Style Underperformer:
Sector Underperformers:
- 1) Oil Tankers -1.82% 2) Coal -1.37% 3) Education -1.30%
Stocks Falling on Unusual Volume:
- S, PTR, SNCR, GTN, TTEK, GOOD, MW, LZB, POOL, GOF, CTB, NOAH, TROX, ENV, SXC, BRO, VIPS, PRSC, GCI, TSRO, DXCM, ADUS, BBRY, SODA, UFPI, CME, BEN and WLT
Stocks With Unusual Put Option Activity:
- 1) MW 2) ADBE 3) AKS 4) FDX 5) MU
Stocks With Most Negative News Mentions:
- 1) DRI 2) KLAC 3) AKS 4) TGT 5) BAC
Charts:
Style Outperformer:
Sector Outperformers:
- Networking +.48% 2) Internet +.23% 3) Energy +.12%
Stocks Rising on Unusual Volume:
- ADBE, LINE, NKTR and NVDA
Stocks With Unusual Call Option Activity:
- 1) VNDA 2) RPRX 3) FNSR 4) KERX 5) ADBE
Stocks With Most Positive News Mentions:
- 1) BLL 2) TOL 3) UNFI 4) BA 5) WMT
Charts:
Evening Headlines
Bloomberg:
- China Swaps Climb for Record 13th Day as Cash Shortage Deepens. China’s
one-year interest-rate swap climbed for a record 13th day as the
central bank refrained from adding funds to the financial system to
compensate for slowing capital inflows. A sale of 10-year government
debt attracted the fewest orders since August 2012. The People’s
Bank of China asked lenders to submit orders for 14-day
reverse-repurchase contracts, which are used to add funds, and 28-day
repurchase contracts this morning, according to a trader at a primary
dealer required to bid at the auctions. The PBOC has refrained from
using reverse repos since Feb. 7. Regulators are forcing trust funds
and wealth managers to shift assets into publicly traded securities as
part of its crackdown on so-called shadow banking. “The market is
disappointed by the lack of reverse repos from the PBOC,” said Frances
Cheung, a strategist at Credit Agricole CIB in Hong Kong. “The
liquidity squeeze stems from less inflows and policy makers’ own policy
to crack down on shadow banking, so the PBOC may be reluctant to use
short-term tools to help.” The one-year swap, the fixed cost needed to
receive the floating seven-day repo rate, jumped 20 basis points to 4.18
percent as of 10:47 a.m. in Shanghai, according to data compiled
by Bloomberg. That was the highest level since September 2011
and the longest run of gains in data compiled by Bloomberg going
back to 2006.
- GM(GM) Says China Luxury Vehicle Demand Slower Than Expected.
General Motors Co. (GM), which broke ground on a new Cadillac assembly
plant in China today, forecast demand for luxury autos will grow at a
slower pace than the total vehicle market this year. Sales of premium
cars in China will probably increase about
4 percent this year, or about half the pace that the automaker
had expected at the start of the year, Bob Socia, GM’s China
head, said in a briefing in Shanghai today. The automaker has
said it expects total industry sales to increase about 7 percent
to 8 percent this year. “Even taking into consideration the crackdown on
corruption, calls for frugality and slower economic growth,
luxury car demand should hold at around 10 percent growth,”
said Han Weiqi, an auto analyst with CSC International Holdings
Ltd. in Shanghai. “GM’s estimate for 4 percent growth means
they expect the segment will be pretty sluggish.”
- China’s Military Buildup Worrisome, Japan’s U.S. Ambassador Says. China’s “spectacularly active” naval posture and “massive”
military buildup in Asia are part of a pattern of belligerent behavior
toward Japan and other neighbors over maritime disputes, according to
Japan’s ambassador to the U.S. Speaking at a Bloomberg Government
breakfast in Washington yesterday, Japanese Ambassador to the U.S.
Kenichiro Sasae described China’s increasingly frequent forays to lodge
territorial claims in the resource-rich East and South China Seas as
“harassing” and “provocative.” Japan is urging the Chinese
government to “restrain yourself,” said Sasae, who served as deputy
foreign minister until last year.
- Aussie
Risk Premium Increases to Most in Year: Australia Credit. The cost to
insure corporate debt in Australia exceeds the global average by the
most in almost a year on concern the economy is losing the advantages
that allowed it to survive two decades without recession. The Markit
iTraxx Australia gauge climbed to 124 basis points on June 13, or 22
basis points higher than the average of four other credit-default swaps
indexes from around the world, the widest gap since July, CMA prices
show. Swaps on Rio Tinto Group, whose borrowing costs increased in a
bond sale last week, jumped 40 basis points to 125, the steepest climb
this year among the Australian index's 25 members, the data show.
- China Stocks Fall to a Six-Month Low Amid IPO, Property Concern. China’s
stocks fell to a six-month low amid speculation the government may
introduce more property curbs to contain rising prices and regulators
are considering resuming approvals of initial public offerings. China
Vanke Co. slid to the lowest level in six months as the China Securities
Journal reported the country may expand property tax trials to more
cities “soon.” Jiangxi Copper Co. and Yanzhou Coal Mining Co. led
declines for metal and energy companies before a manufacturing report
tomorrow. China will allow IPOs only after new rules aimed at boosting
protection for investors go into effect, a China Securities Regulatory
Commission official with knowledge of the matter said. The Shanghai
Composite Index (SHCOMP) fell 1 percent to 2,137.48 at 9:51 a.m. local
time, poised for the lowest close since Dec. 13, while the CSI 300 Index lost 1.3 percent to 2,388.07 and the Hang Seng China Enterprises Index (HSCEI) dropped 1.3 percent.
- Asian Stocks Gain as Japanese Exporters Rise on Weak Yen.
Asian stocks rose as Japanese exporters rallied after the nation’s
shipments increased and the yen weakened ahead of the conclusion of a
Federal Reserve policy meeting. Honda Motor Co. (7267), a Japanese
carmaker that gets about 83 percent of sales from overseas, added 1.3
percent. Mitsui O.S.K. Lines Ltd., the largest operator of merchant
shipping fleets, rose 1.3 percent in Tokyo after a gauge that tracks the
cost of shipping commodities increased for a ninth day. Rio Tinto (RIO)
Group gained 1.7 percent after a report the world’s No. 2 mining
company will cut jobs at its Australian iron-ore operations. The MSCI Asia Pacific Index rose 0.4 percent to 132.24 as
of noon in Tokyo, paring gains of as much as 1 percent.
- Brazilian Protests Resume as 50,000 Mass in Sao Paulo. Brazilian protesters angry about a
range of political and economic issues took to the streets for
the sixth night in less than two weeks with some attempting to
storm city hall in Sao Paulo, South America’s largest city. About 50,000 people massed throughout Sao Paulo and
thousands marched on city hall, according to Datafolha, the
Grupo Folha research institute. A smaller group backed police in
full riot gear against a wall and attempted to break into the
building before they were stymied by other demonstrators forming
a human chain to stop them. Protestors then marched down all
eight lanes of Avenida Paulista, the city’s main boulevard.
- Copper Near Six-Week Low Ahead of FOMC Meeting Outcome.
Copper traded near the lowest level
in six weeks as investors waited for the outcome of Federal Reserve’s
meeting tonight. Metal for delivery in three months was little changed
at
$7,011 a metric ton on the London Metal Exchange as of 9:39 a.m.
Shanghai time after falling to $6,965 yesterday, the lowest
since May 3.
- Copper Slump Longest Since 2001 on Supply Gain:
Chart of the Day. Copper traded in London is heading for a third
straight quarterly decline, the longest slump in more than a decade,
reflecting concern that slowing economic growth will curb demand for
already ample supply. Prices are down 7.1% since the end of March,
following a 4.9% slide in the first quarter and a 3.3% drop in the 2012
fourth quarter. The last stretch of losses that long ended in September
2001. Copper for delivery in three months on the LME is down 12% this
year.
- Sudden Stock Crashes Usually Caused by Human Error, SEC Says. Concern that American stock markets
have become more susceptible to split-second crashes due to
computerization isn’t supported by the data, a Securities and
Exchange Commission official said. Most “mini-flash crashes,” a term sometimes applied when
an individual U.S. stock briefly surges or plunges for no
obvious reason, are the result of human errors, not broken
software, said Gregg Berman, head of the SEC’s Office of
Analytics and Research.
- BofA(BAC) Should Face Foreclosure Probe by TARP Watchdog, Waters Says. Bank of America Corp.
(BAC), the second-biggest U.S. lender, should be investigated for its
treatment of distressed homeowners, said Representative Maxine Waters,
the
top Democrat on the House Financial Services Committee. Employees say the lender told them to delay applications to
the Home Affordable Modification Program, or HAMP, to increase
fees and send customers into foreclosure, Waters wrote today in
a letter to the watchdog for the U.S. government’s bailout
program. She cited a June 14 Bloomberg article based on court
documents in making the request.
Wall Street Journal:
- U.S. to Propose New Phase In Nuclear-Arms Cuts. President
Barack Obama, in a major foreign-policy speech in Berlin on Wednesday,
is set to make the case for a new phase in nuclear-weapons reductions,
said senior U.S. officials briefed on the plans. Despite mounting tensions with Cold War adversary Russia over the
Syrian civil war and missile defense, Mr. Obama is expected in the
speech to say the U.S. and Russia can reduce their arsenals of deployed
nuclear weapons by as much as another one-third, beyond the cuts
mandated under the 2010 New START, or Strategic Arms Reduction Treaty,
without undercutting deterrence or capabilities, the officials said.
- Traders Try to Game Platts Oil-Price Benchmarks. The European Union says it is searching for evidence that oil traders
manipulate prices. If oil trader Halis Bektas is correct, it shouldn't
be hard to find. Mr. Bektas describes one strategy he has used himself: Offer to sell a
small amount at a loss to drive down published oil prices, then snap up
shiploads at the lower price.
- Middle-Class Brazil Finds Its Voice in Protests. Demonstrations Showcase Electorate's Rising Demands; Leader Shows Empathy. A day after the biggest demonstrations in decades gripped Brazil, this
South American nation awoke to a shifting political landscape, with
protest leaders seeking to turn Monday's venting of national frustration
into a long-term movement, and a wary political class searching for
footing in a country that has voiced a powerful call for change.
Fox News:
- Did senior State Department security officials commit perjury? Two top officials at the State Department's Diplomatic Security Service
(DS) -- the federal law enforcement agency that protects American
diplomats and investigates allegations of criminal misconduct by State
Department employees -- gave sworn testimony earlier this year that
appears to be evasive at best, and untrue at worst, according to
evidence obtained by Fox News.
CNBC:
- Emerging Market Allocations Lowest Since 2008. Investor confidence in emerging markets is continuing to plummet,
with a recent fund managers' survey showing that equity investment in
the group of countries has fallen to its lowest level since December
2008. The BofA Merrill Lynch Fund Manager Survey for June
showed that about 9 percent of asset allocators were underweight
emerging market equities - the first underweight reading since 2009 and
down from a 3 percent overweight position in May.
Zero Hedge:
Business Insider:
New York Times:
- Islamists Press Blasphemy Cases in a New Egypt. Egypt’s prosecutors have been flooded with blasphemy complaints since
2011 as Islamists exercising their new societal clout have pushed for
prosecutions and courts have handed down steep fines and prison terms
for insulting religion. This month alone, a Christian teacher in Luxor was fined $14,000 for
insulting the Prophet Muhammad in class, a writer was given five years
in prison for promoting atheism and a Christian lawyer was sentenced to
one year for insulting Islam — in a private conversation. Blasphemy cases were once rare in Egypt, and their frequency has
increased sharply since the revolution. More than two dozen cases have
gone to trial, and nearly all defendants have been found guilty. At
least 13 have received prison sentences.
FXStreet.com:
- Flash: Taper is a smoke-screen it's all about China now - RBS. According
to Gibbs, "the big risk factor for global markets now is China
and how it deals with its financial bubble, with all the evidence is
that the new government is now working on this problem." For the
Strategist, the real question now is "can they let the air out without
too much damage?" Gibbs wonders, responding that "it's really a matter
of how much damage." That realisation, in view og Gibbs, is
probably the main reason for the sustained weakness in commodity and
Asian emerging currencies this year: "It is a reason for their
significant further decline than risk assets in the US and Europe" Gibbs
said. As a final note, Gibbs notes that we are entering a phase in
which the market no longer ignores the Chinese shadow banking system,
saying that "while the Taper and Abenomics smokescreens have distracted
the market from developments in China somewhat, China has certainly
entered the main-stream market analysis." We are seeing warning signals
about the 'shadow banking' in China on a much more regular basis now.
Breitbart.com:
- ObamaCare Rule: HHS, IRS Can Share Private Health Information. Though millions of Americans sign forms in their doctors’ offices
which claim their personal health information is protected under the
Health Insurance Portability and Accountability Act (HIPAA), a new
ObamaCare rule requires federal and local agencies and health insurers
to trade the personal health data of any person interested in signing up
for the new state exchanges.
Reuters:
- Adobe(ADBE) profit beats as Creative Cloud subscriptions soar.
Adobe Systems Inc, which makes the Photoshop and Acrobat software,
reported a higher-than-expected adjusted quarterly profit as demand rose
for Creative Cloud, the subscription-based version of its flagship
software package.
Shares of the company rose 4.4 percent in after-market trading.
Financial Times:
Telegraph:
The Australian:
- Unions' polling confirms 'disaster' for Labor. (video) CONFIDENTIAL political polling
conducted for the ACTU has confirmed Labor is facing huge swings in a
raft of ALP seats, results described by leading union officials as
"diabolical" and "disastrous" for Julia Gillard.
But the ACTU leadership is standing behind the Prime Minister and
opposing any moves to replace her with Kevin Rudd despite the polling.
Ming Pao:
- Hong
Kong Cargo Throughput Little Change January-May. Cargo throughput grew
just .2% in the first five months of the year, citing Li Jianhong, China
Merchants Holdings International vice chairman.
China Securities Journal:
- China May Expand Property Tax Trials 'Soon'. China may expand property
tax trials to more cities "soon," citing people. The Chinese cities of
Beijing, Shenzhen, Nanjing, Hangzhou and Qingdao have drafted property tax trial plans.
Evening Recommendations
Night Trading
- Asian equity indices are -1.0% to +.50% on average.
- Asia Ex-Japan Investment Grade CDS Index 136.0 +5.0 basis points.
- Asia Pacific Sovereign CDS Index 106.25 +1.0 basis point.
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 -500,000 barrels versus a +2,523,000 barrel gain the prior week. Gasoline inventories are estimated to rise by +750,000 barrels versus a +2,748,000 barrel gain the prior week. Distillate inventories are estimated to rise by +925,000 barrels versus a -1,163,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.5% versus a -.9% decline the prior week.
2:00 pm EST
- The FOMC is expected to leave the benchmark fed funds rate at .25%.
Upcoming Splits
Other Potential Market Movers
- The Fed's Bernanke speaking, German 10Y Bond auction, HSBC China Manufacturing PMI, weekly MBA mortgage applications report and the (GE) analyst meeting could also impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by financial and technology shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.
Broad Equity Market Tone:
- Advance/Decline Line: Higher
- Sector Performance: Most Sectors Rising
- Market Leading Stocks: Underperforming
Equity Investor Angst:
- Volatility(VIX) 16.51 -1.73%
- Euro/Yen Carry Return Index 133.05 +1.34
- Emerging Markets Currency Volatility(VXY) 10.11 +2.12%
- S&P 500 Implied Correlation 55.57 -.58%
- ISE Sentiment Index 99.0 +20.73%
- Total Put/Call .80 -15.79%
Credit Investor Angst:
- North American Investment Grade CDS Index 81.98 +.10%
- European Financial Sector CDS Index 155.95 +1.30%
- Western Europe Sovereign Debt CDS Index 87.0 -2.79%
- Emerging Market CDS Index 323.10 +1.64%
- 2-Year Swap Spread 16.0 -.25 bp
- 3-Month EUR/USD Cross-Currency Basis Swap -11.5 +.25 bp
Economic Gauges:
- 3-Month T-Bill Yield .04% unch.
- China Import Iron Ore Spot $117.70/Metric Tonne +2.35%
- Citi US Economic Surprise Index -14.80 -.8 point
- Citi Emerging Markets Economic Surprise Index -46.2 +.3 point
- 10-Year TIPS Spread 2.08 +3 bps
Overseas Futures:
- Nikkei Futures: Indicating +328 open in Japan
- DAX Futures: Indicating +4 open in Germany
Portfolio:
- Higher: On gains in my tech/biotech/retail sector longs
- Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges, then added them back
- Market Exposure: 50% Net Long
Bloomberg:
- European Car Sales Fall to 20-Year Low Amid Unemployment.
European car sales fell to a 20-year low in May as record joblessness
caused by a recession in the euro area reduced demand at PSA Peugeot
Citroen (UG), Renault SA (RNO), Fiat SpA (F) and General Motors Co. (GM)
Registrations dropped 5.9 percent to 1.08 million vehicles from 1.15 million a year earlier, the Brussels-based European Automobile Manufacturers’ Association, or ACEA, said today. The figure was the lowest for the month since 1993,
said Quynh-Nhu Huynh, the group’s economics director. The ACEA compiles
data for the 27-nation EU plus Switzerland, Norway and Iceland. Peugeot,
Renault, Fiat and GM’s deliveries fell at least 10 percent in the
region last month as price cuts failed to attract buyers. European
political leaders are seeking ways to revive a shrinking economy weighed
down by the sovereign-debt crisis, with unemployment in the 17
countries using the euro reaching 12.2 percent in April. “We have to
wait at least five years until the car market will basically recover,”
Ferdinand Dudenhoeffer, director of the Center for Automotive Research
at University of Duisburg-Essen in Germany. “That means that the debt
crisis in southern Europe will deepen and last”for awhile.
- Danske Bank Told to Boost Risk-Weighted Assets by $18 Bln. Danske
Bank A/S (DANSKE), Denmark’s biggest lender, was told by the country’s
financial watchdog it had underestimated risky assets as global
regulators increase scrutiny of banks’ internal models. Danske fell as much as 8 percent in Copenhagen trading after the Financial Supervisory Authority ordered the bank to
adjust its models in a step that will force it to add about 100
billion kroner ($18 billion), or 13 percent, to risk-weighted
assets “over time,” according to a statement late yesterday.
- Abe
Risk Jump Trails Only Portugal as Arrow Misses: Japan Credit. Japan's
bond risk climbed the most among developed nations after Portugal in the
past month as confidence waned in Prime Minister Shinzo Abe's economic
policy. Premiums on credit-default swaps protecting Japanese government
bonds for five years surged 26 basis points to 80 basis points in the
month through June 14, according to CMA. Contracts for Portugal's debt
jumped 31 points, while those for US Treasuries declined 4 points.
- China Insiders Sell Most Shares in May in 4 Years, UBS Says. Major
shareholders, senior management and individuals with stakes of more
than 5 percent sold a net 24.7 billion yuan ($4 billion) of Chinese A
shares in May, the most for a month since June 2009, UBS AG said. The
biggest sales were in computer-related shares, media and “special
equipment” sectors, UBS strategists including Qin Xia wrote in a
report dated today. Net stakes rose only in chemical raw materials and
telecom operations, while the sell-off in smaller companies as a percentage of the free-float
reached new post-2008 highs, they wrote. The Shanghai Composite added 0.3 percent at 2,155.90 at
2:30 p.m. local time, after touching its lowest level in almost
six months last week. The index has lost 25 percent in the past
four years, the most among the world’s 10 biggest stock markets,
according to data compiled by Bloomberg. The MSCI All-Country
World Index has rallied 34 percent in that time.
- PBOC Sacrifices Growth as Bank Curbs Invert Swaps: China Credit.
China's interest-rate traders are the most pessimistic on economic
growth in 21 months, as Fitch Ratings says policy markers are focused on
fixing the nation's banks to avert an industry crisis. The five-year
interest-rate swap, which exchanges fixed payments for the floating
seven-day repurchase rate, was 21 basis points below the one-year rate
yesterday, the biggest discount since September 2011, Bloomberg data
show. "The PBOC is doing the opposite of what the banks were hoping it
would do," said Ju Wang, a senior strategist at HSBC Holdings Plc in
Hong Kong. "It is focusing on cleaning up the banks' balance sheets and
the financial system in spite of the liquidity squeeze."
- Protests Show Brazil Dream Fades as Rousseff Popularity Ebbs. Francisco Soares, a 32-year-old Brasilia electrician, felt
good about life two years ago when he started commuting in his first
car, blasting the music and passing packed buses. Since then, bills
started piling up, the cost of living jumped and last week he had to
sell his wheels. After a decade that saw 40 million people rise
from poverty, Brazil’s middle class finds itself squeezed by faster
inflation, rising debt and a weaker currency. Consumers are spending
less at supermarkets and hairdressers as the classic weekend event, a
prime cut barbecue, becomes a stretch for some. Continuing a wave of
demonstrations sparked by increasing bus fares, protesters yesterday
held the biggest march in two decades, halting traffic in Sao Paulo,
attacking the state legislature in Rio de Janeiro and climbing on the
roof of Congress in Brasilia. The emerging middle class was the
engine of economic growth and made the developing nation one of the
world’s top five markets for cars and mobile phones.
- Surprising Slowdown in Nonresidential Building: EcoPulse. (video) Private nonresidential construction is losing steam in the U.S., a sign
that commercial real estate may be a drag on the economy as business
leaders are reluctant to make large property investments. Spending on lodging, office, commercial and manufacturing buildings
grew 5.6 percent in April to about $11 billion from a year ago on a
nonseasonally-adjusted basis, the slowest pace in almost two years,
data from the Census Bureau show. Four years into the economic
expansion, “we’d expect to see more lasting signs of strength,” said
Kermit Baker, chief economist for the American Institute of Architects.
“That hasn’t happened yet.”
- Copper Declines to Six-Week Low in New York Before Fed Meeting.
Copper fell to the lowest in six
weeks in New York before Federal Reserve policy makers begin a meeting
that may indicate when the central bank will start curbing debt
purchases intended to stoke the U.S. economy. A two-day meeting of the Federal Open Market Committee begins today. The Fed is buying $85 billion of debt a month. Copper futures for delivery in September slid 1.7 percent
to $3.1555 a pound at 10:18 a.m. on the Comex in New York. The
metal touched $3.151, the lowest for a most-active contract
since May 3.
- Americans Exporting More Oil First Time Since ’70s. Advances such as hydraulic fracturing are leading to record production
that may outstrip refinery capacity within 18 months to three years,
said Benjamin Salisbury, a senior energy policy analyst at FBR Capital
Markets Corp. in Arlington, Virginia. Net petroleum imports now account
for about 40 percent of demand, down from 60 percent in 2005, according
to the U.S. Energy Information Administration, the Energy Department
research unit.
- Keystone Seen Failing to Sop Up Canada Oil Glut. Canadian
oil prices are forecast to fall compared with
world benchmarks because production from oil sands, fields of
sand coated with heavy oil beneath about 90,000 square
kilometers (34,749 square miles) of boreal forest in northern Alberta,
is estimated to more than double to 3.8 million barrels a day by 2022. Keystone, the 1,179-mile link from Alberta to Nebraska first proposed in 2008 and delayed in part by
environmental activists, would only briefly relieve the glut.
- Deutsche Bank Sees ‘Subdued’ Commodity Prices as Supercycle Ends. Deutsche Bank AG (DB) said commodity prices are poised to remain in “subdued territory for years to
come” after a bull run that drove prices up almost fourfold in
the last 12 years. Banks from Citigroup Inc. to Goldman Sachs Inc. have called
an end to the commodities supercycle as the economy in China,
top user of raw materials, grows at a slower pace and the
country shifts to consumer-driven growth. The Standard & Poor’s
GSCI Index of 24 raw materials fell 2.5 percent this year after
almost quadrupling since 2001.
Fox News:
- Video shows workers offering 'Obamaphones' to those vowing to sell them -- for drugs. A Republican senator renewed his criticism of a government-backed
program that hands out cell phones after an undercover video showed
vendors helping people obtain the phones even after saying they wanted to sell them for drugs and other items.
The video was released by conservative activist James O'Keefe and his
group Project Veritas. It claimed to show undercover investigators
visiting Philadelphia locations for phone vendor Stand Up Wireless and
locations for one other company. In one exchange, the investigator -- posing as someone who wants a
free phone -- asks if the phone will belong to him after he gets it.
"Whatever you want to do with it," the worker says. The investigator
floats the possibility of getting "money for heroin." The employee
responds: "Hey, I don't judge."
CNBC:
- Markets More Doubtful of Fed Easing Benefits: CNBC Survey.
The effects of the Federal Reserve's bond-buying program are looking
more lackluster and more disruptive to market functioning, according to
the latest CNBC Fed survey. The net percent of respondents who
believe quantitative easing, or "QE," can help lower mortgage rates and
bond yields has fallen, as
has the net percent who say it will raise stock prices.
Zero Hedge:
Business Insider:
Moody's:
- Moody's: US subprime auto ABS risk factors are rising. Risk factors such as weakening loan credit, stiff competition among
originators, and readily available funding for asset-backed
securities (ABS) all portend higher credit losses for subprime auto lending,
according to a new report from Moody's Investors Service.
"Risk Factors Still on Rise for US Subprime Auto ABS" follows
a June 2012 Moody's report on increasing risks in the subprime auto
lending market, "US Subprime Auto Lending Market Harkens Back
to 1990s." The new report cites a number of factors affecting the rise in subprime
auto credit risk, including more private equity money entering the
market that will further intensify increasing competition from banks and
credit unions. "The increased competition among subprime lenders is resulting in
more loans to borrowers of weaker credit quality," said Peter
McNally, a Moody's Vice President and co-author of
the report.
Reuters:
- China Will Probably Resume Approving IPOs From End-July. "It is
almost certain" that mainland China IPO approvals will resume at end of
July, citing sources present at a meeting of China Securities Regulatory
Commission Vice Chairman Yao Gang and brokerages.
- Hedge funds brace for renewed debt crisis. The euro zone's debt crisis may
be far from over, while Japan's money-printing gamble to revive
its economy could destabilise global markets if it doesn't work, some hedge fund managers say.
They are taking the view that the rally in financial markets over much
of the past year, fuelled by central bank money printing, could mask a
failure to tackle some European countries' and banks' debt problems, and
the sell-off of recent
weeks may be the start of a longer downward move.
ValueWalk:
- 10% Down, 90% Mortgage Financing Option Is Back Again. After its virtual disappearance for several years, the 10 percent down payment mortgage financing are back in action. Brendon
DeSimone writes in Zillo Blog that some lenders have started offering
90 percent mortgage financing again on almost all types of loans.
Telegraph:
Expansion:
- Bank of Spain wants to carry out a confidential stress test of
lenders in the fall. Regulator wants to review assets of banks ahead of
EBA, ECB stress test exercise. Asset review may help govt decide whether
more European bailout funds are needed for banking system.
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
Xinhua:
- China 2012 Health-Care Costs Gain 18.8% on Year. Est. total cost
of health care services in nation last yr was 2.89t yuan, citing
statistics bulletin from Natl Health & Family Planning
Commission.
Style Underperformer:
Sector Underperformers:
- 1) Gold & Silver -2.40% 2) Education -.45% 3) Homebuilders -.21%
Stocks Falling on Unusual Volume:
- PBR, SA, AUY, BSBR, ABV, DEO, NMFC, SFL, RH, FDS, PNW, ARDC, LNCO, HRL, AU, ECPG, KFY, SAFM, FRAN, MDT, BLKB, RNF, AMWD, CRL and JW/A
Stocks With Unusual Put Option Activity:
- 1) ABC 2) WY 3) ADBE 4) MU 5) RCL
Stocks With Most Negative News Mentions:
- 1) CRL 2) WMB 3) YHOO 4) CAT 5) NWSA
Charts:
