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21Apr2015 Pre-Market Commentary: U.S. Futures Up, Corporate Earning Coming In Mixed, Oil Dipped Slightly

Written by Gary

Premarkets are up as oil prices dipped slightly this morning but remained near a 2015 peak reached last week as expectations of another rise in U.S. stockpiles and near-record-high Saudi Arabian output were balanced by rising tension in the Middle East.

United Technologies reported mixed first quarter earnings on Tuesday, as it continues to battle the stronger dollar. Click more for this mornings prognosis.

Here is the current market situation from CNN Money

European markets are broadly higher today with shares in Germany leading the region. The DAX is up 2.41% while France's CAC 40 is up 0.20% and London's FTSE 100 is up 0.06%.

U.S. Futures point to a higher opening this morning as corporate earnings are mixed rather than all negative. The U.S. Economy is still viewed as recovering at a snails pace and investors are very concerned that any World event or anomaly could upset the financial apple cart and send equities tumbling.

What Is Moving the Markets

Here are the headlines moving the markets.

Following "Soft" Capital Controls, ECB Threatens Greece With ELA Cut Even As 1 Million Workers Go Unpaid For Months

Things for insolvent, cashless Greece are - not unexpectedly - getting worse by the day.

Following yesterday's shocking decree that the government will confiscate local government reserves and "sweep" them into the central bank to provide the country more funds as it approaches another month of heavy IMF repayments, earlier today Bloomberg reported that the ECB would add insult to injury and was may increase haircuts for Greek banks accessing Emergency Liquidity Assistance, thus "reining in" the so very critical emergency liquidity which has kept Greek banks operating in recent weeks as the bank run sweeping the domestic banking sector has gotten worse by the day.

ECB staff have proposed increasing the discounts imposed on the securities banks post as collateral when borrowing from the Bank of Greece, the people said, asking not to be named as the matter is private. While adjusting these so-called haircuts hasn't been formally discussed by the Governing Council, it may be considered if Greece's leaders fail to quickly convince euro-area finance ministers they can reform their economy and secure bailout funds, one of the people said. Greek bank stocks slid.

According to Bloomberg, the ECB staff proposal lays out three options to reduce central-bank risk: "the scenarios envisage returning haircuts to the level before late last year, when the ECB eased its collateral requirements for Greece; to set them at 75 percent; or to set them at 90 percent. The latter two options could be applied if ...

Currency Wars Back as Russia Buys One Million Ounces of Gold in March

Currency Wars Back as Russia Buys One Million Ounces of Gold in March

- Russia buys one million ounces and increases gold reserves by another 2.6% in March
- Russia sees gold as important monetary and strategic asset in stealth currency wars
- Large purchase by Russia who normally buy some 300,000 ounces a month
- Russian gold reserves, at nearly 40 million ounces, are now fifth largest in the world
- Russia likely coordinating gold reserve accumulation with ex-Soviet States
- Concerns regarding euro and crisis in erstwhile reserve currency, the dollar
- Gold remains central to international monetary system
- Central banks continue to accumulate large volumes


Russia increased its gold holdings by one million ounces in March, bringing its total reserves to nearly 40 million ounces or 1,238 metric tonnes. The Russian one million ounce gold purchase is a large one even by Russian standards as in recent years they have consistently been buying roughly 300,000 ounces per month.

It followed a two month break from the gold market which had led to erroneous speculation that Russia was not interested in increasing its gold reserves any further.

Since 2005, Russia's gold reserves have increased three-fold. As a comparison, in the second quarter of 2009, R ...

Verizon Profit Beats Estimates as More Users Sign Up

Verizon Communications Inc's quarterly profit beat analysts' expectations, helped by higher net addition of postpaid subscribers as users added more devices to data plans.

Ten Things We're Grateful For (Irony Alert)

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Being grateful boosts your happiness. Ten wonderful things I'm grateful for.

Since every volume on the nearly endless shelf of pop psychology self-help books recommends working up some gratitude as the key to happiness, I've conjured up a list of what I'm grateful for. (Please turn your irony setting on.)

1. I'm grateful that our choice of president has been reduced to two equally detestable dynasties or their proxies. This greatly simplifies the process of selecting a warmongering figurehead for the Empire and its bankers.

2. I'm grateful that I can watch a full spectrum of entertainment, ranging from depraved to dreadfully unfunny on any device at anytime. This white noise helps block out any troubling clarity of thought or urge to ask what I might feel if I wasn't constantly distracted.

3. I'm grateful that there are so many opportunities to borrow money, because if I couldn't borrow more, I might miss an astounding opportunity to consume more of something I don't really need.

4. I'm grateful that every food item in the store now contains sugar in one form or another, or a sugar substitute. This simplifies the process of maintaining my addiction to sugar, as all I need to do is eat anything produced by Corporate America's food sector.

5. I'm grateful I live in a country where the government can trample on the rights of its citizens behind a thin veil of legitima ...

March 2015 Sea Container Counts Are Not Strong Even Though the Labor Troubles Are Over

Written by Steven Hansen

The West Coast Ports labor dispute is over, and appears the backlog has been eliminated causing a spike in exports. However, not only is year-to-date volumes contracting for both imports and exports - but March exports are contracting month-over-month and year-over-year. This is indicating weak economic conditions domestically and globally.

Read more ...

DuPont Says Strong Dollar to Have Bigger Impact Than Expected

Chemical maker DuPont reported lower sales in all of its businesses and said a strong dollar would take a bigger toll on its full-year earnings than it had expected.

DuPont says strong dollar to have bigger impact than expected

(Reuters) - Chemical maker DuPont reported lower sales in all of its businesses and said a strong dollar would take a bigger toll on its full-year earnings than it had expected.

Lockheed Martin profit falls 6 percent on fewer jet deliveries

(Reuters) - Lockheed Martin Corp , the Pentagon's No. 1 weapons supplier, reported a 6 percent fall in quarterly profit, partly due to fewer aircraft deliveries.

First Chinese State-Owned Firm Defaults On Its Bonds

Just hours after Chinese property developer Kaisa defaulted on two dollar-denominated 2018 notes (the 30-day grace period on some $52 million in interest due March 18 expired), we learn that a third publicly-listed Chinese firm will now miss a coupon payment proving yet again that "you never know where the skeletons in the closet are or what company will be next."

This time it's Baoding Tianwei Group Co.. which, as Bloomberg reports, has been struggling for quite some time:

"Our company suffered huge losses in 2014 and the debt to asset ratio surged quickly," Baoding Tianwei said in today's statement. "Our company has lost financing ability and suffered from a capital shortage. We can't raise enough money to repay interest, despite all the efforts we have made."

Baoding Tianwei had a loss of 10.14 billion yuan in 2014, according to today's statement. A statement from the company on April 3 showed that by the end of last year, Tianwei had some 1.86 billion yuan of overdue borrowings. Its 22.96 percent stake in listed firm Baoding Tianwei Baobian Electric Co. has been frozen by local courts because of its dispute with creditors, according to China Credit Rating Co.

The interesting thing about Baoding Tianwei though, is that it's a subsidiary of a state-owned firm and initially, some observers wondered whether the parent would step in to avert a default by the power transformer manufacturer which needed to make nearly $14 million in interest paym ...

Frontrunning: April 21

The Fed Still Wants Easy Money (BBG) - you don't say

ECB Is Studying Curbs on Greek Bank Support (BBG)

Banks Paid to Borrow as Three-Month Euribor Drops Below Zero (BBG)

Baoding Tianwei is first state-owned Chinese enterprise to default (Reuters)

Major Chinese Developer Says It Can't Pay Dollar Debts (BBG)

Wall Street Has No Idea How Much Money Venezuela Has (BBG)

Goldman Sachs, Morgan Stanley Find Different Paths to Profits (WSJ)

Does the Collapse of a Chinese Developer Signal the Start of More Defaults? (BBG)

Retail Traders Wield Social Media for Investing Fame (

Futures up as weak earnings worries fade

(Reuters) - U.S. stock index futures rose on Tuesday after earnings results by companies including IBM helped ease fears of a disappointing earnings quarter.

Futures Surge On First Chinese State Bankruptcy, Greek Capital Controls And Approaching Default

Explaining the catalysts that move the "market" overnight has become so farcical it is practically an exercise in futility and absurdism.

We start in China where shortly following the default on offshore bonds by one of China's largest property developers, Kaisa, overnight we learned that Baoding Tianwei Baobian Electric Co Ltd would become the third listed Chinese firm to publicly default on an interest payment to bond investors on an onshore issue. Unlike the previous two defaults, the bond in question was traded on the interbank market, which is much larger and restricted to institutional investors.

More importantly, the company is also a subsidiary of a large central state-owned enterprise, unlike China's first two defaulters. Which means that should the default proceed without a bailout, the Chinese bond issuing pipeline will likely once again get clogged up over fears of future defaults across the corporate spectrum, which would also suggest even further easing by the PBOC in the coming weeks, and an even more parabolic move by the Chinese equity bubble.

Sure enough, the Shanghai Composite soared 1.8% on the news, and the Hang Seng closed 2.8% higher.

But wait, there was more bad news.

BBG reported that shortly after Greece launched "soft" capital controls, the ECB is now studying measures to rein in Emergency Liquidity Assistance (ELA) to Greek banks, as resistance to further aiding the country's stricken lenders grows in the Governing Council, people with knowledge of the discussions said. As a reminder, ELA is the only reason why Greek banks are still oper ...

Report Seeks Overhaul of Postal Service Surveillance Program

The program, which records information on letters and packages sent to suspects, lacks oversight, a report by a national defense lawyers' group said.

Cirque du Soleil Being Sold to TPG-Led Private Equity Group

Private equity investors agreed to buy Cirque du Soleil for 1.5 billion Canadian dollars, a purchase that will pave the way for the company to expand into China.

Moving HQ to Singapore makes sense for Standard Chartered: Aberdeen's Young

SINGAPORE (Reuters) - Standard Chartered has a strong business case to move its headquarters from London to Singapore and save millions in taxes as, unlike HSBC , it doesn't have a banking network in the UK, Aberdeen Asset Management said.

BNP executive tipped as front-runner to head Bank of France

PARIS (Reuters) - Top BNP Paribas banker Francois Villeroy de Galhau emerged as a possible candidate to replace the retiring governor of the Bank of France on Tuesday as he was named to lead a new state-sponsored investment drive.

Aberdeen, Blackrock flag risks in frothy Chinese stock markets

SINGAPORE (Reuters) - Aberdeen Asset Management's head of Asian operations warned on Tuesday that Chinese money was moving "a bit like a casino" in domestic stock markets, while BlackRock called on China to reform its capital markets further to avert boom and bust scenarios.

Square Feet: Target's Hasty Exit From Canada Leaves Anger Behind

The American retailer has stirred resentment among landlords, in part, for its use of bankruptcy law in shutting down Canadian operations.

Steven A. Ballmer's Inner Fan Finds Its Voice in a Corner of the N.B.A.

Ballmer, the former chief executive of Microsoft and the first-year owner of the Los Angeles Clippers, is, in the words of the team's coach, "the most normal $24 billion guy I know."

Upbeat earnings lift stocks, Greek anxiety hits euro

LONDON (Reuters) - World stocks climbed back toward all-time highs on Tuesday as upbeat European earnings reports and expectations of a sixth straight rise in German business confidence helped offset worries about a possible Greek default.

ECB staff have proposal to tighten Greek use of emergency funding: Bloomberg

FRANKFURT (Reuters) - European Central Bank staff have prepared a proposal to increase the haircut on the security that Greek banks offer in return for emergency liquidity, Bloomberg reported on Tuesday, citing people with knowledge of the discussions.

United Tech Profit Rises, But Stronger Dollar Cuts Into Sales

United Technologies reported mixed first quarter earnings on Tuesday, as it continues to battle the stronger dollar.

China needs more reform to avert 'boom bust' market scenarios: BlackRock

SINGAPORE (Reuters) - The chief executive of BlackRock Inc , the world's largest money manager, said on Tuesday that China will need to continue to reform its capital markets to avert what he called boom and bust scenarios.

Greek Default Almost A Certainty As Grexit Talk Swirls

The U.S. dollar edged up against several other currencies on Tuesday, supported by a euro that's under increasing pressure due to the Greek imbroglio.

Blue Bell Recalls All Products After Listeria Outbreak

Tests indicated that products from the ice cream maker Blue Bell Creameries were the source of an infection that has killed three, the C.D.C. said.

Iran wants OPEC to pave way for its extra oil production when sanctions lifted

ANKARA (Reuters) - Members of the Organization of the Petroleum Exporting Countries (OPEC) should prepare for extra Iranian crude production when Western sanctions on Tehran are lifted, Iran's oil minister was quoted on Tuesday by state news agency IRNA as saying.

With a prince's backing, James Murdoch may soon ascend at Fox

(Reuters) - Saudi Arabia's Prince Alwaleed bin Talal is in no doubt that James Murdoch is ready to take a much bigger role at Twenty-First Century Fox, by far the largest part of the media empire that James' father Rupert Murdoch built.

Boutique banks to suffer most if Comcast-Time Warner Cable deal vetoed

(Reuters) - Hints that U.S. regulators could veto Comcast Corp's proposed $45 billion takeover of Time Warner Cable Inc have investment bankers worried about whether they will get paid, with smaller advisory firms particularly on edge.

Inflation goal may be too low, says Fed's Rosengren: FT

(Reuters) - Central banks including the Federal Reserve may need to set higher inflation targets in the future to avoid dealing with low economic growth, Eric Rosengren, president of the Federal Reserve Bank of Boston, said in an interview with the Financial Times.

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