Wednesday, March 09, 2016

Today's Headlines

Posted by Gary .....at 2:46 PM
Bloomberg:
  • The China Intervention Trade Is Back as State Funds Battle Bears. (video) The Chinese stock market has once again turned into a battleground for bearish investors and state-directed funds determined to spark a rally. During each of the past six days, the Shanghai Composite Index has recorded intraday losses before recovering to end the trading session higher, with suspected intervention targets including Industrial & Commercial Bank of China Ltd. and PetroChina Co. leading the rebound. After dropping as much as 3.1 percent on Wednesday, the benchmark gauge pared its loss to 1.3 percent at the close as ICBC jumped. The resumption of afternoon rallies, a common occurrence during the height of the government’s market rescue campaign in July, has presented traders with a quandary: Worsening economic data suggest stocks should fall, but state intervention provides an opportunity to profit from short-term gains. It’s yet another sign of how government meddling has undermined the leadership’s own pledge to increase the role of market forces in the world’s second-largest economy. “Near-term data like trade is negative, and so there is selling pressure,” said Francis Cheung, a senior strategist at CLSA Ltd. in Hong Kong. “The government is supporting the market for the NPC, so when it ends, we could see a pullback.”
  • Draghi Stimulus Fails in Stock Market as Swings Match 2008. Mario Draghi is having no success convincing stock investors that the European Central Bank has the firepower to reignite growth. While all economists in a Bloomberg survey expect the central bank to cut interest rates when policy makers meet Thursday, and 73 percent project them to boost the amount of money put into the financial system through bond purchases, fund managers aren’t optimistic about a post-decision equity rally. In the first year of quantitative easing, the Euro Stoxx 50 Index fell 17 percent, and volatility reached levels not seen since 2008. The gauge has dropped in each month but one following an ECB meeting since April.
  • Draghi Has Banking Chiefs Bemoaning ECB's Negative-Rate Push. (video) The euro area’s bankers, battered by falling trading revenue and weak profitability, are predicting more pain as the European Central Bank gets ready to lower interest rates further into negative territory. While lenders managed over the past 18 months to counter the impact of the ECB’s push below zero, executives said a deeper descent threatens to upend banking’s centuries-old model of safeguarding deposits and charging interest on loans. In a world of subzero rates, depositors are charged and credit is almost free, with the goal of spurring economic growth and inflation. “We can cope with the current interest-rate environment or even a bit lower,” Gerrit Zalm, chief executive officer of ABN Amro Group NV, said in an interview in Shanghai last week. “But if we were really going into the very negative interest-rate environment, a lot of banks including us will have a difficult period.”
  • French Banks Suffer Most as Lending Squeezed by ECB Rates: Chart. French banks are suffering more than their counterparts as the European Central Bank squeezes rates. New-business mortgage spreads have narrowed more than those in Ireland, Italy and Spain, according to Bloomberg Intelligence. With almost three-quarters of economists in a Bloomberg survey forecasting the ECB to expand monthly bond purchases on Thursday, and all but one predicting the deposit rate cut further below zero, pressure is set to increase further. 
  • Bank of France Cuts Growth Forecast as Business Confidence Falls. The Bank of France said growth this quarter will be weaker than previously anticipated and confidence among manufacturers fell the most in three years. Sentiment among factory executives dropped to 98 in February from 101 in January, its biggest decline since January 2013, according to a monthly survey from the central bank. As a result, the economy will expand 0.3 percent this quarter instead of 0.4 percent, it said on Wednesday. The drop in confidence is a significant indication that a slowdown in emerging-market economies such as China and Brazil is spilling over into Europe and may threaten France’s first real recovery since President Francois Hollande came to power in May 2012.
  • Negative Rate Extremes Have Watchdog Predicting More Bank Fees. Banks in Denmark have so far made a point of shielding their retail depositors from negative interest rates. But more than 3 1/2 years into the policy (and with central bank Governor Lars Rohde signaling rates may not go positive until 2019) “something has to give,” according to Jesper Berg, the director general of the Financial Supervisory Authority in Copenhagen. For Berg, the most likely scenario is that banks start charging more fees. “Clearly, the longer it lasts,” the greater the “need to find other solutions,” he said in an interview.
  • Iran Tests Ballistic Missiles for Second Day in Row. Iran tested two ballistic missiles carrying markings calling for Israel’s destruction, hours after Washington said it would investigate whether an earlier launch violated United Nations Security Council resolutions. The test on Wednesday and its bellicose message coincided with a trip by U.S. Vice President Joe Biden to Israel, where he assured Prime Minister Benjamin Netanyahu that the Obama administration would take action against any Iranian violation of the nuclear accord with world powers signed in July.
  • European Stocks Advance as ECB Meeting Looms; Prudential Climbs. (video) European shares advanced for the first day in three as investors speculated on further stimulus from the European Central Bank when it meets tomorrow. Prudential Plc led insurers higher with a 2.9 percent advance after reporting a jump in profit. Glencore Plc paced miners higher, while gains in oil helped energy shares rebound from their deepest selloff in two weeks. Burberry Group Plc fell 6.7 percent after people familiar with the matter said that HSBC Holdings Plc’s disclosure that it held 5 percent of the fashion retailer’s shares was part of a series of trades rather than a single bidder building a stake. The Stoxx 600 added 0.5 percent to 339.14 at the close of trading, paring gains in afternoon trade after earlier rising as much as 1.3 percent. 
  • Siemens Cuts 2,500 Mostly German Jobs Amid Commodities Slump. "Plunging demand in raw materials markets has led to a significant intensification of competition, particularly in Asia,” Jürgen Brandes, head of Siemens’s process industries and drives division, said in the statement.
  • Freeport(FCX) Says Copper Cuts Not Enough to End Surplus in 2016. Copper-output cuts spurred by lower prices aren’t enough to end a surplus this year and demand won’t catch up with supply until 2017, according to a senior official at Freeport-McMoRan Inc., the largest publicly traded producer of the metal. Around 700,000 metric tons of supply will have been removed in about the year through mid-2016 as prices sank to a six-year low, according to Javier Targhetta, a senior vice president of marketing and sales. Still, new supplies from mines added this year mean a glut won’t be completely wiped out in 2016, he said in an interview Tuesday.
  • Iron Ore Drops Back After `Surprising Blip' That Notched Record. Iron ore dropped on Wednesday, eroding Monday’s record surge, amid a revival in concern that global supply is outpacing demand. Ore with 62 percent content delivered to Qingdao fell 8.8 percent to $58.02 a dry metric ton, according to e-mailed data from Metal Bulletin Ltd. The price dipped 0.2 percent on Tuesday after Monday’s 19 percent rally to the highest since June. The retreat was preceded by losses on futures in Singapore and China. The global iron ore market remains grossly oversupplied, demand in China is faltering and there’s a severe glut of steel, according to Li Xinchuang, deputy secretary-general of the China Iron & Steel Association. Li, whose group represents the top mills in the country that makes half of the world’s steel, said that the recent gains probably won’t last.
  • Don't Let Rally Fool You: Commodity Firms Still Face Debt Cliff. (video) If you think commodity producers are out of the woods as markets rally, here’s a reality check: many are still grappling to contain debt. Another year of belt-tightening hasn’t kept pace with an earnings slump after prices collapsed. One gauge of leverage among mining, energy and agriculture companies continued to rise in the fourth quarter and is more than double year-earlier levels. While raw materials have rebounded in the past month, they are still well below levels of even two years ago -- 26 percent in the case of copper and 62 percent for crude. To end the gluts that sank prices, companies ought to be cutting more output, but many are still so deeply in debt that they need to keep churning out cash to stay above water. “I call it the commodity conundrum,” said Jessica Fung, a commodities analyst with BMO Nesbitt Burns Inc. in Toronto. “Cutting production is absolutely the last resort for any company because you’re basically shutting down your revenue generation. And then what?”
  • Art Market Rally Halts, Sales Fall for First Time Since 2012. It’s official: The bull market for art is taking a breather. Global art sales fell 7 percent last year to $63.8 billion, led by a slowdown in Asia and weaker demand for postwar and contemporary art, the European Fine Art Foundation said in its annual art market report on Wednesday. It’s the first decline since 2012, when purchases fell 12 percent.The market for art is cooling as financial markets show signs of weakening after a seven-year bull run that pushed prices for many risk assets to records.
Wall Street Journal:
  • Carly Fiorina Endorses Ted Cruz, Says Donald Trump Must Be Defeated. (video) Mrs. Fiorina, a former Hewlett-Packard Co. CEO, told a crowd at a Cruz rally that she voted for the Texas senator during Virginia’s March 1 primary and urged Republicans to rally behind him. “We’re going to have to beat Donald Trump at the ballot box,” Mrs. Fiorina said. “And the only guy who can beat Donald Trump is Ted Cruz.” Mrs. Fiorina stressed Mr. Cruz’s electability, saying he “won, over and over and over again,” Mrs. Fiorina said. She added: “It is time to unite behind Ted Cruz.”
  • $lammed by ObamaCare. My Bronze plan’s monthly premium jumped $194 this year. I never thought I’d look forward to Medicare, but I do now.
MarketWatch.com:
Zero Hedge:
Washington Examiner:  
  • Clinton crushes Trump in new national poll. Despite assuring Republicans he would beat Democratic presidential front-runner Hillary Clinton "very easily" in the general election, Donald Trump trails the former secretary of state by almost 10 points in a new poll released Wednesday. According to the latest ABC News/Washington Post poll of registered voters, Clinton would edge Trump 50-41 percent if the two candidates went head-to-head in November. The former first lady has expanded her lead over Trump by six points since September. Trump, the thrice-married billionaire who's been heavily criticized for his treatment of women, trails Clinton by 21 percentage points among women voters in the same poll, although he leads her by 5 percent among men. While three-quarters of Republican respondents would support Trump as their party's nominee, 86 percent of Democrats would support Clinton as theirs. Clinton also outperformed Trump among independents, 48 to 39 percent, and voters under the age of 40, and was consistently rated the more trusted candidate on handling the economy, terrorism, immigration and dealing with international crises. On immigration, an issue Trump has made central to his campaign, Clinton leads him by 19 percentage points as the more trusted candidate.
TheBlaze:
  • ‘Are You Proud of That?’: Cokie Roberts Confronts Trump on His Discourse’s ‘Effect on Children’. ABC News political commentator Cokie Roberts asked Republican presidential front-runner Donald Trump Wednesday if he was “proud” of a political environment in which school children taunt each other about getting deported — an environment for which his campaign is allegedly responsible. “There’ve been incidents of children, of white children, pointing to their darker-skinned classmates and saying ‘You’ll be deported when Donald Trump is president.’ There have been incidents of white kids at basketball games holding up signs to teams which have Hispanic kids on them saying ‘We’re going to build a wall to keep you out.’ Are you proud of that? Is that something you’ve done in American political and social discourse that you’re proud of?” Roberts asked during a segement on MSBNC’s “Morning Joe.”
Telegraph: 

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