BOJ moves to end deflation in Japan. As expected, the Bank of Japan has bowed to huge political pressure and announced further easing measures designed to pull the country out of deflation. The BOJ doubled the inflation target to 2% and said it will start Fed-style open-ended asset purchases of ¥13T ($144.77B) a month, but only starting in January 2014. The delay in the new program helped cause Japanese stocks to close -0.3%. The BOJ's taking a "huge gamble," says Ambrose Evans-Pritchard.
German investor confidence jumps. Germany's ZEW index of investor economic sentiment has surged to its highest level since May 2010, jumping to 31.5 in January from 6.9 in December and coming in way above consensus of 12. The six-month outlook has also improved and the upbeat sentiment could boost investment, although the situation with Germany's trading partners is still considered to be weak.
Top Stock News
DuPont tops the Street but net profit slides. DuPont's (NYSE:DD) Q4 net profit fell to $111M from $373M last year but EPS of $0.11 beat consensus, while revenue was flat at $7.3B and in line. "Weakness in markets served by Performance Chemicals and Electronics & Communications provided significant challenges in 2012," DuPont said. The company expects 2013 operating EPS to rise 2-7% to $3.85-$4.05 vs consensus of $3.84 and revenue of $36B, which would be in line. Shares were +1.1% premarket.
Siemens FQ1 net profit also surpasses expectations - report. Siemens' (SI) FQ1 net profit from continuing operations was reportedly little changed at €1.3B, above consensus of €1.14B, while revenue was flat at €17.9B and missed forecasts of €18.1B. Earnings were hurt by a major financial hit following delays in the delivery of high-speed trains to Deutsche Bahn, and by Siemens' exit from its solar business. New orders were above sales. Shares were +1.15% premarket.
Blockbuster store closures to continue. Dish Network (NASDAQ:DISH) intends to shut 300 of Blockbuster's 800 outlets in the U.S. in the coming weeks and lay off 3,000 workers, or 10% of the parent company's staff. The stores to be closed are underperforming or are coming to the end of their leases. The closures add to 500 branches that Dish shut last year, although the company still "continues to see value in the Blockbuster brand."
Toyota could promote Prius developer to Chairman. Toyota could reportedly appoint Vice Chairman Takeshi Uchiyamada, who headed the development of the Prius hybrid car, as chairman as early as this year, although his promotion could be delayed until 2014. The change is unlikely to reduce the grip on power of President Akio Toyoda.
GSK flu vaccine linked to narcolepsy. GlaxoSmithKline's (NYSE:GSK) Pandemrix H1N1 swine flu vaccine, which was given to over 30M people in 47 countries during the 2009-2010 H1N1 swine flu pandemic, has been linked with hundreds of cases of the incurable sleep disorder narcolepsy in Europe. GSK said there isn't yet enough data to demonstrate a causal relationship, although narcolepsy expert Emmanuel Mignot believes the information is pointing in just one direction.
Google's growth seen continuing. It's set to be a big day for tech earnings, with Google (NASDAQ:GOOG), IBM (NYSE:IBM) and Texas Instruments (NASDAQ:TXN) due to report Q4 results after the bell. Google's EPS is expected to rise to $10.52 from $9.50 a year ago and revenues to jump 52% to $12.36B; IBM's EPS is seen at $5.71 vs $4.71 and its revenues -1.4% at $29.09B; and TI's EPS is forecast to fall to $0.34 from $0.48 and its revenues to slide 13.8% to $2.95B.
Buybacks seen boosting EPS, but only by some. With S&P 500 companies retiring 8B shares through buybacks in the 18 months to October 2012, EPS figures are likely to get a surprisingly strong boost. It would be surprising because, as Robert Baird's Brian Rauscher says, analysts don't often factor in stock repurchases when making their forecasts.
Top Economic & Other News
GOP will look to extend debt cap tomorrow. House Republicans will attempt to pass a measure tomorrow that would extend the debt ceiling until May 19 by allowing the government to borrow what it needs to meet its obligations rather than by specifying a dollar amount for the limit. The Treasury would also be allowed to top up its emergency borrowing capacity, effectively pushing the debt deadline into the summer.
Eurogroup picks Holland's finance minister as Chairman. As expected, the Eurogroup has chosen Holland's Jeroen Dijsselbloem as its next chairman to replace Jean-Claude Juncker. At a meeting in Brussels, eurozone finance ministers also debated how and when the ESM should be able to provide direct support to banks, while Portugal and Ireland requested more time to repay their bailouts. Cyprus is unlikely to get a rescue deal until March.
Global unemployment seen topping 200M. The number of unemployed worldwide is forecast to rise by 5.1M this year to over 202M, the UN's International Labour Organization says in its annual report. It's worth pointing out that the ILO has cut its jobless figures down each year, although that's because of an increase in the number of people leaving the labor market. Since before the financial crisis in 2007, the total "jobs gap" is 67M.
In Asia, Japan -0.3% to 10710. Hong Kong +0.3% to 23659. China -0.6% to 2315. India -0.6% to 19982.
In Europe, at midday, London -0.1%. Paris -0.2%. Frankfurt -0.5%.
Futures at 7:00: Dow flat. S&P flat. Nasdaq +0.1%. Crude flat at $95.50. Gold +0.25% to $1691.40.
Today's economic calendar:
8:30 Chicago Fed National Activity Index
10:00 Existing Home Sales
10:00 Richmond Fed Mfg.
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