January 28, 2013 Update

DJIA:13,895 NASDAQ:3,149 10-YR TRS: 29/32, yield 1.947% Oil:$ EURO:$1.3459 YEN:90.87

Domestic News

• Market Update The futures remain unchanged as investor uncertainty about the federal budget, today’s round of earnings and robust economic calendar. 
• The orders for durable goods for December will be released at 8:30am and is expected to has have climbed by 2%, showing U.S. manufacturing stabilization after a mid-year slump.

International Updates

Europe

• Market Update The U.K. benchmark stock index is trading in a tight spread as the retail sector trends lower after a broker downgrade, banks are in the lead. Overall, the European stock markets are fighting for direction with heavyweight oil firms adding pressure. 

Asia

• Market Update Asian markets are mostly trading up after a corporate-results-driven rally on Wall Street and amid a positive earnings outlook for Chinese firms. However, Japanese stocks fall from near three-year highs as investors are pulling out of the market and taking profits. 
• The government of Japan has estimated that GDP will increase by 2.5% for the fiscal year beginning in April, which is bullish compared to its previous forecast of 1..8% growth. Strong export outflows and higher government capital spending are expected to be drivers. 
• China's state-run news agency has reported that in an effort to keep up with the high demand for smart phone, Samsung (SSNLF.PK) will invest $1.7B in its plant in the Jiangsu Province. The investment will go to equipment and research for chip projects.

Corporate

• As a result of David Cameron’s negative commentary, Starbucks (SBUX) has decided not to invest the $158M that was meant for the U.K.
• General Motors (GM) CEP Dan Akerson has indicated that GM will consider other joint venture partners in emerging markets outside of SAIC. It is rumored that GM and PSA Peugeot may look for new partners in Russia and Latin America.
• Apple (AAPL) was cut to neutral from outperform by Baird with a target price of $465.
• Boeing (BA) could face $5B in revenue from the 787 dilemma. 
• Earnings: 

On the Ackman Brawl

Someone who knows nothing about the Herbalife deal and had only been exposed to Icahn’s account on CBNC would have believed “Ackman is a liar... (and) the crybaby in the school yard.” On the other hand, if the same uninformed person had only heard Ackman’s side of the story they would have learned that Icahn is “not an honest guy... (and) takes advantage of the little people.” After listening to the brawl on CNBC, it became apparent that multiple histories in the narrative exist because of the disconnect between Ackman and Icahn’s memory and that of the actual business transaction (or lack of). Ackman claims Icahn did not uphold the promises he was legally bound to. Icahn swears he was not aware of being legally bound to anything. Both believe they have been taken advantage of. Each consider the other a liar. Numbers may be absolute, but the narratives that create them are ambiguous. The truth about the Herbalife deal may never be revealed, but it is important to understand that the two had once been friends. Therefore, because history is incomplete, the real lesson to be learned from this discourse, as Gordon Gekko brilliantly put it, is in this industry “if you need a friend, get a dog.”