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 Good morning! Here's what you need to know. - Markets in Asia finished mostly lower. Korea's Kospi closed down -1.16%. Hong Kong's Hang Seng was off -0.51%. Japan's Nikkei bucked the trend, climbing 1.92%. European stocks were seeing uneven gains. U.S. futures were pointing higher.
- China's November HSBC manufacturing flash PMI fell to a two-month low of 50.4, from 50.9 last month. This was the first decline in the index in five months. "The optimism unleashed by China’s reform plan is today hammered by the reality of weaker economic data," said Societe Generale economist Wei Yao. "Although the headline figure of 50.4 still indicated expansion, we caution that the acceleration trend of activity growth is reaching its end," added Yao.
- The Eurozone's Flash Composite Output Index fell to 51.5 in November from 51.9 in October. Economists were expecting a reading of 52.0. France's private sector contracted. “Any improvements were largely confined to Germany, where the PMI has notched up the best growth since mid-2011 so far in the fourth quarter, signaling a 0.5% increase in GDP," said Markit economist Chris Williamson. "France, on the other hand, showed further signs of being 'the sick man of Europe' with output showing a renewed decline and raising the risk that GDP could fall again in the fourth quarter, constituting a renewed recession. Meanwhile growth outside the 'big two' slowed to near-stagnation.” Germany was the lone bright spot with flash PMI climbing 110 bps to 54.3.
- European Central Bank chief Mario Draghi refused to comment on rumors that the agency was leaning toward negative interest rates, saying there was no "new" news and emphasizing they'd already raised it as a possibility. But he did say the eurozone had been "witnessing disinflation in slow motion for several months now," according to the FT.
- The FT is also saying that Portugal may need another bailout, a sharp contrast with Ireland, where Troika assistance has just wound down. "High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. "Many officials in Lisbon and Brussels believe Portugal is almost certain to avail itself of the backstop Dublin shunned when its bailout ends next June: a short-term line of credit from the eurozone’s €500bn rescue fund. But several senior officials directly involved in overseeing Portugal’s €78bn bailout fear a so-called 'precautionary programme' may not be enough."
- Goldman Sachs is bullish on stocks. In a new note, chief equities analyst David Kostin predicts growth will lead U.S. markets as much as 23% higher through 2016. "Our [2014] return forecast reflects rising, albeit decelerating, profit growth and a slightly lower P/E multiple," said Kostin. "The linchpin of our market forecast is growth – in the economy, sales, and earnings. We expect 3.6% global economic growth. The US will advance at a 3% pace while inflation remains contained at 1.4%. China, Japan, and even Europe will all grow, expanding GDP by 7.8%, 1.6%, and 1.5%, respectively. Sales and earnings growth are a direct result of economic activity. We expect revenue growth of 5% (ex-Financials and Utilities) and overall EPS growth of 8% in 2014. Growth in these metrics should continue in 2015, 2016, and 2017."
- A busy day in economics. As usual, at 8:30 am, we get weekly jobless claims, which are expected to decline 4,000 to 335,000. The latest producer price index also prints at that time, with core inflation of 0.1% expected. At 8:58 am, we'll learn the flash U.S. purchasing manager's index for manufacturing. Consensus is for 53.0. Finally at 10 am we get the latest Philadelphia Fed's Business Outlook Survey for November, which is expected to fall 4.3 points MOM to 15.5. Three different Fed officials — St. Louis President James Bullard, Richmond Fed President Jeffrey Lacker, and Governor Jerome Powell — speak today.
- Also a busy day for retail-related earnings, with Sears, Gap, Abercrombie and Fitch, Ross Stores, Dollar Tree and Perry Ellis all reporting before the bell. We'll also get Pandora after the bell.
- Consumer Reports says Tesla Model S owners gave the electric vehicle the highest satisfaction score any car has seen in years: 99 out of 100. Porsche Boxters came in second. Tesla shares have been taking it on the chin since October, when three drivers reported the car catching on fire in. The stock was downgraded by Barclays yesterday on concern the reports could impact sales. BI's Alex Davies explained why the concerns are probably misplaced: the three fires amount to one fire for every 33.3 million miles driven in a Tesla, compared with the U.S. average of 1 in 16 million miles.
- The Wall Street Journal reports on the "burgeoning business known as political intelligence," where people with access to policy changes like or former government officials "gather insights on policy changes that they then sell to investors." But the paper says investigators are having some difficulty figuring out when a research outlet has simply made a good call rather than illicitly obtained insider information. They cite a recent example of a change in Medicare payments correctly called by consulting firm Height Securities just before it was announced that sent health care stocks soaring.
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