Bloomberg:
- Goldman(GS) to Citigroup(C) Miss World’s Worst Selloff in China. The China reform trade is backfiring in the stock market. After soaring the most in two years on Nov. 18 as the Communist Party unveiled its biggest policy changes since the 1990s, the Hang Seng China Enterprises Index has since posted the world’s worst drop. An index of stocks JPMorgan Chase & Co. says benefit most from reform sank 10 percent this year through yesterday.
- Ex-BOJ Policy Maker Sees Scary Japan Inflation Dilemma. The Bank of Japan faces a “terrifying dilemma” of inflation forcing it to tighten monetary policy just as the central bank most needs to support the bond market, according to a former board member. There’s about a 50-50 percent chance the BOJ will achieve its 2 percent goal for consumer-price increases, which could push the 10-year yield above 3 percent, said Kazuo Ueda, who served as a BOJ policy maker from 1998 to 2005, and was also senior adviser to the Government Pension Investment Fund. Bond market expectations for inflation have risen to 1.36 percent from 0.94 percent in October, data compiled by Bloomberg show.
- Asian Stocks Index Extends Biggest Rally in Seven Weeks. Asian stocks rose, with the regional benchmark index extending its biggest rally in seven weeks yesterday, as U.S. equity gauges held at record highs and investors weighed earnings. Kadokawa Corp., a Japanese book publisher, surged 10 percent on a report it will merge with Dwango Co. Hotel Properties Ltd., which manages hotels, surged 7.3 percent in Singapore after reporting higher quarterly profit. Dentsu Inc., an advertising company, slid 4.9 percent in Tokyo after forecasting net income that missed estimates. The MSCI Asia Pacific Index rose 0.3 percent to 139.72 as of 10:56 a.m. in Tokyo with all but one of its 10 industry groups climbing.
- Split-Second Lurches Affect Stocks From AOL(AOL) to Caterpillar(CAT). A trading firm’s mistake caused wild price swings in U.S. stocks including Caterpillar Inc., AOL Inc. and Nabors Industries Ltd. about 10 minutes before markets closed today, according to people familiar with the matter. Caterpillar, which had been trading around $107.12, jumped to an intraday high of $108.21 within a second at 3:49 p.m. New York time before almost immediately sinking back to where it had been. More than $11 million worth of shares changed hands at the elevated levels, according to data compiled by Bloomberg. The shares were moved by orders tied to the close of trading that were incorrectly entered, said the people, who asked to not be named because the details aren’t public.
- U.S. Steel Imports Spark Wave of Trade Complaints. Global Production Capacity Has Doubled.
- U.S. Backs Off Tight Mortgage Rules. In Reversal, Administration and Fannie, Freddie Regulator Push to Make More Credit Available to Boost Housing Recovery. The Obama administration and federal regulators are reversing course on some of the biggest postcrisis efforts to tighten mortgage-lending standards amid concern they could snuff out the fledgling housing rebound and dent the economic recovery. On Tuesday, Mel Watt, the newly installed overseer of Fannie Mae and Freddie Mac, said the mortgage giants should direct their focus toward making more credit available to...
- Google(GOOG) Faces Challenges in Europe After Privacy Ruling. Surprise Decision Could Prove Highly Disruptive to Search-Engine Operators. Europe's top court ruled that Google Inc. can be forced to erase links to content about individuals on the Web, a surprise decision that could disrupt search-engine operators and shift the balance between online privacy and free speech across Europe. Under Tuesday's ruling—which doesn't trigger any specific new enforcement, but sets a strong legal precedent across the European Union—individuals can request that search engines remove links to news articles, court judgments and other documents in search results for their...
- Nigerian Militant Makes a Name for Himself Through Terror. Boko Haram Leader Steps Up Attacks to Emerge From Shadows of Other Radical Groups. When he appeared in a video on Monday boasting of having abducted more than 200 schoolgirls, the leader of terror group Boko Haram took the occasion to egg on the U.S. Army and get in a dig at ancient Egypt. "We don't fear any American troops," shouted Abubakar Shekau, whose Islamist insurgency has terrorized northern Nigeria and recently drawn search-and-rescue advisers from the U.S. and other countries....
- U.S. Military Pressed on Climate Change. Retired Officers' Report to Call for Updated War Plans and Building More Ships to Operate in Arctic. The military must do more to prepare for the impacts of a changing climate, including updating war plans and building more ships to operate in the Arctic, a report by a group of retired military officers will say Wednesday.
- Stopping Keystone Ensures More Railroad Tank-Car Spills. Pipelines in the U.S. carry 25 times more oil than tank cars do, yet derailments are by far the biggest threat. The Keystone XL Pipeline got another nail in its coffin Monday, in the form of a Senate energy vote that excluded the pipeline issue. But Keystone was already near death thanks to the Obama's administration's recent decision to ignore the evidence of a definitive government study—and instead keep listening to environmentalists' dubious claims. The upshot will be more political fires in Washington caused by train derailments in the absence of a pipeline to transport oil more safely.
- Corporate bond rally is next to bust, some fear. It’s ‘better to leave early than to stay too late,’ say UBS strategists.
- Russia Holds "De-Dollarization Meeting": China, Iran Willing To Drop USD From Bilateral Trade.
- If Economic Cycle Theorists Are Correct, 2015 To 2020 Will Be Devastating For The US. (graph)
- German Finance Minister Admits To "New Bubbles" & "Excessive Confidence".
- Harvard Group Cancels "Satanic Black Mass".
- Rupert Murdoch's Drop Boxes: Where Central Bankers Post Front-Runners On When To "Buy".
- China Deploys Submarine Near Vietnam Oil Rig, 86 Vessels Now Present.
Reuters:
- U.S. Fed warns of more bank scrutiny over leveraged loans. A senior Federal Reserve official warned banks on Tuesday the central bank may have to take further action to ensure compliance with U.S. guidance on leveraged lending, in the clearest sign yet it is seeking to dispel a perception that it is lenient.
Evening Recommendations
- None of note
- Asian equity indices are -.25% to +.50% on average.
- Asia Ex-Japan Investment Grade CDS Index 117.5 -2.25 basis points.
- Asia Pacific Sovereign CDS Index 83.0 -1.75 basis points.
- FTSE-100 futures +.17%.
- S&P 500 futures +.08%.
- NASDAQ 100 futures +.08%.
Earnings of Note
Company/Estimate
- (DE)/2.49
- (M)/.60
- (A)/.73
- (CSCO)/.48
- (JACK)/.52
- (XONE)/-.12
- (RMAX)/.27
8:30 am EST
- The PPI Final Demand MoM for April is estimated to rise +.2% versus a +.5% gain in March.
- PPI Ex Food & Energy for April is estimated to rise +.2% versus a +.5% gain in March.
- Bloomberg consensus estimates call for a weekly crude oil inventory build of +36,360 barrels versus a -1,781,000 barrel decline the prior week. Gasoline supplies are estimated to rise by +90,910 barrels versus a +1,608,000 barrel gain the prior week. Distillate inventories are estimated to rise by +381,820 barrels versus a -447,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.46% versus a -.8% decline the prior week.
- None of note
- The Japan GDP report, Eurozone CPI, UK Unemployment report, BoE minutes, weekly MBA mortgage applications report, JPMorgan Homebuilding/Building Products Conference, (WMB) analyst day and the (MWW) briefing day could impact trading today.
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