Financial Markets and Economy
Bond Traders See Even Two Fed Rate Hikes This Year as Optimistic (Bloomberg)
Traders are betting that two interest-rate increases could be too many in 2016.
The Dubious Logic of Stock-Market Circuit Breakers (The New Yorker)
Many things that are supposed to make you safer don’t actually do so. Taking off your shoes at airports, for example, is largely security theatre. (How many prospective shoe bombers have been nabbed since Richard Reid?) But the practice offers the impression of protection, so it stays—just to be on the safe side, you know.
The stock market just did something it has only done 3 other times in the last 100 years — and it's not good (Business Insider)
On Wednesday, stocks got crushed and officially entered a "correction," defined as a 10% drop from recent highs.
This is the second time in the last six months that this has happened — remember, stocks fell 10% in August in just a few days — and these two corrections in such a short period of time don't look good, historically.
Alcoa Investors Awaiting Split Payoff Get Gloomy Outlook: Chart (Bloomberg)
Alcoa Inc. investors got a much-anticipated glimpse of the future this week. Unfortunately, it looks a lot like the recent past.
Best Buy’s stock price is dropping as fast as its sales (Quartz)
It was a blue Christmas at Best Buy. The $11 billion in revenue that the electronics chain brought in during the nine weeks ended Jan. 2 was down 3.6% from the previous year’s holiday shopping season.
Morgan Stanley is shaking up its huge trading business (Business Insider)
Morgan Stanley has announced a raft of changes to its sales and trading business.
Sam Kellie-Smith will become global head of fixed income and commodities, according to a memo seen by Business Insider.
Asian Stocks Rebound After U.S. Advance as Material Shares Rise (Bloomberg)
Asian stocks tracked U.S. gains, with the regional benchmark paring its second week of losses, as material shares led the advance.
Apple’s iPhone slowdown starting to take toll on suppliers (Market Watch)
Companies that make parts for Apple Inc. are warning of lower first-half revenue this year, in a sign of slowing sales of the latest iPhones.
Taiwan Semiconductor Manufacturing Co., which manufactures the chips that run iPhones and other popular electronic devices, forecast Thursday its first-quarter revenue would decline as much as 11% from the previous year, citing soft demand for high-end smartphones.
There's something messed up about China's latest data dump (Business Insider)
In note to clients sent Thursday morning, Credit Suisse analysts Dong Tao and Weishen Deng suggest that Chinese corporates are going to extraordinary lengths to get around government restrictions on selling yuan.
Panic, pause, smash… stock-market bottom? (Market Watch)
The stock market panicked its way into 2016. Then it took a brief pause this week, before getting smashed again on Wednesday. If Don Fishback’s theory is on point, Thursday’s big rally shouldn’t come as much of a surprise. A trend going back more than 60 years supports a bottom here.
Overheard at Davos: Never Wrong, Often Early (Bloomberg)
The forecast is for a flurry of economic forecasts and little snow.
If you're selling stocks because of oil, the worst is probably over (Business Insider)
If you're selling stocks because of the negative impact the oil crash will have on the economy, the worst is probably over.
Just short of calling a bottom in oil, Deutsche Bank's Torsten Sløk argued in a client note Thursday that the impact of the crash on the economy cannot get much worse than its been over the last year.
As we recently noted, it's unlikely that anyone would give away oil for free.
You can probably stop worrying about rising rates for awhile (The Reformed Broker)
My friend Peter Boockvar had this to say about rate hike odds early this morning… On the heels of the strong 10 yr note auction and the new on the run note, the 2s/10s spread is narrowing to just below 116 bps, the lowest since January ’08. The April fed funds futures contract covering the March meeting has the odds of a rate hike down to 30%.
Intel Forecast Shows Server Demand Can't Blunt PC Slides Impact (Bloomberg)
Intel Corp., the worlds biggest semiconductor maker, predicted first-quarter sales that will fall short of some estimates, held back by the continued slump in demand for personal computers.
Powerball Isn't Investing and Vice Versa (Bloomberg View)
By now you are likely sick of all the chatter about tonight’s astounding $1.5 billion Powerball lottery drawing. I have been quite critical of lotteries in the past. They are a classic grab for the free lunch, a desire for the benefits of wealth without the sweat and hard labor.
This is no small issue: As a nation, our lottery habit is truly
Brent Crude Trailing WTI Through 2017 as Iran Oil Exports Loom (Bloomberg)
Brent Brent oil is trading at a discount to West Texas Intermediate crude through October 2017 as an expected surge in Iranian production adds to oversupplies in Europe and falling U.S. output trims the glut in America.
Japanese Shares Rebound After Oil Sparks Relief Rally in U.S. (Bloomberg)
Japanese shares rose, with the Topix index climbing back after slumping on Thursday, as the yen weakened and more stable oil prices sparked a rally in U.S. equities.
The Bedrock of Portfolio Management (A Wealth of Common Sense)
Investors often spend much of their time thinking tactically instead of psychologically. They want to know how to handle the next week or month in the markets without ever planning for the next year or decade.
China Stocks Head for Third Week of Losses Before Economic Data (Bloomberg)
Chinese stocks fell, sending the benchmark index toward a third week of declines, before the release of bank lending data that may signal a deepening slowdown in the economy.
Dollar Climbs as Crude-Oil Rebound Spurs Gains for U.S. Equities (Bloomberg)
The dollar climbed as rebounding oil prices provided a respite from the selloff thats gripped global financial markets this year.
SP 500 and NDX Futures Daily Charts – Flippity Flop (Jesse's Cafe Americain)
Stocks were in rally mode today, in an attempt to dampen fear and encourage confidence.
Politics
Republicans Debate Who Is the Alpha (Bloomberg View)
The most primal scene in American politics is a debate stage, where candidates wrestle in rhetorical mud for dominance. Of course, when the candidates are auditioning for the presidency, their aggression is sublimated, their rapiers metaphorical. (When political attacks merge with the physical kind, the combatants are no longer in a democratic republic as Americans understand the term.)
Democratic campaign erupts into firefight after Bernie Sanders ad criticizes Hillary Clinton on Wall Street (Business Insider)
Former US Secretary of State Hillary Clinton's presidential campaign pounced on Thursday after her chief primary rival, US Sen. Bernie Sanders (I-Vermont), swiped at her in a television ad.
The Sanders ad never mentioned Clinton by name, but it did take an implicit shot at the Democratic front-runner for her support on Wall Street.
Technology
BMW says it will bring self-parking tech to the US 'as quickly as possible' (The Verge)
BMW got a special mention in today's press conference by US Department of Transportation Secretary Anthony Foxx, who noted that the company's self-parking system — which is already available in some models outside the US — is compliant with federal regulations. Previously, BMW had specifically avoided bringing the system here for fear of running afoul of those rules.
Audi Built A Moon Rover (Popular Science)
Tucked into a corner of Audi’s expansive booth at the North American International Auto Show in Detroit this week sat a little piece of hardcore astronomical research—a pint-sized lunar rover. Compared to the massive hunks of aluminum, steel and carbon fiber that surrounded it, the little ‘bot looked like a fragile toy. In truth, of course, it’ll leave those brutish earthbound guys eating its lunar dust.
Health and Life Sciences
Diets Rich In Fruit Linked To Reduced Risk Of Erectile Dysfunction (Forbes)
Erectile dysfunction (ED) has long been linked to heart problems–and that’s logical, since both organs require healthy blood flow to function well. When one organ is not receiving appropriate blood flow, the other also probably isn’t. And as is true for cardiovascular health, previous studies have linked a man’s diet to his risk for ED. Last year, a study found, for instance, that coffee, which is known in moderation to be good for the heart, is also good for erectile function. And now a large-scale study finds that men who eat healthy amounts of fruit, especially those high in antioxidants, have a reduced risk of ED.
Check brain before anaesthetic – study (BBC)
Taking readings of brain activity before patients go for surgery could help doctors give a more accurate dose of anaesthetic, researchers suggest.
At present, a patient's body weight is the main factor in deciding the dose.
Life on the Home Planet
Toxic Coal Ash Hits Poor and Minority Communities Hardest (Scientific American)
Too often toxic coal ash, a byproduct of coal-fired power, ends up in poor, minority communities. U.S. civil rights officials are launching a deeper look at federal environmental policy to find out why.
The U.S. Commission on Civil Rights will hold a hearing next week on environmental justice and the Environmental Protection Agency. The focus is the impact of coal ash, a toxic waste product of burning coal that often contains harmful metals such as lead, mercury, chromium and cadmium.
