The Saudi King Is Dead, ECB QE Is Alive

Economic Data

- (BR) Brazil Jan IBGE Inflation IPCA-15 M/M: 0.9% v 0.9%e; Y/Y: 6.7% v 6.7%e
- (BR) Brazil Dec Current Account Balance: -$10.3B v -$9.7Be; Foreign Direct Investment (FDI): $6.7B v $6.9Be
- (US) Dec Chicago Fed National Activity Index: -0.05 v +0.48e
- (CA) Canada Dec CPI M/M: -0.7% v -0.6%e; Y/Y: 1.5% v 1.6%e; Consumer Price Index: 124.5 v 124.6e
- (CA) Canada Dec CPI Core M/M: -0.3% v -0.3%e; Y/Y: 2.2% v 2.3%e
- (CA) Canada Dec CPI(Seasonally Adj) M/M: -0.1% v -0.3%e; CPI Core (Seasonally Adj) M/M: 0.2% v 0.2%e
- (CA) Canada Nov Retail Sales M/M: +0.4% v -0.2%e; Retail Sales Ex Auto M/M: 0.7% v 0.1%e
- (BE) Belgium Jan Business Confidence: -8.8 v -6.2e
- (US) Jan Preliminary Markit Manufacturing PMI: 53.7 v 54.0e
- (US) Dec Existing Home Sales: 5.04M v 5.08Me
- (US) Dec Leading Index: 0.5% v 0.4%e

European stocks are seeing another session of big gains post-ECB, while US names are underperforming. Gold is hovering around $1,300 after recent gains, crude has given up its gains and EUR/USD bounced up to 1.1280 after testing 1.1110 earlier today. As of writing, the DJIA is down 0.22%, the S&P500 is off 0.18% and the Nasdaq is up 0.26%.

December US existing home sales rose modestly over November's figure but missed expectations for the second month in a row. For all of 2014, total existing homes sales declined on a y/y basis for the first time since 2010. Total supply fell quite a bit in December, and the NAR warned that lower supply would prompt affordability concerns in the months ahead. The major homebuilders are down slightly, in line with broader markets.

Saudi King Abdullah had officially passed away, following several weeks of rumors he had already died. Salman bin Abdulaziz Al Saud, the 79-year old brother of the king and a former Minister of Defense, was installed as the new monarch. Reports suggest he is in poor health and possibly has dementia, with the complicated royal family riven by factional disputes. Salman pledged to continue all of his predecessor's policies. WTI jumped about a buck on the news to $47.75, but is back around $46.20 as of writing.

Shares of UPS tanked 9.5% this morning after the logistics giant cut its FY14 guidance, offered weak preliminary Q4 numbers and tamped down FY15 expectations. UPS claimed that while package volume and revenue results were in line with expectations, operating profit was negatively impacted by higher than expected peak-related expenses. FDX is off 2% in sympathy, although that firm reaffirmed its guidance after UPS's news.

Shares of industrials Honeywell and General Electric are gaining after solid quarterly results. Earnings and revenue at both firms gained modestly and were just above expectations, and both firms reiterated their guidance. GE warned 2015 would be a challenging for the oil & gas business, and revenue for the unit declined 6% y/y in the December quarter.

McDonald's fourth quarter results were severely undercooked: the firm missed on the top- and bottom lines, while comps remained negative in all major regions. The one good thing you could say is that comps improved over the third quarter's disastrous performance. Starbucks was right in line and comps saw very good growth. SBUX is up 6% on the session, while MCD's losses have been very slight.

Looking Ahead

- 14:00 (AR) Argentina Nov Economic Activity Index (Monthly GDP) M/M: No est v 0.8% prior; Y/Y: 0.1%e v 0.1% prior
- 15:00 (AR) Argentina Dec Industrial Production M/M: No est v -1.1% prior; Y/Y: -1.1%e v -2.1% prior
- (CO) Colombia Dec Industrial Confidence: No est v -4.1 prior; Retail Confidence: No est v 22.0 prior

***Weekend***
- (GR) Greece Parliamentary elections