Good morning. Here’s what you need to know.
- Markets are booming in Europe, with the German DAX, French CAC, and Italian FTSE MIB gaining 1.3%, 1.2%, and 3.2%, respectively. Trading in Asia was mixed overnight. U.S. stocks are moving sideways early in the tradin session.
- Italy and Spain both successfully auctioned sovereign debt today. The Bank of Spain sold €10 billion during the sale, twice its goal. Italy auctioned €12 billion of notes as borrowing costs declined tremendously. Both countries are seeing big rallies on both ends of the yield curve. Here’s what you need to know about Europe in 2012.
- Chinese consumer prices increased 4.1% in December, a 15-month low and needed break from rampant inflation. The overall index measuring consumer prices declined slightly: 0.1 percentage points. Analysts note that the drop would likely have been larger had seasonal factors, like an earlier Chinese New Year, not lined up as they had.
- The European Central Bank left benchmark rates unchanged at 1.0% this morning, largely expected by economists. Some analysts believe the bank will lower the benchmark rate by 50 basis points over the coming year.
- Hungary saw strong demand for its debt in an auction today, selling 44 billion forint, or $181 million. The country had a goal to raise some 33 billion forint through sales of notes maturing in 2014, 2017 and 2022. Yields on the 10-year note have sharply declined over the past few days, with a 186 basis point reduction today.
- Indian industrial production surged 5.9% in November, topping analyst expectations. The increase reverses a 4.7% contraction in October. The Reserve Bank of India, which has been aggressively raising rates to counter inflation, said strong consumer demand was attributable for the boost.
- Oil giant Chevron warned that fourth quarter earnings would be “significantly below” third quarter results. Income generated from the refining of crude fell to near break even as production dropped by 270,000 barrels a day on an asset sale and turnaround at its California operations. Analysts had forecast top line results of $59.6 billion. Click here to see why the oil industry is moving to shale >
- The U.K.’s largest supermarket operator, Tesco, saw comparable store sales decline by 2.3%, during the six weeks ended Jan. 7. The company said it was disappointed with results, while warning that profit would be at the “low end of the current consensus range.” Here’s why some retailers should be worried about 2012.
- Economic announcements today include advance retail sales and initial jobless claims. Retail sales climbed just 0.1%, missing expectations for 0.4% growth. Online electronics sales were especially weak. Weekly initial jobless claims jumped to 299k, which was worse than the 375k expected.
- In a rebuke to Republicans, Warren Buffett told Time Magazine he would help reduce the national debt by matching every additional dollar in taxes Congressional Republicans pay. However, Buffett raised that rate to three-for-one for ever dollar Senate Majority leader Mitch McConnell voluntarily hands over. According to Media Matters, Republicans in the Senate have a combined net worth of $387 million.