Tuesday, March 24, 2015

Today's Headlines

  • Russia Calls on U.S. to Remove Its Nuclear Weapons From Europe. Russia called for a ban on American nuclear weapons in parts of Europe, saying the U.S. is breaking an international agreement by holding joint nuclear training missions with NATO allies that don’t possess such weapons. Using ships and airfields as well as training crews from non-nuclear states from the North Atlantic Treaty Organization in such exercises is “in direct contradiction to the letter and spirit” of the Nuclear Non-Proliferation Treaty, or NPT, ministry spokesman Alexander Lukashevich said in a statement on its website.
  • Euro area waits for Greek Plan CEuropean officials are preparing to assess Greece's third set of economic policy proposals with German Chancellor Angela Merkel urging Prime Minister Alexis Tsipras to do what is needed to qualify for aid. Tsipras' government may submit a comprehensive list of policy measures aimed at securing more financial aid by the end of the week. That document needs the endorsement of Greece's official creditors and the finance officials' committee before ministers will consider whether it's up to scratch. Euro-area finance officials will hold a call on Wednesday to discuss progress on Greece, two people familiar with the plans said.
  • Soros Says Greece Now Lose-Lose Game After Being Mishandled. (video) The chances of Greece leaving the euro area are now 50-50 and the country could go “down the drain,” billionaire investor George Soros said. “It’s now a lose-lose game and the best that can happen is actually muddling through,” Soros, 84, said in a Bloomberg Television interview due to air Tuesday. “Greece is a long-festering problem that was mishandled from the beginning by all parties.”
  • French Output Growth Cools as Manufacturing Weakness Persists. France’s private-sector output lost momentum this month as manufacturing shrank for an 11th consecutive month, holding back the recovery. Markit Economics said on Tuesday that its composite Purchasing Managers Index for services and manufacturing slipped to 51.7 from 52.2 in February. While the factory measure rose to 48.2 from 47.6, it remained below the 50 mark that divides expansion from contraction. The services gauge declined to 52.8 from 53.4
  • Banks Push European Stocks Higher With Stoxx 600 Nearing Record. Lenders led a rally in European stocks, sending the Stoxx Europe 600 Index near a record. Spain’s Banco Santander SA and Italy’s Intesa Sanpaolo SpA climbed more than 1.5 percent, while France’s Societe Generale SA added 2.5 percent. Deutsche Lufthansa AG lost 1.6 percent as Germanwings, its low-cost subsidiary, operated a plane that crashed in southern France. The Stoxx 600 advanced 0.3 percent to 402.49 at the close of trading in London, reversing an earlier drop of as much as 0.5 percent as data showed that euro-area business activity expanded faster than forecast.
  • Beijing to Shut All Major Coal Power Plants to Cut Pollution. Beijing, where pollution averaged more than twice China’s national standard last year, will close the last of its four major coal-fired power plants next year. The capital city will shutter China Huaneng Group Corp.’s 845-megawatt power plant in 2016, after last week closing plants owned by Guohua Electric Power Corp. and Beijing Energy Investment Holding Co., according to a statement Monday on the website of the city’s economic planning agency. A fourth major power plant, owned by China Datang Corp., was shut last year. 
  • Here's How $20 Oil Could Become a Reality If Storage Runs Out. (video) The looming storage crisis explained.
  • Morgan Stanley(MS) Cuts Commodities Outlook on China Demand. Morgan Stanley cut its price forecasts for almost all base metals and bulk commodities as China’s “dormant” industry fails to bolster demand in the world’s biggest consumer of copper and iron ore. The bank reduced its 2015 estimate for nickel by 23 percent from its previous estimate to an average $14,815 a metric ton and lowered copper by 16 percent to $5,945 a ton. It cut its iron ore outlook by 28 percent and coking coal by 16 percent.
  • Bullard Says Markets Risk Rate-Rise Surprise If They Ignore Fed. Investors risk suffering a Federal Reserve interest-rate rise surprise unless market expectations for future tightening line up with the outlook of policy makers, said St. Louis Fed President James Bullard. Bullard said active discussion by the Fed about the timing of the first rates increase since 2006 ought to ensure that it doesn’t come as a shock when policy eventually moves.
  • Speed Traders Team Up in Microwave-Tower Superhighway Plan. Two key competitors in the technological arms race that’s driving financial markets ever closer to light speed have called a truce. KCG Holdings Inc., a brokerage with roots in high-frequency trading, and World Class Wireless LLC will unite their networks of microwave towers, connecting major market centers around the globe, according to a statement released last month. WCW, which is owned by ECW Wireless, has the same address and senior managers as high-frequency trader Jump Trading LLC. A representative for Jump said the firm declined to comment.
Wall Street Journal:
  • Profit recession: This is what you need to know. (video) The suddenly dour forecast for corporate profits in 2015 is accompanying fears that a recession will be close behind. In fact, the two have gone pretty much hand in hand over the years, which is why a looming earnings pullback in corporate America has sparked concern on Wall Street. Since the end of World War II in 1945, each of the 10 economic recessions has been accompanied by a decline in earnings growth.
  • Nasty tax surprise for Obamacare customers (video).
Business Insider: 
The Times:
  • West’s tech bubble is ‘about to burst’. Silicon Valley is in a bubble and it is about to burst, one of the technology industry’s shrewdest investors has warned. A considerable number of “unicorns” — young, private technology companies worth $1 billion or more — are doomed to fail in the coming months, Sir Michael Moritz, the chairman of Sequoia Capital, told The Times.

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