Good morning! Here's what you need to know.
— The Australian dollar had an abysmal session after the country posted a weak jobs report. The currency has been falling since last spring as emerging markets like China (the major importer of Australian commodities) struggle to remain on the sustainable growth path. "The Australian economy lost a net 22.6k jobs. The Bloomberg consensus called for a 10k increase," BBH's Marc Chandler summarizes in his morning note. "Adding insult to injury, the November series was revised to show a 15.4k gain instead of the initial 21.0k. Moreover, these headline figures understate the dismal news. Australia lost 31.6k full-time jobs in December and the downward revision to the November series reflects almost exclusively full-time jobs."
— Yahoo COO Henrique De Castro, one of CEO Marissa Mayer's first major hires, is leaving the company effective January 16. "His job at Yahoo was to fix the company's relationship with big agencies to get Yahoo's ad business cranking again," writes our Jay Yarow. "Mayer hired De Castro because she believed he was responsible for building Google's display ad business from nothing to doing billions of dollars in revenue."
— It's a busy day of economic data. At 8:30 a.m., we'll get the consumer price index. Economists expect CPI increased 0.3% month-over-month in December, 0.1% excluding food and energy. "Unadjusted gasoline prices rose slightly in December (4 cents nationwide)," Credit Suisse economists wrote clients. "But seasonal factors expect a significant decline, so adjusted gasoline could rise almost 4% on the month... Shelter inflation appears to be firming, though goods prices should remain tame."
— Also at 8:30 a.m., weekly initial jobless claims will come in. Economists believe claims will fall to 325,000 from 330,000 last week. "Initial jobless claims probably popped up during the week ended January 11, but we think that seasonal factor issues exaggerated the underlying change," wrote Citi's Peter D'Antonio, who expects a 355,000 reading. "We anticipate that unadjusted claims rose by 20%, which is not unusual for the first full week of January when many holiday workers are released."
— Then at 10:00 a.m., the Philadelphia Fed Business Outlook survey will be released. Economics believe that the regional business activity index will climb to 8.5 in January, up from 7.0 in December. "While below the levels in the second half of last year, a move further into expansionary territory would be in line with our view that manufacturing activity will continue to pick up in 2014," wrote Barclays' economists. Finally, also at 10:00 a.m., the NAHB housing market index will come out. Economists believe the homebuilder sentiment index will remain unchanged at 58 for December. Barclays' economists are more bullish: "We look for an increase to 59 in the January NAHB index of home builder sentiment," they wrote. "This would reflect the fading effect of higher mortgage rates earlier this year and would bode well for residential construction activity in 2014."
— Goldman Sachs will report earnings this morning. Market watchers will be looking for whether the bank suffered declines in fixed-income, currencies and commodities trading (FICC) like they did in the third quarter. FactSet analysts said adjusted earnings could come in at $3.99 a share, which would be down 29% from a year ago, as MarketWatch noted.
— Asian markets were mixed in overnight trading. Japan's Nikkei fell 0.39%, Hong Kong's Hang Seng climbed 0.37%, and Korea's KOSPI was up 0.21%. Europe started flat and U.S. futures were pointing a bit lower.
— Next week begins the World Economic Forum's annual conference in Davos, Switzerland. Quartz crunched the numbers: "This year’s conference will bring together 196 academics, 288 government officials, 48 representatives from international organizations, and 2,101 people from the private sector," writes Quartz's David Yanofsky. "Only 15% of expected attendees are women, down from 17% last year."
— Private equity firm Apollo has purchased Chuck E. Cheese for about $1 billion, the Financial Times' Ed Hammond reports. "The deal, which will be announced on Thursday morning, will see Apollo, the fund controlled by billionaire Leon Black, pay $54 per share for Chuck E. Cheese," Hammond reports. "The price paid by Apollo marks an 11.5 per cent premium to the restaurant group’s Wednesday closing price of $48.43."
— In China, over 200 million people have begun the estimated 3.62 billion trips home for the Chinese New Year. The "world's biggest annual human migration" will last 40 days. "That movement of people strains the country’s transportation system, with tickets hard to buy, controversies over ticket sale systems, black-marketeering...trains packed like sardine tins and fights over boarding, lines and seats," reports the New York Times' Didi Kirsten Tatlow. "But the end goal – celebrating with family – is considered worth it."
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