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·         Credit Suisse swings to fourth-quarter loss, weighed down by provisions for a U.S. legal dispute

 

·         One big reason the market is still rallying: Companies are slashing costs

Stocks are hitting new highs on the back of a magical phrase being sprinkled like pixie dust among the conference calls this earnings season: “operating leverage.”

“The market is set to see a substantial acceleration in earnings growth on better-than-expected operating leverage,” Morgan Stanley’s Mike Wilson said in a recent note to clients.

“Operating leverage” is an accounting term that measures how a company can increase profit by decreasing costs and increasing revenue.

Simply put, Wilson and other strategists are expecting that the cost-cutting efforts of corporate America in 2020 — reducing rent, cutting travel, and especially eliminating jobs — will dramatically improve the bottom line and accelerate profits even more when revenues are expected to increase in 2021.

More revenues + lower expenses = more profit.

 

·         Wall Street worries about regulatory fallout from the GameStop saga

Wall Street is concerned about the Yellen regulator super summit, and with good reason, market watchers say.

Treasury Secretary Janet Yellen has announced she will be meeting with the heads of the Securities and Exchange Commission, the Federal Reserve board, the New York Fed and the Commodities Futures Trading Commission to discuss “whether recent activities are consistent with investor protection and fair and efficient markets.”

The meeting could take place as early as Thursday.

·         Asian stocks hit by profit taking amid concerns about stretched rally

Asian stocks fell on Thursday as investors locked in profits on sectors that have outperformed recently in a sign of growing caution about the recent rally in global equities.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.42% but was still close to an all-time high. Chinese markets dipped on their first day of trade after the Lunar New Year break.

In signs global sentiment was still buoyant, Euro Stoxx 50 futures were up 0.22%, German DAX futures were up 0.15% at 13,917, and FTSE futures rose 0.3%.

 

·         Japanese shares slip on market outlook caution, Fast Retailing shines

Japan’s benchmark Nikkei share average inched lower on Thursday as investors tuned cautions about the sustainability of a recent rally above the 30,000 level, though sharp gains in Uniqlo operator Fast Retailing limited the decline.

The Nikkei 225 index settled down 0.19% at 30,236.09, reversing earlier gain, while the broader Topix fell 1% to 1,941.91.

Earlier this week, the Nikkei reclaimed the 30,000 level for the first time since 1990 amid growing expectations of an economic rebound.

Apparel maker Fast Retailing jumped 4.58%, making it the biggest contributor to the Nikkei, followed by Chugai Pharmaceutical, which rose 2.17%.

 

·         China's blue-chip index retreats from record high on policy tightening worries

China’s blue-chip index ended lower after scaling an all-time high on Thursday, the first trading session after a week-long Lunar New Year holiday, on worries over policy tightening and lofty valuations.

The blue-chip CSI300 index climbed as much as 2.1% to an all-time high of 5,930.9, before closing down 0.7% at 5,768.38, while the Shanghai Composite Index rose 0.6% to 3,675.36.