Evening Headlines
Bloomberg:
- Euro Holds Gain Before Luxembourg’s Juncker Visits Greece. The euro remained higher before Luxembourg Prime Minister Jean-Claude Juncker visits Greece tomorrow to discuss the country’s request for an extension to its fiscal adjustment program. The 17-nation currency headed for an advance versus most of its 16 major counterparts this month after Spain’s benchmark yields slid to a seven-week low, supporting the outlook for a bill auction today. Demand for the euro was tempered after Germany’s Bundesbank criticized European Central Bank bond buying. Australia’s dollar climbed after minutes of the Reserve Bank’s last meeting showed that policy makers see domestic growth overshadowing a “fragile” global outlook. “The hurdles are still high, but European leaders do seem to be working towards more positive results,” said Callum Henderson, global head of currency research at Standard Chartered Plc in Singapore. “This is a period of calm before a resumption of the bear trend for the euro.” The bank predicts the euro will be at $1.18 by Sept. 30, Henderson said.
- Greece Must Decide If Best in Euro, Merkel Ally Tells Rheinische. Greece’s economic changes are too slow and the government must consider next month whether the country should stay in the euro area, Michael Meister, a senior lawmaker in German Chancellor Angela Merkel’s governing party, was quoted as saying by the Rheinische Post. Meister, the Christian Democratic Union’s deputy parliamentary leader, said the Greek government must ask itself in mid-September whether it has majority support in parliament and among the people for the required painful overhaul, according to the newspaper, which cited an interview. Meister said a Greek exit would be regrettable, Rheinische reported. Reports so far indicate that the speed of reform in Greece isn’t sufficient, with privatization lagging in particular, Meister was quoted as saying. Any proposal for a third international bailout for Greece wouldn’t get majority backing in Merkel’s governing coalition, he was quoted as saying in the comments e-mailed to other media in advance of publication.
- Kloppers Buys Time for BHP Revival as Profit Forecast Drops. BHP Billiton Ltd. (BHP) Chief Executive Officer Marius Kloppers, under investor scrutiny following the failure of three deals, bought himself some time by waiving his bonus after lopping $2.84 billion off the value of BHP’s shale gas assets. The question is, how much? The world’s biggest mining company is forecast to report a 38 percent drop in earnings to $14.6 billion in the year ended June 30, according to the average of 18 analyst estimates compiled by Bloomberg. That will include writedowns on shale and at the nickel unit, which Kloppers announced earlier this month along with his decision to forgo his bonus.
- Almost Half of Doctors Burned Out by Rising Workload. About 1 in 2 doctors are burned out, showing signs of emotional exhaustion and little interest in work as patient loads increase, U.S. researchers found. Doctors working in emergency, family and internal medicine were the most likely to feel drained, according to the study released today in the Archives of Internal Medicine. Researchers said burnout also was tied to long hours, with 37 percent of physicians working more than 60 hours a week. The number of doctors reporting feeling burned out is surprising and troubling, said Tait Shanafelt, a professor of medicine at the Mayo Clinic and lead study author. He said the trend may cause physicians to quit or reduce their workload just as demand for doctors is increasing with the aging population. The issue may get worse as 32 million Americans are expected to get health insurance by 2014 under a new U.S. law, increasing the number of people seeking medical care, he said. “Right at a time when we are trying to provide care to people who are uninsured and projecting workforce shortages we are seeing this burnout rate creep in, which may cause physicians to reduce workloads and consider early retirement,” Shanafelt said. He added that burnout has also been linked to medical errors and worse patient care in previous studies.
- U.S. Brokerage Audits Riddled With Deficiencies, Watchdog Finds. Auditors of U.S. brokerages failed to ensure the companies resolved deficiencies in safeguarding customer funds and meeting capital, according to a Washington- based watchdog crafting oversight under the Dodd-Frank Act. Reviews of 23 audits conducted by 10 firms found flaws in every one, the Public Company Accounting Oversight Board’s said today in a report on the Washington-based watchdog’s interim inspection program. In most cases, financial statements weren’t reviewed well enough to justify signing off on them, according to the PCAOB, which didn’t name the auditors and brokerages in the report and said they were all smaller firms.
- Wall Street Leaderless in Rules Fight as Dimon Diminished. Wall Street, the global financial community reeling from public outrage and increased regulation, is proving incapable of finding a champion to replace sidelined JPMorgan Chase & Co. (JPM) Chief Executive Officer Jamie Dimon. Dimon, 56, one of the industry’s most forceful advocates, has lost stature as his bank, the largest in the U.S. by assets, juggles multiple investigations and a $5.8 billion trading loss on wrong-way bets on credit derivatives. His peers at other big lenders are hobbled by poor performance, tarnished reputations or a reluctance to step into the breach.
- Australia’s Resource Boom Losing Steam. Australia’s multibillion-dollar spending boom on resources is losing momentum unexpectedly rapidly, with several projects on hold or cancelled as commodity prices fall and banks become less willing to lend. From copper mines in tropical Queensland state to the big iron-ore pits in the country’s arid west, mining companies are laying off workers and idling equipment until metal prices rise sufficiently. The cutbacks are largely in response to China, which needs vast amounts of coal for its power stations and iron ore for the steel frames in its high-rise buildings, but where demand for commodities has been slowing. Iron-ore prices, which hit a record last year, are now at a 2½-year low, and aluminum and nickel prices also are holding near multi-year lows.
- Buffett's Move Raises a Red Flag. A decision by Warren Buffett's Berkshire Hathaway Inc. to end a large wager on the municipal-bond market is deepening questions from some investors about the risks of buying debt issued by cities, states and other public entities. The Omaha, Neb., company recently terminated credit-default swaps insuring $8.25 billion of municipal debt. The termination, disclosed in a quarterly filing with regulators this month, ended five years early a bullish bet that Mr. Buffett made before the financial crisis that more than a dozen U.S. states would keep paying their bills on time, according to a person familiar with the transaction.
- When Kids Return Home. It's back-to-school time, but instead of sending their kids off to college, many parents are welcoming them home—particularly those in their 20s. The stagnant economy, slow hiring and college debt are some of the big factors driving people back home at a time when they used to strike out on their own. About 22% of 25- to 34-year-olds lived in multigenerational households in 2010, up from 11% in 1980, according to a Pew Research Center analysis of census data.
Business Insider:
- Early Facebook(FB) Investor Peter Thiel Has Sold The Majority Of His Stake.
- Obama Visited This Apple Farm, But The Management Was Not Happy About His 'You Didn't Build That' Comment.
- MITT ROMNEY, GOP: It's Time To Audit The Fed.
Zero Hedge:
- When Japan Goes Japanese: Presenting The Terminal Keynesian Endgame In 14 Charts.
- Career Risk Panic: Only 11% Of Hedge Funds Are Outperforming The S&P In 2012.
- Velocity of Money Worse Than The 1930s. (graph)
NY Times:
- Among Entrepreneurs, Romney Leads By 20. A new Rasmussen Reports national telephone survey shows that among those who are self-employed or own their own business, Mitt Romney enjoys a 20-point lead. Fifty-six percent (56%) favor Romney, and 36% prefer the president.
- Regional airlines face closings, bankruptcy. They face significant challenges, as the big airlines they often fly for are phasing out smaller and costlier regional jets and cutting some low-traffic regional routes to focus on those that are more lucrative.
- Expedia(EXPE), Marriott(MAR), others face U.S. price-fixing lawsuit. Expedia Inc, Hilton Worldwide Inc and other large hotel retailers and operators were accused in a federal lawsuit in California of conspiring to fix hotel room prices as they battled small online retailers who sold rooms more cheaply. Two consumers are seeking class action status for the suit filed on Monday in California federal court, which alleges the hotels teamed with online room sellers to set minimum rates on rooms and is seeking unspecified money damages.
- Urban Outfitters(URBN) beats as styles work with shoppers. Clothing retailer Urban Outfitters Inc's quarterly results handily b eat Wall Street expectations as its namesake store attracted more shoppers, sending its shares up 17 percent af t er the bell. Urban Outfitters, criticized for unattractive merchandise, especially at its Anthropologie unit, has been trying to turn around its business by improving merchandise, shuffling its management and stocking up prudently.
- U.S. muni market riled by Fed report on defaults. The Federal Reserve Bank of New York has riled analysts and other participants in the U.S. municipal bond market with a report issued last week finding that defaults are more prevalent than credit rating agencies suggest. The report, which included non-rated debt, found that muni defaults "happen much more frequently than most casual observers are aware".
MNI:
- No China RRR Cut Now. The PBOC's injection of liquidity via open market operations are adequate to ensure market liquidity for now, citing a person close to the State Council. The Chinese government is worried that overly aggressive easing will stoke property prices as authorities attempt to rein in housing bubbles.
- The China Banking Regulatory Commission asked domestic banks to pay attention to overseas risk exposure.
- None of note
- Asian equity indices are unch. to +.50% on average.
- Asia Ex-Japan Investment Grade CDS Index 145.50 -2.0 basis points.
- Asia Pacific Sovereign CDS Index 123.0 -2.0 basis points.
- FTSE-100 futures +.19%.
- S&P 500 futures +.01%.
- NASDAQ 100 futures +.06%.
Earnings of Note
Company/Estimate
- (TECD)/1.17
- (DSW)/.62
- (MDT)/.85
- (BKS)/-.90
- (ADI)/.56
- (INTU)/.06
- (DELL)/.45
- (WSM)/.41
- None of note
Upcoming Splits
- None of note
Other Potential Market Movers
- The Fed's Lockhart speaking, Spanish Bill Auction and the weekly retail sales reports could also impact trading today.
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