“This story is developing. Please check back for further updates.
Economists in a Reuters survey expect a 0.3 percent decrease compared with a 0.4 percent decrease in March. Excluding automobiles, sales are expected to fall 0.1 percent versus a 0.4 percent drop in March.”
Comments »“European policy makers expressed a willingness to consider new ways to revive their ailing economy as they confronted fresh U.S. pressure to take action.
The bloc’s finance ministers and central bankers left weekend talks of the Group of Seven signaling that they’re poised to scale back austerity, are open to increased monetary aid and looking to unfreeze bank lending. European officials will meet in Brussels today to discuss the economy and review aid payments for crisis-struck nations from Greece to Spain.
Europe’s governments are in the midst of a policy rethink after three years of slimming budgets as they face up to a deepening recession in the euro area and a record unemployment rate that’s exceeded 12 percent. Still in doubt for economists is what kind of stimulus will actually be delivered and what effect it could have in the crisis-torn 17-member currency bloc.
“The new ‘fiscal realism’ is in evidence,” Mark Wall, co-chief European economist at Deutsche Bank AG in London, said in a report to clients. “Austerity may have reached its political limits and markets are happy to see some rebalancing. The key remains economic growth.”
Yields on sovereign debt that soared during the crisis have eased with the European Central Bank’s pledge to do whatever it takes to defend the euro. The single currency was little changed at $1.2986 as of 9:03 a.m. today.
Group of Seven finance chiefs indicated they will tolerate a sliding yen for now as they intensified their focus on Japan’s recovery strategy.
Finance ministers and central bankers reaffirmed their February commitment to “not target exchange rates” at a meeting in Aylesbury, near London, U.K. Chancellor of the Exchequer George Osborne told reporters May 11.
The Bank of Japan “can and should ease again if the current measure does not seem to be working,” Takuji Okubo, chief economist at Japan Macro Advisors in Tokyo, said in an e-mailed response to questions.
While signaling acceptance of the yen’s decline through 100 per dollar for the first time since 2009, G-7 policy makers said they examined Japan’s strategy and that they will monitor its impact on currencies. The yen has fallen 15 percent against the dollar this year and 13 percent versus the euro as the Bank of Japan stepped up monetary stimulus.
“Everybody watches exchange rate developments,” German Finance Minister Wolfgang Schaeuble said after the meeting. “We had a very intense discussion about Japan with our Japanese colleagues.”
The yen weakened past 102 per dollar for the first time since October 2008 today. It dropped 0.2 percent to 101.87 a dollar as of 10:12 a.m. in Tokyo after losing 2.6 percent last week, the most in five weeks. It fell to 102.15 earlier.
“Returns from the U.S. equity bull market that started four years ago are matching those from the last half of the 1990s even as valuations are 28 percent lower.
The Standard & Poor’s 500 Index has gained 26.2 percent annually including dividends since March 2009, the same as during the last 50 months of the technology bubble, according to data compiled by Bloomberg. Shares in the index now trade at 18.6 times annual profit, below the average 25.7 multiple in the 1990s rally led by Internet companies.
For bulls, the valuations show stocks will keep rising after the S&P 500 advanced 164 percent as individuals scarred by the worst financial meltdown since the Great Depression return to equities. Bears say the price-earnings ratios mean investors lack confidence in the economy and corporate profit growth. They also note that the last time returns were this high, the bubble popped and more than $5 trillion was erased from the value of U.S. stocks, according to data from the World Bank.
“The size of this rally’s not what keeps me up at night,” Paul Zemsky, the New York-based head of asset allocation for ING Investment Management, which oversees about $170 billion, said in a May 8 phone interview. “That was a tremendous rallythen, too, but I’m not getting all nervous based on the size of the rally this time, because we’re not there yet in terms of valuation.”
West Texas Intermediate crude fell for a third day, the longest run of declines in four weeks, as OPEC boosted output to the highest level in five months.
WTI slid as much as 1.2 percent, and London-traded Brent dropped for a second day. The Organization of Petroleum Exporting Countries produced 30.46 million barrels a day last month, up from 30.18 million in March, the group’s secretariat said May 10. That’s the most since November. Morgan Stanley predicted that the spread between WTI and Brent will widen as U.S. supplies accumulate.
“Even if demand surprises, the market is still likely to remain comfortably supplied,” said Andrey Kryuchenkov, an analyst at VTB Capital in London, who predicts that WTI will struggle to surpass $96.80 a barrel this month.
WTI for June delivery fell as much as $1.18 to $94.86 a barrel in electronic trading on the New York Mercantile Exchange and was at $95.18 at 12:00 p.m. London time. The volume of all contracts traded was 1.2 percent below the 100-day average.
Brent for June settlement lost as much as $1.24, or 1.2 percent, to $102.67 on the ICE Futures Europe exchange. The European benchmark crude was at a premium of $7.59 to WTI, the narrowest since January 2011, compared with $7.87 on May 10.
“Gold fell for a third day in New York as strength in the dollar may mean more declines in exchange-traded products holdings.
Holdings in gold-backed ETPs dropped 0.6 percent on May 10 as the dollar reached a five-week high against six major currencies, according to data compiled by Bloomberg. The U.S. Dollar Index climbed as much as 0.2 percent today as the Standard & Poor’s GSCI gauge of 24 commodities fell 0.6 percent.
“Commodities in general have been hurt by the dollar’s recent strength,” said Sun Yonggang, a macroeconomic strategist at Everbright Futures Co., a unit of one of China’s largest state-owned investment companies. “Investors are losing interest in gold.”
Gold for June delivery dropped 0.6 percent to $1,428.10 an ounce by 6:11 a.m. on Comex in New York. Prices dropped 1.9 percent last week, the first decline in three weeks….”
Comments »“Elan Corp. (ELN) agreed to pay $1 billion for a share of the royalties on new drugs fromTheravance Inc. (THRX) as the Irish drugmaker tries to persuade shareholders to spurn a takeover offer by Royalty Pharma.
Elan will receive 21 percent of the royalties earned by Theravance from GlaxoSmithKline Plc (GSK) on the four respiratory medicines, and 20 percent of that income stream will be paid to Elan shareholders as a dividend, the Dublin-based company said in a statement today. The transaction is subject to shareholder approval, it said.
Elan is adopting an investment model pioneered by Pablo Legorreta, chief executive officer of Royalty Pharma, which has offered to buy Elan for about $5.7 billion. The company’s board last month unanimously rejected the takeover bid, advising shareholders not to take action. Elan plans to announce several more deals this year, Chief Executive Officer Kelly Martin said in a phone interview today.
“This is just one piece of the puzzle,” Martin said. “This deal allows us to invest our long-termcash flow into interesting clinical and commercial assets.”
Elan’s hunt for new assets stems from Biogen Idec Inc.’s Feb. 6 agreement to buy Elan’s stake in the Tysabri multiple sclerosis drug for $3.25 billion in cash plus future royalties. The sale transformed the Irish company into an investment vehicle, since it has no operations. Elan said at the time that it planned to use the cash for possible acquisitions and would return some of the proceeds to shareholders.
“Australia’s dollar declined toward an 11-month low after a private report showed business confidence slid amid bets that the Reserve Bank will cut interest rates further to curb the currency’s strength.
The so-called Aussie weakened against most of its 16 major peers after Barclays Plc cut its forecast for the currency, citing Australia’s falling yield advantage. New Zealand’s dollar held a five-day loss versus the U.S. greenback as the premium on the South Pacific nation’s 10-year note rate over Treasuries was near a four-year low.
“The Australian dollar has a little bit more room to decline,” said Takuya Kawabata, an analyst at Gaitame.com Research Institute Ltd. in Tokyo, a unit of Japan’s largest currency margin-trading company. “A recovery in the Aussie above $1 and a further advance would fan speculation the RBA will cut borrowing costs again.”
Australia’s dollar lost 0.4 percent to 99.86 U.S. cents as of 4:14 p.m. in Sydney after touching 99.61 on May 10, the weakest since June 14 and halting a record 10-month stretch of trading above parity. New Zealand’s currency was little changed at 83.03 U.S. cents.
The extra yield that investors receive to hold New Zealand’s benchmark 10-year note instead of similar-maturity Treasuries was at 1.44 percentage points after falling to 1.42 on May 3, the least since January 2009…..”
Comments »“Japanese stocks rose, with the Topix Index extending a 4 1/2-year high, as the yen weakened past 102 against the dollar after the Group of Seven signaled tolerance for the currency’s drop.Nissan (7201) Motor Co. and Panasonic (6752) Corp. jumped after posting earnings.
Brokerages rose the most among the 33 Topix industry groups, with Nomura Holdings Inc. surging 9.6 percent. Nissan added 4.5 percent after the automaker forecast net-income to grow 23 percent based on an assumption the yen will trade at 95 to the dollar. Panasonic gained 7.6 percent after the electronics maker topped estimates for operating profit. Sharp Corp. climbed 12 percent after the Nikkei newspaper reported the money-losing TV maker plans to pare its European operations.
The Topix advanced 1.8 percent to close at 1,232.20 in Tokyo, the highest close since Aug. 29, 2008. More than nine stocks gained for every seven that fell. The Nikkei 225 Stock Average (NKY) added 1.2 percent to 14,782.21, with volume 42 percent above the 30-day average.
“G-7 has given a nod to Japan’s measures to beat deflation,” said Kuninobu Takeuchi, Tokyo-based executive portfolio manager at DIAM Co, which oversees the equivalent of about $98 billion. “Exiting deflation means growth, enabling companies to expand. Companies tend to put forward conservative profit forecasts, say a 30-40 percent increase, while the market is pricing growth of 40-50 percent.”
The Topix and the Nikkei have been the top-performing major equity gauges since mid-November, advancing more than 70 percent amid unprecedented monetary easing from theBank of Japan and calls from Prime Minister Shinzo Abe to end deflation.
“BHP Billiton Ltd. (BHP), the world’s biggest exporter of steelmaking coal, may face a drop in contract prices to a record low in the third quarter amid rising supply and weaker Asian demand.
Asian buyers will probably pay $165 a metric ton for hard coking coal in the three-month period starting July 1, according to the median estimate of five analysts surveyed by Bloomberg News. That would match the record low for contracts set in the first quarter and compare with $172 a ton in the second quarter. Spot prices have slid 11 percent since March, data compiled by Bloomberg show.
Rising supply from Mongolia and South Africa has added to an increase from Australia, which is rebounding from January floods that shut rail lines and curbed exports. A slowing Chinese economy is also causing weakness in the price, Shuma Uchino, the chief financial officer of Mitsubishi Corp. (8058) said in Tokyo on May 8. The Japanese company is a partner in the world’s biggest exporter, the BHP Billiton Mitsubishi Alliance.
“There’s too much supply,” said Daniel Hynes, the Sydney-based head of commodity strategy at CIMB Group Holdings Bhd. (CIMB) who predicts contracts may be settled at $180 a ton. “There’s a recovery from the Australian market, which is compounding weak demand from China and Japan, the biggest importer of premium hard coking coal. That has meant that the market has remained relatively weak.”
Yields for Italy, Spain, France, and Germany …
Comments »It has become increasingly clear that web crime, hacking, and general mayhem is being unleashed via the web.
This documentary shows just how vulnerable the interweb is and why you should be extremely careful of what you use a computer for.
Cheers on your weekend!
[youtube://http://www.youtube.com/watch?v=34cwMz3HZ8Q 450 300]If you did not get enough from the above documentary here is another documentary to chomp on…
[youtube://http://www.youtube.com/watch?v=Rj35GguOAGE 450 300] Comments »[youtube://http://www.youtube.com/watch?v=d9fC3flXY5g 450 300] [youtube://http://www.youtube.com/watch?v=N8LZGQ4MkvQ 450 300]
Comments »“Now seems like a great time to invest in the stock market, which has continued its bullish ways this year. But then why has stock ownership reached a 15-year low?
Gallup’s annual Economy and Finance survey, conducted April 4-14, found that only 52% of Americans currently are playing the market. That’s the lowest rate since at least 1998, when Gallup began tracking stock ownership. Even that figure is deceptive because about half of Americans who do own stock do so only through pension funds, mutual funds and other accounts they don’t control.
Meanwhile, the Dow Jones Industrial Average reached 15,000 recently, for the first time ever….”
Comments »“SAN JUAN, Puerto Rico — Federal authorities in Puerto Rico have arrested an executive at Pfizer Pharmaceutical for allegedly producing child pornography.
Officials say 48-year-old Reinaldo Diaz Camacho was charged after Puerto Rico police received information that he was having sexually explicit conversations with a 16-year-old boy on Facebook.
U.S. Attorney Rosa Emilia Rodriguez said Thursday that the boy’s mother told authorities she had seen the conversations on her son’s cellphone….”
Comments »“Rail traffic trends have been undoubtedly weak in recent weeks as we’ve seen double digit year over year growth slide into negative territory. This brought our 12 week moving average from a high of 6.75% in March to the low single digits.
The latest intermodal traffic data from AAR showed 2.8% growth which is an improvement from last week’s 1.6% reading, but still trending lower on a monthly basis. We’re now at a 3 month low in the moving average at 3.13%. So there are some small signs of stability, but the overall trend is still down….”
Comments »“We have tracked the key short interest changes as of April 30 in these large cap stocks: General Electric Co. (NYSE: GE), Nokia Corp. (NYSE: NOK), Bank of America Corp. (NYSE: BAC), Verizon Communications Inc. (NYSE: VZ), Alpha Natural Resources Inc. (NYSE: ANR), McDonald’s Corp. (NYSE: MCD), Apple Inc. (NASDAQ: AAPL), BlackBerry (NASDAQ: BBRY), Microsoft Corp. (NASDAQ: MSFT), Dell Inc. (NASDAQ: DELL), Green Mountain Coffee Roasters Inc. (NASDAQ: GMCR) and Cisco Systems Inc. (NASDAQ: CSCO)….”
Comments »Upgrades – AGN, AWK, ABFS, BA, BSX, EIX, NUAN, PRLB, DDD, TEVA, WDAY, Z,
Downgrades – AES, CVC, DF, DNDN, FRX, LTD, MYL, OPTR, RCII, SHPG, TECH,
Comments »
