“Don’t short a DULL market” — unknown

1. China Eases Again with Bank Reserves Cut — following the country’s soft GDP data last week, China’s central bank cut the reserve requirement ratio for all banks by 100 bps to 18.5%, adding more liquidity to the world’s second-largest economy to combat slowing growth. China’s GDP is still expected to fall to a quarter-century low of around 7% this year from 7.4% in 2014, even with the additional stimulus.
2. Bird flu Hits Iowa Chickens as Virus Outbreak Escalates — MarketWatch, U.S. Department of Agriculture reported an Iowa farm’s flock of about 5.3 million chickens has been hit with avian influenza, marking a sharp escalation of the virus outbreak that has rattled the poultry industry since it began late last year. Poultry companies and animal-health officials are struggling to respond to the worst outbreak of avian influenza in years, with cases in upper Midwest states like Minnesota, Wisconsin and Iowa rapidly mounting over the past two weeks.
3. China to Open Card Markets — the no. 2 economy’s bank card-clearing market will be open to foreign competitors beginning June 1 2015. It comes as China rebalances its economy toward consumption and liberalizes the finance sectors. Visa (V) & MasterCard (MA) are the beneficiary.
4. US Business Investment Plans Fall for 7th Straight Month — the Commerce Department reported non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, declined 0.5 percent last month after a revised 2.2 percent drop in February, which was the biggest drop since July 2013. The decline likely weighed down by a strong dollar and lower energy prices, suggesting the economy could struggle to rebound from a soft patch hit at the start of the year.

The week ahead — Economic data from Econoday.com:

“I’m always thinking about losing money as opposed to making money. Don’t focus on making money; focus on protecting what you have.” – Paul Tudor Jones

1. China Grows at Slowest Pace Since Financial Crisis — China’s economy grew at its slowest pace since the global financial crisis in the first quarter of 2015. China’s exports sank 15% vs. March. This figure was a shock to economists who’d forecast an 11.7% rise. Overall Q1 shrank 6.3% vs. the 6% growth target in ’15.
2. Standard & Poor’s Downgraded Greece’s Credit Rating to CCC+ with a Negative Outlook — S&P cited a substantial risk of a Greek default due to the country’s drawn out negotiations with its creditors.
3. Greek Government Bonds Plunge as Default Fears Grow — MarketWatch, Greek government bonds plunged late last week, shaken by yet another downgrade and growing expectations that the country will be forced into a default. yields on the country’s two-year bonds had soared close to 4 percentage points on the day to more than 27%. Meanwhile, yields on the country’s 10-year debt advanced by a little more than 1 percentage point to a shade under 13%— their highest in over two years. An inverted yield curve, where shorter-term debt yields more than longer-dated bonds, is a classic signal that investors see a very high risk of default.
4. China Regulators to Allow Short-Selling by Fund Manager — the new regulation was announced last Friday to allow fund managers to lend shares for short-selling and will also expand the number of stocks investors can short sell. The moves were announced by the Securities Association of China aimed at increasing supplies of securities and cooling down China’s markets. Various forms of government stimulus and a frenzy of buying by investors have driven the Shanghai Composite index up by 33% year-to-date, while the Hong Kong Hang Seng index up 17% year-to-date.
5. S&P Energy Sector (XLE) Rebound — the Energy Sector has held its respective quadruple bottom, and has broken out above its downtrend line. Below is Energy Sector chart for the last 12-month.

The week ahead — Economic data from Econoday.com:

There will not be any Weekly Re-Cap for the week of April 6 to April 10 2015. We are away for some needed R&R.

Have a good week.

The staffs at EGS.

“I measure what’s going on, and I adapt to it. I try to get my ego out of the way. The market is smarter than I am so I bend.” – Martin Zweig

1. China Policy Makers Signaled Easing Talks — China policy makers signaled the country had capacity to ease monetary policy and boost sluggish growth at the Boao Forum for Asia on last week. China’s central bank has already taken a series of easing steps since November, cutting interest rates twice and slashing banks’ reserve requirements.
2. US Factory Orders Rose in February For First Time in 6 Months — Reuters, the Commerce Department reported new orders for manufactured goods increased 0.2 percent, the largest gain since July, after a revised 0.7 percent drop in January. Orders excluding transportation rose 0.8 percent, the biggest rise in eight months. Shipments of factory goods rose 0.7 percent after four straight months of declines.
3. Greece Tells Creditors It Will Run Out of Cash on April 9 — Greece made an appeal for more loans before reforms on which new disbursements hinge are agreed and implemented, but the request was rejected, euro zone officials said. Also, the ECB raised its cap on emergency liquidity assistance that Greek banks can draw from the country’s central bank by €700M, increasing the ELA ceiling to €71.8B. The central bank has been raising the cap in increments to keep pressure on Greece to strike a deal.
4. March Payroll Data Shows Weak Jobs Report — Job growth slumped to a 15-month low in March, the Labor Department reported last Frid. Various tracking models used by economists show growth in gross domestic product slowing sharply to around or under a 1% annual rate in the first quarter. The slowdown has been blamed on the cold winter weather to the slowdown at West Coast ports to the impact of low oil prices and the stronger dollar.
5. Iran and the West Reach Nuclear Deal — Pres Obama hailed the tentative nuclear deal that would severely restrict Iran, including slashing the number of installed centrifuges and barring high uranium enrichment for 15 years. After IAEA inspections confirm compliance, the US and EU would suspend crippling sanctions.

The week ahead — Economic data from Econoday.com: