Tag: finance

We realize the future for blogging was bright, but this bright? Moments ago, Bloomberg View, Bloomberg’s in house blogging operation, announced that El-Erian had joined it as a columnist. And just like that Mohamed has his own unedited venue in which to spill all the dirt on his former employer.

From BusinessWeek:

Bloomberg View today announced that Mohamed A. El-Erian is joining the opinion and analysis site as a daily columnist covering economic developments, policy and financial markets.

 

“Mohamed is one of the world’s most highly-regarded financial and economic observers – and he’s also a wonderful writer” said David Shipley, the senior executive editor of Bloomberg View. “We’re thrilled that he’s going to be sharing his insights with our readers on a daily basis.”

 

El-Erian’s first Bloomberg View column, The Dangers of Policy Drift, appears today and concludes that the annual spring meetings of the International Monetary Fund and the World Bank were unsurprisingly a “wasted opportunity” considering that “the global economy desperately needs better steering.”

 

El-Erian is Chief Economic Advisor at Allianz SE and the author of “When Markets Collide,” a bestseller that won the 2008 Financial Times/Goldman Sachs Business Book of the Year.

 

He is chairman of President Obama’s Global Development Council, a Financial Times contributing editor, and the former CEO and co-CIO of PIMCO. He holds a master’s degree and doctorate in economics from Oxford University, having completed his undergraduate degree at Cambridge University.

Hopefully this isn’t a conflict of interest with Bloomberg’s other subsidiary, BusinessWeek, which as we showed over the weekend, once again outdid itself in the cover department, covering none else than El-Erian’s former boss and current drama soap opera nemesis, Bill Gross.

via Zero Hedge http://ift.tt/1jEumS1 Tyler Durden

With Ukraine no longer paying for Russian gaz, and with Gazprom making it clear Kiev has to a) first pay the overdue $2+ billion in invoice and then b) prepay some $5 billion in gas until the end of the year of Europe gets it, it was only a matter of time before the US Treasury stepped in and paid off part or all of Gazprom’s demands. That time is now, when moments ago Jack Lew announced a $1 billion loan guarantee for Ukraine – very much the same way that the US provided billions in loan guarnatees for the now long overthrown Mursi regime in Egypt. And in other news, many more “costly” and “damaging” US sanctions are surely headed Russia’s way any second now.

From the Treasury:

Treasury Secretary Lew Announces Signing Of $1 Billion U.S. Loan Guarantee Agreement For Ukraine

 

WASHINGTON – Today, the U.S. Treasury Secretary Jacob J. Lew announced the signing of a $1 billion loan guarantee agreement for Ukraine.  This guarantee, when completed, will complement the Government of Ukraine’s International Monetary Fund (IMF) reform program and underscores the United States’ commitment to Ukraine.

 

“The Ukrainian people have demonstrated tremendous courage as they have charted an independent course for their country and demanded a government that truly reflects the will of the people.  The United States has been at the forefront of building international support for Ukraine, and holding Russia accountable for its violation of Ukrainian sovereignty and destabilizing action,” said Secretary Lew in his remarks at the U.S. Treasury Department today.  “I would like to congratulate Minister Shlapak on the progress he and his team have made in putting in place a comprehensive economic reform program together with the IMF.  The United States very much wants to see Ukraine prosper, and we will continue to stand with the Ukrainian people as they move forward to realize their long-held aspirations.”

 

The $1 billion loan guarantee is part of a U.S. bilateral assistance package that also includes technical assistance to help Ukraine return to a path of economic recovery.  This loan guarantee will bolster the Government of Ukraine’s ability to provide critical services as it implements reforms, while protecting the most vulnerable Ukrainian households from the impact of the necessary economic adjustment. 

 

Secretary Lew and Ukrainian Finance Minister Oleksandr Shlapak held a bilateral meeting before today’s announcement to discuss the ongoing situation in Ukraine and Ukraine’s progress on its economic reform plan.

 

The United States will continue to urge its international partners to take immediate steps to bolster the IMF assistance package and move forward with bilateral aid and technical assistance. 

And the inevitable photo op:

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

While the so-called “experts” were adamant in repeating that one must ignore all Q1 economic data (because of harsh weather you know), one thing the same “experts” pounded the table on was the earnings growth in 2014 which confirmed that the Fed was correct in tapering and that the corporate sector was well on its way to achieving “escape velocity” and a stable recovery. And then this happened…

 

Oh, and this too.

h/t @Not_Jim_Cramer

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

One look at the level of Citigroup stock pre-open and one could get the impression that the bank had a whopper of a result. And, on the surface at least, it did, after it reported $1.30 in EPS, beating the $1.14 expected and revenues of $20.1 billion also beating the $19.4 billion expected if still a modest decline from the comparable result a year ago. What was not emphasized is that the bulk of the revenue, and thus earnings, upside was courtesy of the insolvent and bailed out Citi Holdings, where the top line increased by 58% from $914MM to $1.442Bn and the Net Loss shrink from $0.8 billion to $0.3 billion, while Citicorp – the main operating subsidiary – saw revenues decline by 5% from $19.7 billion to $18.7 billion, as Net Income dropped by 8% from $4.8 Billion to $4.4 billion.

In other words the entire beat was due to fudging the holdings and income statement in the rolloff, bailed out Holdings division (without which Citi wouldn’t exist).

Why did Citi have to resort to such an algo-fooling cheap shoot? Simple: operations in its core banking group, the bread and butter of New Normal banks, Investment Banking and Fixed Income Markets, both declined by 10% and 18% respectively, as the US capital markets continue to deteriorate, leading to an 11% dump in the most important, Institutional Clients Group, EBT.

 

But what was worst, and naturally will not be discussed at all by the peanut gallery, about Citi’s just announced results is that the amount of Citigroup mortgage originations – that key aspect of the trumpeted “housing market recovery” – did what it has done at every other bank. It plunged. Only at Citigroup, it plunged so badly, it just reached a new record low which at $5.2 billion is a 71% drop from a year ago! Long live the housing recovery… in which nobody seems to be participating.

And speaking of loan creation, based on reported data, so far in Q1, three of the four big banks: Citi, Wells and JPM have reported that total loan issuance is negative, something which drastically differs from what the Fed reports in its weekly commercial bank update report.

We eagerly look forward to the rest of the banks to conclude reporting Q1 numbers so we can determine just how wildly the Fed’s H.8 statement is fabricating data.

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

Not entirely surprising given the data from the automakers in recent weeks, but the 3.4% jump in auto dealer sales provided enough juice to push overall retail sales in the US up 1.1% MoM (beating expectations of 0.8% and with last month’s data revised higher). This is the biggest month-over-month jump in retail sales since Sept 2012. The question, of course, is whether this auto spike is sustainable to support the overall sales environment or will the ever lowering credit standards of the subprime auto loan market lead to the inevitable collapse in a few months?

 

 

So now we must hope for more bad weather so that we can have more pent-up demand for over-allocation to dealer lots?

One place there was no pent up demand overflow was in electronics sales, which in addition to gas stations (expected following the drop in gas prices), and miscellaneous store retailers, posted the largest M/M drop in March, declining by 1.6%.

 

Finally, putting the long-term retail sales trajectory in perspective, here is the M/M and Y/Y change in the retail sales control group:

via Zero Hedge http://ift.tt/1gvFr4h Tyler Durden

The last few days have seen Western anti-Russian rhetoric and red lines escalate dramatically as the military and economic issues come to light in any push back against Putin’s pressure. From NatGas export fallacies to “boomerang”-ing sanctions, the west seems stuck (for now).. which brings up the question – why is China and Russia making huge investments in commodity-miners? Russia’s largest gold miner Polyus Gold is considering a complete onshoring of its activities and China is buying a huge Peruvian copper mine from Glencore. The outcome would appear to enable both firms to do away with USD but not having to buy this resource in the market… just mine it?

 

Russia is onshoring its commodity miners…

Polyus Gold, Russia’s biggest gold miner, is considering state proposals to encourage the rebasing of Russian firms currently owned by offshore entities and intends to explore these issues with the government, the company said on Friday.

 

…

 

Russian President Vladimir Putin has been pushing for the so-called “de-offshorisation” of the Russian economy, whereby companies with offshore entities re-register them in Russia and pay taxes in Russia.

 

…

 

Earlier this week First Deputy Prime Minister Igor Shuvalov urged companies listed on foreign stock exchanges to consider relisting in Moscow to protect themselves from sanctions imposed by the West over Russia’s annexation of Crimea.

 

Polyus’s biggest shareholder is Russian tycoon Suleiman Kerimov, who owns 40.22 percent.

and China is buying commodity miners…

A Chinese consortium is buying Glencore Xstrata’s copper mine in Peru in a $6bn (£3.6bn) all-cash deal, marking one of China’s largest mining acquisitions.

 

The consortium is led by MMG Limited and includes China’s Citic Metal.

 

The acquisition is subject to regulatory approvals but all parties expect the deal to be done by the end of September.

 

Analysts expect Glencore to use the proceeds from the sale to reduce its debt.

 

The mine is expected to produce more than 450,000 tonnes of copper a year in its first five years.

 

China relies heavily on the metal, which is used in electronics production.

Another peg in the anti-USD hegemony board? Shift each nation’s need to use USD to purchase critical resources and instead own them away from control by western states…?

via Zero Hedge http://ift.tt/1kR8AOX Tyler Durden

While US equities have spent much of the past several weeks under pressure (the NASDAQ bio tech index has fallen over 21%, the NASDAQ Comp is down over 8% and the S&P500 is down over 4%), BofAML’s Macneil Curry is concerned that the VIX index suggests conditions should deteriorate further before greater signs of a base materialize.

Since 2012 most tradable market lows have come only after the VIX has pushed north of 20%. It is currently only 17%.

In such an environment, US Treasuries should rally further. Indeed, US 10yr yields have broken below key resistance at 2.608%/2.632%, exposing the long term pivot zone of 2.469%/2.399%. The Japanese ¥ should benefit as well. The 200d in $/¥ is key (100.81) A break below would do significant psychological damage and force out many trend followers.

Chart of the week: The VIX is not where it needs to be

 

While US equities have fallen sharply, the VIX index still shows signs of complacency. Historically, most tradable equity bottoms transpire after the VIX Index trades above 20%.

With it currently residing at 17%, the S&P500 can deteriorate further towards 9m trendline support / 200d avg at 1792/1761

Source: BofAML

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

As was expected, so called Russian separatists completely ignored Ukraine’s 0600 GMT ultimatum to hand over their weapons and give up, which means Ukraine now is in the clear, according to its leaders, to engage in the previously warned military “anti-terrorist” operation. As a result, as Reuters updates,  “towns in eastern Ukraine on Monday braced for military action. As the 9 a.m. (07.00 a.m. BST) deadline issued by authorities in Kiev expired, a Reuters reporter in the flashpoint city of Slaviansk, where armed men had seized two government buildings, said there was no outward sign the rebels were complying with the ultimatum.” Subsequent reports indicated that since the deadline passed, at least 4 people have been killed however since virtually no “factual” propaganda news out of Ukraine is to be believed currently, we would heavily discount this update.

More from Reuters:

In Slaviansk as of 9 a.m. local time on Monday, a Russian flag still flew over police headquarters, one of two buildings taken over by the separatists, while masked men continued to man barricades of sandbags in front of it.

 

Even as the deadline passed, a truck appeared bringing more tyres to heap on top of the barricades to reinforce them.

 

There was tension in the air as people tried to go about their normal business, though school and colleges have been closed and parents advised to keep their children indoors.

 

Alexei Myzenko, a 38-year-old bank teller, was at work as usual, but he said he and his wife had told their son, who is at university in the eastern town of Kharkiv, not to attend lectures on Monday.

 

“We didn’t want anything to happen to him,” said Myzenko. “Of course, some people are afraid. But they are still lining up to get their pensions,” he said.

 

Myzenko said his wife, who is a teacher, had been called by the town administration to tell her that school was cancelled until further notice.

Presenting “military forward guidance”

Iryna Zemlyanskaya, 62, who works as a pharmacist, said: “I am going to work. They’ve promised to use force so many times and have not done a single thing. No-one’s even afraid anymore.”

Below is the complete recap of overnight events courtesy of RanSquawk:

• Interim President Turchinov had set a deadline of 0600 GMT for the rebels to lay down their arms or face full anti-terrorist operations, however this deadline was not met. Since then 4 people have been killed in the clashes in Slovyansk.
• Ukraine President Turchinov says Kiev leadership ‘not against’ referendum being held in Eastern Ukraine at the same time as Presidential election.
• At least 100 Pro-Russian separatists attack police headquarters in east Ukraine city of Horlivka.
• Following the news of increasing tensions coming from Ukraine, Germany has halted arms export licenses to Russia, according to Ministry.
• EU is looking at stage 3 sanctions for Russia which could include economic and financial measures, according to Irish Deputy Premier Gilmore.
• Polish Foreign Minister says the situation in Ukraine could be used as pretext for armed Russian intervention.
• UK Foreign Secretary Hague says there can be no doubt that events in Eastern Ukraine have been instigated by Russia, that Russian denials of involvement do not have a shred of creditability and that further sanctions have to be the response to Russia’s behaviour in East Ukraine.

Should Ukraine once again escalate and launch the trumpeted military operation, watch for a prompt and significant Russian response.

via Zero Hedge http://ift.tt/1kQVL7b Tyler Durden

• Three dead in shootings at Kansas Jewish centers; man to face charges (WSJ)
• Sanctions Blowback in Russia Targets Burgers to Movies (BBG)
• Deadly Virus’s Spread Raises Alarms in Mideast (WSJ)
• China group buys $6bn Glencore Peru copper mine (BBG)
• Iran lodges complaint against United States over U.N. envoy ban (Reuters)
• Russian assets down sharply on Ukraine conflict fears (Reuters)
• ECB comments knock euro, but not much (Reuters)
• World-Leading $25 Hourly Wage Roils Swiss Businesses (BBG)
• Gross Loses to Goldman in Hot Bond Strategy as Pimco Lags (PIMCO)
• Southwest Co-Pilot Retires After Wrong Airport Landing (BBG)
• Citigroup Said to Cut Up to 300 Jobs in Global Markets Division (BBG)

 

Overnight Media Digest

WSJ

* Fined by China for misleading pricing and selling poor-quality products, Wal-Mart Stores Inc paid fines and ratcheted up its testing and inspections, but it is also doing something rare for a Western company: Telling Chinese authorities they need to clean up their own act. (http://ift.tt/1hEnTbw)

* General Motors Co’s European unit, Adam Opel AG, appears to be on the cusp of breaking even before its 2016 target date – welcome news for GM Chief Executive Mary Barra amid the fallout from a massive recall that is expected to take a $1.3 billion bite out of GM’s first-quarter profit. (http://ift.tt/1hEnTYN)

* Citigroup Inc declined to work on an Italian government-backed bid for Spain’s Deoleo SA the world’s biggest olive-oil bottler, because of concern that the deal would infuriate the Spanish government, according to two people with knowledge of the discussions. (http://ift.tt/1iN6lXb)

* Yahoo Inc will release revenue and profit numbers from Alibaba Group Holding Ltd on Tuesday. Those figures are expected to show a big fourth quarter for Alibaba. The report will help set the stage for Alibaba’s expected filing for a U.S. initial public offering, which may value the company at more than $100 billion, say analysts. (http://ift.tt/1hEnW6V)

* Google Inc wants to expand further in the New York city and is launching a search for enough space to hold more than 3,000 employees, according to several real-estate executives familiar with the hunt. The Internet firm has been in discussions with several landlords about leasing at much as 600,000 square feet in Manhattan-about half the size of the Chrysler Building. (http://ift.tt/1hEnW6W)

* The turmoil caused by the “Heartbleed” encryption bug is shedding light on a little-known element of the White House’s surveillance overhaul package: how the government handles software holes and vulnerabilities. The National Security Agency has compiled a list of software bugs and holes known as “zero days,” which the agency has exploited to gain access to secure networks before they can be fixed. (http://ift.tt/1hEnTYO)

* The world’s top finance officials stepped up warnings about low inflation during weekend meetings of the International Monetary Fund, calling for action to combat downward price pressures that threaten consumption and stymie debt reduction. The IMF’s policy committee highlighted stubbornly weak price increases as a key drag on the global recovery, which is approaching the end of its fifth year. (http://ift.tt/1iN6mdq)

* The IMF again sounded the alarm bell at the weekend over low global inflation. But has the worst of anemic price rises already passed the world economy? That, at least, is the view of JP Morgan & Chase economists. In its weekly roundup of global economies, JP Morgan said it believed inflation has reached a low point after two-and-a-half years of falling price growth. (http://ift.tt/1hEnW6X)

* Glencore Xstrata said it agreed to sell the mining company’s Las Bambas Peruvian copper project to a Chinese consortium in an all-cash deal worth at least $5.8 billion. Glencore said it had agreed to sell its entire interest in Las Bambas to a consortium led by MMG Ltd, a unit of state-controlled China Minmetals Corp. (http://ift.tt/1hEnW6Y)

* Citigroup Inc has cut 200 to 300 jobs, or about 2 percent of its global markets workforce. The bank is tightly managing expenses and “making targeted head count reductions in light of current market conditions,” a company spokeswoman said. (http://ift.tt/1iN6mdx)

* China’s largest brokerage, Citic Securities Co has bought a stake in U.S. brokerage firm BTIG LLC, the company’s latest move to grow outside of China through buying a holding in a Western investment firm. (http://ift.tt/1hEnTYR)

 

FT

Commodities trader Glencore Xstrata sold its interest in the Las Bambas copper mine in Peru to a Chinese consortium for $6 billion in cash.

The European Central Bank is ready to make asset purchases if it deems them necessary to stave off low inflation in the euro zone, Executive Board member Benoit Coeure said on Sunday.

The amount of individual penalties levied on wayward bankers by UK’s Financial Conduct Authority has increased 76 percent over the past two years.

Finance Minister George Osborne’s plan to give the taxman powers to clamp down on 10 billion pounds of tax evasion and avoidance in the UK might face opposition from a committee of MPs, who argue that the move could hit civil liberties.

Britain’s Co-Operative Group is set to reveal a staggering 2 billion-2.5 billion pound loss on Thursday, highlighting the urgency of adopting sweeping governance reforms at the troubled mutual.

Certain sections of the World Health Organisation are keen to categorise e-cigarettes as tobacco and regulate them as normal cigarettes, according to leaked documents seen by the FT.

 

NYT

* Glencore Xstrata, the giant commodities trading and mining company, said on Sunday that it had sold its interest in the Las Bambas copper mine in Peru to a Chinese consortium in a $5.85 billion cash deal, one of China’s biggest mining acquisitions in recent years. (http://ift.tt/1iN6mdy)

* Quora, a question-and-answer website, which has no revenue and just 70 employees, recently announced that it had raised an additional $80 million. The eye-popping investment – for no obvious immediate purpose – was the latest example of a dynamic that is reshaping Silicon Valley: Start-ups, already flush with cash, are piling on the investment dollars. (http://ift.tt/1hEnTYS)

* Entrepreneurs are lucky to have one big score. Richard Barton has had a string of them, by repeatedly asking the same simple question: What piece of marketplace information do people crave and don’t have? By producing and investing in a series of successful start-ups such as Expedia, Zillow and Glassdoor, 46-year old Barton has managed to accomplish something few others have done. (http://ift.tt/1iN6o57)

* Yahoo Inc a company that seems like a permanent adolescent in search of an identity, is about to try a new persona: high-quality television programmer. At a time when the culture is addicted to high-end television narratives, Yahoo wants in on the action, partly because while its site may have flat traffic – 700 million global visits a month – and declining revenue, it has zero cachet and no discernible way forward. (http://ift.tt/1hEnTYT)

* Maxwell House coffee – a pantry staple promoted as “Good to the last drop” for almost a century – is remaking its marketing. The makeover, to be introduced on Monday by the Maxwell House parent, Kraft Foods Group Inc, includes logos, packaging, new products, the brand’s presence in digital media and social media and advertising. (http://ift.tt/1hEnW75)

 

Canada

THE GLOBE AND MAIL

* In a rare exercise of power, a Senate committee is pushing back against Canadian Prime Minister Stephen Harper’s Conservative government by unanimously recommending changes to the Fair Elections Act, an overhaul of electoral law that is fiercely opposed by other parties. (http://ift.tt/1hEnTYU)

* Calgary MP Rob Anders lost the Conservative Party’s nomination contest for the newly created riding of Calgary Signal Hill to former Progressive Conservative MLA Ron Liepert. (http://ift.tt/1iN6o5c)

Reports in the business section:

* When the Governor of the Bank of Canada Stephen Poloz leaves its key interest rate at 1 percent on Wednesday, it will be the 29th consecutive meeting that the central bank does nothing. If economists are right, the bank won’t start raising rates again until the middle of next year. (http://ift.tt/1hEnW78)

NATIONAL POST

* Teams of volunteers in southern Ontario and Quebec were preparing for flooding with walls of sandbags on Sunday as they awaited heavy rain expected to hit parts of both provinces over the next several days. Environment Canada said parts of Ontario could get up to 75 millimetres of rain by early Tuesday, while upwards of 45 millimetres of rain was expected in southern and central Quebec. (http://ift.tt/1hEnTYV)

* New Democratic Party Leader Tom Mulcair says with 18 months to go before the next election, he’s focusing his party’s sights on the federal government’s Election Act overhaul, saying the hotly debated legislation should be the focus of the next campaign because it could undermine the rules of democracy. (http://ift.tt/1iN6mdH)

FINANCIAL POST

* Enbridge Inc vowed to press on with its C$7.9 billion Northern Gateway pipeline through British Coumbia despite a vote Saturday that saw a majority of residents in Kitimat vote against the project. (http://ift.tt/1hEnTYW)

 

China

SOUTH CHINA MORNING POST

— Beijing has left the door open on the possibility of a pan-democrat being allowed to run for chief executive in 2017. But there is no possibility of public nomination of candidates, Hong Kong’s lawmakers were told during a meeting with senior mainland officials in Shanghai. (http://ift.tt/1hEnW7b)

— The United States looks set to reintroduce annual reports to Congress on political developments in Hong Kong following a plea by the Democratic Party’s founding chairman Martin Lee Chu-ming. (http://ift.tt/1hEnW7c)

— Hong Kong’s financial services minister has warned market players not to expect the quota under the proposed cross-border stock trading scheme to be increased after it is filled, despite complaints that the cap is too low. (http://ift.tt/1iN6o5i)

THE STANDARD

— Both primary and secondary home market sales improved slightly during the weekend. The leader was Cheung Kong Holdings with its final batch of flats — all 402 homes — at Trinity Towers, sold in two weeks. (http://ift.tt/1iN6o5l)

— Wing Tai Properties expects to invest up to HK$710 million in developing the most expensive residential plot in Hong Kong’s Sai Wan Ho. (http://ift.tt/1hEnWnq)

HONG KONG ECONOMIC JOURNAL

— Media services group SMI Culture Group Holdings Ltd said it planned to invest in making 8 to 10 movies this year. One of the movies it has invested in — American Dreams in China — recorded 539 million yuan in box office receipts on the mainland.

HONG KONG ECONOMIC TIMES

— CITIC Pacific, which is expected to announce details of its acquisition of parent assets on April 16, may issue new shares and obtain a syndicated loan to raise capital to finance the deal, according to market sources. Sovereign funds, such as Temasek, may be introduced as strategic investors, they added.

 

Britain

The Times

GLENCORE SELLS $6 BLN MINE TO MAKE PEACE

Glencore Xstrata is to sell its Las Bambas copper mine to a consortium of Chinese state-controlled resources companies for more than $6.25 billion

CO-OP BANK LOOKS AT DITCHING KPMG AS AUDITOR AS IT RUSHES TO RAISE 400 MLN STG

KPMG, the Co-op Bank’s auditor for more than 40 years, is facing dismissal after the embattled bank revealed on Friday that it was putting its audit contract out to tender.

The Guardian

CO-OP RISKS TIGHTER CONTROL BY BANKS WITHOUT REFORM, WARNS LORD MYNERS

Myners, who was brought in to reform the crisis-stricken Co-operative Group, fears his plan will be rejected unless the owners of the loss-making chain of supermarkets, pharmacies and funeral homes understand the serious need for a radical overhaul of the way it is run.

HOUSE OF FRASER SELLS 89 PCT STAKE TO CHINESE CONGLOMERATE SANPOWER

Department store sells majority stake in 480 million pound deal touted as largest overseas retail acquisition by Chinese business.

TESCO CHIEF UNDER PRESSURE AS RETAILER EXPECTED TO ANNOUNCE 9 PCT FALL IN PROFITS

Philip Clarke sees supermarket’s share price drop to 10-year low despite 1 billion pound expenditure on store refurbishments and staff.

The Telegraph

WAGE RISES TO OUTSTRIP INFLATION AS STRAIN EASES

Pay increases are set to outstrip inflation for the first time in six years as the economy gathers pace and unemployment continues to fall, according to forecasters.

PUNCH TAVERNS BRINGS IN INDEPENDENT RESTRUCTURING SPECIALIST

Punch Taverns, Britain’s second biggest pubs group, has brought in an independent corporate restructuring expert to aid long-running discussions over its 2.3 billion pound debt mountain.

 

 

Fly On The Wall 7:00 AM Market Snapshot

ECONOMIC REPORTS

Domestic economic reports scheduled today include:
Retail sales for March at 8:30–consensus up 1.0%
Business inventories for February at 10:00–consensus up 0.6%

ANALYST RESEARCH

Upgrades

Acorda Therapeutics (ACOR) upgraded to Outperform from Market Perform at FBR Capital
Allegheny Technologies (ATI) upgraded to Neutral from Underperform at Sterne Agee
BP (BP) upgraded to Buy from Hold at Canaccord
Bloomin’ Brands (BLMN) upgraded to Buy from Hold at Deutsche Bank
Boardwalk Pipeline (BWP) upgraded to Neutral from Underperform at BofA/Merrill
Boston Scientific (BSX) upgraded at BofA/Merrill
Boston Scientific (BSX) upgraded to Buy from Neutral at BofA/Merrill
Charles Schwab (SCHW) upgraded to Buy from Neutral at UBS
Eaton Vance (EV) upgraded to Neutral from Sell at Citigroup
Edwards Lifesciences (EW) upgraded to Neutral from Underweight at JPMorgan
Eli Lilly (LLY) upgraded to Hold from Underperform at Jefferies
F5 Networks (FFIV) upgraded to Buy from Hold at Stifel
Lincoln National (LNC) upgraded to Strong Buy from Outperform at Raymond James
MasterCard (MA) upgraded to Outperform from Neutral at RW Baird
McDermott (MDR) upgraded to Neutral from Underweight at HSBC
Palo Alto (PANW) upgraded to Overweight from Equalweight at Barclays
PriceSmart (PSMT) upgraded to Buy from Neutral at Roth Capital
Principal Financial (PFG) upgraded to Outperform from Market Perform at Raymond James
Regency Energy Partners (RGP) upgraded to Buy from Neutral at BofA/Merrill
Sensata (ST) upgraded to Buy from Neutral at Citigroup
TD Ameritrade (AMTD) upgraded to Buy from Neutral at UBS
TD Ameritrade (AMTD) upgraded to Outperform from Market Perform at Keefe Bruyette
TTM Technologies (TTMI) upgraded to Buy from Neutral at UBS
Transocean (RIG) upgraded to Hold from Sell at Deutsche Bank
Ultimate Software (ULTI) upgraded to Outperform from Market Perform at Raymond James
VMware (VMW) upgraded to Outperform from Underperform at CLSA
Visa (V) upgraded to Outperform from Neutral at RW Baird
bebe stores (BEBE) upgraded to Buy from Neutral at Janney Capital

Downgrades

Bancolombia (CIB) downgraded to Neutral from Overweight at JPMorgan
Brookfield Renewable (BEP) downgraded to Neutral from Outperform at Credit Suisse
Corning (GLW) downgraded to Hold from Buy at Stifel
Enbridge (ENB) downgraded to Neutral from Outperform at Credit Suisse
HeartWare (HTWR) downgraded to Sell from Neutral at Goldman
Johnson & Johnson (JNJ) downgraded to Hold from Buy at Jefferies
Medtronic (MDT) downgraded to Neutral from Overweight at JPMorgan
Microsoft (MSFT) downgraded to Hold from Buy at Deutsche Bank
Millicom (MIICF) downgraded to Sell from Hold at Berenberg
STMicroelectronics (STM) downgraded to Sell from Neutral at UBS
Whole Foods (WFM) downgraded to Hold from Buy at BB&T

Initiations

3D Systems (DDD) initiated with a Neutral at Goldman
Akebia (AKBA) initiated with a Buy at UBS
Akebia (AKBA) initiated with an Outperform at Credit Suisse
Akebia (AKBA) initiated with an Overweight at Morgan Stanley
Argo Group (AGII) initiated with a Market Perform at Keefe Bruyette
Artisan Partners (APAM) initiated with an Outperform at RBC Capital
Kindred Biosciences (KIN) initiated with an Outperform at Leerink
LifeLock (LOCK) initiated with an Outperform at Pacific Crest
MasterCard (MA) initiated with a Sector Perform at Pacific Crest
MediWound (MDWD) initiated with an Outperform at BMO Capital
MediWound (MDWD) initiated with an Outperform at Credit Suisse
New York Mortgage (NYMT) initiated with a Market Perform at Keefe Bruyette
Old Second Bancorp (OSBC) rated Market Perform from not covered at Keefe Bruyette
Paylocity (PCTY) initiated with a Buy at Deutsche Bank
Paylocity (PCTY) initiated with a Buy at Needham
Paylocity (PCTY) initiated with a Neutral at BofA/Merrill
Paylocity (PCTY) initiated with an Outperform at JMP Securities
Q2 Holdings (QTWO) initiated with a Buy at Canaccord
Q2 Holdings (QTWO) initiated with a Buy at Needham
Q2 Holdings (QTWO) initiated with a Buy at Stifel
Q2 Holdings (QTWO) initiated with an Outperform at RBC Capital
Q2 Holdings (QTWO) initiated with an Overweight at JPMorgan
Rouse Properties (RSE) initiated with a Hold at KeyBanc
Sempra Energy (SRE) initiated with a Buy at UBS
Stratasys (SSYS) initiated with a Buy at Goldman
Ultimate Software (ULTI) initiated with a Buy at Deutsche Bank
Visa (V) initiated with an Outperform at Pacific Crest

COMPANY NEWS

Herbalife (HLF) says no knowledge of ongoing investigation by DoJ or FBI
Invesco Mortgage (IVR) CFO to resign
Vornado (VNO) to spin-off shopping center business
Trina Solar (TSL)lowers Q1 solar module shipment view to 540MW-570MW from 670MW-700MW, still sees FY14 module shipments 3.6GW-3.8GW
Amazon.com (AMZN) says Amazon Fire TV out of stock until April 21
Total (TOT), partners to develop Kaombo project in Angola for $16B
Medtronic (MDT) says CoreValve ruling has no impact outside U.S.
Intercept (ICPT) reports additional positive data from POISE trial at EASL  
Edwards (EW) says court limits sale of Medtronic CoreValve system in U.S. 

EARNINGS

Fuwei Films (FFHL) reports Q4 RMB(0.04) vs. RMB(0.96) a year ago
Flexible Solutions (FSI) reports Q1 revenue $3.81M, one estimate $4.94M

NEWSPAPERS/WEBSITES

3D Systems (DDD), other 3-D printing stocks could fall further, Barron’s says
Google (GOOG), Palo Alto (PANW) worth looking into, Barron’s says
Caesar’s (CZR) deal with second-lien bondholders could dilute shares, Barron’s says
JPMorgan (JPM) outlook promising despite earnings shortfall, Barron’s reports
Land’s End (LE) shares could head lower, Barron’s says
LifeLock (LOCK), DFC Global have more downside, Barron’s says
J&J (JNJ) halting development of Botox (AGN) competitor, WSJ says
Amazon.com (AMZN) plans to launch smartphone in 2H14, WSJ reports
‘Captain America’ surpasses ‘Rio 2’ in weekend box office, LA Times says
Facebook (FB) looks to provide financial services for users, Financial Times reports
GM Opel unit may get to break even ahead of 2016 target, WSJ says
Phillips 66 (PSX) halts sale efforts for Irish refinery, Independent says
Sprint (S) and Spotify plan to team up, Re/code says 

SYNDICATE
CEL-SCI (CVM) to offer common stock, six month warrants in ‘best efforts’ offering
Pan American Silver (PAAS) files to sell 7.81M common shares
Radio One (ROIAK) files to sell $100M of Class D common stock

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

Futures are treading water once more now that Ukraine has stormed to center stage from the backburner after everyone was convinced Putin would let the situation cool off after annexing Crimea. Guess not. Adding the renewed geopolitical jitters to what has already been a beta stock bloodbath into a holiday shortened week assures some high volatility fireworks. Cautious sentiment was observed over in Asia (Nikkei 225 -0.36%) amid renewed fears that geopolitical tensions in Ukraine will flare up again following reports of exchange gunfire with pro-Russian militants. This sentiment carried over into the European session with stocks lower across the board (Eurostoxx50 -0.71%). EUR is lower after ECB’s Draghi said any further strengthening of the EUR would warrant further action by the ECB, including non-standard measures such as quantitative easing – it is amazing how frequently and often the Virtu algos still fall for Draghi’s jawboning trick which has now become all too clear will never be implemented and certainly not if he keeps talking about it daily, as he does.

The trading week has gotten off to a subdued start in Asia today, but this morning’s falls in equities have been smaller than what one would expect following last Friday’s 0.95% fall in the S&P500. Nonetheless, negative headlines in Ukraine are keeping a lid on risk sentiment today. The Nikkei – 0.4%) and HSCEI (-0.3%) are a touch lower, as are S&P 500 futures (-0.1%). A Chinese media outlet is suggesting that a number of Chinese banks including the country’s largest bank may issue around CNY80bn (US$13bn) in preference shares each as they look to build capital buffers amid rising credit quality concerns. Banks are weighing on Chinese bourses today. Elsewhere, Asian credit is trading a few bps wider but the strength of US rates is capping any EM widening.

Taking a look at some other weekend headlines, the conflict between the Ukraine and Russia reaches an inflection point today after the Ukrainian government gave pro-Russian separatists in eastern Ukraine a Monday morning deadline to disarm or face a “full-scale anti-terrorist operation” by its armed forces. Over the weekend Ukraine had sent in forces to regain control of government buildings in a number eastern Ukrainian cities but some anti-Kiev blockades remain across the east. Russia’s UN ambassador warned that in a few hours time, things in the Ukraine could take “an irreversible turn for the worse” and requested that Ukraine drop its Monday ultimatum. The UN Security Council is meeting as we type. This is something to watch out for today. Palladium futures are up 0.7% overnight while Wheat futures are up 1.5%.

Elsewhere in the week ahead, the key data releases include Eurozone’s  industrial production today, the German ZEW survey tomorrow and Spanish/Italian trade on Wednesday. Foreign ministers from Ukraine, Russia, EU and the US will hold a summit on Thursday where the weekend’s clashes between the Ukrainian military and pro-Russian forces in Eastern Ukraine will be discussed. Credit Suisse reports 1Q 14 numbers on Wednesday. In EM, it will be an important week for China-watchers with China reporting a range of data including industrial production, Q1 GDP and retail sales on Wednesday. DB expects China’s first quarter growth to be 7.4% which puts it above consensus at 7.3%. Elsewhere in EM, there is IP data for Russia (Tuesday) and inflation readings in India (Tuesday) and Brazil (Thurs).

Bulletin Headline Summary From Bloomberg And RanSquawk

• Treasuries steady, 2Y-7Y yields lowest since mid-March; 10Y after rallying 10bps last week on declines in stocks and bund yields, strength in JPY amid Ukraine and global growth concern.
• The U.S. and EU have reached “crunch time” to halt further destabilization in Ukraine and curb any further Russian expansion in the region
• Russia and the U.S. traded barbs at an emergency meeting of the UN Security Council as a deadline passed for pro-Russian separatists to leave buildings they occupied amid escalating violence in eastern Ukraine
• Draghi said a further appreciation of the euro would trigger more monetary stimulus in his strongest warning yet about the region’s rising currency
• Republican odds of U.S. Senate takeover is rising amid fall- off in turnout in 2014 midterms when the electorate will trend older and whiter and as Obama’s public approval lags
• The lopsided bond market has caught the attention of the SEC, which is examining whether the biggest players, such as Pimco and BlackRock, get preferential prices and access because of their influence
• China’s banking regulator ordered owners of the nation’s 68 trust companies to be prepared to provide funding or sell their stakes as the risk of defaults rises in the $1.9t industry for high-yield investment
• Sovereign yields mostly lower. Asian stocks mixed, Nikkei -0.4%, Shanghai little changed. European equity markets U.S. stock futures fall. WTI crude and copper lower, gold gains

US Event Calendar

• 8:30am: Retail Sales Advance m/m, March, est. 0.9% (prior 0.3%)
  • Retail Sales Ex Auto m/m, March, est. 0.5% (prior 0.3%)
  • Retail Sales Ex Auto and Gas, March, est. 0.4% (prior 0.3%)
  • Retail Sales Control Group, March, est. 0.6% (prior 0.3%)
• 10:00am: Business Inventories, Feb., est. 0.5% (prior 0.4%) Central Banks
• 9:30pm: Reserve Bank of Australia releases minutes of April meeting
• 12:45pm: Fed’s Tarullo, ECB’s Noyer speak in New York Supply
• POMO 11:00am: Fed to purchase $900m-$1.15b in 2036-2044 sector

 

EU & UK Headlines

Comments by ECB’s Draghi failed to prop up the sentiment towards riskier assets, with stocks lower across the board as combination of concerns surrounding Ukraine and the ongoing equity correction in the US dominated the price action. Nevertheless, despite the risk averse sentiment, peripheral bond yield spreads tightened on the prospect of potential buying of assets by the ECB. On that note, strategists at RBS believe that odds of ECB QE in coming years is 100%, next action by the ECB is likely to involve rate cut and an extension of full-allotment regime (MRO/ LTRO) from to June 2015 to June 2016.

Regarding the latest developments in Ukraine, Russian domestic stock market (MICEX) fell over 1% and spot RUB rose to its highest level since late March following reports that Ukraine’s armed forces plan to launch a “fullscale anti-terrorist operation” against pro-Russian separatists. It was also reported this morning, citing Ukraine President, that Kiev leadership is ‘not against’ referendum being held in Eastern Ukraine at the same time as Presidential election.

US Headlines

Little in terms of US specific commentary, however the apparent weakness in European equities seemingly filtered through into US equity futures, down between 0.2-0.4% at last check ahead of the cash open. Focus now turns to earnings release by Citigroup at 1300BST/0700CDT and the release of the latest Retail Sales report at 1330BST/0730CDT.

Equities

Risk averse sentiment dominated the price action since the open this morning, with technology leading the move lower in a continuation of the sector weakness seen across the pond in the US. As a reminder, the NASDAQ biotech index entered a bear market on Friday as as real money continued to rotate out of biotech and momentum names. Going forward, Citigroup will report earnings at 1300BST/0700CDT, with EPS exp. USD 1.14 and revenue exp. USD 19.39bln.

FX

Comments by ECB’s Draghi over the weekend who said that any further strengthening of the EUR would warrant further action by the ECB, including non-standard measures such as quantitative easing resulted in broad based EUR weakness. This in turn saw EUR/GBP fall below the 50DMA line and the spot EUR rate fell to within 10pips shy of the 21DMA line.

Commodities

Soft commodities and palladium benefited the most amid the renewed fears that tensions between Russia and Ukraine will escalate further. However WTI and Brent crude futures were little impacted and instead traded lower amid broad based risk off sentiment. Of note, analysts at Goldman Sachs said that gold is seen declining on tapering and US recovery and that Gold losses this year are to be data dependent.

* * *

Jim Reid concludes the overnight recap

The key event over the weekend was the IMF meetings. As expected the focus was around future policy action (or inaction) of the G3  central banks. Mario Draghi was central to that debate, suggesting that “the strengthening of the exchange rate would require – to make our monetary stance equally accommodative – further monetary policy accommodation”. Exactly what was meant by further accommodation was not elaborated on, though the FT conjectured that Draghi was leaning towards negative deposit rates. The ECB president steered clear of mentioning specific FX levels with which it would trigger ECB action. ECB executive board member Benoit Coeure stoked the flames further by outlining the contours of a potential QE program. Coeure said any program would be focused more on price levels rather than quantity. Purchases would be linked to the interest rate maturities that are most important for firms’ and households’ investment and consumption decisions which he said was the “intermediate to longer part of the yield curve”. Coeure also said that “segmentation would have to be taken into consideration in our strategy” which meant that purchases of a single asset class, such as government bonds or ABS, could not be assumed to affect interest rates across all asset classes (Reuters). Less dovish members of the ECB including Austria’s Ewald Nowotny said that any discussion on further easing is likely to come at the June meeting when the ECB will be able to better determine the permanence or not of current disinflation. This June timeframe seems to be also favoured by the Bundesbank who reportedly prefers waiting until June when a fresh forecast for inflation will be unveiled (FT).

For all the talk over the weekend, euro-dollar is trading only about 0.25% lower in Asian trading today (1.385 as we type) and despite all the QE-related talk over the last few weeks, the EURUSD cross is still not too far from 2.5 year  highs. Outside of the ECB, the policy direction of the Fed still appears to be at odds with those of its G3 counterparts. The St Louis Fed’s Bullard remarked that a commitment to keep rates low even as the economy was “normalising” could be a policy error. Bullard repeated that his dot forecast is 4 or 4.25% in 2016. Outgoing Fed official Jeremy Stein reiterated his concerns about broader financial stability but said that the Fed doesn’t need to expand its current dual mandate in order to take financial stability into account. Stein reiterated that the Fed should monitor the term structure of interest rates, credit spreads and asset prices as part of its current mandate. In Japan, the WSJ reported late  on Friday that Japanese PM Shinzo is planning to see BoJ Governor Kuroda this month to discuss monetary policy, before the next BoJ policy meeting on April 30th. This meeting comes as Japan’s finance minister acknowledged over the weekend that the country’s investment climate hasn’t improved because firms are not sure that deflation has been overcome (Nikkei). In a somewhat contradictory report, Bloomberg says that the Japanese government risks loses  public support for its economic policies by spurring too much inflation too quickly, particularly when wages have yet to materially improve (Bloomberg).

The trading week has gotten off to a subdued start in Asia today, but this morning’s falls in equities have been smaller than what one would expect following last Friday’s 0.95% fall in the S&P500. Nonetheless, negative headlines in Ukraine are keeping a lid on risk sentiment today. The Nikkei – 0.4%) and HSCEI (-0.3%) are a touch lower, as are S&P 500 futures (-0.1%). A Chinese media outlet is suggesting that a number of Chinese banks including the country’s largest bank may issue around CNY80bn (US$13bn) in preference shares each as they look to build capital buffers amid rising credit quality concerns. Banks are weighing on Chinese bourses today. Elsewhere, Asian credit is trading a few bps wider but the strength of US rates is capping any EM widening.

Taking a look at some other weekend headlines, the conflict between the Ukraine and Russia reaches an inflection point today after the Ukrainian government gave pro-Russian separatists in eastern Ukraine a Monday morning deadline to disarm or face a “full-scale anti-terrorist operation” by its armed forces. Over the weekend Ukraine had sent in forces to regain control of government buildings in a number eastern Ukrainian cities but some anti-Kiev blockades remain across the east. Russia’s UN ambassador warned that in a few hours time, things in the Ukraine could take “an irreversible turn for the worse” and requested that Ukraine drop its Monday ultimatum. The UN Security Council is meeting as we type. This is something to watch out for today. Palladium futures are up 0.7% overnight while Wheat futures are up 1.5%.

Turning to the week ahead, though it’s a holiday-shortened week with Easter approaching on Friday there’s still plenty on the macro calendar ahead of us over the next four days. Starting in the US, there is a pretty full data docket starting with today’s retail sales where consensus is expecting a pickup in activity (0.9% vs 0.3% previous), driven by the recent rebound in auto sales. On Tuesday, the latest Empire Fed and NAHB homebuilder surveys will be released. On Wednesday, there are housing permits, housing starts and industrial production. Thursday’s Philly Fed rounds out the data docket. Fed Chair Janet Yellen will be making a speech at the Economic Club of NY on Wednesday. The day before that, she will be making some opening remarks at the Atlanta Fed’s Financial Market conference.

On the micro side, this will be a pivotal week for the US earnings season with a number of large cap financials and tech heavy-weights reporting. Indeed, though only around 10% of the S&P500 constituents are reporting this week, they together account for around one-fifth of the index’s market cap.  Following the rout in tech stocks over the last week or so, the quarterly filings and management commentary from Intel, Yahoo (Tuesday), Google (Wednesday) will give us a good guide as to how earnings in that sector are faring. Following JPM and Wells Fargo who reported on Friday, a number of large US bank holding companies are on the earnings docket this week including Citi (Monday), BofA (Wednesday), Goldman and Morgan Stanley (Thursday). JPMorgan gave the bank reporting season a soft start after they missed EPS and revenue estimates on Friday with some concern over the revenue declines in FICC (-21% yoy) and equities (-3% yoy). Citigroup’s earnings (before the opening bell today) will be interesting with the WSJ reporting over the weekend that the group has cut back some headcount in its global markets business in response to a slump in its trading businesses, particularly in fixed income. Taken together with JPM’s results on Friday, it seems struggling FICC revenues are a theme for the banking sector at this early stage in the reporting cycle. Though the focus on Friday was the continued decline in tech stocks, it was actually the banking sector (-1.37%) which weighed on the US stock markets the most as investors re-calibrated their earnings expectations for the rest of the US banks. The overall view from our US equity strategists is that final Q1 EPS growth for the S&P500 will be weak at 4% with sales growth at just 3%, which would be the 8th quarter of anaemic sales growth.

Elsewhere in the week ahead, the key data releases include Eurozone’s  industrial production today, the German ZEW survey tomorrow and Spanish/Italian trade on Wednesday. Foreign ministers from Ukraine, Russia, EU and the US will hold a summit on Thursday where the weekend’s clashes between the Ukrainian military and pro-Russian forces in Eastern Ukraine will be discussed. Credit Suisse reports 1Q 14 numbers on Wednesday. In EM, it will be an important week for China-watchers with China reporting a range of data including industrial production, Q1 GDP and retail sales on Wednesday. DB expects China’s first quarter growth to be 7.4% which puts it above consensus at 7.3%. Elsewhere in EM, there is IP data for Russia (Tuesday) and inflation readings in India (Tuesday) and Brazil (Thurs).

via Zero Hedge http://ift.tt/1iMX8xO Tyler Durden