Saturday, February 27, 2016

Today's Headlines

Posted by Gary .....at 9:32 PM
Bloomberg:
  • G-20 Affirms No-Devaluation Pledge, to Consult on Currencies. Finance chiefs from the Group of 20 agreed to consult closely on foreign exchange markets and reiterated past pledges to refrain from competitive devaluations. The G-20 members agreed to use monetary, fiscal and structural tools to boost growth, according to a final communique released in Shanghai on Saturday. Underscoring concerns over the limitations of central bank-led stimulus, "monetary policy alone cannot lead to balanced growth," the document said. Leading into the meetings, Bank of England Governor Mark Carney warned counterparts against getting embroiled in a currency war by pushing interest rates too low, while International Monetary Fund Managing Director Christine Lagarde said the effects of monetary policies, even innovative ones, are diminishing. With the U.K. mulling spending cuts, Japan planning a sales tax increase, Germany’s finance minister warning debt-funded growth just leads to “zombifying” economies, and the U.S. constrained by a lame duck president and Republican-controlled Congress, it may fall to China to ratchet up the fiscal firepower. "Investor hopes of coordinated policy actions proved to be pure fantasy," said David Loevinger, a former China specialist at the U.S. Treasury and now an analyst at fund manager TCW Group Inc. in Los Angeles. "It’s every country for themselves."
  • Brexit and Refugees Join G-20 Worry List in Draft Communique. The Group of 20 added a potential Brexit and an escalating refugee crisis to its long worry list, even as it argued recent market volatility didn’t reflect global growth momentum. In a draft of the communique obtained by Bloomberg News, the G-20 members agreed to use monetary, fiscal and structural tools to boost growth and calibrate and communicate their policies. Monetary policy alone can’t bring balanced growth, according to the document, which one person participating in the drafting process said would see only minor revisions. Finance chiefs from the G-20 nations agreed to "consult closely" on foreign exchange markets, warning that excessive volatility can hurt financial and economic stability and promised to improve their monitoring of capital flows in an effort to identify potential risks sooner. The group reiterated past pledges to refrain from competitive devaluations. Key economic risks also include escalated geopolitical tensions, a large drop in commodity prices, and volatile capital flows.
  • Japan, Not China, Emerges as Currency Worry at G-20 Meeting. China’s currency was expected to be one of the the main topics at this week’s Group of 20 meeting. Instead, Japan’s yen and monetary policy were identified as a source of concern for some officials from the world’s leading economies. "The debate was also about Japan, to be honest -- there was some concern that we would get into a situation of competitive devaluations," Eurogroup chief Jeroen Dijsselbloem said in Shanghai. Once one country devalues it’s currency, "the risk is very large that another follows and we get into competitive devaluation," Dijsselbloem told reporters.
  • Global Slowdown Concerns Policy Makers as Fed, ECB Ponder Rates. (video) Central bankers from the U.S. and Europe said weaker global growth will affect the economic outlook and may have implications for the pace of monetary policy divergence. Federal Reserve Governor Lael Brainard said Friday at a panel discussion in New York that the pace of interest-rate increases in the U.S. may be slower than previously anticipated, as she urged officials across the world to coordinate efforts to increase demand. European Central Bank Executive Board member Peter Praet said at the same event that weaker readings on the European economy are a warning sign. Their comments come as finance ministers and central bankers from the Group of 20 developed and emerging market economies gather in Shanghai to discuss how best to revive the world economy. While U.S. and Chinese officials called for increased government spending, Germany argued that using debt to fund growth just leads to “zombifying” economies.
  • Vale(VALE) Relegated to Junk by Moody's in Three-Step Downgrade. Vale SA had its credit rating lowered three levels to junk status by Moody’s on prospects that iron ore and base metal prices won’t recover meaningfully before 2017. Moody’s cut Vale ratings to Ba3 from Baa3, while withdrawing its issuer rating and assigning a Ba3 corporate family rating. The outlook is negative. The action comes a day after the Rio de Janeiro-based company vowed to step up efforts to cut net debt, which rose to $25 billion at the end of last year, as a slowdown in Chinese growth collides with rising supply to push down commodity prices.
  • Hedge Funds' Bearish Gas Bets Pay Off With Slide to 17-Year Low. For more than a year, hedge funds have held a bearish position in U.S. natural gas, betting that a ballooning supply glut would hammer prices. They were right. Just before gas futures tumbled to a 17-year low this week, money managers boosted their net-short position in contracts for the fuel by 31 percent. Their bearish bets jumped in the seven days ended Feb. 23 while their long wagers on prices rising were little changed, according to U.S. Commodity Futures Trading Commission data.
  • Budding Joy Over U.S. Stocks Rebound Marred by Drop in Trading. The budding rebound in U.S. stocks is probably more notable for what it lacks than what it represents in terms of animal spirits. While the Standard & Poor’s 500 Index jumped 1.6 percent in the past five days to cap the biggest two-week surge in a year, a large portion of investors have watched the rally from the sidelines. The gains came amid the weakest volume in 2016, a sign that there is a lack of conviction in the advance following a 10 percent rout that erased more than $2.5 trillion from U.S. equity values.
  • SkyBridge Pulls $1 Billion From Paulson, Loeb and Rosenstein. Anthony Scaramucci’s SkyBridge Capital, a high-profile investor in hedge funds, pulled about $1 billion in the fourth quarter from event-driven strategies run by John Paulson, Daniel Loeb and Barry Rosenstein in a shift away from volatile stock markets. SkyBridge disclosed Thursday that it reduced its exposure to a pair of Paulson funds whose value swung widely during the year. The New York-based firm also cut its holding in Loeb’s Third Point Ultra fund and Rosenstein’s Jana Nirvana, according to a regulatory filing by SkyBridge’s public vehicle for allocating investor capital to different money managers. SkyBridge withdrew the money from the event-driven funds to invest with managers who specialize in cash-generating securities, such as mortgage-backed securities and structured debt, according to a person familiar with the matter. SkyBridge was also concerned that equity markets were becoming more volatile, and wanted to lessen its exposure to activist and event managers because they primarily invest in stocks, this person said, requesting anonymity because the information is confidential.
  • Regeneron(REGN) Eye Drug’s Advantage Over Roche’s Narrowed in Trial. Regeneron Pharmaceuticals Inc.’s Eylea injection was no more effective in treating a severe eye disease than Roche Holding AG’s Lucentis after two years, according to findings from a new study that may not be enough to knock Regeneron off its dominant perch in the field.
Wall Street Journal:
Barron's:
  • Had bullish commentary on (WMT), (MDT), (FTNT), (CHKP), (PANW) and (ATRO).
  • Had bearish commentary on (XLU).
Fox News:
  • Clinton wins South Carolina primary, Fox News projects. Hillary Clinton cruised Saturday to an easy victory in the South Carolina Democratic primary, taking back the momentum from Bernie Sanders heading into Super Tuesday – though Sanders will keep his foothold in the race as he continues to rack up delegates and contributions. Fox News projected Clinton's win moments after polls closed. The Democratic front-runner rode to victory on the strength of her support from black voters – her so-called “firewall” that, in the end, held up.
  • SE Asian foreign ministers voice concerns on South China Sea. (video)
Zero Hedge:
Business Insider:
Daily Caller:
  • The Sad End of Chris Christie's Political Life. That Tuesday night, Mr. Christie lost in New Hampshire, just like anyone could have told him. It had been a long trek, and along the way he’d cannibalized every member of his party, used every oxygen tank, and reached the top. But the top wasn’t the Oval Office in Washington, D.C. he’d once dreamed of, it was a city in Texas. There, in the winter sun, the champion of New Jersey stood in the shadow of Manhattan’s Mr. Trump. Mr. Trump– the man who tried to evict an old New Jersey widow to make room for a limousine parking lot for a soon-to-be-bankrupt New Jersey casino in a New Jersey city Mr. Trump would soon leave behind him. There’s no way the journey would end behind Mr. Trump, Mr. Christie had promised his last backer, a newspaper publisher, two weeks earlier. Joe McQuaid had believed the governor. Mr. Trump’s “fairytale” policies would never work, the governor had told The Daily Caller and a room full of supporters days prior. Those voters had probably believed him too. Standing at the podium, Mr. Christie said he was “proud to be here to endorse Donald Trump”– the “fairytale” candidate he was hitching his White House appointment hopes to. Some fairytales come true. But most don’t.
Focus:
  • German Budget Surplus to Be Used Entirely for Refugees. Deputy Finance Minister Jens Spahn told Focus that budget surplus of EU12.1B "reserved" entirely for refugees.
Spiegel:
  • IMF Says Greece Faces 'Difficulty' Paying Debt in March. IMF worried that many EU governments are willing to compromise on savings measures imposed on Greece as country struggles with wave of immigrants.

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