Evening Headlines
Bloomberg:
Bloomberg:
- Southeast Asia's Debt Problem Hasn't Gone Away. In Southeast Asia, original sin hasn’t gone away. Even as the region’s currencies rally, stock markets rise and foreign investors return, a legacy of debt remains one of the biggest threats to economic stability. Governments and companies in Indonesia, Malaysia and other countries in the region have continued to add to borrowing this year after selling the most amount of dollar bonds in three years in 2015, increasing risks if the U.S. Federal Reserve again lifts interest rates, the dollar rallies and local currencies tank. The recent rebound in emerging-market sentiment may simply be masking the threat of “original sin” -- a term coined by economists Barry Eichengreen and Ricardo Hausmann after the region’s 1997-98 meltdown and used to describe the difficulties faced by developing countries that run up overseas borrowing.
- Currency Check: More Volatility Ahead for the Yuan? (video)
- `Risk-On' Rally Loses Luster When Viewed Against Haven Markets. From stocks to developing-nation currencies, riskier assets around the world have been flashing the all-clear signal for over a month. But for investors in the world’s safest securities, nothing has changed, and that may spell trouble. Some of the world’s great haven destinations have proven resilient amid a rally that’s sent global equities surging more than 11 percent from their February lows. That’s a change from the start of the year, when there was a simple relationship between stocks and developed-economy government debt: When one went down, the other went up. Continued demand for gold, the Japanese yen and government bonds show investors are skeptical of a rally that’s lifted the world’s riskiest assets after a terrible start to 2016.
- Greenbacks slumps to 18-month low v yen. The US dollar touched the weakest level since October 2014 against the yen after the release of minutes from the Federal Reserve's March meeting, when policy makers scaled back expectations for the pace of interest-rate increases in 2016. The dollar fell 0.5 per cent to 109.79 yen as of 5pm in New York, after touching 109.34. The greenback dropped 0.1 per cent to about $US1.14 per euro, approaching the weakest since October. The Australian dollar edged higher to 76.02 US cents near 8.45am Sydney time.
- Asian Stocks Jump Amid Dollar Drop as Drugmakers Gain. Asian stocks climbed, while the dollar extended losses, after Federal Reserve meeting minutes reaffirmed that U.S. policy makers aren’t in a rush to raise interest rates and as the recovery in crude oil prices solidified. The MSCI Asia Pacific Index gained 0.6 percent as of 10:10 a.m. Tokyo time, with health-care stocks jumping 1.3 percent, led by Korea’s Celltrion Inc. and Japan-listed Astellas Pharma Inc.
- China Ramps Up Aluminum Production as 20% Rally Allows Restarts. Aluminum smelters in China, which supply more than half the world’s metal, are restarting idled plants after a price rally, according to the industry group that brokered an agreement in December to curb capacity. As much as half of Chinese smelter capacity is profitable at current prices, Wen Xianjun, deputy chairman of the China Nonferrous Metals Industry Association, said in a phone interview, adding the restarts weren’t a breach of the December accord because the pact allowed for flexibility in production. Prices of the metal used to make everything from window frames to aircraft have climbed more than 20 percent from a low in November on the Shanghai Futures Exchange as Chinese policy makers signaled their willingness to bolster growth. The new production may reverse a decline in exports after they flooded world markets last year and hurt producers from the U.S. to India.
- New Tax Rules on Inversion Deals Are Met With Protest. Pfizer, Allergan and others criticize restrictions aimed at limiting companies’ ability to move tax address overseas. A day after the Obama administration limited the ability of U.S. companies to do international deals to lighten their tax burdens, Pfizer Inc. and Allergan PLC terminated their planned $150 billion merger and other companies around the globe raced to assess the impact of the new rules.
- Tiger Global Hedge Fund Plunges on Amazon, Netflix, Other Bets. Charles ‘Chase’ Coleman’s tech-loving hedge fund falls 22% in the first quarter as tech boom wanes. One of the biggest supporters of the recent technology boom lost at least $1 billion during the first three months of the year, illustrating how ardor has cooled for a once-hot sector of the U.S. economy.
- Brazil Moves Closer to Impeaching President Dilma Rousseff. Committee report recommends that lawmakers vote in favor of a trial before the Senate. Brazil’s Congress moved closer to impeaching President Dilma Rousseff, with the release of a report recommending that lawmakers vote in favor of her trial before the Senate.
- The Not-Trump GOP Rises. The delegate math is getting hard, and New York may not be the lifeline Trump needs. The Real Clear Politics average of Wisconsin polls (March 23-April 3) pointed to a close race, placing Ted Cruz ahead of Donald Trump by 39% to 35%. But the final week leading to Tuesday’s primary was not kind to Mr. Trump, and he was crushed, 48% to 35%. Mr. Cruz’s victory—taking 36 of 42 delegates—likely means no candidate will have the 1,237 delegates necessary for a first-ballot victory at the Republican convention in July. And...
Zero Hedge:
Earnings of Note
Company/Estimate
8:30 am EST
- Governor Of Puerto Rico Set To Impose Capital Controls.
- McDonalds(MCD) Responds To Minimum Wage Hikes, Launches McCafe Coffee Kiosk.
- Does Not Compute: The Market Is The "Most Overbought Since 2009" Yet "Most Short Since 2008". (graph)
- Why Hillary Clinton’s Paid Speeches Are Relevant.
- How Much Of S&P Earnings Growth Comes From Buybacks. (graph)
- The Panama Papers: This Is The Consequence Of Centralized Money And Power.
- Dutch Referendum May Have Unleashed European "Continental Crisis".
- Millionaires Are Fleeing Chicago In Record Numbers.
- Here We Go Again: Obama Pushes Banks To Lower Home Loan Standards.
- San Francisco Home Prices: "This Is Troubling". (graph)
- Stocks Soar On Oil Ignition, Biotech Bonanza. (graph)
- China just started unloading its biggest problem on the rest of the world, and the world is already freaking out.
- The debt bubble is bursting, and there's 'nowhere to hide'.
- Texas' homes might be as overvalued as San Francisco's.
- Powerful Chinese officials were implicated in the 'Panama Papers' — but you wouldn't know it in China.
- China's debt is growing faster than its economy.
- The doctor shortage in the US will soon hit crisis levels.
- This isn't a bullish recipe for stocks. (graph)
- Bed Bath and Beyond(BBBY) jumps after strong earnings.
- U.S. Plans to Require Banks to Identify Owners of Shell Companies. The United States government is close to issuing a rule that will for the first time require banks and other financial institutions to find out the identities of people hidden behind shell companies. The rule is meant to close a major loophole in the American banking system that enables the sorts of secretive financial maneuvers that were thrust into the spotlight this week with the leak of millions of documents from a law firm in Panama.
- Fed's Kaplan says caution on rates does not mean standing still. Dallas Fed President Robert Kaplan declined on Wednesday to say when he expects to call for the Fed's next interest rate rise, but said that while the United States is vulnerable to "some amount of" financial turmoil, he sees costs to excess monetary policy accommodation.
- Yahoo(YHOO) expects 2016 revenue to drop about 15 percent: Re/code. Yahoo Inc expects a sharp decline in both its revenue and earnings this year compared with 2015, with revenue seen falling nearly 15 percent and earnings over 20 percent, Re/code reported on Wednesday, citing a Yahoo document.
- U.S. Steel(X) is cutting about 750 non-union jobs - CNBC, citing AP.
- China's debt explosion threatens financial stability, Fitch warns. China's huge debt levels will weigh on growth over the next five years and could threaten the country's financial stability unless policymakers rein in credit, Fitch has warned. The rating agency said a "remarkable build-up in leverage across China's economy" since the 2008 financial crisis meant Beijing's ability to meet ambitious annual growth targets of 6.5pc to 7pc between 2016 and 2020 looked "extremely challenging". While China's public debt ratio stood at 55pc of gross domestic product (GDP) at the end of last year, total credit in the world's second largest economy, excluding equity raising, climbed to almost 200pc of GDP in 2015, from 115pc in 2008, according to official estimates. Fitch said the "true figure" was likely to be closer to 250pc. It expects this to climb to 260pc of GDP by the end of this year as total debt continues to grow faster than the economy. "High and rising leverage in the economy is a mounting source of systemic vulnerability," Fitch analysts wrote in a note. "The longer the economy's indebtedness goes on rising, the greater the difficulty of unwinding it, and the higher the risk of a shock to economic and financial stability."
- Asian equity indices are -.25% to +.50% on average.
- Asia Ex-Japan Investment Grade CDS Index 144.75 -3.75 basis points.
- Asia Pacific Sovereign CDS Index 59.0 -2.25 basis points.
- Bloomberg Emerging Markets Currency Index 72.06 +.09%.
- S&P 500 futures -.04%.
- NASDAQ 100 futures -.05%.
Earnings of Note
Company/Estimate
- (KMX)/.71
- (CAG)/.59
- (RAD)/.06
- (ANGO)/.14
- (DLTH)/.35
- (PSMT)/.90
- (RECN)/.15
- (RT)/.05
- (WDFC)/.86
8:30 am EST
- Initial Jobless Claims for last week are estimated to fall to 270K versus 276K the prior week.
- Continuing Claims are estimated to fall to 2170K versus 2173K prior.
- Consumer Credit for February is estimated to rise to $14.9B versus $10.538B in January.
- None of note
- The Fed's Yellen speaking, Fed's George speaking, France Trade Balance report, Bloomberg April US Economic Survey, weekly Bloomberg Consumer Comfort Index, weekly EIA natural gas inventory report and the (KEYW) investor day could also impact trading today.
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