Today's Headlines

Bloomberg: 

• The Yuan Drop Just Added $14 Billion to Asia Inc.’s Debt Burden. The record devaluation of the yuan has dragged down almost every currency in Asia. As they drop, the foreign debt bills of the region’s companies are rising. Almost $1.6 trillion of bonds and loans denominated in dollars and euros across Asia outside Japan and China has just become $14 billion more expensive for companies that service the debt in their home currency, Bloomberg-compiled data show. While many borrowers have hedged their exposure, the cost of doing that and repaying interest and principal is going up. The People’s Bank of China cut its daily yuan reference rate by a record on Tuesday, triggering the currency’s biggest two-day loss since China unified official and market exchange rates in 1994. The move accelerated a selloff in other parts of Asia, pushing the Indonesian rupiah and the Malaysian ringgit back to 1998 lows and the Thai baht to a six-year trough. “The impact on the rest of dollar Asia is pretty negative,” said Tim Jagger, a Singapore-based portfolio manager at Aviva Investors Global Services Ltd., which managed some $386 billion as of March 31. “My worry in times like these is that some unintended consequences come out of this type of action.” 

• Has China Admitted It Has a Growth Problem? (video)

• German Exporters Face 'New Normal' From China. (video)

• Who’s Crazy Now? Yuan Bears Vindicated by Tumble See More Pain. Sue Trinh had to defend her sanity. Albert Edwards almost got kicked out of meetings. Kevin Lai was ignored by clients for an entire year. Once ridiculed for their bearish forecasts on China’s currency, the analysts who predicted this week’s devaluation don’t look so crazy now. As investors around the world ask what happens next, the forecasters who got it right say the yuan has further to fall. “Some investors told me I was crazy,” Trinh, the senior currency strategist at Royal Bank of Canada in Hong Kong who predicted a yuan retreat in June, when most of her peers were forecasting a stable or stronger exchange rate. “The renminbi was misaligned with fundamentals.”

• Europe Stocks Brush Off China Woes as Nestle Gains on Earnings. The biggest decline in European equities since October was put aside on Thursday as Nestle SA and TUI AG rallied after reporting earnings. Shares of the world’s largest food company climbed 2.7 percent, the most since January, after it reported that first-half sales increased more than analysts had estimated. TUI rallied 6.6 percent after the tour operator said profit growth will be at the upper end of its forecast. “Markets can move on from scares like China very quickly,” said Daniel Murray, London-based head of research at EFG Asset Management. “There’s still some attractive features of the European market, with a much better growth environment and with corporate profits finally picking up. The European selloff was just part of a broader, risk-aversion reaction.” The Stoxx Europe 600 Index gained 1 percent to 386.69 at the close of trading in London, with about 80 percent of its members advancing.

• September Fed Rate Rise Still Seen as Economists Shrug Off Yuan. Economists are standing by their projections for a September Federal Reserve interest-rate increase, despite a surprise devaluation in China’s currency that has heightened uncertainty in the international outlook. Seventy-seven percent of forecasters in a Bloomberg survey taken Aug. 7-12 said that the Fed will raise its main policy rate next month for the first time since 2006, up from 76 percent in July. All respondents were given the opportunity to revise their forecasts following the yuan news. Eleven percent projected a December rate move in this survey, while 8 percent expect an increase at the October meeting, which isn’t followed by a press conference.

• Oil Majors’ $60 Billion Cuts Don’t Go Far Enough as Crude Slides. The world's energy giants need to make tough decisions to keep investors happy. The $60 billion of oil-industry spending cuts this year aren't likely to be enough to meet sacrosanct dividend commitments as crude languishes near a six-year low. The world’s biggest producers will need to trim investments by a further $26 billion, according to Jefferies Group LLC. Capital spending will have to fall 10 percent next year, Banco Santander SA says.

• Kohl’s(KSS) Drops After Saying 2015 Profit Will Be Low End of Range. Kohl’s Corp. fell the most in almost three months after posting second-quarter profit that trailed analysts’ estimates and saying earnings this year will be at the low end of its forecast. Profit in the quarter ended Aug. 1 was $1.07 a share, excluding some items, the Menomonee Falls, Wisconsin-based company said Thursday in a statement. Analysts estimated $1.16. Sales rose 0.6 percent to $4.27 billion, trailing analysts’ $4.31 billion projection.

• Inside Tesla's(TSLA) 2.1 Million Shares Stock Offering. (video)

Fox News:

• Official: Clinton ‘inner circle’ may have stripped email classification markings. (video) The latest revelations about top secret information traversing Hillary Clinton's private email server have triggered accusations that someone in her "inner circle" likely stripped the classification markings, illegally.

Zero Hedge:

• Apocalyptic Footage From Tianjin Explosion Captured By Drone. (video)

• Which States Will Suffer The Most From China's Devaluation?

• Business Inventories Surge Most In 29 Months, Sales Ratio Signals Recession Imminent. (graph)

• Retail Sales Meets Expectations, Leaves Door Open For September Rate Hike. (graph)

• Initial Jobless Claims Average Hits New 42 Year Low - What Happens Next? (graph)

• WTI Crude Tumbles Back To $42 Handle. (graph)

• Both ECB And BOJ Warn More QE May Be Response To Chinese Currency War.

• "Project Omega" - Why HFTs Never Lose Money: The Criminal Fraud Explained.

• Mind The JOLTS - There's A Bearish Warning In There.

• If You're Buying Energy Stocks, Ignore These 3 Charts. (graph)

• One Trader Warns "Market Realities Were Starkly Exposed This Week".

• Even The Fed Admits Recession Looms: Q3 GDP Forecast Slashed To Just 0.7%. (graph)

Business Insider:

• Donald Trump mentioned 'terrific' Warren Buffett when he was asked about potential cabinet picks. Trump also told Hannity on Wednesday that Buffett had said the "nicest things" about him, though he noted that the billionaire investor is a supporter of former Secretary of State Hillary Clinton, the Democratic front-runner in 2016. "Warren Buffett said the nicest things about me the other day," he said. "I have great respect for Warren Buffett. But he said, 'Trump is here to stay.' I was impressed because I think he's supporting perhaps Hillary or something."

• Senior US military official: Turkey 'needed a hook' and tricked us on ISIS.

• 19 US stocks with the most exposure to China.

• Winter is coming for oil.

Reuters:

• Islamic State claims huge truck bomb attack in Baghdad's Sadr City. At least 76 people were killed and 212 wounded on Thursday in a blast claimed by Islamic State in Baghdad's Sadr City, police and medical sources said, one of the biggest attacks on the capital since Haider al-Abadi became prime minister a year ago. "A refrigerator truck packed with explosives blew up inside Jamila market at around 6 a.m. (0300 GMT)," police officer Muhsin al-Saedi said. "Many people were killed and body parts were thrown on top of nearby buildings."