Style Underperformer:
Sector Underperformers:
- 1) Coal -1.31% 2) Construction -1.30% 3) Computer Services -1.01%
Stocks Falling on Unusual Volume:
- NTLS, VOD, DISH, PBR, GNMK, CLVS, IEP, LULU, SHOS, GSF, KS, PKO, JPI, BFK, ISG, WAB, MITT, HPS, MQY, TTWO, WSR, OXM, DTK, SWJ, ISF, AN, MXF, LM, GEB and BIIB
Stocks With Unusual Put Option Activity:
- 1) SIRI 2) LYV 3) AKAM 4) ITB 5) XOP
Stocks With Most Negative News Mentions:
- 1) LM 2) FCX 3) NFLX 4) GS 5) FIO
Charts:
Style Outperformer:
Sector Outperformers:
- Gold & Silver +2.31% 2) Hospitals +1.07% 3) Tobacco +.17%
Stocks Rising on Unusual Volume:
- BEAT, CTB, ULTA, SE, HMA, QCOR, CLDX and SCTY
Stocks With Unusual Call Option Activity:
- 1) KOG 2) ULTA 3) SE 4) HCA 5) DF
Stocks With Most Positive News Mentions:
- 1) EMC 2) PGR 3) RVBD 4) VZ 5) BA
Charts:
Evening Headlines
Bloomberg:
- Italy
Debt Trading Like Bunds Spells Pain for Spain: Euro Credit. Italian
borrowing costs are rising in parallel with German yields for the first
time in two years, exacerbating the risk that Europe's debt crisis will
worsen. "For the first time in a while, German and Italian bonds are
moving in the same direction as global bonds are facing the same threat
and that's central banks pulling back from extra stimulus," said Luca
Cazzulani, a senior fixed-income strategist at UniCredit Global Research
in Milan. "It will become more expensive for everyone to borrow money,
but Germany can perhaps handle this far better than Italy and Spain. The
biggest risk is when yields keep rising when there's still no growth in
peripheral nations."
- North Korea Scraps Talks on Industrial Zone, S. Korea Says. North Korea “unilaterally” called
off the highest-level talks since Kim Jong Un took power in
protest over the rank of South Korea’s proposed delegate, the
South’s Unification Ministry said. The North insisted that South Korea’s Unification Minister
meet its “much lower-ranking” official and rejected the
South’s revised proposal for vice minister-level discussions,
Unification Ministry spokesman Kim Hyung Suk said in a televised
briefing last night. The two-day talks were due to begin today
in Seoul and focus on the reopening of a joint factory park.
- Emerging-Market
Anxieties Jump by Most Since '08: Credit Markets. The biggest drop in
perceived creditworthiness for emerging-market borrowers since the
credit crisis is deepening as speculation intensifies that central banks
will scale back record stimulus. Prices on the Markit CDX Emerging
Markets index, a credit-default swaps benchmark for debtor nations from
Latin America to the Middle East and Asia, have tumbled 4 cents in the
two weeks through yesterday to 107 cents on the dollar. The decline is
the biggest since the failure of Lehman Brothers Holdings Inc.
reverberated across financial markets and caused the index to plunge 6.7
cents in the period ended Nov. 18, 2008. Investors who eight weeks ago
were willing to lend Rwanda $400 million at an interest rate of 6.625
percent in its first debt offering are now struggling to find any haven
as developing countries bear the brunt of the global bond rout.
- Indonesian Stocks Fall as Investors Sell Most Shares Since 2011.
Indonesia stocks dropped for a fifth day after overseas investors sold
the most shares in the nation yesterday since March 2011 as rising U.S.
Treasury yields lure capital from emerging markets. The Jakarta Composite Index sank 2 percent at 9:14 a.m.
local time, taking its decline from its May 20 record to 13
percent.
- Asia Stocks Drop, Extend Global Rout, on Stimulus Concern.
Asian stocks fell, extending a rout that wiped out about $400 billion
from the value of global equities yesterday, as Japanese machinery
orders declined more than expected and concern grew that central banks
from Tokyo to
Washington are increasingly reluctant to add stimulus. Toyota Motor
Corp., the world’s largest carmaker, retreated
3.2 percent in Tokyo after the yen gained the most in three
years. Hitachi Construction Machinery Co. lost 0.7 percent in
Tokyo. Hyundai Merchant Marine Co. plunged 14 percent in Seoul
after North Korea called off talks yesterday on a joint
industrial zone. The MSCI Asia Pacific Index dropped 0.8 percent to 130.54 as of 12:21 p.m. in Tokyo, with more than four shares falling
for each that advanced. Markets in China, Hong Kong, Taiwan and
the Philippines are closed for holidays.
- Goldman Maintains Neutral Recommendation on Commodity Prices. Goldman Sachs Group Inc. maintained
its neutral recommendation on commodity prices, predicting a
significant decline in agriculture in the second half of the
year even if the summer weather is worse than in 2011. “Prices are unlikely to collapse from current levels as
demand is not weak enough to create large unexpected inventory
builds while supply rarely creates a surge in inventory like
what demand can do when it falls unexpectedly,” they said.
- Copper MACD Measure Signals Drop to 2010 Low: Technical Analysis. Copper
futures in New York are poised to reach the lowest price since mid-2010
in the next two months, according to technical analysis from Paul
Kavanaugh at FuturePath Trading LLC. The moving average
convergence-divergence graph, or MACD, shows the 26-week and 12-week
moving averages traded below a nine-week measure known as the signal
line since June 7. The
crossover is a bearish sign, Kavanaugh said.
- Rubber Drops to 9-Month Low as Yen Rally Saps Investor Appetite. Rubber slumped to the lowest level
in nine months after the Japanese currency rallied the most in
three years against the dollar, sapping investor appetite for
yen-denominated futures. The contract for delivery in November lost as much as 3.9
percent to 239 yen a kilogram ($2,476 a metric ton) on the Tokyo
Commodity Exchange, the lowest since Sept. 12. Futures traded at
240.6 yen at 11 a.m., extending losses this year to 20 percent.
- Record U.S. Soybean Crop Seen Extending Bear Market: Commodities.
Stockpiles (US09ESUS) at the end of August 2014 will have gained 116
percent to 7.29 million metric tons in 12 months, according to the
average of 30 analyst estimates compiled by Bloomberg. U.S. production
will jump 12 percent to 91.74 million tons, adding almost enough extra
supply to feed India for a year. The U.S. government updates its estimates tomorrow.
- Metacapital in Worst Slide as Bloodbath Roils Funds: Mortgages. Deepak Narula rose to fame as
manager of the best-performing hedge fund last year by
navigating the government’s stimulus efforts. He’s having a far
harder time as the Federal Reserve moves closer to an exit. Metacapital Management LP’s flagship $1.5 billion fund lost
an estimated 6.4 percent last month, the worst decline since it
started in 2008, according to a letter to investors obtained by
Bloomberg News. That followed drops of 0.5 percent in April and
0.1 percent in March, after 17 months of consecutive gains
including a 41 percent return last year. Narula, like other investors in government-backed mortgage
bonds, is being punished by speculation the Fed will scale back
its debt-buying program. That has caused the securities to
underperform Treasuries by the most since 2008. Rising home
prices, President Barack Obama’s nomination of Democratic
congressman Mel Watt to oversee Fannie Mae and Freddie Mac, and
other issues have further roiled the market. “It’s been a bloodbath the last four to six weeks,” said
Troy Gayeski, a senior portfolio manager who helps invest client
money in hedge funds at SkyBridge Capital, which manages about
$7.7 billion. “It was a confluence of just about everything”
from investors’ concerns that refinancing would pick up among
some borrowers who’ve had trouble qualifying to the slump in the
mortgage debt that the Fed is buying, he said.
- Medicare Pays $900 Million a Year Too Much for Lab Tests. Medicare, the U.S. health program
for the elderly and disabled, spends $900 million more a year
than it should for medical lab services and should seek
authority from lawmakers to cut its bills, auditors said. Medicare spent about $8.2 billion on lab services in 2010,
more than any other insurer in the nation, while paying from 18
percent to 30 percent more for 20 of the highest-volume and most
expensive tests, according to the Health and Human Services
Department’s inspector general. The Centers for Medicare &
Medicaid Services, which runs the $574 billion health program,
said the agency is exploring whether it can revise payments to
labs, according to a report issued today by Daniel Levinson, the HHS inspector general. “The
lab test payment rate structure is outdated and should be changed,”
Levinson said in his report. Quest Diagnostics Inc. (DGX) and Laboratory
Corporation of America Holdings, the two largest lab services companies
in the U.S., each receive at least 15 percent of their annual revenue
from Medicare, according to data compiled by Bloomberg.
Wall Street Journal:
- Global Tumult Grips Markets. Question for Investors: Bumpy Return to Normal or New Volatility as Central Banks Step Back? The tectonic plates of the world economy are shifting, moving the yield
on the 10-year Treasury to the highest level in more than a year and
shaking financial markets from Tokyo to Mumbai and Johannesburg to São
Paulo.
- Turkish Police Move to Evict Demonstrators. Security Forces Fire Tear Gas, Water Cannons at Protesters in Istanbul Square After Premier Condemns 'Illegal Uprising'. Turkish police stormed a landmark Istanbul square in a bid to evict
entrenched protesters on Tuesday, sparking daylong clashes in the heart
of the city, as Prime Minister Recep Tayyip Erdogan clamped down after
two weeks of nationwide demonstrations. Hundreds of security forces moved into Taksim Square, the epicenter
of protests, around 7:30 a.m., firing tear gas and water cannons,
sending thousands of overwhelmingly peaceful protesters scattering from
the area. Battalions of police, which had ceded control of the area the
day after nationwide protests flared May 31, secured the square's
perimeter by 8 a.m.
- Stores Prepare to Widen Access to Plan B Pill.
Drugstores are preparing to change how they stock and sell a widely
used emergency contraceptive after the Obama administration agreed to
allow the pill to be sold over the counter to customers of all ages.
- Immigration Bill Advances in Senate. The push to rewrite the nation's immigration laws easily advanced in
the Senate Tuesday, lending the effort a burst of momentum as lawmakers
prepare to spend the rest of the month debating the issue. The Senate voted 82-15 on a motion that lets lawmakers formally
debate the bill and begin offering amendments. All 15 "no" votes came
from Republicans.
The measure, which required 60 votes to pass, won support from 28 Republicans.
- Monsanto(MON) Eyes Spring Launch in South America for New Soy Seeds. Biotechnology company Monsanto Co. (MON) plans to debut its second-generation of
genetically modified soybean seeds in its key South American market during the
next growing season. South America produces just over half the world's soybeans, with Brazil and
Argentina among the top three global producers of the oilseed, according to U.S.
Department of Agriculture data.
- Bank Indonesia Raises Overnight Deposit Rate. Bank Indonesia raised its overnight deposit facility rate by a
quarter of a percentage point to 4.25%, to help ease downward pressures
on the rupiah. The central bank said Wednesday it is "ready to take any necessary
step" to maintain monetary stability following the rupiah's recent
depreciation, Bank Indonesia said in a news release. The surprise increase in the rate, called the Fasbi, comes ahead of
the central bank's policy meeting Thursday. Analysts have said the
central bank was likely to hold its benchmark rate at 5.75% for the 16th
consecutive month.
Fox News:
- Post 9-11 terror fighting legislation under attack. In the dozen years that have passed since the Sept. 11 terror
attacks, Congress has enacted a series of laws aimed at keeping the
country safe. But today, the same measures and mandates that were once
put in place for the country’s protection have come under attack. Hardest hit: the Patriot Act.
CNBC:
Zero Hedge:
Business Insider:
New York Times:
- Insurers Inflating Books, New York Regulator Says. New York State regulators are calling for a nationwide moratorium on
transactions that life insurers are using to alter their books by
billions of dollars, saying that the deals put policyholders at risk and
could lead to another taxpayer bailout. Insurers’ use of the secretive transactions has become widespread,
nearly doubling over the last five years. The deals now affect life
insurance policies worth trillions of dollars, according to an analysis
done for The New York Times by SNL Financial, a research and data firm.
LawrenceMcDonald.com:
The Blaze:
Reuters:
- Analysis - Asia's ticking time bonds; Time to cut and run? Efforts to make
the global financial system safer could be making Asia more - not less -
vulnerable to any credit market shocks, leaving bond traders worried
that a sharp selloff since late May could turn into a rout.
Low global interest rates have
made it easier than ever to sell new bonds denominated in dollars, euros
or yen, resulting in a boom in issuance that has made Asia and its
companies ever more dependent on debt. But the market for trading those bonds is
slowly drying up, leaving it susceptible to a sharper selloff if holders
of these so-called G3 bonds decide it is time to head for the exit. "The
issue is that if any of them choose to sell their holdings, the market
may not have the capacity to absorb these flows. If we reach a stage
like that then liquidity could dry up very quickly and that can have a
spiralling effect," said Dhimant Shah, a fund manager at Mackenzie
Investments in Singapore.
- MSCI lowers Greece to emerging market status. Equity index provider MSCI on Tuesday lowered European Union member Greece to emerging market from developed market status, citing failure to qualify on several criteria for market accessibility.
- Decline in Yum's(YUM) China restaurant sales eases in May.
KFC parent Yum Brands Inc reported on Tuesday an estimated 19 percent
drop in May sales at established restaurants in China, a smaller decline
than in April when the country's bird flu outbreak caused diners to
shun chicken. That result just matched the average of eight analysts, as
compiled by Consensus Metrix. Shares in Yum fell 1.3 percent at
$70.80 in after-hours trading.
- Nasdaq short interest down 1.1 pct in late May.
Short interest on the Nasdaq dipped 1.1 percent in the last half of May,
the exchange said on Tuesday, suggesting a decrease in bearish
sentiment in the stock
market. As of May 31, short interest declined to about 7.489 billion
shares, compared with 7.574 billion shares as of May. 15.
- Germans accuse U.S. of Stasi tactics before Obama visit. German
outrage over a U.S. Internet spying program has broken out ahead of a
visit by Barack Obama, with ministers demanding the president provide a
full explanation when he lands in Berlin next week and one official likening the tactics to
those of the East German Stasi.
Quartz:
- Chinese local governments are padding their balance sheets with billions in fake assets. Even China’s most prominent cities and provinces are increasingly
relying on high-risk and murky forms of borrowing. That’s according
to a
new report from China’s National Audit Office on the finances of 36
provincial and municipal governments (link in Chinese). The report
covered the governments of cities including Shanghai, Chongqing and
Tianjin, and the provincial
governments of Guangdong, Jiangsu and others. Here’s a roundup of the
most notable numbers:
Telegraph:
Kyodo:
- Apple(AAPL) Raises Macbook Pro, IMac Prices in Japan. Co. raised notebook and desktop computer prices by as much as 40,000 yen in Japan yesterday on weakening yen. Price of 13-inch, 750GB Macbook Pro increased by 10,000 yen to 148,800 yen; iMac's most expensive model now costs 198,000 yen, 30,000 yen more than before.
Evening Recommendations
Oppenheimer:
- Rated (BOBE) Outperform, target $57.
Night Trading
- Asian equity indices are -1.25% to -.50% on average.
- Asia Ex-Japan Investment Grade CDS Index 141.0 +8.0 basis points.
- Asia Pacific Sovereign CDS Index 117.5 +12.5 basis points.
- NASDAQ 100 futures +.19%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
10:30 am EST
- Bloomberg
consensus estimates call for a weekly crude oil inventory decline of
-1,500,000 barrels versus a -6,267,000 barrel decline the prior week. Gasoline supplies are estimated to rise by +500,000 barrels versus a -366,000 barrel decline the prior week. Distillate inventories are estimated to rise by +1,500,000 barrels versus a +2,611,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to rise by +.3% versus a +2.0% gain the prior week.
2:00 pm EST
- The Monthly Budget Deficit for May is estimated to widen to -$136.5B versus -$124.6B in April.
Upcoming Splits
Other Potential Market Movers
- The Eurozone Industrial Production data, German CPI report, US 10Y T-Note auction, Australia Unemployment report, USDA Crop Report, weekly MBA Mortgage Applications report, Piper Jaffray Consumer Conference, Goldman European Financials Conference, Deutsche Industrials/Basic Materials Conference, (EA) analyst event and the (TAP) analyst meeting could also impact trading today.
BOTTOM LINE: Asian
indices are lower, weighed down by technology and financial shares
in the region. I expect US stocks to open mixed and weaken into
the afternoon, finishing modestly lower. The Portfolio is 25% net long heading into the day.
Today's Market Take:
Broad Market Tone:
- Advance/Decline Line: Substantially Lower
- Sector Performance: Every Sector Declining
- Market Leading Stocks: Underperforming
Equity Investor Angst:
- ISE Sentiment Index 98.0 +25.64%
- Total Put/Call 1.02 -3.77%
Credit Investor Angst:
- North American Investment Grade CDS Index 85.38 +1.52%
- European Financial Sector CDS Index 162.63 +3.34%
- Western Europe Sovereign Debt CDS Index 91.25 +4.88%
- Emerging Market CDS Index 341.24 +6.19%
- 2-Year Swap Spread 18.0 unch.
- 3-Month EUR/USD Cross-Currency Basis Swap -12.75 -.25 bp
Economic Gauges:
- 3-Month T-Bill Yield .04% unch.
- China Import Iron Ore Spot $110.90/Metric Tonne n/a
- Citi US Economic Surprise Index -31.0 +1.9 points
- 10-Year TIPS Spread 2.09 -1 bp
Overseas Futures:
- Nikkei Futures: Indicating -323 open in Japan
- DAX Futures: Indicating +2 open in Germany
Portfolio:
- Slightly Higher: On gains in my index hedges and emerging markets shorts
- Disclosed Trades: Added to my (IWM)/(QQQ) hedges
- Market Exposure: Moved to 25% Net Long
Bloomberg:
- European Bonds Slide After BOJ, Draghi Damp Central-Bank Bets. European government bonds fell,
pushing up borrowing costs for all euro-area sovereigns, as the
Bank of Japan’s decision to leave monetary policy unchanged
damped speculation central banks will increase debt purchases. Spanish 10-year yields climbed to the highest level in two
months as European stocks slumped. Portuguese and Irish bonds
slid after European Central Bank President Mario Draghi told
German television yesterday that debt buying will only be used
to target prices that are out of line with fundamentals. German
10-year yields rose to the most in more than three months as a
court began hearings on the ECB’s stimulus plan.
- European Stocks Fall as BOJ Adds No New Stimulus.
European stocks retreated for a
second day as the Bank of Japan refrained from expanding stimulus and
Treasuries sank amid speculation the Federal Reserve will trim bond
purchases. Legrand SA (LR) retreated 4.1 percent after Wendel sold the
remaining 14.4 million shares it holds in the world’s largest maker of
switches, plugs and lighting controls. ICAP Plc dropped 3.6 percent
after Credit Suisse Group AG recommended selling the shares. BHP
Billiton Ltd. led a gauge of mining companies to the lowest level since
2009 as copper dropped for a fourth day. DNO
International ASA surged to a five-year high. The Stoxx Europe 600 Index fell 1.2 percent to 291.74 at
the close of trading, as Germany’s top court began hearings on the European Central Bank’s Outright Monetary Transactions
program. The benchmark gauge earlier sank as much as 2.1
percent, reaching a seven-week low. The measure has retreated
6.1 percent since May 22.
- Corporate Credit Risk Rises to Two-Month High on BOJ Decision. The cost of insuring against losses
on European high-yield corporate debt rose to the highest in two
months after Bank of Japan policy makers refrained from
increasing monetary stimulus. The Markit iTraxx Crossover Index of credit-default swaps
on 50 companies with mostly junk credit ratings rose for a
second day, jumping as much as 29 basis points to 477, the
highest since April 5. The gauge was trading at 473 at 11:01
a.m. in London. The Markit iTraxx Europe Index of credit-default swaps
linked to 125 companies with investment-grade ratings rose as
much as seven basis points to 113, the highest since April 19.
An increase signals deterioration in perceptions of credit
quality. The Markit iTraxx Financial Index linked to senior debt of
25 banks and insurers climbed nine basis points to 167 and the
subordinated index rose 12 basis points to 242.
- Kuroda’s April-Was-Enough Message Faces Investors Wanting More. Bank
of Japan Governor Haruhiko Kuroda’s conviction his April plan to double
the nation’s monetary base will be enough to end deflation is
confronting its biggest test with a sustained sell-off in stocks. The Topix index fell 1 percent yesterday, extending its
decline to 14 percent from a May 22 high, after the BOJ
refrained from adding stimulus or expanding its toolkit for
tackling volatility in bonds. Kuroda has repeatedly said the BOJ
has taken all “necessary” measures.
- Emerging-Market Stocks Tumble as Ibovespa Plunges 20% From High. Emerging-market stocks slumped to a
nine-month low as Brazil’s benchmark Ibovespa (IBOV) dropped more than
20 percent from this year’s high and concern grew that global
central banks will pare economic stimulus measures. OGX Petroleo & Gas Participacoes SA, the oil producer
controlled by the Brazilian billionaire Eike Batista, led
losses in the nation’s stock index since Jan. 3, tumbling 75
percent. The MSCI BRIC Index slipped for a 10th day, the longest
losing streak since at least January 1995. OAO Gazprom, Russia’s
natural gas exporter, slid to the lowest price since March 2009
as commodities plunged. Turkey’s benchmark stock index extended
its drop to 19 percent from last month’s record as anti-government protesters clashed with riot police. The MSCI Emerging Markets Index retreated 1.7 percent to
956.87 at 11:20 a.m. in New York, set for the lowest close since
Sept. 6. The 50-day volatility on the gauge rose to 12.4, a
seven-month high.
- Junk Bond ETF Volatility Hits Three-Year High to Stocks: Options.
The cost of hedging against swings in a security tracking U.S.
high-yield debt rose to a three-year high relative to equities on
concern the bond market will extend losses should the Federal Reserve
begin curtailing its stimulus. Implied volatility on the iShares iBoxx $
High Yield Corporate Bond Fund was .71 times the measure for the SPDR
S&P 500 ETF Trust, according to Bloomberg. The ratio reached .73
on June 3, the highest level since May 2010.
- Falling New Orders Signal U.S. Stock Inflation: Chart of the Day. (graph) Inflation has taken hold in the
stock market as the prospects for earnings and the economy are
worsening, according to Barry C. Knapp, Barclays Plc’s head of
U.S. equity strategy. The CHART OF THE DAY shows how Knapp drew his
conclusion,
presented in a June 7 report. He compared the Standard & Poor’s
500 Index’s forward price-earnings ratio, based on anticipated profits,
with the Institute for Supply Management’s new-order index for
manufacturers. During May, the forward P/E climbed to a three-year high
of
15.2, according to data compiled by Bloomberg. Yet the ISM gauge
fell last month to 48.8, its lowest level since July.
- Credit Swaps in U.S. Approach Two-Month High on Stimulus Concern. A
gauge of U.S. corporate credit
risk approached a two-month high as the Bank of Japan left stimulus
efforts unchanged and concern lingered that the Federal Reserve will
reduce bond buying. The Markit CDX North American Investment Grade
Index, a credit-default swaps benchmark that investors use to hedge
against losses or to speculate on creditworthiness, added 3.3 basis
points to a mid-price of 87.4 basis points at 8:17 a.m. in New York,
according to prices compiled by Bloomberg. The index
reached 88.7 June 6, the highest intraday level since April 5.
- Crude Trade Shrinking Most Since Recession Seen Curbing Tankers. World trade in crude oil shrank the
most last quarter since the global recession, leading to lower
earnings for tankers and stunting the industry’s recovery,
according to RS Platou Markets AS. Global imports slumped 4 percent compared with a year
earlier as shipments declined to the U.S. and China, the biggest
buyers, the Oslo-based investment bank said in an e-mailed
report today. Rates for the largest tankers, known as VLCCs,
will average $15,000 a day this year, down from a previous
estimate of $20,000, according to the report. Surging production in the U.S. cut imports by 20 percent,
and the cargoes aren’t going to other countries as high prices
curb demand, Platou said in the report. Imports to China, the
main source of demand growth, slid 2 percent, Platou estimated.
Next year will be little changed.
- Citigroup(C) Facing $7 Billion Hit on Dollar Gain, Peabody Says. Citigroup Inc. (C) could lose as much as $7 billion on
currency swings if Charles Peabody is right, putting the analyst at odds
with peers who say the stock will be the best performer among big U.S.
banks in the year ahead. Peabody, who leads research at Portales
Partners LLC, is among only four analysts out of 34 tracked by Bloomberg
who recommend investors sell Citigroup shares. He estimates the bank
may lose $5 billion to $7 billion in regulatory capital this year if the
dollar gains against the yen, euro and currencies in emerging markets,
which provide about half the firm’s profit. That would be its worst
translation loss in five years, exceeding the $3.5 billion deficit in
2011.
- Decrease in Job Openings Tempers U.S. Hiring Prospects: Economy.
Job openings in the U.S. fell in April, showing companies were waiting
to assess the effects of higher taxes and reduced government spending
before committing to bigger staff increases. The number of positions
waiting to be filled fell by 118,000 to 3.76 million, the fewest since
January, from a revised 3.88 million in March, the Labor Department
reported today in Washington.
- OPEC Boosts Supply to Six-Month High; Demand Forecast Stable. The Organization of Petroleum
Exporting Countries raised crude output in May to the highest
level in six months while keeping its demand forecast for 2013
unchanged because of risks to the global economy. OPEC increased
production by 106,000 barrels a day to 30.57 million a day last month,
led by gains in Saudi Arabia, the group said today in its monthly market
report, citing secondary sources. Global oil demand will increase by 780,000 barrels a
day, or 0.9 percent, this year to 89.7 million a day, in line
with estimates in the previous report.
Wall Street Journal:
- Police Move to Recapture Istanbul Square. Prime Minister Erdogan Says Protests Are Illegal, Spurred On by Radical Groups. Turkish police moved to recapture a landmark square in Istanbul on
Tuesday, sparking daylong clashes in the heart of the city as Prime
Minister Recep Tayyip Erdogan took a tougher line against protesters
after two weeks of nationwide demonstrations.
- Money Flows Out of Emerging Markets. Money streamed out of emerging markets Tuesday, destabilizing
currencies, sinking stocks and creating headaches for policy makers
already worried about faltering growth. In the latest signs of turmoil, highflying stock markets fell sharply
in Asia, while currencies in South Africa, India and Turkey reeled in
the face of a surging U.S. dollar. Mexico's peso, which just a month ago
was trading at its strongest level in almost two years, moved to its
weakest level since late November.
Fox News:
MarketWatch:
CNBC:
Zero Hedge:
Business Insider:
CoalGuru:
- Thermal coal ARA price for 2014 plunges as Credit Suisse cuts forecast. European coal for 2014 dropped to record as Credit Suisse AG analysts
cut their price forecasts for the fuel and the region’s electricity
costs. The price of coal for 2014 delivery to
Amsterdam-Rotterdam-Antwerp declined as much as 1 percent to USD 88 a
tonne, the lowest level since the contract started trading in January
2010. European coal will average USD 85 a tonne this year compared
with a previous forecast of USD 108.20, the bank said. In 2014,
the
cost will average USD 92 a tonne from USD 114.10 predicted in December.
European power will average EUR 37.5 per MW hour in 2016, down from EUR
46.60 forecast in December. Mr
Zoltan Fekete and Mr Vincent Gilles said in a research note they are
cutting their outlook amid expectations that stagnant power demand won’t
be matched by reduced capacity, and on lowered price forecasts for
carbon emission permits and coal. They said “At that anticipated level,
gas plants will continue to lose vast amounts of money while coal
spreads will come down to break even levels by the end of the decade.”
Reuters:
- Bundesbank chief-sees risk ECB bond-buying could slow reforms.
Bundesbank chief Jens Weidmann told Germany's Constitutional Court he
saw a risk that the European Central Bank's (ECB) bond-buying (OMT)
programme could slow euro zone reforms and dent the bank's credibility. "I see the danger that despite the per se welcome arrangements of the OMT programme, consolidation and reform
efforts could slow and the credibility of monetary policy as a
guarantor of price stability would dwindle." He added it would be problematic to mutualise the solvency risk of euro zone states via monetary policy.
Handelsblatt:
- Half of Germans Want Court to Stop ECB's OMT. 48% of Germans want
highest court to stop ECB's bond-buying program while 31% say
plaintiffs' charges against ECB are unjustified.
Le Monde:
- France
Faces 'Rising Tide' of Job Cuts, Montebourg Says. The June 10
announcements of reorganization at Michelin and Lafuma and a lack of
buyers for Virgin stores and Gad abbatoirs threaten 3,000 jobs in
France. "The economy is declining everywhere in Europe, we're taking on a
lot of water, we're in the middle of a storm," Industry Minister
Montebourg said.
Mundo:
- Spain will probably have to tap its pensions reserve fund in July, citing people in the social security department.
Echoing fears that
European policymakers remain in a state of cognitive dissonance –
recognizing the need for root-and-branch overhaul of peripheral banks,
but backtracking on joint liability plans – Christopher Flowers, the
legendary FIG investor who now runs the £2.3 billion ($3.5 billion)
private equity group JC Flowers, sounded the alarm over the negative
sovereign-bank feedback loop.
In a shot across the bows of market bulls, who cite the return of
capital flows to weaker eurozone states, Flowers issued a stark warning:
"There is a scenario where we have a Lehman-type event: we wake up some
Thursday and a big country is in trouble.
"And the ECB will have to decide to support banks x, y, z. And then the
ECB will, in fact, decide to own bank x, y, z.
While we want you to share, we ask you use the functions on-site rather than copy/paste. See T's & C's for details. http://www.euromoney.com/Article/3211790/CurrentIssue/88924/Restructuring-Flowers-slams-Europe-over-inaction.html?copyrightInfo=true
Style Underperformer:
Sector Underperformers:
- 1) Coal -3.03% 2) Gold & Silver -2.55% 3) Steel -1.78%
Stocks Falling on Unusual Volume:
- TLK, IRE, IBN, C, BBVA, PBR, STO, XNPT, TVL, KERX, GNMK, LULU, XTEX, WAGE, DBL, SHOS, WWAV, HPS, PKO, MFRM, SCTY, AN, BNNY, EVEP, DLX, CSOD, POR, FNF, NAV, VNQI, AMRE, IFGL, UAN, DLX, AN, POR and MFRM
Stocks With Unusual Put Option Activity:
- 1) AMTD 2) SCHW 3) SCCO 4) HYG 5) STT
Stocks With Most Negative News Mentions:
- 1) MXIM 2) MCO 3) T 4) WFC 5) NAV
Charts:
