Strong Chinese trade data boost global stocks. China's exports soundly beat expectations by jumping 14.1% on year in December and showed a marked improvement from a 2.9% rise in November as the growth in sales to the U.S. and EU accelerated. Imports increased 6% while the trade surplus surged 61% on month to $31.6B, well above consensus of $19.6B. The data boosted global shares (see below), although analysts warned about reading too much into what can be volatile figures.
Investor titans do battle over Herbalife. Carl Icahn has reportedly bought a stake in Herbalife (NYSE:HLF), joining Dan Loeb after he revealed an 8.2% holding yesterday. That puts the pair up against Bill Ackman's massive short position. Adding to the fun, the SEC is reportedly investigating Herbalife, although it's not clear what for. The nutrition-supplements company is today due to provide a rebuttal of Ackman's claims that the firm is nothing but a pyramid scheme.
AIG confirms it won't join $25B suit vs government. Facing vitriol from the public, media and politicians, AIG (NYSE:AIG) has confirmed that it won't join Hank Greenberg's $25B lawsuit against the government over the terms of its $182B bailout. "It is not acceptable socially for AIG to have taken this money and to think we can go back and sue the government," CEO BOB Benmosche said.
Top Stock News
Tim Cook meets China Mobile Chairman. Apple (NASDAQ:AAPL) CEO Tim Cook met with China Mobile (NYSE:CHL) Chairman Xi Guohua today, when they discussed "matters of cooperation" and signed a confidentiality agreement. The talks have increased hopes of a breakthrough that would allow China's largest operator to offer iPhones. Tim Cook said he is confident the country will soon become Apple's largest market, with the company planning to increase the number of stores there to over 25 from 11.
Deutsche Bank earned €500M on interest-rate trades. Deutsche Bank (NYSE:DB) reportedly generated a profit of at least €500M in 2008 from trades pegged to inter-bank interest rates, although there's no indication that those trades affected the market or were illegal. The bets show the rewards and risks involved: the bank calculated that of September 30, 2008, it could earn or lose up to €68M for each 0.01 percentage point change in the spread between different rates related to Libor and Euribor.
Sprint relaxed about fight for Clearwire. Sprint (NYSE:S) reportedly feels no pressure to increase its $2B, $2.97-a-share offer for Clearwire after Dish (NASDAQ:DISH) proposed $3.30, and thinks a bidding war is unlikely. Despite Sprint owning just over 50% of Clearwire, the latter is duty bound to consider the offer from Dish, which might receive support from Crest Financial, Clearwire's second-largest shareholder with 8% and a vocal critic of the Sprint bid.
JPMorgan to pay $2B in banks' foreclosure deal. JPMorgan's (NYSE:JPM) share of the $8.5B settlement over foreclosure abuse between 10 banks and regulators is $2B, with the company saying it will take a $700M pretax charge in its Q4 results. The charge shows how banks pushed to close the deal so they could include the costs in their upcoming reports using "subsequent-events" accounting rules, allowing them to start 2013 with a cleaner slate.
Boeing, analysts defends Dreamliner. Boeing (NYSE:BA) has defended the safety of its 787 Dreamliner after three incidents in three days this week, expressing "extreme confidence" in the plane. Analysts have also flown to the rescue: Citi said the glitches "do not signal grave issues" with the Dreamliner's long-term prospects, while Oppenheimer sees the incidents as ordinary "teething" problems "magnified by the 787's media glow."
Top Economic & Other News
Obama to nominate Jack Lew as Treasury Secretary today. As expected, President Obama will nominate White House Chief of Staff Jack Lew as Treasury Secretary at 1:30 pm ET today to replace Timothy Geithner. Lew, who was the director of the Office of Management & Budget twice, is a government career-man except for a two-year stint as a managing director at Citigroup (NYSE:C) from 2006-2008.
BOE leaves policy as is. As expected, the Bank of England has left its monetary policy unchanged, keeping its benchmark interest rate at 0.5% and announcing no new money printing. Next up is the ECB very soon.
Spain gets year off to good start in debt markets. Spain has begun funding it operations for 2013, raising €5.8B for bonds of varying maturities, above its target of €4B-€5B. The country's 10-year note yields dropped 17 bps post-auction to a 10-month low of 4.97%.
Another report finds that massive healthcare savings can be made. The U.S. could save $2T in healthcare costs over ten years, a report from the nonpartisan Commonwealth Fund argues. The study adds to one from UnitedHealth (NYSE:UNH), which reckons that a mere $500B in savings can be found. The fund recommends setting GDP per capita spending targets, better co-ordination in treatment, and tying payment to results rather than just to the use of services.
In Asia, Japan +0.7% to 10653. Hong Kong +0.6% to 23354. China +0.4% to 2284. India flat at 19664.
In Europe, at midday, London +0.1%. Paris -0.2%. Frankfurt +0.2%.
Futures at 7:00: Dow +0.2%. S&P +0.25%. Nasdaq +0.3%. Crude +1.4% to $94.39. Gold +0.5% to $1663.10.
Today's economic calendar:
8:30 Jobless Claims
9:45 Bloomberg Consumer Comfort Index
10:00 Wholesale Trade
10:30 EIA Natural Gas Inventory
12:45 PM Fed's George: Economic Outllook
1:00 PM Results of $13B, 30-Year Note Auction
2:00 PM Fed's Bullard: U.S. Economic and Monetary Policy
4:30 PM Fed Balance Sheet
4:30 PM Money Supply
8:00 PM Fed's Kocherlakota: "U.S. economy with Marketplace Money economics"
Notable earnings before today's open: SVU
See full real-time earnings coverage »
Wall Street Breakfast is sent out by email for free -- Get it now »