Bloomberg:
- China Said to Resume Private Share-Sale Reviews Frozen Amid Rout. Chinese regulators will resume processing applications for private share sales this week, signaling an easing of market curbs imposed during a $3.4 trillion equity rout, according to people with knowledge of the matter. The China Securities Regulatory Commission will review no more than five applications on Friday and a maximum of 10 next week, said the people, who asked not to be identified because the matter is private. Initial public offerings will remain suspended, they said.
- GM(GM) China Sales Fall for Third Time in Four Months. General Motors Co. deliveries slumped for a third time in the past four months in China amid an industrywide slowdown in the world’s largest auto market. GM and its China joint ventures sold 229,175 vehicles in July, 4 percent fewer than a year earlier, according to a statement on its website Thursday. The decline was mainly due to a dip in sales leading up to the introduction of new models and the phasing out of older Chevrolets, the company said. The Detroit-based carmaker cut its outlook for China’s industrywide growth for this year to a low single-digit range last month, from the 6 percent to 8 percent range it projected earlier. The automaker also said it expects a more volatile market in China as growth moderates and stiffer competition to increase the pressure to cut prices.
- Asean Is ‘Seriously Concerned’ About South China Sea Reclamation. Foreign ministers from the Association of Southeast Asian Nations said they were “seriously concerned” about land reclamation in the South China Sea, where several member states are locked in territorial disputes with China.
- Currencies in Freefall Handcuff Bankers From Chile to Colombia. Central bankers in commodity-dependent Andes economies aren’t even considering interest-rate cuts to revive growth, even as prices for oil, copper and other raw materials collapse. That’s because the deepening price slump is also dragging down currencies in Colombia and Chile -- a swoon that’s fanning inflation and tying policy makers’ hands. Fixed-income traders have now ratcheted up cost-of-living expectations for Colombia and Chile after their tenders sank more than 10 percent in the past three months.
- Greek May Jobless Rate at 25% With Economy Facing Bleak Outlook. Greece’s unemployment rate dropped to a three-year low in May even as the country faced off with international creditors. The jobless rate fell to 25 percent in May from 25.6 percent in April, according to data published on Thursday. While that’s the lowest since June 2012 and less than the 25.5 percent median estimate from five economists in a Bloomberg survey, the figures predate the country’s banking shutdown in June that lead to a collapse in economic confidence.
- Europe Moves to Cut Risk in $505 Trillion Derivatives Market. Banks and investors in the European Union will have to send trades of some interest-rate swaps to a third party under new rules intended to make financial markets safer. The banks and major investors that hold the derivatives will have to use a third party called a clearinghouse to process their trades, the European Commission, the EU’s executive arm, said in a statement on Thursday.
- China Stocks Extend $3.4 Trillion Tumble as Turnover Plummets. China’s stocks fell for a fifth time in six days and turnover plummeted as unprecedented government intervention fails to stop a $3.4 trillion rout. The Shanghai Composite Index lost 0.9 percent to 3,661.54 at the close. Telecom and health-care companies led losses. The volume of shares trading on the measure was 51 percent lower than the 30-day average. The Shanghai Composite has fallen 29 percent from its June 12 peak as traders bet valuations were unsustainably high.
- Media Rout Sinks Nasdaq as Selloff in Emerging Assets Worsens. A rout in U.S. media stocks sent the Nasdaq 100 Index to its biggest decline in a month, while emerging- market equities and currencies tumbled amid the specter of higher U.S. interest rates. The Nasdaq 100 plunged 1.8 percent at 11:53 a.m. in New York, and the Standard & Poor’s 500 Index lost 0.9 percent. Media stocks from Viacom Inc. to 21st Century Fox Inc. plunged in the biggest two-day selloff since 2008. The MSCI Emerging Markets Index fell 0.8 percent to a two-year low, while a gauge of developing-nation currencies slid to a fresh record. U.S. crude sank below $45 a barrel.
- European Stocks Fall Most in a Week Led by Commodity Producers. (video) European stocks slid, extending losses as miners and oil shares deepened declines and investors weighed the prospect of a Federal Reserve rate increase. Commodity producers posted the worst performance among industry groups as BHP Billiton Ltd. and Glencore Plc lost 2 percent or more. BP Plc and Tullow Oil Plc fell at least 1.4 percent as oil dropped to its lowest level since March. Among shares moving on earnings, Zurich Insurance Group AG slid 4.6 percent after posting worse-than-estimated profit. The Stoxx Europe 600 Index lost 0.8 percent to 400.7 at the close of trading, the most since July 27.
- Heady Days of Mining Boom Over as ‘New Normal’ Reigns, Rio Says. Rio Tinto Group doesn’t see the good old days of booming commodity prices and record profits coming back anytime soon. China’s economic slump and expanding mine output mean “challenging” times for the industry, Rio said in its earnings statement on Thursday. While the company has been insulated by lower costs, it reported a 43 percent drop in first-half profit after iron ore prices collapsed because of a global glut.
- Dairy Drop Drags Food Prices Down in Longest Run in 16 Years. The biggest drop in dairy prices in almost a year helped drag down global food costs for a ninth month, the longest stretch of declines since 1999. An index of 73 food prices fell 1 percent in July to 164.6, the lowest since September 2009, the United Nations’ Food & Agriculture Organization said in a report Thursday. Dairy product costs slumped 7.2 percent, the most since August 2014, to a six-year low.
- Explorers In Need of Cash Are Selling Oil Fields as Last Resort. Energy explorers reeling from the rout in oil prices are looking for liquidity in an obvious place: their rocks. Having exhausted other ways to raise cash as a glut of global supply depresses prices, a slew of producers from Anadarko Petroleum Corp. to Comstock Resources Inc. announced more than $2.4 billion in asset sales last month, according to data compiled by Bloomberg. Selling oil and gas fields to pay off lenders and fund new drilling -- often a wildcatter’s option of last resort -- is surging after a six-month lull.
- Another Major Pillar of the Bull Market Is Collapsing. A bull market without Apple Inc. is one thing. Removing cable television and movie stocks from the 6 1/2-year rally in U.S. equities is a little harder to imagine. Ignited by a plunge in Walt Disney Co., shares tracked by the 15-company S&P 500 Media Index have tumbled 11 percent in two days, poised for the biggest slump since 2008.
- Loeb Sees Energy Credit Opportunity, Builds Short Stock Bets. Hedge fund manager Dan Loeb said he’s looking for opportunities in energy-related debt after oil prices resumed their decline. “Energy is presenting some very interesting opportunities in credit right now,” Loeb said Thursday in a conference call discussing results at Third Point Reinsurance Ltd., the reinsurer where he oversees investments. “So we are looking at that.” Loeb said he has mostly steered clear of energy recently, sidestepping a second plunge in oil prices that hurt investors who were “suckered in.” He said in February that money managers raising funds to capitalize on energy distress might be disappointed. The money manager has increased bets that securities will decline as he seeks to cope with market volatility. “Increased short exposure in 2015 has helped the portfolio,” including in June, he said. “We continue to increase this exposure through both hedges and single-name equity positions.”
- This Student Debt Relief Program Will Cost Taxpayers at Least $39 Billion. Asking everyone's rich uncle to pay for school.
- Credit Risk Is Staging a Comeback. For years, investors poured money into junk-rated corporate debt with impunity. Arguably, bonds were bought indiscriminately, with seemingly little thought about the actual risk of a company defaulting on its debt. Interest rates, after all, were hovering at zero percent, money was plentiful, and there seemed little likelihood that a company would find itself suddenly starved of credit. With corporate default rates forecast to remain stubbornly low, one junk-rated company was pretty much the same as another. That is beginning to change. The collapse of the commodities complex is feeding into the credit markets, as energy companies have played a significant role in bond sales in recent years. You can see the trend in the chart below from Deutsche Bank, which shows spreads of all CCC-rated bonds, in blue, and CCC-rated spreads stripping out all the bonds sold by energy companies, in red.
Business Insider:
Reuters:
- Sinopec Plans to Cut Crude Processing From Oct. Co. plans to cut monthly crude processing volume by 1m tons from Oct., citing a person familiar with the matter. Co. to reduce oil refining as fuel stockpiles rise and growth of diesel demand slows, the report says.
Telegraph:
- Indebted Portugal is still the problem child of the eurozone. Asphyxiating debt levels, falling job creation and bad loans still plague the economy, a year after it exited its bail-out programme, warns the IMF.
Xinhua:
- China Machinery Industry Faces Downward Pressure. Output in China's machine industry rose 5.7% in 1H, citing data released by China Machinery Industry Federation. The growth rate is .6 ppt lower than overall industrial output in 1H, which is rare in recent years.
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