- Methodology change sees Indian economy grow faster than China's (Reuters)
- Can Greek Businesses Even Survive? (WSJ)
- Putin to travel to Minsk talks raising hopes of a deal over Ukraine (Euronews)
- Ukraine contact group representatives deny ceasefire deal in Minsk (Reuters)
- Moar buybacks! Hedge Fund-Backed Investor Puts Himself Up for G.M. Board (NYT)
- Ukraine peace summit overshadowed by some of war's worst fighting (Reuters)
- Time for non-non-GAAP excluding China: Tesla CEO threatens firings after dismal China sales - sources (Reuters)
- Jon Stewart leaving Comedy Central's 'The Daily Show' (Reuters)
The only question on traders' minds today, with the lack of any macro news out of the US (except for the DOE crude oil inventory update at 10:30am Eastern expecting a build of 3.5MM, down from 6.33MM last week, and the 10 Year bond auction at 1pm) is which Greek trip abroad is more important: that of FinMin Varoufakis to Belgium where he will enter the lion's den of Eurogroup finance ministers at 3:30pm GMT, or that of the foreign minister Kotzias who has already arrived in Moscow, and where we already got such blockbuster statements as:
LAVROV: RUSSIA WILL CONSIDER AID REQUESTS, IF GREECE MAKES THEM; KOTZIAS: GREECE IS WILLING TO MEDIATE BETWEEN EU, RUSSIA
Or perhaps both are critical, as what happens in Brussels will surely impact the outcome of the Greek trip to Russia?
- Greek defense minister says Greece has Plan B if EU rigid on deal (Reuters)
- Germany rejects Greek claim for World War Two reparations (Reuters)
- Greece to Seek $11.3 Billion in Financing to Avoid Funding Crunch (BBG)
- Lazard Sees $113 Billion Greek Debt Cut as ‘Reasonable’ (BBG)
- U.S. Navy Considers Setting Up Ship Base in Australia (BBG)
- Dalio’s Bridgewater Fund Said to Rise 8.3% in January (BBG)
- As U.S. Exits, China Takes On Afghanistan Role (WSJ)
- EU money funds cut exposure to bank debt (FT)
- China Inflation Drops to Five-Year Low in January (WSJ)
- Oil-Price Rebound Predicted (WSJ)
The world economy stands on the brink of a second credit crisis as the vital transmission systems for lending between banks begin to seize up and the debt markets fall over. The latest round of quantitative easing from the European Central Bank will buy some time but it looks like too little too late.
Quarterly earnings fell (yes fell) 2% from Q4 2013 to Q4 2014 on an operating EPS basis, and as Goldman Sachs notes, was only saved from a much more disastrous fate by Apple. However, don't worry about the mother's milk of markets... From now on, everything looks awesome as the hockey-stick extrapolators project EPS growth to resume in its escape velocity gung-ho, higher interest rates are good way by year-end...
Consumer Credit Growth Misses: Revolving Credit Surges As Student, Car Loans Have Weakest Increase Since February 2012Submitted by Tyler Durden on 02/06/2015 16:13 -0400
Following a significant downward revision to November's data, December consumer credit growth printed a gain of $14.755 billion, missing expectations of $15 billion (for the 5th month) and hovering near one-year lows. The most notable aspect was the $5.77 billion surge in revolving credit (e.g. credit cards) as Americans extended and pretended into the holidays - the biggest rise since April.
- Arab World Unites to Condemn ‘Barbaric’ Death of Jordanian Pilot (BBG)
- Jordan hangs two Iraqi militants in response to pilot's death (Reuters)
- As Oil Prices Climb, Some Harbor Doubts (WSJ)
- Taiwan plane cartwheels into river after take-off, killing at least 19 (Reuters)
- Seven dead as commuter train hits car near New York City (Reuters)
- Apollo’s 600% Profit on Oil Company Leaves Rivals Behind (BBG)
- Greece's rock-star finance minister Yanis Varoufakis defies ECB's drachma threats (Telegraph)
- RBA cuts interest rates to record low of 2.25% (SMH)
- RBI keeps rates on hold (Reuters), India allows banks flexibility on big projects to reboot growth (Reuters)
- BP slashes capital spending by 20% (FT)
- Greek Retreat on Writedown May Move Fight to Spending (BBG)
- Rosneft accounting move helps BP beat profit forecast (Reuters)
- Amazon in Talks to Buy Some of RadioShack's Stores (BBG)
- Behind Obama's budget proposals, a gloomy view of the future (Reuters)
- How the Justice Department, S&P Came to Terms (WSJ)
- Staples, Office Depot in Advanced Talks to Merge (WSJ)
Virtually all of AAPL's cash growth in the December 31 quarter took place offshore, where its cash hoard rose from $137 billion to $158 billion (mostly thanks to the previously mentioned surge in Chinese iPhone purchases). How much of Apple's cash is domestic? As the following chart shows, a paltry $20 billion of AAPL's cash, or barely above 10%, is held domestically - one of the lowest levels in the past 4 years - and can be used for such corporate activities as stock buybacks and dividends.
One word - Apple. Not only is Apple single-handedly moving S&P 500 earnings, it is now - thanks to the planned issuance of $5 billion of debt to fund moar buybacks - shifting the US Treasury market as rate-locks slam yields higher in an illiquid market...
Yesterday we commented on the outsized macro impact that one company already excerts on the world, when we reported that in the fourth quarter, a whopping 60% of retail sales growth was due to the launch of Apple's iPhone 6 in the fall of 2014, and the surge of Chinese tourists who tok advantage of Hong Kong's lower prices and earlier release. So how about the micro level? For the answer we present the chart below. Behold: the AAPL effect, which demonstrates that what until AAPL's release was shaping up to be a flat Q4 earnings season for the S&P 500, has since transformed into Q4 EPS growth of 2.1%, and made Apple the largest contributor to earnings growth for the S&P 500 at the company level for the fourth quarter. All this, thanks to just one company!
The sales of iPhone, which are captured in other consumer durable sales, grew on average 60%y/y since September, propelled predominately by the launch of new product. Excluding iPhones, retail sales value would have contracted almost 1%y/y in October, at the peak of the 'Occupy' movement, and expanded a more subdued 1.3%y/y during Sep-Nov 14 (see figure 1). In other words, over 60% of retail sales growth was attributable to iPhone in late 2014.
- Falling Prices Spread Pain Far Across The Oil Patch (WSJ)
- ISIS Group Claims Responsibility for Attacks That Killed 27 in Egypt (NBC)
- Russia Unexpectedly Cuts Key Rate as Economy Eclipses Ruble (BBG)
- Greece’s Feisty Finance Minister Tries a More Moderate Message (NYT)
- U.S. homeownership hits 20-year low, but new households growing (Reuters)
- Indian Banks’ Shares Plunge as Bad-Loan Provisions Surge (BBG)
- Underground Terror Network Said to Benefit Would-Be Jihadists in Europe (WSJ)
- Russia warns West support for Kiev could lead to 'catastrophe' (Reuters)
- Who Doubts Yellen's Policies? Summers for One (BBG)
- Samsung, Apple Back in Dead Heat for Global Smartphone Dominance (WSJ)
- Islamic State purportedly sets new deadline for hostage swap (Reuters)
- Turkey's $7.9 Billion Mystery Money That's Simply Vanished (BBG)
- How a Two-Tier Economy Is Reshaping the U.S. Marketplace (WSJ)
- U.S. Prisons Grapple With Aging Population (WSJ)
- Hasenstab Sees $3 Billion Vanish in Ukraine as One Big Bet Sours (BBG) - maybe he should BTFD, pardon, "invest" in Belarus next?
- Belarus May Seek Debt Restructuring in 2015, President Says (BBG)