Evening Headlines
Bloomberg:
- Obama Said to Appoint Elizabeth Warren as Interim Head of Consumer Bureau. President Barack Obama plans to appoint Elizabeth Warren as the interim head of the new Consumer Financial Protection Bureau as early as this week, according to a person familiar with the matter. The consumer bureau is one of the biggest regulatory consequences of a Wall Street overhaul Obama signed into law in July. The bureau will have a $400 million budget and the power to impose federal rules on mortgages, credit cards, layaway plans and other consumer credit products.
- Asian Stocks Set for 'Zero' Return, May Turn Negative, Deutsche Bank Says. Asian stocks are set for “zero percent” returns over the next 12 months as corporate earnings growth falters, according to Deutsche Bank AG. The brokerage is “underweight” in Taiwan, India and China, “neutral” on South Korea, Thailand and Indonesia, and “overweight” in the Philippines, Hong Kong, Malaysia and Singapore, strategists led by Ajay Kapur wrote in a report yesterday. “We could end up on the negative side of that zero expected return,” Kapur wrote, citing “impending earnings-per- share disappointments, high relative valuations in Asia, the probability of a stronger U.S. dollar, diminished pricing power, falling terms of trade and deteriorating free liquidity.”
- Hedge-Fund Lobbying Group Opposes New U.S. Rules for High-Frequency Trades. The U.S. hedge-fund industry’s biggest lobbying group urged regulators against cracking down on high-frequency trading, saying new rules would increase costs for all investors and make markets less liquid.
- SEC Questions Trading Crusade as Market Makers Disappear. The U.S. Securities and Exchange Commission has spent 15 years remaking the stock market into 11 competing exchanges and hundreds of computer-driven traders. In the process it has virtually eliminated the traditional market makers who bought and sold stocks when no one else would. Now the SEC is concerned the revolution has gone too far, leaving markets vulnerable when selling starts to snowball.
- Kohl's(KSS) Looking at Prospect of Dividend, Share Buybacks.
- U.S. Expects to Sue Over Deepwater Horizon Disaster. The U.S. Justice Department said Monday that it expects to file a civil suit in relation to the Deepwater Horizon disaster, asking the court handling hundreds of private cases to give government and state plaintiffs special consideration. In a court filing, the department said the U.S. government had "potential civil claims arising from the spill," citing several statutes under which the federal government could bring suits and claim damages, including the Clean Water Act and the Oil Pollution Act. "At this juncture, the United States expects that it may file a civil complaint related to the Deepwater Horizon disaster under these provisions and possibly others," the Justice Department said in its filing.
- Ad Targets McDonald's(MCD). Group Seeks to Link Chain to Heart-Disease Deaths in D.C.
- The 1099 Insurrection. The White House fights an effort to ease a burden on small business. You might not have seen it reported, but the Senate will vote this morning on whether to repeal part of ObamaCare that it passed only months ago. The White House is opposed, but this fight is likely to be the first of many as Americans discover—as Nancy Pelosi once famously predicted—what's in the bill. The Senate will vote on amendments to the White House small business bill that would rescind an ObamaCare mandate that companies track and submit to the IRS all business-to-business transactions over $600 annually. Democrats tucked the 1099 reporting footnote into the bill to raise an estimated $17.1 billion, part of the effort to claim that ObamaCare reduces the deficit by $100 billion or so.
- 'Bridge Building' and the WTC Mosque. Feisal Abdul Rauf has suggested Americans could find themselves "under attack" if he doesn't get his way.
- San Francisco Fed Warns of Sluggish Growth, Weak Wages, And Falling Inflation.
- Broke Los Angeles Spent $578 Million On This Extravagant Public School.
Politico:
- Tea Party to GOP: Defund Health Care. A major tea party group is asking Republican congressional leaders to include cutting funds to implement the new health care law in a contract the GOP plans to roll out later this month.
- Hill Battles Over Bush Tax Cuts. With their backs to the wall, Democrats want two things from Congress this fall: a fast break and a political bank shot — melding small-business relief with a fight over Bush-era tax cuts for the wealthy.
- House Lawmakers Urge Action on China Currency. Ninety-three U.S. lawmakers have signed a letter urging Democratic leaders in the House of Representatives to schedule a vote on a bill to get tough with China over its currency exchange rate practices, a lawmaker's office said on Monday. Many members of Congress believe China undervalues its currency by as much as 40 percent to give Chinese companies an unfair price advantage in world trade.
- Saudi Reveals Large Unconventional Gas Reserves. Saudi Arabia has large reserves of unconventional gas that could help the kingdom to meet soaring domestic energy needs and leave more crude oil available for export, the head of its national oil company has said. Khalid al-Falih, chief executive of Saudi Aramco, the world’s biggest oil company, told the Financial Times that the kingdom could hold hundreds of trillions of cubic feet of unconventional resources such as shale gas, more than doubling its proved reserves of 280,000bn cubic feet.
- Bankers Fear Race to Surpass Basel III. Top bankers in the UK, US and Switzerland are braced for their national regulators to impose tougher capital requirements than those required by Sunday’s landmark global agreement, even as investors bid up bank shares on relief that the standards were not more rigorous.
- US, Eyeing Iran, Moves on $60 Billion Saudi Arms Deal. The Obama administration will soon notify Congress of an arms sale to Saudi Arabia worth up to $60 billion, U.S. officials said on Monday, a potentially record-breaking deal that may help counter Iran's growing regional muscle.
- Chinese Develloers' High-Yielding Bonds May Carry Sting. The good news first: people who invested in bonds issued by newly listed mainland developers are getting record high interest rates. But the bad news is that the risk of losses on these bonds is mounting as the housing market shows signs of slowing.
Citigroup:
- Reiterated Buy on (MGA), target $98.
- Asian equity indices are -.25% to +.50% on average.
- Asia Ex-Japan Investment Grade CDS Index 114.0 -3.0 basis points.
- Asia Pacific Sovereign CDS Index 110.0 -6.0 basis points.
- S&P 500 futures +.02%.
- NASDAQ 100 futures -.03%.
Earnings of Note
Company/Estimate
- (CBRL)/1.11
- (KR)/.36
- (BBY)/.44
- (PLL)/.64
8:30 am EST
- Advance Retail Sales for August are estimated to rise +.3% versus a +.4% gain in July.
- Retail Sales Less Autos for August are estimated to rise +.3% versus a +.2% gain in July.
- Retail Sales Ex Auto & Gas for August are estimated to rise +.4% versus a -.1% decline in July.
- Business Inventories for July are estimated to rise +.7% versus a +.3% gain in June.
- None of note
- The NFIB Small Business Optimism Index, IBD/TIPP Economic Optimism Index, weekly retail sales reports, ABC Consumer Confidence report, (TLEO) Analyst Day, (SLE) Analyst Day, (NUVA) Investor Day, (CSCO) Analyst Conference, (VAR) Investor Meeting, Barclays Financial Services Conference, Robert W. Baird Health Care Conference, Deutsche Bank Technology Conference, BofA Merrill Investment Conference and the Wedbush Morgan Clean Tech Conference could also impact trading today.
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