Today's Headlines

Bloomberg:    

• As China Stocks Outrun the 2007 Bubble, UBS Braces for Clampdown. (graph) With China’s world-beating stock market attracting an unprecedented number of novice traders, the question on many investors’ minds is how long authorities will let the rally run before stepping in to cool things down. As UBS Group AG strategist Lu Wenjie sees it, policy makers may add to existing interventions as soon as later this year. The Shanghai Composite Index’s 121 percent surge over the past 15 months isn’t justified by earnings prospects in an economy growing at the slowest pace since 2009, according to Lu. “It’s absolutely possible we’ll see some draconian measures from the regulators,” he said in an interview in Hong Kong. “The pace of stock rally is too fast.”

• French Output Slows as ‘Moribund’ Economy on Verge of Stalling. Growth in France’s private sector almost stalled in April in a sign of renewed weakness in the euro area’s second-largest economy. A Purchasing Managers Index for the service and manufacturing industries dropped to 50.2 from 51.5 in March, London-based Markit Economics said on Thursday. The reading is barely above the 50-point mark that divides expansion from contraction and below the median estimate in a Bloomberg survey of economists, which was for an increase to 51.8.

• German Economy Starts Quarter Weaker as Orders Slow. A gauge of German economic growth weakened in April as new business slowed. A Purchasing Managers Index for factories and services fell to 54.2 from 55.4 in March, London-based Markit Economics said on Thursday. While the reading remains well above the 50-point mark that divides expansion from contraction, it is below the 55.6 predicted by economists in a Bloomberg survey.

• Europe’s Top Asset Manager Says Stock-Market Crash Possible. Allianz SE, Europe’s biggest insurer and asset manager, cautioned investors against possible turmoil in the stock markets after a recent rally. “We see generally meager growth prospects, political dangers and risks of a stock market crash,” Oliver Baete, board member and designate chief executive officer, said in an interview with Germany’s Manager Magazin on Thursday. Holger Ullrich, a spokesman for Allianz, confirmed the comments. 

• European Stocks Drop as Manufacturing, Services Miss Estimates. European stocks declined as data showed euro-area output expanded at a slower pace in April, and Ericsson AB led technology shares lower. The Stoxx Europe 600 Index lost 0.4 percent to 407.18 at the close of trading, having earlier tumbled as much as 1 percent and gained 0.4 percent.

• U.S. Shale Fracklog Triples as Drillers Keep Oil From Market. Think the U.S. is awash in crude now? Thank the fracklog that it’s not worse. Drillers in oil and gas fields from Texas to Pennsylvania have yet to turn on the spigots at 4,731 wells they’ve drilled, keeping 322,000 barrels a day underground, a Bloomberg Intelligence analysis shows. That’s almost as much as OPEC member Libya has been pumping this year. The number of wells waiting to be hydraulically fractured, known as the fracklog, has tripled in the past year as companies delay work in order to avoid pumping more oil while prices are low. It’s kept crude off the market with storage tanks the fullest since 1930. The fracklog may slow a recovery as firms quickly finish wells at the first sign of higher prices.

• Bird Flu ‘Catastrophe’ Mounts Amid Concern Virus Is Airborne. Deadly bird flu swelled in the poultry industry in Minnesota and neighboring Wisconsin amid speculation that winds may be carrying virus particles into facilities housing turkeys and chickens. “This is a catastrophe for both the turkey and the egg industries,” William Rehm, the president of Daybreak Foods Inc., said after his company’s farm in Jefferson County, Wisconsin, with 800,000 egg-laying hens was infected by bird flu. “Some USDA veterinarians are starting to believe the virus is spreading from particulates in the air,” he said Wednesday in a telephone interview. 

• The U.S. Economy Hasn't Disappointed Analysts This Much Since the Great Recession. (graph) A morning's worth of disappointing data sent the Economic Surprise Index down further. Following a quartet of weaker-than-expected economic data reports released this morning, Bloomberg's U.S. economic surprise index has fallen to levels seen only during the Great Recession. At -0.783, the 15-year-old index has been this far away from zero in either direction in only two other periods: in early 2009, when it hit a record-low -0.996, and in March 2011, when it climbed as high as 0.950.

Wall Street Journal:

• EU Considers Creating Powerful Regulator to Oversee Web Platforms. New body would oversee a swath of mainly U.S.-based Internet companies.

ZeroHedge: 

• Why Sarao Is The Flash Crash Patsy: He Threatened To Expose The "Mass Manipulation Of High Frequency Nerds".

• Hillary's Charities Suffer A "Geithner Moment", Will Refile 5 Years Of Taxes.

• Oil Prices Won't Recover Anytime Soon Says Exxon(XOM) CEO. (graph)

• Spot The Odd "VIX" Out. (graph)

• It's A Mania - Behold The Red Chips And The Big Macs. (graph)

• The Most Disturbing Chart Of The "New Housing Normal". (graph)

• How The Second Tech Bubble Will Burst, In The Words Of Silicon Valley's "Poster Child" And World's Youngest Billionaire.

• New Home Sales Tumble By Most In Almost 2 Years As Northeast Crashes. (graph)

• US Manufacturing PMI Misses By Most On Record As New Orders Tumble. (graph)

• Forget "Grexit", "Grimbo" Has Arrived.

• Initial Claims Worse Than Expected (Again), Remain Flat For 2015. (graph)

• "Blew" Chips: 3M Latest To Miss, Guide Lower On "Strong Dollar, Mixed Global Economy".