Since the advance reports of layoffs at Microsoft started circulating this Sunday, the giant tech company has surged over 8%. This has raised the market cap of the behemoth by almost $28 Billion. Today we get the 'news' that Microsoft was laying off a record 18,000 employees (more than tripled the 2009 dump of 5,900 employees).That means - for all activist investors out there looking to raise MSFT share price - a $1.5 million market cap boost for each scalp, which, in other words, is the marginal "value added" of every currently employed Microsoft worker.
It seems like it was only yesterday when the first official Chinese corporate default in history (there have been many other ones in the past but all were quickly masked by the government to avoid a panic), Chaori Solar, entered the history books. Now it's time for default number in the country's onshore bond market as Huatong Road & Bridge Group, a company whose businesses includ bridge and highway construction, real estate, coal, eco-friendly construction materials and agriculture-related projects, based in the northern province of Shanxi, said it may miss a 400 million yuan ($64.5 million) note payment due July 23, according to a statement to the Shanghai Clearing House yesterday.
Housing Starts Tumble, Miss Most Since January 2007; Permits Have Biggest Two-Month Plunge Since LehmanSubmitted by Tyler Durden on 07/17/2014 - 08:55
"Epic disaster." Those two words best explain what just happened with US housing starts and permits in June.
Yet again the fate of the US economy is left to seasonal adjustments... Non-seasonally-adjusted initial jobless claims surged over 47,000 this week to its worst in 6-months. But by the magic of PhD adjustment, this translated into 3,000 seasonally-adjusted drop from last week, beating expectations and printing near 'recovery' cycle lows. We can only imagine the adjustments needed to cope with Microsoft's layoffs. 2014 has seen the smallest percentage drop in initial claims since the crisis began.
While the news was reported earlier this week, it is perhaps notable that what was once considered the leading US tech company has also succumbed to the great "jobless" US recovery (in which the US economy is somehow adding 200K+ jobs every month even as it is firing millions). Furthermore, what was supposed to be 6,000 layoffs has just tripled to 18,000, which also happens to be the largest round of layoffs in MSFT history, surpassing the previous record of 5,800 set back in 2009.
The Russian Ruble slumped 1.6% today, its biggest drop in over 4 months as investors kneejerk-reacted to the US latest round of restricted-funding-access sanctions. The Ruble is back at 2-month lows against the USD. The bonds of several of the sanctioned companies are also breaking down with Rosneft yields up 89bps at 6.22% and Novatek yields surging to 6.44% as even though Fitch confirms these firms can manage their own cash needs through 2015, as one analyst notes, "the lack of ability to raise long-term dollar funding will become a big economic limitation for all of them." The broad Russian stock market is also tumbling, down to 2-month lows (though still notably above the US markets since sanctions began). We wonder how long before BRICS Bank steps in to provide 'temporary' funding... and just how quickly Putin's "boomerang" will hit if this selling continues.
While most news coming out of Ukraine regarding the ongoing civil war are merely propaganda designed to make Russia look bad, and hence irrelevant (and vice versa from Russia of course - the only news that matters re: Ukraine is i) what happens with gas deliveries to Europe via Ukraine and ii) the fate of the South Stream pipeline; the rest is mostly noise), it is perhaps a testament to how the global media will observe Russia's response to the latest US sanctions, and hardly improve risk appetite, that as Reuters reports a Russian jet shot down a Ukrainian SU-25 fighter plane that was on military operations over the east of Ukraine.
- Bubble Paranoia Setting in as S&P 500 Surge Stirs Angst (BBG)
- But how will math PhDs determine "fair value" - Wall Street Techs Take Secrets to Next Job at Their Peril (BBG)
- U.S., EU Escalate Russia Sanctions as Putin Holds Firm (Bloomberg)
- Australia Becomes First Developed Nation to Repeal Carbon Tax (WSJ)
- Gaza humanitarian truce goes into force, hours after tunnel clash (Reuters)
- Barclays, Deutsche Bank Said to Face U.S. Senate Hearing (BBG)
- ECB Asset Buying Far Off and May Not Come, Hansson Says (BBG)
- Time Warner win would make Murdoch U.S. media king (Reuters)
- Costly Vertex Drug Is Denied, and Medicaid Patients Sue (WSJ)
- China Rallying for All Wrong Reasons to Top-Rated Analyst (BBG)
- GM recalls some cars with problematic switches; judges others safe (Reuters)
Slowly but surely, all those cans that many hoped were kicked indefinitely into the future, are coming back home to roost. The biggest impact on global risk overnight have been undoubtedly the expanded Russian sanctions announced by Obama yesterday, which have sent the Russian Micex index reeling to six week lows (as it does initially after every sanction announcement, only for the BTFDers to appear promptly thereafter), with the biggest hits saved for the named companies such as Rosneft -5.6%, Novatek -5.1%, and others Alrosa -5.7%, VTB Bank -4.3%, Sberbank -3.4% and so on. Then promptly risk off mood spilled over into broader Europe and at last check the Stoxx600 was down 0.8%, with Bund futures soaring to record highs especially following news (from the Ukraine side) that a Russian warplane attacked a Ukrainian fighter jet. Not helping matters is the end of the dead cat bounce in Portugal where after soaring by 20% yesterday on hopes of a fresh capital infusion, Espirito Santo has once again crashed, dropping as much as 11%, driven lower following downgrades by both S&P and Moodys, as well as the realization that someone was pulling everyone's legs with the rumor of an equity stake sale.
"Sanctions have a boomerang effect and without any doubt they will push U.S.-Russian relations into a dead end, and cause very serious damage, and it undermines the long term security interests of the US State and its people."
"This means that U.S. companies willing to work in Russia will lose their competitiveness next to other global energy companies." Putin said the sanctions will hurt Exxon Mobil Corp which has been given the opportunity to operate in Russia. "So, do they not want it to work there? They are causing damage to their major energy companies." Putin said the sanctions will hurt Exxon Mobil Corp which has been given the opportunity to operate in Russia. "So, do they not want it to work there? They are causing damage to their major energy companies."
While we understand that there are many nuances in the ongoing illegal immigrant debate, and there are certainly two sides to every story, we can't help but wonder if the US government granting a $50 million award to BCFS Health and Human Services to house "young illegal immigrants at the site of the current Palm Aire Hotel and Suites" in Weslaco, Texas is the best use of government funding. As KRGV reported, " A center for unaccompanied minors set to open in Weslaco later this year will be the first of its kind in the nation, officials with a network of non-profits said. A center for unaccompanied minors set to open in Weslaco later this year will be the first of its kind in the nation, officials with a network of non-profits said... Representatives with BCFS said the Palm Aire will undergo a multi-million dollar transformation."
In one of the most uncomfortable (and must-see) interviews, UK Channel 4's John Snow 'discusses' Israel's bombing raids and policies towards Hamas with Israeli government spokesman Mark Regev. The interview starts with a punch, "How does killing children on a beach contribute to your purpose of protecting Israeli civilians?" Regev ducks and weaves from question to question, flummoxed when Snow jabs, "if you couldn't tell these were 4 young Palestinian children playing football on a Gaza beach, you need better equipment," only to be slammed towards the end with, "why not be brave and talk directly to Hamas? You haven't got the courage." Not the kind of interview one is likely to see on US TV.
It appears, unlike in the mid 2000s, that the low level of volatility and high level of stocks has not had the desired effect on ramping animal spirits among the general population. Judging by the number of "optimistic" stories, peak animal spirits passed at the start of 2012... as optimism is now back at crisis lows...
When scientists start using phrases such as "the worst drought" and "as bad as you can imagine" to describe what is going on in the western half of the country, you know that things are bad. Thanks to an epic drought that never seems to end, we are witnessing the beginning of a water crisis that most people never even dreamed was possible in this day and age. The following are 20 signs that the stunning drought is starting to become apocalyptic...
If you thought the latest round of US sanctions against some largely unknown Russians and a few new companies listed here, most notably Rosneft and Gazprombank - but not Gazprom, never Gazprom - that would cut off Russian gas to Europe and Merkel doesn't want that - would be largely a non-event, you are right. Unless you own a Kalashnikov, aka AK-47 rifle. In which case read on.