Evening Headlines
Bloomberg:
- Yen, Dollar Rise on Terrorist Concerns After Bin Laden's Death. The yen rose against all its major counterparts as Asian stocks declined amid signs global economic growth is losing momentum, spurring demand for safer assets. The dollar also strengthened versus most of its major peers after the U.S. and Australia boosted security at their embassies around the world on concern this week’s killing of Osama bin Laden will lead to revenge attacks.
- Return on Equity at 10-Year High Fails to Drive Valuations. U.S. companies, earning more from investments in plants and labor than any time in the last decade, have yet to reap the benefits in their stock valuations. Return on equity at International Business Machines Corp. (IBM) has risen to 68 percent this year from 24 percent in 2005 after the Armonk, New York-based company sold its personal-computer business and reorganized staff. Net income per employee rose to $34,758 in 2010, the highest since at least 1987, according to data compiled by Bloomberg. The stock, up 108 percent since the end of 2005 through last week, trades 16 percent below its average price-earnings ratio during the past decade. IBM’s example mirrors the Standard & Poor’s 500 Index, where return on equity has risen six quarters to 23 percent and may reach 27 percent next year, the highest annual level since 2000, analyst estimates compiled by Bloomberg show.
- Financing China Costs Poised to Rise With Decision on CDB Debt. China Development Bank Corp.’s private-equity unit sports three bronze busts of Communist Party leaders in its Beijing lobby. Chairman Mao Zedong is there, and so is his eventual successor as leader, Deng Xiaoping. Then there’s Chen Yun, once China’s top economic planner. The state-owned policy bank, created in 1994 to support the government’s economic and infrastructure goals, has been led since 1998 by Chen’s son, 66-year-old Chen Yuan. His father, like Deng, is among the Communist Party’s so-called eight immortals, who wielded power in the 1980s and 1990s, Bloomberg Markets magazine reports in its June issue. The younger Chen, who led CDB through the Chinese banking crisis more than a decade ago by offloading 100 billion yuan ($15.3 billion) in bad debt, has made the bank the engine of the national government’s economic development policies. CDB had $687.8 billion in loans on its books at the end of 2010, more than twice as much as the World Bank.
- Oil Drops on Economic Growth Concern as Bin Laden Death Boosts Volatility. Oil dropped for a second day in New York on signs U.S. economic growth may slow, while price swings intensified on concern the death of Osama bin Laden will lead to retaliatory attacks. Oil for June delivery slipped as much as 77 cents to $112.75 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $112.97 at 12:07 p.m. Sydney time. Yesterday, it lost 41 cents, or 0.4 percent, to $113.52, after earlier rising as high as $114.83. Prices are up 31 percent the past year. Brent crude for June settlement traded at $124.41 a barrel, down 71 cents, on London’s ICE Futures Europe Exchange.
- Archer Daniels(ADM) Unit Joins Cargill Pushing Into Asset Management Amid Rally. The financial units of Archer Daniels Midland Co., Continental Grain Co. and Cargill Inc., among the biggest names in agriculture, are pushing into the money management business as commodities markets are soaring.
- Morgan Stanley(MS) Aligned With Commodity Bulls as Goldman Says Sell. Money managers are making near-record bets on higher commodity prices, aligning themselves with Morgan Stanley after Goldman Sachs Group Inc. said investors should reduce most of their holdings. Funds held a net 1.49 million futures and options in 18 commodities by April 26, 57 percent more than a year earlier, according to U.S. Commodity Futures Trading Commission data compiled by Bloomberg. The Standard & Poor’s GSCI Total Return Index of 24 commodities beat bonds, stocks and the dollar every month since December, the longest in at least 14 years. It rose in April for an eighth month, the best stretch since 2004. Investors held a record $412 billion of raw-material assets by the end of March, almost 50 percent more than a year earlier, Barclays Capital estimates. Net-long positions held by managed-money funds are within 4.8 percent of the record 1.56 million contracts reached in October, CFTC data show. Open interest in 17 of 19 commodities tracked by the Thomson Reuters/Jefferies CRB Index reached 8.2 million contracts, data from the CFTC show. That compares with an all-time high of 8.6 million on Feb. 18.
- Pakistan's Bin Laden Connection Is Probed. Obama administration officials said Monday they would probe whether Pakistani authorities helped al Qaeda leader Osama bin Laden stay in hiding for years, one day after he was killed by U.S. special forces at an outsize mansion complex located in the same city as Pakistan's top military academy. Emerging details of the U.S. raid immediately raised questions about how bin Laden, the most wanted man in American history, had eluded a manhunt that dates back more than a decade. The al Qaeda leader was cornered not in a remote border hideout but in a three-story mansion complex in Abbottabad, a city roughly 40 miles north of Islamabad that is thick with active and retired Pakistani military personnel.
- Tornadoes Leave Many Missing. In Tuscaloosa, Ala., Police Don't Know Whereabouts of 340 People; Some Haven't Called Relatives Yet. For the friends and relatives of the hundreds who died in the tornadoes that pounded Alabama and other Southern states last week, there are funerals and wakes. For the families of the hundreds more still believed missing, there are only questions and fear. Over the weekend, officials lowered the death toll in Alabama to 236 from 250. State officials said Monday they were verifying death tolls county by county. The number of injured and hospitalized is 2,219.
- Four US State Governors Form Offshore Drilling Advocacy Coalition. A group of coastal-state governors has formed a coalition to press the federal government to speed its permitting of offshore oil drilling, Mississippi Gov. Haley Barbour said Monday.
- Hedge Funds Crowd Emerging Markets, Silver. “Hedge funds are fully committed to emerging markets again,” said Mary Ann Bartels, head of U.S. Technical Analysis at Bank of America Merrill Lynch. Bartels issued a research report on Monday suggesting that broad-ranging macro hedge funds have continued to pile into a “crowded long” trade in emerging markets. If the current hedge-fund interest in emerging markets builds to a tipping point, investors could be looking at a correction that leaves many of them on the losing side of this trade.
- Cramer: Why It's Not Too Late to Buy Apple(AAPL). Although trading at roughly $345 a share, Cramer said Monday Apple's stock is "way too cheap." After all, the "Mad Money" host thinks the technology stock could soon go to $400.
- Obama Counterterrorism Chief Says It's "Inconceivable" That Pakistan Wasn't Helping Bin Laden.
- One of the Biggest Silver Bulls in the World Just Started Selling. Sprott Asset Management sold $35 million in PSLV shares last week, according to a document released by the SEC (via Zero Hedge).The sales occurred between April 18 and 25th.
- CME(CME) Hikes Silver Margin for Third Time in 7 Days, Raises Initial, Maintenance Margins By 12%.
- Market Breaks: After Hours Edition as NYSE(NYX) Says It Is Investigating Pervasive Broken Trades.
New York Times:
- Bin Laden's Death Likely to Deepen Suspicions of Pakistan. The killing of deep inside Pakistan in an American operation, almost in plain sight in a medium-sized city that hosts numerous Pakistani forces, seems certain to further inflame tensions between the United States and Pakistan and raise significant questions about whether elements of the Pakistani spy agency knew the whereabouts of the leader of .
- Costs of Rare Earth Rise With Demand. World prices have doubled in the last four months for rare earths — metallic elements needed for many of the most sophisticated civilian and military technologies, whether smartphones or smart bombs. And this year’s increases come atop price gains of as much as fourfold during 2010. The reason is basic economics: demand continues to outstrip efforts to expand supplies and break China’s chokehold on the market.
Daily Beast:
Reuters:
- Citadel's Griffin Assails Too-Big-To-Fail. Banks with close ties to Washington would be favored under new liquidation rules meant to avoid "the too big to fail" taxpayer rescues seen in the recent financial crisis, Kenneth Griffin, head of giant hedge fund Citadel LLC, warned on Monday. "Companies connected to Washington that curry political favor will be favored" by the new rules "at the expense of those that do not have their business model built around appeasing politicians," Griffin told the 2011 Milken Institute Global Conference in Beverly Hills, California. "It will deeply entrench crony capitalism in the middle of our financial system," he said of the liquidation authority included in last year's Dodd-Frank financial law. Griffin said the law gives regulators too much authority and discriminates against banks that do not have enough clout in Washington. "It opens the door to crony capitalism unlike what we've ever seen before in this country," he told a panel discussion at the conference. Jim Millstein, the former chief restructuring officer of the U.S. Treasury Department, agreed with Griffin that the legislation was flawed but said there is a need for government to provide liquidity to the financial system in times of strain. "My own estimation is that if we hit close to the edge again, we will see a repeat of the drama played out in September, October 2008," Millstein said. Thomas Wilson, chief executive of insurer Allstate Corp (ALL.N) and deputy chairman of the Federal Reserve Bank of Chicago, said the law gives the FDIC too much power. "When you ask the FDIC to come do an O.L.A. (orderly liquidation authority) with rules that they make up, it will work to the disadvantage of the markets," Wilson told panelists.
- Libyan Rebels in Loan Talks to Avert Cash Crunch. Rebels controlling Libya's east are in talks for loans from the United Arab Emirates and Qatar, a spokesman said, as they scramble to avoid running out of funds as the Libyan conflict drags on.
- US Group Urges Focus on China State-Owned Companies. The United States should focus less on China's currency practices and more on the threat to U.S companies posed by Beijing's support for state-owned enterprises, a U.S. business group said on Monday.
- US Gas Price Jumps Near $4/Gal, Lawmakers To Act.
- Chesapeake(CHK), Anadarko(APC) Results Hurt by Hedging. Quarterly results from Anadarko Petroleum Corp and Chesapeake Energy Corp were hurt by quarterly accounting for natural gas prices, but excluding those changes, the companies topped expectations as they produced more oil.
- Glencore Has Bigger Risk Appetite Than Wall Street Banks. The research reveals that Glencore could have lost a daily $42.5m last year on average when measured by the so-called “value-at-risk” measure, much more than the average $25.7m put at risk each day in 2010 in commodities trading by Goldman Sachs, Morgan Stanley, Barclays Capital and JPMorgan. The four banks are the largest commodities dealers by revenues in the financial sector.
- Apple Inc.(AAPL) will ship over seven million iPad tablets in the second quarter, up at least 50% from the first quarter, citing people in the industry.
- First-quarter net income for non-financial companies listed in China decline 10% from the fourth quarter.
- Home prices and sales in some Chinese cities rose last month, indicating the government may have failed to curb the property market.
- Compound in Pakistan Was Once a Safe House. The compound in Abbottabad where Osama Bin Laden was killed was once used as a safe house by Pakistan's premier intelligence agency ISI, Gulf News has learnt. "This area had been used as ISI's safe house, but it was not under their use any more because they keep on changing their locations," a senior intelligence official confided to Gulf News. However, he did not reveal when and for how long it was used by the ISI operatives. Another official cautiously said "it may not be the same house but the same compound or area used by the ISI". The official also confirmed that the house was rented out by Afghan nationals and is not owned by the government. The house is located just 800 metres away from the Pakistan Military Academy and some former senior military officials live nearby.
Citigroup:
- Reiterated Buy on (ADP), raised target to $59.
- Asian equity indices are -1.25% to unch. on average.
- Asia Ex-Japan Investment Grade CDS Index 103.50 -.25 basis point.
- Asia Pacific Sovereign CDS Index 109.0 -1.5 basis points.
- S&P 500 futures -.26%.
- NASDAQ 100 futures -.26%.
Earnings of Note
Company/Estimate
- (AAWW)/.78
- (CTSH)/.66
- (BZH)/-.45
- (ADM)/.85
- (MLM)/-.36
- (RDC)/.29
- (OSG)/-1.61
- (ANR)/.92
- (SMG)/2.05
- (DIN)/1.16
- (VSH)/.49
- (H)/.05
- (EMR)/.74
- (MYL)/.44
- (COCO)/.21
- (CKP)/.10
- (LM)/.45
- (DUK)/.35
- (AMT)/.23
- (GET)/.05
- (MCK)/1.60
- (VCLK)/.18
- (CEPH)/2.05
- (GMCR)/.38
- (LVS)/.44
- (CMCSA)/.34
- (GNW)/.21
- (OPEN)/.23
- (CVG)/.24
- (FSLR)/1.17
- (KLIC)/.38
- (CLX)/1.04
- (MA)/4.09
- (AVP)/.31
- (MRO)/1.41
- (PCG)/.80
- (PFE)/.58
10:00 am EST
- Factory Orders for March are estimated to rise +2.0% versus a -.1% decline in February.
- Total Vehicle Sales for April are estimated to fall to 13.0M versus 13.06M in March.
- (MMSI) 5-for-4
- The 1-Year Treasury Bills Auction, weekly retail sales reports, (DHR) analyst meeting, (SVU) investor day, (AHC) investor day and the (ALB) investor day could also impact trading today.
No comments:
Post a Comment