Bloomberg:
- Saudis on Alert at Iraq Border for Conflict Spillover. Saudi Arabia is deploying men and high-tech machinery to boost vigilance along its 800 kilometer (500-mile) northern border with Iraq, where it faces security threats from both sides in a deepening sectarian conflict. The National Guard and the Ministry of Defense sent an extra 1,000 men each, while border patrols have been increased and helicopters deployed to the area, General Faleh al-Subaie, commander of the Saudi Border Guard in the north, said in the city of Arar. That’s the command post for the Arar crossing station, about 60 kilometers away, where fences and 7 meter-high sand berms separate OPEC’s two largest oil producers.
- Iran Nuclear Deal Falters as Contingency Plans Considered. The top diplomats from the U.S. and Iran said progress in nuclear negotiations may not be enough to meet a July 20 deadline for clinching a long-term accord. U.S. Secretary of State John Kerry flew back to Washington after failing to reach a breakthrough with his Iranian counterpart, Mohammad Javad Zarif. Iran’s foreign minister is staying on in Vienna in an attempt to bridge the gaps to an agreement over the next five days.
- EU Leaders Weigh Sanctions Against Russia Over Ukraine. European Union leaders meeting in Brussels will consider expanded sanctions against Russia over the Ukraine conflict, as the U.S. urges the bloc to take a tougher stand against Moscow. German Chancellor Angela Merkel said the question of possibly stronger penalties against Russia is on the agenda for an EU summit today. “We haven’t spoken with every member state,” she told reporters after a meeting in the Croatian city of Dubrovnik yesterday, adding that she didn’t want to ‘‘pre-empt the results.’’
- Shadow-Banking Curb Fuels Loan-Backed Debt Spree: China Credit. Chinese banks’ sales of bonds backed by loans have surged 22-fold this year as the government seeks to curb shadow banking, while still allowing lenders to make room on their balance sheets for new financing. Banks have issued 78.7 billion yuan ($12.7 billion) of such securities, compared with 3.6 billionyuan in the same period last year and 15.8 billion yuan for all of 2013, Bloomberg-compiled data show. Such transactions must get approval from regulators and are more transparent than wealth-management products and trusts, which have been used by banks to bypass capital controls.
- BRICS Agree on $50 Billion Bank With Something for Everyone. Leaders of the five BRICS nations agreed on the structure of a $50 billion development bank by granting China its headquarters and India its first rotating presidency. Brazil, Russia and South Africa were also granted posts or units in the new bank.
- Asian Stocks Swing From Gain to Loss. Asian stocks swung between gains and losses after the Federal Reserve said some sectors of the U.S. equity market have excessive valuations and banks reported better-than-estimated earnings. Iluka Resources Ltd. led materials shares higher, climbing 2.3 percent in Sydney, after the world’s biggest zircon producer reported production of the mineral topped estimates. Rio Tinto Group gained 1.3 percent after iron-ore output surged in the second quarter. Yahoo Japan Corp. slipped 1.8 percent in Tokyo, leading a retreat among technology shares. The MSCI Asia Pacific Index was little changed at 147.08 as of 9:20 a.m. in Tokyo, before markets open in Hong Kong and China.
- Goldman(GS) Sees Lower Commodity Prices Over Five Years on Supplies. Commodities from iron ore to copper and Brent crude are expected to drop over the next five years as global supplies increase, according to Goldman Sachs Group Inc. There will be substantial declines in some metals, energy and bulk commodities, analysts including Chief Currency Strategist Robin Brooks wrote in a report. The period of continued year-on-year price rises for most commodities is over, they said in the report, which was dated yesterday.
- Rio Says Iron Ore Output Rose 11% on Australia Expansion. Rio Tinto Group (RIO), the world’s second-largest mining company, said second-quarter iron-ore production increased 11 percent after expanding operations in the remote Pilbara region of Western Australia. Output was 57.5 million metric tons in the three months to June 30, from 51.8 million tons a year earlier, London-based Rio said today in a statement. That’s in line with the 57.7 million-ton median estimate of seven analysts surveyed by Bloomberg. The company raised its full-year copper guidance.
- Yellen Sees Risk of Bubbles in Leveraged Loan Market. Federal Reserve Chair Janet Yellen warned she sees signs of asset price bubbles forming in some markets such as those for leveraged loans and lower-rated corporate debt, while indicating stocks aren’t overvalued. “We’re seeing a deterioration in lending standards, and we are attentive to risks that can develop in this environment” of low interest rates, Yellen said today in semi-annual testimony to the Senate Banking Committee.
- Apple(AAPL), IBM(IBM) to Develop IPhone Apps for Business Customers. Apple Inc. (AAPL) and International Business Machines Corp. (IBM) will work together to create business software for iPhone and iPad users, setting aside a three-decade-old rivalry to cater to an increasingly mobile workforce.
- Israel Warns Gazans of New Attack After Hamas Rejects Truce. First Israeli Killed by a Rocket From Gaza. Israel threatened to broaden its offensive against Hamas after the Islamists rejected a truce, and the army warned tens of thousands of Palestinians in northern Gaza to clear out by Wednesday morning. Despite the continued fighting, the White House called a cease-fire proposed by Egypt on Monday a "live option" and urged Hamas to accept the terms and stop firing rockets from Gaza into Israel.
- Russia, Ukraine Beef Up Accusations. War of Words Spark Speculation About Military Escalation. Russia and Ukraine moved on Tuesday to bolster accusations against each other of cross-border attacks, stepping up a war of disputed facts that has accompanied the bloody separatist conflict in Ukraine's east. Russia's Ministry of Defense brought 11 foreign military attachés, including one from the U.S., to a neighborhood on the Russian side of the border where Moscow accused Kiev's forces of shelling a residential house on...
- Fed's Yellen Hedges Her View on Rates. Easy-Money Policies Appropriate, but Sooner Hike Than Expected Is Possible if Job Market Quickly Improves. Federal Reserve Chairwoman Janet Yellen defended keeping interest rates low before Congress on Tuesday, but opened the door a crack to earlier-than-planned rate hikes if the labor market continues its surprising improvement. "If the labor market continues to improve more quickly than anticipated by the [Fed]," she told the Senate Banking Committee, "then increases in the federal-funds rate target likely would occur...
- Obama Administration Urges Immediate Action on 'Inversions'. Jacob Lew Says Lawmakers Should Enact Legislation to Shut Down 'Abuse'. The Obama administration joined the growing debate over U.S.
companies reincorporating overseas for tax purposes, urging lawmakers to
pass legislation to limit the moves. In a letter to leaders of
the congressional tax-writing committees, Treasury Secretary Jacob Lew
said lawmakers "should enact legislation immediately…to shut down this
abuse of our tax system." The letter was reviewed by The Wall Street
Journal on Tuesday...
- What Obama Missed on the Border. If the president came to see the disastrous effects of Washington's policy in person, he might want to act.
- Stolen uranium compounds not only dirty bomb ingredients within ISIS' grasp, say experts. Plenty of materials for a potential dirty bomb are likely scattered throughout the area of Iraq controlled by ISIS, and pulling off an attack that spreads even a minor amount of radiation could be a huge PR coup for the terror group, experts told FoxNews.com.
- Intel(INTC) earnings beat estimates, shares jump. Intel shares rallied after the firm reported quarterly earnings and revenue that beat analysts' expectations on Tuesday, citing stronger-than-expected demand for corporate PCs. After the earnings announcement, the company's shares rose more than 4 percent in extended-hours trading.
- Yahoo(YHOO) sales guidance misses estimates, shares wobble. Yahoo posted quarterly earnings and revenue that missed Wall Street expectations Tuesday and also handed in current-quarter sales guidance that fell short of estimates. But shares still poked higher in extended-hours trading after the firm said it won't have to sell as much of its Alibaba stake. Yahoo shares fell nearly 2 percent in extended hours trading.
- "China Is Fixed" GDP & Industrial Production Beat As Retail Sales Miss & Home Prices Tumble. (graph)
- Market Rigging Explained. (graph)
Reuters:
- Chinese property developers at risk as trust funds dry up. China's shadow banking firms slashed lending to property developers in the first half of this year, closing off a crucial funding avenue just as the housing market cools, potentially spelling trouble for the sector and the broader economy. Trust companies, which pool money from rich people and companies to make high-interest loans and are part of the China's vast and opaque shadow banking system, were a ready source of cash during the housing boom, particularly for smaller developers that had trouble borrowing from banks.
- Hershey(HSY) increases prices as costs rise. Hershey Co, the No. 1 candy producer in the United States, said it would increase prices of its instant consumable, multi-pack, packaged candy and grocery lines by 8 percent to tackle rising commodity costs.
- Italy's GTECH to buy gaming company IGT for $6.4 bln including debt. Italy's GTECH SpA will buy International Game Technology in a cash-and-stock deal valued at $6.4 billion, including net debt, the companies said on Wednesday. GTECH will pay $4.7 billion in cash and stock and the assumption of $1.7 billion in net debt, the companies said in a statement.
Obama takes on coal with first-ever carbon limits
Read more at http://www.philly.com/philly/news/politics/20130919_ap_0f857b20e0c144a5a1e1b9dddc9f9d72.html#YRThyDOhArykUeYy.99
Telegraph:Read more at http://www.philly.com/philly/news/politics/20130919_ap_0f857b20e0c144a5a1e1b9dddc9f9d72.html#YRThyDOhArykUeYy.99
- Global equity melt-up in full swing even if investors hate themselves. (graph) So in a sense, the equity rally is a function of the collective acts of monetary authorities pushing investors into stocks. This of course is why the BIS is in despair. “Overall, it is hard to avoid the sense of a puzzling disconnect between the markets’ buoyancy and underlying economic developments globally,” it said. Just wait until the Fed tightens in earnest.
Shanghai Securities News:
- China's Economy Risks Entering Deflation. China's economy risks entering deflation and liquidity trap and should have relatively loose monetary policy, Fan Jianjun, a researcher at the Development Research Center under the State Council, writes.
- China Unlikely to Cut Interest Rates This Year. Possibility isn't big that China will have interest rate cut this year, citing Lian Ping, chief economnist of Bank of Communications. China will be relatively prudent on interest rate adjustment, Lian said.
- None of note
- Asian equity indices are -.25% to +.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 102.0 unch.
- Asia Pacific Sovereign CDS Index 71.50 +.5 basis point.
- FTSE-100 futures +.02%.
- S&P 500 futures -.04%.
- NASDAQ 100 futures +.04%.
Earnings of Note
Company/Estimate
- (NTRS)/.84
- (SCHW)/.22
- (USB)/.77
- (ABT)/.51
- (BLK)/4.46
- (BAC)/.29
- (STJ)/1.00
- (YUM)/.73
- (SNDK)/1.39
- (URI)/1.46
- (LVS)/.90
- (EBAY)/.68
- (PNC)/1.78
- (KMI)/.30
- (TXT)/.46
8:30 am EST
- PPI Final Demand for June is estimated to rise +.2% versus a -.2% decline in May.
- PPI Ex Food and Energy for June is estimated to rise +.2% versus a -.1% decline in May.
- Net Long-Term TIC Flows for May are estimated at $25.0B versus -$24.2B in April.
- Industrial Production for June is estimated to rise +.3% versus a +.6% gain in May.
- Capacity Utilization for June is estimated to rise to 79.3% versus 79.1% in May.
- Manufacturing Production for June is estimated to rise +.3% versus a +.6% gain in May.
- The NAHB Housing Market Index for July is estimated to rise to 50.0 versus 49.0 in June.
- Bloomberg consensus estimates call for a weekly crude oil inventory decline of -2,100,000 barrels versus a -2,370,000 barrel decline the prior week. Gasoline supplies are estimated to rise by +610,000 barrels versus a 579,000 barrel gain the prior week. Distillate inventories are estimated to rise by +1,600,000 barrels versus a +227,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to rise by +.14% versus a +.2% gain the prior week.
- Fed's Beige Book release.
- (AAON) 3-for-2
- (SFBS) 3-for-1
- The Fed's Fisher speaking, Fed's Williams speaking, Bank of Canada rate decision and the weekly MBA mortgage applications report could impact trading today.
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