- Ukraine in ‘Undeclared War’ With Russia as Rebels Unite. Insurgents killed six Ukrainian soldiers and wounded eight others in an ambush near an eastern rebel-held stronghold as the defense minister said the country was fighting an “undeclared war” with Russia. More than 30 attackers struck a convoy near the Donetsk region city of Kramatorsk at about 1 p.m., according to a statement on the Defense Ministry’s website. As fighting flared, Europe tried to rev up diplomatic efforts, with Germany’s Foreign Minister Frank-Walter Steinmeier visiting Kiev and Odessa in a bid to broker talks between the central government and separatists. “Russia is already engaged” in Ukraine “in supporting Russian-led protesters and terrorists,” Ukrainian Prime Minister Arseniy Yatsenyuk told reporters in Brussels today after talks with European Commission President Jose Barroso. “We urge Russia to condemn them, to urge all these so-called protesters -- or really, terrorists -- to leave and vacate the buildings, and to do everything they can to stabilize the situation in Ukraine. Russia will fail to make Ukraine a failed state.”
- Russia Bans Rocket Engine Sales to U.S. Military. Russia said it will no longer export rocket engines to the U.S. to launch military satellites, adding to a dispute in Washington that already pits the two biggest U.S. defense contractors against billionaire Elon Musk. Russian Deputy Prime Minister Dmitry Rogozin told reporters in Moscow today that Russian engines can be used only to launch civilian payloads, amid tensions over Russia’s support for separatists in Ukraine and the U.S. and European economic sanctions that have followed.
- China Slowdown Deepens. China’s economic slowdown deepened with unexpected decelerations in industrial-output and investment growth and a decline in home sales, testing policy makers’ reluctance to step up monetary stimulus. Factory production rose 8.7 percent in April from a year earlier, the National Bureau of Statistics said in Beijing, compared with the 8.9 percent median estimate of analysts surveyed by Bloomberg News. Fixed-asset investment increased 17.3 percent in the first four months of the year, the slowest for the period since 2001, and home sales fell 9.9 percent.
- Asian Junk Left Behind as Defaults Expose Cracks: Credit. Asia’s junk bond returns are lagging behind investment-grade debt like never before as China’s weakest projected growth since 1990 and escalating leverage expose cracks across the region’s economies. Speculative-grade notes denominated in dollars have gained 2.76 percent this year through May 9, 1.95 percentage points less than high-grade bonds, according to index data compiled by JPMorgan Chase & Co. The underperformance is the worst over the same period since at least 2005. Globally, returns were about even at 4.1 percent, Bloomberg indexes show.
- German Investor Confidence Drops for Fifth Straight Month. German investor confidence fell for a fifth month in May in a sign of growing concern that threats from low inflation (ECCPEST) to a strong euro may undermine the recovery. The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict economic developments six months in advance, slid to 33.1 from 43.2 in April. The gauge is at the lowest level since January 2013. Economists forecast a decline to 40, according to the median of 33 estimates in a Bloomberg News survey. The index has dropped every month since reaching a seven-year high of 62 in December.
- Bundesbank Support for ECB Stimulus Not to Be Automatic. The Bundesbank’s support for any more stimulus for the euro area won’t be automatic even if the European Central Bank cuts its inflation forecast for 2016, two people with knowledge of the matter said. While the German central bank will focus on the outlook for price stability at the end of the ECB’s forecast horizon and is open to a package of measures from a negative deposit rate to halting the sterilization of crisis-era bond purchases, nothing is decided yet, said the people, who asked not to be identified because the matter is private.
- Europe Stocks Rise to Six-Year High; ThyssenKrupp Climbs. European stocks climbed to a six-year high amid better-than-estimated earnings from ThyssenKrupp AG to Airbus Group NV. (AIR) ThyssenKrupp rose 4.1 percent after Germany’s biggest steelmaker also raised its full-year earnings forecast. Airbus advanced 6.2 percent. Pandora A/S jumped 8.1 percent after increasing its sales projection. Telecom Italia SpA (TIT) declined 5.2 percent as quarterly revenue missed estimates. The Stoxx Europe 600 Index gained 0.3 percent to 341.89 at the close of trading in London.
- Why Chart Watchers Are Skeptical of S&P 500’s New Record. There are soldiers and there are generals in the stock market, according to Oppenheimer & Co.’s Ari Wald, and they need to march together for this army to keep winning.
- Grandma Gets to Play Hedge Fund With New Credit Swap ETFs. If your grandmother wants to bet her savings on a bundle of credit derivatives, it’ll be easy for her to do so through a new swath of exchange-traded funds. The ETFs may not have been created with her in mind, but she’ll be able to buy their shares. Regulators this month signed off on a plan to allow trading in eight new ProShares ETFs backed by wagers on the creditworthiness of the riskiest to the safest corporate borrowers. Those funds, which package credit-default swaps, join more than 250 others that are based on derivatives, an arena traditionally dominated by hedge funds.
- Wells Fargo(WFC) Needs to Answer for Bad Home Loans, U.S. Says. Wells Fargo & Co. (WFC:US)’s $5 billion payment two years ago in a national mortgage settlement was for loan servicing abuses, and the bank still needs to answer for making bad government-insured loans, a U.S. Justice Department lawyer told a federal appeals court.
- U.S. Economy Contracted In First Quarter, Latest Figures Show.
- Bundesbank Open to Significant ECB Stimulus in June if 2016 Inflation Forecasts Lowered. Measures Include Negative Rate On Bank Deposits, Person Familiar With Matter Said.
ZeroHedge:
- 6 Ukraine Soldiers Killed, 8 Injured Ahead Of Tomorrow's "Leave Or Face War" Deadline.
- The Farce Is Complete: Joe Biden's Son Joins Board Of Largest Ukraine Gas Producer.
- The Fed's Consumer Credit Spreadsheet Is #REF!-ing Out: Here's Why.
- Student Loans Soar To Record $1.111 Trillion, Up 12% In Past Year. (graph)
- "Robust Evidence" Confirms Fed Leaks Data Ahead Of Rate Announcements.
- Why The Bond Bubble In Peripheral Europe Is A Problem.
- The "Quite Gloomy" Chinese Housing Market Completes "Head And Shoulders" Formation. (graph)
- SEC Official Claims Over 50% Of Private Equity Audits Reveal Criminal Behavior.
Business Insider:
- Marijuana Is More Addictive These Days — Here's Why.
- Healthcare Workers Exposed To Florida MERS Patient Show Symptoms Of Infection.
- 10 Charts That New College Graduates Are Going To Hate.
- CHART OF THE DAY: This Is What $11.65 Trillion Worth Of Household Debt Looks Like.
- The Expected Winner Of India's Election Is No Fan Of The US.
- Our recovery is at risk from British arrogance and delusion. We tend to blow it whenever things start to go right, and my great worry is that this time will be no different.
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