Evening Headlines
Bloomberg:
Bloomberg:
- Moody’s Cuts Credit Outlook on Chinese Financial Firms, SOEs. Moody’s Investors Service cut its credit-rating outlook on 38 Chinese state-owned enterprises and 25 financial institutions after the agency’s decision to lower the country’s sovereign credit-rating outlook. The SOEs’ outlook was reduced to negative, Moody’s said in a Thursday statement, a day after it issued a separate release downgrading the non-insurance financial firms to negative from stable. The financial institutions include three policy banks, 12 domestic commercial banks and three distressed asset-management companies, Moody’s said March 2. The SOE and financial downgrades followed Moody’s decision to lower its outlook on China’s sovereign credit rating on Wednesday to negative from stable. The agency highlighted the country’s surging debt burden and questioned the government’s ability to enact reforms.
- China's Busiest Internet Banker Warns of `Lawless' Markets. China’s most prolific Internet dealmaker has issued a stern warning about the dangers facing investors in “lawless” venture capital and startup markets, urging regulators to step in and curb irrational investment and asset bubbles. Individual investors lured by promises of extravagant returns are flooding into the high-risk realm of venture capital, Fan Bao, head of China Renaissance Partners, wrote in a column. They’re disrupting markets by inflating values and could get burned when the bubble bursts, he wrote in the influential business magazine Caixin. “The influx of retail investors into primary markets is dangerous,” he wrote in a piece penned in Chinese and published online this week. “This market isn’t suitable for retail investors, it’s not the same as in secondary markets where price fluctuations correct rapidly. Primary markets aren’t liquid, there’s no process for regulating risk, and retail investors could lose their shirts.” That’s a stark warning from one of the most visible players in China’s Internet boom. It echoes the views of economists and market participants who’ve argued that easy monetary policy is boosting liquidity, stoking a retail investor frenzy and encouraging investment bubbles.
- Brazil Holds Rate at 14.25% on Bet Downturn to Damp Prices. Brazil’s central bank kept its benchmark interest rate unchanged for a fifth consecutive meeting on the view that the deepest recession in decades, steep borrowing costs and weaker global growth will combine to slow inflation dramatically. Policy makers, led by President Alexandre Tombini, held the key rate at a nine-year high of 14.25 percent on Wednesday, as forecast by 44 of 46 analysts surveyed by Bloomberg. The remainder of economists expected an increase of 25 or 50 basis points. Two members of the eight-person central bank board, Tony Volpon and Sidnei Correa Marques, voted for a half-point hike.
- Asian Stocks Extend Rally as Oil Rises Toward $35; Ringgit Rises. Asian stocks rose to an eight-week high, emerging-market currencies strengthened and oil climbed toward $35 a barrel, buoyed by improving U.S. economic data and prospects for further stimulus in China. The MSCI Asia Pacific Index was set for its biggest three-day rally since August, led by banks and raw-materials producers. U.S. crude advanced for a fourth day after data showing declines in American oil production. Malaysia’s ringgit and South Korea’s won led gains among major currencies, while the Japanese yen was the biggest loser. Yields on Australian government debt due in a decade rose to a two-week high. The MSCI Asia Pacific Index rose 1.2 percent as of 11:06 a.m. Tokyo time, building on a 3.7 percent advance over the last two days.
- Why the Outlook for Oil Prices Remains Weak. (video)
- Costco(COST) Profit Drops as Demand Wanes From Higher-Income Shoppers. Costco Wholesale Corp. posted second-quarter earnings that trailed analysts’ estimates as higher-income shoppers show signs of curtailing spending. Net income fell 8.7 percent to $546 million, or $1.24 a share, the Issaquah, Washington-based company said Wednesday in a statement. Analysts estimated $1.28 a share, on average. Same-store sales in the U.S., a closely watched measure by investors, increased 4 percent excluding the negative impacts from gasoline price deflation and foreign exchange, compared with an estimate of 4.9 percent.
- Insurers Probed on Hepatitis C Drug Coverage. New York state’s attorney general investigates alleged restrictions on expensive but effective drugs. New York’s attorney general is investigating state health-insurance companies for allegedly restricting coverage of drugs that can cure hepatitis C, saying that the firms have inappropriately rationed care by denying patients expensive but effective medication.
- Indicted Ex-Chesapeake Energy CEO Aubrey McClendon Dies in Car Crash. 56-year-old was killed after his vehicle hit a wall at speeds exceeding the local limit.
- SunEdison’s(SUNE) Troubles Darken Prospects of Vivint Deal. The mounting financial woes of SunEdison have jeopardized the solar-energy company’s plans to purchase Vivint Solar.
- Trump University Fraud Suit Can Proceed, Appeals Court Rules. New York Attorney General Eric Schneiderman had alleged education program had defrauded students. A fraud allegation against Donald Trump’s education program can move forward, a New York state appeals court said Tuesday in a ruling likely to fuel controversy over an issue Mr. Trump’s opponents in the Republican presidential primaries have seized on in recent weeks.
- Trump’s Pottery Barn GOP. Even as he wins, GOP resistance to his nomination builds. Donald Trump claims to have opposed the Iraq war before opposition was fashionable. So perhaps he won’t mind if we apply Colin Powell’s adaptation of the Pottery Barn rule to Mr. Trump’s attempted takeover of the Republican Party: If you break it, you bought it.
- A Big Push for Flawed Front-Runners. Bernie could cause trouble for Hillary at the convention. And Trump is no ‘unifier.’
- Romney to deliver major speech on 2016 race. (video) Mitt Romney plans to deliver a major speech on the state of the 2016 race for the White House Thursday, amid rising panic among some Republican leaders that Donald Trump may be cruising to the nomination.
- DOJ reportedly grants immunity to former State Dept staffer in Clinton email probe. (video) The Justice Department has reportedly granted immunity to a former State Department staffer who worked on Hillary Clinton’s private email server. A senior U.S. law enforcement official told The Washington Post on Wednesday that the FBI secured the cooperation of Bryan Pagliano, who worked on Clinton’s 2008 presidential campaign before setting up the private server at her New York home in 2009.
Zero Hedge:
Earnings of Note
Company/Estimate
7:30 am EST
- Sheep Line Up For Slaughter: Investors Buy Most Junk Bonds Ever. (graph)
- Striking Admission By Former Bank Of England Head: The European Depression Was A "Deliberate" Act. (graph)
- The Next Cockroach Emerges: Including Undrawn Loans, Canadian Banks Exposure To Oil Doubles. (graph)
- "How To Move To Canada" Searches Spike 1,000% After Trump Super Tuesday Rout. (graph)
- Oil Options Traders Ain't Buying It - Bearish Bets Biggest In A Year. (graph)
- Global Central Banks Continue Longest Gold-Buying-Spree Since Vietnam War. (graph)
- US Stocks Are The Most Overbought In 12 Years. (graph)
- "I'm Very Sad": Peso Collapse Triggers Despair At Mexican Border Towns. (graph)
- Keynes: How A Witch Doctor Convinced The World He's A Neurosurgeon.
- Small Cap Stocks Soar On The Lowest Volume Day Of 2016. (graph)
- Wealthy shoppers' latest habit is killing Restoration Hardware(RH).
- The Cleveland Fed breaks down just how punishing the retail business is right now.
- North Korea fires several missiles into the sea, hours after being hit with further UN sanctions.
- Global manufacturing activity has stalled out. (graph)
- A security expert said he could hack into San Francisco's $35,000 police drones from a mile away.
- The West is out of options and out of time.
- Sports Authority announced it will shutter 140 locations — find out if your hometown store is closing.
- Only the IMF can now save Brazil. Brazil is heading straight into the arms of the International Monetary Fund. The sooner this grim reality is recognized by the country's leaders, the safer it will be for the world. The interwoven political and economic crisis has gone beyond the point of no return. The government is frozen. The finance ministry has lost the trust of Brazilian investors and global markets in equal measure.
- China Property Market Speculators Use Crowd-Funding, P2P. Crowd funding and peer-to-peer lending are being used in property market speculation in Chinese tier-1 cities. Chinese government should improve supervision and curb excessive speculation.
- Asian equity indices are +.25% to +1.0% on average.
- Asia Ex-Japan Investment Grade CDS Index 149.25 -2.25 basis points.
- Asia Pacific Sovereign CDS Index 73.0 unch.
- Bloomberg Emerging Markets Currency Index 69.33 +.07%.
- S&P 500 futures +.08%.
- NASDAQ 100 futures +.20%.
Earnings of Note
Company/Estimate
- (CBK)/-.14
- (DG)/1.26
- (PLCE)/1.11
- (ARO)/-.13
- (asps)/1.03
- (loco)/.13
- (FNSR)/.22
- (ULTA)/1.54
- (PAY)/.46
- (ZUMZ)/.50
7:30 am EST
- Challenger Job Cuts YoY for February.
- Final 4Q Non-Farm Productivity is estimated to fall -2.9% versus a prior estimate of a -3.0% decline.
- Final 4Q Unit Labor Costs are estimated to rise +4.3% versus a +4.5% prior estimate.
- Initial Jobless Claims are estimated to fall to 270K versus 272K the prior week.
- Continuing Claims are estimated to fall to 2250K versus 2253K prior.
- Final Markit US Services PMI for February is estimated to rise to 50.0 versus a prior estimate of 49.8.
- ISM Non-Manufacturing for February is estimated to fall to 53.1 versus 53.5 in January.
- Factory Orders for January are estimated to rise +2.1% versus a -2.9% decline in December.
Upcoming Splits
- None of note
- The Eurozone Services PMI, weekly Bloomberg Consumer Comfort Index, weekly EIA natural gas inventory report, BofA Merrill Industrial/Energy/Infrastructure conference, (CY) analyst day and (ANGI) investor day could also impact trading today.
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