- Guess who doesn’t believe in the “great rotation out of bonds and into stocks”: Abe Aids Bernanke as Japan Seen Buying Foreign Debt (BBG)
- AIG Sues Federal Reserve Vehicle in Dispute Over Lawsuit Rights (WSJ)
- JPMorgan Said to Weigh Disclosing Whale Report Faulting Dimon (BBG)
- Ugly Choices Loom Over Debt Clash (WSJ)
- Credit Suisse to cut bonus pool by 20 percent (Reuters)
- Brazilian Bikini Waxes Make Crab Lice Endangered Species (BBG)
- EU redrafts plan for bank rescue funding (FT)
- JCPenney stock plunges after bad holiday (NY Post)
- Regulator Comments Buoy Shanghai Stocks (WSJ)
- Japan voters back PM Abe’s efforts to spur growth, beat deflation (Reuters)
- Cameron averts row over Europe speech (FT)
- Swatch Buys Harry Winston Jewelry Brand for $1 Billion (BBG)
- UPS Adandons TNT Express as EU Moves to Reject Takeover (BBG)
- Chinese labor unions to give more to needy workers (China Daily)
Overnight Media Digest
* Apple Inc has cut its orders for components for the iPhone 5 due to weaker-than-expected demand, people familiar with the situation said. (http://link.reuters.com/fex25t)
* Nissan Motor Co Ltd’s upscale Infiniti vehicles will be introduced into its home market in Japan in as soon as two years for the first time, some 25 years after the brand was launched, the head of the luxury vehicle division said. (http://link.reuters.com/tax25t)
* General Motors Co on Sunday took the wraps off a seventh-generation Chevrolet Corvette sports car that the company hopes will become the poster child for a 2013 product blitz designed to buff GM’s top-selling Chevrolet line. (http://link.reuters.com/wax25t)
* JaguarLand Rover, the luxury car company owned by Tata Motors Ltd, sold a record 357,773 vehicles globally last year. (http://link.reuters.com/zax25t)
* Taiwan’s HTC Corp is taking its smartphones to Myanmar, joining an expanding list of foreign companies seeking a foothold in one of Asia’s last investment frontiers. (http://link.reuters.com/bex25t)
* American International Group Inc filed a lawsuit against Maiden Lane II, a vehicle created by the Federal Reserve Bank of New York during AIG’s government bailout to acquire some of its troubled mortgage bonds, in a dispute over potentially valuable rights to sue issuers of the bonds. (http://link.reuters.com/cex25t)
* JPMorgan Chase & Co’s board is expected to dock the 2012 bonuses of Chief Executive James Dimon and another top executive because of the “London Whale” trading debacle, said people close to the company. (http://link.reuters.com/xax25t)
* Some of the first airlines to operate the Boeing Co 787 took unusual steps to mitigate reliability problems and keep their marquee jets on schedule, even before U.S. regulators last week ordered a sweeping review of the Dreamliner program, according to industry officials and flight records. (http://link.reuters.com/vax25t)
* Senior Indian tax officials plan to meet with representatives of Vodafone Group Plc this week to try to resolve a tax dispute with the British company, a senior finance-ministry official said. (http://link.reuters.com/gex25t)
* Dubai Group, a holding company owned by the emirate’s ruler with interests in property and financial services, and four international banks have agreed to resolve their legal differences in a push to finish a $10 billion debt restructuring, two people familiar with the matter said. (http://link.reuters.com/hex25t)
* The showdown over U.S.’s debt ceiling could force the government to consider drastic steps to manage its limited cash, including delaying trillions of dollars of payments to employees, Social Security recipients, contractors and others.
Countries seeking aid from the euro zone’s bank rescue fund, the European Stability Mechanism, will still need to shoulder a large part of the cost of future bailouts themselves, according to a draft proposal.
The European Union will set out reforms this year to support a pan-European telecoms market, said commission vice-president Neelie Kroes in an interview.
Investment bank Goldman Sachs is planning to delay UK bonus payouts until after April, when the top rate of income tax falls to 45 percent.
Spanish utility Iberdrola has scrapped plans to sell its stake in Britain’s Scottish Power after recent asset sales went better than expected.
Joe Plumeri, the outgoing head of insurance broker Willis, criticised ‘contingent commissions’, the practice of insurance brokers receiving payments from underwriters.
* Citic Telecom International Holdings Ltd’s stock rose as much as 18 percent on Monday in Hong Kong after an announcement on Sunday that it would pay $1.2 billion to Britain’s Cable & Wireless Communications Plc and Portugal Telecom SGPS SA to acquire a further 79 percent of Companhia de Telecomunicações de Macau.
* Google Inc has become one of the most prolific and popular developers of apps for the iPhone, in effect helping its competitor, Apple Inc, make more appealing products – even as relations between the companies have deteriorated.
* At an invitation-only gathering hours before the North American International Auto Show was scheduled to open for press previews, General Motors Co introduced the 2014 Corvette, the seventh generation of Chevrolet’s hallmark sports car.
* The creators of “South Park” are branching out beyond the underpants business. Taking after the Gnomes on the animated series who ardently practice American capitalism, Trey Parker and Matt Stone have wooed investors and raised money to form their own production studio, which they plan to announce on Monday.
* Until recently, investors had been all too eager to pour millions into any web start-up with rapid growth, regardless of whether it made money or even had plans to do so down the road. But after Facebook Inc’s rocky initial public offering and flameouts at Zynga Inc and Groupon Inc, venture capitalists are entering a picky phase.
* Economic growth remained sluggish and politics often intruded on the markets, yet stocks achieved solid returns last year all the same. The Standard & Poor’s 500-stock index rose 13.4 percent for the year, even with a 1 percent decline in the fourth quarter.
* After a sharp economic slowdown through much of last year, China’s economy is growing again – but not at its previous double-digit pace, and with signs that inflation might become a problem again.
* An investigation into work performed on the troubled $3.2 billion Croton water treatment plant in the Bronx, one of the New York city’s largest public works projects, has uncovered fraud and other crimes that are expected to lead to criminal charges against two men, and a deferred prosecution agreement, according to people with knowledge of the case.
* Pharmacies around the New York city struggled to meet the demand for flu vaccinations on Sunday, a day after Governor Andrew Cuomo declared a public health state of emergency in response to a drastic increase in the number of flu cases this year.
– A commentary says China needs urgently to strengthen its efforts to fight pollution as smog caused by air pollutants has smothered Beijing and some other major Chinese cities for the past several days.
SHANGHAI SECURITIES NEWS
– Inflation will be the biggest risk that threatens stability of China’s economy in 2013, Jiao Jinpu, a Chinese central bank official told a forum over the weekend.
– China’s economy is expected to grow 8 percent in 2013, slightly faster than 2012, said a research report by the State Information Center, a top government think-tank. China will announce 2012 GDP growth figures this week.
CHINA SECURITIES JOURNAL
– The China Securities Regulatory Commission issues the country’s first guidelines for standards of compiling statistics in the securities and commodity futures industry.
– An analysis by this newspaper warns against the increasing risk from China’ surging asset management products issued by banks and other financial institutions.
CHINA DAILY (www.chinadaily.com.cn)
– Growth of China’s retail sales is likely to expand to 15 percent in 2013 from an estimated 14.3 percent in 2012 as the government makes fresh efforts to boost domestic consumption, the China General Chamber of Commerce, an industry association, said in a report.
THE GLOBE AND MAIL
* Plans will likely proceed for more First Nations protests this week, with possible blockades of railways and highways. Politicians can also expect to be greeted by more protesters when they return to their official House of Commons duties at the end of January.
However, two of Ottawa’s most prominent aboriginal critics took steps this weekend to soften their tone.
* The Canadian government is in early stages of providing military training to Niger, a country struggling to cope with the spreading Islamic extremism afflicting neighbouring Mali and the region.
Reports in the business section:
* Three former Nortel Networks Corp executives, accused of fraudulently manipulating Nortel’s financial results in 2002 and 2003, will learn their fate in a Toronto courtroom on Monday when a judge will deliver his verdict in their long-running fraud trial.
Former CEO Frank Dunn, former CFO Douglas Beatty and former controller Michael Gollogly are accused of pushing the money-losing company to profitability and triggering special “return to profitability” bonuses for themselves.
* Leading shareholders of Inmet Mining Corp said the company is shopping a significant but minority stake in Cobre Panama, the $6.2 billion copper project it is developing in Central America, as it works to fend off a hostile takeover from rival First Quantum Minerals Ltd.
* Former cabinet minister Martin Cauchon has made a late entry into the already crowded federal Liberal leadership race.
Cauchon submitted his nomination papers and a $75,000 entry fee just hours before the party’s registration deadline on Sunday midnight.
* Calls are mounting for Attawapiskat Chief Theresa Spence to end her liquid-only diet, now in its 35th day. Chief Spence has been on a diet of water, fish broth and tea since Dec. 11 in her push for a meeting with Prime Minister Stephen Harper and the Governor-General.
Fly On The Wall 7:00 AM Market Snapshot
Allscripts (MDRX) upgraded to Strong Buy from Market Perform at Raymond James
Analog Devices (ADI) upgraded to Outperform from Neutral at Credit Suisse
CTC Media (CTCM) upgraded to Buy from Neutral at Goldman
Capital One (COF) upgraded to Buy from Neutral at Goldman
Cisco (CSCO) upgraded to Outperform from Market Perform at William Blair
Cisco (CSCO) upgraded to Outperform from Neutral at RW Baird
Covance (CVD) upgraded to Buy from Neutral at Goldman
Deere (DE) upgraded to Neutral from Underweight at JPMorgan
Encana (ECA) upgraded to Buy from Hold at Societe Generale
Facebook (FB) upgraded to Buy from Hold at Deutsche Bank
Fusion-io (FIO) upgraded to Overweight from Neutral at JPMorgan
Grainger (GWW) upgraded to Buy from Hold at Wunderlich
Halozyme (HALO) upgraded to Outperform from Market Perform at BMO Capital
Hess Corp. (HES) upgraded to Neutral from Underperform at Credit Suisse
Hewlett-Packard (HPQ) upgraded to Neutral from Underweight at JPMorgan
Infosys (INFY) upgraded to Overweight from Equal Weight at Barclays
Infosys (INFY) upgraded to Overweight from Neutral at JPMorgan
Norfolk Southern (NSC) upgraded to Buy from Hold at Deutsche Bank
PAREXEL (PRXL) upgraded to Neutral from Sell at Goldman
Verisk Analytics (VRSK) upgraded to Overweight from Equal Weight at Barclays
Xilinx (XLNX) upgraded to Outperform from Neutral at Credit Suisse
ARM Holdings (ARMH) downgraded to Neutral from Overweight at Piper Jaffray
American Express (AXP) downgraded to Neutral from Buy at Goldman
EMC (EMC) downgraded to Neutral from Overweight at JPMorgan
Huntsman (HUN) downgraded to Market Perform from Outperform at Wells Fargo
IBM (IBM) downgraded to Neutral from Overweight at JPMorgan
JDSU (JDSU) downgraded to Neutral from Buy at Goldman
Maxim Integrated (MXIM) downgraded to Neutral from Outperform at Credit Suisse
Nokia (NOK) downgraded to Underweight from Equal Weight at Barclays
Old Dominion (ODFL) downgraded to Hold from Buy at Deutsche Bank
Plains Exploration (PXP) downgraded to Neutral from Positive at Susquehanna
Rush Enterprises (RUSHA) downgraded to Hold from Buy at Wunderlich
Scripps Networks (SNI) downgraded to Hold from Buy at Deutsche Bank
Werner (WERN) downgraded to Hold from Buy at Deutsche Bank
Rock-Tenn (RKT) initiated with an Overweight at Barclays
Williams (WMB) reinstated with an Overweight at Barclays
Harry Winston (HWD) sold luxury brand to Swatch Group (SWGAY) for $750M
News Corp. (NWSA), Sky Deutschland and its new bank syndicate reached agreement
Icahn acquired 1.56% of Transocean (RIG) shares, looks to buy more
Humana (HUM) ratings affirmed by A.M. Best, outlook stable
Hostess Brands selected Flowers Foods (FLO) as stalking horse bidder for the majority of assets related to its bread business for $360M
Groupon (GRPN) acquired Glassmap, terms not disclosed
Will this finally be the year that investors dump bonds and return to stocks? Some signs are indicating that maybe, possibly, the tide is beginning to reverse. For the week ended Wednesday, U.S. investors plowed $18B into stock mutual funds and exchange-traded funds, the largest one-week total since June 2008, the Wall Street Journal reports
Auto makers (GM, F, FIATY) have found a quicker path to improved fuel efficiency, reinventing the way traditional gas-powered cars are built. They’re cutting weight by substituting more plastics, aluminum and magnesium, including materials once found only in high-end race cars, the Wall Street Journal reports
The U.S. economy is expected to grow by 2.5% in 2013, improving to 3.5% growth in 2014, said Chicago Fed President Charles Evans. He also forecast the U.S. unemployment rate would be 7.4% this year, easing to about 7% in 2014, Reuters reports
CVC Capital Partners and Royal Bank of Scotland (RBS) sold a combined $290M stake in Hong Kong-listed luggage maker Samsonite International, according to a term sheet, Reuters reports
JPMorgan Chase’s (JPM) board will consider releasing an internal report this week that faults CEO Jamie Dimon’s oversight of a division that lost more than $6.2B on botched trades, sources say, Bloomberg reports
A group of oil and gas pipeline operators led by Plains All American Pipeline LP (PAA) announced plans just in the past three months to spend about $1B on rail depot projects to help move more crude from inland fields to refineries on the coasts.Warren Buffett’s (BRK.A) Burlington Northern Santa Fe LLC, the largest U.S. railroad, spent $400M on terminals in 2012, Bloomberg reports
KeyCorp (KEY) looks prosperous, could be worth $11 per share
Ensco (ESV) stock is a value, could rise further from earnings growth
With a promising year ahead, theater owners (RGC, CNK, CKEC, EPR) could be a good play
HD stuns and ‘Smart’ TVs confound at Consumer Electronic Show in Las Vegas (SSNLF, SNE, SHCAY, GOOG, MRVL, AAPL, LNVGY, NTGR)
Athersys (ATHX) files to sell 20M shares of common stock, warrants
CorMedix (CRMD) files to sell 3.78M shares of common stock for holders
Lexington Realty (LXP) to offer $100M in common shares in at-the-market program
[VIA Zero Hedge]