Bloomberg:
- China Finance Chief Lou Says 6.5% Growth Wouldn’t Pose Problem. Chinese Finance Minister Lou Jiwei said a 6.5 percent economic-growth rate wouldn’t be a “big problem,” signaling the government may tolerate a slower pace of expansion than officials have previously indicated. Lou, speaking yesterday at the U.S.-China Strategic and Economic Dialogue in Washington, also said he’s confident in achieving a 7 percent growth rate this year. That’s lower than the government’s 2013 target of 7.5 percent, given in March. First-half expansion was probably below 7.7 percent “but not too far from it,” he said. His comments suggest China is prepared to allow the economy to slow further from a pace that’s already at risk of falling to a 23-year low this year as Premier Li Keqiang’s government focuses on policy changes to create more-sustainable expansion. The statistics bureau reports second-quarter gross domestic product on July 15, with the median estimate of analysts for a 7.5 percent increase from last year. “We don’t think 6.5 percent or 7 percent will be a big problem,” Lou said at a press briefing in response to a question on whether there’s a limit on slower growth that officials will tolerate. “It’s difficult to give you a limit. But from the data we have, we have the confidence.”
- Toxic China Lake Incites Next Generation. “My parents were more focused on putting food on the table,” said Chen, sitting in one of his Mr. Cake shops sporting black Ray-Ban sunglasses and a Bluetooth headset. “But for us, we’re living very well and we want a better quality of life. We want the things we’re eating to be the best, we want the place we’re living in to be the best, we want the air we’re breathing to be the best.” Chen’s concerns help explain why China’s new leaders have signaled they are willing to endure the pain of slower growth as they push a more durable economic model that buttresses the Communist Party’s legitimacy. The nation is entering uncharted territory -- navigating the demands of a newly vocal middle class without the democratic and civil institutions that helped Japan and the U.S. clean up environmental damage in the 1970s.
- China Swap Rate Rises in Week as PBOC Refrains From Adding Funds. China’s one-year interest-rate swap climbed this week on speculation the central bank will refrain from adding funds to markets after inflation quickened in June. The People’s Bank of China didn’t inject capital into the financial system this week for the first time since May, data compiled by Bloomberg show. Consumer prices in Asia’s largest economy rose 2.7 percent in June from a year earlier, the most in four months, official figures showed July 9.
- Asian Stocks Extend U.S. Jump on Stimulus as Copper Gains. Asian stocks rose, with the regional benchmark headed for its biggest weekly gain since April, on optimism policy makers from the U.S. to Japan will maintain stimulus. Metals led commodities lower, while the won climbed. The MSCI Asia Pacific Index added 0.2 percent to 135.39 at 12:31 p.m. in Tokyo.
- Gold Heads for Best Week Since October 2011 on Stimulus Outlook. Spot gold traded at $1,283.62 an ounce by 11:50 a.m. in Singapore from $1,286.20 yesterday, when prices climbed for a fourth day to $1,298.73, the highest since June 24. The metal is poised for a 4.9 percent gain this week. Holdings in the SPDR Gold Trust, the biggest bullion-backed exchange-traded product, were unchanged yesterday after declining for four days.
- Rubber Set for First Weekly Loss in Four as Yen Reduces Appeal. Rubber declined, heading for the first weekly loss in four, after Japan’s currency rebounded, weakening the appeal of yen-denominated futures. Rubber for delivery in December on the Tokyo Commodity Exchange lost as much as 1.2 percent to 242.2 yen a kilogram ($2,440 a metric ton) after settling yesterday at the highest level since July 5. Futures traded at 242.7 yen at 10:33 a.m., extending losses for this week to 1 percent.
- Draghi Impotent as Fed Trumps ECB on Yield Curve: Euro Credit. The widest gap between two- and 10- year German yields in more than a year suggests the European Central Bank is struggling to protect the region's economy from a U.S.-led surge in borrowing costs. "The steeper yield curve in the euro area effectively means an increase in funding costs for both sovereign and corporate borrowers without an associated change in inflation or growth," said Lyn Graham-Taylor, a fixed-income strategist at Rabobank Intl. in London.
- Loose Lips Sink Euro Bond Markets in Crisis: Cutting Research. Loose lips can cost Europe’s bond markets. A European Central Bank paper released last week used 25,000 news media releases between January 2009 and October 2011 to investigate how much political communications affected sovereign bond yields during the region’s fiscal crisis. The ECB study focused on public pronouncements on fiscal policy and state finances by officials. It found in the short term that certain types of commentary had a quantifiable effect on the spread between the bond yields of Greece, Ireland and Portugal over German bunds. The impact was biggest for Greece.
- Cross-Border Swaps Deal to End U.S.-Europe Regulation Overlap. U.S. and European Union financial regulators took a step toward bringing derivatives trading under an integrated framework of global regulation designed to reduce risks in the $633 trillion swaps market. The accord, announced jointly yesterday in Brussels and Washington by the EU and the U.S. Commodity Futures Trading Commission, broke a deadlock over whether the U.S. could impose its rules on trades booked in Europe. Banks and other swaps traders said the deal reduces the chance they will be forced to comply with conflicting regulatory regimes. “This shows that the CFTC recognizes that other countries and other jurisdictions have equally made a lot of progress and that they have to recognize those rules,” Ken Bentsen, president of the Securities Industry and Financial Markets Association, said in a telephone interview. “The devil’s in the details. But it would appear to be a shift in a positive way.”
- Mortgage Applications for New U.S. Homes Dropped 15% in June. Loan applications for purchases of new U.S. homes tumbled last month, a sign rising mortgage rates may have damped demand for builders, according an index released today by the Mortgage Bankers Association. The Builder Application Survey showed a 15 percent decline in loan submissions in June from the previous month, the Washington-based group said in a statement. The newly created gauge tracks application volume predominantly from mortgage units of large homebuilders across the country. The survey may be an indicator of new-home sales, since the mortgage application is typically made around the time the sales contract is signed, said Michael Fratantoni, vice president of research and economics at the Mortgage Bankers Association. A jump in mortgage rates, spurred by expectations that the Federal Reserve will reduce its stimulus program, has sparked concern that housing demand will weaken as buying costs increase.
- Obama Gets Negative Marks From Voters Upset With Policies. The Quinnipiac University survey showed 48 percent of respondents disapproving of Obama’s job performance and 44 percent approving, virtually unchanged from the 49 percent negative rating and 45 percent positive mark for him in a May poll. In an April poll, Obama was given a positive grade by 49 percent and a negative one by 45 percent.
- Disease Kills Shrimp Output, Pushes U.S. Prices Higher. Asia is fighting a new disease that has reduced shrimp output in Thailand as much as 40%, driving prices higher for Western restaurants and retailers.
- Spain Prepares Cuts in Renewable-Energy Subsidies. Moving to Curb the Threat to Public Coffers, the Government Will Estimate Projects' 'Reasonable Profitability'. Spain is preparing cuts in subsidies for renewable-energy production in an attempt to diminish their threat to public coffers, according to people familiar with an industry overhaul expected to be announced as early as Friday. They said the government would unveil a more complex formula for determining the guaranteed income that producers receive for the electricity they generate from wind- and solar-energy projects. That formula would be based on the government's estimate of a level of "reasonable profitability" for each project, depending on several factors including its age, cost, and the amount of subsidies it has already received.
- Hospitals Prescribe Big Data To Track Doctors at Work. Technology is making it easier to monitor doctors' work as patients' details are compiled electronically instead of on paper charts. Software makers are selling new tools to crunch the data. Software called Crimson offered by the Advisory Board Co. ABCO +3.55% now includes information on more than a half-million doctors, up from fewer than 50,000 in 2009.
- U.S., Firms Draw a Bead on Chinese Cyberspies. The U.S. government gave American Internet providers addresses linked to suspected Chinese hackers earlier this year as part of a previously undisclosed effort aimed at blocking cyberspying, current and former U.S. officials said. The push reflects a significant shift in levels of cooperation between the government and Internet companies amid rising concerns over hacking. It also marks a bold move by the U.S. as it takes part in high-level meetings on cybersecurity and other matters with the Chinese this week in Washington. Each side accuses the other of cyberespionage.
- A Peek at Trucking Data, and Then the Stock Surged. Glimpses of Key Figures Can Aid Investors in Truck Stocks, Soybeans, Bed Makers and Others.
- Another IRS Scandal Waiting to Happen. Federal Elections Commissioner Donald McGahn wants to rein in the bureaucracy of this sensitive agency. The political left is furious.
- House narrowly passes farm bill after Republicans carve out food stamps. The House on Thursday narrowly passed a massive farm bill, after Republicans took the risky step of carving out the food stamp program -- a move Democrats effectively boycotted. The bill passed on a 216-208 vote. Zero Democrats voted for it.
- Fed’s risky codependency with the markets. Commentary: Playing psychotherapist to the markets.
- ECB's Constancio Sees Long Period of Slow Euro Zone Growth. The euro zone is likely to see an extended period of slow economic growth and European Central Bank's policy will have to stay loose for a long time, ECB Vice-President Vitor Constancio said on Friday. Constancio, in the text of a speech to be given in Singapore, also criticized the European Commission's proposal for shutting down failing banks, saying that the planned authority should be given access to a public credit line.'
- US Senators Introduce Bill to Break Up Megabanks. A small bipartisan group of U.S. senators on Thursday introduced legislation that would break up Wall Street's megabanks by separating traditional banking activity from riskier financial services.
- SPX EBITDA GP
. (graph)
- What 'Trickle-Down' Wealth Effect? (graph)
New York Times:
- Consumer Frugality Adds to Woes in France. “It used to be elbow to elbow here,” said Hamidou Debo, a shoe vendor who sat quietly in his outdoor stall as a handful of people browsed through silver-hued sandals and black leather high-tops before shuffling away without buying. “Now the crowds are around half what they used to be.” For Mr. Debo and 2,500 other merchants in the 17-acre market on the northern edge of Paris, an economic slowdown has gripped business, and there is no telling when things might turn around. Last year, he said, he regularly made 300 to 400 euros, or $390 to $520, in sales by lunchtime. Now he barely makes 100 euros.
- Bomb, gun attacks across Iraq kill at least 44. Bombers and gunmen attacked policemen and a wake in Iraq among other targets, killing at least 44 people across the country on Thursday, in the latest burst of violence that has raised concerns about a return to civil strife. Gunmen opened fire on two checkpoints guarding oil installations on the road between Haditha and Baiji, 180 km (111 miles) north of the capital, killing 11 people, police said. In the town of Muqdadiya, 80 km northeast of Baghdad, a further 11 people were killed when a car bomb exploded at a wake. As survivors gathered to evacuate the wounded, a suicide bomber blew himself up, police said.
- Google's(GOOG) Schmidt says relationship with AppleAAPL) has improved. The relationship between Google Inc and Apple Inc has improved over the past year with the rival technology companies and sometimes partners conducting "lots and lots" of meetings, Google Executive Chairman Eric Schmidt said. Schmidt did not provide details about the nature of the meetings during comments to reporters at the annual Allen and Co media conference in Sun Valley, Idaho on Thursday. He noted that Google Chief Business Officer Nikesh Arora, who joined him at the press briefing, was leading many of the discussions. The two companies are in "constant business discussions on a long list of issues," Schmidt said.
- Ford(F) says auto industry needs more Europe output cuts. Ford Motor Co's European chief Stephen Odell on Thursday said that the industry production cuts of 1.5 million to 2 million vehicles in Europe that have occurred or are announced still leave output well above demand. Ford estimates that Europe's auto industry, after those cuts are realized, will still be making at least 4 million vehicles a year - more than market demand. Ford expects to lose $2 billion in Europe in 2013.
- Valero(VLO) sees lower Q2 earnings as costs rise. U.S. refining company Valero Energy Corp on Thursday said it expects lower second-quarter earnings as the price of some of the crude oil it processes rose. Shares of Valero fell 4 percent to $33.15 after the close of regular trading.
- U.S. Fed balance sheet grew in latest week. The U.S. Federal Reserve's balance sheet grew in the latest week as the U.S. central bank added to its holdings of Treasury debt, Fed data released on Thursday showed. The Fed's balance sheet liabilities, which are a broad gauge of its lending to the financial system, stood at $3.462 trillion on July 10, compared with $3.450 trillion on July 3.
- China’s great economic leap forward hits the wall. This was supposed to be the Asian century, but the Eastern boom is dying of exhaustion. So here’s how it looks. Years of unsustainable, credit-fuelled growth are brought to a halt by a crushing financial crisis which exposes deep structural flaws at the heart of the economy. Rarely has the assumption of ever-rising living standards looked so vulnerable, with younger generations forced to pay not just for the crippling legacy of debt their parents leave behind, but for the mounting costs of an ageing population and the consequences of decades-long environmental degradation. Economic decline, austerity and inter-generational recrimination seem to beckon as populations adjust to the true mediocrity of their circumstances.
- Renewed fear of global recession as companies rein in spending plans. Growth in spending on machinery and investment by the world’s 2,000 biggest companies has begun to contract for the first time since the Lehman crisis, led by sharp falls in China and a near collapse in Latin America.
- Tepco Fukushima Plant's Cesium-137 Levels Above Limit. Tepco detected level of radioactive Cesium-137 near Fukushima Dai-Ichi No. 3 reactor's turbine building was ~1m times higher than the regulatory limit, citing co.
- China Should Not Artificially Stimulate Growth. Ba Shusong, a researcher at the State Council Development Research Center, said China should not artificially stimulate economy for the time being, citing Ba's speech at a meeting. Stimulus will only lead to asset bubbles, Ba said. 2Q GDP growth will slow to .4% and the trend of slowdown will continue for the next few months, citing Ba.
Morgan Stanley:
- Cut Wynn Macau to Underweight, target HK$22.
- Asian equity indices are -.50% to +.50% on average.
- Asia Ex-Japan Investment Grade CDS Index 146.0 -10.5 basis points.
- Asia Pacific Sovereign CDS Index 110.0 -8.75 basis points.
- FTSE-100 futures -.08%.
- S&P 500 futures -.14%.
- NASDAQ 100 futures -.08%.
Earnings of Note
Company/Estimate
- (JPM)/1.43
- (WFC)/.93
- (WBS)/.47
8:30 am EST
- The Producer Price Index for June is estimated to rise +.5% versus a +.5% gain in May.
- The PPI Ex Food & Energy for June is estimated to rise +.1% versus a +.1% gain in May.
- Preliminary Univ. of Mich. Consumer Confidence for July is estimated to rise to 84.7 from 84.1 in June.
- None of note
- The Fed's Williams speaking, Fed's Bullard speaking, Fed's Plosser speaking, Eurozone Industrial Production data and the BoJ Economic Situation report could also impact trading today.
No comments:
Post a Comment