Financial Markets and Economy
The Oil Price Bounce Has Failed to Excite Equity Analysts. So Far. (Bloomberg)
As oil fell in the second half of last year, analysts followed by lowering their ratings on European energy companies. They're still cutting, even as oil rebounds.
A Bloomberg measure that converts each analyst’s current stock recommendation into a number —from one for a 'sell' to five for a 'buy'— has continued to fall every month this year despite a 10 percent rally in the price of Brent crude.
Nothing China is doing is working (Business Insider)
A bunch of data about the state of China's economy came out Tuesday night, and altogether it told us one thing — nothing the government has been doing to save its economy from falling deeper into a slowdown is working.
Since November, China has cut benchmark interest rates three times, including once Saturday. It has also loosened mortgage policies to prop up the housing market.
Euro Pares Gain as Draghi Underlines Commitment to Easing Plan (Bloomberg)
The euro pared gains as Mario Draghi said the European Central Bank will implement its bond-buying program “in full.”
The common currency was little changed against the dollar after earlier rising 0.8 percent to the highest in almost three months. Draghi, the ECB president, said in a speech in Washington that the central bank’s unconventional measures have proven effective, and low interest rates haven’t yet led to financial imbalances.
Debt Traders to Fed: We Dare You to Try Raising Rates This Year (Bloomberg)
Go ahead, Federal Reserve, keep trying to prepare markets for an interest-rate increase this year.
It isn’t working.
The longer U.S. central bankers wait to initiate their tightening cycle, the more traders push back their expectations for when borrowing costs will start rising. On Thursday, futures contracts were implying that traders saw the fed funds rate at about 0.3 percent rate by December. That’s the lowest estimate of the year, and about half the forecast for the overnight lending benchmark that the Fed gave in March.
US companies are rushing to insulate themselves against Venezuela's sinking currency (Business Insider)
A growing number of U.S. companies say they can't cope with Venezuela's sinking bolivar currency, prompting some of them to remove their operations in the South American nation from their consolidated financial reports. In other cases, they have exited the country altogether through a sale or by simply shuttering their businesses there.
Many of those recently taking such action are medium-sized or small companies, which means that the tumbling currency and a deeply troubled Venezuelan economy have tended to have a disproportionately greater impact on their results than suffered by bigger entities with business in the country.
How Often Are Markets “Normal?” (A Wealth Of Common Sense)
Stock market prices are artificially high. Bond market yields are artificially low. Valuations are at unsustainable levels. It’s all paper gains that will be erased eventually. We need a more normalized environment.
Investors and pundits have been hammering these points home for some time now. And there is some legitimacy to the idea that interest rates are too low and valuations are above average. But waiting around for the markets to return to “normal” could mean you’re waiting for a long time. Normal markets just don’t occur very often when you look back historically.
Stocks and Tradings
About $91 Million of Avon Stock Traded at Peak of Frenzy (Bloomberg)
Traders — human and otherwise — churned about $91 million worth of Avon Products Inc. stock in the 25 minutes after a takeover filing the company is now treating as a hoax.
That’s four times as much as traded all day prior to then, according to data compiled by Bloomberg. More than 12 million shares went off in 19,941 trades during the stretch when the stock went from $6.60 to $8 and then back to about $7.20 at noon, the wildest minutes of the deluge. The rush came in between three separate circuit breakers that halted trading because of the volatility.
Liquidity Risk: Same as it Ever Was (Ben Carlson, Yahoo)
For the past two to three years now I’ve read article after article about the potential for market dislocations during the next downturn because of liquidity issues in certain areas of the market.
It’s now easier than ever to invest in almost any type of security or market you can think of through ETFs or mutual funds that allow for daily liquidity in fund shares. The problem that many have been pointing out is that the underlying securities that make up some of these funds are not as liquid as the funds themselves, creating a potential liquidity mismatch.
McDonald’s Has to Do More than Manipulate Its Stock Price (HBR)
The “turnaround plan” recently announced by McDonald’s includes an aggressive program to manipulatively boost its stock price via stock buybacks, an activity that has become the major focus of its corporate strategy over the past decade. A central plank of the plan is to “return $8 [billion] to $9 billion to shareholders in 2015 and to reach the top end of its three-year target of returning $18 billion to $20 billion to them by the end of 2016.” In 2014, McDonald’s expended $3.2 billion each on buybacks and dividends, equivalent to 134% of its net income, and its executives can do up to $8.1 billion in buybacks in 2015 under its current board-authorized repurchase program.
Politics
Trade supporters breathe easier as U.S. trade bill clears Senate hurdle (Reuters)
A 12-nation Pacific trade agreement cleared a crucial test in the U.S. Senate on Thursday, giving a resounding thumbs-up to legislation that holds the key to President Barack Obama's diplomatic pivot to Asia.
Just two days after Democrats defied Obama to block debate on a bill to "fast-track" trade deals such as the Trans-Pacific Partnership (TPP) trade deal through Congress, the Senate voted 65 to 33 to move ahead with consideration of the measure.
Technology
This Robot Cracks Open Combination Locks In Seconds (Tech Crunch)
Those combination locks you pick up for a few bucks at the office supply store have never been the epitome of security — but in recent weeks, they’ve taken a beating.
A few weeks ago, Samy Kamkar — the endlessly clever gent behind the USB necklace that’ll hack your computer and the self-title Samy virus that devastated MySpace back in the day — demonstrated a way to crack a Master Lock by hand in just a few minutes.
Mobile World Congress 2015: Five glimpses of the future (CNN)
Mobile World Congress 2015 brought together 2,000 exhibitors and tens of thousands of delegates under one roof in Barcelona. But as well as the myriad cell phone launches that are the show's trademark, this year's event also pointed to a brave new world of mobile technology, featuring speakers and exhibitors that had everyone asking questions from: What if cars could talk to each other? When will we outgrow 4G? And why isn't my vending machine smart yet?
So here are five forward-thinking pieces of tech that could shape our tomorrows, as showcased at Mobile World Congress.
Health and Life Sciences
CVS Experiment On How To Get People To Stop Smoking Has Fascinating Results (Think Progress)
Although the smoking rate among U.S. adults has been on the decline in recent years, tobacco is still the biggest public health threat in the country, contributing to tens of thousands of preventable deaths and racking up billions in health care expenditureseach year. So researchers are still trying to figure out what could convince the estimated 40 million smokers in the U.S. to kick the habit for good. Is there a more creative way to tackle the problem?
That was the subject of an innovative study that tracked a group of CVS employees who were recruited to participate in an incentive-based cessation program. According to the researchers, who published their results in the New England Journal of Medicinethis week, offering smokers varying financial rewards and penalties in exchange for cutting out cigarettes worked better than they expected.
Life on the Home Planet
Space Invader: Street artist turns Hong Kong into 1980s video game (CNN)
Two years ago in Hong Kong it looked like game over for a street artist trying to transform the city into a 1980s video game.
Authorities didn't appreciate pixelated characters such as Pac-Man and Super Mario appearing on their walls, and so wiped them out.
Now Invader, as the anonymous French artist is known, is back with a newer, bigger exhibition of his works — his biggest solo venture to date outside of Europe.
And this time he has official approval.
Bee Die-Offs Are Worst Where Pesticide Use Is Heaviest (Mother Jones)
The nation's honeybee crisis has deepened, with colony die-offs rising sharply over last year's levels, the latest survey from the US Department of Agriculture-funded Bee Informed Partnership shows. A decade or so ago, a mysterious winter-season phenomenon known as colony-collapse disorder emerged, in which bee populations would abandon their hives en masse. These heavy winter-season losses have tapered off somewhat, but now researchers are finding substantial summer-season losses, too. Here are the latest numbers.
Water Wars Officially Begin In California (Zero Hedge)
A century of government meddling has turned the issue of water rights on its head, and further centralized control of waterways in local, state, and federal governments; and, as Acuweather reports, with the state of California mired in its fourth year of drought and a mandatory 25% reduction in water usage in place, reports of water theft are becoming increasingly common. With a stunning 46% of the state in 'exceptional' drought, and forecast to worsen, huge amounts of water are 'going missing' from the Sacramento-San Joaquin Delta and a state investigation was launched. From illegally tapping into hydrants in order to fill up tanks to directly pumping from public canals, California continues to formulate new strategies to preserve as much water as possible and fight the new water wars that are emerging.
Iraqi Who Worked for the U.S. Military Is Arrested in Texas in Link to Islamic State (NY Times)
An Iraqi man who worked as a translator for the American military before moving to the United States in 2009 was arrested on Thursday in Texas by F.B.I. agents who say he pledged allegiance to the leader of the Islamic State last year and misled them about his travels to Syria.
Defying U.S., Colombia Halts Aerial Spraying of Crops Used to Make Cocaine (NY Times)
The government of Colombia on Thursday night rejected a major tool in the American-backed antidrug campaign — ordering a halt to the aerial spraying of the country’s vast illegal plantings of coca, the crop used to make cocaine, citing concerns that the spray causes cancer.
The decision ends a program that has continued for more than two decades, raising questions about the viability of long-accepted strategies in the war on drugs in the region.
