January 30, 2013 Update

DJIA:13,954 NASDAQ:3,153 10-YR TRS: 4/32, yield 1.988% Oil:$97.57 EURO:$1.3492 YEN:90.73

Technologically Terrifying

Ray Kurzweil has predicted that within the next thirty-two years the exponential advancement of artificial intelligence will lead to the extinction of the human race. Although this may sound farfetched, consider the devastations technology is responsible for in the short time it has been able to creatively destruct the world. To start: massive job cuts, the encouragement of lazy tendencies, the loss of creative thinking and non-electronic innovation, an increase of technology related health problems, and a reduction of in-person social interaction. At the rate we are progressing, one has to wonder how far humanity will allow technology to advance before robots decide they operate best without us and, because they have been programmed to autocorrect, proceed to annihilate the human race. There is little doubt about the conveniences and luxuries technology provides, but how long will future generations survive and what will their quality of life be like if we continue to let ourselves be creatively destructed at our current exponential pace?

Domestic News

• Market Update. Little changed from uncertainty regarding today’s economic data, earnings, and Federal Reserve Meeting.
• ADP’s January private sector payroll data will be released at 8:15am, and is forecast to show a growth of 173,000 jobs - which down from December’s 215,000 employee increase. 
• Commerce Department will release Q4 GDP estimates at 8:30am, expected to grow around 1%
• The Fed will announce their policy at 2:15 this afternoon, which will likely to be the continuation of bond buying until further notice. 

International Updates

Asia

• Market Update. Thanks to optimistic economic sentiment, Japanese shares closed at 33-month high, Hong Kong reached a 21-month high, and Australia has had its longest rally since October 2003. 
• Japanese retail sales +0.4% Y/Y in December which is higher than forecast, but lower then November’s +1.2%. 
• Chinese banks rolled over at least 3T yuan ($482B) of 4T yuan in loan plus interest that local municipalities were suppose to have repaid by the end of last year. 

Europe

• Market Update Fighting for direction as market participants remain weary about the Fed’s latest policy decision.
• The Spanish preliminary Q4 GDP is -0.7% Q/Q, which is lower than the expectation of -0.6%. Y/Y GDP is -1.8%, which is also below the 1.7% consensus. 

Corporate

• Rumor is that Michael Dell wants to take Dell (DELL) private by contributing $500-$1B to this $3.6B (15.7%) stake and becoming the biggest stake holder. 
• From May to December, All Nippon Airways replaced 10 lithium-ion batteries on its fleet of Boeing (BA) 787s because of defect. Regulators are now questioning the lithium-ion battery.
• Toyota (TM) is recalling roughly 1.3 million vehicles, including the 2003 and 2004 Corolla Matrix because of faulty airbags and the 2006 Lexus CS due to problematic front wipers.  
• Earnings: