Saturday, March 12, 2016

Today's Headlines

Posted by Gary .....at 8:46 PM
Bloomberg: 
  • China PBOC Chief Cites Credit Risk While Reassuring on Growth. People’s Bank of China Governor Zhou Xiaochuan warned banks about increased credit risk amid rising real estate prices in the biggest cities, while adding the country can achieve its economic growth targets without too much monetary stimulus. Property prices have begun to diverge severely from values in less-populated areas, Zhou said at a briefing in Beijing. He said the country faces “relatively big’ downward pressure from efforts to eliminate excess housing inventory, which may suppress prices nationwide. With the briefing, his fourth public appearance in less than a month, Zhou again sought to project an aura of calm and tamp down concern over volatility in the stock and currency markets while underscoring the risks posed by rising debt. Warning signs including low inflation and flagging industrial output have led to speculation that the government will need to rely on looser monetary policy to achieve its minimum growth target of 6.5 percent over the next five years. “Excessive monetary policy stimulus isn’t necessary to achieve the target,” Zhou said, reiterating past comments that monetary policy is prudent with a slight easing bias. “If there isn’t any big economic or financial turmoil, we’ll keep prudent monetary policy.”
  • China Industrial Output, Retail Sales Slow as Property Gains. China’s industrial production and retail sales both slowed in the first two months of the year, highlighting the pressure leaders will face to meet this year’s annual growth target even as the central bank governor said major stimulus wasn’t needed. Industrial output rose 5.4 percent from a year earlier in January and February, the National Bureau of Statistics said Saturday, compared with the 5.6 percent median estimate of economists surveyed by Bloomberg. Retail sales climbed 10.2 percent from a year earlier, missing the 11 percent projected gain in the survey, while fixed-asset investment exceeded estimates with a 10.2 percent increase. The reports highlight the choice facing policy makers: step up monetary and fiscal stimulus and build up more debt, or let the nation’s industrial engines slow further while reducing overcapacity in the steel, cement and coal sectors. Steel output fell in the two-month period, while aluminum output tumbled 7.7 percent, Saturday’s reports showed. "The overall growth profile remains still gloomy," said Zhou Hao, an economist at Commerzbank AG in Singapore. "The mix of data give us a worrying picture. Activity data remained weak while inflation and property prices are turning around."
  • New China Stocks Chief Vows Decisive Intervention If Needed. China’s new stock regulator vowed to step in “decisively” if needed to stem the sort of stock-market panic that resulted in a $5 trillion wipeout last summer, adding that it was far too early to think about the state rescue fund leaving the market. China Securities Regulatory Commission Chairman Liu Shiyu wouldn’t give a time line on government plans to speed up initial public offerings. He defended the government’s decision to intervene last year, saying the move bought leaders time to restore a “dysfunctional” market and headed off bigger threats to the financial system. “Under such a situation of panic, if we didn’t act decisively, could the impact not be huge?” Liu said at the briefing, held on the sidelines of China’s annual legislative session. “It would certainly have led to even greater panic and systemic financial risks.”
  • Finland Loses AAA Rating From Fitch as Growth Prospects Weaken. Finland had its credit grade cut to AA+ by Fitch Ratings, which cited a limited potential for a pickup in economic growth. “Economic performance remains weak,” Fitch said in a statement Friday announcing the reduction to the second-highest credit grade. Finland had a triple-A rating from Fitch since 1998. The company changed its outlook to negative in March 2015, five months after Standard & Poor’s lowered the nation to AA+. The lower credit rating hasn’t hurt the country’s ability to borrow. Since the S&P downgrade, 10-year government bond yields have fallen 0.44 percentage point to 0.58 percent, according to data compiled by Bloomberg. 
  • Merkel Faces Triple Challenge as States Vote Amid Refugee Crisis. Voters in three German states go to the polls Sunday in the first major electoral test of Chancellor Angela Merkel’s open-border refugee policy. More than a fifth of the German population lives in the regions at stake, making the contest the biggest of Merkel’s third term and the most significant vote before the next federal ballot in 18 months. Voting stations open at 8 a.m. and close at 6 p.m., when exit polls will be released. While voters will be casting their ballots for regional assemblies, surveys show the biggest public concern to be Europe’s refugee crisis and its impact on Germany. The arrival of about 1 million asylum seekers in Germany last year alone has hurt support for Merkel’s Christian Democratic Union party nationally and threatens to upend the election outcome in the states of Baden-Wuerttemberg, Rhineland-Palatinate and Saxony-Anhalt. “Merkel faces the most serious challenge of her chancellorship in the migrant crisis” and a major setback for her party Sunday would “trigger some unsettling headlines and possibly even speculation that her position may be at risk,” said Holger Schmieding, chief economist at Berenberg Bank. “That could cause concerns well beyond Germany.”
  • A Short History of Unsuccessfully Calling a Bottom in Oil: (graph). Catching a falling knife is hard, especially when it’s covered in oil. The International Energy Agency today said oil prices may have bottomed out. Several people have tried to call the oil’s floor since prices started falling in the summer of 2014. So far nobody has been right.
  • China Steel Output Declines as Economic Transition Cuts Demand. China’s steel mills, which supply half of global output, churned out less steel in the first two months of the year, extending a decline amid government efforts to reduce reliance on manufacturing for growth. Crude-steel production for the January-to-February period dropped 5.7 percent from a year earlier to 121.07 million metric tons, data published by the country’s statistics bureau Saturday showed. Steel products output fell 2.1 percent to 162.28 million tons. Steel mills in China are battling losses and overcapacity as the nation transitions its economy to one fueled by consumption and services, from growth driven by manufacturing, and have seen their output fall off record highs in 2014. Steel output tends to drop before and during the weeklong Lunar New Year holiday, which began Feb. 8 this year, before climbing after the break when manufacturing activity picks up.
  • Trump Rally Violence Spurs Kasich Rebuke for `Toxic' Atmosphere. Donald Trump has created “a toxic environment” that’s allowed for violence at his rallies, Ohio Governor John Kasich said on Saturday, hours after the Republican front-runner canceled a campaign appearance in Chicago after large protests. It’s right to acknowledge the frustration and anger that many voters have about politics, yet “there is no place for a national leader to prey on the fears of people,” Kasich said at a press conference before speaking at a Republican Party breakfast in suburban Cincinnati, days before Ohio’s presidential primary on March 15. He said he was “deeply disturbed” by the tenor of the race. “You don’t get down in the mud and wrestle,” he said. “If our rhetoric is negative, our rhetoric is divisive, we will not solve these problems that the American people expect us to fix.”
Wall Street Journal:
  • Cities Grapple With Rising Murder Rates. A continuing rise in homicides in some cities during the first two months of 2016 is rattling officials hoping last year’s spike in killings was an aberration in the decadeslong decline in the country’s murder rate.
  • Voters Should Be Mad at Electric Cars.
  • The Donald and The Barack. Obama is Trump’s more sophisticated, articulate liberal antecedent. President Obama is said to be a reflective man, and often he is the one saying so, but you wouldn’t know it from his Thursday press conference with Canadian Prime Minister Justin Trudeau. Asked about political polarization and the Donald Trump phenomenon, Mr. Obama denied all responsibility. He doesn’t seem to appreciate the kind of country he will leave behind.
Barron's:
  • Had bullish commentary on (TWX), (ASH), (HYH), (IR), (KORS), (DISCA), (BA), (INTC) and (RL).
  • Had bearish commentary on (FB), (AMZN), (NFLX) and (GOOGL).
Fox News:
  • Trump calls off Chicago rally due to security concerns. Republican presidential candidate Donald Trump canceled one of his signature rallies on Friday, calling off the event in Chicago due to safety concerns after protesters packed into the arena where it was to take place. The announcement that the billionaire businessman would postpone the rally until another day led a large portion of the crowd inside the University of Illinois at Chicago Pavilion to break out into raucous cheers. 
  • Campaign event chaos follows Trump from Chicago to Ohio. (video) Republican presidential front-runner Donald Trump on Saturday encountered more violence on the campaign trail when somebody got too close to the front-runner at an Ohio rally and Secret Service agents rushed the stage, one day after violence forced Trump to cancel a rally in Chicago.
  • Report says ISIS forcing birth control on sex slaves. The ISIS terror group’s unspeakable acts now include pushing birth control on young women forced into sex slavery. To keep the sex trade running, ISIS fighters are aggressively forcing birth control on their victims so they won’t get pregnant as they are raped repeatedly while being passed among them, the New York Times reported Saturday.
CNBC:
Zero Hedge:
Business Insider:

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