- Obama Gets Boehner’s Support in ‘Call to Action’ Against Syria. President Barack Obama urged Congress to take a “prompt” vote authorizing military action against Syria and won endorsement for the cause from the two top Republicans in the U.S. House. Backing from House Speaker John Boehner and Majority Leader Eric Cantor will help Obama as he makes his case to lawmakers who’ve questioned the evidence presented by the administration that the Syrian government was behind a sarin gas attack last month or whether the U.S. has a vital interest in the region.
- European Stocks Decline; Benchmark Stoxx 600 Index Falls. European stocks declined as U.S. Speaker of the House John Boehner said he supports the president’s call for action against Syria, offsetting better-than-forecast manufacturing data. Vodafone (VOD) Group Plc slipped 5 percent as shareholders weighed the details of the $130-billion deal to sell its stake in Verizon Wireless. Nokia Oyj soared 34 percent after Microsoft Corp. agreed to buy its handset business for 5.44 billion euros ($7.2 billion). Dufry AG, the operator of duty-free stores, climbed 3.4 percent after winning contracts in Brazil. The Stoxx Europe 600 Index fell 0.4 percent to 301.78 at the close. Stock markets were rattled earlier, with the gauge losing as much as 0.7 percent, by what Israel said was a joint flight test with the U.S. of its Arrow missile-interception system over the Mediterranean Sea.
- Treasuries Slide Most in a Month as Factory Gains Spur Fed Bets. Treasuries fell the most in a month as a gauge of U.S. manufacturing rose more than forecast in August, reinforcing bets the Federal Reserve will soon announce to reduce monetary stimulus. Yields on benchmark 10-year notes climbed as much as 13 basis points, extending the biggest annual rout in U.S. government securities in almost four decades. Treasuries fell earlier as demand for refuge eased while the threat of an immediate U.S. military strike on Syria declined. The Labor Department will report Sept. 6 U.S. payrolls added more jobs in August than in July, and Fed policy makers meet Sept. 17-18.
- Crude Advances as Obama Seeks Support on Syria. West Texas Intermediate crude advanced as U.S. President Barack Obama sought support in Congress for a military strike on Syria, bolstering concern that oil shipments from the Middle East will be disrupted. Futures gained as much as 1.1 percent after House Speaker John Boehner told reporters he will back the president’s call for action against Syria in response to the alleged use of chemical weapons. Obama stepped up lobbying today after requesting authorization from Congress on Aug. 31. Prices climbed earlier as Israel said it carried out a missile joint test launch with the U.S. in the Mediterranean Sea. “The market is processing what appears to be a slow grind to military action against Syria,” said John Kilduff, a partner at Again Capital LLC, a New York hedge fund that focuses on energy. “There’s headline risk ahead of us. The reaction to the Israeli missile test is an example of what we will be seeing until the Syria situation is resolved.” WTI crude for October delivery climbed $1.01, or 0.9 percent, to $108.66 a barrel at 1:39 p.m. on the New York Mercantile Exchange. Trading was 2.6 percent above the 100-day average. There was no floor trading yesterday because of the U.S. Labor Day holiday, and yesterday’s electronic transactions will be booked today for settlement purposes. Brent oil for October settlement increased $1.47, or 1.3 percent, to $115.80 a barrel on the ICE Futures Europe exchange. Trading was 29 percent above the 100-day average. The European benchmark grade traded at a $7.14 premium to WTI.
- Gold Rises First Time in Four Days on Middle Ease Tension. Gold gained for the first time in four sessions after Israel tested its missile-defense system, fueling concern that tensions in the Middle East will escalate and boosting the appeal of haven assets. Gold futures for December delivery rose 0.3 percent to $1,400.50 an ounce at 10:20 a.m. on the Comex in New York.
- Dealers in Debt Pare Commitments Raising Risk as Rules Bite. The worst losses in U.S. debt in at least 37 years are being magnified by investors exiting the market at the same time new regulations prompt Wall Street firms to cut back on trading corporate bonds. Bank of America Merrill Lynch’s U.S. Broad Market Index is on pace to drop 4.41 percent, the biggest annual loss since at least 1976. Investors pulled $123 billion from bond funds since May, according to TrimTabs Investment Research. Trading in corporate fixed-income securities is the lowest ever as a proportion of outstanding debt, and volumes in Treasuries are little changed from 2007 levels even though the market has almost tripled to $11.5 trillion, Financial Industry Regulatory Authority and ICAP Plc data show. Bonds are getting riskier even with inflation at bay and corporate profits hitting new highs. “When bond investors start to meaningfully divest themselves of their positions, it will be analogous to yelling fire in a crowded theater,” Michael Underhill, the chief investment officer at Capital Innovations LLC, which manages $1.5 billion, said in an e-mail Aug. 23.
- State Bank of India Credit Growth 21% y/y as of Now. Home and auto loans driving credit growth, Chairman Pratip Chaudhuri said in a Bloomberg TV India interview.
- What Is a Hedge Fund, Anyway? We explain the basics as a longtime ban on advertising ends.
- Spain's Ying-Yang Charts. (graphs)
New York Times:
- World Economy Growing Unevenly, O.E.C.D. Says. The world economy will continue slowly expanding for the rest of the year, despite signs of relative weakness in China and other emerging markets, and an uneven recovery in Europe, the Organization for Economic Cooperation and Development said Tuesday. The picture in emerging economies is less promising, the organization noted. China, it said, “appears to have passed the trough” — the nadir of its economic cycle — but it and other emerging economies face significant uncertainty, including possible financial market disruptions.
- Former Chinese Railroad Official Indicted on Bribery Charges. A former high-ranking Chinese railroad official, whose daughter’s employment at JPMorgan Chase is a focus of an antibribery investigation in the United States, has been formally indicted on bribery charges in a Beijing court. Zhang Shuguang, former deputy chief engineer at the Ministry of Railways, was indicted on charges related to 13 incidents of bribery from 2000 to 2011, Chinese news reports said on Tuesday.
- India's Sensex slumps 651 points on geopolitical worries. The BSE Sensex fell nearly 4 percent on Tuesday, retreating from a 2-1/2 week closing high in the previous session, as blue chip shares slumped as fears of military tensions in the Middle East roiled global markets.
- Chinese cities reporting inflated foreign investment data: paper. Some eastern Chinese cities have been found inflating the amount of foreign investments they receive by paying brokers to introduce US dollars from abroad, which adds to the financial burden of local authorities, the Chinese-language China Business News reports. According to the news outlet, certain cities in an unspecified eastern Chinese province have been hiring brokering agencies in Guangdong to set up firms under the names of people based in Hong Kong and Taiwan. The firms, which in actuality do not exist, then usher in US dollars, which means foreign investments for local governments. The brokering agencies bring in the "foreign investments" for a reward from local authorities — 170,000 yuan (US$28,000) in return for every US$1 million introduced — according to a report by Gong Zhen, an official from the Central Committee of the Jiu San Society. As a result of the practice, a city reported growth in the foreign investments for four consecutive years, according to Gong.
- China's Xi Calls for Ban on Buying Gifts Using Public Funds. Chinese President Xi Jinping calls for a ban on using public funds to buy gifts or hold banquets during festivals, including the Mid-Autumn Festival and National Day holidays, citing Xi as saying during a visit to the northeaster Chinese province of Liaoning. Xi also calls for a ban on using public funds for travel during holidays, CCTV said.
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