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Global Wrap

US Stocks deteriorated, with the S&P 500 finishing lower for a fifth straight session on weak domestic economic data, while the market extended losses to end on its lows after Fitch downgraded Greece’ issuer default rating to ‘CCC’ from ‘B-.’ After-the-bell, Moody’s downgraded 16 Spanish banks, but that had little impact on the Euro. Flow was heavy on the NYSE, with nearly a billion shares changing hands in what was the most active session in nearly a month as major accounts stepped up liquidation into the close as a result of an escalating flight to quality.

Gold rallied, with the yellow metal for June delivery rising the most since October and ending a 4-day slump as a disappointing Philadelphia Fed, which showed that new orders contracted to minus 1.2 from 2.7, revived expectations that the Fed will announce more stimulus to bolster growth amid the ongoing European Debt crisis. The Dollar Index, however, still advanced, climbing within 0.1 points of hitting its highest level since Sep, 2010.
European Stocks declined, with British, French and German indices all shedding at least a percent after the ECB paused lending to some Greek banks to reduce their exposure to the state in the event of a Eurozone exit, while speculation that Moody’s would downgrade Spanish Banks contaminated sentiment. Hence European Banks – Barclays (181.9p, -3.8%), Credit Suisse (CHF 18.91, -0.9%), Deutsche Bank (€28.49, -2.0%), Société Générale (€15.47, -3.6%) – were widely offered. Bankia (€1.42, -14.0%) sank on reports of depositors withdrawing funds.

Fitch cut Greece’s rating to ‘CCC’ after the rating’s agency cited “the heightened risk that Greece may not be able to sustain its membership of Economic and Monetary Union.” Also, they flagged that an exit “would likely result in widespread default on private sector as well as sovereign euro-denominated obligations.”

US Treasuries rallied on the back of fresh expectations of Fed easing, while rotation into ‘safe haven’ assets saw the complex finish on its highs. The government sold $13 billion of 10-Year TIPS at a record negative yield of −0.39%, with dealers taking a record low 34.5% of the sale as investors piled in. The curve flattened aggressively.

Financials lagged as Major Banks – Bank of America ($6.98, -1.8%), Citigroup ($26.41, -1.9%), JPMorgan Chase ($33.93, -4.3%), Wells Fargo ($31.44, -1.7%) – tracked Euro peers. Separately, Jamie Dimon agreed to testify before a Sentate committee on the JPM’s $2 billion trading loss, while Timothy Geithner suggested that it may appropriate for Dimon to remain on board as a director of the Federal Reserve Bank of New York,

Materials – Alcoa ($8.50, +.0.1%), Cliffs Resources ($49.83, -3.0%), Freeport ($32.17, -1.2%), US Steel ($22.43, – 1.5%) – generally printed losses in line with weaker Industrial Metals, albeit Gold Miners – Barrick Gold ($37.41, +6.2%), GoldCorp ($34.76, +6.1%), Newmont Mining ($45.26, +4.1%) – surged in like with the precious metal.

Wal Mart ($61.68, +4.2%) jumped, rising the most in 3-years after the company beat first-quarter profit estimates.

Global Wrap

US Stocks finished lower, with the S&P 500 slipping for a fourth day, the worst losing streak in a month as fears that Greece’s crisis is worsening offset stronger reports on domestic housing starts and industrial production. As a result, the bellwether indices finished near session lows, on above average flow, after earlier printing gains out of the open on tepid bargain-hunting and short-covering. The Greenback extended upside, rising to a fresh 4-month high against the Euro, leaving Gold offered as low as $1531/oz. The yellow metal has entered an official bear market after falling more than 20 percent from a record $1921/oz in September. June Crude slipped below $92/bbl, before paring losses, while Copper fell to its lowest level since January, slipping below $3.50/lb.

Minutes from the FOMC showed that several Fed policy makers flagged a loss of economic momentum or increased risks to their economic outlook could warrant additional action to keep the recovery in tact. Policy makers also discussed the conditions for any change in the 2014 horizon for low rates. The minutes cited a lack of confidence in their forecasts. “Some members recalled that gains in employment strengthened in early 2010 and again in early 2011 only to diminish as those years progressed,” the minutes said.

US Housing starts rose 2.6 percent to a 717,000 annual rate from March’s revised 699,000 pace that was stronger than previously reported. Industrial production climbed 1.1 percent, the most since December 2010.

European Stocks declined, with most regional benchmarks losing ground for a third day as Greek worries offset a wider-than-forecast regional trade surplus that should contribute to second quarter GDP. Greece called a new election after President Karolos Papoulias failed to broker a coalition. Greece’s Democratic Left leader, Fotis sole task of a  caretaker government decided by party leaders today would be to hold elections, which will most likely be set for June 17.10-Year Gilt Yields hit a record-low 1.82 percent.

US Treasuries fluctuated, as a lack of encouraging European news left trading choppy and unenthusiastic, while gave up strength on reports that the ECB halted monetary policy operations to some Greek banks, the complex finished off intraday lows amid curve flattening.

Financials lagged as Major Banks – Bank of America ($7.11, -2.6%), Citigroup ($26.92, -3.1%), JPMorgan Chase ($35.46, -2.2%), Wells Fargo ($31.97, -0.8%) – tracked EU peers. Materials – Alcoa ($8.49, -2.5%), Cliffs ($51.37, -1.5%), Freeport ($32.57, -0.3%), Newmont ($43.50, +0.3%), US Steel ($22.76, -4.9%) – were also mostly offered.

General Electric ($19.00, +3.3%) rallied as the company’s finance arm said it will resume its quarterly dividend to the parent company and pay the conglomerate a $4.5 billion special dividend this year. Deere ($74.18, -3.2%) fell even after reporting sales and profits ahead of estimates, while the tractor maker also raised its guidance.

Global Market Wrap

US Stocks fluctuated, with the bellwether indices catching a positive lead from Europe out of the open, before bears eventually prevailed with the market finishing near its lows as talks to form a new Greek government failed. The US Dollar Index extended its longest rally ever as the Euro fell to a four-month low against the Greenback. Hence, Spot Gold fell to as lows as $1541/oz, while June Crude traded as low as $93.02/bbl, the weakest since November, before paring downside. Volumes were heavier, with nearly 870 million shares trading on NYSE.

US April Retail Sales rose at the slowest pace of the year as consumers took a pared back spending that was induced by unseasonably warm weather in prior months. The 0.1 percent gain followed a 0.7 percent increase.

European Stocks declined, despite initially ticking higher as German GDP grew five times more than forecast in the first quarter as exports to emerging markets offset weaker euro-area demand. German Bund Yields rose to 1.47 percent after hitting a record 1.43 percent the previous day. Greece will hold a new vote as early as next month as polls showed that the anti-austerity Syriza group could win the ballot, prompting Euro exit concerns.

European Financials slumped – Barclays (186.1p, -2.0%), Crédit Agricole (€3.04, -7.0%), Credit Suisse (CHF 19.08, -1.1%), Deutsche Bank (€29.38, -1.7%) – as Banks posting the biggest contribution to the Euro Stoxx 600’s decline. Materials – BHP Billiton (1766p, -1.8%), Rio Tinto (2953p, -2.9%), Xstrata (999p, -1.4%) – tracked metal prices lower as Copper fell to a four-month low, while Lead and Tin both lost at least a percent on the LME.

US Treasuries consolidated, with 10-Year Yields (1.76%) trading at almost a seven-month low before stronger Empire Manufacturing data and CPI report that showed an annual inflation rate of 2.3 percent prevented the complex from breaking out higher. Long-Term inflows data showed net private investor selling of Treasuries, but the slack was picked up by offshore buyers. 30-Year Yields fell to the lowest level since January at 2.91 percent.

Materials – Alcoa ($8.71, -2.4%), Cliffs ($52.16, -4.3%), Freeport ($32.65, -4.8%), Newmont ($43.39, -2.9%) – and Oil & Gas Producers – Chevron ($100.90, -1.0%), ConocoPhillips ($52.53, -0.8%) – were among the worst performing sectors in the S&P 500. Chesapeake Energy ($14.65, -5.6%) tumbled on fears of a liquidity crunch.

JPMorgan Chase ($36.24, +1.3%) bounced as the group held its AGM. CEO Jamie Dimon’s pay package was approved by stockholders and he kept his post as chairman of the board. Fellow Banks – Bank of America ($7.30, -0.7%), Citigroup ($27.79, -1.2%), Wells Fargo ($32.24, -0.5%) – otherwise printed losses. Separately, Morgan Stanley ($14.14, -1.1%) investors approved the firm’s executive compensation plans.

Home Depot ($48.67, -2.4%) skidded as the Dow component posted weaker-than-expected sales results.

Global Market Wrap

US Stocks dropped, sending the Dow Jones Industrial Average to its lowest level in 15-Weeks as Greece failed to form a new government, adding to speculation that the state will leave the Euro. Hence, the bellwether indices gapped lower out of the open, before paring losses into the afternoon on tepid bargain hunting, before the market turned back towards session lows into the close on average volume (802 mln shares traded on NYSE).

Moody’s downgraded 26 Italian Banks after Wall Street closed. Intesa Sanpaolo (€1.03, -3.6%) and UniCredit (€2.67, -4.9%) were among those lenders that had their credit ratings cut one to four levels. “The ratings for Italian banks are now amongst the lowest within advanced European countries, reflecting these banks’ susceptibility to the adverse operating environments in Italy and Europe,” Moody’s said in a statement.

European Stocks declined, with French, Italian and Spanish gauges all ditching at least two percent as Angela Merkel’s party lost an election in Germany’s most populus state. Meanwhile, Greece’s President failed to secure agreement on a unity government and avert new elections. He will now call a meeting of all leaders of parties represented in parliament for 2 PM in Athens today to discuss the proposal. German 10-Year Bund Yields hit a record-low 1.43 percent after a report showed Euro-Area Industrial Production fell 2.2% YoY vs. Survey -1.4%.

European Financials slumped – Barclays (189.80p, -6.4%), Crédit Agricole (€3.27, -5.5%), Credit Suisse (CHF 19.29, -2.6%), Deutsche Bank (€29.88, -4.1%) – as traders began pricing in a Greek Euro exit. Materials – BHP Billiton (1798.0p, -3.5%), Rio Tinto (3043p, -3.2%) – fell as commodities extended the longest slump since 2008.

US Treasuries rallied, sending 7-Year Yields to a record low 1.679 percent as Euro contagion fears promptedrotation into safe haven assets. The market paid little attention to a decent Italian bond sale, focusing instead on Thursday’s upcoming Spanish auction. The belly and long-end led the charge as the curve flattened into the close

JPMorgan Chase ($35.79, -3.2%) extended losses. The bank’s Chief Investment Officer, who was responsible for  overseeing the unit that entered into the $2 billion losing trade, announced her retirement. Separately, US politicians said Jamie Dimon should resign as a director of the Federal Reserve Bank of New York. Fellow Banks – Bank of America ($7.35, -2.7%), Citigroup ($28.14, -4.1%), Wells Fargo ($32.41, -2.7%) – also slipped.

Groupon ($11.74, +18.5%) surged ahead of its earnings report and extended gains after hours on its quarterly.

US Materials – Alcoa ($8.92, -1.6%), Cliffs ($54.48, -1.7%), Freeport ($34.30, -1.3%), Newmont ($44.67, -1.5%) – skidded along with US Oil & Gas Producers – Chevron ($101.94, -0.7%), ConocoPhillips ($52.93, -1.1%).

Global Market Wrap

US Equities slipped, with the S&P 500 ending the week at a 2-Month low as Financials slumped after JPMorgan Chase reported a $2 billion trading loss, overshadowing stronger consumer confidence data which hit a 4-Year high. The market, however, managed to climb off opening lows amid speculation that China’s central bank would announce fresh easing measures, which materialised on Saturday. The US Dollar rose to a 4-Month high against the Euro and has extended gains today after Greece’s President failed to establish a government this past weekend.

European Equities climbed, with regional indices bouncing off earlier lows on stronger US consumer confidence data and reports that Greek government talks were progressing. Traders discounted news that the European Commission reiterated its February forecast for GDP in the Euro area to contract 0.3 percent this year. Regional Banks – Barclays -2.9%), Crédit Agricole (€3.46, -1.0%), Credit Suisse (CHF 19.80, -0.4%), Deutsche Bank (€31.17, -0.2%) – fell after JPMorgan’s trading loss prompted fears other firms may have of similar exposures.

Treasuries rose, with the complex booking its longest streak of weekly gains since 1998 when Russia devalued the Ruble and delayed debt payments. 10-Year Yields re-approached tech support at 1.80 percent.

JPMorgan Chase ($36.96, -9.3%) tumbled. This morning reports are surfacing flagging executives at the bank’s chief investment office will leave as early as this week. Meanwhile, US politicians have called for Jamie Dimon to resign his position as a director at the Federal ReserveBank of New York. Commercial – Bank of America ($7.55, -2.0%), Citi ($29.35, -4.2%), Wells Fargo ($33.31, +0.4%) – and Investment Banks – Goldman’s ($102′.13, -3.9%), Morgan’s ($14.95, -4.2%) – mostly fell.

Materials declined, with Metals & Miners – Alcoa ($9.06, -0.4%), Cliffs Resources ($55.43, -1.8%), Freeport ($34.74, -1.6%), Newmont Mining ($45.36, -1.8%) – shedding ground after Chinese industrial producti rose by the least in 3-Year, spurring renewed ‘hard landing’ fears. Oil & Gas Producers – Anadarko ($68.31, -1.4%), Chevron ($102.69, -0.7%) ConocoPhillips ($53.50, -1.3%) – tracked lower as Crude fell to a 2012 low. Nordstrom ($50.96, -4.8%) reported disappointing store sales data

Global Market Wrap

US Equities fluctuated, with the S&P 500 kicking off a two-month low, but at the expense of the NASDAQ Composite, as a decline in weekly claims for unemployment insurance and news that Greece will attempt to form a new government triggered light bargain hunting. The market, however, finished below session highs on weaker volumes as investor
conviction on the whole still lacked. Moreover, Stock Futures dropped after the closing bell as JPMorgan Chase said it lost about $2 billion on synthetic credit securities. The US Dollar Index climbed for a third day.

European Equities jumped, with Spain’s IBEX 35 rallying as much as 3.9 percent as risk markets stabilised, while regional earnings pleased investors. Deutsche Telekom (€8.80, +3.0%) rallied after posting profits ahead of estimates and discussed the potential for a merger between T-Mobile with MetroPCS. Repsol (€14.21, +8.2%) rose the most in two
years as Spain’s biggest oil company posted a higher profit. UniCredit (€2.84, +6.8%) said its first-quarter earnings rose 13 percent to €914 million on higher-trading revenues, offsetting weaker fees and lending.

Treasuries declined, with 10-Year Yields rising above 1.90 percent at one stage as a positive bias returned towards stocks, while technicians reported overbought conditions. The 30-year auction was well received
JPMorgan Chase ($38.50, -5.5%) plunged in extended trade after the lender reported a loss of about $2 billion on synthetic credit securities on an “egregious’” failure by its chief investment office, which the bank says focuses on hedging. “This portfolio has proven to be riskier, more volatile and less effective as an economic hedge than the firm
previously believed.” Fellow Banks – Bank of America ($7.70, -0.4%), Citigroup ($106.32, -0.9%), Wells Fargo ($33.19, +1.7%) – were mixed
News Corp ($20.60, +5.1%) surged, rising the most in 5-months, after revenue growth at its cable networks and film studio helped it exceed analysts’ expectations. Cisco Systems ($16.81, -10.5%), however, fell after the tech company posted guidance that disappointed, prompting at least ten brokerages to reduce their price targets. Metals & Miners – Alcoa ($9.10, -0.6%), Cliffs Resources ($56.46, -0.6%), Freeport ($35.31, -0.6%), Newmont Mining ($46.20, -0.7%) – all returned south.

Global Market Wrap

US Equities declined, with the NASDAQ Composite ditching as much as 1.9 percent, reaching a 13-week low, before the market managed to stage an intraday recovery as bargain hunters stepped. Volumes were heavier than average, with turnover on the NYSE hitting a 3-week high as major accounts began liquidating long positions on expectations of another rocky summer trading period. The Euro cracked US$1.30 after political tension in Greece intensified, spurring fears that they will leave the Eurozone. Spot Gold traded as low as $1595/oz as a consequence

European Equities stalled as the leader of Greece’s biggest political party failed to reach an agreement on a new government following the weekend’s elections. Moreover, a malfunction that delayed the opening of Germany’s equity exchange worsened already frayed nerves. Greek Banks – Alpha Bank (€0.72, -14.0%), National Bank of Greece (€1.42, -8.4%) – fell sharply. Materials – BHP Billiton (1860p, -3.0%), Rio Tinto (3107p, -3.3%), Xstrata (1089p, -3.8%) – were offered as Base Meals tipped. HSBC (548.6p, -1.2%) reported better-than-expected earnings. Treasuries danced as risk markets stumbled, while Uncle Sam issued $32 billion of 3-Year notes that drew a strong bid-to-cover ratio of 3.65. 10-Year Yields reached support at a three-month low at 1.814 percent.

Financials skidded as Commercial – Bank of America ($7.79, -2.1%), Citigroup ($31.32, -1.1%), JPMorgan ($41.38, -1.0%), Wells Fargo ($33.15, -1.0%) – and Investment Banks – Goldman Sachs ($109.37, – 0.6%), Morgan Stanley ($15.84, -1.9%) – reflected European worries, but they did rise off session lows. McDonald’s ($93.55, -2.1%) released
same-store sales data that was below market forecasts. Walt Disney ($44.30, +1.1%) extended gains after-hours as its profit beat estimates.

Materials underperformed, with Metals & Miners – Alcoa ($9.21, – 1.3%), Cliffs Resources ($56.76, -2.9%), Freeport ($35.62, -2.1%), US Steel ($26.16, -1.9%) – attracting a negative lead from London peers. Gold Miners – Barrick Gold ($36.72, -3.2%), Newmont ($44.76, -3.0%) – reflected losses in the yellow metal. June Crude retained a bid above $97/bbl. Oil Producers – Chevron ($102.84, -0.5%), ConocoPhillips ($54.31, +1.8%), Exxon Mobil ($84.02, -0.5%) – printed some upside.

Global Market Wrap

US Equities fluctuated, with the bellwether indices ending the trading day little changed after catching a negative lead from Europe out of the opening  as France’s Nicolas Sarkozy was dismissed as Head of State.Stock Futures, however, aggressively pared sharper losses in Asia that at one point indicated the S&P 500 would skid as much as 1.5 percent. In line with the recovery in risk markets, the Euro bounced above $1.30 after earlier dropping below the widely watched level as it hit 12-week lows. June Crude settled below $98/bbl on fresh economic uncertainty.

European Equities rallied off morning lows, with Germany’s XETRA DAX wiping out a loss of as much as 151 points as Standard & Poor’s said France’s election result won’t impact its ratings for the time being, promoting bargain hunting. Greece’s ASE Index, however, plunged as much as 9.2 percent and maintained losses into the close after voters switched to anti-austerity parties during weekend elections. French 10- Year Yields spiked as much as 6 basis points before reversing course. BNP Paribas (€30.23, +4.2%) and Soc Générale (€17.99, +4.0%) rose.

Treasuries were little changed after earlier surging in Asian hours as risk markets stabilised, while traders prepped up for $102 billion of new supply this week. The belly and wings of the curve ended all the same.

Financials outperformed as Major Banks – Bank of America ($7. +2.8%), Citigroup ($31.67, +0.2%), JPMorgan ($41.78, +0.1%), Wells Fargo ($33.50, +1.4%) – printed upside. AIG ($31.84, -3.0%), however, fell as Uncle Sam auctioned $5 billion of stock in the bailed-out insurer. Investment Firms – Goldman Sachs ($110.94, +1.0%), Morgan Stanley ($16.15, +0.9%) – advanced. Intel ($27.76, -0.5%) boosted its dividend

Energy lagged, with Oil & Gas Producers – Apache ($87.84, -1.4%), Chevron ($103.31, -0.4%), Exxon Mobil ($84.48, -0.1%) – struggling to attract interest on weaker crude prices. Basic Materials – Alcoa ($9.33, -0.4%), Cliffs Resources ($58.46, +0.3%), Freeport ($36.40, unch), US ($26.67, -0.3%) – were a mixed bag. Gold Miners – Barrick Gold ($37.94, +0.1%), Newmont Mining ($46.14, unch) – lacked direction as the yellow metal was little changed. Vertex Pharmaceuticals ($58.12, +55.4%) rocketed amid positive results from its new cystic fibrosis drug