Financial Markets and Economy
Korea's Export Engine Slips into Reverse as Japan Steps on the Gas (Bloomberg)
South Korea’s much-vaunted export machine is losing steam as the won rises against the euro and the yen, undercutting sales in global markets.
That's in sharp contrast to Japan, where currency depreciation is giving a leg up to large manufacturers that ship their wares abroad.
American Meritocracy Isn’t What It Used To Be, In Five Charts (Wall Street Journal)
Last week’s WSJ/NBC poll found that Americans, by more than two to one, are more worried about their ability to get ahead financially than they are about the widening income gap.
A new book by Robert Putnam, the Harvard University political scientist, delivers some detailed insights into what’s behind those worries. Mr. Putnam joins President Barack Obama and Arthur Brooks, president of the American Enterprise Institute, for a discussion on poverty at Georgetown University on Tuesday.
Owens-Illinois to buy Mexican glass container business for $2.15 billion (Market Watch)
Owens-Illinois Inc. has agreed to buy Vitro S.A.B. de C.V.’s food and beverage glass container business for $2.15 billion in cash, a move that will give Owens-Illinois a foothold in the Mexican glass-packaging market.
Vitro VITROA, +0.20% is the largest supplier of glass containers in Mexico. The deal includes five plants in Mexico and one in Bolivia, with a total of 4,700 employees.
Euro Strengthens for Second Day as Region’s Growth Accelerates (Bloomberg)
The euro rose for a second day against the dollar as a report showed growth in the currency bloc expanded at the fastest pace in almost two years in the first quarter.
The 19-nation currency was about 1.4 percent from a 2 1/2-month high reached last week versus the greenback. While German gross domestic product data for the three months through March came in below economists’ estimates, a separate report showed France grew the most in almost two years in the same period.
European GDP Growth Trounces America In Q1, Biggest Rise In 4 Years; Greece Back In Recession (Zero Hedge)
While the US economy was crushed by harsh snow in Q1, with its GDP set to be revised to nearly -1.0% (yes, we know the real reason was the collapse in Chinese end demand and the soaring dollar but don't tell the Fed), Europe must have had a very balmy winter, because as Eurostat reported earlier today, Europe grew (and considering Europe estimates the "benefit" for prostitution and illegal drugs to the economy, we use the term loosely) 0.4% in the first quarter, a 1.6% annualized growth rate, in line with expectations, up from 0.3% last quarter and a year ago, and tied for the highest GDP print in 4 years.
Greece’s Creditors Said to Seek EU3 Billion in Budget Cuts (Bloomberg)
Greece’s anti-austerity government needs to raise at least three billion euros ($3.4 billion) through additional fiscal measures by the end of this year to meet the minimum budget targets acceptable by creditors, an official with knowledge of the discussions said.
The reductions would bring the primary budget surplus in 2015 to just over 1 percent of gross domestic product, a target Greek Interior Minister Nikos Voutsis said today is acceptable. Without any change in fiscal policy, Greece would end 2015 with a budget deficit of about 0.5 percent of GDP, the official said. The so-called primary budget balance doesn’t include interest payments.
Balyasny Asset Management Ends The First Quarter Flat (Value Walk)
Balyasny Asset Management’s Atlas Global Strategy has finally pulled ahead of the heavy losses it took following the Swiss National Bank’s decision to remove the euro-franc currency peg, and ended 1Q15 up 0.09% (+0.39% in March). While managing partner Dmitry Balyasny acknowledges that the past quarter returns are low, he says that even the macro strategy that looks bad in the aggregate has been successful if you exclude the big drop from the Swiss currency move.
Dollar still has another 10% gain in it, says Pimco (Market Watch)
Ignore the pullback — the dollar rally is far from over, says a top Pimco investment manager.
With a Federal Reserve rate hike and a stronger U.S. economy on the horizon, the greenback’s bull run will soon pick up pace again, says Mihir Worah, Pimcos chief investment officer for return and asset allocation.
One of the most important labor market trends is picking up steam (Business Insider)
Retail workers are still quitting their jobs.
The latest Job Openings and Labor Turnover Survey, or JOLTS report, released on Tuesday showed that while job openings in March declined from February's 14-year high, the rate at which workers in retail are quitting their jobs jumped to the highest level since December 2007.
Euro-Area Growth Picks Up as France Outperforms Germany (Bloomberg)
Euro-area growth quickened in the first quarter as stronger-than-predicted performances from France and Italy made up for weaker momentum in Germany.
Gross domestic product in the region rose 0.4 percent in the first three months of the year after expanding 0.3 percent in the previous three months, the European Union’s statistics office in Luxembourg said Wednesday. That’s in line with the median of 42 estimates in a Bloomberg survey. Greece fell back into recession.
Economists Forecast One More Chinese Interest-Rate Cut This Year (Bloomberg)
Economists are forecasting another cut in China’s benchmark one-year lending rate in the third quarter as policy makers step in to cushion the nation’s economic slowdown.
The lending rate is expected to fall 0.25 percentage point to 4.85 percent in the third quarter, according to the median of 23 economists. Analysts also expect banks’ reserve ratios will be lowered, the median of 24 analysts showed.
French Economy Beats Forecasts With Fastest Growth Since 2013 (Bloomberg)
French economic growth accelerated more than economists forecast in the first quarter as lower oil prices and a weaker euro helped propel a recovery across the euro area.
Gross domestic product rose 0.6 percent after stagnating in the previous three months, the country’s statistics office in Paris said Tuesday. Economists had forecast a 0.4 percent gain, according to a Bloomberg News survey. Euro-region growth probably quickened to 0.4 percent, economists said before a report due later.
Oil's Not Coming Back. Here's Why (Bloomberg)
Oil bulls who’ve cheered a rebound of 40 percent from a six-year low should take heed: Unless demand accelerates, the rally is in danger.
The omens aren’t good. The U.S. government expects global consumption to grow next year at less than half the rate of 2010, when the world was emerging from a previous recession. The growth is insufficient to close the gap with rising supply, according to Royal Dutch Shell Plc, Europe’s biggest energy producer.
Stocks and Trading
The Time Is Right for Decade’s Biggest Grocery Merger: Real M&A (Bloomberg)
Delhaize Group’s rising stock may have made it the right size for a merger with Royal Ahold NV.
The Food Lion chain owner climbed more than 30 percent in the last year through the beginning of May as it improved sales and sold underperforming stores. The shares added another 16 percent this week on the news that Delhaize is in talks to combine with Dutch rival Ahold.
European Stocks Rebound Amid GDP Data as SABMiller, Vivendi Gain (Bloomberg)
European stocks rebounded amid earnings reports and as data showed the region’s economy expanded at its fastest pace in almost two years.
The Stoxx Europe 600 Index climbed 0.9 percent to 399.7 at 10:21 a.m. in London. Vivendi SA gained 2.1 percent after first-quarter earnings topped projections. SABMiller Plc also added 2.1 percent after the world’s second-biggest brewer reported annual pretax profit that beat analysts’ estimates.
Draghi QE Turns Stocks Into Bond Appendage as Correlation Jumps (Bloomberg)
Mario Draghi’s quantitative-easing program is tying together the fate of Europe’s stock and bond markets to a degree not seen in almost two years.
Since the European Central Bank president began buying government debt, the correlation between moves in the Euro Stoxx 50 Index and a gauge tracking the region’s bonds has climbed to its highest level since September 2013. While that served bulls when fixed-income markets gained to start the year, lately it’s been all downside with equities following bonds to a loss of 6.7 percent.
Stock futures rise ahead of retail data (Reuters)
U.S. stock index futures were higher on Wednesday as a global bond selloff eased and investors waited for a ream of data including U.S. retail sales for April.
U.S. retail sales likely continued to recover in April as pent up demand sent consumers shopping after a slow winter season. The data will be released at 8:30 a.m. ET.
The government will also release business inventories data for March at 8:30 a.m. ET, which is expected to show a rise of 0.2 percent, compared with an increase of 0.3 percent in February. Import and export data for April will be released at 10 a.m. ET.
Politics
Did Barack Obama Just Lose to Elizabeth Warren? (Mother Jones)
In Washington, as in much of life, it often seems that social evolution doesn't progress much beyond high school. So it was hardly surprising that in the media the battle over the Trans-Pacific Partnership trade deal was often depicted as a spat between the BMOC of the party (President Barack Obama) and the queen of the alt crowd (Sen. Elizabeth Warren). Yet the vote on Tuesday afternoon in the Senate that blocked fast-track legislation—which would allow the president to bring the TPP to an up-or-down floor vote with no amendments—was a sign that Obama's problems are not just with Warren, the Massachusetts populist and progressive darling. Every member of his own party but one voted to stymie a vote on the fast-track bill Obama has been pushing. And after the vote, Sen. Chuck Schumer, the New York Democrat who often is mindful of the interests of Manhattan-based financiers, was at the mic denouncing the fast-track measure and demanding a trade deal that does right by American workers—a jab at Obama, who has passionately asserted the TPP is good for US workers
What Happens When Republicans Realize Obamacare Was Written for Them? (Bloomberg)
Luis Lang, a 49-year-old smoker and diabetic from South Carolina, is going to go blind unless he figures out how to pay for expensive eye treatment.
Lang is a self-employed, uninsured handyman who stopped working due to his poor vision. He’s also a Republican who decided not to purchase Obamacare and prided himself on being able to pay his own medical bills, but also assumed that there would be some kind of government help in the event of an emergency, the Charlotte Observer reported Tuesday. He missed the enrollment period and wouldn’t have qualified for subsidies because, since he’s not working, he makes too little money. But he still makes too much money for Medicaid, which South Carolina did not expand.
Saudi Arabia's new king just snubbed Obama (Business Insider)
The recently crowned king of Saudi Arabia is reportedly snubbing President Barack Obama to express his displeasure with the US' strengthening ties with Iran, according to The New York Times and The Wall Street Journal.
Technology
Moore's Law Reaches 50 as Chip Industry Faces New Challenges (Bloomberg)
Even for its author, Moore's Law — the predictor of progress in the electronics industry — has been around a lot longer than expected.
"I’m amazed. The original prediction was to look 10 years out, which I thought was a stretch," Intel Corp. co-founder Gordon Moore said at an event Monday to mark 50 years since he postulated that the number of transistors on a computer chip doubles every two years.
With Windows 10, The OS Becomes A Service Instead Of A Series Of Major Releases (Tech Crunch)
Microsoft is moving to a different kind of software model with Windows 10. A developer evangelist noted that Windows 10 would be the “last version of Windows” during the company’s Ignite conference this week, and a follow-up confirmation from an official Microsoft spokesperson revealed (via the Telegraph) that, indeed, updates to Windows after that release would follow an incremental path that would lead to ongoing improvements, instead of splashy, more occasional numbered launches
Facebook launches its journalism-saving “instant articles.” Here’s how to find them (QZ)
Facebook moved one step closer to taking over the internet this morning with the formal launch of “instant articles,” which allows publishers such as the New York Times, National Geographic, Buzzfeed, and others to publish their work directly through the social network rather than on their own websites.
How-To: Clean your iOS device with free downloads, recovering lost space (9 to 5 mac)
When Apple was designing the Mac app iDVD, then-CEO Steve Jobs directed his development team to build a dead-simple DVD-burning application: instead of a mess of options and windows, Jobs wanted one window with one button marked “Burn,” which would be pressed once the desired video file was dragged-and-dropped into the window. Years later, when Jobs wanted Apple’s iOS devices to be even simpler, he dumped the Mac’s windows and drag-and-drop file system in favor of a grid of icons. There wasn’t even a trash can to worry about — instead, iOS would automatically discard unused files as needed
Health and Life Sciences
Scientists regenerate bone tissue using only proteins secreted by stem cells (Science Daily)
Scientists have discovered a way to regrow bone tissue using the protein signals produced by stem cells. This technology could help treat victims who have experienced major trauma to a limb, like soldiers wounded in combat or casualties of a natural disaster. The new method improves on older therapies by providing a sustainable source for fresh tissue and reducing the risk of tumor formation that can arise with stem cell transplants.
Why American Researchers Want To Use Cuba’s Cancer Drugs (Think Progress)
During the 55-year, United States-led trade embargo, the Cuban government used what little resources it had to spur innovation in preventative medicine. Now, with the newly normalized relationship between the U.S. and the small Caribbean nation, American researchers want to seize an opportunity to expand access to Cuba’s medical investments.
New York Gov. Andrew Cuomo (D) recently visited Havana to broker a deal between between cancer researchers in his state and Cuban officials, who have created a potentially promising therapeutic vaccine against lung cancer that is headed to the United States for clinical trials.
Nano memory cell can mimic the brain’s long-term memory (Science Daily)
RMIT University researchers have mimicked the way the human brain processes information with the development of an electronic long-term memory cell.
Researchers at the MicroNano Research Facility (MNRF) have built the one of the world's first electronic multi-state memory cell which mirrors the brain's ability to simultaneously process and store multiple strands of information.
Life on the Home Planet
Five Killed as NYC-Bound Amtrak Train Crashes in Philadelphia (Bloomberg)
At least five people were killed Tuesday night, and dozens of others injured, when an Amtrak train headed to New York City derailed in Philadelphia, shutting down part of the busiest passenger rail corridor in the U.S.
Northeast Regional Train 188, which originated in Washington, went off the tracks about 9:30 p.m., sending more than 50 people to hospitals for treatment, according to the city’s fire department. The cause wasn’t immediately known.
Insect cookery kit makes Edinburgh Napier university degree show (BBC)
An Edinburgh student has created a cookery kit to encourage people to eat insects as part of their daily diet.
Creepy-crawlies like beetles, caterpillars and grasshoppers are a staple food in many parts of the world.
However, despite them being low in fat and calories and containing as much protein as beef, many in the Western world steer clear of eating insects.
Search for Malaysia Airlines Plane Uncovers Remnants of a Shipwreck (NY Times)
Search crews looking for a Malaysia Airlines jet believed to have crashed in the southern Indian Ocean have found the remnants of a shipwreck — including an anchor and possibly a ship’s bell — resting on the seabed almost two and a half miles down.
It is not what searchers were hoping to find. Paul Kennedy, search director for Fugro Survey, a division of a Dutch company hired by the Australian government to look for wreckage from Malaysia Airlines Flight 370, said the debris was not from the jet.
Here Comes Trouble: Forecasters Agree El Nino Is Here (Bloomberg)
Three of the big meteorological agencies on the Pacific Rim now agree:El Nino has come.
The Australian Bureau of Meteorology joined the U.S. Climate Prediction Center and Japan Meteorological Agency on Tuesday in declaring that sea-surface temperatures in the equatorial Pacific are high enough — and the atmosphere above the ocean has reacted strongly enough — to mean an El Nino has begun.
