Evening Headlines
Bloomberg:
- Draghi Credibility at Stake as ECB Tries to Save The Euro. European Central Bank President Mario Draghi’s task today is straight-forward: produce a plan to save the euro. Draghi pledged more than a month ago to do what’s needed to preserve the single currency; now he’s under pressure to follow through with details of a bond-purchase plan to lower borrowing costs in Spain and Italy and prevent a breakup of Europe’s monetary union. Expectations have built to such an extent that Draghi risks losing credibility unless he delivers at a press conference after today’s Governing Council meeting in Frankfurt, economists and investors said. “Draghi has put his credibility squarely on the line,” said Julian Callow, chief European economist at Barclays Capital in London. “He has made it his business to save the euro, so he is going to be called on that.” Draghi told the European Parliament this week that the ECB needs to intervene in bond markets to wrest back control of interest rates in a fragmented euro-area economy and save the currency, according to a recording of a closed-door session obtained by Bloomberg News. His blueprint, sent to council members just two days ago and opposed by Germany’s Bundesbank, proposes unlimited buying of government debt with maturities of up to about three years, two central bank officials said yesterday on condition of anonymity. Rate Cut? Draghi will hold a press conference at 2:30 p.m., 45 minutes after the ECB announces its interest-rate decision. Economists are split over whether policy makers will lower the benchmark rate to a new record low, with 30 of 58 in a Bloomberg survey predicting a quarter-point cut to 0.5 percent and 28 forecasting no change.
- VeriFone(PAY) Falls as Quarterly Revenue Misses Estimates. VeriFone Systems Inc. (PAY) tumbled in late trading after the maker of credit-card terminals reported third-quarter sales that fell short of analysts’ estimates, citing unfavorable currency swings, competitive pressure in Europe and a fire in Brazil. The shares of San Jose, California-based VeriFone dropped as much as 17 percent to $29.50 after closing at $35.38 in New York. The stock had declined less than 1 percent this year.
- Iron Ore Will Drop to $50/ton Long Term, Andy Xie Says. Xie keeps forecast that ore will hit %50/t, probably before mid-2013, and stay down permanently, according the economist. Any rebound will be small, temporary because of high short-term steel inventory, lack of long-term growth prospects. Steel production is still rising, while demand declines as Chinese local govts resist production cuts, arrange financing to keep mills in their cities producing; "This story will come to a crashing end," he said. Steel, ore won't bottom until production stops, inventory is liquidated and "you see some bankruptcies in the steel industry." Steel demand unlikely to grow as construction of highways, railroads, properties has peaked; car market will probably see single-digit growth.
- Citigroup(C), Goldman(GS), UBS(UBS) Sued Over Mortgage-Backed Bonds. Citigroup Inc. (C), Goldman Sachs Group Inc. (GS) and UBS AG (UBSN) were sued separately in New York over losses on $368.7 million in mortgage-backed securities. The three banks made “material misrepresentations” about the loans backing the securities and about the transfer of the loans into trusts, according to filings today in New York State Supreme Court.
- Chinese Solar-Panel Exporters Face Threat of EU Tariffs. The European Union threatened to impose tariffs on solar panels from China in the wake of similar U.S. trade protection, saying EU producers may be victims of unfair price undercutting. The EU opened a probe into whether Chinese manufacturers of solar panels sell them in the 27-nation bloc below cost, a practice known as dumping. The inquiry covers crystalline silicon photovoltaic modules or panels and cells and wafers used in them. At stake is whether European competitors such as Solarworld AG, Germany’s largest maker of the renewable-energy technology, win levies to counter growing competition from China. The investigation will determine whether solar panels from China are “being dumped and whether the dumped imports have caused injury to the union industry,” the European Commission, the EU’s trade authority in Brussels, said today in the Official Journal.
- Europe Outlook Dims as Bank Meets. Downturn Deepened Over Summer, Complicating Choice for ECB Officials.
- U.S. Competitiveness Slips. Northern European countries topped the overall ranking of a global competitiveness report released Wednesday by the World Economic Forum, as the United States slipped for the fourth year in a row. "In addition to the burgeoning macroeconomic vulnerabilities, some aspects of the country's [United States] institutional environment continue to raise concern among business leaders, particularly the low public trust in politicians and a perceived lack of government efficiency," said the WEF, a think tank that also hosts the annual meeting of global business and political leaders in the Alpine town of Davos, Switzerland.
- Retiree Health Costs Rising. State and local governments in New York will have to come up with an additional quarter of a trillion dollars to pay the entire tab for retiree health care, according to a new report. The $250 billion bill for retiree health coverage is up from $210 billion two years ago, said the study issued by the Empire Center for New York State Policy on Wednesday. Referred to as "other post-employment benefits," or OPEB, the unfunded obligations represent a troubling strain on budgets.
- Desperately Seeking Middle-Class Taxes. What Obama's critique of Ryan tells us about Obama's budget plans. Democrats in Charlotte are pounding away at the savage budget cuts that Mitt Romney and Paul Ryan supposedly favor and their phantom plan for "raising taxes on the middle class," as President Obama puts it. The truth is the opposite, but table that for a moment. The President seems not to realize his critique is really a scorching if implicit indictment of his own time in office.
Business Insider:
- Subprime Auto Lending Is Bigger Today Than It Was At The Peak Of The Credit Bubble.
- Angry Democratic Delegates Booed As The Party Added 'God' And Support Of Jerusalem To The Platform. (video)
- Anderson Cooper Says Democratic Congresswoman In 'Alternate Universe' After She Explains Jerusalem Platform Fiasco. (video)
- 4 Things Everyone Gets Wrong About The Australian Commodity Bust.
- MORGAN STANLEY(MS): The Global Economy Continues To Sink Deeper Into The Twilight Zone.
Zero Hedge:
- Help Wanted Ads Plunge By Most Since Lehman Collapse. (graph)
- Citi's(C) 'Red Flag' Warning From The Credit Markets.
- Retirement Reality Full Frontal: Why Every 30 Year Old Must Risk It All To Be Able To Retire.
CNBC:
- US Will Go Over the 'Fiscal Cliff': Orszag. The U.S. will go over the fiscal cliff early next year before a deal gets cut in January to address the country’s fiscal problems, Peter Orszag, a former Obama administration official and current vice chairman at Citigroup, told CNBC’s "Closing Bell" on Wednesday. “I think what's going to happen is probably early next year, not late, next year, you will have a big fiscal deal that gets cut,” he said.
- World Bank Appoints Chief Economist From India.
NY Times:
ABC News:
- Secret Service Investigating Purported Ransom of Mitt Romney’s Tax Returns. Someone claims to have stolen years of Mitt Romney’s tax returns from a Tennessee office of the financial firm PricewaterhouseCoopers, and the Secret Service is investigating what appears to be a ransom scheme. The local Democratic and Republican parties in Williamson County, Tenn., where the PricewaterhouseCoopers office is located, both received packages, each containing a thumb drive and a letter outlining a competitive-bidding ransom scheme that appears designed to pit Republicans and Democrats against each other over the release of Romney’s taxes.
- U.S. debt $417 billion below the debt ceiling. The debt ceiling is currently set at $16.394 trillion. At the end of August, the amount of debt subject to that limit -- which excludes certain types of debt -- was $15.977 trillion, roughly $417 billion below the cap. Since the government typically borrows between $100 billion and $125 billion a month, that means it's on track to hit the ceiling sometime in December. But the Treasury Department will likely be able to use "extraordinary measures" to keep the debt just below the legal limit for a couple of months. Bottom line: Congress will likely need to raise the ceiling in early 2013 or Treasury will risk defaulting on the country's legal obligations by failing to pay all of its bills in full and on time.
- Daily Presidential Tracking Poll. The Rasmussen Reports daily Presidential Tracking Poll for Wednesday shows Mitt Romney attracting support from 48% of voters nationwide, while President Obama earns 45% of the vote. Two percent (2%) prefer some other candidate, and five percent (5%) are undecided.
- Romney raps Obama over growing debt, food stamp record. Republican presidential candidate Mitt Romney blasted U.S. President Barack Obama over the size of the national debt and the record number of Americans on food stamps, in a jab on the eve of a major speech by the Democrat. Romney said "two big numbers out this week" prove that Americans are not better off than when Obama took office in 2009. "We've gone from $10 trillion that the president inherited from all prior presidents to $16 trillion," Romney told reporters in the swing state of New Hampshire. The Treasury Department this week announced that the public debt had surpassed $16 trillion. "The other number's forty-seven. Forty-seven million now on food stamps. When he came to office there were 32 million. He's added 15 million people," Romney said. He was referring to an Agriculture Department report on Tuesday that showed the number of people on food stamps jumped to a record high of 46.7 million in June.
- None of note
- Asian equity indices are -.75% to +.50% on average.
- Asia Ex-Japan Investment Grade CDS Index 149.0 -1.5 basis points.
- Asia Pacific Sovereign CDS Index 122.0 unch.
- FTSE-100 futures +.29%.
- S&P 500 futures +.22%.
- NASDAQ 100 futures +.20%.
Earnings of Note
Company/Estimate
- (COO)/1.29
- (ULTA)/.51
- (MFRM)/.28
- (NAV)/-1.41
- (HOV)/-.14
8:15 am EST
- ADP Employment Change for August is estimated to fall to 140K versus 163K in July.
8:30 am EST
- Initial Jobless Claims are estimated to fall to 370K versus 374K the prior week.
- Continuing Claims are estimated to fall to 3315K versus 3316K prior.
10:00 am EST
- ISM Non-Manufacturing for August is estimated to fall to 52.5 versus 52.6 in July.
11:00 am EST
- Bloomberg consensus estimates call for a weekly crude oil inventory decline of -4,950,000 barrels versus a +3,778,000 barrel gain the prior week. Distillate supplies are estimated to fall by -1,550,000 barrels versus a +873,000 barrel gain the prior week. Gasoline inventories are estimated to fall by -3,000,000 barrels versus a -1,509,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to fall by -1.5% versus unch. the prior week.
Upcoming Splits
- None of note
Other Potential Market Movers
- The ECB rate decision, Spanish/French bond auctions, Eurozone GDP data, Challenger Job Cuts report for August, ICSC Chain Store Sales report for August, BoE rate decision, Australia trade data, OECD economic outlook, weekly Bloomberg Consumer Comfort Index, (SYK) analyst meeting and the (QLGC) analyst day could also impact trading today.
No comments:
Post a Comment