FT : Global steel industry set for recovery

Global steel industry set for recovery

The global steel industry is expected to make a recovery this year led by a rebound in Europe and the rest of the world, offsetting a slowdown in Chinese growth.
World production of steel will rise by 3.6 per cent in 2014, with growth finally returning to Europe after bottoming out last year, according to a Financial Times poll of 15 steel analysts.

A 2.4 per cent year-on-year increase in output in Europe, following six years of decline, will partly offset a slowdown in China as the world’s biggest steel producer moves from an investment to a services-driven economy.
Chinese steel production is expected to rise year-on-year by just 4 per cent, compared with about 6 per cent in 2013, according to top steel analysts.
Matthew De Morgan, chief executive officer of Duferco, the world’s biggest steel trader, said: “The steel sector will have a better 2014 in terms of volumes and we are past the bottom from this perspective, but the pricing outlook is not spectacular.”
The research supports forecasts by the World Steel Association that growth rates for Chinese steel output will drop below the rest of the world for the first time since 2006. The industry body expects world steel production excluding China to rise by 3.5 per cent year on year, surpassing growth of 3 per cent in China. Overall global growth last year was 3.1 per cent.
John Lichtenstein, global managing director of Accenture’s metals industry group, said: “This pattern will probably persist for the indefinite future as China shifts to a services and consumer-driven economic growth model, and growth in the other emerging economies takes stronger hold.”
The bulk of new steel production capacity growth is instead expected to come from regions such as India, the Gulf, Latin America and former Soviet states over the next few years, according to Brian Levich of Metal Bulletin Research.
The pick-up in European output will provide a boost to companies’ earnings, particularly Europe-based steelmakers such as ArcelorMittal and ThyssenKrupp, which have been hit by weak demand on the continent in the construction and car industries.
In recent months, steel companies have become more optimistic on the outlook. In November, Lakshmi Mittal, chief executive of ArcelorMittal, said it had passed the bottom of its two-year slump, while Tata Steel also noted modest improvements.
“All the indicators are moving in a positive direction; therefore, we are cautiously optimistic about the prospects for 2014,” said Mr Mittal, the Indian billionaire.
But top steel analysts warned there remained significant problems in the steel sector that would continue to weigh on profits and prevent a full recovery.
Seth Rosenfeld, analyst at Jefferies, said the industry remained “structurally impaired” by significant excess production capacity and low pricing power.
“Following years of demand destruction, a key risk for 2014 is that steelmakers may be too aggressive in restarting idled capacity in an effort to capitalise on current strength and take market share,” he said. “Should this happen, volumes may pick up but prices will remain depressed.”
While analysts foresee a strengthening of the recovery in steel output, they are far from predicting a return to the days of rapid global growth seen before the financial crisis.
World steel output between 2003 and 2007 rose more than 6 per cent a year for six years in a row, driven by a surge in production and consumption in China. Between 2000 and 2012 the country tripled its share of world steel output from 15 per cent to 46 per cent.

FT : Khodorkovsky release sparks Yukos legal speculation

Khodorkovsky release sparks Yukos legal speculation

When Leonid Nevzlin, the former business partner of Mikhail Khodorkovsky, met the one-time Russian tycoon after his release from prison, he says the two men spoke “about the kids, the weather and other pleasant things”.
Since Russian president Vladimir Putin allowed Mr Khodorkovsky to be freed last month after ten years behind bars on charges of fraud and money laundering, speculation has mounted over whether Russia’s one-time richest man will be able to regain some of his wealth, and what his role may be in the proliferating legal battles over the remainders of the business empire that the Russian government removed from him.
Mr Nevzlin is one of those best-placed to know. In 2005, Mr Khodorkovsky transferred his majority stake in Menatep, the holding company which controlled his Yukos Oil group, to his fellow investor who had already fled to Israel.
After Mr Khodorkovsky’s arrest, Russian authorities started investigating Yukos for tax evasion and eventually placed the group into bankruptcy in 2007 and sold its Russian assets off to competitors, mainly state oil firm Rosneft.
But Yukos’ assets outside Russia remain beyond the control of the Russian state under two Dutch-registered protective foundations. Former Yukos managers who run those are also fighting a host of lawsuits in the European Court of Human Rights, the Netherlands and other jurisdictions over damages from the forced expropriation of the group and to defend the remaining assets against attempts from Rosneft to gain control.
The mushrooming litigation has been a constant thorn in the side of Rosneft. Only last Thursday, a New York court ordered Samaraneftegaz, a former Yukos subsidiary now owned by Rosneft, to turn over assets to the US to satisfy a judgment to pay Yukos Capital – a company under the Dutch foundations – US$186m and restrained it from transferring assets to either shareholders or affiliates. Samaraneftegaz has been refusing to pay the damages ever since 2007. The rare order amounts to an attempt to temporarily block dividends to Rosneft from this affiliate.
The US$186m is just one small part of a total of up to US$2.5bn in claims, according to Bruce Misamore, the former Yukos chief financial officer who helps run the foundations. So far, US$485m has been collected, and all other claims are either in some stage of litigation or may be submitted in the future.
The foundations also have in excess of US$1.2bn in cash from the sale of two former Yukos overseas assets. Eventually, this money should be distributed to former shareholders, who are believed to total as many as 55,000.
But this year, the Yukos managers who manage the assets have their eyes set on a much bigger prize: they are waiting for a ruling from the European Court of Human Rights on a claim related to the Yukos bankruptcy potentially worth in the tens of billions of dollars. Some suggest it is closer to the value that was placed on Yukos by analysts and economists at the time of liquidation, frequently stated as between US$40bn and US$60bn. Rosneft is defending the action.
Separately, Gibraltar-registered Menatep, now called GML, is awaiting a ruling in an arbitration under the Energy Charter Treaty in The Hague over a US$100bn claim against the Russian Federation.
Mr Nevzlin, who was unavailable to comment to the FT, told Russian media that Mr Khodorkovsky would have nothing to do with any of these claims – in line with the former Yukos chief’s assurances to Mr Putin that he would not fight for his former assets after regaining freedom.
In an interview with independent TV channel Dozhd aired late on Friday, Mr Nevzlin said Mr Khodorkovsky had “severely rebuffed” his attempt to inform him about the group’s finances. “He is not interested in this. Therefore we did not succeed to talk about business and finances with him,” Mr Nevzlin said. “It has become clear that as far as the management of the group by the trusts is concerned, I will continue to do that.”
The Russian newspaper Novaya Gazeta quoted Mr Nevzlin as saying that the transfer of Mr Khodorkovsky’s shares to him was irreversible.
But some of the conspiracy theories traded in Russia since Mr Khodorkovsky’s release see the tycoon as not only not fighting for his former wealth, but speculate he could try to make a deal with Mr Putin to settle the court case in The Hague in exchange for the release of Platon Lebedev, his other former partner, and Aleksey Pichugin, another former Yukos official, who are still in prison in Russia.
A ruling against the Russian state in the world’s largest-ever arbitration case in The Hague “would have a monstrous impact on the Kremlin regime and on Vladimir Putin personally – from a legal, reputational and also from a financial perspective,” said Andrey Illarionov, a former economic adviser to Mr Putin, in his blog. The date for a ruling has been postponed. “We had expected it early this year but were recently notified that it will now come before the end of the first half – so I expect it in June,” said Tim Osborne, the GML director who heads the case.
Mr Khodorkovsky’s partners fiercely reject the idea that the claim in The Hague could be withdrawn. “The group under the leadership of Tim Osborne intends to fight for victory in that process and fight for compensation from the Russian Federation no matter what,” said Mr Nevzlin in the Dozhd interview. “First and foremost, the group needs to win the case. If the case is won and damages are awarded, then one will be able to talk about things.”

FT : Turkey clamps down on internet as Erdogan tightens grip on power

Turkey clamps down on internet as Erdogan tightens grip on power

Turkey is seeking to increase control over internet access at a time when the government is also tightening its grip on the country’s legal institutions in response to a corruption scandal.
A legislative proposal put forward by the ruling AK party would give the transport and communication minister the power to block websites deemed to infringe privacy, as well as compelling internet service providers to retain information of their customers movements on the net.

The measure, attached to an omnibus bill, increasing its chances of passage, would also require ISPs to restrict access to proxy sites, which can allow users to circumvent censorship.
Turkey already has internet filters intended to protect children and made 1,673 requests for Google to remove material from the web in the first six months of last year – more than three times any other country – although most of its requests were turned down.
But some critics have alleged that the legislative initiative is part of a general trend in which the government of Recep Tayyip Erdogan, prime minister, is concentrating more power in the wake of a corruption investigation that has targeted a host of figures connected to the government, including four former ministers and Mr Erdogan’s own son, Bilal.
“These are politically motivated measures to curb the free flow of information on the internet even further in Turkey,” said Yaman Akdeniz, a law professor at Istanbul’s Bilgi University. “Looking at the current political climate, it is primarily for controlling the leaking of videos and WikiLeaks kind of documents.”
Last week, the government proposed legislation that would increase the justice ministry’s powers over the council that supervises Turkey’s judges and prosecutors - a move that the council’s acting chairman said, on behalf of a majority of its members, was unconstitutional and violates the separation of powers. Violence broke out at a discussion of these measures on Saturday, with a ruling party MP aiming a kick at a senior judge’s head. On Sunday, Mr Erdogan criticised the judge who was attacked in the brawl, calling him not a lawyer but a “militant”.
The government has also removed hundreds of police officers from their posts in the weeks since the corruption inquiry began on December 17. Mr Erdogan has attacked the probe as a “judicial coup” and a “modern coup, staged by friends” – a reference to the movement of Fethullah Gulen, a preacher and former ally who has broken with the AKP and has many followers in the police, prosecution service and judiciary.
While AKP officials says Gulenists in Turkey’s legal institutions are using the investigation as part of a feud against Mr Erdogan, the massive shifts of personnel in the police and among the prosecutors handling the case have made it harder for it to progress or for new lines of inquiry to be opened.
With hostilities intensifying between the AKP and the Gulenists, expectations had been growing that further revelations of alleged corrupt behaviour could be leaked on the internet. In recent years, a number of recordings involving high profile figures in Turkish public life have mysteriously appeared on the web.
However, the new legislative proposal on the internet could allow the government to shut down access to such videos.
Ankara’s push for greater powers has also raised concerns in Washington and Brussels. “The US supports the desire of the Turkish people for a legal system . . . where no one is above the law and where allegations against public figures are investigated impartially,” said Jen Psaki, state department spokeswoman, last week in the Obama administration’s latest expression of exasperation with Mr Erdogan. “We’ve expressed our concerns about some of the events that are happening directly, publicly and privately, and we’ll continue to do that.”

FT : Beats seeks to unseat Spotify with music service

Beats seeks to unseat Spotify with music service

Beats Electronics, the audio equipment maker started by Jimmy Iovine and Dr Dre, the hip-hop star, has launched a new service with the aim of unseating Spotify as market leader of the nascent music subscription industry.
Beats Music will be available first in the US with other countries, such as the UK, to follow. Backed by music industry heavyweights and a group of billionaires that includes Len Blavatnik and James Packer, it has also struck a partnership with AT&T, to offer “family plan” subscriptions to the telecom operator’s customers.
The launch comes as competition heats up in music subscription, with Google-owned YouTube working on a paid and advertising-supported service, which is likely to launch this year.
Beats Music said its service would be more personalised than rival offerings, with data analysis and playlists from top artists helping subscribers discover new music. “The future of media is all about curation by trusted sources,” said Ian Rogers, Beats Music chief executive.
Unlike Spotify and YouTube, Beats will have no ad-supported free service. “We think you should pay for music,” said Mr Rogers. The design of the service reflected the shift to mobile music consumption, he added. “It was designed first for the mobile, not a [web] browser.”
The service will be available on iOS, Android and Windows phones and will cost $10 a month. AT&T customers will be able up to sign up to five family members to a single $15 a month subscription, similar to its family text message plans. “We know our customers have a big passion for music but there’s an affordability barrier . . . this solves that,” said David Christopher, chief marketing officer of AT&T Mobility.
By launching the new service, Beats hopes to capitalise on the popularity of its headphones and audio devices, which have been a hit with sports stars and musicians. Sales of so-called “premium” headphones have soared since the company launched its first range five years ago and a rash of imitators has joined the market.
The launch of Beats Music comes at a pivotal time for the music industry, which continues to grapple with the transition to digital distribution. US digital music sales declined in 2013 for the first time since the launch of Apple’s iTunes store a decade ago, according to recent data from Nielsen SoundScan.
Some artists, such as Beyoncé, bucked the trend: the singer gave the ailing album format a shot in the arm when she released her latest album as a fixed bundle on iTunes and became the fastest-selling release in the history of Apple’s online store.
But the broader trend is towards subscription services such as Spotify, Deezer and Rdio. A report last year from Nielsen SoundScan found that audio and video streams increased 24 per cent to 50m streams during the first half of 2013 compared with the previous year.
Beats last year sold a $500m equity stake to Carlyle, the private equity group, in a deal that valued the company at more than $1bn.
It also spun out Beats Music, raising $60m from a group of investors, including Mr Blavatnik, who paid $3.3bn for Warner Music in 2011, and Mr Packer, son of the late Australian investor Kerry Packer.
Marc Rowan, a co-founder of Apollo Global Management, the private equity firm; and Lee Bass, a Texan billionaire, have also invested in Beats Music.
Spotify last year raised about $250m in new financing from an early backer of Netflix, valuing the Swedish digital music service at more than $4bn. Technology Crossover Ventures led Spotify’s most recent financing, which came a year after a $100m investment led by Goldman Sachs had valued the company at $3bn.

(ZH) "The S&P500 Is Now Overvalued By Almost Any Measure"

"The S&P500 Is Now Overvalued By Almost Any Measure" {http://bit.ly/1ezfl2b}


"As long as the music is playing, you've got to get up and dance.... We’re still dancing."
- Chuck Prince, July 2007

Late last night the music may have just skipped a major beat after Goldman released a Friday evening note that is perhaps the most bearish thing to come out of Goldman's chief strategist David Kostin in over a year, (and who incidentally just repeated what we said most recently a week ago in "Stocks Are More Expensive Now Than At Their 2007 Peak"). To wit:

S&P 500 valuation is lofty by almost any measure, both for the aggregate market (15.9x) as well as the median stock (16.8x). We believe S&P 500 trades close to fair value and the forward path will depend on profit growth rather than P/E expansion. However, many clients argue that the P/E multiple will continue to rise in 2014 with 17x or 18x often cited, with some investors arguing for 20x. We explore valuation using various approaches. We conclude that further P/E expansion will be difficult to achieve. Of course, it is possible. It is just not probable based on history.
The current valuation of the S&P 500 is lofty by almost any measure, both for the aggregate market as well as the median stock: (1) The P/E ratio; (2) the current P/E expansion cycle; (3) EV/Sales; (4) EV/EBITDA; (5) Free Cash Flow yield; (6) Price/Book as well as the ROE and P/B relationship; and compared with the levels of (6) inflation; (7)
nominal 10-year Treasury yields; and (8) real interest rates. Furthermore, the cyclically-adjusted P/E ratio suggests the S&P 500 is currently 30% overvalued in terms of (9) Operating EPS and (10) about 45% overvalued using As Reported earnings.
Cue David Tepper to bring out even bigger greater fools who do believe in his 20x PE multiple "thesis." Cause if 20x works, why not 40x, or 60x, or moar?

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Kostin's full "market is now overvalued" note:

We believe S&P 500 currently trades close to fair value and the forward path of the market will depend on the trajectory of profits rather than further expansion of the forward P/E multiple from the current 15.9x. We forecast a modest price gain of roughly 3% to our year-end 2014 target of 1900. We expect S&P 500 will climb to 2100 by the end of 2015 and reach 2200 by the end of 2016 representing a gain of 20% over the next three years.

However, many clients argue that the multiple will continue to expand in 2014 leading to another year of strong US equity returns. A forward multiple of 17x or 18x is often cited, with others suggesting 20x is reasonable given the strengthening US economy and low interest rates. Many on the buy-side have year-end 2014 targets between 2000 and 2200 reflecting a price gain of 9% to 20%, well above our more modest projection.

The current valuation of the S&P 500 is lofty by almost any measure, both for the aggregate market as well as the median stock: (1) The P/E ratio; (2) the current P/E expansion cycle; (3) EV/Sales; (4) EV/EBITDA; (5) Free Cash Flow yield; (6) Price/Book as well as the ROE and P/B relationship; and compared with the levels of (6) inflation; (7) nominal 10-year Treasury yields; and (8) real interest rates. Furthermore, the cyclically-adjusted P/E ratio suggests the S&P 500 is currently 30% overvalued in terms of (9) Operating EPS and (10) about 45% overvalued using As Reported earnings.

Reflecting on our recent client visits and conversations, the biggest surprise is how many investors expect the forward P/E multiple to expand to 17x or 18x. For some reason, many market participants believe the P/E multiple has a long-term average of 15x and therefore expansion to 17-18x seems reasonable. But the common perception is wrong. The forward P/E ratio for the S&P 500 during the past 5-year, 10-year, and 35- year periods has averaged 13.2x, 14.1x, and 13.0x, respectively. At 15.9x, the current aggregate forward P/E multiple is high by historical standards.

Most investors are surprised to learn that since 1976 the S&P 500 P/E multiple has only exceeded 17x during the 1997-2000 Tech Bubble and a brief four-month period in 2003-04 (see Exhibit 1). Other than those two episodes, the US stock market has never traded at a P/E of 17x or above.

A graph of the historical distribution of P/E ratios clearly highlights that outside of the Tech Bubble, the market has only rarely (5% of the time) traded at the current forward multiple of 16x (see Exhibit 2).

The elevated market multiple is even more apparent when viewed on a median basis. At 16.8x, the current multiple is at the high end of its historical distribution (see Exhibit 3).

The multiple expansion cycle provides another lens through which we view equity valuation. There have been nine multiple expansion cycles during the past 30 years. The P/E troughed at a median value of 10.5x and peaked at a median value of 15.0x, an increase of roughly 50%. The current expansion cycle began in September 2011 when the market traded at 10.6x forward EPS and it currently trades at 15.9x, an expansion of 50%. However, during most (7 of the 9) of the cycles the backdrop included falling bond yields and declining inflation. In contrast, bond yields are now increasing and inflation is low but expected to rise.

We addressed equity valuation using the Fed model and interest rate sensitivity in our December 6th US Weekly Kickstart. Simply put, the earnings yield gap between the S&P 500 and ten-year Treasury yields currently equals about 325 bp. Goldman Sachs Economics forecasts bond yields will creep higher to 3.25% by year-end 2014, a rise of just 25 bp. If the earnings yield gap remains unchanged, then the ‘fair value’ multiple according to the Fed model would be 15.2x at year-end 2014. The implied index level would be 1900 assuming our 2015 EPS forecast of $125. However, bond yields could rise by more than we expect and hit 3.75% while the yield gap could narrow to perhaps 275 bp. The resulting EPS yield of 6.5% represents a forward P/E of 15.4x implying a S&P 500 level of 1923. Exhibit 4 of the Dec 6th Kickstart shows valuation using various yields and yield gaps.

Incorporating inflation into our valuation analysis suggests S&P 500 is slightly overvalued. When real interest rates have been in the 1%-2% band, the P/E has averaged 15.0x. Nominal rates of 3%-4% have been associated with P/E multiples averaging 14.2x, nearly two points below today. As noted earlier, S&P 500 is overvalued on both an aggregate and median basis on many classic metrics, including EV/EBITDA, FCF, and P/B (see Exhibits 5-8).






* * *

Then again, this is Goldman, where dodecatuple reverse psychology in recos is the norm. If Goldman has just gone bearish, it would logically suggest it is very short and is hoping for a crash. But it could also mean it is hoping its clients panic and dump so collapsing trade volumes finally soar and Goldman makes at least some money on commissions, or is waiting for a plunge in stocks so it can put its massive cash hoard to use, or simply planting the seeds of the next Lehman-like event (now over 5 years later), which would serve as the periodic reset of what once used to be a business cycle? We are sure to find out soon because whatever happens, there will be volatility.

>>> Premier Foods nears sale of Hovis' controlling stake to Gores

Premier Foods nears sale of Hovis' controlling stake to Gores
Premier Foods could reveal in the next few weeks the sale of a controlling stake in its Hovis bread unit to the private-equity fund Gores, The Sunday Times reported.

The unsourced report said Gores has become the leading bidder, following a competitive auction process against rivals, including PAI Partners and Sun European Partners.

The values of the offers made for Hovis were not specified in the report; London-listed Premier has a market capitalisation of GBP 311m (EUR 375m).



Source Sunday Times

>>> FirstGroup shareholder Sandell to seek support for break-up proposal in UK t

FirstGroup shareholder Sandell to seek support for break-up proposal in UK this week

FirstGroup will this week face increasing pressure from the Swedish activist investor Thomas Sandell of Sandell Asset Management, The Sunday Telegraph reported.

Sandell is thought to be flying to London for meetings with investors in the UK-listed transport company and his firm will pitch its plans for breaking up the business at a conference hosted by Bank of America Merrill Lynch, the report said.

The article quoted an anonymous top-10 investor in FirstGroup who, having met Sandell Asset Management last week, described its proposal as “fundamentally interesting”. However, the same shareholder pointed out the difference between a plan which looks good in theory and its actual execution, the report said.

FirstGroup, last month, described Sandell’s proposals for the US asset sales and spin-offs as structurally flawed, a claim by which it stands, according to a group spokesperson cited in the piece.

Sandell owns 3.1% of FirstGroup, a level of shareholding which led one unidentified FirstGroup board member to question if the hedge fund has the right to make such proposals or to demand an investor meeting, the item reported.


Source Sunday Telegraph

>>> Barron's Summary

Barrons Saturday summary: positive on CSCO and MGA

Cover story: Looking ahead to 2014, some of the best places for income appear to be high-dividend stocks, municipal bonds, REITs, convertible bonds, and utility and telecom shares; Barrons presents 10 income sectors in order of appeal, with 29 stocks that offer solid yields: High-dividend stocks (SDY, DVY, VIG); municipal bonds (VWITX, MMHAX, NEA); real estate investment trusts (VNQ, SPG, AVB); telecom stocks (T, VZ), convertible bonds (CWB, MCOAX, AGC); electric utilities (XLU, DUK, PCG); preferred stocks (PFF, WFC/PL, C/PK); junk bonds (BKLN, HYT, FAGIX); master limited partnerships (AMLP, AMJ, EPD); Treasuries (TLT, IEF, TIP).

Features: 1) Positive on CSCO: Fears about companys dominance of Internet hardware are overblown, and shares, which are cheaper than they were a decade ago, could return 20% over the coming year and are an opportunity for bargain hunters. 2) Positive on DKS, HD, LOW, M, TGT, TJX, WSM: Among retailers expected to continue doing well following a 3.4% holiday sales rise year over year, though challenges in the sector remain. 3) Positive on MGA: Shares of Canadian auto-parts maker are cheap, and could provide a total return of nearly 30% if investors accord it a multiple in line with the industry or the S&P 500.

Tech Trader: Positive on ZTE, Huawei, Meizu: Chinese smartphone makers believe behemoths Samsung and AAPL are vulnerable, and collectively represent a coming of age of the countrys tech effort that poses a growing challenge to current champions, while the perception that Chinese firms are merely copying Apple and Samsung doesnt do justice to their assiduous appropriation of tactics and strategy.

Trader: The potential argument against the rally continuing is the markets valuation, which ranges from equal or slightly higher than historic averages, depending on the metric used; Positive on F, SLB: A quick drop in the shares of a well-known company with a solid business and a promising future could be a nice entry point for investors with a two- to three-year outlook; Positive on AWI: Investors may start warming up to stock if increasing cash flows and earnings allow it to reduce debt in coming years, shares will likely benefit from a recovery in nonresidential construction and companys growing efficiencies.

Follow-Up: Positive on SIRI: Company is thriving, and is pre-installed on about 70% of new cars; sales this year are likely to reach $4.2B, generating free cash flow of $1.2B, all of which means shareholders should hold out for stronger bid from LMCA.

Small Caps: Positive on TWI: There are good reasons to believe company may see a rebound in 2014, and shares look cheap at five time enterprise value to 2014 estimated EBITDA.

Mutual Funds: Interview with Wally Weitz, Founder, President, and Portfolio Manager, Weitz Investment Management (top ten holdings: VRX, AON, BRKB, DTV, FLIR, RWT, TXN, ICON, LBTYK, WFC); Interview with Robert Ewing, Co-Head, U.S. Equities, Putnam Investments (picks: JPM, BAC, Royal Dutch Shell).

European Trader: Observers expect some type of modest policy easing from the European Central Bank around the end of this quarter, triggered by tightening in financial markets or fears of inflation; ECB could opt for some kind of asset purchasing that would rekindle bank lending.

Asian Trader: Memory chip makers have discovered that chasing market share and adding capacity destroys profits; Mark Newman, analyst for Sanford C. Bernstein in Hong Kong, likes Hynix, but thinks Inotera has more upside for investors willing to take more risk.

Emerging Markets: China is a good first stop for bargain hunters for its relatively attractive valuations and government reforms aimed at more-stable growth (Positive on Tencent, BIDU, Haier Electronics, MediaTek); For Mexico investors, Megacable has a clean balance sheet and is cheaper than U.S. and European rivals, but has greater growth prospects.

Commodities: Gasoline futures have slowed and could fall further as winter weather chills demand for driving. CEO Spotlight: Profile of DWA chief Jeffrey Katzenberg, who by design and necessity is spending less time on the film business and working on developing other content.

Streetwise: Positive on LYB: RBC analyst Chris Nocella thinks company is entering an accelerated growth phase in which profits could expand more than 25% as increased capacity resolves some bottlenecks and as it continues to benefit from robust margins and cost cuts.

>>> Germany finance minister Schaeuble: We are planning zero new debt for 2015; the economy is doing well - Rheinische Post

Germany finance minister Schaeuble: We are planning zero new debt for 2015; the economy is doing well - Rheinische Post - German government and EU Commission forecast for German 2014 GDP at around 1.7% "is on the cautious side." - 2013 debt level will come in below €25.1B even after the extra funding for flood relief in the eastern part of the country. - In 2014, the German deficit will narrow and its structural budget will be balanced. - Greece has made clear progress, much more than many people thought the country could make. If Greece meets all of its obligations by the end of 2015, achieving a primary budget surplus, and still needs financial help, we would be willing to do something.