From Bloomberg:
Tesco Reports Record Loss as Spiraling Debt Adds to Strain
Tesco Plc reported the biggest annual loss in its 96-year history after writing down property values and taking steps to reduce its pension-fund deficit as it seeks to ease increasing financial strains.
The net loss was 5.74 billion pounds ($8.6 billion) in the 53 weeks ended Feb. 28, Britain’s largest supermarket company said in a statement Wednesday, seeking to put behind it a year that’s included an accounting scandal, management upheaval and slumping sales both at home and internationally. (More)
Schwarzman Deems China Defaults Good as Markets Embrace Failure
You’d think two defaults in two days would be negative for markets in China.
Apparently, they’re not. Investors seem almost downright happy about missed interest payments by Kaisa Group Holdings Ltd. and Baoding Tianwei Group Co. this week, and are responding by piling more money into the Asian nation’s securities. (Read more)
Mystery Trader Armed With Algorithms Rewrites Flash Crash Story
From a modest stucco house in suburban west London, where jetliners roar overhead on their approach to Heathrow Airport, a small-time trader was about to play a hand in one of the most harrowing moments in Wall Street history.
Navinder Singh Sarao was as anonymous as they come — little more than a day trader by the standards of the Street. (Continue)
Protesters Mock Bankers as ECB Fuels Spain Mortgage Fight
Dressed as a banker from a bygone age, with a black top hat, a cigar and a briefcase full of fake money, Eduardo Martinez Cobo traveled to Madrid to protest what he considers unfair clauses in his mortgage contract. (More)
Biggest Banks Split on How to Trade Next Norway Rate Cut
Bank economists tracking the Norwegian central bank can’t decide whether the next rate cut will come in May or June.
After unexpectedly keeping rates unchanged in March and signaling a 100 percent chance of a cut in one of the bank’s next two meetings, analysts are struggling to decipher the nuance of Governor Oeystein Olsen’s policy signals. (Continue here)
Japan to Bolster Rules After Drone Lands on Roof of Abe’s Office
apan will strengthen legislation governing unmanned aircraft after a small drone appeared to have fallen Wednesday onto the roof of the office of Prime Minister Shinzo Abe, who was away at an international gathering in Jakarta. (Read more)
Tesla Motors Inc. is signing up big customers like Wal-Mart and Cargill, accelerating efforts to become a leader in energy storage — a new market that’s poised to boost sales and profit at the electric vehicle pioneer.
Next week, Telsa will make a deeper push beyond the car business when it unveils batteries for homes and utilities. (More)
Spanish Banks Overseas Push Reflects Doubts on Recovery at Home
A flurry of attempts by Spanish banks to buy foreign lenders may say more about the weakness of their home market than the strength of the opportunities chased abroad.
So far this year, CaixaBank SA has bid 1.1 billion euros ($1.18 billion) to buy the rest of Portugal’s Banco BPI SA that it doesn’t own, and Banco Sabadell SA has offered about 1.7 billion-pounds ($2.5 billion) for Britain’s TSB Banking Group Plc. Banco Popular Espanol SA also looked at buying Citigroup’s Central American consumer business before pulling out of talks. (Here)
After Record Drought, Dengue Fever Is Now Sweeping Across Sao Paulo
For six months, taps ran dry 12 hours a day in Gregori Pizzanelli Leccese’s Sao Paulo neighborhood. Many residents stored water just to get by.
It’s no wonder the mosquito population exploded — and so did dengue fever, he said.
“I’ve seen a major increase of mosquitoes in the city over the past five years,” said Leccese, 28, who runs a clothing manufacturer with his father. “There’s no more fumigation like there used to be. I see nothing about prevention education anywhere.” (Read more)
Hedge Fund That Made 18% on Dollar Strength Now Bets on Drop
Charlie Chan, a former Credit Suisse Group AG proprietary trader who now runs his own hedge fund, reduced bets the dollar will strengthen and added trades that would profit from a decline. (Read here)
Sony Profit Beats Estimates as Hirai Revamp Fuels Games, Sensors
Sony Corp. beat analyst profit estimates as it cut costs in the TV division and boosted earnings at the games and financial services businesses.
Operating income more than doubled from a year earlier to 68 billion yen ($569 million) in the 12 months ended March, the company reported Wednesday on a preliminary basis. That compares with the 47.2 billion-yen average of 19 analyst estimates compiled by Bloomberg. (Continue)
Hong Kong Skyscraper Rents Lead World as New York Soars
Offices on the highest floors of skyscrapers in Hong Kong are the most expensive in the world to lease, costing 66 percent more than in New York.
High-rise properties cost $251 a square foot in Hong Kong, after rents climbed 11.3 percent in the second half of 2014, according to Knight Frank LLP. New York rents rose 20 percent to $150 in the period, the second-highest increase after Kuala Lumpur in an 18-city index compiled by the London-based property broker. (More)
A Surge in Imports Proves the U.S. Economy's Global Dominance Right Now
For drought-stricken California, March was less about any kind of precipitation from Mother Nature and more about the virtual flood of imported cargo.
Container ships steamed into West Coast ports last month after the end of a labor dispute, a situation that may soon play out in U.S. trade data. And while the resulting surge in imports may be short-lived, it could still depress first-quarter growth — especially when combined with a smaller gain in exports that underscores America's role as the biggest ship in the waters of the global economy. (Full article)
China Will Keep Growing Because It Has to (BloombergView)
Can China’s economic policy makers maneuver their way out of this one? Let’s see: there’s a property bubble that’s beginning to deflate, a construction boom that’s now going in reverse and a financial system that’s riddled with bad debts. Oh, and the air is still really dirty. (More)
United Technologies, IBM Cut Costs to Combat Strong Dollar
A surging U.S. currency made it harder to boost overseas sales last quarter, requiring U.S. companies led by United Technologies Corp. and IBM to slash costs to top analysts’ earnings estimates in the March period. (Here)
Loyalty to 1960s Machine Shows Risk From Japan’s Aging Factories
The oldest piece of equipment at Osaka Machine Tool Co. has been there so long that only the company’s 70-year-old chairman, Katumi Takata, still knows how to use it. He isn’t planning to replace it anytime soon.
Many other Japanese manufacturers are equally reluctant to spend money. The average age of their facilities and equipment is the highest in at least three decades, according to Dai-ichi Life Research Institute, and has risen faster than in rival industrial powerhouses such as the U.S. and Germany. (Read here)
Europe's Collision Course With Greece (BloombergView)
Union isn't deviating, and neither is Athens. Before much longer, though, something really will have to give — and it seems ever more probable that, when it does, the news will be bad.
Confidence has firmed across Europe that a Greek default won't much harm any other country — indeed, that the rest of the EU might actually be stronger if the Greeks are taught a lesson. This theory is wrong. If it's pressed into action, Europe will come to repent its biggest miscalculation since the creation of the euro. (More)
Emerging Stocks Rise as China Equities Climb to Seven-Year High
Emerging-market stocks rose for a second day as utilities rallied and speculation that China will accelerate stimulus sent the nation’s equities to the highest level in seven years. Russia’s ruble strengthened. (Continue here)
Kering Tumbles in Paris as Efforts to Revive Gucci Dent Growth
Kering SA tumbled in Paris trading after reporting Gucci’s weakest quarterly performance in more than five years and slowing sales growth at handbag maker Bottega Veneta amid a slowdown in Asia.
The shares fell as much as 4.9 percent to 169.25 euros as of 9:16 a.m. in the French capital. That’s the steepest intraday drop in almost six months. (Read more)
Richemont Profit Slumps on Derivative Valuation Adjustments
Cie. Financiere Richemont SA, the maker of Cartier jewelry and Montblanc pens, said full-year profit dropped about 36 percent because of adjustments to the value of financial instruments.
Non-cash losses were incurred to reflect changes in the market value on monetary items and derivatives in the 12 months through March, the Geneva-based company said in an unscheduled statement Wednesday. The stock fell as much as 2.8 percent. (Continue)
European Stocks Fall First Time in 3 Days as Energy Shares Drop
A drop in energy producers sent European stocks lower after a two-day rally.
The Stoxx Europe 600 Index lost 0.3 percent to 407.9 at 9:51 a.m. in London after earlier rising as much as 0.6 percent and falling 0.5 percent. All the oil and gas companies in the gauge slid, while technology shares climbed the most among 19 industry groups. Greece’s benchmark ASE Index dropped for a fourth day, extending its lowest level since 2012. (Full article)
Fortescue Rating Cut by S&P as Iron Ore Plunge Pressures Profit
Fortescue Metals Group Ltd., the fourth-largest iron-ore producer, had its corporate credit rating cut by Standard & Poor’s on expectations the commodity’s price collapse will erode profits over the next two years. (Read here)
The Price of a Rising Swiss Franc: Recession
Switzerland is paying the price for letting its exchange rate soar.
Three months since ending a cap on the franc, the country is now suffering from its biggest decline in output since the 2008-2009 financial crisis as exports slump, according to a survey of economists. (Continue reading)
