Bloomberg:
- Russia Seizes on Kerry Comment on Syria Giving Up Weapons. Russia seized on a casual comment by U.S. Secretary of State John Kerry to urge that Syria turn over its arsenal of chemical weapons to international control to avert an American military strike. “If the establishment of international control of chemical weapons in the country will help avoid military strikes, we will immediately start working with Damascus,” Russian Foreign Minister Sergei Lavrov said after meeting with his Syrian counterpart in Moscow. Syria’s government said it welcomed the idea. Russia jumped on a hypothetical comment by Kerry, who told reporters in London that Syrian President Bashar al-Assad could avert a threatened U.S. attack by turning over “every single bit of his chemical weapons to the international community in the next week.” While Kerry added immediately that Assad “isn’t about to do it, and it can’t be done, obviously,” the idea took on a life of its own.
- Cows on Runways Show Indonesia Growth Challenge: Southeast Asia. Jakarta’s Soekarno-Hatta airport, Southeast Asia’s busiest, couldn’t offer Lion Group the space it needed to build a new airplane maintenance facility. Instead, the company ended up picking a site near Singapore.
- Asian Stocks to Baht Climb Before China Data as Oil Slips. Asian stocks rose, extending the longest rally in the benchmark equity gauge this year, and the Thai baht and Malaysian ringgit climbed before Chinese factory output and retail sales data expected to show growth in August. Crude oil slipped for a second day and credit risk fell. The MSCI Asia Pacific Index rose 0.9 percent at 12:20 p.m. in Tokyo, advancing for a ninth day in its longest winning streak since December.
- Rubber Drops Most in 3 Weeks With Oil on Easing Syria Concerns. Rubber declined the most in three weeks as oil prices dropped, cutting the appetite for the commodity used in tires, amid speculation that the U.S. Congress won’t endorse a strike against Syria. Rubber for delivery in February lost as much as 2.1 percent, the biggest drop for a most-active contract since Aug. 20, to 280 yen a kilogram ($2,812 a metric ton) on the Tokyo Commodity Exchange. Futures traded at 280.4 yen by 12:05 p.m. local time, down 7.3 percent this year.
- Rebar Falls From One-Week High as Steel Mills Boost Production. Steel reinforcement-bar futures in Shanghai retreated from a one-week high as Chinese steel mills increased production of the building material. Rebar for delivery in January on the Shanghai Futures Exchange declined as much as 0.5 percent to 3,735 yuan ($610) a metric ton before trading at 3,736 yuan at 10:43 a.m. local time. The contract closed at 3,752 yuan yesterday, the highest level since Sept. 2.
- Banks Seen at Risk Five Years After Lehman Collapse. While the amount of capital at the six largest U.S. lenders has almost doubled since 2008, policy makers and some Wall Street veterans say that’s not enough. They see a system still too leveraged, complicated and interconnected to withstand a panic, and regulators ill-equipped to head one off -- the same conditions that led to the last crisis.
- Verizon(VZ) Said to Plan Up to Eight-Part Bond Sale This Week. Verizon Communications Inc. (VZ) plans to finance its purchase of Vodafone Group Plc (VOD)’s stake in their mobile phone unit with an offering of as many as eight parts that may exceed Apple Inc.’s record issue in April.
- Apple(AAPL) to Unveil IPhones Seeking End to Year of Struggles. Apple Inc. (AAPL)’s introduction of new iPhones is a chance for the company to turn the page on a dour year that included no big new gadgets, a falling stock and stepped-up competition. Apple will update its flagship product, adding more colors and a less-expensive model, at an event at its Cupertino, California, headquarters today, a person with knowledge of the plans said last month. Apple, which will hold a viewing of the presentation in Beijing for the first time, is also close to securing deals with China Mobile Ltd. (941) and Japan’s NTT DoCoMo Inc. (9437) to sell iPhones in Asia’s biggest markets.
- Mortgage Lenders, Home Buyers Feel Rate Squeeze. Wells Fargo, J.P. Morgan Warn of Slowdown. A rise in interest rates is slamming homeowners' demand for mortgages, prompting large and midsize banks to cut jobs and warn investors of declining profitability in the home-loan business. Wells Fargo & Co., the nation's largest mortgage company by loan value, on Monday told investors at a conference that it expects mortgage originations to drop nearly 30% in the third quarter to roughly $80 billion, down from $112 billion in the second quarter. Businesses Aim to Ride New Funding Wave. As Ban Is Set to End, Some Regulators Fret About Possible Scams.
- China Tightens Grip on Social Media. Chinese authorities said that social-media users who post comments considered to be slanderous could face prison if the posts attract wide attention—a ruling free-speech advocates criticized as an attempt to give legal backing to the suppression of online dissent.
- John B. Taylor: The Weak Recovery Explains Rising Inequality, Not Vice Versa. Obama blames tax cuts that began under Reagan for today's slow growth. The data don't back him up.
Last year at this time a debate raged about whether economic growth and job creation has been abnormally slow compared with previous recoveries from recessions in the United States. Now that the growth rate has declined to 1.6% over the past year from 2.8%, the debate is no longer about whether. It's about why. The poor economic policies of the past few years is a reasonable explanation for today's weak economy.
- Obama backs off 'red line,' opens door to 'diplomatic track' on Syria. President Obama on Monday took a sharp turn away from his "red line" threat to Syria on the eve of taking his case to the American people, saying in an interview with Fox News that he's open to negotiations on an alternative plan that could avert a military strike. The president was responding to a proposal, formally put forward by the Russians, to have the Assad regime turn over its chemical weapons to international control. "We will pursue this diplomatic track," Obama told Fox News. "I fervently hope that this can be resolved in a non-military way."
- Fox News Poll: Voters say US less respected since Obama took office. Nearly half of American voters -- 48 percent -- think the United States is less respected around the world today than it was five years ago. That’s up from 37 percent who felt that way last year, according to a Fox News poll. The new poll, released Monday, finds 14 percent of voters think the U.S. is more respected today -- nearly five years into the Obama presidency -- and 36 percent say it’s unchanged.
- Bank of America(BAC) to cut 2,100 jobs as loan demand weakens. Bank of America plans to eliminate nearly 2,100 jobs and close 16 mortgage offices due to weak loan demand, Bloomberg reported Monday. Sources with direct knowledge of the plans said 1,500 of the employees process home loans and about 200 deal with overdue mortgages.
- India's crisis a 'wake-up call': Stephen Roach. (video) Long-term India bull Stephen Roach told CNBC on Tuesday that he was turning bearish on Asia's third-largest economy, and warned that the country's currency crisis should prove a "wake-up call" for investors.
- Parity a mirage for the yen. (graph)
- JPMorgan Warns: Increasing Rates Have "Reduced The Remaining Refinance Opportunity By More Than 50%".
- Black Swan Risk Shifts to Emerging Markets: SocGen. SocGen is out with a lengthy report titled Global Economic Outlook: Looking under the hood of recovery. In the report there is an interesting tidbit on black swan risks. Below is an excerpt on that segment.
- AFL-CIO will not campaign against Summers for Fed - Trumka. The chief of the AFL-CIO said the largest U.S. federation of labor unions will not campaign against the nomination of Lawrence Summers to be the next Federal Reserve chairman.
The Economic Times:
China Securities Journal:- Banks expect no quick fix for NPA pain despite RBI warning. Despite the Reserve Bank of India's (RBI) hard talks against loan defaulters, banks are expecting more pain in terms of asset quality as the systemic gaps allow bad borrowers to divert funds and go scot-free under the garb of economic slowdown.
- China Should Implement Strict Property Controls. China should maintain its "prudent" monetary policy and implement "relatively strict" property controls to prevent a rebound in consumer and property prices, a commentary by reporters Gu Xin says. Chinese consumer prices will face "relatively heavy" pressure to rise next year, the commentary said.
- Beware: Wall St. debt re-packaging machine is back. Wall Street's re-packaging of debt into an alphabet soup of complex, leveraged investments helped fell Lehman Brothers five years ago this month and brought other financial institutions like AIG to the government's door begging for bailouts. This slicing and dicing — known as securitization or structured finance — is on the rebound, and not much has changed in the way it is done. If it catches on in a big way again, the financial system could become fragile once more, experts say. "It's basically the same people doing the same things all over again, only more intensely," says Brian Reynolds, chief market strategist at Rosenblatt Securities. "In the long term we should be worried."
Wells Fargo:
- Rated (ILMN) Outperform.
- Asian equity indices are +.50% to +1.75% on average.
- Asia Ex-Japan Investment Grade CDS Index 135.0 -8.0 basis points.
- Asia Pacific Sovereign CDS Index 117.0 -5.5 basis points.
- FTSE-100 futures +.41%.
- S&P 500 futures +.07%.
- NASDAQ 100 futures +.16%.
Earnings of Note
Company/Estimate
- (CBK)/-.02
- (OXM)/.98
- (RH)/.43
7:30 am EST
- The NFIB Small Business Optimism Index for August is estimated to rise to 95.0 versus 94.1 in July.
- JOLTs Job Openings for July are estimated to fall to 3900 versus 3936 in June.
- None of note
- The Italian GDP report, China Industrial Production/Fixed Asset/Retail Sales reports, 3Y Note auction, weekly retail sales reports, Baird Healthcare Conference, RBC Industrials Conference, Goldman Sachs Retail Conference, (STX) analyst meeting, (TPX) investor day, (HAS) investor day and the (CGNX) analyst day could also impact trading today.
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