Holidays in Europe and Asia left things quiet overnight after some traders used the last day of April to frontrun the old "sell in May and go away" market adage. Market closures also kept the Chinese day trading hordes from using a tiny beat on the official manufacturing PMI print as an excuse to pile more money into the country's equity mania, while Japanese shares ended mostly unchanged as investors fret over when the BoJ will deliver the next shot of monetary heroin. In the US we'll get a look at ISM manufacturing and the latest read on consumer confidence as we head into the weekend.
Apple is the Ty Cobb of corporate America. Like Cobb, Apple has set some impressive records. Nine years, a trillion dollars in sales, and almost no taxes paid. Apple risks having a legacy of tainted success and isolation.
- Marchers protest police violence in Baltimore, New York (Reuters)
- Majority of Financial Pros Now Say Greece Is Headed for Euro Exit (BBG)
- Greece signals concessions in crunch talks with lenders (Reuters)
- Greece, Euro-Area Partners Target Deal by Sunday (BBG)
- Iglesias Says EU Risking Right-Wing Backlash With Greek Pressure (BBG)
- Student-Loan Surge Undercuts Millennials’ Place in U.S. Economy (BBG)
- Majors’ Quandary: Why Drill for Oil When They Can Buy Somebody Else’s? (WSJ)
The biggest overnight story was neither out of China, where despite the ridiculous surge in new account openings and margin debt the SHCOMP dipped 08%, or out of Japan, where the Nikkei dropped 2.7%, the biggest drop in months, after the BOJ disappointed some by not monetizing more than 100% of net issuance and keeping QE unchanged, but Europe where for the second day in a row there was a furious selloff of Bunds at the open of trading, which briefly sent the yield on the 10Y to 0.38% (it was 0.6% two weeks ago), in turn sending the EURUSD soaring by almost 200 pips to a two month high of 1.1250, and weighing on US equity futures, before retracing some of the losses.
Apple fan-boys have proclaimed the Apple Watch a screaming success as Tim Cook explained he was "generally happy" with the launch. The big driver of the impression of awesomeness was how hard it was to get one... i.e. so much demand that supply copuld not keep up. However, as The Wall Street Journal reports, it was not demand, it was instead defects that forced the company to limit supply.
Why have Apple shares languished in the wake of Monday's top and bottom line beat? We may now have the answer...
"I explained that it was the brand new Apple Watch and they laughed in a really deliberately hurtful way. The accounts assistant said it was the opposite of a fanny magnet and everyone cracked up..."
- Maryland Governor Calls in National Guard to Control Baltimore Riots (BBG)
- Fed Seen Delaying Liftoff to September to Push Down Unemployment (BBG)
- Nepal PM says toll could rise to 10,000 (Reuters)
- China Readies Fresh Easing to Tackle Specter of Debt (WSJ)
- ‘Damned Lies’ Threaten to Overshadow U.K. GDP in Election Fight (BBG)
- Uncertainty Over Impact of a Default by Greece (NYT)
- Why the Cost of Hedging European Banks Stocks Has Soared (BBG)
- Carinthia cash crunch gives Austria its own mini-Greece (Reuters)
Moments ago AAPL reported Q2 earnings for the quarter ended March 31, 2015 which saw AAPL beat soundly on the top and bottom line as as result of a jump in iPhone sales, even as iPad and Mac sales came in below the expectation. EPS was $2.33 vs consensus $2.16, while revenues came in at $58.0 billion, $2 billion higher than the $56.0 billion expected. But while the operations were impressive if China and iPhone centric, what everyone is focusing on is the AAPL news that it once again expanded its buyback program en route to hitting the Goldman forecast of a record $900 billion in 2015 for the entire S&P500, by announcing it would boost its buyback authorization by more than 50%, from $90 billion to $140 billion.
With the Nasdaq having finally eclisped its bubble-era record, the weight of the tech investing world now rests on the shoulders (or should we say "wrists") of just one company...
- Obama’s Drone-Strike Rules to Be Reviewed (WSJ)
- Hostage locations difficult to track - and may be getting harder (Reuters)
- Varoufakis Said to Take Hammering From Riled EU Ministers (BBG)
- EU Frustration Mounts as Greeks Try to Bypass Aid Process (BBG)
- Kleiner Perkins seeks almost $1 million in costs in Pao case (Reuters)
- Google Misses, Caps Costs as Growth Slows (WSJ)... stock surges
- Oil prices trade near 2015 highs on Yemen worries (Reuters)
- Pentagon Announces New Strategy for Cyberwarfare (NYT)
- Bloomberg Oil at $65 Seen Freeing 500,000 Barrels From Shale Fracklog (BBG)
- ‘Flash Crash’ Trader Navinder Sarao: It Was Wits, Not Bits (WSJ)
What do retail investors do on volatile days like Friday’s jolt lower on the S&P 500? Thanks to one very large online broker’s publicly available order flow, we now know...
Explaining the catalysts that move the "market" overnight has become so farcical it is practically an exercise in futility and absurdism.
It is only fitting that the next business day following a headline that "Global Futures Slide China Tumbles On Short Selling Boost" we would see China, in an apparent panic, not only cut its RRR by 100 bps to 18.5% - far more than expected and the most since 2008 - but, more importantly, hinted that the Friday regulatory decision to encourage short sales and tighter margin rules on "umbrella trusts" was in no way meant to pop that the Chinese stock bubble, ridiculous as it may be. End result: after Chinese futures crashed by up to 6% on Friday after the Shanghai close, overnight the SHCOMP was down just 1.64%, erasing the bulk of the futures loss. More importantly, US equity futures have seen a strong bid this morning in yet another attempt to defend not only the Apple Sachs Industrial Average from going red on the year but the all important 100 DMA technical levels.