Bloomberg:
- ECB Faces Roadblock to 2015 Start for EU Bank Bail-In Plans. The European Central Bank and Germany met resistance from national governments in their bid to bring forward the start date of EU rules that would force losses on failing banks’ creditors. France and Spain were among a large group of EU nations to weigh in against the proposal, which would have seen the start date of the so-called bail-in rules shunted forward to as early as 2015 from 2018, at a meeting of national ambassadors today in Brussels, according to an EU official. Nations were concerned that a faster timetable wouldn’t leave banks with enough time to prepare, said the official, who couldn’t be named in line with EU policy. The legislation, proposed last year by Michel Barnier, the EU’s financial services chief, would require banks to issue minimum amounts of unsecured debt and other liabilities that regulators could write down in a crisis.
- China Service Industries Expand at Slower Pace, Survey Shows. China’s service industries expanded at a slower pace last month, adding to the drag on growth in the world’s second-biggest economy after manufacturing lost momentum. The non-manufacturing Purchasing Managers’ Index fell to 54.5 from 55.6 in March, the National Bureau of Statistics and China Federation of Logistics and Purchasing said in a statement today in Beijing. Risks that include surging credit, overcapacity and an overheating property market may limit the government’s room to stimulate growth. “The PMI adds to downside risks for China and the region,” said Dariusz Kowalczyk, senior economist and strategist at Credit Agricole CIB in Hong Kong. “The reading suggests that growth momentum will remain relatively soft” in the second quarter, and that the economy “has shifted to a weaker growth trajectory,” he said.
- India Says Inflation, Trade Gap Constrain Policy Scope: Economy. The Reserve Bank of India said the space for monetary policy to support economic growth remains constrained by elevated consumer-price inflation and a record current-account deficit. “Monetary policy would need to be calibrated recognizing the very limited policy space available to ease further,” the Reserve Bank said yesterday in an economic review before today’s rate decision in Mumbai. It cited “significant” risks including a “high” current-account gap and “inflation above the threshold over which it becomes inimical to growth sustainability.”
- Australia April Services Industry Gauge Drops by Most in a Year. A gauge of Australia’s services industry dropped in April by the most in a year as sales, new orders and employment declined amid weakening domestic demand. The performance of services index fell to 44.1 from 49.6 in March, the Australian Industry Group and Commonwealth Bank of Australia (CBA) said in Sydney today. The 5.5 point drop was the biggest since April 2012 and the gauge hasn’t been above 50, the dividing line between expansion and contraction, since January last year.
- Hong Kong Overheating Risk Seen by HKMA’s Chan on Surging Debt. Hong Kong’s economy is at risk of overheating after household debt rose to a record 61 percent of gross domestic product, said Norman Chan, chief executive of the Hong Kong Monetary Authority. “Hong Kong’s consumption and personal-debt growth have consistently outpaced overall economic growth,” Chan told lawmakers today, citing risks to “macroeconomic stability.”
- U.S. Demands North Korea Free American Given Hard Labor. The U.S. called for the immediate release of an American citizen after North Korea sentenced the man, Pae Jun Ho, to 15 years’ hard labor for unidentified “hostile acts” against the communist country. State Department spokesman Patrick Ventrell said yesterday that the U.S. is urging North Korea “to grant him amnesty and to allow for his immediate release.”
- Asian Stocks Rise With Metals; Dollar Weakens Before Jobs Data. Asian stocks rose for the first time in three days as Macquarie Group (MQG) Ltd. reported higher earnings and investors awaited the release of U.S. jobs data. Metals gained, while the dollar weakened. The MSCI Asia Pacific excluding Japan Index gained 0.3 percent at 10:27 a.m. in Hong Kong.
- Teradata's(TDC) Q1 profit down 35 percent. Data management company Teradata Corp. reported Thursday its first-quarter profit dropped 35 percent as the company got off to what its CEO acknowledged was a slow start to the year.
- U.S. Bulks Up to Combat Iran. The Pentagon has redesigned its biggest "bunker buster" bomb with more advanced features intended to enable it to destroy Iran's most heavily fortified and defended nuclear site.
- French Leader François Hollande's Woes Fan European Fears. A new hurdle has popped up in Europe's race to save itself from economic calamity: French President François Hollande, who built his career on an ability to forge consensus, now finds himself in the unaccustomed position of pleasing no one. Mr. Hollande's ruling Socialist Party is in revolt. Party heavyweights are urging him to turn up the heat on Germany's Chancellor Angela Merkel and defy her prescription of austerity for resolving the euro-zone crisis. The French press last week splashed a Socialist Party draft paper that described Ms. Merkel as "selfish." Mr. Hollande's success or failure to reach consensus with Ms. Merkel—without alienating his leftist majority in Parliament—is likely to have profound repercussions on the euro zone's future. There are widening concerns that France, Europe's second-largest economy behind Germany, risks becoming the next problem child.
- SEC Zeroing In on 'Prime' Funds. Money Funds Viewed as Most Vulnerable to Flight by Anxious Investors Would Face Tighter Rules. U.S. securities regulators, under pressure to address risks posed by the $2.6 trillion money-market-mutual fund industry, are considering a scaled-back approach that would tighten rules for about half of the sector that is seen as most vulnerable to investor runs, according to people familiar with staff discussions.
- Marco Rubio: The Immigration Reform Opportunity. Several Senate colleagues and I drew up a reform bill, and now Americans' input will help us improve it.
- State Department's Benghazi review panel under investigation, Fox News confirms. The State Department's Office of Inspector General is investigating the special internal panel that probed the Benghazi terror attack for the State Department, Fox News has confirmed. The IG's office is said by well-placed sources to be seeking to determine whether the Accountability Review Board, or ARB -- led by former U.N. Ambassador Thomas Pickering and former Chairman of the Joint Chiefs of Staff Adm. Mike Mullen -- failed to interview key witnesses who had asked to provide their accounts of the Benghazi attacks to the panel. The IG's office notified the department of the "special review" on March 28, according to Doug Welty, the congressional and public affairs officer of the IG's office.
CNBC:
- AIG(AIG) Earnings Top Expectations but Revenue Misses. AIG on Thursday reported first-quarter earnings that beat market expectations, driven primarily by higher operating income in its property and casualty business.After the earnings announcement, the company's shares climbed in extended-hours trading.
- LinkedIn(LNKD) Earnings Beat; Outlook Falls Short. LinkedIn beat on both earnings and revenue but the stock fell sharply after-hours as the social-networking site's outlook fell short.
Business Insider:
Washington Post:
- India, China remain at odds over alleged border incursion. Two weeks ago, Indian military officials announced that they had discovered that a platoon of Chinese soldiers had crossed the de facto border between the two countries and set up camp an unprecedented six miles inside Indian-claimed territory, sparking a still-unresolved standoff. China’s Foreign Ministry said last week that its troops were patrolling on the Chinese side of the border and “never trespassed the line.” Such disputes have a long history. But the latest incident, in a previously uncontested area, involves the most serious accusations by India in 25 years and is posing a challenge for the countries’ diplomats ahead of a visit to New Delhi by China’s new premier, Li Keqiang, this month.
- Vast Oil Reserve May Now Be Within Reach, and Battle Heats Up. Secure in this state’s history and mythology, the venerable Midway-Sunset oil field near here keeps producing crude more than a century after Southern California’s oil boom. Many of its bobbing pump jacks are relatively short, a telltale sign of the shallowness of the wells and the ease of extracting their prize. But away from this forest of pump jacks on a flat, brown landscape, a road snakes up into nearby hills that are largely untouched — save for a handful of exploratory wells pumping oil from depths many times those of Midway-Sunset’s. These wells are tapping crude directly from what is called the Monterey Shale, which could represent the future of California’s oil industry — and a potential arena for conflict between drillers and the state’s powerful environmental interests. Comprising two-thirds of the United States’s total estimated shale oil reserves and covering 1,750 square miles from Southern to Central California, the Monterey Shale could turn California into the nation’s top oil-producing state and yield the kind of riches that far smaller shale oil deposits have showered on North Dakota and Texas.
- A Rate Cut in Europe, and a Hint of Limits. The European Central Bank cut its benchmark interest rate to a record low on Thursday. But its president, Mario Draghi, indicated that his promise last year to do “whatever it takes” to save the euro had limits.
- JPMorgan(JPM) Caught in Swirl of Regulatory Woes. Government investigators have found that JPMorgan Chase devised “manipulative schemes” that transformed “money-losing power plants into powerful profit centers,” and that one of its most senior executives gave “false and misleading statements” under oath.
- U.S. sues owner of nation's biggest for-profit hospice chain. The U.S. Justice Department is suing Chemed Corp(CHE) and its hospice subsidiaries, including the biggest U.S. for-profit hospice chain, alleging false billings for Medicare hospice services. The government said on Thursday that its complaint accuses Chemed and its leading hospice subsidiary, Vitas Hospice Services, of being involved in the submission of false claims for crisis care services that proved to be unnecessary, were never actually provided or failed to meet Medicare requirements. The companies used aggressive marketing tactics and pressured staff to increase the numbers of crisis care claims submitted to Medicare, whether valid or not, according to the Justice Department.
- U.S. Treasury chief to meet with Wall Street executives. The dinner meeting in New York includes JPMorgan Chase & Co Chief Executive Jamie Dimon, hedge fund manager John Paulson, Blackstone Group LP CEO Stephen Schwartzman and others, according to a person attending. Lew, 57, has spent his first few weeks as Treasury chief on international travel, in congressional hearings and on other priorities. Thursday's dinner comes ahead of Friday's release of unemployment data for April. Topics for discussion might also touch on the global economy, including Europe and China, and cyber security.
- Weak North American sales drag on Tempur-Pedic(TPX). Mattress maker Tempur-Pedic International Inc's first-quarter revenue fell 11 percent, excluding its recent Sealy's acquisition, hurt by a decline in sales at its core North America business. Shares of Lexington, Kentucky-based Tempur-Pedic fell 2 percent in after-hours trading, after the company reported lower earnings for the first quarter.
- Man dead after Houston airport shooting sparks panic. A man sparked a panic at a busy Houston airport terminal on Thursday when he pulled out a gun and shot at the ceiling, then either shot himself or was killed by a security officer who confronted him. Houston police spokesman Kese Smith said the man who died was 30 years old, but did not identify him. No other people were injured or killed in the incident, he said. Smith said the man fired at least one shot at the ceiling. He was then confronted by a Homeland Security officer nearby, who fired his weapon. "The Homeland Security Officer and the suspect fired shots simultaneously. The suspect was struck and (was) treated by responding paramedics who pronounced him dead in an ambulance," Houston police said in a statement. It was not clear if the man died from a self-inflicted gunshot or from one or more shots fired by the security officer.
- Australia billionaire spends big on nickel even as glut worries persist. Australian mining magnate Clive Palmer is joining Vale, Xstrata and other sector heavyweights pouring money into nickel despite a dire near-term outlook for demand, as they plough on with projects bought on the cheap or as part of corporate takeovers.
- 'No alternative to austerity' says IMF chief. IMF chief Christine Lagarde insisted Thursday there was no alternative to the agenda of austerity being pushed across Europe, after massive demonstrations in several countries demanded an end to the policies. "There is no alternative to austerity," Lagarde told Swiss public broadcaster RTS. "The situation is difficult," she acknowledged, adding that countries needed to simultaneously observe "budgetary discipline", "prefer elements of growth" and promote "investment in employment".
- China Must Control LGFV Loans. China Banking Regulatory Commission asks banks not to increase scale of loans to local government financing vehicles, according to a front-page commentary, citing an official at the regulator. The country will continue pushing forward risk control for LGFV bonds this year, he said.
- Chinese Banks Face Growing Capital Shortfall. Capital shortfall would reach 383.6b yuan next year should their earnings fall 30% from current level, citing People's Bank of China Deputy Governor Liu Shiyu. Chinese banks face growing pressure to replenish capital as a result of balance sheet expansion. Chinese banks' business model build on balance sheet expansion not sustainable, he said. Five largest commercial banks may for the first time face 40.5b yuan of capital shortfall next year should they maintain current level of expansion. Big five's cumulative capital shortage may reach 1.7t yuan by 2017. Big five to have 2.8t yuan of shortfall by 2017 should next year's profits fall 30% from current level. Banks must build new internal capital replenishment system, improve profitability and risk management to control capital pressure, he said.
- None of note
- Asian equity indices are -.50% to +.50% on average.
- Asia Ex-Japan Investment Grade CDS Index 105.0 -2.0 basis points.
- Asia Pacific Sovereign CDS Index 85.25 -1.75 basis points.
- FTSE-100 futures -.16%.
- S&P 500 futures -.06%.
- NASDAQ 100 futures +.06%.
Earnings of Note
Company/Estimate
- (AXL)/.16
- (ADP)/.98
- (CBOE)/.46
- (DUK)/1.04
- (MCO)/.85
- (NWL)/.32
- (ZEUS)/.28
- (RUTH)/.19
- (SUP)/.18
- (TDS)/.06
8:30 am EST
- The Change in Non-farm Payrolls for April is estimated at 140K versus 88K in March.
- The Unemployment Rate for April is estimated at 7.6% versus 7.6% in March.
- Average Hourly Earnings for April are estimated to rise +.2% versus unch. in March.
- Factory Orders for March are estimated to fall -2.9% versus a +3.0% gain in February.
- The ISM Non-Manufacturing Composite for April is estimated to fall to 54.0 versus 54.4 in March.
- None of note
- The Fed's Lacker speaking, Fed's Tarullo speaking, Fed's Rosengren speaking, Eurozone PPI data, (PBI) investor meeting, (BX) investor day and (COV) guidance could also impact trading today.
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