Bloomberg:
- Saudi Arabia, Gulf Allies Starts Bombing Houthi Targets in Yemen. Saudi Arabia and its Gulf Arab allies started bombing Shiite Houthi targets in Yemen Thursday, the Saudi ambassador to Washington said. The allies launched “the military operations in support of the people of Yemen and their legitimate government,” Ambassador Adel al-Jubair said in a statement. The military strikes were started after an “appeal” from Yemen’s President Abdurabuh Mansur Hadi. Saudi Arabia’s King Salman ordered the airstrikes at midnight local time, Saudi-owned Al-Arabiya television reported. The bombing campaign comes after forces loyal to the rebel group marched on Aden, the stronghold of the internationally recognized President Abdurabuh Mansur Hadi in the southern port city of Aden. Hadi has left his residence in the city, Mohammed Hadi, an aide, said. Saudi Arabia, the world’s top oil exporter, has accused Iran of fomenting unrest in Yemen.
- Yemen Government’s Fall Is Another Blow to Obama’s War on Terror. Escalating chaos in Yemen threatens the Obama administration’s ability to combat the al-Qaeda affiliate that’s most intent on attacking the U.S. and its allies. It was only last June that President Barack Obama singled out Yemen as a model for U.S. efforts to fight terrorism by relying on training allied forces rather than risk American lives. Now the fall of the government and the turmoil there further imperil his signature antiterrorist strategies, which also are facing difficulties in Afghanistan, Iraq, Syria, Libya and elsewhere. “This is bad for counterterrorism,” said Daniel Benjamin, a former State Department antiterrorism adviser. “There’s no question there will be an effect on intelligence-gathering -- and a significant one.”
- A Murky, Sloppy Muddle: How Greece’s Exit From Euro Could Happen. With the fight to keep Greece in the euro now in its sixth year, everyone is running out of patience. More importantly, Prime Minister Alexis Tsipras’s government in Athens is running out of money. While bond yields suggest investors expect Greece to stay in the euro, economists such as UniCredit Bank AG’s Erik Nielsen say it may be just a matter of time before he’s forced to print a new currency. Adopting the euro was always supposed to be a one-way ticket, so there is no legal precedent or political roadmap for an exit. If you’re waiting for a formal announcement of a clear resolution, you may be waiting a long time.
- China Bulls Adopt Price-to-Whatever Ratio as Equities Surge. The signs of a Chinese equity bubble are visible just about everywhere Hao Hong looks. The chief China strategist at Bocom International Holdings Co. points to soaring price-to-earnings ratios, the shrinking yield advantage that stocks offer over bonds and the fact that mainland-listed equities now trade at a 34 percent premium over nearly identical shares in Hong Kong. So what’s Hong’s advice to investors? Keep buying, of course.
- Currency War Is Now a Dud as Windfall From Devaluations Vanishes. Currency wars, it turns out, may not be worth fighting right now. While weaker exchange rates have at times throughout history helped stoke economic growth by making countries’ exports cheaper, the benefits are becoming hard to find. Nowhere is this more apparent than in developing nations, where currencies have slumped 24 percent on average against the dollar since 2011. Yet despite this, their annual export growth rate has actually slowed to 4 percent in the past four years from 8 percent during the previous decade, according to the CPB Netherlands Bureau for Economic Policy Analysis. In Brazil, the real’s 48 percent plunge since 2011 has done little to revive an economy heading for its worst performance in 25 years.
- Tech Stock Selloff Continues in Asia; Oil Jumps on Yemen. Asian shares dropped the most in eight weeks, led by technology shares after the Nasdaq Composite Index tumbled in the U.S. Oil advanced after Saudi Arabia and its Gulf Arab allies started bombing targets in Yemen. The MSCI Asia Pacific Index sank 1.2 percent by 11 a.m. in Tokyo, as Taiwan Semiconductor Manufacturing Co. and Apple Inc. supplier AAC Technologies Holdings Inc. tumbled at least 3 percent. Japan’s Topix gauge fell the most since Jan. 6.
- Oil Rises on Mideast Disruption Risk as Saudi Arabia Bombs Yemen. Oil erased losses to rise for a fifth day in New York as Saudi Arabia said it started bombing rebel targets in Yemen with its allies. Futures gained as much as 1.4 percent to trade near $50 a barrel, the highest intraday price since March 10. King Salman ordered the airstrikes against Shiite Houthi positions after an “appeal” from Yemen’s President Abdurabuh Mansur Hadi, Saudi Ambassador Adel al-Jubair said in Washington. Prices slid earlier on Thursday after a U.S. government report showed crude inventories and production swelling further last week to the most in more than three decades.
- The Fed Still Needs to Figure Out How to Raise Rates. For all the talk about when Federal Reserve policy makers are going to raise interest rates, they haven’t quite figured out how to do it. The central bank has had trouble controlling near-term borrowing costs since the 2008 financial crisis and has been experimenting with ways to do so. While its main new tool has enabled the Fed to exert more influence over money-market rates in the past year, strategists from Barclays Plc to Goldman Sachs Group Inc. say the program is too small to prevent rates from falling when officials want them to climb. At issue is the Fed’s balance sheet, which has ballooned through its bond buying, leaving over $2 trillion in excess reserves in the banking system that may prove to be more difficult to siphon off than in the past. New methods are needed because the federal funds rate, long the central bank’s primary policy instrument, has ceased to be an effective means to guide short-term market rates.
- Apple(AAPL) Plans China IPhone Trade-In Program With Foxconn. Apple Inc. plans to introduce a trade-in program for iPhones in China, people familiar with the effort said, after a similar program bolstered sales in the U.S.
- Saudi Arabia Launches Military Operations in Yemen. Saudi ambassador to U.S. says 10 countries participating in operations. Saudi Arabia and other Gulf nations launched airstrikes against Houthi rebels in the Yemeni capital San’a in defense of what the Riyadh government called the country’s legitimate government. The airstrikes began hours after the country’s president, Abed Rabbo Mansour Hadi, was forced to flee the southern port city of Aden by boat after...
- Iran Stalls U.N. Probe Into Its Atomic Past. Talks over Iran’s nuclear program have hit a stumbling block because Tehran has failed to cooperate with a United Nations probe into whether it tried to build atomic weapons in the past. Talks over Iran’s nuclear program have hit a stumbling block a week before a key deadline because Tehran has failed to cooperate with a United Nations probe into whether it tried to build atomic weapons in the past, say people close to the negotiations. In response, these people say, the U.S. and its diplomatic partners are revising their demands on Iran to address these concerns before they agree to finalize a...
- Buyout Firms Feel Pinch From Lending Crackdown. Regulatory guidance that seeks to limit the use of borrowed money in takeovers has hampered the business of debt-laden acquisitions. An effort by regulators to deter banks from financing takeovers with high levels of debt has dealt a blow to the private-equity industry. After resisting at first, banks have lately been falling in line with guidance regulators set in 2013, which sought to limit how much debt banks could extend for corporate takeovers. The shift is now stinging private-equity firms, whose bread-and-butter business is debt-laden buyouts.
- The Bergdahl Desertion. Obama wanted to ‘whittle away’ the killers at Guantanamo. The United States Army intends to charge Sgt. Bowe Bergdahl with desertion and misbehavior before the enemy. That was Wednesday’s news, but the bigger story is the extravagant price the U.S. has paid because President Obama wanted to score political points.
- Obama’s Mideast Realignment. His new doctrine: Downgrade ties to Israel and the Saudis while letting Iran fill the vacuum left by U.S. retreat. Let’s connect the dots. Data point No. 1: President Obama withdrew U.S. forces from Iraq in 2011 and is preparing to leave Afghanistan by the end of 2016, even while keeping a few more troops there this year and next than originally planned. Point No. 2: The Obama administration keeps largely silent about Iran’s power grab in...
- Bergdahl charged with desertion, could face life in prison. (video) Army Sgt. Bowe Bergdahl, who was captured by the Taliban after abandoning his post in Afghanistan and then freed five years later in a controversial trade for five Guantanamo detainees, was charged Wednesday with desertion. U.S. Army Forces Command announced the decision at Fort Bragg in North Carolina.
CNBC:
- Biotechs could be the early warning for stocks. Traders are watching small caps and the biotech sector Thursday to see whether they continue to melt down, as the harbinger of a deeper selloff in the broader market.
- Things that will happen if Venezuela implodes. An economic implosion is becoming increasingly likely in Venezuela, and the country's debtholders, trade partners and neighbors are bracing for the fallout.
- Pay Attention To The Warning Signs. (graph)
- "Danger, Will Robinson!" (graph)
LA Times:
- Iran-backed rebels in Yemen loot secret files about U.S. spy operations. Secret intelligence files held by Yemeni security forces and containing details of American intelligence operations in the country have been looted by Iran-backed militia leaders, exposing names of informants and plans for U.S.-backed counter-terrorism operations, U.S. officials say.
- None of note
- Asian equity indices are -1.0% to unch. on average.
- Asia Ex-Japan Investment Grade CDS Index 113.0 +1.0 basis point.
- Asia Pacific Sovereign CDS Index 61.75 +1.25 basis points.
- S&P 500 futures +.04%.
- NASDAQ 100 futures unch.
Earnings of Note
Company/Estimate
- (ACN)/1.07
- (CMC)/.19
- (CAG)/.52
- (FRED)/.01
- (LULU)/.73
- (SCHL)/-.56
- (SIG)/3.03
- (WGO)/.38
- (AIR)/.37
- (GME)/2.17
- (OXM)1.02
- (RH)/1.01
8:30 am EST
- Initial Jobless Claims are estimated to fall to 290K versus 291K the prior week.
- Continuing Claims are estimated to fall to 2400K versus 2417K prior.
- Preliminary Markit US Services PMI for March is estimated to fall to 57.0 versus 57.1 in February.
- Kansas City Fed Manufacturing Activity for March is estimated at 1.0 versus 1.0 in February.
- (MGA) 2-for-1
- The Fed's Bullard speaking, Fed's Lockhart speaking, German GFK data, Japan CPI, $29B 7Y T-Note auction, weekly Bloomberg Consumer Comfort Index, weekly EIA natural gas inventory report, CIBC Retail/Consumer Conference, (CIEN) annual meeting, Johnson Rice Oilfield Services Conference, (SRE) analyst conference and the (PLAB) investor day could also impact trading today.
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