Thursday, July 30, 2015

Today's Headlines

Posted by Gary .....at 2:58 PM
Bloomberg: 
  • Tsipras Confronts Rebels Within Who Oppose Greek Aid Talks. Greek Prime Minister Alexis Tsipras confronted rebels within his own party for not backing his deal with creditors, in a showdown that could put Europe’s most indebted state on course for snap elections. Speaking to a central committee meeting of the Syriza governing party, Tsipras challenged dissenters to hold a party ballot on Sunday if they reject his decisions. He also called for an emergency congress in September to gauge his support. The committee will decide on the initiatives after about a quarter of the party’s lawmakers rejected Tsipras’s move to seek a new bailout. 
  • IMF Reiterates Unwillingness to Fund Greece Without Debt Relief. The International Monetary Fund reiterated its unwillingness to provide more financing to Greece without debt relief by euro-member states and further reforms from the Greek government. The Washington-based lender’s management won’t support a new loan program unless Greece’s debt is sustainable in the medium term and the country’s budget is fully financed for 12 months, an IMF official told reporters Thursday on a conference call. The official spoke on condition of anonymity. The IMF will require an explicit, concrete commitment of debt relief from euro-member countries before moving forward with a new loan, the official said. European countries haven’t had detailed discussions with the IMF on a debt restructuring, according to the official.
  • Audi Trims Global Sales Forecast, Citing China Slowdown. Audi AG trimmed its global annual sales forecast as the world’s second-biggest luxury-car manufacturer faces volatile markets in China and elsewhere. Audi will deliver more cars this year than last, the Ingolstadt, Germany-based carmaker said Thursday in a statement. Audi had previously said it would sell “significantly more” cars. Its parent Volkswagen AG on Wednesday also lowered its global sales goal.
  • Brazil Gives Borrowers With Record Debt a Lifeline: More Credit. Brazilian household debt has swelled to a record. The government has a way to help: Payday lending. Brazilian President Dilma Rousseff signed a decree this month making it easier to use payday loans from banks to refinance credit cards. In the U.S., the credit lines have earned a bad rap for high fees and shady marketing, but in Brazil they let borrowers cut interest rates by two-thirds. That doesn’t mean the rates are low -- at least not by global standards. While Brazilian household debt as a portion of income is still half that of the U.S., it’s the interest rates that’s worrying bank analysts and consumer watchdogs. In the U.S., credit cards charge an average of about 15 percent a year. In Brazil -- where formal credit is still a relatively new concept for much of the population -- consumers pay 85 percent for cards and 27 percent for payday loans, the central bank says. “It’s too much credit for people who aren’t educated financially and have to pay such high interest rates,” said Diogenes Donizete, a coordinator of debt services at Sao Paulo state’s consumer-protection agency, known as Procon. Payday loans are just another “excellent ingredient to get even more over-indebted people.”
  • AB InBev Earnings Miss Estimates on Weakness in U.S, Brazil. Anheuser-Busch InBev NV, the world’s biggest brewer, reported second-quarter profit growth that missed analyst estimates on worse-than-expected beer sales in Brazil, the U.S. and China. Adjusted earnings before interest, taxes, depreciation and amortization rose 4.6 percent on an organic basis to $4.16 billion, the Leuven, Belgium-based maker of Stella Artois said Thursday in a statement. That lagged behind the median estimate of 17 analysts for 8 percent growth. The shares fell as much as 4.9 percent in Brussels.
  • Puerto Rico Risking Point of No Return With Debt Payment Default. Puerto Rico is poised to set in motion a chain of events to force investors into negotiating a restructuring of the island’s $72 billion debt burden. The commonwealth’s Public Finance Corp. will likely fail to make $58 million in bond payments due Aug. 1, the first default since Puerto Rico was ceded to the U.S. following the Spanish-American War. Government officials say they can’t make the payment because the legislature didn’t appropriate the funds last month for the current fiscal year.
  • Shell to Cut 6,500 Jobs as Prolonged Market Downturn Looms. Royal Dutch Shell Plc said it’s preparing for a “prolonged downturn” by cutting thousands of jobs and slashing billions of dollars in investments over the next two years. The shares gained the most in almost six months. The company, which in April said it was confident prices would return to $90 a barrel in three years, on Thursday said that “today’s oil price downturn could last for several years.” Shell is cutting 6,500 jobs this year and plans to reduce capital investment by $7 billion, it said in a statement.
  • $40 Oil May Force Russia Into an Emergency Rate Hike, Economists Say. If oil hits $40, Russia is in trouble. Already faced with recession and sanctions, a further drop in crude might force the country's central bank into an emergency rate hike — after four cuts already this year — according to 65 percent of economists surveyed by Bloomberg from July 24-29. Thirty-nine percent of analysts said the government might impose Greek-like capital controls and 22 percent predicted a takeover of at least some of the country's banks.   
  • Mexican Peso’s Plunge Accelerates, and Central Bank Intervenes. The Mexican peso’s decline gathered speed, falling by the most in eight weeks to a new record and prompting the central bank to sell $200 million under a currency-intervention program. The peso slid 1.1 percent to 16.4708 per U.S. dollar as of 1:13 p.m. in Mexico City, sinking the most since June 5. Mexico’s currency has lost 10 percent this year. 
  • Emerging Currencies Sink as U.S. Growth Stokes Fed Rate Concern. Emerging-market currencies slumped the most in 11 weeks and stocks retreated as accelerating U.S. economic growth rekindled concern that the Federal Reserve will raise interest rates sooner rather than later. South Africa’s rand led declines, weakening 1.6 percent against the dollar. The real ended a three-day advance as Brazilian policy makers signaled that they’re going to stop raising borrowing costs. A Bloomberg gauge of 20 developing-nation currencies slid 0.7 percent to a record low. The MSCI Emerging Markets Index fell for the sixth time in seven days, slipping 0.8 percent to 892.78 at 11:35 a.m. in New York, led by a 1.8 percent decline in technology stocks.
  • Europe Stocks Rise for 3rd Day on Earnings as Shell, Nokia Gain. European stocks climbed amid better-than-forecast earnings. Royal Dutch Shell Plc rose 4.9 percent after saying it will cut jobs and sell a stake in a Japanese refiner. Nokia Oyj jumped 7.5 percent after profitability at its network-equipment business improved. Renault SA slid 8 percent after its profit gain failed to keep pace with rival PSA Peugeot Citroen. The Stoxx Europe 600 Index added 0.6 percent to 396.24 at the close of trading. 
  • Oil Market Embraces Lower-for-Longer Price View as Futures Sink. The global oil surplus increasingly looks like a problem that’ll take years rather than months to solve — and the market is pricing that in. U.S. crude futures for delivery in five years have broken below levels seen during the financial crisis. With leading OPEC members pumping at a record, supplies from elsewhere holding up and Iran close to reviving exports, the market is signaling the glut will persist. The global oversupply has already prompted oil companies to warn that the price rout will continue. Royal Dutch Shell Plc said Thursday it’s braced for a “prolonged downturn,” echoing a forecast from BP Plc Chief Executive Officer Bob Dudley that prices will stay “lower for longer.”
  • Commodities Set for Worst Month Since 2011 Amid Oversupply. Commodities are set for the biggest monthly loss since 2011 amid a price collapse that drove oil into a bear market and pushed gold to a five-year low. The Bloomberg Commodity Index is down 9.5 percent in July, the most since September 2011, after dropping to a 13-year low this week. Oil companies such as BP Plc have started a new round of cost cutting, while shares of Freeport-McMoRan Inc., the biggest publicly traded copper producer, fell the most on a weekly basis in six years through July 24. West Texas Intermediate is heading for its biggest monthly fall this year, while copper in London is set for the worst month since January.
  • See You in September Is Bond Mantra for Fed to Reveal Rate Rise. Treasury two-year note yields reached the highest in six weeks after government reports showed signs that economic growth and inflation are picking up, raising the probability of a Federal Reserve interest-rate increase in September close to 50 percent. Fed policy makers said Wednesday they would be ready to raise rates when there had been “some further improvement in the labor market” and when they are “reasonably confident” inflation is moving toward 2 percent.

Fox News: 
  • Call it 'research,' not 'business,' Planned Parenthood doc says in latest sting video. A Colorado Planned Parenthood doctor stresses calling the harvesting of fetal tissue "research" and not "business" -- and casually pokes around in a petri dish of aborted remains as a colleague exclaims, "Another boy!" -- in the latest video released Thursday by an activist group whose hidden camera stings have imperiled the embattled nonprofit's taxpayer funding.
CNBC:
  • Stock market highs hiding 'bloodbath' within. The S&P 500 came within a whisker of a record high only 10 days ago. It remains within 2 percent of the all-time high reached in the middle of May. But the index is not telling the whole story. Underneath the surface some serious problems are lurking. 
ZeroHedge:
Business Insider:
Telegraph: 
China National Radio:
  • Politburo Says China to Step Up 'Targeted Control'. China still faces "relatively big" downward economic pressure, China National Radio reports, citing Communist Party Politburo meeting chaired by President Xi Jinping today.

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