In the latest indication of contracting global growth, overnight Hong Kong reported that its Q1 GDP fell off a cliff 0.4% qoq, widly missing estimates of 0.1% growth as retail sales plummeted and the property market continued its collapse. On a y/y basis, the economy grew only 0.8% when compared to the same period last year, less than half the 1.9% y/y growth reflected in Q4.
Gundlach told Reuters that the with the S&P500 rangebound around 2,050 for some time, "it's tough to get much of a rally off of price-to-earnings this high with earnings falling and the Fed itching to tighten with GDP growth already projected to decline," he said. In keeping with his recent skepticism, he said that his forecast on the market remains a gloomy one: "I'm sticking with my '2 percent upside and 20 downside' prediction on U.S. stocks.... it's working, I can see it going to 1,600."
- Nerves dominate before U.S. retail numbers (Reuters)
- Stocks Give Up Week’s Gains as Commodities Fall; Yen, Bonds Rise (BBG)
- Apple Invests $1 Billion in Didi, Uber’s Rival in China (WSJ)
- Dollar hits two-week high, posts best fortnight since February (Reuters)
- OPEC Sees Rival Oil Production Declining as Markets Rebalance (WSJ)
- Trump on best behavior as he woos Republicans but differences remain (Reuters)
"Let me congratulate you all on the completion of this energy bridge linking Crimea to the rest of Russia... The work itself proceeded at a truly rapid pace with the result that we have ended the energy blockade of Crimea in a very short time. I have no doubt that we would succeed in breaking through any kind of blockade, should anyone take it into their heads to test us."
One particular energy trader - a name well-known to Zero Hedge readers - Glencore, has built up a massive inventory stake in the Brent market where it now holds an unprecedented 30% position in Brent, which it is holding for offshore storage in its tankers in hopes of pushing the price of Brent, and thus the entire energy complex higher, by limiting supply.
For the oil industry, nothing is clear. While the industry is seeking reforms on a number of levels, including changes to rules that require state-run Petrobras to have a 30-percent operating stake in all sub-salt projects and changes to tough local content rules, nothing is likely to be decided until Rousseff’s status is definitive. At the same time, there were already indications that the oil industry was gaining ground with the current government.
Full-Blown Fearmongering: Bank Of England Warns Of Recession, "Sharp" Sterling Fall If UK Leaves EuropeSubmitted by Tyler Durden on 05/12/2016 08:09 -0400
While the Bank of England voted unanimously 9-0 to keep rates on hold at 0.5%, what the market was far more focused on the BOE's latest gloomy scenarios about what would happen should the UK vote for Brexit on June 23. The BOE did not disappoint, and cautioned that that sterling could fall "sharply" and unemployment would probably rise, while in the press conference after the announcement BOE governor and former Goldmanite Mark Carney went all the way warning Brexit "could possibly lead to recession."
- Trump’s Early Backers on Capitol Hill See Their Profile Raised (WSJ)
- Oil prices rise toward six-month high, tightening supply (Reuters)
- EIA says outlook for oil brightens as output disruptions erode surplus (Reuters)
- Investors Fleeing $9 Trillion of Negative Yields Fuel Bond Binge (BBG)
- Beaten-Up Hedge Fund Billionaires Reminisce About 'Golden Age' (BBG)
When it comes to Donald Trump, the mainstream media has had a habit of being repeatedly wrong in its forecasts. Most recently, in the aftermath of Trump's effective victory in the GOP primaries, the conventional wisdom was that the real estate billionaire would "never" be able to catch up to Hillary's support at the national level. This too now appears to have been a mistake. According to the latest just released Reuters/Ipsos poll, Donald Trump's support has surged and he is now running about even with Democrat Hillary Clinton among likely U.S. voters, in what Reuters describes as "a dramatic turnaround since he became the Republican party's presumptive presidential nominee."
The United States' European missile defense shield goes live on Thursday almost a decade after Washington proposed protecting NATO from Iranian rockets and despite Russian warnings that the West is threatening the peace in central Europe. As a result, Reuters notes that "Russia is incensed at such of show of force by its Cold War rival in formerly communist-ruled eastern Europe where it once held sway. Moscow says the U.S.-led alliance is trying to encircle it close to the strategically important Black Sea, home to a Russian naval fleet and where NATO is also considering increasing patrols."
Veritaseum Blockchain-based Bank Research Hits Another Home Run - Banco Popular Shown to be Bear Stearns Redux!Submitted by Reggie Middleton on 05/11/2016 10:16 -0400
Witness true research that reveals true facts, that unlocks true alpha, aka VALUE! Banco Popular is walking down the same path as Bear Stearns. We should know, we called out Bear in January 2008, and we called out BP months ago.
The share rebound triggered by the hasty creation last month of the fund intended to inject capital into weaker lenders and buy their bad loans proved short-lived. Banco Popolare is dragging the rest of the Italian banking system drastically lower today after a "susprise" Q1 loss driven by soaring bad loan writedowns. Banco Popolare is down 14% on the day (25% in a week) to a record low, as Reuters reports the bank was forced to admit the reality of its bad loans by the European Central Bank as a condition for approving a planned merger with Banca Popolare di Milano that will create Italy's third-biggest banking group.
- Clinton loss in West Virginia signals trouble in Rust Belt (Reuters)
- GOP hopefuls struggle with support of Trump (Hill)
- Brazil Impeachment Vote May Spell Rousseff's Last Day on Job (BBG)
- Staples-Office Depot Merger Collapses After Block by Judge (BBG)
- Tumbling Banco Popolare leads Italian bank shares lower (Reuters)
Russia is moving full steam ahead with its plan to kill the petro-dollar, and is burying OPEC's influence along with it. As we reported earlier, Russia has taken its next step toward de-dollarization by launching its own benchmark oil futures contract that will price oil in rubles instead of USD. Now, it appears as though Russia has deemed it is time to start chipping away at OPEC and its power within the oil space.