market news updateEvery morning the Street of Walls team puts out an update on market levels, today’s top stories, and active M&A deals.

Today’s Top Stories:

  • GS Morning Update: “Stock markets in Asia were mostly closed or operating with scant liquidity Monday as the region kicks off the Lunar New Year this week. As a result, Asian stocks are not likely to provide any reliable indication of market sentiment all week long. Stocks in Europe, however, are trading normally and up again to start the week as the “risk-on” rally continues amidst optimism that policy makers can agree on a program that keeps Europe on a path (albeit a slow and circuitous one perhaps) to resolving its sovereign debt crisis” (GS)
  • UBS Global Strategy: “Having advocated a cautious stance for most of 2011, we now believe investors should begin to adopt incrementally more cyclical positions – We believe falling cyclical risk premiums in the US and China, enhanced liquidity provision of the ECB and attractive relative valuations will underpin continued outperformance of equities, REITs and high-yield corporate bonds in 2012. Accordingly, we upgrade risk assets in our model portfolio” (UBS)
  • Relaxation of Basel III: the FT discusses how Paris and Berlin on Mon will publish a joint paper pushing for certain elements of the Basel III capital rules to be relaxed and/or delayed (FT)
  • Obama State of the Union: the NYT claims Obama will articulate a vision whereby the government plays an integral role in promoting a prosperous and equitable society
  • US Oil Production Surging: Federal forecasters are expected to confirm on Monday what the energy industry already knows: Oil production is surging in the U.S. http://on.wsj.com/xbdMQ7
  • Apple Manufacturing: “Apple executives believe there simply aren’t enough American workers with the skills the company needs or factories with sufficient speed and flexibility”.  “We shouldn’t be criticized for using Chinese workers,” a current Apple executive said. “The U.S. has stopped producing people with the skills we need.” http://nyti.ms/y6B5AV
  • UK Bank Compensation: the country on Tues will unveil plans for making compensation packages more transparent (London Times)
  • Jefferies Poaching RBS: the company is holding talks about recruiting certain people from the RBS cash equities business (London Telegraph)
  • Jana Adds Marathon Petroleum: Jana Partners disclosed a 5.5% stake in the outstanding common stock of Marathon Petroleum Corporation (NYSE:MPC) http://bit.ly/zeumN8
  • UBS Say Greece Will Default: “The probability of Greek default is very high, and we reiterate our base case that it will happen. We do believe that CDS contracts will get triggered and that it is important to do so” (UBS)

Economic Calendar:

  • Tuesday: the State of the Union Address (Tue., 9pm EST)
  • Wednesday: Federal Open Market Committee (FOMC) meeting

M&A Watch:

  • Weekly M&A Trends: M&A volumes increased 44% while equity and debt underwriting rose substantially http://bit.ly/yZJ4HN
Disclosure: I do not have a position in any stocks mentioned in this article, do not have a plan to initiate a position within the next 72 hours.
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