FINANCIAL MARKETS
Asia stocks higher as Shanghai steadies after dramatic dive
SEOUL, South Korea (AP) — Asian stock markets rose today and Shanghai rebounded from a dramatic dive the day before, after China’s economic slowdown in the fourth quarter wasn’t as sharp as feared.
China’s economy expanded 7.4 percent last year, which was its weakest performance in 24 years, but fourth quarter growth of 7.3 percent was slightly higher than expected.
The International Monetary Fund lowered its forecasts for global growth over the next two years, warning that persistent weakness in most major economies will outweigh the boost from lower oil prices.
Benchmark U.S. crude oil fell more than a dollar to slip below $48 a barrel. The dollar gained against the euro and the yen.
ECONOMY-THE-WEEK-AHEAD
Business events scheduled for the coming week
WASHINGTON (AP) — It’s a big week for data on the housing market and corporate earnings.
The National Association of Home Builders releases housing market index for January this morning, while the Commerce Department will release numbers on December housing starts tomorrow. Freddie Mac updates mortgage rates as usual on Thursday, while the National Association of Realtors releases data on existing home sales for December on Friday.
Morgan Stanley, Delta Air Lines and Johnson & Johnson report quarterly financial results before the market opens today.
After the market closes, IBM and Netflix report their results.
ECONOMIC OUTLOOK
IMF cuts growth forecasts, citing sluggish EU, Japan, BRICS
TOKYO (AP) — In a development that could shake markets far and wide, the International Monetary Fund has lowered its forecasts for global growth over the next two years. It warns in a statement today that persistent weakness in most major economies will outweigh the boost from lower oil prices.
The IMF downgraded the projections it issued in October by 0.3 percentage point each, predicting global growth at 3.5 percent this year and 3.7 percent in 2016.
But even with those reductions, the world economy would be growing faster than in 2014, when the IMF estimates it expanded 3.3 percent.
The IMF’s report says that much of the momentum will come from a stronger-than-expected expansion in the U.S., while growth in Europe, China, Japan and Russia slows.
Advanced economies are forecast to expand by 2.4 percent in 2015, a smidgen higher than earlier thought, and at the same rate in 2016. Growth in developing economies was forecast to slip to 4.3 percent from an estimated 4.4 percent in 2014, but then recover to 4.7 percent in 2016.
STATE OF UNION-TAX PROPOSALS
Obama seeking tax increases on wealthy to help middle class
WASHINGTON (AP) — Republican lawmakers are already signaling they will do what they can to block President Barack Obama’s pitch for tax increases on the wealthiest Americans.
Obama is making the pitch in his State of the Union address Tuesday night in hopes of putting the new Republican Congress in the position of defending top income earners over the middle class.
Senior administration officials say Obama will call for raising the capital gains rate on top income earners and eliminating a tax break on inheritances, with the revenue going to fund new tax credits and other cost-saving measures for middle-class taxpayers.
Key Republicans in both chambers are indicating they’ll oppose the plan.
Senate Finance Committee chairman Orrin Hatch says “slapping American small businesses, savers and investors with more tax hikes” will negate the benefits of tax policies that have helped expand the economy.
A spokesman for House Speaker John Boehner calls the proposal, “the same, old top-down approach” from President Obama.
CHINA-ECONOMY
China’s 2014 economic growth slowest in more than 2 decades
HONG KONG (AP) — The government of China reports that its economic growth slowed to the weakest level in more than two decades, expanding 7.4 percent in 2014 from 7.7 percent the previous year.
Growth in the fourth quarter of last year was 7.3 percent, unchanged from the previous quarter, which was the slowest expansion in five years.
The annual rate was the slowest growth for the world’s second biggest economy since 1990 and it undershoots the official full-year target of 7.5 percent.
The latest numbers are still miles ahead of growth rates in other major economies, but represent a sharp decline from double digit growth in previous years and add to pressure on the country’s communist leaders as they try to prevent a sharper slowdown in 2015.
Chinese officials have tried to lower expectations by saying growth below the official target would be acceptable. But a surprise interest rate cut by policymakers in November indicated they were worried about a politically dangerous spike in job losses.
BUDGET-HEALTH CARE LAW
GOP divided over using budget process on health care law
WASHINGTON (AP) — Republicans running Congress have promised to use every weapon in their arsenal to take down President Barack Obama’s health care law.
But now some are questioning whether to use the congressional budget process to derail the 2010 law or save the special step for more traditional purposes like cutting spending or overhauling the tax code. A potentially divisive debate between tea party forces and GOP pragmatists looms.
At issue is an arcane process known as budget reconciliation. It’s the only filibuster-proof option available to Republicans, who control the Senate with 54 seats but must still muster 60 votes to pass other legislation.
Senate precedents sharply limit the number of reconciliation bills and so a major debate has begun among Republicans over what to put in it.
ALASKA BUDGET-OIL
Alaska faces lean budget times as oil prices plunge
JUNEAU, Alaska (AP) — Alaska faces some drastic cuts to its state budget as oil prices plunge.
Lawmakers converge on Juneau for the start of the session Tuesday with oil at about half as much as the $107 a barrel it was when legislators left in April. Alaska relies heavily on oil revenue to fund state government.
With an estimated 80 percent decline in oil production taxes since last year, lawmakers and new Gov. Bill Walker will have to look at cuts and possible new revenue streams even as they dip into savings.
New ideas are welcomed. In fact, Walker is giving prizes to the five best ideas residents have to cut spending or raise money. In these lean times, it’s not too extravagant: a soup-and-sandwich lunch with Walker.
ALASKA-CANADA-STEEL FLAP
Canada threatens to block project over US steel requirements
JUNEAU, Alaska (AP) — The Canadian government has issued an order that would block the state of Alaska from updating a ferry terminal unless the two sides resolve an ongoing dispute over the use of U.S. steel in the project.
The project is on Canadian soil that’s leased by the state. The port at Prince Rupert is part of the Alaska Marine Highway System.
Most of the funding for construction is expected to come from the Federal Highway Administration, which has “Buy America” requirements for steel, iron and manufactured products used in projects it funds.
Canada’s minister of international trade, Ed Fast, says the application of “Buy America” provisions on Canadian soil is an “affront to Canadian sovereignty.”
Gov. Bill Walker says he believes the two sides will see their way through the situation.
PORT LABOR
Labor dispute at West Coast sea ports doesn’t take a holiday
LOS ANGELES (AP) — The dispute between dockworkers at the West Coast’s sea ports and their employers didn’t take a day off for the Martin Luther King Jr. holiday.
The two sides have been trying to negotiate a new contract for months, and as tensions have risen the rate that cargo is moving has slowed.
On Monday, the operators of terminals at ports where dockworkers typically load and unload massive ocean-going ships ordered slimmed-down work crews.
A spokesman for the terminal operators said container ships would not be worked at 29 ports from San Diego to Seattle because crews must concentrate on trying to clear dockside yards already congested with containers.
The dockworkers’ union says its members are being unfairly punished; employers say dockworkers are purposely slowing work to gain bargaining leverage.
PIPELINE SPILL
Crews bring drinking water to eastern Montana city after oil spills into Yellowstone River
GLENDIVE, Mont. (AP) — Officials plan to bring in truckloads of drinking water for the 6,000 residents of an eastern Montana city just downstream of an oil spill into the Yellowstone River.
State and federal officials say preliminary tests Monday indicate that at least some oil got into Glendive’s public water supply, so they’re bringing in outside water as a precaution.
Further tests are planned to determine whether the spill has created any public health threat.
Up to 50,000 gallons of oil spilled in Saturday’s pipeline accident. Cleanup crews are being hampered by ice that covers most of the river, making it hard to find the oil.
Wyoming-based Bridger Pipeline Co. accepted responsibility for the spill and has pledged to clean it up.
ABBVIE-EU-HEPATITIS TREATMENT
AbbVie’s new hepatitis C treatment gets approval in EU
NORTH CHICAGO, Ill. (AP) — Drugmaker AbbVie says its new, multipill hepatitis C treatment has been approved for patients in the 28 European Union member countries.
The company, based in North Chicago, Illinois, says the European Commission granted marketing authorization for its treatment consisting of Viekirax and Exviera.
It’s already approved in Switzerland, Norway and other nonmember countries in Europe, on top of Canada and the U.S., where Viekirax is called Viekira Pak.
AbbVie’s medicines are part of a new generation of hepatitis C treatments that don’t require any injections, have fewer side effects and cure nearly all patients in as little as eight weeks.
Older treatments cause flu-like side effects many patients can’t tolerate, require treatment for as much as a year and still barely cure half of patients with the liver-damaging disease.
BOX OFFICE
‘American Sniper’ astounds with $105.3M over MLK weekend
NEW YORK (AP) — Clint Eastwood’s R-rated Iraq War drama “American Sniper” opened in January like a superhero movie in July, taking in a record $105.3 million over the Martin Luther King Jr. four-day weekend.
The film’s success obliterated forecasts and set numerous box-office records. It easily surpassed “Avatar” to become the biggest January weekend ever.
This was actually the third week of release for “American Sniper,” which played in just a handful of theaters for two weeks. That release helped stoke demand for the film, in which Bradley Cooper stars as Navy SEAL marksman Chris Kyle.
The resounding wide-release opening is also tops for the 84-year-old Eastwood. And it, in one weekend, gives the Oscar best-picture race something it was lacking: a big box-office hit. “American Sniper” is nominated for six Academy Awards.
AMAZON-MOVIE PRODUCTION
Amazon branching out from TV series to movie production
SEATTLE (AP) — Amazon Studios is branching out from television series to movies, announcing plans to begin producing and acquiring original movies for theatrical release and, within weeks, video streaming.
Just five years after its launch, Amazon Studios says it will begin producing motion pictures this year and aims to release a dozen original “prestige movies” annually.
Independent filmmaker Ted Hope will oversee creative development for the new unit, Amazon Original Movies. Hope co-founded and ran Good Machine, a production company behind some Academy Award-nominated films, including “Crouching Tiger, Hidden Dragon,” and “Eat Drink Man Woman.”
Amazon Original Movies will focus on unique stories, characters and voices from “top and up-and-coming creators,” according to the company. Once movies have hit theaters, they’ll debut on Amazon Prime Instant Video within 4 to 8 weeks.
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