MARKET CURRENTS
real-time news and commentary for investors
MARKET CURRENTS
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Today - Wednesday, May 23
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11:19 AM America Movil (AMX -2.1%) slips after being downgraded to Neutral from Overweight on valuation at JPMorgan. The firm also lowers its price target to $27 from $28. Comment!
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10:40 AM German bond yields continue to fall to astonishing lows, the 30-year off 11 bps to 1.99% - the first-ever time with a one handle (Japan's is 1.82%). The 10-year is off 9 bps to 1.38% (Japan 0.87%). The 2-year yields all of 5 basis points, towering over Japan at 11 bps. Comment!
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10:32 AM Europe rapidly deteriorates, the Stoxx 50 -3%, led by Italy, -3.8%, and Spain, -3.2%. The euro goes bidless, sliding under $1.26 for the first time since August 2010. S&P 500 -1.1%. 2 Comments
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9:53 AM The ECB has set up a working group to focus on worsening financial conditions due to Greece, reports Die Welt, citing sources. Leading the panel is Germany's Joerg Asmussen. Further market deterioration is likely to instigate new anti-crisis measures from the ECB, they say. Comment!
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9:05 AM Veolia Environnement (VE) is in advanced talks to sell its ailing bus division to the Afikim group, according to reports. The French conglomerate is seeking to sell off its various transportation businesses all over the world. VE -1.5% premarket. Comment!
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9:02 AM Emerging from a meeting with Spain's Rajoy, French President Hollande says he's unaware of any call for EU states to come up with contingency plans for a Greek exit. Putting a slight bid into European shares are sketchy comments over the wires about Greece getting more lenient bailout terms from the EU. Stoxx 50 -2%. S&P futures well off session lows, -0.5%. 1 Comment
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8:43 AM Italian May consumer confidence falls to 86.5 from 88.8 previously, and against expectations for a rise to 90. It's the worst print since 1996. A gauge of unemployment expectations rises to 113 from 106. Milan -3%. Comment!
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8:35 AM Each eurozone country must draw up its own contingency plan should Greece leave EMU, decides the Eurogroup Working Group (EWG). It's a significant step as nothing like this has previously been ordered for fear of leaks. Among the elements to consider are what support the EU/IMF should give. Comment!
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8:00 AM If Greece exits the eurozone, writes The Tell, the EU should consider replacing it with Turkey. The country's speedy growth and youthful demographics would help a union sorely in need of both. One wonders if the reason Turkey's economy is perky (even overheating) is because it's not part of the eurozone. The EU may want the country, but has anybody checked with Ankara? 3 Comments
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7:56 AM Industry analysts see the move by Sears Holdings (SHLD) to reduce its stake in Sears Canada to 51% as clearing the path for a host of U.S. retailers to jump in to take advantage of the void as Sears Canada trims its operations. Both Nordstrom (JWN) and Saks (SKS) could jump into a Canadian market that boasts 50% higher sales per square foot at malls than in the U.S., while Target (TGT) might accelerate its own expansion plans. Comment!
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7:47 AM The rupee hits an all-time low for the 6th consecutive day, now requiring 56.18 of them to purchase one dollar. Traders believe the RBI intervened, temporarily sending the rupee as high as 55.52, but the currency soon weakened anew. Given global risk aversion at the moment, the RBI doesn't have a shot. Comment!
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7:31 AM Spanish PM Rajoy will use the occasion of a meeting of EU leaders today to ask the ECB to purchase his country's bonds, reports El Mundo. "Enough is never enough," says Adam Johnson, recalling Spanish banks took down 47% of the recent LTRO. Madrid -2.1%. 1 Comment
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7:21 AM Constant chants of "catastrophe" should Greece exit EMU "borders on political blackmail," writes Ambrose Evans-Pritchard. It will only be so if the EU and IMF choose that path, thus making catastrophe not a fait accompli, but a political decision. The catastrophe, he says, comes from those clinging to failed ideology (fixed exchange rate). 1 Comment
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7:06 AM The euro hits a new low for 2012 and the lowest level since the summer of 2010 as panic once again hits the continent. The common currency touched $1.2615 earlier, now buying $1.2655, -0.2% for the session. The euro bottomed at about $1.25 during the financial crisis and $1.19 in the summer 2010 bear market. Comment!
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7:01 AM Germany sells €4.56B of 2-year notes carrying a coupon of 0%, and priced to yield 0.07%. There was strong demand for the paper as investors see value even at these prices. How low can the yield go? Well, Swiss 2-year paper currently yields -0.10%. Comment!
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6:47 AM Mazda (MZDAF.PK) and Fiat (FIATY.PK) join forces for the first time with plans to develop a lightweight sports car and explore strategic opportunities in Europe. The linkup between the two automakers leaves Ford (F) with one less partner as a longstanding relationship with Mazda peters out. 2 Comments
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5:56 AM EU leaders are due to meet in Brussels today as Germany comes under increasing pressure to agree to a softening of austerity and to eurobonds, ideas favored by Francois Hollande. However, as an EU diplomat says: eurobonds are "the equivalent of ringing the bell for a happy hour so the inebriated can postpone their hangover indefinitely." 3 Comments
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4:41 AM European stocks extend their losses following ugly U.K. retail numbers and BoE minutes. London -1.4%. Paris -1.8%. Frankfurt -1.5%. Comment!
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4:36 AM Horrible retail figures out of the U.K.: Sales fell 2.3% M/M in April, far exceeding the expected 0.8% drop. Sales -1.1% Y/Y vs. expectations of +1%. Comment!
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2:55 AM Some blunt eurozone truths from Jin Liqun, chairman of CIC's supervisory board: Eurozone leaders have demonstrated a "lack of leadership" on the region's debt crisis, "too much time has been wasted on endless bargaining... for piecemail bailouts," and the core eurozone nations will have to "keep an eye out for possible copycats should the Greeks be allowed to escape from the crisis unscathed." 2 Comments
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2:48 AM The Bank of Japan keeps its monetary policy unchanged, leaving rates in the 0-0.1% band and holding asset purchases steady at a total of ¥70T ($880B). Analysts expect an increase in asset purchases to come soon, either during a meeting next month ahead of Greek elections, or in July, when the bank gives its updated inflation forecast. Comment!
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2:38 AM Japan's trade deficit widened to ¥520.3B ($6.5B) in April from a shortfall of ¥84.5B in March, as exports rose a less-than-expected 7.9%. Finmin Jun Azumi calls for the Bank of Japan to "take appropriate steps in a timely manner;" analysts believe BOJ may boost asset purchases in the coming months. 3 Comments
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