Monday, August 10, 2015

Today's Headlines

Posted by Gary .....at 3:02 PM
Bloomberg: 
  • Ukraine Tells Allies East Situation Worsens as Attacks Rise. Ukraine said pro-Russian rebels increased the intensity of shelling to the highest in weeks, prompting the administration in Kiev to inform its allies about the deteriorating situation in the war-torn east. Pro-Russian separatists violated a truce 127 times in the past 24 hours, the military said on Monday. The heaviest fighting occurred near the village of Starognativka in the Donetsk region this morning, leaving “many casualties” among rebels, it said. One Ukrainian serviceman was killed and 16 wounded overnight, Oleksandr Turchynov, head of the National Defense and Security Council, said in an e-mailed statement. Tensions are building after more than a year of fighting, which has killed at least 6,700 people, according to the United Nations. Ukraine needs the war to end as it seeks to rebuild an economy crippled by recession, renegotiate its foreign debt and restore confidence in the hryvnia, this year’s third-worst-performing currency against the dollar. 
  • Here are the S&P 500 Stocks With the Highest Exposure to China. Wynn Resorts(WYNN), YUM! Brands(YUM), Intel(INTC), and more. In new research, Kostin and his group take a look at the China exposure of S&P 500 companies. Overall, the analysts say, some $168 billion of S&P 500 revenue comes explicitly from China, according to company disclosures. That's a relatively low amount, equivalent to just 2 percent of total sales in the overall index, but the topline figure masks some large variations between sectors and firms.
  • Russian GDP Plunges 4.6%. Russia’s economy shrank the most since 2009 after a currency crisis jolted consumer demand, while a selloff in oil threatens to drag the country into a deeper recession. Gross domestic product contracted 4.6 percent in the second quarter from a year earlier after a 2.2 percent decline in the previous three months, the Federal Statistics Service in Moscow said on Monday, citing preliminary data. That was worse than the median forecast for a 4.5 percent slump in a Bloomberg survey of 18 analysts. The Economy Ministry had projected that output shrank 4.4 percent in the period, calling it “the lowest point” for Russia.  
  • Negative Yields on $1.5 Trillion of Euro Bonds Show Flat Economy. Negative bond yields, unthinkable before Europe’s debt crisis, have become a fact of life as the euro region shows few signs of growth. More than four months after the European Central Bank started its bond-buying program to funnel money into the economy, $1.5 trillion of securities issued by governments in the region pay less than zero, according to data compiled by Bloomberg. That’s equivalent to 23 percent of that market. 
  • European Stocks Advance as Technology, Resource Companies Rally. European stocks advanced as technology and resource companies rebounded, while investors speculated on the possibility of Chinese stimulus. BHP Billiton Ltd. and Rio Tinto Group rose at least 1.5 percent, leading commodity producers to the best performance of the 19 industry groups on the Stoxx 600. ASML Holding NV added 2.7 percent, pushing technology stocks to the second-largest gain. Statoil ASA and Royal Dutch Shell Plc weighed on oil-and-gas shares even as oil rose from the lowest level in almost five months. The Stoxx Europe 600 Index climbed 0.7 percent to 399.82 at the close of trading, reversing earlier losses of as much as 0.7 percent.
  • Watch Out for a Deeper Credit Selloff as Commodity Pain Spreads. It’s getting harder to find U.S. credit investments that are insulated from the pain of slumping commodity prices. U.S. companies have generally been reporting lower quarterly earnings, even those outside an oil industry that’s been rocked by the almost 60 percent plunge in crude since last year’s peak. And revenues at most U.S. companies are positively correlated to metal prices, which have sagged in response to cooling growth from Asia to South America, according to Deutsche Bank AG analysts. Those aren’t great signs for investors who’ve bought $9 trillion of dollar-denominated corporate bonds since the end of 2008. But perhaps a worse omen is that investment-grade companies are piling on debt at the fastest pace in at least a decade, boosting such obligations by 17.1 percent versus last year, the analysts wrote in an Aug. 7 report. This suggests that companies are depending more on the global economy to accelerate at a time when it doesn’t seem like that’s happening. And it doesn’t bode well for investors now sitting on the biggest pile of U.S. corporate bonds ever.
  • S&P Flouts History in Break With Bonds That Often Ends Badly. As far as credit markets are concerned, U.S. stock investors have lost touch with reality. That’s seen in the extra yield bond investors demand over Treasuries. The spread has expanded by 0.48 percentage point from a year ago, the most since 2012, even as the Standard & Poor’s 500 Index rallied. While not without precedent, instances when anxiety in bonds didn’t seep into equities are rare. More than 70 percent of the time since 1996, as spreads widened as much as they have since April, the S&P 500 has fallen, with the average decline exceeding 10 percent, data compiled by Bloomberg show.
CNBC: 
  • Retail investors bet on Apple, market rebound: TD. Small investors were net buyers of U.S. stocks for a third straight month in July, according to data gleaned from 6 million TD Ameritrade accounts, keeping up their summer buying spree despite a market trading frustratingly sideways.
Zero Hedge:
NBC:
  • China Read Emails of Top U.S. Officials. China's cyber spies have accessed the private emails of "many" top Obama administration officials, according to a senior U.S. intelligence official and a top secret document obtained by NBC News, and have been doing so since at least April 2010. The email grab -- first codenamed "Dancing Panda" by U.S. officials, and then "Legion Amethyst" -- was detected in April 2010, according to a top secret NSA briefing from 2014. The intrusion into personal emails was still active at the time of the briefing and, according to the senior official, is still going on.
Reuters:
  • OPEC has no plan for emergency meeting on oil price drop -delegates. The Organization of the Petroleum Exporting Countries has no plan to hold an emergency meeting to discuss the drop in oil prices before its next scheduled gathering in December, two OPEC delegates said on Monday. Earlier on Monday, Algerian Energy Minister Salah Khebri was reported by state news agency APS as saying discussions about holding such a meeting were ongoing.
Telegraph:

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