Daily Market Update – January 22, 2013

Top News Highlights

• GE announced Q4'12 operating earnings of $4.7B, or $0.44 per share, both up 13% from the Q4'11. GAAP earnings from continuing operations were $4.3B, or $0.41 per share, up 9% and 11% respectively. Revenues were $39.3B for the quarter, up 4%, and $147.4B for the year. Industrial segment organic revenue growth was 4% for the quarter and 8% for the year. Industrial segment profit rose 12% in the fourth quarter to $4.9B. GE Capital progressed with its strategy of a smaller, more focused financial services business with solid earnings. GE Capital earnings grew 9% in the quarter and ENI was $419B at quarter end. GE Capital Q4'12 revenues and profit of $11.8B and $1.8B, respectively were up from $11.6B and $1.7B in the same year-ago quarter. Full year 2012 revenues and profit of $46.0B and $7.4B, respectively were down from $49.1B and up from $6.6B in 2011. Infrastructure order pricing rose 0.5% for the quarter, and four of six Infrastructure businesses had double-digit growth in orders for equipment, including Oil & Gas, Energy Management, Aviation, and Transportation

Economic Highlights

• Confidence among American households unexpectedly fell to a one-year low in Jan, as higher payroll taxes create a risk that the biggest part of the economy will slow in early 2013. The Thomson Reuters/University of Michigan preliminary index of consumer sentiment dropped to 71.3, the lowest since Dec 2011, from 72.9 the prior month. The gauge was projected to rise to 75, according to the forecast in a Bloomberg survey
• Germany's economic slowdown is likely to be short-lived as the biggest Euro area economy's prospects have improved at the beginning of the year, Bundesbank said in a monthly report. On Dec 7, the Bundesbank trimmed its German growth forecast for this year to 0.4% from 1.6%. Growth is seen picking up to 1.9% in 2014. business sentiment has improved, especially the view on export prospects, the central bank said. "The broadly stable labor market and better employment outlook indicate that the economic weakness will not last long," the bank said. Signs of a recovery are already visible in the Q1'13, it added
• The Bank of Japan set a 2% inflation target and said it will shift to Federal Reserve-style open-ended asset purchases in its strongest commitment yet to ending two decades of deflation. Stocks fell and the yen strengthened after the BOJ and the government said that the price goal has no deadline. The central bank will buy about 13T yen ($145B) in assets per month from Jan 2014, including about 2T in Japanese government bonds and about 10T yen in treasury bills, the BOJ said

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