- Russia Warns Ukraine on Military Action in Eastern Region. Ukrainian authorities sent security forces to Kharkiv to clear the country’s second-biggest city of separatists as Russia traded accusations with the U.S. and warned that its neighbor’s crackdown risks sparking civil war. An “anti-terrorist operation” was under way in Kharkiv, with the subway closed and the downtown area sealed off in Ukraine’s second-biggest city, Interior Minister Arsen Avakov said on his Facebook page. Russia said 150 specialists from a U.S. private security company were working with Ukraine to put down protests, the Foreign Ministry said after the U.S. accused Russia of instigating unrest in the country’s eastern regions. “We call for the immediate halt of all military preparations, which risk sparking a civil war,” the ministry in Moscow said in a website statement.
- Ukraine Mounts Security Push as Russia Warns on Civil War. Ukrainian authorities sent security forces to Kharkiv to clear the country’s second-biggest city of separatists as U.S. Secretary of State John Kerry accused Russia of using “special forces and agents” to spark unrest. An “anti-terrorist operation” was under way in Kharkiv, 40 kilometers (25 miles) from the Russian border, with the subway closed and the center sealed off, Interior Minister Arsen Avakov said today. The Russian government said its neighbor’s crackdown risks sparking civil war. “Provocateurs have been sent there to create chaos,” Kerry told the Senate Foreign Relations Committee in Washington. “These efforts are as ham-handed as they are transparent,” Kerry said. He accused Russia of working to “create a contrived crisis with paid operatives across an international boundary.”
- Yen Set for Dollar Gains With Kuroda on Hold: Technical Analysis. The Bank of Japan’s decision not to add to unprecedented monetary stimulus has the yen poised to breach a key technical level, which may see it strengthen to a two-month high, according to JPMorgan Chase & Co.
- European Stocks Drop for Second Day Amid Ukraine Tensions. European stocks declined for a second day as investors weighed escalating tensions between America and Russia over the future of eastern Europe. Suedzucker AG plunged the most since at least 1998 after saying revenue and profit in the year through February 2015 will miss analysts’ estimates. Sports Direct International Plc slid the most this year after founder Mike Ashley sold a 4 percent stake. Nokia (NOK1V) Oyj climbed the most since October after getting China’s approval for the sale of its handsets business to Microsoft Corp. The Stoxx Europe 600 Index slipped 0.3 percent to 333.85 at the close of trading in London, after earlier declining as much as 1 percent.
- WTI Oil Gains on Cushing Supply Outlook. WTI for May delivery climbed $1.76, or 1.8 percent, to $102.20 a barrel at 1:24 p.m. on the New York Mercantile Exchange. Prices are up 3.8 percent this year. The volume of all futures traded was 42 percent above the 100-day average.
- U.S. Banks to Face Tougher Leverage Caps Than Competitors. The biggest U.S. banks will face greater restrictions on borrowing power than their overseas competitors under supplemental leverage ratio rules set to be adopted by regulators in Washington today. Eight lenders, including JPMorgan Chase (JPM) & Co. and Bank of America Corp., are going to be required to keep loss-absorbing capital at least 5 percent of total assets under the rules designed to curtail risk in the financial system. The cap being approved by the Federal Reserve, Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency surpasses the 3 percent minimum set in a global agreement by the Basel Committee on Banking Supervision.
- VIX Jumps 19% as Losses Worsen Below Surface of S&P 500: Options. While two weeks of selling look like a blip on a chart of the Standard & Poor’s 500 Index (SPX), for the average investor it’s been a lot more painful. Amazon.com Inc. (AMZN), Whole Foods Market Inc. and Transocean Ltd. are among 43 companies that have lost more than 20 percent from their 52-week high, data compiled by Bloomberg show. The average stock is down 9 percent from its most recent peak, according to Bespoke Investment Group LLC. Concern that the drop will worsen pushed the VIX (VIX) to its biggest gain in three weeks.
- Biotech Suffers Record Exit at Largest ETF Signaling Turn. Investors pulled a record $372 million from the biggest biotechnology exchange traded fund in its worst day of redemptions ever. The withdrawals from the iShares Nasdaq Biotechnology ETF on April 4 were the most since its 2001 inception, with 7.5 percent of the fund’s $4.98 billion in total assets leaving what is the biggest biotech-focused ETF, according to data compiled by Bloomberg. It follows a lengthy run-up in biotechnology industry stocks.
- Goldman(GS) Strategist Sees High Chance of 10% Market Drop. Goldman Sachs Group Inc.’s David Kostin has some good news, and some bad news. First, the bad news. There’s a good chance the U.S. market will see a 10 percent drop sometime during the next 12 months. Well, as far as precision goes, “good chance” is not good enough for a quant like Kostin, so he gives an exact probability: 67 percent odds of a 10 percent retreat from a peak in the next 12 months. Now for the good news, if you can call it that: He still expects the market to end the year higher, though not by much. Kostin is sticking with his year-end S&P 500 forecast of 1,900, according to a note to clients dated yesterday. That implies a gain of less than 2.8 percent for the year and less than 3 percent from yesterday’s close.
Wall Street Journal:
- Crisis in Ukraine. Streaming Coverage:
- Tech carnage hits hedge funds. (video)
- The 'Crackdown' Begins: Ukraine Launches "Anti-Terrorist" Operations In Eastern Ukraine, Arrests 70.
Business Insider:
Reuters:
- U.S. to trim air, sea and land nuke launchers under U.S.-Russia treaty -officials. The United States will scale back its land, sea and air nuclear missile launchers under a New START treaty with Russia but not retire a ballistic missile squadron as some lawmakers had expected, U.S. officials told Reuters. The U.S. military will disable four missile launch tubes on each of its 14 U.S. nuclear submarines, convert 30 B-52 nuclear bombers to conventional use and empty 50 intercontinental ballistic missile silos, senior administration officials said on condition of anonymity.
- Gold rises as dollar drops, Ukraine tensions rise. Gold rose 1 percent on Tuesday on a sharply lower dollar and as renewed tensions between the United States and Russia over Ukraine burnished bullion's safe-haven appeal.
- JPMorgan(JPM) Sees Parallel to Subprime Bust at Regional Banks. A boom in leveraged loans issued by large and regional banks, or low-rated debt used to finance private-equity buyouts, is drawing alarming comparisons to the subprime mortgage boom in 2006 and 2007. According to one analyst, banks such as Regions Financial(RF), Fifth Third Bancorp(FITB), and Citigroup(C) are most at risk of getting caught up in the market froth.
Economic Times:
- China Economy Faces Downward Pressure. China's economy faces certain downward pressure, citing Zhang Liqun, a researcher with State Council's Development Research Center, as saying. Some cos. with difficulties need to go bankrupt as part of solving the problem of overcapacity, which may affect the stability of economic growth, Zhang said. Currently China should mainly rely on fiscal policy and keep monetary policy stable, citing Zhang. The report was posted on the central government's website.
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