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R.T.M. ~ Frontrunning ~ 4th Edition, Vol.1 ~ Jan 26th-30th

Discussion in 'Coffee Shack (Daily News/Economy)' started by Argent Dragon, Jan 26, 2015.



  1. Argent Dragon

    Argent Dragon Site Support Site Mgr Site Supporter

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    [h=1]ConvergEx Survey: Oil Price Plunge Risks Global Recession[/h]
    Many economists say plunge in oil prices during the past seven months will prove to be a boon for the global economy.But a survey of 306 investment professionals by the ConvergEx Group brokerage paints a different picture. A total of 68 percent of the respondents think oil prices will keep falling, while only 20 percent responded that they felt oil prices had made their lows. [Full Story]



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    searcher and REO 54 like this.
  2. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    [h=1]Frontrunning: January 26[/h]

    [​IMG]
    Submitted by Tyler Durden on 01/26/2015 07:46 -0500





    • Alexis Tsipras: the Syriza leader about to take charge in Greece (Guardian)
    • Tsipras to form anti-bailout Greek government after big victory (Reuters)
    • Tsipras Forges Anti-Austerity Coalition in EU Challenge (BBG)
    • East Coast braces, flights canceled as 'historic' blizzard bears down (Reuters)
    • Rebels press Ukraine offensive, Obama promises steps against Russian-backed 'aggression (Reuters)
    • Syriza Victory Brings Hope for Immigrants of EU Access (BBG)
    • For Saudis, Falling Demand for Oil Is the Biggest Concern (BBG)
    • Oil prices fall on market relief over Saudi policy (Reuters)
    • Chris Christie Joins Crowded GOP Fight for Donors (WSJ)
    • NY insider trading ruling tests prosecutors beyond Wall Street (Reuters)
    • Samaras’s Undoing Came Fast After Praise From Merkel (BBG)
    • Pimco-Led Rescue of Batista Startup Seen Faltering on Oil (BBG)
    • Packaging companies Rock-Tenn, MeadWestvaco to merge (Reuters)



    Overnight Media Digest

    WSJ

    * Coinbase Inc, a startup backed by $106 million from the New York Stock Exchange, banks and venture-capital firms, said its exchange will offer greater security for individuals and institutions to trade bitcoin and monitor real-time pricing of the cryptocurrency. (http://on.wsj.com/1yiGwUE)

    * Google Inc's upcoming wireless service would aim to end subscribers' reliance on a single carrier, instead giving them the ability to pick the best signal from a variety of sources, people familiar with the plan said. (http://on.wsj.com/1JLolgV)

    * Siemens Chief Executive Joe Kaeser is expected to face tough questions from investors on Tuesday over the high price he agreed in September to pay for U.S. oil equipment maker Dresser-Rand Group Inc. (http://on.wsj.com/1uurafu)

    * Axis Capital Holdings Ltd and PartnerRe Ltd said they have agreed to merge and form one of the world's biggest reinsurance and specialist insurance companies, a firm with a combined market value of $11 billion. (http://on.wsj.com/1zMe6sZ)

    * New Jersey Gov. Chris Christie and his supporters have formed a political-action committee ahead of a likely bid for president, adding a third well-known Republican figure to the fight for campaign funds among the party's core donor class. (http://on.wsj.com/1Cr5lUB)

    * Cablevision Systems Corp said it will offer a Wi-Fi mobile-phone service starting next month, making it the first U.S. cable operator to take such a product to market. (http://on.wsj.com/1JLz8rz)



    FT

    * U.S. venture capital group Andreessen Horowitz has won a bidding process to invest in money transfer group TransferWise. The group will invest $58 million in the London-based company.

    * Standard Chartered is looking to replace its Chief Executive Peter Sands and has appointed Egon Zehnder to conduct the search. The move follows calls from some of the bank's largest shareholders to accelerate the plan of succession.

    * A committee of MP's have called for a suspension on fracking, dealing a fresh blow to Britain's shale gas industry. They have warned that the government was using "undemocratic" laws to help the industry.

    * Danish company Novo Nordisk is setting a $1 billion a year revenue target for its Saxenda medicine as it anticipates that pharmaceuticals will come to have an increasing role in helping people lose weight.



    NYT

    * After his term as mayor ended, Michael Bloomberg has moved quickly to reassert control at the company that he founded and that bears his name, especially in its media operation. (http://nyti.ms/1zM3PNp)

    * With the Federal Reserve expected to send a stronger signal on when it will raise its benchmark interest rate, three people who lost jobs in the downturn are working but not making as much as before. (http://nyti.ms/1yHY1m6)

    * Greece rejected the harsh economics of austerity on Sunday and sent a warning to the rest of Europe as the left-wing Syriza party won a decisive victory in national elections, positioning its tough-talking leader, Alexis Tsipras, to become the next prime minister. (http://nyti.ms/1EKDQoz)

    * Advertisers, and possibly other third parties, are finding ways to exploit a hidden tracking mechanism that Verizon Wireless users cannot delete. (http://nyti.ms/15z0Ava)

    * In this digital age when filling a shopping cart requires little more than clicking on a screen, the printed retail catalog keeps vying for a place on the coffee table. (http://nyti.ms/15z0UKi)

    * Sheldon Silver, the longtime speaker of the New York State Assembly, agreed on Sunday to relinquish his duties on a temporary basis as he fights federal corruption charges, according to people briefed on the matter. (http://nyti.ms/1yTWHwQ)

    * London-based TransferWise has announced that it has raised $58 million in a new round of fund-raising by a consortium of investors led by the Silicon Valley firm Andreessen Horowitz. (http://nyti.ms/1xWMn36)

    * The Raine Group plans to announce on Monday that it has hired Tom Freston, the former chief executive of Viacom , as a senior adviser. (http://nyti.ms/1JrCYrB)

    * Two big insurance companies, PartnerRe Ltd and Axis Capital Holdings, have agreed to merge, creating a new $11 billion player in the specialized field of reinsurance. (http://nyti.ms/1yI2rcF)



    Canada

    THE GLOBE AND MAIL

    ** Canada's oil producers are being told to brace for more bad news, even as they struggle to cope with a collapse that has driven prices down by nearly 60 percent from their peak last June. Toronto-Dominion Bank economist Dina Ignjatovic said she expects WTI prices to sink below $40 as bulging inventories weigh on the market in the next few months. (bit.ly/1CypDvH)

    ** Goldcorp Inc's quest for new mines is a matter of survival, according to the company's chairman. "The only way mining companies can grow is through acquisitions and the only way they can survive is through acquisitions. Sometimes, I'm not sure people outside the mining business appreciate that," Ian Telfer said in a recent interview. (bit.ly/1BrgkMo)

    ** The federal government will not meet the Monday deadline set by the Thalidomide Victims Association of Canada to announce a financial aid package for Canadians harmed by the drug, an emotional setback for victims anticipating help to cope with their failing health. (bit.ly/1yIp4h8)

    NATIONAL POST

    ** A bitter dispute over a $112 million investment in Caribbean casinos has placed Michael DeGroote, one of Canada's wealthiest businessmen, at the center of bizarre accusations of mafia exploitation, death threats and fraud. (bit.ly/1CMiFkc)

    ** Owning BlackBerry Ltd shares requires a strong stomach and over the last few months many investors have decided to say goodbye to the stock's dips and peaks. (bit.ly/1xXFA9d)

    ** While President Barack Obama's new tax proposals may never see the light of day, given the Republican majorities in both the House and Senate, they have generated discussion among cross-border tax practitioners. Dual citizens living in Canada or Canadians who own U.S. properties may wonder whether they need to reopen their estate plans in case the proposals, referred to by the White House as an attempt to close the "trust-fund loophole," ever come into law. (bit.ly/1yVHMkr)



    China

    CHINA SECURITIES JOURNAL

    - The impact of cutting the interest rate and reserve requirement ratio (RRR) was limited for the real economy and funds might flow into the stock market, said Liu Shijin, vice-director of Development Research Center of the State Council.

    - The China Insurance Regulatory Commission and four other government regulators jointly released a guidance, saying they would support and encourage insurance companies to accelerate the development of credit warranty insurance.

    SECURITIES TIMES

    - Anbang Insurance Group has increased its stake in China Minsheng Banking eight times in two months, and is the largest shareholder with a holding of 18.35 percent.

    CHINA DAILY

    - China will increase visa privileges for foreign experts, the paper said. Foreign experts recruited through 55 talent programmes will be able to apply for visas, resident permits and permanent residency, a privilege previously only given to those on the 1,000 Talent Plan.

    - Shanghai's decision to scrap the GDP target this year signals a shift in attention from quantity to quality of economic growth, said an editorial in the official paper. But underdeveloped regions cannot follow this example, it said.



    Britain

    The Times

    Bentley Motors is helping to create a university technical college in Crewe as part of efforts to meet a skills shortage and to produce the home-grown talent it believes is vital to preserve its quintessential Britishness. (http://thetim.es/1BbJwnO)

    Greece sent shockwaves across Europe last night as a radical left-wing party that has promised to end austerity and refuse to take orders from Berlin and Brussels triumphed in the country's election. (http://thetim.es/1uu8tsm)

    The Guardian

    Security procedures are being reviewed at Downing Street after a hoax caller pretending to be the head of Government Communications Headquarters (GCHQ) managed to get through to David Cameron. Cameron spoke to the imposter, who was claiming to be the GCHQ director Robert Hannigan, but ended the call quite quickly after he released he was being tricked. (http://bit.ly/15IwExD)

    Philip Green has put BHS up for sale after receiving a number of approaches for the department store chain. The move comes after years of speculation that the retail tycoon was willing to part with BHS if a buyer could be found for the loss-making business. (http://bit.ly/1JqZ0Ld)

    The Telegraph

    Card Factory Plc is in the early stages of considering a bid for upmarket rival Paperchase. The retailer, which has 130 UK stores and 30 outlets overseas including the United Arab Emirates, France and Germany, has been put up for sale by its private equity owners with a price tag of around 150 million pounds. (http://bit.ly/15B0y6h)

    British companies paid out a record 97.4 billion pounds in dividends to investors last year after the bumper one-off payment from Vodafone Group Plc outweighed the drag caused by a strong pound. (http://bit.ly/1L9jbPy)

    Sky News

    The Post Office will this week publicly target becoming one of Britain's leading financial services providers by the end of the decade, amid ministerial support for its vast network to play a greater role in banking provision. (http://bit.ly/15I6GKH)

    The parent company of British Airways has approached Aer Lingus about a fresh takeover bid for the Irish carrier. Sky News can exclusively reveal that International Consolidated Airlines Group submitted a revised proposal to the board of Aer Lingus within the last couple of days. (http://bit.ly/1C3GKGB)



    Fly On The Wall Pre-Market Buzz

    ECONOMIC REPORTS
    Domestic economic reports scheduled for today include:
    Dallas Fed manufacturing activity index for January at 10:30--consensus 4.0



    ANALYST RESEARCH

    Upgrades
    American Axle (AXL) upgraded to Overweight from Neutral at JPMorgan
    Bed Bath & Beyond (BBBY) upgraded to Outperform from Perform at Oppenheimer
    DRDGOLD (DRD) upgraded to Neutral from Underweight at JPMorgan
    DealerTrack (TRAK) upgraded to Buy from Hold at Stifel
    DreamWorks Animation (DWA) upgraded to Buy from Neutral at B. Riley
    First Niagara (FNFG) upgraded to Buy from Hold at Jefferies
    Fortinet (FTNT) upgraded to Buy from Neutral at Citigroup
    Garmin (GRMN) upgraded to Outperform from Sector Perform at RBC Capital
    Harmony Gold (HMY) upgraded to Overweight from Neutral at JPMorgan
    McDonald's (MCD) upgraded to Overweight from Equal Weight at Stephens
    Monro Muffler (MNRO) upgraded to Neutral from Reduce at SunTrust
    Pier 1 Imports (PIR) upgraded to Outperform from Perform at Oppenheimer
    Randgold (GOLD) upgraded to Overweight from Neutral at JPMorgan
    Triumph Group (TGI) upgraded to Sector Perform from Underperform at RBC Capital


    Downgrades
    Aluminum Corp. of China (ACH) downgraded to Underweight from Neutral at JPMorgan
    AmeriGas (APU) downgraded to Hold from Buy at Jefferies
    B2Gold (BTG) downgraded to Neutral from Buy at Goldman
    CenterPoint Energy (CNP) downgraded to Neutral from Buy at Citigroup
    CommScope (COMM) downgraded to Sector Perform from Outperform at RBC Capital
    Derma Sciences (DSCI) downgraded to Neutral from Overweight at Piper Jaffray
    Fortress (FIG) downgraded to Market Perform from Outperform at Keefe Bruyette
    Gold Fields (GFI) downgraded to Neutral from Overweight at JPMorgan
    Graco (GGG) downgraded to Perform from Outperform at Oppenheimer
    Gran Tierra (GTE) downgraded to Neutral from Outperform at Credit Suisse
    HCP (HCP) downgraded to Neutral from Buy at Mizuho
    IGM Financial (IGIFF) downgraded to Underweight from Equal Weight at Barclays
    Insulet (PODD) downgraded to Market Perform from Outperform at William Blair
    KCG Holdings (KCG) downgraded to Sell from Neutral at Goldman
    Knight Transportation (KNX) downgraded to Hold from Buy at KeyBanc
    Maxim Integrated (MXIM) downgraded to Neutral from Positive at Susquehanna
    Praxair (PX) downgraded to Neutral from Outperform at RW Baird
    Qualys (QLYS) downgraded to Market Perform from Outperform at JMP Securities
    State Street (STT) downgraded to Underperform from Market Perform at Bernstein
    Tandem Diabetes (TNDM) downgraded to Market Perform from Outperform at William Blair
    Trinseo (TSE) downgraded to Neutral from Buy at Citigroup
    UPS (UPS) downgraded to Equal Weight from Overweight at Barclays
    UPS (UPS) downgraded to Neutral from Outperform at Credit Suisse
    VeriSign (VRSN) downgraded to Underperform from Neutral at Credit Suisse


    Initiations
    Aruba Networks (ARUN) initiated with a Neutral at Citigroup
    KapStone (KS) initiated with an Outperform at RBC Capital
    Lear (LEA) resumed with a Neutral at JPMorgan
    Paramount Group (PGRE) initiated with a Neutral at UBS
    QAD Inc (QADB) initiated with a Buy at Canaccord
    Ruckus Wireless (RKUS) initiated with a Buy at Citigroup
    Ubiquiti Networks (UBNT) initiated with a Neutral at Citigroup


    COMPANY NEWS
    AT&T (T) to acquire Nextel Mexico for $1.88B, less outstanding net debt
    Post Holdings (POST) to acquire MOM brands for $1.15B
    RockTenn (RKT) and MeadWestvaco (MWV) entered into a definitive combination agreement to create a global provider of consumer and corrugated packaging in a transaction with a combined equity value of $16B
    Endo (ENDP) to replace Covidien (COV) in S&P 500 as of 1/26 close, HCA Holdings (HCA) to replace Safeway (SWY) in S&P 500 as of 1/26 close
    Gilead Sciences (GILD) expanded its hepatitis C generic licensing agreements to include the investigational NS5A inhibitor GS-5816. The expanded agreements will allow Gilead’s India-based partners to manufacture GS-5816 and the single tablet regimen of sofosbuvir/GS-5816, once approved, for distribution in 91 developing countries
    AXIS Capital (AXS), PartnerRe (PRE) to combine in $11B merger



    EARNINGS

    Companies that beat consensus earnings expectations last night and today include:
    Provident Financial (PROV), RockTenn (RKT)
    Post Holdings (POST) reports preliminary Q1 sales $1.07B, consensus $1.07B
    PartnerRe (PRE) sees Q4 EPS $4.20-$4.60, may not compare to consensus $3.04
    AXIS Capital (AXS) sees Q4 EPS $1.15-$1.21, consensus $1.21



    NEWSPAPERS/WEBSITES
    Apple (AAPL) to report China iPhone sales topped U.S. iPhone sales, Financial Times reports
    Teva (TEVA) rebuffed Pfizer (PFE) approach late last year, Bloomberg reports
    Yahoo (YHOO) may absorb Tumblr sales force, Re/code reports
    FXCM (FXCM) to consider selling assets to repay rescue loan, WSJ reports
    Private equity firm 'seriously' considered buying Herbalife (HLF), NY Post reports (NUS, AVP)
    PepsiCo's (PEP) new director nominee could ease tensions with Trian, Barron's says
    Twitter (TWTR) still has problems, Barron's says
    Urban Outfitters (URBN) could be more attractive, Barron's says
    Oracle (ORCL) shares could climb over 20%, Barron's says


    http://www.zerohedge.com/news/2015-01-26/frontrunning-january-26
     
  3. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    Market Wrap: Global Risk Rattled By Syriza Surge To Power


    [​IMG]
    Submitted by Tyler Durden on 01/26/2015 07:19 -0500


    [​IMG]
    This morning both the SNB stunner from two weeks ago, and the less than stunning ECB QE announcement from last Thursday are long forgotten, and the only topic on markets' minds is the startling surge of Syriza and its formation of a coalition government with another anti-bailout party - a development that many in Europe never expected could happen, and which has pushed Europe to the bring of the unexpected yet again. And while there is much speculation that this time Europe is much better positioned to "handle a Grexit", the reality is that European bank balance sheets are as bad if not worse than in 2014, 2013, 2012 or any other year for that matter, because none of ther €1+ trillion in NPLs have been addressed and the only thing that has happened is funding bank capital deficiencies with newly printed money. You know what they say about solvency and liquidity.

    In any event, Syriza's dramatic ascent to power now places Greece on collision course with the Troika, and certainly Germany, a collision that everyone will be watching closely, and none other more than various other regional breakaway powers such as Spain's Podemos which is already riding on the coattails of Syriza's victory.

    All of this is also being manifest in sentiment toward risk this morning, which has seen a bit of a bounceback following a sharp selloff in the overnight futures, one which wiped out all the market gains since the announcement of Draghi's Q€.

    Asian markets kicked off the week on a cautious note with focus on SYRIZA’s victory in Greece. US equity futures fell with the Nikkei 225 (-0.3%) following suit amid a strong JPY, underpinned by flight to safety flows. Shanghai Comp (+0.94) and Hang Seng (+0.24%) rallied late in the session after lacking direction for most of the day, continuing on from last week’s sharp post-Chinese GDP gains.

    European equities are marginally in the green after a choppy morning session following the Greek elections, with the only tier 1 data this morning, German IFO Business Climate (106.7 vs Exp. 106.5, Prev. 105.5), coming in slightly above-expected but having no sustained reaction. The FTSE is the underperformer as mining names weigh on the index as a result of falling commodity prices as well as the Athens Stock Exchange, which opened 3% lower, with banks weighing in the sector, opening 7% lower, however these losses have been mostly pared throughout the morning.

    In terms of stock specific stories, news over the weekend suggested that IBM (IBM) are to lay off 26% of their global workforce this week and Pfizer (PFE) are said to have been rebuffed by Teva (TEVA) in their search for an M&A deal. This news has seen Shire (SHP LN) trade higher this morning, along with news that the US FDA have said it would license their Natpara drug.

    Elsewhere, Bunds are lower on the day after failing to sustain a break above 159.00 shortly after the open and settled below the handle with little price action for the rest of the European morning, while Greek bond yields are wider to the German benchmark by 40 bps this morning. Short sterling has been weighed upon by more hawkish than usual comments from BoE’ Carney (Neutral), who warned that low interest rates may not last as long as investors expect, which echoed similar comments from Forbes (Soft Hawk) over the weekend.

    Volumes may be lighter than usual heading into the US session as the North-east of the US faces a 'potentially historic blizzard' which would lead to 3ft of snow, with heavy snowfall forecast from Philadelphia to Maine and blizzard warnings issued in both New York and Boston.

    In FX, the European session has seen a retracement of heavy selling pressure in EUR/USD following on from the pair falling below the 1.1100 handle for the first time since 2003 during Asian hours. However, this morning sees the greenback coming off its eleven year highs to see EUR/USD rise around 50 pips back above 1.1200, with European participants considering the reaction to SYRIZA’s victory over-exaggerated, as the victory has been widely anticipated in Europe. Meanwhile, the pullback in USD has not seen USD/JPY able to fall back below the 118.00 handle, which was broken overnight.

    RUB currently trades around session lows as the conflict with Ukraine continued to escalate over the weekend, with Ukrainian President saying that the Russian threat to Ukraine has increased and US President Obama hinting at new Russian sanctions.

    The other noteworthy currency is CHF, with volatility continuing after the SNB announced the removal of the currency floor, where EUR/CHF currently resides below parity but has seen buying pressure throughout the European morning.

    The commodity complex has seen gold pull back from its post ECB-QE announcement highs to trade below USD 1,185/oz, with the yellow metal failing to break above USD 1,300/oz overnight and falling throughout the morning. The energy sector sees Brent and WTI futures both in negative territory with the latter breaking below the USD 45.00 handle and continuing to trade around the handle throughout the European morning, partially as a consequence of the strong USD.

    In summary: European shares stay mixed with the travel & leisure and autos sectors outperforming and oil & gas, basic resources underperforming. Syriza to form coalition with Independent Greeks party after Greek election. Euro reverses losses, Greek stocks pare Friday’s gain, Greek bond yields rise. Ruble weakens. German IFO above estimates. The Swiss and German markets are the best-performing larger bourses, U.K. the worst. Portuguese yields decline. Commodities fall, with natural gas, silver underperforming and nickel outperforming. U.S. Dallas Fed index due later.


    Market Wrap:


    • S&P 500 futures down 0.3% to 2038
    • Stoxx 600 up 0.1% to 370.8
    • US 10Yr yield down 1bps to 1.79%
    • German 10Yr yield up 0bps to 0.36%
    • MSCI Asia Pacific down 0.2% to 140.8
    • Gold spot down 0.8% to $1283.2/oz
    • Euro up 0.29% to $1.1237
    • Dollar Index up 0.17% to 94.93
    • Italian 10Yr yield down 2bps to 1.51%
    • Spanish 10Yr yield down 0bps to 1.38%
    • French 10Yr yield up 1bps to 0.55%
    • S&P GSCI Index down 0.8% to 376.8
    • Brent Futures down 1.3% to $48.1/bbl, WTI Futures down 1.3% to $45/bbl
    • LME 3m Copper down 1.3% to $5447.5/MT
    • LME 3m Nickel up 0.3% to $14400/MT
    • Wheat futures up 0.1% to 530.5 USd/bu


    Bulletin Headline Summary


    • Prime Minister-elect Alexis Tsipras forged an anti-austerity alliance within hours of his election victory, challenging European peers with a declaration that the era of bowing to international demands for budget cuts is over
    • The challenge for Tsipras now is to come good on his election pledges, including a writedown of Greek debt, while persuading creditors from ECB, IMF and European Commission to keep aid flowing
    • "The Greeks have the right to vote for whom they want,” Hans-Peter Friedrich, a deputy caucus leader for Merkel’s faction in parliament, told Bild newspaper. “We have the right to no longer finance Greek debt”
    • Finland remains open to discussions on extending maturities, lowering rates on Greek loans, Prime Minister Alexander Stubb says; however, “it’s unfathomable to make Finnish taxpayers pay for Greek stimulus policies”
    • Governor Haruhiko Kuroda says the Bank of Japan may need to get creative in any further monetary stimulus. Among options analysts highlight: regional-government bonds, a type of security that could aid public support
    • German business confidence rose in Jan. with Ifo institute’s business climate index advancing to 106.7, higher than forecast, from 105.5 in Dec.
    • A blizzard forecasters call “life-threatening” that may drop three feet of snow from New York to Boston has caused more than 1,800 flight cancellations and will likely block road and rail traffic, close schools and knock out power across the U.S. Northeast
    • Sovereign yields mostly lower; Greek 10Y yields surge 50bps. Asian, European stocks mostly higher, U.S. equity-index futures fall. Brent and WTI, gold and copper fall


    US Event Calendar


    • 10:30am: Dallas Fed Mfg Activity, Jan, est. 4 (prior 4.1)


    * * *


    DB's Jim Reid Concludes the overnight recap

    After the polls closed last night it soon became clear from the exit polls that Syriza had claimed a stunning victory although 12 hours later and with 95% of the results counted Syriza look to have fallen just short of an outright majority. Syriza have won 36.4% of the vote compared to 27.8% for the governing New Democracy party and are projected to win 149 seats vs the 151 needed for a majority on the 300 seat parliament. Even so, DB’s George Saravelos wrote last night that, “the election outcome in Greece this evening is at the very top-end of an “anti-austerity” mandate that the electorate could deliver.” So what next? First Syriza’s leader Alexis Tsipras now has a three day long “exploratory mandate” in which his party will negotiate with other parties to secure a majority. Alternatively Syriza could form a minority government where it will need to secure a tolerance vote from parliament – this requires only a majority of those MP’s present to secure the confidence vote and so Syriza could manage this if it agrees with smaller parties for them to stay away from the vote. Early reports suggest that Syriza will look to make a deal with the right-wing anti-bailout Independent Greeks party, with a Syriza official stating that, "There was an agreement with Mr Kammenos (leader of the Independent Greeks Party) to meet on Monday at 10:30 local time to confirm the support and possible participation of the Independent Greeks in the new government." In terms of what happens next, this same official suggested that, “most likely is that the prime minister will be sworn in on Monday and the new government will be sworn in on Tuesday evening or at the latest on Wednesday morning." Tsipras is also expected to meet with leaders of the centrist To Potomi and the Communist party KKE before taking up government (Reuters).

    In terms of the formation of this government, George thinks that, “the positions of finance minister, PM chief of staff, and chair of the council of economic advisors are likely to form the core of a new government's negotiating team with the Troika and these appointments will therefore be closely watched.”

    Looking ahead Parliament is scheduled to open on February 5th where its first job will be to elect a new President, which should take place by February 13th. Following this the new government will request a vote of confidence from parliament to allow it to begin negotiations with the Troika. After this the next big deadline for Greece is February 28th when the country’s current program expires and a major question for the new government is if they will request and whether they will be granted an extension on this. George Saravelos expects that, “it is in both sides' interest to secure an extension of the program to July to allow negotiations to proceed, but it is important that this materializes. ” From the European side we will probably get an early flavour for how Greek-Eurogroup negotiations will pan out later today as the Eurozone finance ministers meet later and are expected to give some sign over whether they would accept an extension. If this extension can be agreed then the Troika will likely send a mission to Athens in mid-February to start negotiations although Tsipras has indicated it is an open question whether or not they will be invited.

    The situation in Greece is undoubtedly delicate with the nation’s banks having already requested liquidity assistance from the ECB due to deposit outflows and the Greek government's continuing need to issue debt. Ultimately the outcome here is going to depend on how negotiations between Syriza and the Troika go, with Syriza’s desire to achieve meaningful debt relief for Greece along with a reduction in austerity and changes to the country’s structural reforms all on Syriza’s policy platform. It is likely that the twists and turns of these negotiations will form the main narrative for Greek risk in the coming weeks. George sees a consensual outcome between the Greek government and its creditors as achievable but requiring very meaningful concessions from both sides and the chance of Greek government instability and fresh elections a possibility.

    Looking slightly more widely, last night’s result marks a major political event for Europe and possibly a new era for European politics. It marks the first time that a non-mainstream party has won the reins of government in the aftermath of the crisis and may be a harbringer for more political turmoil to come for the region as non-mainstream parties grow ever closer to power. Syriza are the first to form a government. They may not be the last. How Greece under Syriza performs from here on will be an important test case for the region. Note that this still could be a slow burning issue. Our plate spinning analogy for 2015 suggested that the central banks would keep the plates spinning aggressively until a cure for gravity (sustainable growth) or a policy error or a political accident. With the ECB now being aggressive, the fall-out from yesterday's vote is likely to be limited unless no compromise can be made. However political risk is going to be the biggest challenge to the Euro over the years ahead. It might only take one rogue election result to seriously damage the whole project.

    Overnight in Asia markets have been reacting to the news. EURUSD was as much as -1% lower in overnight trading but has recovered to be sat currently -0.23% lower. Risk has so far struggled with a number of Asian equity markets currently trading down – the Nikkei is -0.3% whilst the Hang Seng is -0.12% The US 10Y has been well bid with the rate falling another 4bps.

    In other news over the weekend the conflict in eastern Ukraine seemed to heat up further after a rocket attack on the port city of Mariupol on Saturday. The US, NATA and OSCE said that the launch took place in rebel-held territory. At an emergency meeting on Sunday the Ukrainian President stated that separatists are attacking along the entire front line (Bloomberg news). The growing battles in the area are a sign of the escalation in the conflict and over the weekend the US and its allies have been putting pressure on the Russian government to use its influence on the rebels to curtail the violence and adhere to the September ceasefire, with Angela Merkel speaking with Vladimir Putin on the phone yesterday to this end (Reuters).

    Looking back to last Friday, markets were broadly strong as they traded with greater conviction on Thursday’s ECB move although they pared back some of their gains later in the day as Greek concerns began to rise not helped by Syriza’s Tsipras comments that Syriza doesn’t recognize commitments made by previous governments. Nevertheless the ECB impulse won out with the Stoxx600 closing the day up +1.5% and iTraxx Main and Crossover closing -1.4bps and -4.7bps respectively. Government bonds also rallied (10Y US and German yields closed the day -5bps and -9bps) and the EUR continued to fall as EURUSD lost another -1%. Even Greek 10Y bond yields managed to fall 40bps. The clearest disappointment was US equities as the S&P500 closed the day down -0.6%, partly on the back of the weaker US manufacturing PMI which fell to 53.7 its lowest read in a year vs. expectations it would rise to 54.

    There are few major data points today with the December Spanish PPI data (expected to rise to -0.9% from -1.1% MoM) and the January German IFO surveys due out (all components are expected to improve) as well as the already discussed Eurogroup finance ministers meeting in Brussels. We will also get earnings reports from Microsoft. Overnight we will have Chinese industrial profits for December.

    Looking ahead to the rest of the week, tomorrow the German and Italian finance ministers will speak at an EU committee and the EU finance ministers will meet. In the UK we will get Q4 GDP (expected to slip slightly to +0.6% QoQ) and France will release its latest jobseekers data. We will also get US durable goods orders, Case-Shiller house prices, composite and services PMI’s, new home sales and consumer confidence. On Wednesday we have one of the highlights of the week with the FOMC’s latest meeting – whilst there isn’t scheduled to be a press conference or the release of the Fed’s Summary of Economic Projections there will nevertheless be a statement. On Thursday we will have the latest Italian confidence and wage data, euro area confidence, German January inflation (expected in at -0.2% YoY), US initial jobless claims and Japanese inflation (expected to slip to +2.3% YoY). Finally to close the week we will have German December retail sales, Spanish Q4 GDP (expected in steady at +0.5% QoQ), euro area inflation and unemployment, and Q4 US GDP (expected to slip to +3.1% QoQ annualised) and core PCE inflation.

    Whilst the current earnings season is taking a back seat given all the macro developments, we could have some interesting highlights this week as we see results from some of the major oil and gas companies. Indeed we have 9 of them reporting including names such as ConocoPhillips and Chevron. Earnings will likely be impacted from the downturn in oil but perhaps more importantly we will hear their thoughts around what lies ahead for the sector. Interestingly the four US energy companies that have reported so far aren't doing that badly relative to the market's earnings expectations but we suspect that's also because most of them are oil drillers where earnings haven't been much impacted by the downturn yet. There's perhaps also a stronger focus on cost and balance sheet discipline in Q4 but overall the outlook still remains challenging as evinced by some of the job cuts announced by the likes of Schulumberger and Halliburton so far. We've updated our usual earnings tracker table in the PDF today. Whilst only 74 S&P 500 companies have reported so far, the earnings and revenue performance is largely similar to those we've seen in previous years. The EPS beats (73% of total) are a lot stronger than sales beats (49% of total) so far. A similar trend is also emerging on the other side of the Atlantic where EPS beats (80% of total) are much stronger than revenue beats (36% of total) although it is still very early days for the European reporting calendar.


    http://www.zerohedge.com/news/2015-01-26/market-wrap-global-risk-rattled-syriza-surge-power
     
  4. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    RANsquawk Week Ahead 26th January 2015

    [video=youtube_share;UpOHkBOYypU]http://youtu.be/UpOHkBOYypU[/video]

    http://youtu.be/UpOHkBOYypU
     
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    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    Gold & Silver Market Morning [FONT=Verdana, Arial, Helvetica, sans-serif]
    By: Julian D. W. Phillips, Gold/Silver Forecaster - Global Watch
    [/FONT]
    [FONT=Verdana, Arial, Helvetica, sans-serif]New York closed at $1,293.70 down $10.00. In Asia gold held that level, but in London the price dropped to $1,281 with the euro again weaker by a cent at $1.1228 down 1.00 cent against the dollar. The Fix saw the gold price set at $1,282.75 down $10.75 and in the euro, at €1,141.541 down €8.748, while the euro was almost unchanged at $1.1237. Ahead of New York’s opening gold was trading in London uncertainly, at $1,281.60 and in the euro at €1,140.77.

    [/FONT]
     
  7. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    Last edited: Jan 26, 2015
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    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    ECB Starts QE.... But Media Talks Deflategate

    [video=youtube_share;-nT4GMkP9jA]http://youtu.be/-nT4GMkP9jA[/video]

    http://youtu.be/-nT4GMkP9jA

    Published on Jan 26, 2015
     
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    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    Gold Slips, Jan 2015 Silver Eagle Sales Top Jan 2014
    http://www.coinnews.net/2015/01/26/gold-slips-jan-2015-silver-eagle-sales-top-jan-2014/

    India Silver Import 2014 At 7,063 Tonnes, Up 15%
    http://www.silverseek.com/commentary/india-silver-import-2014-7063-tonnes-15-14052

    [FONT=Verdana, Arial, Helvetica, sans-serif]Gold Seeker Closing Report: Gold and Silver Fall But Miners Gain [/FONT][FONT=Verdana, Arial, Helvetica, sans-serif]
    By: Chris Mullen, Gold-Seeker.com
    [/FONT]
    [FONT=Verdana, Arial, Helvetica, sans-serif]Gold dropped $17.49 to $1276.21 by a little after 10AM EST before it bounced back higher into the close, but it still ended with a loss of 1.03%. Silver slipped to as low as $17.878 and ended with a loss of 2.24%.[/FONT][FONT=Verdana, Arial, Helvetica, sans-serif][/FONT] ​
     
  12. REO 54

    REO 54 Midas Member Midas Member

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    2015 January 26 09:24

    Baltic Dry Index down to 720 points
    On January 23, 2014, the Baltic Dry Index fell to 720 points, down 31 points (4.13%) against the level of January 22.

    BDI is a number issued daily by the London-based Baltic Exchange. Not restricted to Baltic Sea countries, the index provides "an assessment of the price of moving the major raw materials by sea. Taking in 23 shipping routes measured on a timecharter basis, the index covers Handysize, Supramax, Panamax, and Capesize dry bulk carriers carrying a range of commodities including coal, iron ore and grain. Because dry bulk primarily consists of materials that function as raw material inputs to the production of intermediate or finished goods, the index is also seen as an efficient economic indicator of future economic growth and production.
    On 20 May 2008, the index reached its record high level since its introduction in 1985, reaching 11,793 points. On 3 February 2012, the index had dropped 647 points, the lowest since 1986.

    http://en.portnews.ru/news/193851/
     
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    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    Standard & Poor’s downgrades Russia's credit rating to junk

    [video=youtube_share;lL8FzvaXTcQ]http://youtu.be/lL8FzvaXTcQ[/video]

    http://youtu.be/lL8FzvaXTcQ

    Published on Jan 26, 2015

    US-based credit rating agency Standard & Poor’s has cut Russia’s sovereign rating to BBB-, leaving it below investment grade for the first time in a decade. Paul Craig Roberts, former assistant secretary of the U.S. Treasury, thinks that decisions taken by credit rating agencies often have political overtones
     
  16. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    As The Middle Class Evaporates, Global Oligarchs Plan Their Escape Form The Impoverished Pleb Masses



    [​IMG]
    Submitted by Tyler Durden on 01/26/2015 22:40 -0500




    Submitted by Mike Krieger via Liberty Blitzkrieg blog,


    The middle class has shrunk consistently over the past half-century. Until 2000, the reason was primarily because more Americans moved up the income ladder. But since then, the reason has shifted: There is a greater share of households on the lower rungs of the economic ladder.

    – From yesterday’s New York Times article: Middle Class Shrinks Further as More Fall Out Instead of Climbing Up

    At a packed session in Davos, former hedge fund director Robert Johnson revealed that worried hedge fund managers were already planning their escapes. “I know hedge fund managers all over the world who are buying airstrips and farms in places like New Zealand because they think they need a getaway,” he said.

    – From the Guardian’s article: As Inequality Soars, the Nervous Super Rich are Already Planning Their Escapes


    So the other day, President Barack Obama once again demonstrated his contempt for the American public by using his State of the Union address to pejoratively blurt out meaningless phrases such as “but tonight, we turn the page” and: “The verdict is clear. Middle-class economics works. Expanding opportunity works. And these policies will continue to work, as long as politics don’t get in the way.”

    Sorry, but why are “we turning the page” tonight? Weren’t you elected over six years ago? Why didn’t you turn the page in 2009?

    Meanwhile, I’m astounded by the phrase “middle-class economics works.” Perhaps it does, but how would anyone know? The only thing I’ve seen from his administration is a laser focused determination to consolidate all American wealth and power into the hands of a tiny group of oligarchs and their lapdogs.

    Indeed, the following articles published in the last two days by the New York Times and the Guardian show the true results of Obama’s oligarch-coddling legacy. The Obama years have been nothing short of an oligarch crime scene.


    First, from the New York Times:


    The middle class that President Obama identified in his State of the Union speech last week as the foundation of the American economy has been shrinking for almost half a century.

    In the late 1960s, more than half of the households in the United States were squarely in the middle, earning, in today’s dollars, $35,000 to $100,000 a year. Few people noticed or cared as the size of that group began to fall, because the shift was primarily caused by more Americans climbing the economic ladder into upper-income brackets.

    But since 2000, the middle-class share of households has continued to narrow, the main reason being that more people have fallen to the bottom. At the same time, fewer of those in this group fit the traditional image of a married couple with children at home, a gap increasingly filled by the elderly.



    Remember, middle-class economics works. If the goal is its total destruction.


    These charts from the New York Times do not tell the tale of a thriving economy:

    [​IMG]




    Even as the American middle class has shrunk, it has gone through a transformation. The 53 million households that remain in the middle class — about 43 percent of all households — look considerably different from their middle-class predecessors of a previous generation, according to a New York Times analysis of census data.

    In recent years, the fastest-growing component of the new middle class has been households headed by people 65 and older. Today’s seniors have better retirement benefits than previous generations. Also, older Americans are increasingly working past traditional retirement age. More than eight million, or 19 percent, were in the labor force in 2013, nearly twice as many as in 2000.

    According to a New York Times poll in December, 60 percent of people who call themselves middle class think that if they work hard they will get rich. But the evidence suggests that goal is increasingly out of reach. When middle class people look up, they see the rich getting richer while they spin their wheels.




    One of the main reasons we have seen such a low level of resistance to this historic oligarch theft, is due to the successful brainwashing of the American public. Despite clear evidence to the contrary, 60% of what is left of the middle-class still think they are going to get rich. They have no idea that they are really just a bunch of deluded plebs unable to see how systematically and catestrophically they are being played.

    Meanwhile, the Guardian describes how many global oligarchs are already planning their escape. These people know full well they are being enriched criminally. Their response is to take as much money as possible and flee before the pitchforks emerge (see: The Pitchforks are Coming…– A Dire Warning from a Member of the 0.01%).




    With growing inequality and the civil unrest from Ferguson and the Occupy protests fresh in people’s mind, the world’s super rich are already preparing for the consequences. At a packed session in Davos, former hedge fund director Robert Johnson revealed that worried hedge fund managers were already planning their escapes. “I know hedge fund managers all over the world who are buying airstrips and farms in places like New Zealand because they think they need a getaway,” he said.

    But as former New Zealand prime minister and now UN development head Helen Clark explained, rather than being a game changer, recent examples suggest the Ferguson movement may soon be forgotten. “We saw Occupy flare up and then fade like many others like it,” Clark said. “The problem movements like these have is stickability. The challenge is for them to build structures that are ongoing; to sustain these new voices.”

    Clarke said: “Solutions are there. What’s been lacking is political will. Politicians do not respond to those who don’t have a voice In the end this is all about redistributing income and power.”

    She added: “Seventy five percent of people in developing countries live in places that are less equal than they were in 1990.”



    Welcome to the recovery suckers.


    http://www.zerohedge.com/news/2015-...s-plan-their-escape-form-impoverished-pleb-ma
     
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    Market Wrap: Futures Tumble On Spike Of "Strong Dollar" Earnings Disappointments And Profit Warnings



    [​IMG]
    Submitted by Tyler Durden on 01/27/2015 07:25 -0500




    Following yesterday's earnings disappointments, most notably from Microsoft which is down 7% this morning following the usual after-the-fact downgrades from JPM, Citi and Nomura, futures were already on a the back foot heading into this morning - no doubt impacted by the deja vu ridiculous move in the EURCHF noted earlier - when the latest batch of earnings just hit, of which Dow component Procter and Gamble stood out and which missed revenue of $20.16Bn (est. $20.67Bn) and EPS of $1.06 (est. $1.13).

    How P&G justified the weak quarter is actually a good summary of macro events in Q4: "The October - December 2014 quarter was a challenging one with unprecedented currency devaluations. Virtually every currency in the world devalued versus the U.S. dollar, with the Russian Ruble leading the way. While we continue to make steady progress on the strategic transformation of the company - which focuses P&G on about a dozen core categories and 70 to 80 brands, on leading brand growth, on accelerating meaningful product innovation and increasing productivity savings - the considerable business portfolio, product innovation, and productivity progress was not enough to overcome foreign exchange.""

    But the punchline, and in direct refutation of what Jack Lew said previously about a strong dollar being good for the US economy, was this:


    "The outlook for the year will remain challenging. Foreign exchange will reduce fiscal 2015 sales by 5% and net earnings by 12%, or at least $1.4 billion after tax. We have and will continue to offset as much of this currency impact as we can through productivity driven cost savings. And we will continue to invest in our businesses, brands and product innovation, because it is the right thing to do for the mid- and long-term, while we deliver another year of strong cash returns to shareowners. We are adjusting fiscal year earnings targets accordingly<[​IMG]/p>


    In other words, P&G will "offset" the surge in the USD with more layoffs. So when Jack Lew said "good" he really meant "bad."
    Expect many more EPS misses and warnings in the coming days and months as the year end 2015 S&P consensus target crashes and burns and as the sellside penguins are finally forced to admit what we said in November: that 2015 earnings will be lower than 2014, which in turn were lower than 2013 on a GAAP basis. Not a pretty pattern.

    In other macro news, Asian equity markets mostly rose with the exception of Chinese bourses; Shanghai Comp (-0.6%) and Hang Seng (-0.4%) both closed lower after Chinese December Industrial Profits Y/Y (-8.0% vs. Prev. -4.2%) printed their biggest fall on record. Nikkei 225 (+1.3%) approached a 1-month high underpinned by risk on sentiment and a weak JPY. ASX 200 (+0.8%) traded in the green despite weakness in basic materials after yesterday’s iron ore slump which saw prices touch a 5 and a 1/2yr low.

    As previously noted, the main FX move of note this morning was a sharp rise in CHF to an intraday high of 1.0382 before paring the move later in the session. This comes amid speculation of SNB intervention after a reiteration overnight from SNB deputy Danthine, who stated once again that the central bank is prepared to conduct FX intervention. However, the move has proved very short lived with the cross now trading sub-1.0100 as the market continues to test the might of the central bank.

    Analysts at IFR suggest that the SNB may prefer to focus their attention on USD/CHF rather than EUR/CHF, due to the risks attached to holding EUR reserves amid the uncertainty that has developed as a result of the Greek election and the announcement of QE by the ECB. Elsewhere, the only tier 1 data this morning was the UK Q4 advanced GDP which came in at 0.5% vs. Exp. 0.6% (Prev. 0.7%). However despite a brief fast money move lower in GBP/USD the reaction was not sustained with the pair broadly flat heading into the US session.

    Over in Europe, equities spent the majority of the day in negative territory, trending lower with no fundamental reason behind the move. The SMI, however bucks this trend and currently resides in positive territory as a consequence of the weakening in CHF early in the session. Meanwhile, with regards to fixed income, the GR/GE 10y spread is over 50 bps wider today as a continuation of yesterday’s post-election price action, while Bunds have ticked higher as a consequence of weakness in equities.

    Also of note, we did have supply today from both Italy and the Netherlands however this failed to impact the broader market. Both Danaher (DHR) and DuPont reported relatively weak earnings, citing the strength in the USD, with this being a theme throughout earnings season so far as Johnson & Johnson (JNJ) and United Technologies (UTX) have both said similar. Microsoft (MSFT) also announced that FX was hurting business and trade lower by around 6.5% in pre-market trade.

    Today’s European session has so far been choppy in the commodity complex with WTI crude futures straddling the USD 45.00 handle, as it did for most of yesterday’s European morning as well. Later today we’ll see US API crude inventories, which last week saw a larger than expected build. In terms of news, Saudi Aramco CEO says that Saudi Arabia are not to blame for the market imbalance seen in the oil market and added that ‘nobody can dictate a fair price for oil’. (RTRS) Elsewhere, UBS have cut this year’s Brent forecast to USD 52.50/bbl from USD 69.75, and sees 2016 Brent price at USD 67.50/bbl from USD 80.00 and the bank also cuts their WTI crude price for this year to USD 49.00 from USD 64.75/bbl and next year to USD 62.50/bbl from USD 75.00/bbl.



    Bulletin Headline Summary from RanSquawk and Bloomberg


    • Large volatility seen in EUR/CHF which briefly touched 1.0382 this morning before paring the whole move as suggestions of SNB intervention proved decidedly short lived
    • Stronger USD continues to weigh on corporate US earnings with Microsoft down 6.5% pre market.
    • Looking ahead, main US data comes in the form of Durable Goods Orders, Services PMI, New Home Sales, Consumer Confidence Index and Richmond Fed Manufacturing Index
    • Despite this, many European participants are anticipating a quiet US session, with volumes to be light amid heavy blizzards in the US
    • Treasuries steady; trading and corporate issuance may be slow as
      northeastern U.S. digs out from snowstorm that was not as bad as
      anticipated; NYC may get no more than a foot of snow vs warnings for as
      much as three feet.
    • $26b 2Y and $15b 2Y FRN auctions rescheduled to tomorrow, while 5Y rescheduled to Thursday at 11:30am, followed by 7Y at 1pm
    • Durable goods orders and new-home sales data will probably come out shortly after their scheduled release times of 8:30am and 10:00am, respectively
    • The Swiss National Bank reaffirmed its willingness to intervene in markets, sending the franc to its weakest level against the euro since the institution abandoned its cap
    • U.K. economic growth grew 0.5% 4Q, less than forecast, as shrinking production and construction countered strength in consumer demand
    • With 100 days until the U.K. general election, Prime Minister David Cameron’s Conservatives took the lead in three polls; U.K. Independence Party leader Nigel Farage predicted his party will win at least five seats
    • Chinese industrial companies’ profits declined the most in at least three years last month, underscoring the challenge facing the nation’s former growth drivers as the economy slows and commodity prices slump
    • Euro area finance chiefs signaled their willingness to do a deal with Alexis Tsipras, so long as the new Greek prime minister drops his demand for a debt writedown
    • EU leaders threatened to tighten sanctions on Russia as soon as Thursday in reaction to renewed attacks on eastern Ukraine by pro-Kremlin separatists
    • Israel’s Netanyahu said yesterday he “strongly objects” to the terms of a proposed nuclear deal with Iran, suggesting the odds of reaching a deal to prevent Iran from developing nuclear weapons are growing longer
    • Saxo Bank A/S says it is bracing itself for lawsuits from some clients who may be unhappy with its efforts to have them cover losses on their Swiss franc accounts.
    • Sovereign yields mostly higher; Greek 10Y yields surge 45bps. Asian stocks mostly higher, with Nikkei gaining, Shanghai lower, European stocks fall, U.S. equity-index futures decline. Brent, WTI and gold steady; copper falls


    US Event Calendar, mostly delayed:


    • 8:30am: Durable Goods Orders, Dec., est. 0.4% (prior -0.7%, revised -0.9%)
      • Durables Ex-Transportation, Dec., est. 0.6% (prior -0.4%, revised -0.7%)
      • Cap Goods Orders Nondef Ex Air, Dec., est. 0.9% (prior 0.0%, revised -0.5%)
      • Cap Goods Ship Nondef Ex Air, Dec., est. 1% (prior 0.2%, revised -0.2%)
    • 9:00am: S&P/CS 20 City m/m, Nov., 0.65% (prior 0.76%)
    • S&P/CS Composite-20 y/y, Nov., est. 4.3% (prior 4.50%)
      • S&P/CaseShiller 20-City Index NSA, Nov. (prior 173.36)
      • S&P/Case-Shiller U.S. HPI y/y, Nov., est. 4.6% (prior 4.64%)
      • S&P/Case-Shiller U.S. HPI NSA, Nov. (prior 167.11)
    • 9:45am: Markit US Composite PMI, Jan. prelim. (prior 53.5)
      • Markit U.S. Services PMI, Jan. prelim., est. 53.8 (prior 53.3)
    • 10:00am: New Home Sales m/m, Dec., est. 2.7% (prior -1.6%); New Home Sales, Dec., est. 450k (prior 438k)
    • 10:00am: Consumer Confidence Index, Jan., est. 95.5 (prior 92.6)
    • 10:00am: Richmond Fed Mfg Index, Jan., est. 5 (prior 7) Central Banks


    In conclusion, here is DB's Jim Reid with an early summary of events

    Whilst the Greek election may have rated as noisy on the political spectrum, on the market spectrum beyond Greece’s own shores it has so far been a whimper. Whilst Greek 10y yields rose over 60bps to close the day at 8.8% and the Greek ASE index closed the day down over 3%, markets around the rest of the world were relatively sanguine with the Italian and Portuguese 10y government yields actually closing the day lower (although Spanish and core rates did rise around 4bps), the Stoxx 600 closing up +0.55%, led by the DAX up +1.4%, and the S&P500 up +0.3%. In European credit Itraxx Main and Xover both closed the day tighter (by -2bps and –8bps respectively) as did the financial senior and sub indices. Even EURUSD managed to bounce of its lows. Given this reaction it seems that so far markets are pricing in either that (a) Greece’s Syriza government will cut a deal with the Troika or (b) potential “Grexit” does not matter beyond Greece and we are unlikely to see a return of more broad-based periphery stresses. Especially in light of the ECB’s huge QE program announced last week, neither view seems unreasonable.

    In terms of developments over the past 24 hours in Greece, first the left-wing, anti-bailout Syriza joined forces with the right-wing anti-bailout party the Independent Greeks to form a majority government and Alexis Tsipras, leader of Syriza, was sworn in as Prime Minister. On the other side of the newly dusted off European bargaining table we had a number of comments from European finance ministers who met in Brussels staking out what can broadly be described as a constructive tone with a hard edge. The Belgian Finance Minister was quoted by the VRT network saying Greece "must respect the rules of monetary union" but added that there was room for flexibility (BBC) and the Eurogroup working head Wieser said that he forecast, “that an extension of the (Greek bailout) programme will have to happen." (Reuters). The German Foreign Minister said, “"we offer to work with the Greek government, but we expect them to stand by agreements." (Reuters). On a similar note the chairman of the Eurogroup, Jeroen Dijsselbloem said, "There is very little support for a write-off in Europe,” From the ECB’s side, Benoit Coeure said, “There is no room for unilateral action in Europe, that doesn't exclude a discussion, for example, on the rescheduling of this debt.” (Reuters). We have the replay details for DB’s conference call yesterday on Greece at the end.

    Looking to the near horizon, the next important development in the situation will come later today when Tsipras is expected to name his government cabinet, with the focus on who he will name finance minister to head up talks with the Troika. At the moment the front runner for the post is Yanis Varoufakis (BBC). He is quoted yesterday as saying, “We will take to the eurozone a plan for minimising this Greek debacle, we are going to put three or four things on the table: genuine reforms and creating a rational plan for debt restructure.. we want to bind our repayments to our growth.” (BBC). After this focus will likely turn to whether the new Greek government can get an extension on its bailout program which expires at the end of February.

    Outside of Greece there were a few other major news stories. Russia’s foreign-currency credit rating was cut to HY (BB+) by S&P, putting it below IG for the first time in 10 years. In response the ruble sold off with USDRUB rising +7.8% on the day, although the further 1% drop in WTI prices and continued fighting in eastern Ukraine also didn’t help. In terms of major macro data yesterday it was relatively quiet with no major releases from the US whilst from Europe we had Spanish PPI reads (which came in lower than expected) and the latest German IFO confidence and expectations surveys (which came in broadly higher).

    Overnight in Asia markets have been mixed as despite a relatively strong open on the back of the European and US sessions many have now sunk into the red on the back of a weak industrial profits read in China, which fell 8% YoY in December. This was the biggest drop since at least October 2011. Whilst the Shanghai Composite is currently trading down around -1.8% and the MSCI Apex 50 is down around -0.5%, Japanese equities are outperforming, with the Nikkei up around +1.4%. Asian credit indices are trading marginally tighter.

    Looking to the day ahead and market liquidity may be affected by the huge blizzard which hit the north east of the US today with many transport links closed down in preparation. An emergency situation has been declared in the states of New York, New Jersey, Connecticut, Rhode Island, Massachusetts and New Hampshire with some 60m people possibly affected. In terms of macro releases we will have UK Q4 GDP (expected to slip to +0.6% from +0.7% QoQ), EU finance ministers will be meeting in Brussels to discuss Ukraine and debate EC President Jean-Claude Juncker's 315 billion-euro investment program proposal and over in the US we will have December durable goods orders (expected in at +0.4%), house price data and the January composite and services PMI. The FOMC also begins its two day meeting.

    On the earnings calendar today we have Siemens and Novartis in Europe, whilst in the US we have Lockheed Martin, Pfizer, P&G, Caterpillar, AT&T and Apple all reporting.


    http://www.zerohedge.com/news/2015-...dollar-earnings-disappointments-and-profit-wa
     
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    Gold & Silver Market Morning [FONT=Verdana, Arial, Helvetica, sans-serif]
    By: Julian D. W. Phillips, Gold/Silver Forecaster - Global Watch
    [/FONT]
    [FONT=Verdana, Arial, Helvetica, sans-serif]New York closed at $1,280.40 down $13.30. In Asia gold held that level. The Fix saw the gold price set at $1,279.00 down $3.75 and in the euro, at €1,132.961 down €8.58, while the euro was stronger at $1.1289. Ahead of New York’s opening gold was trading in London uncertainly, at $1,281.00 and in the euro at €1,135.69.

    [/FONT]
     
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    [h=1]Preview of January FOMC Meeting and Beyond[/h]

    [​IMG]
    Submitted by Marc To Market on 01/27/2015 09:16 -0500



    [​IMG]The Federal Reserve’s two-day meeting concludes Wednesday. To the extent the FOMC meeting is ever routine, this should be it. Its forward guidance evolved at the end of last year. The “considerable time” between the end of the asset purchase program, which it never called quantitative easing, and the first hike has been replaced with “patience”.

    At Yellen’s first press conference last year, she abandoned the Fed’s purposeful, strategic ambiguity and suggested “considerable time” was around six months. She again yielded to temptation in December to define “patience” as a couple of meetings.

    The January meeting is covered by that forward guidance. It is unlikely to change. The next meeting in March is a different story. If the Fed wants to prepare the market for a potential rate hike in the middle of the year, the March meeting, which will see updated macro-economic forecasts and a press conference, is more important. Patience at the March meeting would seem to preclude a June hike.

    Economic activity has unfolded largely as the Federal Reserve anticipated. Its macro-economic assessment is unlikely to have changed dramatically over the past six week. There was an unusual large number of dissents at the December meeting. Not only have those regional presidents surrendered their votes on the FOMC amid the annual rotation, but all three have indicated plans to resign this year.

    The decline in yields at the short-end of the curve, including the Fed funds and Eurodollar futures, suggest that the consensus expected a June hike may be fraying. There are three reasons for the creeping doubts, and they are related to each of the Fed’s three mandates: price stability, full employment, and financial stability.

    At heart of the matter are developments in Europe. The decline dramatic decline in the euro and European interest rates is spurring a strong dollar rally. The dollar’s appreciation will, the argument maintains, will undermine US exports and growth, slowing progress in the labor market. The dollar’s rally will further depress prices. The Fed’s preferred measure of inflation has been below target for nearly three years. The flow of capital out of Europe may endanger US financial stability.

    While the economic theory behind these concerns is valid, in practice a more nuanced picture emerges. And one that may not pose a significant hurdle to a mid-year hike. The US is the world’s third largest exporter (behind China and Germany), but that is not the primary way US companies service world demand. For historical and institutional reasons beyond the scope of this short note, US companies service foreign demand primarily by building and selling locally. The sales by majority owned affiliates of US multinationals abroad will see 4-5x more goods and services than the US exports. That means that local production takes a larger hit when local demand is weak rather than US-based facilities.

    The US exports about 13% of GDP. This is relatively low among the high income countries though we should note that Japan, which is often mistakenly said to be export driven, exports about the same as the US as a percentage of GDP. US exports are near record levels. The best thing for US exports, if that is one’s focus, is stronger world demand, not necessarily a weaker dollar.

    US officials recognize that Europe and Japan are taking measures that can help to facilitate stronger growth. Through various administrations, the pro-growth stance of the US officials has remained a relative constant. It is not, of course, that growth solves all the problems, but it does make the problems easier to address. While the euro area stagnated in the April-September 2014 period, and the Japanese economy contracted, the US experienced its strongest growth in over a decade. The US economy is expected to have continued to growth above trend in Q4. That data will be reported at the end of the week.

    Headline inflation in the US is set to fall further under the weight of the decline in energy prices. A negative year-over-year print cannot ruled out. The Federal Reserve differs from most other major central banks by targeting what is called core inflation in the US, which excludes food and energy. Fed officials are well aware that households pay for food and energy. The reason to exclude them for policy purposes is that they are volatile. They can obscure the underlying signal.

    For the past half century, headline inflation has converged with core inflation; not the other way around. The Fed’s leadership has signaled that it would look through the one-off decline in inflation sparked by the fall in energy prices. The stimulative impact on demand is regarded as more permanent, provided energy prices stay low.

    There may be some bleed through as the drop in energy has some modest knock-on effects on the core rate. Transportation costs may decline though it is not yet apparent in airfare. Public transportation costs are administered prices and are unlikely to be cut. A ride on the New York subway, for example, is about to rise by 10%. Around 40% of the core basket is accounted for by housing costs, and these do not appear poised to decline.

    The dollar’s appreciation can be expected to exert downward pressure on import prices. However, much of what the US imports are priced and invoiced in US dollars. This is an import mitigating factor that is often not appreciated by observers.

    The last time the Fed began a tightening cycle, the core PCE deflator, the Fed targeted rate, was not far from current levels. Back then, in 2004, the Fed did not have a formal inflation target, but it is instructive nonetheless. The same is generally true about the unemployment rate. By mid-year, the national unemployment rate is likely to have fallen further. In addition, a strong majority of states will also have unemployment levels that economists regard as full employment.

    It is true that the participation rate has fallen. It appears that retirement and returning to school are two major contributing factors. There has also been an unusual increase in workers on disability insurance.

    The point is that the Federal Reserve is already showing patience. The current macro-economic performance in past cycles would have arguably already seen the Fed begin a tightening cycle. Indeed, part of the dollar’s appreciation is predicated on anticipation of Fed tightening.

    Some observers suggest that the flow of European savings into the US may jeopardize the Fed’s third (and often forgotten) mandate financial stability. However, they mistakenly think this could deter Fed tightening. To the contrary, concern about financial stability has been cited by the hawks on the Federal Reserve to hike rates rather than the doves who are concerned about the low levels of inflation.

    There are two other reasons what a June rate hike should not be abandoned yet. First, the tapering was indicative of the process the Fed is pursuing. It gave investors, businesses and foreign countries several months of advanced warning that it would slow its asset purchases in a measured manner. It did precisely that. Neither the contraction in Q1 14 GDP nor the acceleration of job growth took it off its course. The leadership of the Federal Reserve has indicated that it is getting closer to its first hike. The evolution of the macro-economic data will determine the exact timing, but near midyear, that have said, still look reasonable. The Fed’s transparency and credibility rests on it saying what it will do and then doing it.

    Second, it is not clear when the next economic downturn will begin though we can feel fairly confident that it will not be this year. The Federal Reserve needs to create the conditions to allow it to cut rates rather than resort to new asset purchases. In order to do this it needs to raise rates. This can be parodied as saying rates have to be raised so they can be cut, but it does not do this argument justice.

    The bottom line is that the January FOMC meeting will most likely pass without much impact. Clearer indication of the Fed’s intention in Q2 will have to wait for the March meeting. While some are observers are having cold feet, we continue to think that a June hike remains the most likely scenario. If we are wrong, it is that the hike is delivered in September instead. Regardless of the exact timing, the US economy and the Federal Reserve are well ahead of most of the major central banks in the larger business cycle.


    http://www.zerohedge.com/news/2015-01-27/preview-january-fomc-meeting-and-beyond
     
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    RANsquawk FOMC Preview 28th January 2015

    [video=youtube_share;ucmnEtUerzc]http://youtu.be/ucmnEtUerzc[/video]

    http://youtu.be/ucmnEtUerzc

    Published on Jan 27, 2015
     
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    Art Cashin On The Anniversary Of The Unsolved Murder Of A Banker With "Too Many Enemies"



    [​IMG]
    Submitted by Tyler Durden on 01/27/2015 14:18 -0500


    For those who enjoy going through offbeat anniversaries, today's pick by Art Cashin is sure to raise a few eyebrows.




    [​IMG]

    On this day in 1955, the police were called to the five story, Fifth Avenue, mansion of Serge Rubenstein. There they found the corpse of the controversial 46 year-old "Financier." He had been strangled with a curtain cord.

    Rubenstein embodied in one man everything that would later be called "the sins of the eighties." He was greedy. He was flashy. He was a raider. His operations were shrouded in mystery and covered by dummy companies. And he used the press to exaggerate his wealth, so that he could bump up his credit with gullible bankers. He had been the guest of presidents and potentates. And through it all most folks thought he was a real slime ball.

    In covering his murder, Time magazine felt he had so many enemies that, with only a little tongue in cheek, Time congratulated the New York City police on having "....narrowed the list of suspects down to 10,000." It never got narrower.



    To note the date, stop by a dimly lit bar and sip a Black Russian. Try not to make any friends and don't pay cash. But stay away from the curtains.

    Stocks didn’t get strangled Monday. Instead, they were run over by a speeding salt spreader, as states, cities and organizations hunkered down for a classic blizzard. Mother Nature, trickster that she is, moved the storm further offshore than models had projected. That led to snowfall less than one-third of the worst estimates.

    Nonetheless, as I write this in the pre-dawn hours in lower Manhattan, Wall Street is a ghost-town. No traffic. No papers. No coffee and almost no people. New York lives through its subways. It may be hours to get them back up and running.


    Snor'easter aside, here is some more from the archives on the curious death of Rubinstein...


    [​IMG]



    ... which is still unsolved:




    Serge Rubinstein: The butler didn't do it

    The New York police did not lack for clues or suspects when they found the body of millionaire Serge Rubinstein in the third-floor bedroom of his Fifth Avenue mansion the morning of Jan. 27, 1955. The pajama-clad body was sprawled near a photograph of Rubinstein as Napoleon, a favorite costume-party role. His hands and feet were tied with venetian-blind cord and his mouth sealed with a wide band of adhesive tape. He had been strangled. In the room were a dozen fingerprints that weren't Rubinstein's, a woman's white dress glove and a handbag. Rubinstein, a womanizing stock manipulator, knew so many people—many of them enemies—that he kept six thick notebooks containing their names. His police dossier indicated that he was a cad only a mother could love, and the police weren't entirely sure about her. (She lived on the floors above him.) Rubinstein even had a butler, who found the body.

    Serge Manuel Rubinstein was the son of a financial adviser to czarist Russia's maniacal monk Rasputin. At the age of 10 he fled the Bolshevik revolution carrying a fortune in jewels in his knickers. Cambridge-educated, he became the managing director of a small French bank at 24, and a year later launched a Franco-Asian stock-rigging scheme that netted him millions and eventual expulsion from France for imperiling the franc. In 1938, at age 30, he came to the U.S., and to avoid the draft he got married and fathered two children. Nonetheless, he was sent to prison for two years for draft evasion. Once out, he divorced his wife, shamelessly manipulated both stocks and beautiful women and, with the aid of a battery of expensive lawyers, fended off U.S. efforts to deport him.

    The very abundance of suspects was the cops' undoing. In the 21 years since the murder, they have interviewed thousands of persons—one of the most extensive investigations in the New York homicide squad's history. The department still has not closed the book on Rubinstein. "His background left a lot of openings," says retired detective Raymond Seiler, who worked full-time on the case for three years. "Every turn you took, there was other speculation." Detectives never could match up the fingerprints with suspects, who included a Canadian financier, a Japanese banker, Rubinstein's sex partners and a Queens chauffeur who had once planned to kidnap him. The glove and bag belonged to a woman who dated him well before his death. Mother Rubinstein was ruled out—"She even held a seance to find out who killed him," Seiler recalls. The butler proved to be one of the few admirers Rubinstein had in the world.


    http://www.zerohedge.com/news/2015-...rsary-unsolved-murder-banker-too-many-enemies
     
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    Inherent Unfairness [FONT=Verdana, Arial, Helvetica, sans-serif]
    By: Turd Ferguson
    [/FONT]
    [FONT=Verdana, Arial, Helvetica, sans-serif]As painful as it may be, I'd like you to please take a moment and imagine yourself as resident CNBS stock huckster, Jim Cramer. As ole Jim is often wont to do, let's pretend that you've found an undervalued equity with strong fundamentals. A potential home run that has been beaten down by years of aggressive selling and short-selling.

    Gold Seeker Closing Report: Gold and Silver Gain With Oil While Stocks and Dollar Fall [FONT=Verdana, Arial, Helvetica, sans-serif]
    By: Chris Mullen, Gold-Seeker.com
    [/FONT]
    [FONT=Verdana, Arial, Helvetica, sans-serif]Gold climbed $17.13 to $1297.53 at about 10:45AM EST before it drifted back lower into midday, but it still ended with a gain of 1.12%. Silver surged to as high as $18.196 and ended with a gain of 1.12%.[/FONT]
    [/FONT]
     
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    [h=1]The New Venezuelan Entrepreneur: Making A living Lining-Up For Toilet Paper[/h]

    [​IMG]
    Submitted by Tyler Durden on 01/27/2015 19:30 -0500



    [​IMG]
    Submitted by Simon Black via Sovereign Man blog,

    At two in the morning, Krisbell quietly slips out of bed so as to not wake the two small children curled up next to her.

    She grabs her phone and quickly dials her friends’ numbers as she’s already headed out the door to get the day’s intelligence report.
    Most importantly—where is milk, sugar, and toilet paper being sold today?

    From the moment price controls were levied in the country, there were shortages of everything in Venezuela.

    Each month, it’s become increasingly difficult to get basic goods. And the lines are growing longer and longer.

    Not everyone can afford to wait in line half the day just to get a few supplies.

    And since you can’t even get everything in one store, it takes the second half of the day to get the rest of what you need—if there’s even anything left by then.

    Friends and neighbors had started coming to Krisbell, asking her if she could help them get things from the grocery store.

    They all have to work just to be able to afford the food in the first place, and they can’t spare the time to stand in line.

    So (as reported by Bloomberg) Krisbell started taking on clients. Now she has enough that she’s earning her entire living from waiting in line.

    Imagine—an entire cottage industry (absurd as it may be) now exists in Venezuela because of destructive government polices.

    Everyone in the country has to pay extra for their basic goods, while others dedicate their professional lives to the unproductive task of standing in line.

    (If this seems far-fetched, consider that the US tax preparation industry takes in $6 billion annually for dedicating itself to the unproductive task of filling out Byzantine tax forms…)

    There’s no limit to the stupidity and destructiveness of people in power, and Venezuela’s President Maduro is a prime example.

    This man (and his predecessor) took the country with the largest oil reserves in the world and crippled it to the point that Venezuela now imports oil.

    And that was before oil prices plummeted. Now the country is even weaker.

    Venezuela’s government is now on the brink of defaulting on its financial obligations… just as it has already defaulted on its obligations to its citizens.

    It’s a sad example of what governments do when they go bankrupt.

    Almost invariably they manipulate the currency and print money.

    This eventually causes inflation to get out of hand and prices to soar. They try to control it by imposing price controls.

    And because it becomes unprofitable for businesses to produce at artificially low prices, shortages ensue.

    Then they institute capital controls to trap money inside the country.

    This movie has played out so many times before. And yet people rarely learn.

    The consequences of terrible decisions creep up gradually, and then suddenly. Most people don’t realize what’s happening until it’s too late.

    The resulting economic hardship often leads to extremism, or dangerous populism. Just look at what’s happening across Europe (and especially Greece with its new radical left Prime Minister).

    But it all starts with a bankrupt government and decades of destructive policies.

    We’ve all seen what’s happened with Venezuela. If you’re in a bankrupt nation, make sure this doesn’t affect you. Make sure you always have a Plan B.


    http://www.zerohedge.com/news/2015-...ntrepreneur-making-living-lining-toilet-paper
     
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    EU to consider barring Russia from SWIFT interbank system

    [video=youtube_share;W_uzi80npe0]http://youtu.be/W_uzi80npe0[/video]

    http://youtu.be/W_uzi80npe0

    Published on Jan 27, 2015

    Calls to disconnect Russian banks from the global SWIFT interbank system came amid the deterioration of relations between Russia and the West, and the introduction of sanctions in response to Moscow’s alleged role in the Ukraine conflict. Russia’s response to a possible cut-off from the SWIFT international banking payment system will be “unrestricted,” Prime Minister Dmitry Medvedev vowed.
     
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    [h=1]Frontrunning: January 28[/h]

    [​IMG]
    Submitted by Tyler Durden on 01/28/2015 07:52 -0500



    [​IMG]
    • Fed seen remaining patient with rate guidance amid global turmoil (Reuters)
    • National Weather Service apologizes for blizzard forecast miss (CBS)
    • Greek PM Tsipras pushes on with radical change, markets tumble (Reuters)
    • Obama Drops Plan to Raise Taxes on ‘529’ College Savings Accounts (WSJ)
    • Hard Choices on Easy Money Lie Ahead for Fed Chief (Hilsenrath)
    • Debt That Once Boosted Its Cities Now Burdens China (WSJ)
    • Skymark Said to File for Bankruptcy After Airbus Deal Flops (BBG)
    • Heavy Fighting Drains Ukraine Government’s Options and Finances (WSJ)
    • Norway Regulator Raises Warning Housing Market Is Out of Control (BBG)
    • Strong Dollar Squeezes U.S. Firms (WSJ)
    • Subprime Bonds Are Back With Different Name Seven Years After U.S. Crisis (BBG)
    • Singapore Pulls Trigger in Deflation Fight (WSJ)




    Overnight Media Digest

    WSJ

    * Janet Yellen's job is about to get harder after a relatively easy first year as Federal Reserve chairwoman, as she looks to move past the preset course of winding down a bond-buying program and begin raising interest rates. (http://on.wsj.com/1zW8Pil)

    * A government program to rid itself of TARP investments in small banks has proved a boon to hedge funds, private-equity and other private investors, according to a new watchdog report. (http://on.wsj.com/1wA1LRk)

    * Apple Inc surpassed even the most bullish Wall Street expectations for its holiday quarter with an improbable trifecta: selling 46 percent more iPhones at higher prices - and earning more on each sale. (http://on.wsj.com/1zW9lwY)

    * The Seattle Seahawks' secret weapon just might be their willingness to give a sports psychologist the freedom to roam the training facility, locker room and even the sidelines every game, to make sure their heads are as sound as their bodies.(http://on.wsj.com/1zW9DDY)

    * The stronger dollar is slicing sales and profits at big American companies, prompting them to put renewed emphasis on cost cutting and cramping the broader U.S. economy. (http://on.wsj.com/1zW9Ozb)

    * Yahoo Inc unveiled plans for a tax-free spinoff of its remaining holdings in Chinese e-commerce giant Alibaba Group Holding Ltd as the company also reported declines in fourth-quarter earnings and revenue. (http://on.wsj.com/1zW9PmS)

    * China's proposed new rules on foreign investment will help the Chinese government re-exert control over the flood of foreign money and interests coming into the country's booming Internet industry. (http://on.wsj.com/1zW9QqM)

    * Thousands of branch closures, aimed at cutting costs, have limited access to banking services in some parts of rural Spain.(http://on.wsj.com/1zW9UXA)

    * The Monetary Authority of Singapore said it would slow the Singapore dollar's appreciation against a basket of currencies, making the city state the latest country to ease monetary policy to fend off deflationary pressures exacerbated by a steep drop in crude oil prices.(http://on.wsj.com/1zWamVO)

    * Audi AG, Volkswagen AG and Porsche are recalling more than 93,500 cars and SUVs world-wide to fix fuel-leak problems. (http://on.wsj.com/1zWaMvm)

    * Retail foreign-exchange broker FXCM Inc was nearly felled by outsize bets made by foreign customers who aren't subject to U.S. regulations, according to people familiar with regulators' review of the firm. (http://on.wsj.com/1zWaTXP)

    * A Citigroup Inc unit plans to announce Wednesday it will change its screening processes for checking and savings accounts to be more forgiving of customers' histories, becoming the second financial institution to reach such an agreement with New York Attorney General Eric Schneiderman.



    FT

    * Bain Capital, a U.S. based private equity firm, has acquired British car parts maker TI Automotive for $2.4 billion, including debt. Bain bought the company from rivals Oaktree Capital.

    * Commodities trader Vitol is to develop a $7 billion offshore oil and gas project in Ghana with Italian company ENI. The final go-head for the project was received from the Ghana government on Tuesday.

    * Britain's economy grew at a pace that was its fastest since the financial crisis. The economy grew 2.6 percent in 2014 despite falls in building and industrial production in the last three months of 2014.



    NYT

    * U.S. President Barack Obama concluded his three-day trip with a tough-love message to his hosts, as he vowed to be "India's best partner" in taking its place in the ranks of the world's great powers but urged it to do more to protect human rights and fight climate change. (http://nyti.ms/1zW9Nve)

    * From the makeup of his cabinet to an early warning sent to the European Union over Russia policy, Greece's new prime minister, Alexis Tsipras, on Tuesday signaled a sharp shift in direction for Greece as he unveiled the first government led from the far left in the country's modern history. (http://nyti.ms/1Cfh6Pg)

    * Marissa Mayer, chief executive of Yahoo, said on Tuesday that the Internet company would spin off its 15.4 percent stake in Alibaba, China's leading e-commerce company, into a separate company. (http://nyti.ms/1K1fR5z)

    * If shareholders accept the bid from the International Airlines Group, or I.A.G., the parent company of British Airways Plc and Iberia of Spain, for Aer Lingus Group Plc , valued at 1.36 billion euros ($1.54 billion), it would be Europe's first significant airline consolidation deal in almost five years. (http://nyti.ms/1tnmjSb)

    * Shareholder activism is in full roar as hedge funds prowl and companies retreat, but Nelson Peltz's campaign to replace four directors at DuPont may just be where corporate America finally draws the line and tries to stem the activist tide. (http://nyti.ms/1JEpTLK)



    Canada

    THE GLOBE AND MAIL

    ** Canada's big banks reduced their prime lending rates in the wake of the Bank of Canada's unexpected move last week, but stopped short of matching the central bank's quarter-percentage-point cut in a bid to protect profits. (http://bit.ly/15KHKRZ)

    ** Tim Hortons Inc is letting go an unspecified number of employees at its corporate offices as it prepares for a new era under the new ownership of fast-food chain Burger King . (http://bit.ly/15NStLk)

    ** The Manitoba government says it will revamp its child welfare system and introduce new legislation that will strengthen the Office of the Children's Advocate, a move that comes six months after Tina Fontaine's high-profile death in care and a decade after the province failed to protect an aboriginal girl who was ultimately murdered. (http://bit.ly/1zajeEp)

    NATIONAL POST

    ** Canada's finance minister insists low- and middle-income families will see two-thirds of the benefits from the Stephen Harper government's contentious multibillion-dollar tableau of family-friendly measures. (http://bit.ly/1Dg6Vak)

    ** A tweet criticizing Prime Minister Stephen Harper for hiding in a closet during last fall's attack on Parliament Hill was swiftly removed from an Alberta Liberal party candidate's Twitter account. (http://bit.ly/1yvOrhq)

    ** Pinetree Capital Ltd, an investment and merchant bank that was a world leader in financing junior resource firms, announced this week that controversial chairman and chief executive Sheldon Inwentash is resigning after more than 22 years at the helm. (http://bit.ly/1D8LAPV)



    China

    CHINA SECURITIES JOURNAL

    - China is expected to announce reforms to state-owned enterprises before the Lunar New Year holiday, the week starting Feb 19, according to a senior official at the National Development and Reform Commission, the country's top planner.

    SECURITIES TIMES

    - Chinese investors are buying shares of companies that are owned by brokerages, according to an analysis by the newspaper. Brokerages are performing well in China's current stock market rally, it said.

    SHANGHAI SECURITIES NEWS

    - A Shanghai-based private equity firm, VStone Capital Co, will launch an A-share mutual fund product in Europe, the paper reported, citing an unidentifiable source who is familiar with the issue.

    CHINA DAILY

    - Alibaba's Jack Ma along with seven other entrepeneurs opened a school for startups in Hangzhou, Zhejiang Province.

    - The value of Chinese brands rose significantly in 2014, driven by private companies without government backing, rather than state-owned enterprises, according to global communications companies.

    SHANGHAI DAILY

    - Shanghai will limit the number of visitors to its temples over Chinese New Year, the newspaper reported. A stampede on Shanghai's famous Bund killed 36 people on New Year's Eve.



    Britain

    The Times

    Mike Ashley has strengthened his grasp on the money streams entering Rangers after the cash-strapped Scottish Championship club's board agreed a 10 million pounds ($15.19 million) emergency loan with Sports Direct, the Newcastle United owner's retail business. (http://thetim.es/1yYazq1)

    Greek prime minister Alexis Tsipras named a radical libertarian as his finance minister. Yanis Varoufakis was sworn in along with the other 39 members of Greece's new coalition cabinet. (http://thetim.es/1y3BTix)

    The Guardian

    Britain's economic recovery slowed in the fourth quarter of 2014, but annual growth was the fastest since the financial crisis of 2007. Official figures showed that in the final three months of 2014, GDP growth slowed to a quarterly rate of 0.5 percent. (http://bit.ly/1DeuNLp)

    Sales commission at the estate agents Foxtons slid by more than a quarter at the end of last year in the latest sign that the capital's runaway housing market is rapidly cooling. (http://bit.ly/1v0aFO8)

    The Telegraph

    A High Court ruling has found Companies House liable for the demise of Taylor & Sons Ltd, after they erroneously recorded that the Cardiff engineering firm had been wound up. In fact it was another entirely unconnected company Taylor & Son Ltd which had actually gone bust. (http://bit.ly/1BlbOMI)

    Venture capitalist reveals he informed Vince Cable's Department of Business of likely collapse a week before Christmas. Jon Moulton, chairman of Better Capital, said his business had suffered a serious financial and reputational hit as a result of the collapse over Christmas 2014. (http://bit.ly/1y3C5OJ)

    Sky News

    The chairman of Pearson Plc, Glen Moreno, is to step down after a decade at the helm. Sources said that Pearson's nominations committee had enlisted JCA Group, a City headhunting firm, to oversee the process of recruiting Moreno's successor. (http://bit.ly/1yLtfJb)

    Up to two million holders of a credit card insurance product could secure compensation. The Financial Conduct Authority said it had reached agreement on a compensation scheme after card customers were sold security products costing up to 25 pounds annually to cover fraudulent use in the event of a card being lost or stolen. (http://bit.ly/1v0kiMT)

    The Independent

    EDF Energy today announced it will cut its gas prices by 1.3 percent making it the last of the Big Six energy suppliers to reduce tariffs in reaction to falling wholesale costs. The French-owned firm said the cut will take effect from Feb. 11 and will benefit around one million customers. (http://ind.pn/1z884jy)

    Developer Almacantar announced yesterday that it has started work converting Centre Point, which was developed by property tycoon Harry Hyams in 1966, into 82 luxury apartments. According to The Telegraph, the apartments will consist of 16 one-bedroom, 37 two-bedroom, 26 three-bedroom, two four-bedroom and one five-bedroom flats. (http://ind.pn/1BjRs6I)


    Fly On The Wall Pre-market Buzz


    ECONOMIC REPORTS
    Domestic economic reports scheduled for today include:
    FOMC meeting announcement of federal funds rate to be reported at 14:00


    ANALYST RESEARCH

    Upgrades
    Caterpillar (CAT) upgraded to Neutral from Underweight at JPMorgan
    Freescale (FSL) upgraded to Strong Buy from Buy at Needham
    Interface (TILE) upgraded to Buy from Neutral at Longbow
    Southwest (LUV) upgraded to Outperform from Neutral at Credit Suisse
    USG (USG) upgraded to Outperform from Neutral at Macquarie
    VCA Inc. (WOOF) upgraded to Buy from Hold at Stifel
    Yahoo (YHOO) upgraded to Buy from Fair Value at CRT Capital


    Downgrades
    AOL (AOL) downgraded to Market Perform from Outperform at Wells Fargo
    Agios Pharmaceuticals (AGIO) downgraded to Neutral from Buy at Citigroup
    American Airlines (AAL) downgraded to Neutral from Outperform at Credit Suisse
    Bonanza Creek (BCEI) downgraded to Neutral from Buy at SunTrust
    CVR Refining (CVRR) downgraded to Neutral from Buy at Citigroup
    Capital One (COF) downgraded to Neutral from Buy at Guggenheim
    Caterpillar (CAT) downgraded to Neutral from Buy at Longbow
    Caterpillar (CAT) downgraded to Underweight from Neutral at Atlantic Equities
    Commerce Bancshares (CBSH) downgraded to Underperform at Keefe Bruyette
    Coty (COTY) downgraded to Neutral from Overweight at Piper Jaffray
    Discover (DFS) downgraded to Neutral from Buy at Guggenheim
    DuPont (DD) downgraded to Neutral from Overweight at JPMorgan
    Express Scripts (ESRX) downgraded to Market Perform from Outperform at FBR Capital
    First Cash Financial (FCFS) downgraded to Neutral from Buy at Janney Capital
    Goodyear Tire (GT) downgraded to Neutral from Buy at SunTrust
    Informatica (INFA) downgraded to Hold from Buy at Evercore ISI
    InterContinental (IHG) downgraded to Hold from Buy at Deutsche Bank
    Marten Transport (MRTN) downgraded to Market Perform from Outperform at Raymond James
    National Oilwell (NOV) downgraded to Underperform from Neutral at Credit Suisse
    ONEOK Partners (OKS) downgraded to Neutral from Buy at Citigroup
    Open Text (OTEX) downgraded to Neutral from Outperform at Credit Suisse
    Philips (PHG) downgraded to Underweight from Equal Weight at Barclays
    RE/MAX downgraded to Underperform from Market Perform at JMP Securities
    Siemens (SIEGY) downgraded to Underweight from Equal Weight at Barclays
    South State (SSB) downgraded to Market Perform from Outperform at Fig Partners
    Tesoro (TSO) downgraded to Neutral from Buy at Citigroup
    Ultra Petroleum (UPL) downgraded to Sell from Neutral at Goldman
    VMware (VMW) downgraded to Hold from Buy at Needham


    Initiations
    Diplomat Pharmacy (DPLO) initiated with an Outperform at RW Baird
    Lion Biotechnologies (LBIO) initiated with a Buy at Jefferies
    Madison Square Garden (MSG) initiated with a Hold at Jefferies
    Synchrony Financial (SYF) initiated with a Positive at Susquehanna
    Xylem (XYL) initiated with a Neutral at Boenning & Scattergood


    COMPANY NEWS
    Yahoo (YHOO) said it plans for tax-free spin-off of remaining stake in Alibaba (BABA)
    Apple (AAPL) said Apple Watch device expected to ship in April, said it sold 74.5M iPhones and 21.42M iPads in Q1
    CommScope (COMM) to acquire TE Connectivity's (TE) Telecom, Enterprise, & Wireless business in an all-cash transaction valued at approximately $3B
    TE Connectivity (TE) authorized expansion of share repurchase program by $3B
    BNY Mellon (BK) under review for violating Foreign Corrupt Practices Act
    VMware (VMW) authorized additional $1B stock buyback
    Walter Energy (WLT) suspended dividend



    EARNINGS

    Companies that beat consensus earnings expectations last night and today include:
    Apple (AAPL), Yahoo (YHOO), MarketAxess (MKTX), Arctic Cat (ACAT), McCormick (MKC), Anthem (ANTM), TE Connectivity (TEL), STMicroelectronics (STM), Pulaski Financial (PULB), Flushing Financial (FFIC), Seacoast Banking (SBCF), PolyOne (POL), Customers Bancorp (CUBI), U.S. Steel (X), LegacyTexas Financial (LTXB), Total System (TSS), United Financial (UBNK), Dime Community (DCOM), Amdocs (DOX), Applied Micro Circuits (AMCC), VMware (VMW), Western Digital (WDC), Cytec Industries (CYT), Informatica (INFA), Freescale (FSL), ACE Limited (ACE), Flotek (FTK), Mercury Systems (mrcy), Illumina (ILMN), Marten Transport (MRTN), Juniper (JNPR), Calamos (CLMS), Abiomed (ABMD), Amgen (AMGN), Electronic Arts (EA)

    Companies that missed consensus earnings expectations include:
    UMB Financial (UMBF), First Busey (BUSE), Ethan Allen (ETH), Trustmark (TRMK), WesBanco (WSBC), MidSouth Bancorp (MSL), Black Box (BBOX), United Community Financial (UCFC), International Game (IGT), EZCORP (EZPW), Accuray (ARAY), Stryker (SYK), CONMED (CNMD)

    Companies that matched consensus earnings expectations include:
    AT&T (T), Praxair (PX), Open Text (OTEX)



    NEWSPAPERS/WEBSITES
    Apple Pay (AAPL) service gaining in market share, Bloomberg reports (EBAY, GOOG)
    Airbus (EADSY) CEO promises "management consequences" after A400M delays, FT says
    Royal Dutch Shell (RDS.A) to build petrochemicals plant in Iraq, Reuters reports
    Citi (C) unit reaches agreement with NY AG on ChexSystems data, WSJ reports
    Activist investor to pressure for new Pepsi (PEP) CEO in summer, NY Post reports
    IBM (IBM) could begin layoffs today, Business Insider reports


    SYNDICATE
    Atara Biotherapeutics (ATRA) files to sell 3M shares of common stock
    Opexa Therapeutics (OPXA) files rights offering
    Shake Shack (SHAK) increases 5M share IPO range to $17.00-$19.00
    Synergy Resources (SYRG) 16.2M share Spot Secondary priced at $10.75
    Wafergen Biosystems (WGBS) files $30M mixed securities shelf
    Ascendis Pharma (ASND) 6M share IPO priced at $18.00


    http://www.zerohedge.com/news/2015-01-28/frontrunning-january-28
     
  36. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    Market Wrap: All Eyes On Yellen Who Better Not Disappoint

    [​IMG]
    Submitted by Tyler Durden on 01/28/2015 07:22 -0500



    While all the algos are programmed and set to scan today's FOMC statement for whether both "patient" and "considerable time" are still there (as it did last time when it supposedly sent a pseudo-hawkish message while telling Virtu and Getco to buy, buy, buy), the market is torn between the trends observed in recent days: on one hand finally succumbing to the adverse impact of USD strength, which overnight also saw the Singapore Dollar admit defeat in the ongoing currency wars, is crushing both revenues and EPS, as well as outlooks, for the bulk of US companies, even as millennials - long since given up on buying a house - allocate their meager savings to the annual incarnation of Apple's flagship product as seen in yesterday's record, blowout numbers by AAPL which is up 8% in the premarket and sending Nasdaq futures soaring compared to the stagnant DJIA or S&P. And then there is Europe where the mood is decidedly sour this morning, with Greece imploding on fears Tsipras really means business and concerns the Greek "virus" may spread to other peripheral nations whose bonds have also seen a lack of a bond bid this morning.

    So will Yellen save the day again?

    The problem is that at this point it is unclear just what that means: if she continues ignoring the global deflationary pressures and not relent to delaying the rate hike, then the USD will surge even more (which at this point is no longer a good thing as explained in "When A Soaring Dollar "Reflects Loss Of Investor Confidence And Is Potentially Devastating""), pressuring US exports and corporations that much more until finally something snaps and the decoupling theme so prevalent for the past 6 months is ruined.

    Or will she admit that the myth of a US recovery was just that, for the 5th year in a row, and hint that all else equal, the Fed may not only keep ZIRP for longer, but even go NIRP or, once the US budget deficit grows enough to allow another full-blown debt monetization by the Fed, return to a QE regime?

    We don't expect answers to all these questions, but today is certainly shaping up to be a dramatic session, one which will be that much more dramatic courtesy of the now pervasive lack of market liquidity.

    Looking at markets, today’s European session saw equities open higher, with sentiment stemming from Apple (+7% pre market) posting a net profit of USD 18bln for the quarter, the largest for a public company in history and Yahoo! (+7.5% pre market) announcing plans for a tax-free sale of its remaining stake in Alibaba (BABA) into a newly formed spin-off company. However, this move was pared with little data or newsflow to sustain the sentiment, to trade in the red by the middle of the session, with Euro Stoxx down around 1%, weighed upon by Siemens who are down over 5% after two negative broker moves and volatility in Greece. This saw flows head to Bunds at the expense of equities, with the German benchmark reclaiming the 158.00 handle and T-Notes moving in tandem with its European counterpart.

    Greece is still feeling the repercussions of SYRIZA’s election victory on Sunday with leader Tsipras commenting that he will aim to negotiate debt and expects radical changes, however will not target destructive conflict with creditors. This saw the GE/GR 10y spread widen by 90 bps, while the ASE is down around 7% on the day, with Greek banks the underperformers.

    Looking ahead, as well the FOMC rate decision, market focus will also be on earnings today, with high profile company Facebook, QUALCOMM, Boeing and Biogen all scheduled to report.

    Asian equity markets trade mixed amid a negative close on Wall Street, with sentiment lifted by stellar earnings from Apple.

    Consequently, the both the Hang Seng (+0.22%) and Nikkei 225 (+0.15%) pared back their initial losses, the latter further bolstered by JPY giving-up yesterday’s gains against the greenback. Elsewhere, the Shanghai Comp (-1.41%) was the session laggard falling to a 1-week low amid concerns about Umbrella Trusts after China Everbright reduced its Trust leverage ratio to no higher than 1:2:5 from next.

    During the European morning, sources suggested Chinese State Regulators are restarting probes into margin trading at Chinese brokers, with probes into margin trading in China the catalyst for the sell off in the Shanghai Comp last Monday where the index closed down 7.7%.

    In FX markets, AUD/USD strengthened during the Asian session, with focus particularly on the RBA's preferred measure of CPI, the CPI Trimmed Mean, which came in at 0.7% vs Exp. 0.5% (Prev. 0.4%, Rev. 0.3%). This saw an immediate 80 pip rise, with the CPI data lowering the expectation for an RBA cut. However, the move pared some of its gains during the European morning amid rumours of a report from RBA watcher Terry McCrann stating the RBA are very likely to cut rates at their meeting next week, with the article believed to be for publication on Thursday. Elsewhere, FX markets remain relatively tentative with little of note on the calendar ahead of the FOMC rate decision after European market (1900GMT).

    In the commodity complex, palladium outperforms precious metals this morning as fears over further sanctions on Russia continue to underpin price action. This comes as US Treasury Secretary Lew says that they are prepared to impose further sanctions in Russia given the recent increase in tensions in East Ukraine with palladium prices sensitive to such news as Russia are the world’s largest producer.
    Looking ahead, DoE US Crude Oil Inventories are the piece of tier 1 data today at 1530GMT/0930CST after yesterday’s API’s showed a build (12700k vs. Prev. 5700k).

    In summary: European shares are little changed, rallying from intraday lows, as banks and travel stocks underperform and basic resources, personal & household outperform. Most European bond yields rise. Greek PM says government to negotiate debt relief, while govt questions moves to impose more sanctions on Russia. Greek 10-yr yield spread vs bunds widens to more than 1,000 basis points. Singapore dollar fell after central bank said it will seek a slower pace of appreciation against currency basket. The euro is weaker against the dollar. Japanese 10yr bond yields rise. Apple rises as much as 8% in Frankfurt trading after results. U.S. futures are little changed to higher. Goldman cuts its near-term outlook for raw materials to underweight. decline, with natural gas, WTI crude underperforming and zinc outperforming. U.S. mortgage applications, FOMC rate decision due later.



    Market Wrap:


    • S&P 500 futures up 0.2% to 2032.70
    • Stoxx 600 down 0.1% to 368.3
    • US 10Yr yield down 3bps to 1.79%
    • German 10Yr yield down 2bps to 0.36%
    • MSCI Asia Pacific steady at 142.4
    • Gold spot down 0.2% to $1289.5/oz
    • Euro down 0.14% to $1.1365
    • Dollar Index up 0.05% to 94.07
    • Italian 10Yr yield up 8bps to 1.61%
    • Spanish 10Yr yield up 7bps to 1.46%
    • French 10Yr yield up 0bps to 0.58%
    • S&P GSCI Index down 0.6% to 379.9
    • Brent Futures down 0.8% to $49.2/bbl, WTI Futures down 1.7% to $45.4/bbl
    • LME 3m Copper up 0.9% to $5468/MT
    • LME 3m Nickel up 1.1% to $14960/MT
    • Wheat futures down 0.7% to 515.3 USd/bu


    Bulletin Headline Summary from RanSquawk and Bloomberg


    • European equities open in the green following Apple’s impressive earnings, however the move has failed to be sustained with industrials weighing on equities as Siemens falls over 5% on negative broker moves
    • Greece is still feeling the repercussions of SYRIZA’s election victory the GE/GR 10y spread widen by 90 bps, while the ASE is down around 7% on the day, with Greek banks the underperformers.
    • The market awaits the latest FOMC announcement (1900GMT/1300CST) with focus remaining on the `considerable time` phrasing and whether the Fed will acknowledge the strong USD and its impact on growth.
    • Treasuries gain, 30Y yield trading near record low before Fed statement scheduled for 2pm in Washington; 2Y 0.502% before U.S. sells $26b at 2pm, WI yield 0.535% vs 0.703% in Dec. 2Y FRN to be sold at 11:30am.
    • Fed policy makers seen keeping “patient” language in today’s statement, according to published research and interviews with strategists
    • Greek Prime Minister Alexis Tsipras promised to avoid a “catastrophic clash” with creditors and European governments, as Greece’s stock and bond markets extended declines to lows not seen since the peak of country’s debt crisis
    • The yuan overtook Canada’s dollar to rank fifth for use in global payments, bolstering the case for the IMF to endorse it as a reserve currency
    • Bank of England’s Andrew Haldane says new normal for interest rates may be 2%-4%, BOE rate rises will be gradual when they come
    • Germany gets bids for EU1.212b vs EU2b sale goal for 30-year bonds that fall just outside eligibility for QE
    • Singapore unexpectedly eased monetary policy, sending SGD to the weakest since 2010 vs USD; MAS said in an unscheduled statement it will seek a slower pace of appreciation against a basket of currencies
    • As Kaisa Group Holdings Ltd. seeks to avert a debt default after a member of the controlling Kwok family left, analysts are taking a closer look at Sino Life Insurance Co., its second-largest shareholder
    • Apple Inc posted a 30% jump in FY1Q revenue to $74.6b as net income rose 38% to a record $18b amid sales of larger screen iPhones and refreshed Mac computers
    • Sovereign yields mostly higher, peripheral EU surges, with Greece 10Y yield approaching 10.50%; Portugal, Spain and Italy also higher. Asian stocks mixed; European stocks fall, U.S. equity-index futures gain. Brent, WTI and gold lower; copper gains


    US Economic Calendar


    • 7:00am: MBA Mortgage Applications, Jan. 23 (prior 14.2%) Central Banks
    • 2:00pm: Fed seen maintaining overnight bank lending rate target between 0% and 0.25%
    • 3:00pm: Reserve Bank of New Zealand seen maintaining official cash rate of 3.5%
    • 11:30: U.S. to sell $15b 2Y FRN via auction delayed by winter storm
    • 1:00pm: U.S. to sell $26b in 2Y notes via auction also delayed by weather



    * * *



    DB's Jim Reid concludes the overnight summary

    So my two days off from work have been spent moping on the sofa with my leg elevated and covered in ice. All after Saturday's bad skiing injury when I've snapped knee ligaments. A non-ideal mini break culminating in watching Liverpool lose a semi-final on the telly last night! In fact in the 90 hours since the accident I've either been in bed or the sofa. This morning I'm hobbling away from the Alps on crutches and onto a train to Paris where I'm speaking at a conference this afternoon. If you're going skiing over the rest of the season please be more careful than I've been this year!! Oh and make sure you've got insurance which fortunately I did. Getting carried off the mountain is expensive. Luckily it was in France and not Switzerland though!

    One wonders how careful the Fed will be in 2015. We may get some early clues today after the conclusion of the first FOMC meeting of the year. This meeting isn’t going to see the release of the Fed’s Summary of Economic Projections, nor a press conference but nevertheless it will be interesting to see the Fed’s January statement. DB’s Peter Hooper expects that the Fed will use this meeting for some ‚necessary housekeeping? with just a few small language changes as he thinks the economic picture has changed moderately but not enough for any significant changes to be made. To sum up, Peter expects the statement to be much like December's in which the Fed’s message was that as long as the labour market continues to show improvement and they continue to project inflation returning to 2% over the next few years (as indicated in their December forecast) the lift-off for Fed rates could begin around the middle of this year. Peter takes this to mean sometime between June and September and most likely June so long as (1) core PCE inflation falls at most another tenth or so in the near term, (2) wage inflation is showing signs of rising, (3) survey measures of longer term inflation expectations are holding firm, and (4) employment and unemployment continue on their recent favourable trends. He thinks that if core inflation drops by several tenths this could push the first hike out a meeting or two.

    If the Fed stick to their script then the market could be in for a small shock. Market-based measures of the first Fed hike place it at around the October meeting. This is already one meeting later than was being priced in at the start of the year. After this the second hike is priced in for around March 2016, whilst we entered the year pricing in the second hike for December 2015. So there is room here for volatility as we approach the summer FOMC meetings if the Fed’s message remains unchanged. It has long been our view that the Fed will struggle to hike as soon as it wants to given global growth and inflation issues, however there's no doubt they are keen to pull the trigger so something will have to give at some point. So any evidence either way today will be interesting.

    Talking of central banks, we've seen another surprise move overnight as Singapore has eased monetary policy by reducing the slope of the policy band for the Singapore Dollar. The central bank also cut inflation forecasts for this year with expectations of a 0.5% decline in prices. The SGD is around 1% weaker versus the Dollar and at its lowest since September 2010. The MAS is now the ninth central bank to ease in January, most of which have been a surprise move. Who is next is the big question, and can the Fed continue to try to prime the market for rate hikes when the rest of the world is easing?

    Taking a look at the early trading in Asia this morning, equity markets are generally firmer with the Hang Seng (+0.61%), Nikkei (+0.40%) and Kospi (+0.50%) up but the Shanghai Comp (-0.07%) weaker. The ASX is +0.10% and the AUD +0.69% stronger versus the US Dollar following better than expected core inflation data out of Australia.

    Back to markets yesterday, equities took a sharp leg lower in the US yesterday following largely mixed economic data as well as generally weaker corporate earnings. Both the S&P 500 (-1.34%) and Dow (-1.65%) closed just inside their intraday lows whilst CDX IG closed 1bp wider. Earnings yesterday supported the weaker sentiment in markets. In particular releases from Caterpillar, Microsoft and Proctor and Gamble headlined disappointing quarterly releases with earnings generally below consensus. Thematically, Proctor and Gamble reported difficulties with a fluctuating FX market - the company release noting that it was the ‘most significant fiscal year currency impact’ in its history. US chemicals group Dupont also downgraded 2015 profit forecasts following a larger than expected currency impact as a result of the stronger Dollar. As well as currency impacts, lower oil prices has been the other key theme that we’ve seen come out of results so far and yesterday’s release from Caterpillar highlighted the subdued demand from oil and mining services companies in particular. It wasn’t all bad news however. After market close yesterday shares in both Apple and Yahoo rose 7% and 10% respectively in extended trading following better than expected earnings. The FT reported that Apple in particular reported the highest quarterly net profit ($18bn) on record for any company despite Apple’s CFO noting that ‘results would have been even stronger absent fierce foreign exchange volatility’.

    Away from earnings yesterday, it was a busy day for data in the US. Durable goods orders (-3.4% mom vs. +0.3% expected) and core capital goods orders (-0.6% mom vs. +0.9%) for December disappointed. Our US team noted that the latter print means core orders for Q4 have fallen at an 11.4% saar rate which is much weaker than recent industrial production indicators have showed. As a result our colleagues have downgraded their Q4 real GDP forecast to 3.3% from 4.2% previously but maintain that the advance estimate will likely be revised higher as top-down indicators indicate stronger growth. Elsewhere new home sales (481k vs. 450k expected) surprised to the upside whilst the January consumer confidence was particularly strong at 102.9 – ahead of expectations of 95.5 and nearly 10 points up from December’s reading. The reading was the highest since August 2007 and no doubt boosted by lower gasoline prices and an improving labour market. Finally the Case-Shiller home price index was in line at +0.8% mom whilst the preliminary services PMI ticked up a notch to 54.0 (from 53.3 previously). Treasuries were volatile over the course of trading. Having opened at 1.824%, the 10y benchmark hit an intraday low of 1.746% before paring back all of those gains to close unchanged.

    There was similar weakness in Europe yesterday with the Stoxx 600 finishing -0.99% and the Dax -1.57%. Crossover also closed 11bps wider. Greek equities (-3.69%) ended weaker for the second successive day since Sunday’s election with banks (-11.61%) in particular leading the declines with continued uncertainties over deposits and potential further ELA access required. Greek 3y and 10y yields closed +199bps and +38bps wider respectively. In terms of the latest updates, Tsipras announced his new cabinet yesterday including naming Yanis Varoufakis as the new finance minister. As per Reuters the new government has, as expected, halted the privatization of Greece’s biggest port yesterday which had previously been agreed under its bailout agreement to China’s Cosco Group and four other potential suitors.

    It was perhaps unsurprising to see comments from Germany’s Merkel yesterday quoted on Bloomberg saying that the debate about a Greek debt cut is astonishing and that the new government has to make clear whether it’s committed to terms of the EU aid programme, specifically saying that the ball is in Greece’s court. Interestingly another article on Bloomberg reported that the new Syriza-led coalition issued a statement opposing EU sanctions for Russia over the conflict in the Ukraine. According to the report, the Greek government was reported as saying that ‘Greece doesn’t consent’ and that the announcement violated ‘proper procedure’ by not securing Greek support. Interestingly Greece’s new foreign minister Kotzias has the opportunity to block further sanctions on Russia tomorrow at an EU meeting given that sanctions require a unanimous consensus from all 28 governments. It’ll be interesting to see the developments between now and then but the meeting could provide early signs into the near term approach Greece takes to dealing with the wider Euro-area, and vice-versa.

    Away from Greece it was a quiet day elsewhere in Europe with just UK Q4 GDP, which came in a touch lower than expected (+2.7% yoy vs. +2.8% expected). 10y Gilts finished 3bps lower at 1.483% and Bunds were relatively unchanged at 0.383%. Peripheral yields however were anywhere from 2-7bps wider. The Euro closed 1.27% firmer versus the Dollar at $1.138.

    In terms of the day ahead, its a relatively quiet day in Europe this morning with just the German import price index and consumer confidence for the region as well as in France. In the US this afternoon with little in the way of data, focus will likely just be on the aforementioned FOMC.


    http://www.zerohedge.com/news/2015-01-28/market-wrap-all-eyes-yellen-who-better-not-disappoint
     
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    From a local paper this AM...............

    Congress at work: Looking out for Wall Street


    Posted: Wednesday, January 28, 2015 12:15 am
    By Mike Krauss


    The Wall Street crash of 2008 was brought on by unprecedented self-serving and risk taking that went undetected by the regulators — the cops on the beat — to whom the American people entrust the job of insuring honest markets and honest dealing in the banking and finance industry.

    Since the Reagan administration, Congress and presidents of both parties have been bowing to Wall Street and billions of dollars of lobbying and campaign contributions in a system of legalized bribes. This has steadily reduced the manpower and resources of the regulators and put Wall Street insiders in charge of their agencies; even as the global wheeling and dealing of the finance industry they are charged to police has become ever more complex and opaque.


    The lessons to be learned are obvious. Wall Street cannot be trusted to regulate itself. The rewards of fraud have trumped honesty and morality. The regulators are out-gunned. The crooks run circles around the cops.

    And the remedy is equally obvious. Limits must be placed on Wall Street’s risk taking and the cops on the beat — the Securities and Exchange Commission in particular — must be given the tools and authority to do their job, detect catastrophic risk, take action to avert another crash and protect the American people.

    But Congress and the president have done just the opposite.

    In December, a Wall Street friendly Congress and president got together to enact legislation to allow Wall Street banks to place their riskiest assets — almost $300 trillion of derivatives holdings — in the business units that enjoy FDIC protection, setting up a back door bail out via the FDIC in the next crash.

    Republican Mike Fitzpatrick, who represents Bucks County, was one of seven votes that made the difference to pass the legislation in the House. Now, Fitzpatrick is leading the charge for more favors for the parasites in pin stripes.

    He has introduced legislation to further roll back the already weakened safeguards put in place after 2008 to protect Main Street from Wall Street’s greed and recklessness.

    Can the congressman and so many of his colleagues have forgotten the lessons of 2008? Or is it that Congress just can’t see the forest for the green of all that Wall Street campaign and lobbying cash?

    But if Congress has no memory, not so Wall Street, which knows that one trader making a bad bet can take down a bank. While Congress may have forgotten the “London Whale,” the trader who took a loss that blind-sided JP Morgan two years ago, the banksters remember.

    They remember way back to 1995, when one trader bet wrong and took down Barings, one of the oldest merchant banks in the world.

    Wall Street is getting ready for the next crash.

    First, the global banking cartel used the G20 to set up a “bail in” — a confiscation of deposits — to insure the cash on hand to survive the next bad bet. Then the barons got Wall Street-friendly Congress and president to set up another insurance policy, the back door bail out via the FDIC.

    Two bail outs are better than one.

    Fitzpatrick’s constituents may not be pleased to learn that he is so eager to serve Wall Street that he cannot remember the horrendous damage done only six years ago. Kevin Yoder, the Kansas Republican and Wall Street errand boy who slipped the back door bail out into last year’s legislation, got hammered by the Kansas media and constituents posting on his Facebook page.

    One called Yoder the “lowest of the low” and added, “Hope you burn in hell.” Another called Yoder “one greedy immoral coward.”

    Gotta love Kansas. Direct.

    Which may explain why Fitzpatrick was selected to quarterback Wall Street’s latest play — he’s not running for re-election. So whatever heat he may take for his services to Wall Street, he’s fire-proof.

    Give Wall Street credit. They look out for their own.

    Who in Congress is looking out for the American people? Mr. Fitzpatrick, the vice chairman of the House Financial Services Subcommittee on Oversight and Investigation, who favors protecting Wall Street from the oversight that might prevent another crash?


    http://www.buckscountycouriertimes....cle_99b51240-aff5-50f4-bc3a-bd1be8d3d645.html
     
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    Asian Metals Market Update
    By: Chintan Karnani, Insignia Consultants

    Incoming US economic data releases before the FOMC suggest that a softer tone on interest rates could be adopted. But whether that will translate into big gains for gold and silver will be dependent on the ability to break past key medium term resistances. However in spite and despite everything, I still remain positive on silver for the medium term to long term and will use the fall ((if any) after the FOMC meet in silver to invest for next year.


    Gold & Silver Market Morning [FONT=Verdana, Arial, Helvetica, sans-serif]
    By: Julian D. W. Phillips, Gold/Silver Forecaster - Global Watch

    [FONT=Verdana, Arial, Helvetica, sans-serif]New York closed at $1,294.70 up $14.30. In Asia gold slipped to $1,289. The Fix saw the gold price set at $1,287.00 up $8.00 and in the euro, at €1,131.926 down €1.035, while the euro was ¾ of a cent stronger at $1.1137. Ahead of New York’s opening gold was trading in London better, at $1,290.3 and in the euro at €1,135.43.[/FONT]
    [/FONT]
     
    Last edited: Jan 28, 2015

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