Good morning. Here's what you need to know.
- Asian markets were mostly closed in overnight trading for the Lunar New Year holiday. European markets are mixed, with France up nearly 0.6 percent, and Italy down 0.4 percent. U.S. futures are modestly higher.
- Pope Benedict XVI will resign due to health reasons on February 28. In a press release he said, "After having repeatedly examined my conscience before God, I have come to the certainty that my strengths, due to an advanced age, are no longer suited to an adequate exercise of the Petrine ministry."
- Euro area finance ministers are meeting in Brussels today to discuss financial aid for Cyprus and Greece. Meanwhile, G7 officials are reportedly considering releasing a statement to calm concerns over a currency war. The next two weeks are loaded with market-moving geopolitical events >
- China's extremely high pollution levels prompted Beijing to urge its residents to limit their use of fireworks while celebrating the Lunar New Year, also called the Spring Festival. The muted celebrations were also part of the government's efforts to crackdown on corruption. Click here to see how people are celebrating the Lunar New Year >
- U.S. Airways Group and AMR Corp could announce an $11 billion merger in a week, according to Reuters. This comes 14 months after AMR Corp filed for bankruptcy, and the merger would make it the world's largest airline.
- Apple is working on an iWatch, according to the NY Times. The watch uses curved glass to bend to the wrist and is expected to operate Apple's iOS platform.
- In earnings news, Tesla is expected to report a fourth quarter loss of $0.53 per share. Tesla has posted a loss in every quarter since its 2010 IPO. Investors will be watching the production of its Model S cars, and the company needs to make 400 a week to break even, according to The Wall Street Journal.
- The deadlock in Washington continues as we inch closer to the March 1 sequester deadline that would bring about automatic spending cuts. President Obama wants spending cuts to be accompanied by higher taxes. Meanwhile, Obama will give his State of the Union address tomorrow. The crazy story of the time when nearly anyone in America could issue their own currency >
- French industrial production declined 0.1 percent month-over-month in December, after a 0.5 percent rise in November. On a quarterly basis, industrial production was down 1.8 percent from Q3 2012, and down 3.1 percent from Q4 2011.
- Bank of America's latest Bull & Bear index suggests that "investor sentiment is currently more bullish than 99% of all readings since 2002". This is seen as contrarian sell signal.
- Bonus - Taylor Swift reportedly took a shot at her ex Harry Styles at the Grammys last night when she feigned a British accent.
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