Bloomberg:
- U.S. Warns Russia of More Sanctions as G-7 Studies Ukraine Aid. The U.S. threatened Russia with more sanctions for its incursion into Ukraine as global finance chiefs debated how best to deliver aid to the beleaguered former Soviet republic. With Group of Seven finance ministers and central bankers meeting yesterday in Washington, U.S. Treasury Secretary Jacob J. Lew delivered the warning in talks with his Russian counterpart, Anton Siluanov. It was made just hours after Russian President Vladimir Putin threatened to halt natural gas shipments to Ukraine. “Secretary Lew emphasized that Russia’s ongoing occupation and purported annexation of Crimea is illegal and illegitimate,” the Treasury said in a statement after the officials met. “The United States is prepared to impose additional significant sanctions on Russia if it continues to escalate the situation in Ukraine.”
- Japan Stocks Set for Worst Week Since 2011 Quake With 7.1% Slump. Japan’s Topix index fell for a sixth day, heading for its biggest weekly slump since the March 2011 earthquake, as the yen rose and a selloff in technology stocks resumed. Fast Retailing Co. tumbled. “As market sentiment worsens in the U.S., investors tend to focus on negatives, creating a downward spiral,” said Juichi Wako, a Tokyo-based equity strategist at Nomura Holdings Inc., the nation’s biggest brokerage. “We’re seeing a necessary correction in technology shares.” SoftBank Corp., a mobile-phone operator and Internet-company investor, was the biggest drag on the Topix today, while Yahoo Japan Corp., which operates an online portal site, slid 2.9 percent. Fast Retailing tumbled 8 percent, extending its weekly drop to 13 percent, after Asia’s biggest clothing retailer cut its forecast for annual profit as costs rise and demand weakens for the company’s casual wear in Japan. Nissan Motor Co., a carmaker that gets about 80 percent of revenue abroad, lost 2 percent.
- Fast Retailing Plunges in Tokyo After Cutting Profit Forecast. Fast Retailing Co. (9983), Asia’s biggest clothing retailer, fell the most in nine months in Tokyo trading after lowering its annual profit forecast, citing higher costs and weak demand. Net income will be about 88 billion yen ($865 million) for the year ending August, lower than its previous forecast of 92 billion yen, the Yamaguchi, Japan-based company said yesterday after the market closed. That compares with a 94.5 billion yen average of 19 analysts estimates compiled by Bloomberg.
- Property Trust Sales Drop 49% as Vicious Loop Seen: China Credit. Chinese developers raised 49 percent less through trusts in the first quarter as the collapse of Zhejiang Xingrun Real Estate Co. highlighted default risks. “The banking system and the shadow banking system are becoming concerned about exposure,” David Cui, China strategist at Bank of America said in an interview yesterday. “Once people refuse to provide credit to developers, their balance sheets will be under pressure, forcing them to cut prices. Once enough of them cut prices, fewer people would buy because most people buy property only when they think the price is going up. If this persists, it will turn into a vicious loop.”
- China Fake Data to Skew More Export Numbers. China’s data distortions will muddy analysis of the nation’s trade until at least June, making it harder to assess the strength of the world’s biggest exporter and second-largest economy. That’s when China will provide figures that compare with what Royal Bank of Scotland Group Plc economist Louis Kuijs says are “pretty clean” numbers from May 2013 that followed a crackdown on inflated invoices used to disguise capital inflows.
- Turkish Lira Drops Most in Three Weeks as Moody’s Cuts Outlook. Turkey’s lira dropped the most in three weeks after Moody’s Investors Service lowered its outlook on the nation’s debt rating to negative from stable. Moody’s cited “increased pressure on external financing position driven by heightened political uncertainty, lower global liquidity and slowing near-term economic outlook” as reasons for the decision. The lira fell 0.5 percent to 2.1187 per dollar as of 9:09 a.m. in Singapore, according to data compiled by Bloomberg. The currency was headed for a 0.3 percent weekly loss.
- Asian Stocks Sink With Aussie on Tech Rout. Asian stocks slid, pushing the regional index down the most in three weeks, while emerging-market and commodity currencies weakened as a renewed selloff in U.S. technology shares cut demand for riskier assets. The MSCI Asia Pacific Index sank 1 percent by 12:06 p.m. in Tokyo, its biggest drop since March 20. Fast Retailing Co. drove a 2.3 percent tumble in Japan’s Nikkei 225 Stock Average, which is headed for the steepest weekly drop among developed markets.
- Dollar Set for Biggest Weekly Drop in Eight Months; Aussie Falls. The dollar was set for the biggest weekly slide in eight months against a basket of its major peers as the Federal Reserve’s meeting minutes damped speculation that U.S. interest rates will rise. The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major counterparts, was little changed at 1,005.53 at 11:23 a.m. in Tokyo. It has lost 1.1 percent since April 4, set for the biggest weekly drop since the period ended Aug. 9.
- Options Trader Spends $5.3 Million to Bet Russell 2000 Will Drop. An investor paid about $5.3 million for a trade that will pay off if the iShares Russell 2000 ETF falls at least 2 percent by May. The trader bought 40,000 bearish contracts on the small-cap stock ETF (IWM) expiring in May with a strike price of $113, while selling the same number of May $107 puts in a strategy known as a put spread, according to JonesTrading Institutional Services LLC.
- Who Is Sylvia Burwell, HHS Secretary Sebelius's Expected Replacement? Ms. Burwell Has a Low Public Profile, But Is One of the Most Experienced Officials in Obama's White House.
- Heartbleed Bug Found in Cisco(CSCO) Routers, Juniper(JNPR) Gear. Encryption Bug Affects Equipment That Connects to the Web.
- Finra Scrutinizes Banks' Role in Bond Market. Regulators Are Looking at Whether Some Money Managers Are Favored at the Expense of Other Investors.
- Sensitive Market Data Leaked After Government Phone Call. Agency Provided Vital U.S. Funding Information, but Who Was Listening In?
- Citigroup(C) Faces Inquiry in California Over Failure to Report Suspicious Activity. Some Transactions Involved Suspected Drug-Cartel Members.
- Stocks could continue to lose ground. (video) The bloodbath in stocks could continue, even if the market manages to bounce Friday.
Business Insider:
Reuters:
- Asia overtakes U.S. as top destination for Venezuela oil -PDVSA. Asia overtook North America last year as the main destination for Venezuelan exports of crude oil and processed fuels, according to preliminary data submitted to parliament by state oil company PDVSA.
- GM(GM) shares drop to near IPO price of $33. Investors' concerns about ongoing turmoil at General Motors Co, linked to the deaths of at least 13 people, could push the automaker's shares below GM's $33 IPO price for the first time since last June.
- China should be very cautious with any stimulus - central bank. The Chinese government and central bank should be "very cautious" in implementing any stimulus programs because they tend to be less efficient than natural market forces in boosting growth, a People's Bank of China official said on Thursday. "Any kind of stimulus package should be very cautious in the sense that you should believe that the market driver is the natural and the most efficient way to grow, and a stimulus growth driver is not as efficient as the natural market driver," Yi said. "And the government and the central bank should be very cautious."
- Gundlach: global economy 'deflationary scare' could happen again. Jeffrey Gundlach, chief executive and chief investment officer of DoubleLine Capital, said on Thursday the global economy could potentially see a "deflationary scare" again and added that he likes gold as a diversifier.
- Hedge funds' March performance worst in nine months - data. Hedge funds had their weakest month since mid-2013 in March, data showed on Thursday, as investments took a hit from tensions in Ukraine and fears of a slowdown in China. The asset-weighted SS&C GlobeOp Capital Performance Index showed the gross return of the average fund was minus 1.03 percent in March, the first and largest monthly drop since last June, although they remain up 2.46 percent year to date.
- China Must Fix Housing Bubble Before Yuan Opening, Yu Says. Govt should keep "certain capital account controls" while allowing yuan to float, Yu Yongding said, citing the economist's comments to a housing forum. Domestic problems including the housing bubble, inefficient allocation of resources must be resolved before full opening.
- China Drafts Plan to Control Energy Consumption. China is drafting a plan to control energy and coal consumption as part of pollution control efforts, citing a person from the National Development and Reform Commission.
- BYD March Vehicle Sales Volume Drops 25% y/y. Co's vehicle sales in the month dropped to 39,000 from 51,700 a year ago, citing Li Yunfei, deputy general manager of the sales division. Total sales in the first quarter dropped to 100,300 vs 143,000 a year ago.
ISI Group:
- Rated (QCOM) Strong Buy, target $90.
- Rated (NXPI) Strong Buy, target $85.
- Rated (MU) Strong Buy, target $30.
- Rated (LRCX) Strong Buy, target $70.
- Rated (AMAT) Strong Buy, target $25.
- Rated (FSL) Cautious, target $20.
- Rated (LLTC) Cautious, target $46.
- Asian equity indices are -1.25% to -.50% on average.
- Asia Ex-Japan Investment Grade CDS Index 120.5 -1.25 basis points.
- Asia Pacific Sovereign CDS Index 86.5 unch.
- FTSE-100 futures -.71%.
- S&P 500 futures +.11%.
- NASDAQ 100 futures +.09%.
Earnings of Note
Company/Estimate
- (FAST)/.38
- (JPM)/1.39
- (WFC)/.97
8:30 am EST
- PPI Final Demand MoM for March is estimated to rise +.1% versus a -.1% decline in February.
- PPI Ex Food and Energy MoM for March is estimated to rise +.2% versus a -.2% decline in February.
- Preliminary Univ. of Michigan Consumer Confidence for April is estimated to rise to 81.0 versus 80.0 in March.
- None of note
- The Eurozone CPI and (DYN) investor day could also impact trading today.
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