Evening Headlines
Bloomberg:
- Investing for a China Crisis. China's growing list of problems, including a slowing economy, rising
militarism, messy corruption crackdown and increasingly troubled shadow
banking sector, could provoke a major financial crisis. In the "never
waste a crisis" spirit, a number of investment opportunities present
themselves: -- Short Chinese stocks. The Shanghai Composite Index is down 67 percent from its October 2007 peak. Even though Chinese stocks may seem inexpensive -- the price-to-earnings ratio for the Shanghai index over the last 12 months is 9.8, compared with 17.3 for the far more costly S&P 500 -- there is no obvious floor. If China has a financial crisis, the risk to Chinese equities is considerable. Bank stocks may be especially
vulnerable. Investors who lack direct access to mainland Chinese stocks
can use Hong Kong-listed equities and exchange-traded funds. --
Sell commodities. Industrial and agricultural commodity prices
took off
in 2002, right after China joined the World Trade Organization. As
manufacturers in Europe and North America shifted production to China,
its thirst for commodities kept growing. Many producers of industrial
materials, including base metals, iron ore and coal, also increased
capacity as prices leaped.
- Asian Stocks Rise on Faster Japan Inflation, U.S. Outlook.
Asian stocks rose, with the regional benchmark index heading for its
biggest monthly advance since September, as a report showed Japanese
inflation accelerated and investors speculated the U.S. economy is
recovering from its first contraction in three years. Toyota Motor Corp.
(7203), the world’s biggest carmaker, added 1.1 percent in Tokyo.
Envestra Ltd. gained 1.1 percent in Sydney as billionaire Li Ka-shing’s
Cheung Kong Group agreed to buy the Australian gas supplier for A$2.4
billion ($2.2 billion). Lynas Corp., which spent $930 million on a
rare-earths processing plant in Malaysia, tumbled 16 percent in Sydney
after completing a share placement and as debt-restructuring talks
continue. The MSCI Asia Pacific Index (MXAP) added 0.2 percent to 142.35 as
of 10:04 a.m. in Hong Kong, heading for its highest close since
November.
- Iron Ore Heads for Record Losing Streak as Goldman Eyes Supply.
Iron ore is heading for a sixth straight monthly decline in the longest
losing streak on record as increasing supplies from Australia and
Brazil spur a global surplus just as demand growth in China slows. Ore
with 62 percent content delivered to Tianjin was at $95.70 a dry ton
yesterday, 9.2 percent lower this month, according to data from The
Steel Index Ltd. The steel-making raw material, which is at a 20-month
low, has dropped every month since December in the longest run of
monthly losses since the
data series began in November 2008.
- Food Replacing Oil as China M&A Commodity of Choice: Commodities. After spending the past decade and
more than $200 billion acquiring mines and oilfields from Australia to Argentina, China’s attention is turning to food. The world’s most populous nation is confronting a harsh reality: For every additional bushel of wheat or pound of beef
the world produces, China will need almost half of that to keep
its citizens fed.
- Beware of Exotic ETFs Bearing Credit-Default Swaps. If you’ve always wanted to bet your savings on risky credit derivatives,
now’s the time. In May regulators signed off on a plan to allow trading
in eight exchange-traded funds (ETFs) created by ProShares that will
hold credit-default swaps—the derivatives that helped bring on the
global credit crisis in 2008.
Wall Street Journal:
- China Hacking Is Deep and Diverse, Experts Say. Intruders Often Work As Hackers For Hire, According to Officials. China's Internet espionage capabilities are deeper and more widely
dispersed than the U.S. indictment of five army officers last week
suggests, former top government officials say, extending to a sprawling
hacking-industrial complex that shields the Chinese government but also
sometimes backfires on Beijing. Some of the most sophisticated
intruders observed by U.S. officials and private-sector security firms
work as hackers for hire and at makeshift defense contractors, not the
government, and aren't among those named in...
- Borrowers Tap Their Homes at a Hot Clip. Helocs Jumped 8% in the First Quarter. A rebound in house prices and near-record-low interest rates are prompting homeowners to borrow against their properties, marking the return of a practice that was all the rage before the financial crisis. Home-equity lines of credit, or Helocs, and home-equity loans jumped 8% in the first quarter from a year earlier, industry newsletter Inside Mortgage Finance said Thursday. The $13 billion extended was the most for the start of a...
- The VA Scandal Is a Crisis of Leadership. Obama's inattention to managing the government may kill the progressive project. The Veterans Administration scandal involves charges of manipulation
and falsification of medical waiting lists and systemwide rigging to
hide delayed or inadequate treatment, which may have caused the deaths
of some of those waiting for care. There are whistle-blowers,
allegations of local coverups, and the possibility of criminal charges.
Also becoming clearer are two motives for those involved in what appears
to have been a racket: their compensation and their career
trajectories. This scandal won't go away as others...
CNBC:
Zero Hedge:
Business Insider:
- Michael Bloomberg Blasts Ivy League For Liberal 'Censorship'. Former New York City Mayor Michael Bloomberg accused the entire Ivy
League of liberal political bias during a particularly fiery
commencement address at Harvard University Thursday. "It is just a modern form of McCarthyism," Bloomberg said of
university "censorship" of conservatives. "Think about the irony: In the
1950s, the right wing was attempting to repress left wing ideas. Today,
on many college campuses, it is liberals trying to repress conservative
ideas even as conservative faculty members are at risk of becoming an
endangered species" "And that is probably nowhere more true than it is here in the Ivy League," declared Bloomberg.
Reuters:
- Japan consumer spending, factory output skid after sales tax hike. Japan's household spending in
April fell at the fastest rate in three years in a sign that
consumption could be slow to recover from an increase in the
nationwide sales tax, raising questions over the pace of
economic recovery. Japanese household spending fell 4.6 percent in April from a
year ago, more than the median market forecast for a 3.2 percent
annual decline. That marked the fastest annual decline since
March 2011, when an exceptionally powerful earthquake triggered
a nuclear disaster. Compared to the previous month, spending tumbled by a record
13.3 percent in April, more than the 13.0 percent decline
expected by economists. Government data published with the new figures show that
household spending fell further after the April 1 sales tax hike
than it did after the 3 percent sales tax in was imposed in
1989, and when it raised the tax to 5 percent in 1997.
Financial Times:
- IMF warns ‘rising’ African nations on sovereign debt risks. The International Monetary Fund has warned African nations issuing billions of dollars in sovereign bonds
that they could overload their economies with too much debt and derail
the best economic period for the region in a generation.
Telegraph:
Evening Recommendations
Night Trading
- Asian equity indices are -.50% to unch. on average.
- Asia Ex-Japan Investment Grade CDS Index 110.0 -.5 basis point.
- Asia Pacific Sovereign CDS Index 80.25 unch.
- NASDAQ 100 futures -.11%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
8:30 am EST
- Personal Income for April is estimated to rise +.3% versus a +.5% gain in March.
- Personal Spending for April is estimated to rise +.2% versus a +.9% gain in March.
- The PCE Core for April is estimated to rise +.2% versus a +.2% gain in March.
9:00 am EST
- The ISM Milwaukee for May is estimated to rise to 52.0 versus 47.26 in April.
9:45 am EST
- The Chicago Purchasing Manager for May is estimated to fall to 61.0 versus 63.0 in April.
9:55 am EST
- Final Univ. of Mich. Consumer Confidence for May is estimated to rise to 82.5 versus a prior estimate of 81.8.
Upcoming Splits
Other Potential Market Movers
- The
Fed's Plosser speaking, Fed's Lacker speaking, Fed's Pianalto speaking,
Canada gdp report and the ASCO Meeting could impact trading today.
BOTTOM LINE: Asian
indices are mostly lower, weighed down by industrial and technology
shares in the region. I expect US stocks to open mixed 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: Modestly Higher
- Sector Performance: Most Sectors Rising
- Market Leading Stocks: Underperforming
Equity Investor Angst:
- Volatility(VIX) 11.76 +.68%
- Euro/Yen Carry Return Index 144.41 -.05%
- Emerging Markets Currency Volatility(VXY) 6.97 -1.27%
- S&P 500 Implied Correlation 55.34 +.31%
- ISE Sentiment Index 99.0 -2.94%
- Total Put/Call .68 -24.44%
Credit Investor Angst:
- North American Investment Grade CDS Index 62.21 -1.13%
- European Financial Sector CDS Index 72.52 -.32%
- Western Europe Sovereign Debt CDS Index 34.86 -.56%
- Asia Pacific Sovereign Debt CDS Index 79.72 -.75%
- Emerging Market CDS Index 246.32 -2.30%
- China Blended Corporate Spread Index 348.68 +.77%
- 2-Year Swap Spread 13.0 +.5 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -8.25 +.25 basis point
Economic Gauges:
- 3-Month T-Bill Yield .03% unch.
- Yield Curve 208.0 +1.0 basis point
- China Import Iron Ore Spot $95.70/Metric Tonne -1.14%
- Citi US Economic Surprise Index-2.90 -4.0 points
- Citi Emerging Markets Economic Surprise Index -19.30 unch.
- 10-Year TIPS Spread 2.23 +2.0 basis points
Overseas Futures:
- Nikkei Futures: Indicating +49 open in Japan
- DAX Futures: Indicating +11 open in Germany
Portfolio:
- Higher: On gains in my medical/biotech/tech/retail sector longs
- Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
- Market Exposure: Moved to 75% Net Long
Bloomberg:
- Rebels Kill 14 Downing Ukraine Chopper as Russia Sees War. Pro-Russian
rebels downed a military helicopter in eastern Ukraine, killing 13
troops and a general, as an adviser to President Vladimir Putin accused
the U.S. of pushing the world toward war through proxies in Kiev.
Insurgents shot down an Mi-8 transport chopper with a shoulder-fired
missile amid
heavy fighting in Slovyansk, 100 miles (160 kilometers) from the Russian
border, Speaker Oleksandr Turchynov told parliament today. They also
attacked a military base near Luhansk, according to the National Guard. Russia
demanded Ukraine halt its “fratricidal war” and withdraw troops from
the mainly Russian-speaking regions of the east after separatists
suffered the heaviest casualties of their campaign. Western countries
should use their influence to stop Ukraine from “sliding into a national
catastrophe,” the Foreign Ministry in Moscow said on its website.
- Russia Sanctions Threat Seen Abating Amid Recession Risk. Russia is less likely to face further
sanctions from the U.S. and the European Union as the government
is sending conciliatory signals toward Ukraine, a Bloomberg
survey of economists showed. The U.S. will refrain from escalating punitive measures,
according to 66 percent of respondents in a survey of 32
economists, compared with 28 percent last month. The EU will
hold off on sanctions according to 84 percent, up from 78
percent in April. The probability of the Russian economy
slipping into recession in the next 12 months remained at 50
percent, according to the median forecast in a separate survey.
- China Threatens Further Action Against U.S. Over Hacking Dispute. China
said it will take further action against the U.S. for prosecuting five
of its military officers for alleged hacking, saying it has evidence its
companies have also been hacked. Online attacks from a “specific
country” have targeted Chinese companies, its military and important
websites, Ministry of National Defense spokesman Geng Yansheng said.
Geng didn’t specify the country in remarks posted on the ministry’s
website
today in response to a question about the indictment.
- Bond Surge Worldwide Drives Index Yield to One-Year Low. A worldwide bond-market surge pushed
yields to the lowest levels in a year on growing evidence
central banks can keep stimulating economic growth without
igniting inflation. Treasury 10-year note yields fell to the least
since June.
A rally yesterday drove the yield on the Bloomberg Global Developed
Sovereign Bond Index to 1.28 percent, the lowest since May 2013.
Australia’s (GACGB10) 10-year yield dropped to an 11-month low, Japan’s
slid to the least in 12 months, while European bond yields were close to
the lowest since the formation of the region’s shared currency. The U.S. sold $29 billion of seven-year notes at the lowest yield since October.
- Copper Drops From 11-Week High AMid Demand Concerns.
Copper fell from an 11-week high in
London on signs of slowing economic growth in China and the U.S., the
biggest users of the metal. U.S. gross domestic product fell at a 1
percent annualized rate in the first quarter, a bigger drop than
economists surveyed by Bloomberg projected, government figures showed
today. A purchasing managers index due later this week may show
little acceleration this month in Chinese manufacturing after
the gauge grew less than estimated in April. Copper has lost 6.4
percent this year amid signs of slowing economies.
- Obama Seeks Climate Legacy as Coal-State Democrats Cringe.
Obama now is set to release new limits on greenhouse gas emissions by
power plants as early as next week. That comes atop the unveiling of a
National Climate Assessment in May and executive actions including
promoting
renewable fuels and building better defenses against extreme weather. Liberated from re-election politics, he’s freer to speak about the
challenges of a warming planet and is using his bully pulpit to create
urgency on an issue that most Americans rank as a low priority, the
aides said. The expansive action is alarming some in the business community, who say the administration’s policies will hurt the economy. “This administration is setting up the next energy crisis in this
country,” said Laura Sheehan, a spokeswoman for the American Coalition
for Clean Coal Electricity in Washington. “They’re not looking at the
long-term consequences.” Obama also faces push-back from some
within his own party, who warn that tighter regulations could hamper
Democratic candidates in areas where coal is a major source of jobs.
Democrats in Kentucky and West Virginia already are distancing
themselves from the president’s energy policies, highlighting their
opposition to a “war on coal” on the campaign trail.
- Consumer Comfort in U.S. Falls to Lowest Level Since November. Consumer confidence declined last week to the lowest level
since November as Americans’ views of their finances and the buying
climate weakened. The Bloomberg Consumer Comfort Index fell to
33.3 in the period ended May 25 from 34.1 the prior week. A measure of
personal finances retreated for the third time in four weeks, and a
gauge of whether this is a good time to buy goods and services dropped
to the lowest point since mid-February.
- Credit Trader’s Shift to Rates Shows Where Anxieties Lie. Rate derivatives have become more popular than ever for wagering on
whether borrowing costs will rise or fall as the Federal Reserve scales
back its unprecedented stimulus. The amount of over-the-counter
interest-rate swaps has swelled 30 percent since the end of 2009, to a record notional $584.4 trillion as of December, according to a May 23 CME Group Inc. (CME) report. At
the same time, the volume of privately negotiated credit-default swaps
has plunged to a notional $21 trillion, 64 percent below the peak of
$58.2 trillion in December 2007.
Wall Street Journal:
- DOJ Opened At Least 10 Probes into Bank Processing Activities. 'Operation Choke Point' Disclosed in Government Memo. The U.S. Department of Justice has opened at
least 10 civil and criminal investigations into whether banks and
payment processing firms helped enable fraudulent activity, according to
an internal Justice Department memo viewed by The Wall Street Journal. More
than 850 pages of internal documents on the DOJ's probe of alleged
fraud in the financial industry were obtained by the House Oversight and
Government Reform Committee. Ms. Frimpong, in her memo, wrote that the government had the opened
civil investigations into 10 banks and payment processors and was in
settlement talks with three of them.
- Doctors' War Stories From VA Hospitals. Administrators limited operating time so that work stopped by 3 p.m. With the recent revelations about the disgraceful treatment of patients
by the Veterans Affairs hospitals, the public is discovering what the
majority of doctors in this country have long known: The VA health-care
system is a disaster.
- Justice Dept. Seeks More Than $10 Billion Penalty From BNP Paribas. French Bank Faces Criminal Probe of Alleged Sanctions Violations.
- Tyson(TSN) Enters Bidding for Hillshire Brands With $6.1 Billion Offer. Proposal Tops Offer Made by JBS's Pilgrim's Pride, Setting Up Meatpacker Slugfest.
MarketWatch.com:
- Hedge fund assets to hit $5.8 trillion by 2018: Citi survey. The
hedge fund industry will double its assets in the next four years to
nearly $6 trillion by diversifying products and giving retail investors
more access, according to a new survey. Traditional hedge fund
clients are high-net-worth individuals, but more and more retail
investors will have access to the asset class, according to the latest
Citi Investor Services Survey.
Fox News:
- Obama under bipartisan pressure to oust Shinseki on heels of IG report. President Obama is coming under heavy pressure from both sides of the
aisle following a scathing inspector general report to tackle the
problems at the Department of Veterans Affairs head-on -- first, by
relieving VA Secretary Eric Shinseki of his command. More than a half-dozen Democratic senators are now calling for
Shinseki's resignation, since the Office of Inspector General released
an interim report on Wednesday finding "systemic" problems with clinics
lying about patient wait times.
CNBC:
ZeroHedge:
ValueWalk:
- 500 Largest Hedge Fund Managers Control 90% Of AUM. Preqin
Research highlights the 505 hedge fund managers with more than $1bn in
AUM currently manage $2.39tn of the industry’s $2.66tn total assets, but
account for just 11% of active firms.
- Derivatives Worldwide Hit 710 Trillion, According To BIS Study.
The Bank for International. Settlements (BIS) just published a
statistical study on the amount of derivatives worldwide at the end of
2013, and they reach the astronomical amount of $710 Trillions
($710,000,000,000,000). For comparison purposes, the United States GDP in 2013 amounts to $16
Billion, or 44 times less. And this mass of derivatives beats by 20% the
preceding record, dating just before the 2008 crisis… We hear a lot
about bubbles these days, in the stock market, the bond market or in the
commodities market, but this one is without a doubt the greatest one.
Reuters:
Folha de S.Paulo:
- Brazil
Govt Sees Possibility of 2014 GDP Growth Below 2%. Economic growth has
become main concern for govt, citing President Dilma Rousseff's aides it
didn't identify. Govt sees possibility of trade deficit this year.
Investments may be below 2013 level. Govt sees no room for fiscal
expansion to stimulate economy; inflation still high.
Style Underperformer:
Sector Underperformers:
- 1) Coal -.60% 2) Disk Drives -.51% 3) Restaurants -.45%
Stocks Falling on Unusual Volume:
- RXN, STON, FN, GNRC, BAH, SC, TOUR, RCAP, REGI, TECD, DG, CPRT, KORS, UNT, CM, ARMK, BOBE, TW, CSTE, MTZ, BWS, ANN, NJR and ENB
Stocks With Unusual Put Option Activity:
- 1) DG 2) ZTS 3) TWX 4) F 5) ORCL
Stocks With Most Negative News Mentions:
- 1) C 2) SLXP 3) DG 4) DLR 5) AWAY
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Alt Energy +1.26% 2) Gold & Silver +1.19% 3) Tobacco +.96%
Stocks Rising on Unusual Volume:
- HSH, AMSG, PANW, PLKI, ANIK, ANF, QSII, SZYM, TSN, MELI, CLNE, WB, SUNE, CLVS, SCTY, ANIK and ZOES
Stocks With Unusual Call Option Activity:
- 1) ACT 2) RSH 3) PANW 4) TSN 5) TLT
Stocks With Most Positive News Mentions:
- 1) ANF 2) TSN 3) BIIB 4) AMZN 5) BIIB
Charts:
Evening Headlines
Bloomberg:
- Russia Urges ‘Emergency Steps’ Over Ukraine After Rebel Losses. Russia
called for unspecified “emergency” measures to halt the violence in
eastern Ukraine after separatist militias suffered the heaviest
casualties of their insurgency. “It’s necessary to take emergency steps
to stop the bloodshed and start an inclusive internal Ukrainian
dialogue,” Foreign Minister Sergei Lavrov told his German counterpart
Frank-Walter Steinmeier by phone yesterday, according to the
ministry’s website. “There’s no excuse” for military action in the
southeastern part of the country, Lavrov said. Ukraine stepped up air
patrols over the eastern city of Donetsk yesterday as a convoy of
pro-Russian rebels moved
through the city with an anti-aircraft gun in tow, threatening
renewed violence after dozens of militants were killed in a
government operation to retake the area’s biggest airport.
- Free Toasters for China's Depositors? by A. Gary Shilling. In
part two of this four-part series, I wrote about China’s shadow banks
and the government’s efforts to assert more control over them.
- Japan Retail Sales Fall at Record Pace After Sales-Tax Rise.
Japan’s retail sales dropped at the fastest pace in at least 14 years
last month after the first consumption-tax increase since 1997 depressed
consumer spending. Sales in April declined 13.7 percent from the
previous month, the trade ministry reported today, more than the median
forecast of an 11.7 percent decline in a Bloomberg News survey
of 11 economists.
- Thais Say Facebook(FB) Goes Down as Junta Releases Red Shirts. Internet
users in Thailand reported temporarily losing access to Facebook Inc.
(FB), sparking speculation the social media site had been blocked by the
military. At the same time, the junta that seized power a week ago released
leaders from the Red Shirt movement opposed to the coup.
- EU Firms in China Worried About Tech Security, Poll Finds.
The European Union Chamber of Commerce in China said its members are
concerned about the security of their technology systems in the country,
citing a poll conducted after the U.S. indicted five Chinese military
officials for allegedly stealing corporate secrets. Eighty of 100
companies responding to a survey are concerned about their
information-technology systems in China, while 53 percent are more
concerned about security in the country than in other regions, the EU
Chamber said in an e-mail.
Most members have noticed increased online censorship or slower
Internet speeds in China in the past few weeks, according to the
survey.
- Asian Stocks Fall as Japan Retail Sales Slump in April.
Asian stocks fell, with the regional benchmark index retreating from a
six-month high, as investors weighed a worse-than-estimated drop in
Japan’s retail sales before a report that’s expected to show the U.S.
economy contracted last quarter. Fast Retailing Co. (9983), Asia’s
biggest clothing seller, slipped 1.1 percent in Tokyo. BHP Billiton
Ltd., the world’s No. 1 mining company, dropped 1.6 percent in Sydney as
copper futures declined. Samsung Electronics Co., the largest maker of
smartphones, climbed 1.5 percent in Seoul after unveiling a prototype
health-monitoring wristband. The MSCI Asia Pacific Index (MXAP) lost 0.1 percent to 141.72 as
of 9:37 a.m. in Tokyo, after yesterday reaching its highest
level since Nov. 29.
Wall Street Journal:
Fox News:
CNBC:
- Apple(AAPL) to acquire Beats Electronics for $3 billion. (video) Apple will acquire headphone maker Beats Electronics for $3 billion, Apple said on Wednesday. The deal is expected to close in the fiscal fourth
quarter. Apple will pay $2.6 billion in cash and another $400 million in
equity. It will also continue to use the Beats brand.
- China's millionaire machine slows. (video) China's millionaire machine has slowed, suggesting that the country's economic weakness is reaching the top of the economy.
Zero Hedge:
Business Insider:
Reuters:
- Brazil pauses interest rate hikes despite high inflation. Brazil
left its benchmark interest rate unchanged on Wednesday, pausing one of
the world's longest-running tightening cycles to avoid choking its
weakening economy despite high inflation. In a unanimous decision, the central bank's monetary policy committee, known as Copom, kept its Selic rate at 11 percent,
breaking a streak of nine consecutive hikes as expected by a
majority of analysts and market traders.
Telegraph:
The Australian:
- Iron ore price slips further. The iron ore price has fallen further as fears over weakened steel demand in China continue to weigh on the commodity. Benchmark
iron ore for immediate delivery to the port of Tianjin in China is
trading at $US96.80 a tonne, down from $US98.10 in the previous session.
Last week the iron ore price crashed through the $US100 a tonne mark
for the first time in nearly two years and it currently sits at its
lowest point since September 13, 2012 when it traded at $US96.10 a
tonne. Credit Suisse this week warned that even if iron ore manages
some stability in the near term -- or even modest gains -- the second
half of the year is likely to see the commodity price fall below 2012's
low of $US87 a tonne.
Shanghai Securities News:
- China Asks Banks to Control Worsening Bad Loan. Chinese regulator
asked banks to control worsening ratios of outstanding bad loans and
conduct stress tests. The regulator said in an internal meeting that
banks asset risks are "under control" while spreading to different
regions and industries, the report said.
Evening Recommendations
Night Trading
- Asian equity indices are -.25% to +.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 110.50 -4.5 basis points.
- Asia Pacific Sovereign CDS Index 80.25 -.75 basis point.
- NASDAQ 100 futures +.03%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
8:30 am EST
- 1Q GDP is estimated to fall -.5% versus a prior estimate of a +.1% gain.
- 1Q Personal Consumption is estimated to rise +3.1% versus a prior estimate of a +3.0% gain.
- 1Q GDP Price Index is estimated to rise +1.3% versus a prior estimate of a +1.3% increase.
- 1Q Core PCE is estimated to rise +1.3% versus a prior estimate of a +1.3% increase.
- Initial Jobless Claims are estimated to fall to 318K versus 326K the prior week.
- Continuing Claims are estimated to fall to 2650K versus 2653K prior.
10:00 am EST
- Pending Home Sales for April are estimated to rise +1.0% versus a +3.4% gain in March.
10:30 am EST
- Bloomberg
consensus estimates call for a weekly crude oil inventory decline of
-118,180 barrels versus a -7,226,000 barrel decline the prior week.
Gasoline supplies are estimated to rise by 190,910 barrels versus a
970,000 barrel decline the prior week. Distillate supplies are estimated
to rise by +445,450 barrels versus a +3,399,000 barrel gain the prior
week. Finally, Refinery Utilization is estimated to rise by +.33% versus
a -.1% decline the prior week.
Upcoming Splits
Other Potential Market Movers
- The
Fed's Pianalto speaking, Fed's Mester speaking, Japan CPI, $29B 7Y
T-Note auction, weekly Bloomberg Consumer Comfort Index and the (AKS)
annual meeting could impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by industrial
and technology shares in the region. I expect US stocks to open
modestly higher and to weaken into the afternoon, finishing mixed. The
Portfolio is 50% net long heading into the day.
