Bloomberg:
- Kuroda Struggles With Communication as Japan Rates Rise: Economy. Haruhiko Kuroda may need to talk his way out of a paradox he helped create. Installed as head of the Bank of Japan in March, Kuroda aims to unlock borrowing and spending by lifting inflation expectations and wages after 15 years of deflation. Market volatility partly triggered by the BOJ’s record bond-buying now threatens to sap business and consumer confidence and weaken the campaign to reflate the world’s third-biggest economy. Kuroda next speaks at 11:55 a.m. at a conference in Tokyo.
- Japan $314 Billion Rout Tests Topix Bulls Who Pushed Gain. The biggest drop in Japanese shares since the 2011 earthquake erased $314 billion in market value, shaking bulls who pushed the Topix Index to five-year highs and highlighting their vulnerability to shocks at home and abroad. This year’s best performing major equity gauge plunged 6.9 percent in record volume yesterday after government bond yields rose to the highest levels in a year and Chinese manufacturing missed estimates.
- Aussie Dollar Is Villain as Ford Ends Mad-Max Land Output. Ford Motor Co. (F) Falcons, driven by Mel Gibson in Australia’s 1979 movie “Mad Max,” have rolled off a Melbourne production line for 53 years. Now, like Max’s “last of the V-8s,” their days are numbered. Ford, in Australia since 1925, said yesterday it will close its local manufacturing plants in October 2016, resulting in 1,200 job losses. General Motors Co. (GM)’s Holden unit, which traces its roots to 1856 when it started as a saddler business, said on April 8 it will cut about 500 workers as currency devaluations overseas make its operations among the world’s costliest.
- Asia Stocks Rise as Japanese Shares Rebound From Slump. Asian stocks rose as Japanese shares rebounded from the biggest drop since 2011 amid optimism growth in company earnings and the economy are intact. Australian stocks headed for the largest weekly drop in a year. Shinsei Bank Ltd., which tumbled 15 percent yesterday for the biggest loss on the Nikkei 225 Stock Average, increased 6.1 percent today. Japanese wireless carrier SoftBank Corp. (9984) rose 3.8 percent after saying it will let the U.S. government have veto power over one nominee to Sprint Nextel Corp.’s board to ease security concerns if its $20.1 billion takeover bid succeeds. Echo Entertainment Group Ltd. (EGP) fell to a record low in Sydney after rival Crown Ltd. sold its 10 percent stake in Echo. The MSCI Asia Pacific Index gained 0.5 percent to 139.41 as of 11:25 a.m. in Tokyo.
- Bonds Rigged as Stocks Expensive for Scots Manager Doubling Fund. From his view of the world in Scotland, Bruce Stout says investors risk getting burned because optimism is too high for stocks and bond yields are too low. The markets might be proving him right. The MSCI World Index, a gauge of developed stock markets, sank by the most yesterday since April 15, while Japan’s Topix Index lost 6.9 percent. Stout, whose 1.5 billion-pound ($2.3 billion) Murray International Trust (MYI) at Aberdeen Asset Management Plc (ADN) posted triple-digit returns during the past four years, has been selling shares he reckons are now too expensive, while his fixed-income holdings are the lowest in 25 years. “The higher prices go the more short-term expectations can distort things and then you can lose your money,” Stout said at his office in Edinburgh. “That’s why we’re in a capital preservation mode to try and not lose money.” With economies in Europe yo-yoing in and out of recession, a slowdown in China and India, and central banks from the U.S. to Japan still printing money to revive growth, Stout is more pessimistic than some of the world’s biggest investors.
- WTI Crude Heads for Biggest Weekly Decline in More Than a Month. West Texas Intermediate crude headed for the biggest weekly drop in more than a month amid signs of rising U.S. fuel supplies and a global economic slowdown. Brent oil may fall below $95 a barrel, Bank of America Corp. said.
- Rebar Pares Weekly Drop as Rally in Stocks Counters Weak Demand. Steel reinforcement-bar futures pared a weekly loss as a rebound in China’s stock market from the biggest slump in a month countered weaker demand prospects. Rebar for delivery in October rose as much as 0.9 percent to 3,584 yuan ($585) a metric ton on the Shanghai Futures Exchange and was at 3,565 at 10:55 a.m. Futures lost 1.6 percent this week, a second weekly decline.
- Google(GOOG) Said to Consider Buying Waze Presaging Bidding War. Google Inc. (GOOG), maker of the Android operating system, is considering buying map-software provider Waze Inc., setting up a possible bidding war with Facebook Inc.(FB), people familiar with the matter said. Waze is fielding expressions of interest from multiple parties and is seeking more than $1 billion, said one of the people, who asked not to be identified because the talks are private. The Palo Alto, California-based startup might also remain independent, instead seeking to raise a round of venture capital financing, the people said.
- Bridge Collapse in Washington State Sends People, Vehicles Into River. An Interstate 5 bridge over a river north of Seattle collapsed Thursday evening, dumping vehicles and people into the water, the Washington State Patrol said.
- Iran Hacks Energy Firms, U.S. Says. Oil-and-Gas, Power Companies' Control Systems Believed to Be Infiltrated; Fear of Sabotage Potential. Iranian-backed hackers have escalated a campaign of cyberassaults against U.S. corporations by launching infiltration and surveillance missions against the computer networks running energy companies, according to current and former U.S. officials.
- Asia Goes on a Debt Binge as Much of World Sobers Up. In the heart of Kuala Lumpur lies the abandoned foundation of Plaza Rakyat, a never-built skyscraper and shopping mall. Rusty rebar jutting from concrete pilings and fetid green pools of rainwater serve as an unintended monument to the debt crisis that ravaged Asia in the late 1990s. Today, less than a half mile from the abandoned project, the next boom is under way in the Malaysian metropolis. Construction has begun on a new subway line, and next to one station plans call for a 118-story zigzagging skyscraper that would be the third-tallest building in the world. Cheap credit is fueling the building spree.
- New Signs of China Flailing Cast Global Pall. Report of Contracting Factory Activity Hits Markets; Beijing Signals Acceptance as Hopes Fade for a Quick Growth Pickup. New data suggesting contraction in Chinese manufacturing cast further doubt about growth in the world's No. 2 economy, hitting markets as investors worry about the implications for the global outlook.
- Boy Scout Leaders Vote to Allow Gay Youth. The Boy Scouts of America decided to allow gay youth to openly join its ranks, reversing a long-standing ban.
- States' Rift on Taxes Widens. Minnesota, Others Move to Raise Revenue as Cuts Remain Popular Elsewhere. Minnesota's move to raise $2.1 billion in new taxes, largely from the wealthy, to fund government programs puts it among a handful of states controlled by Democrats that are adopting more liberal fiscal policies at a time when many Republican-dominated statehouses are pushing to cut taxes.
- Noonan: A Battering Ram Becomes a Stonewall. The IRS's leaders refuse to account for the agency's corruption and abuse. "I don't know." "I don't remember." "I'm not familiar with that detail." "It's not my precise area." "I'm not familiar with that letter." These are quotes from the Internal Revenue Service officials who testified this week before the House and Senate.
- IRS official on leave refused to resign, says GOP senator. First she refused to testify. Now Lois Lerner, the IRS official at the center of the tax agency scandal, is refusing to resign, according to a top Republican senator. Sources confirmed to Fox News earlier Thursday that Lerner, the head of the IRS division that oversaw the unit targeting conservative groups, had been placed on administrative leave, with pay. But Sen. Charles Grassley, R-Iowa, claimed she was only put in that status after refusing to step down. He said the commissioner was in his right to demand her resignation, and said taxpayers should not continue to pay her salary indefinitely.
Zero Hedge:
Business Insider:
Reuters:
- BOJ Kuroda says will strive to ensure JGB market stability. Bank of Japan Governor Haruhiko Kuroda said on Friday the central bank will make efforts to avert volatility in bond markets through flexible market operations and enhanced communication with market participants. "We don't have specific targets for stock prices or currency rates, and I won't comment on daily moves," Kuroda said at a seminar in Tokyo. "As for the bond market, where the BOJ is directly involved in through market operations, stability is extremely desirable," he said.
- Brazil to auction its biggest-ever oil find in October. Brazil plans to sell the right to explore and develop its largest-ever oil discovery in October, auctioning an offshore petroleum prospect that is expected to produce about 12 billion barrels of oil over 35 years.
- Japan finmin: govt must always keeps fiscal discipline in mind. Japanese Finance Minister Taro Aso said on Friday that the government must always keep fiscal discipline in mind. He said the government has used stimulus spending to help the economy, but if it continues with big fiscal spending this could hurt trust in Japan's public finances.
- Salesforce.com's(CRM) quarterly results disappoint Wall Street. Salesforce.com Inc's quarterly earnings and outlook disappointed investors as costs rise following a spree of acquisitions, sending its shares lower.
- U.S. Fed balance sheet expands in latest week. The U.S. Federal Reserve's balance sheet expanded in the latest week on higher holdings of Treasuries and U.S. mortgage-backed securities, Fed data released on Thursday showed. The Fed's balance sheet - a broad gauge of its lending to the financial system - stood at $3.356 trillion on May 22, up from $3.312 trillion on May 15.
- Veteran fears 'beginning of the end' for Japan as bond market buckles. Global markets face a witches’ brew of new risks as Japan’s monetary adventure wobbles, China slows further and the US Fed prepares to shut the spigot of dollar liquidity.
- MNI index adds to fears China recovery losing momentum. China’s economic recovery may be losing momentum, as indicators for new orders and financial conditions worsened, according to the latest MNI China business sentiment indicator. The flash overall conditions index fell to 57.1 from 58.5 in April and 58.2 in March, MNI, a unit of Deutsche Boerse Group. It was the eighth straight month of expansion for the overall index, however, MNI said. The flash new orders indicator fell to 56.5, from 58.2 in April, and the financial positions indicator worsened to 52.0, from 54.6. The flash availability of credit index rose to 44.3 in May, from 42.9, MNI said. The flash production index fell to 54.3, from 57.3.
- None of note
- Asian equity indices are -1.50% to unch. on average.
- Asia Ex-Japan Investment Grade CDS Index 106.0 +3.0 basis points.
- Asia Pacific Sovereign CDS Index 91.75 +4.75 basis points.
- FTSE-100 futures +.09%.
- S&P 500 futures -.11%.
- NASDAQ 100 futures -.01%.
Earnings of Note
Company/Estimate
- (ANF)/-.05
- (FL)/.88
- (HIBB)/1.07
8:30 am EST
- Durable Goods Orders for April are estimated to rise +1.5% versus a -5.7% decline in March.
- Durables Ex Transports for April are estimated to rise +.5% verssu a -1.4% decline in March.
- Cap Goods Orders Non-Defense Ex Air for April are estimated to rise +.5% versus a +.2% gain in March.
- None of note
- The Eurozone GDP report and German IFO Index could also impact trading today.
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