Treasuries rose, driving 10-year yields below 1.50 percent for the first time, while stocks tumbled after U.S. employers created fewer jobs than economists estimated and Chinese manufacturing slowed. Commodities slumped.
Yields on 10-year Treasuries dropped eight basis points to 1.48 percent at 9:11 a.m. New York time. Standard & Poor’s 500 Index futures retreated 1.9 percent to 1,284.70, and the Stoxx Europe 600 Index slumped 2.1 percent. The S&P GSCI gauge of 24 commodities slipped to the lowest level since October as crude oil futures retreated 3.6 percent to $83.43 a barrel. The yield on Germany’s two-year note fell as low as minus 0.012 percent. Gold futures climbed 1.4 percent to $1,586.30 an ounce.
Payrolls climbed by 69,000 last month, less than the most- pessimistic forecast in a Bloomberg News survey, after a revised 77,000 gain in April that was smaller than initially estimated, the Labor Department said. The median estimate called for a 150,000 increase in May. The jobless rate rose to 8.2 percent. A report showed Chinese manufacturing grew less than estimated.
“Yuck, this is really not good,” Michael Mullaney, who helps manage $9.5 billion as chief investment officer at Fiduciary Trust in Boston, said in a phone interview. “We’re at a very precarious point right now as far as investors’ psyche is concerned.”
Treasuries last month had their highest returns since August, returning 1.8 percent, reflecting the declining stability of the 17-member euro currency amid a worsening sovereign debt crisis, according to indexes compiled by Bank of America Merrill Lynch. The MSCI All-Country World Index of shares lost 8.9 percent including dividends, the biggest monthly decline since September. The euro declined 6.6 percent versus the dollar in May, the most since September.
April Peak
The S&P 500 peaked in 2012 on April 2, when it reached a four-year high of 1,419.04. Losses accelerated after the April 6 employment report from the U.S. Labor Department showed the slowest job creation in five months. Today’s report bolstered concern that the labor-market recovery is stalling.
Thirty-year Treasury bond yields declined nine basis points to 2.55 percent, and fell to 2.5089 percent earlier, the lowest in Federal Reserve records beginning in 1953.
Valuation measures show Treasuries are at the most expensive levels ever. The term premium, a model created by economists at the Fed, touched negative 0.91 percent, the most expensive level ever. A negative reading indicates investors are willing to accept yields below what’s considered fair value.
Alcoa, Caterpillar
In the U.S. stock market, Alcoa Inc., Caterpillar Inc. and Bank of America Corp. dropped at least 2 percent to pace losses among the largest companies. Wynn Resorts Ltd., MGM Resorts International and Las Vegas Sands Corp. slumped more than 3 percent as Macau casino gambling revenue grew at the slowest pace since July 2009. Facebook Inc. slid 3 percent after yesterday posting the biggest rally since its initial public offering last month.
Stocks fell around the world earlier after China led a slowdown in manufacturing across Asia. China’s Purchasing Managers’ Index fell to 50.4 in May from 53.3 in April, China’s statistics bureau and logistics federation said today in Beijing. Economists projected 52, according to the median estimate in a Bloomberg News survey. Measures for India, South Korea and Taiwan also declined.
To contact the reporters on this story: Nick Baker in New York at nbaker7@bloomberg.net; Rita Nazareth in New York at rnazareth@bloomberg.net
To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net
Rise in financial hardship for Hull University students - BBC News
The number of Hull University students facing financial hardship increased by 54% over the past four years, its union said.
The student union said 2,300 students had contacted its advisors for support last year compared to 1,500 in 2008.
About 22,000 students study at the university. Four years ago, there were 21,000.
The Department for Business, Innovation & Skills (BIS) said "generous packages of financial support" were available.
Gina Rayment, from Hull University's student union, said: "They're coming to us with quite serious problems such as possible rent arrears where they could actually lose a roof over their heads."
Food parcels"It isn't just that they need some money for a Friday night, it's actually that they need money for food, they need money to pay their bills and they need money for rent."
The union said there were a number of reasons why students were facing hardship including mismanagement of money or loss of parental incomes.
"One of the main reasons here in Hull is that there are no part-time jobs that students used to rely on to get themselves through university," said Ms Rayment.
The rise in financial hardship has also led to an increase in the number of food parcels it provides to students.
Last year the union distributed 70 food parcels to students compared to 30 in 2008, the union said.
A spokesperson from BIS said: "There is a generous package of financial support to help with living costs in the form of loans and non-repayable grants.
"Our reforms will offer more financial support and lower monthly repayments once you are in well paid work."
US STOCKS-Wall St set to tumble after payrolls data - Reuters UK
* May U.S. non-farm payrolls well short of expectations
* China PMI falls
* Futures off: Dow 203 pts, S&P 23.8 pts, Nasdaq 42.5 pts (Adds data, updates prices)
NEW YORK, June 1 (Reuters) - Wall Street was set to tumble on Friday after U.S. jobs growth showed an anemic addition to the workforce, compounding worries over soft Chinese factory data and triggering fears of global recession.
The Labor Department said employers created a paltry 69,000 jobs last month, the weakest in a year, and the unemployment rate rose to 8.2 percent. Economists polled by Reuters had expected non-farm payrolls to increase 150,000.
China's economy showed signs of a broadening slowdown as its official purchasing managers' index fell to 50.4 in May from April's 13-month high of 53.3, signaling a deeper-than-forecast deterioration in demand at home and abroad.
"It's a continuation of the slowdown in the economic numbers we've been seeing domestically over the last couple of months," said Darrell Cronk, regional chief investment officer for Wells Fargo Private Bank in the Northeast, in New York.
"I would expect a relatively ugly day in the markets."
S&P 500 futures fell 23.8 points and were well below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures dropped 203 points, and Nasdaq 100 futures lost 42.5 points.
In Europe, Markit's Eurozone Manufacturing Purchasing Managers' Index dropped to 45.1 in May from 45.9 in April.
Banking shares dropped in premarket, with JPMorgan Chase & Co down 2.4 percent to $32.34 and Banc of America Corp down 3.1 percent to $7.12. The Select Sector SPDR Financial ETF lost 2.2 percent.
Investor concern has been rising about the stability of Spain's banking system and the euro zone as a whole, at the same time U.S. data has shown tepid economic growth.
The worries sent the benchmark S&P 500 index down 6.3 percent in May and investors fleeing to safe-haven government securities.
European shares fell to a fresh five-month low on growing signs that the debt crises in Spain and Greece were hurting the region's biggest economies. The FTSEurofirst 300 index was down 2.3 percent.
(Reporting By Chuck Mikolajczak; Editing by Dave Zimmerman)
How Kickstarter facilitates financial investments - Reuters Blogs
Remember Flint and Tinder, the Kickstarter underwear project I wrote about last month? Well, it ended up raising $291,493 in all — almost ten times its initial $30,000 goal. In that sense, it’s like a mini-Pebble, the watch which raised $10,266,845 on Kickstarter and exceeded its goal by a factor of 102. Pebble was quite open about the fact that they were going to Kickstarter after having been rejected by more conventional sources of funding: a lot of VCs turned them down before the Kickstarter campaign went viral. And now, with $10 million in the bank, it’s not clear whether Pebble wants or needs any VC money at all.
Flint and Tinder, by contrast, does want more money, despite raising much more than it asked for. I got an email from Jake Bronstein, the man behind it, today: “I am currently trying to raise money from investors for this project,” he wrote, “to finance CapX improvements to the factory to make our product truly competitive”.
Actually, I should be a bit more accurate: I was copied on an email from Jake Bronstein, which was actually addressed to Reuters’s editor-in-chief, Steve Adler. The subject line? “I think one of your reporters is harassing me / can someone have a look”.
Bronstein’s request was that I remove a link to a YouTube video which I included in an update to my post. It seems that now he’s asking real investors for money, rather than just people who think it’s a good idea to buy underwear on Kickstarter, those investors will want to do things like check out Flint and Tinder’s website. After all, the Kickstarter page says that the main way the company can be competitive is by selling directly from its website. But if you try to find Flint and Tinder’s website, by Googling it, you’ll find that no such site exists. Instead, my post is the top search result.
Bronstein doesn’t want potential investors following that particular link, for much the same reason as he has now taken down his highly NSFW website, jakebronstein.com. That URL now redirects to his about.me page; that, in turn, links to his Wikipedia entry, which features an incomplete list of his publicity stunts, and describes his occupation as “Ex-Road Ruler, current-prankster and blogger Zoomdoggle”. But Bronstein has erased Zoomdoggle, too, from the internet.
Kickstarter is quite clear that it doesn’t vet projects, or their founders. And no one expects Flint and Tinder’s 5,578 funders to have done some kind of due diligence on the company. But this project is very far from Kickstarter’s core mission of providing funding for one-off creative projects. Kickstarter’s very first rule is unambiguous on this front:
1. Funding for projects only.
A project has a clear goal, like making an album, a book, or a work of art. A project will eventually be completed, and something will be produced by it. A project is not open-ended. Starting a business, for example, does not qualify as a project.
Flouting this restriction, Bronstein talks on his Kickstarter page about how “for every 1000 pair we sell per month, 1 full-time job has to be added back to the assembly line”. That seems pretty open-ended to me. And if he’s now looking for investors, that sounds like he’s starting a business, too. Not to mention the fact that in a follow-up email today, Bronstein said that my ego was getting in the way of his “earnest attempts at job creation”.
In a comment he left on my original post, Bronstein accused me of not being diligent in researching his background on the internet — which is kinda funny, given that he seems to be trying as hard as possible for people to do just that, both by taking down his own websites and by asking sites like Reuters to remove content about him.
Still, Flint and Tinder is clearly more than just another instance of Kickstarter looking like the Home Shopping Network. It’s also something rarer: an instance of Kickstarter being used as a way of making a company much more attractive to potential investors.
This happens in two ways. One is that a successful Kickstarter project acts as proof-of-demand: potential investors in Flint and Tinder, for instance, now know that there are thousands of people out there who, quite literally, buy into its project. And on top of that, Kickstarter funds constitute a source of unbelievably cheap unsecured debt, with a zero interest rate and no set maturity date; in the case of Flint and Tinder, moreover, that financing is repayable entirely in underwear.
Once a company has the best part of $300,000 in interest-free financing repayable at a time of its choosing in underwear, the famous underpants gnome business model starts looking actually rather attractive. I’m not entirely sure where or how Kickstarter funds would feature in an investment banker’s model of a company’s capital structure. They’re basically equity, without any kind of ownership or voting rights, which is offset against a set of future deliverables. In any case, Kickstarter funds will nearly always make any company’s balance sheet look a good deal healthier.
And so Kickstarter becomes more than just a way of funding projects, and more than just a way of demonstrating demand for as-yet-nonexistent products. It can also be a way of making your company a lot more attractive to potential investors. Kickstarter has made the decision that it’s not getting into the crowdfunding business as envsiaged in the JOBS Act. But in a way, it’s being dragged into investment markets whether it likes it or not. Unless, of course, it starts cracking down on the likes of Flint and Tinder.
Stocks post worst month in three years in May - The Guardian
Liverpool Manager Brendan Rodgers: Enough Money to Spend - ibtimes.co.uk
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Liverpool captain Steven Gerrard has, meanwhile, confirmed Werner's claim Rodgers was always first choice and confirmed also he had spoken to the new boss ahead of the appointment.
"I'm excited, I'm really looking forward to working with Brendan. We shared a phone call last night and I'm really looking forward to meeting him in person and getting started. What I can go on record and say is that Brendan was the first choice. I was in the loop all the way through the last few weeks with the Liverpool board and owners - and Brendan Rodgers was the first choice," ESPN quoted Gerrard as saying.
"When he was in the running for the job, I was speaking to the Chelsea boys and some of the players who had worked with him as well. They all spoke highly of him, said he was a good coach and a good guy: very honest and supports his players very well. That's all you ask for as a player," the England captain added.
Rodgers received praise from football pundits and fans across the globe last term for effectively deploying his positive, Barcelona-inspired tiki-taka style of play at Swansea's first season in the English top-flight and managing to finish 11th in the table.
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