Tuesday, March 31, 2015

Today's Headlines

  • Merkel, Hollande Say Time Short for Greek Economic Plan. German Chancellor Angela Merkel and French President Francois Hollande pressed Greece’s government to come up with an economic plan that its creditors can approve, saying time is short. “There’s no time to lose,” Merkel said at a news conference with Hollande after they met in Berlin on Tuesday. While talks between Greek officials and the country’s euro-area lenders in Brussels are “a start,” they “aren’t there yet,” she said.
  • Greece Opposes EU’s Sanctions on Russia, Tsipras Tells Tass. Greece opposes European Union sanctions imposed against Russia over the conflict in Ukraine, Prime Minister Alexis Tsipras said, denouncing the approach as “senseless” and calling for a negotiated solution. Greece has suffered from a Russian food import ban that President Vladimir Putin imposed in response to the sanctions, Tsipras said in an interview with state-run Russian news service Tass published on Tuesday. After his government was sworn in two months ago, Tsipras said that he told EU leaders that they couldn’t assume he would support the penalties. “We disagree with sanctions,” Tsipras told Tass. “I see it as a road to nowhere.”
  • Foreign Investors Are Cashing Out of China. International investors are cashing out of China’s world-beating equity rally. Foreigners sold a net 1.7 billion yuan ($274 million) of Chinese shares via the Shanghai-Hong Kong exchange link in the week through Monday, while the two biggest Hong Kong exchange-traded funds tracking mainland stocks had withdrawals of $622 million. Money flowed out of the link again on Tuesday as the Shanghai Composite Index dropped from a seven-year high.   
  • Winners are Losers in Last Day of Quarter for European Equities. The industries and markets that led the rally in European shares this quarter were responsible for their decline on Tuesday. The Stoxx Europe 600 Index lost 0.6 percent to 397.3 at the close of trading in London, trimming its best first-quarter rally since 1998. Carmakers and chemicals companies fell the most among 19 industry groups.
  • U.S. Oil Storage to Be Maxed Out by This Summer: Schork. (video)
  • Appalachia Miners Wiped Out by Coal Glut That They Can’t Reverse. The principal problem is sinking coal prices. They’ve dropped 33 percent over the past four years to levels that have made most mining companies across the Appalachia mountain region unprofitable. To make matters worse, there’s little chance of a quick rebound in prices. That’s because idling a mine to cut output and stem losses isn’t an option for many companies. The cost of doing so -- even on a temporary basis -- has become so prohibitive that it can put a miner out of business fast, Blackburn and other industry analysts say. So companies keep pulling coal out of the ground, opting to take a small, steady loss rather than one big writedown, in the hope that prices will bounce back. That, of course, is only adding to the supply glut in the U.S., the world’s second-biggest producer, and driving prices down further. It’s become, in essence, a trap for miners.
  • Fed’s Lacker Sees ‘Strong’ Case to Raise Rates at June FOMC. Federal Reserve Bank of Richmond President Jeffrey Lacker said the main interest rate should be raised in June amid a stronger job market, consumer-spending growth and inflation heading back toward the Fed’s target. “A strong case can be made that the federal funds rate should be higher than it is now,” Lacker, who votes on policy this year, said Tuesday in the text of remarks at the district bank in Virginia. “Unless incoming economic reports diverge substantially from projections, the case for raising rates will remain strong at the June meeting.”
  • San Francisco Boom Pins Office Landlords to Tech Bets. (video) San Francisco real estate developers are planning to add more than 8 million square feet (743,000 square meters) of office space in the next four years, the equivalent of 16 Transamerica Pyramids, and are betting on strong demand from technology tenants to fill it. While companies such as Salesforce and Uber Technologies Inc. have already reached deals for some of those towers, the pace of construction may make landlords vulnerable as they increasingly depend on an industry known for its booms and busts. San Francisco is one of only three markets in the U.S. where the coming office supply is forecast to outpace tenant leasing this year and next, according to Reis Inc., a real estate research company. The others are Houston and Fort Worth in Texas, where developers added new offices amid growth in the energy industry, which is now being hurt by a plunge in oil prices.
  • Apple(AAPL) Pay Running Into Hurdles at Checkout Counter, Survey Finds. Apple Inc.’s new mobile-payment system is failing to capture all of its potential business, according to a survey, with two-thirds of users reporting problems using the service at the checkout counter. While 66 percent of iPhone 6 and 6 Plus owners surveyed had signed up for Apple Pay, repeat usage is being hurt, the study by Phoenix Marketing International said. Almost half of users visited a store listed as an Apple Pay merchant only to find they couldn’t use the service because the location wasn’t actually accepting the system or wasn’t ready to do so, according to the survey, which drew about 3,000 respondents.
  • Here Comes a New Wave of Billion-Dollar Hedge Funds. Hedge fund investors aren’t giving up just yet. At least six new hedge funds are on track to start with at least $1 billion this year, according to data compiled by Bloomberg, after eight firms started with a 10-figure sum last year. The industry hasn’t seen this many mega-startups since 2005, when 13 funds raised a combined $19 billion. Frustrated with the mediocre performance of some of the industry’s old guard, investors hoping for higher returns are writing checks to a handful of new funds, including one run by Brevan Howard Asset Management veteran Chris Rokos and another headed by ex-Elliott Management Corp. star Didric Cederholm.
Business Insider: 
Contra Corner:
  • Corn plunges after disappointing plantings report. U.S. farmers were seen cutting their corn plantings by less than expected in 2015 even as supplies ballooned to the highest since 1987, U.S. government data showed on Tuesday. The U.S. Agriculture Department, in its closely watched prospective plantings report, also predicted that farmers would devote a record 84.635 million acres of their fields to soybeans this spring. But the soybean seedings outlook was below market forecasts. Corn futures fell more than 3 percent after the report.

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