another site
The “not really most important jobs data ever” is out. Here are the results:
More shortly.
via Zero Hedge http://ift.tt/1nPGiEI Tyler Durden
Nigel Farage's UKIP has opened up a clear lead in the run up to next month’s elections for the European Parliament. According to ComRes, 38% of Britons certain to vote say that they would cast their ballot for the party, compared to 27% who would vote for Labour, 18% who would vote for the Conservatives and 8% who would vote Lib Dem. UKIP is damaging Conservative hopes as 67% of 2010 Tory voters are now saying they would vote for UKIP. However, it's not all rainbows and unicorns for the euro-skeptic party, as – somewhat expectedly – almost one third of Britons think that UKIP is a racist party; even as 48% believe UKIP has sensible policies.
European Voting Intention
- UKIP: 38% (+8)
- Labour: 27% (-3)
- Conservatives: 18% (-4)
- Liberal Democrats: 8% (NC)
But as ITV reports, there are some concerns…
Almost one third of Britons think that Ukip is a racist party, according to a new ITV News/ComRes poll.
Of the 2,052 British adults surveyed about their opinion of the UK Independence Party, 32% said they believed the party was racist. 40% disagreed with this statement and 29% said they did not know.
A third of the British public think UKIP are more honest than other parties
…
82% of likely UKIP voters at the European Parliamentary elections think Ukip is more honest than other political parties.
Britons are split about whether Ukip has sensible policies: 38% think not, but 38% think the party does.
Half of 2010 Conservatives (48%) think that Ukip has sensible policies.
It seems change is coming – as Farage himself noted recently…
"The whole European project is based on a falsehood… and it's a dangerous one.. because if you try to impose a new flag, a new anthem, a new president, a new army, a new police force; without first seeking the consent of the people you are creating the very nationalisms and resentment that the project was supposed to snuff out." Farage concludes, he is not against Europe but is "against this Europe," and this year's European elections will mark the turning point.
via Zero Hedge http://ift.tt/1i0p2cc Tyler Durden
In
the late 1980s the U.S. government had an opportunity to change its
relationship with Iran from hostile to nonadversarial. It had been
hostile since 1979, when the Islamic revolution overthrew the
brutal U.S.-backed Shah Mohammad Reza Pahlavi and Iranians held 52
Americans hostage for more than a year. Then suddenly, in April
1992, the administration changed course. Why? Sheldon Richman
highlights one compelling reason: the CIA and Pentagon feared their
budgets and staffs would be slashed with the end of the Cold War,
and needed a new antagonist.
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The
Ohio Libertarian Party (LPO) gubernatorial candidate Charlie Earl
was shot down by a U.S. circuit court yesterday and is taking his
case to the Supreme Court as a final bid to get on the ballot.
As a recap, earlier this year Earl got enough signatures to
run, but Secretary of State John Husted, a Republican, had him
disqualified on a technicality: The person Earl hired to collect
signatures failed to list the LPO as his employer. The would-be
candidate has taken the case through the court system claiming that
the signature collector’s First Amendment rights, specifically his
right to not declare his employer, are being denied by Husted.
The previous judge before the case said the burden of listing an
employer was minimal, and sided against Earl.
The 6th U.S. Circuit Court of Appeals yesterday stood
by that ruling and doesn’t seem to care much about the impact this
could have on the LPO. The Associated Press
reports:
The three-judge panel acknowledged the decision could present
“severe and irreparable harm” on the party and likely undermine its
status as a ballot-qualified party in the state.“We note that the LPO has struggled to become and remain a
ballot-qualified party in Ohio, and we acknowledge that this
decision entails that their efforts must continue still,” the
opinion said. “But we also note that we decide one case at a time,
on the record before us. In so doing, we preserve the First
Amendment’s primary place in our democracy over the
long run.”
Regaining that status would require jumping through some serious
hoops,
thanks to a recent Republican-crafted law. Earl is making
an appeal to the Supreme Court, though that won’t yield anything in
time for the May 6 primary.
Earl accuses
the Ohio GOP of deliberately setting up barriers to his candidacy
out of fear that he will take votes away from Gov. John Kasich.
Significantly (and perhaps surprisingly), the courts
agree. The district court that previously sided against the
Libertarian acknowledged that “operatives or supporters of the Ohio
Republican Party” orchestrated a plot against him. The circuit
court reaffirmed this yesterday,
lumping the Democratic Party into the conspiracy, too.
This meddling and undermining competition in elections has no legal
bearing on the very serious issue of failing to meet a
technicality.
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From RanSquawk
Today’s consensus expectations:
What the banks expect:
Quick take:
Today sees the release of the US nonfarm payrolls for April, which is expected to show 218k jobs added. However, ahead of the figure analyst forecasts are quite evenly spread, with the majority lying between 195k and 230k.
The vast majority surveyed also expect the unemployment rate to decline to 6.6% from 6.7% in March, although the labor force participation rate (prev. 63.2%) has historically been a significant driver of a fall or climb in the unemployment rate.
In terms of recent data points, Wednesday’s ADP employment change came in at 220k, the highest reading since November. The ADP report shares a very similar methodology to NFP, and although the correlation has been questionned in recent months, last month’s ADP reading was just 1k below the payrolls reading at 191k. Additionally, as noted by analysts at Deutsche Bank, the ‘jobs plentiful’ component of US consumer confidence is often a strong indicator of NFP, and that figure came in lower than previous on Tuesday at 12.9% (prev. 13.1%).
An additional point to note is that April was the first month since the winter that populous regions of the US did not experience a storm. Severe weather conditions were cited as a constraint on hiring during Q1, and Wednesday’s large GDP miss (0.1% vs. Exp. 1.2%) is widely being attributed to this factor. The BLS says volatile employment trends around the spring break period, rather than weather conditions can also account for yesterday’s higher than expected initial jobless claims for the week ended April 26th. Prior to that reading, the four-week average of weekly claims was at a post-recession low.
Market Reaction
As the Fed remain on track to taper their bond buying program, and with markets sensitive to projections for the first hike to the Fed Fund Rate (FFR), focus will likely fall on the unemployment rate unless the headline is widely away from expectation. An unemployment rate outside of the main expectation range will likely see a sustained reaction, and an adjustment to the current forecast, with the first hike of the FFR currently priced in for July 2015.
via Zero Hedge http://ift.tt/1pW7dRa Tyler Durden
Overnight Media Digest
WSJ
* German Chancellor Angela Merkel will be carrying a clear message from Germany’s business lobby when she meets President Barack Obama at the White House to discuss the Ukraine crisis: No more sanctions on Russia. (r.reuters.com/qaj98v)
* Pfizer Inc and AstraZeneca have resumed talks about a trans-Atlantic merger of the two drug giants, after Pfizer sweetened the terms of an earlier takeover offer for its British rival. (r.reuters.com/jaj98v)
* Retirement investors are putting more money into stocks than they have since markets were slammed by the financial crisis six years ago. Meanwhile, large investors such as pension funds, banks and insurance companies are showing less appetite for risk. Demand for shares of newly public companies has weakened, and utilities, considered safe when economic growth isn’t robust, are the best-performing group this year. (r.reuters.com/vej98v)
* As Apple Inc and Samsung Electronics Co squabble in court over who copied whose phone features, the companies’ grip over the smartphone industry is slipping. The two companies account for nearly all smartphone hardware profits. But they are losing market share to Chinese rivals with lower-priced phones, particularly in developing nations. (r.reuters.com/hej98v)
* Mark Fields is set to take over as chief executive of Ford Motor Co on July 1, and he’ll face very different set of challenges than those the current boss, Alan Mulally, has tackled over the last eight years. (r.reuters.com/xej98v)
* The New York Stock Exchange agreed to settle allegations it broke rules designed to protect investors, the second such pact in less than two years as the top U.S. securities regulator tries to ratchet up the policing of stock markets. The Big Board, along with affiliated exchanges and a broker, agreed to pay $4.5 million to settle civil charges by the Securities and Exchange Commission that they “repeatedly” broke their own rules or failed to submit rules governing certain activities to the regulator. (r.reuters.com/jej98v)
* J. Crew is developing a new store format aimed at budget-conscious shoppers underscoring the difficulty apparel retailers have had in boosting sales without help from discounts. The new format is called J. Crew Mercantile and will feature merchandise and prices closer to what shoppers would find at J. Crew Factory, the retailer’s outlet stores, than what is available in its full-line stores. (r.reuters.com/rej98v)
* Exxon Mobil Corp is pushing ahead with its plans to drill in Russia’s Arctic seas – its biggest opportunity to discover untapped deposits of oil and gas – even though deteriorating relations between Moscow and Washington have increased the risks. (r.reuters.com/tej98v)
FT
U.S. drugmaker Pfizer Inc is planning to sweeten its 60 billion pound ($101.37 billion) takeover bid for AstraZeneca Plc hoping to increase pressure on its UK rival to enter talks to create the world’s biggest pharmaceuticals company.
The U.S. government has said business leaders who attend the St. Petersburg International Economic Forum in May are sending “an inappropriate message, given Russia’s behaviour” in Ukraine.
The two big U.S. credit card companies, Visa and MasterCard, have both warned about the impact of proposed legislation in Russia – a response to U.S. sanctions – that will increase the control of the Russian authorities over its payment systems.
Rolls-Royce Chief Executive John Rishton said he was “reasonably optimistic” about the sale of the company’s energy business to Siemens going through, in a deal expected to raise at least 900 million pounds.
Britain’s financial watchdog, the Financial Conduct Authority, has banned a former co-worker of UBS rogue trader Kweku Adoboli from working in the financial services industry.
NYT
* Seattle Mayor Ed Murray presented on Thursday what he described as an imperfect but workable plan to increase the city’s minimum wage to $15 an hour, more than twice the federal minimum wage and one of the highest anywhere in the nation, through a series of complex and phased-in stages. (http://ift.tt/1i0eYQk)
* The White House, hoping to move the national debate over privacy beyond the National Security Agency’s surveillance activities to the practices of companies like Google and Facebook, released a long-anticipated report on Thursday that recommends developing government limits on how private companies make use of the torrent of information they gather from their customers online. (http://ift.tt/RaQ6LA)
* Ares Management LP, a private equity and debt investing firm, is expected to have its debut on the New York Stock Exchange on Friday, becoming the seventh major private equity firm to tap the public markets. The initial public offering was priced conservatively Thursday evening, raising $345.7 million for Ares and a large shareholder, the Abu Dhabi Investment Authority. The shares priced at $19 each, below an expected range of $21 to $23, according to a person briefed on the matter. (http://ift.tt/RaQ6v6)
* Merck & Co Inc, the big health care company, is close to a deal to sell its consumer unit to Bayer AG for about $14 billion, a person briefed on the matter said on Thursday. (http://ift.tt/1i0f0aV)
* Three federal agencies and one billionaire hedge fund manager have placed Herbalife Ltd under the microscope, scrutinizing whether the diet-supplements company is a pyramid scheme. But Herbalife is not the only one under investigation. Some federal authorities are pursuing other inquiries that might expand the regulatory gaze from Herbalife to the traders who traffic in the company’s stock. (http://ift.tt/RaQ86c)
* The auction site eBay Inc has settled a federal antitrust case that accused it of having a secret deal with Intuit Inc not to try to hire each other’s employees. (http://ift.tt/1i0f0aZ)
Canada
THE GLOBE AND MAIL
* Ontario’s Liberal government is ramping up the province’s deficit with a big-spending budget designed to either forestall an election or pay off at the polls in the event of a snap vote. (http://ift.tt/RaQ8mK)
* Toronto Mayor Rob Ford, on a leave to seek professional treatment for his addiction issues, is facing a growing chorus of calls to resign from business leaders, political rivals and his council colleagues. (http://ift.tt/1i0f0b1)
Reports in the business section:
* SNC-Lavalin Group Inc is selling its Alberta electricity transmission company AltaLink for C$3.2 billion to Warren Buffett’s Berkshire Hathaway Inc, as it moves away from infrastructure investments and puts its resources into engineering and construction. (http://ift.tt/RaQ8mM)
NATIONAL POST
* The Liberal minority government of Ontario has delivered a budget packed with new spending and tax hikes for high-income earners while allowing this year’s deficit to balloon to C$12 billion, C$2 billion higher than predicted. (http://ift.tt/1i0f0b7)
* Liberal Party of Canada Leader Justin Trudeau’s credibility has again come under fire from a member of his own party, with new allegations that he is stacking the deck to help star candidates win local nomination battles. (http://ift.tt/RaQ71Y)
FINANCIAL POST
* Canadian auto sales rose to record levels in April with Ford Motor Co narrowly outselling its rival Chrysler Canada Inc last month. Overall auto sales increased 4 percent year over year in Canada last month to 178,703 units, up 2 percent from the previous record set for April in 2008, according to figures collected by DesRosiers Automotive Consultants. (http://ift.tt/1i0f0bd)
* Canadian engineering giant SNC-Lavalin Group Inc is selling its entire stake in Alberta electricity transmission company Altalink for about C$3.2 billion to Warren Buffett’s Berkshire Hathaway Inc in a deal priced far beyond what the market had been expecting. (http://ift.tt/RaQ8D4)
Britain
The Telegraph
PFIZER MULLS HIGHER BID FOR ASTRAZENECA
Pfizer Inc is mulling a bid in excess of 63 billion pounds ($106.44 billion) for its smaller British rival AstraZeneca Plc, according to reports. (http://ift.tt/1pUPVUo)
SCOTTISH ‘YES’ VOTE COULD IMPROVE UK CREDIT, SAYS MOODY’S
Britain could end up with a better credit rating if Scotland votes for independence, with a “yes” providing the catalyst for an upgrade of the remaining UK’s debt, according to Moody’s. (http://ift.tt/1pUPY2w)
‘DANGEROUS’ TO IGNORE HOUSE PRICE BOOM, WARNS BOE DEPUTY
Surging house prices pose the single biggest threat to UK financial stability, the deputy governor of the Bank of England has warned. (http://ift.tt/1o8u3QW)
The Guardian
ELECTORAL COMMISSION VOIDS CBI LISTING AS NO CAMPAIGNER IN SCOTLAND VOTE
The Electoral Commission has nullified the Confederation of British Industry’s controversial registration as a no campaigner in the Scottish independence referendum, after ruling that the application was made by the wrong CBI official. (http://ift.tt/1o8u735)
FAT FACE AND PIZZAEXPRESS UP FOR AUCTION AS FIRMS TEST BUYERS’ APPETITES
Fat Face and PizzaExpress are the latest consumer brands to go under the hammer as private equity firms look to cash in on rising consumer confidence and buoyant financial markets. (http://ift.tt/1o8u3R0)
The Times
ROLLS CONFIDENT OF RETURN TO GROWTH
Rolls-Royce insisted yesterday that it would not be knocked off course despite a surging pound and a 30 million pound charge to fix a product defect. (http://ift.tt/1pUPVUx)
HENDERSON INVESTORS IN REVOLT OVER CHIEF’S PAY
This year’s bout of shareholder revolts over pay appeared to escalate yesterday after Henderson Group was given a bruising in the wake of a 4.5 million pound annual payout for Andrew Formica, its chief executive. (http://ift.tt/1pUPY2J)
The Independent
POUND LEAPS AFTER SURGE IN MANUFACTURING OUTPUT
The latest stunning evidence of a UK manufacturing revival sent the pound surging to a five-year high yesterday as the City upped its bets on early interest rate rises. (http://ift.tt/1pUPY2L)
HERITAGE OIL FOUNDER SELLS TO QATARI SHEIKH IN 1 BLN STG DEAL
The former prime minister of Qatar is buying Heritage Oil in a deal that values the explorer founded by the former mercenary Tony Buckingham at nearly 1 billion pounds. (http://ift.tt/1o8u47i)
Fly On The Wall 7:00 AM Market Snapshot
ECONOMIC REPORTS
Domestic economic reports scheduled today include:
Change in nonfarm payrolls for April at 8:30–consensus 215K
Unemployment rate for April at 8:30–consensus 6.6%
New York ISM for April at 9:45–consensus 54.0
Factory orders for March at 10:00–consensus up 1.4%
ANALYST RESEARCH
Upgrades
AmTrust Financial (AFSI) upgraded to Buy from Neutral at Compass Point
Aruba Networks (ARUN) upgraded to Outperform from Perform at Oppenheimer
Avanir (AVNR) upgraded to Buy from Neutral at Mizuho
Beazer Homes (BZH) upgraded to Buy from Neutral at Compass Point
Constant Contact (CTCT) upgraded to Outperform from Neutral at RW Baird
Dynegy (DYN) upgraded to Strong Buy from Buy at ISI Group
EP Energy (EPE) upgraded to Buy from Neutral at Mizuho
Endo (ENDP) upgraded to Overweight from Equal Weight at Morgan Stanley
Evercore Partners (EVR) upgraded to Buy from Neutral at UBS
General Dynamics (GD) upgraded to Neutral from Sell at Goldman
InvenSense (INVN) upgraded to Buy from Hold at Needham
Kennametal (KMT) upgraded to Outperform from Market Perform at Wells Fargo
LinkedIn (LNKD) upgraded to Buy from Neutral at UBS
Masco (MAS) upgraded to Neutral from Sell at Goldman
Masco (MAS) upgraded to Strong Buy from Market Perform at Raymond James
Maxwell (MXWL) upgraded to Buy from Neutral at Roth Capital
Mercer (MERC) upgraded to Outperform from Market Perform at Raymond James
Mohawk (MHK) upgraded to Outperform from Market Perform at Raymond James
Novartis (NVS) upgraded to Buy from Hold at Jefferies
OpenTable (OPEN) upgraded to Buy from Neutral at BofA/Merrill
Oracle (ORCL) upgraded to Buy from Hold at Societe Generale
Piedmont Office Realty (PDM) upgraded to Hold from Sell at Stifel
Texas Instruments (TXN) upgraded to Neutral from Reduce at Nomura
United Microelectronics (UMC) upgraded to Neutral from Underperform at BofA/Merrill
Wynn Resorts (WYNN) upgraded to Buy from Neutral at Sterne Agee
Downgrades
AXIS Capital (AXS) downgraded to Underperform from Market Perform at BMO Capital
Avon Products (AVP) downgraded to Neutral from Buy at BTIG
BNP Paribas (BNPQY) downgraded to Neutral from Outperform at Credit Suisse
Broadcom (BRCM) downgraded to Neutral from Buy at Nomura
Cabot Oil & Gas (COG) downgraded to Market Perform from Outperform at Bernstein
DCT Industrial (DCT) downgraded to Neutral from Buy at ISI Group
DirecTV (DTV) downgraded to Neutral from Buy at Citigroup
Oclaro (OCLR) downgraded to Neutral from Buy at B. Riley
PSEG (PEG) downgraded to Sector Perform from Outperform at RBC Capital
Procera Networks (PKT) downgraded to Sector Perform from Outperform at Pacific Crest
United Microelectronics (UMC) downgraded to Neutral from Buy at UBS
Vocera (VCRA) downgraded to Neutral from Overweight at JPMorgan
Wisconsin Energy (WEC) downgraded to Neutral from Buy at ISI Group
Initiations
GAIN Capital (GCAP) initiated with an Outperform at Keefe Bruyette
Gastar Exploration (GST) initiated with a Buy at Wunderlich
Gran Tierra (GTE) initiated with a Neutral at Goldman
Navient (NAVI) initiated with an Equalweight at Barclays
Navient (NAVI) initiated with an Outperform at Keefe Bruyette
COMPANY NEWS
Pfizer (PFE) confirmed delivery of increased offer of $84.47 per share to AstraZeneca (AZN)
AstraZeneca (AZN) rejected proposal from Pfizer (PFE) as ‘substantially’ undervalued
LinkedIn (LNKD) guided to FY14 revenues that were lower than analysts’ current forecasts. The company said it has no plans for a significant increase in China investment
Berry Plastics (BERY) CEO said business will improve in coming quarters
Verizon (VZ) said in a regulatory filing that it believes it would be “perverse and unjust” for the FCC to adopt rules that would “subsidize” companies like T-Mobile (TMUS) and Sprint (S) by allowing them to bid on airwaves set aside for smaller firms
InterContinental Hotels (IHG) announced a $750M special dividend
Royal Bank of Scotland (RBS) said on track to achieve capital targets
EARNINGS
Companies that beat consensus earnings expectations last night and today include:
Newell Rubbermaid (NWL), Hill-Rom (HRC), Alliant Energy (LNT), Dresser-Rand (DRC), Alon USA Energy (ALJ), Alon USA Partners (ALDW), XL Group (XL), MasTec (MTZ), Territorial Bancorp (TBNK), Black Hills (BKH), OpenTable (OPEN), Scansource (SCSC), Sequenom (SQNM), Northeast Utilities (NU), QLogic (QLGC), eHealth (EHTH), Chegg (CHGG), HCI Group (HCI), Bottomline Technologies (EPAY), Autobytel (ABTL), TeleCommunication Systems (TSYS), Mitek Systems (MITK), BioMarin (BMRN), Seattle Genetics (SGEN), Westport (WPRT), Ellie Mae (ELLI), Impax (IPXL), American Vanguard (AVD), Universal Electronics (UEIC), Audience (ADNC), Nutrisystem (NTRI), Tempur Sealy (TPX), Constant Contact (CTCT), Southwestern Energy (SWN), Akamai (AKAM), ON Semiconductor (ONNN), GigOptix (GIG), BJ’s Restaurants (BJRI), PMC-Sierra (PMCS), MICROS (MCRS), InterMune (ITMN), Federated National (FNHC), Web.com (WWWW), Maxwell (MXWL), DigitalGlobe (DGI), Addus HomeCare (ADUS), SBA Communications (SBAC), Outerwall (OUTR), Outerwall (OUTR), Vertex (VRTX), Skullcandy (SKUL), Omnicell (OMCL), Western Union (WU), A10 Networks (ATEN), Wynn Resorts (WYNN), LinkedIn (LNKD), FleetCor (FLT), Affymetrix (AFFX), Expedia (EXPE)
Companies that missed consensus earnings expectations include:
Northwest Natural Gas (NWN), Exelis (XLS), Berry Plastics (BERY), Cheniere Energy (LNG), Integrys Energy (TEG), Eldorado Gold (EGO), Oil States (OIS), Frank’s International (FI), Sierra Wireless (SWIR), Golden Minerals (AUMN), Southside Bancshares (SBSI), Multi-Fineline (MFLX), Bill Barrett (BBG), Manitowoc (MTW), Idenix (IDIX), Computer Programs (CPSI), LRR Energy (LRE), Medley Capital (MCC), Exelixis (EXEL), XPO Logistics (XPO), InvenSense (INVN), Insight Enterprises (NSIT), KEYW (KEYW), Entropic (ENTR), Kodiak Oil & Gas (KOG), Fluor (FLR), Actuate (BIRT), Oncothyreon (ONTY), Standard Pacific (SPF), ServiceSource (SREV), Rubicon (RBCN), RadiSys (RSYS), Procera Networks (PKT), DaVita (DVA), Bally Technologies (BYI), Cornerstone OnDemand (CSOD), DexCom (DXCM), FBL Financial (FFG), FBL Financial (FFG), Einstein Noah (BAGL)
Companies that matched consensus earnings expectations include:
Cheniere Energy Partners (CQH), Immersion (IMMR), Select Medical (SEM), Geron (GERN), SciQuest (SQI), Natural Grocers (NGVC), The Inventure Group (SNAK), First NBC Bank (NBCB), Callidus Software (CALD), Cerus (CERS)
NEWSPAPERS/WEBSITES
U.S. probing Herbalife (HLF) traders, NY Times says
DirecTV (DTV) likely open to a sale, WSJ reports (T)
Regulators against Sprint (S)-T-Mobile (TMUS) deal, sources say, NY Post reports
General Motors (GM) recalls over 50,000 Cadillac SRX SUVs, Detroit Free Press reports
Under Armour (UA) suits part of U.S. speedskating issues in Sochi, WSJ says
New York AG eyeing exchanges in high frequency probe (ICE, NDAQ), Reuters reports
SYNDICATE
Aldexa (ALDX) 1.5M share IPO priced at $8.00
Ares Capital (ARES) 11.4M share IPO priced at $19.00
Chimerix (CMRX) files $200M mixed securities shelf
EQT Midstream Partners (EQM) 10.75M share Secondary priced at $75.75
HD Supply (HDS) 30M share Secondary priced at $26.00
Immunomedics (IMMU) $30M share Spot Secondary; price range $3.35-$3.45
Investors Bancorp (ISBC) 219.581M stock offering priced at $10.00
Media General (MEG) 4.21M share Secondary priced at $15.50
Papa Murphy’s (FRSH) 5.833M share IPO priced at $11.00
Tetraphase (TTPH) files $125M mixed securities shelf
via Zero Hedge http://ift.tt/RaQz0l Tyler Durden
Another day where the taken for granted overnight futures levitation is missing (despite a rather rampy USDJPY), indicates that algos are likely waiting for guidance from today’s NFP data (buy if beat, buy more if miss) before committing monopoly money. The consensus for today’s NFP is 218K, (up from 192K), although as Goldman notes the whisper number is as high as 240K. As DB says, “the honest truth is that markets are in one giant holding pattern at the moment with volatility and conviction low.” One evidence of this is the AAII weekly sentiment indicator which shows the % bullish, bearish or neutral on the US stock market for the next six months. This week the neutral indicator (40.78) is at its highest level for 9 years. No wonder volumes and volatility are low if investors are lacking a directional bias. Yesterday’s reaction to the ISM manufacturing was interesting. Though the headline number came in firmer than expected (54.9 vs 54.3 expected) and more than 1pt higher than last month’s reading of 53.7, the UST and equity reaction suggested that the data had actually surprised to the downside.
In Europe muted price action observed across various asset classes today as market participants come back from May Day holiday and wait for US algos to take charge. In terms of macroeconomic releases, this morning’s release of lower than expected UK Construction PMI failed to result in a meaningful uptick by Gilts, which were weighed on by the unwind of Thursday’s pricing of Wellcome Trust’s GBP 400mln 45-year deal. Limited reaction to EU based PMIs (Italian Manufacturing PMI 54.0 vs. Exp. 52.9, French Manufacturing PMI 51.2 vs. Exp. 50.9, German Manufacturing PMI 54.1 vs. Exp. 54.2 and Eurozone Manufacturing PMI 53.4 vs. Exp. 53.3).
Looking at how Asia is trading this morning, the tone has been generally cautious, with volumes lower across the regions as many participants remain out of the office due to the May Day holidays yesterday, and looming golden week holidays in Japan. The Nikkei (-0.4%), KOSPI (-0.1%) are both lower, as is copper futures (-0.1%). Policy easing appears to be a more remote possibility in both China and Japan based on the latest comments from both country’s state leaders. In an article published late yesterday, Chinese Premier Li again voiced his opposition to short term stimulus policies to boost growth, instead preferring to pursue deeper economic reforms (South China Morning Post). In Japan, Prime Minister Abe said that the recent sales tax hike hasn’t hurt consumption as much as feared (Reuters), perhaps lessening hopes of incremental BoJ easing in the short term. A number of Japanese chain stores said that the sales drop was smaller in April than the one that followed the sales tax hike in 1997 (Japan Times). More than 80% of the Japan’s key retailers believe that the drop in demand following the April 1st tax hike will fade away by June, according to a Nikkei survey. More than seven out of 10 respondents said sales for April met or beat expectations (Nikkei).
Bulletin headline summary from Bloomberg and RanSquawk
US Event Calendar
EU & UK Headlines
Muted price action observed across various asset classes today as market participants await the release of the latest jobs report by the BLS. In terms of macroeconomic releases, this morning’s release of lower than expected UK Construction PMI failed to result in a meaningful uptick by Gilts, which were weighed on by the unwind of Thursday’s pricing of Wellcome Trust’s GBP 400mln 45-year deal. Limited reaction to EU based PMIs (Italian Manufacturing PMI 54.0 vs. Exp. 52.9, French Manufacturing PMI 51.2 vs. Exp. 50.9, German Manufacturing PMI 54.1 vs. Exp. 54.2 and Eurozone Manufacturing PMI 53.4 vs. Exp. 53.3).
Equities
Heading into the North American open stocks in Europe are seen mixed, as market participants await the release of the latest NFP jobs report by the BLS due later on in the session. In terms of notable stock movers, RBS shares surged in London after the bank posted better than expected operating profit, while also noting that it sees modest increases in NIM for rest of year. Also of note, AstraZeneca board rejected Pfizer’s revised GBP 50.00 per share bid, stating that the offer undervalues the company. Focus will now be on earnings by Chevron due out later today.
FX
Combination of weaker than expected UK Construction PMI data, together with reports that AstraZeneca board has rejected Pfizer’s revised GBP 50.00 per share bid meant that GBP/USD underperformed its peers. At the same time, this enabled EUR/GBP to recover off 0.8200 level and advance towards its 10DMA line.
Commodities
Reports that Libya’s Zueitina Port has received first crude tanker has failed to weigh on price, which instead were largely driven by the renewed fears surrounding the stand-off between Russia and Ukraine. Latest reports indicate that that two Ukrainian army helicopters were shot-down by self-defence forces in Slavyansk, according to sources. This follows the Ukrainian army reportedly beginning a special operation against pro-autonomy activists in the area. Additionally, Ukraine’s interim PM said his country was entering its ‘most dangerous 10 days’ since independence.
* * *
DB’s Jim Reid summarizes the balance of overnight news
It’s hard to imagine that we won’t see a fairly strong payroll number today but the question is whether we see a strong enough number to suggest that the US economy will soon be on the path most economists expected at the start of 2014. The 3, 6 and 12 month average for payrolls is 178k, 188k and 187k respectively. Interestingly this would suggest that the weather impact on payrolls this year might only be around 10k/month if you think growth this year is the same as last. If you believe growth is structurally higher in 2014 then we probably do need to be averaging north of 200k consistently and we therefore need a catch-up soon. The street is at 215k today with our very own sunnyside-up Joe Lavorgna at 240k. Consensus is expecting the unemployment rate to drop 0.1ppt to 6.6% (DB is at 6.5%) which if correct would equal the postcrisis lows recorded in January 2014. The other thing worth looking out for is the participation rate (63.2% last month) which has been gradually ticking higher since bottoming in October 2013.
We probably are in a period where strong data would be a relief with the caveat that a number above 250k might shake Treasuries enough for risk to be concerned. So 200-250k might be the sweet spot for equities. 150-200k would probably help the grind slightly higher as yields would stay low and base rate hikes pushed out. A number below 150k seems unlikely today but if it occurs would probably start to put chinks in the armour of the bulls. The above is all very back of the envelope as revisions, the unemployment rate, the participation rate, and other one-off issues can all impact the interpretation of the headline. But it gives an idea of what might happen with a clean number.
The honest truth is that markets are in one giant holding pattern at the moment with volatility and conviction low. One evidence of this is the AAII weekly sentiment indicator which shows the % bullish, bearish or neutral on the US stock market for the next six months. This week the neutral indicator (40.78) is at its highest level for 9 years. No wonder volumes and volatility are low if investors are lacking a directional bias. Yesterday’s reaction to the ISM manufacturing was interesting. Though the headline number came in firmer than expected (54.9 vs 54.3 expected) and more than 1pt higher than last month’s reading of 53.7, the UST and equity reaction suggested that the data had actually surprised to the downside.
Indeed S&P500 futures fell 7.5 points and treasury yields rallied by about 5bp in the minutes after the ISM release. Perhaps markets had been conditioned to expect a strong number following the strength of the Chicago PMI, ADP (Wednesday) and consumer spending reports earlier. Or perhaps it was the miss on the ISM Prices Paid index (56.5 vs 59.5 expected) which fell 2.5points MoM, with low inflation remaining a topical issue. The disappointment on yesterday’s construction spending number (0.2% vs 0.5% expected) could have also explained the market wobble. Looking at the ISM report in more detail, the improvement in the headline was driven by employment (54.7 vs. 51.1 prev) and supplier deliveries (55.9 vs. 54.0). Comments from the Institute for Supply Management indicated that some of the improvement in the former may be due to a catch-up from earlier weather-related weakness.
Coming back to the treasury market, yesterday’s post-ISM rally brought 10yr yields below the 2.60% mark for a brief period yesterday. It eventually finished the day back above this level, but we’re still firmly at the bottom of the last few months’ trading range. US 30yr yields fell to their lowest in around 10 months, and the 2s/30s curve flattened to its lowest level since June last year. In equities, the S&P500 (-0.01%) closed virtually unchanged with gains in the telco sector (largely M&A driven), offset by weakness in oil & gas following disappointing earnings announcement. Many EM markets were closed, but the announcement of the IMF loan for Ukraine did little to help Ukrainian bond yields which rose significantly. Overnight, there have been reports that Ukrainian military forces have launched a large scale operation in the town of Slaviansk (which lies between Kharkiv and Luhansk) to retake separatist-held areas (RT.com, Reuters). There have been reports of casualties on both sides. Outside of the macro data, M&A still is a key driving force for equities and the deal flow continued yesterday with news such as Pfizer planning to raise its bid for AstraZeneca and Bayer said to be talks with Merck to buy its consumer health unit. The final numbers for April showed that it was the busiest month for M&A in terms of volume since at least mid-2007 according to Bloomberg data. Despite the trend, the average premium paid by acquirers remains in line with historical averages (19-20%) suggesting at least there is some restraint being shown by corporate management. Whether it makes sense to be acquiring companies at near record stock prices is another matter.
Looking at how Asia is trading this morning, the tone has been generally cautious, with volumes lower across the regions as many participants remain out of the office due to the May Day holidays yesterday, and looming golden week holidays in Japan. The Nikkei (-0.4%), KOSPI (-0.1%) are both lower, as is copper futures (-0.1%). Policy easing appears to be a more remote possibility in both China and Japan based on the latest comments from both country’s state leaders. In an article published late yesterday, Chinese Premier Li again voiced his opposition to short term stimulus policies to boost growth, instead preferring to pursue deeper economic reforms (South China Morning Post). In Japan, Prime Minister Abe said that the recent sales tax hike hasn’t hurt consumption as much as feared (Reuters), perhaps lessening hopes of incremental BoJ easing in the short term. A number of Japanese chain stores said that the sales drop was smaller in April than the one that followed the sales tax hike in 1997 (Japan Times). More than 80% of the Japan’s key retailers believe that the drop in demand following the April 1st tax hike will fade away by June, according to a Nikkei survey. More than seven out of 10 respondents said sales for April met or beat expectations (Nikkei).
Turning to the day ahead, the final Euroarea PMIs will be released this morning together with the first readings for the periphery. The US payroll numbers are due 1:30pm London time which will be followed by US factors orders (consensus +1.5% MoM). China’s official services PMI will be released on Saturday.
via Zero Hedge http://ift.tt/1kvvd6p Tyler Durden
After a few days of extended verbal foreplay, it was only a matter of time before Ukraine finally snapped and resumed a military operation to regain the lost cities in the east, especially once the warmongering IMF made it explicitly clear that should Ukraine lose control of pro-Russian controlled cities the $17 billion bailout package would be lost too. Sure enough, early this morning Kiev launched a military operation to regain control of the pro-Russian separatist stronghold of Slovyansk, overrunning numerous roadblocks and surrounding the city, officials said, but meeting stiff resistance from militants who managed to shoot down at least one helicopter.
Pro-Russian soldier with a grenade launcher manning a checkpoint
Ukrainian soldiers stand guard at a Ukrainian checkpoint near the eastern town of Slaviansk May 2, 2014.
Credit: REUTERS/Baz Ratner
A pro-Russian separatist stands guard on top of an armoured personnel carrier in the town of Slaviansk in eastern Ukraine May 2, 2014.
Credit: REUTERS/Baz Ratner
Ukrainian soldiers stand guard at a Ukrainian checkpoint near the eastern town of Slaviansk May 2, 2014.
Credit: REUTERS/Baz Ratner
A Ukrainian military helicopter flies near a Ukrainian checkpoint near the town of Slaviansk in eastern Ukraine May 2, 2014.
Credit: REUTERS/Baz Ratner
According to WSJ reporters, Ukraine’s Interior Minister Arsen Avakov said militant fighters fought back against the advancing Ukrainian units with heavy weaponry, including grenade launchers and shoulder-fired surface-to-air missiles. There was no immediate sign that Ukraine’s forces were moving further into the city.
Separatist leaders claimed to have shot down four Ukrainian helicopters in the clash, Russian state media reported, but Ukraine’s defense ministry said two helicopters had been shot down and that two soldiers were killed and several more wounded. Ukraine’s state security service confirmed only one Mi-24 chopper was taken down, with one pilot killed and the other taken captive. A spokeswoman for the separatists said one person was killed and another wounded on their side.
Video clip of Ukraine army helicopters shot down in Slavyansk
Reuters adds that a third helicopter, an Mi-8 transport aircraft, was also hit and a serviceman wounded, the Defence Ministry said. The SBU security service said this helicopter was carrying medics.
Yet even this appears merely a preview of the event to come, which on request of western powers, may wait until after the market is closed on Friday afternoon.
Eight hours after Reuters journalists in Slaviansk heard shooting break out and saw one helicopter opening fire, the city of 130,000 was quiet, with shops shut and armed separatists in control of the streets while Ukrainian forces in armored vehicles had taken up positions on the outskirts of town.
Ukrainian officials said troops overran rebel checkpoints around the city in an operation launched before dawn and it was now “tightly encircled”. They pointed to the heavy fire that hit the helicopters as proof of the presence of Russian forces, despite repeated denials from Moscow that it has troops on the ground or is controlling the uprising.
And then the Russian warnings started:
Putin’s spokesman heaped blame on the Ukrainian government, which took power two months ago after pro-Western protests forced the Kremlin-backed elected president to flee to Russia. Noting that Putin had warned before that any “punitive operation” would be a “criminal act”, Dmitry Peskov told Russian news agencies that this was what had now happened at Slaviansk, where separatists seeking independence or annexation by Moscow are holding seven foreign European military observers.
Saying Putin had sent an envoy, Vladimir Lukin, to southeast Ukraine to negotiate their release, Peskov said that Lukin had not been heard from since the Ukrainian operation began.
“While Russia is making efforts to de-escalate and settle the conflict, the Kiev regime has turned to firing on civilian towns with military aircraft and has begun a punitive operation, effectively destroying the last hope of survival for the Geneva accord,” he said, referring to a deal on April 17 signed by Russia, Ukraine, the United States and the European Union.
Reuters is also reporting that Russian President Vladimir Putin’s spokesman said on Friday that Kiev would be held responsible “first of all by its people” for its decision to launch a “punitive operation” in south-east Ukraine.
Kremlin spokesman Dmitry Peskov, speaking on Rossiya 24 television, called on Europe and the United States to give their assessment of the situation in the area, where “aviation is being used against the population” and urged Kiev to think again about its actions, according to the report.
About as clear a warning as one can get that Russia is about to cross the border in a “peacekeeping” mission and get involved as well: hardly the de-escalation the priced to global pax Americana, and climatic perfection rigged and manipulated markets desire.
For now, however, the eye of the military hurricane may be passing over Slavyansk:
Reuters journalists in the city heard shooting from shortly after 4 a.m. (9 p.m. EDT Thursday) and saw a military helicopter open fire. Towards midday, the city was quiet, shops were shut but rebel gunmen appeared to be still in tight control of the streets. Ukrainian troops were at a halt in the suburbs.
The SBU said the deadly use by the separatists of shoulder-launched anti-aircraft missiles was evidence that “trained, highly qualified foreign military specialists” were operating in the area “and not local civilians, as the Russian government says, armed only with guns taken from hunting stores”.
Armed groups seeking union with Russia have seized a number of government buildings in towns in eastern Ukraine. The action in Slaviansk appeared to mark the heaviest military response by Kiev since it tightened a cordon around the city a week ago.
“They wanted to carry out some small-scale tactical operations just to scare the people,” said a militant manning a checkpoint leading to the army-held airfield. “But so far things have not worked out the way they wanted.”
The irony of course is that East Ukraine is for all intents and purposes lost to Kiev, and with the IMF ultimatum hanging over the acting government’s head, a civil was is now all but inevitable, a war which will most certainly end up involving both Russia and NATO eventually:
“Shells came into my garden,” said one local man, Gennady. “They say that they have come to defend us. But who from?” he said of the Ukrainian forces. “Civilians must stop them.” On the town’s southern outskirts, eight Ukrainian armored personnel carriers cut off the road but faced a cordon two deep of local residents shouting at them to go home.
So while we await the final escalation, here is some media coverage of what really happened.
Amateur footage from a resident in Slavansk shows a plume of smoke rising from the city on Friday morning.
Pictures have emerged in social media of a wounded helicopter pilot being helped into an ambulance by self-defense forces.
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— ??????????-LIVE (@NovorossiyaLive) May 2, 2014
helicopter just landed, dispatched another 20 troops and left againm Just outsdie slavyansk http://ift.tt/1pVVa6r
— Kate Parkinson (@katecctvnews) May 2, 2014
Former anti govt militia checkpoint outside Slavyansk taken over by Ukr militiary http://ift.tt/1pVVa6u
— Kate Parkinson (@katecctvnews) May 2, 2014
Ukrainian armored vehicles presses people in Yasnogorka
Helicopters above Slavyansk:
#Slovyansk: 4 #Russian MPADS bargain shoppers held over 2 downed #Ukrainian helos. #Ukraine #Sloviansk #Slavyansk http://ift.tt/1hjMmxQ
— Ukrainian Updates (@Ukroblogger) May 2, 2014
via Zero Hedge http://ift.tt/1hjNAJs Tyler Durden
The Olympia,
Washington, school district has placed a bus driver on leave after
video allegedly showed him bullying
a special needs student. Mariah Clevenger, 14, had been
complaining about the driver, who wasn’t named by local media, for
over a year. She said he called her dumb and threatened to kick her
off the bus. But her mother says she thought Mariah just might be
overreacting because of her disability.
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