North American Investment Grade CDS Index 90.27 bps +.4%
European Financial Sector CDS Index 99.58 bps -5.08%
Western Europe Sovereign Debt CDS Index 116.0 bps -5.18%
Emerging Market CDS Index 222.52 bps +1.14%
2-Year Swap Spread 24.0 +6 bps
TED Spread 19.0 +1 bp
Economic Gauges:
3-Month T-Bill Yield .16% unch.
Yield Curve 270.0 -3 bps
China Import Iron Ore Spot $172.90/Metric Tonne unch.
Citi US Economic Surprise Index +20.30 +2.0 points
10-Year TIPS Spread 2.40% -4 bps
Overseas Futures:
Nikkei Futures: Indicating -77 open in Japan
DAX Futures: Indicating -27 open in Germany
Portfolio:
Lower: On losses in my Financial, Retail and Tech long positions
Disclosed Trades: Added (IWM), (QQQQ) hedges, added to my (EEM) short
Market Exposure: Moved to 75% Net Long
BOTTOM LINE: Today's overall market action is very bearish as equities trade near session lows on good volume. On the positive side, Gold, Ag, Oil Tanker and Utility stocks are relatively strong, posting gains for the day. The declines in the euro financial sector cds index and western europe sovereign debt cds index are positives. On the negative side, REIT, Construction, HMO, Disk Drive, Semi and Computer shares are under meaningful pressure, falling 2.5%+. (IYR) has been heavy throughout the day. The Greece sovereign debt cds is jumping 6.2% today to 729.50 bps, despite optimism over the prospects for an imminent bailout. The Shanghai Composite was unable to bounce last night with most of the rest of Asia and continues to hover near its 52-week low, which is a red flag for the global economy. The 10-year yield is down another 6 basis points. While a pullback from recent levels is welcome, investors are likely getting a bit worried that yields are falling too much. While much of the focus today is on (GS) and the rest of the financials, the technology sector(Morgan Stanley Tech Index: MSH) has been heavy for about 10 days and is close to breaking down through its 50-day moving average, which is another red flag. Finally, oil is now trading as if another spike higher is coming this summer, which could become another significant headwind for the global economy. I expect US stocks to trade modestly lower into the close from current levels on profit-taking, tax hike worries, increasing financial sector pessimism, rising economic fear and more shorting.
Papandreou Says Greek 'Survival' at Stake in Talks. Greek Prime Minister George Papandreou said the country’s survival was at stake in talks to win a potential $159 billion European Union-led bailout in exchange for budget cuts denounced by unions as “savage.” “Now, today, immediately, what is at stake is the survival of the nation,” Papandreou said in parliament in Athens today. “This is the ‘red line.’” He said talks with the EU and International Monetary Fund were “tough,” with his government resisting “not in the street with rocks, but in negotiations.”
Goldman(GS) Leads Credit Swap Rise on Criminal Probe as Banks Jump. Goldman Sachs Group Inc. led a jump in the cost to protect bank bonds as federal prosecutors investigate the firm to determine whether to pursue a criminal fraud case, according to two people familiar with the matter. Credit-default swaps on Goldman Sachs increased the most since the Securities and Exchange Commission’s civil lawsuit filing on April 16, as a federal review begins by the U.S. attorney in Manhattan, said two people familiar with the matter, who weren’t authorized to comment and spoke on condition of anonymity. Bank of America Corp. cut its rating on the shares to “neutral” from “buy,” citing the probe. Credit swaps on Goldman Sachs climbed 25.8 basis points to 157.4 basis points, according to CMA DataVision. Swaps on other banks, including Morgan Stanley to Bank of America, also rose. Swaps on Morgan Stanley rose 10.2 basis points to 162.7 basis points, CMA prices show. Contracts on Bank of America climbed 8.3 basis points to 135.7, and swaps on JPMorgan Chase & Co. increased 8 basis points to 82.6.
Oil Rises to Two-Week High Above $86 on Weaker Dollar, Recovery. U.S. Interior Department inspectors began boarding deep- water platforms in the Gulf of Mexico and Louisiana asked for help from the National Guard, as an oil sheen reportedly washed ashore in the worst rig spill in four decades. The leak, five times bigger than previously estimated, prompted Louisiana Governor Bobby Jindal to declare a state of emergency, and led Senator Bill Nelson, a Florida Democrat, to ask President Barack Obama to indefinitely suspend plans to expand offshore drilling for oil and natural gas.
Spain Pricks Solar Power Bubble as Greek Fate Looms. Spain is lancing an 18 billion-euro ($24 billion) investment bubble in solar energy that has boosted public liabilities, choking off new projects as it works to cut power prices and insulate itself from Greece’s debt crisis. Industry Minister Miguel Sebastian is negotiating reductions in subsidies for solar plants that would curb energy costs, a ministry spokesman said this week.
China Reports Third Attack on School Children in as Many Days. China reported its third attack on school children in as many days, as domestic media called for tightening of security for students. A man in the eastern province of Shandong injured five kindergarten children and a teacher today when he attacked a local school armed with an iron hammer, the official Xinhua News Agency reported. The man then soaked himself in gasoline, grabbed two of the children and set himself on fire, according to the report. Teachers were able to pull the children away, while the attacker died at the scene, Xinhua reported. The incident follows an attack on a primary school in the southern province of Guangdong on April 28 that injured 18 students and a teacher, and an assault yesterday on a kindergarten in the eastern province of Jiangsu in which 29 children and three adults were hurt. Xu, who was detained by police, said the attacks were “his revenge on society” for business and personal humiliations, Xinhua reported today, citing Jiang Wenxiang, chief of the local security bureau. An initial police investigation found Xu was “reasonably well off” and owned eight apartments in downtown Taixing city, Xinhua reported. A day earlier, Chen Kangbing snuck into a primary school in Guangdong province’s Leizhou city armed with a knife and injured 16 children, five seriously, Xinhua reported. Chen, a 33-year- old art teacher, had been diagnosed as suffering from severe neurosis in 2008 and was undergoing an assessment of his metal state, Xinhua reported. A doctor in Fujian province convicted of killing eight students in a March 23 attack was executed on Aug. 28, China Daily reported today.
Beijing to Limit How Many Homes Residents May Buy. The city of Beijing will issues policies today limiting how many homes residents of the Chinese capital are allowed to buy, the Shanghai Securities News reported today, citing an unidentified person. The city will also “basically” stop loans for the purchase of third homes, as well as loans for those originally from outside Beijing who haven’t paid a year’s tax in the Chinese capital, the Shanghai-based newspaper reported.
GM 'Close to Commiting Fraud' in Ad, Lawmaker Says. A senior Republican criticized General Motors Co. decision to run television advertisements featuring the company's CEO that tout its repayment of $6.7 billion in government loans. Rep. Darrell Issa, R-Calif., the ranking member of the House Oversight and Government Reform Committee, said in a letter obtained by The Detroit News today to GM chairman and CEO Edward Whitacre Jr. that the company "has come dangerously close to committing fraud and that you might have colluded with the U.S. Treasury to deceive the American public." GM's ads featured Whitacre touting that fact that GM "repaid our government loan in full, with interest, five years ahead of the original schedule." Issa called on GM to stop running the television advertisements. But GM spokesman Dave Roman said the ads stopped running as scheduled on Tuesday night. At issue is the fact that GM received $50 billion in U.S. government bailout funds -- but about $43 billion of those were swapped by the government in exchange for a 61 percent majority stake in GM. GM had $17.4 billion of those funds in escrow -- and GM tapped unused funds from that account to repay the taxpayers for the loan portion. But it won't be clear for years whether taxpayers will be completely repaid until the government sells all of its shares in the company.
Dems Spark Alarm With Call for National ID Card. A plan by Senate Democratic leaders to reform the nation’s immigration laws ran into strong opposition from civil liberties defenders before lawmakers even unveiled it Thursday. Democratic leaders have proposed requiring every worker in the nation to carry a national identification card with biometric information, such as a fingerprint, within the next six years, according to a draft of the measure.
Rasmussen Reports:
66% See Tax Cuts as Better Way to Create Jobs Than More Government Spending. Most U.S. voters favor a new government program designed to create jobs but still think ultimately tax cuts and decisions by private business leaders will do more good in terms of job creation. A new Rasmussen Reports national telephone survey of Likely Voters finds that 66% believe cutting taxes is a better way to create new jobs than increasing government spending. That’s up seven points from January. Just 18% think increasing government spending is the better way to go.
Reuters:
Discovery(DISCA) Profit Up 42%. Discovery Communications reported a 42 percent rise in quarterly profit, as the company's push to bring its hit cable TV programs abroad resulted in a sharp jump in international advertising sales.
Sky News:
British banks are to warn of the possibility of a "double dip" recession, citing a "secret report" the broadcaster said it obtained. The report will be circulated after the upcoming general election.
Handelsblatt:
The German government will ask the country's banks to increase investment in Greek bonds to help underpin aid for Greece. Banks' help will be voluntary.
Lidove Noviny:
A majority of Czechs oppose adoption of the euro, citing a survey by the CVVM polling unit of the Academy of Science in Prague. The poll, the first to indicate a negative stance nationwide toward the currency switch, showed 55% of Czechs don't want to adopt the euro, compared with 38% who wish to join Europe's common currency.
Greece May See 'Multi-Notch' Moody's Cut Depending on Aid Pact. Greece’s credit rating may be hit by a “multi-notch” downgrade by Moody’s Investors Service if the government doesn’t cut the budget deficit enough or the European Union fails to agree a united response to its crisis. Moody’s, which has an A3 rating on Greece, will make a decision after the government announces the budget steps agreed on with the International Monetary Fund and the EU. An accord may be announced in coming days. “‘Should, however, the mobilization of external support continue to be fractious and/or should the Greek government and people fail to fully deliver on and acquiesce to ambitious policy adjustments, Moody’s indicates that this would inflict significant damage to Greece’s creditworthiness,” the rating company said in a statement. The country’s largest union has already denounced some measures, which may include three-year wage freezes, as “unjust.” Greece’s NET Radio said cuts may amount to 10 percentage points of gross domestic product, equivalent to around 24 billion euros. The deficit was 13.6 percent of GDP in 2009.
Goldman(GS) Scrutinized by U.S. Prosecutors Examining SEC Case. Federal prosecutors in New York are investigating transactions by Goldman Sachs Group Inc., accused of misleading investors by U.S. securities regulators, to determine whether to pursue a criminal fraud case, according to two people familiar with the matter. The federal review, which lawyers say is common in such a high-profile case, is being done by the U.S. attorney in Manhattan, said the people, who weren’t authorized to comment and spoke on condition of anonymity.
Senate Bill's Word Change May Save Swaps Phone Trades. A one-word deletion in the 1,565- page Senate financial reform bill may help banks and inter- dealer brokers maintain how they trade swaps in the unregulated $605 trillion over-the-counter derivatives market. The change is in the definition of so-called swap execution facilities, a way for banks, hedge funds and asset managers to trade private derivatives that are to be sent to clearinghouses under legislation written by Senator Blanche Lincoln, chairwoman of the Agriculture Committee. The latest version deletes the word “trading” from the term “trading facility,” according to a copy of the revised bill obtained by Bloomberg News. A “trading facility,” as defined under the U.S. Commodity Exchange Act, prohibits phone transactions, which is how swaps have been traded for three decades. The banks that dominate the market profit by relying on telephone-based trading because it’s less transparent than electronic-trading systems, said Darrell Duffie, a finance professor at Stanford University in California. “Dealer profits depend on the ability to limit the amount of competition for a trade,” Duffie said today in a telephone interview. “The policy objective behind this legislation is to go the other way -- to increase the amount of competition for a trade.” At stake is trading revenue in unregulated markets that last year generated an estimated $28 billion for five U.S. dealers including JPMorgan Chase & Co., Goldman Sachs Group Inc. and Morgan Stanley, according to reports from the New York-based banks collected by the Federal Reserve and people familiar with banks’ income.
Moore Capital Fined in Platinum Manipulation Case. Moore Capital Management LP agreed to pay $25 million to settle charges that a former portfolio manager attempted to manipulate platinum and palladium futures during a surge in prices two years ago, U.S. regulators said.
Natural Gas Drops Most in Seven Months on Stockpiles, Output. Natural gas futures fell the most in seven months in New York after government reports showed bulging U.S. inventories and rising production. Supplies gained 83 billion cubic feet in the week ended April 23 to 1.912 trillion cubic feet, the Energy Department said. Analysts forecast an increase of 70 billion. Losses accelerated after a separate department report showed that gas output in February rose 1.6 percent to the highest monthly level since at least January 2005. “Supply is there and demand is not,” said Kyle Cooper, a managing director at energy consultant IAF Advisors in Houston. “It just implies you’ve got to change something because we can’t keep putting gas in storage at this pace.” Natural gas for June delivery fell 36.8 cents, or 8.5 percent, to settle at $3.98 per million British thermal units on the New York Mercantile Exchange, the biggest one-day decline since Sept. 11. Gas has dropped 29 percent this year. Inventories were 18.8 percent above the five-year average, little changed from 18.5 percent in last week’s supply report.
Wells Fargo(WFC) Builds Team to Bundle, Trade Mortgages. Wells Fargo & Co., aiming to translate home-lending clout into bigger profits, is building a team to package and trade mortgage-backed securities and curb reliance on Wall Street competitors.
Asian Stocks May Fall 17% on Greek Crisis, BNP Says. Asian stocks outside of Japan may fall 17 percent in the short term as the Greek fiscal crisis prompts a drop in fund flows, BNP Paribas said. The MSCI Asia excluding Japan Index may decline to around 410 ahead of a May 10 meeting of leaders from the euro region, BNP analysts Clive McDonnell and Ryan Tsai said in a report today, citing their Portfolio Flows model.
North Korea's Denials on Ship Sinking May Cloud Lee-Hu Meeting. North Korea’s possible involvement in the sinking of a South Korean warship last month is likely to overshadow today’s meeting in Shanghai between the South’s president, Lee Myung Bak, and Chinese counterpart Hu Jintao. Hu’s summit with Lee, in China to celebrate the opening of the $44 billion World Expo, will help shape any international response should an investigation indicate that North Korea caused the March 26 sinking, which killed 46 South Korean sailors. China is North Korea’s principal trading partner and political ally as well as the host for stalled negotiations on the reclusive regime’s nuclear weapons program. South Korea’s Defense Ministry said the sinking, off its west coast close to the disputed border with North Korea, was most likely caused by a torpedo. South Korea may take the incident to the UN Security Council if North Korea’s role is confirmed, Foreign Minister Yu Myung Hwan said on April 20.
Cameron Bolsters Bid to Oust Brown With Win in Debate. Conservative leader David Cameron won the final debate of the U.K. election campaign, three instant-reaction polls showed, gaining momentum in his bid to oust Prime Minister Gordon Brown in the May 6 vote. Cameron’s central message in the 90-minute debate in Birmingham, central England, was that 13 years of Labour Party rule had left Britain struggling to recover from its longest recession and the highest unemployment in 16 years. “If you vote Labour, you’re going to get more of the same,” Cameron said. “If you vote Conservative on Thursday, you can have a new fresh government, making a clean break.”
Steel Futures in Shanghai Head for Biggest Drop in Three Months. Steel futures in Shanghai are poised for the largest monthly decline in three months on concern demand may ebb in China, the largest consumer and producer, as the government moved to cool its real-estate market. The government has in the past two weeks raised mortgage rates and down-payment ratios, barred lending for third-home purchases and ordered tighter scrutiny of developers’ financing to restrain property prices that surged at a record 11.7 percent in March. “The short-term outlook for steel has been hurt by the measures the government has taken to curb property speculation,” Xie Shuguang, an analyst Dongguan Hualian Futures Co., said from Guangdong. “Stockpiles have fallen but considering we’re in the peak demand season now, they are not falling as fast as expected.”
Wall Street Journal:
Google(GOOG) to Show TV Software in May. Google Inc. is planning to introduce Android-based television software to developers at an event in May, according to people familiar with the matter. The technology—designed to open set-top boxes, TVs and other devices to more content from the Internet—is attracting interest from partners that include Sony Corp., Intel Corp. and Logitech International SA, which are expected to offer products that support the software, these people said.
Starbucks(SBUX) Mounts Major Grocery Push. In the days ahead, a clue to the long-range growth strategy of Starbucks Corp. will become apparent, though not at its vast chain of coffee shops. Instead look down the coffee aisle of your local grocer. Starbucks is rolling out Via instant coffee—so far sold only in its own shops and a couple of retail chains—to tens of thousands of supermarkets, mass merchandisers and other outlets in coming weeks.
Buffett Is Expected to Fire at Will. Soon after the Securities and Exchange Commission sued Goldman Sachs Group Inc.(GS) alleging fraud, Goldman Chief Executive Lloyd Blankfein asked Warren Buffett for tips on how to handle the explosive situation, according to people familiar with the matter. Mr. Buffett, whose Berkshire Hathaway Inc. invested $5 billion in Goldman at the height of the financial crisis, told Mr. Blankfein he would let him know if he came up with any good ideas. Berkshire shareholders heading to Omaha, Neb., this weekend may soon get a view into Mr. Buffett's thinking. "I expect to get multiple questions about Goldman and I'll give extensive and complete replies," he said in an interview Thursday.
Airlines Approach Final Deal to Merge. Continental Airlines Inc.(CAL) and UAL Corp.'s United Airlines(UAUA) are expected to announce Monday that they are merging to form the world's largest airline, people familiar with the matter said.
Warning Signal on U.K. Debt?As investors scramble to protect themselves from the next credit flare-up in Europe, their worries are spreading to the U.K. Investors bought a net $443 million of credit-default swaps to insure against a U.K. default last week, according to data compiled by the Depository Trust and Clearing Corp., taking the total outstanding to $8.2 billion. That was easily the biggest gain among sovereign borrowers. The size of protection on the U.K. has roughly doubled since the year began, a move that far outpaces the run-up in Greek CDS last fall.
Bloomberg Businessweek:
European Options at Highest Versus U.S. on Debt Fear. Investors are paying the most in seven years for options to protect against losses in European stocks relative to U.S. contracts, speculating Greece’s debt crisis will spread to other nations. Europe’s VStoxx Index, a gauge of options on the Euro Stoxx 50 Index, closed at 29.52 yesterday. That’s 60 percent higher than the VIX, the biggest premium versus the benchmark index for U.S. equity options since May 2003. “Contagion risk is high,” said Justin Golden, a strategist at New York-based Macro Risk Advisors LLC, which advises institutions on equity derivatives. “The market is more fearful of European stocks than they are of U.S. stocks.”
Chinese, Indonesian Glossy Paper to Face U.S. Import Duties. Glossy paper imported from China and Indonesia will face antidumping duties, the U.S. Commerce Department said in adding to a record number of trade complaints against the Chinese. Duties on $260 million of paper used for magazines will average 60.27 percent for China and 10.62 percent for Indonesia, the Commerce Department announced yesterday. U.S. Customs will start collecting deposits of the duties while the case proceeds to a conclusion this year, the statement said.
Marketwatch.com:
Samsung Profit Jumps on Higher Chip, Panel Prices. Samsung Electronics Co. said Friday its first-quarter net profit grew more than sixfold from a year earlier, largely thanks to brisk sales of chips and flat panels as demand for personal computers and flat-screen televisions improved on the back of the global economic recovery. Sales rose 21% to KRW34.64 trillion in the first quarter from KRW28.67 trillion a year earlier, the company said in a regulatory filing.
IBD:
Flooring Retailer Nails Down Profits Despite Slump. For most retailers, a big boost in inventory is a sign that things aren't selling fast enough. But with Lumber Liquidators (LL), it's all part of the strategy.
NY Times:
Berkshire Hathaway's(BRK/A) Derivatives Exposure. For someone who once called these instruments “financial weapons of mass destruction,” the Oracle of Omaha has accumulated quite a portfolio. He has sold “put” options on various equity indexes and some credit default protection too, with an exposure of up to $63 billion.
Chicago-Area Foreclosure Auctions Hit New High. More than 9,300 homeowners lost properties last quarter. More Chicago-area homeowners lost their homes to foreclosure in the first three months of the year than in any quarter in the past five years. This disturbing statistic raises doubts about the effectiveness of mortgage loan modification efforts and could put more downward pressure on property values.
Time:
Maybe It's Time to Break Up the Banks. As the Senate takes up debate on financial industry overhaul, there is one issue above all others that is imperative to work out: how to deal with institutions that are Too Big To Fail. The reason the government stepped in with taxpayer money at firms like Citigroup and AIG is still alive and well. Our financial giants are so behemoth and interconnected that should one quickly go out of business, the entire system could be at risk. Unfortunately, as an increasing number of commentators are pointing out, the solution Congress is currently contemplating will likely do little to change that. Now that the bill is being debating in the Senate, other ideas are being put on the table, most visibly from Senator Richard Shelby, the ranking Republican on the Democrat-controlled banking committee that signed off on the original bill. Shelby wants to do away with the $50 billion fund and gain assurances that companies' shareholders and bondholders take a real hit when their company collapses. This is a noble effort to remove a government-mediated safety net and let financial players know that if they take big risks and fail, they will be the ones to suffer. Other good ideas, like forcing banks to issue debt that would be converted to equity in the event of a crisis, have a similar goal. Increasingly, though, I'm coming around on the idea that even these efforts don't go far enough. These ideas are all still about how to deal with the aftermath of a massive financial institution bringing the system to the brink, not preventing that from happening in the first place. Is there anything that would keep too much power and importance from building up inside of any single financial institution? It's tough to say for sure, but what is starting to be clear to me is that only one course of action has a real shot: breaking up the big banks.
Reuters:
Florida Democrat Seeks Halt to Offshore Exploration. Florida Democratic Senator Bill Nelson, citing the risk of a potential "environmental and economic disaster" from the Gulf oil spill, said on Thursday he was filing legislation to temporarily prohibit the Obama administration from expanding U.S. offshore drilling.
Pakistan to Get $600 Mln Under U.S. Program - Pentagon.The United States plans to quickly transfer $600 million to Pakistan to reimburse the government for military operations over the last year, the Pentagon said on Thursday. "There has been some concern on the Pakistani's part about the rate at which they are reimbursed for Coalition Support Funds for their efforts in the war on terror on our behalf within their borders," Pentagon Press Secretary Geoff Morrell said at a news conference.
Financial Times:
Greece agrees €24bn austerity package. Greece has agreed the outline of a €24bn austerity package, including a three-year wage freeze for public sector workers, in return for a multibillion-euro loan from the eurozone and the International Monetary Fund, according to people familiar with the talks. Final details of the measures, which are intended to slash the budget deficit by 10-11 percentage points of gross domestic product over the next three years, were still being worked out, a senior government official said. Negotiations with officials from the IMF, the European Commission, and the European Central Bank are due to be completed at the weekend and the measures will be presented for approval by the Greek parliament next week. The package also includes an increase in value-added tax, the second this year. Greece faces exceptionally strict monitoring by the EU and IMF because of its poor record of implementing previous economic reform programmes. On top of the wage freeze, public sector workers will lose their “13th and 14th month” salaries, paid at Christmas and Easter, and see further cuts in allowances. Andreas Loverdos, social affairs minister, told the Financial Times pensioners would also lose seasonal bonuses as part of an overhaul of the underfunded state pension system. The average retirement age will be raised from 53 at present to 67, he said. “The timetable for the pension measures is still being debated, but there isn’t much room for manoeuvre – this is about saving the country from collapse,” Mr Loverdos said.
citywire:
RAB Capital Warns on Commodity Prices. Leading commodity hedge fund RAB Capital has warned that the ever stronger dollar and Asian tightening will ultimately push down metal prices. The group's RAB Special Situations fund managed by Philip Richard told investors this week that while metals performed well in March with copper rising 8.3% and returning to autumn 2008 levels and aluminum up 11% there could be trouble ahead. ‘Some concerns are being raised about commodity prices in the near term,’ the company said today, in its latest update. ‘A strengthening US dollar naturally feeds through to weaker commodity prices and during March fears raised about Greek debt at times impacted positively on the US dollar against the euro. ‘The manager of the fund believes uncertainty relating to the PIGS economies will continue to affect the market for some time. Further, there have been increasing fears Chinese and Indian tightening may negatively impact industrial metals later in the year.’ Over the past 15 years, the global economic cycle has been almost perfectly predicted by the aggregate credit cycle of America and China, and it is this trend, RAB believes, that suggests prices could face a downdraft later this year.
Asahi:
North Korea may be preparing to test-fire missiles over the Sea of Japan in May, citing defense officials.
China Securities Journal:
China's introduction of a property tax now may be viable because of strong economic growth, citing Jia Kang, head of the Ministry of Finance's research arm.
Evening Recommendations Citigroup:
Reiterated Buy on (CME), target $380.
Reiterated Buy on (HOT), raised target to $65.
Reiterated Buy on (HGSI), target $38.
Reiterated Buy on (OI), raised estimates, boosted target to $44.
Reiterated Buy on (OMX), target $22.
Reiterated Buy on (VPRT), target $64.
Night Trading
Asian indices are -.25% to +1.0% on average.
Asia Ex-Japan Investment Grade CDS Index 99.0 -5.5 basis points.
Advance 1Q GDP is estimated to rise +3.3% versus a +5.6% gain in 4Q.
Advance 1Q Personal Consumption is estimated to rise +3.3% versus a +1.6% gain in 4Q.
Advance 1Q GDP Price Index is estimated to rise +.9% versus a +.5% gain in 4Q.
Advance 1Q Core PCE is estimated to rise+.5% versus a +1.8% gain in 4Q.
1Q Employment Cost Index is estimated to rise +.5% versus a +.5% gain in 4Q.
9:45 am EST
Chicago Purchasing Manager for April is estimated to rise to 60.0 versus 58.8 in March.
9:55 am EST
Final Univ. of Mich. Consumer Confidence for April is estimated at 71.0 versus 69.5 in March.
Upcoming Splits
None of note
Other Potential Market Movers
None of note
BOTTOM LINE: Asian indices are mostly higher, boosted by technology and automaker shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 100% net long heading into the day.
