Friday, October 17, 2014

Today's Headlines

  • Rebel Elections Snarl Ukraine Talks as Putin Resists EU. Separatists’ plans to bring forward elections in rebel-held regions of Ukraine have become a sticking point in talks between the European Union and Russia aimed at resolving conflict. Russian President Vladimir Putin refused to denounce votes planned for Nov. 2 in Luhansk and Donetsk in the east of the country despite pressure from European leaders including Germany’s Angela Merkel and the U.K.’s David Cameron at talks in Milan today, according to a Downing Street official.
  • Putin’s Ruble Rescue Plan Crashes Into Global Market Rout. Russia’s efforts to ease a dollar funding crunch that is exacerbating the ruble’s decline are being hampered by a global market rout. The ruble fell to a fresh record yesterday, bond yields jumped and the cost of insuring government debt against non-payment was within 10 basis points of the highest level since 2011 even as the central bank announced a $50 billion repurchase agreement program and the Finance Ministry pledged an additional $3 billion
  • Dallas Lab Worker Isolated on Carnival Cruise for Possible Ebola Contact. (video) A health worker from the Dallas hospital that diagnosed the first U.S. case of Ebola has voluntarily been isolated aboard a Carnival Corp. cruise ship. The worker, a lab supervisor at Texas Health Presbyterian Hospital, hasn’t exhibited any symptoms of Ebola since she boarded the Carnival Magic bound for the Caribbean on Oct. 12 in Galveston, Texas, according to an e-mailed statement today from Carnival Corp.
  • ECB Says Too-Slow Governments a Threat to Europe Revival. European Central Bank policy makers said governments must accelerate plans to strengthen their economies or risk derailing the region’s recovery. “Talking vaguely about structural reforms, but not doing them, is the worst of all worlds,” Executive Board member Benoit Coeure said today in Riga. “It creates uncertainty over the path of real interest rates, without in tandem raising expectations of future growth.”
  • Italian Bonds Drop as Greek Concern Sparks Worst Week in a Year. Italian bonds fell, with 10-year yields set for the biggest weekly increase in more than a year, as prospects of Greece exiting its bailout combined with the threat of recession to sap demand for higher-yielding assets. Spain’s government securities dropped for a third day before the country’s rating review by Moody’s Investors Service, a day after a debt sale fell short of its maximum target amid turmoil prompted by a surge in Greek yields. German 10-year bonds headed for a fifth week of gains as economic reports this week and gauges showing a decline in inflation expectations fueled concern the euro area is heading for recession. 
  • Rolls-Royce Sales to Drop on Russia Sanctions, Economic Woes. Rolls-Royce Holdings Plc (RR/) said sales will decline this year and could fall again in 2015 as a worsening economic situation prompts clients to delay orders and sanctions over the Ukraine crisis stall Russian contracts. Shares of London-based Rolls-Royce fell as much as 16 percent as the world’s second-biggest maker of aircraft engines said revenue will drop by between 3.5 and 4 percent in 2014, with free cash flow dwindling to about 350 million pounds ($564 million), or less than half the figure previously anticipated. 
  • Corporate Gloom Spreads in Europe as Rolls-Royce to Nestle Miss. While Rolls-Royce Holdings Plc (RR/)’s gas turbines and Jimmy Choo Plc (CHOO)’s $1,995 peep-toe sandals have nothing in common, today the two companies encapsulated the corporate decline that’s gripping Europe. It’s been a tough week for European companies, with Rolls-Royce cutting its full-year target for sales and cash flow, leading the stock to drop the most in eight month, while Jimmy Choo sold shares to the public at the bottom end of its range. 
  • European Stocks Rise Most Since 2011 on Stimulus Pressure. (video) European stocks climbed the most in almost three years, ending their longest losing streak in 11 years, as an ailing euro-area economy increases pressure on policy makers to provide more stimulus measures. The Stoxx Europe 600 Index jumped 2.8 percent to 318.68 at the close of trading, after a 7.7 percent slump in the past eight days dragged it to the lowest level of the year.
  • FHFA Said to Plan Steps to Ease Lending to Riskier Buyers. A U.S. housing regulator plans new steps to encourage banks to lend to buyers with less than-perfect credit scores, according to two people with direct knowledge of the matter. Melvin L. Watt, the director of the Federal Housing Finance Agency, will clarify in a speech next week when banks are required to buy back failing loans from Fannie Mae (FNMA) and Freddie Mac, said the people, who asked not to be identified because his plans aren’t public.
Fox News:
Financial Times: 
  • Junk bonds caught in flight from risk. A sell-off in US stocks this week hit the junk bond markets as investors shunned the riskier securities amid fears about the outlook for the global economy.

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