Today's Headlines

Bloomberg: 

• Merkel Stamps Out Optimism on Greece After Tsipras Talks. (video) German Chancellor Angela Merkel said that greater efforts are needed to unlock bailout funds for Greece after late-night negotiations with Greek Prime Minister Alexis Tsipras failed to yield any sign of a breakthrough. With time running out for a deal to free up the remaining 7.2 billion-euro ($8 billion) tranche of aid, Merkel’s discussions in Latvia with Tsipras and French President Francois Hollande broke up in the early hours of Friday with an agreement only to keep talking. Tsipras talked of a resolution “soon,” whereas Merkel said there’s “a whole lot to do.”
• Greek Banks Face Contingency Plans as Crisis Threatens. The European Commission is preparing contingency plans for the Greek banking system in the event government leaders fail to agree to a deal to help the indebted nation, according to two people familiar with the talks. Officials are looking at how to manage the failure of financial firms in Greece and other events that may cause widespread investor losses, said one of the people, who asked not to be identified as the discussions are private.
• German Business Confidence Declines as Risks Cloud Outlook. German business confidence fell for the first time in seven months in May, signaling caution over the growth outlook for Europe’s largest economy. The Ifo institute’s business climate index dropped to 108.5 from 108.6 in April. That still beat the median estimate of 108.3, and an earlier report showed German capital investment increased at the fastest pace in a year last quarter. 
• Brazil Boosts Taxes on Banks Before Rolling Out Budget Cuts. Brazil is stepping up efforts to shrink a widening budget gap by raising taxes on banks and preparing to freeze spending. Banks, brokerages and credit-card processors among others will pay a 20 percent tax on profit, up from 15 percent, according to a presidential decree published in the official gazette on Friday. The measure, which becomes effective Sept. 1, will boost tax collection by about 750 million reais ($244 million) in 2015 and 3.8 billion reais next year, according to the tax agency.
• JPMorgan(JPM): Something Has Gone Wrong With the Global Consumer. What to make of a global slowdown in retail sales. "It would be difficult to overstate the recent downside surprise in global consumer spending," writes JPMorgan Senior Global Economist Joseph Lupton. Though retail sales in the U.S. have missed expectations for five consecutive months, disappointing consumer spending is far from just a made-in-the-USA story, he observes.  
• European Stocks Near Three-Week High as DAX Falls With Euro Up. European stocks were little changed, posting their biggest weekly gain since mid-April. The Stoxx Europe 600 Index slipped less than 0.1 percent to 407.74 at the close of trading in London, trimming a decline of as much as 0.4 percent.
• Iron Ore Completes Second Weekly Loss as Producers Expand Supply. Iron ore capped a second weekly decline on concern that rising output from the world’s largest producers will exceed demand from China and widen a global surplus. Ore with 62 percent content delivered to Qingdao dropped 2.2 percent this week to $59.96 a dry metric ton, according to Metal Bulletin Ltd. While the price jumped 3.5 percent on Friday, it remains 69 percent below a record $191.70 in 2011. 
• Risky Loans Shunned by Banks Are Booming in Wall Street's Shadow. Regulators’ efforts to rein in Wall Street’s biggest banks are in danger of backfiring. Guidelines aimed at strengthening lending standards are shifting the market for high-yield credit to less-supervised loan funds, raising alarm this week from the Financial Stability Oversight Council. Because the funds don’t have depositors, some of their money comes from Wall Street banks, leaving systemically important institutions exposed to risks regulators hoped to avoid.
• Inflation Closer to Fed’s Goal After Core Prices Advance. The U.S. cost of living excluding what households pay for food and fuel climbed more than forecast in April, indicating inflation is gravitating toward the Federal Reserve’s goal. The core consumer-price index rose 0.3 percent, the biggest gain since January 2013 and reflecting broad-based increases, a Labor Department report showed Friday. In the last three months, core inflation advanced an annualized 2.6 percent, the most since August 2011. Including food and fuel, the gauge was up a more moderate 0.1 percent as prices fell at grocery stores and gas stations. Costs may continue to firm as fuel expenses rebound, apartment rents climb and health-care services become more expensive.

Wall Street Journal:

• Huatai Collects More Fuel for China Stock-Market Fire. Huatai Securities’ Hong Kong IPO continues a barrage of brokerage fundraising that’s looking long in the tooth. It’s hard not to look at all the cash raised by brokers, along with the massive increase in margin lending provided by those brokers, and conclude there’s a self-reinforcing phenomenon at work. This week, for the first time, margin lending outstanding breached 2 trillion yuan ($322 billion)—five times the level of a year ago.

Fox News:

• State Department releases 1st batch of Clinton emails. (video) The State Department has released 296 emails from Hillary Clinton's tenure as secretary of state, in the first batch of emails to be made public. The emails, just a fraction of what the department has in its custody, show internal communications before and after the Benghazi terror attack in 2012. One email to Clinton, regarding one of then-U.N. Ambassador Susan Rice's TV appearances the Sunday after the attack, appeared to praise her for reflecting their "view" that the attack was "spontaneous."

CNBC: 

• Yellen: Rate hike appropriate this year if economy improves. (video)
• 7 major housing markets now 'overvalued'. (video)
• Microsoft(MSFT), Salesforce(CRM) talks fizzled over price: Sources. (video)

ZeroHedge:

• Oil Prices Unmoved By Oil Rig Count Decline Of Just 1. (graph)
• JPMorgan Officially Apologizes For Being A Criminal Market Manipulator.
• Dear FBI: Here Is Today's Market Manipulation. (graph)
• Wall Street R.I.P. - The Bubble Is Dying At The Zero Bound. (graph)
• Why The US Consumer Is About To be Crushed: The Obamacare Inflationary Deluge Arrives. (graph)
• Core Consumer Prices Jump Most Since March 2006 Thanks To Surging Healthcare Costs. (graph)
• Two Ominous Stock Market Charts. (graph)
• Meanwhile, Mass Layoffs Continue For America's Miners.
• US Department Of Commerce Officially Jumps The Shark, Will "Double Seasonally Adjust" GDP Data.

Business Insider: 

• Turns out the former Chinese billionaire whose solar company just imploded was shorting his own stock.
• Here are 7 things to take away from Janet Yellen's speech on Friday.
• These maps show what ISIS has achieved in the last year.
• Russians seized in Ukraine: We were following Moscow's orders.
• John Deere(DE) warns the farming business is about to go from bad to worse.

Reuters:

• Funny times in China stocks, joke unclear: James Saft. Many things about China stocks are funny, but probably not right now to investors in Hanergy Thin Film Power Group, Goldin Financial Holdings or Goldin Properties Holdings. The three Hong Kong-listed shares, which had all increased in price several-fold in recent months, tumbled over the past two trading days in spectacular fashion. Solar company Hanergy's market value melted by $19 billion in scarcely more minutes on Wednesday, tumbling 47 percent on no news before the stock was suspended. Thursday brought similar tumbles in the linked Goldin companies, which fell more than 40 percent each, slashing their value by $23 billion. Goldin Financial is a short-term commercial lender but has wide-ranging property interests, while Goldin Properties is a developer.

Telegraph: 

• IMF rules out 'quick and dirty' Greek deal as Juncker warns of Grexit 'indignity'. Christine Lagarde says she will not sign off on a piecemeal deal for cash-strapped Greece.