Wednesday, May 18, 2016

Today's Headlines

  • Spain’s Debt Jumps Most in Century, Topping 100% of GDP: Chart. Spain’s debt pile topped 100 percent of gross domestic product in the January-March period, according to Bloomberg calculations, marking the first time in more than a century that debt has outweighed total output. The nation’s debt has nearly tripled since 2007 as a decade-long housing bubble came to an abrupt end, putting pressure on Spain’s public finances in the worst economic crisis in modern history. The country owed 1.1 trillion euros ($1.24 trillion) as of March.
  • Europe Stock Investors Are Paying Up for Earnings Growth: Chart.
  • Europe Shares Rise With Banks as Investors Speculate on Fed Hike. Banks propelled a rebound in European stocks, while investors weighed the possibility of the Federal Reserve increasing interest rates sooner than had been expected. The Stoxx Europe 600 Index climbed 0.9 percent to 337.58 at the close of trading, after earlier sliding as much as 0.5 percent.
  • Saudi Arabia Considers Paying Contractors With IOUs. Saudi Arabia has told banks in the country that it is considering giving contractors IOUs to settle some outstanding bills, according to people with knowledge of the discussions. A projected budget deficit this year is prompting the government to weigh alternatives to limit spending. Contractors would receive bond-like instruments to cover the amount they are owed by the state which they could hold until maturity or sell on to banks, the people said, asking not to be identified because the information is private. Contractors have received some payments from the government in cash and the rest could come in "I-owe-you" notes, the people said.
  • Most Fed Officials Saw June Hike Likely If Economy Warrants. (video) Most Federal Reserve policy makers in April said an interest-rate increase would be appropriate in June if the economy continued to improve, but were divided over whether those conditions were likely to be met in time. “Most participants judged that if incoming data were consistent with economic growth picking up in the second quarter, labor market conditions continuing to strengthen and inflation making progress toward the committee’s 2 percent objective, then it likely would be appropriate for the committee to increase the target range for the federal funds rate in June,” according to minutes of the Federal Open Market Committee’s April 26-27 meeting released Wednesday in Washington. “Participants expressed a range of views about the likelihood that incoming information would make it appropriate to adjust the stance of policy at the time of the next meeting,” the minutes stated.
  • S&P 500 Technicals Reveal Ominous Reminders of 2001, 2008: Chart. The S&P 500 Index’s 50-week moving average just fell below its longer-term mean, repeating a pattern seen in 2001 and 2008. While daily moving averages aren’t in a bearish zone, pessimism has been growing among investors amid lackluster corporate earnings, concern over the health of the global economy and uncertainty about the timing of Federal Reserve rate increases. The U.S. equity gauge tumbled as much as 11 percent this year before erasing losses.
  • Clinton, Democrats Confronting Dangerous Divisions Within Party. Hillary Clinton’s claim of a narrow victory in Kentucky and Bernie Sanders’ win in Oregon illustrated a deepening rift among Democrats with the potential to hobble the party heading into the general election. The split outcome in Tuesday’s primaries gives Clinton little leverage to push Sanders to unify his supporters behind her in preparation for an expected campaign against presumptive Republican nominee Donald Trump, who is using the extended primary contest to attack Clinton’s standing with her own party. Sanders showed no intention of dialing back his fight against Clinton or urging his supporters to fall in line. His spokesman said Sanders is considering seeking a recount in Kentucky, where Clinton was clinging to a lead of a half percentage point.
  • Trump’s Disclosure Shows Role in New Companies During Campaign. (video) During his campaign for president, Donald Trump found time to do something else: take positions in 49 new companies, partnerships or corporations since July, according to his latest financial disclosure. Trump’s filing to the Federal Election Commission emerged Wednesday, adding new details about the presumptive Republican nominee’s financial portfolio. Even so, it may not shed much light on his income, or net worth. Trump, the presumptive Republican nominee, listed positions as president, chairman, member or trustee in 564 entities, up from 515 that he listed in an earlier filing.
Wall Street Journal:
  • Target(TGT) Gives Weak Forecast as Sales Decline. Retailer cites ‘increasingly volatile consumer environment’ and sees a weaker quarter than analysts expect. Target Corp. on Wednesday warned that weaker consumer spending will continue to weigh on its performance after hitting sales growth in the recent quarter. Chief Executive Brian Cornell blamed “an increasingly volatile consumer environment” and said Target’s view of second-quarter results “has been tempered by the recent slowdown in consumer trends.” Shares fell 9.4% to $66.67 in recent trading.
  • Iran’s Government and Revolutionary Guards Battle for Control of Economy. President Hassan Rouhani wants to make way for foreign deals and investment by limiting the business role taken on by the Revolutionary Guards when sanctions isolated Iran.
Zero Hedge: 
  • German Govt Readying Measures to Prevent Real Estate Bubble. German govt is preparing draft law to give financial regulator BaFin powers to take steps to restrict mortgage lending if it sees a threat to financial stability.

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