In a positive sign, companies restocked at a faster pace in December in expectations that consumers will step up spending. The Commerce Department said on Tuesday that business stockpiles grew 0.4 percent in December and sales rose 0.7 percent, almost double the November gain.
Higher inventories require more production that boosts growth of the economy and suggests companies expect more sales.
Wholesalers reported a 1 percent increase in inventories while retailers reported a 0.2 percent gain and manufacturers 0.1 percent.
Roy Bostock, the chairman of Yahoo Inc, and three other directors will step down as the struggling company ploughs ahead with an internal overhaul. Yahoo is presently including discussions on dealing with its stakes in Alibaba Group of China and Yahoo Japan.
Yahoo appointed former Rovi Corp CEO and International Business Machines Corp veteran Alfred Amoroso and ex-eBay COO Maynard Webb as independent directors, according to a company announcement.
“We have engaged with potential investors and reviewed proposals concerning an equity investment in the company, although at this time there have not been any proposals which have been deemed by the committee to be attractive to our shareholders,” Bostock said in a letter to shareholders released on Tuesday.
“We are also in active discussions with our partners in Asia regarding the possibility of restructuring our holdings in Alibaba Group and Yahoo Japan. The complexity and unique nature of these transactions is significant,” the letter said.
On Tuesday, German Chancellor Angela Merkel said she did not want to see Greece being forced out of the euro, warning that this would have “unforeseeable consequences.”
“I will have no part in forcing Greece out of the euro,” she said. The chancellor said there was no alternative for Greece to painful reforms.
“We don’t do it to make things difficult for people, what would be our interest in doing that? But we want to reach a point where Greece can, with European help, live off its resources,” said Merkel. “Nobody wants to force reforms on them from outside,” she said.
For the third consecutive month in the year to December, the core consumer prices of Japan fell and mild deflation is expected to persist this year as energy prices stabilize and worries about the debt crisis of Europe suppress wage growth and economic activity.
Core consumer prices declined an annual 0.1 percent and retail sales fell 1.2 pct in 2011, the first fall in two years.
“The stagnation of other developed countries is likely to push back the timing of Japan beating deflation from the mid-2010s as originally thought to the late 2010s,” said Takeshi Minami, chief economist at Norinchukin Research Institute. “The BOJ will need to keep its ultra-easy stance in the meantime. If risks from the euro-zone debt crisis heighten, it could move for an additional easing in the near term.”
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Standard & Poor’s said on Friday that the top credit rating of Europe’s bailout fund, EFSF, depends on additional financial backing from Germany and the other three remaining AAA-rated euro zone countries.
Also known as European Financial Stability Facility, the fund has its AAA rating at risk after S&P stripped two of its guarantors, France and Austria, of their top credit ratings.
“If you have a greater commitment from the other countries, then the EFSF could retain its AAA rating,” John Chambers, the chairman of S&P’s sovereign rating committee, told Reuters Insider in an interview.
“If you’ve lost two of the six AAA guarantors, either they need to increase the backing from the four remaining AAA guarantors or they need to raise some cash buffers,” Chambers said.
The Nikkei business daily has disclosed that Camera maker Canon Inc plans to meet its sales target of 5 trillion yen ($64.84 billion) in 2015 through diversification into medical equipment and movie cameras.
“The business plan assumes annualized growth of 7 percent, but we will be short of the 5 trillion yen target by about 300 billion yen at the current pace,” Chairman Fujio Mitarai told the Nikkei.
The Nikkei reported that Canon plans to boost annual sales in medical equipment from a little more than 30 billion yen now to 100 billion yen and also intends to focus on new operations, like professional video cameras for shooting movies, a field it will enter this year.
This year, top commodity picks for Goldman Sachs are oil, gold, and base metals. The investment bank said on Monday that these picks are selected primarily because of a big upside risk in oil due to tight fundamentals and a potential Iranian conflict.
Head of Commodities Research Jeff Currie said Brent crude is the commodity with the greatest potential to break above its target. “Oil we like the most from a fundamental basis but at $113 a barrel in the current environment is pretty rich,” he told a strategy conference in London.
Brent oil is expected to end the year $127.50 per barrel and trade at an average of $120 in 2012, according to Goldman. Gold and base metals have further to rise from present level to targets of Goldman, but have scant potential above the targets.
“Oil on the other hand, given the current environment, tight fundamentals, the current geo-political situation in Iran, creates massive upside price risk relative to our target,” Currie said.
The China Daily, quoting a government official, reported on Wednesday that the Chinese government is planning new policies for boosting domestic consumption, particularly of vehicles and appliances, in a bid to offset the effects of sagging export demand.
Huang Hai, former assistant minister of commerce and a member of the economic and trade policy consulting committee linked to the Ministry of Commerce said the government is working on new measures with tax rebates on vehicles and domestic appliances either having expired or due to expire.
The paper said these measures can include subsidies for families living in affordable housing that buy electrical appliances and for consumers planning to change cars.
In their first trading session of the year on Monday, European stocks ended higher and were led by defensive utilities such as E.ON (EONGn.DE) and GDF Suez (GSZ.PA), while volumes were anemic as UK and U.S. markets remained closed for the New Year holiday.
The FTSEurofirst 300 .FTEU3 index of top European shares provisionally closed 1 percent higher at 1,011.14 points, which is its highest close in two months.
A number of traders and analysts warned about the risk of hangover from the brisk two-week Christmas rally when most investors come back to work later in the week.
“The odds for a post-party headache will indeed be high,” Saxo Bank trading advisor Didier Abbato said. “The bad news is that Santa did not deliver on a quick fix solution to Europe’s financial troubles.”
