Bloomberg:
- Russia Rejects Automatic Sanctions Return If Iran Cheats on Deal. The Obama administration is trying to sell a nuclear deal with Iran to skeptical Arabs, Israelis and U.S. lawmakers by saying that United Nations sanctions will be restored automatically if the Iranians are caught cheating. Not so, say the Russians, who have one of five vetoes in the 15-member UN Security Council. “There can be no automaticity, none whatsoever” in reimposing UN sanctions if Iran violates the terms of an agreement to curb its nuclear program, Russia’s UN Ambassador Vitaly Churkin told Bloomberg News on Wednesday.
- Man Who Brought Down Barings Warns on China. Twenty years after bringing down a major British bank, Nick Leeson is sounding alarm bells about China. Unless the country reforms its stock markets, he warns, it's only a matter of time until his earlier disaster repeats itself on a larger scale.
- Japan Markets Most Disjointed in 23 Years Show Kuroda Heavy Hand. The weakest correlation between Japanese bond yields and stocks in 23 years is showing how dependent the nation’s markets have become on central bank support. The 60-day measure tracking moves between Japan’s Topix stock index and the 10-year benchmark government bond yield fell to negative 0.33 on Wednesday, the lowest since 1992 and below the 1 level that would represent lockstep moves. The last time the relationship broke down in April 2013, the Topix fell for four straight months, the longest since the rout triggered by Lehman Brothers Holdings Inc.’s collapse in 2008. A similar pattern can also be seen in December 2010 and February 2007.
- Saudi Arabia Is Making Its First Real Attempt to Be a Military Power. In the more assertive Saudi Arabia that’s emerging after the Arab Spring, war is no longer taboo as an instrument of policy and Washington’s approval isn’t required. Once known for cautious diplomacy, the oil-rich kingdom is turning more frequently to hard power. The shift has been under way since unrest swept across the Arab world in 2011. It accelerated after the succession of King Salman in January, and the promotion of his son as defense chief. Since then, the Saudis have started an air war in Yemen against Shiite Muslim rebels they accuse of being tools of Iran.
- Asian Stocks Fall as Japan Drops on Yen After U.S. Retail Sales. Asian stocks declined after weaker-than-forecast U.S. retail sales fueled concern about growth in the world’s largest economy, strengthening the yen and sending Japanese shares lower. The MSCI Asia Pacific Index fell 0.1 percent to 152.45 as of 9:06 a.m. in Tokyo.
- Stan Druckenmiller Sees ‘Massive’ Problem Caused by Aging. Billionaire investor Stan Druckenmiller said an aging population will present a “massive, massive problem” in 15 years. “The young people are not going to be talking about cutting back,” Druckenmiller said at a New York event hosted by Addepar, a technology company that provides software to financial advisers, fund managers and family offices. “There will be nothing to cut back.”
- Ralph Lauren to Hike Prices in Some Countries to Offset FX Hit. Clothing company Ralph Lauren Corp. will raise prices across the board in Japan, Canada, Australia and Europe during the next year in an effort to offset losses from a stronger U.S. dollar.
- Senate Deal Gives Trade Bill New Life. Accord opens door to new vote on fast-track after Democrats blocked the measure Tuesday.
- Trader Accused in ‘Flash Crash’ Accused Rivals of Misconduct. Navinder Singh Sarao complained to CME more than 100 times.
- Investors Double Down on Spring Turnaround. Traders are piling into assets that rose as dollar fell—but how long will the rally last?
- Springtime for Dictators. Raúl Castro’s “very friendly” meeting with Pope Francis.
- Amtrak engineer applied brakes while train hurtling at twice speed limit: NTSB. (video) The engineer of the Amtrak train that derailed near Philadelphia -- killing at least seven and sending more than 200 to area hospitals -- applied the emergency brakes just seconds before the train jumped the tracks while hurtling along at almost twice the speed limit, a National Transportation Safety Board spokesman said Wednesday.
- A Generational Storm Is Coming. (graph)
Reuters:
- Cisco(CSCO) profit edges past estimates despite weak telecom spending. Cisco Systems Inc's quarterly profit edged past market estimates as demand for new switches, routers, wireless gear and servers made up for sluggish spending by telecom customers and weak sales in emerging markets.
- Higher prices help Shake Shack(SHAK) post unexpected profit. Hamburger chain Shake Shack Inc reported a surprise quarterly profit, as they raised prices for their hormone- and antibiotic-free burgers, popular with increasingly health-conscious U.S. customers. The company, which also reported better-than-expected revenue for the first quarter, raised its full-year revenue forecast, sending its shares up nearly 10 percent in after-hours trading on Wednesday.
- Wal-Mart(WMT) challenges Amazon(AMZN) with unlimited shipping service for $50 per year. Wal-Mart Stores Inc is planning to test a new unlimited online shipping service this summer for $50 per year, a move that may hurt Amazon's annual $99 Prime shipping service. Wal-Mart's service, which will be by invitation only for now, will offer selected products on the company's website to customers within three days or less, company spokesman Ravi Jariwala told Reuters. Wal-Mart offers more than 7 million products on its website.
- Brazil's Petrobras expects to export 50 pct more oil in 2015. Brazil's state-run oil company Petrobras on Wednesday estimated nearly 50 percent growth in oil exports in 2015, thanks to new offshore output and as its refineries lack capacity to process more crude.
- Puma Biotech(PUMA) breast cancer trial detailed, shares fall 25 pct. Details from a late-stage trial of Puma Biotechnology's experimental breast cancer pill neratinib showed that it improved disease-free survival for certain breast cancer patients, but only by 2.3 months. Puma shares slid 25 percent after hours following release of the findings on Wednesday by the American Society of Clinical Oncology ahead of its annual meeting later this month.
Financial Times:
Caixin:- Rubio vows ‘moral clarity’ abroad. Marco Rubio, the Cuban-American Republican running for president, on Wednesday vowed to restore a “moral clarity” to US foreign policy in a speech that outlined a tough stance on China, Russia and Iran.
- China Everbright Bank Has Most Umbrella Trust Exposure. China Everbright Bank has the highest exposure to umbrella trusts at 200b yuan, citing a person familiar with the matter. China Merchants Bank and Industrial Bank have 100b yuan each of umbrella trusts, the report said.
- None of note
- Asian equity indices are -.75% to unch. on average.
- Asia Ex-Japan Investment Grade CDS Index 107.25 -.25 basis point.
- Asia Pacific Sovereign CDS Index 60.25 +.25 basis point.
- S&P 500 futures +.06%.
- NASDAQ 100 futures unch.
Earnings of Note
Company/Estimate
- (KSS)/.55
- (PERY)/.63
- (PBH)/.45
- (TK)/.14
- (PLCE)/.83
- (AMAT)/.28
- (DDS)/2.78
- (LOCO)/.17
- (JWN)/.71
- (SINA)/.02
- (SYMC)/.44
- (WB)/.01
8:30 am EST
- PPI Final Demand for April is estimated to rise +.1% versus a +.2% gain in March.
- PPI Ex Food and Energy for April is estimated to rise +.1% versus a +.2% gain in March.
- Initial Jobless Claims are estimated to rise to 273K versus 265K the prior week.
- Continuing Claims are estimated to rise to 2232K versus 2228K prior.
- None of note
- The BoJ's Kuroda speaking, $16B 30Y T-Bond auction, Bloomberg US Economic Survey for May, weekly Bloomberg Consumer Comfort Index, weekly EIA natural gas inventory report, (CPLA) analyst day, (ADT) investor day and the (KSS) annual meeting could also impact trading today.
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