Tuesday, September 29, 2015

Today's Headlines

Posted by Gary .....at 3:08 PM
Bloomberg:    
  • Traders Flee Emerging Markets at Fastest Pace Since 2008 Crisis. Investors have pulled $40 billion out of developing economies in the third quarter, fleeing emerging markets at the fastest pace since the height of the global financial crisis. The quarterly outflow was the first since 2009 and the biggest since the final three months of 2008, when traders sold $105 billion of assets, according to the Institute of International Finance. The retreat came as data signaled faltering Chinese economic growth, commodity prices slumped and the Federal Reserve moved closer to an increase in the near-zero U.S. interest rates that have supported demand for riskier assets in developing nations. About $19 billion of the selloff was equities, with the remaining $21 billion in debt, the IIF said in a report Tuesday. There were outflows in all three months this quarter. 
  • Glencore Must Stem Rumors, Stop Lehman-Like Moment, L&G Says. (video) Glencore Plc faces a “quasi-Lehman moment,” where rumors about the company’s viability hurt the stock amid a lack of information from its leadership, Legal & General Group Plc Chief Executive Officer Nigel Wilson said. “There’s a lot of noise and there’s not enough signalling,” Wilson said on Bloomberg Television’s “Countdown” on Tuesday. “That lack of information causes a huge amount of uncertainty at Glencore, which is having a massive contagion effect across the world,” he said, commenting before the market opened.
  • Japan's Economy Suffers the Shortfalls of Abenomics. (video)  
  • Rajan Surprises Again With Bigger-Than-Forecast India Rate Cut. (video)
    India central bank Governor Raghuram Rajan built on his record of surprises with policy decisions Tuesday, taking advantage of a rout in commodity prices to lower borrowing costs by more than forecast. Rajan, who unleashed emergency measures to prop up the rupee days after he took office and began this year with two unscheduled interest-rate cuts, lowered the benchmark repurchase rate by half a percentage point, to 6.75 percent. Most of the 52 economists surveyed by Bloomberg had predicted a quarter-point move, and just one made the right call.
  • German Stock Investors See $400 Billion Vanish as DAX Slumps. German stocks are falling at a rate not seen since Europe’s sovereign debt crisis. The nation’s equity market has lost almost $400 billion in value from a high in April as the DAX Index heads for its first back-to-back quarterly declines since the start of 2009. Hit first by a rebounding euro and the Greek crisis, the losses accelerated in recent weeks as concern over a Chinese slowdown escalated and automakers tumbled after Volkswagen AG admitted cheating on emissions tests in some of its diesel cars. 
  • European Dark Pools Brace for Continent-Wide Limits on Trading. The European Union is going ahead with new regulations that could stop many of the continent’s largest companies from trading on dark pools, even though a senior lawmaker has denounced the rules as unworkable and exchanges have said they will impact trading in unpredictable ways. The European Securities and Markets Authority made one concession to its critics when it published the final version of the rules on Monday. The EU’s markets regulator changed an existing exemption to the trading limits, so that stakes in thinly traded companies can more easily change hands on dark pools once the new rules come into force in January 2017.  
  • European Stocks Fall for Second Day as Growth Concern Persists. European stocks deepened losses today, signaling investor worry over global growth hasn’t abated. Concern over a slowdown in Asia and uncertainty over the Federal Reserve’s actions is weighing on shares, boosting volatility. A gauge measuring swings on euro-area stocks is at its highest level since 2011 on a monthly basis, data compiled by Bloomberg show. The Stoxx Europe 600 Index dropped 0.7 percent to 339.23 at the close of trading, after briefly reversing a decline of as much as 1.8 percent earlier.
  • The Real Estate Crisis in North Dakota's Man Camps. Chain saws and staple guns echo across a $40 million residential complex under construction in Williston, North Dakota, a few miles from almost-empty camps once filled with oil workers. After struggling to house thousands of migrant roughnecks during the boom, the state faces a new real-estate crisis: The frenzied drilling that made it No. 1 in personal-income growth and job creation for five consecutive years hasn’t lasted long enough to support the oil-fueled building explosion. 
  • BofA(BAC) Sees Junk-Bond Train Wreck as Pain Spreads Across Market. Junk-bond investors reeling from a brutal month of losses had better get ready for more pain. What started out as weakness in commodities-related debt has quickly spread to other areas of the market, with lackluster earnings, heavily indebted companies, slow global growth and “appalling bond market liquidity” signaling the end of the credit boom, Bank of America Corp. analysts led by Michael Contopoulos wrote in a report Tuesday. “The malaise is spreading, albeit slowly,” Contopoulos wrote. “We suspect that this is the start of a long, slow and painful unwind of the excesses of the last five years.” 
  • Goldman Sachs(GS) Slashes S&P 500 Price Target, Sees Negative Return for U.S. Stocks. Goldman Sachs now expects the S&P 500-stock index to finish in the red in 2015. Chief U.S. equity strategist David Kostin lowered his year-end price target for the S&P 500 to 2,000, from 2,100, citing slower than anticipated growth from the world's two biggest economies and lower-than-expected oil prices. This drop of nearly 3 percent would be the benchmark index's first negative year since 2011, though this level also represents upside of more than 6 percent from where the S&P 500 closed on Monday. 
  • Credit Suisse: There's a Growing Threat of a Major Top in the S&P 500. Another technical indicator flashes a warning signal. Sorry bulls, technical analysis isn't looking so hot for U.S. equities at the moment, and Credit Suisse is piling onto your pain. In a new note, Ric Deverell and his team at Credit Suisse point to some technical levels worth watching, one of which could be a big signal that the top is in for the S&P 500-stock index. The index is currently trading around 1,890.  
  • U.S. Inflation Outlook Slumps to Six-Year Low as Fed Sees Pickup. The Treasury market is signaling inflation expectations in the U.S. are tumbling, even as Federal Reserve officials stick to forecasts for a pickup. The difference between yields on five-year notes and similar-maturity Treasury Inflation Protected Securities, a gauge of expectations for consumer prices, fell below 1 percentage point Tuesday. The so-called break-even rate is the lowest in six years, after dropping the most in more than eight months on Monday.  Hillary Clinton Fixes Sights on Ripe Target: Prescription Drug Prices. It's a calculated risk by the front-runner, who has steered clear of other corporate targets pursued by rival Bernie Sanders. Hillary Clinton may have found the perfect target to show that she'll be as tough on corporations as her Democratic presidential rival, Bernie Sanders: Big Pharma. Following up on her tweet last week against “price-gouging” by Turing Pharmaceuticals that sent biotech stocks plummeting, the Democratic front-runner released a hard-hitting television ad on Monday suggesting that CEO Martin Shkreli decided to lower prices after she went after him. In between, she unveiled a proposal to cap out-of-pocket drug expenses, offer tax credits to help families deal with soaring costs, force drug manufacturers to invest more on research and development, and oblige companies to invest in the production of generics. 
  • Biotech dread is like nothing in four years. Following a week-long rout that has lopped 20 percent off share prices, investors are bidding up contracts that protect against declines in the iShares Nasdaq Biotechnology ETF in the next 30 days, driving the price to the highest since 2011 compared with contracts expiring in three months. The difference in implied volatility shows trader obsession with the prospect of losses in the here and now, rather than months in the future. Implied volatility for 30-day contracts on the iShares Nasdaq Biotech ETF is 51.93, compared with 42.93 for options that expire in three months, according to data compiled by Bloomberg. That gap of 9 is the most since August 2011. Meanwhile, 30-day historical volatility spiked to a four-year high on Monday. 
  • Bespoke: Biotech Stocks Could Fall Another 10 Percent. A short history of biotech bears and bulls. What goes up must come down? The S&P Biotechnology Select Industry Index fell nearly 5 percent to start the week, as drug price increases undergo major scrutiny. The downward move follows a runup that has seen the index jump, from 1,040 back in September 2011, to 4,110 at the end of June this year—an astonishing 295 percent increase.  
  • BofA(BAC) Said to Cut Dozens of Traders, Bankers as Revenue Drops. Bank of America Corp. is cutting dozens of jobs across the firm’s trading and banking divisions after Chief Executive Officer Brian Moynihan pledged to trim expenses amid a decline in trading revenue, according to two people with knowledge of the plans. 
  • Pimco Sees Fed 'Phantom Rate Hike' at Root of Market Volatility. Financial-market volatility has climbed as investors wait for a Federal Reserve shift that policy makers have signaled yet failed to deliver, according to Tony Crescenzi at Pacific Investment Management Co. With Fed officials indicating they will probably raise the central bank’s target interest rate from near zero this year, investors have moved to get ahead of the policy change, Crescenzi, an executive vice president at the money manager, wrote in a note published Tuesday. Pimco, based in Newport Beach, California, oversaw about $1.52 trillion as of June 30.  
  • Google Unveils Nexus Phones by LG, Huawei to Challenge IPhone. Google Inc. unveiled its newest Nexus smartphones with Huawei and LG Electronics Inc. as it looks to blunt the growth of Apple Inc.’s iPhone.
Business Insider: 
Reuters:
  • Delayed rate hike 'risk management' says Fed's Mester: Nikkei. The Federal Reserve delayed an interest rate hike this month as a "risk management" measure in the face of global growth concerns and financial market volatility, Cleveland Fed President Loretta Mester was quoted on Tuesday as saying. Mester, interviewed by Nikkei, repeated that she believes the U.S. economy is strong enough for an initial rate hike. "The decision not to raise rates in September was really a decision about risk management," she was quoted as saying, citing risks to U.S. economic forecasts from a "reassessment of global growth" and renewed questions about China's economy and those of emerging markets.
News9:
  • Chesapeake Energy(CHK) Said to Be Laying Off Up to 1,000. Up to 1,000 employees could be let go at Chesapeake Energy; layoffs said to be underway.
Telegraph: 

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)