Bloomberg:
- China's Solution to $3 Trillion Debt Is to Deal with It Later. China’s government has a creative solution to address repayment concerns hanging over more than $3 trillion in regional debt. It will deal with it later. The Finance Ministry issued a 1 trillion yuan ($160 billion) quota for local governments to convert maturing high-cost debt into lower-yielding municipal notes to be repaid at a future date, according to a March 8 statement. Questions left unanswered include whether investors will be forced into the swap, how much transparency there will be over assets involved and whether the liabilities will strain the nation’s finances.
- Suburb With 27% Jobless Shows Danger of Australian Recession. In a shopping center full of sale signs in Broadmeadows, a Melbourne suburb with 27 percent unemployment, Soney Kul is struggling to shift half-price jewelry. “People don’t want to spend,” the 27-year-old said, gesturing at the sparsely-filled display cases in his family-owned store, Altinbas. “They’re too scared to spend because they don’t know what the next day will hold.” After a decade-long mining boom powered by Chinese demand, Australia’s economy is falling back to earth fast. Among the worst hit are industrial areas like Broadmeadows, whose Ford Motor Co. plant will shut after a record-high currency made operations untenable, and the slowdown is spreading. Only four months after economists were forecasting interest-rate increases in 2015, the country’s central bank has cut its benchmark to a fresh record low.
- Asian Stocks Drop as Dollar Spurs World Rout; Oil Sub-$50. Asian stocks fell, extending a global selloff sparked by gains in the dollar as U.S. monetary policy diverges from the rest of the world. Copper slipped before Chinese economic data, and U.S. oil was below $49 a barrel. The MSCI Asia Pacific Index lost 0.3 percent by 9:55 a.m. in Tokyo, falling for a third day as Australia’s S&P/ASX 200 Index sank 0.7 percent. Japanese shares slipped 0.2 percent, with the yen close to a 7 1/2-year low. The greenback touched its strongest level since April 2003 against the euro and added 0.3 percent versus the Malaysian ringgit.
- Euro Racing Toward Record Quarterly Drop on Draghi’s Bond Buying. The euro is poised for its biggest quarterly decline as the European Central bank embarks on purchases of sovereign debt this week to spur inflation. The shared currency has weakened about 11.5 percent this year, eclipsing the 10.6 percent decline during the credit crunch in the third quarter of 2008. The euro slumped to a 12-year low Wednesday as national central banks in the euro region were said to have purchased sovereign debt for a second day on Tuesday in their quantitative-easing program.
- Junk-Bond Protections Hit Lowest Quality on Record, Moody’s Says. Investor protections in new U.S. junk bonds fell to the weakest level in at least four years as risky borrowers are able to dictate terms to yield-starved investors, according to Moody’s Investors Service. The rating company’s gauge of the strength of investor safeguards registered its worst reading in February for newly issued speculative-grade bonds in data going back to January 2011, analysts Alexander Dill and Evan Friedman wrote in a report today. Moody’s covenant-quality gauge, in which 5 indicates the weakest protections and 1 the strongest, measured 4.51 for bonds issued in February, up from 4.41 in January and surpassing the previous record of 4.43 in September 2014. Covenants are protections written into bond documents that can restrict an issuer’s ability to borrow more.
- GE’s(GE) Immelt Earns $37 Million Payday After 2014 Business Revamp. General Electric Co. Chief Executive Officer Jeffrey Immelt’s compensation almost doubled in 2014 as his pension soared and he signed the company’s largest-ever acquisition. Immelt pocketed $37.3 million last year, including a bonus of $5.4 million, the Fairfield, Connecticut-based company said Tuesday in a filing with the U.S. Securities and Exchange Commission. His base salary rose 8.2 percent to $3.8 million.
- Fed Likely to Remove ‘Patient’ Barrier for Rate Increase as Soon as June. by Jon Hilsenrath. Shift at March meeting would create policy flexibility; inflation outlook key on fed-funds increase. The Federal Reserve is strongly considering removing a barrier to raising short-term interest rates as early as June by dropping its promise to be “patient” before acting. Discussions about interest-rate guidance and an uncertain inflation outlook are likely to take center stage at the Fed’s next meeting March 17-18.
- The Fatal Flaw in Obama’s Dealings With Iran. Taking a collaborative approach to negotiating with bad actors always turns out badly. Better to coerce them. ‘Extraordinarily reasonable,” President Obama called it in an interview aired on Sunday, referring to the multiparty deal being negotiated on Iran’s nuclear-weapons program. When the talks began, Mr. Obama said it was “unacceptable” for Iran to acquire nuclear weapons. Now it isn’t clear whether that is actually his view. On Capitol Hill, distrust of the president is intense, fueled by resentment that he doesn’t intend to submit the nuclear deal for congressional approval. Forty-seven Republican .
- Clinton’s iPad while secretary of state not certified as 'secure,' sources say. (video) Not only was Hillary Clinton exclusively using a personal email account for government business, but according to her own memoir she relied on an iPad -- though security and investigative sources tell Fox News the device was "not certified as secure."
- Will China’s ‘money garrote’ strangle the global economy? Another part of China’s new normal is not just lower growth, but also an era where the central bank is no longer able to magically speed its money-printing presses.
Business Insider:
Reuters:
- Japan machinery orders fall in sign of soft capex demand. Japan's core machinery orders fell 1.7 percent in January, suggesting that companies remain reluctant to increase capital expenditure given the uncertain economic outlook. The data underscores the challenges Prime Minister Shinzo Abe and the Bank of Japan face as they attempt to nudge firms into boosting spending on wages and equipment with their stimulus policies.
- ETF tracking the euro draws $37 mln bearish bet. A trader in the U.S. options market placed a $37 million bet against the euro on Tuesday, even as the dollar hit a multi-year high against the currency.
- None of note
- Asian equity indices are -.50% to +.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 109.25 +3.5 basis points.
- Asia Pacific Sovereign CDS Index 68.0 +2.75 basis points.
- S&P 500 futures +.31%.
- NASDAQ 100 futures +.25%.
Earnings of Note
Company/Estimate
- (BWS)/.16
- (VRA)/.45
- (KKD)/.16
- (MW)/-.07
- (SGMS)/-.48
- (SHAK)/-.03
- (ZOES)/-.05
10:30 am EST
- Bloomberg consensus estimates call for a weekly crude oil inventory build of +4,595,000 barrels versus a +10,303,000 barrel increase the prior week. Gasoline supplies are estimated to fall by -1,680,000 barrels versus a +46,000 barrel gain the prior week. Distillate supplies are estimated to fall by -2,260,000 barrels versus a -1,722,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to fall by -.26% versus a -.8% decline the prior week.
- None of note
- The China retail sales report, CCAR results, $21B 10Y T-Note auction, weekly MBA mortgage applications report, Barclays Healthcare conference, (SNCR) analyst meeting, (MET) investor conference and the (TREX) analyst day could also impact trading today.