Frontrunning: June 30

Tyler Durden's picture
  • Rice Supplies Tightening in China May Increase Imports, Bolster Inflation (Bloomberg)
  • IMF warns US of global debt ‘shock’ (FT)
  • China may widen yuan trading band soon-Bank of China (Reuters)
  • Italy May Raise Trading Tax (WSJ)
  • Deutsche Bank warns on voluntary rollover (FT)
  • GOP wants Senate to cancel vacation (Washington Times)
  • As QE2 ends, market debates Fed's next move (Reuters)
  • Greek parliament expected to endorse second bill (Reuters)
  • Appeals Court Says Health Law Is Constitutional (WSJ)
  • Al Qaeda Remains Top Threat to U.S. (WSJ)
  • US says drone campaign to continue (FT)
  • Rome set to back €47bn austerity package (FT)
  • German Banks, Government Agree on Draft Greek Plan (Bloomberg)
  • Britain attacks Brussels spending plan (FT)
  • France defends arms airlift to Libyan rebels (Reuters)
  • Deficit Concerns Push Rupee to First Loss in Four Quarters: India Credit (Bloomberg)

European economic highlights:

  • Germany Retail Sales  May -2.8%m/m – Lower than expected. Consensus +0.5%m/m. Previous +0.0%m/m.
  • France Consumer Spending  May -1.5%m/m – Lower than expected. Consensus +0.8% m/m. Previous -1.2% m/m.
  • Spain Current Account Balance  Apr  -€3.4bn. Previous -€5.7bn.
  • Turkey GDP  Q1 +11.0%yoy – Higher than expected. Consensus +9.7%y/y. Previous +9.2%y/y.
  • Turkey Trade Balance  May  USD -10.1bn – Lower than expected. Consensus USD -9.4bn. Previous USD -9.1bn.
  • Germany Unemployment (Change)  Jun -8k m/m – Lower than expected. Consensus -17k m/m. Previous -8k m/m.
  • Italy Harmonised CPI  Jun 0.1%mom – As expected. Consensus 0.1%mm. Previous 0.2%mm. 
  • Norway Retail Sales  May  +1.6%mom – Higher than expected. Consensus +0.5%. Previous +0.2%.
  • Euroland Consumer Prices - Provisional (nsa)  Jun 2.7%y/y – Lower than expected. Consensus 2.8% y/y. Previous 2.7% y/y.

Global highlight summary from Egan Jones:

  • Greek lawmakers back $112B austerity plan.
  • Acuity Brands misses by a cent; reports Q3 EPS of $0.62. Revs rose 12.4% to $458.3M.
  • Amazon to cut off California-based web affiliates to protest new online sales tax rule.
  • AMR said to be in talks for record order of up to 280 Airbus, Boeing jets.
  • CA Tech to acquire privately-held ITKO for $330M in cash.
  • CACI Int; sees 2012 EPS at least $4.60, above the cons est. of $4.53.
  • Callaway Golf to report loss of ~$55M in Q2; revs of ~$270M (cons $307.1M). To cut an undisclosed number of jobs.
  • Credit Suisse said to plan eliminating more than 600 jobs in its investment bank arm.
  • Eurozone inflation steady at 2.7 percent, above ECB target but below market expectations.
  • Fiserv Inc. agreed to pay $465M for CashEdge Inc.
  • General Mills says Q4t profit rose 51% to $320.2M, but higher costs will cut 2012 profit.
  • HP in talks to license WebOS software, CEO Apotheker says.
  • KB Home misses by $0.58, posts Q2 loss of $0.89/sh. Revs fell 27.4% to $271.7M.
  • LivingSocial is said to discuss $1B IPO with bankers.
  • Lloyds Banking Group to cut 15,000 jobs, plans to save $2.4B.
  • LSE calls off merger with TMX Group.
  • McGraw-Hill authorizes new 50M share repurchase program.
  • Monsanto raised its 2011 profit forecast; discloses probe by regulators on its customer incentive scheme.
  • Oracle to buy Pillar Data Systems, a storage start-up where Ellison is the principal owner.
  • Parthenon to purchase Well Fargo's H.D. Vest Fincl Srvcs business; terms not disclosed.
  • Renasant to acquire RBC Bank (USA)'s Birmingham-based trust unit.
  • Samsung sues Apple over IPhone, IPad and IPod technology.
  • UBS to purchase ING's EUR25B Austalian asset management unit.
  • Visa, MasterCard surge as Fed lifts caps on debit-card transaction fees to 21 cents a transaction, from an earlier proposal of 12 cents.
  • Worthington Ind boosted its qtrly dividend; to buy back up to 10M shares.

Economic Calendar: Data on Initial & Continuing Claims, Chicago PMI to be released today.
Earnings Calendar: APOL, AZZ, CAMP, CBK, DRI, MKC, STZ, SWHC.

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goldencross10's picture

QE2 "go the F#%K to sleep"

dcb's picture

a letter I sent to the financial times today

Sir, As a retail investor I am unable to obtain easy access to the most sure fire investments with a very limited probability of loss and high potential rewards. The strategy is essentially a behavioral economics strategy which relies on the governing elites, central bankers, and the taxpayer. Tests have already proved this strategy to be immensely rewarding. When a large institution/ country gets in trouble, or regulation matters are to be determine and assets have discounted the risk of harsh legislation or failure that is the time to buy.   In the financial crisis bonds of large financial companies were backed by state guarantees. I have been attempting to get my hands on Greek bonds for weeks without success and additionally I have been searching for a way to purchase Irish, and other national debts of the euro zone that the market has discounted deeply. I know the response from policy makers will be to provide endless taxpayer money to back these assets and put other tax payers on the hook. At least with the purchase of these assets I can hedge the risk being imposed by the political elites upon me with future tax increases. The larger and more violent the response of the people in democratic societies the larger the chance the elected officials will continue to pursue the very policies their populace wants terminated. Using this investment theory I am searching for TEPCO bonds.   I can further take this investing theory and use it to predict monetary and regulatory policy. Buying master card and visa at a discount with the assumption rational non punitive swipe fees will be adopted. Instead they were about double what was considered reasonable. I can take basell 2, on capital requirements. I know they won't be very harsh, and know they won't stop systemic risk. So I get the double bonus o owning a large systemic institution trading at a discount that I know the state will always bail out again because resolution mechanisms and ring fencing legislation won't do what it is supposed to.   I used the same principle in investing with QE. Knowing that wall street may loose money if the market continued down I took the bet that Bernanke would adopt QE. Knowing despite what Bernake said it would make oil and commodities skyrocket I put the majority of my money there. After all when he flooded the system with liquidity at the start of the financial crisis before oil went to 147 and food skyrocketed. This of course led to a commodity induced recession and I shorted oil all the way down. So, with QE I shorted the long bond with TBT (double invested long treasury), as well. Having seen the price spike in oil lead to further economic weakness at start of the financial crisis, at the end of QE 1, and now at the end of QE 2, I have made good money on the oil short as it and other commodities dropped and on treasuries. (disclaimer as the s and P approaches 1320 I will become market neutral again with stops so it won't matter what way the market moves).   So, I always take the bet that the elected will put the tax payers on the hook, and when the fed makes policy choices it will be bad for every day people and good for the banks and traders. THIS IS THE HIGHEST RETURN STRATEGY AVAILABLE KNOW. It does mean you have to have a of of cash available to buy the beaten down assets, but there is little downside with state backing and high potential upside.   PS: when the phrase contagion is mentioned, that is the buy signal. I also know the elected bodies and regulatory agencies are captured by the banking industry and it is clear the unstated policy is to make sure the bankers are protected from their poor investment decisions. This is the no brainer investment strategy of our time.
Careless Whisper's picture

National Association of Realtors chief economist, speaking at a Greenwich country club, says "things look pretty good around here"


mendigo's picture

i like that imf warning

in short: if us does not extend itself more borrowing capacity and soon, it risks damaging its credit rating