Broad Market Tone:
- Advance/Decline Line: Slightly Higher
- Sector Performance: Mixed
- Market Leading Stocks: Outperforming
Equity Investor Angst:
- ISE Sentiment Index 80.0 -17.53%
- Total Put/Call 1.01 -8.18%
Credit Investor Angst:
- North American Investment Grade CDS Index 81.98 -2.16%
- European Financial Sector CDS Index 167.0 -2.82%
- Western Europe Sovereign Debt CDS Index 99.68 -.67%
- Emerging Market CDS Index 236.08 -1.65%
- 2-Year Swap Spread 13.5 -.25 bp
- 3-Month EUR/USD Cross-Currency Basis Swap -17.25 -.25 bp
Economic Gauges:
- 3-Month T-Bill Yield .05% unch.
- China Import Iron Ore Spot $138.0/Metric Tonne unch.
- Citi US Economic Surprise Index -5.0 -.1 point
- 10-Year TIPS Spread 2.35 +3 basis points
Overseas Futures:
- Nikkei Futures: Indicating +113 open in Japan
- DAX Futures: Indicating +32 open in Germany
Portfolio:
- Higher: On gains in my retail, biotech and tech sector longs
- Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges, then added them back
- Market Exposure: 50% Net Long
Bloomberg:
- Spain Has EU’s Largest Deficit, Undermining Rajoy Pickup.
Spain’s budget deficit was the largest in the European Union last year,
underlining the challenge faced by Prime Minister Mariano Rajoy as he
is due to present a new plan to foster a recovery. The EU’s statistics
agency Eurostat today reported Spain’s deficit widened to 10.6 percent
of gross domestic product last year, ahead of Greece’s 10 percent of GDP
gap, swollen by the cost of bailing out its banking system. That
compares with 9.4
percent in 2011. The Spanish premier pledged on April 17 to unveil measures
this Friday to make the euro region’s fourth-largest economy
more flexible and competitive. That announcement will end a week
of reports ranging from an estimate of gross domestic product in
the first quarter to data showing if unemployment reached
another record.
- Banks Face Revenue Losses of $17 Billion, Deutsche Bank Says. Investment banks may lose $17 billion of revenue in fixed income,
currencies and commodities by 2016 because of levies and regulation,
according to a Deutsche Bank AG report. European securities firms will bear most of the erosion as a tax on financial
transactions cuts sales and trading volumes, Deutsche Bank analysts
including Matt Spick, wrote in a note to clients today. The next “wave”
of regulation on over-the- counter derivatives and clearing may spur
smaller competitors to exit the businesses, they said. “We
see risks that multiple regulations, especially the
financial-transaction tax, compound to deliver a sharp reduction in FICC
revenues in Europe,” said the analysts. “We already see signs of shifts
in market share in favor of U.S. investment banks, and we expect this
trend to continue.”
- European Stocks Rise on Italy President, BOJ Stimulus. European
stocks rose, rebounding from the biggest weekly drop in five months, as
Italy elected a president and the Group of 20 refrained from opposing
the Bank of Japan’s stimulus policies. UniCredit SpA climbed 2.7
percent as Italy’s two-year bond yield declined to a record low.
Delhaize (DELB) Group SA surged to a 17-month high as the Belgian
retailer’s profit beat estimates. Royal Philips Electronics NV (PHIA)
slid for a seventh day after earnings missed projections. The Stoxx
Europe 600 Index (SXXP) advanced 0.2 percent to 285.68
at the close of trading.
- Copper Sags as China Imports, U.S. Home Sales Dim Demand Outlook. Copper fell for a second straight
session in New York as lower imports into China and an
unexpected drop in U.S. home sales fueled concern that demand is
weakening in the two biggest users of the metal. Shipments of refined copper into China in March dropped 37
percent from a year earlier, customs figures showed today.
Purchases of previously owned houses slid 0.6 percent to a 4.92
million annual rate last month, figures from the National
Association of Realtors showed today. That trailed the 5 million
rate projected in a Bloomberg survey of economists. “China’s been the biggest buyer of raw materials for the
past several years, so if they’re slowing, we’ll be in for a
bumpy summer,” John Petrie, a senior market strategist at Zaner
Group in Chicago, said in a telephone interview. “Commodities
in general are in a difficult spot right now.”
Wall Street Journal:
Zero Hedge:
Business Insider:
Reuters:
- Caterpillar(CAT) profit misses, cuts outlook on weak mining. Caterpillar Inc
posted disappointing quarterly results and cut its 2013 profit forecast
on Monday to reflect a drop in demand for heavy equipment from its
mining customers, and its shares turned lower in early trading.
- China says new bird flu case found in northeast. A man in the
northeastern Chinese province of Shandong has been infected by a new
strain of bird flu, the first case found in the province, state
news agency Xinhua said on Monday, bringing the total number of victims
in China to 105. The H7N9 virus has killed 20 people in China. Although
it is not clear how people are becoming infected, the World
Health Organization (WHO) says there is no evidence of the most worrying
scenario - sustained transmission between people.
- Canada to announce arrests after thwarting 'major terrorist attack' - CBC. Canadian police
and intelligence agencies will announce multiple arrests on Monday after
an operation to thwart a "major terrorist attack," the Canadian
Broadcasting Corporation reported, citing unidentified "highly placed"
sources.
The operation was coordinated with the U.S. Department of Homeland Security and the FBI, CBC said.
AP:
- FBI: No Ricin Found in Home of Mississippi Suspect. Investigators haven't found any ricin in the house of Mississippi man
accused of mailing poisoned letters to President Barack Obama, a U.S.
senator and a local judge, according to testimony Monday from an FBI
agent. Agent Brandon Grant said that a search of Paul Kevin Curtis' house in
Corinth, Miss., on Friday did not turn up ricin or ingredients for the
poison. A search of Curtis' computers has found no evidence so far that
he researched making ricin.
- South Korea, China angered by visit to Yasukuni war shrine by Japan gov't ministers. Japan's government said Monday that donations by the prime minister
to a controversial war shrine and visits by three Cabinet ministers were
made in an unofficial capacity, while neighbors China and South Korea
lodged protests over the actions. Yasukuni Shrine honors
Japanese wartime leaders convicted of war crimes among 2.5 million
Japanese killed in fighting during World War II. The shrine compound has
a war museum that glorifies Japan's wartime past, and the site is a
focus of nationalist pride among Japanese conservatives and
right-wingers. Visits to the shrine by political leaders
are routinely criticized by China and South and North Korea, which bore
much of the brunt of Japan's pre-1945 militarist march through Asia. The
visits are regarded as evidence that Japan's leaders do not acknowledge
their country's responsibility for its militarist past.
Telegraph:
Bild Zeitung:
- Company insolvencies in euro-area countries like Spain and Greece
that may rise by 33% this year will hurt German companies, citing
estimates of insurer Euler Hermes. Non-payments to German companies may
add up to EU31 billion.
Handelsblatt:
- AfD, a new political party set up to pull Germany out of euro,
would gain 19% of votes in a federal election, citing an on-line Mafo
Institute poll it commissioned.
ABC:
- Spain to Target 6% Budget Deficit This Year. Spain to release
medium-term budget plans April 26. EU set limit of 4.5% on Spanish
budget deficit for this year.
Xinhua:
- New Orders Decline for China's Machine Tool Makers. Drop in March
marked 22nd consecutive month of falling orders, citing data released
today. "No improvement" in 1Q, said Chen Huiren, deputy
secretary-general of China Machine Tool & Tool Builders'
Association.
Style Underperformer:
Sector Underperformers:
- 1) Oil Tankers -1.41% 2) Steel -1.11% 3) HMOs -1.08%
Stocks Falling on Unusual Volume:
- MCBC, WIT, CFNL, VRTX, EFII, AFSI, UTEK, AIRM, ASR, PHG, TAYC, IBM, CTSH, SWFT, OSIS, SAP, WGO, SBS, ACHC, INFA, TNC, RNF, SRPT, ALXN, BOH, CPHD and CR
Stocks With Unusual Put Option Activity:
- 1) DXJ 2) COH 3) CTSH 4) CAH 5) DISH
Stocks With Most Negative News Mentions:
- 1) UA 2) PENN 3) RIG 4) B 5) WYNN
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Software +.95% 2) Oil Service +.69% 3) Gold & Silver +.33%
Stocks Rising on Unusual Volume:
- ACAD, KERX, MSFT, NMFC, ACTG, SIX, HAL, BIIB, NFLX and NMFC
Stocks With Unusual Call Option Activity:
- 1) UUP 2) MDVN 3) ISIS 4) SWKS 5) QLIK
Stocks With Most Positive News Mentions:
- 1) VMI 2) HAS 3) EQIX 4) NFLX 5) SIX
Charts:
Weekend Headlines
Bloomberg:
- G-20 Eyes Stimulus Fallout Even as Japan Bond Buying Praised.
Group of 20 finance chiefs pledged
to stay alert to any fallout from easy monetary policies even as
they backed the Bank of Japan (8301)’s plan to buy more than 7 trillion
yen ($70 billion) a month of bonds. In a nod to concerns that stimulus
in one economy often creates challenges elsewhere and could fuel asset
bubbles, the G-20 officials meeting in Washington heightened their
commitment to being “mindful of unintended negative side effects
stemming from extended periods of monetary easing.” While a sliding
yen drew fresh complaints from South Korea, its 20 percent decline
against the dollar in the past six months wasn’t enough to stop G-20
officials from backing new BOJ measures aimed at delivering 2 percent
inflation in two years. Bank of Japan Governor Haruhiko Kuroda emerged
from the talks
saying he was emboldened to press ahead with his campaign to
defeat 15 years of deflation.
- Germany Says ‘Liability Cascade’ Must Prevail in Bank Rescues. Plans in the euro area to allow the
direct recapitalization of failing banks must stick to a
hierarchy of responsibility that starts with the banks’
shareholders, the German Finance Ministry said. In its report for April, the ministry said a “liability
cascade” must prevail in any attempt to save a bank, allowing
the European Stability Mechanism to allocate resources on its
main job of averting state insolvencies. “From the German government’s point of view, it’s
important to limit the volume for direct recapitalization to
allow the ESM to focus on its core task,” the ministry in
Berlin said today. “It’s also important that the liability
hierarchy is followed,” it said, echoing comments made by
Finance Minister Wolfgang Schaeuble in Brussels this month.
- Dijsselbloem: EU Bank Resolution Agency May Need Treaty. The European Union may need to
enact treaty changes to create a new institution to shut down
failing banks, Dutch Finance Minister Jeroen Dijsselbloem said. The EU can pursue most of its banking-union strategy under
existing treaties, Dijsselbloem, who chairs the so-called
Eurogroup of euro-area finance ministers, told reporters in
Washington today. “I know that we can push forward at least 80, 90 percent
of the project, and the final decision on having a singular
resolution authority may need to make a treaty change,”
Dijsselbloem said.
- French people are increasingly gloomy
about their country's future, a poll showed, with the number of
pessimists rising from last month. 70% said they are pessimistic about
the future of French society, an increase of 2 percentage points from
March. People questioned cited rising unemployment and decreasing
purchasing power as biggest concerns, according to the poll.
- European Central Bank Executive Board member Joerg Asmussen
speaking in Washington. "We cannot repair unsound budgets. We cannot
clean up struggling banks. We cannot solve deep-rooted problems in the
structure of Europe's economies," he said. "Once-and-for-all solutions"
are an "illusion," Asmussen said.
- Bundesbank President Jens Weidmann said at a press briefing in
Washington it may take "a decade rather than a year" before the euro
region will have overcome the consequences of its crisis. De-leveraging
will lead to "low growth rates," Weidmann said.
- PBOC's Zhou Says Slower Growth Needed as China Restructures.
China's central bank governor says first quarter gdp growth "normal".
Zhou said growth must be sacrificed to make structural adjustments. China
will continue to implement prudent monetary and proactive fiscal
policies to promote economic growth and keep prices stable, he said.
- Bearish
ETF Bets Soar to 6-Year High on China Economy. Bets on declines in the
largest Chinese etf are surging to the highest level since 2007 on
concern a slowdown in the world's second-largest economy will stifle
company earnings. Short interest on the iShares FTSE China 25 Index Fund
climbed to 48.6 million shares, or 3.2% of the total outstanding at the
end of March, the most since June 2007, data compiled by Bloomberg show.
- BMW's Rolls Royce Sees Slowing Sales Growth in China, CEO
Says. "Business isn't any longer as explosive as it was the years
before, but we're still optimistic here with the market," Rolls-Royce
Motor Cars CEO Torsten Mueller-Oetvoes said in an interview. The
comments come as new Communist Party Chief Xi Jinping pushes for a
campaign to rein in lavish spending.
- China’s Stocks Drop as Insurers Retreat After Sichuan Earthquake. China’s stocks declined, led by insurers, after an April 20 quake in Sichuan province that killed at least 186 people. China Life Insurance Co. slumped 3.1 percent, heading for
its biggest drop since March 3. A gauge tracking drugmakers
climbed 0.7 percent, led by Harbin Pharmaceutical Group Co. The
State Council urged citizens to donate funds for reconstruction
after the country’s strongest earthquake in three years left 1.5
million people needing aid. Inner Mongolia Baotou Steel Rare-
Earth Hi-Tech Co. retreated 1.3 percent after profit fell.
- Asian Stocks Rise as Japanese Exporters Rally on Weak Yen.
Asian stocks rose for a second day, led by Japanese exporters as the
yen slid to a four-year low against the U.S. dollar after the Bank of
Japan’s stimulus policies were unopposed at a Group of 20 meeting. The MSCI Asia Pacific Index gained 0.6 percent to 137.07 as
of 10:17 a.m. in Tokyo, with about four shares rising for each
that fell.
- Hedge Fund Gold Wagers Defy Worst Slump in 33 Years: Commodities.
Hedge funds increased bets on gold rallying after prices plunged the
most in 33 years, underscoring billionaire John Paulson’s view that
bullion will rebound. Fund managers and other speculators increased
net-long positions in gold by 9.8 percent to 61,579 futures and options
in the week ended April 16, U.S. Commodity Futures Trading
Commission data show. Investors turned bullish on silver for the
first time in three weeks. Wagers on higher prices across 18
U.S.-traded raw materials climbed 5.1 percent to 453,467
contracts, the first gain in three weeks.
- Copper Drops for Second Day as China Quake Raises Demand Concern.
Copper declined for a second day in London amid speculation that an
earthquake in China’s Sichuan province will hurt demand for the metal in
the near-term before it boosts consumption in the reconstruction. Metal
for delivery in three months fell as much as 1.5 percent to $6,888.75 a
metric ton on the London Metal Exchange, before trading at $6,935.50 at
9:44 a.m. Shanghai time, headed for the lowest close since October
2011. Copper declined for a fifth consecutive week and dropped into a
bear market. The August futures contract on the Shanghai Futures Exchange dropped 1.1 percent to 50,110 yuan ($8,107) a ton.
- China Rebar Falls as Iron Ore Price Decline, Steel Supply Rises. Steel reinforcement-bar futures
fell, extending the biggest weekly decline in two months, amid
rising output from domestic mills and a decline in the price of iron ore. The
contract for October delivery on the Shanghai Futures Exchange fell as
much as 0.6 percent to 3,665 yuan ($593) before trading at 3,678 at
10:12 a.m. local time. Futures lost 4 percent last week, the biggest
weekly decline since Feb. 22. Spot iron ore at Tianjin port fell for the
fifth day to $138 a dry ton on April 19, the Steel Index Ltd. data
show. China’s daily crude steel output nationwide in early April was
estimated to have risen 2.5 percent from late-March, Custeel.com
analyst Hu Yanping said on April 18. “Supply still exceeds demand in the
rebar market,” Jiang
Yuying, an analyst at Chengdu Brilliant Futures Co., said by
phone from Shanghai today.
- Corn Slumps to One-Week Low on Demand Concerns for U.S. Grain.
Corn slumped to its lowest level in
almost a week as a bird flu outbreak in China added to concern that
demand for the U.S. grain for poultry and livestock feeds may wane. Soybeans and wheat also declined.
Corn for delivery in July slumped as much as 1.4 percent to
$6.24 a bushel on the Chicago Board of Trade, the cheapest level
for the most-active contract since April 16.
- Chicago-Area Man Arrested on Charge of Supporting Intl Terrorism. A
18-year-old Chicago-area man was
arrested by the Federal Bureau of Investigation late yesterday at O’Hare
International Airport on a charge of supporting terrorism overseas.
Abdella Ahmad Tounisi, of Aurora, Illinois, was taken into custody
without incident as he was getting on a flight for Istanbul, the FBI
said in a statement. The bureau said he appeared in U.S. District Court today
and was charged with one count of attempting to provide material
support to a foreign terrorist organization, which is a felony. The statement said he was traveling to Syria to join a
jihadist militant group operating inside Syria.
Wall Street Journal:
- Turn to Religion Split Bomb Suspects' Home. After last week's Boston Marathon bombings, Zubeidat Tsarnaeva phoned
her son Tamerlan in Massachusetts to make sure he was safe.
"Mama, why are you worrying?" Tamerlan replied from Boston, laughing. Days later, it was the son who phoned his mother. The two, in recent
years, had shared a powerful transformation to a more intense brand of
Islam.
"The police, they have started
shooting at us, they are chasing us," Mrs. Tsarnaeva says Tamerlan told
her. "Mama, I love you." Then the phone went silent.
- U.S. Eyes Pushback On China Hacking. The Obama administration is considering a raft of options to more
aggressively confront China over cyberspying, officials say, a
potentially rapid escalation of a conflict the White House has only
recently acknowledged.
Options include trade sanctions,
diplomatic pressure, indictments of Chinese nationals in U.S. courts and
cyber countermeasures—both attack and defense, officials said.
- Consumer Loans Surge Across Asia. Banks From Around the World Target Middle Class With Financing for Autos, Home Appliances. Lenders from around the world are fueling a boom in short-term loans across Asia, helping push debt to record levels
as a burgeoning middle class strives for a better lifestyle and banks
look to diversify away from the slow-growing West. Companies ranging
from Citigroup Inc. to Japan's big banks to a Dutch consumer-finance
provider that built its business in Central and Eastern Europe are
issuing credit cards or stepping up lending for cars, motorcycles and
home appliances from India
to Indonesia. Nonmortgage consumer credit in Asia outside of
Japan rose 67% in the past five years to $1.66 trillion by the end of
2012, according to data provider Euromonitor International. In the U.S.
the rise was only 10% during the same period as consumers cut back on
debt following the financial crisis.
- Economic Woes Abroad Bode Ill for the U.S. Troubles overseas are threatening the U.S. recovery for the fourth
year in a row. This time it's weakening economies abroad, rather than
tumbling financial markets, signaling turbulence ahead.
U.S. exports of goods to the European
Union are declining outright. Growth in overall U.S. exports has been
sputtering for months, after a three-year postrecession surge. And major
U.S. companies are reporting increasingly dour overseas outlooks tied
to the recession-plagued euro zone and slowing growth in other leading
economies such as China.
The renewed fears of a global slowdown come after months of hope that a stronger recovery was finally taking shape.
- North Korea Reaffirms Commitment to Nuclear Program. North Korea said it would be willing to hold disarmament talks with the U.S. but
not over its nuclear-weapons program, its latest gambit in a weekslong run of
threatening behavior that has in recent days been supplemented by extreme
conditions for potential dialogue. An official in Seoul said the North has moved two more launchers to its east
coast for a possible test firing of short-range Scud missiles, South Korea's
Yonhap news agency reported on Sunday. The defense ministry declined to comment
on the report. Scud missiles have a range of a few hundred kilometers and would
pose no threat to South Korea or other countries if fired into the sea.
A bigger concern are the one or two midrange missiles that North Korea is
believed to have positioned on its eastern seaboard. North Korea celebrates the
anniversary of the founding of its military on April 25, which has led to
speculation that it may test-launch missiles on that day.
- Enemy Combatants in Boston. Was there a FISA order issued for Tamerlan Tsarnaev? A row has broken out over whether the Obama Administration is violating
the legal due process of Boston terror suspect Dzhokhar Tsarnaev by not
reading him his Miranda rights before questioning. The more relevant
question for the safety of the U.S. homeland is why the Administration
has declined to designate him as a terrorist enemy combatant.
Fox News:
- IMF Chief Lagarde: Worries About Currency Valuations on the Rise. IMF Managing Director Christine Lagarde has said in recent weeks that
fears of a global series of currency devaluations, or currency war, are
overblown. But that's not to say the IMF doesn't recognize that
easy money policies in the U.S., Japan and Europe aren't putting
pressure on other countries' exchange rates. Fearing that those
actions might be efforts to devalue their currencies to gain a
competitive trading advantage has tempted some governments to consider
retaliating--by cutting the value of their own exchange rate. "Worries
over currency valuations and competitive depreciation are on the rise,"
Ms. Lagarde said in her formal policy agenda presented to the IMF's
steering committee.
CNBC:
- Softness in Indian Market a Concern: Ford Motor(F). The decline in the Indian auto industry is a concern for one of the
world's largest automakers Ford Motor Company, the firm told CNBC at
the Auto Shanghai Summit 2013. "The softness in the Indian
market right now is a little bit of a concern," said president of Asia
Pacific operations David Schoch on the sidelines of the auto show.
- China Housing Bubble? Watch These 2 Cities: Vanke. Controlling home price increases in China's capital Beijing and
financial hub Shanghai is critical for cooling the country's broader
property market, according to Wang Shi, chairman of Vanke, the
mainland's largest real estate developer. "My
concern is that if the price increases in those two cities can't be
controlled, it will result in price increases in other cities as well
and that won't be a good thing," Wang told CNBC on the sidelines of the
China Entrepreneur Club's Annual Summit of Green Companies in Kunming,
which is located in the country's southwestern Yunnan province.
Business Insider:
New York Times:
- Report Shows More New Yorkers Are Near Poverty. The rise in New York City’s poverty rate as a result
of the recession has apparently eased, but not before pushing nearly half of the
city’s population into the ranks of the poor or near-poor in 2011, according to
an analysis by the Bloomberg administration. That year, according to the city’s measure, about 46
percent of New Yorkers were making less than 150 percent of the poverty
threshold, a benchmark used to describe people who are not officially poor but
who still struggle to get by. That represents a rise of more than three
percentage points since 2009, when the nation’s recession officially ended.
LA Times:
- Bird flu outbreak is spreading fear in China. A new strain of avian flu called H7N9, which
has caused 18 deaths, is causing deepening concern. People are avoiding
zoos, passing up chicken dinners, and farmers are killing their flocks.
CNN:
- China earthquake shears off mountainsides, kills 186 people. A strong earthquake that struck the southwestern Chinese province of
Sichuan this weekend has killed 186 people, sent nearly 8,200 to
hospitals and created a dire dearth of drinking water, Chinese state-run
Xinhua reported Sunday. Earlier reports had said as many as 11,200
people were injured.
Reuters:
- GM(GM) to add four more plants in China by 2015: executive.
General Motors Co will add four new plants in the next three years in
China to bring its production capacity to 5 million vehicles a year, the
head of GM China said on Saturday at the Shanghai auto show. Bob Socia, head of GM China, said that the company and its joint venture partners will invest $11 billion in China by 2016, but did not break out the cost of the new
plants.
- ArcelorMittal(MT) CEO says high labour, energy costs hurt France. ArcelorMittal
CEO Lakshmi Mittal said on Saturday he regretted that the steel giant
was having to permanently close two French blast furnaces but high
labour and energy costs kept France at a competitive disadvantage.
Mittal, who has drawn fury in France over the closure of the decades-old
furnaces, said ArcelorMittal (ISPA.AS) had every intention of remaining
in the country for the long term, but its export potential was limited
by constraints on competitiveness. "To increase the productivity of our
sites in France, we need energy costs to come down, like in the United
States and Germany," Mittal said in an interview with the weekly Journal
du Dimanche. "In France, labour costs are 20 percent higher than in Spain and labour laws are still too rigid." A
long battle by trade unions to save the furnaces, which employed 629
people, has turned Florange, the last survivor in a once vibrant steel
region in northeast France, into a symbol of industrial decline.
AP:
- Police: Bombing Suspects Planned More Attacks. As churches paused to mourn the dead and console the survivors of the
Boston Marathon bombing Sunday, the city's police commissioner said the
two suspects had such a large cache of weapons that they were probably
planning other attacks. The surviving suspect remained hospitalized and
unable to speak with a gunshot wound to the throat. After the two brothers engaged in a gun battle with police early Friday,
authorities found many unexploded homemade bombs at the scene, along
with more than 250 rounds of ammunition. Police Commissioner Ed Davis said the stockpile was "as dangerous as it gets in urban policing."
"We have reason to believe, based upon the evidence that was found at
that scene — the explosions, the explosive ordnance that was unexploded
and the firepower that they had — that they were going to attack other
individuals. That's my belief at this point."
Financial Times:
- Kames quits European periphery. Kames
Capital’s Phil Milburn is selling down the remainder of his peripheral
European holdings in his £1.4bn High Yield Bond fund on concerns that
the market has not fully priced in risks in continental Europe. Mr
Milburn, who co-manages the fund with Melanie Mitchell, says he was
surprised how little reaction there had been to the election in Italy
and the Cyprus bank levy. The fund has been defensively positioned since
the second half of 2012, but the managers have been taking even more
money out of Italy in recent weeks and selling the lower quality parts
of their only Irish holding,
Ardagh. Mr Milburn says: “We have looked at our peripheral Europe holdings
and in the past couple of weeks we have been reducing our exposure to
Italy.
Telegraph:
Mirror:
WirtschaftsWoche:
- German Finance Minister Wolfgang Schaeuble said the Cyrpus rescue
should be used as a template for any further euro-bloc bailouts and
that it's necessary for bank deposit holders to make a contribution when
banks have to be saved. If banks have to be saved in the future, their
owners, creditors and savers would have to make a contribution,
Schaeuble said. This is needed to get the moral hazard problem under
control, he said. Schaeuble defended Eurogroup president Jeroen
Dijsselbloem who made similar comments, saying criticism of Dijsselbloem
was not justtified and didn't come from "me".
Le Journal du Dimanche:
- French President Francois Hollande's approval rating fell six points to 25% in April, an Ifop institute poll showed.
Shana:
- Oil prices have been weakened by oversupply of 1.5 million barrels a day, citing Mohammad Ali Khatibi, Iran's governor to OPEC.
Mehr:
-
North Korea has proposed importing oil from Iran, citing Iranian Oil Minister Rostam Qasemi.
Weekend Recommendations
Barron's:
- Bullish commentary on (CQB) and (GDX).
- Bearish commentary on (KO).
Night Trading
- Asian indices are -.25% to +1.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 114.50 -2.0 basis points.
- Asia Pacific Sovereign CDS Index 90.25 -1.5 basis points.
- NASDAQ 100 futures +.57%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
8:30 am EST
- The Chicago Fed National Activity Index for March is estimated to fall to .35 versus .44 in February.
10:00 am EST
- Existing Home Sales for March are estimated to rise to 5.0M versus 4.98M in February.
Upcoming Splits
Other Potential Market Movers
- The Fed's Dudley speaking, China HSBC PMI and the Eurozone Consumer Confidence report could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by consumer and automaker shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the week.
U.S. Week Ahead by MarketWatch (video).
Wall St. Week Ahead by Reuters.
Stocks to Watch Monday by MarketWatch.
Weekly Economic Calendar by Briefing.com.
BOTTOM LINE: I expect US stocks to finish the week modestly lower on rising global growth fears, Mideast unrest, Asian tensions, rising bird flu concerns, more Eurozone
debt angst, earnings worries and more shorting. My
intermediate-term trading indicators are giving neutral signals and the
Portfolio is 50% net long heading into the week.
