Apple IPhone Sales in China Seen Surpassing U.S. for First Time (Bloomberg)
Apple Inc.’s IPhone sales in China may have exceeded the U.S. for the first time in the latest quarter, thanks to brisk demand during the country’s New Year celebrations.
Apple will probably show on Monday that earnings jumped by more than 20 percent when it reports results for the second fiscal quarter, which ended in March. While Apple doesn’t break out shipments by country, the company may have sold 18 million to 20 million iPhones in greater China during the period, while U.S. deliveries were about 14 million to 15 million, according to Creative Strategies LLC.
Russia Deploys Tactial Drone In The Arctic, Exposes Rarely-Seen US Spy Satellite Images (ZeroHedge)
While the USA is busy killing US civilians and terrorists with its drone program, Russia is set to deploy its own Orlan-10 drones in the oil- and gas-rich Arctic region (reportedly to monitor the climate situation). As SputnikNews reports, Colonel Aleksandr Gordeev stated "the drones' task is to maintain impartial control of the situation in the Russian sector of the Arctic, including the ecological and ice situation in the adjoining sea areas and along the Northern Sea Route." So, passive-agressive? However, Russia also chose this week to release rarely-seen images of a US intelligence satellite which as one analyst notes is provocative (but obscure in its intent other than the growing recognition of US space-based surveillance assets).
China Inc. Finds Cure to Debt Hangover in $4 Trillion Stock Boom (Bloomberg)
China Inc. is turning to the stock market for a cure to its unprecedented debt hangover.
As authorities show a newfound tolerance for defaults and debt levels at Shanghai Composite Index members climb to all-time highs, Chinese companies are increasingly tapping the equity market for funds to pay down liabilities and invest in growth. They’ve announced $82 billion of secondary stock offerings in 2015, a figure UBS Group AG predicts will increase to a record $161 billion by December. That comes on top of $10 billion already raised through IPOs.
Greece’s Day of Reckoning Inches Closer as Debt Payments Loom (Bloomberg)
Greece will look for ways to assemble enough cash to pay its pensioners and employees this week, after euro area finance ministers on Friday said they won’t disburse more aid until bailout terms are met.
Europe’s most-indebted state will use the deposits of local governments, cities and other funds to meet end-of month payments totaling over 1.5 billion euros ($1.6 billion). By doing so, they risk straining liquidity buffers, after households and companies withdrew almost 1.3 billion euros in savings last week, according to a person who wasn’t authorized to speak publicly on the matter.
Corinthian Colleges Closes Remaining Campuses (WSJ)
Corinthian Colleges Inc. on Sunday said it is ending operations and closing its remaining 28 campuses, affecting about 16,000 students.
Even Ireland’s Weakest Bank Can Raise Money in This Bond Market (Bloomberg)
The first Irish lender to sell Europe’s riskiest type of bank bond is also the nation’s weakest.
Permanent TSB Group Holdings Plc, which failed European financial stress tests last year, is selling 125 million euros ($136 million) of so-called additional Tier 1, or AT1, bonds this week. The undated securities convert into shares should capital drop below a certain threshold and carry coupons that issuers can just decide not to pay.
Airbus A380 Haunted by Lack of Orders Marks Decade in the Skies (Bloomberg)
At the tender age of 10, the Airbus A380 is already entering a mid-life crisis.
The double-decker aircraft has failed to win a single order from any new airline customer for two years now, and senior management was forced to come to the airliner’s defense in December after the planemaker’s parent introduced the possibility of axing the A380 outright. As the mid point of the year approaches, the plane has yet again drawn a blank on deals.
WHCD host reflects: Drink now, think later (TheHill)
White House Correspondents’ Association dinner host Cecily Strong gave President Obama high marks in an interview broadcast Sunday for his comedy routine at the annual event.
“When he is making a speech and being funny, he does that very, very well,” Strong told host Chuck Todd of NBC’s “Meet the Press” after Saturday night's dinner.
Oil Bears Routed by Spring Thaw in Prices as Drill Rigs Sit Idle (Bloomberg)
Speculators pulled bearish oil bets at the fastest pace on record as Saudi Arabia renewed strikes on Yemen and U.S. output slowed.
Hedge funds reduced their short position in West Texas Intermediate crude by 32 percent in the seven days ended April 21, driving the net-long position to the highest since July, U.S. Commodity Futures Trading Commission data show.
Asia Stocks Extend 7-Year High After U.S. Shares Rise to Records (Bloomberg)
Asian stocks climbed, with the regional benchmark index extending a seven-year high, after U.S. equities advanced to records. Materials shares led the advance.
The MSCI Asia Pacific Index rose 0.2 percent to 156.40 as of 9:01 a.m. in Tokyo after closing Friday at its highest since January 2008. The Nasdaq Composite Index posted a fresh record and the Standard & Poor’s 500 Index closed at an all-time high as Google Inc., Microsoft Corp. and Amazon.com Inc. rallied after posting quarterly results. E-mini futures on the S&P 500 were little changed today.
Apple’s HealthKit Linked to Patients at Big Los Angeles Hospital (Bloomberg)
Apple Inc.’s health-tracking software is being connected to patient files at Cedars-Sinai Medical Center in Los Angeles, marking the largest integration yet for the tech company’s foray into the health industry.
The hospital updated its online medical records system this weekend, turning on access to HealthKit for more than 80,000 patients, Darren Dworkin, chief information officer at Cedars-Sinai, said in an interview.
ECB Seen Going All the Way on QE as Taper Doubted by Economists (Bloomberg)
The European Central Bank won’t end its asset-buying program early, though it might do so abruptly, economists say.
More than two-thirds of respondents in a Bloomberg survey said the ECB will stop quantitative easing in September 2016, as currently planned, and most of those said it’ll do so without tapering purchases. The remaining analysts said policy makers will gradually wind the program down, with the end-date ranging from December 2016 to December 2017.
Which Japan Companies Will Beat Forecasts? Here’s a Start (Bloomberg)
If you’re searching for Japanese companies likely to beat earnings forecasts this quarter, one good place to start is the currency assumptions.
Take Mitsubishi Electric Corp., the industrial giant that makes everything from rice cookers to satellites. In February, the company gave a profit forecast that was based on the yen at 100 to the dollar, even though the currency was bouncing around 120. That means Mitsubishi’s overseas sales will bring in more revenue than assumed just two months ago — one reason the company will probably beat forecasts when it reports April 28.
Asia Stocks Extend 7-Year High After U.S. Shares Rise to Records (Bloomberg)
Asian stocks climbed, with the regional benchmark index extending a seven-year high, after U.S. equities advanced to records. Materials shares led the advance.
Contaminated Oil That No One Wants Is Heading to Asia (Bloomberg)
One million barrels of oil. Enough to fill more than 60 Olympic-sized swimming pools. And there it sat in tanks outside San Francisco — for three years — despite crude prices that topped $100 a barrel.
This isn’t the prized “light, sweet” kind of crude that is pumped out of the ground in Texas, or even the thick, sticky stuff from Alberta’s tar sands. Rather, it’s what’s known as “orphaned oil” that is so contaminated with organic chlorides that it can corrode the insides of even the biggest refineries.
Oil Trades Near 4-Month High Amid Mideast Supply-Disruption Risk (Bloomberg)
Oil traded near the highest price since December on concern that Middle East supplies may be disrupted as Saudi Arabia expanded its military campaign against Yemen.
Euro Plunge to Parity Derails as Draghi Cash Flows Into Equities (Bloomberg)
After its biggest slide since being created in 1999, the euro is finding a floor.
A torrent of money unleashed by the European Central Bank is fueling demand from U.S. and other international investors for the region’s stocks — and the currency needed to buy them. Global mutual funds and exchange-traded funds that focus on European equities attracted $63.6 billion this year through April 22, up 70 percent over the same period in 2014, according to data compiled by EPFR Global.
To Bank of America, U.S. Fund Flows Sound Alarm Bells Amid Rally (Bloomberg)
U.S. equities are rallying in a vacuum of money flows, which some strategists and traders say is a sign of losses to come.
In the week through Wednesday, $7.2 billion was pulled from U.S. stock funds, the ninth withdrawal in the last 10 weeks, according to data compiled by Bank of America Corp. and EPFR Global. At the same time, the Standard & Poor’s 500 Index has climbed 3.8 percent from a low in March and the Nasdaq Composite Index has jumped to a record.
Here’s The Old Nemesis Starting to Spook U.S. Bond Traders Again (Bloomberg)
Three months ago, bond traders were bracing for deflation in the U.S.
Now, they’re starting to worry about inflation — and snapping up a record share of Treasuries that offer some protection.
So what’s changed? Part of the answer, of course, has to do with oil, which arrested what seemed like an unrelenting slide that pushed prices from more than $100 a barrel to less than $50 in a span of five months.
Japan Stocks Swing Before Central Bank Meetings, Company Results (Bloomberg)
Japanese stocks fluctuated ahead of policy meetings by the Federal Reserve and Bank of Japan and as more than 300 local companies prepare to report earnings this week.
Applied Materials Drops Tokyo Electron on Antitrust Concerns (Bloomberg)
Applied Materials Inc. scrapped its $9.39 billion takeover bid for chipmaking equipment rival Tokyo Electron Ltd., becoming the second deal to fall apart in a week after opposition by the U.S. Department of Justice.
Proposed remedies from the two suppliers weren’t enough to allay regulatory concerns about the potential impact on competition, according to a statement Monday. Applied Materials and Tokyo Electron separately announced plans to buy back stock.
Why C.E.O. Pay Reform Failed (NewYorker)
Over the next few weeks, American companies will engage in a quaint ritual: the shareholder meeting. Investors will have a chance to vent about performance and to offer resolutions on corporate policy. Many will also get to do something relatively novel: cast an advisory vote on the pay packages of C.E.O.s and other top executives. This power, known as “say-on-pay,” became law in 2010, as part of the Dodd-Frank bill. In the wake of the financial crisis, which amplified anger about exorbitant C.E.O. salaries, reformers looking for ways to rein in the practice seized on say-on-pay, which the United Kingdom adopted in 2002. The hope was that the practice would, as Barack Obama once put it, help in “restoring common sense to executive pay.”
India’s VIX Index Rises for Record 10th Day on Demand for Hedges (Bloomberg)
The benchmark gauge of Indian equity option prices climbed for a 10th day, its longest stretch on record, as investors hedged against a further decline in stocks from a three-month low.
The stock market should be VERY interested in the big wage report coming up this week (BusinessInsider)
On Thursday morning, the employment cost index, or ECI, for the first quarter will be released.
Unlike the average hourly earnings number released in the monthly jobs report, the ECI is a more comprehensive measure of compensation, taking into account things like how much employers spend on things like benefits in addition to wages.
How I Got Converted to G.M.O. Food (NYTimes)
NAIROBI, Kenya — Mohammed Rahman doesn’t know it yet, but his small farm in central Bangladesh is globally significant. Mr. Rahman, a smallholder farmer in Krishnapur, about 60 miles northwest of the capital, Dhaka, grows eggplant on his meager acre of waterlogged land.
As we squatted in the muddy field, examining the lush green foliage and shiny purple fruits, he explained how, for the first time this season, he had been able to stop using pesticides. This was thanks to a new pest-resistant variety of eggplant supplied by the government-run Bangladesh Agricultural Research Institute.
Komatsu’s Profit Falls 15% Amid Growth Slowdown in China (Bloomberg)
Komatsu Ltd. reported a 15 percent decline in fourth-quarter profit after slower economic growth in China cooled the country’s construction market and undermined the appetite of mining companies to invest in resource-rich nations.
Net income fell to 37.5 billion yen ($315 million) for the three months ended March 31 from 44.1 billion yen a year earlier, according to Bloomberg calculations based on full-year results released Monday.
Emerging Stocks Rise to Seven-Month High as Chinese Shares Surge (Bloomberg)
Emerging-market stocks headed for a seven-month high as energy companies rallied and investors speculated China will step up measures to support economic growth. Taiwan’s dollar strengthened the most in 15 years.
Box Office: 'Avengers: Age Of Ultron' Nabs Mighty $201M Overseas Debut (Forbes)
It won’t open until next weekend in America, but much of the worldwide movie going community got their initial sampling of Walt Disney’s Avengers: Age of Ultron starting late last week, and it has already crossed the $200 million mark overseas. The much-anticipated comic book superhero sequel debuted on April 22nd and expanded through the week into around 55% of its would-be worldwide market. It earned $9.5 million in total on its first day and it upped its total to $44.8 million worldwide heading into the weekend. It will expand to most of the rest of the world over the next week, with high profile debuts in America on May 1st, China on May 12th, and Japan on July 4th. And with the first extended weekend accounted for, the $250 million production has earned $201.2 million worldwide. By the way, it earned $10.7m of that in IMAX, netting the company’s biggest overseas “not with China” debut ever.
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Greece's finance minister channels FDR: 'I welcome their hatred' (BusinessInsider)
Amid high-level brinkmanship by Greece's finance minister Yanis Varoufakis, the euro zone officials negotiating the next tranche of bailout funds to cash-strapped Athens are getting frustrated.
Earlier this week, a participant of the April 24 meeting in Riga, Latvia, called Varoufakis a "time-waster, a gambler, and an amateur." And now eight participants talked to Bloomberg about how the game theorist's brash style made the talks maddening.
Europe Stocks Decline Amid Greek Deadlock as Deutsche Bank Falls (Bloomberg)
European stocks fell, reversing earlier gains, as investors weighed Greek payments due this week after euro-area finance ministers refused to release more aid to the debt-ridden country.
HSBC Jumps Most Since ’11 After Retail Spinoff Plan Reported (Bloomberg)
HSBC Holdings Plc’s shares jumped the most since 2011 in Hong Kong after a newspaper reported that the lender may spin off its U.K. retail bank and the company earlier pledged to review its domicile.
Shares of HSBC, Europe’s largest bank, rose as much as 6 percent, the biggest intraday gain since Dec. 1, 2011, to HK$78.25. The stock was up 5.2 percent as of the noon trading break, compared with a 1.3 percent increase in the benchmark Hang Seng Index.
Traders have been ‘spoofing’ the market and now regulators are finally catching on (BusinessInsider)
On Tuesday, trader Navinder Singh Sarao was arrested in London in connection with the Flash Crash of 2010.
His charge: "spoofing."
Sarao's case is just the latest in a recent wave of spoofing investigations being conducted by the Justice Department, the Securities and Exchange Commission and other regulators.
Cap Gemini to Acquire Igate for $4 Billion to Challenge IBM (Bloomberg)
Cap Gemini SA, the largest European technology-services provider, agreed to buy Igate Corp. for about $4 billion in cash to expand in North America, which is outpacing Europe’s growth.
Get ready for a busy week in the economy — Here's your complete preview (BusinessInsider)
This week is stacked with top-shelf economic data, include new reports on manufacturing, housing, and consumer sentiment.
We're also going to get the first official estimate of GDP growth in Q1. This week also comes with the Q1 employment cost index (ECI) report, which economists will watch closely for signs of wage growth.
Paul Craig Roberts: "Truth Is Washington's Enemy" (ZeroHedge)
US Representative Ed Royce (R, CA) is busy at work destroying the possibility of truth being spoken in the US. On April 15 at a hearing before the House Committee on Foreign Affairs of which Royce is chairman, Royce made use of two minor presstitutes to help him redefine all who take exception to Washington’s lies as “threats” who belong to a deranged pro-Russian propaganda cult.
Washington’s problem is that whereas Washington controls the print and TV media in the US and its vassal states in Europe, Canada, Australia, Ukraine, and Japan, Washington does not control Internet sites, such as this one, or media, such as RT, of non-vassal states. Consequently, Washington’s lies are subject to challenge, and as people lose confidence in Western print and TV media because of the propaganda content, Washington’s agendas, which depend on lies, are experiencing rougher sledding.
India Rupee Falls to Weakest Level in 2015 as Debt Outflows Rise (Bloomberg)
India’s rupee weakened to its lowest level this year as global funds stepped up sales of the nation’s debt amid uncertainties over a retrospective tax on capital gains.
Goldman Gets Cold Feet:"It Is Difficult To Predict How Negative The Market Reaction To Grexit Would Be" (ZeroHedge)
On Friday, courtesy of Bloomberg, we showed a very detailed Greek repayment schedule which laid out just how difficult the next few months will be for the bankrupt, in the words of its finance minister, country.
Deutsche Bank to Cut $3.8 Billion Costs in Strategy Shift (Bloomberg)
Deutsche Bank AG plans to reduce annual costs by a further 3.5 billion euros ($3.8 billion), cut back its ownership in the Postbank consumer unit and shrink the securities business to revive profitability. The shares dropped.
Deutsche Bank aims to achieve a return on tangible equity of at least 10 percent in the medium term, the Frankfurt-based company said in a statement Monday, scrapping its previous profitability goal. It will reduce the number of countries or local presences by as much as 15 percent by 2020 and close up to 200 branches.
Strong iPhone Sales Will Power Apple’s Encore (WSJ)
Talk about a tough act to follow. When Apple Inc. last reported earnings in January, it posted a quarterly net income of $18 billion—the most profitable quarter of any publicly traded company ever.
Can Biogen beat the memory thief? (Forbes)
Of the leading causes of death, Alzheimer’s Disease is the only one for which there is no way to prevent it, cure it, or slow its progression. A Boston-area biotech may be closer than ever to solving the puzzle.
Above illustration by Sinelab
Even before Jeffrey Sevigny stepped to the podium, it was clear that something momentous had occurred in the worldof Alzheimer’s research. Before Biogen’s senior medical director for clinical development could click on the first slide of his PowerPoint deck, tens of billions of biotech investment dollars had already been wagered on what his presentation would say.
"I’m Not Crazy, I’m Scared" – Why For One Trader, This Time It Is Different (ZeroHedge)
The SPX flirted with all-time highs. The Nasdaq Index made 15 year highs; Chinese equities, and so many other equity indices are flying. Bonds sold off this week, but the German 10-year yield is still ~17bps, the U.S. 10-year yield unable to get beyond 2%, and Greek bonds had a two-day rally that would be truly impressive if it wasn’t on volume that made it just an exercise moving wide bid/offer spreads, representing sentiment not trading.
The USD is selling off on the view that Greece is saved, the Fed is scared, and a “we can’t sit with positions because it never works” mentality. The only really new thing the market needs to digest is that commodities may be nearing a bottom
Indonesian Stocks Decline Most in Six Months on Growth Concerns (Bloomberg)
Indonesian stocks dropped, sending the benchmark index toward its biggest loss in six months, on concern an economic slowdown will damp earnings growth.
The Jakarta Composite Index fell 2.8 percent to 5,286.02 at 1:34 p.m., heading for the biggest decline since Oct. 2. PT Bank Mandiri dropped 5.5 percent and PT Bank Rakyat Indonesia slumped 4.8 percent, leading a retreat by lenders. Palm oil producer PT Astra Agro Lestari sank 9.1 percent after quarterly profit tumbled 80 percent.
The Unit Root of the Matter: Is it Demand or Supply? (RogerFarmerBlog)
John Cochrane responds to my piece on why there is no evidence that the economy is self-correcting with an excellent blog post on unit roots. John's post raises two issues. The first is descriptive statistics. What is a parsimonious way to describe the time series properties of the unemployment rate? Here we agree. Unemployment is the sum of a persistent component and a transitory component.
The second is economics. How should we interpret the permanent component? I claim that the permanent component is caused by shifts from one equilibrium to another and that each of these equilibria is associated with a different permanent unemployment rate. I’ll call that the “demand side theory”. (More on the data here and here and my perspective on the theory here andhere).
Glorious Bonds Mixed After Coupon Paid as Moody’s Flags Concerns (Bloomberg)
Bonds of Glorious Property Holdings Ltd. were mixed Monday after the developer made a coupon payment Friday, as Moody’s Investors Service flagged concerns about a principal repayment due in October.
PetroChina, Sinopec Jump by Daily Limit on Merger Speculation (Bloomberg)
PetroChina Co. and China Petroleum & Chemical Corp., the nation’s two largest oil explorers, jumped by their daily trading limit in Shanghai today on speculation the government is considering mergers.
“Big oil names are soaring because of speculation that the government is studying mergers in the industry,” said Clement Cheng, an equity trader at RBC Investment Management Asia in Hong Kong. “The oil sector has been undervalued for a long time.”
The “War on Cash” in 10 Spine-Chilling Quotes (NakedCapitalism)
The war on cash is escalating. As Mises’ Jo Salerno reports, the latest combatant to join the fray is JP Morgan Chase, the largest bank in the U.S., which recently enacted a policy restricting the use of cash in selected markets; bans cash payments for credit cards, mortgages, and auto loans; and disallows the storage of “any cash or coins” in safe deposit boxes. In other words, the war has moved on from one of words to actions.
War Haunts Russia’s Southern Fringe, Putting Pipelines at Risk (Bloomberg)
Russia’s southern periphery is closer to open war than at any time since the 1990s.
Hostilities between Azerbaijan and Armenia are mounting 21 years after a cease-fire froze a conflict that flared in the dying days of the Soviet Union. During the relative calm, companies including BP Plc poured billions of dollars into producing oil and gas in Azerbaijan and building pipelines to link the country with Turkey, Italy and the rest of Europe.
Our Financial Future: Infinite Greed Meets A Funny Thing Called Karma (TwoMinds)
All those angered by the mere question of the viability of this predatory pillaging in the name of capitalism are incapable of even admitting this cultural crisis exists.
Somewhere along the line, we lost the ability to distinguish between earning a profit and maximizing private gain by any means, i.e. Infinite Greed. If you insist on making this distinction now, you anger a lot of people, as it blows the capitalist cover of Infinite Greed.
George W. Bush Bashes Obama on Middle East (BloombergView)
In a closed-door meeting with Jewish Donors Saturday night, former President George W. Bush delivered his harshest public criticisms to date against his successor on foreign policy, saying that President Barack Obama is being naïve about Iran and the pending nuclear deal and losing the war against the Islamic State.
China’s Young Leave State Ranks to Chase Riches at Tech Startups (Bloomberg)
For decades, the most coveted jobs in China have been in government, with their steady income, job security and power. Now people like Nymar Li are changing that perception by leaving the state to seek their fortunes at startups.
Li became the pride of his family when he landed a job in the customs bureau right out of college a decade ago. Then last year, he gave up the security of employment for life to join an e-commerce startup working in Hangzhou, following the path of Jack Ma who helped found Alibaba Group Holding Ltd. in the same city and then pulled off the largest initial public offering ever.
More Barbarians at the Gates: Private Equity Puts Primary Care in Play (NakedCapitalism)
There are still some idealistic physicians who enter primary care practice as a calling.
The usual informal definition of primary care is care which is continuous, coordinated, comprehensive and compassionate. The official definition used by the American Academy of Family Physicians (AAFP) is:
Primary care is that care provided by physicians specifically trained for and skilled in comprehensive first contact and continuing care for persons with any undiagnosed sign, symptom, or health concern (the ‘undifferentiated’ patient) not limited by problem origin (biological, behavioral, or social), organ system, or diagnosis.
How a $17 Trillion Bull Market Falls Short Compared With History (Bloomberg)
Since the depths of the financial crisis, American investors have seen the value of their stocks balloon by $17 trillion as earnings rose 15-fold.
Doug Ramsey has a word for that: abysmal.
The chief investment officer of Leuthold Group LLC says profits in the Standard & Poor’s 500 Index should be 32 percent higher based on growth rates since the Great Depression. The same could also be said for stocks, where gains of 21 percent a year since 2009 still leave an index of total return 8 percent below a historical trendline calculated by Ned Davis Research since 1925.
3 Tough Choices for ECB on Greece (BloombergView)
As another meeting of euro area finance ministers ended in acrimonyFriday, the focus this week will turn to the resumption of — it is to be hoped — more constructive technical discussions between Greece and its European partners. Yet the most potentially decisive discussions will be taking place in a different venue: Decision makers at the European Central Bank’s will hold their weekly consideration of how much “emergency liquidity” they should extend to Greek banks and on what terms.
The 10 Most Affordable Cities For Millennials (Bloomberg)
In the aftermath of the housing crisis, it seemed like millennials might give up on homeownership in favor of a lifetime spent renting squalid apartments in gentrifying urban centers. Fears of that grim scenario have mostly passed, and it’s not uncommon to hear of young faces at open houses, or to read surveys in which renters say they’re finally ready to fork over a down payment.
