Global Stock Rout Is Spreading As Investors Are Dumping Almost Everything

If you’re just waking up, then you’ll see that emerging markets are getting routed again.
Whether its Thai stocks, Brazilian bonds, or the South African Rand (its currency) investors are dumping it all.
This is a complex topic, and there are some idiosyncrasies that make each country different from another (of course), but there are 3 big themes.
The first one is the rise in US interest rates.
For the first time in awhile, real US 10-year interest rates (which is nominal interest rates adjusted for inflation) have turned positive.

FRED

More importantly than the fact that they’ve turned positive is the fact that there’s just been a big spike in US real rates.
Read more: http://www.businessinsider.com/whats-slamming-emerging-markets-2013-6#ixzz2VudfcEGM
Rate shock seen hitting equities hard
http://blogs.marketwatch.com/thetell/2013/06/11/rate-shock-seen-hitting-equities-hard/
Futures tumble as global stock rout spreads

U.S. stock futures fell sharply on Tuesday, tracking losses in global markets after the Bank of Japan disappointed some investors by holding its policy steady, and worries about Federal Reserve tapering continued to haunt the market.

Global stocks were also rattled as a German constitutional court began to consider the legality of the European Central Bank’s pledge last year to buy the government bonds of weaker euro-zone countries to prevent the single currency from breaking up.

http://www.marketwatch.com/story/stock-futures-drop-bank-of-japan-ecb-eyed-2013-06-11?dist=beforebell

10 Things You Need To Know Before The Opening Bell

Global markets sell off, Indian rupee hits record low, and protests continue in Turkey.

• Asian markets were lower in overnight trading with the Nikkei down 1.45%. Europe is selling off with Italy down nearly 2%. U.S. futures are down.

• The Bank of Japan failed to take any measures to address a month of volatility in bond markets. Instead it is sticking with a plan to double its monetary base and help re-stimulate the economy. The plan to double the monetary base was expected to cause yields to fall and bond prices to appreciate, but has done the opposite. Jeff Gundlach explains what is going on in global markets >

• The Indian rupee plunged to a record low of 58.98 per dollar on Tuesday. Reuters reports that it was intervention on the part of the Reserve Bank of India that stemmed further declines. What’s the matter with India?

Read more: http://www.businessinsider.com/opening-bell-june-11-2013-6#ixzz2Vue0jv5Y
Yen Soars Most In Over Three Years, Nikkei Futures Plummet

Two days ago we made a very simple observation: “Whenever Goldman openly commands the muppets to buy, you know the situation is serious, and Goldman has a lot of unwinding to do. Which is precisely what just happened following the Squid’s reco to buy Nikkei September futures (NKU3) ahead of the BOJ meeting. What is Goldman’s thesis in a nutshell: hope may be fading in Abenomics, but the “incentives for Governor Kuroda to use the [upcoming BOJ] meeting to signal a firmer and clearer commitment to the easing course, and to highlight the potential to do more, are high and rising.” In other words, please bet the farm on more of the same jawboning that lead to a 20% loss for anyone who bought as recently as 2 weeks ago. Oh, and by the way, complete the sentence, whenever a client is buying from a Goldman flow trader, the Goldman flow trader is [____].“ The answer, by the way, was “selling“, as any muppet who may have taken Goldman’s most recent advice just found out.


http://www.zerohedge.com/news/2013-06-11/yen-soars-most-over-three-years-nikkei-futures-plummet
Press Preview Of German Constitutional Court Decision
http://www.zerohedge.com/news/2013-06-11/press-preview-german-constitutional-court-decision
Bonds selling off on this dreadful possibility

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2013/06/Taper%20perspective_1.jpg
Russian Market‏@russian_market27 m
Car sales in Russia drop -12% in May.
Bond Market Tremors Get Louder
It appears the cracks in the armor of the central bankers created by an over-enthusiastic BoJ’s impact on the quadrillion JPY JGB markets are now rippling through the global market place. While every talking head that dares to speak has proclaimed the weakness in bonds as nirvana for equity bulls, it seems they were wrong, very wrong. As bond market tremors ignite everywhere, so equity markets come a little unglued at the prospect that the Fed, ECB, BoJ, and PBOC may not be so omnipotent after all…

Bond markets…


Stock Markets…


Charts: Bloomberg
http://www.zerohedge.com/news/2013-06-11/bond-market-tremors-get-louder

YEN 97!!!
http://www.marketwatch.com/
Everything is selling off today: stocks, bonds, and commodities around the world getting crushed
The sell-off in government bonds has gone completely global as concerns over Federal Reserve tapering of monetary stimulus infect the market.

Everywhere this morning, bond yields are up huge as investors dump sovereign debt.
In the United States, the 10-year yield is up 6 basis points to 2.26%, its highest level in over a year.
In the eurozone, French 10-year yields are up 5 basis points to 2.23%, Germany is up 3 basis points to 1.63%, Italy is up 15 basis points to 4.43%, and Spain is up 14 basis points to 4.471%.
Portuguese 10-year yields are up 37 basis points to 6.49%, and Greek yields are up 93 basis points to 10.28%.
Elsewhere in the developed world, the Japanese 10-year yield is up 5 basis points to 0.88%, Canada is up 5 basis points to 2.25%, Australia is up 11 basis points to 3.40%, and Switzerland is up 10 basis points to 0.84%.
Moving to emerging markets, Brazilian 10-year yields are up 14 basis points to 4.03% Mexico is up 14 basis points to 3.46%, Russia is up 15 basis points to 3.90%, and Turkey is up 31 basis points to 4.53%.
Read more: http://www.businessinsider.com/global-government-bond-sell-off-2013-6#ixzz2VuerG04Y
China Trade War Escalates
http://www.zerohedge.com/news/2013-06-11/china-trade-war-escalates
Its all about Yen-Carry-Trade.
Japanese Yen strengthening.
Chart to watch:
http://www.advfn.com/p.php?pid=qkquote&symbol=FX^USDJPY
A German banker fell asleep and turned a minor transfer into millions
http://www.businessinsider.com/german-banker-transfers-millions-2013-6
EL-ERIAN: The Market ‘Sucking Sounds’ Are Getting Louder As Four Forces Come Together
http://www.businessinsider.com/el-erian-on-the-liquidity-gap-2013-6
US-Dollar vs Yen.
When it drops, stocks drop.

IRS Buying Spying Equipment: Covert Cameras in Coffee Trays, Plants

(AP Photo)

(CNSNews.com) – The IRS, currently in the midst of scandals involving the targeting of conservative groups and lavish taxpayer-funded conferences, is ordering surveillance equipment that includes hidden cameras in coffee trays, plants and clock radios.
The IRS wants to secure the surveillance equipment quickly – it posted a solicitation on June 6 and is looking to close the deal by Monday, June 10.  The agency already has a company lined up for the order but is not commenting on the details.
“The Internal Revenue Service intends to award a Purchase Order to an undisclosed Corporation,” reads the solicitation.
“The following descriptions are vague due to the use and nature of the items,” it says.
“If you feel that you can provide the following equipment, please respond to this email no later than 4 days after the solicitation date,” the IRS said.
Among the items the agency will purchase are four “Covert Coffee tray(s) with Camera concealment,” and four “Remote surveillance system(s)” with “Built-in DVD Burner and 2 Internal HDDs, cameras.”
The IRS also is buying four cameras to hide in plants: “(QTY 4) Plant Concealment Color 700 Lines Color IP Camera Concealment with Single Channel Network Server, supports dual video stream, Poe [Power over Ethernet], software included, case included, router included.”
Finishing out the order are four “Color IP Camera Concealment with single channel network server, supports dual video stream, poe, webviewer and cms software included, audio,” and two “Concealed clock radio.”

(AP Photo)

“Responses to this notice must be received by this office within 3 business days of the date of this synopsis by 2:00 P.M. EST, June 10, 2013,” the IRS said.  Interested vendors are to contact Ricardo Carter, a Contract Specialist at the IRS.
“If no compelling responses are received, award will be made to the original solicited corporation,” the IRS said.
The original solicitation was only available to private companies for bids for 19 business hours.
The notice was posted at 11:07 a.m. on June 6 and had a deadline of 2:00 p.m. on Monday. Taking a normal 9-to-5 work week, the solicitation was open for bids for six hours on Thursday, eight hours on Friday, and five hours on Monday, for a total of 19 hours.
The response date was changed on Monday, pushed back to 2:00 p.m. on Tuesday, June 11.
The location listed for the solicitation is the IRS’s National Office of Procurement, in Oxon Hill, Md.
"The Procurement Office acquires the products and services required to support the IRS mission,” according to its website.
In recent weeks the IRS has been at the center of multiple scandals, admitting to targeting Tea Party groups and subjecting them to greater scrutiny when applying for non-profit status during the 2010 and 2012 elections.
A report by the Treasury Inspector General for Tax Administration revealed that groups with names like “patriot” in their titles were singled out, required to complete lengthy personal questionnaires (often multiple times) and having their nonprofit status delayed, sometimes for more than three years.
Last week a second Inspector General report detailed nearly $50 million in wasteful spending by the agency on conferences, in which employees stayed at luxurious Las Vegas hotels, paid a keynote speaker $17,000 to paint a picture of U2 singer Bono, and spent $50,000 on parody videos of “Star Trek.”

BANCORRUPTCY

Gold slides to three-week low on stimulus concerns

By Jan Harvey

LONDON (Reuters) - Gold fell 1 percent on Tuesday to a near three-week low after the Bank of Japan opted not to extend its stimulus programme, stoking speculation that the era of ultra-loose global monetary policy is coming to an end.

Gold had already been hurt by talk the U.S. Federal Reserve may be set to taper its monetary easing sooner than expected, after Standard & Poor's revised up its U.S. sovereign credit outlook on Monday and a U.S. payrolls report last week beat forecasts.

Successive rounds of stimulus measures around the world have boosted gold prices to record highs in recent years by keeping up pressure on interest rates while stoking inflation fears. Speculation they may be set to end is now pressuring the metal.

Spot gold was down 1.1 percent at $1,371.11 an ounce at 0923 GMT, while U.S. gold futures for August delivery were down $15.20 an ounce at $1,370.80.
"The market is coming around to the view that the Fed will taper quantitative easing," Credit Agricole analyst Robin Bhar said. "The fact that the economy seems to be creating jobs, as we saw with the payrolls report on Friday, makes Fed tapering more likely than not."
He added, "The Bank of Japan's reluctance to further stimulate is just another reason to at least be cautious on gold."
Concerns that the era of plentiful monetary stimulus is on the wane knocked European shares 0.9 percent lower and hit peripheral euro zone bond prices. The dollar fell a quarter of a percent against the euro. (MKTS/GLOB) (GVD/EUR) (FRX/)

Dealers in Singapore said gold demand had eased after a jump in April, which followed the biggest two-day fall in gold prices in 30 years. Gold bars and coins were therefore easier to obtain, they said.

GRAPHIC-2013 asset returns: http://link.reuters.com/dub25t
GRAPHIC-2013 commod returns: http://link.reuters.com/reb25t
GRAPHIC-Gold/USD correlation: http://r.reuters.com/ryx52s
GRAPHIC-Plat/palladium ratio: http://link.reuters.com/qub87s
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
GOLD ETF REPORTS INFLOW

The world's largest gold-backed exchange-traded fund, New York's SPDR Gold Trust, reported its largest inflow in over a month on Monday, of 2.7 tonnes. Its holdings still remained near four-year lows, however, down 340 tonnes this year.

Among other precious metals, silver was down 1 percent at $21.69 an ounce, spot platinum was down 1.1 percent at $1,485.99 an ounce and spot palladium was down 1.3 percent at $757.72 an ounce.

Platinum producer Lonmin and South Africa's Association of Mineworkers and Construction Union (AMCU) were in talks on Tuesday to avert a strike, a union official said.

AMCU wants to be recognised as the majority union at Lonmin as it now represents over 70 percent of the workforce at the world's third-largest producer of the precious metal and has threatened to down tools at the mine this week if talks fail.
Swiss bank UBS said while platinum had been at its cheapest compared with palladium in more than a decade recently, supply threats in South Africa had more scope to drive platinum higher.
"In spite of their apparent preference for palladium this year, investors are also wary of supply risks in platinum that could easily result in sharp price spikes, especially in the next few months," it said.

"Market participants are keeping a close eye on headlines from South Africa. Tensions are increasing. Given the more acute upside risks to platinum in the near term, palladium's relative strength versus platinum should not be taken for granted." (editing by Jane Baird)

Why Lululemon Is a Buy Right Now: Macke

Sports apparel maker Lululemon (LULU) reported earnings last night. Here's the quick and dirty on the quarter: EPS came in at 33-cents including the endlessly discussed see-through pants debacle. Revenue was good, margins were fine, and guidance was decent.

All was basically well until they got to the kicker: CEO Christine Day is stepping down as soon as a replacement is found. The news surprised the Street and sent shares down 15% from all-time highs at $82.50. The stock dipped below $70 a share in early trading.

Estimates are dropping and there's blood in the Streets. The shares seem expensive and bears are licking their chops. I'm on the other side of the trade planning to add shares anywhere under $70.
That said the product remains the same, the opportunities are huge and untapped, and LULU is replacing a CEO who presided over several operational snafus over the last 12 months. Ms. Day had taken LULU as far as she could in terms of expanding it as a bricks and mortar concept. Now the company needs an operator to execute international expansion plans and improve distribution.
Related: How Much Blame Should a CEO Shoulder for a Recall?
There may be more roaches in the kitchen for LULU. Maybe the numbers aren't all they seem or Day was fired for causes the company isn't addressing. I'm willing to give them the benefit of the doubt largely because of how well it handled the pants recall recently and the overall brand since LULU went public.
The image of Lulu as a retailer is wrong. Direct to consumer revenue (read: online and some catalog) rose 40% year-over-year and now accounts for 15.6% of total sales compared to 55% last year.

Lululemon is still regarded as a women's wear company, particularly on the East Coast. The truth is Lulu makes the best workout gear a man can buy. It's more comfortable, looks better and lasts longer than anything from Nike (NKE), Under Armour (UA), or anything else on the market.

Downgrades be damned, I'm using the sell-off as a buying opportunity. THIS IS NOT A RECOMMENDATION but I intend to initiate a position in LULU after the open anywhere under $70 a share. My stop is under $63 (10%).

Feel free to take the other side.

Wall St. down as Bank of Japan decision fuels stimulus worries

By Angela Moon and Alison Griswold

NEW YORK (Reuters) - Stocks fell on Tuesday after the Bank of Japan chose not to take stimulus measures and increased investors' worries about the eventual decline in central bank support that has supported equities' rally.
Losses were felt broadly across sectors, with the financial (.SPSY) and materials (.SPLRCM) groups leading the way down, falling more than 1 percent each. The defensive utilities sector (.SPLRCU) fared relatively better, down just 0.2 percent.
The lack of further action from BOJ rattled investors across asset classes. U.S. Treasury yields hit fresh 14-month highs, the yen rose sharply and equities dropped globally.
The reaction highlighted worries about what will happen when the global stimulus programs eventually go away. Investors have also become more nervous in recent weeks over when the U.S. Federal Reserve may slow its measures, which have been a significant driver of this year's stock market rally.
"Clearly this is attributable to the Bank of Japan and them not following through on what everybody anticipates as a blank check in aiding banks in particular with their policies," said Joseph Greco, managing director at Meridian Equity Partners in New York.
He said investors must stop seeing bad economic news as good for the stock market because it means prolonged stimulus efforts by the Fed. "We're starting to see people coming to grips with that. We need good news to be good news for the market," Greco said.
Data showed U.S. wholesale inventories rose modestly in April, the latest suggestion that restocking will not be much of a boost to economic growth in the second quarter. Market reaction was muted.
The Dow Jones industrial average (.DJI) was down 80.45 points, or 0.53 percent, at 15,158.14. The Standard & Poor's 500 Index (.SPX) was down 10.86 points, or 0.66 percent, at 1,631.95. The Nasdaq Composite Index (.IXIC) was down 21.97 points, or 0.63 percent, at 3,451.80.
In the first two hours of trading, decliners had the upper hand, beating advancers on the New York Stock Exchange by 2,564 to 343. On the Nasdaq, decliners were beating advancers 1,775 to 529.
The Bank of Japan in April announced a $1.4 trillion stimulus program, and while the central bank on Tuesday left the door open to taking fresh steps to calm markets if borrowing costs spike again, it did not appear to assuage investors.
The S&P 500 is up more than 15 percent since the start of the year, but markets have been bumpier since comments from Fed Chairman Ben Bernanke last month sparked uncertainty over the central bank's timeline for slowing its $85 billion a month bond purchase program.
Some investors are starting to prepare for the Fed to cool the pace of its bond buys by the end of the year.
Among individual companies, shares of Lululemon Athletica (LULU.O) (LLL.TO) slumped after the company's chief executive said she will step down. The stock was down more than 17 percent at $68.05.

SoftBank Corp (9984.T) said it agreed with Sprint Nextel Corp (S.N) to raise its offer for the U.S. wireless carrier to $21.6 billion from $20.1 billion. Sprint was up 2.2 percent at $7.34.

Dole Food Company Inc (DOLE.N) surged more than 21 percent to $12.37 after the company received an unsolicited buyout offer from its chief executive.

(Reporting by Angela Moon)

U.S. hiring outlook positive; global employers uncertain: report

By Madeline Will

NEW YORK (Reuters) - More employers in the United States plan to hire workers next quarter than in any period since the fourth quarter of 2008, according to a survey by Manpower Group (MAN.N), the global employment services giant.

Manpower's quarterly survey released Tuesday found most employers around the globe were uncertain about hiring more workers in the July through September period given tepid consumer demand. There were certain bright spots, however, with employers in the United States and some parts of Europe feeling cautiously optimistic.

"If you look at it from a global perspective, the overall feeling is that there are definitely challenges," said Manpower's CEO Jeff Joerres. But he said employers are more optimistic than in past months about global economic prospects.

Manpower, which surveyed 42 economies, found that employers in 31 countries and territories planned to hire next quarter. Hiring intentions strengthened in 17 economies, including Spain, Greece and the United States, compared to the previous quarter.

Hiring intentions remained unchanged in four economies and weakened in 21, including France, China and India.

The United States added 175,000 jobs last month after adding only 149,000 in April, the Labor Department said on Friday. The unemployment rate rose a tenth of a point to 7.6 percent.
The United States' net employment outlook ticked forward one point from the previous quarter to a seasonally adjusted plus-12, the report said. The outlook measures the difference between those adding jobs and those cutting jobs. Manpower's index is a directional indicator rather than a predictor of the size of job gains.
For the second consecutive quarter, employers in all 50 states, Washington, D.C. and Puerto Rico have reported positive hiring plans, Manpower said.

Joerres said U.S. companies still have concerns about what will happen next in areas like Europe or China, about healthcare costs and general uncertainty.

"In the past, that would shock the system," he said. "Today, we're used to shocks."
More than one in four employers in the U.S. construction sector have said they will hire in the quarter beginning in July, the strongest outlook since before the global recession. This is a positive sign for the housing market, Joerres said.

In Europe, hiring has stalled with growing uncertainties among employers, the report said. But Joerres said the region has had some positive indicators, including in Greece, which has seen its still-negative hiring outlook improve for four consecutive quarters.

"We're not saying Europe is out of the woods," Joerres said. "It's that Europe is still moving and driving towards an overall solution rather than falling off the cliff, and that's positive for the rest of the world."
'LESS EMERGING AND MORE MATURE'

Hiring outlooks weakened in most of the Asia Pacific region, most significantly in India, which reported the weakest expectations since joining Manpower's survey eight years ago.

While none of the Indian employers surveyed by Manpower said they intended to reduce their workforce this quarter, the hiring expectations dropped 6 points from the previous quarter and 28 points from a year earlier to a plus-18. Joerres said the decline is partly due to the slowdown of India's business process outsourcing industry, which has matured.

"The Indias and Chinas of the world are in some ways less emerging and more mature, and are feeling some of the illnesses of a mature economy," Joerres said.
Sixty-one percent of Indian employers have also struggled to find suitable employees, telling Manpower that recent graduates of India's business and engineering schools often lack necessary hard and soft skills.
The talent shortage has been an issue worldwide, with a lack of skilled trades workers topping the list. Thirty-five percent of employers reported difficulties in filling positions due to a talent shortage, the highest proportion since 2007.

Employers in the United States and Germany, however, reported a smaller talent shortage this year than last year, with the lowest percentages reported in both countries since 2010.

Thirty-nine percent of U.S. employers reported difficulties in filling positions, 10 percentage points less than last year, and 35 percent of German employers, 7 percentage points less.

(Reporting by Madeline Will; Editing by Chizu Nomiyama)