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Pre-Market Primer: Germany Not Immune to Euro Slump; Yen Stabilizes


And is Dell going private?

Markets are slightly down today as investors brace for several more weeks of a debt ceiling fight in Washington and retail sales showed that last year's holiday shopping wasn't so bad after all.

Dow (INDEXDJX:.DJI) futures fell 0.31% to 13,390. S&P 500 (INDEXSP:.INX) futures dropped 0.40% to 1,458.60. Nasdaq (INDEXNASDAQ:.IXIC) futures slipped 0.29% to 2,720.75.

US retail sales in December 2012 beat expectations by a huge margin, rising 0.5% after an upwardly revised 0.4% uptick in November 2012. Economists expected a gain of just 0.2%. Excluding autos and gas, sales were up 0.6%.

Producer prices continue to fall. PPI fell 0.2% last month after a 0.8% drop in November. The New York Fed's Empire Manufacturing survey for this month fell short of expectations at -7.78. Experts expected it to come in at dead zero.

Yesterday, President Barack Obama had his last press conference of his first term. He spent quite a bit of the time talking about the Republicans' refusal to raise the statutory debt limit.

"What I will not do is to have that negotiation with a gun at the head of the American people," he said yesterday. The Treasury already reached the debt ceiling in December. Through sheer extraordinary accounting measures, the government can continue to meet its obligations until about mid-February. Fitch, the ratings agency, reiterated its warning that it will downgrade its credit rating for the United States if the debt limit isn't raised. Fitch might cut the country's AAA rating even if there isn't a default if policymakers don't find a solution to the ballooning deficit.

Lululemon Athletica (NASDAQ:LULU) shares fell 6.9% after the company said yesterday that its fourth quarter revenue will miss analyst estimates. The yoga gear retailer said that revenue will be between $475 million and $480 million. Analysts forecast $489 million.

Wal-Mart (NYSE:WMT) will announce today that it plans to hire 100,000 military veterans over the next five years.

Dell (NASDAQ:DELL) rose nearly 13% yesterday on reports that the company is considering offers to go private from at least two private equity firms. The stock continues to trade higher in after-hours trading. In the premarket, Dell is up 4%.

Germany's economy contracted more than expected at the end of 2012. The eurozone's biggest GDP contracted by 0.5% in the fourth quarter of 2012 after gaining 0.2% in the third. This was the biggest quarterly drop in nearly three years. Over the full year, Germany grew by just 0.7% after rising 3% in 2011.

Akira Amari, Japan's economy minister, warned the government that there are huge risks to swiftly weakening the yen. He said that while a weaker yen could make Japan's exports more competitive, it would cause "a spike in import prices." Japan imports most of its energy and industrial materials. Especially after it abandoned nuclear power, Japan has a huge appetite for natural gas and oil. The yen fell 1.06% to 88.53 to the dollar today.

Bank of Japan Governor Masaaki Shirakawa promised again today that the central bank plans to pursue the level of "powerful monetary easing" that the new government demands.

Twitter: @vincent_trivett
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