US FINANCIAL MARKET
- Caterpillar posted a 55% drop in quarterly profit due to a charge connected with accounting fraud at a Chinese subsidiary. Still, its adjusted profit and revenue were better than analysts expected. The company posted net income of $697 million and revenue fell 7% to $16.08 billion. Executives forecast 2013 would be a “tough year.” For this year, Caterpillar expects revenue of $60 billion to $68 billion, with a profit of $7 to $9 per share. Analysts had been expecting a profit of $8.54 per share on revenue of $64.58 billion.
- Toyota regained the crown as the world’s top selling automaker in 2012, posting record-high sales and beating rivals GM and Volkswagen. Toyota sold 9.75 million vehicles, up 22.6% from a year ago. GM sold 9.28 million vehicles in 2012, up 2.9% from a year ago, while Volkswagen sold 9.07 million vehicles, up 11.2%.
- Kimberly-Clark, the maker of Kleenex tissues and Huggies diapers, reported a 33% drop in fourth-quarter profits. Yet, the results were better than consensus estimates.
- Starbucks denied it had threatened to suspend investment in Britain in protest over perceived government criticism of its tax affairs.
- Google, which says it gets about 1,400 requests a month from U.S. authorities for users’ e- mails and documents, is organizing an effort to press for limits on government access to digital communications.
US ECONOMY & POLITICS
- The Commerce Department said that overall durable goods orders jumped 4.6% in December, beating economists’ expectations of a 1.8% gain. The unexpectedly strong gain was in part driven by non-defense aircraft orders, consistent with the strong Boeing orders for December.
- Durable goods ex transportation rose by 1.3% (vs. consensus 0.8%).
- Core capital goods shipments — which feed directly into the equipment & software component of GDP — rose by a smaller-than-anticipated 0.3% (vs. consensus +0.8%). However, an upward revision to the prior month’s gain left the level of December shipments roughly in line with consensus expectations.
- Durable goods inventories were unchanged in December. The rate of durable goods inventory accumulation in Q4 was somewhat slower than in Q3, in line with our forecast for inventory investment to detract from Q4 real GDP growth.
- Economists are increasingly, but still cautiously, optimistic about growth in the year ahead with the hiring expected to pick up in coming months. A quarterly survey by the National Association for Business Economists (NABE) released shows half of the economists polled now expect real GDP to grow between 2 and 4% in 2013.
- Fed’s preliminary report on 2012-Q4 GDP is likely to show that the U.S. economic growth slowed to an annualized rate of 1.2%. The US economy grew 2, 1.3, and 3.1% during 2012 Q1, Q2, and Q3, respectively. If this is the case, 2012 growth will be around 1.9% for the year.
- A bipartisan group of U.S. senators has reached an agreement on principles for the most comprehensive attempt to redo immigration laws.
EUROPE & WORLD
- Japan’s government raised its growth forecast, predicting the economy will emerge from recession and expand 2.5% in the coming fiscal year.
TODAY in HISTORY
- Congress passed legislation creating the U.S. Coast Guard (1915)
- U.S. shuttle Challenger exploded 72 seconds after lift-off, killing all seven crew members aboard (1986)
Sources: Reuters, Yahoo Finance, Google Finance, Bloomberg, CNN Money.
This information has been prepared from sources believed to be reliable, but no representation is being made as to its accuracy or completeness. The information provided should be used only as general information and is not intended to provide specific advice or recommendations for any individual. The economic forecasts set forth in the material may not develop as predicted. All indices, such as the S & P 500, are unmanaged and may not be invested into directly.