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Good morning. Here’s what you need to know.
- Asian markets were mixed in overnight trading with the Nikkei up 0.5 per cent and the Chinese markets still closed for the New Year holiday. Europe is selling off after eurozone GDP contracts, and U.S. markets are trading lower.
- Eurozone Q4 GDP fell by 0.6 per cent, against expectations for a decline of 0.4 per cent, showing the region’s recession is deepening. Italian GDP unexpectedly contracted 0.9 per cent. Here are 36 maps that explain the entire world >
- In M&A news, US Airways and American Airlines have announced a $11 billion deal that will create the world’s largest airline. AMR Corp’s creditors would own 72 per cent of the combined airline and U.S. Airways’ shareholders would hold the rest. Meanwhile, Berkshire Hathaway and 3G Capital are buying Heinz for $28 billion, according to CNBC.
- Japanese fourth quarter GDP fell 0.1 per cent, missing expectations of a rise of 0.1 per cent. Japanese prime minister Shinzo Abe is trying to boost monetary stimulus to help bolster growth.
- Initial jobless claims fell to 341k, which was much better than expected. Consensus was for new claims to fall to 360K
- In earnings news, Pepsico reported Q4 net income of $1.06 per share, on revenue of $19.95 billion. Meanwhile, Rio Tinto reported a $3 billion loss, its first ever full-year loss. The company also raised full-year dividend by 15 per cent to $1.67, more than analysts’ expectations. Morgan Stanley: These are the 17 best stocks for dividends >
- Cisco Systems forecast that its fiscal third quarter sales would rise four to six per cent year-over-year and projected revenue of $12.1 billion – $12.3 billion. Analysts were looking for $12.2 billion. Cisco said demand was impacted by weaker growth in China and Europe, and could also be hit by lower government demand in the U.S..
- Indian inflation as measured by its wholesale price index was up 6.62 per cent year-over-year in January. The pace of growth was the slowest in 38-months. As India’s growth is said to reach a 10-year low, this boosts the case for an interest rate cut.
- Central banks bought 534.6 metric tons of gold in 2012, the most in almost 50 years, according to the latest data from the World Gold Council. Net purchases by central banks accounted for 12 per cent of demand in 2012, up from 10 per cent the previous year.
- Brewing giant Anheuser-Busch InBev revised the terms of its $20.1 billion bid for Mexican brewer Grupo Modelo to beat government objections that it restricted competition.
- Bonus – Jessica Chastain reportedly refuses to acknowledge her biological father Michael Monasterio, who passed away last week.
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