross Domestic Product increase by 6.4% in 2012. 
• That went up to 7.2% in 2013.
• The forecast so far this year is even higher at 7.8%.
• It is forecast to average out at 8.3% over the next three-year period.

It’s thanks to the end of the civil war in the country that the economy has been able to take off. Infrastructure has been developed and the country has turned itself into a major maritime and aviation hub in the region today. They are also concentrating on research and energy. The Governor of the Central Bank of Sri Lanka Ajit Nivard Cabraal also lowered the interest rates in the country at the start of the year, while the rest of the region is increasing theirs.

The Sri Lankan economy has a value of $59 billion today. But consumer spending is not quite good enough still today despite the economic gains being made by the country. But, that means that the country has good potential. Consumer sentiment will increase in the coming years undoubtedly as Sri Lanka attracts greater foreign investment. Foreign direct investment will bring the sluggish consumers out.

Rebounding economic growth and economic opportunities that have been rushed in after the end of the civil war in May 2009 mean that Sri Lanka is finally coming to grips with its economy. The strong prospects for economic growth will undoubtedly mean that Sri Lanka is the place to invest in and it may just be your cup of tea. But, think again if you believe that the tea industry is the only place to invest in there!

Originally posted: Sri Lanka: Your Cup of Tea

You might also enjoy:Working for the Few | USA:The Land of the Not-So-Free 

 

via Zero Hedge http://ift.tt/1hdBanv Pivotfarm

.

 

 

Five TBTF geezas sitting in an oak panelled room in the Rothschild’s building, each armed with fixed lines and little flags.

What could possibly go wrong?

 

. .

 

Ponzi can surely attest

The gold in the vault is the best

But then he checked leases

For 10 times the pieces

And said: “Now I’m really impressed!!!”

The Limerick King

via Zero Hedge http://ift.tt/KxVw06 williambanzai7

Who can forget Tim Geithner’s historic interview from April 2011, in which he said:

Peter Barnes “Is there a risk that the United States could lose its AAA credit rating? Yes or no?”

 

Geithner’s response: “No risk of that.”

 

“No risk?” Barnes asked.

 

“No risk,” Geithner said.

Considering that the US was downgraded by S&P just 4 months later, one person who certainly will never forget his idiotic preannouncement, is the former Treasury secretary, Tim Geithner. And being the sore loser that everyone suspected he was (although one hopes his recent well-paid move to Warburg Pincus will help soothe his sensitivity) it will come as no surprise that Geithner told the Chairman of embattled rating agency Standard & Poor’s, that its downgrade of the US from AAA to AA+ “would be met by a response.”

From Bloomberg:

S&P filed a declaration of McGraw yesterday in federal court in Santa Ana, California, as part of a request to force the U.S. to hand over potential evidence the company says will support its claim that the government filed a fraud lawsuit against it last year in retaliation for its downgrade of the U.S. debt two years earlier.

 

In his court statement, McGraw said Geithner called him on Aug. 8, 2011, after S&P was the only credit ratings company to downgrade the U.S. debt. Geithner, McGraw said, told him that S&P would be held accountable for the downgrade. Government officials have said the downgrade was based on an error by S&P.

 

“S&P’s conduct would be looked at very carefully,” Geithner told McGraw according to the filing. “Such behavior would not occur, he said, without a response from the government.”

 

The Justice Department last year accused S&P of lying about its ratings being free of conflicts of interest and may seek as much as $5 billion in civil penalties. The government alleged in its Feb. 4, 2013, complaint that S&P knowingly downplayed the risk on securities before the credit crisis to win business from investment banks seeking the highest possible ratings to help sell the instruments.

None of this somces as a surprise, and it has been well-known for a long time that the only reason the US Department of Injustice targeted only S&P and not Moody’s or Fitch for their crisis era ratings of mortgages is precisely due to Geithner’s vendetta with S&P. Of course, this kind of selective punishment simply means that nobody else will dare to touch the US rating ever again, or speak badly against the sovereign in a public medium for fears of retaliation.

Naturally, while this means that the credibility of the rating agencies is now non-existent even among the head in the sand groupthink, what is worse is observing the US’ slide into the kind of totalitarian, 1st Amendment quashing tactics that worked out so well for all previous fascist regimes. 

via Zero Hedge http://ift.tt/1mzPOJI Tyler Durden

Who can forget Tim Geithner’s historic interview from April 2011, in which he said:

Peter Barnes “Is there a risk that the United States could lose its AAA credit rating? Yes or no?”

 

Geithner’s response: “No risk of that.”

 

“No risk?” Barnes asked.

 

“No risk,” Geithner said.

Considering that the US was downgraded by S&P just 4 months later, one person who certainly will never forget his idiotic preannouncement, is the former Treasury secretary, Tim Geithner. And being the sore loser that everyone suspected he was (although one hopes his recent well-paid move to Warburg Pincus will help soothe his sensitivity) it will come as no surprise that Geithner told the Chairman of embattled rating agency Standard & Poor’s, that its downgrade of the US from AAA to AA+ “would be met by a response.”

From Bloomberg:

S&P filed a declaration of McGraw yesterday in federal court in Santa Ana, California, as part of a request to force the U.S. to hand over potential evidence the company says will support its claim that the government filed a fraud lawsuit against it last year in retaliation for its downgrade of the U.S. debt two years earlier.

 

In his court statement, McGraw said Geithner called him on Aug. 8, 2011, after S&P was the only credit ratings company to downgrade the U.S. debt. Geithner, McGraw said, told him that S&P would be held accountable for the downgrade. Government officials have said the downgrade was based on an error by S&P.

 

“S&P’s conduct would be looked at very carefully,” Geithner told McGraw according to the filing. “Such behavior would not occur, he said, without a response from the government.”

 

The Justice Department last year accused S&P of lying about its ratings being free of conflicts of interest and may seek as much as $5 billion in civil penalties. The government alleged in its Feb. 4, 2013, complaint that S&P knowingly downplayed the risk on securities before the credit crisis to win business from investment banks seeking the highest possible ratings to help sell the instruments.

None of this somces as a surprise, and it has been well-known for a long time that the only reason the US Department of Injustice targeted only S&P and not Moody’s or Fitch for their crisis era ratings of mortgages is precisely due to Geithner’s vendetta with S&P. Of course, this kind of selective punishment simply means that nobody else will dare to touch the US rating ever again, or speak badly against the sovereign in a public medium for fears of retaliation.

Naturally, while this means that the credibility of the rating agencies is now non-existent even among the head in the sand groupthink, what is worse is observing the US’ slide into the kind of totalitarian, 1st Amendment quashing tactics that worked out so well for all previous fascist regimes. 

via Zero Hedge http://ift.tt/1mzPOJI Tyler Durden

• Hilsenrath: Next Cut in Fed Bond Buys Looms – Reduction to $65 Billion Could Be Announced on Jan. 29 (WSJ)
• China Workforce Slide Robs Xi of Growth Engine (BBG)
• Obama pulls the race card: Obama Says Race May Blunt Poll Standing in Interview (BBG)
• Chinese firm’s IPO deal switches banks as chairman’s daughter moves from JPMorgan to UBS (SCMP)
• China and Russia may hold joint naval drill in the Mediterranean (RT)
• Iran invite to Syria talks withdrawn after boycott threat (Reuters)
• Seven Chinese IPOs Halt Trading After 44 Percent Share  (BBG)
• U.S. military says readying plans for Olympic security assistance (Reuters)
• Thank you Bernanke: Investors Most Upbeat in 5 Years With Record 59% Bullish in Poll (BBG)
• From His Refuge in the Poconos, Reclusive Imam Fethullah Gulen Roils Turkey (WSJ)
• Hong Kong, Vancouver Least Affordable Home Markets, Survey Shows (BBG)
• Link to Target breach of pair’s arrests questioned (CBSNews)
• China Money Rate Drops as PBOC Cash Injections Spur Stocks Rally (BBG)
• First its notebooks, now… Lenovo Said to Be in Discussions to Buy IBM Server Business (BBG)
• Snow Closes Washington Offices as U.S. Flights Disrupted  (BBG)
• Why a Balkan diploma-mill degree is more valuable than one from Oxford (CSMonitor)
• JPMorgan Says BVG Owes $200 Million Over ‘Unfortunate’ CDS (BBG)

Overnight Media Digest:

WSJ

* The Fed is on track to trim its bond-buying program for the second time in six weeks as a lackluster December jobs report failed to diminish the central bank’s expectations for solid U.S. economic growth this year.

* President Barack Obama’s sagging approval ratings and the rocky health-law rollout are expanding the map of competitive Senate races this year, giving Republicans new hope of capturing seats in states that the president carried in 2012.

* China’s growth prospects this year depend on the gains it can chalk up from exports and the pains that come from trying to remake the world’s No. 2 economy. China is one of the most powerful engines of global growth, but one that no longer operates at full throttle. On Monday, Beijing reported that its gross domestic product last year grew 7.7 percent, matching 2012’s rate. China economists generally forecast economic growth of somewhere between 7 percent and 8 percent this year, too.

* Iran would have to remove 15,000 centrifuge machines and take other drastic measures to forge a comprehensive nuclear agreement with the West, according to a report by a U.S. think tank that drew from conversations with senior U.S. officials.

* Fethullah Gulen, a reclusive imam whose crumbling alliance with Turkish Prime Minister Recep Tayyip Erdogan has threatened the country’s stability, lashed out Monday at his one-time partner, the strongest sign yet of an irreparable split.

* KKR & Co and Affinity Equity Partners have agreed to sell South Korea’s Oriental Brewery back to Anheuser-Busch InBev for $5.8 billion in the largest deal on record allowing a private equity firm to exit from an Asian investment.

* PSA Peugeot Citroën is moving closer to a 3 billion euros ($4.06 billion) transformative deal with a Chinese partner and the French government that will hinge on whether private investors have appetite for shares in an unprofitable and cash-bleeding car maker exposed to cutthroat competition in Europe.

* Deutsche Bank AG’s surprise 1 billion euros ($1.35 billion) fourth-quarter loss suggests that a new phase of banking cleanups is getting under way in Europe, a likely precursor to other European lenders absorbing financial hits.

* Royal Dutch Shell is selling its stake in an Australian natural gas project, the oil company’s first disposal since it issued a rare profit warning last week. Shell said it has agreed to sell its 8 percent equity interest in the Wheatstone-Iago gas field, which is operated by U.S.-based Chevron Corp, and a 6.4 percent interest in the Wheatstone liquefied natural gas project in Western Australia for $1.14 billion in cash to state-owned Kuwait Foreign Petroleum Exploration Co.

* China’s Lenovo Group Ltd is in talks to buy International Business Machines Corp.’s low-end server business, a person familiar with the matter said, reviving negotiations that fell apart last year over valuation.

* A cross-border buyout that once valued Cooper Tire & Rubber Co at $2.5 billion has now devolved into a court battle over as little as a few hundred million dollars. Cooper officially terminated its sale to India’s Apollo Tyres Ltd Monday after months of delay in which Apollo sought to cut the $35 per share price.

* Target CEO Gregg Steinhafel is calling to adopt chip-based credit-card technology to thwart theft. But the debate was different a decade ago, when Target pulled the plug on a $40 million program that did just that.

* Investors will be paying close attention to Samsung Electronics Co’s earnings this week for any signs of weakness in the smartphone market and to see whether the company’s streak of record results is coming to an end.

* The fiery tit-for-tat that erupted in court last week between Apple Inc and a court-appointed lawyer overseeing the company’s e-book pricing shined a light on something that has annoyed corporations for years: compliance monitors.

* Needing to generate revenue, Twitter is moving to capitalize on the fact that its user base is more racially diverse than U.S. Internet users as a whole.

* Senior Argentine officials met with representatives of the Paris Club on Monday in a bid to jump start negotiations to settle Argentina’s long-standing debt with the club of creditor nations.

 

FT

Airbus Group is expected to challenge British eurosceptics and make a case in favour of UK’s membership of the European Union. The aerospace company told the Financial Times that the UK as part of the EU is an economic model that works “extremely well”.

Discount retailer Poundlands and Pets at Home are expected to float by early February, sources told the Financial Times. Poundlands may seek a valuation of 700 million pounds to 800 million pounds, while Pets at Home may be valued at 1.5 billion pounds.

WM Morrison suspended group treasurer Paul Coyle, arrested in December by the Financial Conduct Authority in connection with an insider trading case, according to sources. Coyle has not been charged for any offence as yet.

The Financial Reporting Council will probe auditor KPMG’s book-keeping at the Co-operative Bank, which has been hit by a capital shortfall of 1.5 billion pounds and a drugs scandal involving its ex-chairman.

Off licence group Conviviality Retail’s chief executive Diana Hunter said minimum pricing is expected to create a “level playing field” for off licences against supermarkets, and that she did not expect the government to change its stance from an earlier rejected plan for a price floor in alcoholic beverages last year.

 

NYT

* Europe lacks a vibrant market for corporate bonds issued by smaller, riskier companies, making European companies more dependent on bank credit than American businesses.

* The World Economic Forum, for which the cost of membership and a ticket to the annual meeting is more than $70,000, is both admired and derided as a velvet-rope club for the 1 percent of the 1 percent. However, the leaders of some of the largest and most transformative companies are demonstrating, with their absence, the difficulty of convening a global conversation with all the main stakeholders.

* Royal Dutch Shell said on Monday that it would sell its minority interest in an Australian liquefied natural gas project to the Kuwait Foreign Petroleum Exploration Company for about $1.1 billion.

* Waste Control Specialists has a monopoly: as aging nuclear reactors retire, their most radioactive steel, concrete and other components must be shipped for burial somewhere.

* Account information stolen during the Target security breach is now being divided up and sold off regionally, a South Texas police chief said on Monday following the arrest of two Mexican citizens who the authorities say arrived at the border with 96 fraudulent credit cards.

* Bixi, the Canadian company that designs and builds bicycles and supporting technology for bike-sharing systems around the world, including those in New York and London, sought bankruptcy protection on Monday.

* Weixin, a fast-growing social messaging app from the Chinese Internet company Tencent, is no mere copy of any existing service, and its success may thwart Facebook’S ambitions in China. Weixin, a highly addictive social networking tool that allows smartphone users to send messages and share news, photos, videos and web links, much like America’s WhatsApp, or Line, a Japanese communications and messaging app.

* Hotels are competing with one another to create luxury suites for the extremely wealthy, who are willing to pay five-figure nightly rates. In New York, the race to capture the highest end of the market continues. In November, the Mandarin Oriental, New York, opened a 3,300-square-foot suite that includes floor-to-ceiling windows and a dining room that seats 10; its rate is $28,000 a night.

* A 60-second Chobani commercial – in the first Super Bowl appearance for the No. 1 brand of Greek yogurt – is scheduled for the third quarter. Two brands of Greek-style yogurt, Chobani and Dannon Oikos, have bought commercial time during the game.

* Some farmers are raising their pigs more humanely in wide open spaces, instead of tight quarters, and selling them to restaurants and grocers increasingly interested in how animals are treated.

 

Canada

THE GLOBE AND MAIL

* Prime Minister Stephen Harper, who has made backing Israel a governing credo, used a historic speech to the Knesset to lay out the case for his staunch support – insisting it is not only a “moral imperative” but also strategically important to democracies around the world.

* The pace of new oil-sands development should be slowed so governments can focus on an infrastructure shortage in Fort McMurray, the region’s ex-MP says. Brian Jean resigned this month as the Conservative member of Parliament for Fort McMurray-Athabasca, and says now the most pressing issues facing his community are largely out of federal hands.

Reports in the business section:

* BlackBerry Ltd shares rose more than 8 percent on Monday, after the smartphone company received a vote of confidence from the U.S. Department of Defense. The government agency says about 80,000 BlackBerrys will be deployed on its new mobile device management system by the end of this month.

* A sluggish global economy and stuttering recovery are among the factors that trimmed Bombardier Inc’s aircraft order book and total number of plane deliveries last year. Montreal-based Bombardier Aerospace said on Monday that it received orders for 388 planes, net of cancellations, in 2013, compared with 481 orders in the previous year.

NATIONAL POST

* Prime Minister Stephen Harper Monday warned that a dangerous new form of anti-Semitism has emerged and said the globe has a moral and strategic objective to rally around Israel as a haven for Jews.

* Conservative MP Rob Anders is trying to put the word “rape” back into the Criminal Code, seeking to end the ambiguity that some feminists agree is minimizing the severity of sexual assault in the public’s perception.

FINANCIAL POST

* Target Corp is warning its Canadian customers that a massive security breach at the retailer over the holiday season may have led to their personal information being stolen.

* Falling bonds yields could push mortgage rates lower in coming weeks as banks compete in the spring housing market, traditionally the strongest real estate period of the year.

 

China

SHANGHAI SECURITIES NEWS

– The Shenzhen Stock Exchange warned investors against “stir frying” newly-listed stocks as the first batch of companies debuts on the exchange following a year-long hiatus of initial public offerings.

– Bank of Communications said it plans to raise up to 40 billion yuan ($6.61 billion) by selling debt in domestic and overseas markets in a bid to replenish capital.

CHINA BUSINESS NEWS

– Nearly 1,000 officials in China’s environmental protection system were punished between January 2012 and June 2013 for violating rules or breaking laws, according to the government.

PEOPLE’S DAILY

– During a meeting with Boeing Vice Chairman Ray Conner, Chinese Vice Premier Wang Yang said the country would deepen economic reforms and strive to create an open, transparent and fair environment for foreign investors.

SHANGHAI DAILY

– The Shanghai Film Group Corp is in talks with Marvel Entertainment, owned by Walt Disney Co, for a new Chinese superhero film that will revolve around the adventures of a Chinese terra-cotta warrior, said Ren Zhonglun, president of the group.

 

Britain

The Telegraph

GOVERNMENT TOLD AIRPORTS COMMISSION NOT TO REPORT UNTIL AFTER GENERAL ELECTION

Ministers told the body investigating where to build a new runway not to deliver its findings until after the 2015 General Election, MPs are told, as the Airports Commission’s chairman accuses Boris Johnson of “vulgar abuse”.

CO-OP PULLS SALE OF GENERAL INSURANCE ARM

The Co-operative Group has opted to hold onto its general insurance business, 10 months after putting it up for sale. The decision was made as the mutual no longer needs the money the sale could have brought in, following a revision of the plans to fill the Co-op Bank’s 1.5 billion pound black hole.

The Guardian

FAT FACE SET FOR STOCK MARKET FLOTATION

The casual fashion chain Fat Face is set for a stock market flotation in the first half of this year after appointing two advisers. The retailer, which is chaired by former Marks & Spencer boss Stuart Rose, has hired Citi and Jefferies to sound out potential investors as it seeks a London listing, with March the earliest likely date.

MORRISONS EXECUTIVE ARRESTED IN INSIDER TRADING INVESTIGATION

Morrisons’ group treasurer and head of tax is under investigation by the Financial Conduct Authority over allegations relating to the trading of shares in Ocado before a tie-up was announced between the companies. Paul Coyle was arrested in December in Harrogate, North Yorkshire, and was taken in for questioning in connection with alleged insider dealing and market abuse.

The Times

BRITAIN’S RECOVERY FASTEST OF ALL – IMF

Britain’s economy is bouncing back faster than any major trading nation, the International Monetary Fund will say on Tuesday. Underlining the strength of the recovery, the Washington-based fund is set to raise its forecast for the UK economy for the second time in less than four months, lifting Britain from one of the world’s laggards to among its fastest growing developed countries.

“BLACK HOLE” SPARKS CLOSE SCRUTINY OF CO-OP BANK AUDITS

The accountancy watchdog has opened an investigation into KPMG’s audits of the Co-operative Bank in the years leading up to the lender’s collapse. The Financial Reporting Council said on Monday that it was examining the “Big Four” firm’s audits up to and including 2012 but did not say how far back its investigation would go.

The Independent

UKFI SEEKS CUT-PRICE DEAL ON NEW LLOYDS SALE

The agency which manages taxpayers’ stake in Lloyds Banking Group is attempting to secure a knockdown price from City bankers vying to work on a share sale that will return it fully to the private sector. Sky News understands that UK Financial Investments has asked investment banks in recent days to present fee proposals for executing a sale of part or all of the government’s remaining 20 billion pound stake in Lloyds.

IMF UPGRADES UK GROWTH FORECAST ABOVE RIVALS The International Monetary Fund is on the brink of upgrading its growth forecast for the UK more than any other major economy, Sky News has learnt. The Fund is poised to increase its projection for UK growth in 2014 from 1.9 percent to 2.4 percent. Although the Fund will also lift its forecasts for world economic growth, the UK upgrade is significantly stronger.

 

Fly on the Wall 7:00 AM Market Snapshot

ECONOMIC REPORTS

No market-moving domestic economic reports are scheduled today.

ANALYST RESEARCH

Upgrades

AAR Corp. (AIR) upgraded to Neutral from Underperform at Credit Suisse
Alcoa (AA) upgraded to Overweight from Neutral at JPMorgan
Allscripts (MDRX) upgraded to Neutral from Sell at B. Riley
Bloomin’ Brands (BLMN) upgraded to Overweight from Neutral at JPMorgan
Boston Scientific (BSX) upgraded to Overweight from Neutral at Piper Jaffray
Burger King (BKW) upgraded to Conviction Buy from Buy at Goldman
Century Aluminum (CENX) upgraded to Overweight from Underweight at JPMorgan
Comerica (CMA) upgraded to Market Perform from Underperform at Keefe Bruyette
Gap (GPS) upgraded to Buy from Underperform at Sterne Agee
Inteliquent (IQNT) upgraded to Outperform from Market Perform at Raymond James
Motorola Solutions (MSI) upgraded to Buy from Neutral at Citigroup
NVIDIA (NVDA) upgraded to Equal Weight from Underweight at Evercore
Quintiles (Q) upgraded to Buy from Neutral at Goldman
Sasol (SSL) upgraded to Overweight from Equal Weight at Barclays
Schlumberger (SLB) upgraded to Outperform from Neutral at Credit Suisse
Seagate (STX) upgraded to Overweight from Equal Weight at Morgan Stanley
Steven Madden (SHOO) upgraded to Buy from Hold at BB&T
Stratasys (SSYS) upgraded to Outperform from Neutral at Credit Suisse
TESARO (TSRO) upgraded to Outperform from Market Perform at BMO Capital
Western Digital (WDC) upgraded to Outperform from Market Perform at BMO Capital

Downgrades

3D Systems (DDD) downgraded to Neutral from Outperform at Credit Suisse
AEGON (AEG) downgraded to Neutral from Overweight at HSBC
Apple (AAPL) downgraded to Hold from Buy at Societe Generale
Covance (CVD) downgraded to Neutral from Buy at Goldman
Exxon Mobil (XOM) downgraded to Neutral from Buy at BofA/Merrill
FireEye (FEYE) downgraded to Neutral from Overweight at JPMorgan
M&T Bank (MTB) downgraded to Market Perform from Outperform at Raymond James
Mechel (MTL) downgraded to Underweight from Neutral at JPMorgan
Nationstar (NSM) downgraded to Market Perform from Outperform at FBR Capital
Noble Corp. (NE) downgraded to Equal Weight from Overweight at Morgan Stanley
Skechers (SKX) downgraded to Hold from Buy at BB&T
SolarCity (SCTY) downgraded to Neutral from Overweight at JPMorgan
Starbucks (SBUX) downgraded to Buy from Conviction Buy at Goldman
T. Rowe Price (TROW) downgraded to Neutral from Buy at Citigroup
TJX (TJX) downgraded to Neutral from Buy at Sterne Agee
Target (TGT) downgraded to Underperform from Market Perform at Cowen

Initiations

ARAMARK (ARMK) initiated with a Neutral at Goldman
ARAMARK (ARMK) initiated with an Outperform at Credit Suisse
ARAMARK (ARMK) initiated with an Outperform at RW Baird
ARAMARK (ARMK) initiated with an Outperform at Wells Fargo
ARAMARK (ARMK) initiated with an Overweight at JPMorgan
Basic Energy (BAS) initiated with an Outperform at Imperial Capital
CatchMark Timber (CTT) initiated with a Buy at Stifel
CatchMark Timber (CTT) initiated with an Outperform at RW Baird
Hilton Worldwide (HLT) initiated with a Buy at Citigroup
Hilton Worldwide (HLT) initiated with a Buy at Deutsche Bank
Hilton Worldwide (HLT) initiated with a Market Perform at Wells Fargo
Hilton Worldwide (HLT) initiated with an Outperform at Credit Suisse
Hilton Worldwide (HLT) initiated with an Overweight at JPMorgan
SPX Corp. (SPW) re-initiated with an Overweight at Barclays
Turkcell (TKC) initiated with an Overweight at HSBC

HOT STOCKS

AB InBev (BUD) reacquired Oriental Brewery from KKR (KKR), Affinity for $5.8B
Roche (RHHBY) said two phase III schizophrenia studies missed primary endpoints
JoS. A. Bank (JOSB) board rejected tender offer from Men’s Wearhouse (MW)
Verizon (VZ) to purchase Intel (INTC) media assets, terms not disclosed
Royal Dutch Shell (RDS.A) sold equity interest in Wheatstone LNG for $1.135B
Teamsters announced tentative agreement with YRC Worldwide (YRCW)
Boeing (BA), GE Capital Aviation (GE) announced order for 40 737s
GE (GE) acquired Cameron’s (CAM) compression unit for $550M
Cameron (CAM) exploring sale of centrifugal business
Accenture (ACN) acquired ClientHouse, terms not disclosed
Actavis (ACT) divested generics commercial ops in seven markets in Western Europe
Brocade (BRCD) sold network adapter business to QLogic (QLGC)

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Mercantile Bank (MBWM), Baker Hughes (BHI), Signature Bank (SBNY)

Companies that missed consensus earnings expectations include:
First Defiance Financial (FDEF)

NEWSPAPERS/WEBSITES

Gates has taken more active role at Microsoft (MSFT), Re/code reports
Wells Fargo (WFC) banning staff from investing in P2P loans, FT reports
Pair arrested in connection with Target (TGT) breach, LA Times reports
Twitter (TWTR) product chief Michael Sippey to step down, WSJ reports
Toyota (TM) reconsiders its Thai investment, Reuters reports
JPMorgan (JPM), faced with a hiring investigation, ends China IPO, Reuters reports
Lenovo (LNVGY) again eyes IBM (IBM) server unit, Reuters reports
Amazon (AMZN) looks towards ‘anticipatory shipping’ method, WSJ reports
HP (HPQ) begins pushing Windows 7 (MSFT) instead of Windows 8, Business Insider reports

BARRON’S

Denbury Resources (DNR) shares could advance 20%
Gap (GPS) could climb 30% over the next year
Dean Foods (DF) could rise 30%, attract private equity interest
Intel (INTC) should report mobile along with other PC chips
GameStop (GME) slide creates opportunity for investors
Homebuilders, suppliers may benefit as young buyers emerge (USG, AXLL, HUN, DHI, PHM, HOV, TOL, MDC, LEN, KBH, BZH, RYL)

 

 

via Zero Hedge http://ift.tt/LMWCWH Tyler Durden

One of the bigger stories overnight is Hilsenrath’s latest communication from the Fed which once again simply paraphrases the status quo opinion, namely which is that the Fed will taper by another $10 billion on January 29, reducing the total monthly flow to $65 billion. “The Federal Reserve is on track to trim its bond-buying program for the second time in six weeks as a lackluster December jobs report failed to diminish the central bank’s expectations for solid U.S. economic growth this year, according to interviews with officials and their public comments.” Of course, should the Fed not do that, as the Hilsenrath turned to Hilsen-wrath after all those Taper rumors in September ended up being one giant dud, one can once and for all completely ignore the WSJ reporter, who will have lost all his Fed sources and is now merely an echo chamber of consensus. What is notable is that the result of the latest mouthpiece effort, the USD is stronger, which means USDJPY is higher, which means US equity futures are flying…. on less QE to be announced. We eagerly await for this particular correlation pair to finally flip.

The other big story, of course, is the already noted well-telegraphed in advance PBOC liquidity injection ahead of the Chinese Lunar New Year, and ahead of a potential January 31 Trust default which will certainly shake the foundations of the Chinese shadow banking system to the core. Not helping nerves was last night’s announcement by Zhang Ming, a researcher and director of the international investment department at the Chinese Academy of Social Sciences, that “trusts and shadow banking will see defaults this year, and this is a good thing.” Let’s circle back in 6 months to see just how good it is.

Still, the PBOC’s liquidity was a welcome addition to a market suddenly on the ropes about where new money will come from, sending the USDJPY soaring, the Nikkei higher by 1%, the Shanghai Composite higher by 0.86% back over 2000 and the S&P futures about 8 points higher. This happened despite Europe once again issuing warning signs of a slowdown when the January German ZEW Survey missed expectations of an increase to 64.0, and instead declined from 62.0 to 61.7.

The end results is that heading into the North American open stocks in Europe are seen broadly higher, albeit marginally, with USTs under pressure and USD index supported by the latest WSJ’s Hilsenrath article. He also added that the Fed could cut purchases to USD 65bln/month, adding that the Fed is comfortable with rate expectations in the market. Furthermore for USTs it is worth noting that there is unconfirmed market talk that they have been put under pressure by a large block sale by a large Japanese bank. Financials were among the best performing sectors, supported by actions by the PBOC overnight, after the central bank injected CNY 180bln via 21-day reverse repos and CNY 75bln via 7-day reverse repos, which was the first injection into the interbank market since December 23rd. At the same time, market participants used yesterday’s Deutsche Bank’s profit warning inspired sell off to reinstate longs. Brent Crude futures also trade higher this morning following the aforementioned liquidity injection by the PBOC.

Oh yeah, that epic boondoggle Davos, where fawning, wannabe access journalists meet wannabe world saver superheroes, officially begins today.

In the absence of any material macro news in the US, which may be shivering in freezing cold as the second Polar Vortex, aka cold winter weather and, gasp, snow, grips the nation, Verizon Communications, IBM and Johnson & Johnson may dictate the tone in the absence of other major data releases. Today’s POMO is $1.00 – $1.50 billion in the 02/15/2036 – 11/15/2043 bucket.

Market snapshot

• S&P 500 futures up 0.3% to 1839.5
• Stoxx 600 up 0.4% to 336.8
• US 10Yr yield up 4bps to 2.86%
• German 10Yr yield up 2bps to 1.76%
• MSCI Asia Pacific down 0.1% to 139.2
• Gold spot down 0.5% to $1248.9/oz

Asian Headlines

PBoC injected CNY 180bln via 21-day reverse repos and CNY 75bln via 7-day reverse repos, which was the first injection into the interbank market since December 23rd. (BBG) The central bank has been providing shortterm liquidity in order to shore up cash demand ahead of the upcoming Lunar New Year holiday in China.

EU & UK Headlines

German ZEW Survey Expectations (Jan) M/M 61.7 vs Exp. 64.0 (Prev. 62.0)
– German ZEW Survey Current Situation (Jan) M/M 41.2 vs Exp. 35.0 (Prev. 32.4)
– ZEW said this months survey’s improved current conditions and confirms expectations of economic upswing with
investor sentiment decreasing only marginally. (RTRS)

ECB’s Nowotny has said he sees better chance of Euro-Zone growth being revised rather than lowered and expects neither inflation nor deflation in the Euro-Zone with policy to stay accommodative. (BBG)

Eurogroup Head Dijsselbloem has said Greece did not meet all conditions for Q4 payments and it is unclear when the Greece Troika mission is to be resumed. (BBG)

The ECB alloted EUR 116.3bln to 212 bidders in their 7-day MRO operation vs. Exp. EUR 105bln. (RTRS) At 1200GMT the ECB will aim to drain EUR 177.5bln which will lead to volatile price action in the short-end, should the Central Bank fail to sterilise its purchases.

US Headlines

Fed Watcher John Hilsenrath has said the Fed are on track to trim their QE program at the January meeting, and could cut purchases to USD 65bln/month, adding that the Fed is comfortable with rate expectations in the market. (DJN)

US Weather Service issued a winter storm warning for New York from 12pm January 21st through 6am January 22nd and added that NYC may get 6-10 inches of snow and strong winds. (BBG) Adverse weather conditions on the east coast of the US can keep volumes light as traders are kept away from their desks.

Equities

Stocks traded higher in Europe this morning, with financials outperforming as credit spreads tightened after the ECB injected liquidity via the MRO op, also supported by actions by the PBOC overnight. French listed Alstom shares fell over 10% at the open after the company cut margin and cash flow outlook. Elsewhere, outlook update by SAP, where the company pushed back its profitability target by two years, weighed on other technology related names and heading into the North American open, technology is the worst performing sector.

FX

Worse than expected German ZEW survey, firmer USD, which rose to its highest level since November, with the 200DMA line seen at 81.47, ensured that both EUR and GBP pairs trended lower. While a combination of favourable interest rate differential flows, together with a better bid USD saw USD/JPY advance to its highest since 16th Jan. Elsewhere, USD/CAD has reached 1.1000 for first time since 2009 and NZD remains strong following following the nations firmer than expected CPI reading.

Commodities

HSBC analysts forecast 2014 gold prices at USD 1292/Oz. (CNBC)

Chinese gold imports look set to fall from last year’s record levels, adding further pressure on gold and causing analysts to forecast a price decline for a second year. (RTRS)

OPEC crude output rose 310,000 bpd to 29.82mln bpd in December, according to IEA’s monthly oil market report. (BBG)

IEA raises forecast for 2014 global oil demand forecast by 90,000 bpd and sees 2014 oil demand rising 1.3mln bpd to 92.5mln bpd. (BBG)

Importers of Iranian crude kept purchases little changed in December, the month after world powers agreed to relax some sanctions against the Persian Gulf state as part of an accord to curb its nuclear program, reports the IEA. (BBG)

Traders book most tankers for Libya crude since September according to a fixtures timetable. (BBG) This follows the El Sharara refinery returning to normal operations following recent protests.

China’s December crude oil output up 0.93% Y/Y at 17.90mln tonnes and gasoline exports rise 32% to 325,990 Mt from
December 2012. (BBG)

 

Deutsche concludes the overnight recap

Though European markets felt fairly directionless yesterday, there has been plenty of debate on China’s growth numbers after the release of Q4 GDP data yesterday. The prevailing sentiment is a bit firmer this morning thanks to the Peoples’ Bank of China’s actions today and yesterday to shore up liquidity into the domestic banking system. According to Reuters, the PBoC has conducted a total of CNY180bn in 21- day reverse repos and another CNY75bn in 7-day reverse repos to provide short term funds to banks today. This comes after the PBoC announced that it had provided liquidity to larger banks through its Standing Lending Facility yesterday, but the total amount provided was not disclosed. In addition to that, the PBoC is expanding the facility to small-medium sized banks in 10 regions for a trial period of 14 days (concluding after Lunar New Year). As part of the trial, smaller banks can seek funding before the month-end Lunar New Year holiday via the SLF when the overnight, 7-day and 14-day repo rate exceed 5%, 7% and 8% respectively.
Approximately US$20bn has been set aside for the trial.

The PBoC’s actions have provided a boost to Asian equities this morning. S&P500 futures are up 0.4% and Asian bourses are up between 0.5 and 1 percent. China’s 14-day repo rate has declined by more than 300bp and this has helped Chinese Ashares stem recent losses (Shanghai Comp +0.7%). Nonetheless, the Shanghai Composite (-5.2% YTD) remains one of the worst performing equity indices in the Asia region (and indeed the world), exceeding even the poor YTD performance of Brazil’s Bovespa (-4.7%) in USD terms. Outside of equities there has been a flow of investors looking to buy credit protection via the Australian sovereign 5yr CDS and China sovereign 5yr CDS, which have widened by as much as 4-5bp apiece in the last 24 hours, but the PBoC’s injection has provided some relief today. In Japan, a 0.5% move higher in USDJPY is underpinning the bid for Japanese equities (Nikkei +1.4%) though flows remain on the subdued side.

Outside of China, there was little news flow to drive markets either way with US markets closed for the Martin Luther King Jr holiday. The Stoxx600 (-0.1%) consolidated at YTD highs, but likely would have finished in positive territory were it not for the stark underperformance of European banks (-0.95%). One of the outperforming banks (on a relative basis) was Standard Chartered (-0.15%) who continue to be the subject of takeover reports by various financial commentators – including the Financial Times who wrote that the bank looks attractive on a relative value basis after falling 30% since Q1 last year. In fixed income, the new year rip tighter in peripheral bond yields continued yesterday and 10yr Spanish yields (-2bp) reached seven year lows. The Irish 10yr firmed by 20bp, after Moody’s upgraded the sovereign to investment grade late last Friday. Ireland’s NTMA said that it will be widening its marketing scope to potentially market bonds in Asia and Middle East. Gilts were largely unchanged as markets wait in anticipation for tomorrow’s UK employment report and BoE minutes.

In an otherwise quiet week for data, we should point out that delegates attending the World Economic Forum will begin arriving at Davos today for the annual meeting. This year’s  theme is “The Reshaping of the World: Consequences for Society, Politics and Business”. There are a number dignitaries will be attending the conference including the UK, Japanese, Brazilian and Italian prime ministers/presidents, central bank heads such as Carney, Kuroda and Draghi; together with the likes of Jacob Lew (US treasury secretary), Ban-Ki Moon (UN), Christine Lagarde (IMF) and Jim Yong Kim (World Bank). Expect plenty of soundbites from these leaders over the next couple of days.

Elsewhere in the day ahead, the latest German ZEW survey is the highlight on the data docket. Earnings from Unilever, Verizon Communications, IBM and Johnson & Johnson may dictate the tone in the absence of other major data releases. In EM, the focus will be on the central bank policy decisions in Turkey and Hungary.

via Zero Hedge http://ift.tt/LMWAOx Tyler Durden