Wednesday, April 27, 2016

Wednesday, April 27, Night Wall Street Roundup: Wall Street ticks up as hawkish Fed fears ebb; Apple weighs

By Rodrigo Campos
April 27, 2016

U.S. stocks ended slightly higher on Wednesday after fears eased that the Federal Reserve would strongly signal it would raise interest rates in June, though a slump in Apple shares weighed on the Nasdaq index.

Stocks in the telecom and utilities sectors, seen as proxies for fixed income returns when Treasury yields are expected to remain low, rose sharply after the Fed's announcement. That indicates market participants expect U.S. government yields to remain subdued.

"The big takeaway here is they (the Fed) continued to be positive on the domestic economy," said John Bailer, senior portfolio manager at The Boston Company Asset Management. "They have taken out some of the risk on the global economy."

"It is slightly hawkish in my mind but not enough to get the market worried about it."

Economists polled by Reuters expect two rate increases this year but futures prices show traders do not expect a hike until at least September, according to CME Group's FedWatch tool.

The Fed next meets on June 14-15. While the labor market continues to gain strength, inflation remains below the central bank's 2 percent target and mixed economic data could cloud the path to future rate hikes.

The technology sector remained the largest weight on the market after Apple slumped more than 6 percent following its first revenue decline in over a decade.

The Dow Jones industrial average rose 51.23 points, or 0.28 percent, to 18,041.55, the S&P 500 gained 3.45 points, or 0.16 percent, to 2,095.15 and the Nasdaq Composite fell 25.14 points, or 0.51 percent, to 4,863.14.

Nasdaq 100 e-mini futures pared losses after the closing bell as Facebook's shares jumped more than 8 percent after the company beat estimates on both earnings and revenue.

During the regular session, Exxon Mobil shares hit their highest level since May 2015 after the energy company raised its quarterly dividend to 75 cents from 73 cents. The dividend hike came a day after Standard & Poor's cut Exxon's credit rating, in part for being too generous with shareholders. Its shares closed up 0.9 percent at $88.46.

Advancing issues outnumbered declining ones on the NYSE by a 2.4-to-1 ratio and on the Nasdaq a 1.14-to-1 ratio favored advancers.

The S&P 500 posted 25 new 52-week highs and 2 new lows; the Nasdaq recorded 67 new highs and 16 new lows.

About 7.4 billion shares changed hands in U.S. exchanges, compared with a 6.9 billion daily average over the past 20 sessions.

Obama is Right: The Gulf Arabs Ride Free on Terrorism

Saudi Arabia and its neighbors are breaking their counterterrorism promises.

By David Andrew Weinberg
The National Interest
April 27, 2016

President Obama missed the last real opportunity of his administration to urge the Arab Gulf monarchies to finally adopt a no-tolerance rule toward all terrorist groups and to end the inexcusable impunity of terror financiers in their territory. Rather than calling out how certain Gulf states have failed to honor their commitments in this regard, President Obama used language that patted them on the back for half measures during his visit to Riyadh last Thursday for a Gulf leadership summit.

Back in September 2014, just before the start of international airstrikes against Islamic State in Syria, the United States released a document called the Jeddah Communiqué. In it, the State Department announced that the Gulf monarchs and several other Arab allies of the United States hadcommitted to “countering financing of ISIL and other violent extremists, repudiating their hateful ideology, ending impunity and bringing perpetrators to justice.” And just this past week, the United States and the Gulf Cooperation Council reiterated their “shared commitment to defeat terrorism in all its forms.”

So how have the GCC states actually fared, compared to their promises? Well, if you listen to President Obama this week, they’ve already succeeded. He bragged to the press in Riyadh on Thursday that “during the course of our administration, the GCC states have extensively cooperated with us on counterterrorism” and “on curbing the financing of terrorist activities.” The summit’s joint communiqué said the United States “commended” the Gulf states for their “rigorous efforts. . . to prevent terrorist attacks,” including their efforts to “counter violent extremism.”

Yet as I testified last year before Congress, Gulf rulers continue to embrace preachers of religious intolerance—most notably in Saudi Arabia and Qatar, but also in Bahrain, Kuwait and Dubai of the United Arab Emirates. Many Gulf governments have also failed to consistently outlaw major terrorist organizations and take legal action against internationally designated funders of terrorism on their territory.

Indeed, the Gulf region stands at the intersection of two powerful and pivotal trends: fundamentalist ideological currents and enormous wealth from oil and natural gas. That confluence allegedly makes it a top sourcesome have argued the top source—of private donations to certain menacing terrorist organizations such as Al Qaeda, the Taliban, Lashkar-e-Taiba and Hamas.

Official sources told me earlier this year that Kuwait has yet to convict—or even indict on terror-finance charges—a single one of the ten or so living Kuwaiti nationals and residents who are subject to terror-finance sanctions by the United States and United Nations. They also indicated that one or two of the men may still be employed at Kuwait’s flagship state university, and the local press has reported that one sanctioned Kuwaiti has also been given his mosque pulpit back by order of the state.

In Qatar, there is reason to believe circumstances are more or less the same. In 2014, a top Treasury official called both countries “permissive jurisdictions” for terrorist finance, an ignominious appellation that the U.S. government has yet to walk back. That official also called out Qatar for granting legal impunity to citizens in its territory under U.S. and UN sanctions on charges of terror finance.

Last month, Qatar proclaimed that U.S. Treasury Secretary Jack Lew expressed appreciation for Qatar’s “efforts. . . in the prosecution of financiers of terrorism.” But “efforts” to prosecute do not necessarily mean that actual indictments have been filed, that indictments have targeted most of the key individuals on U.S. or UN terror finance lists, that those individuals are now behind bars or that lasting convictions have been achieved. And I can find no publicly available evidence to suggest otherwise.

Additionally, when the United States sanctioned two Qatar-based individuals on charges of funding Al Qaeda last year, a U.S. official reportedly told the press that Qatar had yet to arrest the two men and that “there continues to be concerns about terrorist financing going on in Qatar.”

This month Bahrain followed in the 2014 footsteps of Saudi Arabia and the United Arab Emirates by issuing a formal list of banned terrorist organizations. Notably, they each banned some or all branches of Iran's terrorist proxy Hezbollah. But in all three cases, these lists also displayed serious omissions.

Hamas was left off of all three designation lists, as were all other terrorist organizations that primarily target Israeli civilians, such as Palestinian Islamic Jihad and the Popular Front for the Liberation of Palestine. It is worth recalling that senior Hamas officials, including U.S.-designatedindividuals, routinely are allowed to visit or operate out of Qatar. And last year Treasury called Saudi Arabia “the largest center of Hamas’s financial activity” abroad.

The Bahraini and Emirati lists, both which were released since the Jeddah Communiqué, did ban the Pakistani Taliban. But inexplicably, not a single one of these three Gulf lists banned the Taliban’s most important branch—its Afghan one—or its offshoot in Pakistan, the Haqqani Network. That omission sends a particularly worrisome signal, given that a leaked memo from Obama’s first term asserted that private donations from the Gulf—and not the infamous Afghan drug trade—comprised the primary source of Taliban financing.

Indeed, much ink has been spilled on Qatar’s decision to host five senior Taliban officials who were released from Guantánamo in exchange for one of the Taliban’s U.S. hostages, Sgt. Bowe Bergdahl. But it is also worth noting that the popular podcast Serial revealed just this January as part of its investigation into Bergdahl’s case that a reporter “did an interview for us in Dubai with a high-level Taliban guy there.”

With the exception of providing real estate for basing American bombers, the Gulf states are playing a negligible role in the air war against Islamic State. Several of them—Oman, Kuwait and probably Qatar—have declined to drop even a single bomb against the group. Similarly, the Saudi-led coalition in Yemen has irresponsibly allowed Al Qaeda’s most dangerous branch, Al Qaeda in the Arabian Peninsula, to flourish, and is only nowbeginning to conduct meaningful air strikes against the group.

It is encouraging to see that coalition finally press Al Qaeda to abandon Al Mukalla, the capital of Yemen’s largest province, on Monday. However, judging by figures from Reuters, the group probably extracted hundreds of millions of dollars during the year in which it controlled that city uncontested.

Iona Craig, a freelance reporter in Yemen, reports that many of the AQAP fighters who just retreated from Al Mukalla instead made their way to the Yemeni province of al-Bayda. According to the U.S. Treasury, a Yemeni who reportedly once acted as AQAP’s emir in al-Bayda was Abdel Wahab al-Humayqani, whom the United States declared a Specially Designated Global Terrorist in 2013. In 2015, Humayqani conducted media interviews from Riyadh and was even hosted in the studio as a guest of Saudi state TV.

While the communiqué from last Thursday’s summit included some blandishments about being opposed to Al Qaeda’s local affiliates in Syria and Yemen, participants announced little in the way of specific new commitments as to how they would eliminate this significant threat, which has shown itself capable of grisly international attacks even from limited safe havens in the countryside. Indeed, the Riyadh summit was so low on explicit new counterterrorism commitments that, as the New York Times put it, the gathering ended “without announcing any concrete new plans or initiatives.”

President Obama suggested last month in his controversial Atlantic interview that he views GCC rulers as “free riders” in the fight against terrorism. Regardless of whether or not he muddled the message in Riyadh, the Arab Gulf monarchs are doing a poor job of proving that assertion wrong.

Article Link to the National Interest:

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A Good French President Is Hard to Find

By Therese Raphael
The Bloomberg View
April 27, 2016

Wanted: an honest, well-traveled English speaker of around 50, with private-sector work experience. He must be realistic, determined and a good listener. Ideologues need not apply.

No, I'm not using this column to place a personal ad.

With one year to go before the French presidential election, a polling agency in France asked 1,000 French voters to describe the qualities they would most like to have in a president. The good news is that one of Europe's most conservative electorates looks ready for significant change. The bad news is that the criteria emerging from the poll rule out most of France's political class.

Some wouldn't make the cut because of age. More than half of respondents said that the president should be between the ages of 45 and 54. Francois Mitterrand was 79 when he left office; Jacques Chirac was 75 when he left. More recent French presidents have been a little younger, but the age preference would work against former Prime Minister Alain Juppe, 70, who is reportedly considering a bid from the right. Those meeting the standard include Marine Le Pen, 47, the leader of the populist, anti-immigrant National Front, and Prime Minister Manuel Valls, 53, a potential successor to French President Francois Hollande. The government's most popular politician, Economy Minister Emmanuel Macron, looks a tad young at 38 -- but don't rule him out yet as he would score highly on other criteria.

The head of state must also speak English, a requirement cited by 89 percent of those polled. A good number of French politicians would struggle there, though Macron is a fluent English speaker and former President Nicolas Sarkozy has reportedly used his time out of office to brush up on his English skills.

It's hard to exaggerate the significance of the poll's implicit acknowledgement that English matters in a country that's regarded language as "their primary capital, the symbol of their dignity, the passageway to integration," as former culture minister Jacques Toubon once put it.

Toubon, who warned that Anglo-Saxon countries would stop at nothing "to conquer new territory for their language," even passed a law that banned the use of Anglicisms in French schools. An official council of writers and artists was tasked with coming up with French equivalents of English words that had slipped into common usage, such as "e-mail" or "networking."

The war against "Franglais" has been fierce -- and futile, as the poll acknowledged. Where some 40 percent of European Commission documents were first written in French as recently as 1997; a decade later 72 percent were written originally in English.

English isn't the only new job requirement. Once upon a time, the ideal politician would have graduated from one of the "grandes ecoles," worked in France's enormous public sector in various roles, and been closely affiliated with either the political left or right. While the elite schools are still valued, 76 percent of the poll's respondents say their president should have private sector experience. He or she should also be able to bridge both left and right. The youthful Macron, a former Rothschild banker who is in the Socialist government but not a party member, fits this mold.

In terms of personal qualities, respondents overwhelmingly (71 percent) cited honesty as a primary trait for their president, and 54 percent wanted someone who listens to the people. Realism, determination and courage also got high marks.

Perhaps more surprising in a country whose unions have repeatedly rejected even modest labor market reforms, 57 percent of those polled said the priority of the president must be profound reform even if it meant social upheaval. Macron has recently launched a new movement -- En Marche, or Let's Go -- that is focused on bridging political divides to bring economic reform and growth. Francois Fillon, a former prime minister on the right, has also struck these notes.

But none of this bodes well for 61-year-old President Hollande, whose approval ratings have dropped to around 17 percent. Hollande hasn't closed the door on a re-election bid, but it would take a death-defying leap of political acrobatics for him to pull it off. Having promised voters that he would not seek the office if he failed to fix France's stubbornly high unemployment rate, Hollande would have some explaining to do. French unemployment, at more than 10 percent, is still twice that of the U.K.

Of course, this is just one poll. There is still significant resistance to change; some 40 percent of respondents said they prefer a candidate who will appease society even at the expense of reforms. But it confirms the impression left by the dismal performance of France's mainstream parties during the last regional election. That most French of expressions, "plus ca change, plus c'est la meme chose" (the more things change, the more they stay the same), may no longer hold true.

Article Link to the Bloomberg View:

Ted Cruz is crumbling before our very eyes

By John Podhoretz
The New York Post
April 27, 2016

For the past few weeks, Republican campaign professionals and conservatives who are seeing the GOP nomination heading into Donald Trump’s hands have been counseling anti-Trump voters not to panic and consoling themselves with the notion that things will turn around for Ted Cruz when the final weeks of the campaign shift to the Midwest and mountain states.

After Trump’s astounding five-for-five primary night, by margins that were likely surprising even for Trump fans, it’s now Indiana or bust. If Trump wins the primary next week in the Hoosier state, Cruz is toast and Trump will almost certainly be the Republican nominee.

There’s no putting a lipstick on this pig. Cruz’s numbers Tuesday night, like his numbers in New York last week, were beyond horrible. With six weeks to go before voting concludes, the man conservatives are hoping can overcome Trump with his clever delegate game and more serious mien is getting 10 to 15 percent of the vote in major states.

It isn’t only that the not-Trump vote is failing to coalesce around Cruz; he’s going backward.

And people are kidding themselves if they think Tuesday night’s results won’t have an effect on voters in Indiana and elsewhere.

The big announcement over the weekend that the Cruz and Kasich campaigns had agreed to a divide-and-conquer strategy to deny Trump the 1,237 delegates he needs to win on the first ballot at the Republican convention in July made no difference. Indeed, it only comes into effect with Indiana’s voting.

But note well: Based on the returns, Trump would have won all five states in landslides even if John Kasich had dropped out of the race weeks ago and Ted Cruz had had Trump all to himself.

As it is, Kasich’s emergence in the news just seems to have given Trump new material to freshen up his shtick.

In Warwick, RI, on Monday, Trump went after Kasich for eating during his press conferences, and found new comedic inspiration for his ad hominem assault: Joan Rivers.

“He has the news conference all the time when he’s eating. I have never seen a human being eat in such a disgusting fashion,” Trump said. “I’m always telling my young son, Barron, always with my kids, all of them, I’d say, ‘Children, small, little bites.’ This guy takes a pancake and he’s shoving it in his mouth, it’s . . . it’s disgusting.”

Trump’s cadence and manner in delivering this coup de grace to Kasich were so shockingly similar to Rivers’, it was almost as though her spirit had possessed his body. It seems fitting, somehow, that the #neverTrump effort may have met its end in the voice of the 2009 winner of “Celebrity Apprentice.”

Article Link to the New York Post:

Hillary Just Crushed Bernie's Dreams

It’s time for the guy with some of the Democratic vote to gracefully give way to the woman with much more of it.

By Michael Tomasky 
The Daily Beast
April 27, 2016

Another handful of Clinton wins in big states, and the margins grow. I’m writing before the full pledged delegate count from tonight is known, but she led by 244 coming into tonight not counting super delegates and that may grow by another 30 to 40. (Here’s a great delegate calculator; bookmark it.)

As for the popular vote, she led it by a lot coming into Tuesday night: 10.4 million to 7.7 million, a nearly 2.7 million-vote difference, or 57 to 43 percent, numbers that we call a landslide in a general election. She may have added a couple hundred thousand to that margin tonight. Depending on what happens in California and New Jersey, this could end up being close to 60-40.

So forgive me for being a little confused about why these margins give Bernie Sanders such “leverage” in what we presume to be his looming negotiations with Hillary Clinton over the future of the party of which he’s not a member. It is “incumbent” upon Clinton, he told Chris Hayes Monday on MSNBC, “to tell millions of people who right now do not believe in establishment politics or establishment economics, who have serious misgivings about a candidate who has received millions of dollars from Wall Street and other special interests.”

Is there precedent for the losing candidate demanding that the winning candidate prove her bona fides to his voters? I sure can’t think of any. The most recent precedent we have for this kind of thing is 2008, a contest that of course involved Hillary Clinton. Let’s have a look at how that one wound down.

Clinton did indeed run until the end, winning states all along the way. On the last day of voting, June 3, they drew—she took South Dakota, and he won Montana. At that point, depending on what you did or didn’t count (Michigan and Florida were weird races that year after they broke the DNC calendar to move their primary dates up, and the party punished them by taking away delegates), she was actually ahead of Obama on popular votes. But even excluding Michigan, where Obama wasn’t on the ballot, it was a hell of a lot closer than 57-43. It was 51-49.

Did Clinton carry on about her campaign of the people? Did she say it was incumbent upon Obama to prove his worth to her voters? Did she put her forefinger on her cheek for weeks and make Obama twist in the wind? No, of course not.

Four days after she walloped Obama in California, she got out of the race, gave the famous 18-million-cracks-in-the-glass-ceiling speech, and said: “The way to continue our fight now, to accomplish the goals for which we stand is to take our energy, our passion, our strength, and do all we can to help elect Barack Obama, the next president of the United States. Today, as I suspend my campaign, I congratulate him on the victory he has won and the extraordinary race he has run. I endorse him and throw my full support behind him. And I ask all of you to join me in working as hard for Barack Obama as you have for me. I have served in the Senate with him for four years. I have been in this campaign with him for 16 months. I have stood on the stage and gone toe-to-toe with him in 22 debates. I've had a front-row seat to his candidacy, and I have seen his strength and determination, his grace and his grit. In his own life, Barack Obama has lived the American dream...” and so on. She laid it on thick, and gave a strong and gracious convention speech later.

Now granted, it’s not June. There’s plenty of time for this to wind down civilly. It was a good sign that Tad Devine ++told The New York Times Tuesday afternoon++ that Sanders would “reassess” things Wednesday morning. Of course, that was Devine talking—the only one of Sanders’s top crew who is actually a Democrat and who has to mend fences to eat lunch in this town. At the same time that Devine was speaking these conciliatory words, the Sanders camp sent out a cheeky, we’re-not-done-yet fund-raising solicitation featuring a photo of Bill and Hill at the Donald’s wedding.

So the signals from Sanders-world are mixed. One thing’s for sure: There is no expectation that Sanders will behave like Clinton did in 2008. It’s worth examining why.

On the one hand, it’s understandable. He’s not a Democrat, so party loyalty isn’t a thing here. And the main thing is that the ideological differences between Sanders and Clinton are greater than between Clinton and Obama, or John Edwards and John Kerry, or Bill Bradley and Al Gore. The people voting for Bernie are voting to reject Hillary’s politics in a more fundamental way than the people voting for Bradley were rejecting Gore.

On the other hand… the media’s expectations of these people hinges so greatly on the personality types they establish, and that the media just accept them. No one expects Sanders to be a team player because he’s a guy (emphasis on guy) who has always agitated outside the system. Whereas everyone expects Clinton to behave properly because she’s a woman (emphasis on woman) who has always been the type to do what’s expected of her.

If this were two men, the onus would clearly be on the one who’s behind to play ball and do the responsible thing. But I can’t help suspecting that the media are going to put the weight on her in these next few weeks: Will Hillary accept Bernie’s conditions?

She shouldn’t accept conditions. But she absolutely should take steps to mollify his voters. She’s going to have to. However, she should do it like someone who’s ahead 57-43 should do it. She should say: Sure, I’ll adopt a couple of your positions. But I have a couple of conditions of my own. If I hear the words “Goldman” and “Sachs” coming out of your mouth one more time, if I see any more fund-raising appeals that paint me as the harlot of Wall Street, the deal is dead, and I’ll call Chuck Schumer and make sure that you don’t chair the Budget Committee if we retake the Senate, but instead you have the post-office renaming subcommittee. And I may drop some of that oppo I have on you that I’ve never used. You know the stuff I mean.

Sanders should run to the end. He owes it to his backers in California and New Jersey to give them a chance to vote for him. I don’t know anyone who says otherwise. But it’s now time for him to think about his future, and the future of the influence his movement will have in the Democratic Party.

I want that movement to have influence. There are a lot of people like me, who think Clinton is the stronger candidate, but want Sanders to have some influence over her. And to us, it looks like it’s time for him to think less about revolution than evolution.

Article Link to the Daily Beast:

Beyoncé’s Beehive of Bombastic Buffoons

By Michelle Malkin 
The National Review
April 27, 2016

Question: Why aren’t liberal celebrities ever held accountable for stoking their unhinged fans’ violent threats and stupidity — the same way Republican candidates are called on to disavow every last remote and random act of bad behavior of their supporters?

The double standards are as glaring as a glittering diva’s Harry Winston diamonds.

I’m looking at you, Beyoncé.

The singer dropped a highly incendiary album over the weekend titled Lemonade on her husband Jay-Z’s failing music-streaming service, Tidal. When last we heard from booty-shaking Beyoncé, she was growling and cursing her way half-naked through her Black Panther anthem, “Formation,” at the Super Bowl.

But Queen Bey ain’t just settling for twerk-punctuated, fist-clenching, cop-bashing radical chic. The Black Lives Matter message is incidental this time to her real beef: cheating hubby Jay-Z and his mistress(es?).

“Middle fingers up, put them hands high / Wave it in his face, tell him, boy, bye,” she rants before jeering that her adulterous partner “better call Becky with the good hair.” Wielding a baseball bat, the designer-gown-swathed star sashays down the street in a music video obliterating car windows and fire hydrants.

In case she isn’t clear enough, she threatens: “Ashes to ashes, dust to side chicks.” Whack! Thwack! Bam!

Cue the pop star’s bloodthirsty mob. Beyoncé didn’t just toot a dog whistle. She sounded the alarm for her wolf pack. So far, the rabid fans have virtually mauled two women and one teenager in their online witch hunt on Beyoncé’s behalf.

When fashion designer Rachel Roy took to Instagram to joke about her good hair after Lemonade’s release, Beyoncé’s spittle-flecked fans, who call themselves the “Beehive,” swarmed onto Roy’s social-media accounts. They littered Roy’s Instagram comments with lemon and bumblebee emojis, for starters. Then, they quickly escalated to nasty death threats calling the ex-wife of entertainment mogul Damon Dash (Jay-Z’s former business partner) a “b—h” and a “hoe” who is going to “get f—ed up.”

Stay classy, kids!

Roy was forced to turn her social-media accounts private. But that didn’t provide any protection for two other innocent bystanders in the Beehive’s hysterical onslaught.

Rachel Roy’s 16-year-old daughter, Ava, has also been subjected to blistering harassment online. A photo she posted on Instagram with her mom was littered with nasty insults calling her a “whore” and other unprintable vulgarities.

“R.I.P. to your mom,” one menace jeered. “Tell your basic mutt face Mother to keep her legs closed to [a] married man,” another lashed out (accompanied by eight lemon emojis, of course).

If that weren’t bad enough, Beyonce’s low-information buffoons also confused cooking star Rachael Ray for Rachel Roy. Misplaced misogyny and bullying ensued. The chef’s pretty Instagram pictures of spring vegetable soup and steak salad were inundated with f-bombs and body-shaming. The Beehivers took to Twitter to label Ray a “30-minute meal hoe” among other diatribes, which continue despite the attackers’ being told of the mistaken identity.

Ray, Roy. What difference does it make? Watch out, all you Rachel Reys and Rachel Ruys out there. You’re next.

The bitter bees show no signs of letting up — and Beyoncé’s silence about the vicious vendetta of her swarm speaks volumes. Her own personal army of Bernard Goetzes now suspects British singer and former Jay-Z protégée Rita Ora of being the other other woman. “Rita Ora must die” and “Rita Ora, I hope you die” are among the sweeter sentiments now clogging her social-media accounts.

Twitter recently vowed to improve its policing of hate speech. But its commitment is as full of holes as a honeycomb. Loud-mouthed rapper Azealia Banks got a pass just a few weeks ago after tweeting that former GOP vice-presidential candidate Sarah Palin should be gang-raped. That tells you all you need to know about whether the politically correct micro-messaging platform will filter out The Queen’s filthy minions.

So, the next time sanctimonious Hollywood lefties and social-justice warriors in Silicon Valley blame the Right for uncivil rhetoric and out-of-control online mobs, point them to Beyoncé’s raging beehive and tell ’em:

Buzz off.

Article Link to the National Review:

The Trump Train Continues to Roll

By Conrad Black 
The National Review
April 27, 2016

Two weeks ago, I wrote of the unusually important parallel campaigns, for the presidential nominations in the United States and over whether the United Kingdom would continue within an “ever closer” European Union. I was in Britain last week, and have an update on both contests — which are now slightly intertwined, because of President Obama’s wildly egotistical effort, on invitation from the beleaguered British prime minister, to be a deus ex machina for the forces of “Remain” in the U.K. The great schism yawns ever more cavernously between a severely politically disappointed American public and the official and media personalities whose antics disappoint them. Even at this late date, even the most knowledgeable are inexplicably reticent to recognize how profoundly the antics of the political class of the last 20 years have alienated an immense bloc of the electorate.

Donald Trump’s sweep of five states on Tuesday, bagging enough delegates to get him to around 975 of the 1,237 needed to nominate, and nearly 400 ahead of Senator Cruz, probably does not much reflect public reaction to the shabby effort of Cruz and Kasich to pool their votes according to which is stronger in the remaining individual primaries. But it does show that Donald Trump has graduated from a protest candidate to a favored front-runner in states that are generally rather liberal, even among Republicans, and would have been thought inaccessible to a flamboyant billionaire who has never before sought public office. His speech on foreign policy to the National Press Club on Wednesday reveals a sensible conception of America’s national-security interest, and the candidate’s determination, if elected, to demarcate a sustainable definition of that interest, with suitable consultation with proven allies, especially the other English-speaking powers (Great Britain, Canada, Australia, and New Zealand). He clearly lays out a middle course in which the United States will negotiate any disagreements with China and Russia from a position of military and diplomatic strength, and will revitalize the Western Alliance by abandoning the Obama administration’s perverse effort to make allies out of enemies. He has also pledged not to revert to George W. Bush’s reckless war-making and imposition of democracy on non-democratic allies, which has promoted Hamas, Hezbollah, and the Muslim Brotherhood. It is a cogent and persuasive address that should end the campaign to portray Trump as a blundering warmonger.

The anti-Trump forces, which began by disparaging his candidacy as a beau geste brand-building exercise, capped at 20 percent in the opening primaries and petering out thereafter, and have seen his support rise to almost 50 percent of Republicans, have now, in a final act of desperation, attempted a fusion of candidacies without a withdrawal: Cruz and Kasich are to stand back and support each other in the races where one is clearly ahead of the other. I wrote here more than a month ago that the efforts of the traditional Bush Republicans to ostracize Trump would elicit Lyndon Johnson’s famous “frontlash,” in which those who objected to such cynicism would exceed the numbers of those who fell in with it. Neither candidate has withdrawn, even from any of the remaining primaries; it is an uneasy half-reach between candidates who bracket Trump in policy terms and are too appalled at each other to make a formal alliance. They are like two young teenagers playing “I’ll show you mine if you show me yours.” Most of the followers of both would probably rather have Trump than the other.

It is anachronistic for Jeb Bush to endorse Cruz, the candidate of government shutdown. Once again, the forces of Republican continuity have failed to grasp that most Republicans and most Americans want to defenestrate into the oblivion of fading memory all those even remotely responsible for the unspeakable sequence of blunders of the last 20 years.

Kasich, running as Mr. Rogers, advising us to “hug a stranger in the mall” and “invite a widow to dinner,” has thrown in with the most reactionary claimant of a serious presidential nomination since James Gillespie Blaine in 1884. Cruz is a pure conservative, pitching irreconcilable capitalism, and the steamrollering of any twinge of compromise in the capital. And Kasich, an almost submerged representative of the old Republican center, has been persuaded to assist in trying to salvage Indiana for Cruz, which is all that will revive a hope of a second ballot at the Cleveland convention in July. It will fail, and these two candidates throwing each other waterlogged life preservers will sink like Senator Mitch McConnell’s “hot rock.”

Even the splendid and redoubtable Peggy Noonan wrote, in the Wall Street Journal on Saturday, that she had had her “campaign moment” when the abrasive and sometimes repulsive coarseness of this campaign convinced her that we were not going to hear candidates of the personal suavity, and eloquence, of Franklin D. Roosevelt, John F. Kennedy, Martin Luther King, and Ronald Reagan. The new Donald Trump will be less troubling than he has been in this respect, but the real reason for such a “campaign moment” is that the people who are the surging crowds in this campaign are too angry for that. FDR was addressing extreme national concern, first over the Great Depression and then over the Nazi and Japanese-imperialist threat to democratic civilization. JFK was trying to sell youth, religious tolerance, and a fresh intellect to a nation that had had seven terms of very capable leadership from presidents the age of or a little older than JFK’s father. Martin Luther King had every right to be a good deal more crudely angry than anyone prominent in this election (and probably was in private), but not if, as was his inspired tactic, he was going to mobilize the majority of white America to the black cause. And Ronald Reagan was moving the whole field, and not just one set of goal posts, to the right, and had to reassure, with the infallible benignity of his sometimes almost hypnotic oratorical skills, those whom his opponents attempted to frighten. In this election, Donald Trump has tapped into the anger, frustration, and fear of the scores of millions of voters who feel no one cares about them while the flabby, complacent ranks of the phony Bush-Clinton joint dynasty shift between comfortable deck chairs on what will become the great American Titanic unless there is a course change.

Trump has got the attention of those voters and has now shifted his sights upwards to the rich Republican stomping grounds of the boardrooms and country clubs, as well as the sober middle class. He is the moderate in this race, close to Kasich in policy, well to the center of Cruz and Sanders (approaching from opposite extremes), and the natural claimant on much more of the center than Hillary Clinton. He has corralled the angry and financially stretched working class and can now assuage the concerns of traditional prosperous Republicans who have been spooked by the noisy billingsgate of the early campaign. It is time to retake the center, which Trump has the policies to do. Reagan did it with sonorous eloquence, Nixon with tactical skill, and Trump can do it by his unexceptionable moderation in all areas except rhetorical treatment of Mexican immigration and misconceived trade pacts. He is no Reagan, nor even Nixon, as a public tribune, but he is not complicit in the misgovernment of the last 20 years, he is a proven manager and deal-maker, and he isn’t his opponents.

I have written here several times that Trump was not necessarily my preferred candidate, but this latest skullduggery, by which Cruz robbed Kasich of his ethical virginity by ceding to him two states of no current importance, makes Donald Trump the only respectable candidate. Sanders is a nightmare; Clinton is a hackneyed, tainted, spavined wheel-horse. Cruz is unfit for the office he seeks: His intelligence and most of his policy opinions are not in dispute, but he is too tactically villainous for the headship of the American people, at least on this occasion. John Kasich has been seduced on his way to the Rose Garden, and has banished himself from the scramble for the White House to — if he doesn’t compound his miscues — the second prize in the lottery and a comfortable stay in the vice-presidential Naval Observatory.

In London last week, Barack Obama showed us once again why he has been a disastrous president. Repaying the hard-pressed prime minister, David Cameron, for his improper importuning of the support of U.S. senators for the disgraceful Iranian nuclear-weapons agreement, the president gave the British a finger-wagging lecture on why they must submit to Brussels, accept German laws, pour money into European pockets, and receive unquestioningly the vast flotsam of wretched and desperate people unloosed on Europe by American, conspicuously Obama’s own, blunders in the Middle East. He completely missed the Clapham Omnibus. He said Britain must submit to being subsumed into Europe to retain any influence in Washington, and if it fails to vanish under the Euro-anesthetic, forfeiting the birthright of every Englishman for a thousand years, the United States, armed to the teeth with its mighty trade deficit, will banish it “to the back of the queue” as a trading partner. The European Union, which is largely an anti-American confection, though Nixon and Reagan were the only American presidents sufficiently perceptive to see this, must be allowed to consume and emasculate the greatest ally the United States has ever had — or the United States will punish it itself.

This too, has backfired. Britain has no illusions about the decline of its influence in the last 75 years. But it remains a great and a proud nation. It will not be treated by this departing and, in foreign-policy terms, singularly inept American president like an obstreperous child trying to defer its bedtime. Any of the remaining presidential candidates except Sanders would be an improvement on the incumbent. None could be as transformative of America (to a semi-bankrupt laughing stock) as Obama has been. This creates a challenge and an opportunity for his successor. Donald Trump marked the occasion by announcing that he will bring back to the White House the bust of Winston Churchill that Obama finally manfully acknowledged that he had had removed. The United States has revived quickly from graver political influenzas than the one that now afflicts it, but not so often that anyone should be complacent about it.

Article Link to the National Review:

Saudis refine blueprint for post-oil economy

Establishment of the Public Investment Fund to diversify Saudi Arabia's sources of income must be coupled with a sound strategy to achieve the country's goals.

April 27, 2016

In an April 4 interview with the Bloomberg news agency, Deputy Crown Prince Mohammed bin Salman announced Saudi Arabia's plan to launch a National Transformation Program to shape the kingdom’s economy for the post-oil period. According to the prince, the program will aim to increase the Public Investment Fund (PIF) by restructuring the investments, companies and other assets currently held by the fund. The question now is how can the Saudis ensure the outcomes they seek?

The PIF was established pursuant to a royal decree of Aug. 18, 1971, with capital of 1 billion riyals, the equivalent of $266 million today. Article II of the decree stipulates, “The PIF will finance commercial projects belonging to the government, to industrial institutions associated with the government and to public institutions. These projects shall be either executed independently or through a partnership between the mentioned administrative authorities and private institutions.”

Since its inception, the PIF has played an important role in the financing of vital projects in the kingdom, including in the oil refining, fertilizer, petrochemical and electricity sectors. In July 2014, the Council of Ministers granted the PIF authority to fund new companies inside and outside the kingdom, either independently or in cooperation with the public and private sectors, without the council's prior approval.

The PIF does not have a website, and there is a dearth of information concerning its strategies for managing its assets. In addition, it is not known whether its investment returns are added to the general budget. Over the past year, however, an upswing could be discerned in its operations abroad.

The PIF agreed in March 2015 to buy more than $1 billion worth of shares in the South Korean steelmaker Posco Engineering and Construction. Moreover, in June 2015, it signed a general framework agreement with the French government to encourage financial and business investments between investors in Saudi Arabia and France. In July 2015, the fund signed a memorandum of understanding with Russia's Direct Investment Fund to put $10 billion into Russia. The Saudis were reported to be interested in the agriculture, medicines, logistics, retail and real estate sectors.

The giant oil company Aramco is one of the most important parts of the PIF restructuring process. The prince revealed to Bloomberg that the kingdom would seek to list 5% of the company’s shares on the Saudi market by 2017. By listing Aramco, the largest oil company in the world, Saudi Arabia hopes to establish the foundation for turning the PIF into a sovereign fund that lends itself to diversifying sources of national income away from oil revenues, which account for more than 80% of Saudi exports.

Mohammed told Bloomberg, “By simply transferring the shares of Saudi Aramco to PIF will make PIF the largest fund on Earth.” He added, “Many were saying that the idea of IPOing Aramco was just an attempt to get liquidity to cover Saudi financial needs, but that’s far from the truth. The objective is to diversify income and make investments the source of Saudi government revenue, not oil.” Mohammed expects the fund’s value to reach more than $2 trillion once Aramco is listed.

Ahmed al-Shehri, a writer specializing in Saudi economic affairs, told Al-Monitor, “This move is the right decision, as listing Aramco will help transfer part of the national wealth to Saudi citizens. Also, Aramco’s listing will increase the market’s depth and strength and will raise the level of foreign investor confidence in it.”

Shehri suggested that the Saudi plan also consider “the establishment of investment banks between the sovereign wealth fund and foreign investors on the basis of equal risk and profit sharing so that their investments can be channeled toward financing the industrial, commercial and tourism sectors while the existing banks work on funding individuals, real estate projects and foreign trade. Such a model would attract foreign companies to the Saudi market.”

Shehri warned, however, “Saudi decision-makers must be careful in their fund’s investment asset choices by staying away from high-risk financial derivatives because of the low interest rates and the recession climate prevailing in the global economy. They must also focus on projects with real cash flow, such as pharmaceutical and real estate projects, all the while investing half of the fund’s money in local projects in order to create new jobs and help solve the unemployment problem.”

Nevertheless, devising an appropriate strategy for the selection of the fund's high-risk and low-risk investments and local and global investment plans is not the only challenge facing Saudi policymakers. Angela Cummine, an expert in sovereign wealth funds at the Department of Politics and International Relations at Oxford University, told Al-Monitor, “The key to creating and running an effective, efficient sovereign fund is clarity of mission. The fund’s purpose must be clearly articulated and set out in legislation. The state agencies responsible for setting the fund’s mandate and monitoring performance should not be the same as those running the fund’s daily operations and investing its assets.”

Cummine offered the example of the Chinese model, whereby the Central Bank of China and the China Investment Corporation compete over the investment of huge financial reserves in ways that are sometimes conflicting. She said, “This is a potential issue for Saudi Arabia given that its central bank, SAMA [Saudi Arabian Monetary Agency], the third-largest manager of foreign reserves globally, is likely to feel competitive with any new sovereign fund, let alone one of the scale proposed. The mandates and missions of both funds should be designed to complement, not compete with, one another.”

Cummine added, “With a non-diversified, oil-dependent economy, the new Saudi fund might also consider focusing on asset classes uncorrelated to commodities and Gulf oil. Given the kingdom’s commitment to diversification, the new fund might consider a domestic development mandate similar to that of Mubadala in Abu Dhabi, which seeks to generate an economic as well as social return through its domestic investments in the UAE [United Arab Emirates].”

Sovereign wealth funds have in recent years been playing an increasing role in the management of financial surpluses in various countries around the world. This tool has gained particular importance in countries rich in natural resources to help diversify and protect their economies from fluctuations in oil prices and to make savings sufficient for the needs of future generations.

Although the Saudis' move to establish a new sovereign fund appears to bode well, that alone is insufficient. It also requires a comprehensive blueprint that establishes the functions and powers of the fund and its governance. In addition, the fund’s objectives must complement the objectives of creating a local economic base for sustainable development. Serious public finance reforms will also need to be implemented to ensure optimum outcomes in the long term.

Has the countdown to next Hamas-Israel war begun?

Both Israel and Hamas claim not to want another battle, but both are loudly preparing for one.

April 27, 2016

Israel and Hamas have been escalating their war of words, which observers on both sides fear could turn into violence.

Gaza has yet to recover from the destruction of the last war with Israel in the summer of 2014, when more than 178,000 houses were destroyed or damaged, which makes any upcoming war between Israel and the Palestinians seem too early and premature.

After a flurry of contentious statements in February, the situation calmed in March as both Hamas and Israel stopped talking about a possible fourth Israeli-Gaza war, and both showed a desire to quiet their people and reassure them that no confrontation would break out anytime soon.

But on April 14, an anonymous senior Israeli officer made an unprecedented statement about Israel Defense Forces (IDF) plans for the next potential military confrontation with Hamas in Gaza. Israeli media reported that the official was a prominent source from the IDF leadership in the southern area.

The Israeli plan for a potential war against Hamas in Gaza received wide media coverage in the Palestinian and Israeli press. It calls for each Israeli battalion to kill as many Hamas members as possible and thwart the movement’s moves and goals. The IDF has developed a strong defense and attack system capable of protecting the Gaza envelope and minimizing the threat of mortar shells, while the Israeli air force would launch an extraordinary and efficient offensive.

Abu Mujahid, a spokesman for the Popular Resistance Committees, told Al-Monitor, “The resistance in Gaza is preparing itself for the worst in its upcoming confrontation with the Israeli army. We take the IDF threats to launch a new war against Gaza very seriously. We have growing speculations that the Israeli enemy has begun the countdown for a new aggression against Gaza, and the resistance is getting prepared around the clock in order not to give the Israeli army a chance to launch a sudden attack.”

Israel announced April 18 that it had discovered a new tunnel east of Rafah in the southern Gaza Strip, noting that the tunnel is 2 kilometers (1.24 miles) long, 30 meters (almost 100 feet) deep and extends inside Israel.

On the same day, Izz ad-Din al-Qassam Brigades, Hamas' military wing, issued a statement saying Israel’s supposed "discovery" was designed to distract the public's attention away from criticism targeting Israeli leaders for stalling the process of eliminating the Gaza tunnels and as a way to reassure the Israeli settlers in the Gaza envelope.

Then Hamas noted that it has more in store for Israel than a tunnel. On the same day as well, al-Qassam Brigades revealed for the first time its “R 160” missile, which has a range of 160 kilometers (100 miles), meaning it could reach Haifa.

Yousef Rizqa, former Hamas minister of information and a political adviser to Ismail Haniyeh, the deputy head of Hamas’ political bureau, told Al-Monitor, “Israel’s announcement of discovering the tunnel aims at reassuring the Israeli population that the government is making great efforts to maintain the security of the settlers, confront Hamas and gain international support for Israel, by illustrating the offensive cross-border tunnels as a threat posed by Hamas.

"The more Israel increases its calls to seek out support, the more the expectations for a future war against Gaza increase. Although the resistance in Gaza does not call for a new war and does not want to carry out attacks to break the truce, it has the right to prepare itself on the field, despite the lack of military balance between the resistance and Israel.”

In conjunction with all these security developments, both sides carried out field maneuvers.

On April 18, the Israeli army launched large-scale military maneuvers in the Golan Heights and the Jordan Valley that included field forces and aircraft. Even before that, on April 10, the Israeli army had its largest military training since the 2014 war in Gaza, with the participation of thousands of soldiers, near the Gaza border to simulate the incursion of Hamas inside Israeli settlements and the detention of Israeli hostages.

On April 19, the Ministry of Interior and National Security in Gaza ended the fifth maneuver of its security services, which it had started in Gaza during recent weeks. The maneuver included evacuating all headquarters and increasing security apparatuses, while explosions and weapons firing were heard. Ambulances, civil defense vehicles and the police practiced their movements in a drill that resembled the outbreak of a new war with Israel.

Meanwhile, retired Palestinian Maj. Gen. Wassef Erekat told Al-Monitor, “Decision-makers within the resistance leadership in Gaza must be alert of the possibility of Israel launching a [surprise] attack, as it did in the three previous wars in 2008, 2012 and 2014, since the Israeli government is known for being extreme and risk-taking. Perhaps [the Israeli army] is being pressured by the Israeli public to carry out a bloody military operation against Gaza, despite the misleading statements about not wanting this war.”

Remarkably enough, Israeli Housing Minister Yoav Galant called April 18 for the Israeli army to prepare for a wide-scale confrontation with Hamas in Gaza by the beginning of summer. Perhaps this call seems dangerous because Galant is a former IDF commander and military general who led the war on Gaza in 2014 and is also a member of Israel’s political-security Cabinet.

A Palestinian security official in Gaza told Al-Monitor on condition of anonymity, "Hamas’ and Israel’s declaration of their unwillingness to go into a military confrontation anytime soon might face three factors that may eventually lead to an outbreak of this confrontation. The first is the misunderstanding from both parties due to their field efforts on the Gaza-Israel borders; the second is the increased escalation in the West Bank, most recently the operation in Jerusalem on April 18, which wounded 20 Israelis; and the third is the resistance in Gaza feeling that the blockade is tightening with no alleviation initiatives in sight.”

Meanwhile on April 23, Hamas warned about the continued tightening of the Israeli blockade on Gaza and called regional and international parties to shoulder their responsibilities in the deteriorating situation.

Despite the growing mutual warnings between Hamas and Israel about an imminent confrontation, a number of factors might prevent its outbreak, at least for now. The Israeli army is preoccupied with the growing unrest in the West Bank that began in October. Also, Israelis seem to doubt how much the IDF could actually achieve in Gaza — in terms of completely eliminating the Palestinian factions’ missiles and toppling Hamas — except for killing and wounding thousands of Palestinians. The Israelis must wonder whether it is worth getting pulled back into the Gaza quagmire.

Article Link to Al-Monitor:

Fed set to keep rates unchanged, may nod to ebbing risks

By Lindsay Dunsmuir
April 27, 2016

The U.S. Federal Reserve is expected to keep interest rates unchanged on Wednesday as it continues to monitor the impact from weakening global growth but may seek to signal to markets it is determined to resume policy tightening this year.

The Fed has held its overnight lending rate for banks at a target range of between 0.25 and 0.50 percent since it lifted the benchmark interest rate for the first time in a decade from near zero last December.

Since then the Fed has signaled more caution, despite the U.S. economy's relative strength, as concerns a slowing China would depress global growth sparked steep stock price declines and tighter financial market conditions early in the year.

The latest Fed policy decision statement is due to be released at 2 p.m. EDT on Wednesday. Fed Chair Janet Yellen is not scheduled to hold a press conference.

Markets have turned up since the last rate decision in March. The S&P 500 [.SPX] has risen more than 14 percent since mid-February. China's economy has also shown more positive signs, growing at a 6.7 percent pace in the first quarter.

A Reuters poll of more than 80 economists showed expectations were for two rate increases this year, with the possibility the Fed will hike in June.

Additionally, some of the pressures that have kept inflation lower than the Fed would like have abated. Oil prices have rallied, with the Brent benchmark crude [LC0c1] up 20 percent to around $44 a barrel since the Fed's December rate hike, while the dollar has dropped around 4 percent against a basket of currencies during the same period.

Those factors may allow the Fed to reinstate a balance of risks assessment in its statement, most likely a description of the risks to the U.S. economic outlook as "nearly balanced."

Such phrasing is usually seen as prerequisite to policymakers even considering another rate rise. However, the U.S. central bank has tried to move away from forward guidance as it implements rate hikes.

The Fed may also acknowledge the recent improved market indicators by dropping or softening its March warning that global economic and financial developments "continue to pose risks."

"If anything, Fed officials will likely want to encourage markets to price in more tightening than is being priced in currently," said Jim O'Sullivan, an economist at High Frequency Economics, in a note.

Investors currently see zero chance the Fed will raise rates at this week's meeting and see a 23 percent probability of a hike in June, according to an analysis of Fed Fund futures by the CME Group.

Eye On the Data

The Fed may be wary of making too strong a judgment on the resilience of the U.S. economy come June until it has more data.

The global situation has already caused the Fed rate setters to dial back their estimates on the number of rate rises this year. Predictions from policymakers now show two, compared to four last December.

Other major central banks are grappling with ways to deal with lackluster growth. The Fed remains concerned that with interest rates still close to zero it would have to rely on more unconventional policy tools should the economy slow.

Last week the European Central Bank kept its main refinancing rate at zero and its bank overnight deposit rate in negative territory.

The Bank of Japan could cut its rates further into negative territory when it meets on Thursday.

U.S. data in the pipeline includes the initial estimate of first-quarter gross domestic product growth on Thursday, which is expected to be weak. Economists polled by Reuters predict 0.7 percent growth for the first quarter. The Fed will look for signs over the next few weeks that the economy is accelerating for the second quarter.

Another strong monthly jobs report in just over a week's time could assuage concerns as would evidence a recent uptick in inflation is being maintained.

As such if there isn't a balance of risks reinserted into April's statement, "Fed officials could still use their speeches to manage market expectations higher," if they decide on June, said Sam Bullard, an economist at Wells Fargo.

Oil hits 2016 high, led by falling output and weaker dollar

By Amanda Cooper
April 27, 2016

Oil hit its highest level this year on Wednesday, driven by a falling dollar and evidence of declining U.S. supply, putting the price on course for its strongest monthly performance since last April.

The prospect of an agreement among the world's largest exporters to limit production, which had provided the catalyst for a 55 percent rally since mid-February, evaporated almost two weeks ago when a meeting between OPEC members and their non-OPEC counterparts ended in stalemate.

Since then, Brent has hit its highest since November and, aided by further evidence of declining output anywhere from the U.S. shale basin to the North Sea, attracted fresh investment cash.

"There was definitely a bit of a turning point when we had the initial sell-off after the producer meeting," CMC Markets strategist Jasper Lawler said.

"That got reversed and went on to show that (a production freeze) was a fairly small part of what had been supporting the price and really, it's the supply outlook for the U.S. coupled with the dollar that is really driving returns."

Brent crude futures were up $1.03 at $46.77 a barrel by 0835 GMT, having risen nearly 20 percent in April, their largest one-month gain in a year. The international benchmark earlier hit a 2016 high of $46.81.

U.S. West Texas Intermediate crude futures rose 86 cents to $44.90 a barrel.

Brent received extra support from news that Saudi Arabia and Kuwait appear no closer to restarting their jointly operated Khafji oilfield, which produced 280,000 to 300,000 barrels per day before environmental problems forced a closure in October 2014.

WTI was further bolstered after the American Petroleum Institute reported a draw of nearly 1.1 million barrels in U.S. crude inventories last week. Analysts had expected a 2.4-million-barrel build.

The dollar was down on the day, having fallen about 5 percent against a basket of currencies since the start of the year, even as U.S. interest rates are expected to rise.

The Federal Reserve's policy-setting committee meets on Wednesday but is not expected to announce any change in rates, leaving traders to scour the post-meeting statement for any clues on the outlook.

A weaker dollar cuts the cost to non-U.S. investors of buying dollar-denominated assets such as oil futures.

"A weaker U.S. dollar and expectations of stronger fundamentals drove crude oil prices higher. Sentiment continues to improve, with major producer BP suggesting the markets may rebalance by the end of the year," ANZ bank said.

Article Link to Reuters:

Trump and Clinton trade barbs after big wins in Northeast

By Luciana Lopez and Amanda Becker
April 27, 2016

Republican Donald Trump and Democrat Hillary Clinton rolled up wins in Northeastern states on Tuesday in a major show of strength and immediately turned their fire on each other in a possible preview of a general election matchup.

Trump easily defeated rivals John Kasich and Ted Cruz in all five states that held contests, Pennsylvania, Maryland, Connecticut, Rhode Island and Delaware, with a margin of victory rivaling that of his home state of New York a week ago. He was on a path to winning the vote in every single county in each state.

Clinton, already in control of the Democratic race, defeated challenger Bernie Sanders in Maryland, Delaware, Pennsylvania and Connecticut. Her only loss of the night was to Sanders in Rhode Island.

The two front-runners used victory rallies to snipe at each other in the kind of back and forth that will take place should they win their party's presidential nominations and face off in the Nov. 8 election to succeed Democratic President Barack Obama.

"I think she's a flawed candidate and she's going to be easy to beat," Trump said at a news conference at New York's Trump Tower.

Trump, who is to deliver a foreign policy speech in Washington on Wednesday, criticized Clinton's record as secretary of state and her vote as a U.S. senator from New York in support of the Iraq war. He said her only advantage was as a woman seeking to become the first female U.S. president.

"Frankly if Hillary Clinton were a man, I don't think she'd get 5 percent of the vote," he said.

Clinton, in a victory speech in Philadelphia, took aim at Trump for accusing her of trying to "play the woman card."

"Well if fighting for women's healthcare and paid family leave and equal pay is playing the woman card, then deal me in," she said to cheers.

For the Republicans, the Northeastern battles set the stage for a big contest next week in Indiana. Trump has a small lead in polls in the state but Cruz appears stronger there. Trump needs a victory to get closer to the 1,237 delegates required to win the nomination.

Of 118 committed delegates available on Tuesday, the Associated Press said Trump took 105, raising his total delegates to 950. Kasich won five, all from Rhode Island, and Cruz one, with seven delegates still to be assigned. Pennsylvania’s 54 unbound delegates will become clearer later.

Projecting confidence, Trump said it was time for Cruz and Kasich to get out of the race so the party can unify behind him. He also urged Sanders' voters to support him.

"I consider myself the presumptive nominee," he said, adding later: "As far as I'm concerned, this thing is over."

Although the race remains fluid, Trump's wins made it less likely that Republicans would choose their nominee at a contested convention in July in Cleveland, an outcome seen by Cruz and Kasich as their only chance at the nomination.

Cruz was already looking ahead to Indiana's Republican primary on May 3.

"I got good news for you: Tonight, this campaign moves back to more favorable terrain," the U.S. senator from Texas said in Knightstown, Indiana, inside the high school gymnasium made famous by the movie "Hoosiers," which celebrated underdogs.

Appeal For Unity

Clinton's strong showing in the Democratic race added to the pressure on Sanders to get out of the race or ease his criticism of her.

In her victory speech, Clinton gave a nod to Sanders and spoke of the need for party unity.

"Whether you support Senator Sanders or you support me, there is much more that unites us than divides us," she said.

Clinton's victories on Tuesday gave her 2,141 delegates, according to the AP, pushing her closer to the 2,383 needed for the nomination. Senate Democratic leader Harry Reid told reporters earlier on Tuesday he did not think Sanders, a U.S. senator from Vermont, had a realistic path to winning the nomination.

Sanders, in a speech in Huntington, West Virginia, and a subsequent statement, showed no signs of getting out of the race.

"The people in every state in this country should have the right to determine who they want as president and what the agenda of the Democratic Party should be. That’s why we are in this race until the last vote is cast," he said in his statement.

Trump has consistently done well among lower-income voters and voters with only high school diplomas or less. But he performed well in the Northeastern region, which is the most highly educated in the country and also was strong across income levels.

In Maryland for example, Trump won 62 percent of supporters with some college education and 54 percent of college graduates. He won the support of more than half of Republicans in the state whose incomes were between $50,000 and $200,000 and also won a 46 percent plurality of Republican voters who earned $200,000 or more.

Apple's nine-year iPhone juggernaut stops with first sales decline

By Julia Love and Anya George Tharakan
April 27, 2016

Apple Inc (AAPL.O) on Tuesday posted its first-ever decline in iPhone sales and its first revenue drop in 13 years as the company credited with inventing the smartphone struggles with an increasingly saturated market.

The company's sales dropped by more than a quarter in China, its most important market after the United States, and it also forecast another disappointing quarter for global revenues.

Its shares fell about 8 percent, dropping below $100 for the first time since February. A hike in Apple's share buyback and dividend as well as bumper revenue from services failed to mollify investors.

Apple's results followed disappointing quarterly reports from Microsoft Corp(MSFT.O) and Google-owner Alphabet Inc (GOOGL.O), and microblog Twitter (TWTR.N) also on Tuesday reported results that missed expectations.

Apple said it sold 51.2 million iPhones in its second fiscal quarter, down from 61.2 million in the same quarter a year ago but above analysts' estimates of about 50 million devices.

While Apple executives had predicted iPhone sales would decline this quarter, they must reassure investors that the drop represents a momentary roadblock, rather than a permanent shift for the product that fueled its meteoric rise.

After years of blockbuster sales, many investors fear the iPhone has reached saturation, spelling the end for Apple's exponential growth.

"Apple needs to come up with a radical new innovation or product rather than just the current incremental improvements to existing products. This is the only way in which it will reinvigorate sales growth," said Neil Saunders, chief executive of research firm Conlumino.

Apple Chief Financial Officer Luca Maestri told Reuters that the success of the iPhone 6 a year earlier had set a difficult bar to beat in the second quarter. "The iPhone 6 is an anomaly," he said.

But Chief Executive Tim Cook told analysts that the smartphone market was not growing, reinforcing wider concerns of saturation.

Cook also conceded that the iPhone 6S was driving customers to replace phones at a much lower rate than the 6. "I don't mean just a hair lower; it's a lot lower," he said. "If we'd had the same rate on 6S as 6, it would be time for a huge party."

He pointed to the services division, which includes Apple Music and the App Store, as a bright spot. Its revenue grew 20 percent to $6 billion and surpassed iMac and iPad sales.

Cook also hinted that Apple had more gadgets to come. "The future of Apple is very bright," he said. "Our product pipeline has amazing innovations in store."

Earnings of $1.90 per share fell short of the average analyst estimate of $2 per share, according to Thomson Reuters I/B/E/S. Revenue of $50.56 billion missed expectations of $51.97 billion.

Apple forecast third-quarter revenue of $41 billion to $43 billion, short of the Wall Street consensus of $47.3 billion.

Apple also said it was raising its capital return program by $50 billion through a $35 billion increase in its share buyback authorization and a 10 percent rise in the quarterly dividend.

iPhone SE Demand Strong

In March, Apple released the iPhone SE, a smaller, 4-inch-screen phone featuring much of the company's latest technology. Although sales of the phone were not captured in the second quarter, the device is off to a strong start, particularly in emerging markets, Maestri said.

"The situation right now around the world is that we are supply-constrained," he said. "The demand has been very, very strong."

Although Apple's revenue in Greater China fell 26 percent from the year-ago quarter, Maestri stressed that the company was "extremely optimistic" about China. "We continue to make a lot of investment there," he said.

Cook said that mainland China sales were down only 7 percent in constant currency, attributing much of the Greater China drop to Hong Kong, where strength in the local dollar, which is pegged to U.S. currency, deterred tourist shopping.

The company did not comment on prospects for its iBooks Stores and iTunes Movie service, which were shut down last week in China.

The drop in after-hours shares wipes out roughly $46 billion in market capitalization, roughly the value of heavy equipment maker Caterpillar Inc (CAT.N).

In reaction to Apple's results, shares of its suppliers Skyworks Solutions (SWKS.O), Qorvo (QRVO.O), Broadcom (AVGO.O) and NXP Semiconductors (NXPI.O) all fell 2 percent or more on Tuesday.

Article Link to Reuters: