Bloomberg:
- Ukraine Interim Leader Warns of Economic Danger. Ukrainian parliament Speaker Oleksandr Turchynov, handed presidential powers as lawmakers prepare to form a coalition government, warned that the economy was in a “pre-default situation.” Lawmakers in Kiev worked on reshaping government after ousting Viktor Yanukovych from the presidency for a role in the violence that killed at least 82 people last week. The U.S. and the European Union pledged aid for a new cabinet. Border guards stopped Yanukovych at an airport in the eastern city of Donetsk two days ago. He wasn’t detained.
- U.S.-EU Ready to Help Cash-Strapped Ukraine as President Ousted. The U.S., Europe and the U.K. said they stand ready to help Ukraine following its president’s ouster, days after Standard & Poor’s said the former Soviet republic risks default. “We are here ready to help just as soon as there is someone at the end of the telephone,” U.K. Chancellor of the Exchequer George Osborne said in an interview yesterday in Sydney. “We should be there with a checkbook to help the people of Ukraine rebuild their country.”
- China Rebuts Lew as Emerging Markets Keep Up Pressure on Fed. China led developing markets in hitting back at the U.S. as South Africa kept up pressure on the Federal Reserve to consider the spillover effects of tapering its bond-buying program. A day after Treasury Secretary Jacob J. Lew questioned the pace of China’s economic opening, Chinese Finance Minister Lou Jiwei said yesterday the U.S. economy had been buoyed by monetary policy rather than structural changes. South Africa’s Deputy Finance Minister Nhlanhla Nene called on the Fed to weigh the impact on developing nations as it pares stimulus. “The tension is likely to continue,” said Tomo Kinoshita, chief economist at Nomura Holdings Inc. in Tokyo. “China is on the side of the emerging economies rather than on the side of the advanced economies.”
- China’s Home Price Gains Slow in Big Cities on Lending Curbs. New home price growth in China’s first-tier cities slowed in January after local governments implemented property measures to rein in escalating values and banks tightened lending. Home prices in the capital city of Beijing and the southern business hub of Shenzhen both rose 0.4 percent from a month earlier, the National Bureau of Statistics said in a statement today, the slowest pace since October 2012. Prices in Shanghai added 0.5 percent, the smallest increase since November 2012, and those in Guangzhou gained 0.7 percent.
- India’s Modi Attacks Chinese ‘Expansion’ in Tougher Border Stand. Indian opposition prime ministerial candidate Narendra Modi criticized China for its “expansionary mindset”, signaling he would take a tougher stance in a territorial dispute along their Himalayan frontier. Speaking at an election rally in the remote northeastern Indian state of Arunachal Pradesh that is partly claimed by China, Modi said India would never give up parts of its territory. Instead he urged China to pursue closer economic ties with India for the benefit of both nations as they try to meet a target of $100 billion in bilateral trade by next year.
- Thai Farmers Lose Pickup Trucks as Protests Raise Debt Risk. Koon Thaveepat is in danger of losing his pickup truck and his livelihood. He’s behind on loan payments as Thailand’s anti-government protests delay state rice-purchase payments, threatening to plunge thousands of farmers deeper into debt.
- Beijing Air Pollution Reaches 11-Times WHO Recommended Levels. Beijing’s air pollution reached 11 times World Health Organization-recommended levels today, as the country’s meteorological department forecast smog in north and central China to continue. The concentration of PM2.5, fine particulates that pose the greatest risk to human health, was 290 micrograms per cubic meter at 3 p.m. near the city’s Tiananmen Square, the Beijing Municipal Environmental Monitoring Center said on its website. The WHO recommends levels of no higher than 25 micrograms per cubic meter in 24 hours.
- G-20 Renews Vow on Shadow Banking Amid Talk of China Risk. Global finance officials renewed their promise to address risks from unregulated lending and said their drive to end bailouts for large banks should be nearly finished this year. Group of 20 finance ministers and central bank governors meeting in Sydney over the weekend said they are focused on “substantially completing” efforts to prevent lenders from becoming too big to fail and addressing the risks of shadow banking before a summit of the nations’ leaders in November.
- IMF’s Lagarde Sees Tapering Spurring Further Market Volatility. The dialing back of Federal Reserve stimulus will cause further ructions in financial markets even as it marks an improvement in the global economy, International Monetary Fund Managing Director Christine Lagarde said. “The tapering that we see is a result of the significant improvement of the global economy, but particularly the U.S. economy, and that in and of itself is positive,” Lagarde said today in an interview following a meeting of Group-of-20 finance chiefs in Sydney. “There will continue to be volatility on the markets as a result of this tapering.”
- Indonesia’s GDP Growth May Slow to Least Since 2009, Basri Says. Indonesia’s Finance Minister Chatib Basri said economic growth may slow this year to the least since 2009 as the government reins in the current-account deficit. Southeast Asia’s largest economy may grow between 5.5 percent and 5.8 percent in 2014, Basri said today in an interview in Sydney following a meeting of Group of 20 finance chiefs. The state budget had assumed expansion of 6 percent. Gross domestic product expanded 5.8 percent in 2013.
- China Shares Drop on Loan Curb Reports as Gas Surges. Chinese shares tumbled on reports of property-lending curbs, metals fell and the won dropped against all major peers. Natural gas climbed to its highest price in five years and oil rallied as forecasts for frigid weather in the U.S. bolstered the outlook for energy demand. Gauges of Chinese shares in the mainland and Hong Kong tumbled more than 1.9 percent at 11:17 a.m. in Tokyo amid reports that some banks restricted lending to developers and related sectors. The MSCI Asia Pacific Index erased gains to fall 0.2 percent.
- Tokyo Rubber Follows Shanghai Lower Amid China Property Concerns. Rubber in Tokyo and Shanghai sank as concern grew that property prices in China will retreat, weakening raw-material demand from the largest consumer. The contract for July delivery on the Tokyo Commodity Exchange dropped as much as 5 percent, the biggest decline for a most-active future since Jan. 27, to 215.5 yen a kilogram ($2,105 a metric ton) by 12:10 p.m. local time. Rubber for May delivery on the Shanghai Futures Exchange plunged by the daily price limit to 14,805 yuan ($2,429) a ton. That’s the lowest level for Shanghai futures since June 2009.
- Maduro Warns Venezuela Opposition as Caracas Protests Return. Venezuelan President Nicolas Maduro told opposition governors to take part in talks he called for next week or face “consequences” as Caracas residents prepare for dueling rallies today. Maduro, in a news conference from the presidential palace yesterday, said opposition groups were trying to overthrow his government, backed by the political “right” in Latin America, foreign media and the U.S. “There is a campaign to demonize, to isolate, the Bolivarian revolution,” said Maduro, sitting in front of a portrait of late President Hugo Chavez. “It’s an international campaign that is trying to divide Latin America.”
- U.S. Corporate Credit Swaps Index Rises First Time in Four Weeks. A gauge of U.S. corporate credit risk rose for the first week in four on signs the Federal Reserve is unlikely to slow the pace of stimulus cuts. The Markit CDX North American Investment Grade Index, a credit-default swaps benchmark used to hedge against losses or to speculate on creditworthiness, added 1.3 basis points for the week to 65.1 basis points as of 5:20 p.m. in New York, according to prices compiled by Bloomberg. The measure rose 0.4 basis point today. Moody’s Liquidity-Stress Index for speculative-grade companies increased to 4.5 percent in mid-February, from 4.2 percent at the end of 2013, analysts led by John Puchalla at Moody’s Investors Service wrote in a research note today. The index rises when corporate liquidity appears to weaken and falls when it improves. The risk premium on the Markit CDX North American High Yield Index, tied to the debt of 100 speculative-grade companies, widened 6 basis points for the week to 322.9 after increasing by 1.8 today, Bloomberg prices show.
- Treasury Yield Curve Narrows as U.S. Economic Growth Falters. The difference between yields on two- and 10-year Treasuries narrowed for the first time in three weeks as investors questioned the pace of the economic expansion after reports showed harsh weather weighed on U.S. growth. The premium investors demand to hold benchmark 10-year notes instead of two-year securities fell to 242 basis points, or 2.42 percentage points, as retail sales and existing home sales fell and a manufacturing index declined. Fed chair Janet Yellen testifies before the Senate Feb. 27, a week after minutes from the central bank’s last meeting showed policy makers are unlikely to slow a reduction in bond purchases used to support growth. The Treasury will sell $109 billion in fixed- and floating-rate notes next week.
- Bankrupt Solar-Panel Maker Suntech Seeks Protection in U.S. Suntech Power Holdings Corp., the Chinese solar-panel maker that defaulted on $541 million of bonds, filed for bankruptcy court protection from U.S. creditors as it liquidates in the Cayman Islands.
- Humana(HUM), UnitedHealth(UNH) May Face 3.55% Advantage Rate Cuts. Health insurers participating in the Medicare Advantage program for elderly Americans, including Humana Inc. (HUM) and UnitedHealth Group Inc. (UNH), face a base payment cut of about 3.55 percent next year, the U.S. government said.
- U.S. Examines Swiss Insurance Products In Tax Crackdown. Products Can Be Used Legally By Americans to Defer Taxes. U.S. authorities are scrutinizing Americans' use of Swiss insurance products to determine if they have been used to hide assets, signaling a potential new direction in the U.S. legal crackdown on tax evasion in the Alpine country, according to people with knowledge of the matter.
- Stephen Blackwood: ObamaCare and My Mother's Cancer Medicine. The news was dumbfounding. She used to have a policy that covered the drug that kept her alive. Now she's on her own.
CNBC:
Business Insider:- Ukraine on European course; US warns Putin against grab. Ukraine's interim leadership pledged to put the country back on course for European integration now Moscow-backed Viktor Yanukovych had been ousted from the presidency, while the United States warned Russia against sending in its forces.
Financial Review:
- India’s Rajan lashes US over international reform. The outspoken head of India’s central bank has lashed out at the US Congress for failing to back International Monetary Fund reform, saying emerging markets wanting more say on the body were starting to seek alternatives. “There is only so long the world can wait for the US to get its act together [on IMF reform],” central bank governor Raghuram Rajan told Financial Review Sunday in an interview.
- U.S. Must Not Use Dalai Lama Against China. President Barack Obama's decision to meet with the Dalai Lama is "regrettable" and will damage the relationship the two countries have developed over the years, Deng Yushan and Zhou Yan of Xinhua News wrote in a report on the editorial page. "No matter what Obama discusses with the Dalai Lama this time, it will have no bearing on China as far as the Tibet issue is concerned," it said.
- China Property Investment High Growth Hard to Keep. Continued high growth for China's property investment may be difficult as the economy is slowing and restructuring, according to a front-page commentary by reporter Zhang Min. Investment in many smaller cities is saturated as indicated by a lot of new unsold homes. Larger cities have limited market room because the Communist Party at its 3rd plenum vowed to strictly control population in big cities.
- Industrial Bank Co. and other unidentified banks have tightened lending to property sector and some property related industries such as steel and cement. Industrial Bank Co. may suspend some property-related loans business through end-March, citing people familiar with the situation.
Weekend Recommendations
Barron's:- Bullish commentary on (KALU), (HD), (LOW), (M), (KSS), (ROST), TJX), (WMT),(TGT) and (RL).
- Bearish commentary on (KMP), (CHK), (PXD), (RRC) and (QEP).
- Asian indices are -1.0% to unch. on average.
- Asia Ex-Japan Investment Grade CDS Index 138.0 +2.0 basis points.
- Asia Pacific Sovereign CDS Index 104.75 -.25 basis point.
- FTSE-100 futures -.36%.
- S&P 500 futures -.06%.
- NASDAQ 100 futures -.05%.
Earnings of Note
Company/Estimate
- (ROG)/.76
- (EE)/.11
- (DDS)/3.00
- (PANW)/.09
- (VNO)/-.29
- (EOG)/1.93
- (THC)/.31
- (SCTY)/-.55
- (CLI)/.52
8:30 am EST
- The Chicago Fed National Activity Index for January is estimated to fall to -.2 versus .16 in December.
- Dallas Fed Manufacturing Activity for February is estimated to fall to 3.0 versus 3.8 in January.
- None of note
- The Eurozone CPI, FDIC's Hoenig speaking, JPMorgan High Yield/Leverage Finance Conference, Citi Healthcare Conference and the (CAR) investor day could also impact trading today.
No comments:
Post a Comment