Bloomberg:
- U.S. Tightens Sanctions, Putting More Russian Companies at Risk. The U.S. Treasury broadened the scope of sanctions programs by revising a rule on the ownership of entities by targeted individuals that may extend the measures to at least one Russian company. Today’s change means that a firm can be sanctioned if any combination of sanctioned individuals collectively owns at least 50 percent of it, according to a notice on the department’s website. Previously, the Office of Foreign Assets Control’s so-called 50 percent rule required a single sanctioned person to own 50 percent or more of an entity for it also to be subject to sanctions. “The change in OFAC’s interpretation will be quite significant for those companies with joint ownership by multiple sanctioned persons,” Michael Burton, a sanctions lawyer at Jacobson Burton PLLC in Washington, said in an e-mail.
- Hagel Says Iraq Rescue Less Likely. U.S. troops flew to a mountain in northern Iraq where they found fewer trapped civilians than expected, making it “far less likely” that the U.S. will conduct a rescue, U.S. Defense Secretary Chuck Hagel said. There are several thousand Yezidis remaining on the mountain, according to a military official, who spoke on condition of anonymity to expand on Hagel’s comments.
- Stagflation Stalks Abenomics by William Pesek. Maybe it's time to stop dismissing the risk of stagflation in Japan.
- Xenophobia Concerns in China Mount as Europeans Cry Foul. Tensions in China’s foreign business community escalated to new highs after European companies protested that local authorities involved in an antitrust crackdown are abusing their power through intimidation tactics. Chinese investigators are picking on foreign companies, pressuring them into accepting punishments and depriving them of full hearings, the European Union Chamber of Commerce said yesterday in a statement, without naming anyone. Representatives at the chamber, which has about 1,800 members in the country, declined to elaborate on any specifics beyond the statement.
- BOK Cuts Rate for 1st Time Since May 2013 to Boost Growth. South Korea’s central bank cut its interest rate for the first time in more than a year, risking inflaming record household debt as it backs government efforts to spur Asia’s fourth-biggest economy.
- Asian Stocks Head for Four-Day Gain on Fed Rate Optimism. Asian stocks rose, with the benchmark index on course to gain for a fourth day, as a slowdown in the U.S. retail sales fueled bets the Federal Reserve won’t raise interest rates earlier than expected. Fairfax Media Ltd., a newspaper publisher, jumped 7.1 percent in Sydney after profit beat estimates. Telstra Corp., Australia’s largest phone company, rose 1.9 percent after announcing a share buyback and posting annual profit above estimates. NCsoft Corp., a maker of online games, advanced 8 percent in Seoul after reporting quarterly profit increased. The MSCI Asia Pacific Index (MXAP) added 0.2 percent to 147.53 as of 10:45 a.m. in Tokyo after rising 2.2 percent the past three days.
- Cisco(CSCO) Cutting 6,000 Jobs as CEO Forecasts Stagnant Growth. Cisco Systems Inc. (CSCO) is cutting 6,000 jobs and forecasting little to no revenue growth in the current quarter amid a slump in demand from phone and cable companies, and weakness in emerging markets. The world’s largest networking-equipment maker, which has about 74,000 employees, said it will take a pretax charge of as much as $700 million. Including the latest round of firings, which represent about 8 percent of the workforce, Cisco has eliminated more than 18,000 people over the past three years.
- How Israel Outflanks the White House on Gaza. White House Now Scrutinizing Israeli Requests for Ammunition. White House and State Department officials who were leading U.S. efforts to rein in Israel's military campaign in the Gaza Strip were caught off guard last month when they learned that the Israeli military had been quietly securing supplies of ammunition from the Pentagon without their approval. Since then the Obama administration has tightened its control on arms transfers to Israel. But Israeli and U.S. officials say that the adroit bureaucratic maneuvering made it plain how little influence the White House...
- San Diego Pension Dials Up the Risk to Combat a Shortfall. San Diego County's Pension Manager Is Extreme Example of Those Using Leverage to Boost Performance. A large California pension manager is using complex derivatives to
supercharge its bets as it looks to cover a funding shortfall and
diversify its holdings. The new strategy employed by the San
Diego County Employees Retirement Association is complicated and
potentially risky, but officials close to the system say it is designed
to balance out...
- Awash in Coal, U.S. Imports Even More. Power Plants Reap Benefits From Cheap Colombian Shipments as Mines in Appalachia Begin to Close. Coal imports to the U.S. are rising sharply even as coal mines close throughout Central Appalachia. A big reason: price. It costs $26 a ton to ship coal from Central Appalachia to power plants in Florida compared with $15 a ton to get coal from a mine in Colombia, according to research firm IHS Energy. Labor costs are lower in Colombia, and it's much more cost effective to move coal by ship, which can transport well over...
- Where ObamaCare Is Going. The government single-payer model that liberals aspire to for the U.S. is increasingly in trouble around the world.
- Fox News Poll: Majorities disapprove of Obama on Iraq, Israel and Ukraine. A 74-percent majority thinks Obama hasn’t been tough enough on Russia, up from 66 percent in March. Six percent say Obama has been too tough, 10 percent volunteer “about right” and 11 percent have no opinion. Sizable majorities of Democrats (65 percent), independents (69 percent) and Republicans (88 percent) agree Obama should be tougher on Russia. Just 16 percent of voters think Putin takes Obama seriously, while 77 percent think he doesn’t. That jumps to 87 percent among those who think Obama hasn’t been tough enough on Russia. Some 64 percent of Democrats say the Russian president doesn’t take Obama seriously. Thirty-one percent of voters approve of how Obama is handling the situation in Ukraine, while 50 percent disapprove. Approval among Democrats (52 percent) is far outweighed by disapproval among Republicans (70 percent). The president’s ratings are similar on the Israeli-Palestinian conflict: 30 percent approve, while 54 percent disapprove.
Zero Hedge:
- What Do These Numbers Have In Common: 1,039,000,000,000,000 And 2,170,000,000,000. (graph) As the following two charts show, Japan and Italy just broke another record - sovereign debt loads (1.038 quadrillion JPY and 2.17 trillion EUR respectively).
- Russian Aid Convoy Risks 'Triggering A Dangerously Volatile Situation'. A fleet of 280 Russian trucks carrying humanitarian supplies to Ukraine is currently at a Russian military base 200 miles east of the border, and the confusion surrounding the convoy risks provoking a conflict.
- Italy's Renzi must bring back the lira to end depression. It is an incontrovertible fact that Italy’s 14-year disaster coincides with EMU membership. Italy has been in depression for almost six years. The slump has been punctuated by false dawns, overwhelmed each time by the monetary amateurs in charge of EMU policy. The latest recovery fizzled after a single quarter. The economy is in technical recession again. Output has collapsed by 9.1pc from the peak, back to levels last seen 14 years ago. Industrial production is down to 1980 levels. It takes spectacular policy errors to bring about such an outcome in a modern economy.
- China 1H Energy Consumption Fell Most in 6 Years. China's energy consumption per unit of GDP falls 4.2% y/y in 1H, citing National Development and Reform Commission. Consumption fell 3.7% last year and 3.6% in 2012, the report said.
- China Banks More Cautious in LGFV, Property Lending. Loan growth has slowed to the real estate industry, local govt financing vehicles and sectors with overcapacity including steel and cement as Chinese financial institutions have been more cautious in lending to these areas since the beginning of July, citing Sheng Songcheng, head of the statistics dept. of the People's Bank of China.
CSFB:
- Rated (TSLA) Outperform, target $325.
- Rated (GM) Underperform, target $33.
- Rated (DLPH) Outperform, target $83.
- Rated (LEAR) Outperform, target $114.
- Asian equity indices are -.25% to +.50% on average.
- Asia Ex-Japan Investment Grade CDS Index 104.0 -2.0 basis points.
- Asia Pacific Sovereign CDS Index 72.25 -2.75 basis points.
- FTSE-100 futures -.04%.
- S&P 500 futures +.02%.
- NASDAQ 100 futures +.03%.
Earnings of Note
Company/Estimate
- (AAP)/2.02
- (BGG)/.38
- (KSS)/1.07
- (RRGB)/.90
- (WMT)/1.21
- (A)/.74
- (AMAT)/.27
- (ADSK).,28
- (DDS)/.88
- (JCP)/-.95
- (JWN)/.95
- (SINA)/.10
- (WB)/-.03
- (ZIPR)/-.04
8:30 am EST
- Initial Jobless Claims are estimated to rise to 295K versus 289K the prior week.
- Continuing Claims are estimated to fall to 2507K versus 2518K prior.
- The Import Price Index for July is estimated to fall -.3% versus a +.1% gain in June.
- None of note
- The Eurozone GDP/CPI report, $13B 30Y T-Bond auction, Bloomberg Aug. US Economic Survey, weekly Bloomberg Consumer Comfort Index and the weekly EIA natural gas inventory report could also impact trading today.
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