The Jim Bakker Show

Fed officials say 2-3 rate hikes possible this year

WASHINGTON (Reuters) – The U.S. Federal Reserve could still raise interest rates two or three times this year and June remains on the table, two Fed policymakers said on Tuesday.

Atlanta Fed President Dennis Lockhart said he still assumes there will be two to three rate hikes this year and that markets are more pessimistic on the U.S. economic outlook than he is.

“I think it certainly could be a meeting at which action could be taken,” Lockhart said in reference to the Fed’s next policy meeting on June 14-15.

San Francisco Fed President John Williams, who was speaking with Lockhart at a joint appearance in Washington, agreed that two to three interest rate hikes this year “seems reasonable” and that there will be a lot more economic data to parse between now and mid-June.

“I think incoming data have actually been quite good and reassuring,” Williams said.

The U.S. central bank has held rates at a target range of 0.25 to 0.50 percent since moving from near zero in December.

A key inflation index showed U.S. consumer prices in April notched their biggest increase in more than three years.

Prices for contracts on Fed funds futures suggest investors see only an 11 percent chance of an interest rate increase in June. Rather, investors expect the first and only hike this year to come in November.

(Reporting by Lindsay Dunsmuir and Jason Lange; Editing by Chizu Nomiyama and David Gregorio)

CEO’s get 335 times what average worker makes

The Empire State Building's spire is shrouded in clouds in Manhattan, New York, U.S., May 3, 2016.

By Ross Kerber

BOSTON (Reuters) – Chief executive officers of S&P 500 companies on average made 335 times more money than the average rank-and-file worker last year, down from a multiple of 373 in 2014, according to a union study released on Tuesday.

The figures released annually by the AFL-CIO, the largest U.S. federation of labor unions, are likely to gain attention. Pay disparities, which have persisted despite a steady American economy that has reduced the joblessness rate to around 5 percent and raised wages somewhat, have fueled political debate.

The average production and non-supervisory worker made around $36,900 last year, up from roughly $36,000 in 2014, according to a statement from the AFL-CIO.

Meanwhile the average CEO of an S&P 500 company made $12.4 million last year, down from $13.5 million in 2014. An AFL-CIO spokeswoman said the lower average CEO compensation figure reflected how for many the present value of future pension benefits declined.

Union leaders said the figures showed how pay decisions do not favor the average worker. “The income inequality that exists in this country is a disgrace,” AFL-CIO President Richard Trumka said in a statement. “We must stop Wall Street CEOs from continuing to profit on the backs of working people.”

The high levels of executive pay have drawn criticism from both Democrat Hillary Clinton and Republican Donald Trump in the current U.S. presidential campaign.

Nonetheless, top shareholders have overwhelmingly supported management on executive compensation decisions, according to the advisory “say on pay” votes most public companies hold annually.

Starting in 2017, the U.S. Securities and Exchange Commission will require public companies to disclose the ratio of the pay of their CEO to the median compensation of their employees.

(Reporting by Ross Kerber; Editing by Lisa Von Ahn)

After shoddy China economic data, Xi says to persevere with reform

BEIJING (Reuters) – China will push forward supply-side reform and increase the number of middle-income earners, state television quoted President Xi Jinping as saying on Monday, after economic data for April fueled doubts about the economy’s health.

Xi’s speech to a meeting of top government economic regulators underscores the importance, and pressure, of managing China’s economic shift as growth has cooled to 25-year lows.

Investment, factory output and retail sales in the world’s second-largest economy all grew more slowly than expected in April.

The main thrust is to reduce ineffective supply and increase effective supply, Xi said, according to the official Xinhua news agency.

The government has made reducing the capacity glut one of its top priorities, and has vowed to put “zombie” companies out of business. But economists expect authorities to move slowly to avoid a sharp jump in unemployment.

In some regions there had not been forceful action on government policies, Xi was quoted as saying by Xinhua. At the same time, some policies need to be further researched and drawn up.

For the state and society to remain stable over the long-term, the government must realize its goal of meeting people’s needs and expanding the number of middle-income earners, he said.

China must push forward reform of state-owned enterprises, accelerate change in how government functions and deepen the fundamental reforms of pricing, taxation, finance and social insurance, said Xi.

The government must also improve China’s income distribution system and strengthen people’s property protections, he said.

Separately, China’s State Council plans to encourage private investment, a major foundation of a stable economy, in part by removing hidden barriers, Xinhua said on Monday.

To that end, the State Council will send teams to government departments and provincial governments to inspect progress on promoting private investment, said Xinhua.

(Reporting by Beijing Monitoring Desk, Elias Glenn and Paul Carsten, Editing by Ed Osmond)

India’s wholesale prices rise for first time in 18 months in April

NEW DELHI (Reuters) – India’s wholesale prices <INWPI=ECI> unexpectedly rose for the first time in 18 months, posting an annual gain of 0.34 percent, driven up by higher costs for food and manufactured items, government data showed on Monday.

The data compared with a 0.20 percent annual decline forecast by economists in a Reuters poll. In March, prices fell a provisional 0.85 percent.

Wholesale food prices last month rose 4.23 percent year-on-year, compared with a provisional 3.73 percent gain in March. Prices of manufactured goods increased 0.71 percent year on year in April.

Fuel prices dropped 4.83 percent from a year earlier in April, slower than a provisional 8.30 percent fall a month ago.

(Reporting by Rajesh Kumar Singh; Editing by Malini Menon)

Venezuela opposition slams ‘desperate’ Maduro state of emergency

By Alexandra Ulmer and Corina Pons

CARACAS (Reuters) – Venezuela’s opposition on Saturday slammed a state of emergency decreed by President Nicolas Maduro and vowed to press home efforts to remove the leftist leader this year amid a grim economic crisis.

Maduro on Friday night declared a 60-day state of emergency due to what he called plots from Venezuela and the United States to subvert him. He did not provide specifics.

The measure shows Maduro is panicking as a push for a recall referendum against him gains traction with tired, frustrated Venezuelans, opposition leaders said during a protest in Caracas.

“We’re talking about a desperate president who is putting himself on the margin of legality and constitutionality,” said Democratic Unity coalition leader Jesus Torrealba, adding Maduro was losing support within his own bloc.

“If this state of emergency is issued without consulting the National Assembly, we would technically be talking about a self-coup,” he told hundreds of supporters who waved Venezuelan flags and chanted “he’s going to fall.”

The opposition won control of the National Assembly in a December election, propelled by voter anger over product shortages, raging inflation that has annihilated salaries, and rampant violent crime, but the legislature has been routinely undercut by the Supreme Court.

“A TIME BOMB”

Protests are on the rise and a key poll shows nearly 70 percent of Venezuelans now say Maduro must go this year.

Maduro has vowed to see his term through, however, blasting opposition politicians as coup-mongering elitists seeking to emulate the impeachment of fellow leftist Dilma Rousseff in Brazil.

Saying trouble-makers were fomenting violence to justify a foreign invasion, Maduro on Saturday ordered military exercises for next weekend.

“We’re going to tell imperialism and the international right that the people are present, with their farm instruments in one hand and a gun in the other… to defend this sacred land,” he boomed at a rally.

He added the government would take over idled factories, without providing details.

Critics of Maduro, a former union leader and bus driver, say he should instead focus on people’s urgent needs.

“There will be a social explosion if Maduro doesn’t let the recall referendum happen,” said protester Marisol Dos Santos, 34, an office worker at a supermarket where she says some 800 people queue up daily.

But the opposition fear authorities are trying to delay a referendum until 2017, when the presidency would fall to the vice president, a post currently held by Socialist Party loyalist Aristobulo Isturiz.

“If you block this democratic path we don’t know what might happen in this country,” two-time presidential candidate Henrique Capriles said at the demonstration.

“Venezuela is a time bomb that can explode at any given moment.”

(Writing by Alexandra Ulmer; Editing by Alistair Bell)

Wall Street falls as consumer stocks take a hit

By Noel Randewich

(Reuters) – U.S. stocks fell on Friday as a decline in oil prices added to pressure from consumer companies after gloomy earnings reports from Nordstrom and J.C. Penney overshadowed upbeat April retail sales data.

The decline in the department stores’ shares marked the end of a week that highlighted the expanding clout of Amazon.com and the plight of brick-and mortar retailers struggling to keep up.

Crude prices slipped on Friday as a strong dollar weighed and investors cashed in on gains from a three-day rally.

That pushed the S&P energy index down 1.07 percent.

U.S. retail sales jumped 1.3 percent last month, the largest gain since March 2015 and a bigger rise than economists expected, the U.S.

But consumer stocks, which have already been under pressure this week after a string of feeble earnings reports, fell again after Nordstrom and J.C. Penney reported lower-than-expected sales.

Nordstrom slumped 13.60 percent and J.C. Penney Co Inc lost 3.78 percent. Dillard’s Inc, which gave a quarterly report that also disappointed Wall Street, fell 1.62 percent.

Amazon lost 0.96 percent but was still up 5.5 percent for the week following steady gains since last Friday.

Macy’s rose 0.38 percent after its poor quarterly report on Wednesday triggered a selloff in U.S. retailers.

First-quarter earnings reports are nearly all in and, on average, have not been quite as bad as expected. The S&P 500 is trading at about 16.5 times expected earnings, according to Thomson Reuters.

“It’s hard to make a case that you’re going to have stellar equity market performance. In the context of low interest rates, equity valuations look about right,” said Mark Heppenstall, chief investment officer at Penn Asset Management in Horsham, Pennsylvania.

At 2:35 pm, the Dow Jones industrial average was down 0.99 percent at 17,545.59 points and the S&P 500 had lost 0.85 percent to 2,046.66. The Nasdaq Composite dropped 0.45 percent to 4,715.91.

All of the 10 major S&P sectors fell, led by a 1.38 percent decline in the consumer staples index.

Nvidia surged 14.7 percent after the graphics chipmaker forecast better-than-expected revenue for the current quarter.

Declining issues outnumbered advancing ones on the NYSE by 2,022 to 930. On the Nasdaq, 1,660 issues fell and 1,081 advanced.

The S&P 500 index showed 15 new 52-week highs and 8 new lows, while the Nasdaq recorded 27 new highs and 65 new lows.

(Additoinal reporting by Tanya Agrawal and Yashaswini Swamynathan; Editing by Chizu Nomiyama)

U.S. Retail sales strongly boost economic outlook

A man in short sleeves carries shopping bags near Herald Square during unseasonably warm weather in Manhattan

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. retail sales in April recorded their biggest increase in a year as Americans stepped up purchases of automobiles and a range of other goods, suggesting the economy was regaining momentum after growth almost stalled in the first quarter.

The jump in sales reported by the Commerce Department on Friday is a boost for the sector that has been hit by sluggish demand. It comes days after major retailers, including Macy’s and Nordstrom, reported sales tumbled in the first quarter and lowered their full-year profit forecasts.

“The retail sales report shows that recent claims of the demise of the U.S. consumer have been greatly exaggerated,” said Steve Murphy, a U.S. economist at Capital Economics in Toronto.

Retail sales surged 1.3 percent last month, the largest gain since March 2015, after dropping 0.3 percent in March. Excluding automobiles, gasoline, building materials and food services, retail sales shot up 0.9 percent last month after an upwardly revised 0.2 percent gain in March.

These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product.

They were previously reported to have gained 0.1 percent in March. Economists had forecast retail sales rising 0.8 percent and core retail sales gaining 0.3 percent last month.

Signs of an acceleration in consumer spending keep an interest rate hike from the Federal Reserve next month on the table.

“Today’s data materially strengthen the hand of those within the Fed for a rate increase in June but we remain doubtful as to whether this view will prevail, barring an especially robust employment report in early June,” said Anthony Karydakis, chief economic strategist at Miller Tabak in New York.

Consumer spending prospects got a boost from a separate report showing sentiment among households jumped to an 11-month high in early May.

The University of Michigan said its consumer sentiment index surged 6.8 points to 95.8 early this month, the highest reading since June. Sentiment increased among all income and age groups, with big gains among lower-income and younger households.

Last month’s strong core retail sales increase could prompt economists to raise their second-quarter GDP, currently hovering around a 2 percent annualized rate. Economic growth braked to a 0.5 percent pace in the first three months of the year after expanding at a 1.4 percent pace in the fourth quarter.

But another report from the Commerce Department on Friday showing a 0.4 percent increase in business inventories in March suggest growth was much higher than initially estimated.

Data on retail sales, construction spending and factory orders have already implied that the advance GDP growth estimate could be raised to a 0.9 percent rate when the government publishes its revision later this month.

The dollar rose against the euro and the yen after the data, while prices for U.S. government debt fell. U.S. stocks were trading lower.

Retail sales have been sluggish in part because the strengthening labor market has not generated strong wage growth.

Economists also say that some of the savings from cheaper gasoline over the past year-and-a-half have been absorbed by rising rents and medical care costs.

Macy’s, the largest department chain, said this week same-store sales fell 5.6 percent in the first quarter, and expected full-year sales to decline 3-4 percent.

Nordstrom reported that sales at stores open at least a year fell 1.7 percent in the first quarter. It cut its profit forecast for the year to $2.50-$2.70 per share from $3.10-$3.35.

The Commerce Department report showed retail sales in April rose across all categories, with the exception of building materials and garden equipment. Auto sales advanced 3.2 percent, the largest increase since March 2015, after slumping 3.2 percent in March.

Receipts at service stations increased 2.2 percent, reflecting recent increases in gasoline prices. Sales at clothing stores surged 1.0 percent, the largest increase since May 2015.

Online retail sales jumped 2.1 percent, the biggest gain since June 2014. Receipts at sporting goods and hobby stores rose 0.2 percent last month.

Sales at electronics and appliance outlets increased 0.5 percent. Building materials and garden equipment store receipts, however, fell 1.0 percent last month, the largest decline since August. Sales at restaurants and bars rose 0.3 percent.

In a separate report, the Labor Department said its producer price index climbed 0.2 percent last month after slipping 0.1 percent in March. In the 12 months through April, the PPI was unchanged after dipping 0.1 percent in March.

Inflation continues to be restrained by the lingering effects of the dollar’s surge and oil price plunge. The greenback gained 20 percent against the currencies of the United States’ trading partners between June 2014 and December 2015.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

U.S. jobless claims rise to more than one-year high

Job Seekers at Colorado Hospital Job Fair

WASHINGTON (Reuters) – The number of Americans filing for unemployment benefits unexpectedly rose last week, touching the highest level in more than a year, which could raise concerns about labor market health in the wake of the slowdown in job gains in April.

Initial claims for state unemployment benefits increased 20,000 to a seasonally adjusted 294,000 for the week ended May 7, the highest level since late February 2015, the Labor Department said on Thursday.

Claims for the prior week were unrevised. Economists polled by Reuters had forecast initial claims slipping to 270,000 in the latest week.

Despite last week’s jump, claims remained below 300,000, a threshold associated with healthy job market conditions, for 62 consecutive weeks, the longest stretch since 1973.

A Labor Department analyst said there were no special factors influencing last week’s claims data and no states had been estimated. There was a surge in claims in New York and Michigan in the latest week.

The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, increased 10,250 to 268,250 last week, the highest level in almost three months.

The claims report came on the heels of data last week showing nonfarm payrolls increased only 160,000 in April, the smallest gain in seven months, after advancing by 208,000 in March.

The labor market has been fairly robust despite a sharp slowdown in economic growth in the first quarter. The spike in jobless claims and moderation in employment gains likely do not suggest a deterioration given difficulties adjusting the data for seasonal fluctuations.

A report on Tuesday showed job openings hit an eight-month high in March, with the rate re-testing its post-recession high.

Thursday’s claims report showed the number of people still receiving benefits after an initial week of aid rose 37,000 to 2.16 million in the week ended April 30.

The four-week average of the so-called continuing claims fell 3,750 to 2.14 million, the lowest reading since November 2000.

(Reporting by Lucia Mutikani; Editing by Paul Simao)

Yen falls vs dollar for second day to near two-week low

By Gertrude Chavez-Dreyfuss

NEW YORK (Reuters) – The yen slid to a nearly two-week low against the dollar on Tuesday as risk appetite improved for a second straight session, undermining traditional safe havens such as the Japanese currency.

Repeated verbal warnings from Japan over the weekend and on Tuesday saying it was prepared to step in to weaken the currency has also held off investors seeking to buy the yen at the expense of the dollar. The greenback has struggled recently as the Federal Reserve is on track to raise U.S. interest rates gradually.

“Risk appetite is naturally tied to the belief that we’re in an ultra-low-yield environment and investment managers can’t simply sit here,” said Jeremy Cook, chief economist at payments company World First in London.

“We have to see a move any time we see the slightest bit of positivity, by grabbing yield in emerging markets currencies, for instance.”

Global stock markets were on the upswing overall led by European and Wall Street shares, adding to the positive risk sentiment. [MKTS/GLOB]

In late morning trading, the dollar rose 0.7 percent to 109.11 yen, after hitting a roughly two-week peak of 109.27 <JPY=>. The U.S. currency tumbled to an 18-month low of 105.55 yen last week after the Bank of Japan stood pat on monetary policy.

Finance Minister Taro Aso said on Monday Tokyo was ready to intervene to weaken the currency if moves were volatile enough to hurt the country’s trade and economy. He reiterated that message on Tuesday.

A key economic adviser to Prime Minister Shinzo Abe, Koichi Hamada, also said on Tuesday Japan would intervene in currency markets if the yen rose to between 90 and 95 per dollar.

“There’s definitely the possibility of intervention,” said World First’s Cook. “But I don’t think this will turn the market around. It will be more of a stop-gap measure.”

He added that the only thing that could reverse the yen’s recent strength is fiscal and monetary policy action and any change could happen as early as June.

Meanwhile, speculators were cutting favorable bets on the yen, having piled into the currency in the past few weeks. [IMM/FX]

In other currencies, the euro rose 0.8 percent to a near two-week high of 124.38 yen <EURJPY=>, pulling away from a three-year trough of 121.48 plumbed late last week.

The euro was flat against the dollar at $1.1388 <EUR=>. The dollar index <.DXY> was at 94.171, having hit its highest in nearly two weeks earlier and extending its rise from a 15-month trough struck on May 3.

(Reporting by Gertrude Chavez-Dreyfuss in New York; Additional reporting by Anirban Nag in London; Editing by James Dalgleish)

Oil up as Canada, Nigeria problems counter stockpile concern

Pumpjacks and other infrastructure for producing oil dot fields outside of Watford City, North Dakota

y Amanda Cooper

LONDON (Reuters) – Oil rose on Tuesday, boosted by supply disruptions in Canada and elsewhere that have knocked out 2.5 million barrels of daily production and temporarily eclipsed concern over high global inventories and a looming surplus of refined products.

Brent crude futures <LCOc1> were up 39 cents on the day at $44.02 per barrel by 1200 GMT, while U.S. crude futures <CLc1> were virtually flat at $43.38 per barrel.

In spite of output outages from Canada to Nigeria, oil prices are down by more than 2 percent so far this week, hampered by worries that even hefty dents to production will have little effect on the growth of stocks of unwanted crude.

Weekly data on speculative holdings of crude futures has shown investors are cooling a little toward oil.

“We’ve seen the market slump 10 pct from the highs since this (Canada) news came in, which suggests that there are other fish to fry at the moment,” Saxo Bank senior manager Ole Hansen said.

“The big reaction yesterday to the change in Canada gave an indication that the market has become a bit more focused on selling into rallies…”

Oil prices fell on Monday by as much as 3.8 percent at one point, after the wildfire moved away from the oil sounds town of Fort McMurray in the western Canadian province of Alberta.

Outages in Canada, which consultancy Energy Aspects said now totaled 1.6 million barrels per day (bpd), have brought global disruptions to more than 2.5 million bpd since the beginning of the year. This has at least temporarily wiped out a surplus that emerged in mid-2014 and slashed 70 percent off prices before a recovery started early this year.

A series of attacks on Nigeria’s oil infrastructure has pushed its output of crude close to a 22-year low, Reuters data shows, piling pressure on its finances.

“Despite some significant supply disruptions, most notably in Canada, ongoing bearish fundamentals precipitated a modest retracement in prices,” Societe Generale said in a weekly note to clients.

With plenty of crude available, refiners have produced large volumes of gasoline and diesel, threatening to swamp demand despite the coming U.S. summer driving season.

“Crude cannot go up without support from products, and that support is not there at the moment, and more refineries are coming out of turnarounds so there will be more products and tanks are getting full,” said Oystein Berentsen, managing director for crude at Strong Petroleum in Singapore.

(Additional reporting by Henning Gloystein in SINGAPORE; Editing by David Evans and William Hardy)

Sign up for Jim Bakker Show