Bloomberg:
- Ukraine Army Advances as EU Plans Tougher Putin Sanctions. Ukraine’s army advanced on a last main separatist stronghold as the U.S. said Russian President Vladimir Putin is poised to give the rebels heavy weapons and European Union leaders considered their toughest sanctions yet on Russia. Ukrainian troops are battling insurgents in the town of Horlivka, about 20 kilometers (12 miles) northeast of the regional capital Donetsk, a city of 1 million people where rebels retreated after abandoning other positions earlier this month. Taking Horlivka would open the way to attack one of their last redoubts, Ukrainian Defense Ministry spokesman Andriy Lysenko said yesterday in Kiev. “Fighting to take over Horlivka is going on,” he told journalists. “Donetsk will be next.” CNN reported that long lines of cars jammed roads leading south from the city yesterday as residents tried to flee.
- Photos Said to Show Russia Shelling of Ukraine Released. Satellite photos show that Russia has shelled across the border into Ukraine, the Obama administration said, as Dutch Prime Minister Mark Rutte said signs of heavy fighting prevented investigators from reaching the crash site of Malaysian Air Flight 17. “Russian forces have fired across the border at Ukrainian military forces,” the State Department said in a statement accompanying the photos released yesterday. The pictures also purportedly show “Russia-backed separatists have used heavy artillery, provided by Russia, in attacks on Ukrainian forces from inside Ukraine.” Ukraine’s forces were attacked twice from Russian territory, the Ukrainian defense ministry said in a posting on Facebook, without giving further details.
- Kerry’s Diplomacy Falls Short to End Gaza Fighting. It took U.S. Secretary of State John Kerry five days in the Middle East to negotiate a 12-hour pause in the bloody fighting between Hamas and Israel. Prospects for extending that humanitarian halt in the Gaza war had evaporated by the time Kerry landed in Washington shortly after midnight yesterday following a sleep-deprived week in which he served as a round-the-clock, Cairo-based diplomatic call center for Israel, Egypt and intermediaries to Hamas.
- ECB Opaque-Asset Review Seen Targeting Deutsche Bank, BNP. Deutsche Bank AG (DBK) and BNP Paribas SA (BNP), which hold almost half of the hard-to-value assets on the books of the euro area’s 10 biggest banks, are facing a reality check that could impose losses. As part of its review of 128 lenders, the European Central bank is studying less-actively traded loans and securitized products that banks value with minimal external data. The unprecedented scope of the exercise gives the ECB, which is taking on a supervisory role this year, insight that has eluded investors: comparing how the biggest investment banks value complex assets.
- Australian Regulators Watch as Debt Drives Up Prices: Mortgages. Central banks from Scandinavia to the U.K. to New Zealand are sounding the alarm about soaring mortgage debt and trying to curb risky lending. In Australia, where borrowing is surging, regulators are just watching. Australian household debt is at a 25-year high, according to statistics bureau figures, and a government inquiry this month found housing to be a significant source of risk to the financial system. The average mortgage is at least four times household income in almost 80 percent of the country, research by Digital Finance Analytics shows.
- Asian Stocks Swing as Oil Falls; Soybeans Lead Crop Gains. Asian stocks fluctuated, leaving the regional index near a six-year high, with the Federal Reserve meeting this week to debate the outlook for U.S. interest rates. Oil dropped while Australian bonds climbed with crop futures. The MSCI Asia Pacific Index was little changed by 9:56 a.m. in Tokyo.
Wall Street Journal:
- U.S. Push for Gaza Truce Yields a Few Hours of Calm. Diplomacy Stymied by Divisions Between Washington and its Mideast Allies. After six days of exhaustive meetings and stops in Cairo, Tel Aviv, Jerusalem, Ramallah and Paris, Secretary of State John Kerry came home Sunday with only a few fitful hours of peace in Gaza that proved fleeting. Israel and the Palestinian territory's Hamas rulers observed a 12-hour humanitarian cease-fire on Saturday. But they couldn't agree to extend the truce on Sunday and the cycle of attacks resumed.
- In China, Warnings Flash Despite Better Data. Economic Growth Has Picked Up, but Other Figures Suggest Optimism May Be Premature. When Monte Burnham, the president of Birmingham, Ala.-based Foundry Manufacturing Solutions, recently visited Tianjin, China, he was pleasantly surprised to find its air more breathable than during his previous stay. "Then I realized, the smelters weren't running," recalled Mr. Burnham, referring to the northern port city's giant steel plants, which until recently had been delivering economic growth rates as high as 16% to..
- J.P. Morgan(JPM) Questioned for Conflicts of Interest. Firm Has Responded by Changing Its Disclosures.
- The Danger of Too Loose, Too Long by Richard W. Fisher. With an improving labor market and an uptick in inflation, the danger now is to wait too long to tighten. I have grown increasingly concerned about the risks posed by current monetary policy. First,
we are experiencing financial excess that is of our own making. There
is a lot of talk about "macroprudential supervision" as a way to prevent
financial excess from creating financial instability. But
macroprudential supervision is something of a Maginot Line: It can be
circumvented. Relying upon it to prevent financial instability...
Fox News:
- Israeli PM Benjamin Netanyahu vows Israel will do 'whatever is necessary' in fight with Hamas. Israeli Prime Minister Benjamin Netanyahu on Sunday vowed to do "whatever is necessary" in the country's latest weeks-long battle with Islamic militant group Hamas.
Business Insider:
- US Isolationism Is Feeding A Global Free-For-All. If democratic and humanistic values can be so readily abandoned internationally, and by the states that best embody them, then all talk of a global order based on international law and respect for human rights is an illusion. It means states will accept a free-for-all, a global state of nature, where no one prevents barbarous crimes. Americans and Europeans may not realize that this is what they are contributing to, but they are doing so unambiguously.
- Free Exchange: Sun, Wind and Drain. Wind and solar power are even more expensive than is commonly thought.
- The SEC's New Rules For Money-Markets Are 'One Of The Most Flawed And Controversial' Decisions Ever.
- Russian Rebels Involved In Shooting Down MH17 Were From 4,200 Miles Away. The motivation for nearly half of Sapper's crew to travel all the way across Russia and into Ukraine is unclear. But the notion that they traveled to Ukraine on their own, without guidance from Moscow, is very unlikely.
- Goldman(GS) mortgage deal could reach $1.25B: Source. A deal to resolve a U.S. regulator's claims against Goldman Sachs over mortgage-backed securities sold to Fannie Mae and Freddie Mac leading up to the financial crisis could cost the bank between $800 million and $1.25 billion, according to a person familiar with the matter.
Financial Times:
Der Spiegel:- Argentina braces for sovereign debt default. Santiago Medina frowns as he recalls Argentina’s economic crisis at the time of its 2001 sovereign debt default, when he lost his job and took part in street protests. “Those were tough times,” says Mr Medina, who sells newspapers at a small kiosk beside a traffic-clogged avenue in Buenos Aires. “I don’t understand why the government wants to risk default again. It’s irresponsible: people are going to suffer.”
- German Poll Says 52% Back Russia Sanctions Over Jobs. Most Germans would support sanctions even if they endangered jobs, citing a TNS-Infratest poll. 39% would oppose sanctions if jobs were endangered.
- China Property Curb Easing Won't Stimulate Market. The easing of property purchase curbs in some Chinese cities won't stimulate the market as the government faces problems with excess inventories and growth, reporter Zhang Min said in a front-page commentary. The government is overly reliant on land sales for fiscal revenue.
- China Growth Won't Show 'Strong' Momentum. Chinese economic growth won't show "strong" momentum in 2015-2016, according to a commentary. China faces possible risks in real estate, finance and local government debt. China exports may have a hard time growing quickly.
Weekend Recommendations
Barron's:- Bullish commentary on (DOW), (TUP), (KEY), (GOOG), (WLP), (C), (THRX) and (CIT).
- Bearish commentary on (WMT) and (LXU).
- Asian indices are -.25% to +.75% on average.
- Asia Ex-Japan Investment Grade CDS Index 104.0 +3.0 basis points.
- Asia Pacific Sovereign CDS Index 70.0 -1.0 basis point.
- FTSE-100 futures +.20%.
- S&P 500 futures -.14%.
- NASDAQ 100 futures -.08%.
Earnings of Note
Company/Estimate
- (TSN)/.78
- (CALM)/1.18
- (CMI)/2.39
- (EMN)/1.84
- (ADVS)/.34
- (HLF)/1.57
- (JEC)/.86
9:45 am EST
- Preliminary Markit US Services PMI for July is estimated to fall to 59.8 versus 61.0 in June.
- Pending Home Sales for June are estimated to rise +.5% versus a +6.1% gain in May.
- Dallas Fed Manufacturing Activity for July is estimated to rise to 12.0 versus 11.4 in June.
- None of note
- The Japan Jobless Rate and $29B 2Y T-Note Auction could also impact trading today.
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