CASS forecasts China's GDP growth at 7.5% in 2014

According to a think tank report, 60 percent of economists interviewed forecast that China's 2014 gross domestic product (GDP) growth will stay at about 7.5 percent.

The report was publicized by the Institute of Industrial Economics of the Chinese Academy of Social Sciences (CASS) on Wednesday.

In December 2013, 111 Chinese economists were surveyed for the report, including 16 percent from the CASS and 65 percent from universities.

About 48 percent of the economists believed local governments have difficulties in paying off their debts, while the rest said they are capable of paying off debt.

China will publicize its economic performance on Jan. 20. The country set its 2013 growth rate target at 7.5 percent.

Source: Xinhua

Top Japan biz lobby ready to tolerate pay scale hikes

A committee at the Japan Business Federation, the nation's biggest business lobby known as Keidanren, adopted Wednesday a final draft of the group's guidelines for this year's "shunto" wage talks that show its tolerance of pay scale hikes.

While noting that wage levels should be decided by reflecting management's payment capabilities in principle, the draft, endorsed by the Management and Labor Policy Committee, says firms capable of distributing the benefits of their improving earnings to employees should consider various methods to realize wage hikes.

Source: Jiji Press

China stocks open lower on Thursday

Chinese stocks opened lower on Thursday, with the benchmark Shanghai Composite Index opening 0.13 percent lower at 2,041.77 points.

The Shenzhen Component Index fell 0.35 percent to open at 7,774.65 points.

Source: Xinhua

China's CPI grew 2.6 Y/Y in 2013, China's PPI fell 1.4%

China's consumer price index (CPI), a main gauge of inflation, grew 2.6 percent year on year in 2013, and 2.5 percent in December of 2013, the National Bureau of Statistics said on Thursday.

China's producer price index (PPI) fell 1.4 percent year on year in December, data from the National Bureau of Statistics (NBS) showed on Thursday.

The Dec. PPI, which measures inflation at the wholesale level, marked a decline for 22 consecutive months. The figure stood unchanged from that in November, the data showed.

Annualized PPI for 2013 fell 1.9 percent year on year, the NBS data showed.

Source: XInhua

U.S. Stocks Mostly Down. Minutes, Tapering with Reservations

"S&P 500 down 0.02% at 1837.49. DJIA down 0.4% at 16462.74. Nasdaq Comp up 0.3% at 4165.61. Treasury yields up; 10-year at 2.991%. Nymex crude oil down 1.4% at $92.33. Gold down 0.3% at $1,225.30/ounce.

In a bit of the good-news-is-bad-news trade, stocks fell on Wednesday after ADP’s better-than-expected report on private-sector job growth. Maybe traders started thinking an improving U.S. economy would prod the Fed to accelerate the pace of its QE3 wind-down (what most people call the taper).

The minutes of the Fed’s December meeting showed the bank’s officials were mainly in favor of tapering, but had some reservations. That probably means the Fed will move very slowly in ending the program. But they are moving, leaving Asia to deal with the shifting tides of global capital flows".

Source: WSJ

IBM's Supercomputer Watson still just a Promise.

Accoding to a report fro the Wall Street Journal "IBM Chief Executive Virginia "Ginni" Rometty has told executives she hopes Watson will generate $10 billion in annual revenue within 10 years, according to an October 2013 conference-call transcript reviewed by The Wall Street Journal. She set that target after the executive in charge of Watson said its business plan would bring in $1 billion of revenue a year by 2018. That would make Watson the fastest IBM business unit to reach the $1 billion milestone".

But Watson had total revenue of less than $100 million as of late October, according to the transcript. One of its first big projects, with the University of Texas M.D. Anderson Cancer Center, was "in a ditch" in early 2013, said Manoj Saxena, the executive overseeing Watson.

IBM executives still believe Watson could become one of the biggest innovations in the company's 103-year history, alongside the mainframe and personal computer. In a sign of Watson's potential, IBM plans a "Watson has rapidly moved from an industry-first research initiative to a commercial reality" that tackles business and social problems, an IBM spokesman said. "IBM is making excellent progress with clients and with partners in advancing Watson, and we are excited about Watson's future as a cloud service and as technology that will change lives." Watson also helps IBM sell other technology as customers prepare to use the supercomputer.

During an internal conference call in May, Mr. Saxena said he would "probably" give the Watson team a grade of B+.

Watson's key distinction from other analytical software is its ability to "learn." Feed it medical cases, and Watson will rank possible treatments by "confidence score." During training, doctors tell Watson when it makes a bad recommendation, and the supercomputer learns from its mistakes.

IBM is developing versions of Watson that can match cancer patients to clinical drug trials or recommend an investment strategy after reviewing a customer's portfolio.

Watson is having more trouble solving real-life problems than "Jeopardy" questions, according to a review of internal IBM documents and interviews with Watson's first customers.

For example, Watson's basic learning process requires IBM engineers to master the technicalities of a customer's business—and translate those requirements into usable software. The process has been arduous In addition, Watson doesn't work with the data-center technology offered by SoftLayer Technologies Inc., the cloud-computing provider IBM acquired for $2 billion. IBM also hasn't figured out how to generate a reliable revenue stream from Watson, according to the October conference call.

Citigroup Inc. has been collaborating with IBM since March 2012 to develop a version of Watson that can recommend financial products to consumers. It hasn't been launched yet. A Citigroup spokeswoman said the bank is "continuing to identify and test uses for Watson."

So far, just a handful of customers are using Watson in their daily business. With the supercomputer's help, health insurer WellPoint Inc. determines if doctors' requested treatments meet company guidelines and a patient's insurance policy. Elizabeth Bigham, a WellPoint vice president, said Watson initially took too long to "learn" WellPoint's policies.

Ms. Rometty, IBM's chief executive, met with WellPoint CEO Joseph Swedish to help resolve the problems. IBM reworked Watson's training regimen at WellPoint's request, and the system improved. "It has become part of the way we do business," Ms. Bigham said.

Two years ago, doctors at M.D. Anderson began working with IBM to build a version of Watson that would recommend leukemia treatments by mining medical literature.

After the initial stumbles, Anderson and IBM officials said the project is back on track. Lynda Chin, M.D. Anderson's chairwoman of genomic medicine, says the leukemia-treatment adviser could be used later this year. It might be two more years before Watson could handle other types of cancer.

IBM began exploring Watson's commercial potential before the computer beat two "Jeopardy" champions on live television in 2011. The company is looking to revive growth and modernize an aging technology portfolio.

Under former CEO Samuel Palmisano, IBM routinely met Wall Street's financial expectations. Since Ms. Rometty took over in early 2012, IBM has stumbled more often as new technologies threaten some of its lucrative franchises. IBM shares have lagged behind the overall stock market.

"They need to have something special and they are hoping [Watson] is it," says Stephen Baker, author of "Final Jeopardy," a book about the making of Watson. Rivals like Google Inc. could threaten IBM with "tools within shouting range" of Watson that give customers most of what they need at much lower cost, he added.

IBM's biggest bets are in health care, where it believes Watson can improve care and lower costs by identifying the best treatment option from thousands of academic studies and millions of patient records.

In 2012, Memorial Sloan-Kettering Cancer Center in New York began work on an adviser to recommend cancer treatments. Dr. Mark Kris, a Sloan-Kettering oncologist, said an early version of the Watson tool could be used on patients later this year if it passes tests.

At his office, he pulled out an iPad and showed a screen from Watson that listed three potential treatments. Watson was less than 32% confident that any of them were correct. 

IBM's deal with M.D. Anderson last year is the largest Watson deal, valued at nearly $15 million. IBM executives hope it could grow to $100 million.

The project initially ran awry because IBM's engineers and Anderson's doctors didn't understand each other. IBM's developers worked elsewhere and only visited Houston every few weeks to talk to doctors.

Last spring, Dr. Chin and Watson's chief technology officer, began to meet at least once a week. IBM developers now meet with doctors several times a week. "We all found it painful, but the product is much better now," said Dr. Chin.

The Future of Coal: Scrubbing Technology Revives Midwest Mines

  According to a report from the Wall Street Journal, coal mining revives,now the spread of scrubbing technology, which can remove 97% of a coal-fired power plant's sulfur dioxide, has put Illinois coal back in play.

As power plants installed scrubbers, coal companies reopened mines over the last decade. The state of Illinois was expected to produce 56 million tons of coal last year, up 70% from 2010 according to the EIA.

Peabody Energy Corp. the largest U.S. coal producer, says it produces 30 million tons of coal a year in the Illinois Basin, up from 10 million tons five years ago.

"Now that scrubbers are being put in, Illinois is the low-cost and more-attractive coal," says Jim Thompson, an analyst with IHS Global Insight.

Coal production fell 7% overall in the U.S. in 2012 but rose 10% in the Illinois Basin. Its output is expected to surpass that of Central Appalachia by the end of the decade, according to the EIA.

The basin, which stretches from Illinois into Missouri, Indiana and Western Kentucky, is near railroads, the Mississippi River and other transportation options, offering opportunities even for startups.

When Sunrise built its underground mine in Carlisle in 2005, the company did its own digging. Bids submitted by contractors were around $15 million, but Sunrise did the work for $4.5 million, says company President Brent Bilsland. "We mixed our own concrete. We set arches by hand."

"We don't have huge bureaucracies." he says. "Our mines aren't pretty," but the company is debt-free, Mr. Bilsland says. Hallador reported a 2012 profit of $23.8 million on revenue of $141.3 million.

Mr. Bilsland says Sunrise's nonunion workers earn an average of $75,000 a year and get health and retirement benefits. Only 6% of Illinois Basin miners belong to the United Miners Union compared with 27% in West Virginia.

Source: WSJ

Schwab’s Chief Investment Strategist Liz Ann Sonders risk of a "buyable" correction

 "Liz Ann believes the secular bull market in U.S. stocks is likely intact, but there remains the risk of a correction in the near-term, which is likely a "buyable" correction. While Liz Ann doesn't think inflation is set to rise rapidly, if the unemployment rate were to move down more swiftly than expected alongside stronger economic growth, the market could experience a sharper correction than would otherwise be likely".

Source: Schwab

Fed Minutes: Most Officials Backed Bond-Buying Reduction

From the Wall Street journal:

"As top policy makers began to see the risks to the economic outlook as increasingly balanced, most agreed that the time was right to cut the bond purchases to $75 billion a month from $85 billion. Fed officials have since indicated they expect a steady reduction over the course of this year barring any major economic disruptions".

"Most members agreed that the cumulative improvement in labor market conditions and the likelihood that the improvement would be sustained indicated that the Committee could appropriately begin to slow the pace of its asset purchases at this meeting," according to minutes of the Federal Open Market Committee meeting released Wednesday, with the customary three-week lag.

"Inflation was running below the Committee's longer-run objective, and this was seen as posing possible risks to economic performance," the minutes said. "Many members saw a need for the Committee to monitor inflation developments carefully for evidence that inflation was moving back toward its longer-run objective."

Others also expressed concern about indicators of persistent labor-market weakness, including low workforce participation.

"Many members judged that the Committee should proceed cautiously in taking its first action to reduce the pace of asset purchases and should indicate that further reductions would be undertaken in measured steps," the minutes said.

The minutes stressed that the Fed's bond buys and low-rates policies are contingent not just on the economic backdrop but also based on officials' assessment of their costs and efficacy. One risk is that low rates will lead to asset bubbles, though the central bank did not appear greatly concerned about such a possibility for now.

"Indicators generally suggested that such risks were moderate, in part because of the reduction in leverage and maturity transformation that has occurred in the financial sector since the onset of the financial crisis."

238,000 more private jobs U.S. ADP Report

 Private-sector employers added the most jobs in more than a year in December, with gains across a variety of business sizes and sectors, according to data released Wednesday.

Private employers added 238,000 jobs last month, the most since November 2012,ADP Inc. reported. Trends also show improvement: Private employers added an average of 224,000 jobs per month in the fourth quarter, slightly up from an average of 211,000 during the year-earlier period.

“It appears that businesses are growing more confident and increasing their hiring,” said Mark Zandi, chief economist of Moody’s Analytics, which prepares the report using ADP’s data.

Source: marketwatch

London Metal Exchange Quotes

London Metal Exchange				Price         Change  %
Aluminium Alloy Cash Official Confirmed $/m tonne			Wed 13:30	1807.00	+4.50		+0.3
Aluminium Alloy 3mo Official Confirmed $/m tonne			Wed 13:30	1835.00	-2.50		-0.1
Primary Aluminium Cash Official Confirmed $/m tonne			Wed 13:30	1736.25	+3.50		+0.2
Primary Aluminium 3mo Official Confirmed $/m tonne			Wed 13:30	1782.50	+2.25		+0.1
Copper Cash Official Confirmed $/m tonne			Wed 13:30	7356.00	+21.50		+0.3
Copper 3mo Official Confirmed $/m tonne			Wed 13:30	7226.75	0.00		0.0
Lead Cash Official Confirmed $/m tonne			Wed 13:30	2155.75	-25.00		-1.2
Lead 3mo Official Confirmed $/m tonne			Tue 20:35	2156.50	0.00		0.0
N. American Special Alum Alloy Cash Official Confmd $/m tonne			Wed 13:30	1770.50	+8.50		+0.5
N. American Special Alum Alloy 3mo Official Confmd $/m tonne			Wed 13:30	1797.50	-3.00		-0.2
Nickel Cash Official Confirmed $/m tonne			Wed 13:30	13502.50	-42.50		-0.3
Nickel 3mo Official Confirmed $/m tonne			Wed 13:30	14102.50	0.00		0.0
Tin Cash Official Confirmed $/m tonne			Wed 13:30	22062.50	+345.00		+1.6
Tin 3mo Official Confirmed $/m tonne			Wed 13:30	22045.00	+322.50		+1.5
Zinc Cash Official Confirmed $/m tonne			Wed 13:30	2048.50	+8.00		+0.4
Zinc 3mo Official Confirmed $/m tonne			Tue 20:35	2042.00	0.00		0.0

Source: BBC

Hong Kong shares rise, with tech higher

 Hong Kong stocks rose early Wednesday, with the Hang Seng Index up 0.9% at 22,912.14. Chinese tech shares advanced, as one of China's largest Internet companies, Tencent Holdings Ltd. , gained 2.2%, software developer Kingsoft Corp. climbed 3.1%, and game developer NetDragon Websoft rose 1.8%. Chinese top footwear retailer Belle International Holdings rose 1%, as the company said it has opened nearly 500 new retail outlets in mainland China in 2013 and recorded same-store sales growth of 1.3% for the footwear business. Meanwhile, oil shares dropped, with China Petroleum & Chemical Corporation slipping 0.2% and PetroChina Co. Ltd down 0.1%. On the mainland, the Shanghai Composite Index inched up 0.6% to 2,059.72. 

Source: Marketwatch

Stock markets in Asia rally

Stock markets in Asia logged strong gains on Wednesday as the stronger dollarspurred interest and bargain hunters moved in.

The dollar was last seen trading at ¥104.86 from ¥104.61 on Tuesday.

The benchmark Nikkei 225 index closed 307 points or nearly 2% higher at 16,121, while the wider Topix closed up 22 points or 1.79% at 1,306. The Hang Seng advanced 283 points at 22,996 in Hong Kong. 

Data that showed the US trade deficit narrowed to its lowest level in four years in November also boosted investor confidence.

Among the biggest stock movers, shares of games giant Nintendo charged over 10% higher after news that China has formally authorised game consoles to be sold in the country.

Shares of Mitsubishi Motors tumbled 3.7% after it confirmed it would raise up to $2.3bn via a share placing. 

Elsewhere Suzuki Motor rallied 3.0% while TDK rose 2.4% as the dollar advanced against the yen.

SourCe:  LiveCharts