From Bloomberg
Europe’s Secret Demands Make Banks a Guessing Game for Investors
The secrecy surrounding Europe’s new capital targets is unsettling some investors and analysts who say they’re being kept in the dark about the health of the region’s banks.
The European Central Bank in March approved the last batch of Pillar 2 requirements, completing its first such exercise as supervisor of the region’s biggest banks. The figures, which refer to the second prong of an international accord known as the Basel standards, define how much capital a lender should hold as a buffer against economic shocks. In Italy, the stock-market watchdog deems the levels so crucial it urged banks to disclose them. Elsewhere, lenders have remained silent. (Read more)
Hedge Fund Mines Twitter for Stock Tips
People share more information than you might want to know on Facebook and Twitter. Hedge fund firm Tashtego hopes to profit from it.
Tashtego, backed by early Twitter Inc. investor Spark Capital, plans to raise a fund that will use consumer sentiment and trader behavior from social networks to bet on and against U.S. stocks, said Chief Investment Officer Arthur Mateos. The Boston-based firm’s Social Equities Fund, which relies on algorithms, is expected to eventually reach $1 billion in capital, the 45-year-old said. (More)
U.S. Stock-Index Futures Fall Before Labor Data, Factory Orders
U.S. stock-index futures retreated, indicating equities will decline for a third day before markets close for Good Friday.
E-mini contracts on the Standard & Poor’s 500 Index expiring in June declined 0.4 percent to 2,046.50 at 10:44 a.m. in London, with underlying stocks on track to end the week little changed. Dow Jones Industrial Average futures fell 43 points, or 0.2 percent, to 17,572. (Read more)
China to Conduct Probe of Faked Air Pollution Data, Xinhua Says
China’s environmental protection watchdog will launch a two-year probe to root out falsified air quality data, the official Xinhua News Agency reported. (Continue)
Brazil’s Richest Man May Reap $5.6 Billion in Kraft-Heinz Merger
Brazil’s richest man Jorge Paulo Lemann may add more than $5 billion to his personal fortune after ketchup maker H.J. Heinz merges with Kraft Foods Group Inc.
Heinz, controlled by Lemann’s 3G Capital and Warren Buffett’s Berkshire Hathaway Inc., agreed last week to buy the macaroni-and-cheese maker Kraft in a cash-and-stock deal. Heinz’s 51 percent of the combined company will be worth about $45 billion, valuing Lemann’s stake at about $9.6 billion, said Kevin Dreyer, a portfolio manager at Gabelli Equity Trust Inc. Lemann has invested about $4 billion through 3G Capital, according to data compiled by Bloomberg. (Read more)
Europe Stocks Drop, Paring Weekly Gain as Miners, Carmakers Fall
European stocks declined, paring a weekly gain, as miners and automakers retreated.
Daimler AG fell 2.4 percent. A gauge of commodity producers posted the biggest decline of the 19 industry groups on the Stoxx Europe 600 Index as Societe Generale SA said iron ore prices may extend losses. BHP Billiton Ltd. slid 2.1 percent. (Continue)
Iran Says No Breakthrough After All-Night Nuclear Talks
Iran said diplomats failed to bridge differences over its nuclear program in a marathon round of overnight negotiations, and may only release a statement that falls short of the blueprint they had sought to end a 12-year standoff.
“There’s been good progress made but we still don’t have an agreement on solutions,” Iranian Foreign Minister Mohammad Javad Zarif said on Thursday. “For today, the plan is to prepare a statement, this remains to be done and we need to do it.” The U.S. hasn’t yet commented on the latest talks. (More here)
Record Low Unemployment Gets Germans Spending
Germany’s record low unemployment is persuading Europe’s nation of savers to open their wallets and live a little.
Take Olaf Heintze, who splashed some of his engineer’s salary on a bottle of Scotch whisky he tried at a recent tasting. At 65 euros ($70), it wasn’t exactly cheap. Still, he felt he’d earned it. (Read here)
On Monday night, the front page of the next day’s Indianapolis Star began rocketing across Twitter: it bore a blaring, all-caps headline demanding that Indiana Governor Mike Pence “FIX THIS NOW,” meaning the state’s new “religious freedom” law that had touched off a national furor by allowing businesses to discriminate against gays and lesbians. The Star’s extraordinary front page was the culmination of a wave of media attention that built with astonishing speed and force. Understandably, many people wondered why, since, as Pence strained to point out during his bludgeoning by George Stephanopoulos on Sunday, other states have similar laws. (More here)
This Guy’s Russian Business Is Booming as the Economy Collapses
Jonas Nordlander isn’t too bothered by Russia’s economic bust.
Truth be told, it’s been very good to him.
That’s because the company he co-founded eight years ago, Avito, has grown to become Russia’s largest classified-ad web site. And now, as the recession and ruble devaluation squeeze the finances of the country’s 143 million people, business is booming. Russians are picking out personal items — big and small — that they can hawk for cash on Avito: mobile phones, TVs, sofas, baby strollers, laptops, winter hats, purses, shoes. (Continue)
No Sleeping In for Stock Jocks Awaiting Good Friday Jobs Report
Yousef Abbasi will be checking his phone on Good Friday morning, thanks to the U.S. government and phases of the moon.
Technically, he has the day off, with U.S. stock exchanges shut for the holiday. But the Labor Department’s monthly employment report, one of the most closely watched gauges of the U.S. economy, means the chief market strategist of JonesTrading Institutional Services LLC will be up early. (Here)
Good Friday May Be Friday the 13th for Bonds as Jobs Data Loom 
The most dangerous time for the Treasury market this month will be when the U.S. issues employment data on Friday, if February and March are any guide.
Benchmark 10-year yields jumped 14 basis points on Feb. 6 and 13 basis points on March 6, when the last two reports fueled bets the economy was getting strong enough to withstand higher interest rates. With yields moving inversely to prices, those dates mark the steepest declines in the world’s biggest bond market during the past eight weeks. (More here)
First Saudi Sovereign Debt Since ’07 Seen This Year as Oil Bites 
Saudi Arabia may issue sovereign debt for the first time since 2007 this year after oil’s decline sent its cash reserves plunging, according to Ashmore Group Plc.
Assets of the biggest Arab economy’s central bank tumbled by 76 billion riyals ($20 billion) in February, the largest monthly drop since at least 2000. The country has a debt-to-GDP ratio of about 2.6 percent, according to International Monetary Fund estimates, among the lowest in the world, and may now take advantage of record low interest rates and ample bank liquidity, said John Sfakianakis, a Riyadh-based director at Ashmore and former chief economic adviser to Saudi’s Ministry of Finance. (Read more)
China Isn't Ready for Creative Destruction 
Has China's Joseph Schumpeter moment arrived? China has suggested its decision to roll out deposit insurance for bank accounts beginning on May 1 will usher in a wave of creative destruction, chastening the cronyism that plagues the country. And there is some logic to the official spin. There's a flip side, after all, to Beijing's declaration that normal consumers will be kept safe in a period of market turmoil — namely, the banks themselves could be permitted to go bust. (More)
U.S., Japan Seek Trade Deal in Advance of Abe Washington Visit 
U.S. and Japanese negotiators are rushing to complete a trade agreement they can unveil during Prime Minister Shinzo Abe’s visit to Washington later this month, something they hope will pave the way for a broader Asia-Pacific pact involving 10 other countries.
An accord between the U.S. and Japan about access to each others’ markets for products such as pork, rice and automobiles would only take effect if incorporated into the Trans-Pacific Partnership, a 12-nation negotiation that Japan joined in 2013. Although all the governments must agree, the U.S. and Japan are by far the largest economies involved. (Full article)
Shanghai Traders Make Trillion-Yuan Stock Bet Backed by Debt 
Shanghai traders now have more than 1 trillion yuan ($161 billion) of borrowed cash riding on the world’s highest-flying stock market.
The outstanding balance of margin debt on the Shanghai Stock Exchange surpassed the trillion-yuan mark for the first time on Wednesday, a nearly fourfold jump from just 12 months ago. The city’s benchmark index has surged 86 percent during that time, more than any of the world’s major stock gauges. (More here)
Japan Bubble Alert Found in Drug Stock Rally That Won’t Quit
This year’s Japanese stock rally has a surprise leader: pharmaceutical companies, which tend to lag behind the market when it gains.
Drugmakers soared 22 percent, the most among the 33 industry groups on the benchmark Topix index, compared with a 10 percent gain for the Topix itself. The Topix Pharmaceutical Index climbed to its highest on record on March 24, and earnings multiples are about twice the market average. The Topix has beaten pharmaceutical shares in 12 of the past 17 years it rose. (Here)
Apple Pay Running Into Hurdles at Checkout Counter, Survey Finds
Apple Inc.’s new mobile-payment system is failing to capture all of its potential business, according to a survey, with two-thirds of users reporting problems using the service at the checkout counter.
While 66 percent of iPhone 6 and 6 Plus owners surveyed had signed up for Apple Pay, repeat usage is being hurt, the study by Phoenix Marketing International said. Almost half of users visited a store listed as an Apple Pay merchant only to find they couldn’t use the service because the location wasn’t actually accepting the system or wasn’t ready to do so, according to the survey, which drew about 3,000 respondents. (Continue here)
As Emerging-Market Debt Crisis Talk Grows, Some Investors Scoff
As the dollar soars month after month, the chorus of voices expressing concern about how it will imperil emerging-market companies that borrowed abroad is growing. (Here)
Japanese Firms’ Inflation Outlook Steady in Face of Oil Drop
Japanese companies’ outlook for inflation in the world’s third-biggest economy is holding up even as consumer price gains slow because of cheaper oil and a sluggish recovery. (Continue)
Industrial Stocks Near Trend Break as Low U.S. Rates End Rallies
An exchange-traded fund of industrial stocks is nearing a technical support level as interest rates fall, signaling the ETF’s underperformance could continue.
The Industrial Select Sector SPDR Fund has lagged behind the SPDR Standard & Poor’s 500 ETF by 3 percentage points since Nov. 25 as this stock price ratio has decreased each month this year. During the same time, the yield on 10-year Treasuries has fallen to 1.86 percent from 2.26 percent — see chart. (More)
Micron Sales Forecast Misses Analysts’ Estimates on PC Slump
Micron Technology Inc., the biggest U.S. maker of memory chips, forecast fiscal third-quarter sales that will fall short of analysts’ estimates as orders for personal-computer components slow. (Continue reading)
U.K. Construction Growth Slows More Than Economists Forecast
Construction output in the U.K. eased more than economists forecast last month as activity cooled across the building industry.
A Purchasing Managers’ Index fell to 57.8 from 60.1 in February, Markit Economics Ltd. said Thursday in London. The median estimate in a Bloomberg News survey of economists was for a drop to 59.8. Manufacturing activity strengthened in March, Markit said on Wednesday. (More)
Small Dominates Big in China’s Stimulus-Driven Stock ETF Rally
Smaller is better right now when it comes to U.S. exchange-traded funds investing in China’s booming stock market.
Two ETFs that buy mainland-traded Chinese equities and have assets of less than $45 million have outperformed almost 1,500 U.S.-listed funds this year. The Market Vectors China AMC SME-ChiNext ETF, which focuses on technology and software companies, has surged 49 percent. The Deutsche X-trackers Harvest CSI 500 China-A Shares Small Cap ETF has gained 37 percent. (Full article)
Meet Asia's New Manufacturing Powerhouse: Vietnam
If you thought Asia's manufacturing giants are just China, South Korea and Thailand, say hello to a new one: Vietnam. Its benchmark purchasing managers' index for manufacturing has expanded — a reading above 50 — every month since Aug. 2013, according to HSBC and Markit Economics.
That feat is unmatched by any other Asian country that HSBC and Markit track. By contrast, China's manufacturing PMI has contracted in eight months in that same period. Thailand's manufacturing, as measured by the government, contracted for 22 months through January. (Continue reading)
