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Overnight Sentiment: And In Non-JPM News...

Tyler Durden's picture





 

Yes, believe it or not, there is a world outside of JPM in the past 12 hours, and it was very ugly: weak Chinese CPI, big miss in Chinese industrial output (+9.3%, Est. +12.2%), even bigger miss, actually make it a decline, in Indian factory Outupt (down -3.5%, est. +1.7%), a collapse in China’s new local-currency loans plunging by 32% m/m in April, making a new money infusion paramount (yet inflation still abounds, and the threat of NEW QE keeping the PBOC mum - oh what to do?) and of course... Greece, where things are heading for a second election at breakneck speed, and where Syriza is gaining about a percent in new support each day, guaranteeing life for Europe will be a living hell in one month. What else happened overnight to send futures down 0.5% (and JPM down 8%). Below is a full recap from Bank of America.

In focus

The inconclusive Greek election results and the ensuing domestic political chaos have brought the country closer to the exit from the Euro zone. Greece is now most likely heading for another round of elections with the danger of remaining govern-less for longer or even being led by a leftish coalition party who will most surely clash with the Europeans. A freezing of further support by the EU/IMF and a subsequent exit from the Euro is certainly a visible possibility. In such a scenario, "when will Greece run out of money" is a natural question to ask and then, thinking beyond that "what are the policy options left to tackle yet another Greek crisis" is next.

Market action

Political uncertainty in Greece, signs of slowing economic growth in China and JPMorgan revealing a $2 billion trading loss weighed on investor's sentiment overnight pushing Asian markets into negative territory. The Japanese Nikkei and Shanghai Composite both finished 0.6% down, while the Korean Kospi lost 1.4% and the Hang Seng shed 1.3%. In India, the Sensex finished 0.8% lower.

European stocks are trading lower as company earnings missed estimates and talks on forming a Greek government entered a fifth day. In aggregate, European equities are trading down 0.7%. At home, the S&P 500 finished 0.2% higher yesterday. Today futures are pointing to a lower opening shedding 0.6%.

In bondland, the US treasuries are being bid across the curve with 10-year bonds trading at 1.85%, down 1.2 bps and 30-year trading at 3.03% down1.8 bps. Fixed income is also bid across Europe. The UK gilt is down 5bp to 1.94% and the German bund is down 3bp to 1.51%. In the periphery Spain's 10-year yield is once again below 6%.

The dollar is stronger against other major currencies trading up 0.1% on mounting optimism about the US economy. In the commodity space, crude is down 0.9% trading at $96.21 while gold is off 1% to $1577.

Overseas data wrap-up

As expected, Chinese inflation softened to 3.4% yoy in April from 3.6% in March. Meanwhile, producer-price index dropped 0.7% in April from a year earlier after declining 0.3% in March, the first back-to-back decline since 2009. This data confirms that inflation pressures are well contained in China and if need be gives the government more leeway to stimulate an economy.

Also in China, industrial output rose 9.3% in April from a year earlier compared to 11.9% in March. Fixed-asset investment excluding rural households rose 20.2% in the first four months of the year. Finally, retail sales came in slightly weaker than expected rising 14.1% yoy compared with estimates of 15% and March's 15.2% increase.

Today's events

At 8:30 am, we will be sorting through the PPI report for April. Headline producer prices for April are expected to once again be flat, matching March's performance. Meanwhile, core producer prices are expected to rise 0.2% in April after rising 0.3% in March.
The only other indicator on the data calendar is the final release of the University of Michigan consumer sentiment index at 9:55 which is expected to fall modestly to 76.0 in May from 76.4 in April.

 


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Fri, 05/11/2012 - 08:21 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

HOLLANDE: WORSE THAN WE THOUGHT

 

France's Hollande: Sarkozy underplayed budget woes

 

Buy gold like it's water.

Fri, 05/11/2012 - 08:33 | Link to Comment GeezerGeek
GeezerGeek's picture

"France's Hollande: Sarkozy underplayed budget woes"

Is this the French way of saying "It's Bush's fault"?

Why do all these socialists keep looking for someone else to blame?

Fri, 05/11/2012 - 08:38 | Link to Comment disabledvet
disabledvet's picture

Is it Hollande? Holland? Help me out here...I have Royal Dutch Elm disease and the Burghrmeisters have said "they've found a cure."

Fri, 05/11/2012 - 08:43 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Who signed the first bailouts again?  Wake the fuck up moron.  Another sheep who still believes the left/right paradigm.

Fri, 05/11/2012 - 12:10 | Link to Comment Iwanttoknow
Iwanttoknow's picture

Dear Law of Physics,

sadly quite a few on ZH.

Fri, 05/11/2012 - 09:12 | Link to Comment HD
HD's picture

Non JPM news? Not today...

Fri, 05/11/2012 - 08:29 | Link to Comment gatorengineer
gatorengineer's picture

And the markets seem to ignore it all..... Shouldnt this be down more than 2%?  Or does the futures fairy got a new heavy lift helicopter?

Fri, 05/11/2012 - 08:47 | Link to Comment HoofHearted
HoofHearted's picture

A new heavy lift helicopter with room for the ONE...the Bernank. In fact ZH has had a few mock-ups of him recently...as in the past year or so.

Fri, 05/11/2012 - 09:52 | Link to Comment valley chick
valley chick's picture

With all the bad news out there did I miss the QE rumor? 

Fri, 05/11/2012 - 08:32 | Link to Comment Iam_Silverman
Iam_Silverman's picture

Could it be that this:

"a collapse in China’s new local-currency loans plunging by 32% m/m in April, making a new money infusion paramount (yet inflation still abounds, and the threat of NEW QE keeping the PBOC mum - oh what to do?)"

 

Was offset by this:

"As expected, Chinese inflation softened to 3.4% yoy in April from 3.6% in March. Meanwhile, producer-price index dropped 0.7% in April from a year earlier after declining 0.3%"

and this?

"Also in China, industrial output rose 9.3% in April from a year earlier compared to 11.9% in March. Fixed-asset investment excluding rural households rose 20.2% in the first four months of the year"

 

If your input costs (as a function of inflation pressure) are down, productivity is up, and retail sales are still up 14%, maybe the local loans aren't needed?  Just a guess, I'm open to other interpretations.

 

Fri, 05/11/2012 - 08:33 | Link to Comment orangegeek
orangegeek's picture

With markets declining, USD is looking more bullish.

 

http://bullandbearmash.com/chart/usd-index-daily-9-2012/

Fri, 05/11/2012 - 08:42 | Link to Comment disabledvet
disabledvet's picture

A TRUE wall of worry. The price of gold? Really?

Fri, 05/11/2012 - 08:44 | Link to Comment LawsofPhysics
LawsofPhysics's picture

short term, yes.  Turn that paper into physical assets the great "re-valuation" is upon us.

Fri, 05/11/2012 - 08:49 | Link to Comment GrinandBearit
GrinandBearit's picture

IMO, this JPM loss is basically a non-event.  A zombie bank losing a few billion is nothing. 

It certainly seems like this bogus market could go sideways for a very long time.. at least until the election.

Fri, 05/11/2012 - 09:09 | Link to Comment Sudden Debt
Sudden Debt's picture

And besides all this... gay marriages have Obumels full attention...

I guess we now know which magazine subscriptions our boy has...

 

Sun, 05/13/2012 - 23:22 | Link to Comment qiongqiong
qiongqiong's picture

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