Bloomberg:
- China Cities May Tighten Property Curbs as Slowdown Lifts Target. Chinese cities seeking to cap home-price gains below income growth may need to tighten property curbs as the nation’s slowing economic expansion makes their targets more difficult to meet. Hangzhou, the capital city of the eastern province of Zhejiang, will tighten approvals of pre-sale permits in the second half and may raise down payments for second homes to make sure its price-control target is met, according to a July 27 report by Today Morning Express, a Chinese-language newspaper affiliated with the provincial government. “The home-price problem facing the Hangzhou government in the second half isn’t an isolated case, and therefore we expect more second- and third-tier cities to tighten price controls,” Luo Yu, a Shanghai-based analyst at advisory firm CEBM Group, wrote in an e-mailed report. “The use of administrative measures such as pre-sale permits and price registration will have a negative impact on housing supply and sales.”
- China Is Set to Suffer the Skyscraper Curse. Auditors seeking to head off a Chinese crash are rushing to scrutinize the debt-swollen books of the country’s local governments. Economists are poring over statistics, bond spreads, electricity gauges and stock valuations. They might all have more luck if they got their noses out of the books and looked up.
- China’s Provinces Trail Growth Targets in Slowdown Signal. Most Chinese provinces reported first-half growth below annual targets that in some instances were already lower than last year’s goals, underscoring the breadth of the nation’s slowdown. Seventeen of 30 provinces and provincial-level cities said January-to-June expansion trailed 2013 targets, compared with 14 of 31 in last year’s first half, according to data compiled by Bloomberg News. Inner Mongolia, Jilin and Ningxia had the widest gaps, each at 3 percentage points below a 12 percent target. One province, Qinghai, has yet to release its latest figures.
- Europe’s Biggest Solar Projects Threatened by China Deal. Europe’s decision to curb imports of Chinese solar panels threatens to limit the biggest projects using the technology in the 28-nation bloc while having little impact on the manufacturers accused of dumping their products. The agreement to set a minimum price of 56 euro cents ($0.74) a watt for panels until the end of 2015, reached this weekend, will hurt developers of ground-mounted plants and reduce installations, said Bloomberg New Energy Finance, IHS Inc. (IHS) and the U.K. Solar Trade Association. Developers were already buying Chinese panels cheaper, they said.
- Stevens Says Inflation Data Hasn’t Shifted RBA Scope to Ease. Australia’s central bank Governor Glenn Stevens said second-quarter inflation data suggests there’s still room to lower interest rates if required and that he wouldn’t be surprised if the currency dropped further. “Recent inflation data do not appear to have shifted” the RBA’s assessment that the outlook for prices may “afford some scope to ease policy further if needed to support demand,” he said today in the text of a speech in Sydney. “The recent decline in the exchange rate seems to make sense from a macroeconomic perspective. It would not be a major surprise if a further decline occurred over time.”
- RBI Says Restoring India Rupee Stability Is Key Policy Objective. The Reserve Bank of India said steadying the rupee to help preserve economic stability has become the priority for monetary policy and that more steps are needed to curb the nation’s current-account deficit. “The priority for monetary policy now is to restore stability in the currency market so that macro-financial conditions remain supportive of growth,” the Reserve Bank said in an economic review before today’s rate decision in Mumbai. Such a strategy will work only if reinforced by “structural reforms” to reduce the deficit and spur investment, it said.
- PBOC Conducts First Reverse Repos Since February; Swaps Decline. China’s central bank conducted reverse-repurchase operations for the first time in five months, helping alleviate a cash squeeze that drove the benchmark interbank lending rate to a four-week high.
- Most Asian Stocks Rise as Japanese Exporters Gain on Yen. Most Asian stocks rose as Japanese exporters advanced after the yen weakened, offsetting a bigger-than-estimated decline in Japanese factory output. Toyota Motor Corp. (7203) climbed 2.2 percent in Tokyo as the yen’s weakness boosted the outlook for export income. Daiwa Securities Group Inc., Japan’s second-largest brokerage, jumped 3.6 percent after posting earnings that beat analyst estimates. Jiangxi Copper Co., China’s biggest producer of the metal, dropped 0.9 percent in Hong Kong after copper futures declined. The MSCI Asia Pacific Index added 0.2 percent to 133.42 as of 12:10 p.m. Tokyo time, with more than two shares rising for each that fell.
- Copper Declines After China Provinces’ Growth Trails Targets. Copper dropped after data showed that first-half expansions in most provinces in China missed targets, reinforcing concern that demand growth may slow in the world’s largest consumer. Metal for delivery in three months fell as much as 0.6 percent to $6,840 a metric ton on the London Metal Exchange and was at $6,845 at 10:11 a.m. in Shanghai. The price declined to $6,820 yesterday, the lowest since July 10.
- JPMorgan(JPM) Accused of Energy-Market Manipulation by U.S. Agency. JPMorgan Chase & Co. (JPM) manipulated power markets in California and the Midwest from September 2010 to June 2011, obtaining tens of millions of dollars in overpayments from grid operators, the U.S. Federal Energy Regulatory Commission alleged today. The agency said in a Notice of Alleged Violations that it had preliminarily determined a JPMorgan trading unit had engaged in eight manipulative bidding strategies. The New York-based bank has agreed to sanctions including a fine of about $400 million in a settlement that may be announced as early as tomorrow, according to a person familiar with the case who asked not to be identified because the terms aren’t yet public. Other sanctions may include forfeiting profits, this person said.
- Regulators Face Scrutiny on Banks’ Commodities at Senate Hearing. U.S. banks’ ownership and trading of physical commodities will face further scrutiny tomorrow when the heads of the Commodity Futures Trading Commission and Securities and Exchange Commission testify before lawmakers. Senator Sherrod Brown, the Ohio Democrat who led a hearing on the issue last week, said he plans to question the CFTC’s Gary Gensler and the SEC’s Mary Jo White on their oversight when the two chairman appear before the chamber’s Banking Committee on implementation of Dodd-Frank Act reforms.
- Wynn Resorts’(WYNN) Profit Lags Estimates on Weaker Macau Sales. Wynn Resorts Ltd. (WYNN), the casino company run by Steve Wynn, reported profit that trailed analysts’ estimates amid a slowing of Macau revenue and ongoing hotel renovations by the company there. Excluding items, profit totaled $1.51 a share, Las Vegas-based Wynn said today in a statement. Analysts had projected $1.57 a share, the average of 23 estimates compiled by Bloomberg. Property Ebitda -- earnings before interest, taxes, depreciation and amortization -- in Macau fell 4 percent. “Overall, the results in Macau were below our fairly low expectations,” wrote Joseph Greff, an analyst with JPMorgan Chase & Co., in an investor note today. “Ebitda margins were 210 basis points below our estimate, reflective of a tough June on the mass table side and, to some degree, room renovation disruption,” wrote Greff, who rates the shares the equivalent of buy.
- U.S. Funds Buy No Love at Afghan College. Nangarhar University is a symbol of American largess: U.S. taxpayers foot the bill for dormitories, classrooms and computer labs. Increasingly dominating the campus of Afghanistan's second largest university, however, are Islamist activists who openly sympathize with the Taliban. "The Taliban are the people who are defending this country," said Hamad, a leader of the self-appointed Nangarhar University student council that organizes regular demonstrations against the U.S. and President Hamid Karzai's government. "The foreign troops are invaders."
- White House's Egypt Debate Heralds Shift. In Skirting Declaration on Whether Morsi's Overthrow Was a Coup, U.S. Seeks to Guard Its Limited Leverage Over Generals. When Obama administration lawyers told top policy makers that they had come up with a way to avoid designating Egypt's military takeover a coup—a decision that would obligate the U.S. to freeze aid to the country—some senior White House staffers voiced reservations about the message that would send. But the plan was embraced by members of President Barack Obama's national security cabinet, who concluded unanimously that there was no other way to maintain limited U.S. leverage with Egypt's generals and avoid fueling further violence, said U.S. officials.
- Big Question Hangs Over Small-Caps. Some Investors Say Sector Has Run Its Course as They Pare Holdings; Others See Some Room to Run.
- Bill Nojay: Lessons From a Front-Row Seat for Detroit's Dysfunction. Running the city's transportation department was like being in the boiler room of the Titanic.
- Obama comments on Keystone spark ire, more concerns about project’s future. President Obama’s latest comments on the Keystone XL oil pipeline -- including an attempt to downplay the number of jobs it would create -- are re-igniting concerns that the administration may not approve the project.
- Could Japan fall back into recession next year? Even before Japan can stage a convincing growth rebound, fears are already building over a sharp slowdown in the world's third largest economy, with one analyst warning of a possible recession next year.
- Faith, Hope, And P/E Multiple Expansion. (graphs)
Reuters:
- China risks following Japan into economic coma. After decades of emulating Japan's export-driven economic miracle, China appears in danger of following it into the same kind of economic coma that Japan is trying to wake up from 20 years later. China is struggling to wean itself off a habit picked up from its more advanced neighbour: relying for growth on exports and credit-fuelled investment. That has left its economy lopsided, economists say, with massive over investment in property and industries rapidly losing their cost advantage, from mining and electronics to cars and textiles. Wages are rising, the return on investments falling.
- Fed's Yellen to moderate panel at Jackson Hole conference. Federal Reserve Vice Chair Janet Yellen plans to moderate one of the panels at the annual monetary policy conference in Jackson Hole, Wyoming, next month, a Fed spokeswoman said on Monday.
- GDP Figures of Local Gov'ts Soar Past Beijing's Yet Again. Every reporting area claims a growth rate for first half that is higher than the 7.6 percent figure for the country.
- China Finishes Draft to Remove Overcapacity. China has finished draft on resolving overcapacity problem in steel, cement, electrolytic aluminum, plate glass and shipbuilding industries, citing a person familiar with the matter.
- Property Restrains Upgrade of Chinese Economy. Property has become the biggest issue holding back the upgrade of China's economy, according to a front-page commentary written by Li Fan. Risks are increasing that real estate may "kidnap" the banking system, according to the commentary. China should loosen limits on transaction of existing homes to increase supply and curb prices, the commentary said.
- None of note
- Asian equity indices are -.25% to +1.0% on average.
- Asia Ex-Japan Investment Grade CDS Index 142.0 +2.0 basis points.
- Asia Pacific Sovereign CDS Index 108.75 +2.25 basis points.
- FTSE-100 futures +.54%.
- S&P 500 futures +.14%.
- NASDAQ 100 futures +.21%.
Earnings of Note
Company/Estimate
- (NYX)/.58
- (ODP)/-.10
- (ADS)/2.29
- (ROK)/1.38
- (GLW)/.31
- (OXY)/1.60
- (JBLU)/.14
- (NOV)/1.33
- (GT)/.48
- (PFE)/.55
- (PBI)/.44
- (CMI)/1.98
- (HCP)/.74
- (DDD)/.24
- (FDP)/.81
- (MRK)/.82
- (MDC)/.58
- (AET)/1.40
- (COH)/.89
- (TRW)/1.69
- (DISCA)/.90
- (AFL)/1.51
- (BXP)/1.27
- (AMGN)/1.74
- (BWLD)/.79
- (RVBD)/.22
- (IACI)/.94
- (JLL)/1.42
- (CVD)/.77
- (SYMC)/.36
- (MSTR)/.32
9:00 am EST
- The S&P/CS 20 City MoM SA for May is estimated to rise +1.4% versus a +1.72% gain in April.
- Consumer Confidence for July is estimated to fall to 81.3 versus 81.4 in June.
- (CSWC) 4-for-1
- The Japan Manufacturing PMI report, Eurozone Consumer Confidence/CPI data, Spain gdp report, India rate decision, weekly retail sales reports and the Keefe Bruyette Woods Community Bank Conference could also impact trading today.
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