Bloomberg:
- Slovenian Credit Lowered to Junk by Moody’s as Bond Sale Delayed. Slovenia’s credit rating was cut to junk by Moody’s Investors Service, forcing the government to delay the sale of its first foreign bond this year to ease a financing crunch and avoid an international bailout. The Finance Ministry postponed an offering of dollar- denominated benchmark bonds yesterday before the rating was lowered two levels to Ba1 from Baa2, on par with Turkey, and given a negative outlook. Five members of the 17-nation euro area are now rated junk by Moody’s. Standard & Poor’s and Fitch Ratings both assess Slovenia at A-, the fourth-lowest investment grade. A major factor underpinning the downgrade “is the ongoing turmoil in the country’s banking system and the high likelihood that the sovereign will be required to provide further assistance and capital injections,” Moody’s said late yesterday in an e-mailed statement from New York. “Asset quality at the banks deteriorated considerably in 2012 and has continued to deteriorate since.”
- BOJ Veterans to ECB Pick Demographic Holes in Abe: Japan Credit. Central bank veterans are lining up to highlight the Achilles' heel of Prime Minister Shinzo Abe's economic revival plan: the world's fastest aging society. All five ex-Bank of Japan officials in a Bloomberg News survey said any gains in government bond yields will be contained over the next two years, with four of them seeing little chance that the BOJ will achieve its 2% inflation target. People 65 or older accounted for 22.1% of Japan's total population in 2007-2011, the highest global proportion, according to Bloomberg Rankings. “What creates Japan’s deflation is the aging of society,” said Hideo Kumano, the chief economist at Dai-Ichi Life Research Institute Inc. in Tokyo. “Robust economic growth and business opportunities that provide future income are needed to end deflation. Even if the central bank raises the flag of inflation, whether people will follow it is a different matter.”
- China Manufacturing Gauge Signals Slowdown Persisting: Economy. China’s manufacturing expanded at a weaker pace in April in a sign that the slowdown in the world’s second-largest economy is extending into the second quarter. The Purchasing Managers’ Index was at 50.6, the National Bureau of Statistics and China Federation of Logistics and Purchasing said today in Beijing. That compared with the 50.7 median forecast of 31 analysts in a Bloomberg News survey and a March reading of 50.9.
- Australia Manufacturing Gauge Plunged to Four-Year Low in April. A gauge of Australian manufacturing slumped to a four-year low in April as the sustained strength of the nation’s currency weighed on exporters. The manufacturing index plunged 7.7 points to 36.7 last month, the Australian Industry Group said in a survey released today. The export index was the lowest since 2004, it showed. “The sharp drop in manufacturing production, employment and new orders in April, along with the continued erosion of exports, is deeply concerning,” Innes Willox, AIG’s chief executive officer, said in a statement. “The strength of the Australian dollar is a major burden on domestic producers.” A gauge of employment plunged 9.4 points to 39.3 in April, while new orders dropped 7 points to 32.4, the report showed. The production measure slumped 8.6 points to 33.1. The manufacturing index’s reading on wages edged down 0.7 point to 57 last month, while inventories fell 4.8 points to 46.4, today’s report showed. Supplier deliveries slumped 7.3 points to 41.1, and selling prices dropped 2.7 points to 40.3, it showed.
- Scientists Infect Chicks in Race to Halt Bird Flu Spread. Deep inside a high-security laboratory an hour from Melbourne, scientists working behind air-locked doors inject six-week-old chickens with a virus that has killed one in five people it’s known to have infected. The pathogen is H7N9 bird flu, and it came to Australia’s second-biggest city 12 days ago in a 0.5 milliliter sample -- 10 would fit on a teaspoon -- from a patient in China’s Anhui province. Antibodies from the chickens will help create tests for the virus, part of a race to head off a global outbreak.
- Asian Stocks Fall as Yen Gains Amid Growth Concerns; Oil Drops. Asian stocks declined from the highest level since June 2008, led lower by Japanese shares as the yen strengthened and data signaled a slowdown in global business activity. Oil and copper dropped.
- Copper Weakens for Second Day as China’s Manufacturing Slows. Copper retreated after the biggest monthly loss since May last year as China’s manufacturing expanded at a weaker pace in April, increasing concern that slowing growth will curb demand from the biggest consumer. Copper for delivery in three months declined as much as 0.5 percent to $7,021 a metric ton on the London Metal Exchange and was at $7,023.50 at 9:39 a.m. in Singapore. Nickel and zinc also fell.
- Rubber Drops on Advancing Yen, Weaker Economic Data From China. Rubber declined as Japan’s currency strengthened and data signaled a slowdown in business activity in China and the U.S., the world’s biggest users. The contract for October delivery lost as much as 1.7 percent to 258.1 yen a kilogram ($2,654 a metric ton) and was at 259.2 yen on the Tokyo Commodity Exchange at 10:35 a.m. local time. Futures fell for a third month in April and have lost 14 percent this year.
- U.S. Mint Sales of Gold Coins Jump to Highest in Three Years. Sales of gold coins by the U.S. Mint rose to the highest since December 2009 after the price of the metal in April fell the most in 16 months.
- Obama Said to Choose Watt to Lead Fannie Mae Regulator. Housing industry officials expect President Barack Obama to nominate Representative Mel Watt, a Democrat from North Carolina, as director of the Federal Finance Housing Finance Agency as early as tomorrow, according to three people briefed on the matter.
- Meredith Whitney Predicts ‘Slow Bleed’ of Wall Street Job Cuts. Job cuts on Wall Street will be a “continued slow bleed” after the industry trimmed hundreds of thousands of positions in recent years, said Meredith Whitney, a banking analyst and chief executive officer of Meredith Whitney Advisory Group. “There’s growth out there, but for the majority of financials it’s an anemic growth environment,” Whitney told Willow Bay today in a Bloomberg Television interview at the Milken Institute conference in Los Angeles. “What you’re seeing is stealth cuts.”
- D.C. Suburbs Have Most Concentrated Mortgage Tax Breaks. The mortgage interest deduction capital of the U.S. lies just outside the nation’s capital. More than two of every five tax filers in metropolitan Washington’s Maryland suburbs of Bethesda-Gaithersburg- Frederick claim the tax break, the highest percentage in the country, according to a report released today by the Pew Charitable Trusts. “The distribution of this tax benefit is uneven across the states for many different reasons,” said Anne Stauffer, director of Pew’s fiscal federalism initiative. “There are these large variations, which mean that the impacts of any change would actually be very different” across the U.S.
- Schwab(SCHW) Sues BofA(BAC) and Other Banks Over Libor Manipulation. Charles Schwab Corp. (SCHW), whose antitrust claims against banks over manipulation of the London interbank offered rate were tossed from federal court in New York, sued Bank of America Corp. and other financial institutions for fraud in state court in San Francisco. Schwab alleged in a complaint filed yesterday that it and other company entities purchased billions of dollars in Libor- based instruments that are paying artificially low returns because the banks agreed to depress the rate.
- Ebay(EBAY) Boss Expects ‘Uproar’ From Small Business Over Online Tax. Pretty much the entire online shopping industry, and all the giants of traditional retailing, have lined up in support of the Marketplace Fairness Act, a law currently before Congress that would create a new national standard for charging state sales taxes on products bought online. From Amazon to Wal-Mart, from the AFL-CIO to the Obama administration, support for the act is broad and bipartisan — except for one high-profile exception. Standing almost alone among big e-commerce companies, eBay remains a vocal opponent of the bill. That’s not because the company is opposed to the idea of online sales taxes, or much of the content of the Act, eBay CEO John Donohoe said during a visit to the WSJ today. Instead, its opposition is based on a single-issue concern: it believes small online sellers — who make up the majority of its customers — will face crippling costs complying with the law, and wants them to be exempted from the new system.
- In Reversal, Neighbors Squeeze Russia's Gazprom Over Natural-Gas Prices. Gazprom's European customers have squeezed billions of dollars in discounts from the company, and they are pressing for more, thanks in part to the U.S. shale-gas boom.
- Obama Sees 'Bumps' for Health Law. Rollout Faces Obstacles as Many States Sit Out Medicaid Expansion and Don't Set Up Exchanges. The main goal of the 2010 law is to bring health-insurance coverage to Americans who lack it, yet two of the measure's key ways of doing this have hit obstacles. More than half of the states are on track to sit out the law's Medicaid-expansion goal initially—which means millions of low-income Americans won't have access to health insurance through Medicaid as the law anticipated.
- Learning Goals Spur Backlash. New Standards Adopted by Nearly All States Are Finding a Growing Group of Foes. As more classrooms across the country roll out universal math and reading standards, a growing group of critics are pressing officials to slow their implementation or dump the learning goals entirely. This is the first school year that most states are using voluntary academic standards known as Common Core, which lay out what students should know from kindergarten through 12th grade.
- Edward Niedermeyer: Welcome to General Tso's Motors(GM). Long an important growth market, China is becoming GM's global export base. After decades of slogans like "See the USA in Your Chevrolet" and "Baseball, Hot Dogs, Apple Pie and Chevrolet," General Motors has retreated from its overtly patriotic marketing approach since emerging from government-funded bankruptcy. Maybe that was a wise move, given that American taxpayers paid for the $50 billion bailout of "Government Motors" and not all of them were happy about it. But another dynamic also seems to be at work: The auto maker has fundamentally shifted its focus. American taxpayers may have rescued GM during its moment of need, but it is China that is disproportionately benefiting from the bailout of America's erstwhile automotive icon.
- Obama pledges inquiry on Benghazi survivors’ testimony. President Obama said he is unaware of longstanding efforts by Republican lawmakers to question survivors of the Benghazi attacks but pledged to investigate it. “I’m not familiar with this notion that anybody has been blocked from testifying,” the president said during a White House news conference on Tuesday. “So what I’ll do is I will find out what exactly you’re referring to.”
- Market's Great…If You're Selling: Private Equity Titans. Some of the biggest and most sophisticated private equity and hedge fund investors in the world are stepping back from equities and bond markets.
- Mayday Distress of Europe’s Anti-Austerity Left. A collective howl of protest and despair will resound through Europe's streets and squares on Wednesday at the annual May 1 rallies, which, in happier times, celebrate the dignity of human labor.
Business Insider:
VentureBeat:
- Get ready for more media hacks, Twitter warns. It seems even Twitter is a little shaken up about the recent rash of major media account hacks. The company sent out a letter to publications saying it expects more hacks and provided tips on how to keep Twitter accounts safe.
- FDA approves over-the-counter sales for Plan B. Women and girls age 15 and over will soon be able to buy emergency contraception without a prescription. The Food and Drug Administration announced on Tuesday that it was approving Plan B One-Step, also known as the morning-after pill, to be sold in the retail aisle next to other over-the-counter medications. Customers will not have to ask a pharmacist for it. FDA officials say the announcement is unrelated to a federal judge's order earlier this month, which gave the agency 30 days to make the pill available to all girls and women without a prescription, regardless of age.
- SolarWinds(SWI) forecasts second quarter below estimates. SolarWinds Inc's first-quarter revenue missed analysts' estimates and the network management software maker forecast current-quarter results below expectations as it struggles to sell new licenses. SolarWinds shares fell as much as 10 percent in extended trading.
- Speed traders eyed after Twitter hack attack, U.S. regulator says. The phony tweet from the Associated Press' hacked Twitter account, which sparked a short-lived panic in the stock market a week ago by saying that President Barack Obama was injured in two explosions at the White House, underscored the need to look at regulating automated trading, the top U.S. derivatives regulator said on Tuesday. "I think that we do need to finalize a concept release that we've been working on for many moons here at the CFTC," Commodity Futures Trading Commission Chairman Gary Gensler told a public meeting of the agency on Tuesday.
- Flextronics(FLEX) revenue falls 17 percent. Contract electronics maker Flextronics International Ltd reported a loss in the fourth quarter after the loss of revenue from key customer BlackBerry and charges related to closure of factories and job cuts.
- Fed weighs tighter cap on bank leverage. Federal Reserve officials are weighing a stricter cap on bank leverage , a move that would respond to increasing demands to constrain the riskiness of large lenders. According to people familiar with the matter, Fed officials have discussed increasing the amount of equity capital banks are required to hold, setting the bar higher than the 3 per cent of assets level agreed internationally.
- Eurozone risks Japan-style trap as deflation grinds closer. The eurozone is one shock away from a Japan-style deflation crisis after a key measure of prices fell to the lowest since the launch of the single currency.
- BOMBSHELL: Saudi Arabia warned the United States IN WRITING about Tamerlan Tsarnaev in 2012, and rejected his application for an entry visa to visit Mecca in 2011. The Kingdom of Saudi Arabia sent a written warning about accused Boston Marathon bomber Tamerlan Tsarnaev to the U.S. Department of Homeland Security in 2012, long before pressure-cooker blasts killed three and maimed hundreds, according to a senior Saudi government official with direct knowledge of the document. The Saudi warning, the official told MailOnline, was separate from the multiple red flags raised by Russian intelligence in 2011, and was based on human intelligence developed independently in Yemen. Citing security concerns, the Saudi government also denied an entry visa to the elder Tsarnaev brother in December 2011, when he hoped to make a pilgrimage to Mecca.
- None of note
- Asian equity indices are -.25% to unch. on average.
- Asia Ex-Japan Investment Grade CDS Index 107.50 +.5 basis point.
- Asia Pacific Sovereign CDS Index 86.25 -.75 basis point.
- FTSE-100 futures +.20%.
- S&P 500 futures -.01%.
- NASDAQ 100 futures +.03%.
Earnings of Note
Company/Estimate
- (ADT)/.42
- (DVN)/.55
- (ENR)/1.27
- (VIAB)/.95
- (MA)/6.17
- (MRK)/.79
- (CVH)/.81
- (TWX)/.74
- (CVS)/.79
- (ICE)/1.97
- (EXC)/.68
- (CMCSA)/.50
- (JNY)/.15
- (CHK)/.25
- (RDC)/.52
- (HUM)/1.80
- (SPW)/.26
- (AMT)/.82
- (H)/.08
- (PSX)/1.89
- (CLX)/1.05
- (AGN)/.96
- (ALL)/1.30
- (MAR)/.40
- (ADM)/.50
- (PRU)/1.88
- (LVS)/.67
- (FB)/.13
- (V)/1.81
- (CAR)/.02
- (MET)/1.30
8:15 am EST
- ADP Employment Change for April is estimated at 150K versus 158K in March.
- Construction Spending for March is estimated to rise +.6% versus a +1.2% gain in February.
- ISM Manufacturing for April is estimated to fall to 50.6 versus 51.3 in March.
- ISM Prices Paid for April is estimated to fall to 52.6 versus 54.5 in March.
- Bloomberg consensus estimates call for a weekly crude oil inventory build of +1,100,000 barrels versus a +947,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -900,000 barrels versus a -3,928,000 barrel decline the prior week. Distillate inventories are expected to rise by 250K barrels versus a 97,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to rise +.68% versus a -2.8 decline the prior week.
- The FOMC is expected to leave the benchmark fed funds rate at .25%.
- Total Vehicle Sales for April are estimated at 15.22M versus 15.22M in March.
- (JCTCF) 2-for-1
- The BoJ Minutes, weekly MBA mortgage applications report, Final Markit US PMI for April, (DTE) analyst day and the (AVT) analyst day could also impact trading today.
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