Bloomberg:
- Japan Consumer Prices Slide in Challenge to Abe Revival Campaign. Japan’s consumer prices dropped for a sixth straight month in April, highlighting the challenge for Prime Minister Shinzo Abe in sustaining confidence in an economic revival. Consumer prices excluding fresh food fell 0.4 percent from a year earlier, the statistics bureau said in Tokyo today, matching the median estimate of 29 economists in a Bloomberg News survey.
- Smithfield(SFD) Bosses to Get $85.4 Million From Chinese Deal. Smithfield Foods Inc. (SFD) executives, who run one of the worst-performing large U.S. food makers over the past five years, are set to reap at least $85.4 million from its sale to China’s Shuanghui International Holdings Ltd.
- Australia Banks on Track for Biggest Monthly Fall in Three Years. Australian bank stocks are on course for their worst monthly performance in three years as investors cash out of a rally that drove financial shares to a record high in April. The S&P/ASX 200 Banks index has plunged 12 percent this month, set for the biggest decline since May 2010. “Banks have stood out among the pack and investors, having enjoyed the run and higher dividends, are rotating out to other beaten-down sectors,” Stan Shamu, market strategist at Melbourne-based IG Markets, said by phone. “It’s also time to take a hard look at record-low mortgage growth, increasing competition and a slowing economy’s impact on banks.” The International Monetary Fund this week lowered its growth forecasts for China, Australia’s biggest trading partner, to 7.75 percent this year and next, from earlier projections of 8 percent for 2013 and 8.2 percent in 2014. Investment in commodities and energy has peaked, threatening to slow Australia’s economy, the government said this month.
- Rebar Poised for Fourth Monthly Loss on Supply, Iron Ore Price. Steel reinforcement-bar futures headed for a fourth monthly drop as iron ore fell to the lowest in more than seven months and supply from Chinese mills climbed. Rebar for delivery in October on the Shanghai Futures Exchange declined as much as 0.4 percent to 3,424 yuan ($558) a metric ton and was at 3,433 yuan at 10:15 a.m. local time. Futures retreated 4.6 percent in May. Iron ore for immediate delivery at the Tianjin port in China fell 1.2 percent to $111.60 a dry ton yesterday, the lowest since October, according to the Steel Index Ltd. China’s steel output rose by 20.09 million tons in the first four months of this year, Wang Xiaoqi, deputy head of the China Iron and Steel Association, said at a conference in Shanghai this week. About 54 percent of the additional output is sitting in warehouses, Wang said. “High capacity, high output and lower raw-material prices are all pressuring rebar,” Wang Yongliang, an analyst at Beijing CIFCO Futures Co., said in a report today.
- Asian Stocks Rise as Japan’s Topix Rebounds on Outlook. Asian stocks gained, with Japanese equity gauges rebounding after entering a so-called correction yesterday, following reports that Japan’s pension fund may boost stock holdings and the nation’s industrial output expanded faster than analysts estimated. Mitsubishi Estate Co., Japan’s biggest developer by market value, rose 2 percent. Sony Corp. jumped 3.8 in Tokyo percent as people familiar with the matter said the electronics maker is working with Morgan Stanley and Citigroup Inc. to consider adopting Daniel Loeb’s proposal for an initial public offering of its entertainment unit. BHP Billiton Ltd., the world’s largest mining company, gained 1.4 percent in Sydney after copper futures increased. The MSCI Asia Pacific Index added 0.2 percent to 135.83 as of 11:25 a.m. in Tokyo, with about three shares rising for every two that fell. Seven of the 10 industry groups on the gauge advanced. The measure is heading for its first monthly decline in seven months after Japanese indexes entered a correction yesterday after reaching about five-year highs on May 22.
- Lawson Says European Transaction Tax Will Hurt London. Former Chancellor of the Exchequer Nigel Lawson said the proposed European financial-transaction tax will damage London even though the U.K. isn’t participating.
- Iran Increases its Support for Terrorism, U.S. Says. Iran increased its support of international terrorist-related activities last year, as the capabilities of al-Qaeda’s central leadership in Pakistan declined, the U.S. State Department said. In its annual report on terrorism issued yesterday, the State Department reported a “marked resurgence” in terrorist-related activities last year by Iran, which also is supplying weapons and other “extensive” aid to the Syrian regime for its war against rebel groups. The State Department cited activities by Iran’s Ministry of Intelligence and Security, its Islamic Revolutionary Guard Corps-Quds Force, and its Lebanese ally, Hezbollah. “Iran’s state sponsorship of terrorism and Hezbollah’s terrorist activity have reached a tempo unseen since the 1990s, with attacks plotted in Southeast Asia, Europe, and Africa,” according to the State Department.
- HTC Said to Cancel Large Windows RT Tablet on Weak Demand. HTC Corp. (2498) has scrapped plans to introduce a full-sized tablet computer with Microsoft Corp. (MSFT)’s Windows RT operating system on concern it will meet with lackluster demand, according to people familiar with the matter.
- ERs Crumbling Amid Doctor Shortage as New Patients Loom: Health. “There’s nothing more appalling than being treated in a hallway bed,” said James Dunford, medical director for the city of San Diego’s emergency medical services system. The emergency room is “the canary in the coal mine” for what patients can expect from U.S. health care over the next few years, he said. ERs, the front line of modern medical care, are crumbling nationwide just as patient visits promise to surge with the 2014 rollout of the Affordable Care Act adding 25 million newly insured patients over time. ER doctors say they expect these people, seeking the everyday care they couldn’t get before, to flood a system already so overcrowded that some hospitals are unable to accept ambulances for days at a time. “There’s a shortage of all types of doctors now, and it will only get worse with many Baby Boomer doctors retiring as the Baby Boomers age,” said Darria Long Gillespie, a doctor at Beth Israel Deaconess Medical Center in Boston.
- Swoon in Bonds Puts Eye on Fed. The bond market's monthlong plunge has pushed long-term interest rates on mortgages and U.S. Treasurys to their highest levels in more than a year, sparking a debate: Is this a bursting bubble, the aftereffect of clumsy Federal Reserve communication or a welcome sign the U.S. economy is, at last, on the mend.
- Dispute Flares Inside FDA Over Safety of Popular Blood-Pressure Drugs. The top-selling class of blood-pressure drugs is under attack from an unusual source: a senior regulator at the Food and Drug Administration. Bucking his bosses, Thomas A. Marciniak is seeking stronger warnings about the drugs known as angiotensin receptor blockers, or ARBs, according to internal documents reviewed by The Wall Street Journal.
- Syrian Leader Mocks Foes and Threatens Israel. President Bashar al-Assad mocked the Western-backed opposition groups battling his regime and vowed to attack Israel if it strikes Syria again, in comments that fueled doubts about a positive outcome from planned peace talks.
- Romney Planning to Rejoin National Dialogue. Months After Election Loss, He Will Host Event in Utah for 200 Friends and Campaign Supporters
- David Malpass: Fed Policy Is a Drag on Recovery. The stock market is soaring. Yet real median income has fallen 5%, unheard of except during the Great Depression. Former Federal Reserve Chairman Paul Volcker said in a speech to the Economic Club of New York on Wednesday that the Fed should not be asked to "accommodate misguided fiscal policies" and "will inevitably fall short." He outlined a preferred monetary policy based on orthodox central banking aimed at a stable currency in order to maximize employment. "Credibility is an enormous asset," he said. "Once earned, it must not be frittered away." Those words are true and timely.
- Noonan: An Antidote to Cynicism Poisoning. Restoring public faith will require a full investigation of the IRS's politicization.
Fox News:
- Republicans seek IG probe into Sebelius over ObamaCare group donations. Congressional Republicans on Thursday escalated their call for an independent investigation into whether Health and Human Services Secretary Kathleen Sebelius broke the law when she sought donations from private companies for an independent ObamaCare project. Three top Senate Republicans wrote a letter to the HHS inspector general asking his office to launch a probe. It follows a previous GOP call for a review by another internal watchdog, the Government Accountability Office. At issue is Sebelius' effort to solicit donations and other assistance from various charities and executives for a nonprofit group that is helping sign up people for benefits under the federal health care overhaul.
- Former IRS chief Shulman reportedly visited White House at least 157 times. Even Attorney General Eric Holder, one of Obama's closest allies, visited only 62 times according to the records.
- Critic of big banks wants Fisher to head Fed. Simon Johnson, an economist who is leading the push for the government to do more to tackle “too big to fail” banks, wants Dallas Fed President Richard Fisher to replace Fed Chief Ben Bernanke when Bernanke’s term expires early next year.
- DJIA Price vs. DJIA EPS. (graph)
- For a Job After Graduation, Major in These, Not Those. It pays to go to college in general—but how big a payoff you get can vary wildly depending on what you decide to major in.
- US Worker Wages: "Not Off The Lows". (graphs)
- Is This China's 'Minsky Moment'? (graph)
Washington Post:
- For Obama’s ex-aides, it’s time to cash in on experience. The decision on whether to approve the Keystone XL oil pipeline is a political headache for President Obama. But to five of his former aides, it represents a business opportunity. Four of them — Bill Burton, Stephanie Cutter, Jim Papa and Paul Tewes — work as consultants for opponents of the project, which would carry heavy crude oil from Canada to Gulf Coast refineries. Another, former White House communications director Anita Dunn, counts the project’s sponsor, TransCanada, among her firm’s clients.
Reuters:
- Ex-Microsoft(MSFT) manager plans to create first U.S. marijuana brand. A former Microsoft executive plans to create the first U.S. national marijuana brand, with cannabis he hopes to eventually import legally from Mexico, and said he was kicking off his business by acquiring medical pot dispensaries in three U.S. states.
- Omnivision(OVTI) results beat estimates; shares rise. Image sensor maker OmniVision Technologies Inc reported fourth-quarter results that beat market estimates as demand for its products grew.
- U.S. SEC taking steps to watch for money market fund outflows. The U.S. Securities and Exchange Commission is taking steps to help spot if money starts flowing to alternative investments as the SEC cracks down on money market funds.
- 'Shadow' home inventory could burden U.S. housing agencies, watchdogs say. Millions of U.S. homeowners are months behind on payments on government-backed mortgages, raising the risk federal housing agencies will end up facing the cost of managing a fresh flood of foreclosed homes, two government watchdogs said on Thursday.
- Merkel party allies accuse Hollande of shaking EU’s foundations. Leading members of Germany’s ruling Christian Democratic Union party have fiercely criticised François Hollande, accusing the French president of “shaking the foundations of the European Union” just hours before the two countries’ leaders met in Paris in a bid to repair relations. German concern about the French government’s resistance to economic reform and hostility to EU pressure emerged after Mr Hollande said it was not for the European Commission “to dictate” reforms to Paris.
- Apple(AAPL) Raises iPad, iPod Prices in Japan on Weaker Yen. Apple raised prices of iPad, iPad 2, iPad mini, iPod series today, citing the U..S. maker of iPhone. Apple Japan website shows iPad mini 16GB Wi-Fi model priced at 32,800 yen; was 28,800 yen when released in Nov.
- China Local Debt Must Be Kept at 'Rational Level'. Chinese local government debt needs to be kept at a "rational level" by imposing a budget-regulated debt financing mechanism, Zhang Monan, a researcher at the State Information Center, writes in a commentary. The slowdown in growth is boosting local government debt to "even higher levels," Zhang wrote. China remains exposed to the risk of growing sovereign debt and is headed for a debt crisis, he said. Debt backed by "covert" guarantees from the central government poses the biggest risks in the medium and long term, Zhang said.
- China May Start Tax on Online Sellers This Year. China may start levying a tax on small and medium-sized online sellers within the year, citing a person familiar with the matter.
Deutsche Bank:
- Upgraded (MS) to Buy, target $30.
- Asian equity indices are -.50% to +1.0% on average.
- Asia Ex-Japan Investment Grade CDS Index 111.0 -1.5 basis points.
- Asia Pacific Sovereign CDS Index 96.0 +1.5 basis points.
- FTSE-100 futures -.03%.
- S&P 500 futures +.05%.
- NASDAQ 100 futures +.07%.
Earnings of Note
Company/Estimate
- (GCO)/.87
8:30 am EST
- Personal Income for April is estimated to rise +.1% versus a +.2% gain in March.
- Personal Spending for April is estimated unch. versus a +2% gain in March.
- The PCE Core for April is estimated to rise +.1% versus unch. in March.
- The NAPM-Milwaukee for May is estimated to rise to 49.0 versus 48.43 in April.
- Chicago Purchasing Manager for May is estimated to rise to 50.0 versus a reading of 49.0 in April.
- Final Univ. of Mich. Consumer Confidence for May is estimated at 83.7 versus a prior estimate of 83.7.
- None of note
- The Fed's Pianalto speaking, Italian Unemployment data, Eurozone CPI report, OPEC meeting, G8 meeting, Canadian GDP report, 2013 ASCO meeting and the (IDCC) investor day could also impact trading today.
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