Bloomberg:
- EU Frustration Mounts as Greeks Try to Bypass Aid Process. (video) Euro-area finance ministers voiced their frustration with Greece
after Prime Minister Alexis Tsipras tried to bypass their veto on
financial aid with an appeal to Angela Merkel. With Greece running
out of money and stalling over commitments to reform, euro-zone finance
chiefs meeting in Riga, Latvia, Friday said the country’s authorities
still haven’t shown sufficient progress on plans to revamp the economy
to justify a loan payout. “I demand very urgently that we get results on
the table,” Austrian
Finance Minister Hans Joerg Schelling said before sitting down for
talks. “If you follow the media of the past days you hear time and again
that ‘Tsipras says’ and ‘Tsipras thinks’, so apparently this has been
moved to leaders’ level.”
- Merkel Calls for Calm as Greek Talks Descend Into Name-Calling. German
Chancellor Angela Merkel called for calm after a euro-area finance
ministers’ meeting on Greece descended into acrimony and name-calling.
Finance chiefs meeting in Riga, Latvia, on Friday, let loose at Yanis
Varoufakis, their Greek counterpart, as they ruled out making a partial
aid payment in exchange for a narrower program of reforms. “It’s important that we show understanding for each other,” Merkel
told a crowd at a campaign event in Bremerhaven, Germany. While all
sides are working toward a deal, “we don’t know if this will work out,”
she said.
- Ukraine’s President Says Martial Law Ready If Troops Attacked. President Petro Poroshenko said he’s ready to place Ukraine under
martial law if his army is attacked in the embattled eastern part of the
country. “If Ukrainian troops are attacked, we can do everything to introduce
martial law,” Poroshenko said in an interview with the Ukraina
television channel on Friday. “I will submit to parliament a
corresponding bill and the country will very quickly move to a military
footing.”
- China to Crack Down on Stock Manipulation as Market Soars. China’s securities regulator started a campaign to crack down on
stock-market manipulation and insider trading, the latest effort to
reduce risks as an equities boom lures a record number of novice
investors. The China Securities Regulatory Commission will target trading by
brokerage employees using non-public information, and market
manipulation, including of futures prices, the CSRC said in a Friday
statement on its website. The regulator also cited insider trading in
over-the-counter markets and accounting fraud in mergers and
acquisition.
- Pimco’s Kiesel Sees Bubble in $3 Trillion of Negative-Yield Debt. Forget high-yield bonds. The real froth in markets can be found in
the swelling pool of negative-yielding government debt from Europe to
Japan. That’s according to Mark Kiesel, chief investment officer for global
credit at Pacific Investment Management Co., who’s increasingly wary of
investors paying governments from Spain to Switzerland to lend to them.
- European Stocks Extend Weekly Advance as HSBC, Miners Climb. European
stocks rebounded, extending weekly gains, as HSBC Holdings
Plc led banks higher and companies including Renault SA rose on sales
and earnings releases. HSBC climbed 2.9 percent after saying that it has
started a review into moving its headquarters from the U.K. Renault
added 3.7 percent after reporting quarterly sales rose 14 percent.
Glencore Plc, BHP Billiton Ltd. and Rio Tinto Group led commodity
producers to the biggest gain of the 19 industry groups on the Stoxx
Europe 600 Index as iron ore advanced into a bull market. AstraZeneca
Plc declined 1.7 percent after posting lower first-quarter earnings.
The Stoxx 600 rose 0.3 percent to 408.42 at the close of trading, for a weekly gain of 1.2 percent.
- Saudi Arabia Has a Solution to the Global Oil Glut Problem. Saudi Arabia has a response to the global surplus of oil: Raise output to near-record levels and then pump even more. The world’s biggest oil
exporter, having abandoned last year its role of keeping global markets
in balance, now has incentive to maximize output and undermine rival
producers by using its reserve capacity, according to Citigroup Inc. and
UBS AG. Just meeting its own domestic demand this summer will require a
lot more fuel, others estimate.
- Some of the flash crash story just makes no sense. The first question that arises from the Commodity Futures Trading
Commission's case against Navinder Singh Sarao is: Why did it take them
five years to bring it? A guy living with his parents next to
London's Heathrow Airport enters a lot of big, phony orders to sell U.S.
stock market futures; the market promptly collapses on May 6, 2010; it
takes five years for the army of U.S. financial regulators to work out
that there might be some connection between the two events. It makes no
sense.
- Retail Stocks Flash Bearish Signal on Oil, U.S. Spending Pause. Retail stocks are trailing the broader market as the plunge in oil prices shows signs of coming to an end. The SPDR Standard & Poor’s Retail Exchange-Traded Fund -- made up
of more than 100 companies including Wal-Mart Stores Inc. and
Amazon.com Inc. -- has fallen 0.4 percentage point since April 2, while
the SPDR S&P 500 ETF has risen 2.3 percentage points -- see chart.
That follows a 10-month rally when the retail group outpaced the
benchmark fund by 12 percentage points.
ZeroHedge:
Reuters:
Telegraph:
Style Underperformer:
Sector Underperformers:
- 1) Education -3.62% 2) Semis -2.22% 3) Oil Service -1.81%
Stocks Falling on Unusual Volume:
- AERI, SPNC, AWAY, UIS, EMES, PRGO, INFY, XRX, BGG, HWAY, DV, UBNT, NTGR, SCHL, TRN, NVDQ, BJRI, BIIB, CVTI, SSD, NLSN, CHTR, HBI, SRCL, VRSN, PII, RMBS, PRLB, NCR, EFII, RHI, SYA, ETH, KN, CAMP, ARRS, HCLP, HBI, FRGI, SYNA, MTSI, MPWR, MXIM, HZO, OFG, DDD, XRX, RMD, CVTI and NTGR
Stocks With Unusual Put Option Activity:
- 1) PII 2) XLB 3) MBI 4) ALTR 5) GPS
Stocks With Most Negative News Mentions:
- 1) BBY 2) MTW 3) EMES 4) UBNT 5) LL
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Internet +3.49% 2) Steel +2.99% 3) Software +2.95%
Stocks Rising on Unusual Volume:
- GIMO, EHTH, AMZN, TBI, ACTG, DNKN, HUBG, ALGN, CPHD, JNPR, MSFT, ASPS, BGS, VLTC, AAN, HA, NEM, QLIK, MMSI, SBUX and MAT
Stocks With Unusual Call Option Activity:
- 1) NUAN 2) SVU 3) VDSI 4) DNKN 5) DTV
Stocks With Most Positive News Mentions:
- 1) MAT 2) JNPR 3) AMZN 4) MSFT 5) DPZ
Charts:
Evening Headlines
Bloomberg:
- Greeks Trapped in Financial Vise as Euro Region Turns the Screws. As
Greek Prime Minister Alexis Tsipras follows an increasingly perilous
financial path, his antagonists are just sitting tight. Finance
ministers from the euro region discuss in Riga on Friday
where to go from here as talks on more rescue money for Greece enter a
fourth month. Frustrated after fruitless calls on Tsipras to tackle his
country’s problems, creditors can only withhold the support that would
allow him to shield Greeks from financial reality while keeping the
country in the currency. “This is the next stage of the negotiation,” said James Nixon, chief
European economist at Oxford Economics in London. “They’ll see how the
political situation develops in Greece if they apply the thumbscrews.”
- Putin’s Miracle Dissolves as Russian Middle Class Faces Crunch. The middle class -- defined by Russian researchers as people with higher
education who earn above the average and don’t do manual labor -- has
doubled to 40 percent of the 146 million-person population under Putin.
While he pledged in 2008 to increase it to as high as 70 percent by
2020, Natalia Tikhonova of the Higher School of Economics in Moscow sees
it shrinking to 30 percent in the next year or two.
- Nikkei Surge No Reflection of Economy, Opposition Chief Says. The
Nikkei 225 Stock Average’s surge past 20,000 doesn’t indicate
that Japan’s economy is strong, the country’s opposition leader said.
“While stock prices are rising, not many people think that the
economy has improved,” Democratic Party of Japan President Katsuya Okada
said Thursday in an interview at his Tokyo office. “It’s incorrect to
view stock prices as a measure of everything.” “Should stock prices become unstable, the mood will change a lot,” Okada
said. “The government shouldn’t just be trying to raise stock prices,
it should trying to raise the level of people’s livelihoods by improving
the economy.”
- Kaisa Stirs Commodity Bears Eyeing China’s Property-Led Slowdown. Kaisa
Group Holdings Ltd.’s bond default this week underlines how China’s
faltering property sector is threatening to blunt any rebound in
commodities prices. As much as half of the country’s copper consumption and about 35
percent of its steel use is related to housing and real estate,
according to Goldman Sachs Group Inc. China’s new property starts slid
18 percent in the first three months of the year as a downturn in
economic growth leaves a backlog of unsold homes and depressed prices.
- Glorious Property Seen as Close to Default After Kaisa’s Tumble. After Kaisa Group Holdings Ltd. defaulted on its dollar bonds
earlier this week, the market got to wondering, who could be next? They
didn’t have to look very far. Attention has rapidly shifted to Glorious Property Holdings Ltd.,
whose controlling shareholder is billionaire Zhang Zhirong. It must
repay $19.5 million of interest Monday on its $300 million of 13 percent
notes due 2015. Moody’s Investors Service cut its senior unsecured
rating to Ca, just one step from the lowest grade typically signaling
default, on April 20 citing sliding sales.
- Asian Stocks Head for Fourth Weekly Gain; Nikkei Retreats on Yen. Asian stocks rose, with the regional benchmark index set to post a
fourth straight weekly advance. Japanese shares retreated as the yen
held gains amid weak U.S. economic data.
The MSCI Asia Pacific Index added 0.3 percent to 155.65 as of 9:30
a.m. in Tokyo, poised for a 1.1 percent increase this week and the
longest run of weekly advances since February.
- Deutsche Bank: Why The Fed Can't Ignore Treasury Market Illiquidity. An attempt at measuring liquidity in the Treasury market.
On October 15, Wall Street let out a collective gasp as yields on U.S.
government bonds veered wildly. For minutes, sellers appeared to simply
step away from the market - leaving the yield on the benchmark 10-year
Treasury to plunge 33 basis points before rising to settle at 2.13
percent. Concerns over liquidity in U.S. Treasuries have subsequently
bubbled over with the International Monetary Fund, JPMorgan chief
executive Jamie Dimon and plenty of others all sounding the alarm
about the ability of the $12 trillion market to withstand a sell-off.
- Subprime Auto-Loan Bonds Skew Lender Incentives, Lawsky Says. Growing sales of bonds backed by subprime auto loans are creating “a
disalignment of incentives” for lenders, fueling more and more debt for
the riskiest borrowers, according to New York’s top banking regulator. Packaging loans to car buyers with spotty credit into bonds “scares
me a bit,” Benjamin Lawsky, superintendent of the Department of
Financial Services, told state senators Thursday in Albany during a
hearing on lending practices. Increasing issuance of the loans and the
securities they back are prompting lenders to “push loan after loan
out,” he said.
- Ford to Lay Off 700 Workers at Plant Making Small Cars, Hybrids. Ford Motor Co. said it’s laying off a shift of 700 workers at a
Michigan factory that builds small cars, hybrids and electric vehicles
that are attracting fewer buyers. The plant in Wayne, a Detroit suburb, produces the Focus small car
and C-Max hybrid, which had U.S. sales declines last month of 15 percent
and 23 percent, respectively.
Wall Street Journal:
- Quid Pro Clinton. Democrats who expect Bill and Hillary to change are delusional. We’re not the first to make the comparison, but Bill and Hillary
Clinton’s adventures in the uranium trade recall nothing as much as
Tammany Hall’s concept of “honest graft.” Except maybe their
never-ending use of power and status for personal and political gain
requires a new special terminology. Dishonest graft? The New York
Times reported Thursday on the foreign cash that flowed into the
Clinton Foundation between 2009 and 2013 as subsidiaries of the Russian
state nuclear energy agency Rosatom acquired control of a..
- The Climate-Change Religion. Earth Day provided a fresh opening for Obama to raise alarms about global warming based on beliefs, not science.
Fox News:
CNBC:
Zero Hedge:
Business Insider:
Evening Recommendations
Night Trading
- Asian equity indices are -.50% to +.75% on average.
- Asia Ex-Japan Investment Grade CDS Index 106.50 +1.5 basis points.
- Asia Pacific Sovereign CDS Index 59.75 +.25 basis point.
- NASDAQ 100 futures +.41%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
8:30 AM EST
- Durable Goods Orders for March are estimated to rise +.6% versus a -1.4% decline in February.
- Durables Ex Transports for March are estimated to rise +.3% versus a -.4% decline in February.
- Cap Goods Orders Non-Defense Ex Air for March are estimated to rise +.3% versus a -1.4% decline in February.
Upcoming Splits
Other Potential Market Movers
- The Germany IFO index could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by commodity and industrial shares in the region. I expect US stocks to open modestly higher and to maintain gains into the afternoon. The Portfolio is 75% net long heading into the day.
Broad Equity Market Tone:
- Advance/Decline Line: Higher
- Sector Performance: Most Sectors Rising
- Market Leading Stocks: Performing In Line
Equity Investor Angst:
- Volatility(VIX) 12.55 -1.26%
- Euro/Yen Carry Return Index 135.10 +.57%
- Emerging Markets Currency Volatility(VXY) 9.91 -.10%
- S&P 500 Implied Correlation 66.46 -.46%
- ISE Sentiment Index 107.0 -33.54%
- Total Put/Call 1.0 +7.53%
Credit Investor Angst:
- North American Investment Grade CDS Index 61.36 -.49%
- America Energy Sector High-Yield CDS Index 1,071.0 +.98%
- European Financial Sector CDS Index 72.54 -.98%
- Western Europe Sovereign Debt CDS Index 25.80 -3.53%
- Asia Pacific Sovereign Debt CDS Index 59.98 +.65%
- Emerging Market CDS Index 292.86 -1.61%
- iBoxx Offshore RMB China Corporates High Yield Index 117.09 +.08%
- 2-Year Swap Spread 26.5 -.25 basis point
- TED Spread 25.75 +.25 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -20.25 +.5 basis point
Economic Gauges:
- 3-Month T-Bill Yield .02% unch.
- Yield Curve 142.0 -1.0 basis point
- China Import Iron Ore Spot $54.82/Metric Tonne +1.44%
- Citi US Economic Surprise Index -56.80 -5.4 points
- Citi Eurozone Economic Surprise Index 20.60 -26.0 points
- Citi Emerging Markets Economic Surprise Index -14.4 -1.3 points
- 10-Year TIPS Spread 1.89 +1.0 basis point
Overseas Futures:
- Nikkei Futures: Indicating +5 open in Japan
- DAX Futures: Indicating +100 open in Germany
Portfolio:
- Higher: On gains in my retail/medical/tech/biotech sector longs
- Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
- Market Exposure: Moved to 75% Net Long
