- Russian Inflation Accelerates to Nine-Month High on Ruble. Russian March inflation was the fastest in nine months, driven by the ruble’s weakening amid the country’s worst standoff against the U.S. and the European Union since the end of the Cold War. Consumer prices rose 6.9 percent from a year earlier after 6.2 percent advance in February, the Federal Statistics Service in Moscow said today in an e-mailed statement. The median estimate of 18 economists in a Bloomberg survey was 6.8 percent. Prices rose 1 percent on the month, compared with a median forecast of 0.9 percent.
- Spanish Yields Below America’s as Rally Breaks New Ground. The next time Spain sells five-year debt, it may borrow the cash at a lower rate than the U.S. pays. Yields on the Spanish notes fell below those of their U.S. equivalents today for the first time since 2007, the latest milestone in this year’s rally among the bonds of Europe’s most indebted nations. The Iberian country’s rate was more than 7 percentage points above its U.S. counterpart in 2012, before European Central Bank President Mario Draghi pledged to protect the euro, allaying concern the currency bloc would splinter. Now the rally is morphing into a bet the ECB will either print cash to buy bonds or allow inflation, which slowed to a more-than four-year low of 0.5 percent in March, to remain subdued and preserve the value of fixed-income payments.
- European Stocks Rally as Holcim, Lafarge Hold Talks. European stocks rose to a six-year high as Holcim Ltd. (HOLN) and Lafarge SA rallied and a U.S. report showed that the world’s biggest economy created more jobs in February than initially estimated. Holcim jumped 6.9 percent after saying it has held advanced merger discussions with Lafarge, which surged 8.9 percent. Remy Cointreau SA increased 3.6 percent following a report that Brown-Forman Corp. has considered a purchase of the cognac maker. EasyJet Plc (EZJ) rose 2 percent after the low-cost airline said more passengers took its flights last month. The Stoxx Europe 600 Index added 0.6 percent to 339.18 at the close, its highest level since January 2008.
- Hog Prices Head for Biggest Weekly Drop Since August 2009. Hog futures headed for the biggest weekly decline in more than four years as confirmed cases of a piglet-killing virus slowed amid speculation that high pork prices are eroding demand. The U.S. inventory of swine that farmers plan to sell for slaughter declined less than forecast by analysts in the three months through March 1, government data showed on March 28. Yesterday, wholesale pork tumbled 2.9 percent, the most in 13 weeks, according to U.S. Department of Agriculture figures.
- WTI, Brent Crudes Gain. WTI for May delivery increased 99 cents, or 1 percent, to $101.28 a barrel at 1:37 p.m. on the New York Mercantile Exchange. Prices are down 0.4 percent this week. The volume of all futures traded was 8.9 percent below the 100-day average.
- Treasuries Rally Most Since January as Jobs Gain Trails Forecast. Yields on five-year notes dropped the most in two months, widening the gap with 30-year bonds to 1.87 percentage points, or 187 basis points.
- Wall Street Engineers Awaken CDOs in Real Estate Deals. Wall Street’s financial engineers are getting creative again. Commercial real-estate investor H/2 Capital Partners bundled a hodge podge of its holdings -- from bonds tied to skyscrapers and malls to junk-rated bank loans -- into about $400 million of securities. The deal, similar to the pre-crisis transactions known as collateralized debt obligations, included one portion that Moody’s Investors Service gave its highest rating of Aaa.
- Traders Bilked Investors With High-Speed Tactic, SEC Says. The U.S. Securities and Exchange Commission accused five New Jersey-based traders and two brokerages of bilking investors with illegal high-speed trading tactics known as “layering” or “spoofing.” Joseph Dondero, a co-owner of Visionary Trading LLC, tricked investors into buying and selling specific stocks at prices he manipulated by peppering those shares with orders he immediately canceled, the SEC said in an administrative order today. Dondero, Visionary Trading, Lightspeed Trading LLC and four other individuals will pay about $3 million to settle the matter.
- Buying Bonds in Sellers’ World: Prepare to Fail. Want to buy a corporate bond? Good luck finding one. Traders trying to purchase investment-grade notes are failing about 46 percent of the time, close to the worst rate in more than four years as measured by activity on MarketAxess Holdings Inc.’s electronic platform. On the flip side, investors trying to sell the debt are having the easiest time on record, with an 85 percent success rate. Bond buyers are showing an unwillingness to part with their holdings as a rally fueled by more than five years of unprecedented Federal Reserve stimulus refuses to die. Ironically, it’s harder than ever to find securities for sale even though the U.S. corporate-debt market has grown 53 percent since 2008, with companies selling $6.9 trillion of notes since then, according to data compiled by the Securities Industry and Financial Markets Association and Bloomberg. “Right now, everyone’s a buyer,” said Edward Meigs, who manages $1.6 billion of debt assets at First Eagle Investment Management in Baltimore. “There’s a marked level of complacency.”
- U.S. Seeks Changes to ‘Skewed’ Data in UN Climate Draft. U.S. President Barack Obama’s administration is concerned that a crucial United Nations report on climate science may be too harsh in assessing the cost of fighting global warming.
- GM(GM) Know-Nothing Chiefs Buck Post-Tylenol Crisis Standard. When the late Robert Pritzker ran Marmon Group LLC, his family’s conglomerate, he gave the managers of its major units his phone number. “He said, ‘If anything happens to imperil life, you call me, and you tell them to find me wherever I am,’” said Jim Schrager, a professor of entrepreneurship and strategy at the University of Chicago’s Booth School of Business, who worked at Marmon in the 1980s and dialed the number himself once, in the middle of the night. “The CEO sets the tone,” Schrager said. “Wanting to find out is different than finding out.”
- Rubber Prices Plunge on Fears of Thai Selling Spree. Rubber prices are down as much as 6% this week as traders rush to sell on fears the market will become awash in supply.
- Gold tops $1,300 as payrolls fall into ‘dove camp’. Yellow metal is set for a gain on the week; silver trades back above $20.
- Goldman Sachs(GS) CEO Blankfein 2013 pay jumps 50%. Goldman Sachs Group Inc. CEO Lloyd Blankfein pay jumped in 2013 to $19.9 million in total compensation, from $13.3 million in 2012, according to the Securities and Exchange Commission methodology, in a filing on Friday. As part of the compensation, Blankfein received $11.3 million in stock awards. The firm's president and COO Gary Cohn was paid $18 million last year, versus approximately $12.5 million the year before.
- DoubleLine’s Jeffrey Gundlach: Stocks are vulnerable. The record rise in U.S. stock prices could be at risk if the Federal Reserve is telegraphing that it’s going to raise key lending rates soon, according to Jeffrey Gundlach.
- Dollar falls against yen after jobs data. Euro at five-week low. The dollar USDJPY -0.65% fell to ¥103.31 from ¥103.93 late Thursday, moving in step with a drop in the benchmark 10-year Treasury 10_YEAR -2.42% yield. The dollar was at ¥103.91 just before the report.
- MOMO OH NO. (graph)
The New Yorker:
- Is China the Next Lehman Brothers? If China manages to muddle through and achieve a “soft landing” it will be one of the few countries on record that have escaped a big credit and real-estate boom without a wrenching recession. If you want more reasons to be skeptical, I suggest reading “Avoiding the Fall: China’s Economic Restructuring,” by Michael Pettis, an economist at Peking University who also maintains a lively but irregular blog, where he has consistently warned that the challenges facing China are much bigger than many outsiders realize.
- Former U.S. regulator says Fannie, Freddie investors stand to lose. James Lockhart, a former regulator of Fannie Mae and Freddie Mac who is now with private equity firm WL Ross & Co, on Thursday said investors are making "worthless" bets snapping up the stock of the two mortgage finance firms.
- Momentum stocks slide anew, dragging equities lower. The Nasdaq tumbled more than 2 percent on Friday, led by another selloff in momentum stocks like Netflix and TripAdvisor. The Nasdaq biotech index lost 3.3 percent. It has dropped 17 percent since reaching a high on Feb. 25. Biogen Idec Inc fell 3.6 percent to $291. Gilead Sciences dropped 2.4 percent."The market (as a whole) hasn't rolled over, but these bigger high-flyers are taking it on the chin, which suggests some people are changing their ideals," said Michael Matousek, head trader at U.S. Global Investors Inc in San Antonio, which manages about $1.3 billion. "They don't want to be in growth names. They want to be more defensive." The S&P 500's top seven decliners were Nasdaq names, led by E*Trade Financial, down 7.5 percent at $20.50. Netflix dropped 4.2 percent to $337.72.
- Brazil auto output and sales drop in March. Automobile production and sales in Brazil sank in March as tighter credit, higher prices and weaker consumer confidence sparked caution at local showrooms and assembly lines. Production fell 3.6 percent in March from February, according to data released on Friday by Brazilian automaker association Anfavea. Automobile sales dropped 7.1 percent in March after falling 17 percent in the previous month, Anfavea said.
- U.S. warns China not to try Crimea-style action in Asia. China should not doubt the U.S. commitment to defend its Asian allies and the prospect of economic retaliation should also discourage Beijing from using force to pursue territorial claims in Asia in the way Russia has in Crimea, a senior U.S. official said on Thursday. Daniel Russel, President Barack Obama's diplomatic point man for East Asia, said it was difficult to determine what China's intentions might be, but Russia's annexation of Crimea had heightened concerns among U.S. allies in the region about the possibility of China using force to pursue its claims.
- Turkey Rate Cut to Expose Economy to FX Risk, Fitch Says. Central bank cutting interest rates could boost loan growth and C/A deficit, which would be negative, Fitch director Paul Rawkins says in an interview.