Bloomberg:
- Dividend Bets Trailing Europe Stocks Highlight Draghi Skepticism. Has the stock rally spurred by Mario Draghi’s quantitative easing gone too far? Based on financial contracts betting on future dividend rates, the answer is yes. While the Euro Stoxx 50 Index has climbed 17 percent since the start of the year, expectations for dividend growth have risen about one-third as fast, according to futures. Contracts allowing traders to speculate on dividend levels in the benchmark gauge trade on the Eurex exchange. The gap, currently the widest of any time in the past six years, reflects skepticism that European Central Bank stimulus will do as much for corporate profits and the economy as it has for asset prices.
- China Failing to Spike the Global Monetary Punchbowl as Fed Did. When it comes to spiking the global punch bowl, Zhou Xiaochuan doesn’t come close to central bankers in the U.S. or Europe. After central bank stimulus from the Federal Reserve and European Central Bank had a ripple effect in foreign financial markets, economists from UBS Group AG are advising investors not to expect a similar lift as Zhou’s People’s Bank of China cuts interest rates and encourages banks to lend.
- Asian Stocks Rise After Fed Minutes as Investors Await China PMI. Asian stocks advanced for the first time in three days as investors weighed the minutes of the Federal Reserve’s last meeting and awaited China manufacturing data. The MSCI Asia Pacific Index rose 0.1 percent to 153.02 as of 9:02 a.m. in Tokyo.
- ‘Shale-ionaires’ Suffering from Wave of Bankrupt Oil Drillers. A rebound in oil prices that bottomed near $44 a barrel in March has provided some relief to stronger companies that have been able to compensate with cost cuts and more efficient operations. For many smaller, cash-strapped producers, current prices of almost $60 still aren’t enough to make ends meet compared to the $100-plus prices seen during the boom days. There have been at least a dozen bankruptcy filings in recent months, and more than a dozen have defaulted on bond payments or warned investors of challenging times ahead, according to data compiled by Bloomberg.
- Once-Unthinkable Criminal Pleas by U.S. Banks Get Investor ‘Meh’. Investors yawned at the news Wednesday that five of the world’s biggest banks, including JPMorgan Chase & Co. and Citigroup Inc., agreed to plead guilty in a currency-rigging probe. They’re among six banks that will pay $5.8 billion in fines. Barely more than a year ago, criminal charges against major U.S. banks were considered unthinkable, with lawyers and analysts viewing felony convictions as a death sentence and a threat to the financial system. Now, by granting waivers allowing lenders to keep operating even after a felony plea, the government has managed to punish firms while protecting them from fatal consequences.
- Reclusive Chicago Multimillionaire Throwing Fundraiser for Hillary Clinton Tonight. Over the years, Fred Eychaner has given millions to the Clintons and their causes. But he shuns the spotlight. In an era of political megadonors, Fred Eychaner is an outlier. He never appears on television. He never hosts weekend summits for fellow donors. And he rarely talks to reporters. Even so, there was no more natural spot for one of Hillary Clinton's biggest Midwest fundraisers than Eychaner's upscale Chicago home.
- Fed Looks Past June for First Rate Hike. Federal Reserve officials at their April policy meeting said in the most explicit terms yet that they are unlikely to start raising short-term interest rates in June, as seemed possible when 2015 began. Officials have been saying they won’t begin lifting their benchmark federal funds rate from near zero until they see more improvement in the labor market and are confident inflation will rise toward their 2% target. Several of them...
- Cleanup Crews Tackle California Oil Spill as Officials Assess Size. Pipeline operator says spill could be as large as 2,500 barrels, while 500 barrels may have reached the water.
- Hillary vs. 19 Republicans. The GOP free-for-all is better politics than the Democrats’ coronation of Hillary Clinton.
- Ancient Syrian city reportedly in ISIS hands amid antiquities outcry. Islamic State militants reportedly captured the ancient Syrian town of Palmyra Wednesday as Syrian officials evacuated citizens and scrambled to keep priceless antiquities from falling into terrorist hands. The Syrian Observatory for human rights told The Associated Press that government forces collapsed in the face of ISIS attacks and withdrew from the town late Wednesday. The Wall Street Journal reported that before fleeing, the National Defense Forces evacuated civilians as militants took control of residential areas and established themselves in the city’s nearby ruins.
- Is Hedge Fund Hatred a Bad Sign for Stocks? Is the resentment against these funds just one more sign of overexuberance for the stock market?
CNBC:
- Bank punishment 'won't change anything': Lawyer. (video) He contended that the punishment will come down more on shareholders than the traders themselves. The punishment marks "a good first step," attorney Andrew Stoltmann said Wednesday. But he added that it had not gone far enough. "The individuals who engaged in this activity have to be indicted," he said on "Closing Bell."
Business Insider:
- China has a new priority #1. What we're going to get here is a bumpy ride where the Chinese government moves from reform to growth, growth to reform, in order to avoid a hard landing. It's going to be tough, though. During bumpy rides things can sometimes spin out of control.
- San Francisco’s housing boom has gotten over-the-top crazy. (graph) The median home price is now 37% above the prior-bubble completely mind-boggling median price that afterwards everyone admitted had been based on totally crazy valuations. This has a real impact on rents, with average asking rent in the first quarter hitting $3,458 a month, or $41,500 per year.
- CVS(CVS) nears deal to buy Omnicare(OMCR) for more than $12 bln -sources. CVS Health Corp, the second-largest U.S. drugstore operator, is nearing a deal to buy pharmacy service provider Omnicare Inc for more than $12 billion, according to two people familiar with the matter. A deal between the two companies could be announced as early as Thursday, one of the people said.
- Defiant Greeks force Europe to negotiating table as time-bomb ticks. EMU creditors have Greece's Alexis Tsipras by the scruff of the neck, but he has a knife to their throats.
- Chinese Fund Caps Holdings of SME, ChiNext Stocks. First Qianhai Fund limited single fund's combined holding of stocks on SME and ChiNext at no more than 10% of total net assets. Co. made the decision on concern bubbles in SME and ChiNext board may break, according to the report.
- None of note
- Asian equity indices are -.50% to +.50% on average.
- Asia Ex-Japan Investment Grade CDS Index 106.0 +.5 basis point.
- Asia Pacific Sovereign CDS Index 59.50 +.5 basis point.
- S&P 500 futures -.30%.
- NASDAQ 100 futures -.27%.
Earnings of Note
Company/Estimate
- (AAP)/2.48
- (BBY)/.29
- (BKE)/.79
- (DLTR)/.75
- (DCI)/.35
- (PDCO)/.65
- (QSII)/.15
- (SHLD)/-2.59
- (TTC)/1.63
- (TSL)/.08
- (ARO)/-.55
- (CRMT)/.82
- (GPS)/.55
- (HPQ)/.86
- (INTU)/2.74
- (MRVL)/.11
- (ROST)/1.28
- (TFM)/.49
8:30 am EST
- Chicago Fed National Activity Index for April is estimated to rise to 0.0 versus -.42 in March.
- Initial Jobless Claims for last week are estimated to rise to 270K versus 264K the prior week.
- Continuing Claims are estimated to rise to 2231K versus 2229K prior.
- Preliminary Markit US Manufacturing PMI for May is estimated to rise to 54.5 versus 54.1 in April.
- Philly Fed Business Outlook for May is estimated to rise to 8.0 versus 7.5 in April.
- Existing Home Sales for April are estimated to rise to 5.23M versus 5.19M in March.
- The Leading Index for April is estimated to rise +.3% versus a +.2% gain in March.
- Kansas City Fed Manufacturing Activity for May is estimated to rise to -4.0 versus -7.0 in April.
- None of note
- The Fed's Williams speaking, Mario Draghi press conference, ECB rate decision, Eurozone PMI report, Bloomberg Economic Expectations for May, weekly Bloomberg Consumer Comfort Index, weekly EIA natural gas inventory report, (AOS) analyst day, (AFL) analysts briefing and (FLIR) investor day could also impact trading today.
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