Liverpool Transfer News: Big-Money Signings Linked in Latest Reds Rumours

Liverpool manager Brendan Rodgers believes his side can "absolutely" challenge for the Premier League's top four after watching the Reds snatch a late 2-2 draw with Arsenal on Sunday, as reported by Phil McNulty of BBC Sport.

Rodgers continues to be linked with a host of January signings to help make this happen. Liverpool played improved football against a poor Gunners outfit, once again creating many opportunities to win the match, per Squawka:

This follows on from the 19 shots on goal produced during the 3-0 loss against Manchester United, per WhoScored.com. While Rodgers' side appears far more creative with Raheem Sterling feeding off Adam Lallana's passes, goals are still difficult to come by.

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Daniel Sturridge's January return—revealed by Rodgers after the match, per McNulty—could stop the club firing up a bid for Porto's Jackson Martinez. Tottenham are ready to go "all out" for the Colombian's signature, according to Portuguese newspaper Record (h/t Hannah Duncan of the Metro), meaning Liverpool's quest to sign a new striker may turn elsewhere.

The unlikely story that Fernando Torres will return to the club continues to circulate, per Rob Shepherd of MailOnline. Liverpool already have one striker who opposition fans love to berate in Mario Balotelli, meaning it wouldn't be helpful to the club's image to add Torres, someone whose form has dropped dramatically since he left Anfield in 2011.

Jamie Casey of SkyBet highlights poor odds around Torres' potential return:

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Borussia Dortmund's Marco Reus has reportedly agreed to a deal with Real Madrid, according to Marc Williams of the Daily Star, so the unlikely dream of his capture could be etching further away for Reds fans. Confirmation of such an agreement is yet to be announced, however, and goes against Florentino Perez's assessment of the situation.

"We're not looking at Reus, in the same way as we're not talking about renovations," said the Madrid president, per AS.

Defensive problems continue to plague Liverpool's progress. Despite dictating much of the match against Arsenal, the home side was easily breached at the back.

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Anthony Chapman of the Sunday Express believes Liverpool are ready to do battle with Arsenal and Manchester United for the £25 million signing of Real Madrid full-back Fabio Coentrao, but this also seems a strange rumour from Liverpool's point of view.

Coentrao is a useful player, there's no doubt about it, but this fee is outrageous for a player who has failed to consistently hold down a place in Los Blancos' starting XI since arriving in 2011. The left-back would offer a quality alternative to Alberto Moreno and could be useful as an attacking full-back if Rodgers is to keep his 3-4-3 formation.

Even so, any double-digit fee is questionable considering the impact it would have on Liverpool's ability to adhere to UEFA's Financial Fair Play rules. Rodgers can spend his money far more wisely and should instead look to unearth greater value for money.

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This may come in the form of a free transfer. Former Barcelona goalkeeper Victor Valdes continues to train with United, but Louis van Gaal recently reacted angrily when asked if he would join the club.

In fact, the Dutchman provided a tongue-in-cheek quote telling the Spaniard to move to Merseyside, reported by James Dickenson of the Daily Express:

"

It's only talk from you (the press). Not from us, not from Valdes, only the media. I'm not here to inform the media. You have to wait and listen and see. If Liverpool are interested, he goes to Liverpool. The media are suggesting and that's a big mistake.

That's why I'm always angry because you are inventing stories. There are no stories. He is training here. I give him the possibility to do that. We shall see.

"

Football pundit Janusz Michallik recently described to B/R UK's Ryan Bailey exactly what Liverpool need when the market opens:

The Reds have showed better play in recent matches, despite positive results still being a struggle. This is progress after such a disappointing start to the season. Things will only get better when Sturridge returns to fitness, particularly if Rodgers spends well throughout January.

A quick fix is unlikely—new players still need to bed in and Liverpool's problems run throughout the side—but supporters will no doubt take heart from Martin Skrtel's last-gasp rescue act against the Gunners.