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Automatic spending cuts set to kick in tonight. President Obama is due to meet with Congressional leaders today to discuss the $85B of automatic spending cuts that are due to take effect at 11.59 pm tonight - on the by now fairly strong assumption that the sides don't find a way to delay the reductions once again. While the White House has been issuing dark warnings about the effects of the cuts, there's much confusion about which programs will be hit.

Chinese manufacturing slows in February. China's factory activity weakened last month as the official PMI, which focuses on larger state-owned companies, unexpectedly fell to 50.1 from 50.4 in January. HSBC's PMI, which concentrates on smaller private firms, dropped to 50.4 from 52.3. The timing of the Chinese New Year may have affected the figures, with HSBC saying that the average of January and February still indicated good growth.

Groupon fires Andrew Mason as CEO. Not unexpectedly, Groupon (GRPN) yesterday sacked CEO Andrew Mason following a disastrous Q4 report, the latest in a series of poor results. "From controversial metrics in our S1 to our material weakness to two quarters of missing our own expectations and a stock price that's hovering around one quarter of our listing price, the events of the last year and a half speak for themselves," Mason wrote in a candid memo. Shares were +4.2% premarket.

Top Stock News
Data helps send global shares tumbling. U.S. stock futures have followed European shares lower following the weak Chinese and eurozone PMI prints, while Italy's post-election instability continues to weigh. The MIB was especially weak, possibly also due to unemployment hitting a record 11.7% in January. However, investors are apparently "eerily calm" about the $85B in sequestration, but maybe they've just been worn down by it all.

Lloyds sinks despite smaller net loss. Lloyds' (LYG) 2012 pretax loss narrowed to £570M from £3.5B in 2011, with the bank's earnings hurt by the provision of £3.575B for the mis-selling of payment-protection insurance, including £1.5B in Q4. Lloyds' underlying profit jumped to £2.61B from £638M. The U.K. government reportedly plans to start selling its 39% stake in Lloyds when the bank's share price hits 61 pence, which is lower than previously thought. The stock was -6.3% at 51.06 pence at midday in London.

Schulze unable to make his Best Buy. Talks between Best Buy (BBY) and a group made up of founder Richard Schulze and three private-equity firms over the consortium taking a large minority stake in the retailer have reportedly ended after it was unable to attract the necessary debt and equity financing. Schulze had until last night to organize a bid, but he'll now have to wait until next year if he wants to try again.

Salesforce.com gains following big quarter. Salesforce's (CRM) shares climbed 4.8% in post-market trading after its FQ4 earnings topped expectations and despite the business-software company's net loss widening to $20.8M from $4.08M due to $108M in stock-based compensation and a one-time tax charge. Still, adjusted EPS came in at $0.51 while revenue jumped 32% to $834.7M, one of the fastest rates of sales growth among major tech companies.

Gap's net profit surges 61%. Gap's (GPS) impressive turnaround continued in Q4 as the clothing retailer's net profit soared 61% to $351M and EPS of $0.73 beat consensus. Revenue rose 10.5% to $4.73B, helped by increased comparable-store sales in the U.S., but missed forecasts. Gap provided FY profit guidance mostly below expectations, due to the weak yen, although it did raise its annual dividend by 20% to $0.60 a share. The company's stock rose 2.8% in AH trading.

Paulson to oppose MetroPCS's merger with T-Mobile. Paulson & Co, MetroPCS's (PCS) largest shareholder with a 9.9% stake, will vote against the carrier's merger with T-Mobile USA (OTCPK:DTEGF), as the combined company would have "too much debt at too high an interest rate to be competitive." Paulson would change its mind if the debt and interest rate were lowered, and if MetroPCS investors received added cash and a higher share exchange ratio.

Freddie Mac swings to record net profit of $11B. After generating losses of $90B from 2008-2011, Freddie Mac (OTCQB:FMCC) swung to its first profit since 2006 last year, earning a record $11B vs a loss of $5.3B in 2011. Freddie's Q4 profit climbed more than seven-fold to $4.5B. The mortgage giant has benefited from the improving economy as home prices have stabilized and mortgage delinquencies declined. Freddie will pay a $5.8B dividend to the Treasury in March.

Icahn gets two seats on Herbalife board. Herbalife's (HLF) shares jumped 7.6% yesterday following news that Carl Icahn has received two seats on an expanded board, and been given the option of almost doubling his stake to 25%. Bill Ackman "has given us the opportunity to buy a company at a discount...and for that, I thank him," Icahn told Bloomberg.

Top Economic & Other News
Eurozone factory activity continues to decline... Eurozone Manufacturing PMI again contracted in February, although it was unchanged from January at 47.9 as Germany stabilized but as all other countries except Ireland declined. "The combination of a revival in export orders and resilient domestic demand has helped propel Germany’s growth so far this year, while deteriorating domestic demand is holding back the economies of France, Italy and Spain," Markit said.

...and eurozone unemployment continues to hit new records. The eurozone's jobless rate increased to yet another record of 11.9% in January from 11.8% in December and vs expectations of 11.8%. The number of people without a job rose by 201,000 on month to just under 19M. Youth unemployment was 24.2%, with the figure in Spain more than double that at 55.5%.

Default worries send Argentine markets into turmoil. Fears that Argentina will default hit the country's markets yesterday, with the Merval stock index tumbling 3.5% and the cost to insure $10M of its debt for one year rising to a whopping $6.6M. The turmoil came after a lawyer representing Argentina's government told a U.S. court on Wednesday that it would choose to default rather than pay bondholders who won't accept restructured debt that was issued following the 2001 crisis.

Editors' Picks
How Obamacare Could Harm Growth In 2014, Part II
Google's Glass Ceiling Is Upward Of Its $1000 Target Price
Valuing The Yen

Today's Markets:
In Asia, Japan +0.4% to 11606. Hong Kong -0.6% to 22880. China -0.3% to 2360. India +0.3% to 18919.
In Europe, at midday, London -0.5%. Paris -1.2%. Frankfurt -0.9%.
Futures at 7:00: Dow -0.3%. S&P -0.4%. Nasdaq -0.1%. Crude -1.05% to $91.08. Gold -0.7% to $1566.70.

Today's economic calendar:
Auto sales
8:30 Personal Income and Outlays
8:58 PMI Manufacturing Index
9:55 Reuters/UofM Consumer Sentiment
10:00 ISM Manufacturing Index
10:00 Construction Spending
10:00 Bernanke: 'Low Long-Term Interest Rates'

Notable earnings before today's open: AMRC, BBY, EVEP, FWLT, HPT, MGA, NVAX, POM, XLS

Notable earnings after today's close: PDLI, STEC, VECO, VNR

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Source: Wall Street Breakfast: Must-Know News