Monday, April 07, 2014

Today's Headlines

  • U.S., Ukraine Accuse Russia as Protesters Seize Offices. The U.S. joined Ukraine in accusing Russia of instigating the storming of government offices in eastern Ukraine and warned that any move by Russian forces into the area would be a “serious escalation” of the crisis. White House press secretary Jay Carney said there is evidence that some of the pro-Russian separatists who seized administration buildings in the cities of Luhansk and Donetsk aren’t locals and that some of the protesters were paid. Ukrainian officials say Russia has sent agents to foment unrest and justify carving off more of the nation. “If Russia moves into eastern Ukraine, either overtly or covertly, this would be a very serious escalation,” Carney said today in Washington. He added that there “will be costs for further transgressions” against Ukraine’s sovereignty.
  • Goldman(GS) Sees Chance to Cut Its China Junk Debt Holdings. Goldman Sachs Group Inc. (GS) says now may be a good time to cut holdings of Chinese high-yield bonds after the longest winning streak in six weeks. “Investors should use the recent rally to reduce overweight positions,” analysts led by Hong Kong-based Kenneth Ho wrote in a note dated April 4. “We believe that there will be more headlines noises to come out of China and expect to see further credit differentiation.” 
  • European Stocks Drop as Technology Shares Fall. European stocks fell from a six-year high, posting their biggest decline in a month, as shares of technology companies tumbled. Technology shares lost 2 percent, the most among 19 industry groups in the benchmark gauge, with United Internet AG falling 4.3 percent and ARM Holdings Plc dropping 2.4 percent. Osram Licht AG slid the most since it started trading after its spinoff from Siemens AG as Berenberg Bank lowered its rating. Altice SA jumped 11 percent, while Bouygues SA slumped the most since August 2012, after Vivendi SA (VIV) agreed to sell its phone unit SFR to Altice in a deal valued at more than 17 billion euros ($23.3 billion). The Stoxx 600 fell 1.2 percent to 334.96 at the close of trading.
  • Speculators Cut Bullish Oil Bets by Most in Nine Months. Fewer than three weeks into spring, oil speculators are already thinking about the summer. Hedge funds and other money managers boosted bullish wagers the most since February, betting that refineries will need to buy more crude to accelerate gasoline output before the peak U.S summer driving season. Fuel supply is already tight, with consumers paying the most at the pump in seven months. 
  • Euro Gains as ECB Signals Deflation Risk Is Contained. The euro gained against most of its major counterparts as European Central Bank policy makers signaled deflation risks are contained, subduing speculation of a round of bond-buying to boost prices and economic growth.
  • Oil Imports Seen Falling to Zero as Soon as 2037 by U.S. Net oil imports to the U.S. could fall to zero by 2037 because of robust production in areas including North Dakota’s Bakken field and Texas’s Eagle Ford formation, according to a government projection released today.
  • Private Equity, Hedge Funds Wary Of Marketing Via JOBS Act. Only 4% of hedge fund managers and 5% of private equity managers who responded to the survey said they have registered to market under the JOBS Act. Cost is a major factor, according to 42% of hedge fund managers and 24% of private equity firms. Other barriers named include potential conflict with the AIFMD (cited by 22% of private equity firms surveyed), increased scrutiny from the SEC (cited by 20%), and the negative perception of marketing (cited by 20%).
Wall Street Journal: 
  • Housing recovery is all for the 'haves'. Demand is high, prices are higher, but the housing numbers this spring are just not adding up. Mortgage origination volumes hit their lowest recorded level since at least 2000, according to areport released Monday from Black Knight Financial Services. 
  • US SEC forms squad to examine private funds: Sources. The U.S. Securities and Exchange Commission has put together a dedicated group to examine private equity and hedge funds, after the 2010 Dodd-Frank law required the funds to be regulated, according to people familiar with the matter. The examiners will look at areas including how private equity and hedge funds value their assets, disclose their fees, and communicate with investors.
Wall Street All-Stars:
Business Insider: 
Financial Times:
South China Morning Post:
  • Agricultural Bank of China warns branches of loan risks. Caution comes after price cuts at housing projects in smaller mainland cities cause panic. Agricultural Bank of China, the mainland's third-largest lender by market value, has warned its branches about credit risks from property lending, two sources said.

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