Sr. China Official Says China Should Guard Against a Weak Dollar Policy

Perhaps we should guard against lead, melamine, and plastic rice..

“(Reuters) – China should guard against risks from “excessive” holdings of U.S. assets as Washington could pursue a policy to weaken the dollar, a senior currency regulator said in comments published on a website that briefly pushed the dollar lower.

However, the comments by Guan Tao of the State Administration of Foreign Exchange were quickly removed from the website at his request. He told Reuters the comments had been made in private academic discussions and represented his personal view only.

“We must be alert of economic and political risks in excessive holdings of U.S. dollar assets,” Guan, head of the international payment department at SAFE said in the article on the website of China Finance 40 Forum, a Beijing-based think-tank of Chinese economists, bankers and officials. (www.cf40.org.cn)”

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“Almost 40% of homeowners who took out second mortgages—extracting cash from their residences to cover everything from vacations to medical bills—are underwater on their loans, more than twice the rate of owners who didn’t take out such loans.

The finding, in a report to be released Tuesday by real-estate data firm CoreLogicInc., illustrates the consequences of easy borrowing amid the housing boom’s inflated prices. The report says 38% of borrowers who took cash out of their residences using home-equity loans are underwater, or owe more than their home is worth. By contrast, 18% of borrowers who don’t have these loans were underwater.

It’s not clear how much cash withdrawn from homes during the boom was used to acquire luxuries such as expensive automobiles, and how much went to basic necessities, including tuition expenses, or renovations intended to raise a property’s value.”

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“WASHINGTON (Reuters) – U.S. job openings were harder to come by in April as private sector hiring ebbed, further evidence that the labor market remains precarious, Labor Department data showed on Tuesday.

There were 2.97 million open positions in April, down from 3.12 million in March, according to the government’s Job Openings and Labor Turnover Survey (JOLTS). The hiring rate dipped slightly to 3.0 percent from 3.1 percent.

Private sector hires slipped to 3.71 million from 3.81 million, and the rate eased to 3.4 percent from 3.5 percent.

The level of total hires has risen from a trough of 3.6 million in October of 2009, but remains well below the 5.0 million leveled that prevailed before the economy entered a prolonged recession, at the end of 2007.

The report comes just as data last week showed the economy added a disappointing 54,000 new jobs in May and the unemployment rate rose to 9.1 percent, sparking worries the recovery might be faltering.

The JOLTS figures encompass employment data from about 16,000 establishments across the country.

(Reporting by Pedro Nicolaci da Costa, Editing by Chizu Nomiyama)

(This story is corrected to show April and March figures in paragraph 2)”

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Well that means he will take a dirt nap….

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No. Ticker % Change
1 TIN 41.46
2 CNAM 36.55
4 MSHL 11.36
5 ISNS 10.89
6 CUR 10.71
7 HOKU 9.68
8 CMFO 9.61
9 CADC 9.60
10 IGC 9.52
11 WAC 8.82
12 OVTI 8.50
13 MRNA 8.19
14 AGYS 8.11
15 EXEL 7.94
16 LTON 7.92
17 CEP 7.85
18 MOBI 7.50
19 GRRF 7.46
20 RODM 7.41
21 UNIS 7.41
22 GPK 7.40
23 MOD 7.19
24 CXZ 7.14
25 LAD 6.93

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Now up 6%+, nearing $28

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Upgrades

MTG – MGIC Investment initiated with a Positive at Susquehanna

APA – Apache upgraded to Strong Buy from Outperform at Raymond James

CPO – Corn Products upgraded to Buy from Hold at Deutsche Bank

KEY – KeyCorp upgraded to Buy at Compass Point

XLNX – Xilinx upgraded to Neutral from Sell at Goldman

BEAV – BE Aerospace added to Conviction Buy List at Goldman

PRXL – PAREXEL downgraded to Market Perform from Outperform at Raymond James

EXPE – Expedia target raised to $33 from $29 at Citigroup

UTHR – United Therapeutics downgraded to Neutral from Add at Citadel

FTNT – Fortinet target raised to $27 at Wedbush on continued share gains

AEZS – Aeterna Zentaris initiated with a Outperform at Oppenheimer

JNPR – Juniper Networks upgraded to Overweight from Equal Weight at Evercore Partners

AAPL – Apple’s halo shines brighter with iCloud – Oppenheimer

QDEL – Quidel: Hearing upgraded at William Blair

SYMC – Symantec upgraded to Outperform from Neutral at Cowen

TQNT – TriQuint Semi initiated with Buy at Cantor Fitzgerald

PFCB – PF Chang’s upgraded to Neutral from Underperform at Credit Suisse

Downgrades

S – Sprint Nextel downgraded to Sell at Stifel Nicolaus

OPEN – OpenTable: Spotlight trends slowing, competitive outlook increasing, awaiting new product – Benchmark

CA – CA Tech downgraded to Neutral from Outperform at Cowen

NARA – Nara Bancorp downgraded to Market Perform from Strong Buy at Raymond James

FTR – Frontier Communications downgraded to Underperform from Neutral at Macquarie

CTXS – Citrix Systems downgraded to Underweight from Neutral at JP Morgan

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Gapping up

TIN +41.6%, SLV +1.8%, RIO +3.5%, BHP+3.4%, WY +3.1%, MT +2.8%, GFI +2.2%, SLRC +2.1%, TOT+2.1%, SWKS +2.7%, SAP +1.4%, EXPE +2.5%, DB +2.4%, RMBS +2.3%, BBL +2.3%, RDS.A +1.2%, MIND +14.9%, BZ +7.1%, RBS +2.7%, ING +2.7%,  DB +2.4%, LYG +2.3%, FRO +6%, OCZ +4.9%, PKG +4.4%, COOL +4.3%, KS +4%, IP +3.9%,BCS +2.6%, MWV +2.5%,

Gapping down

TLB -27.6%, LPHI -10.3%, FCEL -8.4%, HBI -14.7%, GIII -8.2%, OXGN -2%PBY -13%,

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In Play

On the Wires

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“NEW YORK—U.S. stock futures rose in an attempt to halt a four-session losing streak, as a rebound in European markets and corporate merger news helped give investor sentiment a lift ahead of a speech by the Fed chief Ben Bernanke.

About 90 minutes before the opening bell, Dow Jones Industrial Average futures gained 43 points to 12130, while Standard & Poor’s 500-stock index futures advanced 6 points to 1291. The Dow lost 480 points over the last four sessions, and the S&P 500 closed below 1300 for the first time in 2½ months. Nasdaq 100 futures gained 7 points to 2281. Changes in stock futures don’t always accurately predict stock moves after the opening bell…..”

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“Ford CEO Alan Mulally will tell investors his company plans to increase sales by 50 percent over the next four years, CNBC has learned.

Ford [F  13.91   -0.10  (-0.71%)   ] is targeting annual global sales of 8 million vehicles by 2015. Last year, Ford sold 5.3 million cars, trucks, and SUVs around the world.

Mulally’s growth plan hinges on a rapid expansion in Asia and Africa as well as increased sales of small cars.

By the end of the decade, Ford expects 55 percent of the vehicles it sell around the world to be small cars.

China, India and the developing markets in Asia and Africa have long been areas where Ford has trailed competitors. The company only gets 15 percent of its global sales in those regions, but it is planning to double that figure to 30 percent by 2020.”

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“(Reuters) – Women’s clothing retailer Talbots Inc (TLB.N) warned its revenue would fall for the fifth straight quarter even as heavy discounting shrinks its margins, and its shares tumbled 25 percent before the markets opened.

Like most clothes retailers, Talbots is having a tough time juggling high costs of raw materials and gasoline with the need to discount heavily to keep customers interested.

An unseasonably cold weather also added to its troubles.”

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“European stocks rose, rebounding from a 10-week low, as investors speculated that recent losses had overestimated the slowdown in the global economic recovery. U.S. futures climbed and Asian shares were little changed.

ING Groep NV (INGA) gained 1 percent as the Dutch bank was said to have received takeover approaches for its U.S. online unit. Credit Agricole SA (ACA) and Sky Deutschland AG (SKYD) climbed as brokerages recommended buying the shares of both companies. Mitchells & Butlers Plc (MAB)surged following a report that a group of investors may bid for the pub and restaurant owner.

The benchmark Stoxx Europe 600 Index advanced 0.1 percent to 272.38 at 12:12 p.m. inLondon, its first gain in five days. Standard & Poor’s 500 Index futures expiring in June increased 0.5 percent to 1,291, while the MSCI Asia Pacific Index rose 0.1 percent today.

“Investors have probably overestimated risk in the last few days,” said Matthias Jasper, the head of equities at WGZ Bank AG in Dusseldorf. “Equities are cheap relative to bonds. Companies are very healthy.”

The Stoxx 600 has fallen 2.9 percent since the beginning of the month and is currently trading at about 13 times its companies’ reported earnings, near the cheapest valuation since April 2009, according to data compiled by Bloomberg. Fifty-eight percent of companies in the gauge that have announced earnings since April 11 topped the average analyst estimate for per-share profit.”

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“Japanese stocks gained for the first time in four days as Tokyo ElectricPower Co. advanced after the government said it didn’t support a breakup of the utility and as carmakers climbed.

Tokyo Electric, operator of the nuclear plant crippled by the March 11 earthquake and tsunami, rebounded from yesterday’s record 28 percent plunge. Toyota Motor Corp. (7203) climbed 2.2 percent after the company said it will be able to announce earnings forecasts this week, boosting confidence that the world’s No. 1 carmaker is recovering from the quake. Camera-maker Canon Inc. (7751) sank 2.6 percent after the end of a share buyback program.

The Nikkei 225 (NKY) Stock Average gained 0.7 percent to 9,442.95 at the 3 p.m. close in Tokyo, fluctuating between gains and losses more than 20 times in the morning session after the yen rose against the dollar last night. The broader Topix rose 0.7 percent to 813.76. Stocks in the index trade at an average of 0.93 times book value, the lowest level among the world’s 15 largest equity markets.”

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“Crude rose, reversing earlier losses, amid speculation the Organization of Petroleum Exporting Countries may reduce supply in response to slowing demand.

Futures gained as much as 0.3 percent in New York. The International Energy Agency on May 12 trimmed its 2011 global oil demand forecast for the first time as this year’s price rally begins to weigh on consumers. There is a 65 percent chance OPEC will raise its production quota to lessen the risk high prices will curb demand, Societe Generale SA said in a report.

“The current data coming out suggest a fall off in economic activity and a decrease in demand,” said Alexander Ridgers, head of commodities at CMC Markets in London. “If this happens OPEC will tighten their supply.”

Crude for July delivery rose as much as 29 cents to $99.30 a barrel in electronic trading on the New York Mercantile Exchange and was at $99.14 at 10:33 a.m. London time. Prices are up 39 percent the past year. Brent crude for July delivery was at $114.78 a barrel, up 30 cents, on the London-based ICE Futures Europe exchange.”

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“Gold gained for a third day in London as concern about Europe’s debt crisis, signs that the U.S. economy is slowing and a weakening dollar spurred demand for the metal as an alternative investment. Palladium climbed.

U.S. payrolls grew at the slowest pace in eight months in May and manufacturing expanded at its slowest pace in more than a year, reports showed last week. The European Union needs to reach an accord on Greece’s debts before finance ministers meet on June 20, EU Economic and Monetary Affairs Commissioner Olli Rehn said yesterday. The dollar slid to a one-month low against six currencies. Gold typically moves counter to the greenback.

“Speculation U.S. economic growth is losing pace and the Greek debt crisis is worsening” is supporting gold, John Meyer, an analyst at Fairfax IS in London, wrote in a report today. “The dollar is off this morning, helping support prices as they push toward the record.”

Immediate-delivery gold gained $4.68, or 0.3 percent, to $1,549.32 an ounce by 11:30 a.m. in London. It yesterday reached $1,553.65, the highest price since May 2. Gold for August delivery was 0.2 percent higher at $1,550.10 an ounce on the Comex in New York.

Bullion was little changed at $1,548.40 an ounce in the morning “fixing” in London, used by some mining companies to sell output, from $1,549 at yesterday’s afternoon fixing.”

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“A failure by European regulators to make banks raise enough capital to withstand a sovereign default is complicating efforts to resolveGreece’s debt crisis.

The “fragilities” of Europe’s banking industry mean a Greek default isn’t an option, European Union Economic and Monetary Affairs Commissioner Olli Rehn said in New York last week. By delaying a decision some investors consider inevitable, policy makers risk increasing the cost to European taxpayers and prolonging Greece’s economic pain.

“European officials are trying to buy time for the troubled economies to get their house in order and the banks to be strengthened,” said Guy de Blonay, who helps manage about $41 billion at Jupiter Asset Management Ltd. in London.

While estimates of the capital shortfall vary, the vulnerability of European banks to a sovereign shock isn’t disputed. Independent Credit View, a Swiss rating company that predicted Ireland’s banks would need another bailout last year, found in a study to be published tomorrow that 33 of Europe’s biggest banks would need $347 billion of additional capital by the end of 2012 to boost their tangible common equity to 10 percent, even before any sovereign default.

European banks had $188 billion at risk from the government debt of Greece, Ireland, Portugal and Spain at the end of 2010, according to a report this week from the Bank for International Settlements. European lenders held $52.3 billion in Greek sovereign debt, with German banks owning the biggest share, the BIS data showed.

‘Voluntary’ Role”

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“Factory orders in Germany, Europe’s largest economy, rebounded in April from a slump in the previous month, led by stronger demand for investment goods.

Orders, adjusted for seasonal swings and inflation, rose 2.8 percent from March, when they plunged a revised 2.7 percent, the Economy Ministry in Berlin said in a statement today. Economists had forecast a gain of 2 percent, according to the median of 37 estimates in a Bloomberg News survey. In the year, orders rose 10.5 percent, when adjusted for work days.

Germany’s recovery is broadening as companies boost investment and hiring to meet booming export demand from emerging Asia, even as surging energy prices are sapping households’ spending power and countries including Greece toughen austerity measures. While first-quarter growth was probably “overstated,” the economy is in a “good condition,” Bundesbank President Jens Weidmann said on May 23.”

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