Good morning. Here's what you need to know.
- Asian markets were mixed in overnight trading with the Nikkei up 0.72 percent. Meanwhile, the Karachi Stock Exchange plunged after its Supreme Court ordered the arrest of prime minister Raja Pervez Ashraf. Europe is mixed and U.S. futures are modestly lower as concerns build over the debt ceiling.
- The yen strengthened last night after Japan's economy minister Akari Amari warned that import prices would surge on excessive yen weakness. Societe Generale's Kit Juckes wrote, "official comments on policy and the currency have been one-way traffic – weakening the yen – since the elections last month. I suspect that thee is near-unanimity in the market that the yen has fallen too far, too fast, but also enthusiasm to sell into corrections such as this."
- The debt ceiling debate continues to heat up. President Obama has said that he sees no alternative to raising the debt ceiling and Congress would be "irresponsible" not to do so. Some analysts have said a government shutdown should be assumed. Meanwhile, Fitch warned that the failure to raise the debt ceiling will prompt a downgrade of U.S. credit rating even if debt payments are made. Goldman: Hide your kids, the sequester is coming >
- Homebuilder Lennar Corp. beat expectations when it reported Q4 net income of $124.3 million or $0.56 per share, against estimates for $0.45 per share. Revenue increased 42 percent to $1.35 billion.
- The German economy contracted 0.5 percent in the fourth quarter, according to a preliminary estimate by the Federal Statistics Office. Growth is said to have slowed to 0.7 percent in 2012, from 3 percent in 2011.
- PPI and retail sales for December are out at 8:30 a.m. ET. Consensus is for PPI to decline 0.1 percent month-over-month (MoM) and for retail sales to rise 0.2 percent MoM. Follow the release at Money Game >
- Facebook shares are up in pre-market trading ahead of its mysterious event at its Menlo Park, California headquarters at 10 a.m. PT.
- Lulemon's shares were down 7 percent in after hours trading after the company revised its financial guidance. It now expects Q4 net revenue in the high end of its $475 million to $480 million range, which is below the $489 million analysts are looking for. This presentation will have you convinced that stocks are going sideways for a decade >
- The Empire State manufacturing survey for January is out at 8:30 a.m. ET, followed by business inventories for November at 10 a.m. ET. Consensus is for the general business conditions index to rise to 0 and for inventories to rise 0.3 percent MoM. Follow the release at Money Game >
- UK consumer prices were up 2.7 percent year-over-year in December, the same rate as the October and November. Rising electricity and gas prices kept inflation above the Bank of England's 2 percent target.
- Bonus - Complex magazine created seven covers of Rihanna to celebrate her seventh album.
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