Monday, May 17, 2010

Today’s Top Stories

Today’s Top Stories

· China - A few items being pointed to for the weakness in China – concern that the euro’s decline is pressuring Chinese exports (see comments from Ministry of Commerce’s Jian), commentary indicating there will be additional property tightening measures takes (Premier Jiabao said curbing the overly fast rise of housing prices in some Chinese cities is one of the challenges the government has to work on), a new Conference Board leading economic index for China showed eco growth is peaking, and concern that a revaluation of the yuan may be pushed off (some think there has been capital flows into Chinese equities in anticipation of a higher yuan).

· Euro – do European officials secretly welcome the weaker euro?  ECB’s Nowotny says not worried about euro slide - the euro's slide against the dollar hasn't raised "major concerns" at the European Central Bank he said; also on the euro this morning – the EU Commission said the weaker euro “is helpful” for European exports”.  Russia cut the euros shares in its foreign currency reserve, and a report this weekend from UBS suggests that the appetite for holding euros among private sector institutions and managers of official currency reserves is fading.

· Europe - Hurting sentiment are comments from Germany’s Merkel that the bailout announcement "has only bought time, not a solution" and comments from European Commissioner for Economic and Monetary Affairs Olli Rehn that the €750 billion (£638 billion) crisis mechanism agreed last week should be made so unattractive that countries will not want to use it.

· Trichet blames the state of Europe’s fiscal condition, not speculators, for the euro’s recent slump; Trichet said Europe could be heading for its toughest situation for the last 65 years; Trichet reiterated that his bank remains independent from political influence and called for a “quantum leap” in supervision of individual state spending; Trichet said the situation last weekend was similar to what occurred after Lehman w/world capital markets seizing up – Spiegel 

· UK budget - comments from incoming Conservative-Lib Dem that the gov’t is finding the state of Britain’s budget to be worse than originally thought. 

· Greece – says will receive the first installment of emergency EU loans on Tues, one day before EU8.5B of bonds come due.  Bloomberg

· M&A - bunch of deals today - MAN Group to buy GLG; UHS to buy PSYS; Astellas to buy OSIP; and spec that Apollo to buy PTV and spec that INTC to buy Infineon's wireless chip biz

· Energy/Crude/commodities – bunch of headlines this morning; 1) research call from JPMorgan’s F Lucas – “Raising 2010 oil price ($70 to $80), reducing 2010-12 US gas price, upgrade RDS to OW”; 2) signs of hope  in the Gulf after BP says it was successful in inserting a tube into the broken pipe spilling oil into the gulf; will siphon some of the crude into a ship at the surface; 3) BP was subject of a “60 Min” segment Sun night which placed blame on the co (vs. other partners) and said its Atlantis rig in the Gulf may be more dangerous than the Deepwater Horizon).  Also - copper closed below its 200day on Friday (first time closing below this year) and it was the last of the major base metals (aluminum/zinc) to fall below their 200 day. oil is also well below its 200 day MA.

· Hedge Funds – some of the world’s largest hedge funds are suffering losses in May as a result of the market volatility; losses in May have erased the YTD gains for a bunch of managers (FT)  

· State tax collection – tax collections for the month of Apr are falling short of projections and in some cases even falling on a Y/Y basis – WSJ  

· Samsung raises capex to W18T from prior W8.5T.....note however that this was expected and actually under some forecasts from last week (~W20T+)...Samsung had already said it would ramping up spending (RTRS)

· COF – reports master trust #s for the month of Apr – NCOs fall from 10.87% to 9.68%; 30-day delinquencies fall from 5.3% to 5.07%

1 comment:

  1. Technology has consolidated around 5-10 big players around the world who are gobbling up smaller companies and using their huge cash hoards to outspend the competition.Nothing reflects this better than Samsung’s massive capital spending plan this year.With a dominant share in the memory and LCD markets , Samsung with its huge capex spend this year could greatly increase the gap in technology and capacity with its competitors who are still weakened by the last year’s recession.Read more at