Evening Headlines
Bloomberg:
- Greece to Meet With Creditors as Talks Stuck in Stalemate. Greek officials plan to meet Wednesday in Brussels with creditors as
time runs short to secure a deal before the country needs to make
payments to the International Monetary Fund in early June. There has been little convergence in recent talks to release bailout
funds the country needs to pay the IMF almost 1.6 billion euros ($1.75
billion) next month, said people familiar with the matter, who asked not
to be identified because the discussions are private. The first of the
transfers is due June 5.
- The G-7's Problem: Can the World Deal With a Greek Default? When the world’s top finance ministers and central-bank chiefs meet
in Dresden this week, they may struggle to stick to an agenda set by
their German hosts that doesn’t mention Greece. The Group of Seven meeting starting on Wednesday will officially
focus on big-picture themes of economic growth, tax evasion and
strengthening the global financial architecture. Yet the most pressing
matter for many of the policy makers attending is whether Greece can
stay in the euro, and whether the world can handle the consequences if
it can’t.
- Luxury Brands’ Value Shrinks $7 Billion as China Curbs Largesse. Luxury isn’t what it used to be. The value of the top 10 luxury-goods brands fell 6 percent, or $7.1
billion, to $105 billion as companies from Prada SpA to Cartier grappled
with slowing sales in China and Russia, research company Millward Brown
said in the 2015 BrandZ study published Wednesday.
- Ahmadinejad Enters Fray as Iran Argues Over Nuclear Concession. Iran’s former President Mahmoud Ahmadinejad got embroiled in a fight
among Iran’s ruling elite about nuclear concessions the Islamic Republic
will make as part of a deal to lift sanctions. Officials told Iran’s parliament last week that the government has
agreed to allow international inspections of military sites under its
supervision, according to the state-run Fars news agency. Iran’s Supreme
Leader Ayatollah Ali Khamenei had previously ruled out visits to army
sites or interviews with nuclear scientists.
- Asia Stocks Follow U.S. Shares Lower as Data Spur Rate-Rise Bets. Asian stocks dropped, following a decline in U.S. equities, after
better-than-estimated economic data bolstered the case for higher
interest rates in the world’s largest economy.
The MSCI Asia Pacific Index lost 0.3 percent to 152.77 as of 9:01 a.m. in Tokyo.
- OPEC Seen Backing Saudi Arabia’s Plan to Keep Supplies Elevated. When Saudi Arabia argues next week that OPEC should keep up
production to fight the rise in U.S. shale oil levels, prices will be on
its side. Crude plunged for eight of nine weeks prior to group’s November
gathering, when the kingdom faced down opposition from the majority of
fellow members, who advocated output reductions to tackle a global glut.
With oil companies around the world cutting investment, U.S. output
peaking and prices up, Saudi Arabia’s strategy will be extended at
OPEC’s semiannual meeting on June 5, say Societe Generale SA and Bank of
America Corp.
- Iron Ore Forecast Cut 32% by Citigroup as Demand to Drop. Global iron ore demand will contract over the 2020s as steel
consumption growth in China peaks, according to Citigroup Inc., which
reduced its long-run price forecast for the raw material by 32 percent. The long-run estimate was cut to $55 a metric ton from $81 as the
world’s major mining companies added more cheap supply, analysts
including Ivan Szpakowski wrote in a report on Wednesday. From 2016 to
2018, prices may average $40, it said.
- Identity Thieves Got Private Data for 104,000 U.S. Taxpayers. Identity thieves stole information on 104,000 U.S. taxpayers from
the IRS website and used the data to file fake tax returns that yielded
as much as $50 million in refunds, agency Commissioner John Koskinen
said. The thieves had enough personal information on the taxpayers to get
past security filters on the “Get Transcript” function on the Internal
Revenue Service’s website, Koskinen said Tuesday on a conference call
with reporters.
- Airlines Slide Into Bear Market on 21% Drop From 2015 Peak. The U.S. airline industry slipped into a bear market as investors
worry that carriers are losing power to raise fares even as oil prices
rise. The Bloomberg U.S. Airlines Index tumbled for a fifth straight day
Tuesday, dropping 21 percent from its 2015 high on Jan. 26, a common
definition of a bear market. The decline has occurred despite forecasts
for a record industry profit this year and as planes fly with more than
80 percent of seats filled.
- Ivy League Presidents Are Starting to Get Paid Like Corporate Executives. Ivy League presidential pay is looking more like the big leagues. Columbia University paid President Lee Bollinger $4.6 million in
2013, a 36 percent increase from the year before, according to a tax
filing released Tuesday. Yale University recently revealed it paid
former President Richard Levin a bonus of $8.5 million when he retired
in 2013 after 20 years. Presidential pay at elite universities is increasingly resembling
that of corporate America, with performance bonuses and exit packages.
While colleges say the rewards reflect the complexity of running
multi-billion-dollar organizations, professors, alumni and others have
questioned whether it is appropriate for nonprofits.
Wall Street Journal:
- Iraqi Forces, Militias Launch Attacks to Drive Islamic State From Ramadi. Extremists captured Anbar’s provincial capital this month. Military and paramilitary forces launched attacks around Ramadi in
what the government called the start of an offensive against Islamic
State in Iraq’s biggest province, a high-stakes campaign that hands
Iran-backed militias the lead role against the Sunni extremists. The counteroffensive comes just over a week after the fall of...
- How to Prevent the Fall of Baghdad. Islamic State is likely to use the tactics that worked in Ramadi. The U.S. can do much to change the outcome. Islamic State, also known as ISIS, has seized control of Ramadi, the
capital of Anbar province just 70 highway miles from Baghdad. Fallujah,
located between, is already a terror stronghold. There is little
doubt that ISIS leader Abu Bakr al-Baghdadi plans to capture the city
whose name he bears. A man who declared himself a caliph, Baghdadi knows
his home was...
CNBC:
Zero Hedge:
Business Insider:
- The oil market can't ignore fundamentals forever. (graph) Present data, however, suggests that the global over-supply has gotten
worse, not better, that overall demand for liquids remains weak, and the
world economic outlook is discouraging.
Telegraph:
Macao Daily:
- Macau 1Q Retail Sales Fall 11% y/y on Luxury Goods. 1Q retail sales of watches, jewelery slump 31% on year.
Evening Recommendations
BB&T:
- Rated (KATE) Buy, target $35.
Night Trading
- Asian equity indices are -1.25% to -.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 107.5 +1.5 basis points.
- Asia Pacific Sovereign CDS Index 59.5 +1.0 basis point.
- NASDAQ 100 futures -.08%.
Earnings of Note
Company/Estimate
Economic Releases
Upcoming Splits
Other Potential Market Movers
- The weekly US retail sales reports, Bank of Canada rate decision, weekly MBA mortgage applications report, Sanford C. Bernstein Strategic Decisions Conference, Citi Consumer Conference, Cowen Tech/Media/Telecom Conference, (SO) annual meeting, (IDTI) analyst day and the (COT) analyst meeting could also impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and commodity shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 25% net long heading into the day.