Bloomberg:
- Deutsche Bank Struggles to Shake Winter Blues in Credit Markets. For all of John Cryan’s efforts to reassure investors that Deutsche Bank AG is “rock solid,” credit markets are still signaling plenty of concern. The cost of insuring against losses on Deutsche Bank’s debt is 69 percent higher than the average for 12 of its biggest peers. While that’s less than it was in February, the gap shows investors are still singling out the bank after worries emerged earlier in the year that declining profitability will erode its ability to keep paying coupons on its riskiest bonds. It’s also showing the difficulty of reversing the effects of a derivatives market where a rapid rise in credit-default swap prices can fuel even more hedging by the firms that trade with the bank.
- Europe Stocks Rise as Total, Statoil Lead Oil Companies Higher. (video) Energy companies pushed European equities up for a second day amid better-than-estimated earnings reports and as oil reached $45 a barrel. Statoil ASA jumped 6.1 percent after Norway’s biggest oil company unexpectedly posted a profit, and Total SA gained 2.8 percent as its earnings beat estimates. Adidas AG climbed 6 percent after raising its annual profit forecast as consumers spend more before this year’s Euro soccer tournament. Munich Re fell 3.8 percent, dragging insurers lower, after forecasting lower profit than previously expected. The Stoxx Europe 600 Index rose 0.3 percent at the close of trading, reversing losses of as much as 0.4 percent.
- U.S. Crude Stockpiles Could See Return to 1929 Levels: Chart. If analysts are right, crude oil supplies in the U.S. may have surpassed the 540-million-barrel mark for the first time since 1929. An Energy Information Administration report set to be released Wednesday at 10:30 a.m. ET will tell us for sure. Analysts surveyed by Bloomberg say U.S. crude supplies probably expanded by 1.75 million barrels in the week ended April 22.
- China Trades Enough Cotton in One Day to Make Jeans for Everyone. It’s not just metals caught up in China’s commodity fever. The equivalent of 41 million bales of cotton traded in a single day on the Zhengzhou Commodity Exchange last week, the most in more than five years and enough to make almost 9 billion pairs of jeans, or at least one for every person on the planet. Prices that had slumped to the lowest on record in February surged almost 19 percent in the four days leading up to the trading spike on Friday.
- Loeb's Third Point Says Hedge Funds in 'Catastrophic' Period. Third Point, founded by Dan Loeb, said hedge funds are in the first stage of a “washout” after “catastrophic” performance this year. “There is no doubt that we are in the first innings of a washout in hedge funds and certain strategies,” the New York-based firm said in a quarterly letter posted late Tuesday on its website. The $2.9 trillion hedge fund industry had the worst start to a year in returns and outflows in at least seven years. Alan Howard’s Brevan Howard Asset Management and Paul Tudor Jones’ Tudor Investment Corp. are among the firms that clients are pulling billions of dollars from, while managers including Bill Ackman and John Paulson have posted steep losses. Hedge funds lost 1.9 percent in the first quarter, according to Hedge Fund Research’s global index, the poorest performance since 2008. The industry had net outflows of $16.6 billion in the last two quarters, the most since 2009, according to HFR. In 2015, 979 funds closed, more than any year since 2009, according to the research firm.
Wall Street Journal:
- Fed Stands Pat, Signals No Hurry to Raise Rates in Weeks Ahead. Statement cites mixed economic backdrop and lingering concerns about low inflation and global developments. Federal Reserve officials left short-term interest rates unchanged Wednesday and signaled they plan to move cautiously, citing a mixed economic backdrop and lingering concerns about low inflation and global economic developments.
Zero Hedge:
- FOMC Statement Key Take Aways: "Fed Leaves Door Open For June Rate Hike".
- Fed Removes "Global Risk" Alert But Keeps Monitoring "Global Economic And Financial Developments" - Full Statement Redline.
- Business "Subsidies" Plummet 70% As Government Support Evaporates.
- A Major Warning From Tom McClellan : "Can This Possibly End Well?" (graph)
- The "World's Biggest Short Squeeze" Has Spread From ETFs To Stocks. (graph)
- "Hold Onto Your Hats": A Chinese Commodity Is Now The Most Traded In The World, Surpassing Oil. (graph)
- Pending Home Sales Tumble In The West As "Demand Is Starting To Weaken". (graph)
Caixin:
- PBOC Adviser Says Capacity Cut Plan Smaller Than Expected. Chinese central bank adviser Huang Yiping said nationwide capacity reduction plan that has been announced is "way smaller" than market expectations and won't help much with current structural problems, citing an interview. Financial support to real economy is weakening because lots of money was used to keep "zombie cos." running instead of creating new value, Huang said.