Saturday, September 26, 2015

Today's Headlines

Posted by Gary .....at 4:58 PM
Bloomberg:    
  • Stocks Slump Toward Worst Quarter in 4 Years Amid Fed Confusion. A sales warning from Caterpillar Inc. showed the risks of slowing global growth, while Nike Inc. provided a more upbeat view of demand overseas. Investors weighed a slip in equipment orders against a pickup in gross domestic product. A tweet by Hillary Clinton roiled the biotechnology industry, highlighting the volatility facing markets. And above it all loomed the Federal Reserve, whose officials fueled the debate over whether the American economy is robust enough to withstand higher interest rates amid the recent turmoil. The Standard & Poor’s 500 Index finished the five days with a loss of 1.4 percent. The gauge has tumbled 6.4 percent in the quarter, headed for its worst slide in four years.
  • Volkswagen Scandal Spreads Trouble From IPOs to Credit Markets. A week after it admitted to cheating on U.S. emissions tests for years, Volkswagen AG’s pain is beginning to spread throughout Europe’s credit markets. The Bank of France stopped trading two securities backed by Volkswagen auto loans on Friday, while executives of parts supplier Schaeffler AG find themselves fielding questions about their biggest customer as they drum up support for an initial public offering, according to people familiar with the matters. Since Volkswagen admitted Sept. 18 that it had cheated on U.S. air pollution tests since 2009, the chief executive officer resigned, the company became the target of a joint investigation by 27 U.S. states and the stock price tumbled 28 percent.
  • Catalans Vote on Independence as World Leaders Warn of the Risk. Catalans head to the polls on Sunday to decide whether to try and create a new European state with the international community telling them they could be making a costly mistake. While Catalans are officially choosing lawmakers for the 135-seat regional assembly, their president, Artur Mas, has formed a pro-independence alliance with his traditional rivals within the separatist camp in a bid to win a clear mandate for breaking away from Spain. The legal barriers to a breakaway remain high, but many Catalans are determined to push forward regardless. The campaign risks seeing their region excluded from the European Union and its single currency, roiling the market for Spain’s 1 trillion euros ($1.1 trillion) of sovereign debt and wrenching the industrial links that tie Catalan manufacturers to clients and supplies across the continent.   
  • Shop Rents Tumble on H.K. Street That Was World's Priciest. Cosmetics retailer Colourmix will soon move to Hong Kong’s Russell Street, once the world’s most expensive shopping strip, and pay almost 40 percent less than the former tenant as China’s economic slowdown rattles the city. “Landlords have to face the reality, no matter how reluctant they are,” Lawrence Wong, a director at property agent Sheraton Valuers Ltd., said in a telephone interview Saturday. “It’s still better than leaving their property empty.” Russell Street has lost its claim as the most expensive shopping street on the planet to New York’s Fifth Avenue, according to broker Cushman & Wakefield Inc. in November. A July research report by Jones Lang LaSalle Inc. predicted prices for space in prime locations will drop 15 percent to 20 percent in Hong Kong this year. Retail rents were down 12 percent in Causeway Bay and 3 percent in Central at the end of June, Oriental Daily reported earlier this month, citing data from CBRE Group Inc.
  • Xi, Putin Stay at Chinese-Owned Waldorf Obama Snubbed. Chinese President Xi Jinping leaves the White House, where he discussed the theft of commercial secrets, and heads to New York to check in tonight at the Waldorf Astoria, where his privacy is sure to be guaranteed by the hotel’s new Chinese owners. On Sunday, Xi will be joined by Russia’s Vladimir Putin, who also picked the Waldorf for his first stay in Manhattan in a decade, according to diplomats preparing for the Eurasian leaders’ address to the annual seven-day session of the United Nations General Assembly.  
  • Dollar Ready to Ride Jobs Gain After Yellen Clarifies Rate Plans. If employment forecasts are any indication, the dollar is about to have another good week. A gauge of the greenback rose the most in two months after Federal Reserve Chair Janet Yellen clarified that she was one of the policy makers who believe an interest-rate rise would likely be appropriate this year. The prospect of higher U.S. rates raises the appeal of dollar-denominated holdings. An Oct. 2 jobs report is projected to add to the central bank’s case for reducing monetary stimulus.
  • Junk-Debt Investors Fight for Scraps as U.S. Shale Rout Deepens. It’s every U.S. shale investor for himself as the worst oil rout in almost 30 years drags down its latest victims. Investors in $158.2 million of Goodrich Petroleum Corp.’s debt agreed to take 47 cents on the dollar in exchange for stock warrants for some note holders and a lien on Goodrich’s oil acreage, according to a company statement today. That puts them second in line if the Houston-based company liquidates its assets in bankruptcy and pushes the remaining holders of $116.8 million in original bonds to the back of the pack. "In the industry it’s called ‘getting primed,’" said Spencer Cutter, a credit analyst with Bloomberg Intelligence. "It’s every man for himself. They’re trying to get in and get exchanged, and if you can’t you’re getting left out in the cold."
  • Oil's Killing U.S. Power Generators, And They Don't Even Burn It. The slide in global oil prices helped send shares of America’s power generators to their worst weekly decline in more than six years. And they don’t even burn the stuff. The glut of crude pooling up around the world has cut oil prices 23 percent in three months, and overseas natural gas supplies linked to crude are so cheap that America’s gas exports can’t compete. Traders speculating that more of the power-plant fuel will just remain in the U.S. have sent gas futures to the lowest seasonal level in 14 years. And power generators’ stocks followed suit, with a Bloomberg Intelligence index of generators sliding 12.9 percent, touching a low on Thursday not seen since July 2012.
  • N.Y. to Shut Obamacare Insurer With $265 Million in Loans. Health Republic Insurance of New York, the Affordable Care Act insurer that got $265 million in U.S. loans, will stop selling policies and eventually cease operations under orders from New York and federal regulators.The insurer will be wound down because regulators found that it was likely to become financially insolvent, according to an e-mailed statement Friday from New York’s Department of Financial Services. Health Republic, the No. 2 provider of health coverage to individuals on the state’s Affordable Care Act marketplace, is the latest insurer created under the ACA to face financial trouble.
Barron's:
  • Had bullish comments on (BWA), (DLPH), (HAR), (ADSK), (EPC), (PANW) and (FTNT).
  • Had bearish comments on (JBLU).
Fox News:
Zero Hedge:
Business Insider:
  • 101 Iranian-American scholars just sent an ominous letter to the White House. In a letter to President Obama, 101 Iranian-American scholars outlined various abuses committed by Rouhani and his closest advisers in the government. According to the scholars, Rouhani represents less of a change in Iranian policy, and more of a continuation of the same policies pushed by the country's hard-lined clerics since they gained power. Perhaps the most damning criticism, one made by Amnesty International and echoed by the scholars, is the “unprecedented” killing spree that the Iranian government is currently on.
  • The S&P 500 bought $134 billion worth of itself in Q2. One of the big drivers of earnings per share growth has been stock buybacks. The math is relatively straight forward: companies use cash to buy their own stock, allowing net earnings to be divvied up among a smaller number of shares. While buybacks have been booming since the financial crisis, they've leveled off lately. "Dollar-value share repurchases amounted to $134.4 billion over the second quarter (July), which represented a 6.9% decline from the first quarter (April) and a 0.4% decline year-over-year," FactSet's Andrew Birstingl notes. "On a trailing twelve-month basis (TTM), dollar-value share repurchases totaled $555.5 billion, which was approximately flat with the first quarter."

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