Evening Headlines
Bloomberg:
- European Disunion: For Two Rivals in Greek Crisis, It’s Personal. Yanis Varoufakis and Wolfgang Schäuble are fierce defenders of polar-opposite economic views. They go head-to-head Thursday afternoon in Luxembourg. How their struggle ends will shape the future of Europe.
- Biggest Chinese SUV Maker Seen Triggering Wave of Price Cuts. Chinese automakers will offer bigger discounts on their SUVs after market leader Great Wall Motor Co. lowered prices on two of its most popular models, according to Barclays Plc and Sanford C. Bernstein & Co. Great Wall, the biggest maker of sport-utility vehicles in China, cut prices this week on its H2 and H6 models by 5,000 yuan ($805) and 6,000 yuan, respectively, sending itsstock to a five-month low in Hong Kong trading.
- China’s Stocks Drop as Money Rates Jump Amid New Share Sales. China’s stocks fell on concern valuations have outstripped earnings growth and as money market rates jumped before Guotai Junan Securities Co. started selling shares in the nation’s biggest initial public offering since 2010. Financial and telecom companies led declines with Bank of Communications Ltd. sliding 5.7 percent and China United Network Communications Ltd. retreating 1.9 percent. The seven-day repurchase rate climbed to the highest since April as 25 IPOs hit the market this week. The Shanghai Composite Index fell 0.4 percent to 4,946.96 at 10:03 a.m.
- Asian Stocks Advance After Fed Signals Gradual Rate Increases. Asian stocks rose for the first time in four days after the Federal Reserve said the pace of U.S. monetary-policy tightening will be gradual, with the central bank preparing to raise interest rates this year. The MSCI Asia Pacific Index gained 0.4 percent to 146.71 as of 9:01 a.m. in Tokyo.
- Treasuries Advance After Fed Holds Rate, Highlights Weakness. Treasuries rose, and yields fell to a two-week low, after the Federal Reserve refrained from raising interest rates and highlighted weakness in the economy after a meeting Wednesday. The threat of a Greek default is helping drive demand for the relative safety of U.S. government debt.
- Junkyard Palladium Strands Bulls Betting on Demand for Car Parts. When gold and silver were languishing, precious-metals investors were betting palladium would soar as record car sales boosted demand for catalytic converters. Turns out, there’s more of the metal around with recycled palladium from junked vehicles and rising mine output. For a third straight year, the amount of scrap will the highest ever, accounting for 30 percent of supply, Barclays Plc predicts.
Wall Street Journal:
- A Tale of Two Clinton Campaigns. In 1991, Bill spoke about responsibility and the middle class. Hillary talks of grievance.
Fox News:
MarketWatch.com:
- Jabil Circuit(JBL) posts weak revenue outlook. Jabil Circuit Inc. on Wednesday posted a weak revenue outlook for its fourth quarter and said its third-quarter revenue rose but was near the bottom end of its own projections. Profit, meanwhile, declined sharply. Shares of the electronics maker slipped 6% to $22.87 a share in after-hours trading.
Zero Hedge:
- Destroying The Data-Dependent Dot-Plots, Here's Janet Yellen's Real "Surprises" In 2 Simple Charts. (graph)
- "Goldbug" Analysts Capitulation. (graph)
Business Insider:
- The US is reportedly changing the face of the $10 bill. Secretary of the Treasury Jack Lew is set to announce on Thursday that the Bureau of Engraving and Printing will replace the current portrait of Alexander Hamilton from the ten dollar bill, in favor of one featuring both Hamilton and an as-yet undecided woman. The only legal criterion for who should be on the bill is that the person be dead. However, the Treasury told the New York Times that Lew is looking for a woman “who was a champion for our inclusive democracy."
CNN:
- Multiple Fatalities in Mass Shooting Inside Church in South Carolina; Gunman at Large. Several people were killed in a shooting at a historic African-American church in Charleston, South Carolina, a source close to the investigation told CNN. The shooter is still at large. The shooting took place Wednesday evening at the Emanuel African Methodist Episcopal (AME) Church. On its website, the church describes itself as the “oldest AME church in the south.” “It’s really bad. It’s a very bad scene,” local pastor Thomas Dixon said.
Reuters:
- Weidmann says ECB can't fund Greece if political talks fail-press. The European Central Bank will not be able to provide financial help for Greece if Athens' political negotiations with its creditors definitively break down, Bundesbank President Jens Weidmann said on Wednesday.
China Daily:
- New rules mean ships can be used by military. The country has approved a set of technical guidelines that require all civilian shipbuilders to ensure that their new vessels are suitable for military use in an emergency, the China Classification Society has revealed.
Evening Recommendations
- None of note
Night Trading
- Asian equity indices are -.50% to +.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 112.0 unch.
- Asia Pacific Sovereign CDS Index 62.25 -1.0 basis point.
- S&P 500 futures -.20%.
- NASDAQ 100 futures -.18%.
Earnings of Note
Company/Estimate
- (KR)/1.22
- (RAD)/.03
- (FNSR)/.25
- (RHT)/.41
- (SWHC)/.35
Economic Releases
8:30 am EST
- The Current Account Deficit for 1Q is estimated at -$117.3B versus -$113.5B in 4Q.
- The CPI for May is estimated to rise +.5% versus a +.1% gain in April.
- The CPI Ex Food & Energy for May is estimated to rise +.2% versus a +.3% gain in April.
- Initial Jobless Claims are estimated to fall to 277K versus 279K the prior week.
- Continuing Claims are estimated to fall to 2210K versus 2265K prior.
10:00 am EST
- The Philly Fed Business Outlook Index for June is estimated to rise to 8.0 versus 6.7 in May.
- The Leading Index for May is estimated to rise +.4% versus a +.7% gain in April.
Upcoming Splits
- (CF) 5-for-1
Other Potential Market Movers
- The Eurogroup Meeting Day 1, Eurozone Labor Costs report, Greece EUR 350M IMF payment due, SNB rate decision, Bloomberg Economic Expectations Index for June, weekly Bloomberg Consumer Comfort Index, weekly EIA natural gas inventory report, (SEE) analyst day, (COHU) analyst day, (TRIP) annual meeting, (ANF) annual meeting, (SNDK) annual meeting, (ZOES) annual meeting and the (PVH) annual meeting could also impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by commodity and industrial
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.