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Pre-Market Primer: China Trade Data Lifts Global Stocks


Spanish borrowing costs are dropping fast, too.

Stocks are set to rally today on encouraging trade data from China, largely offsetting a disappointing report on initial jobless claims.

China's exports came in stronger than expected. The country's trade surplus rose to $31.62 billion in December 2012 from $19.63 billion in the month before. Exports rose 14.1% to a seven-month high and imports gained 6%. Economists expected just a 4.5% gain in exports and 2.6% in imports. Strong import demand in the world's second-largest economy lifted industrial commodity and energy futures. The data also pushed up the Aussie dollar and helped weigh on the Japanese yen.

New renminbi-denominated loans in China fell to 454.3 billion yuan in December. Analysts expected at least 640.5 billion yuan in new loans.

US stocks are pointing toward a higher opening despite the fact that initial claims for unemployment insurance rose to 371,000 last week from 367,000 in the week before. Economists expected claims to fall to 362,000.

Dow (INDEXDJX:.DJI) futures were up 0.28% at 13,362. Futures contracts on the S&P 500 (INDEXSP:.INX) rose 0.38% to 1,4561.40 and Nasdaq (INDEXNASDAQ:.IXIC) futures gained 0.47% to 2,734.75. European and Asian equities also sold off this morning.

As expected, the European Central Bank left benchmark rates unchanged and refrained from making major policy statements today. The ECB's key refinancing rate will stay at 0.75%. The Bank of England also left rates unchanged at 0.5% and announced no new stimulus action.

A strong Spanish bond sale also lifted investors' mood today. In its first debt sale of the year, Madrid raised 5.8 billion euros in mostly short-term bonds; the bonds were within the timeframe in which investors might be made whole by an international bailout. Yields on the Spanish 10-year bond dipped below 5% to a 10-month low of 4.99%.

France's consumer prices rose 0.3% in December, meeting economists' expectations. Industrial production surprised, however. Excluding construction, French industry improved by 0.5% in November 2012.

President Obama will nominate Jack Lew as Treasury Secretary today. Though largely seen as a Wall Street outsider, Lew previously worked as a managing director at Citigroup (NYSE:C) before moving to the public sector. Currently, he serves as the President's Chief of Staff. If nominated, our paper currency might have a rather curious signature on it.

Reuters reports that Apple (NASDAQ:AAPL) CEO Tim Cook met with China Mobile (NYSE:CHL) chairman XI Guohua in Beijing today. Apple analysts and Cook see China as the area where the Cupertino, Califorinia-based company has the most potential for growth. A deal with China Mobile (NYSE:CHL), the country's (and the world's) largest carrier, would open the company to millions of potential iPhone customers. Aside from the iPhone's prohibitive cost, another hurdle is the different 3G network that China Mobile uses.

Delta Air Lines (NYSE:DAL) shares rose after Goldman Sachs (NYSE:GS) recommended the company as a buy. Morgan Stanley (NYSE:MS) lowered its rating on Microsoft (NASDAQ:MSFT) to equal weight from overweight, citing weak demand for home personal computers running its software. Shares of Microsoft fell 0.5% in the pre-market.

Hedge funds are fighting a war. Multilevel marketing company Herbalife (NYSE:HLF) serves as the battlefield. Last month, Pershing Square manager Bill Ackman made a huge presentation on his short thesis on the company, accusing it of operating a pyramid scheme. Other investors piled into the short and the SEC is investigating the company's practices. Third Point's Dan Loeb revealed an 8.2% long holding in the company, taking advantage of the lower share price. He says that Ackman's hope that the government will shut down this decades-old company is unrealistic. Carl Icahn has joined Loeb in the long position.

Twitter: @vincent_trivett
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