Evening Headlines
Bloomberg:
Bloomberg:
- China Early Economy Indicators Show Little Cheer, Little Change. After something of a roller-coaster ride in March and April, China settled into sluggish growth in May, according to the earliest batch of private indicators tracking the world’s second-largest economy. The Minxin manufacturing index from the China Academy of New Supply-side Economics, Market News International’s business confidence indicator and Standard Chartered Plc’s small-business gauge all retreated. The key May indicators for new credit, industrial production, fixed-asset investment and retail sales are expected in mid-June, after the official purchasing managers index for manufacturing on June 1. That PMI probably fell to 50 for May from 50.1 the prior month, according to a Bloomberg survey of economists. The tepid signs thus far for May activity coincide with signals from policy makers that they want to keep a lid on rising debt, even if such restraint caps an economic rebound. Here’s what the earliest economic data show for this month:
- Asia Stocks Rise as U.S. Home Sales Surge, Rate-Hike Bets Climb. Asian stocks rose, with the regional equities benchmark gauge rebounding from a seven-week low, after a surge in U.S. home sales fueled speculation the world’s biggest economy can withstand higher interest rates. The MSCI Asia Pacific Index climbed 0.8 percent to 125.95 as of 9:03 a.m. in Tokyo after closing on Tuesday at the lowest level since April 6. Japan’s Topix index added 1.6 percent as the yen traded at 110.15 per dollar after falling 0.7 percent Tuesday.
- The Outlook for Copper Amid Weak Prices and Demand. (video)
- Banks Said to Devise Plans for Cutting Back Online Lending Risk. Some of Wall Street’s biggest banks are making contingency plans to cut their exposure to online consumer loans if the market deteriorates further after the recent crisis at LendingClub Corp., people with knowledge of the reviews said. While firms including Credit Suisse Group AG and Deutsche Bank AG haven’t scaled back exposure, they’re concerned about financing they provide to institutional investors that buy loans from companies like LendingClub and Prosper Marketplace Inc., the people said. Industry lawyers estimate that banks have funded a few billion dollars of online loans for investors through these credit lines. Wall Street lenders are looking to avoid making the same mistakes they made in the subprime crisis, when they were late to limit their exposure to bad mortgage loans.
- Apple(AAPL) Said to Hit Setback in Push to Open Stores in India. (video) Apple Inc. Chief Executive Officer Tim Cook went to India last week to push his bestselling iPhones. The trip may not have paid off. India’s Foreign Investment Promotion Board ruled Apple must comply with regulations to procure 30 percent of components locally if it wants to sell through its own retail stores, according to people with direct knowledge of matter. The company makes most of its products in China and doesn’t currently meet that criteria. While India can provide waivers for cutting-edge technology companies, the panel decided it can’t certify Apple for that exception, the people said, asking not to be identified as the decision isn’t public. The FIPB decision needs to be ratified by the government and it could still be overruled.
- U.S. Probes Real-Estate Firm With Ties to Sen. Bob Corker. Investigators are focused on accounting questions at CBL & Associates but also are reviewing the senator’s stock trades in the REIT.
- Signals from the U.S. Yield Curve: World Can’t Handle Fed Rate Hikes. The yield curve, long seen as a soothsayer for the health of the economy, may be sending us a new signal: The world can’t handle a rise in U.S. interest rates, even if America can.
- Terror Attacks, Air Crashes Weaken Appetite for European Travel. Strong dollar buoys bookings by American tourists, but Brussels, Istanbul suffer major declines.
- The Nationwide Crime Wave Is Building. As the homicide rate keeps rising in many cities, even some who dismissed the ‘Ferguson effect’ admit the phenomenon is real.
- Kasich joins Cruz, Rubio in keeping delegates as campaign leverage. (video) Ohio Gov. John Kasich has become the latest Donald Trump rival to take a clenched-fist approach to the delegates he won during the primary season, moving this week to keep those delegates as bargaining chips going into the party's July nominating convention.
CNBC:
- Strong Treasury auction could be signaling something darker on horizon. (video) Buyers swarmed the two-year Treasury auction, at the same time market expectations for a Fed rate hike were building.
- Hewlett Packard Enterprise(HPE) announces spinoff as earnings meet Street. (video) Hewlett Packard Enterprise on Tuesday reported earnings that met Wall Street's expectations and announced a spinoff of its enterprise services unit, which will merge with Computer Sciences.
- Gundlach: US stocks are 'dead money;' rally feels like short squeeze.
Zero Hedge:
Earnings of Note
Company/Estimate
8:30 am EST
- Why China Is Being Flooded With Oil: Billions In Underwater OPEC Loans Repayable In Crude.
- Japan's Broken Economy - 25 Years Of Failed "Stimulus" & "Temporary Illusions". (graph)
- Shootings In Chicago Are Up An Astonishing 50% From This Time Last Year. (graph)
- Eurogroup Agrees To Disburse €7.5BN To Greece Which Will Be Used To Repay Creditors.
- Warning Signs Everywhere. (graph)
- With The Lowest Volume Since Q1 2014, The Global M&A Boom May Be Over. (graph)
- Iran's Ayatollah: "The US Can't Do A Damn Thing About Our Missile Program".
- ObamaCare Isn't Working - These Five Charts Show Why.
- More Young Americans Live With Their Parents Than At Any Time Since The Great Depression. (graph)
- Crude Spikes Above $49 After Biggest Inventory Draw Since 2015. (graph)
- Clinton Adviser, Nobel Prize Winning Economist Endorsed Venezuelan Socialism.
- Gold Drops, Oil Pops As Another Volumeless Buying-Frenzy Strikes Stocks. (graph)
- Toyota is investing in Uber.
- Things have gotten so bad in the oil industry that workers have stopped paying their car loans.
- HERE IT IS: One brutal chart shows death is imminent for America's department stores.
- Stock market euphoria might be at an all-time high. (graph)
Reuters:
Night Trading - China's wary lenders force rust-belt country to take expensive shadow bank loans. Mainstream lenders in China are squeezing borrowers in the country's rust-belt provinces, forcing firms to take on higher interest-rate loans from so-called shadow banks, a Reuters analysis of central bank figures shows.
- Asian equity indices are +.75% to +1.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 143.75 -2.5 basis points.
- Asia Pacific Sovereign CDS Index 53.25 -2.25 basis points.
- Bloomberg Emerging Markets Currency Index 70.61 unch.
- S&P 500 futures +.14%.
- NASDAQ 100 futures +.19%.
Earnings of Note
Company/Estimate
- (EV)/.48
- (TIF)/.68
- (UHAL)/3.14
- (CPRT)/.54
- (COST)/1.22
- (GES)/-.19
- (HPQ)/.38
- (NTAP)/.58
- (PVH)/1.43
- (TDW)/-.54
- (WSM)/.50
8:30 am EST
- Advance Goods Trade Balance for April is estimated at -$60.0B versus -$56.9B in March.
- The FHFA House Price Index MoM for March is estimated to rise +.5% versus a +.4% gain in February.
- The Preliminary US Services PMI for May is estimated to rise to 53.0 versus 52.8 in April.
- Bloomberg consensus
estimates call for a weekly crude oil inventory decline of -1,660,000
barrels versus a +1,310,000 barrel gain the prior week. Gasoline
supplies are estimated to fall by -1,380,000 barrels versus a -2,496,000
barrel decline the prior week. Distillate supplies are estimated to fall by -963,000 barrels versus a -3,170,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise +.47% versus a +1.4% gain prior.
- None of note
- The Fed's Kaplan speaking, Bank of Canada rate decision, $34B 5Y T-Note auction, weekly MBA mortgage applications report, 1Q House Price Purchase Index, (JACK) analyst meeting, (PLCE) annual meeting, (AFL) analyst briefing and the (A) analyst meeting could also impact trading today.
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