Bloomberg:
- Spain Jobless Rate Breaches 27% to Highest in 37 Years on Recession Woes. Spanish
unemployment rose more than economists forecast in the first quarter to
the highest in at least 37 years as efforts to tackle the European
Union’s biggest budget deficit crimped economic growth. The number of
jobless increased to more than 6 million for the first time, climbing
to 27.2 percent of the workforce, compared with 26.02 percent in the
previous three months, the National Statistics Institute in Madrid said today. That was more than the 26.5 percent median forecast
of eight economists surveyed by Bloomberg News. Prime Minister Mariano
Rajoy will tomorrow unveil measures aimed at halting a six-year economic
slump. Spain’s recession dragged into a seventh quarter in the first
three months of 2013, leaving the country with more than a fifth of all
jobless people in the EU. “The pace of the increase is surprising given we were supposed to be in a softer phase of the recession,” Ricardo Santos, a euro region economist at BNP Paribas SA in London, said in a telephone interview. “We could now end the year at 28 percent unemployment and we may see a downward revision of first-quarter
growth.”
- French Joblessness Climbs to Record, Adding Pressure on Hollande. French jobless claims rose to the
highest ever, increasing pressure on President Francois Hollande
to revive an economy that has been stalled for two years. The number of people actively looking for work increased by
36,900, or 1.2 percent, to 3.225 million, the labor ministry
said today in an e-mailed statement. Economists expected an
increase of 25,000, according to the median of three forecasts
gathered by Bloomberg News. The 23rd monthly increase takes the total number of
jobseekers past the previous record of 3.195 million, which was
set in January 1997 when Jacques Chirac had been president for
less than two years.
- Gold Rises Most Since September as Central Banks Join Buyers.
Gold climbed the most since September on central-bank buying and signs
of more investor demand following last week’s biggest drop in three
decades. Gold futures for June delivery jumped 2.2 percent to
$1,454.50 an ounce at 10:38 a.m. on the Comex in New York, heading for
the biggest gain since Sept. 13. On April 15, the metal slumped 9.3
percent, the most since March 1980.
- Grain Ships Have Biggest Fall This Year as Cargo Demand Slows. Rates for dry bulk carriers hauling
grains and minerals fell the most in a single session this year
as demand for cargoes slowed. Day rates for Panamaxes, 750-foot-long
ships capable of hauling about 75,000 metric tons of cargo, slid 3.8
percent to $8,955, the most since Dec. 20, according to the Baltic Exchange in London, which publishes shipping prices on more than 50 maritime routes. Today’s decrease, the third in a row, means
costs plunged to the lowest since April 12, exchange data show.
Rates for grain-carrying Panamaxes declined 6.7 percent
over the last three sessions.
- Iran Told Hezbollah to Join Syria War, Says Group Ex-Leader. Iran pressed Hezbollah fighters to
join the civil war in Syria to bolster President Bashar al- Assad’s armed struggle, according to Sobhi al-Tofaili, a
disaffected former leader of the militant group. The allegation, made on Lebanon’s Future Television, echoes
similar comments by George Sabra, interim leader of the Syrian
National Coalition, at a press conference in Turkey on April 22. The former Hezbollah secretary said that at least 138
militiamen had died in Syria and scores had been wounded.
Wall Street Journal:
Fox News:
- Lawmakers demand 'action' in Syria after intel confirms chemical weapons use. Top-ranking lawmakers on both sides of the aisle declared Thursday
that the "red line" in Syria has been crossed, calling for "strong" U.S.
and international intervention after administration officials revealed
the intelligence community believes chemical weapons were used. Sen. John McCain, R-Ariz., and Sen. Dianne Feinstein, D-Calif.,
chairwoman of the Senate intelligence committee, were among those urging
swift action.
- Boston Marathon bombers' next target was Times Square, says Bloomberg. DEVELOPING:
The Boston Marathon bombing suspects had Times Square in their sights
before law enforcement authorities put an end to their bloody terror
spree, according New York Mayor Michael Bloomberg. "New York was
next on their list of targets," Bloomberg said of brothers Tamerlan and
Dzhokhar Tsarnaev. Bloomberg said he received confirmation of the
chilling second phaseof their plot from the FBI.
“The fact is, New York City remains a prime target for those who hate
America and want to kill Americans.”
MarketWatch:
CNBC:
Zero Hedge:
Business Insider:
Reuters:
- 3M(MMM) cuts 2013 outlook on falling electronics demand. Diversified U.S. manufacturer 3M Co cut its 2013 profit forecast on
Thursday, citing weakening demand for flat-panel televisions as well as
the stronger U.S. dollar. The lowered outlook came after first-quarter profit and revenue both missed Wall Street expectations.
- Brazil's central bank signals interest rate hikes ahead. All the members of the
Brazilian central bank's board agree on the need to raise
interest rates to fight naggingly high inflation, but lingering
worries about the global economy could limit the scope of the
tightening cycle. In the minutes
from its most recent rate-setting meeting released on Thursday, the
central bank warned that monetary policy must remain "especially
vigilant" and signaled that it will look to administer rate hikes
cautiously to avoid tripping up the tepid economic recovery under way in
Brazil.
- COLUMN-Market euphoria misreads the signals from Brussels and Rome: Kaletsky.
- Watchmakers fret over China sales slump. Luxury watchmakers expect sales
growth to slow this year as a recovery in the United States and
buoyant Middle East demand fail to offset a China slump more deep-rooted than a temporary blip caused by anti-corruption moves. The heads of Swatch Group's biggest brand Omega and
LVMH flagship brand TAG Heuer as well as high-end
independents Patek Philippe and Ulysse Nardin all said demand in
Greater China had tumbled, particularly for high-end models.
USA Today:
The Guardian:
- Crisis for Europe as trust hits record low. Poll in European Union's six biggest countries finds Euroscepticism is soaring amid bailouts and spending cuts. "The
damage is so deep that it does not matter whether you come from a
creditor, debtor country, euro would-be member or the UK: everybody is
worse off," said José Ignacio Torreblanca, head of the ECFR's Madrid
office. "Citizens now think that their national democracy is being
subverted by the way the euro crisis is conducted." The most dramatic fall in faith in the EU has occurred in Spain,
where the banking and housing market collapse, eurozone bailout and
runaway unemployment have combined to produce 72% "tending not to trust"
the EU, with only 20% "tending to trust".
Style Underperformer:
Sector Underperformers:
- 1) Papers -.48% 2) Drugs -.12% 3) REITs -.04%
Stocks Falling on Unusual Volume:
- CAP, VPFG, CRR, INTU, PLD, RJF, QCOM, CLW, CTXS, BLL, SWY, VAR, ARII, UFS, VCI, PRLB, OIS, MMM, RS, TSCO, MLNX, QLIK, KEP, HLIT and VIP
Stocks With Unusual Put Option Activity:
- 1) DNDN 2) SWY 3) HRB 4) WM 5) LGF
Stocks With Most Negative News Mentions:
- 1) INTU 2) TILE 3) CFR 4) SWK 5) D
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Education +4.84% 2) Disk Drives +3.62% 3) Steel +3.02%
Stocks Rising on Unusual Volume:
- INFN, NXST, NIHD, TVL, COG, SYMM, RNDY, OTEX, STMP, ANGI, CRI, FIO, MEOH, BYI, LTM, JAH, AKAM, NOW, CAB, CAKE, FFIV, CLF, RCL, CLGX, TER, RRD, EQT, ALXN, RYL, CDNS, SCI, BG, BC, LRCX, LKQ, KKR, WDC, WDAY, CCI, PHM, LPS, LEA, BYD, BIIB, WLT and FRAN
Stocks With Unusual Call Option Activity:
- 1) RVBD 2) PXP 3) FIO 4) LRCX 5) RCL
Stocks With Most Positive News Mentions:
- 1) WLP 2) KNX 3) WM 4) JNJ 5) UPS
Charts:
Evening Headlines
Bloomberg:
- Italy Led by Letta Brings Berlusconi Back to Governing as Winner. Silvio Berlusconi, the three-time
prime minister and two-time convicted lawbreaker, won a path
back to power in Italy by outmaneuvering rivals during an eight-
week political stalemate. A year and a half after resigning in near-disgrace, the 76-
year-old billionaire became the key figure in talks to form the
next Cabinet after Enrico Letta of the Democratic Party was
appointed prime minister yesterday. Berlusconi and his 241
lawmakers, the second-biggest contingent, hold the votes Letta,
46, needs to secure a parliamentary majority. “Silvio Berlusconi is the real winner,” Nichi Vendola, an
opponent and head of the Left, Ecology and Freedom party, said
April 20 after the owner of broadcaster Mediaset SpA (MS) laid the
groundwork to be part of the governing alliance.
- Slovenian Banks Need $1.2 Billion by July 31, May Require More. Slovenian
banks including Nova
Ljubljanska Banka d.d and Nova Kreditna Banka Maribor d.d. will need a
capital injection of at least 900 million euros ($1.2 billion) by the
end of July as the government works to fix the banking industry without
seeking outside aid. The government of Prime Minister Alenka Bratusek, in power
for five weeks, included a list of priorities in a draft
document posted yesterday on the website of the parliament in
Ljubljana. It said the plan will be sent to European officials
by May 9.
- Renault First-Quarter Revenue Falls 12% on European Drop. Renault
SA (RNO), France’s second-biggest carmaker, said first-quarter revenue
fell 12 percent as an intensifying car-market contraction in Europe
that’s now in its sixth year overwhelmed delivery growth outside the
region. Sales dropped to 8.27 billion euros ($10.7 billion) from a
restated 9.37 billion euros a year earlier, the Boulogne-
Billancourt, France-based company said yesterday in a statement.
Revenue was less than the 8.57 billion-euro average of 11
analyst estimates compiled by Bloomberg. Renault and larger competitor
PSA Peugeot Citroen (UG) cut their forecasts for industrywide European
car sales in 2013 as a recession in the 17 countries that use the euro
pushed the automotive market in Europe to a two-decade low.
- Mutant Bird Flu Virus Evolves to Show Pandemic Characteristics. A mutant version of a bird flu virus created by scientists last year
to show its ability to spread between humans evolved to show
characteristics of previous pandemic viruses, a study found. A
genetic component of the mutant H5N1 virus developed a 200-fold
preference for binding with human over avian receptors, according to a
study led by researchers at the MRC National Institute for Medical
Research in London. Their paper was published today in the scientific
journal Nature.
- China Stocks Fall for 3rd Time in Four Days as Volatility Rises. China’s
stocks fell for the third time in four days, led by banks and
developers, as a gauge of price swings on the benchmark index rose to a
one-year high. Industrial Bank Co. sank 1.9 percent, while Poly Real
Estate Group Co. (600048) fell to a two-week low, leading a 1 percent
slump in the CSI 300 Financials Index. Jiangsu Yueda Investment Co.
posted the third-biggest decline in the Shanghai Composite (SHCOMP)
Index after first-quarter profit fell. “Investors are still very
concerned about the economy
after the slew of bad data recently,” Deng Wenyuan, an analyst
at Soochow Securities Co., said by phone from Suzhou, near
Shanghai. “Financials and property stocks get affected the most because
they take up a large percentage of the index and they are cyclical
stocks, which don’t do well when economic growth is slowing.” The
Shanghai Composite slumped 8.9 percent from a Feb. 6 high to yesterday
on concern slowing growth will hurt earnings.
- Risk of Miscalculation Over North Korea Has Grown, Dempsey Says. The
risk of a miscalculation in the dispute over North Korea’s nuclear and
missile programs has increased, and China takes the tensions “very
seriously,” the chairman of the U.S. Joint Chiefs of Staff said
yesterday. North Korea is “in a period of prolonged provocation
rather than cyclical provocation,” Martin Dempsey told
reporters yesterday after arriving in Beijing April 21 and
meeting officials including President Xi Jinping.
- Rebar Trades Near Lowest in Four Months as Iron Ore Declines. Steel
reinforcement-bar futures in Shanghai traded near the lowest level in
more than four months, as ironore prices retreated to the lowest since
March 21 and high output weighed on the market. The contract for October
delivery on the Shanghai Futures Exchange fell as much as 0.6 percent
to 3,625 yuan ($587) a metric ton and was at 3,632 yuan at 10:09 a.m.
local time. Futures touched 3,578 yuan yesterday, the lowest since
Dec. 5. Spot iron ore at Tianjin port fell 1 percent to $135.10 a dry
ton yesterday, Steel Index Ltd. data show. The China Iron and Steel
Association will release its production estimate tomorrow for the
mid-April period. Output should have increased, Dang Man, an analyst at
Maike Futures Co., said by phone from
Xi’an today. “The market is still quite bearish given the high output
and declining raw-material prices,” Dang said. “Futures could
test the 3,500 yuan support level in the next few days.”
- Zinc Falls as Base Metals Slip Amid Weak Economic Data in China. Zinc
led declines in base metals in London as signs of slowing economic
growth in China added to concerns that demand for industrial metals will
decline. Aluminum and lead also slipped, while copper and nickel
were little changed. Zinc for delivery in three months on the London
Metal Exchange dropped 0.6 percent to $1,907 a metric ton at 11:09 a.m.
Seoul time. Copper dropped as much as 0.7 percent to
$6,982.75 and swung between losses and gains before trading
little changed.
- Paulson to Start Second Real Estate Fund After Decline in Assets. Billionaire John Paulson is
starting another private-equity fund to invest in real estate,
marking the second time this month that his money-management
firm has revealed plans to raise additional assets. Paulson & Co., which is based in New York, will seek
capital for Paulson Real Estate Fund II LP as well as an
offshore affiliate, according to a private-placement notice it
filed with the U.S. Securities and Exchange Commission on April
22. The funds haven’t begun taking money from clients, according
to the filing. The investment firm’s assets under management have declined
to $18 billion from a peak of about $38 billion in early 2011
after money-losing bets tied to gold, the European sovereign-
debt crisis and the U.S. economy.
Wall Street Journal:
- Bomb Suspect Was Put on Two Watch Lists. CIA, FBI Flagged Him for Concern, Raising New Questions About Missed Opportunities to Prevent Fatal Boston Attack. U.S. authorities put alleged Boston bomber Tamerlan Tsarnaev on two
separate watch lists in 2011 after Russian security agencies twice
reached out to their American counterparts, raising new questions about
missed opportunities to prevent the attack.
Russian officials contacted the
Federal Bureau of Investigation in March 2011, then reached out to the
Central Intelligence Agency in September of that year, citing concerns
Mr. Tsarnaev might have been associating with extremists, according to
U.S. officials.
- Wheels Are Falling Off the Commodities Supercycle. Two things underpinned the upswing in industrial commodities. First,
low prices discouraged investment in new oil fields and mines through
most of the 1980s and 1990s. Second, demand in emerging markets,
especially China, jumped.
Neither factor will hold this decade in the way they did during the last.
- CFTC's Chilton Says Staff Eyeing Trading After Hoax. Commodity Futures Trading Commissioner Bart Chilton said agency
officials are looking into trading that took place after the Tuesday
Twitter hoax that sent markets careening sharply lower in a matter of
minutes. Mr. Chilton, a Democrat, told The Wall Street Journal that the CFTC is
looking into the trading of 28 heavily traded futures contracts during a
five-minute period after a false tweet from the Associated Press's
Twitter feed said there were two explosions at the White House and
President Barack Obama was injured. A group identifying itself as the
Syrian Electronic Army claimed responsibility for the fake tweet.
- European Bonds Are Defying Gravity. "The markets are overestimating the capacity of the European Central
Bank to intervene in case of need," said Roberto Perotti, an economist
at Bocconi University in Milan. He argues that Italy is essentially too
big to save, even by the ECB, if it ran seriously aground. And Italy's weak economy raises its risk: Without economic growth, it
is difficult to contain Italy's huge public debt—the second-largest as a
proportion of GDP in the euro zone, after Greece. Moreover, restarting economic growth will be a significant challenge.
Low rates from the central bank—the ECB's main interest rate is 0.75%,
and many analysts now expect a cut as soon as next week—haven't
effectively percolated down to small businesses and consumers in Italy
or Spain. "On our reckoning, liquidity conditions in the euro zone are as poor
as they've been at any time in the past four or five years," said Mike
Howell of CrossBorder Capital, a London research firm that tracks money
flows.
MarketWatch.com:
CNBC:
- Why Are Japanese Still Dumping Foreign Bonds? There are great expectations that Japanese companies flooded with
liquidity will pour some of it into foreign bond markets, but latest
capital flow data published on Thursday tell a different story. Japanese institutions were net sellers of foreign bonds for a sixth
straight week, selling 862.6 billion yen ($8.7 billion) in overseas debt
for the week ended April 20, according to weekly data from the Ministry
of Finance, more than double the net 331.9 billion in the previous
week.
Zero Hedge:
Business Insider:
LA Times:
- Multiple explosions, fires reported on barges near Mobile, Ala. Three people were hurt in multiple explosions aboard two fuel barges
in the Mobile River in Alabama on Wednesday night, according to the
Mobile Fire Department. The department said the three victims were taken to a
hospital. The Coast Guard said they had been burned, and their
conditions were unknown. The fire department said the barges experienced four blasts, with the
first reported about 9 p.m. The incident occurred in the vicinity of
the Carnival Triumph, the cruise ship that lost power in the Gulf of
Mexico and later broke loose of its moorings at a Mobile shipyard.
Politico:
- Lawmakers, aides may get Obamacare exemption. Congressional leaders in both parties are engaged in high-level,
confidential talks about exempting lawmakers and Capitol Hill aides from
the insurance exchanges they are mandated to join as part of President
Barack Obama’s health care overhaul, sources in both parties said. The
talks — which involve Senate Majority Leader Harry Reid (D-Nev.), House
Speaker John Boehner (R-Ohio), the Obama administration and other top
lawmakers — are extraordinarily sensitive, with both sides acutely aware
of the potential for political fallout from giving carve-outs from the
hugely controversial law to 535 lawmakers and thousands of their aides.
Discussions have stretched out for months, sources said. A source close to the talks says: “Everyone
has to hold hands on this and jump, or nothing is going to get done.”
Yet if Capitol Hill leaders move forward with the plan, they risk
being dubbed hypocrites by their political rivals and the American
public. By removing themselves from a key Obamacare component, lawmakers
and aides would be held to a different standard than the people who put
them in office.
AP:
- South Korea warns of 'grave measure' if North Korea rejects talks on shuttered factory. South Korea on Thursday warned of an unspecified "grave measure" if
North Korea rejects a call for talks on a jointly run factory park that
has been closed for nearly a month. In a televised briefing with reporters, Unification Ministry
spokesman Kim Hyung-suk refused to describe what Seoul would do if
Pyongyang doesn't respond by a deadline Friday to a demand for formal
working-level talks on the industrial complex just over the heavily
armed border in the North Korean town of Kaesong. But Seoul may be signaling it will pull out its remaining workers
from the factory across the border in Kaesong. That could lead to the
end of a complex considered the last remaining symbol of inter-Korean
cooperation.
Reuters:
- GM(GM) sees April U.S. new-car sales rising at similar rate to March. General Motors Co
Chief Executive Dan Akerson said he sees the U.S. auto
industry's new-vehicle sales in April rising at a similar rate
as the previous month, when they increased 3.4 percent. Akerson said he was especially worried about weak consumer
confidence. Worries about a possible slowdown in the U.S. economy were
underlined on Wednesday after orders in March for long-lasting
manufactured goods recorded their biggest drop in seven months. The Commerce Department said U.S. durable goods orders
slumped 5.7 percent as demand fell across the board for these
goods -- items from toasters to aircraft that are meant to last
three years or more. The decline followed a 4.3 percent increase
in February and was double what economists had expected. Akerson also said that Europe, where the U.S. automaker does
not expect to return to profitability before 2015, remains weak.
He pointed to the loss reported on Wednesday in that region by
U.S. rival Ford Motor Co.
- Qualcomm's(QCOM) earnings outlook points to competition in Asia.
Leading mobile chipmaker Qualcomm forecast earnings below expectations
on Wednesday as competition in smartphones intensifies and shifts toward
Asia, and its stock fell sharply. San Diego-based Qualcomm is
benefiting from strong demand for smartphones and a shift by network
operators worldwide to a
high-speed wireless technology known as long-term evolution
(LTE), where the chipmaker is ahead of rivals. But the market potential is attracting growing competition
from smaller rivals eager to expand their mobile presence in
Asia and other developing regions.
Financial Times:
- JPMorgan(JPM) under pressure in Basel spat. Leading
European companies have accused JPMorgan Chase and other US banks of
putting their own interests ahead of their clients in
a spat over tough new bank capital rules for derivatives sold privately
off exchanges.
- Europe’s ills cannot be healed by monetary innovation alone. Governments and companies must introduce structural reforms, says Yves Mersch. The
eurozone faces a triple problem: stretched states, fragile banks and
shrinking economies. If addressed properly, we can make a virtuous cycle
that will help with all three. If managed poorly, however, they could
descend into a vicious cycle. Governments and banks are now linked. States that had to
recapitalise impaired domestic banks have taken on extra debt.
Conversely, sound banks have been affected by the weakness of their home
governments. The effect has been to lower the credit ratings of both
banks and sovereigns. Combined with the need to deleverage and the
freezing of money markets, there is now less international lending
through financial markets and the flow of credit is hampered.
Der Standard:
- ECB monetary policy in "challenging situation" amid inflation differentials across euro area and ECB used unconventional steps to curtail monetary conditions drifting apart, ECB Executive Board member Benoit Coeure is quoted as saying. Euro area countries need to pursue structural reforms, improve guidance. Case of Cyprus has shown that taxpayers won't have to pay for mistakes made by banks, he said. "Bail in" rescue is "right and important" concept that is internationally accepted.
Yomiuri:
- Farmers in Japan's Fukushima will begin trial farming in 10 restricted zones affected by the 2011 earthqake, tsunami and nuclear disasters, citing the prefecture's horticultural bureau.
Evening Recommendations
Night Trading
- Asian equity indices are -.25% to +.75% on average.
- Asia Ex-Japan Investment Grade CDS Index 111.50 +.5 basis point.
- Asia Pacific Sovereign CDS Index 90.0 +.75 basis point.
- NASDAQ 100 futures +.15%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
8:30 am EST
- Initial Jobless Claims are estimated to fall to 350K versus 352K the prior week.
- Continuing Claims are estimated to fall to 3060K versus 3068K prior.
11:00 am EST
- The Kansas City Fed Manufacturing Activity Index for April is estimated to rise to -1.0 versus -5.0 in March.
Upcoming Splits
Other Potential Market Movers
- The Spanish Unemployment report, UK gdp report, 7Y T-Note auction, Japanese CPI, weekly EIA natural gas inventory report and the weekly Bloomberg Consumer Comfort Index could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by commodity and industrial shares in the region. I expect US stocks to open modestly higher and weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.
Broad Market Tone:
- Advance/Decline Line: Slightly Higher
- Sector Performance: Most Sectors Rising
- Market Leading Stocks: Outperforming
Equity Investor Angst:
- ISE Sentiment Index 128.0 +30.61%
- Total Put/Call .80 -10.11%
Credit Investor Angst:
- North American Investment Grade CDS Index 80.02 -.82%
- European Financial Sector CDS Index 158.0 +.36%
- Western Europe Sovereign Debt CDS Index 97.96 +.29%
- Emerging Market CDS Index 234.43 +.24%
- 2-Year Swap Spread 13.0 -.5 bp
- 3-Month EUR/USD Cross-Currency Basis Swap -17.5 +.25 bp
Economic Gauges:
- 3-Month T-Bill Yield .05% unch.
- China Import Iron Ore Spot $135.10/Metric Tonne -.95%
- Citi US Economic Surprise Index -7.90 -3.0 points
- 10-Year TIPS Spread 2.38 +1 basis point
Overseas Futures:
- Nikkei Futures: Indicating +130 open in Japan
- DAX Futures: Indicating +12 open in Germany
Portfolio:
- Slightly Higher: On gains in my retail and tech sector longs
- Disclosed Trades: Added to my (IWM)/(QQQ) hedges, then covered some of them
- Market Exposure: 50% Net Long
Bloomberg:
- German Ifo Sentiment Fell After Winter Chilled Recovery: Economy. German business confidence fell for a second month in April after
winter weather hindered the recovery in Europe’s largest economy, adding
to signs that the European Central Bank may cut interest rates. The
Ifo institute in Munich said its business climate index, based on a
survey of 7,000 executives, dropped to 104.4 from 106.7 in March.
Economists in a Bloomberg News survey forecast a decline to 106.2, according to the median of 44 estimates.
- Pimco Reduced Its Holdings of Spanish, Italian Bonds, Balls Says. Pacific Investment Management Co.
cut its holdings of Spanish and Italian government debt starting
last month after a rally in the securities, according toAndrew Balls, the London-based head of European portfolio management.
“We’ve been reducing credit risk in our portfolios and in recent weeks
we’ve cut Italy and Spain,” Balls said today in a telephone interview.
“It’s a function of levels and
fundamentals. The spreads look reasonable but not as attractive
as they were.”
- Bird Flu Strain Spreads as Taiwan Reports First H7N9 Infection. Taiwan confirmed an H7N9 bird flu infection in a traveler
returning to the island from China, the first incidence of the killer
virus spreading outside the mainland. A 53-year-old Taiwanese man
tested positive for the latest strain of avian flu after a business
trip to the eastern city of Suzhou and returning to Taiwan via Shanghai,
Minister of Health Chiu Wen-ta said at a briefing in Taipei yesterday.
The patient, who is in critical condition in an isolation room, didn’t
come into contact with birds and poultry, Chiu said. The first
discovery of the virus outside China, 10 years after an outbreak of the
Severe Acute Respiratory Syndrome, or SARS, may lead to increased
scrutiny of travelers into and out of the country.
- Chinese
Contracts Reach Four-Year High as Economy Slows: Options. The cost of
hedging against swings in Chinese equities has risen to the highest
level in almost four years relative to other emerging markets on signs
the world's second-largest economy is losing momentum. The difference in
implied volatility for the iShares FTSE China 25 Index Fund and the
iShares MSCI Emerging Markets Index Fund has more than doubled to 5.12
since Feb., based on data compiled by Bloomberg on three-month contracts
with an exercise price closest to the shares. That's the biggest gap
since August 2009 for the measure of options costs.
- LG Electronics Profit Plunges 91% Amid Stagnant TV Demand. LG Electronics Inc. (066570), the world’s
second-largest television maker, posted a 91 percent drop in
first-quarter profit as a stagnant market hurt TV sales. The
shares fell.
- Jones Group to Close 170 Stores While Trimming 8% of Workforce. Jones Group Inc. (JNY), the owner of the
Jones New York, Nine West and Anne Klein fashion brands, will
close 170 stores and cut 8 percent of its workforce after first-
quarter profit trailed analysts’ estimates.
- Senate Will Pass Online Tax Bill This Week, Reid Says. The U.S. Senate will pass a bill
this week that will let states collect sales taxes from
retailers outside their borders, said Senate Majority Leader
Harry Reid. Reid, a Nevada Democrat, blamed a “handful” of senators
for delaying a final vote on the measure, which attracted 74
supporters on a procedural vote April 22.
Wall Street Journal:
Fox News:
MarketWatch:
CNBC:
Zero Hedge:
Business Insider:
Reuters:
CNN:
Telegraph:
Australia Network News:
- 21 people killed in social unrest in China's Xinjiang. Clashes in China's western region of Xinjiang have left
21 people dead, including police officers and social workers, a
provincial government official said. Gun fights broke out in Bachu
county after police went to search the home of locals suspected of
possessing illegal knives, a report on government-run news website
Tianshan Net said. The report said 15 of those killed were either
police or social workers, including 11 members of China's Uighur ethnic
minority, who live mainly in Xinjiang. A further six "gang
members" were reportedly shot dead in the violence, while eight more
were arrested. A provincial government official said these people were
Uighurs but did not confirm their identity. The report said an
investigation showed the gang members had been plotting to carry out
"terrorist activities", and branded the fighting a "violent terror
incident".
