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Wednesday, May 21, 2014

Wednesday Watch

Posted by Gary .....at 1:08 AM
Evening Headlines 
Bloomberg:
  • Russian Army Starts Withdrawing as Medvedev Sees Cold War. Russia said its troops are pulling back from Ukraine’s border, as Prime Minister Dmitry Medvedev warned the U.S. and the European Union they risk provoking a new Cold War. Ukraine and the U.S. said they haven’t yet seen signs of the pullback reported by Russian state TV, which said yesterday that soldiers in three Russian regions bordering Ukraine have started to return to their bases. 
  • Japan Trade Deficit Shrinks as Tax Increase Crimps Imports. Japan’s trade deficit shrank in April as imports rose the least in 16 months after the first sales-tax increase in 17 years crimped consumer spending. Inbound shipments rose 3.4 percent from a year earlier, the Ministry of Finance said today in Tokyo. Exports (JNTBEXPY) increased 5.1 percent, leaving a deficit of 808.9 billion yen ($8 billion), down 7.8 percent from a year earlier.
  • U.S. Said to Seek More than $5 Billion in BNP Settlement. U.S. authorities are seeking more than $5 billion from BNP Paribas SA (BNP) to settle federal and state investigations into the lender’s dealings with sanctioned countries including Sudan and Iran, according to a person familiar with the matter. The amount sought to resolve the investigation has escalated and now far exceeds the $2.6 billion that Credit Suisse AG (CSGN) agreed to pay in a settlement with the U.S. for helping Americans evade taxes. Discussions are continuing and the final number could change, the person said.
  • Asia Stocks Fall Fourth Day Before Bank of Japan Decision. Asian stocks fell for a fourth day, with the regional benchmark index heading for its longest losing streak since January, as the yen strengthened ahead of a Bank of Japan decision on monetary policy today. Raw-material suppliers led declines on the regional gauge, with BHP Billiton Ltd. losing 1.8 percent in Sydney after benchmark prices for iron-ore delivered to China’s Tianjin port dropped to the lowest since 2012. Mazda Motor Corp. fell 2.6 percent as the yen traded near its strongest level in more than three months. Japan Petroleum Exploration Co. (1662) led energy suppliers higher, jumping 6.3 percent, after its stock rating was raised by SMBC Nikko Securities Inc. The MSCI Asia Pacific Index slipped 0.5 percent to 138.46 as of 9:41 a.m. in Hong Kong, with nine of its 10 industry groups declining.
  • BlackRock’s Fink Says Housing Structure More Unsound Now. BlackRock Inc. (BLK)’s Chief Executive Officer Laurence D. Fink said the U.S. housing market is “structurally more unsound” today than before the financial crisis because it depends more on government-backed mortgage companies such as Fannie Mae and Freddie Mac. “We’re more dependent on Fannie and Freddie than we were before the crisis,” Fink said today at a conference held by the Investment Company Institute in Washington, noting that he was one of the first Freddie Mac bond traders on Wall Street. 
Wall Street Journal:
  • Debt Rises in Leveraged Buyouts Despite Warnings. Regulators Urge Banks to Avoid Financing High Levels of Debt. Wall Street banks are financing more private-equity takeovers with high levels of debt, despite warnings by regulators to reduce the amount of risky loans they make. The Federal Reserve and the Office of the Comptroller of the Currency last year issued guidance urging banks to avoid financing leveraged buyouts in most industries that would put debt on a company of more than six times its earnings before interest, taxes, depreciation and amortization, or Ebitda. The Fed and the OCC also told banks to limit borrowing... 
  • Investor Demand High as Fannie Mae Sets Price Range for Risky Mortgage Securities. Investors Say Fannie Lowers Yields on Offering From Initial Discussions. The latest place where investors are taking on more risk in exchange for apparently meager returns: the U.S. housing market. Bond buyers on Tuesday jockeyed to get a piece of $1.6 billion of riskier Fannie Mae securities, enabling the government-backed mortgage company to twice cut the yields it offered on the debt. The offering is Fannie's third sale of so-called risk-sharing certificates that enlist investors to pay for...
  • After Martial Law Declaration, Thailand Waits for General's Next Move. A day after Thailand's military imposed nationwide martial law, the country faced uncertainty over whether a coup d'état was imminent or if its civilian leaders could broker a deal to end months of bitter and often violent feuding. The military urged calm and insisted the declaration—made under a 100-year-old constitutional decree that gives the army sweeping powers to maintain order—wasn't a coup. No curfew was imposed, and residents were encouraged to go about business as usual. Some Thais were seen taking... 
Fox News: 
  • Pentagon prepares for possible evacuation of US personnel from Libya, amid upheaval. The Obama administration is moving military assets into place in preparation for a possible evacuation of Americans from Libya, as a political crisis threatens to touch off a new wave of violence in the unstable country. Officials say no decision has been made on whether to move U.S. personnel, particularly those at the U.S. Embassy in Tripoli, out of Libya. But the U.S. military is preparing in case the State Department makes the call.
  • McConnell beats Tea Party challenge to win primary, now faces tough November contest.
Barron's:
  • Salesforce(CRM) Rising: FYQ1 Beats, Q2 Rev View, Year View Beat.
MarketWatch.com: 
  • Charles Plosser thinks there’s a ticking time bomb at the Fed. The way Charles Plosser sees it, the Federal Reserve is sitting on a ticking time bomb that could severely damage the economy unless the central bank reacts quickly to defuse the looming threat.
CNBC:
  • European bonds signaling trouble? The quick move higher in the yields of Europe's weakest sovereigns from historic lows may be just the beginning and on the edges it could start to affect other low-rated credits where investors have hunted for yield—such as U.S. junk bonds.
  • Flash crash could come at any time: Bill Fleckenstein. (video)
Zero Hedge:
  • The Birth Of Eurasia - Russia & China Do Pipelineistan.
  • Socialist-Motion Trainwreck: France Mistakenly Orders 2,000 Trains Which Are Too Wide For Its Platforms.
  • Credit Mania Update – The Chase for CCC-Rated Bonds. (graph)
  • Jobless Claims And The Issue Of "Full Employment". (graph) 
  • Putin's Crimea Bonus: Vast Oil And Gas Fields.
ValueWalk: 
  • Dudley: Some Pockets In Financial Markets “Are Concerning”. Dudley on whether there are any bubbles in the financial markets: “Well we look at the financial issues all the time to asset whether the current level interest rates is going to generate excesses in financial markets. Excesses that we need to be concerned about in terms of financial stability. I would say there are pockets that are concerning. Leverage loan markets for example are quite frothy.
Business Insider:
  • Cisco(CSCO) CEO: 'Brutal' Times Are Coming For The Tech Industry. Cisco CEO and walking global economic barometer John Chambers believes that the rapid pace of change in the technology industry is going to create a bloodbath for the major tech players, and every other company on the planet.
  • FBI Director Says He's Having Trouble Recruiting Techies Because They're All Stoners. 
  • Google(GOOG) Overtakes Apple(AAPL) As The World's Most Valuable Brand.
  • South Korean Ships Fire Warning Shots At North Korean Vessels Near The DMZ.
Reuters:
  • Bombings kill at least 118 in central Nigerian city of Jos. Back-to-back bomb blasts killed at least 118 people and wounded 45 in the crowded business district of the central Nigerian city of Jos on Tuesday, emergency services said, in an attack that appeared to bear the hallmarks of the Boko Haram insurgents. 
  • Hedge fund exit requests rise to five month high in May. Demand to pull out money from hedge funds rose to five month high in May as investors looked to adjust their portfolios ahead of the mid-year point.
Obama takes on coal with first-ever carbon limits
Read more at http://www.philly.com/philly/news/politics/20130919_ap_0f857b20e0c144a5a1e1b9dddc9f9d72.html#YRThyDOhArykUeYy.99
Financial Times: 
  • Hedge funds wrongfooted by choppy markets. It was meant to be the year of the hedge fund. After near indiscriminate gains for shares in 2013, the choppier markets of this year were hailed as the perfect conditions for the specialist and skilled active fund manager. It has not turned out that way.
  • China property slowdown spells trouble for Asia bonds. Investing in Chinese developers becoming iffy. In May Central China Real Estate, one of the Chinese mainland’s many property developers, proposed issuing Singapore dollar-denominated notes, to refinance a convertible bond due in August.
Evening Recommendations
  • None of note
Night Trading
  • Asian equity indices are -.75% to -.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 123.0 +2.0 basis points.
  • Asia Pacific Sovereign CDS Index 87.75 +2.0 basis points.
  • FTSE-100 futures -.10%.
  • S&P 500 futures -.04%.
  • NASDAQ 100 futures  -.02%.
Morning Preview Links

Earnings of Note

Company/Estimate
  • (BAH)/.31
  • (PETM)/1.01
  • (TIF)/.78
  • (LOW)/.60
  • (HRL)/.56
  • (TGT)/.71
  • (AEO)/.00
  • (EV)/.55
  • (NTAP)/.79
  • (LB)/.52
  • (SNPS)/.60
  • (SMTC)/.30
  • (WSM)/.44
Economic Releases
10:30 am EST
  • Bloomberg consensus estimates call for a weekly crude oil inventory build of +243,750 barrels versus a +947,000 barrel gain the prior week. Gasoline supplies are estimated to rise by +400,000 barrels versus a -772,000 barrel decline the prior week. Distillate inventories are estimated to fall by -306,250 barrels versus a -1,124,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise +.41% versus a -1.4% decline the prior week.
2:00 pm EST
  • FOMC Minutes from April 29-30 Meeting.
Upcoming Splits
  • (AWH) 3-for-1
Other Potential Market Movers
  • The Fed's Kocherlakota speaking, Fed's George speaking, China HSBC Manufacturing PMI, BoJ decision, BoE minutes, weekly MBA mortgage applications report, BMO Capital Farm to Market Conference, (MXIM) investor day, (AVY) investor meeting, (BA) investor conference, (FLEX) analyst day and the (AWI) investor day could impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by industrial and technology 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.

1 comment:

theyenguy said...


The debt based money system known as fiat money, defined as the mandates of the Banker Regime, was designed for investment gain, was used throughout the world community, was widely accepted in payment for goods and services, and in discharge of obligations; served as a measure of value, and was a storehouse of value.


Fiat money came to an end on May 13, 2014, with the failure of credit, that is trust in the world central banks to provide stimulus for continued investment gains and global economic growth, as evidenced by the trade lower in the Euro, FXE, and the British Pound Sterling, FXB, and the trade lower in Italy, EWI, and Italy’s Debt, ITLY, reflecting the investor’s fear that the monetary policies of the world central banks had crossed the rubicon of sound monetary policy and made “money good” investments bad.


CNBC reports European Bonds Signaling Trouble? The quick move higher in the yields of Europe's weakest sovereigns from historic lows may be just the beginning and on the edges it could start to affect other low-rated credits where investors have hunted for yield, such as US Junk Bonds.


It was the quick move higher in Italy’s Sovereign Yield that caused Italy, EWI, to trade strongly lower.


The new debt based money system, known as diktat money, commenced as peak moral hazard wealth was obtained, reflected in Aggregate Credit, AGG, Major World Currencies, DBV, and Emerging Market Currencies, CEW, topping out in value; and World Stocks, VT, Nation Investment, EFA, Small Cap Nation Investment, SCZ, Dividends Excluding Financials, DTN, trading lower in value.


Diktat money has its origins out of waves of Club Med, read PIGS, sovereign, banking, and corporate insolvency.

Diktat money is defined as the mandates of the Beast Regime, specifically regional fascist leaders; it is designed to establish regional security, stability, and sustainability, and is centered around regional framework agreements, as leaders meet in summits, to renounce national sovereignty and announce regional pooled sovereignty as is seen in the Zero Hedge report The Birth Of Eurasia - Russia & China Do Pipelineistan.

Wednesday, May 21, 2014 at 8:43:00 AM EDT

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