Forex Stocks' correction coming? Not that again

Forex Stocks' correction coming? Not that again Companies: NDX Apple Inc. RELATED QUOTES Symbol Price Change NDX 0.00 0.00 AAPL 585.57 +0.01 Related Content A trader in the S&P 500 options pit at the Chicago Board of Trade looks at an order board shortly after the Federal Reserve's decision to leave short-term interest rates untouched between zero and 0.25 percent in Chicago, January 25, 2012. REUTERS/Frank PolichView Photo A trader in the S&P 500 options pit at the Chicago Board of Trade looks at an order board shortly after the Federal Reserve's decision to leave short-term interest rates untouched between zero and 0.25 percent in Chicago, January 25, 2012. REUTERS/Frank Polich By Angela Moon NEW YORK (Reuters) - Investors are beginning to wonder if this 'Energizer Bunny' of a rally can just keep going without taking a break or a fall. Every Friday for the past couple of months, the question has hung in the back of investors' minds: Is the stock market's rally strong enough to continue without a correction? Even with the S&P 500 above levels unseen since before the financial crisis, the answer remains: Yes. The broad market index broke through 1,400 -- a psychologically important level -- for the first time in four years last week. On Friday, the S&P 500 closed at 1,404.17, its highest since May 20, 2008. At Friday's close, the index was up for nine out of the past 10 weeks. The rally has taken the Nasdaq up to a 12-year recovery high, while it lifted the Dow (DJI:DJI) comfortably above 13,000 to its highest level since December 2007. 'We are seeing this unbelievable rally in the market and yet the market is unbelievably complacent. We haven't been this bullish for a long time,' said Randy Frederick, director of trading and derivatives at the Schwab Center for Financial Research, based in Austin, Texas. Indeed, the CBOE Volatility Index or VIX (MXP:VIX), Wall Street's fear gauge, plunged to a five-year low despite the S&P 500's stunning gain of 12 percent for the year so far. The VIX measures the expected volatility in the S&P 500 index over the next 30 days and generally moves in the opposite direction of the broad market. Investors often use VIX options and futures as a hedge against a market decline. Frederick said the only concern is the wide spread between second- and third-month VIX futures, suggesting a rise in volatility in the longer term. But the front-month futures that expire this week have come down to levels near the spot VIX. The VIX fell 6.2 percent on Friday to end at 14.47, its lowest close since June 2007. 'I would like to see the VIX around 17 just because it tends to have a significant pop when there is bad news at current levels,' Frederick said, adding that 'frankly' there isn't that much negative news out there. STRENGTH IN MIDCAPS Further evidence of the market's bullish sentiment: The S&P 400 Midcap Index <.MID> has popped above the 1,000 mark, an area of strong resistance since last year, according to Ryan Detrick, a senior technical strategist with Schaeffer's Investment Research, in Cincinnati. 'It's a big area of resistance, but we have moved above this. If we manage to stay here, then the strength in the overall market will advance further,' Detrick said. 'Historically, April has been a strong month so we can even see the market going up to 1,440, which is the high made in May 2008,' he added. TRACKING THE BIG APPLE The direction of Apple shares (NSQ:AAPL - News) will also be in focus this week after the stock hit the $600 mark for the first time in history last week, only about a month after it topped 500. Apple currently accounts for about 18 percent of the Nasdaq 100 stock index (NAS:NDX - News). Its weighting was cut to 12.3 percent from 20.5 percent last April, but the price surge has pushed the stock's weighting back up, making this index of 100 well-known companies hostage to the performance of a few technology titans like Apple. With Apple's heavy weighting, investors are questioning whether the broad market can continue to rally even with a pullback in Apple shares. The Nasdaq Composite Index (NAS:COMP), the barometer of tech stocks, closed on Friday at 3,055.26 -- its highest close since November 2000. 'It's a name that a lot of people have exposure to so it definitely has an impact on indexes, but it seems even without Apple, the money gets put to work in other sectors and stocks,' Detrick said. While the VIX has been sliding, the expected volatility in Apple has increased, judging by a VIX index that tracks Apple options. Apple, like IBM and other bellwether names, has its own VIX index. The CBOE Apple VIX index <.VXAPL>, which measures the expected 30-day volatility of the underlying shares of Apple, jumped 35 percent last week, suggesting more gyrations ahead as more investors speculate on short-term moves.

Earn BRICS call for open selection of next World Bank chief

Earn BRICS call for open selection of next World Bank chief MEXICO CITY (Reuters) - A meeting of BRICS major emerging countries discussed the selection process of the next head of the World Bank and emphasized it should be open to all countries, rejecting the tradition that the job automatically goes to an American, a senior BRIC official said on Saturday. The official, speaking after a meeting of the BRICS - Russia, South Africa, Brazil, India and China - said the United States had not circulated the name of its proposed candidate for the World Bank. Asked whether emerging economies could field their own candidate for the post, the official said: 'That is certainly a discussion we will have.' (Reporting By Lesley Wroughton; Editing by Chizu Nomiyama)

Forex Airbus expects years of grappling with A380 cracks

Forex Airbus expects years of grappling with A380 cracks Companies: European Aeronautic Defence and Space NV RELATED QUOTES Symbol Price Change EAD.PA 31.10 +0.28 Related Content An A380 aircraft is seen through a window with an Airbus logo during the EADS / Airbus 'New Year Press Conference' in Hamburg January 17, 2012. REUTERS/Morris Mac MatzenView Photo An A380 aircraft is seen through a window with an Airbus logo during the EADS / Airbus 'New Year Press Conference' in Hamburg January 17, 2012. REUTERS/Morris Mac Matzen FRANKFURT (Reuters) - Airbus will need years to get past problems with wing cracks on its flagship A380 passenger jet, the executive vice president of programs at Airbus told a German magazine. 'This problem will keep us busy for years,' weekly Der Spiegel quoted Tom Williams as saying in an article published on Sunday. European air safety regulators last month ordered checks for A380 wing cracks for the entire superjumbo fleet after safety engineers found cracks in almost all planes inspected. Airbus, the plane maker owned by EADS (PAR:EAD.PA - News), has said a combination of design and manufacturing slips put too much stress on a handful of the 2,000 brackets that fix the exterior of each wing to the ribcage beneath. The magazine said Williams aimed to present a solution for the problem in April, and Airbus will start installing new parts in planes by the end of the year.

Earn Global economy on recovery path, risks remain: IMF chief

Earn IMF Managing Director Christine Lagarde attends a Eurogroup meeting ahead of a two-day EU leaders summit in Brussels March 1, 2012. REUTERS/Francois LenoirView Photo IMF Managing Director Christine Lagarde attends a Eurogroup meeting ahead of a two-day EU leaders summit in Brussels March 1, 2012. REUTERS/Francois Lenoir By Nick Edwards and Koh Gui Qing BEIJING (Reuters) - The global economy has stepped back from the brink of danger and signs of stabilization are emerging from the euro zone and the United States, but high debt levels in developed markets and rising oil prices are key risks ahead, the IMF said on Sunday. 'The global economy may be on a path to recovery, but there is not a great deal of room for maneuver and no room for policy mistakes,' International Monetary Fund (IMF) Managing Director, Christine Lagarde, said in a speech in Beijing. In a separate talk on the same day, Lagarde said that China's yuan could become a reserve currency in the future, adding that the country needed a roadmap for a stronger, more flexible exchange rate system. She said signs of stabilization were emerging to show that policy actions taken in the wake of the global financial crisis were paying off, that U.S. economic indicators were looking a little more upbeat and that Europe had taken an important step forward in solving its crisis with the latest efforts on Greece. 'On the back of these collective efforts, the world economy has stepped back from the brink and we have cause to be more optimistic. Still, optimism must not lull us into a false sense of security. There are still major economic and financial vulnerabilities we must confront,' Lagarde said. The IMF chief cited still fragile financial systems burdened by high public and private debt persists advanced economies as the first of three major risks and said euro zone public sector and bank rollover funding needs in 2012 were equivalent total about 23 percent of GDP. 'Second, the rising price of oil is becoming a threat to global growth. And, third, there is a growing risk that activity in emerging economies will slow over the medium term,' she said. Lagarde also said youth unemployment should be tackled and that all countries must persevere with their policy efforts if the progress made in stabilizing the global economy is to pay off with better prospects ahead. She said advanced economies must continue with macroeconomic support and a balanced fiscal policy, together with financial sector reforms and structural and institutional reforms to repair the damage done by the crisis and to improve competitiveness. Meanwhile emerging market economies need to calibrate macroeconomic policies both to guard against fallout from the advanced economies as well as to keep overheating pressures in check. SEES A YUAN 'ON PAR' WITH CHINA'S STATUS Lagarde's comments on the yuan as a reserve currency were the most direct endorsement to date by an IMF official of China's ambitions for its currency. 'What is needed is a roadmap with a stronger and more flexible exchange rate, more effective liquidity and monetary management, with higher quality supervision and regulation, with a more well-developed financial market, with flexible deposit and lending rates, and finally with the opening up of the capital account,' she told a gathering of leading Chinese policymakers and global business leaders. 'If all that happens, there is no reason why the renminbi will not reach the status of a reserve currency occupying a position on par with China's economic status.' Renminbi is another name for the yuan. China operates a closed capital account system and its yuan currency is tightly controlled, although Beijing has said it wants to increase the international use of the yuan to settle cross border trade and has undertaken a series of reforms in recent years to that end. Lagarde said China had showed leadership and adept policy skills when the global financial crisis exploded and which might have been worse but for the impetus it provided to growth and stability. China unveiled a massive 4 trillion yuan ($635 billion) stimulus package for its economy at the end of 2008 as the financial crisis reverberated around the world and global trade -- which China's massive factory sector depends on for growth and jobs -- shuddered to a standstill. Lagarde further praised what she said was China's leadership and influence in global institutions such as the IMF and G20 group of the world's 20 biggest economies. 'China has been instrumental in helping to make the global economic system less prone to damaging crises,' she said, adding that lingering weaknesses in the global outlook reinforced the importance of China maintaining a prominent role in global policy discussions and accelerating reform in its own economy. Lagarde said she saw three priorities for China, the first to support growth; second, to shift its drivers of economic growth away from investment and exports towards domestic consumption; and third, to spread wealth more widely. The IMF chief said it was crucial that the world's major economies were working together with the same objective. 'We are all interconnected and we are all affected by each other's policy actions. We need to prepare for success together. If we stand together, the whole will be more than the sum of the parts,' Lagarde said. (Additional reporting by Kevin Yao; Editing by Don Durfee and Jonathan Thatcher)

Earn Obama seeks power to merge agencies

Earn WASHINGTON (AP) -- President Barack Obama on Friday took aim at his government's own messy bureaucracy, prodding Congress to give him greater power to merge agencies and promising he would start by collapsing six major economic departments into one. Pressing Republicans on one of their own political issues, Obama said it was time for an 'effective, lean government.' Obama wants the type of reorganizational authority last held by a president when Ronald Reagan was in office. Obama's version would be a so-called consolidation authority allowing him to propose only mergers that promise to save money and shrink government. The deal would help Obama considerably by entitling him to an up-or-down vote from Congress in 90 days. Still, final say would remain with lawmakers, both on whether to grant Obama this fast-track authority and then in deciding whether to approve any of his specific ideas. 'We can do this better,' Obama declared in an event with business owners at the White House, even presenting slides to help make his case. 'So much of the argument out there all the time is up at 40,000 feet, these abstract arguments about who's conservative or who's liberal,' Obama said. 'Most Americans — and certainly most small business owners — you guys are just trying to figure out how do we make things work, how do we apply common sense. And that's what this is about.' In an election year and a political atmosphere of tighter spending, Obama's move is about more than improving a giant bureaucracy. He is attempting to directly counter Republican arguments that he has presided over the kind of government regulation, spending and debt that can undermine the economy — a dominant theme of the emerging presidential campaign. Republicans have often aligned themselves with smaller government. So politically, Obama is trying to put the onus on Republicans in the House and Senate to show why they would be against the pursuit of leaner government. From Capitol Hill, a spokesman for Sen. Mitch McConnell of Kentucky, the top Republican in the Senate, pledged Obama's plan would get a careful review. But the spokesman, Don Stewart, also said: 'After presiding over one of the largest expansions of government in history, and a year after raising the issue in his last State of the Union, it's interesting to see the president finally acknowledge that Washington is out of control.' Obama has an imperative to deliver. He made the promise to come up with a smart reorganization of the government in his last State of the Union speech last January. At the time, Obama grabbed attention by pointing out the absurdity of government inefficiency. In what he called his favorite example, Obama said: 'The Interior Department is in charge of salmon while they're in fresh water, but the Commerce Department handles them when they're in saltwater. And I hear it gets even more complicated once they're smoked.' The White House said the problem is serious for consumers who turn to their government for help and often do not know where to begin. Not in decades has the government undergone a sustained reorganization of itself. Presidents have tried from time to time, but each part of the bureaucracy has its own defenders inside and outside the government, which can make merger ideas politically impossible. That's particularly true because 'efficiency' is often another way of saying people will lose their jobs. Obama hopes to enhance his chances by getting Congress to give him the assurance of a clean, relatively speedy vote on any of his proposals. There is no clear sign that Obama would get that cooperation. He spent much of 2011 in utter gridlock with Republicans in Congress. In the meantime, Obama announced Friday that Karen Mills, the administrator of the Small Business Administration, would be elevated to Cabinet-level rank. But her job would essentially disappear if Obama has his way. If he gets the new fast-track power to propose legislation, Obama's first project would be to combine six major operations of the government that focus on business and trade. They are: the Commerce Department's core business and trade functions; the Small Business Administration; the Office of the U.S. Trade Representative; the Export-Import Bank; the Overseas Private Investment Corporation; and the Trade and Development Agency. The goal would be one agency designed to help businesses thrive. The White House says 1,000 to 2,000 jobs would be cut, but the administration would do so through attrition; that is, as people routinely leave their jobs over time. The administration said the merger would save $3 billion over 10 years by getting rid of duplicative overhead costs, human resources divisions and programs. The name and potential secretary of the new agency have not been determined. The point, the White House says, is not just making the government smaller but better by saving people time and eliminating bureaucratic nightmares. The idea for the consolidated business agency grew out of discussions with hundreds of business leaders and agency heads over the last several months. Brendan Buck, a spokesman for House Speaker John Boehner, R-Ohio, said streamlining government was always a potentially good idea but expressed wariness about whether Obama's plan would really help business. 'American small businesses are more concerned about this administration's policies than from which building in Washington they originate,' Buck said. 'We hope the president isn't simply proposing new packaging for the same burdensome approach.' According to the White House, presidents held such a reorganizational authority for about 50 years until it ran out during Reagan's presidency in 1984. Obama has a series of other ideas about consolidating departments across the government, to be rolled out later.

Forex Utilities to see profit increases in 2012

Forex NEW YORK (AP) -- Shares of power companies appear to be attractive investments this year as the industry invests in new power plants and other infrastructure projects to meet new environmental standards, a Baird analyst said Friday. Analyst David Parker said he expects the industry will spend $750 billion over the next decade to maintain the electrical grid, meet stronger environmental standards and satisfy expanding or changing customer needs. New building projects are a key driver for power company profits because state regulators typically allow utilities to raise power rates and earn a greater return on their investments. Parker favors stocks from NorthWestern Corp. and Allete Inc. Both are expected to lead the industry in profitability in coming years. Northwestern, which delivers electricity and natural gas in Montana, South Dakota and Nebraska, is planning about $2 billion-$3 billion in future projects, including $550-$850 million in near-term opportunities. The near-term projects alone could boost profits by 75 cents to $1.20 per share, Parker said. If its entire project portfolio comes to fruition, it could increase profits by 6 percent-8 percent per year. Allete, which owns and maintains transmission lines in parts of Wisconsin, Michigan, Minnesota and Illinois, also is expected to benefit from new infrastructure growth. Parker expects ALLETE profits to increase by 8 percent-9 percent per year over the next three to five years. Share values for many utilities already have been rising on anticipation of these profit increases. Parker downgraded Alliant Energy Corp., Wisconsin Energy Corp., Hawaiian Electric Industries and UIL Holdings Corp. to 'Neutral' from 'Outperform,' saying their shares have risen to the point that they're now fairly valued. In morning trading, shares of NorthWestern fell by 40 cents to $35 and Allete fell by 15 cents to $40.94. Shares of Alliant fell by 24 cents to $42.68, Wisconsin Energy shares dipped by 25 cents to $34.09, Hawaiian Electric shares fell by 22 cents to $25.73 and UIL Holdings shares dropped by 46 cents to $34.27.

Forex U.S. did not call for strategic oil release: G20 sources

Forex U.S. did not call for strategic oil release: G20 sources U.S. Treasury Secretary Timothy Geithner (C) and Chairman of Grupo Financiero Banorte Guillermo Ortiz (L) arrive to a meeting of Group of Twenty (G20) leading economies' finance ministers and central bankers in Mexico City February 25, 2012. REUTERS/Tomas Bravo MEXICO CITY, Reuters (Feb 25) - The United States did not openly call for a release of countries' strategic oil reserves during Group of 20 meetings this weekend, Group of 20 sources said on Saturday. Treasury Secretary Timothy Geithner said on Friday the United States is considering a release from its strategic oil reserves as rising tensions between Iran and the West over its disputed nuclear program fueled a rise in oil prices. At meeting of G20 economies on Saturday, two people familiar with the discussion said finance officials had discussed the risk to the world economy from oil prices, which rose above $125 a barrel on Friday, but the United States did not push for a release of strategic reserves. Countries hold oil reserves as a buffer against sudden drops in supply. A draft communique for the G20 meeting, which is still under discussion, said high oil prices were a risk to the global economy, the sources said, although the outlook was cautiously optimistic. 'The communique says that there are some positive signs in the global economy, coming especially from the U.S. economy, but they are tentative,' one G20 official said. (Reporting by Francesca Landini and Dave Graham; Writing by Krista Hughes)

Earn Obama Said to Reprise Deficit, Tax Proposals for 2013 Budget

Earn Obama Said to Reprise Deficit, Tax Proposals for 2013 Budget President Barack Obama will reprise previously rejected deficit-reduction plans and tax increases on the wealthy while proposing new incentives for companies to return jobs to the U.S., as part of his fiscal 2013 budget, administration officials said. The election-year spending plan, due to be presented to Congress Feb. 6, is intended to demonstrate the administration's intent to chip away at the nation's long-term deficits. The nation is at a turning point, Obama told business leaders yesterday at a White House event, where he promised to seek tax breaks for companies that make new investments in the U.S. or bring jobs back from overseas. He didn't give details. 'After shedding jobs for more than a decade, American manufacturers have now added jobs for two years in a row,' Obama said. 'But when a lot of folks are still looking for work, now is the time for us to step on the gas.' Economic growth and job creation are expected to be the main issues in the presidential campaign this year. Mitt Romney, a former Massachusetts governor and the front-runner for the Republican nomination, is making criticism of Obama's stewardship of the economy a prime focus of his stump speeches. The unemployment rate has declined for four straight months to 8.5 percent in December, and the Labor Department has reported six consecutive months of job gains of 100,000 or more. Still, the rate has been above 8 percent for almost two years, and little headway has been made in recovering the 8.75 million jobs lost as a result of the recession that ended in June 2009. Election Issue Only one U.S. president, Ronald Reagan, has been re-elected since World War II with a jobless rate above 6 percent. Reagan won a second term with the rate on Election Day 1984 at 7.2 percent, having dropped almost three percentage points in the previous 18 months. Obama also is seeking to make headway on the deficit, which hit $1.3 trillion in fiscal 2011, the third highest as a percentage of gross domestic product since 1945. The president will offer a plan for deficit reduction along the lines of the $4 trillion proposal that he outlined last September. Two administration officials confirmed the plan on condition of anonymity because they weren't authorized to discuss it before it's announced. The previous plan called for $1.5 trillion in tax increases over the next decade, including the expiration of Bush-era tax cuts for families earning $250,000 or more a year. It also would make changes in mandatory spending programs, cutting Medicare and Medicaid and farm subsidies, selling government assets and reducing federal worker benefits. Republican Reaction A spokesman for House Speaker John Boehner said Congress would reject the deficit plan, just as it did last September. 'The president isn't serious if all he's offering are the same job-killing tax hikes that even Democrats in the Senate have already rejected,' Brendan Buck, the spokesman for the Republican leader, said in an e-mailed statement. 'Our debt is threatening the economy as well important programs many seniors rely on. We cannot afford another punt by the president.' Obama's last budget said the deficit in the current fiscal year would be $1.1 trillion, or 7 percent of GDP. By 2015 it would decline to $607 billion, or 3.2 percent of GDP, according to the administration's forecast. Because a 12-member so-called supercommittee of lawmakers failed to agree on a deficit-reduction plan in November, the agreement between the White House and Congress requires more than $1 trillion in automatic, across-the-board cuts in discretionary spending beginning in January 2013. Obama has threatened to veto any attempts to get around the spending cuts and blamed Republicans for refusing to compromise. One Budget One official dismissed speculation Obama would offer two budgets next month: a conventional version and a second one reflecting automatic cuts, known as sequestration. The Budget Control Act of last August doesn't require the Obama administration to submit a budget that includes specific details from a sequester, should it occur. Stan Collender, a budget expert and managing partner at Qorvis Communications LLC in Washington, told reporters at a Jan. 9 seminar that Congress will spend weeks after the elections trying to avoid automatic budget cuts. 'This will be the year of avoiding the sequester,' he said. Many of the tax and spending proposals in Obama's $3.7 trillion budget last year were ignored or rejected by Congress. His fiscal 2013 spending plan probably will encounter even more resistance in an election year when the presidency, every seat in the U.S. House and one-third of those in the Senate will be decided. To contact the reporter on this story: Roger Runningen in Washington at rrunningen@bloomberg.net To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net

Forex Gold & Copper Trends Are Still Higher: Holmes

Forex If you told me yesterday that the largest bank in the U.S. was going to report lackluster earnings results, and Standard & Poor's was going to take its credit rating clever to Europe, but the markets would largely shrug it off - I probably would have politely told said 'you're crazy!' Welcome to reality; it all happened today. And the little market that could clearly thinks it can still test higher levels and isn't going to let some silly headlines derail it. While JP Morgan (JPM), the big banks (^BKX), and the Euro are getting whacked today, it doesn't change the strategy of money managers like Frank Holmes, the CEO & CIO of US Global Investors, who says the crisis du jour has no bearing on the long term opportunities. 'I am a big believer that you buy gold on down days,' this transplanted Torontonian tells us from his new home in Texas. He believes this year could be 'one of those odd years' that the dollar and commodity prices rise together. And much as Holmes likes gold, he loves the gold miners (GDX) even more, largely because they got sold off alongside other stocks last year while the precious metal they produce rose 10%. 'I think the really big opportunity right now is gold stocks,' he says pointing to their relative price compared to spot gold, as well as their historically low price-to-book ratios, and in some cases dividend yields too. Among the names he likes and owns now are Yamana (AUY), RandGold Resources (GOLD), and lesser-known Franco Nevada (FNV) --which Holmes says pays a monthly dividend. As for the metal itself, Holmes is unmoved by the most recent developments and has had no change in his belief that 'anytime you have inflation running at 3% and you're getting 0.1% in a money market fund, it's always better to own gold.' He is similarly undaunted and unchanged in his conviction about copper and belief that China will successfully engineer a soft landing. He's staying long copper because of the country's plans to build 24,000 miles of high speed rail, and he likes the recent uptick in the JP Morgan Global Purchasing Managers Index, which signaled expansion for the first time in almost a year. 'I think copper will go higher,' he states. 'Just like oil can easily have supply restricted, you have seen copper restricted.' Related Quotes: JPM 35.92 -0.93 -2.52% ^BKX 43.44 -0.17 -0.39% XLF 13.81 -0.11 -0.75% EURUSD=X 1.268 -0.0029 -0.23% FXE 126.33 -1.43 -1.12% ^STOXX50E 2,338.01 -7.84 -0.33% FEZ 29.06 -0.57 -1.92% GCF12.CMX 1,632.40 -14.90 (-0.90%) GLD 159.26 -1.12 -0.70% IAU 15.97 -0.11 -0.68% GDX 54.05 -0.67 -1.22% AUY 15.68 -0.12 -0.76% GOLD 108.83 -2.03 -1.83% FNV 39.90 -0.40 -0.99% FXI 36.74 -0.10 -0.27% HGF12.CMX 3.597 -0.05 (-1.29%) COPX 13.91 -0.12 -0.86% CU 31.45 -0.33 -1.04%

Signals JP Morgan Earnings Highlight a Major Challenge for All Big Banks

Signals One of the hottest stocks in the land is limping into a long weekend this morning after earnings failed to impress investors, not only casting a shadow over JP Morgan (JPM), but stoking concerns about the entire Financial sector. Officially, JP Morgan's fourth quarter net income fell 23% to $3.7 billion, or $0.90 per share. While that met expectations, the biggest U.S. bank by assets stumbled on the revenue side, with a 9.6% decline that fell nearly a billion dollars short of estimates. 'They barely got over a very low bar,' says Charles Smith, CIO of Fort Pitt Capital and manager of the Fort Pitt Capital Total Return Fund (FPCGX), pointing out that the EPS estimate had come down about 20% in the past month alone. 'Their revenue growth was very weak,' he says, particularly at the investment bank were the top line shrank 30%. 'The fact that he (CEO Jamie Dimon) said he was proud of an 11% ROE is really telling,' Smith says in the attached clip, adding that revenue growth is going to be tough for all the universal banks. He believes slow revenue growth and shrinking ROE's (Return On Equity) is going to be the theme for the other big banks, many of which report results next week: Citigroup (C) and Wells Fargo (WFC) on Tuesday, Goldman Sachs (GS) on Wednesday, and Bank of America (BAC), Morgan Stanley (MS) and American Express (AXP) on Thursday. Another reason for the poor reaction is simply because JPM and the broader Diversified Financials Industry have become market leaders, after shedding 25% and finishing in the bottom of the pack for 2011. Even though 85% of analysts who follow JP Morgan rate it a ''buy'' with an average price target of $45, Smith is not interested. 'There's going to be a continued opaque nature for these earnings reports going out at least another year,' he says, adding that things like ongoing expenses for mortgage litigation and write downs will continue to muddy up the results. To be fair, while the 4th quarter numbers appear to reflect a ''very weak December,'' the powerful earnings story of the full year cannot be ignored, where JP Morgan netted a record $19 billion profit for 2011. Have the recently re-heated bank stocks gotten ahead of themselves or can they recover and resume their trek higher? Feel free to reach out to us on our Facebook page, on Twitter @MattNesto or @JeffMacke, or in the comment section below. Related Quotes: XLF 13.81 -0.11 -0.75% JPM 35.92 -0.93 -2.52% GS 98.96 -2.25 -2.22% BAC 6.61 -0.18 -2.65% MS 16.63 -0.54 -3.15% C 30.74 -0.86 -2.72% WFC 29.61 0.00 0.00% AXP 49.76 +0.11 +0.22% ^BKX 43.44 -0.17 -0.39%

Forex Bloomberg exec in talks to run New Corp's Dow Jones

Forex Bloomberg exec in talks to run New Corp's Dow Jones RELATED QUOTES Symbol Price Change NWSA 18.88 +0.06 TRI.TO 27.80 -0.14 APKN.PK 0.012 0.00 TRI 27.82 -0.10 (Reuters) - Rupert Murdoch's News Corp is in 'serious talks' to poach veteran Bloomberg LP executive Lex Fenwick to run its Dow Jones publishing business, which houses the Wall Street Journal, according to two people familiar with the discussions. Fenwick, who founded Bloomberg Ventures in 2008, was previously chief executive of Bloomberg LP, taking over from the company founder Michael Bloomberg in December 2001. Wall Street Journal reported news of the talks earlier on Friday. The top job at Dow Jones has been vacant since last July when then-Publisher and Chief Executive Les Hinton resigned in the wake of the phone-hacking scandal at News Corp's UK newspaper unit, which had previously run. Hinton told a UK parliamentary inquiry in 2009 that any problem with phone hacking at the company's papers was limited to one case. It was later revealed that thousands of ordinary people and celebrities had been the victims of the voice mail hacking. Hinton, who worked with News Corp for 52 years, was perhaps Murdoch's closest associate. Bloomberg and Dow Jones compete with Thomson Reuters. (Reporting By Yinka Adegoke; Editing by Steve Orlofsky)

Oil Greece, creditors laboriously piece together debt deal

Oil Greece, creditors laboriously piece together debt deal ReutersReuters – 1 hour 26 minutes ago Companies: Thomson Reuters Corporation RELATED QUOTES Symbol Price Change TRI 27.82 -0.10 By Renee Maltezou and Lefteris Papadimas ATHENS (Reuters) - Greece and its private creditors head back to the negotiating table on Saturday to put together the final pieces of a long-awaited debt swap agreement needed to avert an unruly default. After weeks of muddling through round after round of inconclusive talks, the negotiations appear to be in their final phase, with both sides hoping to secure a preliminary deal before Monday's European Union summit. Prime Minister Lucas Papademos was expected to meet bankers' chief negotiator Charles Dallara at around 1330 GMT (8:30 a.m. EST) on Saturday, before meeting inspectors from the 'troika' of foreign lenders pressing Athens to step up painful reforms. 'Today will be another tough day,' said George Karatzaferis, leader of the far-right LAOS party, one of three parties in Papademos's emergency coalition government. 'We will see whether we can bear the burden that lies ahead.' The debt swap, in which private creditors are to take a 50 percent cut in the nominal value of their Greek bond holdings in exchange for cash and new bonds, is a prerequisite for the country to secure a 130-billion-euro rescue package. Papademos told Reuters in an interview on Friday he expected the debt talks to be concluded within days. 'We made significant progress over the last few weeks and in the last few days in particular. We are trying to conclude the discussions as quickly as possible. I am quite optimistic an agreement will be reached in the coming days,' he said. But concern has grown that the deal may not do enough to get the country's debt reduction plan back on track, and that Greece's European partners will be forced to stump up funds to cover the shortfall. The German news magazine Der Spiegel reported on Saturday that Greece's international lenders thought Athens would need 145 billion euros of public money from the euro zone for its second bailout rather than the planned 130 billion euros. The magazine said the extra money was needed because of the deteriorating economic situation in Greece, echoing a Reuters report on Thursday. Athens also faces problematic talks with the 'troika' of foreign lenders - the European Commission, IMF and European Central Bank - who have warned it needs to do more to drive through painful reforms before they dole out any more money. 'It's all very dense, difficult and crucial,' a Greek finance ministry official said. 'There is optimism because the country needs to survive and we need to protect its citizens because they have suffered a lot.' Athens and its creditors have broadly agreed that new bonds under the swap would probably have a 30-year maturity and a progressive interest rate. The deal is aimed at chopping 100 billion euros off Greece's crushing 350-billion-euro debt load. But they have wrangled for weeks over the interest rate Greece must pay on the new bonds and pressure has grown in recent days on the European Central Bank and other public creditors to accept a cut in the value of their Greek bond holdings like the private sector creditors. A debt deal must be sealed in about three weeks as Greece has to repay 14.5 billion euros of debt on March 20. Otherwise Greece will sink into an uncontrolled default that might spread turmoil across the euro zone. Papademos promised on Friday this would not happen. 'Greece will not default,' he said. International Monetary Fund Managing Director Christine Lagarde said on Saturday that euro zone members were making progress to overcome their crisis but must do more to strengthen their financial firewall, adding that the IMF was ready to help. 'There is progress as we see it,' Lagarde told a panel discussion at the World Economic Forum in Davos. 'But it is critical that the euro zone members actually develop a clear, simple, firewall that can operate both to limit the contagion and to provide this sort of act of trust in the euro zone so that the financing needs of that zone can actually be met.' Senior euro zone officials have expressed optimism on the Greek debt deal, though previous predictions of an imminent agreement have failed to become reality. Greece is in its fifth year of recession, and hopes of an end to the crisis in the near term have virtually gone, because of the combination of squabbling politicians, rising social anger and its inability to get its debt load under control. Germany is pushing for Greece to relinquish control over its budget policy to European institutions as part of discussions over a second rescue package, a European source told Reuters on Friday. Greece said such a move was out of the question, adding that a similar proposal had been made in the past by a Dutch minister without getting anywhere. 'There is no way we would accept such a thing,' a Greek government official told Reuters. (Additional reporting by Renee Maltezou, Writing by Deepa Babington; editing by Tim Pearce)

Signals Bloomberg exec in talks to run New Corp's Dow Jones

Signals Bloomberg exec in talks to run New Corp's Dow Jones RELATED QUOTES Symbol Price Change NWSA 18.88 +0.06 TRI.TO 27.80 -0.14 APKN.PK 0.012 0.00 TRI 27.82 -0.10 (Reuters) - Rupert Murdoch's News Corp is in 'serious talks' to poach veteran Bloomberg LP executive Lex Fenwick to run its Dow Jones publishing business, which houses the Wall Street Journal, according to two people familiar with the discussions. Fenwick, who founded Bloomberg Ventures in 2008, was previously chief executive of Bloomberg LP, taking over from the company founder Michael Bloomberg in December 2001. Wall Street Journal reported news of the talks earlier on Friday. The top job at Dow Jones has been vacant since last July when then-Publisher and Chief Executive Les Hinton resigned in the wake of the phone-hacking scandal at News Corp's UK newspaper unit, which had previously run. Hinton told a UK parliamentary inquiry in 2009 that any problem with phone hacking at the company's papers was limited to one case. It was later revealed that thousands of ordinary people and celebrities had been the victims of the voice mail hacking. Hinton, who worked with News Corp for 52 years, was perhaps Murdoch's closest associate. Bloomberg and Dow Jones compete with Thomson Reuters. (Reporting By Yinka Adegoke; Editing by Steve Orlofsky)

Earn Obama seeks power to merge agencies

Earn WASHINGTON (AP) -- President Barack Obama on Friday took aim at his government's own messy bureaucracy, prodding Congress to give him greater power to merge agencies and promising he would start by collapsing six major economic departments into one. Pressing Republicans on one of their own political issues, Obama said it was time for an 'effective, lean government.' Obama wants the type of reorganizational authority last held by a president when Ronald Reagan was in office. Obama's version would be a so-called consolidation authority allowing him to propose only mergers that promise to save money and shrink government. The deal would help Obama considerably by entitling him to an up-or-down vote from Congress in 90 days. Still, final say would remain with lawmakers, both on whether to grant Obama this fast-track authority and then in deciding whether to approve any of his specific ideas. 'We can do this better,' Obama declared in an event with business owners at the White House, even presenting slides to help make his case. 'So much of the argument out there all the time is up at 40,000 feet, these abstract arguments about who's conservative or who's liberal,' Obama said. 'Most Americans — and certainly most small business owners — you guys are just trying to figure out how do we make things work, how do we apply common sense. And that's what this is about.' In an election year and a political atmosphere of tighter spending, Obama's move is about more than improving a giant bureaucracy. He is attempting to directly counter Republican arguments that he has presided over the kind of government regulation, spending and debt that can undermine the economy — a dominant theme of the emerging presidential campaign. Republicans have often aligned themselves with smaller government. So politically, Obama is trying to put the onus on Republicans in the House and Senate to show why they would be against the pursuit of leaner government. From Capitol Hill, a spokesman for Sen. Mitch McConnell of Kentucky, the top Republican in the Senate, pledged Obama's plan would get a careful review. But the spokesman, Don Stewart, also said: 'After presiding over one of the largest expansions of government in history, and a year after raising the issue in his last State of the Union, it's interesting to see the president finally acknowledge that Washington is out of control.' Obama has an imperative to deliver. He made the promise to come up with a smart reorganization of the government in his last State of the Union speech last January. At the time, Obama grabbed attention by pointing out the absurdity of government inefficiency. In what he called his favorite example, Obama said: 'The Interior Department is in charge of salmon while they're in fresh water, but the Commerce Department handles them when they're in saltwater. And I hear it gets even more complicated once they're smoked.' The White House said the problem is serious for consumers who turn to their government for help and often do not know where to begin. Not in decades has the government undergone a sustained reorganization of itself. Presidents have tried from time to time, but each part of the bureaucracy has its own defenders inside and outside the government, which can make merger ideas politically impossible. That's particularly true because 'efficiency' is often another way of saying people will lose their jobs. Obama hopes to enhance his chances by getting Congress to give him the assurance of a clean, relatively speedy vote on any of his proposals. There is no clear sign that Obama would get that cooperation. He spent much of 2011 in utter gridlock with Republicans in Congress. In the meantime, Obama announced Friday that Karen Mills, the administrator of the Small Business Administration, would be elevated to Cabinet-level rank. But her job would essentially disappear if Obama has his way. If he gets the new fast-track power to propose legislation, Obama's first project would be to combine six major operations of the government that focus on business and trade. They are: the Commerce Department's core business and trade functions; the Small Business Administration; the Office of the U.S. Trade Representative; the Export-Import Bank; the Overseas Private Investment Corporation; and the Trade and Development Agency. The goal would be one agency designed to help businesses thrive. The White House says 1,000 to 2,000 jobs would be cut, but the administration would do so through attrition; that is, as people routinely leave their jobs over time. The administration said the merger would save $3 billion over 10 years by getting rid of duplicative overhead costs, human resources divisions and programs. The name and potential secretary of the new agency have not been determined. The point, the White House says, is not just making the government smaller but better by saving people time and eliminating bureaucratic nightmares. The idea for the consolidated business agency grew out of discussions with hundreds of business leaders and agency heads over the last several months. Brendan Buck, a spokesman for House Speaker John Boehner, R-Ohio, said streamlining government was always a potentially good idea but expressed wariness about whether Obama's plan would really help business. 'American small businesses are more concerned about this administration's policies than from which building in Washington they originate,' Buck said. 'We hope the president isn't simply proposing new packaging for the same burdensome approach.' According to the White House, presidents held such a reorganizational authority for about 50 years until it ran out during Reagan's presidency in 1984. Obama has a series of other ideas about consolidating departments across the government, to be rolled out later.

Earn Etisalat eyes mobile remittances in Gulf

Earn Etisalat eyes mobile remittances in Gulf Companies: AFN RELATED QUOTES Symbol Price Change AFN 0.00 0.00 Related Content A man walks past a sign at the headquarters of telecommunications company Etisalat in Dubai October 25, 2011. REUTERS/Jumana El HelouehView Photo A man walks past a sign at the headquarters of telecommunications company Etisalat in Dubai October 25, 2011. REUTERS/Jumana El Heloueh By Matt Smith DUBAI (Reuters) - UAE telecoms operator Etisalat (ABD:ETISALAT), which saw $1.8 billion moved over its network last year via money transfers, has sought regulatory approval to expand its financial services offerings in the Gulf region, home to millions of expatriates. Mobile money services allow customers to pay bills or make remittances using SMS text messages, often at a cheaper cost than through banks or money transfer firms. 'Remittances are a huge business opportunity,' George Held, director of products and services at Etisalat, told Reuters. 'The cost base for telecoms operators is much different than for banks and exchange houses. We do not need bricks and mortar branches, so our costs are lower and we can pass on this saving and offer better exchange rates and transaction fees.' The former monopoly was expected to focus on its home market and Saudi Arabia. Both countries have large expat populations and inbound annual remittances were worth about $36 billion combined in 2010, Held said. About 89 percent of the UAE's 8.3 million population are expatriates, while in Saudi Arabia just over a fifth of the 27 million population are foreigners. Etisalat's Egypt unit could also profit from an estimated $8 billion of inbound remittances from Egyptians working abroad. Etisalat has tied up with Western Union and MoneyGram International to allow money sent by mobile customers in the Middle East to be collected anywhere in the world. Aside from remittances, the operator hopes to offer salary payments, peer-to-peer domestic funds transfers and utility and shop payments. 'Remittances will be an extremely important part of our mobile money services. But it is not enough alone to drive service adoption, so we will offer a mix of services to make it very hard for customers not to get involved,' said Held. Etisalat already offers some of these services in six countries, including Afghanistan, Pakistan, Sri Lanka and Tanzania and plans to expand this to the 17 countries in which it operates in Asia, Africa and the Middle East. 'We want to introduce mobile money in the rest of our markets as soon as possible. It is not a technical issue, but ticking all the boxes from a regulatory, compliance and customer education point of view,' Held said. LESS MONEY, MORE LOYALTY Mobile money has taken off in parts of Africa, where a minority of people hold bank accounts and the banking infrastructure in rural areas remains limited. About 8 percent of Tanzania's gross domestic product is thought to go through mobile banking. Text-based financial services will not help stem a decline in global SMS revenues - seen dropping up to 40 percent over the next three years as users opt for alternative text services such as BlackBerry Messenger or WhatsApp - but it can improve customer loyalty. 'When people have a mobile wallet ... we believe they will stay with us for a long time,' Held said. 'When was the last time you changed your bank account?' Etisalat will face challenges in convincing customers in the Gulf region, who have easy access to banking and exchange houses, to switch. 'In this region, people are used to going to the bank for transactions - they like to get a receipt. It is not a game-changer for telecom operators' revenues,' said a regional telecoms analyst. Pedro Oliveira, partner at consultant Oliver Wyman, said telecoms operators face a tough task competing with conventional exchange houses. 'Low income workers in the Gulf count every penny. So, it is not convenience that matters, but cost,' he said. 'For expats with prepaid contracts wanting to send money home, they would have to buy prepaid cards to top up their phone balance and then send a text.'

Signals SEC probes exchanges and electronic trading firms ties

Signals SEC probes exchanges and electronic trading firms ties (Reuters) - The U.S. Securities and Exchange Commission has launched a probe into the ties between stock exchanges and certain electronic trading firms, the Wall Street Journal reported on Saturday, citing people familiar with the matter. BATS Global Markets Inc, a U.S. exchange operator that is planning an initial public offering, said in a government filing cited by the Journal that it got a request from the U.S. regulator's enforcement division for information on the use of order types and its communications with certain market participants. The SEC also asked BATS for details about its information technology systems and trading strategies, the filing said. The inquiry also was examining communications BATS has with certain members affiliated with certain stockholders and directors, the paper reported. (Reporting By Debra Sherman in Chicago; Editing by Eric Beech)