- Italy Won’t Seek EU Extension of Budget Deficit Goal, Letta Says. Italian Prime Minister Enrico Letta said he would stick to his predecessor’s promise to balance the budget this year and will work with France to promote more pro- growth policies in the euro region. Italy will “maintain” its commitment to eliminate its deficit in structural terms, Letta said at a press conference with French President Francois Hollande in Paris today. The structural deficit discounts the effects of the recession.
- Landesbank Berlin Quits Euribor in Bank Exodus From Benchmarks. Landesbank Berlin AG, a German regional lender, became the sixth bank this year to stop contributing to the panel setting Euribor, adding to an exodus that includes UBS AG and Rabobank Groep. The bank also stopped contributing to the Eonia and USD Euribor benchmarks, Euribor-EBF, the Brussels-based industry group that runs the rate, said in a statement on its website.
- Pope Calls for More ‘Social Justice’ as Workers Take to Streets. Pope Francis urged the unemployed “not to lose hope” amid record joblessness in the euro area as hundreds of thousands of people demonstrated across Europe against austerity and for workers’ rights. “I think about those who are unemployed often because of an economic conception of society that seeks egoistic profit regardless of social justice,” the pope told a crowd in St. Peter’s Square for a May Day audience.
- China Leads $4.2 Trillion of Asia-Pacific Property Investments. China led a jump in investment in Asia-Pacific commercial properties to $4.2 trillion in 2012 as economic growth drove up capital values and supported new construction, according to London-based broker DTZ. Investors bought $300 billion of commercial property across the Asia-Pacific region, an 8 percent increase from 2011 in U.S. dollar terms, a report by DTZ showed today. China overtook Japan to become the region’s largest market with $1.5 trillion of investments, up from $1.3 trillion in 2011, DTZ said.
- First-Quarter Earnings Look Weak Under the Hood. First-quarter corporate earnings are coming in better than expected, but the good news ends there. The overall pace of growth, while ahead of forecasts, is still weak by historical standards. Sales are clocking in below already reduced analyst expectations. And companies are trimming their own earnings guidance for quarters to come. "If anything, things have gotten a little bit worse than they were at the beginning of the year," said Savita Subramanian, head of U.S. equity and quantitative strategy with Bank of America BAC -1.22% Merrill Lynch. "This is a sign that the easy earnings stories are over." Earnings growth is looking anemic. If reporting continues as expected, corporate profits will grow 2.5% from the first quarter of last year, FactSet said. That compares with a long-run average of about 7% profit growth.
- Truck Surge Revs GM, Ford, Chrysler Sales. U.S. pickup truck sales boomed in April, lifting Detroit's auto makers as increasing home construction spurred new-vehicle purchases by contractors and tradesmen.
- China Grapples With Labor Shortage as Workers Shun Factories. For 15 years, Cui Haifeng worked in China's manufacturing industry, stitching together leather to make soccer balls before working her way up to warehouse manager at a wood-flooring factory. Last month the coal miner's daughter traded a past of factory uniforms for a blouse and skirt, training as a customer-service representative for a life insurer in Guangzhou, southern China's largest city.
- 3 more suspects taken into custody in Boston bombing case, police say. Three new suspects have been charged in connection with the Boston Marathon bombing for conspiring to get rid of an incriminating backpack full of gutted fireworks belonging to their friend after learning he was a suspect in the April 15 terror attack, according to an FBI affidavit released Wednesday.
- Mastermind in Benghazi attack walking free in Libya, sources say. The U.S. has identified the mastermind of the Benghazi attack, sources tell Fox News, though the individual apparently is walking free in Libya. The confirmation from multiple sources comes more than seven months after the assault on two U.S. locations in Benghazi, Libya, where four Americans -- including Ambassador Chris Stevens -- were killed. President Obama pledged after the attack that "justice will be done." But one source told Fox News the government is "sitting on" information.
CNBC:
- Fed Keeps Interest Rates Low, Continues Bond Buying Program. Language in the FOMC statement after the meeting saw one notable change - a declaration that it would increase or decrease the pace of its asset purchases depending on conditions.
- Why an ECB Rate Cut Could Be Too Little, Too Late. Cash-strapped corporates and households in the euro zone are not seeing any recovery despite the European Central Bank's (ECB) extensive action, including cheap loans to banks and reductions in interest rates, suggesting the central bank's methods to jump-start the economy are not working. Global central bank action continues to push peripheral borrowing costs lower. But the support from the ECB has failed to stimulate small businesses and reach households in peripheral nations.
- 'Real' Jobless Rate Still Above 10% In Most States. Two months from now, revised government estimates are likely to show that the economy is even bigger than the currently stated $15 trillion.
- Grand Theft Market: High-Frequency Frontrunning CME(CME) Edition. WSJ's Scott Patterson explains frontrunning by HFT algos is not only a way of life, but is perfectly accepted and even smiled upon.
- Just Two 'Recession' Indicators. (graphs)
dshort.com:
Reuters:
- Construction spending rate hits seven-month low. Construction spending dropped to a seven-month low in March as public outlays recorded their largest drop since 2006, which could cause the first-quarter economic growth estimate to be trimmed. Construction spending fell 1.7 percent to an annual rate of $856.72 billion, the lowest level since August, the Commerce Department said on Wednesday. Spending had increased 1.5 percent in February. Economists polled by Reuters had expected construction spending to rise 0.7 percent in March.
- MasterCard(MA) revenue falls short, CEO says Q2 looks "dodgy". MasterCard Inc, the world's second-largest payment network, reported a higher-than-expected rise in quarterly profit, but the company's revenue missed analysts' estimates as a sluggish global economy weighs on consumer spending. MasterCard shares were down 2.6 percent at $538.54 on Wednesday afternoon. They had previously risen about 6 percent this year.
- Delphi profit drops as sales fall in Europe, N. America. Vehicle parts maker Delphi Automotive Plc reported a 20 percent drop in first-quarter profit on the back of lower sales in Europe and North America, and increased its cost cutting. Shares of the company, once the largest U.S. auto parts supplier, were down 3 percent in midday trading.
- U.S. small businesses cut borrowing for third month in a row. Small U.S. businesses cut back on borrowing a third straight month in March, all but reversing a short-lived surge after the Federal Reserve launched its asset-buying program aimed at boosting growth and jobs. The Thomson Reuters/PayNet Small Business Lending Index, which measures the overall volume of financing to small U.S. companies, fell to 98.5 from an upwardly revised 105.4 in February, PayNet said on Wednesday. PayNet had initially reported the February figure at 101.3.
- Humana(HUM) doubles profit and raises 2013 view. Humana Inc said its quarterly profit more than doubled as customers used medical services less than expected, so the company had to pay fewer claims. Humana also raised its profit forecast for the year.
- The lucrative investment trend hedge funds don't want you to know about. Hedge funds are scooping up personal property tax liens from municipalities at a quick pace after big banks decided it was too risky.
- China: Subprime for the masses. With Chinese workers enjoying a break from their travails on May 1 for Labour Day, it is an opportune time to look at one gift recently bestowed on them by the country’s financiers. The gift is a new investment opportunity going by the name ‘fund of trusts’, which conjures up a sense of diversification and safety. But a more accurate name might be ‘subprime for the masses’. China’s funds of trusts are inspired by the funds of funds that are common in developed financial markets, allowing people to invest in a blend of other funds – whether mutual funds or hedge funds – to gain broader and more dispersed exposure. In China, the funds are invested in a cocktail of different trust products, which include some of the riskiest, high-yielding investments legally available in the country. This innovation is notable for one major reason. Until now trust products have typically required minimum investments of Rmb1mn ($162,000) as a way of ensuring that only wealthy individuals put their money at risk. With funds of trusts, the entry barrier has been cut to as little as Rmb100,000 ($16,200). That puts trust investments within the reach of tens of millions of middle-class Chinese.
- Slowdown in economic giants fuels growth fears. Manufacturing activity in the world's two largest economies, the US and China, slowed in April, signalling weakening demand and casting doubt on global recovery.
- Irish manufacturing output tumbles in April. Irish manufacturing output contracted at its fastest rate in almost four years in April, as sluggish demand both at home and abroad dragged down the eurozone economy.
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