Strong Corporate Earnings in the US, Greece Troubles in the Background

Economic Data

- (IE) Ireland Dec Retail Sales Volume M/M: 0.5% v 0.5% prior; Y/Y: 5.1% v 4.9% prior
- (IE) Ireland Dec Property Prices M/M: 0.4% v 0.5% prior; Y/Y: 16.3% v 16.2% prior
- (US) MBA Mortgage Applications w/e Jan 23rd: -3.2% v +16.1% prior
- (RU) Russia Dec Real Retail Sales M/M: 23.6% v 20.1%e; Y/Y: 5.3% v 2.7%e
- (RU) Russia Dec Unemployment Rate: 5.3% v 5.5%e
- (US) DOE Crude: +8.87M v +4Me; Gasoline: -2.59M v +0.5Me; Distillate: -3.89M v -1.5Me

US equities saw modest gains in the premarket thanks to a handful of robust corporate earnings reports, although indices have moved lower mid-morning. No major revelations are expected from the FOMC decision later today. As of writing, the DJIA is up 0.20%, the S&P500 is down 0.13% and the Nasdaq is up 0.22%.

Greek banks are getting hammered again today, with the top four banks down 25% a piece, following two days of massive losses. The Athens stock exchange is down nearly 7%. The new coalition government and its European opponents have begun preliminary maneuvers ahead of what will surely be vicious negotiations to restructure the Greek bailout deal. Fears of a run on Greek banks are in the air.

EU foreign ministers proposed extending sanctions on Russia by six to nine months due to increasing violence in eastern Ukraine. The EU may begin pinning responsibility for the fighting on Russia, and may also add more sanctions. The latter may include more limitations on Moscow's access to capital makets and advanced technology for the energy sector. The ruble is at six-week lows, with USD/RUB at 68, just shy of the 70 level seen in the mid-December ruble swoon.

Front-month WTI crude dipped below $45 for the third day in a row, this time ahead of the weekly DOE inventory report. The build in crude oil stocks was twice the expected amount, however there were further drawdowns in gasoline and distillates. The EIA's Sieminski warned this morning that fundamentals have played a large part in the recent fall in oil prices, and said prices would probably fall further.

Independent E&P name Hess Corp is down 4.5% today post earnings. Among the very first big producers to report December quarter results, Hess's E&P earnings fell to $92M in the quarter, down from $1.03B a year ago, even as oil and gas production rose substantially from last year. Oil majors Exxon, Conoco and Chevron are down slightly in sympathy. Hess was also the latest producer to slash its capex budget by double digits.

Apple set a record for the most profits in a quarter ever reported by a public company with its first quarter results out last night. iPhone shipments hit a new record high, at 74.5 million units. Revenue absolutely crushed expectations. AAPL is up more than 7% this morning. Shares of Yahoo are well off their highs of +4.5% and headed for the unchanged marks. Now that the spin-off of the firm's Alibaba stake is in the can, many question whether CEO Meyer will be able to deliver appreciable growth.

In other earning, US Steel is rocketing up 13% after absolutely crushing consensus expectations. Boeing is up 5% thanks to a solid fourth quarter, strong margins and a heathy backlog. AmerisourceBergen widely outperformed expectations and raised its full-year view, but is up a mere 3% today. AT&T saw strong net additions but also reported ARPU down nearly 11% y/y, limiting upside gains in the name. General Dynamics saw solid gains after issuing very good results, however the firm's FY15 earnings guidance fell short of expectations and GD is giving up gains. 

Looking Ahead

- 12:30 (BR) Brazil Dec Tax Collections (BRL): 122.6Be v 104.5B prior
- 13:00 (US) Treasury to sell $26B in 2-Year Notes
- 14:00 (US) FOMC Interest Rate Decision: Expected to leave both Lower Bound and Upper Bound unchanged between 0.00-0.25%
- 15:00 (NZ) New Zealand Central Bank (RBNZ) Interest Rate Decision: Expected to leave Official Cash Rate unchanged at 3.50%
- 16:45 (NZ) New Zealand Dec Trade Balance (NZD): -0.8Be v -0.2B prior; Exports: 4.2Be v 4.0B prior; Imports: 4.1Be v 4.2B prior
- 18:50 (JP) Japan Dec Retail Sales M/M: +0.3%e v -0.2% prior (revised from -0.3% prior; Retail Trade Y/Y: 1.0%e v 0.5% prior (revised from 0.4%); Large Retailers' Sales: 0.3%e v 1.1% (revised from 1.2% prior