Today's Headlines
Bloomberg:
- ECB Gives Greece Another Week to Make a Deal. (video) Greece needs to show it’s serious about reaching an agreement with
international creditors next week or risk tighter liquidity rules being
imposed on its banks. European Central Bank officials want progress at a meeting of
euro-region finance ministers on May 11 or they will consider tightening
Greek banks’ access to emergency liquidity they need to stay afloat,
said two officials who spoke on condition of anonymity as the talks are
private. One policy maker said they’re prepared to raise haircuts -- the
discounts imposed on collateral pledged by Greek banks in return for
funding -- to levels seen last year. The ECB declined to comment.
- Greece on the Brink, Again. (video)
- Bond Bears Risk Self-Destruction by Betting on Draghi’s Success. Too
much success for Mario Draghi risks ending up in defeat for investors.
The euro-area’s currency is climbing with bond yields, while equities
are sliding, as financial markets bet the monthly bond-buying of
President Draghi’s European Central Bank will successfully revive
inflation. There is even talk of the 1.1 trillion-euro ($1.2 trillion)
program being tapered. The problem for Draghi is that recent trading goes in the opposite
direction of what he needs to cement stronger inflation and economic
growth. Higher borrowing costs will curb the ability of consumers and
companies to spend, as well as making it costlier for governments to
borrow after falling yields reduced the need for austerity. The euro
will impede exporters which had welcomed the currency’s previous slide,
while lower stocks mean quantitative easing has less of a wealth effect.
- European Opportunities ‘More Hype Than Reality,’ Weingord Says. Money managers promising big returns from European credit
investments are probably overstating the opportunity, Seer Capital
Management Chief Executive Officer Philip Weingord said. “There are interesting opportunities in Europe but it’s more hype than reality,” Weingord
said in a Bloomberg Television interview Thursday with Stephanie Ruhle
and Erik Schatzker at the SkyBridge Alternatives Conference in Las
Vegas. While fund managers have been
touting for years the potential for European banks to unload large
swaths of assets as they face tougher regulations, “it’s not happening,”
he said.
- ArcelorMittal(MT) Cuts Forecast as Iron Ore Conquers Steel Gains. ArcelorMittal
cut its annual profit target as decade-low iron ore prices overwhelm a
recovery in steel. The world’s biggest steelmaker expects $6 billion to
$7 billion of
earnings before interest, taxes, depreciation and amortization this
year, down from the $6.5 billion to $7 billion it forecast earlier. It’s
the fifth-largest iron-ore producer. “We faced a number of headwinds in the first quarter, including a
declining iron-ore price, a stronger dollar and surge of imports in the
United States,” Chief Executive Officer Lakshmi Mittal said in a
statement on Thursday.
- Siemens Cuts Another 4,500 Jobs as Oil Slump Hits Profit. Siemens AG, Europe’s largest engineering company, will cut another
4,500 jobs after second-quarter profit fell more than analysts
estimated, burdened by the declining oil price. Profit from so-called industrial operations fell 4.9 percent to 1.66
billion euros ($1.9 billion), the Munich-based company said in a
statement. That missed the 1.71 billion-euro average estimate of
analysts surveyed by Bloomberg.
- Europe Stocks Halt Two-Day Drop as German Equities Reverse Loss. German equities swung to gains from losses, helping erase an intraday decline in European stocks. The Stoxx Europe 600 Index added less than 0.1 percent to 388.98 at
the close of trading, after plunging as much as 1.8 percent. A drop in
oil and metal prices sent commodity shares tumbling, while travel
companies gained. The Stoxx 600 has fallen 6.1 percent from a record in
April, when valuations were at the highest in at least a decade.
- Oil Producers Cast Aside Gloom as Rally Spurs Drilling Plans. Oil producers battered by the steepest market collapse in a
generation are signaling for the first time that they believe the worst
is behind them. Carrizo Oil & Gas Inc., Devon Energy Corp. and Chesapeake Energy
Corp. all lifted their full-year production outlooks this week. Shale
explorer EOG Resources Inc. said on Tuesday it plans to increase
drilling as soon as crude stabilizes around $65 a barrel, while Pioneer
Natural Resources Co. has said it is preparing to deploy more rigs as
soon as July.
- Consumer Comfort in U.S. Declines to Lowest Level in Eight Weeks. Consumer confidence declined to an eight-week low as attitudes about
the economy dimmed, particularly among those at the bottom of the
income ladder. The Bloomberg Consumer Comfort Index decreased to 43.7 in the week
ended May 3, the fourth straight decline, from 44.7 the prior period.
- Tesla(TSLA) Falls After Analyst Calls Its Cash Burn ‘Eye Watering’. Tesla Motors Inc. fell Thursday after Morgan Stanley said the
company’s “eye watering” use of cash puts more pressure on a good
production start for the Model X sport utility vehicle. Shares of the electric-car maker led by Chief Executive Officer Elon
Musk fell 2.1 percent to $225.68 at 9:37 a.m. New York time.
- Here's What to Look for in Friday's Jobs Report.
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