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For the 5th day in a row, US equities have levitated in the pre-open and faded away quickly soon after. Today is different though in 2 ways: the pump was de minimus and the dump is early. It seems the initial claims good news is indeed bad news for stock investors. Treasuries continue to bear flatten once again as 30Y is rallying and 5Y selling off further; gold is steady at around $1300 and the USD is rallying modestly. Copper and oil prices are rising. European stocks are also faltering with DAX giving up all its early gains.

The S&P is experiencing deja deja deja deja deja vu…

 

And European stocks are fading fast on the better than expected claims data in the US…

 

Commodities are rising in the last hour with copper and oil having had the best morning so far…

 

Charts: Bloomberg

via Zero Hedge http://ift.tt/1fnfTWr Tyler Durden

And so the various estimates of Q4 GDP have made an almost full circle: starting at 3.22% in the first forecast, plunging to 2.38% in the second, and finally settling at 2.63%, a miss from the expected 2.7%. This is down from 4.1% recorded in Q3 which however as everyone knows by now was purely due to a unprecedented, record inventory build up.

In terms of components, Personal Consumption was the silver lining in this latest economic miss, rising at a 3.3% pace higher than the expected 2.7%. This was driven by greater than expected spending on health and financial services. Yes – higher health insUrance costs are somehow a boost to GDP. How this offsets spending on other end goods and services with a finite and declining disposable income stream remains to be seen.

In terms of the actual contribution, Personal Consumption was 2.22%, above 1.73% in the prior revision, offsetting yet another decline in the contribution from Capex, i.e. Fixed Investment, which dropped from +0.58% to +0.43%. By now, however, even Larry Fink has figured out that as long as the Fed is around, there can be no true CapEx growth. Which means it is all about boosting Personal Consumption through the “Russell 200,000” wealth effect channel.

The full breakdown of quarterly GDP is shown below.

 

But don’t worry: those hoping Q1 will be better, don’t hold your breath. This is what’s coming. You know – “snow in the winter” and all that.

via Zero Hedge http://ift.tt/1hdDWez Tyler Durden

Initial jobless claims dropped 10k this week to 311k – the lowest in 4 months – offering little bad-news-is-good-news hope for renewed un-tapering to pump stocks back up. Illinois, New York, and Pennsylvania (all weather-related) saw the biggest drops in claims in the prior week. Continuing claims also fell 53k to 2.82 million, its lowest in 3 months.

 

 

Charts: Bloomberg

via Zero Hedge http://ift.tt/1pbnXjo Tyler Durden

Gazprom must really be demanding payment on overdue Ukraine invoices which is the only way we can explain the unprecedented speed with which the IMF has managed to cobble together a makeshift bailout package of up to $27 billion – the bulk of which will naturally go to Russia – which has just made Ukraine its latest vassal state.

As Bloomberg reports, Kiev reached a staff-level agreement with the Washington-based lender for a two-year loan of $14 billion to $18 billion. The IMF’s board must still sign off on the package, Ukraine’s third since 2008, and the government needs to complete “prior actions” to receive the first installment.  Approval is “expected in April, following the authorities’ adoption of a strong and comprehensive package of prior actions aiming to stabilize the economy and create conditions for sustained growth,” IMF mission chief Nikolay Gueorguiev said in the statement. Disbursement may start next month, he said at a news conference in Kiev.

There are of course, conditions: “Approval is “expected in April, following the authorities’ adoption of a strong and comprehensive package of prior actions aiming to stabilize the economy and create conditions for sustained growth,” IMF mission chief Nikolay Gueorguiev said in the statement. Disbursement may start next month, he said at a news conference in Kiev.”

Just like Troika disbursement for Greek aid may come any minute now… as long as Greece allows to extend the definition of fresh milk so European milk exporters can put Greek milk producers out of business. Yup: we know how the IMF works. That, and of course the requirement to hike gas prices by 40% or so.

And then comes the hyperinflation: “Monetary policy will target domestic price stability while maintaining a flexible exchange rate. This will help eliminate external imbalances, improve competitiveness, support exports and growth, and facilitate the gradual rebuilding of international reserves. The NBU plans to introduce an inflation targeting framework over the next twelve months to firmly anchor inflation expectations.”

Very high inflation targeting.

More:

The IMF agreement will clear the way for 1.6 billion euros ($2.2 billion) in emergency aid from the European Union, European Commission President Jose Barroso said March 5. The EU offered an 11 billion-euro aid package. Ukraine is also waiting for $1 billion in loan guarantees and $150 million in direct assistance from the U.S. “This represents a powerful sign of support from the international community for the Ukrainian government, as we help them stabilize and grow their economy, and move their democracy forward,” the White House said in an e-mailed statement.

Because there is nothing quite like insolvent Europe bailing out insolvent Ukraine.

As part of the IMF agreement, the Ukrainian government agreed to cut
the budget deficit to 2.5 percent of gross domestic product by 2016 and
to raise retail energy tariffs toward their full cost, according to the
Washington-based lender. The central bank will shift toward a flexible
exchange rate and the country will tackle bad debts in the banking
industry, it said.

As we said: welcome to IMF vassal state status. Enjoy your hyperinflation dear Ukrainians – at least you will have your “freedom”… just like Greeks have the Euro, if no economy to speak of.

Then again, with or without the IMF, Ukraine is likely a lost cause – earlier today, acting PM announced that the country is on the verge of bankruptcy, a statement which has no hyperbole in it whatsoever.

To wit: Ukrainian economy to shrink 3% this year, inflation to be 12%-14%, Prime Minister Arseniy Yatsenyuk tells parliament in Kiev. He added the GDP forecast based on passage of “unpopular reforms. If those laws aren’t adopted, we see default and 10% economic  decline. This package of laws is very unpopular, very difficult, very tough reforms, which we should have done in the last 20 years.”

Flashback to Hank Paulson waving a blank 3 page term sheet before Congress demanding ulimited power or else the global economy gets it.

Other disclosures:

• Russian trade restrictions to reduce GDP by 1ppt; Russia will also raise energy prices
• “This is the payment for Ukraine’s independence”
• Ukrainian state debt is 53%/GDP
• Ukraine to pay $480/kcm for Russia gas starting on April 1
• Ukraine didn’t use reserves to back hryvnia in March
• Govt seeks to introduce more progressive income tax system
• Govt to keep minimum wage unchanged this year
• Govt to index pensions, public wages to inflation
• Ukraine needs “urgent” constitutional reform

The full IMF statement is below:

An International Monetary Fund (IMF) mission worked in Kyiv during March 4-25, to assess the current economic situation and discuss the authorities’ economic reform program that could be supported by the IMF. At the conclusion of the visit, Nikolay Gueorguiev, Mission Chief for Ukraine, issued the following statement today in Kyiv:

 

“The mission has reached a staff-level agreement with the authorities of Ukraine on an economic reform program that can be supported by a two-year Stand-By Arrangement (SBA) with the IMF. The financial support from the broader international community that the program will unlock amounts to US$27 billion over the next two years. Of this, assistance from the IMF will range between US$14-18 billion, with the precise amount to be determined once all bilateral and multilateral support is accounted for.

 

“The agreement reached with the authorities is subject to approval by IMF Management and the Executive Board. Consideration by the Executive Board is expected in April, following the authorities’ adoption of a strong and comprehensive package of prior actions aiming to stabilize the economy and create conditions for sustained growth.

 

“Ukraine’s macroeconomic imbalances became unsustainable over the past year. The (until recently) pegged and overvalued exchange rate drove the current account deficit to over 9 percent of GDP, and a lack of competitiveness led to the stagnation of exports and GDP. With significant external payments and limited access to international debt markets, international reserves fell to a critically low level of two months of import in early 2014. The 2013 fiscal deficit was 4½ percent of GDP, and the government accumulated sizeable expenditure arrears. The 2013 deficit of the state-owned gas company Naftogaz reached nearly 2 percent of GDP, driven by the sharp increase in sales at below-cost prices. Without policy action, the combined budget/Naftogaz deficit would widen to over 10 percent of GDP in 2014.

 

“Following the intense economic and political turbulence of recent months, Ukraine has achieved some stability, but faces difficult challenges. To safeguard reserves and address currency overvaluation, the National Bank of Ukraine (NBU) floated the exchange rate in February. Measures implemented in February and March helped stabilize financial markets and ensured that critical budget payments have been met. Nonetheless, the economic outlook remains difficult, with the economy falling back into recession. With no market access at present, large foreign debt repayments loom in 2014-15.

 

“The goal of the authorities’ economic reform program is to restore macroeconomic stability and put the country on the path of sound governance and sustainable economic growth while protecting the vulnerable in the society. The program will focus on reforms in the following key areas: monetary and exchange rate policies; the financial sector; fiscal policies; the energy sector; and governance, transparency, and the business climate.

 

“Monetary policy will target domestic price stability while maintaining a flexible exchange rate. This will help eliminate external imbalances, improve competitiveness, support exports and growth, and facilitate the gradual rebuilding of international reserves. The NBU plans to introduce an inflation targeting framework over the next twelve months to firmly anchor inflation expectations.

 

“Financial sector reforms will focus on: (i) ensuring that banks are sound, liquid, and well-capitalized; (ii) upgrading the regulatory and supervisory framework of the NBU, including complying with international best practice and supervision on a consolidated basis, and (iii) facilitating resolution of non-performing loans in the banking sector.

 

”Fiscal policy will secure priority spending during the coming months and implement deeper fiscal adjustment over the medium-term. The initial stabilization in 2014 will be achieved through a mix of revenue and expenditure measures. For 2015-16, the program envisions a gradual expenditure-led fiscal adjustment—proceeding at a pace commensurate with the speed of economic recovery and protecting the vulnerable—aiming to reduce the fiscal deficit to around 2½ percent of GDP by 2016.

 

“Energy sector reforms will focus on reducing this sector’s fiscal drag, while attracting new investment and enhancing efficiency. A key step is the commitment to step by step energy reform to move retail gas and heating tariffs to full cost recovery, along with early action towards that goal. Importantly, this will be accompanied by scaled up social protection to mitigate the impact on the most vulnerable. Over time, the program will focus also on improving the transparency of Naftogaz’s accounts and restructuring of the company to reduce its costs and raise efficiency.

 

“Reforms to strengthen governance, enhance transparency, and improve the business climate will be central elements of the program. Policy measures in these areas will include adoption of a new procurement law to close loopholes allowing evasion of a competitive procedure; measures to facilitate VAT refunds to businesses; and an independent quarterly audit of the Naftogaz accounts. The above, and other measures, will be fully developed with the assistance of the World Bank, EBRD, and other international financial organizations and will help increase transparency of government operations, address long-standing governance issues, and remove barriers to growth. Moreover, the IMF will prepare a comprehensive diagnostic study that will cover the anti-corruption and governance framework, the design and implementation of laws and regulations, the effectiveness of the judiciary, and tax administration.

 

“The authorities’ economic reform program is rightly focused on addressing the key economic challenges faced by Ukraine. Its success in achieving these important objectives will be steadfast implementation, which will enable these efforts to be supported by the international community.”

Finally, if everything goes according to plan, Ukraine has a sterling role model to look forward to. Quoting German FinMin Wolfi Schauble from yesterday – “If ever we were to reach a situation in which we had to stabilize Ukraine, we would have many experiences from the Greek case to draw on.” In other words, Greece is now an example of “successful” economic reforms. Goodbye Ukraine, it was nice knowing you.

via Zero Hedge http://ift.tt/1fn3hP9 Tyler Durden

The price of gold is at a crossroads right now. Will it go higher or lower? The precious metal is keeping its cards close to the chest, so let us look at the fundamentals and the technicals of the gold price.

It has been two months again since we gave you an update on the gold price and, in that time, a lot has happened. Not only did gold jump up from under 1,200 USD to almost 1,400 USD, but we also noticed different changes in the gold complex as some 2013 trends had a turning point in the first quarter of this year. But let us start with a trend that is still standing: the enduring Chinese hunger for all the available physical gold in the market. Since April of 2013, demand for gold in China has truly exploded and that has not changed in 2014. In the first quarter of 2014, the demand for physical gold (through Hong Kong and the Shanghai Exchange) will probably amount to more than 500 tons; an increase of 30% in comparison to the same quarter of last year. It is probable that the demand for gold in China will decrease as the gold price increases, but these figures are remarkable for the gold market regardless.

On the other side of the spectrum, there are gold trends that are changing. As mentioned before, investors dumped their publicly listed gold funds en masse in 2013 (ETFs, ETPs…), with an exodus from their respective gold reserves as a consequence. That, however, all came to an end in 2014. Even more, the reserves of GLD – the biggest gold ETF in the world – had an inflow of 780 to 820 tons of gold; an increase of around 5 percent. Things are also changing on the futures markets. The inventory of the COMEX – the American gold futures exchange – recovered a bit in 2014, albeit modestly as you can see on the chart below.

The COMEX reserves hit a low on the 23rd of January 2014, when the inventory dropped back to just 370,000 ounces of gold. Meanwhile, the reserves have grown again to 640,000 ounces, although that is still a very long way from the April 2013 high of around 3 million ounces. If the Chinese are responsible for a large part of this drainage of COMEX gold, we suspect that the futures market’s reserves will remain unimpressive for a while longer. It would take a much higher gold price to inspire more influx of precious metal into the market, as the Chinese will not sell unless it is for a good reason or a higher price; that much is certain.

But as commodities markets often work, high prices are the best medicine for high prices and low prices are the best solution for low prices. What analysts actually mean by that is that a higher price elicits more selling activity, which in turn increases the supply and puts downward pressure on the price in the long run. On the other hand, lower prices cause for less gold to enter the market, which creates scarcity and, in turn, drives prices up. In the gold market, we have reached that boiling point. The market appeared to be literally and figuratively sold out in 2013, which is why the smallest rise in demand causes a jump in price. That is actually what we have actually experienced in 2014 as the gold price jumped up by almost 200 USD.

Although 60 USD has already been cut from the recent jump, the trend has not changed as you can see on the chart above. Moreover, the chart is about to make a ‘Golden Cross’, which involves a crossover to the upside of the short-term moving average (50-day) and the long-term moving average (200-day). In technical analysis books, this is signal is considered as one of the most powerful and bullish signals. Although it is still too early to tell, the situation and the above chart is shaping up to look a lot like the Golden Cross from 2009. In that year, negative sentiment among investors and scarcity on the physical market set the tone as well.

Still, it is important to keep our eyes on the ball here. If history is any indication, the gold price rose by 1,000 USD (+111%) in 2.5 years’ time after the 2009 ‘Golden Cross’ on the gold chart. A comparable increase in gold today would catapult us to 2,800 USD by the summer of 2015. We are not that far yet, however. At the moment, gold is consolidating its break-out and a further decrease to 1,275 USD is definitely possible, implying a 50% correction. The upward trend, however, will be confirmed over the coming weeks if the turnaround is validated. We are expecting the gold price to consolidate further over the second quarter after which the price can resume its ascent in H2 of 2014. The possibility is real that the previous record might be tested at that stage already, although it is a bit too early to tell. The 1,550 USD resistance level would have to be taken out with confidence to do that regardless, after which the road is open to 1,600 USD and beyond.

Gold is picking up the pieces from a very tough two years and investors have become side-tracked because of the velocity of last year’s price drop. Today, however, gold is surprising friend and foe and once again in the right direction. The Golden Cross, which is forming on the chart, should underline the change in trend. We foresee volatile times for gold, but we expect that the secular bull market has resumed after a cyclical correction and remain proponents of expanding portfolio positions in gold and gold mining stocks.

 

Position for Gold: Download our free GUIDE TO GOLD!

 

Sprout Money offers a fresh look at investing. We analyze long lasting cycles, coupled with a collection of strategic investments and concrete tips for different types of assets. The methods and strategies from Sprout Money are transformed into the Gold & Silver Report and the Technology Report.

Follow us on Twitter @SproutMoney

via Zero Hedge http://ift.tt/1gFhiwJ Sprout Money

• BOE to Sign Agreement With China on Yuan Clearing Next Week (BBG)
• U.S. law firm plans to bring suit against Boeing, Malaysia Airlines (Reuters)
• Citigroup Fraud Stings Mexico Star as Medina-Mora Chased (BBG)
• Fraternity Chief Feared for Son as Hazings Spurred JPMorgan Snub (BBG)
• UBS suspends six more forex traders (FT)
• Goodbye CSCO Q1 EPS: China to strengthen Internet security after U.S. spying report (Reuters)
• Good luck: Spain Banks With $55 Billion of Property Seek Deals (BBG)
• Citic Pacific Said to Plan About $4 Billion Public Offering (BBG)
• Yahoo Japan to buy eAccess from SoftBank for $3.2 billion (Reuters)
• “Whatever it takes” to talk down the Euro: Euro, peripheral bond yields fall on ECB easing debate (Reuters)
• Obama and Pope Francis Meet in Rome (Reuters)
• License Plate Technology at Risk Post-Snowden (BBG)
• Robert Shiller on the art of stock-picking and the complex psychology of investors (WSJ)
• U.S. jobs market dropouts increasingly likely to stay out (Reuters)

 

Overnight Media Digest

WSJ

* Citigroup Inc failed to get Federal Reserve approval to reward investors with higher dividends and stock buybacks, a surprising blow to Chief Executive Michael Corbat’s effort to bolster the bank’s reputation following a 2008 government rescue. The Fed rejected capital plans from five large banks and approved 25 as part of its annual “stress tests” measuring a firm’s ability to continue lending during a severe economic downturn. (http://ift.tt/1gEoGZk)

* Bank of America Corp and former Chief Executive Kenneth Lewis took big steps to put the financial crisis behind them by paying state and federal agencies to settle lawsuits over the acquisitions of Countrywide Financial Corp and Merrill Lynch & Co. The Charlotte, North Carolina-based lender said it would pay $9.5 billion to settle mortgage claims with Fannie Mae, Freddie Mac and their federal regulator. (http://ift.tt/1gEoERb)

* Brookstone Inc, which sells consumer gadgets ranging from travel electronics to massage chairs, is preparing to file for bankruptcy protection as early as Sunday, with a plan in place to be bought by another specialty retailer Spencer Spirit Holdings Inc, people familiar with the matter said. (http://ift.tt/1gEoERf)

* Microsoft Corp’s new boss on Thursday will have his first shot at outlining a new, less Windows-dependent path for the company. Chief Executive Satya Nadella, at an event in San Francisco, is expected to disclose a new version of Microsoft’s popular Office software for the iPad, people familiar with the matter said. (http://ift.tt/1gEoERi)

* An internal investigation into the George Washington Bridge lane closures conducted by lawyers hired by the Christie administration is expected to absolve additional members of Governor Chris Christie’s senior staff from being involved in the matter. (http://ift.tt/1gEoGZw)

 

FT

Sources said the International Monetary Fund would announce a rescue package for Ukraine of about $15 billion as early as Thursday, hoping that the initial aid payments could be made by the end of April.

Bank of America agreed on Wednesday to pay $9.5 billion to settle claims it sold U.S. housing regulators faulty mortgage bonds.

The U.S. Federal Reserve rejected the capital plans of five large banks including Citigroup as part of its annual stress test, but cleared Bank of America and Goldman Sachs after they agreed to lower buyback and dividend proposals.

Mexico expects to issue tenders for some deep water oilfields next year as it welcomes private investment at its oil and gas exploration and production sector.

King Digital Entertainment’s shares fell more than 15 percent on its New York stock market debut, making the Candy Crush Saga maker the largest new U.S. listing to flop on its opening day in 20 years

 

NYT

* The Federal Reserve dealt an embarrassing blow to Citigroup Inc on Wednesday when it rejected the company’s plans to manage its capital, citing concerns about the “overall reliability of Citigroup’s capital planning process.” It was the only one among the top five banks that failed to persuade the Fed to bless its plans of increasing dividends and repurchasing stock. (http://ift.tt/1hwDDHW)

* Rupert Murdoch appointed his two sons, Lachlan and James to senior positions at his companies News Corp and Twenty-first Century Fox, ensuring that a media conglomerate that has always been run like a small family business would have a Murdoch in charge for years to come.(http://ift.tt/Qj7bDp)

* Children of elderly borrowers are learning that their parents’ reverse mortgages are now threatening their own inheritances. Under federal rules, survivors are supposed to be offered the option to settle the loan for a percentage of the full amount. Instead, reverse mortgage companies are increasingly threatening to foreclose unless heirs pay the mortgages in full. (http://ift.tt/1hwDBjq)

* Bank of America Corp is paying $6.3 billion to settle a lawsuit arising out of troubled mortgage-backed securities it sold to Fannie Mae and Freddie Mac in the run up to the financial crisis. As part of the settlement, Bank of America will also repurchase mortgage securities from Fannie and Freddie that are valued at about $3.2 billion. (http://ift.tt/Qj7bTC)

* Candy Crush Saga-developer King Digital Entertainment saw its stock slump as trade opened on Wednesday, and ended the day down 15.6 percent, closing at $19 per share. The sheer drop disappointed investors who scooped up the stock at the initial public offering, as well as those who bought shares Wednesday morning. (http://ift.tt/1hwDDHZ)

* In the fifth huge recall for automakers this year, Nissan Motor Co Ltd is recalling nearly a million vehicles because the front passenger-side air bag might not deploy in a crash, the company said in a report to regulators published on Wednesday. (http://ift.tt/Qj7e1Z)

* A growing number of big corporate clients are demanding that their law firms demonstrate that their computer systems are employing top-tier technologies to detect and deter attacks from hackers bent on getting their hands on corporate secrets either for their own use or sale to others. (http://ift.tt/1hwDDI0)

* Yet another proposal to overhaul United States’ housing finance system will be put before Congress on Thursday. The major distinction of this proposal is that it would make the mortgage lending system more like a public utility, by creating a co-op of lenders that would be the sole issuer of mortgage-backed securities guaranteed by the government. (http://ift.tt/Qj7bTF)

* Two Democratic senators on Wednesday criticized Target Corp’s management for not stopping a huge data breach of its systems, citing several missed opportunities to thwart the attack and protect customer data. John D. Rockefeller from West Virginia, chairman of the Senate Commerce Committee, and Richard Blumenthal from Connecticut said Target’s failure to heed warning signs of incursions by cyber criminals ultimately was the fault of its top executives. (http://ift.tt/1hwDDI1)

* Connecticut lawmakers on Wednesday became the first in the country to pass legislation that would increase a state’s minimum wage to $10.10 an hour by 2017, the same rate President Obama wants for the federal minimum wage. (http://ift.tt/Qj7e22)

 

Canada

THE GLOBE AND MAIL

* Canadian Prime
Minister Stephen Harper and his U.S. counterpart Barack Obama are urging
European allies to support sanctions targeting Russia’s energy sector,
with both leaders saying North America could help Western Europe end its
dependence on Russian natural gas. (http://ift.tt/1hwiuxK)

*
After a day of tense negotiations under threat of a back-to-work order,
British Columbia Premier Christy Clark signed a settlement with union
and non-union truckers to end the strike that has snarled shipping at
the Port Metro Vancouver for almost a month.
(http://ift.tt/1hwiw8I)

Reports in the business section:

*
Just one week after Jim Flaherty stepped down as the Canadian finance
minister, Bank of Montreal is shaking up the mortgage market,
aggressively cutting its five-year rate to levels that caused him to
intervene last year. BMO is now offering five-year fixed mortgages at
2.99 percent, slashing its rate from 3.49 percent.
(http://ift.tt/1hwiw8O)

NATIONAL POST

*
Toronto Mayor Rob Ford took more than a few punches but remained light
on his feet at the inaugural televised debate in mayoral election that
saw challengers skirt around the police investigation into him and not
once utter the words “crack cocaine.” (http://ift.tt/1jxYbXK)

*
Quebec Premier Pauline Marois’s insistence that her party is a model of
political integrity took a hit on Wednesday as it emerged that Quebec’s
anti-corruption police are looking into past Parti Quebecois
fundraising practices. (http://ift.tt/1hwiw8X)

FINANCIAL POST

*
Quebec’s Liberal Party says the separatist Party Quebecois has gone too
far in its dream of the province as a petroleum promised land and that
no public money should be spent on early-stage oil drilling projects
such as those on Anticosti island. (http://ift.tt/1hwiuOb)

*
BlackBerry Ltd Chief Executive John Chen says he is fighting against
future product leaks by taking “legal action” that he hopes will set an
example. The head of the Waterloo, Ontario-based smartphone company
alleges that a person he did not name stole confidential details about a
future BlackBerry product and leaked them to the public.
(http://ift.tt/1jxYce8)

 

China

CHINA SECURITIES JOURNAL

– China’s pension investment fund reported a net profit of 69.6 billion yuan ($11.21 billion) in 2013, up 6.29 percent from a year earlier, the National Council for Social Security fund said.

– Average daily power output and daily rail transport volume has picked up in March, a sign that the economic activities were gaining pace, said Li Pumin, spokesman of the National Development and Reform Commission.

SHANGHAI SECURITIES NEWS

– China will launch the Baotou Rare Earth Products Exchange on March 28, the first such exchange in the country that aims to provide open prices for rare earth products, it said on its official website.

CHINA DAILY

– The central government will introduce a credit rating system for provinces, cities and counties as it seeks to establish a foundation for a well-regulated municipal debt market, said a source at the Ministry of Finance.

 

Britain

The Telegraph

RBS CITIZENS FAILS FEDERAL RESERVE STRESS TEST

Royal Bank of Scotland’s U.S. business has been barred from raising its dividend by the Federal Reserve after being deemed unable to survive another financial crisis. (http://ift.tt/1hwDBjx)

PENSION CHANGES MUST NOT CREATE MIS-SELLING RISK, SAYS L&G BOSS

Changes to Britain’s pension rules must not be allowed to create an “open-ended liability” for the insurance industry, the boss of Legal & General has warned, as he forecast a 75 percent contraction in the individual annuity market. (http://ift.tt/Qj7bTI)

CANDY CRUSH MAKER’S SHARES TUMBLE ON DEBUT

Shares in the London-based smartphone games developer King tanked on their first day of trading on Wall Street on Wednesday, as the company failed to overcome fears it could prove to be a flash in the pan. (http://ift.tt/1hwDDI6)

The Guardian

WONGA LOOKS BEYOND PAYDAY TO TRY OUT LONGER LOANS

The online lender Wonga is testing out new loans repaid over a six-month period, and has dropped a service that allowed consumers to pay for goods from online retailers using credit. (http://ift.tt/Qj7e23)

LLOYDS SHARE SALE MAKES GOVERNMENT 4.2 BLN STG

The taxpayer’s stake in Lloyds Banking Group has been cut to 25 percent, after the government sold shares worth 4.2 billion pounds on Tuesday night. (http://ift.tt/1hwDDI7)

SSE PLEDGES TO HOLD GAS AND ELECTRICITY PRICES UNTIL 2016

SSE, the UK’s second-largest energy provider, is to freeze gas and electricity prices for its 5 million customers until 2016, putting pressure on rivals to follow. (http://ift.tt/Qj7bTN)

The Times

SCOTS BELIEVE OSBORNE IS ‘BLUFFING’ OVER CURRENCY

George Osborne’s high-stakes gamble of ruling out a currency union between an independent Scotland and the rest of the UK appears to have backfired, with more Scots believing that he is “bluffing” than telling the truth, a poll for The Times has found. (http://ift.tt/1hwDDIa)

The Independent

ROW AS SWISS PICK UK BANKER TO RUN WATCHDOG

Switzerland has named the British banker Mark Branson as the new head of its financial market regulator, it emerged yesterday. (http://ift.tt/Qj7eig)

 

 

Fly On The Wall 7:00 AM Market Snapshot

ECONOMIC REPORTS

Domestic economic reports scheduled today include:

Fourth quarter GDP growth at 8:30–consensus 2.7%
Jobless claims for week of March 22 at 8:30–consensus 323K
Pending home sales for February at 10:00–consensus up 0.2% for the month

ANALYST RESEARCH

Upgrades

BankUnited (BKU) upgraded to Overweight from Equal Weight at Morgan Stanley
Federated Investors (FII) upgraded to Neutral from Underperform at Sterne Agee
New York Times (NYT) upgraded to Overweight from Equal Weight at Evercore
PVH Corp. (PVH) upgraded to Conviction Buy from Buy at Goldman

Downgrades

BlackBerry (BBRY) downgraded to Sell from Hold at Societe Generale
CECO Environmental (CECE) downgraded to Market Perform at FBR Capital
Citigroup (C) downgraded to Market Perform from Outperform at Bernstein
Citigroup (C) downgraded to Market Perform from Outperform at Keefe Bruyette
Five Star (FVE) downgraded to Market Perform from Outperform at JMP Securities

Initiations

Active Power (ACPW) initiated with a Buy at Roth Capital
Amgen (AMGN) initiated with an Overweight at Morgan Stanley
Associated Banc-Corp (ASBC) initiated with a Neutral at DA Davidson
Biogen (BIIB) initiated with an Overweight at Morgan Stanley
Celgene (CELG) initiated with an Equal Weight at Morgan Stanley
Cemig (CIG) initiated with a Buy at Goldman
Gilead (GILD) initiated with an Equal Weight at Morgan Stanley
ICON plc (ICLR) initiated with an Outperform at Credit Suisse
Independence Realty Trust (irt) initiated with a Buy at Deutsche Bank
Pharmacyclics (PCYC) initiated with an Equal Weight at Morgan Stanley
Regeneron (REGN) initiated with an Equal Weight at Morgan Stanley
RingCentral (RNG) initiated with an Outperform at Macquarie
Roundy’s (RNDY) initiated with a Buy at BofA/Merrill
TCF Financial (TCB) initiated with a Neutral at DA Davidson

COMPANY NEWS

Bank of America (BAC) received approval from the Federal Reserve for its 2014 capital plan; the bank will repurchase $4B of its common stock and increase its dividend to 5c from 1c per share
Bank of America (BAC) also announced a more than $9B settlement with the FHFA related to mortgage-backed securities sold to Fannie Mae (FNMA) and Freddie Mac (FMCC) between 2005 and 2007
JPMorgan (JPM) and Morgan Stanley (MS) both received approval from the Federal Reserve for their proposed 2014 capital plans
The Federal Reserve rejected Citigroup’s (C) capital plan for 2014, which included a proposed $6.4B share repurchase program and an increase of the bank’s dividend to 5c per share. Citi will be allowed to continue with its current capital actions, which include a $1.2B share repurchase program and a 1c per share dividend
Essex Property Trust (ESS) will join the S&P 500, replacing Cliffs Natural (CLF), as of the market close on April 1
Santander (SAN) said it will resubmit capital plan after Fed objects for qualitative reasons
Yahoo Japan (YHOO) to buy eAccess from SoftBank (SFTBF) for Y324B

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Leidos (LDOS), Vince Holding (VNCE), Paychex (PAYX)

Companies that missed consensus earnings expectations include:
Signet Jewelers (SIG), H.B. Fuller (FUL), American Eagle Energy (AMZG), Revance Therapeutics (RVNC), Cancer Genetics (CGIX)

NEWSPAPERS/WEBSITES

Twitter (TWTR) expected to introduce new music strategy this week, WSJ reports
Microsoft (MSFT) expected to announce new version of Office for iPad, WSJ reports
UBS (UBS) has suspended six more forex traders, FT reports
Amazon (AMZN) received clearance to provide more cloud services to Pentagon, FT reports
Intel to support Cloudera and stop its distribution of Hadoop, Venture Beat says
Target (TGT) and Visa (V) say fraud limited following data breach, WSJ reports
Facebook (FB) denies Oculus hardware redesign, Re/code reports

SYNDICATE

500.com  (WBAI) files to sell $360M of American Depositary Shares
Advaxis (ADXS) 4.08M share Spot Secondary priced at $3.00
Applied Genetic Technologies (AGTC) 4.17M share IPO priced at $12.00
Ford (F) files to sell 1.34M shares of common stock for holders
Marchex (MCHX) 5.714M share Secondary priced at $10.50
Old Second Bancorp (OSBC) files to sell 13.5M shares of common stock
PennyMac (PFSI) 5.555M share Secondary priced at $16.50
Realty Income (O) 12M share Spot Secondary priced at $39.96
SciQuest (SQI) 3M share Secondary priced at $26.75
Solazyme (SZYM) 5M share Secondary priced at $11.00
Square 1 Financial (SQBK) 5.78M share IPO priced at $18.00
TriNet (TNET) 15M share IPO priced at $16.00
William Lyon Homes (WLH) 2M share Secondary priced at $27.25

via Zero Hedge http://ift.tt/1gFhk7V Tyler Durden