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US stock market, economy and companies update (January 23, 2013)

Contributed by Trade The News

- The DJIA and the Nasdaq are gaining ground this morning, up 0.37% and 0.38%, respectively. Tech names IBM and Google have seen impressive gains after solid earnings reports, propping up both indices. The S&P500 is being weighed down by some losing earnings, with the index flat on the session.

- Continuing the thaw in Washington, DC regarding the debt ceiling, the House is poised to pass a temporary three-month increase in the debt ceiling, to give everyone time and breathing space to work out a new package of spending cuts to replace the sequester. President Obama has signaled that he will go along with the temporary increase. These developments have come as the Congressional Republicans backed off their confrontational stance after apparently coming to the conclusion that resisting the debt limit increase was a losing proposition.

- USD/JPY bounced higher just above the key 88 level overnight, with the yen giving up some of the ecent strength seen after the BoJ rate decision. Japanese Vice Finance Minister Nakao commented that the ministry would continue to watch the yen and reiterated that it would take appropriate action if needed. Also, German Finance Minister Schaeuble commented that the EUR/JPY cross price fluctuation was in a "normal" range and saw no competitive devaluation occurring. EUR/USD trading is listless with the pair well contained within the 1.3250-1.3400 range.

- General Dynamics widely missed earnings and revenue targets in its Q4 report, blaming the slowdown in defense spending combined with a $2B goodwill impairment related to the IT unit. The firm's FY13 forecast fell well short of expectations. Executives warned that military budgets both in the US and abroad are under pressure. Shares of GD are down more than 3%, while fellow defense/aerospace name UTX is up 1% on a solid Q4 report.

- Shares of Google are up nearly 6% this morning after the Q4 report. The firm's revenue was very strong, with paid clicks up, costs under control and advertising revenue steady. At least 12 brokerages have raised ratings on GOOG. Shares of IBM are up 5.6% on excellent results and good FY13 guidance.

- AMD managed to lose less money than expected in its Q4, thanks to margin gains and more business restructuring. However, the firm expects revenue to decline in Q1 on a sequential basis. AMD is up more than 8%.

- McDonalds managed top lowered expectations in its Q4 report, although analysts are concerned about the firm's negative comps in the Asia Pacific business, flat December comps and guidance for negative January comps.

- Homebuilder KB Homes offered a preliminary look at its Q1 numbers after reporting Q4 just one month ago. Net orders for new homes were up 54% y/y, although executives warned they did not necessarily expect the very strong trend in order improvements to last longer into 2013. KBH is up around 8% this morning.

- Rail name CSX is up around 4% and Norfolk Southern is up 2% in the early going. Both firms saw very good Q4 earnings and improved intermodal revenue.

***Looking Ahead***
- (MX) Mexico Dec ANTAD Same-Store Sales Y/Y: No est v 7.1% prior
- (PT) Portugal releases Year-to-Date Budget Report
- 11:15 (CA) Bank of Canada Gov Carney press conference
- 11:30 (US) Treasury to sell 4-Week Bills
- 12:30 (BR) Brazil Dec Tax Collections (BRL): 103.0Be v 83.7Be
- 12:30 (US) House Debt limit vote
- 14:00 (AR) Argentina Dec Trade Balance: $451Me v $634M prior
- 16:30 (US) Weekly API U.S. Crude Oil Inventories
- 18:30 (JP) Japan Dec Total Merchandise Trade Balance: -522.8Be v -953.4B prior; Adj Merchandise Trade Balance: -760.9Be v -868.5B prior
- 20:45 (CN) China Jan HSBC Flash Manufacturing PMI: 51.8e v 51.5 prior

***Economic Data***
- (BR) Brazil Jan IBGE CPI IPCA-15 M/M: 0.9% v 0.8%e
- (US) MBA Mortgage Applications w/e Jan 18th: 7.0% v 15.2% prior
- (BR) Brazil Dec Current Account: -$8.4B v -$6.3Be; Foreign Direct Investment (FDI): $5.4B$4.1Be
- (US) ICSC/GS weekly chain store sales w/e Jan 20th w/w: -1.5%; y/y: +3.2%
- (US) Redbook Retail Sales w/e Jan 20th: +1.8% y/y prior; Jan MTD: -0.4% m/m prior, Jan MTD: +1.9% y/y prior
- (US) Nov House Price Index M/M: 0.6% v 0.7%e
- (CA) Canada Dec Teranet/National Bank HPI M/M: -0.4% v -0.3%e; Y/Y: 3.1% v 3.1%e; House Price Index: 153.45 v 154.02 prior
- (MX) Mexico Nov Retail Sales: 3.5% v 3.6%e
- (CA) Bank of Canada (BOC) leaves Interest Rates unchanged at 1.00%, as expected
- (EU) Euro Zone Jan Advanced Consumer Confidence: -23.9 v -26.0e