Today's Headlines

Bloomberg:

• China Rating Outlook Cut to Negative From Stable by S&P. Standard & Poor’s has cut the outlook for China’s credit rating to negative from stable, saying the nation’s economic rebalancing is likely to proceed more slowly than the ratings firm had expected. The nation’s credit rating is AA- with a negative outlook, S&P said in a statement, which also affirmed the long-term and A-1+ short-term sovereign credit ratings. “We revised the outlook to reflect our expectation that the economic and financial risks to the Chinese government’s creditworthiness are gradually increasing,” S&P said in the statement. “This follows from our belief that, over the next five years, China will show modest progress in economic rebalancing and credit growth deceleration.” China’s economic expansion will remain at or above 6 percent a year in the next three years, S&P forecast. The investment rate may be “well above” what S&P says are sustainable levels of 30-35 percent of GDP. “In our opinion, these expected trends could weaken the Chinese economy’s resilience to shocks, limit the government’s policy options, and increase the likelihood of a sharper decline in trend growth rate,” it said. A downgrade could follow if S&P sees a higher likelihood that China seeks to stabilize growth at or above 6.5 percent by increasing credit at a “significantly faster rate” than nominal GDP growth. Ratings could stabilize if credit growth is moderated to levels in line with economic expansion, S&P said.
• Hong Kong Retail Sales Plunge the Most in 17 Years. Hong Kong’s retail sales in February have plunged the most since 1999 as fewer Chinese tourists visited the city during the Lunar New Year holiday. Retail sales dropped 21 percent in February to HK$37 billion ($4.8 billion) year on year, according to a statement from Hong Kong’s statistics department. Combining January and February, sales fell 14 percent. The monthly decline is the worst since January 1999 when sales were also down 21 percent. “Apart from the severe drag from the protracted slowdown in inbound tourism, the asset market consolidation might also have weighed on local consumption sentiment,” a government said in a statement on Thursday. “The near-term outlook for retail sales will still be constrained by the weak inbound tourism performance and uncertain economic prospects.” The government will monitor closely its repercussions on the wider economy and job market, it said.
• Singapore Banks' Outlook Lowered by Moody's as Pressures Mount. DBS Group Holdings Ltd., Oversea-Chinese Banking Corp. and United Overseas Bank Ltd. had their credit rating outlooks lowered to negative by Moody’s Investors Service, which said it expected a further weakening of conditions for the three largest Singaporean lenders as economic growth slows. “A more challenging operating environment for banks in Singapore in 2016, and possibly beyond, will pressure the banks’ asset quality and profitability,” Moody’s said in a statement, citing a slowdown in economic and trade growth both domestically and in the wider region. Singapore’s economy, among the most vulnerable in Asia to swings in global demand, is facing pressure amid a slowdown in China and a weaker environment for energy and commodities.
• Europe Stocks Lose Lead Over U.S. in Worst Quarter Since '03. The tables have turned on Europe’s stocks. After beating U.S. equities last year by the most in a decade, now they’re trailing by the most since 2003. While the Standard & Poor’s 500 Index has managed to erase its annual drop in a little more than a month, the rebound in the Stoxx Europe 600 Index has done far less. The gauge, down on Thursday, is on track for a quarterly loss of 7.5 percent, with all but one of its industry groups in the red. The European rebound has hit a wall in the past two weeks after the Stoxx 600 recouped about half its 2016 losses. Despite increased European Central Bank stimulus, confidence in the region’s economy is at a 13-month low, and analysts, who projected corporate profit growth at the start of the year, are now calling for declines. “I frankly didn’t understand the preference for Europe,” said Kully Samra, a London-based client manager at Charles Schwab Corp., which has $2.4 trillion in client assets. “The rally was being driven by central-bank action, but you’re not getting fundamental growth. This quarter clearly showed that you can’t just rely on monetary policy. I would expect Europe’s underperformance to continue.” 
• Dollar Falls to Nine-Month Low on Fed's Global Headwinds Concern. A gauge of the dollar fell to a nine-month low after comments from Federal Reserve Chair Janet Yellen reflected concern that global headwinds may restrain the U.S. economy, dimming the prospects for higher interest rates. The U.S. currency was poised for its biggest monthly loss since September 2010 after the Fed chief said Tuesday that the central bank should “proceed cautiously” in raising rates, damping the allure of dollar-denominated assets. The greenback extended losses after a report showed an increase in weekly jobless claims before the government issues its March employment report Friday. 
• Chinese Stock-Index Futures Drop After S&P Cuts Rating Outlook. (video) Chinese stock-index futures fell after Standard & Poor’s cut the outlook for the nation’s credit rating to negative. The FTSE China A50 April futures dropped 0.7 percent at 5:22 p.m. in Singapore, compared with a gain of 0.2 percent before the S&P move. Hang Seng Index futures slipped 0.1 percent. China’s money and equity markets were shut before the announcement, which follows a similar move by Moody’s Investors Service earlier this month.
• Banks Lead Europe Stocks Lower in Worst Start to Year Since 2009. (video) European stocks extended their third quarterly drop in four to wrap up what has been the worst start to a year since the financial crisis. Lenders helped drag the Stoxx Europe 600 Index down 1.1 percent at the close of trading, trimming its monthly gain to 1.1 percent. After rebounding 14 percent in five weeks through March 14, the gauge’s advance has stalled, putting its quarterly drop at 7.7 percent. That’s the worst first-quarter performance since 2009, with all but one of 19 industry groups falling.
• Copper Heads for Worst Run Since January After China Rating Cut. Copper dropped for a fifth day, the longest slump since January, as a cut to the outlook for China’s credit rating added to concerns on global demand. Standard & Poor’s said increasing economic and financial risks prompted it to reduce the outlook for China’s credit rating to negative from stable. Earlier in March, Moody’s Investors Service made a similar revision. In the U.S., the largest user of the metal after China, consumer comfort declined to a three-month low, as Americans’ attitudes about the economy and their financial prospects deteriorated. “Some of the figures that we’re seeing today were not as bullish as expected,” George Gero, a managing director at RBC Wealth Management in New York, said in a telephone interview. “Disappointment leads to some profit-taking.”
• Even Biggest Mine in Cheapest Region Is Victim of Coal Collapse. It’s the country’s biggest coal mine, producing one of every eight tons in the U.S. last year. The coal is dug from seams as high as six-story buildings, buried beneath the rolling Wyoming plains of yellow grass and sagebrush. Now, Peabody Energy Corp. is cutting 235 jobs, or 15 percent of its staff, at its North Antelope Rochelle Mine -- evidence that coal’s collapse has spread beyond Appalachia’s hills to the biggest open pit in America’s cheapest coal-producing region, the Powder River Basin.
• Trump and Clinton See Signs of Trouble in Wisconsin. (video) The respective front-runners both trail in a new poll of Badger State voters. Trump was trailing in the poll, taken March 24-28, to Senator Ted Cruz of Texas, 40 percent to 30 percent. Ohio Governor John Kasich was third, with 21 percent. On the Democratic side, Clinton fell behind Senator Bernie Sanders of Vermont, 49 percent to 45 percent.

CNBC:

• 5 risks that could surprise markets in the second quarter.

Zero Hedge:

• Trump Nomination Odds Tumble As 'Brokered Convention' Bets Soar. (graph)
• Impatient Banks: A Real Red Flag For The Oil Patch.
• "The Buttonwood SPV": The Striking Details Of How China's Central Bank Is Directly Buying Stocks.
• Dear Janet, You Have A Problem - The Fed Policy 'Death Cross'. (graph)
• Chicago Fed's Evans Goes From Hawkish To Dovish And Back To Hawkish Again In Under 2 Weeks.
• Chicago PMI Bounces Back But Remains Below January Highs (Thanks To Warm Weather). (graph)
• Jobless Claims Surge Most In 2 Years As Challenger Warns Of "Significant" Jump In Retail, Computer Layoffs. (graph)
• Europe Remains Stuck In Deflation For Second Month. (graph)

Business Insider:

• We're about to see a mind-blowing demographics shift unprecedented in human history.
• JOHN KASICH: Here are 5 ways Donald Trump proved he shouldn't be president in the past 24 hours.

Politico: 

• Poll: GOP voters skeptical Trump can unify party. Less than four-in-10 registered Republican voters say Donald Trump will be able to solidly unify their party in the general election, according to the results of a Pew Research Center study released Thursday that also largely showed a country divided over prevailing issues and values. Just 38 percent of Republicans said Trump would be able to get the party to "unite solidly" behind him if he becomes the GOP nominee. At the same point in the 2012 cycle, 65 percent said Mitt Romney would be able to bring together a coalition, while 64 percent said the same for John McCain in 2008. Both men, of course, lost to Barack Obama in the general election in November. Supporters of both Ted Cruz and John Kasich have a decidedly grim view of Trump's aptitude. Fifty percent of Cruz backers saying the Manhattan real-estate mogul would be a poor or terrible president and 28 percent saying he would be terrible, while 55 percent of those preferring Kasich said Trump would be poor or terrible and 36 percent calling him terrible. On the other hand, 64 percent of Democratic voters said they believed their party would unify behind Hillary Clinton if she is the nominee, comparable to the 66 percent who in March 2008 said the same about Obama. Only a little more than one-in-four Sanders supporters (28 percent) said they believed Clinton would make a terrible or poor commander in chief.

Nikkei:

• Atlanta Fed's Lockhart Sees Scope for 3 Rate Rises This Year. Report quotes Atlanta Fed's Dennis Lockhart as saying there is scope for 3 rises this year.