Good morning,

Markets are called to open higher this morning. This is what's happening today:

  • Alcoa reported after the New York close that fourth-quarter sales fell to $5.9 billion from $5.99 billion, beating the $5.6 billion average of 11 estimates. The shares rose 1.1% in after-hours trading. Demand in China, the largest aluminum user, will grow 11 percent this year on stimulus spending announced by the new leadership, Alcoa Chief Executive Officer Klaus Kleinfeld said;
  • Alcoa, said it sees global demand growth for the commodity recovering to 7% in 2013 as China’s economic rebound drives demand;
  • 10-year Italian debt is yielding 4.280%, 10-year Spain is yielding 5.055% and 10-year Portuguese debt is yielding 6.377%;
  • Brent is trading at $111.85/bbl;
  • Gold is trading at $1663.29/ t oz;
  • Apple closed the session at $526.19

The markets seem to be holding on to their gains and Alcoa kicked the earning season off on a good start. Investors tend to scrutinize Alcoa's results for hints on where the overall economy is headed, as the company's aluminum products are used in the automotive, appliance and airline industries.

The results o Alcoa where nothing to write home about, however, they came slightly above analysts expectations. Alcoa, (the largest aluminum producer in the United States), is cautiously optimistic demand for the metal will continue to grow in 2013, helped in part by strong sales to aerospace and construction customers. The CEO offered a positive outlook yesterday for 2013, but kept a cautious tone as worries lingered over a looming US budget confrontation. Alcoa expects global aluminum consumption to grow 7% in 2013, up slightly from 6% in 2012, and maintains global aluminum demand will double between 2010 and 2020. It forecast global consumption growth in the aerospace sector to dip to 9-10% in 2013 from 13-14% in 2012, and pegged growth in the automotive sector at 1-4%, well below 16-17% in 2012.

What's good about Alcoa's results is that it gives you an indication of where the global economy is heading. Although Alcoa is optimistic about China, the fact that we are seeing a substantial slowdown in growth for aluminium from the automotive sector is not encouraging. It would be interesting to see how the automotive sector will react to this news in today's session.

Japan is a hot topic today. Japanese shares are performing well again. The yen fell versus all of its major counterparts on expectations the Bank of Japan will accede to government pressure to expand monetary easing that tends to weaken the currency. The yen declined versus the dollar and euro ahead of data this week that may show Japan had a current-account deficit in November, supporting the case for increased stimulus at the central bank’s next meeting. The new Prime Minister is also expected to double the Bank of Japan's inflation goal to reverse morethan a decade of deflation.

In Europe we are seeing some strength in the Euro against a basket of currencies because economist are not expecting the ECB to cut rates in tomorrow's meeting.

So far so good. However, it is paramount that you monitor your portfolio periodically with prices at these levels. The markets are factoring in alot of positive news though there is still alot which needs to be addressed. You heard it from the horse's mouth yesterday when Alcoa's CEO, Klaus Kleinfeld said, ' There is one uncertainty still there, which is the uncertainty around the US budget, and that potentially has an impact, obviously, on the defense spend.'

A stock from CC's equity list: Bunge – Initiating with Overweight Rating and $85 Price Target

JP Morgan – We are initiating coverage of Bunge Limited (BG) with an Overweight rating. BG is a global agribusiness company with businesses including crop procurement and processing, transportation of agricultural commodities, sugarcane processing (including ethanol), grain milling, and food and ingredients. Our Overweight rating is predicated on BG's strong geographic exposure to South America, where production of soybeans and sugarcane is looking strong for the coming season, offset by drought conditions in the U.S., which hampers visibility in the region. With 36% of oilseeds processing capacity and 60% of port capacity located in South America, BG in our view is uniquely positioned to benefit from continued growing demand for protein in Asia. Overall, we believe the stock should continue to outperform its peers; we therefore initiate with an Overweight rating and a YE'13 price target of $85.

For more information on Bunge and other stocks and bonds we follow, contact our offices on 25688688.

Good day and happy trading!

Kristian Camenzuli