Stocks started higher, but then sellers returned. Dow fell 15, decliners just ahead of advancers but NAZ was up 6. The Financial Index slipped pocket change to below 195, a fresh 3 month low. MLPs had a modest bounce back,taking the index up 1 to 380 but the REIT index was off a fraction to the 256s. Junk bond funds were mixed & Treasuries were little changed. Oil did little & gold continued its retreat, down to the mid 1500s..
Alexis Tsipras
Photo: Bloomberg
Greece, which has 10 year debt that yields more than 27%, decides today whether to pay €436M ($562M) to bondholders who shunned last month’s debt swap as a floating-rate note sold a decade ago matures today. Repaying the security would disadvantage investors who took losses in the bond exchange & voters facing spending cuts. Reneging on the obligation also would constitute a default, triggering derivatives contracts & clauses requiring the settlement of other unswapped bonds. Meanwhile, there is no gov to make the choice. One report said that the bond will be paid, citing an unnamed official. Huh! Greece will hold new elections after the President failed to broker the creation of a gov following an inconclusive May 6 vote, Pasok leader Venizelos said today. The Syriza party led by Alexis Tsipras, who favors defaulting & an end to economic austerity, is ahead in current polls. The note maturing today is one of about €7B of bonds either issued by the gov or with its guarantee, whose owners are holding out for a better deal than offered under Greece’s debt restructuring. Greece’s interim gov hasn’t yet decided what to do so the Greek debt mess drones on.
Greece Weighs $562 Million Default or Yield Choice
Photo: Bloomberg
Confidence among US builders rose to the highest level in 5 years in May, a hopeful sign that modest improvement in the housing market will pick up. The National Association of Home Builders/Wells Fargo builder sentiment index rose to 29 in May, the highest reading since May 2007 & up from a downwardly revised reading of 24 in Apr. The index rose for 6 straight months before falling in Apr. However, any reading below 50 indicates negative sentiment about the housing market & the index last reached that in Apr 2006, the peak of the housing boom. Homebuilders reported improving sales & higher traffic from prospective buyers. A gauge measuring confidence in sales over the next 6 months also rose, to 34 from 31. The improved outlook follows other recent signs that the housing market is slowly improving. In Mar, builders requested the highest number of permits to build new homes & apartments in 3½ years & the number of people who signed contracts to buy homes rose in Mar to the highest level in nearly 2 years. Mortgage rates have fallen to record lows & hiring has picked up, making it easier for more Americans to buy homes. But many would-be buyers are having difficulty qualifying for home loans or can't afford larger down payments required by banks.
Homebuilder Confidence in U.S. Climbs to Five-Year High in May
Photo: Bloomberg
Facebook (FB) raised the price range on its IPO to as much as $12.8B as CEO Zuckerberg expects demand for the stock to withstand recent market turmoil. The new range is $34-$38 a share, implying a market value of as much as $104B ((making FB worth more than Cititgroup (C) & McDonald’s (MCD), both Dow stocks)). The company has spent more than a week pitching the IPO to investors across the US & raised the range even after stocks slumped to the lowest levels since Feb. FB topped $4B in revenue in the 12 months through Mar 31, with almost 1B users. Sales are expected to rise 64% to $6B in 2012 (the 3rd straight year of slowing growth). FB plans to stop taking orders today for its IPO, 2 days ahead of schedule. It is believed that the offering of 337M shares is oversubscribed.
Facebook Increases IPO Price Range to $34-$38 a Share
While the markets began the day higher but there was no real oompf behind the buying. Dow is 70 below its early AM highs & probably will be heading lower with the Greek debt mess dominating thinking. JPMorgan (JPM), a Dow stock, is holidng its annual meeting which is expected to get unpleasant as shareholder questions it large loss coming out of the London office. Below is the chart for Dow in the last month, not very pretty.
JPMorgan Chase Capital XVI (AMJ)
Treasaury yields:
U.S. 3-month | 0.086% | |
U.S. 2-year | 0.266% | |
U.S. 10-year | 1.781% |
| CLM12.NYM | ...Crude Oil Jun 12 | ...94.85 | .... 0.07 | (0.1%) |
| GCK12.CMX | ...Gold May 12 | ....1,556.60 | ... 4.00 | (0.3%) |
Get the latest daily market update below:
Photo: Bloomberg
Greece, which has 10 year debt that yields more than 27%, decides today whether to pay €436M ($562M) to bondholders who shunned last month’s debt swap as a floating-rate note sold a decade ago matures today. Repaying the security would disadvantage investors who took losses in the bond exchange & voters facing spending cuts. Reneging on the obligation also would constitute a default, triggering derivatives contracts & clauses requiring the settlement of other unswapped bonds. Meanwhile, there is no gov to make the choice. One report said that the bond will be paid, citing an unnamed official. Huh! Greece will hold new elections after the President failed to broker the creation of a gov following an inconclusive May 6 vote, Pasok leader Venizelos said today. The Syriza party led by Alexis Tsipras, who favors defaulting & an end to economic austerity, is ahead in current polls. The note maturing today is one of about €7B of bonds either issued by the gov or with its guarantee, whose owners are holding out for a better deal than offered under Greece’s debt restructuring. Greece’s interim gov hasn’t yet decided what to do so the Greek debt mess drones on.
Greece Weighs $562 Million Default or Yield Choice
Confidence among US builders rose to the highest level in 5 years in May, a hopeful sign that modest improvement in the housing market will pick up. The National Association of Home Builders/Wells Fargo builder sentiment index rose to 29 in May, the highest reading since May 2007 & up from a downwardly revised reading of 24 in Apr. The index rose for 6 straight months before falling in Apr. However, any reading below 50 indicates negative sentiment about the housing market & the index last reached that in Apr 2006, the peak of the housing boom. Homebuilders reported improving sales & higher traffic from prospective buyers. A gauge measuring confidence in sales over the next 6 months also rose, to 34 from 31. The improved outlook follows other recent signs that the housing market is slowly improving. In Mar, builders requested the highest number of permits to build new homes & apartments in 3½ years & the number of people who signed contracts to buy homes rose in Mar to the highest level in nearly 2 years. Mortgage rates have fallen to record lows & hiring has picked up, making it easier for more Americans to buy homes. But many would-be buyers are having difficulty qualifying for home loans or can't afford larger down payments required by banks.
Homebuilder Confidence in U.S. Climbs to Five-Year High in May
Facebook (FB) raised the price range on its IPO to as much as $12.8B as CEO Zuckerberg expects demand for the stock to withstand recent market turmoil. The new range is $34-$38 a share, implying a market value of as much as $104B ((making FB worth more than Cititgroup (C) & McDonald’s (MCD), both Dow stocks)). The company has spent more than a week pitching the IPO to investors across the US & raised the range even after stocks slumped to the lowest levels since Feb. FB topped $4B in revenue in the 12 months through Mar 31, with almost 1B users. Sales are expected to rise 64% to $6B in 2012 (the 3rd straight year of slowing growth). FB plans to stop taking orders today for its IPO, 2 days ahead of schedule. It is believed that the offering of 337M shares is oversubscribed.
Facebook Increases IPO Price Range to $34-$38 a Share
While the markets began the day higher but there was no real oompf behind the buying. Dow is 70 below its early AM highs & probably will be heading lower with the Greek debt mess dominating thinking. JPMorgan (JPM), a Dow stock, is holidng its annual meeting which is expected to get unpleasant as shareholder questions it large loss coming out of the London office. Below is the chart for Dow in the last month, not very pretty.
Dow Industrials
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