Black Gold Falls as OPEC Inventory Hits Five Month Highs

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.

Saudi Output…”

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“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….”

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“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.

‘Risk Spectrum’….”

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“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…..”

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“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.

Brokerages Rally…”

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“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.”

Supply Increase…”

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World Markets

Currencies

Commodities

USD Libor

Euribor

Yields for Italy, Spain, France,  and Germany …

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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]

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[youtube://http://www.youtube.com/watch?v=d9fC3flXY5g 450 300] [youtube://http://www.youtube.com/watch?v=N8LZGQ4MkvQ 450 300]

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“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….”

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“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….”

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“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….”

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“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)….”

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SOURCE

NYSE

NASDAQ

AMEX

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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,

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In Play ,

On the Wires 

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“With U.S. stocks hitting all-time highs and bond yields under pressure, bubble talk is rampant. But you shouldn’t pay any attention to it, according to Princeton economics professor and New York Times columnist Paul Krugman.

In his Friday column, Krugman writes that there “definitely” is no bond bubble and is “probably not” a stock bubble, either.

The Nobel laureate takes a stab at defining a bubble, calling it a situation in which asset prices appear to be based on implausible expectations for the future. Think of dot-com prices in 1999 or housing prices in 2006. In the latter case, housing prices only made sense if you thought home prices would continue to significantly outpace buyers’ income for years.

When it comes to bonds, you wouldn’t want to buy a 10-year Treasury at a yield of less than 2% if you believed the Fed would be raising short-term rates to 4% or 5% soon, notes Krugman notes, who then asks why you’d believe any such thing:

The Fed normally cuts rates when unemployment is high and inflation is low — which is the situation today. True, it can’t cut rates any further because they’re already near zero and can’t go lower. (Otherwise investors would just sit on cash.) But it’s hard to see why the Fed should raise rates until unemployment falls a lot and/or inflation surges, and there’s no hint in the data that anything like that is going to happen for years to come.

There are several reasons for the bubble fears, but one may have something to do with what he describes as a “deep hatred” for U.S. Federal Reserve Chairman Ben Bernanke “and everything he does.” ….”

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“The yen broke through the 100 dollar resistance level Friday and was trading at 101.63, its weakest level in more than 4 ½ years.

Now the question is will how low can it go. David Baran, co-founder of Tokyo-based hedge fund Symphony Financial Partners, says he doesn’t see the dollar stopping until 115 to 118 yen.

“Give it time, it will happen,” he tells The Wall Street Journal….”

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“Federal securities regulators have been slow to revamp rules abused by corporate insiders to trade their company stocks, according to a group of pension funds and a former SEC commissioner.

In a letter Thursday to the Securities and Exchange Commission, the Council of Institutional Investors urged the agency for the second time in four months to tighten rules on government-sanctioned trading plans that allow corporate executives and directors to sell shares despite potentially having knowledge of nonpublic information about their companies.

The group, which represents pension funds overseeing more than $3 trillion in assets, cited a series in The Wall Street Journal on the issue. The articles have triggered criminal and civil investigations into whether executives and directors improperly profited from trading their company shares while in possession of confidential information.

“There are some abuses going on—even broader than some had suspected,” Jeff Mahoney, the group’s general counsel, said in an interview.

Mary Jo White, the SEC’s new chairman, declined to comment through a spokesman. The SEC hasn’t ruled out taking action to amend its guidance or regulations on the plans, but no such review is under way, according to a person familiar with the agency.

For now, the SEC intends to continue to tackle any abuses of the plans through enforcement actions, the person added…..”

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“Investors are overlooking Facebook‘s potential at their own peril, Leon Cooperman of Omega Advisors said Thursday on CNBC.

“We think that people are underestimating the mobility opportunity that exists in Facebook,” he said. “We think ultimately they could achieve a market cap comparable to a Google, which would make the stock very, very rewarding.” …”

See why Cooperman likes $FB

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