What to watch for today
Manufacturing boosts GE’s profits. The US industrial titan, widely watched because of the worldwide market for its diverse products, reports its fourth-quarter earnings today, and analysts expect higher profits thanks to a tighter focus on its core products after sales of its media division. Then again, it’s also worth remembering that in terms of overall profit, GE is still basically a bank.
More earnings. We’ll also hear fourth-quarter results from Schlumberger, Wipro, Morgan Stanley, State Street and SunTrust Banks.
US consumer sentiment check-in. An index of consumer confidence will let us know how bullish Americans are in the first month of 2013.
More uncertainty over the fate of Algerian hostages. Islamic militants who have taken workers hostage at a gas treatment plant near Algeria’s Libyan border still have the plant under siege. The militants claim 35 hostages have been killed, though Algeria has not released precise information on casualties. The British government is seeking information on the fate of 20 Britons. Japan says 14 of its nationals are missing. One American is reportedly missing too.
While you were sleeping
China’s strong growth, its worst since 1999. The country’s GDP grew 7.9% year-on-year in the fourth quarter, and was expected to be 7.7% for 2012 overall. Robust by anyone else’s standards, but for China it was the slowest growth in more than a decade. Policymakers aren’t expected to overtly push for higher growth in 2013, in part because of fears of rising property prices and over-investment. But Bejiing is likely to keep monetary conditions easy so that local governments can meet their GDP targets via credit-fueled infrastructure projects.
UK prime minister threatened to make a threat about leaving the EU, then didn’t. Blaming the Algerian hostage crisis, UK leader David Cameron canceled a heavily-anticipated speech where he was going to threaten Britain’s exit from the EU. Cameron’s Conservative Party has generally always been filled with euro-skeptics, while its coalition partners the Liberal Democrats are more pro-Europe.
The internet failed to boost British retailing. UK retailers reported a 0.1% fall in sales for December, confounding expectations that their revenues would have increased slightly due to strong online sales. Meanwhile, a slew of British retail chains have gone bust in recent weeks due to a combination of high rents and losing out to online shopping.
AT&T may have a $12 billion-sized hole in its pension pot. The telecoms giant admitted in an SEC filing that it may get a lower return on its pension funds than previously thought, leading to the shortfall. It may not be the only large US blue-chip in this position. Low interest rates caused by the Federal Reserve’s QE3 program have shrunk the interest income that pension funds get from government and corporate bonds.
No more Dreamliners flying. After regulators in India, Europe and Japan followed the US Federal Aviation Administration in grounding Boeing 787 jets over safety problems, Chile’s LAN, Qatar Airways and Ethiopian Airlines all followed suit, thus taking all of the world’s 50 active Dreamliners out of service. All the bad press could cost Boeing in its ongoing rivalry with Airbus.
Jakarta stayed submerged in water. Heavy flooding in the Indonesian capital over the last two days has killed at least five people, while thousands have fled. Local media have begun questioning where all of the money earmarked for flood mitigation work has gone. The BBC reports that Jakarta’s drainage system has not been substantially upgraded since Indonesia’s former Dutch rulers left in 1948.
Quartz obsession interlude
Naomi Rovnick on the changing economy of North Korea and the prospects of reunification: “North Korea attracted almost $100 million of Chinese investment between 2003-2009, often via Chinese-funded joint ventures….Chinese cash is not enriching most North Koreans yet. But the capital, Pyongyang, has started to seem wealthier, Chosun’s Abrahamian says. Around two years ago, he reports, Pyongyang got a hypermarket that is ‘about the size of a mid-sized Wal-Mart’ and ‘sells relatively modern processed foods such as crackers, fish cakes and long-life bread.’ He has also noticed an increase in cars on the roads of the capital, where three years ago it was rare to see a car. ‘I’ve seen Toyotas,’ he says. ‘And even a couple of traffic jams.'” Read more here.
Matters of debate
France’s Mali intervention was the right thing to do. France may have an Afghanistan-style, long-term and expensive war on its hands now. But the Algerian hostage crisis shows jihadists must be stopped.
Citi’s biggest strength is its biggest weakness. After poor fourth-quarter results, the megabank may be regretting its global emphasis.
Europe’s austerity measures will make depressions and unemployment worse.
Tim Geithner defends his response to the crisis. The outgoing US Treasury Secretary explains the European and American economic situations in terms of basketball. (Quartz’s news editor would not be pleased.)
But Simon Johnson says Geithner did terribly. The IMF’s former chief economist says Geithner helped create, and then failed to fix, the “too-big-to-fail” problem.
We can learn about internet fame from the Red Baron. World War I German fighter aces make the case for achievement.
And in WWII, the Brits bugged Nazi generals by putting them up in a stately home.
Facebook users uploaded 1.1 billion photos over New Year’s Eve, it was reported. That will give the company’s controversial new Graph Search function a lot of new data to gobble up.
US companies “hoard” cash because of the just-in-time supply chain. Companies no longer need a lot of inventory, but they do need big piles of ready greenbacks to make quick purchases.
Wrangler plans to sell “moisturizing jeans”. They apparently keep legs nice and soft, possibly reduce cellulite and are called “Denim Spa”.
What it’s like to live in the International Space Station. Take a tour with the outgoing commander.
Our best wishes for a productive day. Please send any news, comments, and more ideas for denim-based beauty treatments to firstname.lastname@example.org. You can follow us on Twitter here for updates during the day.