Violent
bond moves signal tectonic shifts in global markets – (www.telegraph.co.uk) 'It
is absolute pandemonium in the fixed income markets. Everybody has been trying
to get out at the same time but the door is getting smaller,' says RBS. A wave
of turmoil is sweeping through sovereign bond markets, setting off the most
dramatic gyrations seen in recent years and threatening to spill over into
over-heated equity markets. Yields on German 10-year Bunds spiked violently by
almost 20 basis points to 0.78pc in early trading on Thursday as funds
scrambled to unwind the so-called “QE trade” in Europe, with powerful ripple
effects reaching Japan, Australia, Brazil and even US Treasuries. “It is
absolute pandemonium in the fixed income markets,” said Andrew Roberts, head of
European credit at RBS. “Everybody has been trying to get out of long-duration
positions at the same time but the door is getting smaller.” German yields fell
back just as fast to 0.58pc later, as bargain-hunters came back into the
European debt markets, but are still unrecognisable from the historic lows of
0.07pc two weeks ago.
The disconnect in the US stock market just keeps
getting bigger - (www.businessinsider.com) The big disconnect in
the US stock market just keeps getting bigger. A
new Bank of America Merrill Lynch survey published Thursday finds that US
investors have pulled $99 billion out of equities year-to-date — including net
outflows in 11 of the past 12 weeks — despite stock prices continuing to break record highs. This week also saw the biggest outflows from
equity ($17.2 billion) and high-yield bond funds ($2.6 billion) this year. This
data follows a similar report from BAML
last month that
showed investors pulled $79 billion from the stock market this year and nine of
10 weeks to that point. As this imbalance grows, Bank of America writes, so
does the risk of something we haven't seen in the market in years: a correction.
Chinese Stocks Suffer Biggest Weekly Loss In 5
Years - (www.nasdaq.com) The
benchmark Shanghai Composite Index though up 2.3% for the day, lost 5.3% for
the week, its worst performance since May 2010. Most other stock markets in the
region also crept higher to claw back some of the losses from earlier in the
week. Asia's markets have been caught up in the wild fluctuations around the
world. Some of the biggest action has been in Germany, where government debt suffered
a sudden and sharp selloff this week before recovering in late trading
yesterday. But Asia's economic fundamentals are intact, most investors say,
despite slowing economies across the region. Japan's Nikkei Stock Average
finished up 0.5% at 19,379.19, as some of the country's biggest companies
reported improved profits. Game maker Nintendo's shares surged more than 7%
after the company released better-than-expected results, including its first
annual operating profit in four years.
14%
of Zappos' staff quit after CEO ultimatum - (www.businessinsider.com) Zappos,
the Amazon-owned online retailer, confirmed with the Las Vegas Sun that 210 of its 1,503 employees — nearly
14% of the company — took a buyout deal after CEO Tony Hsieh announced the company was completely ridding itself of
manager roles and job titles.
The company, well known for its experiments involving corporate culture, has
been transitioning to a self-management organizational structure known as
Holacracy since the beginning of 2013. Entering this year, about 85% of the
company had made the transition. Hsieh sent a nearly 5,000-word company-wide memo in
late March that explained that any employee who was not satisfied with the
transformation by April 30 could leave with three months' severance.
The $364 Billion Real Estate Threat Inside
China’s Biggest Banks - (www.bloomberg.com)
Fitch Ratings has called real estate the
“biggest threat” to Chinese banks as surging loans tied to properties coincide
with defaults and falling sales. Corporate loans backed by buildings have grown
almost fivefold since 2008 and residential mortgages have more than tripled in
the period among lenders rated by Fitch, the company said Friday. That’s seen property loans held by China’s
four biggest lenders soar to a total 2.26 trillion yuan ($364 billion),
according to their annual reports. “Collateral is supposed to reduce bank risk
-- but the rise of property collateral in corporate loans may actually increase
the chance of bank failure,” Fitch analysts Jack Yuan and Grace Wu said in the
report. “This is because the widespread use of such collateral has lowered the
perceived risks of lending, fueling China’s credit build-up and spreading
real-estate risk to other sectors of the economy.”
Pound taps $1.55 as Conservatives look set for U.K. election
win - (www.marketwatch.com)
Emerging Stocks Pare Weekly Drop as China Rebounds; Ruble Slides - (www.bloomberg.com)
Energy, retail job cuts fuel 3-year high in layoffs - (www.usatoday.com)
It’s Bonds That Are Overvalued, Not Stocks. Here’s Why - (blogs.wsj.com)
Stock Buybacks Hit New Records - (blogs.wsj.com)
Emerging Stocks Pare Weekly Drop as China Rebounds; Ruble Slides - (www.bloomberg.com)
Energy, retail job cuts fuel 3-year high in layoffs - (www.usatoday.com)
It’s Bonds That Are Overvalued, Not Stocks. Here’s Why - (blogs.wsj.com)
Stock Buybacks Hit New Records - (blogs.wsj.com)
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