Friday, August 16, 2013

Today's Headlines

  • Egypt Clashes Resume as Mursi Backers Rally Against Killings. Thousands of Egyptians poured into the streets after Friday prayers to protest this week’s deadly crackdown on Islamists, sparking clashes across the country. Troops backed by tanks and helicopters surrounded Ramsis Square, a focal point of rallies in central Cairo. The Muslim Brotherhood, which called the protests, put the death toll at 60, while state-run Ahram Online said 27 people died, seven in the capital. Security forces and demonstrators also clashed in the provinces of Giza, Alexandria, Fayoum Ismailiya, Damietta, Port Said and Gharbiya. The rallies were being held to protest the Aug. 14 killing of about 578 people when police stormed sit-ins by supporters of ousted President Mohamed Mursi and in the clashes that erupted across the country.
  • Syrian Refugees ‘Streaming’ Into Northern Iraq, UN Says. More than 5,000 Syrians crossed into Iraq’s Kurdistan region yesterday in a “sudden, massive movement,” the United Nations refugee agency said. About 750 people initially crossed the Tigris River at Peshkhabour crossing, followed by a wave of 5,000 to 7,000 people, Adrian Edwards, spokesman for the UN High Commissioner for Refugees, told reporters in Geneva today, according to an agency e-mail summarizing his comments. Most of the Syrians were women, children and elderly people from embattled Aleppo and other regions near Syria’s border with Iraq, Edwards said, citing UN field officers at the scene.
  • Crude Caps Longest Streak of Gains Since April. West Texas Intermediate crude capped the longest streak of gains since April as clashes in Egypt raised concern that Middle East supply will be cut. WTI for September delivery settled at $107.46 a barrel on the New York Mercantile Exchange, the highest level since Aug. 1. The volume of all futures traded was 1.5 percent below the 100-day average at 2:52 p.m. Futures advanced 1.4 percent this week and are up 17 percent this year.
  • Emerging Stocks Fall as India’s Sensex Leads World Losses. Emerging stocks fell as Indian shares plunged the most among global indexes, the rupee sank to a record and a trading error roiled Chinese markets. Egypt’s bond yields soared after a crackdown left hundreds dead. The MSCI Emerging Markets Index slid 0.2 percent to 958.20 at 11:23 a.m. in New York. The S&P BSE Sensex Index dropped the most among among the 94 world gauges tracked by Bloomberg and the rupee weakened as much as 0.9 percent. A trading error at Everbright Securities Co. drove Chinese shares to the biggest swings since the global financial crisis, threatening to erode confidence in the second-worst performing stock market after Greece during the past four years. Indian stocks plunged amid concern that government efforts to stem the rupee’s slide to a record low will curb economic growth. Egypt’s default risk soared to the highest in more than a month. India’s S&P BSE Sensex Index dropped 4 percent in Mumbai as State Bank of India tumbled to the lowest level in four years. ICICI Bank Ltd. slumped 5.2 percent. The rupee touched an unprecedented 62.0050 per dollar today before closing 0.3 percent weaker from Aug. 14 at 61.6550 in Mumbai, according to prices from local banks compiled by Bloomberg. 
  • China Stocks Roiled as Bad Trades Spur Shanghai Swings. China’s stocks were roiled by a trading error at Everbright Securities Co. (601788) that spurred a 53 percent surge in volumes and sent the Shanghai Composite Index to its biggest intraday gain since March 2009. The Shanghai gauge jumped from a loss of as much as 1 percent to a gain of 5.6 percent in two minutes during the morning session as 16 of the measure’s 20 biggest companies by weighting rose by the 10 percent daily limit. The index fell 0.6 percent at the close. Everbright’s trades were the main reason for the jump, the China Securities Regulatory Commission said in a statement. The exchange said trades will be settled as normal. 
  • Gold Rises as Silver Caps Biggest Weekly Gain Since 2008. Gold rose to the highest in almost two months and silver capped the biggest weekly rally since 2008 on signs of higher physical demand for precious metals. Gold futures for December delivery added 0.7 percent to settle at $1,371 an ounce at 1:48 p.m. on the Comex in New York. Prices reached $1,379.20 after the close of regular trading, the highest since June 18. The precious metal gained 4.5 percent this week, the most since July 12.
  • Europe Stocks Rise for Third Week as Growth Tops Forecast. European stocks advanced for a third straight week as data showing the euro area emerged from the longest recession on record outweighed speculation the Federal Reserve will trim monetary stimulus. Italian banks led gains as Banca Monte dei Paschi di Siena SpA and Unione di Banche Italiane SCPA rallied at least 12 percent. GAM Holding AG jumped the most in almost four years as the asset manager said first-half profit more than tripled. Fresnillo (FRES) Plc and Randgold Resources Ltd. increased at least 9 percent as prices for gold and silver rallied. The benchmark Stoxx Europe 600 Index increased 0.1 percent to 306.36 this week, extending its 2013 advance to 9.5 percent.
  • Europe Credit Prices 25% Risk of Sovereign Shock: Morgan Stanley. Return of sovereign risk is the real threat to European credit, and investors should buy CDS protection as there's a 25% chance of another shock this year, Morgan Stanley analysts Andrew Sheets and Phanikiran Naraparaju wrote in a client note. Morgan Stanley less concerned with effects of higher U.S. rates or EM slowdown, re-escalation of euro-zone risks remains damaging to current portfolio positioning, as they're overweight financials and peripheral corporates.
  • AOL(AOL) Is Said to Be Cutting About 500 Jobs at Patch. AOL Inc. (AOL) is eliminating about 500 positions at its struggling Patch local-news business, or close to half of the division’s more than 1,000 employees, according to a person with knowledge of the decision.
Wall Street Journal:
  • Deadly Showdown at Cairo Square. Protests Merge at Ramses Square, Spurring Gunfire, Teargas and a Grim Accounting; Dozens Seen Dead. Thousands of Islamist demonstrators who massed on central Cairo's Ramses Square met with deadly force Friday afternoon, turning a nearby mosque into a makeshift morgue where medics tried to revive shot protesters and people clambered up bloodstained steps to view at least 31 bodies that were laid out inside. Skirmishes continued in the afternoon around the square, where Muslim Brotherhood supporters converged in what they called a Day of Rage to mourn those killed on Wednesday, when a government crackdown on supporters of ousted President Mohammed Morsi sparked violence that left more than 600 people dead around the country.
  • Fannie Could Curb Low-Down-Payment Loan Purchases. Fannie Mae is in discussions to curb its purchases of mortgages that require a minimum down-payment of 3%, according to people familiar with the discussions. Fannie never stopped accepting purchases of loans with 3% down payments, even after lending standards were ratcheted up following the housing bust. But many lenders stopped offering them, in part because they weren’t able to obtain mortgage insurance for those loans, which Fannie requires. In recent months, however, a series of changes in the mortgage market have led to an uptick in low-down-payment loans available for sale to Fannie. That prompted a review of the company’s lending policies, and officials are said to be working on a plan to limit the company’s purchases of these loans.
Zero Hedge:
Business Insider:
  • Sensex slumps 770 points on capital control, U.S. stimulus fears. The Nifty slumped 4 percent on Friday, marking its biggest daily drop in almost two years, as blue chips including HDFC Bank were hit across the board on fears U.S. stimulus tapering would trigger foreign selling and as the rupee hit a record low. The Reserve Bank of India's measures late on Wednesday to restrict how much its citizens and companies can invest abroad also raised fears of outright capital controls that would further undermine the confidence of foreign investors, hitting the rupee. The volatility index which measures the cost of protection via options and is seen by some investors as a "fear" gauge gained 26.4 percent, marking its biggest single day percentage gain since June 17, 2009. The outlook remains weak as Indian shares marked their fourth consecutive weekly fall, totalling a decline of 7.7 percent, as the rupee has tumbled despite various measures undertaken to prop up the currency.
The Guardian:
  • Barack Obama's lost youth. The president's approval rating is falling faster among young people than any other group. Will Republicans capitalise on it?
  • Merkel Rejects Debt Cut for Greece. Debt cut for Greece could create uncertainty elsewhere in Europe, Merkel said in an interview.

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