Bloomberg:
- Town With No Fowl Shows Consequences of China’s Bird Flu Threat. In the village on the outskirts of Beijing where a 7-year-old girl became the Chinese capital’s first bird flu patient, poultry are conspicuous by their absence. Authorities culled chickens and shut live poultry stalls to limit human exposure to farmed birds, which scientists believe are the most probable reservoir of the new H7N9 influenza strain. In the village of Gucheng, 20 kilometers (12 miles) northeast of central Beijing, the only source of chicken readily available to residents is in a supermarket that’s a 30-minute bus ride away.
- China Refuses to Confirm Okinawa Island Belongs to Japanese. China refused to confirm that Okinawa belongs to Japan after two Chinese scholars suggested re-examining the ownership of the archipelago that includes the island, adding to tensions over a separate territorial dispute. Agreements between allied forces during World War II mean the ownership of the Ryukyu Islands may be in question, the researchers said in a commentary in the People’s Daily, the Communist Party’s main newspaper. Asked if China considers Okinawa part of Japan, Foreign Ministry spokeswoman Hua Chunying said scholars have long studied the history of the Ryukyus and Okinawa.
- China’s Stocks Fall From on Drop in Producer Prices. China’s stocks fell for the first time in five days, led by energy and industrial companies, after producer-price declines deepened. Liquor makers rose. Datong Coal Industry Co. (601001) and Anhui Conch Cement Co. slid at least 1.8 percent after the statistics bureau said producer prices dropped 2.6 percent in April from 1.9 percent a month earlier. Kweichow Moutai Co. (600519), China’s biggest liquor maker, jumped 3.8 percent after Shenyin & Wanguo Securities Co. recommended buying the stock. The producer-price reading “indicates the economic recovery is weaker than expected as demand for industrial products looks pretty sluggish,” said Wang Weijun, a strategist at Zheshang Securities Co. in Shanghai.
- Druckenmiller Recommends Betting Against Australian Dollar. Stanley Druckenmiller, who made $1 billion for George Soros as his chief strategist by forcing a devaluation of the British pound in 1992, said investors should bet against the Australian dollar. “We think the Australian dollar will come down and will come down hard,” Druckenmiller said today at the Sohn Investment Conference in New York. “It's expensive.”
- Asian Stocks Rise Fourth Day on Earnings; Toyota Gains. Asian stocks climbed, with the regional benchmark index on course to extend a five-year high, as the Bank of Korea cut interest rates and companies from Toyota Motor Corp. (7203) to Mitsui & Co. forecast higher profit. The MSCI Asia Pacific Index advanced 0.3 percent to 143.93 as of 10:55 a.m. in Tokyo, gaining for a fourth day.
- JPMorgan(JPM) Says Energy Watchdog May Seek to Punish Units, Workers. JPMorgan Chase & Co., the biggest U.S. bank, was warned by federal energy-market regulators that its personnel and two subsidiaries may face claims stemming from a probe into bidding practices. Federal Energy Regulatory Commission staff told JPMorgan in March they may recommend the agency bring an enforcement case, the New York-based company said yesterday in a regulatory filing. Claims may include “alleged violations of FERC rules and the rules of certain independent system operators,” the lender said, without elaborating on the allegations.
- Diplomat Airs Benghazi Attack Details. In Riveting Account of Libya Raid, Official Knocks Administration Response. A high-ranking American diplomat delivered an emotional reconstruction Wednesday of the Sept. 11, 2012, attacks on the U.S. consulate in Benghazi, Libya, providing the first detailed public account from an American official who was on the ground in Libya. The testimony from Gregory Hicks, the No. 2 U.S. official in Libya at the time, before the House Oversight and Government Reform Committee also drew new attention to key questions about the attacks, and how the administration handled the aftermath. The diplomat said he believes the U.S. military could have done more to assist U.S. personnel on the ground. He also said top officials in Washington overlooked information in their early conclusion, since abandoned, that the attack began as a protest.
- Big Banks Push Back Against Tighter Rules. The nation's biggest banks are going on the offensive to fend off growing efforts in Washington to rein them in. The banks have hired longtime, influential Washington hands to deflect regulatory and political pressure to strengthen their finances and to sell assets. Regulators and some lawmakers have raised concern that large banks remain "too big to fail" and could require another government bailout in the event of a new financial meltdown.
- U.S. Is Warned Russia Plans Syria Arms Sale. Israel has warned the U.S. that a Russian deal is imminent to sell advanced ground-to-air missile systems to Syria, weapons that would significantly boost the regime's ability to stave off intervention in its civil war.
- Asia Wrestles With a Flood of Cash. Asian Central Banks Struggle to Tamp Down Strong Currencies. Central banks in Asia, Australia and New Zealand are ratcheting up moves to deal with an influx of capital that is keeping currencies strong and complicating efforts to manage growth. New Zealand's central bank said Wednesday it intervened in foreign-exchange markets to blunt the rise of its currency and would continue to do so, a day after Australia's central bank cut interest rates to a record low and noted the stubborn strength of the Australian dollar. Elsewhere, China is moving to curb bets on the rising yuan, while Thailand is considering efforts to curb the strongest baht since the 1997 Asian financial crisis.
- Henninger: Meet Generation Jobbed. Who will get the political blame for the sky-high joblessness among younger voters?
- Whistle-blower: Botched talking points hurt FBI probe of Benghazi attack. A key Benghazi whistle-blower, responding to Democratic claims that the prolonged scrutiny over the administration's botched talking points is unwarranted, testified Wednesday that the early mischaracterization of the attack may have actually hurt the FBI's investigation. "I definitely believe that it negatively affected our ability to get the FBI team quickly to Benghazi," said Greg Hicks, the deputy chief of mission in Libya who became the top U.S. diplomat in the country after Ambassador Chris Stevens was killed. He claimed the Libyan president was angered by the mischaracterization, in turn slowing the U.S. probe. The claim was one of several new accounts given at Wednesday's high-profile hearing where three whistle-blowers testified.
- Electric Earnings: Tesla(TSLA) Earnings Blow Past Expectations; Shares Surge. Electric-car manufacturer Tesla reported its first quarterly profit on Wednesday, beating expectations and sending shares sharply higher in after-hours trading.
- Coffee Talk: Starbucks(SBUX) Exends Deal With Green Mountain Coffee(GMCR). Starbucks and Green Mountain Coffee Roasters announced a five-year agreement on Wednesday to to triple the number of Starbucks-branded items made for Keurig single-serve coffee machines, the companies said in a release. Separately, Green Mountain reported better-than-expected earnings for the fiscal second quarter. Shares shot up 15 percent after-hours.
- Japan Bear Warns on Unfolding Debt Crisis. Japan will be consumed by a debt crisis surpassing the U.S. subprime crash, a leading U.S.-based hedge fund manager has warned, telling investors that "the beginning of the end has begun" for Japan's finances. Over-indebted governments, and especially the precarious state of Japan's finances, set the tone for the high-profile Ira Sohn investment conference in New York on Wednesday. Kyle Bass of Hayman Capital, a $1.8 billion Texas-based hedge fund and a noted Japan bear, said signs of the crisis had started to emerge, as banks and dealers become less willing to take the other side of negative bets from funds such as his.
- Are Stocks Cheap? (graph)
ValueWalk.com:
- China ‘Addicted’ to Debt, Now at 205% of GDP: CLSA. China’s debt is out of control according to a new report today from CLSA Asia. The report is blunt and to the point regarding China’s problems with its debt load. Below is a summary from CLSA:
- News Corp(NWSA) results beat estimates, spin-off on track. Rupert Murdoch's News Corp reported quarterly earnings that beat Wall Street expectations, aided by growth at its cable networks, and said it is on track to split off its slow-growing publishing business by the end of June.
- Transocean(RIG) profit short of Wall Street estimates. Transocean Ltd, the world's largest offshore drilling contractor, reported on Wednesday a weaker-than-expected rise in quarterly profit as some of its rigs could not work for a period of time due to a third-party equipment problem.
- Rackspace(RAX) results miss estimates after price cuts. Rackspace Hosting Inc, which leases online storage space to companies, reported a lower-than-expected quarterly results after it cut prices of some of its products in February. The company's shares fell 14 percent to $44.84 in after-hours trading.
- Europe on verge of trade war with China over cheap solar panels. Europe is gearing up for a fresh trade war with China with plans to impose a levy on billions of pounds worth of imports of cheap solar panels.
- Bundesbank's Weidmann Criticizes France on Deficit. France as euro "heavyweight" should set example on deficit reduction, German central bank head Jens Weidmann says in an interview. Says countries shouldn't undermine credibility of stricter European deficit-cutting rules by "taking their flexibility to the limit." Says France deficit projected to rise in 2014 means country "isn't saving." Says pledging to respect rules in future isn't enough for euro area to regain confidence.
- China Drafts Plan to Curb Production Overcapacity. The plan will be submitted to the central government decision makers for approval, citing people familiar with the situation. China may strictly control new projects in industries with production overcapacity such as steel, cement and flat glass.
- Chinabond Limits Non-Financial Co. Accounts. China Central Depository & Clearing to only allow accounts opened by non-financial institutions to sell bonds they hold, transfer or settle existing bond contracts, citing a statement from the clearing house. All other activities are suspended for these accounts.
- China Doesn't Need Stimulus for Growth. The tolerance of Chinese decision makers for slowing economic growth will be higher than the market's expectation, China Securities Journal says in an editorial on the front-page. Stimulus measures make it difficult to control property prices and push up food and resource prices, the editorial says.
Deutsche Bank:
- Rated (MTZ) Buy, target $38.
- Rated (FLR) Buy, target $84.
- Rated (KBR) Buy, target $44.
- Rated (CBI) Buy, target $87.
- Asian equity indices are -.25% to +.50% on average.
- Asia Ex-Japan Investment Grade CDS Index 99.0 -1.0 basis point.
- Asia Pacific Sovereign CDS Index 80.5 -.25 basis point.
- FTSE-100 futures +.01%.
- S&P 500 futures -.02%.
- NASDAQ 100 futures +.05%.
Earnings of Note
Company/Estimate
- (PCP)/2.75
- (DISH)/.53
- (AES)/.28
- (FCN)/.50
- (CVC)/.04
- (APA)/2.20
- (NVDA)/.15
- (PSA)/1.62
- (PCLN)/5.27
- (MBI)/.15
- (BID)/-.12
- (AM)/.77
8:30 am EST
- Initial Jobless Claims are estimated to rise to 335K versus 324K the prior week.
- Continuing Claims are estimated to fall to 3018K versus 3019K prior.
- Wholesale Inventories for March are estimated to rise +.3% versus a -.3% decline in February.
- Wholesale Sales for March are estimated to rise +.1% versus a +1.7% gain in February.
- None of note
- The Fed's Plosser speaking, Fed's Lacker speaking, Fed's Evans speaking, Spain 10Y bond auction, BoE rate decision, 30Y bond auction, 1Q Mortgage Delinquencies/Foreclosures, weekly EIA natural gas inventory report, weekly Bloomberg Consumer Comfort Index, (IRBT) analyst day, (MYGN) investor day and the (AES) investor day could also impact trading today.
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