Evening Headlines
Bloomberg:
Bloomberg:
- China’s 1 Trillion Yuan Muni Issues Show Yet to Kick Debt Habit. Global banks are redoing the math on the apparent slowdown in Chinese borrowing in April to include 1 trillion yuan ($153 billion) of regional government notes. The conclusion: the debt binge is far from over. Including record municipal bond sales, total social financing jumped 17 percent from a year earlier, the most since 2014, to 1.76 trillion yuan, UBS Group AG estimates. Growth in adjusted total credit quickened to 17.7 percent from 17.1 percent in March, according to Deutsche Bank AG. The official reading, which excludes borrowing by local governments, came out on Friday and showed a 29 percent slide to 751 billion yuan. The People’s Bank of China was so alarmed by the impression it was less supportive of growth that it highlighted financing by provinces and cities over the weekend. BlackRock Inc.’s Laurence D. Fink, who oversees the world’s largest money manager, is among investors who would rather China grows slower and cuts total debt that was 247 percent of gross domestic product last year, up from 164 percent in 2008.
- Mass Layoffs Are Looming in South Korea. The South Korean government’s push to restructure debt-laden companies is set to cost tens of thousands of workers their jobs in an economy where social security is limited and a rigid labor market reduces the likelihood of getting rehired in a full-time position.
- Russia Gets Flashback to Oil’s Collapse as Risks Mount in China. As risks for recession-hit Russia subside at home, top officials are sounding alarms about another gathering threat. President Vladimir Putin hosts leaders from across Southeast Asia this week, and policy makers are increasingly turning their focus to perils from China. Any “problems” in the second-biggest economy will feed through to Russia via commodities markets, according to Deputy Finance Minister Maxim Oreshkin. Warning that the world economy isn’t yet prepared for a more flexible yuan, Bank of Russia First Deputy Governor Ksenia Yudaeva said it warrants a global discussion. Squeezed by the crash in oil prices and Western sanctions over the conflict in Ukraine, Russia has looked to Asia and China, in particular, as it searches for a way out of its longest recession in two decades. Putin’s pivot to the east has brought tie-ups with China that range from hundreds of billions of dollars in contracts signed by Russia’s biggest energy companies, Gazprom PJSC and Rosneft OJSC, to purchases of yuan-denominated bonds by the central bank last year.
- Ringgit Drops to Two-Month Low as Minutes Boost U.S. Rate Bets. Malaysia’s ringgit slid to the weakest level in two months after minutes of the Federal Reserve’s April meeting boosted speculation U.S. policy makers will raise interest rates as soon as next month. A gauge of the dollar jumped the most since November on Wednesday and U.S. Treasuries fell as the text of the Fed Open Market Committee’s April 26-27 gathering indicated officials see a rate increase next month as likely if the economy keeps improving. Malaysia’s central bank will hold rates for an 11th meeting Thursday, according to a Bloomberg survey before the decision is announced at 6 p.m. in Kuala Lumpur.
- Asian Stocks Swing After Fed Minutes, Japan Gains on Weaker Yen. Asian stocks fluctuated after minutes of the Federal Reserve’s April meeting showed policy makers discussed raising interest rates as early as next month. Japanese shares rose as the yen weakened. The MSCI Asia Pacific Index was little changed at 126.59 as of 9:05 a.m. in Tokyo after dropping as much as 0.4 percent and rising less than 0.1 percent.
- Oil Extends Drop as Unexpected Stockpile Gain Expands U.S. Glut. Oil extended its decline for a second day as U.S. crude stockpiles unexpectedly increased, keeping supplies at the most in more than eight decades. Futures slid as much as 0.8 percent in New York after falling from the highest level in seven months on Wednesday amid a surging U.S. currency. Inventories increased by 1.3 million barrels last week, according to government data. Rain in Canada may slow fires that have shifted back toward oil-sands operations. The Bloomberg Dollar Spot Index rose after the Federal Reserve published minutes of its latest monetary policy suggesting a June hike is possible.
- Iron Ore Faces Second-Half Slump as Frenzy Cools, Supply Builds. After last month’s speculative rally, iron ore is likely to extend declines because of rising supply from the major producers and faltering demand in China, the biggest buyer. “Supply is likely to increase in the second half, so market conditions may ease further,” Rajiv Mukerji, group director of strategic procurement at Tata Steel Ltd., said in an e-mailed response to questions. He’ll be speaking at a conference in Singapore on Thursday that’s being attended by producers including BHP Billiton Ltd. and Vale SA.
- June Fed Rate-Hike Odds Surge After April Meeting Minutes: Chart.
- Obamacare Rates Rise in New York, and So Does Political Risk. The rates Americans pay for coverage through Obamacare are going up, as New York joins the list of states where insurers are seeking big increases in premiums under the program, adding risk for the law as the U.S. presidential election heats up. New York’s health insurers are seeking to raise the amount that customers pay for individual Obamacare plans by an average of 17.3 percent for 2017. That’s alongside sharp increases in Florida, where insurers are looking for 17.7 percent more, and Washington State, where health plans are seeking a 13.5 percent increase from customers. That sticker shock for Obamacare customers could spell trouble for the law and its supporters. Republicans have already criticized President Barack Obama’s signature domestic policy law for limiting consumers’ choices. They may increasingly point at the law’s costs to consumers, especially as the plans become less affordable for people who get small or no subsidies under the program.
- Fed to Markets: June Rate Increase Is on the Table. In April minutes, officials try to reclaim narrative on chance of moves at coming meetings. Federal Reserve officials sent skeptical investors a sharp warning Wednesday that an interest-rate increase is still in play for June’s policy meeting if the economy keeps improving.
- Obama’s Overtime Chimera. The Administration mandates a raise that few will receive.
- Fox News Poll: Clinton's negatives surpass Trump's. (video) American voters dislike Hillary Clinton and Donald Trump. A record 61 percent have a negative view of the likely Democratic nominee, according to a Fox News poll released Wednesday. That’s up from 58 percent in March. Fifty-six percent have an unfavorable view of Trump -- though that’s actually good news for Donald. Because it was 65 percent two months ago (that was a record high). Thirty-seven percent have a favorable opinion of Clinton, down two points from 39 percent in March, establishing a new low. The likely Republican nominee’s favorable jumped over the same time period: 41 percent view Trump positively, up from 31 percent in March.
CNBC:
Zero Hedge:
Telegraph:
Earnings of Note
Company/Estimate
8:30 am EST
- China Sends Hawkish Fed A Message - Devalues Yuan Near 2016 Lows. (graph)
- With 'Recovery' Disproved, There Is Every Need To Examine The Worst Case.
- Elizabeth Holmes Admits Theranos' "Technology" Is A Fraud: Restates, Voids Years Of Test Results.
- How Is This Not Criminal: Goldman(GS) Underwrites $2 Billion Tesla(TSLA) Stock Offering Hours After Upgrading Stock To A Buy. (graph)
- Late-Day Buying Panic Keeps Stocks Green For 2016 After Fed Shock. (graph)
- The Democratic convention might be even rowdier than the GOP's.
- The yield curve is basically inverted already.
- Apple(AAPL) might be Warren Buffett's next big mistake.
- Landlords are starting to freak out about the problems in retail.
- Salesforce(CRM) shares are popping on a beat-and-raise quarter.
Telegraph:
- China's Communist Party goes way of Qing Dynasty as debt hits limit. Nobody rings a bell at the top of the credit supercycle, to misuse an old adage. Except that this time somebody very powerful in China has done exactly that. China watchers are still struggling to identify the author of an electrifying article in the People's Daily that declares war on debt and the "fantasy" of perpetual stimulus.
- Half of Indonesia's Cargo Ships Idle on Weak Economy 60% of Indonesia's coal carrying ships and 40% of the country's general cargo fleet currently idle, citing data from Indonesian National Shipowners Association, known as INSA.
- Asian equity indices are -.75% to unch. on average.
- Asia Ex-Japan Investment Grade CDS Index 144.75 +1.75 basis points.
- Asia Pacific Sovereign CDS Index 54.25 +1.0 basis point.
- Bloomberg Emerging Markets Currency Index 70.78 -.17%.
- S&P 500 futures -.22%.
- NASDAQ 100 futures -.18%.
Earnings of Note
Company/Estimate
- (APP)/2.61
- (DKS)/.49
- (PERY)/.89
- (TK)/.17
- (TTC)/1.80
- (WMT)/.88
- (AMAT)/.32
- (ADSK)/-.14
- (GPS)/.32
- (MRVL)/.10
- (ROST)/.73
- (SCVL)/.57
8:30 am EST
- The Chicago Fed Nat Activity Index for April is estimated to rise to -.2 versus -.44 in March.
- Initial Jobless Claims for last week are estimated to fall to 275K versus 294K the prior week.
- Continuing Claims are estimated to fall to 2158K versus 2161K prior.
- Philly Fed Business Outlook Index for May is estimated to rise to 3.0 versus -1.6 in April.
- The Leading Index for April is estimated to rise +.4% versus a +.2% gain in March.
- None of note
- The Fed's Dudley speaking, ECB minutes, UK retail sales report, Bloomberg Economic Expectations Index for May, weekly Bloomberg Consumer Comfort Index, (JWN) annual meeting, (INTC) annual meeting, (LB) annual meeting and the (R) investor day could also impact trading today.
No comments:
Post a Comment