NYSE Margin Debt Hits Record $451 Billion;
Watch Out If Rate Drops
- (www.forbes.com) Margin debt hit a record $451 billion on the New York Stock Exchange in
January,
as investors borrowed more money than ever to buy into the
post-financial-crisis bull market. And that’s a good thing, for now. But
rapidly rising margin debt can also signal a market top, especially if the rate
of borrowing starts to drop below its 12-month average. That was a strong
signal to get out of the stock market in late 1999 and 2007 — if 0nly investors
had been able to see the data in real time. The NYSE margin statistics are
released after a six-week delay. “You can’t use this for timing, but you can
use it to be prepared for trouble,” says Ricardo Ronco, head of technical
analysis at Aviate Global in London who shared the charts here with
me. The net level of margin debt “gives you an important color on the mentality
of the market,” he told me.
Copper
Posts Biggest Decline Since 2011 on China Demand Concern - (www.bloomberg.com)
Copper futures in New York capped the biggest
loss in more than two years asChina’s first onshore default stoked concern that
rising debt will curb demand in the Asian nation, the world’s largest consumer.
After Shanghai Chaori Solar Energy Science & Technology Co. failed to pay
full interest on its bonds, more defaults may follow, including by makers of
nonferrous metals, said Qiu Xinhong, a bond-fund manager in Guangzhou at Golden
Eagle Asset Management Co. Copper stockpiles monitored by the Shanghai Futures
Exchange have climbed for eight straight weeks, the longest streak in two
years, adding to signs of slowing use. Prices have lost 9.2 percent this year,
the most among 34 commodities tracked by Bloomberg, as signs of faltering
growth in China boosted the outlook for a surplus. Global production will
outpace demand by 81,000 metric tons in 2014, after a deficit of 175,000 tons
last year, Barclays Plc said Feb. 12. Shares of Freeport-McMoRan Copper & Gold Inc. (FCX), the biggest publicly traded producer, fell as
much as 4.8 percent today.
Chile
Peso Falls Most in World as Default in China Sinks Copper - (www.bloomberg.com) Chile’s
peso dropped the most in the world as the price of copper, the Andean nation’s
biggest export, plunged on news of China’s first onshore bond default. The peso
depreciated 1.3 percent to 566.07 per U.S. dollar at the close in Santiago, the weakest
level since June 2009. The decline was the biggest among all of the global
currencies tracked by Bloomberg. The peso was down for a third straight week,
declining 1.3 percent. Copper was on course for its biggest daily loss since
December 2011, falling 4.1 percent. The currency declined even after the
government reported that consumer prices increased more than economists forecast
in February, undermining speculation that the central bank will cut borrowing
costs on March 13. Shanghai Chaori Solar Energy Science & Technology Co.
failed to pay full interest on its bonds, raising concern that more defaults
may follow in the $2 trillion market for Chinese and Hong Kong corporate debt.
IMF
Said to Demand Greater Say on Greek Banks in ECB Wrangle - (www.bloomberg.com) The International Monetary Fund wants a greater say in the fate of Greek
banks because it’s worried that the European Central Bank is being too lenient on them, three
people with knowledge of the matter said. The IMF views an analysis of the
country’s banks run in 2013 by BlackRock Inc. (BLK) as being too optimistic, said the people,
who declined to be identified as the talks are private. The fund is concerned
that the ECB, which will conduct its own stress test later this year, hasn’t pushed the Greek
central bank hard enough to revise BlackRock’s findings, the people said. Those
results will be published today. The IMF is refusing to give ground as it seeks
to preserve its role in Greek banking policy just as the ECB prepares to take
control of overseeing euro-area lenders. Annointing the central bank in Frankfurt as the sole supervisor was supposed to
eradicate the turf wars that sometimes blighted attempts to police banks on a
national level in the run up to the region’s debt crisis.
Russia
Invokes $2 Billion Ukraine Gas Debt Amid Crimea Crisis - (www.bloomberg.com) Russia said Ukraine’s natural gas debt climbed
to almost $2 billion and signaled supplies may be cut, ratcheting up pressure
on its neighbor as they scrap over the future of the Black Sea Crimea region. Ukraine
hasn’t made its February fuel payment and owes Russia $1.89 billion, according
to gas export monopoly OAO Gazprom (OGZD), which halted supplies to Ukraine five years
ago amid a pricing and debt dispute, curbing flows to Europe. Lawmakers in
Moscow said they’d accept the results of a March 16 referendum on Crimea
joining Russia as Arseniy Yatsenyuk, Ukraine’s premier, reiterated that his
cabinet deems the vote illegal.
Ukrainian
minister says planned Crimea referendum illegitimate -(www.reuters.com)
Crimea sets date for vote on whether to join Russia -(www.usatoday.com)
Crimea sets date for vote on whether to join Russia -(www.usatoday.com)
Kerry Makes Push to Ease Ukraine Tension in Lavrov
Talks - (www.bloomberg.com)
China Retains 7.5% Growth Target for 2014 - (www.bloomberg.com)
China Retains 7.5% Growth Target for 2014 - (www.bloomberg.com)
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