Today's Headlines

Bloomberg: 

• EU Joins U.S. With New Sanctions on Russia Over Ukraine. The European Union widened sanctions against Russia for its actions in Ukraine, following similar steps yesterday by the U.S., which called separatist violence in the country’s east “terrorism, pure and simple.” The EU added Russian Deputy Premier Dmitry Kozak to a list of people facing travel bans and asset freezes along with others including pro-Russian separatist leaders, according to a statement today in the EU’s Official Journal. The U.S. targeted seven people, including Kozak and Igor Sechin, head of oil giant OAO Rosneft (ROSN), and 17 companies yesterday linked to allies of President Vladimir Putin, such as InvestCapitalBank. 
• China Test Shows Bad Loan Surge Would Hurt Banks’ Capital. China’s systemically important banks may see their capital adequacy ratio fall to 10.5 percent in the event bad loans surge fivefold, according to a stress test by the nation’s central bank. The average capital adequacy ratio of the 17 banks, which account for 61 percent of China’s banking assets, may fall to 10.5 percent from the end-2013 level of 11.98 percent should nonperforming loans increase 400 percent in the worst-case scenario, the People’s Bank of China said in its annual financial stability report yesterday. 
• European Stocks Advance to Three-Week High Amid Earnings. European stocks rose to a three-week high as companies from Deutsche Bank AG to Statoil ASA reported earnings that beat estimates. Deutsche Bank climbed 2.2 percent after Europe’s largest investment bank said first-quarter profit dropped less than projected. Statoil gained 4.5 percent. Nokia Oyj gained 2.9 percent after naming a new chief executive officer and saying it will spend about 5 billion euros ($6.9 billion) on dividends, share buybacks and debt reduction. ABB Ltd. fell the most in four years after the world’s largest maker of power transformers posted quarterly profit that missed estimates. The Stoxx Europe 600 Index rallied 1.2 percent, the most in a week, to 338.12 at the close of trading in London.
• Apollo’s Rowan Sees ‘Danger Signs’ of Crisis in Debt Markets. Apollo Global Management LLC (APO) co-founder Marc Rowan said he sees many signs of a bubble in the credit markets that could lead to a financial crisis. “All the danger signs are there of a future crisis,” Rowan said today at the Milken Institute Global Conference in Beverly Hills, California. “We’re back to doing exactly the same things that were done in the credit markets during the crisis. Our job is to step wisely and try to avoid that.” Rowan joins a growing chorus of regulators and investors, including Marathon Asset Management LP and DoubleLine Capital LP’s Jeffrey Gundlach, expressing concern about aggressive underwriting standards as the Federal Reserve’s zero-interest policy extends into a sixth year.
• Senate Democrats Weigh Vote Backing Keystone XL. U.S. Senate Democratic leaders are considering scheduling a vote on a non-binding resolution urging approval of TransCanada Corp. (TRP)’s Keystone XL pipeline, according to two Senate Democratic aides. 
• Growing Concern on Job Openings Dents U.S. Confidence: Economy. Americans grew concerned in April that jobs have become more difficult to land, prompting an unexpected drop in confidence from a six-year high. The Conference Board’s sentiment index decreased to 82.3 from 83.9 a month earlier.

Wall Street Journal: 

• NBA Bans Clippers' Donald Sterling for Life for Alleged Racist Comments. Commissioner Adam Silver Says He Will Urge League's Board of Governors to Force Team's Sale.
• U.S. Banks to Help Authorities With Tax Evasion Probe. Swiss Units of Goldman Sachs, Morgan Stanley To Hand Over Details.

CNBC:

• US doesn't have a rational tax policy: Jack Welch. (video)

ZeroHedge: 

• Isolated Russia Makes Friends: To Hold Military Drill With China; Strikes Multi-Billion Deals Qatar And Iran.
• David Stockman Ruins The Perennial Myth Of Crumbling Infrastructure.
• Time For More Costs? Pro-Russian Forces Storm Luhansk Police Buildings - Live Feed. (video)
• China Slams US Over Russian Sanctions; Warns "Will Escalate Tensions".
• Rents Soar To Record High As Homeownership Rate Plunges To 19 Year Low. (graph)
• Case-Shiller Has Longest Home Price Decline Stretch Since 2012; 13 Of 20 Cities See Price Drops. (graph)

Business Insider:

• This Is What The Decline Of Facebook(FB) Looks Like. (graph)
• Harvard Poll Shows Millennials Have 'Historically Low' Levels Of Trust In Government.
• Here Are Some Former High-Flying Momentum Stocks That Have Been Absolutely Smashed In Less Than Two Months.
• Pro-Russia Separatists Have Now Seized Government Buildings In At Least 10 East Ukraine Cities.
• China's Resource-Dependent And Manufacturing-Heavy Provinces Are Seeing A Major Slowdown.
• Obama's Approval Rating Is At Its Lowest Point Ever, And It Could Mean Major Disaster For Democrats.
• The US Stock Market Has A Valuation Problem. (graph)

Financial Times:

• Police become focus of control as Kiev loses grip in the east. Ukrainian authorities appear to have lost control of law and order in Donetsk, the capital city of the province at the heart of separatist unrest, as violent pro-Russia militants roam the streets unchallenged.

Telegraph:

• Nul points for EU’s stress-test comedy, but French property slump rings true. Be careful if you are planning to buy a house in France. The EU stress test for banks released this morning expects French property to fall 1.6pc this year and another 1pc in 2015 even if things go well. The “adverse scenario” is a cumulative drop of 31pc by the end of 2016. This reflects the worries of French regulators who fed the data to the European Banking Authority.

Valor:

• Brazil Carmakers See 2014 Truck Sales Falling 5-12%.