Friday, October 25, 2013

Today's Headlines

  • Export Slowdown Threatens World Economy. The bet on trade is flopping for companies and policy makers who had hoped it would power recoveries held back by weak domestic demand. This week alone, Caterpillar Inc. (CAT) and Unilever (UNA) complained of sliding overseas buying and data showed global trade volumes fell in August by the most since February.
  • China’s Stocks Fall, Capping Longest Losing Streak Since July. China’s stocks fell for a fourth day, capping the longest stretch of losses in almost three months, after money-market rates jumped and Great Wall Motor Co.’s earnings missed analysts’ estimates. Great Wall Motor tumbled 10 percent to lead declines for consumer-discretionary companies reliant on economic growth. Kweichow Moutai Co. (600519), the nation’s biggest liquor maker by market value, slid the most in five weeks after a newspaper reported high-end liquor prices fell 20 percent. Shanghai International Port (Group) Co. (600018) and Shanghai Waigaoqiao Free Trade Zone Development Co. plunged at least 7 percent after rallying more than 90 percent since the start of August. The Shanghai Composite Index (SHCOMP) dropped 1.5 percent to 2,132.96 at the close, the lowest level since Sept. 5
  • Europe Stocks Are Little Changed as Kering Offsets BASF. European stocks were little changed, with the Stoxx Europe 600 Index posting a third weekly advance, as companies from Kering SA to Renault (RNO) SA reported sales that missed projections, offsetting gains in BASF SE. Kering slid 3 percent after its Gucci brand posted the worst sales growth in four years as demand waned in China. Renault slipped 3.2 percent after the Frenchcarmaker said weaker emerging-market currencies cut third-quarter revenue. Telecom Italia SpA slumped 6.4 percent as people familiar with the matter said the company may seek to raise as much as 2 billion euros ($2.8 billion) of new capital. BASF rose 1.3 percent after posting better-than-forecast earnings. The Stoxx 600 slipped 0.1 percent to 320.09 at the close of trading.
  • Gold Futures Rise to One-Month High on U.S. Stimulus Speculation. Gold futures for December delivery gained 0.2 percent to settle at $1,352.50 an ounce at 1:37 p.m. on the Comex in New York, after touching $1,356.40, the highest since Sept. 20. The precious metal added 2.9 percent this week, the second straight increase. 
  • Crude Rises for Second Day. WTI for December delivery gained 68 cents, or 0.7 percent, to $97.79 a barrel at 1:29 p.m. on the New York Mercantile Exchange. The volume of all futures traded was 38 percent lower than the 100-day average. Prices are down 3 percent this week.
  • Obamacare Website Flaws Imperil President’s Activist Agenda. The rocky debut of the insurance exchanges at the heart of President Barack Obama’s health-care law poses risks to his political agenda and the activist role for government that he has championed for his second term. White House officials say they expect a surge in online enrollment to begin in mid-November, meaning the administration may have only about three weeks to fix the flaws before negative public perceptions about the new program begin to harden. “This is your signature program, and you’re marching it onto the field and everybody stumbles,” said Peter Hart, a veteran Democratic pollster. “It’s hard to see competency, and it puts a giant question mark behind the future plans.”
Wall Street Journal:
  • Abe Says Japan Ready to Counter China’s Power. Premier Urges China to Refrain from Using Force. Japanese Prime Minister Shinzo Abe said on Friday that many nations were concerned that China was attempting to use force to change the status quo in Asia, adding that Tokyo's role as the region's leader is to urge Beijing not to follow such a path.
  • Havas CEO: ‘Dire Consequences’ if Advertisers Make Missteps on Privacy. The latest allegations in the U.S. spying scandal have got the advertising industry worried. Consumer behavior data is transforming this industry, with campaigns shaped by analytics gathered from an increasing amount of information shared online. Among the biggest fears? That consumers grow more reluctant to share information about themselves online, potentially undermining fast-growing areas of super-targeted campaigns, such as mobile advertising. Some also fear tougher legislation on data protection, reining in advertisers’ ambitions to do more with it.
Fox News:
Zero Hedge: 
Business Insider: 
Real Clear Politics:
  • Copper hits 2-week low on outlook for demand, surplus. Copper fell on Friday to its lowest in two weeks on expectations for a growing surplus, patchy data on global factory growth and fears top consumer China would clamp down on credit. Copper has traded in a $7,000-$7,420 range since early August due to swelling supply and slower demand growth in China.
Financial Times:
  • Banks open fresh US settlement talks. Global banks have started to approach New York’s attorney-general about paying billions of dollars to settle charges they mis-sold mortgage-backed securities that were at the heart of the financial crisis, following JPMorgan Chase’s tentative agreement pay a $13bn settlement.
  • China turning into 'giant North Korea' say panda pundits. China experts Minxin Pei and Jonathan Fenby left a group of grizzled policy veterans open-mouthed with astonishment at a Westminster lunch by Centre for European Reform. They more or less said that China is reverting to full police-state Maoism, with sinister self-criticism sessions making a comeback. The reforms are skin deep, and the Communist Party is rapidly shutting off the last hope of averting a violent denouement. The country risks turning into a "giant North Korea", held down by repression alone. "People are losing faith in their ability to engineer a (political) soft landing. The likelihood of a revolutionary event is increasing", said Minxin.
Echoing fears that European policymakers remain in a state of cognitive dissonance – recognizing the need for root-and-branch overhaul of peripheral banks, but backtracking on joint liability plans – Christopher Flowers, the legendary FIG investor who now runs the £2.3 billion ($3.5 billion) private equity group JC Flowers, sounded the alarm over the negative sovereign-bank feedback loop. In a shot across the bows of market bulls, who cite the return of capital flows to weaker eurozone states, Flowers issued a stark warning: "There is a scenario where we have a Lehman-type event: we wake up some Thursday and a big country is in trouble. "And the ECB will have to decide to support banks x, y, z. And then the ECB will, in fact, decide to own bank x, y, z.

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  • Japan-US Defense Plan Has Scenario for Islets Recapture. Japan, U.S. included in their joint defense plan a scenario in which the nations' military forces would jointly recapture the disputed islands in the East China Sea if the islets were occupied by China, citing a U.S. defense official.
The Star Online:
  • Nikkei tumbles 2.8% on China fears, biggest one-day fall since early August. Japan’s Nikkei stock average suffered the biggest one-day loss in 2-1/2 months on Friday, hit by yen’s strength against the dollar and as fears grew that tight credit conditions in China could put the brakes on the world’s second-largest economy. The Nikkei shed 2.8% to 14,088.19, its lowest closing level since Oct. 9. For the week, the benchmark fell 3.3%, marking its first weekly fall in three weeks.

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