TradeTheNews.com US Market Update

Dow +47 S&P -4 NASDAQ -8
***Economic data***
- (CA) Canada Dec Consumer Price Index M/M: -0.6% v -0.2%e; Y/Y: 2.3% v 2.7%e; CPI Index: 120.2 v 120.8e
- (CA) Canada Dec CPI Core M/M: -0.5% v -0.2%e; Y/Y: 1.9% v 2.2%e
- (PL) Poland Dec Core Inflation M/M: 0.2% v 0.2%e; Y/Y: 3.1% v 3.0%e
- (CA) Canada Nov Wholesale Sales M/M: -0.4% v +0.5%e
- (US) Dec Existing Home Sales: 4.61M v 4.65Me
- (MX) Mexico Central Bank leaves the Overnight Rate unchanged at 4.50%; As expected

- US equity markets are cautious this morning, struggling to overcome headwinds that include some flawed quarterly reports. The Nasdaq is in the red, weighed down by results from Google, while IBM's positive result is helping the DJIA overcome GE's issues. There were no surprises in the December existing home sales report as the gradual positive trend continues. The dip in mortgage applications at the end of 2011 raises the possibility that the rebound could pause in January. The euro retraced the weakness seen over the last two sessions overnight. Crude has fallen two bucks this morning after the major powers were said to be planning to issue statement later today on the resumption on nuclear talks with Iran, as both sides seek to step back from the confrontational stance seen over recent weeks. Treasury yields are drifting higher once again with the 10-year now bumping up against 2%.

- Investors dumped shares of Google yesterday after the close, following the firm's big earnings miss in its Q4. Google's results were hurt by unfavorable FX rates, increased spending levels, changes to ad formats and the sale of more mobile ads, which cost less. Overnight a financial press article pointed out that while paid clicks rose 34% y/y, the average amount paid by advertisers fell 8% y/y in the quarter. Note that old-line tech giants IBM, Intel and Microsoft all topped expectations and reported solid results in their Q4s. IBM's software revenue was up 9% as most of its key products saw growth, while services units saw 3% revenue growth. Microsoft saw lower PC-related sales, in line with the industry, however this was more than offset by robust gains in its server and entertainment divisions. Intel offered in line revenue guidance for Q1, and also said that its margins would be considerably higher on a y/y basis. IBM and MSFT are up 4% a piece, INTC is up 2%, while GOOG remains down 8%. Following its bankruptcy filing yesterday, Eastman Kodak's advisors said the firm's intellectual property assets are worth $2.2-2.6B.

- General Electric missed revenue expectations in its Q4, which executive blamed on slower growth in Europe, FX issues and some lower investment levels at GE Capital. GE's FY12 profit guidance was unchanged, however the firm warned that revenue would be slightly lower than its prior forecast. CEO Immelt had good things to say about the firm's key energy and GE Capital units, but warned that he expects continued volatility in 2012 and restructuring in the Europe business. Oil services leader Schlumberger modestly topped consensus estimates, on very strong growth in oilfield services revenue. The company said that the deepwater Gulf of Mexico rig count would continue to increase steadily and reach a pre-Macondo level by late 2012. In other news, paper and packaging firm Sonoco cut its Q4 guidance considerably thanks to declining volumes in both the US and Europe.

- In the financial sector, American Express was more or less in line with expectations in its Q4, with steady card services revenue. On the conference call, AmEx executives warned that consumers continue to be cautious on taking more credit card debt. SunTrust Bank also just met consensus targets, on modes growth. Like other conventional banks, it reported continuing improvement in credit quality and healthy loan and deposit growth.

***Looking Ahead***
- (GR) EU/IMF/ECB Troika chiefs to arrive in Athens
- (MX) G20 Vice Finance Ministers meet in Mexico City
- 14:00 (AR) Argentina Nov Economic Activity Index M/M: No est v 0.3% prior; Y/Y: 7.5%e v 8.1% prior
- 16:00 (CO) Colombia Nov Trade Balance: $60Me v $103.2M prior
- 18:00 (IT) Italy PM Monti visits Tripoli, Libya

***Saturday***
- (US) Republican South Carolina Primary

***Sunday***
- (FI) Finland holds first round of Presidential Elections
- (DE) German Chancellor Merkel to meet IMF Lagarde

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