- Chinese companies’ borrowing costs have never been so low. That’s little consolation to firms cutting debt rather than investing amid a slowing economy. The amount of local yuan bond sales minus maturities fell 39 percent in August from a year earlier for non-financial firms to 124 billion yuan ($18.6 billion), data compiled by Bloomberg show. Net issuance since March 31 has slowed to 496 billion yuan after a record 810 billion yuan in the first quarter of 2016. Yields on AA+ and AA rated five-year securities dropped to record lows this month. The decline in bond financing and the lowest fixed-asset investment growth since 1999 suggest central bank monetary easing will have trouble reviving growth that’s forecast to slow through next year. China must balance cutting corporate debt, which more than doubled in five years to 111.7 trillion yuan at the end of 2015, with steps to revive the world’s second-biggest economy.
- Asian Stocks Gain Amid U.S. Rebound While Japan Shares Retreat. Asian stocks rose, following a rebound in U.S. shares on signs of strength in the American economy, while equities in Japan slumped after the yen snapped a four-day slide. The MSCI Asia Pacific Index climbed 0.3 percent to 138.33 as of 9:16 a.m. in Tokyo.
Wall Street Journal:
- Food Price Deflation Cheers Consumers, Hurts Farmers, Grocers and Restaurants. Farm Belt cutbacks hit more businesses even as consumers save big at the grocery store.
- EU Set to Rule Apple Tax Deals With Ireland Illegal. Decision likely to aggravate trans-Atlantic tensions over the bloc’s probes into tax deals secured by U.S. companies.
- Traders Bet Dollar Will Keep Climbing. The U.S. currency hit its highest level in three weeks on Monday, reflecting expectations that the Federal Reserve could increase short-term interest rates as soon as next month.
- HuffPo "Revoked Publishing Access" Of Journalist After 'Hillary Health' Story: "It's Orwellian...I'm Scared".
- Chicago Records "Most Violent Month In 20 Years".
- Germans "Lose Faith In Banks", Rush To Buy Safes.
- Japanese Government Now The Largest Shareholder Of 474 Big Companies.
- Will The Election Be Hacked: FBI Finds "Foreigners" Breached Two State Election Databases.
- As Vancouver's Housing Market Implodes, Furious Chinese Envoy Slams Real Estate Tax. (graph)
- The "Devastating" Truth Behind America's Record Household Net Worth.
- Recent Surge In Inner-City Heroin Overdoses "Unlike Anything We've Seen Before".
- Why A Record Number Of College Grads Are Working Minimum Wage Jobs.
- Mission Creep - How The Fed Will Justify Maintaining Its Excessive Balance Sheet.
- Hershey(HSY) Plunges After Mondelez Pulls Offer To Buy Company.
- Risk-Parity Panic Looms As Bonds, Stocks, Gold Rally; Reject Fed Hawkish Chatter. (graph)
Financial Times:Night Trading
- Mexico spends $1bn to lock in oil export prices for 2017. Hedge of $42 a barrel is part of move to protect public finances as economy faces further pressure.
- Asian equity indices are -.25% to +.5% on average.
- Asia Ex-Japan Investment Grade CDS Index 113.25 -.5 basis point.
- Asia Pacific Sovereign CDS Index 41.75 +1.25 basis points.
- Bloomberg Emerging Markets Currency Index 72.65 -.05%.
- S&P 500 futures -.02%.
- NASDAQ 100 futures -.02%.
Earnings of Note
- The S&P CoreLogic CS 20-City Composite is estimated to fall -.1% versus a -.05% decline in May.
- The Consumer Confidence Index for August is estimated to fall to 97.0 versus 97.3 in July.
- (CHD) 2-for-1
- The Japan Industrial Production report, weekly retail sales reports and the Jefferies Semi/Hardware/Communications Infra Summit could also impact trading today.