Today's Headlines

Bloomberg:    

• China to Consider Starting Trading of Credit-Default Swaps. China is considering starting trading of credit-default swaps as the number of corporate nonpayments surges, according to people familiar with the matter. The National Association of Financial Market Institutional Investors, a central bank subsidiary which oversees interbank market bonds, last month sought opinions on CDS and credit-linked notes from market participants including banks and brokerages, according to the people, who asked not to be identified because the details haven’t been announced. China Foreign Exchange Trade System, which oversees interbank bond trading, held a meeting in Shanghai last week with some financial institutions on the products, they said.
• ICBC Joins Bank of China in Breaching Bad-Loan Coverage Rule. Industrial & Commercial Bank of China Ltd., the world’s largest lender by assets, avoided posting a quarterly drop in profit after letting its buffer for covering bad loans fall below a regulatory minimum.  The bank’s provisions for bad loans stood at 141.2 percent of existing nonperforming credit, compared with a regulatory minimum of 150 percent, the Beijing-based lender said in a statement to Hong’s Kong stock exchange on Thursday. One of China’s biggest banks, Bank of China Ltd., this week reported that it had breached the minimum provision rule, the first lender to do so. Government officials are considering loosening the requirement, a move that would lend support to banks’ profits as the lenders digest an increased volume of bad loans.
• London Luxury Hotels in Worst Year Since 2009 on Terror Risk. Jitters about everything from the risk of terrorism to Britain’s membership of the European Union are battering London luxury hotels as the world’s wealthiest travelers stay away. The city’s priciest hotels were only 65 percent occupied in the three months through March, according to data provider STR. That was the lowest for a first quarter since a global recession roiled the market in 2009 and down from 70 percent a year earlier. London’s top hotels include the Savoy and the recently reopened Lanesborough, where the Royal Suite with a complementary chauffeured Rolls-Royce costs about 25,000 pounds ($36,000) per night. 
• China's Stocks, Bonds, Yuan Are a Triple Losing Bet This Month. For the first time in two years, China’s stocks, bonds and currency are all a losing proposition. The Shanghai Composite Index has dropped 1.9 percent in April to a one-month low, the yuan is down 0.5 percent versus the dollar, while government and corporate bonds have tumbled, with the five-year sovereign yield rising 27 basis points. Only the nation’s commodities markets are looking buoyant as frenzied speculation prompted exchanges to take measures to cool trading.
• Europe Stocks Inch Higher Amid Mixed Earnings as Miners Advance. (video) European stocks edged higher as gains in commodity producers helped erase an earlier drop and investors assessed earnings reports. Anglo American Plc and ArcelorMittal jumped more than 6.9 percent, tracking metal prices higher. Banking results were also at the fore. Deutsche Bank AG rose 4 percent after it posted a surprise profit. Banco Bilbao Vizcaya Argentaria SA slid 6.8 percent after its quarterly earnings tumbled 54 percent, missing estimates. Lloyds Banking Group Plc lost 1.7 percent after its revenue and net income fell. The Stoxx Europe 600 Index added 0.2 percent at the close of trading. It fell as much as 1.5 percent earlier as the Bank of Japan refrained from boosting stimulus. 
• Billionaire Icahn Exits Apple Stake 3 Years After Buying. Billionaire Carl Icahn, who first disclosed his stake in Apple Inc. almost three years ago, has sold out of his position, the activist said Thursday. Icahn sold most of his remaining stake in February, Icahn told CNBC. Apple shares declined 1.7 percent as of 2:11 p.m. in New York, giving the company a market value of about $527 billion. They dropped more than 7 percent this year through Wednesday.
• Hamptons Home Sales Decline to Three-Year Lows. (video)
• Snapchat User Content Fuels Jump to 10 Billion Daily Video Views. The majority of people using Snapchat Inc.’s application are making videos, fueling a boom in watching them, the company is telling its investors. More than a third of Snapchat’s daily users create “Stories,” broadcasting photos and videos from their lives that last 24 hours, according to people familiar with the matter. Now users are watching 10 billion videos a day on the application, up from 8 billion in February, said the people, who asked not to be identified because the information isn’t public.
• Abbott(ABT) to Buy St. Jude Medical(STJ) in Deal Valued at About $25 Billion. (video) Abbott Laboratories agreed to buy heart-device maker St. Jude Medical Inc. for $25 billion, its biggest ever acquisition as the industry consolidates to gain bargaining power with hospitals. St. Jude Medical shareholders will receive $46.75 in cash and 0.8708 shares of Abbott common stock, representing a total of approximately $85 per share, according to a statement Thursday.

Fox News:

• Three relatives of San Bernardino shooter arrested. (video) Three relatives of the San Bernardino terrorists who killed 14 in December were arrested Thursday on federal conspiracy, marriage fraud and false statement charges, the FBI announced. The arrests don’t appear to stem from any actions related to the terror attack, but rather a marriage-for-citizenship scam allegedly enacted between Enrique Marquez, Jr. and Mariya Chernykh. Marquez is already in jail and awaiting trial for conspiring with one of the San Bernardino attackers, Syed Rizwan Farook, in terror plots that never materialized. Marquez is also accused of supplying weapons to Farook and his wife for the San Bernardino attack.

CNBC: 

• Kensho stats: Surging yen may keep lid on stocks. "The U.S. dollar and yen relationship has been a primary driver of the bull market in equities — as cheap borrowing costs in Japan and a rising dollar have fueled a global carry trade. That trade appears to be unwinding," BKCM's Brian Kelly wrote in note to clients Thursday. 
• Apple(AAPL) feels a market force even more powerful than gravity. There's a frightening reason Apple disappointed investors this quarter that doesn't start and end with how much it trailed Wall Street consensus estimates. Same goes for Google, Microsoft, Netflix, Visa and Starbucks. Yes, all these companies disappointed investors in earnings or outlook for the rest of 2016. But here's the fundamental disappointment across all the companies for anyone who follows the market. In a word: overcapacity.
• More evidence the tablet market is sinking fast.

Zero Hedge:  

• This Is Where America's Runaway Inflation Is Hiding. (graph)
• Krugman's Solution Is "The Fiscal Equivalent Of War" - Japan Agrees.
• Volume Collapses As China Commodity Exchanges Ordered To "Curb Speculation". (graph)
• An Inconvenient Truth For Equity Bulls. (graph)
• As Oil Rises, US Shale Companies Have Begun Increasing Oil Production.
• Gold & Silver Soar - Lead The Way Post-Japan "Policy Error". (graph)
• Worst GDP Print In 2 Years Sparks Stock Surge To Scene Of Kuroda's Kamikaze Moment. (graph)
• JPM(JPM) Summarizes Earnings Season So Far: "At -8%, The S&P500 Q1 EPS Growth Is The Worst Since ’09". (graph)
• What Americans Spent The Most Money On In Q1. (graph)
• Dear Janet: Thanks For Helping The Average American. (graph)
• US Economy Grew At Just 0.5% In Q1, Missing Expectations, Lowest Growth Rate In Two Years. (graph)
• 2,607 Days Later, The "Most Hated Bull Market Ever" Is Now The Second Longest In History. (graph)
• Global Stocks Plunge After Bank Of Japan "Shock". (graph)

Business Insider:

• Ted Cruz: John Boehner 'allowed his inner Trump to come out'. This is something that's not publicly known. During the government shutdown, I reached out to John Boehner, and I offered for [Utah Sen.] Mike Lee and me to come over and work with the speaker and actually get something done to stop the disaster that is Obamacare. John Boehner's response was, "I have no interest in talking to you. What could possibly be accomplished by talking. No I will not meet." So when he says I'm the worst guy he's ever worked with, he's never worked with me.
• The new Valeant(VRX) CEO's pay package is putting the company in serious danger.
• Things aren't looking too good for semiconductors.
• Italian authorities arrest ISIS suspects and uncover an attack plot.

Fortune: 

• Here's How Long China’s Debt-Fueled Rebound Can Last. The lag time between government boosts and growth is about 6 months.

Reuters:

• EXCLUSIVE-China securities regulator orders major commodities exchanges to control futures speculation-sources. China's securities regulator ordered the country's major commodity futures exchanges this week to control speculative trading activity, sources told Reuters, after a surge in prices sparked fears of a boom-and-bust cycle. In response, commodity futures exchanges in Dalian, Shanghai and Zhengzhou ordered major institutional investors that lack a commodities background to rein in their trading, three people with direct knowledge of the situation said. The sources didn't define what was meant by a lack of background in commodities. Investors, including hedge funds and retail investors, have placed big bets on Chinese commodities futures this year, driving up contracts including in iron ore, rebar, cotton and even eggs. The rally has prompted many analysts to warn of similarities with a boom in the country's stock markets, which reversed into a sharp crash last summer.

The Telegraph:

• House prices fall almost everywhere as property market takes on 'uncomfortable' feel.