Bloomberg:
- China Investors Shun World's Wildest Stocks as Trading Dries Up. Plunging turnover and the world’s wildest price swings mean that China’s stock market just keeps getting uglier for investors. The value of shares traded on mainland bourses has fallen to $90 billion a day from about $380 billion on May 28, with the difference being equivalent to the average daily trading in the U.S. The Shanghai Composite Index’s volatility over the past 30 days was twice as extreme as the average for the biggest global markets. That’s bad news for government efforts to stabilize equities, according to IG Asia Pte. "For long-term investors, high volume and low volatility is preferred," said Bernard Aw, a strategist at IG in Singapore. "Should liquidity in Chinese stock markets continue to fall, as indicated by falling volume, then we could see greater price swings."
- The Factors Affecting Asia's Growth. (video)
- Bad-Loan Hiatus Ending for Canada Banks as Oil and Economy Slump. Soured loans from slumping oil prices and a weakened economy are likely to push Canada’s banks next year to set aside the most money since 2009. Toronto-Dominion Bank, Royal Bank of Canada and four other large lenders are forecast to allocate 27 percent more money for bad debt next year, according to estimates of analysts surveyed by Bloomberg, adding further pressure to earnings as lending slows. “This is what may create some significant headwinds in 2016,” John Aiken, a Barclays Plc analyst, said in an interview. “The biggest villain is low oil prices and what that’s doing to the Alberta economy. However, broadly speaking, the Canadian economy is not doing well.”
- GM May Need to Cut Capacity in South Korea as Exports Slow. General Motors Co. may need to cut production capacity in its South Korean operations if the company can’t increase sales of the vehicles built there, the president of the GM International division said. The automaker sold 113,000 vehicles from its Korean operations last year and is running its plants at only about 60 percent of their capacity, Stefan Jacoby told reporters Monday. Automakers generally need to run plants at more than 80 percent to make a profit.
- Glencore Slumps to Record Low as Mining Losses Pick Up Speed. The rout across metals and mining shares accelerated as evidence of China’s slowdown renewed investor worries and analysts said prices are heading lower. Glencore tumbled as much as 16 percent, the most ever, and slid below 100 pence for the first time since it began trading in 2011. Anglo American Plc touched a 15-year low and Antofagasta Plc sank 7.3 percent. KAZ Minerals Plc, a small copper miner in Kazakhstan, lost 25 percent.
- EU Spars Over Refugees as OECD Predicts Years-Long Influx. (video) European leaders sparred over border management and the sheltering of refugees, as a study predicted an unabated influx of people fleeing persecution and poverty. Southeast European states continued to object to mandatory quotas for spreading 120,000 refugees around the continent, setting up testy meetings in Brussels of national ministers on Tuesday and of European Union leaders on Wednesday. Those numbers were dwarfed by an Organisation for Economic Cooperation and Development forecast that the tide of migrants into Europe will rise to 1 million in 2015 from 630,000 last year and will remain around that level for most of the decade.
- Volkswagen emission scandal widens: 11 million cars affected. (video) Volkswagen could be facing a criminal investigation by the U.S. Department of Justice and further probes at home and abroad after admitting to cheating on emissions tests. Bloomberg's Hans Nichols reports on "Countdown." Bloomberg.
- Islamic State Threatens Cyber-Attack Against U.K., SITE Says. Islamic State threatened to carry out a cyber-attack against the U.K. on Wednesday, according to SITE Intel Group, which monitors jihadist social media. The group made its threat in a video posted on the Internet that opens with images of militants picking up long knives as they forced a group of Western hostages to march forward and kneel in the dirt. The video goes on to make the cyber-attack threat.
- In Top-Secret Brazil Vaults, Diamonds Are Evidence of a Downturn. Scattered across southern Brazil, three clandestine buildings brimming with gold and diamonds are a testament to the nation’s troubled times. Business at the government-run pawnshops that feed the secret vaults is booming as Brazil’s economy is forecast to contract this year and next, its longest recession in eight decades. The pawnshops -- different from U.S. storefronts that hawk everything from used guitars to leather jackets -- are operated exclusively by state-owned bank Caixa Economica Federal and take mainly rare stones and jewelry.
- Brazilian Real Drops to Record Low Against U.S. Dollar. Brazil’s real fell to its lowest level since its introduction two decades ago and stocks dropped a fourth day on concern that President Dilma Rousseff won’t be able to shore up the country’s budget and avoid further credit-rating cuts. The currency sank to as low as 4.0519 per dollar, the weakest intraday level since it was created in 1994, and traded 1.6 percent lower as of 11:56 a.m. in Sao Paulo. The MSCI Brazil Index of stocks dropped 4 percent to a three-month low, led by a rout in companies that depend on consumer demand.
- Dollar Climbs as Fed Speakers Revive 2015 Rate-Rise Speculation. The dollar reached its strongest level in almost two weeks against the euro after Federal Reserve officials said the U.S. economy is strong enough to withstand an interest-rate increase this year. The greenback climbed versus all but two of its 16 major peers. Futures traders saw 47 percent odds of a Fed move in December, up from 44 percent on Sept. 17. Fed Bank of Atlanta President Dennis Lockhart said he remains confident the U.S. will tighten policy this year, even as recent market volatility raised risks to the economic and inflation outlook. European Central Bank Executive Board member Peter Praet said in Geneva on Monday that policy makers “would forcefully react” if the ECB’s inflation goal is at risk.
- Europe Stocks Slide as Carmakers Head for Biggest Drop Since '11. Volkswagen AG’s unfolding emission-test scandal and worries about global growth weighed on investor sentiment in Europe, sending the region’s stocks lower. Volkswagen tumbled 20 percent, dragging a measure of carmakers to its biggest two-day slump since 2008, after saying irregularities on diesel-output readings extend to 11 million vehicles around the world, and it has set aside 6.5 billion euros ($7.3 billion) in an initial tally of the costs. Shares have lost 35 percent since its admission of cheating on U.S. air-pollution tests. PSA Peugeot Citroen SA fell 8.8 percent after France’s finance minister called for a European investigation of the industry. “The extremely negative thing about it is that you cannot quantify the overall costs and penalties for VW that will occur,” said Matthias Jasper, head of equities at WGZ Bank in Dusseldorf. “It may take years to come and people are getting really nervous about it. I’m completely unable to give a time horizon when this may end; it’s a pretty scary picture. This is also the reason why even long-term oriented investors are dumping the shares.” The Stoxx Europe 600 Index dropped 3.1 percent to 346.67 at the close of trading, its lowest since Aug. 24.
- Copper Leads Metals Slump as Zinc Falls to Lowest in Five Years. Copper led losses in industrial metals and zinc fell to a five-year low on concern that a weakening economy will reduce demand in China, the world’s biggest metals user. The Asian Development Bank cut its growth forecasts for China, and said ebbing consumption of raw materials in the nation would hurt commodity-focused exporters like Mongolia and Indonesia. Production will exceed demand by 598,000 tons by 2017, double the surplus this year, and prices are expected to decline, Nomura Holdings Inc. said in a report dated Monday. Copper for delivery in three months dropped 3.6 percent to settle at $5,078 a metric ton ($2.30 a pound) at 5:51 p.m in London, after touching $5,036, the lowest since Aug. 27. Zinc fell as much as 2.1 percent to the lowest since June 2010. Aluminum, nickel, lead and tin also fell.
- Burned by Oil Trade, Debt Investors Think Twice This Time Around. When banks began to scale back financing for energy companies earlier this year amid the slump in oil prices, some of Wall Street’s savviest asset managers sought to capitalize by lending at high rates. That didn’t work out so well, as crude continued to plunge and lenders were stuck with losing positions. Now, banks are again contemplating credit cuts. But this time hedge funds and private-equity firms are showing more reluctance to step in. “Those so-called lenders of last resort are not out there this time around,” said John Castellano, a managing director at the consulting firm AlixPartners LLP who focuses on advising energy companies. “Many were burned and are staying away.”
- European Coal Prices Slump to a Record Low. European coal for 2016 dropped below $50 a metric ton for the first time amid slumping demand from China, the biggest consumer. Prices have declined 26 percent so far in 2015, heading for a fifth straight year of drops in the benchmark year-ahead contract, according to broker data compiled by Bloomberg. The slump came as lackluster global demand with diminished prospects for growth, including a 35 percent drop in Chinese coal imports from January to July, combined with plenty of available low-cost supply, according to Societe Generale SA.
- The Surprisingly Big Market for Sand Just Collapsed. In New Auburn, Wisconsin, a desolate, little outpost carved from the rolling pine-tree forests that run into Lake Superior, the collapse in oil is wreaking havoc on every aspect of the economy. It’s not that there’s any oil here. None in fact for hundreds of miles around. What they’ve got is sand. Real good sand, piled high in giant mounds.
- Chart-Watchers Zero In on More Warning Signals for U.S. Equities. (video) Equity investors rattled by last month’s correction, the prospects for the global economy and the Federal Reserve’s interest rate policy can add a few more reasons to worry. Several technical charts are sounding warning signals that the worst of equities turmoil may not be over. So is the market headed toward another selloff? It may depend on how much stock you put into such omens. The latest signals come after Wall Street early last month was fixated on another chart -- the “death cross,” in which the 50-day moving average of the Dow Jones Industrial Average fell below the 200-day average. The two lines crossed on Aug. 11, and less than two weeks later the gauge dropped 10 percent in four days for its first correction since 2011. With that in mind, here’s what the chartists are seeing in the latest batch of data:
- Goldman(GS) Chief Blankfein Discloses Curable Lymphoma Disease. Lloyd Blankfein, chief executive officer of Goldman Sachs Group Inc., said he has a “highly curable” form of lymphoma and will undergo chemotherapy over the next several months. “My doctors have advised me that during the treatment, I will be able to work substantially as normal, leading the firm,” Blankfein, 61, said Tuesday in a statement. “My doctors’ and my own expectation is that I will be cured.”
- U.S. Presses Firms to Raise China Complaints. Obama administration enlists business community to raise China issues as Xi Jinping arrives for state visit.
CNBC:
- Look out below—where stocks could bottom: Paulsen. (video) Stocks appear vulnerable to test and maybe even break the lows seen toward the end of August, closely followed market watcher Jim Paulsen said Tuesday, as the Dow Jones industrial average plunged about 200 points on the open. "I think at a minimum we go challenge the old lows we had set on the initial crash," the chief investment strategist at Wells Capital Management told CNBC, referring to Aug. 25 when the Dow sunk to 15,666 and the S&P 500 fell to 1,867. "My best guess is we break those maybe and head down towards 1,800-ish [on the S&P] or that level before we finally scare everyone entirely, and maybe finally find a bottom in this correction," Paulsen said on "Squawk Box." The S&P at 1,800 would represent a nearly 8.5 percent drop from where the index closed Monday at 1,966.
Zero Hedge:
Business Insider:
- MORGAN STANLEY(MS) WARNS: Americans are starting to do 'dumb things' with their money. In a press briefing on Tuesday, Mike Wilson, chief investment officer of Morgan Stanley wealth management, said consumer behavior was starting to show signs of excess as the economic recovery reaches its later stages.
Financial Times:
- Canada’s troubles are also the Fed’s. The US does not directly trade significantly with China. But it does trade heavily with neighbours Canada and Mexico (which are more prominent in Steinberg’s cover than those faraway countries). As Ms Yellen implied, if China’s economic slowdown hurts America’s neighbours, then it hurts the US.
Telegraph:
- Analysts warn of "another crash" as FTSE hits lowest level since Black Monday. Almost £44bn has been wiped off the value of Britain's biggest companies as copper prices hit a two-week low.
- 'Made in Germany' lies in the 'gutter' after Volkswagen caught cheating. VW's conspiracy to rig emissions exposes it as the 'Lance Armstrong' of the car industry, once again revealing corrupt reflexes in German boardrooms.
- As George Osborne kowtows, the world sinks beneath a sea of Chinese overcapacity. Britain was a pioneer in steel and nuclear. Now it must jump to China's tune on both.
Xinhua:
- China to use less power in 2015. China's electricity consumption, a key indicator of economic activity, is expected to climb 2 percent this year from 2014, the slowest pace in 17 years, an official said on Tuesday. The slowdown is related to China's economic slowdown, as well as the rapid growth of power demand in past years, Wang Zhixuan, secretary-general of China Electricity Council, told Tuesday's Economic Information Daily. China's power use grew 11.9 percent in 2011, 5.6 percent in 2012, 7.5 percent in 2013 and 3.8 percent in 2014. In the first half of 2015, power use rose only 1.3 percent.
No comments:
Post a Comment