What to watch for today
South Africa’s state of the union. President Jacob Zuma’s address coincides with South Africa’s 20th year of democracy and comes three months before national elections. He is facing accusations that his African National Congress party is failing to provide basic services.
PepsiCo’s profits lose their fizz. America’s growing distaste for sugary drinks is taking its toll, and the drinkmaker is expected to post a 7.7% decline in earnings. Even worse for Pepsi, Coca Cola is doing just fine.
AIG’s clear-skied report. The massive insurer is expected to release fourth-quarter earnings of $1.01 a share on revenues of $8.56 billion, compared to a loss of $2.68 per share on similar revenue in the same quarter a year ago, when it had to pay out for damage by the US’s Hurricane Sandy.
While you were sleeping
Lenovo’s strong results. The Chinese hardware maker’s profits rose 29% in the third quarter as smartphone and tablet sales soared; even PCs did well, despite a shrinking global market for them. CEO Yang Yuanqing pledged to recoup losses from the pending acquisition of Motorola’s smartphone business and IBM’s servers “in a few quarters.”
Comcast is buying Time Warner Cable. The biggest US cable company has agreed to acquire the second-largest for $44 billion, bringing together two of America’s most-reviled companies. Here’s one sentence and six charts that explain the rationale for the deal.
Rio Tinto rebounded. After a $3 billion loss in 2012, the mining giant beat expectations with second-half profits of $5.99 billion, thanks, in part, to $2.3 billion in cost-cutting. A dividend hike of 15% was also higher than forecast.
Rolls Royce stalled. Sales will not grow this year for the first time in a decade, the company told investors, due to an unexpectedly big dip in demand for its civil-aviation engines. A UK probe into the company’s aerospace and defense sector dealings in Asia continued, resulting in two arrests on Wednesday.
BNP Paribas braced for penalties. Profits fell an alarming 76% after the French bank set aside $1.1 billion for penalties, saying an internal review had uncovered possible breaches of US laws on ties with countries under economic sanctions. (It didn’t say which countries.)
South Korea and Indonesia held rates steady. South Korea’s central bank maintained interest rates at 2.5%, despite a below-target inflation rate; Indonesia’s kept its rate at 7.5% for the third straight month. Indonesia remains vulnerable to capital flight from the Fed taper, but South Korea looks increasingly insulated (paywall).
The Indian parliament erupted in chaos. After the introduction of a controversial bill to split a southern state in two, one legislator on probation wielded a can of pepper spray inside the chambers. Another pulled a knife. Seventeen lawmakers were promptly suspended, and at least three were hospitalized.
Quartz obsession interlude
Steve LeVine on how some bad news for Big Oil is good news for energy technology. “The central element is capital spending. In 2013, the five companies spent a collective $169 billion trying to discover new oil, develop fields, and build big projects. That was $27.3 billion, or about 20%, more than they spent in 2012 on the same endeavors. It also was almost identical to the $30.9 billion drop in profit in 2013. When you factor in the price of oil—crude averaged about $108 a barrel in 2013, compared with $111 the prior year—you get even closer. The higher cost of finding and developing new oil projects is in fact almost entirely responsible for Big Oil’s profit misery last year.” Read more here.
Matters of debate
It’s tough being ugly. Society doesn’t recognize the less attractive as a marginalized group that suffers injustices.
Who started the First World War? Almost 100 years later, experts can’t seem to agree.
You should memorize Confucius. The Chinese president implored his nation to read “The Analects,” by the ancient philosopher; he said Westerners should, too.
Black History Month misses the point. The US’s tradition of celebrating a few heroes disregards the everyday experience of black people in America.
The most popular dating app in emerging markets isn’t a dating app. It’s Facebook.
Earth has expensive taste in cars. A 25-ft sinkhole swallowed eight rare vintage Corvettes at a Kentucky museum.
Cell phones don’t cause cancer. Eleven years of research have now put the urban legend to rest.
Google is renting an airport for its robots. It comes with an enormous NASA hangar.
Syria’s insurgency is being fueled by escaped Iraqi convicts. The aftermath of “Operation Breaking the Walls.”
Eccentric style makes people think you’re successful. A bow-tie or a handlebar mustache can boost your social status.