would like to thank the Academy
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Damn, WLT May calls are either $17.50 or $20. Premium too damn high, going to pass. I forgot my CALL calls, $17.50 for may good price, hopefully about .65
Yeah, XLF at highs, and did not really participate in that huge SPY move yesterday. I think financials are getting rolled. Check out the last 3 years on C, and look at MAY on a MONTHLY chart. BIG RED CANDLES 3 years in a row. I say we make it 4!
Benzinga's Top Downgrades http://stks.co/cSBl $BUD $FVE $LNCO $PHM
Yep, looking at C $46 Puts for May, and WLT $18 or $19 May calls.
Lotto play - $18 XLF Puts for May, I think I can get for under a dime. Get like 5 or so.
The internet is so slow, it takes a bit for a trade to even be made. SUCKS!
Alright, going to make 2 trades today before hitting the sack:
1. Short C with Puts
2. Long WLT with Calls.
Yep, Uncle Ben making sure we stay GREEN. I believe it is between 1000-1100 that the buys are made.
Incredible.
What I did after I got married.....LOL
Don't tell my wife I said that!
Damn, wish I were on yesterday to snag those C Puts. Will get them this morning before hitting the sack.
I liked #10 and #23
Hope to see the race out here, and cheer my nag home.
Same here Stuff. I should be on for about an hour, maybe get in a few trades, and then I am GOING TO SLEEP! Tomorrow I hit the market with a vengeance.
Doesn't seem to be making much of a difference, it is actually kind of positive. Now, if it MISSED by a huge amount, we would be at all new highs by now.
Yep, I can get on all the boards now by clicking their names. Nice that it is fixed.
<zh>Cyprus Parliament To Vote On Bailout This Afternoon
Submitted by Tyler Durden on 04/30/2013 08:03 -0400
default Eurozone Germany Reuters Unemployment
It appears the Eurozone Stockholm Syndrome of absolutely (mutual, but ignore that) Assured Destruction has once again bloomed in tiny Cyprus, where capital controls have now had their one month birthday despite promises for a "very short duration" by the IMF's Lagarde, yet where people - all of whom far poorer and with nothing but a catastrophic depression to look forward to - just don't want to leave the Euro and the Belgian neofeudal kingdom. Because today, Cyprus actually has the power to say no to Europe when its parliament decides whether to back the EU bail-in out imposed on its by its EU "partners." However, as Reuters reports, it most likely will not "with approval likely from a thin majority against mounting calls for the island to exit the euro." Which means that Iceland's miraculous growth case study aside, Cyprus will only have itself and its politicians to blame next year when everyone's standard of living is reduced by 20%, then 20% the year after and so on. All in the name of making sure Deutsche Bank's spring clip loaded €55.6 trillion in notional derivatives never snaps shut.
From Reuters:
Lawmakers were due to meet in an extraordinary session to ratify the terms of the aid, which is conditional on Cyprus winding down its second-largest bank and imposing heavy losses on uninsured depositors in another. Voting was expected on Tuesday afternoon.
No single party has a majority in the 56-member parliament, and the government is counting on support from members of its three-party centre-right coalition which has 30 seats in total. It needs 29 votes for the bill to pass.
Shut out of financial markets for two years, Cyprus will fall into chaotic default if lawmakers vote down the bill, government officials have warned.
"We have had enough of delusions. We don't have another choice. Whoever has one should tell us what it is," Cypriot government spokesman Christos Stylianides told state radio.
You don't? The choice seems pretty clear. Then again, Mr. Stylianides will likely not remain in power if Plan B were voted through, and yes, it would mean immediate pain, but at least some hope of future growth as the Cypriot pounds returns and makes the island nation's economy competitive again. Instead, it will have to suffer 40%+ unemployment for years as it seeks to rebalance internally to be competitive with Germany. At least someone gets it. Ironically, it's the communists:
Communist AKEL, in government until it lost presidential elections in February, said it planned to vote against the bill. It has 19 seats in parliament. The socialist Edek party, with 5 seats, also said it would reject it.
AKEL, which had made the initial application for financial aid in June 2012, said onerous terms offered by Cyprus's EU partners were compelling enough for the island to seek alternative sources of funding.
"Cyprus's only option is a solution outside the loan agreement and the Memorandum of Understanding. Seeking such a solution is possibly tantamount to a decision to exit the euro," it said in a statement.
Naturally, since Germany and DB senior management have allowed it to come to a vote, the proability of an adverse outcome is zero. But at least the theatrics for the population will be enjoyable as now, instead of Europe, the people have their own politicians to thank for betraying them when the full cost of the "bailout" becomes apparent in a few months.
It also means that having had the choice to exit and not taking it, Cyprus will be on its own and will get no sympathy from anyone.
OK, SOME boards are not working, some are. I could get on your Handicap Board no problem, but other boards, like SSS, no can do. Must be a big bug out there in iHub land.
I just tried another board, same thing! I need to hit the UNREAD MESSAGE link to get into a board. Going to try a few others.
Good morning EZ. I am running on fumes right now, lack of sleep last night really kicking my butt. Drank a LOAD of coffee, need to eat dinner soon or I will just pass out at the computer here.
Yep, I get an error if I try to load the board. It says:
Oops! An error occurred
Sorry about that. We've logged the error and it will be investigated.
What to do now? •Try the page again with your browser's back button
•Try the Home page
•Tell Meatloaf or Dave about the error
Nope, never touched it. Let me check.....
Good morning Stuff. Yep, slight reddish tinge. I believe I read somewhere that Cyprus is voting again on the bailout terms sometime today. Unknown which way that will go, but COULD cause some issues. Then again, the market goes up on any news, good or bad, so who knows.
Sorry Stuff, but NO, there ARE no other ways to adapt. I already told my wife that she can not blame me when she catches me with the local university cheerleading squad, it is GLOBAL WARMING that will make me do it!
Spain sinks deeper into recession in first quarter
By Paul Day
MADRID (Reuters) - Spain's economy shrank for the seventh straight quarter from January to March, preliminary data showed on Tuesday, and the recession looks set to last into next year.
Acute joblessness and grim economic data from Spain and other euro zone countries have fueled a raging debate over whether Europe should abandon austerity policies that are still favored by regional powerhouse Germany.
Spain's Gross Domestic Product contracted 0.5 percent in the first three months of this year from the last quarter of 2012, according to preliminary data from the National Statistics Institute, dragged lower by sliding domestic demand.
The Spanish government slashed its economic forecasts for this year on Friday, bringing expectations closer to consensus, though did not announce any significant updates to its vital reform plan designed to restart the economy.
"We recognize the reforms of the government have been significant, but the problem is the starting position of the Spanish economy was much worse than any other European economies and adjusting in this environment is a lengthy process," analyst at Nomura Silvio Peruzzo said.
"We don't see Spain returning to growth until some time next year."
The economy shrank 2 percent on an annual basis in the first quarter, worse than the 1.9 percent registered a quarter earlier and the worst annual contraction since the start of the current recession in the last quarter of 2011.
MORE - http://finance.yahoo.com/news/spain-sinks-deeper-recession-first-080016071.html?l=1#
Dems: Climate change may lead poor women to sex work
[LOL, you can NOT make this stuff up.]
Sam Wood, PHILLY.COM
Posted: Monday, April 29, 2013, 4:16 PM
Climate change will lead poor women to opt for "sex work, transactional sex, and early marriage" warns a resolution proposed last week in Congress.
Introduced by a group of Democrats, the resolution calls on both the House and Senate to recognize how women will be disproportionately affected by global warming.
Women are "the first to feel the immediate and adverse effects of social environmental and economic stress on their families and communities," the document states, adding that 60 to 80 percent of farmers in developing countries are women.
It points to a United Nations report that estimates 3 billion more people might spiral into extreme poverty if governments don't take coordinated action.
Women, it says, will also feel the brunt of a harsher climate if it brings on increased migration, refugee crises and conflicts over food and water.
If a food crisis emerges, it says women may be drawn to sex work that would put them at risk for HIV, sexually transmitted diseases and unplanned pregnancy.
The resolution - H. Con. Res. 36 introduced by Rep. Barbara Lee (D-Calif.) - calls for President Obama to include women in making decisions related to climate change and ensure that there are programs in place to help women prepare and adapt to climate change.
The great economic experiment of 2013: Ben Bernanke vs. austerity
By Mike Konczal, Updated: April 27, 2013
In late 2011, the economist David Beckworth and the writer Ramesh Ponnuru wrote an editorial in the New Republic on how “both liberals and conservatives are wrong about how to fix the economy.” How were they wrong? Conservatives were wrong because, contrary to common belief on the right, the Federal Reserve wasn’t in fact doing enough to boost the economy.
Liberals, however, were wrong in opposing austerity and calling for more fiscal stimulus in the form of stimulus spending or temporary tax cuts. In Beckworth and Ponnuru’s view, the Federal Reserve still had plenty of room to boost the economy. Not only would fiscal tightening be good over the long haul, but it would force the Fed to act. And they argued that as long as the Fed is working to offset austerity, the country “won’t suffer from spending cuts.”
We rarely get to see a major, nationwide economic experiment at work, but so far 2013 has been one of those experiments — specifically, an experiment to try and do exactly what Beckworth and Ponnuru proposed. If you look at macroeconomic policy since last fall, there have been two big moves. The Federal Reserve has committed to much bolder action in adopting the Evans Rule and QE3. At the same time, the country has entered a period of fiscal austerity. Was the Fed action enough to offset the contraction? It’s still very early, and economists will probably debate this for a generation, but, especially after the stagnating GDP report yesterday, it looks as though fiscal policy is the winner.
Of course, policy wasn’t made because of a random New Republic piece. (One hopes.) The fiscal cliff and sequestration were the end result of a long series of policy decisions, including President Obama’s desire to lock in $4 trillion in deficit reduction. Those policies have led to deficit reduction and fiscal contraction at rates that haven’t been seen outside periods of military demobilization. Ben Bernanke was certainly trying to counter the upcoming austerity in his December move, as well as address a chorus of academic criticism that he wasn’t doing enough, while also building a consensus on the Fed’s committee about further action.
Now, before I hear, “How could monetary expansion fail? It’s never even been tried,” it’s worth reflecting on how dramatic the Federal Reserve’s actions were in December. It was an effort to address at once all the criticisms that the Fed should be doing more.
Some had criticized the Fed for committing to keeping rates low until a certain date rather than using the power of forward guidance to peg rates to how well the economy was doing. So the Fed committed to keeping rates low until unemployment hit 6.5 percent. Others thought that it wasn’t clear the Fed would ever let inflation go above 2 percent, and that this would choke off a recovery before it started. So Bernanke said inflation could go as high as 2.5 percent without the Fed tightening. This balancing between unemployment and inflation is in line with the view of people who would like to use nominal GDP as a target.
There were, finally, those who thought the “expectations” channel of when the Fed would start raising rates mattered less than actually going out and buying things. So the Fed committed to making $85 billion dollars in assets purchases every month until the economy recovered. Something for everyone!
So, has monetary policy offset this contraction? Economists will debate how much expansionary monetary policy is offsetting fiscal policy for decades, but we can look at a couple of items already. The first is inflation expectations, as calculated by the Federal Reserve Bank of Cleveland. One-year inflation expectations initially bumped up for December 2012, which many commentators viewed as a positive sign for the new Fed policy. However, in 2013, it has fallen back down, to an average rate lower than that of 2012:
You can also look at long-term interest rates as a sign of how well the economy is doing. An increase in interest rates would signal inflation, higher expected growth and less demand for safe assets. Here, too, there was an initial boost after the December announcement, but as 2013 has continued, interest rates have dropped back down. Growth in GDP, as noted from yesterday, has also come in below expectations, with government spending a main culprit.
So where does this leave us? First of all, just because the Fed’s December actions weren’t capable of offsetting fiscal austerity doesn’t mean that it’s the wrong policy. The biggest threats to a full recovery are both early fiscal and monetary contraction. The Evans Rule is the right rule to communicate to the markets the Federal Reserve’s stance, which is properly a balance between price stability and full employment. The Federal Reserve was, in fact, sitting on its hands, and it is no longer doing that. (Like Beckworth and Ponnuru, I was also in the New Republic in late 2011 calling for the Fed to actually try and do its job.)
Second, there is still more the Federal Reserve could do to try and balance out austerity in 2013, but those moves would require a big change from current policy. Minor tweaking is unlikely to help. Joseph Gagnon of the Peterson Institute for International Economics suggests that, instead of committing to mortgage purchases, the Fed could target the mortgage rate for a time. Other economists, such as Brad DeLong, suggest that an explicit higher inflation target would be important. Still others, ranging from Christina Romer to market monetarists, think the Fed should explicitly target a nominal GDP.
Given that the Fed appears to be having trouble getting these new policies to move inflation expectations or interest rates, a dramatic change may be harder than originally thought. And if even subtle statements by the FOMC can break expectations of policy, as many are worried about, monetary policy at the zero lower bound will be far too fragile to carry us to recovery. However, the status quo of a low inflation target teamed with “break out unconventional policy in case of emergency” doesn’t appear robust enough to handle future recessions.
But the most important lesson to draw is that fiscal policy is incredibly important at this moment. In normal times, the broader effect of government spending, or the fiscal multiplier, is low because the central bank can offset it. But these are not normal times. It’s not clear why the Federal Reserve’s actions haven’t balanced out fiscal austerity. But since they haven’t, we should be even more confident that, as the IMF put it, “fiscal multipliers are currently high in many advanced economies.”
These multipliers work in both directions. As spending benefits the whole economy more in these times, austerity is also much more vicious than it would normally be. Using fiscal policy also avoids the expectations problems that plague monetary policy. When President Obama signs a law promising spending, the public believes the government will spend. That’s not so with the Federal Reserve, where a random statement from a Federal Reserve governor can cause markets to doubt the Fed’s long-term commitment.
Meanwhile, the idea that there exists a debt “danger zone” that should cause us to embrace austerity has recently collapsed due to questionable data and methodology. The question is, will we now move to stimulus to complement the Fed’s efforts to get to full employment, or will we continue to sabotage the recovery?
Mike Konczal is a fellow at the Roosevelt Institute, where he focuses on financial regulation, inequality and unemployment. He writes a weekly column for Wonkblog. Follow him on twitter here.
© The Washington Post Company
Weak Consumer Spending Risks Double Dip Recession
BY Peter Morici
NEW YORK (TheStreet) -- The Commerce Department reported consumer spending advanced 0.2% in March -- much weaker than the 0.3% and 0.7% registered in January and February.
Extraordinary year-end bonuses and dividends -- intended to dodge higher taxes in January -- boosted consumer activity in January and February but now households are hunkering down. Much weaker consumer spending is expected for the second quarter as the $120 billion January hike in payroll taxes and $45 billion increase in income taxes borne by the wealthy weakens household finances.
In January, when a last minute tax deal raised social security taxes, working- and middle-class families could not adjust spending immediately -- they have to keep driving to work and feeding their children -- but in March retail sales fell precipitously. Now forecasters expect traffic at shopping malls to recover only slowly.
Many upper income families pay taxes on a quarterly basis, and the actual impact of the quite complex changes to the tax code and rates implemented in January were not reckoned until their accountants computed their first quarter payments due April 15 -- now they are trimming purchases even further.
Also, the January tax changes greatly reduced mortgage interest deductions for high income families, and this will weaken demand for new and existing homes. The pace of sales may not be much affected but the price increases are likely to slow, especially outside of hot markets like Florida and New York, where speculators and foreign investors seeking refuge from uncertainty in Europe and China have been pouring money. Overall real estate inflation will not support real asset growth and rising consumer spending the balance of 2013 as it did last year.
MORE - http://www.thestreet.com/story/11907906/1/morici-weak-consumer-spending-risks-double-dip-recession.html?cm_ven=GOOGLEN
Hello Lao! All is good, thanks. Last night sucked, internet was down in my room, and the bozos are restless, so I spent a good portion of my night in a cold bunker. Finally got to sleep about 0200, my butt is dragging. Catching up now on work and the market, looks like I missed an exciting day yesterday.
How are you and family?
<zh>Sentiment Muted With Japan, China Closed; Event-Heavy Week Ahead
Submitted by Tyler Durden on 04/29/2013 06:59 -0400
With China and Japan markets closed overnight, activity has been just above zero especially in the critical USDJPY carry, so it was up to Europe to provide this morning's opening salvo. Which naturally meant to ignore the traditionally ugly European economic news such as the April Eurozone Economic Confidence which tumbled from a revised 90.1 to 88.6, missing expectations of 89.3, coupled with a miss in the Business Climate Indicator (-0.93, vs Exp. -0.91), Industrial Confidence (-13.8, Exp. -13.5), and Services Confidence (-11.1, Exp. -7.1), or that the Euroarea household savings rates dropped to a record low 12.2%, as Europeans and Americans race who can be completely savings free first, and focus on what has already been largely priced in such as the new pseudo-technocrat coalition government led by Letta. The result of the latter was a €6 billion 5 and 10 year bond auction in Italy, pricing at 2.84% and 3.94% respectively, both coming in the lowest since October 2010. More frightening is that the Italian 10 year is now just 60 bps away from its all time lows as the ongoing central bank liquidity tsunami lifts all yielding pieces of paper, and the global carry trade goes more ballistic than ever.
What is most curious, as the FT points out in "Italy will lead eurozone revolt against austerity" is that now that so-called austerity is dead in Europe (having been stillborn and much better known by its other name, Fauxterity), and the peripheral countries are set to return to their "drunken-sailor" spending ways that got them in trouble in the first place, the market can't applaud loud enough. Of course, when all global debt is now backstopped by the money printing bad banks formerly known as central banks, what is there not to like. After all Bernanke and his merry academic men are surely in control of the world with an iron fist, and there is no risk of anything bad happening ever again.
Finally, Friday's takedown of gold has so far proven to be quite ineffective and whoever decided to pound the yellow metal precisely as Europe closed on Friday will have to redo it all over again, seemingly providing a much better entry point to everyone who bought at the lows following the now laughable smackdown whose only purpose is to take out the entire bidstack in what can only be classified as not rational "best execution" selling, but banging some close or another, an activity that once upon a time used to be illegal.
Bloomberg's bulletin summary of the notable highlights:
•Fed unlikely to change asset purchases, will likely put off tapering for now, analysts and strategists say
•ECB may lower refinancing rate this week; any such move largely discounted, investors will be looking for additional credit-easing measures, analysts and economists say
•Euro area economic confidence decreased more than forecast in April as the 17- nation currency bloc struggles to emerge from a recession and the bailout of Cyprus renewed debt-crisis concerns
•Minutes from the latest Swedish central bank meeting revealed a growing preoccupation with the krona as the strengthening currency pushes down inflation
•GBP rose to strongest in 10 weeks vs USD after an industry report showed U.K. house prices increased this month, boosting optimism the economy is gathering pace
•Enrico Letta’s government is poised to be installed starting today, as the end of two months of political turmoil in Italy was marred by the shooting of two policemen outside the prime minister’s office in Rome
•Italy’s 10Y borrowing costs declined to a 2 1/2-year low at an auction today, drawing 3.94% vs 4.66% at a March sale of that maturity
•Europe may accelerate a shift away from its austerity- first agenda this week as the new Italian government changes course and a German-Spanish investment pact underscores a renewed focus on combating record unemployment
•Greek lawmakers passed a bill including plans to fire 15,000 workers by the end of next year as the government of Prime Minister Antonis Samaras cleared the latest hurdle to receiving international aid payments
•JPMorgan was the top payer among investment banks last year, awarding its senior employees a fifth more than Goldman, according to a report that also highlights a growing divide between firms based in the U.S. and Europe
•China’s securities regulator plans to raise the minimum proportion equity funds should have in shares, a move that may drive investments into the worst- performing major Asian stock market in the past year
•Global sovereign yields mostly lower, led by Australia and Italy. EU sovereign spreads to Germany tighten
•Japan, China closed for holiday. European equity markets mostly higher, U.S. index futures gain. WTI Crude, gold, copper gain
A quick recap of macro events from SocGen:
A decline in the VIX index, higher stocks and a bounceback in the JPY have been the exception rather than the norm in not too distant history, but this is precisely how currency and risk assets closed last week and are squaring up to this week's fireworks featuring the FOMC, ECB and US non-farm payrolls. With so much event risk concentrated into 48 hours, today and tomorrow should see a fairly slow and lethargic start to proceedings with May Day public holidays across Europe set to drain liquidity from currencies and bonds.
The EUR has enjoyed a decent month so far and is only trailing GBP and NZD as third-best performer in the G10, not bad considering the worsening economic outlook and speculation that the ECB could cut rates on Thursday. Our call on the ECB is for no change in rates, but we are not ruling out an expansion of the non-standard policy tools to help improve lending to the real economy. M3 data on Friday showed a further slowdown to 2.6% yoy in March with lending to non-financial corporations in particularly bad shape. It is not just the EUR but also eurozone equities that are doing well. In local currency terms, the Eurostoxx 50 is up 2.44% this month compared to a 1% gain for the S&P and 0.1% for the FTSE. This does pale of course in contrast to the 12% surge in the Nikkei, but then the ECB is not inflating its balance sheet the way the BoJ is. Let's see whether the ECB thinks economic conditions have worsened enough to warrant fresh action. EC confidence indicators are set to reaffirm a bleak picture in early Q2 and inflation in Germany is set to have slowed to 1.4%. This means that real rates in Germany have tightened by over 50bp since the start of the year. With foreign demand slowing, president Draghi will not be inclined to tolerate a stronger EUR. That means EUR/USD remains a sell on rallies. However, as US data proved last week, it may be down to the ECB to force a breakthrough below 1.2950. How long it stays there could be contingent on the message from the FOMC and payrolls. US 10y yields are plumbing 2013 lows and disappointment over non-farm payrolls would put the debate over Fed tapering on ice.
The full summary from the Jim Reid team at DB:
Turning to markets, Asian equities are mixed overnight despite a negative US lead on Friday as Q4 GDP in the US (more below) came in weaker-than-expected. Japanese and Chinese markets are closed overnight. The Hang Seng is flat but the ASX 200 is +0.5% and the KOSPI is down -0.4% as we type. A reported slowdown in Chinese industrial profits is perhaps also not helping sentiment. Chinese industrial corporate profits are up 12.1% YTD in March, down from a stronger 17.2% print in February. Asian credit markets are firm with IG CDS spreads a touch tighter in overnight trading. New issues remain the dominant theme for EM Asia. Spot Gold is up at $1470/oz after a +0.5% rally overnight.
Recapping Q1 US GDP from Friday, the advanced reading came at +2.5% annualised. This compares with market estimates of 3.0%. Government and net exports were a drag to the headline, which shaved 50bps and 80bps from growth, respectively. Household spending offered some relief although business investments remain cautious. Our US economists think that given the softer-than-expected print on Q1 GDP and broad-based views among economists that the economy will downshift in Q2, two sets of data, namely employment and various production surveys such as regional PMIs and national ISMs, will take on particular significance in the near term.
At a micro level company results remain relatively average to disappointing with top line misses firming up as a key trend for Q1 for US corporates. We’ve now seen just over half of the S&P 500 firms reported. While EPS trend remains solid with nearly ¾ of those beating expectations, only 45% of those have topped analysts’ sales revenue estimates. If this wasn’t enough the initial signs from European reporting is even worse with EPS and sales revenue beat:miss ratio running at 44%:56% and 34%:63%, respectively.
Earnings seem to be outweighed by liquidity and more confidence in the European story at the moment. Indeed a new government in Italy was formed on Sunday which ended the political stalemate of the past two months. Enrico Letta was sworn in on Sunday as the new PM after having managed to form a broad PD-PDL coalition with Berlusconi. In the latest, Berlusconi told the media yesterday that Letta had agreed to his demand to use the first Cabinet meeting to eliminate a property tax on first homes and to reimburse last year’s payment.
Away from Italy, there seems to be increasing hints of austerity relaxation in Europe. Rajoy’s government last Friday approved a plan to delay Spain’s deficit reduction target to within the EU limit of 3% of GDP to 2016 instead of 2014. The plan was also endorsed by the European Commission. Elsewhere, Schaeuble said he will use a meeting with Spanish Economy Minister Guindos later today to push for a bilateral investment program that sidesteps the EU Commission.
Staying in Europe, Cyprus has started the conversion of cash deposits into bank equity as a prerequisite for external aid. The Bank of Cyprus on Sunday said it had converted 37.5% of deposits exceeding EUR100k into "class A" shares, with an additional 22.5% held as a buffer for possible conversion in the future. Another 30% would be temporarily frozen and held as deposits (Reuters).
Despite it being a blockbuster week for data and central bank meetings it is also a shortened week for various key markets globally given 1st May Labour Day and variations thereof. Markets in Hong Kong, Singapore, Germany, Spain, and Italy will be closed on Wednesday. For those in China, it is a three day holiday which only sees the Shanghai Stock Exchange returning on Thursday. Japan is closed overnight and also on Friday for bank holidays.
Besides the key events of the week mentioned at the start, we also have the Chicago PMI (Tuesday), ADP Employment and ISM manufacturing (Wednesday), Trade balance (Thursday) and ISM services (Friday) this week in the US. In Europe we will get some Euroland confidence numbers today followed by inflation and German unemployment tomorrow. The European Commission’s will also release its latest economic forecast for the EU on Thursday. In Asia all eyes will be on the official Chinese PMI on Wednesday followed by the final HSBC variant on Thursday. Company earnings wise we have 137 S&P 500 companies and 84 Stoxx600 companies in Europe (including some of the major financial institutions) reporting this week.
See ya before the open Lottos, off to do some end of day meetings and dinner. Make some big bucks out there!!
Good Morning Baggies. Long time no see. Been out and about, back for a few weeks before the REAL big move comes and I get the hell out of the 'Stan.
Will be looking at C and XLF Puts today, and CALL and WLT Calls. Al depends on how things look at the open, but right now will be fading any green.
Relatively quiet morning so far. Futures a slight green, but the big econ data starts at 0830 with Personal Income, and then housing sales and Dallas Fed at about 1000. I will be leaning towards fading the small pop this morning, and looking at Puts in C and XLF, and calls in CALL and WLT, depending on what goes on.
Good morning Larry! A BEAUTIFUL day out here today, nnothing but sun. Bagram had a NASTY hail storm a few hours ago, couldn't hear the guy on the other end of the phone it was so bad.
Good morning EZ. Hoping to be on and trading this morning, all depends on the conference call later. Mondays SUCK!
0830 Personal Income and Outlays
Prior----------Consensus---------Consensus Range
1.1 %------------0.4 %-----------0.2 % to 0.5 %
The Top Personal Finance Websites and How to Find Them http://stks.co/iTHo
European Stocks Rise With Gold as Italian Government Bonds Rally
By Matthew Brown and Richard Frost - Apr 29, 2013
European stocks and the euro rose with Italian bonds as the country forms a new government amid optimism central banks will maintain monetary stimulus. The region’s corporate creditworthiness improved for a seventh day.
The Stoxx Europe 600 Index added 0.3 percent as of 9:29 a.m. in London, extending its biggest weekly increase in five months. Standard & Poor’s 500 Index futures also gained 0.3 percent. The euro strengthened 0.5 percent against the dollar. Yields on Italian 10-year bonds fell eight basis points to 3.98 percent. The Markit iTraxx Europe index of investment-grade company credit risk fell two basis points for the longest streak since September 2009. Gold climbed 0.8 percent.
Italian Prime Minister Enrico Letta may finish installing a government today nine weeks after voters rejected the country’s budget-cutting course. European Central Bank policymakers may cut interest rates this week, according to the majority of economists in a Bloomberg survey, while the Federal Reserve will consider renewing its commitment to bond-buying at a two-day meeting starting tomorrow. An index of pending home sales in the U.S. jumped 0.9 percent in March from a month earlier, according to a separate survey.
“We’re in a sweet spot for equities,” Steve Brice, chief investment strategist at Standard Chartered Plc in Singapore, said in a Bloomberg Television interview. “The authorities are very keen to keep the economy on a recovery track. They are likely to talk less about tightening” when the Fed concludes its policy meeting this week, he said.
ECB Rates
The Stoxx Europe 600 Index rose 3.7 percent last week, taking its advance for April to 0.7 percent. That would be its 11th straight monthly increase, the longest since 1997. The MSCI All-Country World Index advanced 0.3 percent today. Japanese and Chinese equity markets closed for holidays.
The Frankfurt-based ECB will lower its benchmark rate to a record 0.5 percent when central bankers meet in Bratislava May 2, according to the median of 69 economist estimates compiled by Bloomberg.
Aberdeen Asset Management Plc (ADN) climbed 5 percent after increasing its dividend. Swedish Match AB gained 3 percent after posting first-quarter profit that beat estimates. Bayer AG added 1 percent after saying it will buy Conceptus Inc. for about $1.1 billion. Balfour Beatty Plc (BBY) tumbled 11 percent as the U.K.’s largest construction company said 2013 operating profit will be less than it had projected earlier.
Euro Strength
The euro strengthened 0.4 percent to 1.3076 per dollar. The new Italian government’s pledges to dismantle parts of the budget-cutting project undertaken by ousted premier Mario Monti. German Finance Minister Wolfgang Schaeuble will travel to Spain today to unveil a plan aimed at spurring investment in Spanish companies.
The yen strengthened for a third day against the dollar, appreciating 0.2 percent to 97.84. It weakened 0.3 percent to 128.13 per euro. New Zealand’s dollar strengthened against all of its 16 major peers, climbing 0.6 percent to 85.32 U.S. cents.
Spain’s 10-year bond yield fell as much as eight basis points to 4.20 percent, the lowest since October 2010. Germany’s 10-year bund yield was little changed at 1.22 percent and the rate on 10-year Treasury notes was at 1.67 percent.
Italy plans to sell as much as 6 billion euros ($7.9 billion) of five- and 10-year securities today.
Gold Gains
Gold climbed 0.9 percent to $1,474.91 an ounce, paring its monthly decline to 7.8 percent. West Texas Intermediate crude added 0.2 percent to $93.14 a barrel.
At a time when politicians are squeezing budgets to cut borrowing, the bond market is clamoring for more debt, pushing yields on almost $20 trillion of government securities to less than 1 percent.
The average yield to maturity for the Bank of America Merrill Lynch Global Broad Market Sovereign Plus Index fell to a record low 1.34 percent last week from 3.28 percent five years ago. Even though the amount of bonds in the index has more than doubled to $23 trillion -- bigger than the gross domestic product of the U.S. and China combined -- countries from Germany to Rwanda sold debt in the past month at their lowest yields.
To contact the reporters on this story: Matthew Brown in London at mbrown42@bloomberg.net; Richard Frost in Hong Kong at rfrost4@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
Brent Slips a Second Day Amid Signs of Slowing Chinese Growth
By Grant Smith and Ben Sharples - Apr 29, 2013
Brent crude fell for a second day as investors speculated that slower growth in China will curb fuel demand in the world’s biggest energy consumer.
The benchmark, used to price more than half of the world’s oil, lost as much as 0.6 percent. Net income at Chinese industrial companies increased 5.3 percent in March from a year earlier, compared with 17 percent growth in the first two months, the Beijing-based National Bureau of Statistics said April 27. OPEC’s reference price rebounded above $100 a barrel for the first time in two weeks.
“We don’t expect the out-of-this-world upward race in Chinese oil demand, which we saw in the fourth quarter,” said Michael Poulsen, an analyst at Global Risk Management in Middlefart, Denmark. “However, we do expect oil demand to pick up in the months ahead.”
Brent for June settlement declined as much as 59 cents to $102.57 a barrel on the London-based ICE Futures Europe exchange, and was at $102.99 at 9:11 a.m. local time. The front- month contract was at a premium of $9.86 to West Texas Intermediate futures, from $10.16 on April 26.
WTI for June delivery was at $93.13 a barrel, up 13 cents, in electronic trading on the New York Mercantile Exchange at. The volume of all contracts traded was 12 percent below the 100- day average.
‘Economic Risk’
Morgan Stanley is “skeptical” that the spread between WTI and Brent can fall on a sustained basis, the bank said in a report e-mailed today. Any significant narrowing would be a selling opportunity as differentials will probably widen again throughout the year, it said.
The basket of 12 crude grades used as a reference by the Organization of Petroleum Exporting Countries also rose above $100 for the first time since April 12. The basket was at $100.70 on April 26, according to an e-mail today from the group’s Vienna-based secretariat.
Brent at $100 a barrel “is more reasonable-looking at the fundamentals,” Robin Mills, the head of consulting at Dubai- based Manaar Energy Consulting and Project Management, said yesterday. “Some of the geopolitical risk has come off and the economic risk is to the downside for prices.”
Technical Trend
Net-long positions in WTI crude held by money managers, including hedge funds, commodity pools and commodity-trading advisers, dropped in the week ended April 23, according to the Commodity Futures Trading Commission’s April 26 Commitments of Traders report. They fell by 624 futures and options combined to 182,408, the CFTC report showed. Similar data for Brent will be released at midday London time.
WTI may extend losses as an indicator of technical momentum falters. The 50-day moving average, at $92.65 a barrel today, has dropped below the 100-day moving average for the first time in three months, according to data compiled by Bloomberg. Investors typically sell contracts on a “death cross,” when a moving average falls below a longer-term one. The 50-day average is about 84 cents above the 200-day mean, the smallest premium since February.
To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net Grant Smith in London at gsmith52@bloomberg.net
To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net
If not now, when will ECB cut rates?
By Mark Thompson @CNNMoneyApril 29, 2013
LONDON (CNNMoney)
Stuck in recession, with inflation rates tumbling and unemployment rising, the eurozone looks set to get its first cut in interest rates in 10 months this week.
The European Central Bank has kept its main interest rate at a record low of 0.75% since July 2012 but the clamor for it to relax monetary policy is growing as data deteriorates and its peers take more aggressive action to support their economies.
Eurozone inflation fell to 1.7% in March, comfortably below the ECB's target, and economists expect an even weaker print with the release of April numbers Tuesday.
Since the central bank's governing council last met in early April, when the ECB said it was "ready to act" if the gloom deepened, the International Monetary Fund has cut its global forecast and business surveys have signaled renewed weakness in Germany, Europe's most important economy.
Related: U.S. economy revs up but pace may slow
Unemployment levels in struggling eurozone states such as Greece and Spain have scaled new peaks above 27%. Over 6 million Spaniards are now unemployed and more than half of young workers under the age of 24 are out of work in both nations.
Some commentators believe the ECB will hold fire until it releases new forecasts for growth and inflation in June, but a narrow majority of economists surveyed by Reuters expect a cut to 0.50% when the governing council gathers in the Slovakian capital of Bratislava on Thursday.
"Given the latest data, we think that the case for a front-loaded rate cut is strong enough already, so that the ECB is likely to cut rates on May 2," wrote UBS economist Reinhard Cluse in a research note.
European policymakers continue to predict a gradual recovery in output in the second half of the year but are coming under growing pressure to slow the pace of austerity and do more to improve financing conditions for banks and businesses.
Billionaire investor George Soros warned earlier this month that Germany risked sliding into a recession of its own making by insisting on a rigid policy of austerity and because ECB monetary policy was "out of sync" with the quantitative easing being pursued by other major central banks.
Related: Bank of Japan stands firm while deflation worsens
The International Monetary Fund and independent economists have called for the ECB to cut rates, even if the impact may be little more than symbolic because banks in countries such as Italy and Spain are still hobbled by bad debts and need to rebuild their capital.
The ECB is considering other ways of tackling the credit squeeze but has no appetite for the quantitative easing pursued by the Bank of Japan, Federal Reserve or Bank of England.
Its weapon of choice -- buying government bonds in the secondary market but only under strict conditions and within the framework of an EU bailout agreement -- has not even been tested yet and is viewed with suspicion by Germany.
"We continue to believe that the chances of fully-fledged quantitative easing from the ECB are low," noted Nomura economist Nick Matthews.
The challenge facing the ECB was starkly put when German chancellor Angela Merkel, who is hoping to be re-elected later this year, made a rare intervention in the monetary policy debate late last week.
"The European Central Bank is obviously in a difficult position," she said.
"For Germany it would actually have to raise rates slightly at the moment, but for other countries it would have to do even more for more liquidity to be made available and especially for liquidity to reach corporate financing."
Silver Slump Lures Buyers as Waiting Time Rises in Singapore
By Chanyaporn Chanjaroen - Apr 28, 2013
The slump in silver this month has spurred demand for products from Silver Bullion Pte, one of Singapore’s largest suppliers of coins and bars to retail investors, depleting inventories and doubling delivery times.
Holdings of bars fell to just 54 ounces from 60,000 ounces two and a half weeks ago, according to founder Gregor Gregersen. It now takes at least six weeks for new supplies to arrive in the country up from two to three weeks previously, he said. The company, set up in 2009, counts the Perth Mint in Australia and the Royal Canadian Mint among its suppliers.
Gregersen’s comments add to signs from across Asia that the plunge in silver, as well as gold, has triggered higher demand from physical buyers who see an opportunity to expand holdings. While silver has led declines in commodities this year, losing 20 percent in New York, the amount held in exchange-traded products worldwide remains 2.3 percent higher in 2013. The metal is used both as an investment as well as by industry.
“For many leveraged paper owners, this price fall was a disaster, for most physical bullion owners it was a buying opportunity,” Gregersen said. A batch of 23,000 ounces is expected to be delivered tomorrow, with almost all destined for existing customers who pre-ordered, he said.
Demand for Maple Leaf gold and silver coins is very strong, and has increased in Asia, Europe and North America, said Chris Carkner, managing director of sales for bullion, refinery and ETPs at the Ottawa-based Royal Canadian Mint. The facility continues to supply all its customers, he said.
‘Ramping Up’
“The Perth Mint is meeting the surge in demand for physical silver and gold by ramping up productivity as quickly as possible to ensure lead times are kept to an absolute minimum,” Ron Currie, sales and marketing director, said in an e-mailed response to questions.
Futures tumbled to $22 an ounce on April 16, the lowest since October 2010. The contract for delivery in July traded at $24.20 an ounce on Comex at 10:50 a.m. in Singapore after rising 1.8 percent. Prices peaked at $49.845 in April 2011.
High price swings may deter so-called bargain hunters, Peter Richardson and Joel Crane, Melbourne-based analysts at Morgan Stanley, said in an April 23 report, cutting this year’s silver forecast 19 percent to $27.17. Silver’s thirty-day volatility rose to 46.66 today, the highest since January 2012.
‘Scares Investors’
“Too high volatility usually scares investors away,” Steven Dooley, head of research at brokerage Forex Capital Trading Pty in Melbourne, said by phone today. Prices may test the low of $22 over the next 12 months as prospects for new U.S. monetary stimulus are low, while slower-than-expected economic expansion in China may hurt demand, he said.
Holdings in silver-backed ETPs stood at 19,353.38 tons on April 26, according to data compiled by Bloomberg. While that’s 1.6 percent lower this month, it compares with 18,916.92 tons at the end of 2012.
The plunge in prices wasn’t foreseen by some investors. A Bloomberg survey of 49 analysts published in December showed that the metal was expected to rally to as much as $40.25 an ounce, according to the median high figure.
To contact the reporter on this story: Chanyaporn Chanjaroen in Singapore at cchanjaroen@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
Commodities Still Point To Economic Downturn! http://stks.co/bRx4