Bloomberg:
- Greece Gears Up for Euro-Area Talks as Cash Crunch Looms. Greece’s creditors are assessing proposals
including hiring non-professional inspectors to clamp down on
tax evasion as the government attempts to unlock bailout funds
necessary to keep the country afloat. Prime Minister Alexis Tsipras’s administration sent a set
of commitments Friday to Dutch Finance Minister Jeroen
Dijsselbloem, who chairs meetings of his euro-area counterparts,
in the hope that the policy proposals will pave the way for the
disbursement of aid.
- Greek Loan Payout Hinges on Review of Reforms, EU Says. The institutions overseeing the Greek
bailout program will need to scrutinize the probable impact of
the government’s latest reform proposals before the country can
receive another loan payout, a senior EU official said. The European Commission, the European Central Bank and the
International Monetary Fund -- together formerly known as the
troika -- must assess the overall balance of the measures
proposed by the government in Athens and this will not happen
before euro-area finance ministers meet in Brussels on March 9.
- Putin Cuts His Salary 10% as Russian Living Standards Decline. Russian President Vladimir Putin cut his
salary, and that of his prime minister and other government
employees, by 10 percent as the economy slides into the first
recession in five years, eroding citizens’ living standards. Putin, 62, ordered the wage reductions from May 1 to the
end of the year, according to decrees posted Friday on the
government website. Putin increased his and Prime Minister
Dmitry Medvedev’s salaries by 165 percent in April last year.
The president declared income of 3.7 million rubles ($60,000) in
2013, and Medvedev 4.3 million rubles.
- Putin Takes a Pay Cut as Approval Rating Rises to 85%. (video)
- China Said to Slash Senior Executive Pay at Top Banks, SOEs. China cut pay for top executives at its
biggest banks and some other state-owned companies as part of
efforts to combat inequality, said people with knowledge of the
matter. Senior managers at the nation’s five largest lenders -- all
of which are government-controlled -- had their total
compensation for this year cut to no more than about 600,000
yuan ($95,800), said the people, who asked not to be named
discussing private information. Industrial & Commercial Bank of
China Ltd. Chairman Jiang Jianqing earned about 2 million yuan
in 2013.
- Dollar Climbs Most Since 2011 as Job Gains Fuel Fed Speculation. The dollar rallied the most in more than
three years after a report showing strength in the U.S. labor
market bolstered the case for the Federal Reserve to raise
interest rates as global peers embrace monetary stimulus. The greenback rose against most major counterparts as U.S.
employers added more jobs than forecast and the unemployment
rate fell to the lowest since 2008. Traders boosted wagers on a
rate rise by September. While the Fed has said it will be
“patient” on increasing borrowing costs, Chair Janet Yellen
said last week timing will depend on economic data.
- Emerging Currencies Weaken, Stocks Decline on U.S. Rate Concern. Emerging-market currencies weakened for a
seventh day and stocks slid as a bigger-than-forecast increase
in U.S. payrolls stoked speculation the Federal Reserve will
raise interest rates sooner, damping demand for riskier assets. A gauge tracking 20 developing-country currencies slid 0.7
percent to a record low as Brazil’s real dropped 1.8 percent to
the lowest level since 2004 and peers in South Africa and Mexico
lost at least 1.6 percent. Emerging-market stocks headed for a
three-week low.
- European Stocks Little Changed as Investors Weigh U.S. Jobs Data. European stocks were little changed at a
seven-year high as investors considered whether a strengthening
U.S. economy will bring forward a rate-increase decision.
The Stoxx Europe 600 Index rose 0.1 percent to 394.18 at
the close of trading. The benchmark gauge jumped as much as 0.7
percent after data showed U.S. payrolls rose more than estimated
in February, before paring gains.
- Oil Rigs Get Slammed for the 13th Week. (video) The number of U.S. oil rigs out drilling new wells fell for the 13th
straight week as the U.S. sinks deeper in a glut of excess oil. Drillers idled 64 oil rigs (excluding gas rigs), dropping the number
to 922, Baker Hughes reported on Friday. The rig count is down 43
percent since October, an unprecedented retreat. The median forecast
from a Bloomberg survey of 20 #RigCountGuesses on Twitter was for a
decline of 20 rigs.
Wall Street Journal:
CNBC:
- Fed should not be too patient on rate hikes, Williams says. Federal Reserve policymakers should not wait too long to raise
interest rates, a top U.S. central banker said on Thursday, because
doing so could mean "drastically" overshooting on inflation and forcing
the Fed to hike rates dramatically. "I think that by mid-year it will be the time to
have a serious discussion about starting to raise rates," San Francisco
Fed chief John Williams said.
ZeroHedge:
Business Insider:
Reuters:
- Oil falls as dollar spikes on US jobs data and rate hike fears. Oil fell on Friday as the
dollar surged on bets of a near-term rate hike from strong U.S.
jobs growth, offsetting an early run up in crude prices on
worries about Libyan and Iraq supplies. A stronger dollar makes oil, quoted and traded in the
greenback, costlier for holders of the euro and other
currencies. The dollar rocketed to 11-/12 year highs against a
basket of currencies after the U.S. government reported
the U.S. jobless rate fell to 6-1/2 year lows. Benchmark Brent oil was down 44 cents at $60.04 a
barrel by 11:00 a.m. EST (1600 GMT). U.S. light crude
fell 71 cents at $50.05.
Style Underperformer:
Sector Underperformers:
- 1) Gold & Silver -6.93% 2) Utilities -3.25% 3) REITs -2.91%
Stocks Falling on Unusual Volume:
- IDCC, WX, NGL, CKP, ELS, ES, DCUC, ASCMA, CRTO, EVHC, UTG, VSLR, LO, LL, DAR, GEF, VLP, CSIQ, LULU, HRTX, MSTR, USLV, DCUB, ITC, ERJ, SKUL, BEE, CHK, RAI, ITC, FOSL, ANDE, DAR and ESL
Stocks With Unusual Put Option Activity:
- 1) XLP 2) LEN 3) FXE 4) XLK 5) UTX
Stocks With Most Negative News Mentions:
- 1) LULU 2) GPS 3) XOM 4) BHI 5) HPQ
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Banks +.59% 2) Hospitals +.17% 3) Insurance +.09%
Stocks Rising on Unusual Volume:
- CALA, CLDN, LTM, YY, FNSR, DMND, RTRX, COO, FL, EXAS, QIHU, HZNP, GTN, TFM, ESPR, JDSU and AMTD
Stocks With Unusual Call Option Activity:
- 1) ETFC 2) FNSR 3) BKD 4) APO 5) TBT
Stocks With Most Positive News Mentions:
- 1) MRVL 2) BRO 3) CIEN 4) IPDN 5) FL
Charts:
Evening Headlines
Bloomberg:
- Russia’s Woes Show No Sign of Abating. A graphic guide to Russia’s declining fortunes. Vladimir Putin has survived politically, thanks to Russians’ support for
his assertive foreign policy. But sanctions over Ukraine and a collapse
in oil prices have shaken the economy, draining its foreign exchange
reserves.
- Deutsche Bank(DB) Debt Unit Feels Pinch Amid Review: Credit Markets. Deutsche Bank AG is learning just how hard
it is to stay committed to its fixed-income business in a new
world for investment banking. After using some of the 8.5 billion euros ($9.4 billion) it
raised in a share sale last year to bolster its fixed-income
business, its credit unit has been shrinking. Frank Argilagos,
its head of high-grade debt sales in New York, exited last month
and Joshua Wilkes, co-head of investment-grade trading, departed
in January amid restructurings. Jim Kenny, who took over as sole
head of the team, entertained an offer this week to join a bond-trading platform before the bank wooed him to stay, said three
people with knowledge of the talks.
- Ringgit Leads Weekly Drop in Asia Currencies on China Slowdown. Asian currencies fell this week, led by the
Malaysian ringgit’s slide to a six-year low, as a weakening
growth outlook for China dimmed prospects for regional trade. China set the lowest economic expansion target in more than
15 years after cutting interest rates for the second time in
three months at the weekend. The Bloomberg Dollar Spot Index
advanced before a report that’s forecast to show U.S. employers
added more than 200,000 jobs for a 12th month and ahead of a
Federal Open Market Committee meeting that starts March 17.
- China Stocks Head for First Weekly Drop in Month on IPO Concerns. China’s benchmark stock index headed for its
first weekly decline in a month on concern that new share
offerings next week will divert funds from existing stocks. Consumer and health-care shares lost at least 1.5 percent,
the most among industry groups, as BYD Co., an electric
carmaker, tumbled 7.5 percent, and Xizang Haisco Pharmaceutical
Group Co. sank 3.2 percent. The ChiNext index of small companies
in Shenzhen tumbled 2.7 percent. Haitong Securities Co. added
2.4 percent, propelling financial companies higher, after
traders raised margin debt to a record in Shanghai.
The Shanghai Composite Index fell 0.1 percent to 3,245.88
at 11:02 a.m. local time, taking this week’s loss to 1.9
percent.
- Asia Stocks Rise; Dollar Holds Gain Before Jobs Report. Asian stocks rose while the dollar held
gains, with a gauge measuring the U.S. currency against major
peers headed for its biggest weekly advance since January,
before data on the U.S. jobs market. Oil in New York climbed.
The MSCI Asia Pacific Index added 0.5 percent by 11:40 a.m.
in Tokyo, paring its first drop in five weeks.
- Fed’s Williams Says ‘Serious’ Rate-Rise Discussion Due Mid-Year. Federal Reserve Bank of San Francisco
President John Williams said mid-year may be time for a
“serious discussion” about raising interest rates as the labor
market nears full employment and inflation rebounds. The U.S. will reach maximum employment by year-end or
sooner, lifting wages and inflation, which means the Fed should
raise rates before achieving its policy goals, Williams, who
votes on policy this year, said Thursday in the text of a speech
prepared for delivery in Honolulu.
Wall Street Journal:
- Oil Glut Sparks Latest Dilemma: Where to Put It All. As storage tanks near capacity, some predict spillover will send crude prices even lower. In a world awash in crude, oil producers and traders are facing a billion-barrel conundrum: where to put it all. U.S.
crude-oil supplies are at their highest level in more than 80 years,
according to data from the Energy Information Administration, equal to
nearly 70% of the nation’s storage capacity.
MarketWatch.com:
- Gap(GPS) posts surprise February sales decline. Gap Inc. posted a surprise drop in February same-store sales as its
Gap Global and Banana Republic divisions both reported declines. Sales declined 4% while analysts surveyed by Thomson Reuters had projected a 1.4% increase.
CNBC:
Zero Hedge:
Business Insider:
Reuters:
Bild:
- EU Legislator Warns Greece Against Misleading Accounting. Manfred
Weber, German head of the Christian Democrats in the European
Parliament, warns Greek govt against misleading and unacceptable
financial and accounting practices, citing an interview. Weber
criticized issue of T-bills and EU1.13b backed by the Greek central bank
and the rude and provocative tone of Greek officials.
Shanghai Securities News:
- China Potential Growth May Slow to 6.2% in 2016-2020. Cai Fang,
vice president at Chinese Academy of Social Sciences, made a forecast on
China's average potential GDP growth in a commentary.
Night Trading
- Asian equity indices are unch. to +.75% on average.
- Asia Ex-Japan Investment Grade CDS Index 100.0 -2.0 basis points.
- Asia Pacific Sovereign CDS Index 62.0 -.75 basis point.
- NASDAQ 100 futures -.01%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
8:30 am EST
- The Change in Non-Farm Payrolls for February is estimated at 235K versus 257K in January.
- The Unemployment Rate for February is estimated to fall to 5.6% versus 5.7% in January.
- Average Hourly Earnings for February are estimated to rise +.2% versus a +.5% gain in January.
- The Trade Deficit for January is estimated at -$41.2B versus -$46.6B in December.
3:00 pm EST
- Consumer Credit for January is estimated to fall to $14.5B versus $14.755B in December.
Upcoming Splits
Other Potential Market Movers
- The Eurozone GDP report could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by industrial 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: Slightly Higher
- Sector Performance: Mixed
- Market Leading Stocks: Performing In Line
Equity Investor Angst:
- Volatility(VIX) 14.15 -.49%
- Euro/Yen Carry Return Index 138.37 -.11%
- Emerging Markets Currency Volatility(VXY) 10.27 +2.19%
- S&P 500 Implied Correlation 58.12 -1.37%
- ISE Sentiment Index 36.0 -68.14%
- Total Put/Call .93 +2.20%
Credit Investor Angst:
- North American Investment Grade CDS Index 60.59 -1.78%
- America Energy Sector High-Yield CDS Index 685.0 +2.91%
- European Financial Sector CDS Index 52.71 -6.25%
- Western Europe Sovereign Debt CDS Index 21.50 -5.37%
- Asia Pacific Sovereign Debt CDS Index 62.30 -.83%
- Emerging Market CDS Index 386.64 +1.04%
- iBoxx Offshore RMB China Corporates High Yield Index 114.03 -.23%
- 2-Year Swap Spread 25.75 +1.0 basis point
- TED Spread 26.0 +.5 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -22.75 -.5 basis point
Economic Gauges:
- 3-Month T-Bill Yield .01% unch.
- Yield Curve 147.0 +1.0 basis point
- China Import Iron Ore Spot $59.73/Metric Tonne -3.57%
- Citi US Economic Surprise Index -55.0 -5.4 points
- Citi Eurozone Economic Surprise Index 49.5 -6.1 points
- Citi Emerging Markets Economic Surprise Index -5.90 +.6 point
- 10-Year TIPS Spread 1.84 -4.0 basis points
Overseas Futures:
- Nikkei Futures: Indicating +125 open in Japan
- DAX Futures: Indicating +5 open in Germany
Portfolio:
- Higher: On gains in my biotech/medical/retail sector longs and emerging markets shorts
- Market Exposure: 50% Net Long
Bloomberg:
- Draghi Raises Pressure on Greece as He Keeps Liquidity Tight. Mario Draghi increased pressure on Greece’s
government to make progress on structural economic reforms,
insisting the ECB is providing the country with as much
liquidity as it can within the rules. The European Central Bank has already lent 100 billion
euros ($110 billion) to Greece’s banks, or 68 percent of the
country’s gross domestic product, Draghi said at a press
conference in Nicosia on Thursday. The ECB’s Governing Council
increased the available pool of Emergency Liquidity Assistance,
which comprises the bulk of that lending, by 500 million euros
to 68.8 billion euros, he added.
- Bundesbank’s Dombret Says Not Clear That ECB Stimulus Will Work. Bundesbank board member Andreas Dombret
signaled skepticism on whether the European Central Bank’s
asset-purchase plan will be successful as it takes the pressure
off governments to reform their economies. Speaking just hours after ECB President Mario Draghi
presented details of his unprecedented 1.1 trillion euro ($1.2
trillion) stimulus plan, Dombret said in a Bloomberg TV
interview that “it’s not easy to answer” whether large-scale
bond-buying will work in Europe.
- Brazilian Real Weakens to 3 Per Dollar for First Time Since 2004. Brazil’s real fell past 3 per dollar for the
first time in a decade as fiscal turmoil and signs of economic
contraction stoked speculation that the nation may lose its
investment-grade credit rating. The real slid 0.5 percent to 2.9957 per U.S. dollar at 1:23
p.m. in Sao Paulo after touching 3.0023, the weakest intraday
level since 2004. Net overseas holdings of futures contracts
betting against the real reached a record $38.1 billion March 2.
- Europe Stocks Rise as Draghi Says Bond-Buying to Begin Next Week. (video) European stocks advanced for a second day,
pushing the Stoxx Europe 600 Index to its highest level since
July 2007, as the European Central Bank committed to begin asset
purchases on March 9.
The Stoxx 600 rose 0.8 percent to 393.78 at the close of
trading.
- Oil Falls as Surging U.S. Crude Supply Seen Boosting Global Glut. Oil fell in New York after U.S. crude
supplies increased to the highest level in more than three
decades, adding to a global glut. West Texas Intermediate for April delivery dropped 63
cents, or 1.2 percent, to $50.90 a barrel at 9:09 a.m. on the
New York Mercantile Exchange. The volume of all futures traded
was 43 percent above the 100-day average for the time of day.
- Oil Driller Missing First Bond Payment Marks Junk’s Fast Decline. A Colorado oil producer is giving debt
investors a lesson in the risks of lending to companies that
staked their future on the U.S. shale boom. Less than seven months after raising $175 million in a
junk-bond offering, American Eagle Energy Corp. said Monday that
it wouldn’t make its first interest payment on the debt.
Instead, it hired two advisers -- Canaccord Genuity Group Inc.
and Seaport Global Holdings LLC -- to negotiate with bondholders
on a plan to restructure its debt, according to three people
with knowledge of the situation who asked not to be named
because the matter is private. The holders of the notes are left
to consider how to maximize recovery of their investment, either
by giving the company more time to try to become profitable or
by pushing the company into default.
- Oil Bust Threatens CMBS in Wall Street Funded Shale Towns. The oil glut is threatening to expose cracks
in the commercial-mortgage bond market. Nomura Holdings Inc. estimates that $16 billion in property
debt that has been sold to investors as securities is vulnerable
to default after crude prices plunged, posing risks for the
economies of U.S. cities and towns built around the boom.
- World Food Prices Extend Drop to 4-Year Low on Bigger Harvests. Food prices extended a drop to a four-year
low as better crop prospects cut grain and sugar costs, the
United Nations’ Food & Agriculture Organization said. An index of 73 food prices from around the world fell 1
percent in February to 179.4 points, staying at the lowest since
July 2010, the Rome-based agency said in a report Thursday. The
measure slipped 25 percent since reaching a record in 2011 and
has fallen in 10 of the past 11 months.
ZeroHedge:
Business Insider:
