Bloomberg:
- China Is Set to Lose Manufacturing Crown. Manufacturers will be drawn to Southeast Asia's strengths, including the strategic location and cheap labor of Myanmar, Cambodia and Laos. The cheap, young labor and strategic location of Myanmar, Cambodia and Laos are set to draw increasing numbers of manufacturers to Southeast Asia, which will eventually displace China for the title of "world's factory.''
- Rule No. 1 in China’s Bull-Market Rally: Don’t Look at Earnings. If you’re worried about China’s worst earnings season since the global financial crisis, you’re looking at this stock-market rally all wrong. At least that’s the message from individual investors. They’ve propelled the Shanghai Composite Index to a 90 percent surge since mid-October, even as 2014 profits missed estimates by the most in six years and analysts cut their outlooks at the fastest pace since 2009. Foreign skeptics see the disconnect between earnings forecasts and share prices -- now bigger than in any of the world’s top 40 markets -- as a sign that China’s rally has gone too far.
- Europe’s Deflation Specter Moving on as Greece Clouds Recovery. The euro area’s brush with deflation might be over before it even started. After falling for four straight months, consumer prices in the currency bloc were unchanged in April, according to economists polled by Bloomberg. The respite, coming just as the region’s recovery improves, signals that the effect of a slump in oil prices is petering out without triggering a reinforcing decline in prices and wages.
- Nobody Knows Just How Bad Things Are in Nepal. Down a side street in Kathmandu, Sumit Balang watched a bulldozer rummage through bricks, concrete chunks and other pieces of a four-story apartment building left in ruins after an earthquake on Saturday. Somewhere in there was his brother. Balang’s eyes followed the slow excavation on Tuesday morning before he showed a text message he received the previous night from his older sibling, Amit: “I need food and help.” Maybe Amit Balang, 33, was still alive. Maybe he wasn’t. It started to rain.
- Russia Set to Forgo Deeper Rate Cuts as Inflation Hampers Easing. Russia’s central bank will probably maintain its current pace of monetary easing, looking past ruble gains to keep a lid on the fastest price growth in 13 years. The Bank of Russia will reduce its benchmark interest rate to 13 percent from 14 percent, according to 26 of 40 economists surveyed by Bloomberg. Nine analysts predict a decrease of 150 basis points and five see a two-point cut. The regulator will announce the decision on Thursday at about 1:30 p.m. in Moscow.
- Goldman Sachs Sees Australia’s AAA Rating at Risk of Downgrade. Australia risks losing its top credit rating from Standard & Poor’s for the first time in more than two decades, Goldman Sachs Group Inc. said. Plunging commodity prices, weaker economic growth and government difficulties in passing legislation are expected to spur a further deterioration of the nation’s finances that could lead S&P to place its AAA sovereign rating on negative outlook within coming months, according to analysts Tim Toohey and Andrew Boak.
- China’s Stocks Fall for First Back-to-Back Loss in Two Months. Chinese stocks headed for their first back-to-back losses in two months after the nation’s biggest brokerage restricted the number of shares eligible for margin lending and commodity producers slumped on lower profits. Agricultural Bank of China Ltd. and Bank of Communications Co. slid at least 2 percent after the lenders reported profit growth of less than 2 percent. Anhui Conch Cement Co. dropped 2.2 percent after net income plunged 30 percent in the first quarter. Yanzhou Coal Mining Co. led declines for energy shares after profit fell 17 percent. Citic Securities Co. retreated after the Securities Times reported the brokerage will no longer accept more than 600 stocks as collateral for margin financing. The Shanghai Composite Index fell 1.4 percent to 4,412.91 at 10:42 a.m., after dropping 1.1 percent on Tuesday after the China Securities Regulatory Commission warned new stock investors not to overlook the risk of losses.
- Asian Stocks Retreat as Dollar Holds Slump Before Fed; Oil Drops. Asian shares retreated, led by declines in Sydney and Hong Kong. The dollar traded near a two-month low amid speculation that the Federal Reserve will keep interest rates near zero for longer, and crude oil slipped before U.S. stockpiles data. The MSCI Asia Pacific excluding Japan Index dropped 0.9 percent by 10:24 a.m. in Hong Kong, as Australia’s S&P/ASX 200 Index fell 1.3 percent and the Hang Seng China Enterprises Index slid 1.2 percent.
- SEC Is Set to Propose New Rules on Executive Compensation. Proposal makes it easier for investors to determine whether pay aligns with a firm’s financial results. Securities regulators want publicly traded companies to make it easier for shareholders to determine whether top executives’ compensation is aligned with the firm’s financial performance. On Wednesday, the Securities and Exchange Commission is set to propose long-awaited rules that would force thousands of companies to tell investors how the pay of top...
- Ukraine Leaders Fear Broad Russian Attack, Says EU’s Juncker. Summit in Kiev coincided with fresh violence in eastern Ukraine. Ukraine’s leaders believe Russia is preparing a broad attack on their country, European Commission President Jean-Claude Juncker said Tuesday as he returned from a summit in Kiev that coincided with fresh violence in Ukraine’s east.
- The Blue-City Model. Baltimore shows how progressivism has failed urban America. You’re not supposed to say this in polite company, but what went up in flames in Baltimore Monday night was not merely a senior center, small businesses and police cars. Burning down was also the blue-city model of urban governance. Nothing excuses the violence of rampaging students or the failure of city officials to stop it before Maryland’s Governor called in the National Guard. But as order starts to return to the streets, and the usual political suspects lament the lack of economic prospects for...
- Saudi Arabia arrest 93 terror suspects, foils car bomb plot on US Embassy. Saudi Arabia announced the arrest of 93 suspected terrorists with ties to ISIS Tuesday, including two who were allegedly planning a car bomb attack on the U.S. Embassy in Riyadh. Other potential targets for some of those arrested included residential compounds and prisons.
- Tense Baltimore stages huge police presence to prevent second night of violence. As dusk fell Tuesday night, Baltimore was a city on edge – bracing for further violence while hoping that a huge police presence and a 10 p.m. curfew would prevent a second night of rioting. At a late afternoon press conference, Maryland Gov. Larry Hogan said there would be 2,000 National Guardsmen on duty Tuesday night, along with 1,000 law enforcement officers, and "this combined force will not tolerate violence or looting."
- Why oil could fall to $20 a barrel. A new report from an economic research firm makes a surprising case for crude oil to eventually fall to $20 a barrel over the coming years as technology makes the process of extracting oil from the ground and getting it to the pump as easy as stocking a shelf at Wal-Mart.
- Samsung Electronics first-quarter net profit drops 39 percent.
- Goldman(GS) Asks "Should Stocks Fear Rate Hikes?" (Spoiler Alert: Yes). (graph)
- Dear CFTC: Here Is Today's Illegal "Spoofing" In Gold Futures. (graph)
- Crude Slides On Bigger-Than-Expected API Inventory Build (Small Cushing Draw). (graph)
- Why Markets Are Manic - The Fed Is Addicted To The "Easy Button". (graph)
- Gold & Silver Surge As Schizophrenic Stocks Slump-And-Pump. (graph)
- The First Rule Of Holes. (graph)
- How Will Greece Default? Let Us Count The Ways.
- Goldman(GS) Paid Bill Clinton $200K Before Lobbying Hillary On Export-Import Bank.
- Twitter(TWTR) earnings leak early, stock crashes.
- Wynn(WYNN) shares are getting obliterated.
- Americans are suddenly souring on buying homes.
- GoPro(GPRO) shares are ripping higher.
- Russia is using scare tactics in Ukraine.
- BUFFALO WILD WINGS(BWLD) SHARES PLUNGE 10%, CHICKEN COSTS SPIKE.
- Negative interest rates put world on course for biggest mass default in history. More than €2 trillion-worth of eurozone government bonds trade on a negative interest rate. It's a bubble that is bound to end badly.
- None of note
- Asian equity indices are -1.25% to -.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 106.50 -.5 basis point.
- Asia Pacific Sovereign CDS Index 59.75 -.25 basis point.
- S&P 500 futures -.09%.
- NASDAQ 100 futures -.17%.
Earnings of Note
Company/Estimate
- (ABB)/.35
- (ADT)/.50
- (CBG)/.26
- (ETN)/.98
- (GT)/.44
- (HES)/-1.06
- (HLT)/.12
- (HUM)/2.56
- (IP)/.80
- (LL)/.16
- (MA)/.80
- (NSC)/1.00
- (NOC)/2.27
- (VRX)/2.34
- (TWX)/1.09
- (HOT)/.56
- (BIDU)/1.14
- (ESV)/1.29
- (NE)/.50
- (YELP)/.16
- (WMB)/.12
- (TEX)/.18
8:30 AM EST
- Advance 1Q GDP is estimated to rise +1.0% versus a +2.2% gain in 4Q.
- Advance 1Q Personal Consumption is estimated to rise +1.7% versus a +4.4% gain in 4Q.
- Advance 1Q Core PCE is estimated to rise +1.0% versus a +1.1% gain in 4Q.
- Pending Home Sales for March are estimated to rise +1.0% versus a +3.1% gain in February.
- Bloomberg consensus estimates call for a weekly crude oil inventory build of +2,781,820 barrels versus a +5,315,000 barrel build the prior week. Gasoline supplies are estimated to rise by +336,360 barrels versus a -2,135,000 barrel decline the prior week. Distillate inventories are estimated to rise by +927,270 barrels versus a +395,000 barrel increase the prior week. Finally, Refinery Utilization is estimated to rise by +.69% versus a -1.1% decline the prior week.
- The FOMC is expected to leave the benchmark Fed Funds rate at .25%.
- None of note
- The GFK Consumer Confidence report, 7Y Treasury auction, weekly MBA mortgage applications report, (MSFT) analyst briefing and the (LYB) investor day could also impact trading today.
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