Evening Headlines
Bloomberg:
- Japan Hit by Aftershocks as Jaczko Says Nuclear Crisis Is Yet to Stabilize. Japan’s crippled nuclear station is yet to stabilize and the reactors must be kept cool to prevent the crisis from deteriorating, the U.S. atomic regulator said, as more aftershocks rocked the country. “Currently the situation is static,” Nuclear Regulatory Commission Chairman Gregory Jaczko said at a hearing of the Senate Environment and Public Works Committee yesterday, after Japan raised the severity rating of the accident to the same level as Chernobyl. “It is not yet, however, what we believe to be stable” and “significant additional problems” could still occur at the Fukushima Dai-Ichi plant, he said in Washington. The stricken plant, about 220 kilometers (135 miles) north of Tokyo, is leaking radiation in Japan’s worst civilian nuclear disaster after a magnitude-9 quake and tsunami on March 11. While Tokyo Electric Power Co.’s station has withstood hundreds of aftershocks, temblors this week have hindered efforts to restore cooling systems as workers were temporarily evacuated. Tepco, as the utility is called, said a 5.2-magnitude earthquake today didn’t damage the plant and recovery work is continuing. Japan was struck by two earthquakes stronger than magnitude 6 yesterday, following a 6.6-magnitude temblor April 11 and a magnitude 7.1 aftershock on April 7.
- Libyan Rebels Ask for Help From NATO to Break Qaddafi's Siege of Misrata. Libyan rebels said Muammar Qaddafi’s forces are “accelerating attacks” on Misrata, including firing Russian-made Grad rockets into the city, and appealed for international help to stop the “potentially devastating assault.”
- Banks to Face Sovereign Debt Scrutiny in European Regulator's Stress Tests. European regulators will scrutinize banks’ calculations for losses on sovereign debt held to maturity when carrying out this year’s stress tests, Europe’s top banking supervisor said. Financial watchdogs will “check what banks are doing with reference to some sovereign exposures and see whether they’re taking a conservative attitude” when valuing the assets, Andrea Enria, the chairman of the European Banking Authority, said in an interview in London. Ninety banks will be expected to maintain a Core Tier 1 capital ratio of at least 5 percent under the stress-test scenarios, the EBA said. Portugal last week became the third euro-area state after Greece and Ireland to succumb to the region’s sovereign-debt crisis and request emergency aid. “I understand on contacts I’ve had with banks that some of them have already reviewed the valuations of sovereign exposures on the banking book towards certain countries,” Enria said. Banks hold on to bonds in the banking book until the principal is scheduled to be repaid, rather than trading them on the secondary market. This year’s tests will include a review of how banks would handle a 0.5 percent economic contraction in the euro area in 2011 as well as a 15 percent drop in European equity markets. The EBA tests will also examine the effect of a 75 basis- point-jump in interest rates on European sovereign bonds and an increase in short-term inter-bank financing costs of 125 basis points.
- Asia Deficits Swell as Soaring Oil Makes Leaders Delay Subsidy Reductions. Surging oil and food costs may swell budget deficits in Asia as governments spend on subsidies to keep consumer prices low and avoid inflation protests that helped topple regimes in the Middle East this year. India, Indonesia, Malaysia and Thailand, Asia’s biggest fuel subsidizers, will probably all miss fiscal deficit targets due to higher oil outlays, according to a March 10 Bank of America Merrill Lynch research note. Ten-year bond yields in India are trading near a six-week high, while those in Malaysia are close to levels last seen in January. The threat of further oil-price increases has become a “key downside risk” for global growth, the International Monetary Fund said on April 11. Oil at $120 per barrel would shave 0.5 to 1.2 percentage points off gross domestic product growth this year in most of Asia’s biggest economies, Oversea- Chinese Banking Corp. said in a March 10 report. “If we continue to see this upward pressure on oil prices, that becomes one of the key risks to pretty much most markets,” said Kenneth Akintewe, a Singapore-based money manager at Aberdeen Asset Management Plc (ADN), which oversees $287 billion. Crude prices, which traded close to a three-year high at as much as $112 per barrel last week, may force governments to sell more debt, pushing up yields across the region, he said.
- Commodities Slump Most in Four Weeks as Japan Crisis May Slow World Growth. Commodities slid the most in four weeks, led by declines in grains, oil and industrial metals, as Japan’s nuclear crisis escalated, potentially slowing the global economic expansion. Crude oil retreated in the biggest two-day drop in 11 months after the International Energy Agency warned that oil above $100 a barrel is starting to hurt the global economy. Wheat and copper tumbled the most in four weeks, while cotton fell to a six-week low. Japan’s Economic and Fiscal Policy Minister Kaoru Yosano said today the March 11 earthquake may hurt the economy more than forecast. “Seeing the oil market come down has taken some of the wind out of the inflationary forces that drove commodities to records,” said Adam Klopfenstein, a senior market strategist at Lind-Waldock in Chicago.
- Silver Options Bears Boost Bets on Decline for Second Day. Trading of bearish options on an exchange-traded fund tracking silver jumped to 3.7 times the four-week average, boosted by a single trade for a second day, as futures on the metal snapped a seven-day winning streak. More than a quarter of all volume for puts to sell the iShares Silver Trust (SLV) ETF was concentrated in 100,000 contracts in a strategy known as a butterfly spread, according to OptionsHawk.com, a Boston-based provider of options-market analytics. The trade profits most if the fund falls 7.9 percent to $36 before May options expire, and follows yesterday’s purchase of 100,000 July $25 puts. “This is interesting in the context of yesterday’s trade,” said Caitlin Duffy, an equity-options analyst at Greenwich, Connecticut-based Interactive Brokers Group Inc. (IBKR) “There’s similar sentiment between yesterday and today because this runup has lost momentum and may be due for a turnaround.”
- Pfizer(PFE) Drug Wins FDA Panel's Backing for Pancreatic Cancer. Pfizer Inc. (PFE) won a U.S. panel’s backing to expand marketing of a cancer drug for patients with the rare type of pancreatic tumor diagnosed in Apple Inc. (AAPL)’s Steve Jobs in 2004. The medicine, Sutent, works sufficiently to outweigh potential risks, outside advisers to the Food and Drug Administration said today in an 8-2 vote in White Oak, Maryland.
- Bank of Korea Says Inflation May Accelerate Faster Than Earlier Forecast. South Korea’s inflation will probably accelerate more than previously forecast while economic growth stays in line with expectations, the Bank of Korea said. Consumer prices may increase 3.9 percent in 2011, faster than the previous estimate of 3.5 percent, the central bank forecast in a statement in Seoul today. Accelerating inflation spurred by economic growth and higher oil and food prices may prompt the central bank to raise interest rates three more times this year, according to Barclays Plc.
- Japan Vows Emphasis on Caution. Japanese officials said they will put greater emphasis on protecting the Fukushima Daiichi nuclear plant from strong earthquakes and tsunamis, after a series of aftershocks over the past week showed the facility's vulnerability to another major incident.
- Tokyo Says Economic Recovery Is Stalled. The Japanese economy is no longer on a recovery path because of the impact of the devastating earthquake on March 11, the government said in its monthly economic report, vowing to compile an extra budget to support reconstruction efforts.
- Tyco(TYC) Gets Takeover Offer of $30 Billion. France's Schneider Electric SA has made a preliminary bid for approximately $30 billion for Tyco International Ltd., according to people familiar with the matter, hoping to draw the Swiss-based conglomerate to the negotiating table. "The board is studying the proposal," said one person familiar with the matter. The tentative bid "was a surprise," this person added. As a result, Tyco officials believe "it's going to take awhile to sort it out," this person said. It seems highly unlikely that Tyco will accept a $30 billion offer, and directors "would undoubtedly want it to go higher.''
- Risk Rule Riles Main Street. U.S. manufacturers, energy producers and other corporations are balking at a proposed rule they fear would drive up the cost of hedging against price swings in the commodities they depend upon, renewing a high-stakes debate over whether the regulation of derivatives should extend beyond the financial industry.
- BP(BP) Races to Save Deal With Rosneft. As a bruising fight between BP PLC and some of Russia’s most powerful oligarchs intensifies, BP is now weighing a previously unthinkable step to end the battle: possibly pulling out of its highly lucrative Russian joint venture with the oligarchs, TNK-BP.
- BP(BP) Spill's Next Major Phase: Wrangling Over Toll on Gulf.
- Paul Ryan and His Critics.
- Fitch Warns of Possible China Debt Downgrade. Fitch Ratings said late Tuesday that it has downgraded the outlook on China's long-term local-currency issuer default rating to negative from stable. "The negative outlook reflects concern over the scale of sovereign contingent liabilities and risk to macro-financial stability arising from the very rapid pace of bank lending in recent years, especially against the backdrop of rising real estate valuations and inflation," said Andrew Colquhoun, head of Fitch's Asia-Pacific Sovereigns group. "Fitch expects some sovereign support for the banking system will be required," he said.
- Gasoline Prices Up 40% This Summer, U.S. Says. Motorists should prepare for sticker shock at the pump.
- Why Europe's Debt Crisis Isn't Over.
- Sokol Knew of Lubrizol Deal Progress: Filing. David Sokol knew of progress toward a possible Berkshire Hathaway Inc. bid for Lubrizol Corp. before he bought almost $10 million worth of stock in the lubricant company, according to a new regulatory filing.
- Inflation Actually Near 10% Using Older Measure. After former Federal Reserve Chairman Paul Volcker was appointed in 1979, the consumer price index surged into the double digits, causing the now revered Fed Chief to double the benchmark interest rate in order to break the back of inflation. Using the methodology in place at that time puts the CPI back near those levels.
- Obama Faces a Tough Battle in the Key Stone State: Poll. President Barack Obama's is a perilous position in the key swing state of Pennsylvania, according to new polling numbers released today. The poll, conducted by Public Policy Polling, shows Obama's approval rating is just 42% in the Key Stone State.
- Gallup Economic Confidence Index Plummets To August 2010 Level As Poverty Effect Laps Wealth Effect. (graph)
- Bad News for GM(GM): As China's Own "Cash for Clunkers" Program Ends, Car Sales Come In Far Below Expectations; BYD Sales Plunge.
- Goldman(GS) Goes for the Trifecta: Lowers 2011 Copper Price Target From $11,000 to $9,800/mt; Gold, Silver Next?
CNN Money:
- 20 Highest-Paid CEOs.
- Cotton Prices Heat Up This Summer. If you can't wait to shed that scratchy wool sweater for a cool new cotton T-shirt this summer, prepare yourself. The price hikes on cotton goods that are coming your way will be decidedly uncool. This summer, shoppers will be paying 10% to 15% more on all cotton products, according to a new industry survey.
- iPhone 5 Due in China in October, Sources Allege. The iPhone 5 appears to be on track to launch in China in October, says Ticonderoga Securities analyst Brian White. The information comes from sources at a Chinese electronics trade show, at least some of which are conflicted about when the phone's initial announcement will take place. While some suggest the normal June timeframe, others call for September.If the iPhone 5 does arrive as late as September, White notes that Apple could ramp up international launches faster than it did for the iPhone 4, putting the device in China a month later.
- US Govt Weighs More Drilling Contractor Oversight. The U.S. offshore drilling regulator is weighing options for expanding oversight of rig contractors after last year's massive BP Plc (BP.L) oil spill exposed a possible regulatory gap, Interior official Michael Bromwich said on Tuesday. Bromwich, who heads the the Interior Department's Bureau of Ocean Energy Management, said the agency was examining whether it has the authority to extend its regulations beyond the rig operators. So far, officials have found that the agency's regulations cannot go beyond operators unless new laws are enacted, but the agency is still looking into the issue, Bromwich said.
- Fed Has Provided All The Liquidity US Needs: Fisher. The U.S. Federal Reserve Bank has provided the economy all the liquidity it needs, "and then some," Dallas Fed President Richard Fisher said on Tuesday. The U.S. central bank has kept short-term interest rates near zero for more than two years and has bought more than $2 trillion in long-term securities to push borrowing costs down still further.
- Riverbed Technology(RVBD) Raises Q1 Forecast; Shares Jump. Riverbed Technology Inc raised its first-quarter forecast, which came in above market expectations, on strong sales of its network optimization products across geographies. Shares of the network equipment maker, which closed at $30.92 on Nasdaq on Tuesday, rose 14 percent to $35.10 in trading after the bell.
- Goldman(GS) Was 'Key' Galleon Partner. A former senior Galleon Group executive testified that the precarious state of the financial industry and concerns about its trading partner Goldman Sachs were frequently discussed inside the hedge fund in July 2008, prompting a meeting with senior bank executives that summer.
- US Lacks Credibility on Debt, Says IMF. The US lacks a “credible strategy” to stabilise its mounting public debt posing a small but significant risk of a new global economic crisis, says the International Monetary Fund. In an unusually stern rebuke to its largest shareholder, the IMF said the US was the only advanced economy to be increasing its underlying budget deficit in 2011 at a time when its economy was growing fast enough to reduce borrowing.
- Vietnam has 393,000 metric tons of steel in stockpiles as demand declines, citing information from the Vietnam Steel Association. Steel prices are expected to drop in the second quarter, the report said.
- Chinese property developers are suffering a slump in cash flow as the government tightens monetary policy to tackle inflation and tries to rein in property speculation, citing a report by data provider Shanghai Wind Information Co. Free cash flow at the 84 developers that had filed 2010 annual reports to the Shanghai Stock Exchange by Money was minus -70.59 billion yuan, the report said.
- China's Vice Minister of Land and Resources Yun Xiaosu said that the nation's housing issues are affecting the overall economy and must be resolved. Yun, during a visit to Zhejiang province, said that China must be "determined" to resolve the issue of home prices as the government works to control inflation.
- China may raise its reserve requirement ratio by 50 basis points either April 15 or April 22, citing analysts.
- China's banking regulator will enhance scrutiny on commercial banks through monitoring their average daily loan-to-deposit ratios starting from June, citing a person familiar with the situation.
- Investment bankers and auditors associated with U.S.-listed Chinese companies say they are not to blame for accounting scandals, citing presentations at a conference in Beijing. Auditors are unable to stop Chinese companies that falsify bank statements, a representative of an accountancy firm said.
CSFB:
- Rated (AH) Outperform, target $31.
- Asian equity indices are -.25% to +.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 107.0 +2.0 basis points.
- Asia Pacific Sovereign CDS Index 114.0 +2.0 basis points.
- S&P 500 futures +.30%.
- NASDAQ 100 futures +.29%.
Earnings of Note
Company/Estimate
- (JPM)/1.15
- (ADTN)/.47
8:30 am EST
- Advance Retail Sales for March are estimated to rise +.5% versus a +1.0% gain in February.
- Retail Sales Less Autos for March are estimated to rise +.7% versus a +.7% gain in February.
- Retail Sales Ex Autos & Gas for March are estimated to rise +.5% versus a +.6% gain in February.
- Business Inventories for February are estimated to rise +.8% versus a +.9% gain in January.
- Bloomberg consensus estimates call for a weekly crude oil inventory build of +1,000,000 barrels versus a +1,952,000 barrel gain the prior week. Distillate supplies are expected to rise by +500,000 barrels versus a +195,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -1,000,000 barrels versus a -357,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.45% versus a +.3% gain the prior week.
- Fed's Beige Book.
- None of note
- The Fed's Bullard speaking, Bundesbank's Weber speaking, $21 Billion 10-year Treasury Notes Auction, weekly MBA mortgage applications report and the JOLTs Job Openings report for February could also impact trading today.
No comments:
Post a Comment