Bloomberg:
- EU Panel Penalties to Hurt Solar Firms From China to U.K. The European Union is poised to penalize imports of Chinese solar products, a move that would increase Europe’s cost for most photovoltaic panels an estimated 45 percent overnight. While officials from the U.S., China and the EU have engaged in preliminary talks to settle a dispute over trade in solar-energy products, according to people familiar with the situation, the EU yesterday said it will stick to its June 6 deadline to decide whether to impose import duties. The EU proposal for tariffs would hurt manufacturers such as China’s Trina Solar Ltd. (TSL) and raise costs to build power plants in Europe, the world’s largest market for solar products and one largely supplied by Chinese manufacturers. Duties will trigger “an increase in prices that is a major concern for Chinese producers as well as developers in the region, who may find that many solar projects are no longer viable,” according to Jenny Chase, Bloomberg New Energy Finance’s chief solar analyst. “The proposed anti-dumping tariffs are higher than the industry expected.”
- Caisse de Depot to Sell European Properties Amid ‘Dark Night’. Caisse de Depot et Placement du Quebec is selling some of its European property and redeploying proceeds in assets such as infrastructure while the euro-area economy shrinks, Chief Executive Officer Michael Sabia said. About 20 percent of the Caisse’s C$18 billion ($17.5 billion) of real estate assets are in Western Europe, according to its 2012 annual report. “We are selling real estate assets in Europe,” Sabia said in an interview yesterday at the Bloomberg Canada Economic Summit in Toronto. “Real estate pricing among top quality, platinum-quality assets -- the pricing is quite good, and we are trying to benefit from that and in some other asset categories as well, where selectively asset prices are high.” “There’s a dark night going on in Europe, a dark and foggy night where bad things come out of trees and bite you,” Sabia said. “It’s a pretty scary place. In Europe there are investments to be made, and I think it’s possible to be successful there but there’s no place in the world, other that maybe emerging markets, where the word selectivity is fundamentally important.” Sabia didn’t specify which European properties the Caisse is planning to sell.
- BOJ Affirms Easing Plan After Biggest Jump in Yields in 5 Years. The Bank of Japan affirmed a plan to double the monetary base over two years after a jump in bond yields highlighted risks associated with Prime Minister Shinzo Abe’s campaign to revive the economy. The central bank will expand the supply of money in the economy by 60 to 70 trillion yen ($683 billion) a year, as pledged in April, the BOJ said in Tokyo today. Twenty-six of 27 economists in a Bloomberg News survey forecast no change in monetary policy.
- Japan Exports Miss Estimates After Yen Slides to 4-Year Low. Japan’s exports missed estimates in April and the trade deficit swelled, highlighting weakness in global demand that may weigh on efforts to revive the world’s third-biggest economy. Overseas shipments rose 3.8 percent from a year earlier, the Finance Ministry said in Tokyo today. That was less than the median 5.4 percent estimate of 26 economists surveyed by Bloomberg News. The trade shortfall widened to 879.9 billion yen ($8.6 billion), the most for the month of April since at least 1979, according to the government. Exports to the European Union fell 3.5 percent from a year earlier, dropping for a 19th month, while those to the U.S. jumped 15 percent. Shipments to China rose 0.3 percent, indicating that demand may be stabilising after past declines.
- Australia Consumer Sentiment Slumps Most in 17 Months on Budget. Australian consumer confidence slumped by the most in 17 months as a government announcement the budget would remain in deficit overshadowed record low interest rates, a private survey showed. The sentiment index for May dropped 7 percent to 97.6, a Westpac Banking Corp. (WBC) and Melbourne Institute survey taken May 13-18 of 1,200 adults showed today in Sydney. That was the biggest drop since December 2011 and the first time since October 2012 the figure has fallen below 100, which indicates pessimists outnumber optimists.
- Asia Stocks Rise to Five-Year High as BOJ Keeps Stimulus. Asian stocks rose, with the regional benchmark index trading at a five-year high, after the Bank of Japan maintained its plan to expand the monetary base. The MSCI Asia Pacific Index advanced 0.4 percent to 144.57 as of 12:08 p.m. in Tokyo. All 10 industry groups on the gauge climbed.
- Subprime Mess Left by Pritzker Is Seen as Opening for Opponents. A 61-page report carrying the seal of the U.S. Treasury Department’s inspector general offers a tutorial for Republican senators interested in challenging Penny Pritzker’s commerce secretary nomination. The document chronicles the 2001 failure of a suburban Chicago bank after Pritzker and her family expanded subprime lending there and did pioneering work with the kind of mortgage-backed securitization that would eventually spread and help spark the worst recession since the Great Depression.
- Oklahoma Tornado: Long Minutes of Desperation Inside School Razed by Storm. When the tornado-warning sirens blared, Kelly Law was already in the hallway of Plaza Towers Elementary School, huddled against the wall, shielding as many students as she could with her body. Another eight or 10 teachers did the same, she said. For the long minutes it took the tornado to pass, she shut her eyes and prayed. The roof was ripped away. "It sounded like rivets being pulled out by a monster," Ms. Law said.
- Investors Brave Loans That Fly Solo. The 40-story office tower at 120 Broadway, occupying a full city block just a stone's throw from Wall Street, looks much as it has since its completion in 1915. The market for loans on such commercial properties, by contrast, has changed in recent months and is booming for the first time since the financial crisis.
- Pesticides Make a Comeback. Many Corn Farmers Go Back to Using Chemicals as Mother Nature Outwits Genetically Modified Seeds.
- Broad Immigration Overhaul Heads to Senate. Bipartisan Committee Agrees on Bill That Would Tighten Border Security, Provide Path to Citizenship.
- The Apple(AAPL) Tax Diversion. Senators beat up a U.S. success for following the tax laws they wrote. You almost have to admire Carl Levin's timing. Amid a furor over politicized IRS tax enforcement, the Michigan Democrat on Tuesday tried to change the subject to a hardy Washington perennial—corporate tax loopholes. Too bad his designated business pinata, Apple, demonstrates instead the insanity of the tax code that Mr. Levin has done so much to write.
- Gramm and McMillin: The Debt Problem Hasn't Vanished. While deficit projections have recently moderated, the cost of servicing the national debt will explode once interest rates begin to rise.
- Sources challenge White House claim of all-hands-on-deck pursuit of Benghazi suspects. U.S. military sources serving in North Africa are challenging the latest White House claim that the administration is applying "all the resources" at its disposal to bring the Benghazi attackers to justice, charging instead that the Obama administration knows who is responsible but is not acting. "They have let it slip by because of politics, and now we've taken all the correlation we had and dropped the ball because of risk (aversion) -- and now the security in Libya is more fragile than ever," one U.S. special operator told Fox News. The source, speaking on condition of anonymity, confirms that U.S. forces have tracked the alleged attackers since October but have since lost the trail of some of them, as no one up the chain of command would authorize them to capture or kill the targeted militia members.
- Bernanke Expected to Deliver Dovish Message. Federal Reserve Chairman Ben Bernanke is expected to maintain his dovish tone when he speaks to Congress Wednesday, and he is likely to dispel any notion that the Fed is ready to cut back on its easing policy.
- Lumber Enters Bear Market. (graph)
Fox19.com:
- Reality Check Exclusive: Cincinnati agent giving orders in IRS scandal? The claim that the ongoing IRS scandal is limited to low level employees is falling apart.
- White House threatens veto of bill to bypass Obama on Keystone. The White House has threatened to veto legislation pending in the U.S House of Representatives that could strip from President Barack Obama the authority to approve the controversial Keystone XL pipeline.
- Chemical-safety watchdog criticizes probe of Texas blast. Officials with the U.S. Chemical Safety Board say they may never know what caused last month's deadly fertilizer-plant explosion in Texas because of interference by federal and Texas agencies, according to a letter sent Tuesday by the head of the regulatory board to U.S. Senator Barbara Boxer.
Telegraph:
- Stocks are booming, so beware the bust. The return of 'animal spirits’ usually points to better times, but it’s more complicated now.
- Amari Says It's Govt's Job to Avoid Volatility in Yieldds. Nikkei cites remarks made by Japanese Economy Minister Akira Amari to reporters in Tokyo.
- Some Chinese Banks Stop Copper Trade Financing. Some Chinese banks have stopped issuing letters of credit, a type of trade financing, for copper importers after a government crackdown on hot-money inflows, citing bankers.
- China Should Expand Property Tax. Timing is "mature" for China to expand property tax trials, according to a commentary written by reporter Ren Xiao on the front page of China Securities Journal. A property tax will effectively relieve pressure on government's fiscal revenue, especially for local governments. It will be helpful to curb volatility of home prices, according to the commentary.
- China Big Steel Companies Face Liability Pressure. China's 30 largest listed steel companies had current liabilities of 759.5b yuan as of 1Q, exceeding their current assets of 530.5b yuan, citing Sheng Zhicheng, deputy secretary general of steel and logistics committee at China Federation of Logistics & Purchasing.
- None of note
- Asian equity indices are unch. to +.75% on average.
- Asia Ex-Japan Investment Grade CDS Index 101.50 +.5 basis point.
- Asia Pacific Sovereign CDS Index 85.0 +.25 basis point.
- FTSE-100 futures +.17%.
- S&P 500 futures -.01%.
- NASDAQ 100 futures +.01%.
Earnings of Note
Company/Estimate
- (SPLS)/.27
- (LOW)/.51
- (TOL)/.08
- (ZLC)/.00
- (TGT)/.84
- (AEO)/.17
- (EV)/.52
- (HPQ)/.81
- (SNPS)/.63
- (LTD)/.46
- (PETM)/.96
- (GES)/.08
10:00 am EST
- Existing Home Sales for April are estimated to rise to 4.99M versus 4.92M in March.
- Bloomberg Consensus estimates call for a weekly crude oil inventory decline of -1,000,000 barrels versus a -624,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -300,000 barrels versus a +2,588,000 barrel gain the prior week. Distillate inventories are estimated to rise by +1,000,000 barrels versus a +2,300,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to rise by +.5% versus a +1.0% gain the prior week.
- FOMC Minutes from April 30-May 1 Meeting.
- None of note
- The Fed's Bernanke speaking, Fed's Fisher speaking, ECB's Draghi speaking, BoJ Decision, German 10Y debt auction, China HSBC Manufacturing PMI, weekly MBA mortgage applications report, (BA) investor conference and the (TMO) analyst meeting could also impact trading today.
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