Bloomberg:
- ZEW’s Fuest Sees Japan-Style Stagnation as ECB Tools Exhausted. Europe faces Japan-style stagnation as governments delay reforms and the European Central Bank comes close to exhausting its options, said Clemens Fuest, president of the ZEW Center for European Economic Research. “I would expect the politicians to really take the problems in hand and face the need to restructure the banking system,” Fuest said in an interview in Mannheim, Germany. “But I see the risk that what’s concentrated on now is shunting the problems down the road and going the Japanese way, into stagnation. The ECB has done its part to solve the crisis. The central bank has used up most of its ammunition.”
- Japan Opposition’s Hosono Says Abenomics Ignores Risks. Goshi Hosono, secretary general of Japan’s biggest opposition party, challenged the government to better protect the elderly and small companies, charging Prime Minister Shinzo Abe’s policies with ignoring the risks of monetary easing and a weakened currency. “It’s a fact that monetary easing and a weaker yen improved the mood, but there are also side effects and risks,” Hosono said yesterday on public broadcaster NHK’s Sunday Debate program. “The government hasn’t taken sufficient care regarding the increased burden on pensioners and small business from rising import prices.”
- China Defies U.S. and Japan in Asserting Rights to Disputed Seas. China dismissed calls for arbitration to resolve disputes in Asian waters vital to world trade after the U.S. and Japan vowed to resist attempts to seize contested territory by force. Qi Jianguo, deputy chief of the General Staff of the People’s Liberation Army, told a forum in Singapore yesterday that Chinese patrols in disputed waters off its coasts were “totally legitimate.” He spoke a day after Defense Secretary Chuck Hagel said the U.S. “stands firmly against any coercive attempts to alter the status quo” in the seas.
- China Nuclear Weapons Stock Grows as India Matches Pakistan Rise. China, which has the world’s second-largest military budget behind the U.S., expanded its nuclear-weapons arsenal last year, with India and Pakistan also bolstering their stockpiles, a research institute said. The three added an estimated 10 warheads each to their inventories, with China’s arsenal now reaching 250 devices, the Stockholm International Peace Research Institute said today in releasing a new yearbook. Pakistan holds 100 to 120 units and India 90 to 110, while North Korea may have as many as eight warheads with an uncertain operational status, it said.
- Changing China Food Safety Key to Shuanghui on Smithfield(SFD). Wan Long, who helped turn a single hog processing plant into China’s largest producer, explains the reasons for his $4.7 billion swoop on Smithfield Food Inc. (SFD) as he adjusts six miniature porcelain pigs on his desk.
- Asian Stocks Fall as U.S. Data Stokes Fed Exit Concern. Nissan Motor Co. (7201), a Japanese carmaker that gets 34 percent of its sales in North America, slid 2.8 percent. Cochlear Ltd. (COH) slumped 14 percent in Sydney after the maker of implant systems for the hearing impaired said sales were weaker in the second half. China Foods Ltd., a maker of products including beverages, snacks and instant food, slumped 10 percent in Hong Kong after saying it expects its operating profit will fall. Nomura Holdings Inc. dropped 6.6 percent, pacing losses among Japanese brokerages. The MSCI Asia Pacific Index fell 0.5 percent to 134.13 as of 12:38 p.m. in Tokyo. All but one of the 10 industry groups on the gauge dropped. The measure declined 5.1 percent in May month, the first monthly loss since October.
- Emerging market dominoes to fall. The worst month in a year for emerging-market currencies will prove to be more than a momentary bout of weakness to strategists at firms from UBS AG to Societe Generale SA that see the Federal Reserve weaning investors off its extraordinary stimulus.
- Rubber Declines to One-Month Low as Oil’s Drop Reduces Appeal. Rubber declined to a one-month low as a drop in oil reduced the appeal of the commodity as an alternative to synthetic products used in tires. Rubber for delivery in November fell as much as 2.8 percent to 251.1 yen a kilogram ($2,498 a metric ton) on the Tokyo Commodity Exchange, the lowest level since May 2. The most-active contract traded at 256 yen at 10:47 a.m., extending losses for this year to 15 percent.
- Hedge Funds Boost Gold Bull Bets Most in Two Months: Commodities. Hedge funds raised bets on a gold rally by the most in two months as the U.S. economy expanded less than previously estimated, boosting speculation the Federal Reserve will maintain the pace of stimulus. Speculators raised their net-long position by 35 percent to 48,096 futures and options by May 28, the biggest gain since March 19, U.S. Commodity Futures Trading Commission data show. Most of the gain came from a drop in short bets, which reached a record a week earlier. Net-bullish wagers across 18 U.S.-traded commodities climbed 13 percent to a nine-week high of 652,708 contracts, led by gains in corn and natural gas.
- IRS Spent $50 Million on Conferences Drawing Congress’s Scrutiny. The U.S. Internal Revenue Service spent about $50 million on 220 conferences for employees from 2010 to 2012, according to the House Oversight and Government Reform Committee. The cost of the agency’s conferences was released today by the committee, which is holding a hearing on the subject June 6. In one case, the IRS spent $4 million for an Anaheim, California, conference in 2010, where some stayed in rooms costing $1,500 to $3,500 a night and $135,000 was paid to outside speakers, including $17,000 for a lecture on “leadership through art.”
- Wave of Unrest Spreads Across Turkey. Crackdown on Protest in Istanbul Park Sparks Nationwide Demonstrations Against Government Policies. An unexpected eruption of often-violent civil unrest swept across Turkey over the weekend, the culmination of a simmering clash over social policy between Prime Minister Recep Tayyip Erdogan and a broadening coalition of Turks that threatens the political stability of a key U.S. ally. The demonstrations mushroomed after a police attack Friday on a small protest against government plans to replace a park in central Istanbul with a housing complex and shopping mall. After two days of clashes around the park and the adjacent Taksim Square, police withdrew Saturday afternoon, leaving protesters to occupy the area.
- Mortgage Investors Get Blindsided. Bonds Backed by Subprime Loans Had $1 Billion of Previously Undisclosed Losses. Some mortgage investors got an unexpected refresher course on the risks of subprime debt when they received notice of $1 billion of previously undisclosed losses.
- Short Seller Seeks Valley 'Pretenders'. Creative hairstyles, fake names and shoe-leather sleuthing transformed Carson Block from a no-name expatriate in China into a celebrity short seller. But will such gambits translate elsewhere? It has "a lot of truly innovative companies, but there are also a number of companies in the Valley that are more pretenders," he says, adding that tech companies won't be Muddy Waters's exclusive focus.
- Under Armour(UA) Arrives on Global Stage. Can niche athletic-apparel maker Under Armour Inc. garner the same global recognition as Nike Inc. and Adidas ADS?
- Deficit Deal Even Less Likely. Improving U.S. Fiscal Health Eases Pressure for a 'Grand Bargain' Amid Gridlock.
Marketwatch.com:
- Taiwan manufacturing swings to contraction. The HSBC Taiwan manufacturing Purchasing Managers' Index dropped to 47.1 from April's 50.7, falling below the 50 mark which divides expansion from contraction. The drop was the first since November, with the sub-index for new orders showing the first decrease in five months and new export orders falling for the first time in six months. HSBC economist Donna Kwok said: "Taiwan manufacturers' descent into contraction mirrors what took place last summer, although client demand is deteriorating at a faster pace this time, both at home and abroad."
Fox News:
- Interviews with IRS agent suggest Tea Party targeting came from Washington. Interviews with an IRS field agent involved in the agency targeting Tea Party groups for additional vetting appear to contradict the White House assertion that rogue agents, not the administration, were behind the effort, according to partial transcripts released Sunday by the House Oversight and Government Reform Committee.
- Top House Republican: Holder being investigated for Hill testimony. The chairman of the House Judiciary Committee said Sunday his panel is investigating remarks Attorney General Eric Holder made under oath regarding the Justice Department accessing a Fox News reporter’s phone logs and emails. "It’s fair to say we're investigating the conflict in his remarks, those remarks were made under oath,” Chairman Rep. Bob Goodlatte, R-Va., told “Fox News Sunday.”
- Wells(WFC) Chief Warns Fed Over Debt Proposal. Wells Fargo's chief executive has warned the Federal Reserve against forcing banks to hold more long-term debt, a measure that central bank officials believe will help end the phenomenon of institutions judged "too big to fail." John Stumpf said the Fed was giving mixed messages on debt and his bank should not be punished for the fact that it is largely funded by deposits. "Sometimes they say 'We want more debt,' sometimes they say, 'Geez, too much debt's not great either'," he told the Financial Times.
- Merck(MRK) Melanoma Drug Shrinks Tumors in 38% of Patients. A Merck drug designed to unmask tumor cells and mobilize the immune system into fighting cancer helped shrink tumors in 38 percent of patients with advanced melanoma in an early-stage study, U.S. researchers said on Sunday.
Zero Hedge:
Business Insider:
Reuters:
Financial Times:- Fed's Yellen: big banks may need more capital than Basel requires. Tougher borrowing limits may be needed for too-big-to-fail banks, the No. 2 official at the Federal Reserve said on Monday, adding her voice to a growing chorus of U.S. regulators looking to go beyond internationally agreed standards in the wake of the 2007-2009 financial crisis.
- Merkel reins in plan to transfer powers to Brussels. German Chancellor Angela Merkel has come out against handing the European Commission more powers, in the clearest sign yet that she is reining in her ambitions to create a "fiscal union" in which euro members cede control of their budgets to Brussels.
- China’s shadow banks. The credit kulaks. The growth in wealth-management products reflects deeper financial distortions.
- Chinese navy begins US economic zone patrols. The Chinese military has started operating within the US’s exclusive economic zone, a move that could transform the dynamic between the dominant Pacific naval power and its main challenger. Admiral Samuel Locklear, commander of US forces in the Pacific, on Sunday confirmed the revelation from a Chinese military delegate at the Shangri-La Dialogue, a high-level defence forum in Singapore, that the People’s Liberation Army navy had started “reciprocating” the US navy’s habit of sending ships and aircraft into the 200-nautical-mile zone off China’s coast.
- BIS warns of dangers of cheap money driving up stock prices. Markets are “under the spell” of the world’s central bankers, with cheap money driving stock prices to record highs despite a lack of good economic news, the Bank for International Settlements has said.
- France worse off than UK in the 1970s: Axa chief. France is in a worse state than Britain was at the time of its 1976 bail-out by the International Monetary Fund, one of the nation’s best-known businessmen has declared.
- BIS records startling collapse of eurozone interbank loans. Cross-border lending is falling drastically across the western world as banks slash exposure to Europe and bend to tougher capital rules, according to data from the Bank for International Settlements.
- ECB to Hire 800 Bank Supervisors for New Agency. European Central Bank will also hire hundreds of technical and support staff to assist additional supervisors at new banking regulator.
- France May Apply 75% Tax on 2013 Pay Over EU 1Mln. France's Finance Ministry has proposed applying a 75% surcharge on compensation above EU1m to monies paid out this year rather than waiting until 2014.
AFR:
- Australia needs $A at US70¢, says economist. Prominent economist Ross Garnaut believes Australia will need a US dollar exchange rate around the US70¢ mark, and maybe even lower, for non-resource sectors of the economy to regain competitiveness.
Weekend Recommendations
Barron's:- Bullish commentary on (INTC).
- Asian indices are -1.50% to unch. on average.
- Asia Ex-Japan Investment Grade CDS Index 116.25 +5.25 basis points.
- Asia Pacific Sovereign CDS Index 100.25 +4.25 basis points.
- FTSE-100 futures -.66%.
- S&P 500 futures +.22%.
- NASDAQ 100 futures +.22%.
Earnings of Note
Company/Estimate
- (CBRL)/.94
- (SAI)/.25
- (GIII)/-.05
10:00 am EST
- Construction Spending for April is estimated to rise +.9% versus a -1.7% decline in March.
- ISM Manufacturing for May is estimated at 50.7 versus 50.7 in April.
- ISM Prices Paid for May is estimated to fall to 49.5 versus 50.0 in April.
- Total Vehicle Sales for May are estimated to rise to 15.1M versus 14.88M in April.
- None of note
- The Fed's Williams speaking, Eurozone PMI report, Japan 10Y bond auction, Final Markit US PMI for May, Jefferies Healthcare Conference, RBC Energy Conference, Goldman Lodging/Gaming/Restaurant/Leisure Conference and the (BCR) investor conference could also impact trading today.
No comments:
Post a Comment