AMERICAN MARKETS OUTLOOK: U.S. stocks are expected to start just
a touch higher Wednesday, said Jawaid Afsar at Secure Equity. He
called the Dow Jones Industrial Average four points higher at 12680
and the S&P 500 up one point at 1316. Good results from Apple
are expected to offer some cheer, but the situation in Europe and
the Greek debt talks cast a cloud. In addition, trading could be
light ahead of the FOMC's rate announcement and Federal Reserve
Chairman Ben Bernanke's press conference. Before these events, U.S.
pending home sales data will be released. The Dow front-month
futures contract was down 0.2% at 12603.0 and the S&P 500
futures were 0.2% lower at 1309.10.
EUROPEAN MARKETS: Euro Stoxx 50 traded down 0.7% at 2415.35,
despite the release of a better-than-expected German Ifo index. The
Ifo index for January came in at 108.3 points, against expectations
of 107.6. "The outcome is good news for the German economy and it
follows a 'healthy' improvement also in German PMIs earlier this
week," said Newedge. Nevertheless, stocks edged down, weighed by
weakness in the tech sector, after Ericsson reported a big fall in
fourth-quarter net profit. Ericsson shares fell 14%, while the
Stoxx Europe 600 techs index was down 2.6%. Banks were also under
pressure, with the Stoxx Europe 600 index for the sector down
1.5%.
London's FTSE was down 0.4% at 5729.96, slipping into the red
after the release of fourth-quarter U.K. GDP figures, which were
weaker than expected. GDP fell by a worse than expected 0.2%
quarter-on-quarter in the fourth quarter, after rising by 0.6% in
the third quarter. ING Bank said U.K. economic activity was likely
to get worse before it got better with a technical recession
expected to be confirmed by first quarter 2012 GDP numbers. As
such, further quantitative easing remained highly probable and "our
view [is] that the BOE will vote for GBP50 billion more QE next
month and a further GBP50 billion in May," said Investec Corporate
Treasury. In stocks, Royal Bank of Scotland was down 2.1%, making
it the top faller in the index after UBS cut its rating on the
bank.
At 1125 GMT, March bunds were up 0.52 at 137.81, and March gilts
were up 0.18 at 115.26.
At 1127 GMT, the dollar was up at Y78.22, the euro was down at
$1.2974, and the pound was also down at $1.5598.
===========================
TOP STORIES:
GREEK PRIVATE CREDITORS TO DISCUSS OPTIONS: Greece's private
sector creditors met in Paris in a bid to "determine the next
course ahead" in talks to help ease the ailing country's fiscal
burden, a source told Dow Jones Newswires.
IFO INDICATES POSITIVE OUTLOOK FOR GERMANY: Indications for the
German economy in 2012 were positive and an improvement in
January's Ifo reading showed a further decline was unlikely, an
economist from the Ifo Institute told Dow Jones Newswires.
UK ON BRINK OF RECESSION: The U.K. economy shrank in the fourth
quarter of 2011, leaving Britain on the brink of recession and
complicating the government's goal of tackling the budget
deficit.
LAGARDE REINFORCES WARNING ON ECONOMY: Despite recent
encouraging signs, the world economy is still in a fragile
situation and everyone must cooperate to make sure it returns to
growth, warned Christine Lagarde, the head of the IMF.
EU MINISTERS RESUME GREECE CRISIS TALKS: European Union finance
ministers further pressured Greece and its private-sector creditors
to ensure a proposed deal to restructure Greece's private-sector
debt will be enough to put the country back on a firm fiscal
footing.
============================
INSIGHT & ANALYSIS FROM DOW JONES NEWSWIRES:
THE WALL STREET JOURNAL: Morgan Stanley and Goldman Sachs fight
for primacy in leading the IPO of Facebook, which is expected to
raise $10 billion.
ANALYSIS: Roche's hostile $5.7 billion bid for Illumina of the
U.S. was the latest sign of European drug companies looking for
bolt-on acquisitions to bolster their businesses as key drugs'
patents expire.
THE WALL STREET JOURNAL EUROPE: The euro hit a four-week high
against sterling Tuesday, but analysts doubt it will retain
sufficient strength to crack its long downward trend, even as the
pound faces mounting headwinds of its own.
HEARD ON THE STREET: With its quarterly revenue up 73% to $46
billion, Apple beat analyst expectations by $7 billion. The amount
by which it beat expectations also tops the entire quarterly
revenue of RIM, Rolfe Winkler said.
THE WALL STREET JOURNAL: No matter how far World Economic Forum
attendees have traveled, most of them will be touched by how the
euro zone's sovereign-debt crisis is resolved.
===========================
STILL TO COME
ET/GMT COUNTRY/PERIOD
1000 1500 US Dec Mass Layoffs
1000 1500 US Dec Pending Home Sales Index
1000 1500 US Nov U.S. Monthly House Price Index
1030 1530 US Jan 20 EIA Weekly Petroleum Status Report
1200 1700 FR Dec Claimant count and job advertisements collected by Pole
emploi
1230 1730 US Federal Reserve Board - U.S. interest rate decision,
followed by Ben Bernanke press briefing
1850 2350 JPN Dec Corporate Service Price Index
N/A N/A US U.S. Department of the Treasury - U.S. Treasury Secretary
Geithner speaks on job creation during North Carolina visit
N/A N/A EU Council of Europe - Cameron speech in Strasbourg amid
dispute on European Court of Human Rights
===========================
OTHER NEWS:
SOME BOE POLICY MAKERS CALL FOR MORE STIMULUS: Bank of England
policy makers voted unanimously in January to keep U.K. monetary
policy on hold but at least some of its rate-setters appeared ready
to sanction another dose of stimulus.
ERICSSON PROFIT PLUNGES AS NETWORK SALES SLOW: Ericsson reported
a steep fall in fourth-quarter net profit, on weak sales of mobile
networks due to increased operator cautiousness, a trend analysts
expected to continue as a result of the ongoing debt crisis.
SAP EXPECTS CONTINUED GROWTH: SAP said it expected continued
growth this year because of strong "momentum" in its business
despite current macroeconomic uncertainty, as it reported a surge
in fourth-quarter profit.
SAUDI ARAMCO SEES OIL DEMAND 'SOMEWHAT SLUGGISH' IN 2012: Oil
demand this year will be "somewhat sluggish" and global economic
conditions will likely remain as turbulent as they were in 2011,
the CEO state giant Saudi Aramco said.
AIR FRANCE-KLM EXPECTS DEEP LOSS: Air France-KLM's financial
situation is "extremely tight" and it incurs a substantial
operating loss in 2011, the chief executive of Air France, one of
the Franco-Dutch group's two airline divisions, said.
AT YAHOO, THE AD DECLINE CONTINUES: Yahoo's new chief executive,
Scott Thompson, unveiled financial results for the fourth quarter
that show continued deterioration at its core advertising
business.
-By Rui Videira, Dow Jones Newswires; +44-20-7842-9221;
rui.videira@dowjones.com