Indices
- Russell 2000 946.27 -.65%
- Value Line Geometric(broad market) 405.94 -.49%
- Russell 1000 Growth 710.96 +.07%
- Russell 1000 Value 794.63 -.52%
- Morgan Stanley Consumer 959.36 +.88%
- Morgan Stanley Cyclical 1,168.64 -.88%
- Morgan Stanley Technology 729.30 -1.59%
- Transports 6,179.26 -1.49%
- Bloomberg European Bank/Financial Services 92.41 -4.26%
- MSCI Emerging Markets 41.98 -2.45%
- Lyxor L/S Equity Long Bias 1,135.25 -.40%
- Lyxor L/S Equity Variable Bias 850.91 -.13%
Sentiment/Internals
- NYSE Cumulative A/D Line 179,518 +.13%
- Bloomberg New Highs-Lows Index 213 -698
- Bloomberg Crude Oil % Bulls 29.03 -15.81%
- CFTC Oil Net Speculative Position 223,721 -1.96%
- CFTC Oil Total Open Interest 1,647,391 -4.22%
- Total Put/Call .93 +9.41%
- ISE Sentiment 94.0 -27.13%
- Volatility(VIX) 13.57 +20.1%
- S&P 500 Implied Correlation 55.18 -.56%
- G7 Currency Volatility (VXY) 9.72 +8.24%
- Smart Money Flow Index 11,394.68 -.81%
- Money Mkt Mutual Fund Assets $2.625 Trillion -1.0%
Futures Spot Prices
- Reformulated Gasoline 306.25 -2.98%
- Heating Oil 288.43 -2.08%
- Bloomberg Base Metals Index 202.97 -2.27%
- US No. 1 Heavy Melt Scrap Steel 341.33 USD/Ton -3.22%
- China Iron Ore Spot 135.30 USD/Ton +.52%
- UBS-Bloomberg Agriculture 1,544.71 -.23%
Economy
- ECRI Weekly Leading Economic Index Growth Rate 6.4% +10 basis points
- Philly Fed ADS Real-Time Business Conditions Index .1689 -6.43%
- S&P 500 Blended Forward 12 Months Mean EPS Estimate 114.38 +.12%
- Citi US Economic Surprise Index 29.10 +2.1 points
- Fed Fund Futures imply 54.0% chance of no change, 46.0% chance of 25 basis point cut on 5/1
- US Dollar Index 82.38 +.30%
- Yield Curve 167.0 -7 basis points
- 10-Year US Treasury Yield 1.93% -6 basis points
- Federal Reserve's Balance Sheet $3.189 Trillion +1.32%
- U.S. Sovereign Debt Credit Default Swap 38.31 +.71%
- Illinois Municipal Debt Credit Default Swap 131.0 -2.07%
- Western Europe Sovereign Debt Credit Default Swap Index 100.95 +3.59%
- Emerging Markets Sovereign Debt CDS Index 187.47 +9.41%
- Israel Sovereign Debt Credit Default Swap 121.29 -6.64%
- Iraq Sovereign Debt Credit Default Swap 481.09 +7.13%
- China Blended Corporate Spread Index 401.0 +8 basis points
- 10-Year TIPS Spread 2.54% -3 basis points
- TED Spread 21.75 +2.0 basis points
- 2-Year Swap Spread 17.75 +4.25 basis points
- 3-Month EUR/USD Cross-Currency Basis Swap -20.50 -4 basis points
- N. America Investment Grade Credit Default Swap Index 89.63 +14.2%
- European Financial Sector Credit Default Swap Index 176.35 +23.42%
- Emerging Markets Credit Default Swap Index 255.89 +6.76%
- CMBS AAA Super Senior 10-Year Treasury Spread to Swaps 134.0 +15.0 basis points
- M1 Money Supply $2.421 Trillion -2.1%
- Commercial Paper Outstanding 1,016.40 -.2%
- 4-Week Moving Average of Jobless Claims 339,800 -7,000
- Continuing Claims Unemployment Rate 2.4% unch.
- Average 30-Year Mortgage Rate 3.54% -9 basis points
- Weekly Mortgage Applications 765.10 -7.1%
- Bloomberg Consumer Comfort -33.9 -2.3 points
- Weekly Retail Sales +2.8% +10 basis points
- Nationwide Gas $3.69/gallon -.01/gallon
- Baltic Dry Index 930.0 +5.68%
- China (Export) Containerized Freight Index 1,107.55 +1.52%
- Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 17.50 unch.
- Rail Freight Carloads 228,806 -2.71%
Best Performing Style
Worst Performing Style
Leading Sectors
Lagging Sectors
Weekly High-Volume Stock Gainers (9)
- OMPI, COSH, PTRY, PMTI, WSM, AMAG, VHS, ENV and CNP
Weekly High-Volume Stock Losers (13)
- TICC, DSW, INCY, TLYS, FF, FDS, CAH, ORCL, FDX, ULTA, TISI, SCHL and WAC
Weekly Charts
ETFs
Stocks
*5-Day Change
Broad Market Tone:
- Advance/Decline Line: Modestly Higher
- Sector Performance: Mixed
- Market Leading Stocks: Underperforming
Equity Investor Angst:
- ISE Sentiment Index 96.0 +29.73%
- Total Put/Call .91 +3.41%
Credit Investor Angst:
- North American Investment Grade CDS Index 90.87 -.46%
- European Financial Sector CDS Index 176.57 +4.1%
- Western Europe Sovereign Debt CDS Index 100.94 -.23%
- Emerging Market CDS Index 255.47 +1.14%
- 2-Year Swap Spread 17.75 +.25 bp
- 3-Month EUR/USD Cross-Currency Basis Swap -20.5 -.25 bp
Economic Gauges:
- 3-Month T-Bill Yield .07% +1 bp
- China Import Iron Ore Spot $135.30/Metric Tonne +.82%
- Citi US Economic Surprise Index 29.10 +.3 point
- 10-Year TIPS Spread 2.54 +1 bp
Overseas Futures:
- Nikkei Futures: Indicating +127 open in Japan
- DAX Futures: Indicating +19 open in Germany
Portfolio:
- Slightly Higher: On gains in my retail, medical, tech, biotech sector longs and emerging markets shorts
- Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
- Market Exposure: Moved to 50% Net Long
Bloomberg:
- Cyprus Struggles to Meet Bailout Demand as Deadline Looms. European and Cypriot officials were locked in talks to find a
formula to avert the Mediterranean island’s financial collapse,
struggling to forge consensus on a bailout package before the European
Central Bank cuts funding. Cyprus’s options narrowed today after
Russia spurned a bid for a loan and coalition lawmakers in Germany
dismissed the Cypriot government’s latest rescue proposals. That left
the troika of international creditors to hammer out fresh terms with
President Nicos Anastasiades’s coalition focusing on the fate of
Cyprus’s ailing banks.
- Cyprus Crisis: Bankers Clashing With Riot Police. (video)
- U.K. Moves Closer to Losing AAA at Fitch on Debt Concerns. Britain came a step closer to
losing its top credit grade at Fitch Ratings after Chancellor of
the Exchequer George Osborne said debt will rise more than
previously forecast. The U.K. was placed on rating watch negative, “indicating
a heightened probability of a downgrade in the near term,” Fitch said in a statement in London today. The company will
complete its review of the grade by the end of April.
- German Business Confidence Unexpectedly Drops. German business confidence unexpectedly fell from a 10-month high in March as Cyprus inflamed the euro region’s debt crisis. The
Ifo institute in Munich said its business climate index, based on a
survey of 7,000 executives, declined to 106.7 from 107.4 in February.
That’s the first drop in five months. Economists predicted a gain to
107.8, according to the median of 42 forecasts in a Bloomberg News survey.
- Banks' Use of CDS to Lower Capital Targeted by Basel Regulators. Global regulators are planning to
crack down on banks that underestimate their capital
requirements because of the way they use credit-default swaps
and other instruments to lower the amount of risk on their
books. The Basel Committee on Banking Supervision said today that
it would seek to stop banks from lowering capital charges by
buying instruments such as CDS to insure themselves against
losses, while failing to recognize the large liabilities they
incur from what they pay for this protection, the group said in
a statement on its website. “The proposed changes are intended to ensure that the
costs, and not just the benefits of purchased credit protection
are appropriately recognized in regulatory capital,” the Basel,
Switzerland-based group of international regulators said in a
statement. There exists a “potential for capital arbitrage” as
banks can book the benefits of these deals without also booking
the associated costs, the group said.
- Biased Loans by Auto Dealers to Bring Bank Suits by CFPB. U.S. banks may be sued by the
Consumer Financial Protection Bureau if they fund discriminatory
vehicle loans made by auto dealers, according to new guidance
released by the agency.
- Mortgage Bonds Detect Bernanke Signaling Retreat: Credit Markets. Mortgage investors are signaling
increased doubt that the Fed will maintain the current pace of bond
purchases much longer as a measure of relative yields on securities it's
buying expands to the widest since July. The spread between yields on Fannie Mae mortgage securities that lenders use to finance new 30-year home loans and those on similar Treasuries widened
for a second day yesterday, reaching 132 basis points and reversing a
week of tightening. Mortgage bonds would be among the first assets
affected by a Fed pullback, PIMCO said.
- Gold Seen Extending Rebound as Cyprus Revives Bulls: Commodities. Gold traders are becoming more
bullish as concern mounts that a worsening of Europe’s debt crisis will spur demand for a protection of wealth at a time
when nations from the U.S. to Japan are signaling more stimulus.
MarketWatch:
Fox News:
- Syria's Assad vows to cleanse nation of extremists. President Bashar Assad vowed Friday to
"wipe out" Muslim extremists in Syria, blaming them for a suicide
bombing at a mosque that killed dozens of people, including a top cleric
who supported the embattled regime in the civil war. The death toll from Thursday night's bombing -- the first suicide
attack on a mosque in two years of violence in Syria -- rose to 49 after
seven of the wounded died overnight, the Health Ministry said. Sheik Mohammad Said Ramadan al-Buti, a top Sunni preacher, was killed
as he was giving a sermon in the mosque in the heart of the capital,
Damascus. The blast, which also wounded nearly 80 other people, was one
of the most brazen assassinations of the civil war, which has seen a
number of suicide bombings blamed on Islamic extremists.
CNBC:
Zero Hedge:
Business Insider:
Real Clear Markets:
Reuters:
Telegraph:
Frankfurter Allgemeine Zeitung:
- Questioning Euro Is Playing With Fire, Schweitzer Says. Newly-appointed head of Germany's DIHK national chamber of commerce Eric Schweitzer says the risk associated with
potentially dissolving euro are incalculable. Cyprus should not get
preferred treatment compared with Greece, Ireland or Portugal, he said.
Hospodarske Noviny:
- Cyprus crisis is "extremely unpleasant" situation, which will
bring new types of risks and will trigger mistrust in governments and
banking systems, Sberbank CEO Herman Gref said in an interview. People
will start to hedge against the risks, which didn't exist before,
including possible tax on bank deposits. Any potential decision on
capital transfers would have long-term and exceptionally "serious"
impact on Cyprus as most investors would leave the country, he said.
El Pais:
- Spain Mulls Cutting 23% of Weekly Train Routes. Spain's public
works ministry may cut 779 train routes unless regions are able to
finance those that aren't profitable. 172 train stations with less than
avg one passenger a day may be removed, citing a draft submitted to
unions.
Style Underperformer:
Sector Underperformers:
- 1) Disk Drives -1.32% 2) HMOs -1.01% 3) Alt Energy -.90%
Stocks Falling on Unusual Volume:
- BSBR, WAL, TPLM, TIBX, HTSI, PAMT, WAC, EVR, TIF, PCYC, SGI, JOSB, LULU, INFA, FSYS, CYMI, QCOR, ANV, PLT, TECD, ASML, CBD, MTN, OCN, INFI, IHS, LAZ and BLOX
Stocks With Unusual Put Option Activity:
- 1) NKE 2) MMM 3) TIF 4) DHI 5) XLP
Stocks With Most Negative News Mentions:
- 1) INFA 2) HUM 3) RAX 4) VMW 5) IBM
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Semis +1.19% 2) Telecom +.93% 3) Restaurants +.91%
Stocks Rising on Unusual Volume:
- DSX, NAT, NKE, MU, INVN, FL and ODFL
Stocks With Unusual Call Option Activity:
- 1) MDLZ 2) CL 3) ROST 4) EA 5) NLY
Stocks With Most Positive News Mentions:
- 1) DDS 2) DSW 3) MFRM 4) TIF 5) DRI
Charts:
Evening Headlines
Bloomberg:
- Cyprus Set to Debate Bailout Bill as ECB Deadline Looms. Cypriot lawmakers will begin debate
today on legislation to unlock bailout funds and prevent a
financial collapse with a European Central Bank deadline to cut
off funding for its lenders in three days. Euro-area finance ministers expect a proposal from Cyprus
“as rapidly as possible” to raise the 5.8 billion euros ($7.5
billion) needed to trigger the emergency loans, they said in a
statement late yesterday after meeting in a teleconference. “Cyprus has it in its own hands to prevent the state’s
bankruptcy but time is running out,” said Hans Michelbach, a
German lawmaker and ally of Chancellor Angela Merkel.
- Cyprus
Rescue Offers Stopgap to Restructuring Risk: Euro Credit. The aid
package Cyprus is seeking would only provide temporary relief as it
risks triggering a capital flight that would push the nation closer to
needing to restructure its debts. As government officials struggle to
lock in a 10 billion euro bailout agreement, aimed mainly at
safeguarding the nation's banks, money managers at Aletti Gestielle SGR
SpA, Fidelity Investments and Sanlam Private Investments said Cyprus
will need more support. "Even with a deal, it's still very likely that
Cyprus will restructure its debt in the next few years," said Nick
Eisinger, a London-based sovereign analyst at Fidelity Investments,
which oversees $1.6 trillion. "The underlying macro conditions are very
challenging and you may see some capital flight. It will leave a bad
taster in people's mouths for a long time."
- EU Fumbling Cyprus Makes Rehn Scapegoat for German-IMF Austerity. European Union Economic and
Monetary Affairs Commissioner Olli Rehn has emerged as the
frontman for crisis-management policies driven out of Berlin
that are spreading economic pain as debt turmoil reignites. Rehn faced a torrent of criticism and a call to resign
after helping broker a rescue package from Cyprus that fell
apart on March 19 over a demand to raid bank deposits. He has
become the defender of German-inspired austerity that helped
deepen the 17-nation euro region’s recession. Almost two years after Rehn announced the “beginning of
the end” of the debt crisis, the euro area is headed for a
back-to-back annual economic contraction for the first time.
Now, Rehn has become a scapegoat as Germany and the
International Monetary Fund let the commissioner take the rap
for the Cyprus bailout that hangs in limbo, said an EU official
who declined to be named. “As soon as things go wrong, people start looking around
for who to blame,” William White, former head of economic
analysis at the Bank of International Settlements, said in a
March 19 telephone interview. “Everybody will be pointing the
finger.”
- Spain Softens Austerity for Regions Anticipating EU Leeway. Spain
is preparing to ease austerity for its most cash-strapped regions in
anticipation that European Union peers will grant the government more
time to reorder public finances in the second year of a recession. “All
options have to be studied given how much the range of regional deficits
has widened,” Budget Minister Cristobal Montoro told reporters in
Madrid following a three-hour meeting with regional budget chiefs last
night. A task force has been created to study how individual debt and
deficit goals could be set for the 17 semi-autonomous regions, Montoro
said.
- Europe’s Bonus Clampdown Hits Two-Thirds of Fund Managers. The European Parliament’s vote to
cap bonuses in the asset-management industry could affect two-
thirds of senior fund managers in the U.K., U.S. funds in Europe
and hedge funds open to small investors. “If the final rules are even close to what has been agreed
today, then this will fundamentally change the way asset
managers are paid,” said Jon Terry, a partner at
PricewaterhouseCoopers LLC. Asset managers “are now facing the
toughest pay rules across the whole of the financial-services
sector.”
- Hong Kong Homes Face 20% Price Drop as Banks Raise Rates. Hong
Kong officials, who have struggled in vain for three years to slow the
growth in home prices, are about to get their wish as the city’s biggest
banks raise mortgage rates. Prices could fall as much as 20 percent
over the next two years, according to Deutsche Bank AG, after lenders
including HSBC Holdings Plc, Hong Kong’s biggest by assets, and Standard
Chartered Plc raise their home loan rates by 25 basis points in
response to tighter risk rules. “You have this pile of measures plus
higher interest rates; this will be a big challenge for the market,”
said Buggle Lau, chief analyst at Midland Holdings Ltd. (1200), the
city’s biggest publicly traded realtor, which predicted as many as a
third of real estate agent branches in Hong Kong will close.
- Li & Fung Says it Will Miss Three-Year Target for Profit. Li
& Fung Ltd. (494), the world’s largest supplier of clothes and toys
to retailers, said it will miss its 2013 profit target after net income
dropped for the first time in four years as a sluggish U.S. economy
damped demand. Li & Fung will “miss the three-year plan,” Bruce
Rockowitz, chief executive officer, told reporters in Hong Kong
yesterday. He had set a goal in 2010 of $1.5 billion operating profit
for 2013. The supplier to Wal-Mart Stores Inc. (WMT) and Target Corp.
(TGT) gets about 60 percent of its revenue from the U.S., where an
increase in payroll taxes, higher fuel costs and federal spending cuts
have hurt consumer confidence. Net income fell 9.4 percent from a
year earlier to $617 million for 2012, missing the $671 million average
of 17 analysts’ estimates compiled by Bloomberg.
- Asian Stocks Head for Largest Weekly Drop Since October.
Asian stocks fell, with the regional equities gauge heading for its
biggest weekly decline since October, as scuffles on the streets of
Nicosia underscored concern that Europe’s debt crisis is worsening.
Bridgestone Corp. (5108), a tiremaker that gets more than 75 percent of
its sales overseas, lost 3.2 percent in Tokyo after
the yen strengthened. HSBC Holdings Plc, Europe’s largest bank,
fell 1.4 percent in Hong Kong. “It seems that the downturn could intensify” in Europe,
said Matthew Sherwood, head of investment markets research in
Sydney at Perpetual Investments, which manages about $25
billion. “Its leadership keeps looking at the hole in the hull
and wondering why they are waist deep in water, rather than
fixing the damage.”
- Solar Glut Survives Suntech as Customers Seek Alternative. A
day after Suntech Power Holdings (STP) Co. Ltd. became the solar
industry’s biggest corporate failure, workers continued to load and
unload trucks at its main factory in China, adding to the global
oversupply of panels.
- Rubber Heading for Bear Market on Dead Cross: Technical Analysis. Rubber
is poised to enter a bear market in the next month as a dead-cross
formation signals a further sell-off, according to Trading Central SA.
Futures in Tokyo, the global benchmark, may tumble as much as 14 percent
to 242 yen a kilogram ($2,550 a metric ton), said Ludwig Garric, a
technical analyst at the Paris-based company,
who correctly predicted the rally in soybeans to a record last
year.
- Uncertainty Over Global Economic Recovery Remain:
Posco's Chung. It is hard to expect a "meaningful recovery" in the
Korean economy due to the global economic slowdown, Posco CEO Chung Joon
Yang said at the annual shareholder meeting in Seoul. Competition among
steelmakers will be more severe this year on weak demand, oversupply,
he said. Economic growth in emerging markets may slow this year as the
recovery in advanced economies is being delayed due to Europe's debt
crisis and growing uncertainties over currencies and oil prices, the
company said in prepared materials.
- Rebar Pares First Weekly Gain in Five as China Economy May Slow. Steel reinforcement-bar futures
pared the first weekly gain in five on concern that growth in China will falter and Europe’s debt crisis may worsen.
Rebar for delivery in October on the Shanghai Futures Exchange fell 0.2
percent to 3,895 yuan ($627) a metric ton at 9:57 a.m. local time,
trimming this week’s gain to 0.9 percent. The Shanghai Composite Index
has dropped 4.4 percent from its Feb. 6 peak on concern that an economic
recovery will weaken as officials take steps to cool the property
market and counter
risks for banks from an expansion in credit.
- Copper Falls as Global Inventories Swell to Highest Since 2003. Copper futures fell for the
fourth time in five sessions on signs of ample global supplies as a
measure of inventory climbed to the highest in nine years. Stockpiles monitored by exchanges in the U.S., London and Shanghai
have surged 45 percent this year to the highest since November 2003.
Production of the refined metal exceeded demand by 168,600 metric tons
in December, the biggest surplus in six years, the International Copper
Study Group said today. “The supply story continues to weigh on the market,” Tim Evans, the
chief market strategist at Long Leaf Trading Group in Chicago, said in a
telephone interview. “There have been some solid economic numbers, but
not enough to change the sentiment around supply, and that will continue
to dominate.” Copper futures for May delivery fell 0.3 percent to settle $3.435 a
pound at 1:08 p.m. on the Comex in New York. The metal has dropped
about 6 percent this year. Refined copper supply will exceed demand this year by 92,000 tons,
or 0.4 percent of global consumption, as mine production increases,
Barclays Plc has forecast.
- Continued quantitative easing
brings concerns of slowing growth and inflation in U.S. economy, John
Lipsky, the IMF's former no. 2 official says at a Seoul forum today.
- When David Einhorn Talks, Markets Listen—Usually.
- Energy Drinks Boost Blood Pressure as Heartbeat Altered. Energy drinks, which have been linked to deaths and hospitalizations,
may boost blood pressure and lead to an erratic heartbeat, a study
found.
- Tibco(TIBX) shares sink on 1Q revenue miss. Tibco Software Inc. reported that its fiscal first-quarter profit fell by more than 50 percent on disappointing revenue. The news sent shares of the business software company down sharply in after-hours trading Thursday.
Wall Street Journal:
- EU Commission: Troika, Cyprus Must Work Intensively for Viable Alternative Plan. The European Union will assess Friday an alternative funding proposal
by Cyprus in return for a EUR10 billion international bailout after the
country rejected an original plan that called for a bank deposit levy, a
spokesman for the European Commission said Thursday. In comments after euro-zone finance ministers held a teleconference to
discuss developments in Cyprus, Simon O'Connor urged Cyprus to "work
intensively" with the troika of international lenders--the EU, the
European Central Bank and the International Monetary Fund--for a viable
bailout plan. "We now need to move into top gear and work intensively with the
Cypriot government and our Troika partners to design a viable
alternative solution that can be acceptable to all euro area member
states," said Mr. O'Connor who is spokesman for the EU's economics
affairs chief, Olli Rehn. Mr. O'Connor said that Cyprus appears to show "an improved spirit of
cooperation" after the government late Thursday rushed to parliament a
range of draft bills regulating the unwinding of failed banks and
introducing capital restrictions to minimize the risk of excess outflows
when the country's banks reopen. "We are conditionally satisfied that the bills on bank resolution and
restriction of capital movements are moving through the legislative
process. Vice President Rehn has been calling for the immediate adoption
of these laws, which are absolutely essential at the current juncture,"
the spokesman said. The bills are expected to be debated by Cyprus's parliament Friday to
enable the country's banks to reopen. The banks have been closed since
an original bailout agreement was struck Saturday. At the earliest,
Cyprus's banks will reopen next Tuesday.
- Peril for Euro Zone Hangs on Small Sum. The assumption of Cyprus not being a systemic risk rests on a single
expectation: that it stays in the euro zone. Should it exit, all bets
are off—and an exit becomes a real possibility if the European Central
Bank pulls out the liquidity it has been pumping into Cypriot banks,
which on Thursday it threatened to do if the Cypriot parliament doesn't
pass legislation to implement its end of the bailout agreement.
"Should Cyprus refuse to blink, I
believe the ECB will carry out the threat—it would not have to put it in
writing otherwise," said Marco Annunziata, chief economist of General
Electric Co., in a note Thursday. "At that point, Cyprus might face a
full-fledged banking crisis and be forced to leave the euro zone."
- Deaf, Blind Sue Over Web Shopping. Advocates for Disabled Say Netflix(NFLX), Target(TGT) Are Legally Obligated to Make Sites Easier to Navigate.
- Airlines Dispute Planned Air-Controller Cuts. FAA Says Sequester Forces Employee Furloughs, While Industry Argues Passengers Are Being Used as Political Pawns. Planned furloughs of air-traffic controllers that could cause major
disruptions in air travel are sparking a dispute between the Federal
Aviation Administration and airlines over how much discretion the agency
has in making its sequester cuts. The FAA, which employs virtually all of the country's civilian
air-traffic controllers, says the furloughs are unavoidable under
mandatory federal budget cuts, and it predicts flights could be delayed
by up to 90 minutes at busy airports as a result. The industry's leading trade group, Airlines for America, has sent a legal memo
to federal officials arguing that the FAA can make the cuts without
major furloughs. Representatives of several major airlines said they
back the trade group's position, but declined to comment further. Two
airline officials, who wouldn't be named, said in interviews they think
the FAA is making fliers political pawns, as the Obama administration
looks to use public backlash over flight delays to force Republicans
into a budget deal.
- Health Insurers Warn on Premiums.
Health insurers are privately warning brokers that premiums for many
individuals and small businesses could increase sharply next year
because of the health-care overhaul law, with the nation's biggest firm
projecting that rates could more than double for some consumers buying
their own plans. The projections, made in sessions with brokers and agents, provide
some of the most concrete evidence yet of how much insurance companies
might increase prices when major provisions of the law kick in next
year—a subject of rigorous debate.
The projected increases are at odds with what the Obama
Administration says consumers should be expecting overall in terms of
cost.
- Inside a Star Hedge Fund: Lots of Big Bets, Built Fast.
SAC Capital Advisors LP bet big on a firm called Ardea Biosciences Inc.
at the beginning of last year. Diving into a small stock it never
before reported owning, the
hedge-fund firm bought 1.2 million shares, which at the end of the first
quarter were valued at $26.7 million.
- Lenders Are Warned on Risk. Regulators Act to Pop a Potential Bubble Caused by Surge in Leveraged Credits.
- Older Households Loading Up on Debt.
Barron's:
Fox News:
- Iran's leader threatens to level cities if Israel attacks, criticizes US nuclear talks. Iran's leader said in a speech that the country would annihilate the
Israeli cities of Tel Aviv and Haifa if it were attacked by Israel, and
criticized the U.S. over nuclear talks. The Supreme Leader Ayatollah Ali Khamenei, who has final say on all
key decisions in Iran, says Israel is too small to be called an enemy,
and that the United States is the "center of animosity" toward the
Islamic republic. "Sometimes, leaders of the Zionist regime threaten us. They threaten
to take military action. They are not in the size to be put in the list
of Iranian nation's enemies," Khamenei said in comments broadcast live
on state TV. In a strong warning to Israel, Khamenei said that if Israel attacked
Iran, the "Islamic Republic will raze Tel Aviv and Haifa to the ground."
MarketWatch.com:
- Euro may be doomed whether Cyprus stays or goes. Commentary: No one can now trust Brussels, or Berlin. However
the crisis in Cyprus is resolved, there will be lasting effects on the
European Union that may well have sealed the fate of the euro.
CNBC:
- Cyprus Risks Euro Exit After EU Bailout Ultimatum. The European Union gave Cyprus till Monday to raise the billions of
euros it needs to secure an international bailout or face a collapse of
its financial system that could push it out of the euro currency zone. In
a sign it was at least preparing for the worst, the Cypriot government
sought powers on Thursday to imptuose capital controls to stem a flood
of funds leaving the island if there is no deal before banks reopen
following this week's shutdown. Parliament will reconvene later
on Friday to debate a raft of government crisis measures after lawmakers
adjourned a late-Thursday sitting saying they needed more time for
consultation.
- Nike(NKE) Shares Pop 8% After Earnings Beat. Nike
on Thursday posted a quarterly profit that handily beat Wall Street's
expectations and said future demand for its apparel and shoes rose.
- Chicago Announces Mass Closing of Elementary Schools. Chicago will close 54 schools and 61 school buildings by the
beginning of the next academic year in the country's third-largest
public school district, a move that union leaders called the largest
mass closing in the nation. The district will shutter 53
elementary schools and one high school by August, primarily in Hispanic
and African-American neighborhoods. The district, which has a $1 billion
annual deficit, has said it needs to close underutilized schools to
save money.
Zero Hedge:
Business Insider:
NY Times:
- To Boaz Weinstein, Betting Against JPMorgan’s(JPM) Trade Was ‘Easy’. “That was a fairly easy and obvious trade to do,” said Boaz Weinstein,
the founder of Saba Capital Management, who was among a group of
investors betting against
JPMorgan’s trader known as the London Whale. While the trade caused
losses of at least $6 billion for JPMorgan, it was enormously profitable
for Mr. Weinstein. Beyond the financial losses, the trade caused
significant
reputational damage for JPMorgan, which said last year that the
loss-making position was intended as a hedge against risk. “I think it’s
pretty clear from the Senate paper that it was not a hedge, it was a
bet,” Mr. Weinstein said.
- Blackstone(BX) Studying Dell(DELL), but Said to Be Unlikely to Bid.
- Europe Weighs iPhone Sale Deals With Carriers for Antitrust Abuse. European
Union regulators are examining the contracts Apple strikes with
cellphone carriers that sell its iPhone for possible antitrust
violations after several carriers complained that the deals throttled
competition.
Reuters:
- US senators introduce railroad antitrust bill. Two leading U.S. senators
on Thursday introduced legislation to strip railroads of their
exemption from antitrust laws, arguing that the policy has led
to higher costs for agricultural producers and other businesses. Similar bills have been introduced numerous times in the
past decade but failed to become law. "This legislation makes commonsense reforms that will
require the railroad industry play by the same antitrust rules
as other industries and will help keep costs down for
businesses, farmers and consumers," said Senator Amy Klobuchar,
the new chair of the Senate Judiciary Committee's antitrust
subcommittee and a Minnesota Democrat, in a statement. She introduced the bill along with David Vitter, a
Republican from Louisiana. Railroads say the exemptions are necessary for their
survival but businesses which rely on rail shipping, especially
power companies which use coal, say railroads have sharply
raised rates.
- Pentagon urged to stop stalling, start planning defense cuts. The Pentagon needs to stop
stalling and start figuring out how to cut its budget by $50
billion annually for the foreseeable future in a way that
preserves U.S. national security, defense analysts from across
the political spectrum said on Thursday. Warning that the department appeared to be clinging to the
hope that Congress and the White House would eventually reverse
the cuts, the analysts said the Pentagon needed to focus on
factors that drive long-term cost growth, including overhead,
compensation and acquisition.
- Brazil stocks hit 4-month low on euro zone data, Cyprus.
- Demand for stock funds plummets over Cyprus fears -Lipper. U.S.-based
stock funds
recorded inflows of just $1.9 billion in the latest week as worries over
Cyprus's debt burden disrupted demand for international stocks, data from Thomson Reuters' Lipper service showed on Thursday. The
drop in demand in the week ended March 20 came after investors poured
$11.26 billion into the funds in the previous week to capitalize on the
Dow Jones Industrial Average's nine-day winning streak. A scant
$297.3 million flowed into funds that hold stocks outside of the United
States as Cyprus, an island in the 17-nation euro currency bloc, flirted
with default on its debt.
Over the previous week, the funds had gained $2.54 billion in
new money.
- U.S. Republicans may use debt limit to leverage spending cuts. House Speaker John Boehner
and his fellow Republicans say they are preparing to use the
next debt limit deadline to fight for further spending cuts and
major changes to federal healthcare and retirement programs. Boehner's demand that any debt cap increase be matched with
commensurate budget savings sets up Republicans for another
fiscal battle with the Obama administration and a possible
repeat of the 2011 debt limit brawl that cost the United States
its top credit rating.
"Dollar for dollar is the plan," Boehner told reporters on
Thursday after the House passed a budget for next year that
would cut domestic programs drastically but is not going to be
approved by the Democratic-controlled Senate. The government is on track to hit the limit on how much it
can borrow around May 19.
- German finance minister sceptical at Cypriot proposal-paper. German Finance Minister
Wolfgang Schaeuble expressed his scepticism at the Cypriot
government's proposal for raising billions of euros during a
meeting of Germany's coalition parties on Thursday afternoon,
newspaper Bild reported. Citing participants at the meeting, the German newspaper
reported in its Friday edition that Schaeuble had said he had
deep doubts and "cosmetic touches alone" would not be enough.
Cyprus must "move and seriously save", he added.
Telegraph:
Shanghai Securities News:
- China May Issue 50% More LGFV Bonds in 2013. China may issue at least 59% more LGFV bonds in 2013 than in the previous year, Ba Shusong, a researcher at the Sate Council's Development Research Center, said in an interview today. China may face some inflationary pressures in 2H, Ba said.
China Securities Journal:
- China may soon announce new policies to support the solar industry, citing the National Development and Reform Commission researcher Wang Sicheng.
Economic Information Daily:
- China Studying Expansion of Consumption Tax. The Ministry of Finance and State Administration of Taxation are studying levying consumption taxes on some products that cause severe pollution or consume
excessive resources, citing a document by the ministry and the National
People's Congress standing committee. China may also raise tax rates
for some "high-end consumer goods," according to the report.
Evening Recommendations
Night Trading
- Asian equity indices are -.75% to unch. on average.
- Asia Ex-Japan Investment Grade CDS Index 120.0 +1.75 basis points.
- Asia Pacific Sovereign CDS Index 90.75 +8.25 basis points.
- NASDAQ 100 futures +.01%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
12:00 pm EST
- Fed revisions of Industrial Production.
Upcoming Splits
Other Potential Market Movers
- The German IFO data and the (TRI) investor day could also impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by industrial and financial shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 25% net long heading into the day.
