Bloomberg:
- Putin Says Sanctions Jeopardize U.S., EU Energy Deals. Russian President Vladimir Putin warned that further economic sanctions over the Ukraine crisis may lead Russia to reconsider participation by U.S. and European Union companies in energy and other key industries. While his government has prepared measures to retaliate for penalties imposed by the U.S. and its allies, Putin told reporters in Minsk, Belarus, yesterday that he doesn’t consider them necessary for now, though that may change. If sanctions continue, “then of course we will have to consider who’s working and how in the Russian Federation, in the key sectors of the Russian economy, including energy,” he said. “We really don’t want to take these reciprocal steps.”
- Moody’s Says Developer Default Risk to Slow Sales: China Credit. Moody’s Investors Service said the risk more Chinese property developers will default, after the collapse of Zhejiang Xingrun Real Estate Co., will make it harder for them to raise funds just as apartment sales cool. The builders have issued $500 million of offshore yuan or dollar bonds this month, compared with $1.6 billion in the same period last year and a record $9.2 billion in the first quarter, data compiled by Moody’s show. The price of property securities, which account for 32 percent of a Bank of America Merrill Lynch index of China dollar bonds, slumped 4.9 percent in the past year, paring their returns to 0.9 percent. That compares with a 1.6 percent total gain for dollar bonds globally, according to Bank of America.
- Asian Stocks Rise Ahead of Bank of Japan, Fed Decisions. Asian stocks rose as investors weighed corporate earnings before the Bank of Japan and Federal Reserve report on monetary policy. Kyocera Corp. climbed 4.2 percent in Tokyo after the electronics and solar-panel maker reported full-year profit that beat analyst estimates. SoftBank Corp., the Japanese phone company controlled by Masayoshi Son, gained 1.7 percent after unit Sprint Corp. boosted its full-year forecast and reported first-quarter sales that topped estimates. Woolworths Ltd. slipped 2.6 percent as quarterly food and liquor sales by the Australian retailer fell short of expectations. The MSCI Asia Pacific Index gained 0.2 percent to 137.76 as of 9:40 a.m. in Tokyo, with all 10 industry groups on the gauge rising.
- Deutsche Bank Among 15 Europe Lenders Cut to Negative by S&P. Deutsche Bank AG (DBK), Germany’s largest lender, was among 15 European banks that had their outlooks cut to negative by Standard & Poor’s on the prospect that governments are less likely to provide aid. The outlooks were lowered from stable “to reflect our view that extraordinary government support is likely to diminish as regulators implement resolution frameworks,” the ratings firm said yesterday in a statement.
- Boiled Frog Syndrome Invades CMBS as Risks Mount: Credit Markets. The growing din surrounding loosening standards in the commercial-mortgage bond market is doing little to deter buyers. Investors are lapping up the debt and accepting less interest to do so even as Moody's Investors Service warns that risk are building in debt linked to properties ranging from shopping malls and skyscrapers to hotels. After a month-long lull in issuance, Wall Street banks were poised to sell about $3.6 billion of the securities yesterday, a week after the ratings company said investors were facing a case of "boiling frog syndrome," where they fail to react to gradually increasing threats until it's too late. "There is no doubt underwriting is getting weaker," Keerthi Raghavan, a debt analyst at Barclays Plc in New York, said in an interview. The pace of deterioration "really picked up steam starting in the middle of 2013."
- NYSE Options Markets Cancel Almost 20,000 Trades After Error. A computer malfunction at IntercontinentalExchange Group Inc. (ICE)’s two U.S. options exchanges caused almost 20,000 erroneous trades, which the market operator later canceled.
- Supreme Court Revives EPA Rule on Air Pollution Across State Lines. Court's 6-2 Ruling Is Victory for Obama Administration; 28 States Will Have to Reduce Power-Plant Emissions. The Environmental Protection Agency can reinstate limits
on power-plant pollution that blows across state lines, the Supreme
Court ruled Tuesday, handing a defeat to electric utilities that opposed
the effort as costly regulatory overreach. The court's 6-2
ruling breathes new life into a 2011 EPA measure known as the
Cross-State Air Pollution Rule, which requires 28 states to reduce
emissions that hurt air quality in...
- Enrollment in Student-Debt Forgiveness Programs Soars in 2014. Two federal programs that offer to wipe away huge accumulations of student debt have grown at a rapid clip this year, putting them among the government’s fastest-growing forms of financial assistance. The Journal reported last week that enrollment in the plans—which allow students to rack up big debts and then forgive the unpaid balance after a set period—surged nearly 40% in the second half of 2013.
- Pro-Russia Forces Extend Grasp in Ukrainian City of Luhansk. Militants Break Down Doors to Government Building; President Criticizes Local Police. Pro-Russia militants in masks broke down doors and stormed government buildings Tuesday in another area of Ukraine that hugs the Russian border, as the new government in Kiev criticized local police for failing to stem the growing unrest.
- A Foreign Policy Flirting With Chaos. The most egregious case of fecklessness has been on Syria. Doubts about American dependability were raised far and wide. American foreign policy is in troubling disarray. The result is unwelcome news for the world, which largely depends upon the United States to promote order in the absence of any other country able and willing to do so. And it is bad for the U.S., which cannot insulate itself from the world.
- Benghazi emails suggest White House aide involved in prepping Rice for ‘video’ explanation. Newly released emails on the Benghazi terror attack suggest a senior White House aide played a central role in preparing former U.N. ambassador Susan Rice for her controversial Sunday show appearances -- where she wrongly blamed protests over an Internet video.
- Trader tries to make $18M betting against S&P ETF. In one of the Tuesday's biggest options trades, a major player spent $1.6 million on a highly risky bearish bet against the market.
- Twitter(TWTR) net loss widens substantially, shares drop after-hours. Twitter's net loss grew by more than $100 million in the first quarter, though the company's operating earnings and revenue beat Wall Street estimates. Shares fell 9 percent in after-hours trading.
- California drove Toyota out of state: Torrance Mayor. (video) Torrance Mayor Frank Scotto blames the state of California for Toyota Motor's decision to relocate its North American headquarters from the city to Plano, Texas. "The state of California lost Toyota," Scotto said on "Power Lunch" Tuesday. He pointed to a number of issues in the Golden State that negatively affect companies' bottom line: tax structure, workers' compensation and liability insurance.
- Abenomics Agony: Japanese Base Wages Tumble By Most In 2014 (22nd Consecutive Monthly Drop). (graph)
CNN:
- SEC chair: We've found 'bogus' private equity and hedge fund fees. SEC Chairwoman Mary Jo White today testified in front of the U.S. House Committee on Financial Services, to discuss the Agency's recent activities and 2015 budget request. As part of that overview, White suggested that recent examinations of hedge fund and private equity fund managers have uncovered some very unsavory activities. Namely, charging improper fees to investors and portfolio companies.
- U.S. Steel(X) returns to profit but warns of weaker 2nd qtr. United States Steel Corp returned to profit in the first quarter, but the steelmaker said Tuesday it expected reduced operating income in the second quarter as cold weather slowed transportation of raw materials and finished products. The Pittsburgh-based steelmaker also said it expects to report a loss in its flat-rolled segment, its biggest unit by shipments, in the second quarter. Its shares fell in after-hours trading.
- None of note
- Asian equity indices are -.50% to +.75% on average.
- Asia Ex-Japan Investment Grade CDS Index 125.50 -2.5 basis points.
- Asia Pacific Sovereign CDS Index 88.5 -.25 basis point.
- FTSE-100 futures -.06%.
- S&P 500 futures -.15%.
- NASDAQ 100 futures -.35%.
Earnings of Note
Company/Estimate
- (HES)/1.01
- (IP)/.54
- (TWX)/.88
- (ADP)/1.08
- (IACI)/.55
- (H)/.11
- (WLP)/2.07
- (SPW)/.21
- (ADT)/.43
- (JLL)/.43
- (SEE)/.25
- (PSX)/1.34
- (PBI)/.40
- (IRF)/.20
- (WBMD)/.10
- (WDC)/1.88
- (YELP)/-.06
- (TSO)/.39
- (MET)/1.39
- (IPI)/-.02
- (WMB)/.24
8:15 am EST
- The ADP Employment Change for April is estimated to rise to 210K versus 191K in March.
- The 1Q Employment Cost Index is estimated to rise +.5% versus a +.5% gain in 4Q.
- Advance 1Q GDP is estimated to rise +1.2% versus a +2.6% gain in 4Q.
- Advance 1Q Personal Consumption is estimated to rise +2.0% versus a +3.3% gain in 4Q.
- Advance 1Q GDP Price Index is estimated to rise +1.6% versus a +1.6% gain in 4Q.
- Advance 1Q Core PCE is estimated to rise +1.2% versus a +1.3% gain in 4Q.
- ISM Milwaukee for April is estimated to fall to 56.0 versus 56.03 in March.
- Chicago Purchasing Manager for April is estimated to rise to 57.0 versus 55.9 in March.
- Bloomberg
consensus estimates call for a weekly crude oil inventory build of
+2,111.110 barrels versus a +3,524,000 barrel gain the prior week.
Gasoline supplies are estimated to fall by -422,220 barrels versus a
-274,000 barrel decline the prior week. Distillate supplies are
estimated to rise by +683,330 barrels versus a +597,000 barrel gain the
prior week.
- The Fed's QE3 Pace for April is estimated to fall to $45B versus $55B prior.
- The Fed is estimated to leave the benchmark fed funds rate at .25%.
- None of note
- The China Manufacturing PMI, Eurozone inflation data, German unemployment rate, BoJ decision and the weekly MBA mortgage applications report could impact trading today.
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