Today's Headlines

Bloomberg:   

• China Stocks Sink in Hong Kong to Two-Year Low on Mainland Risks. China’s stocks slumped in Hong Kong to a two-year low amid speculation mainland shares will decline when trading resumes on Monday after holidays. The Hang Seng China Enterprises Index lost 1.4 percent to 9,169.59 at the close as developer China Vanke Co. and bad-loan manager China Cinda Asset Management Co. led declines. The measure tumbled 6 percent this week to its lowest level since July 2013. Hong Kong financial markets were shut on Thursday for a holiday. The Hang Seng Index dropped 0.5 percent. The gauge of Chinese stocks in Hong Kong has tumbled 23 percent this year, the worst performing index in the world after Peru.
• Hong Kong Home Sales to Slide as Stocks Tank, Centaline Says. Home sales in Hong Kong, where prices have surged to a record, are set to extend declines as buying interest slumped with a stock rout, according to one of the city’s two largest property brokers. Transactions of properties valued from HK$10 million ($1.3 million) to HK$20 million may shrink 20 percent in September from August, Louis Chan, chief executive officer of the residential unit of Centaline Property Agency Ltd., said in a phone interview. Sales of all existing homes done by the closely held real estate agency fell as much as 30 percent in August, Chan said. Hong Kong’s benchmark Hang Seng Index tumbled 12 percent last month, with the gauge slumping 5.2 percent, or more than 1,000 points on Aug. 24, as concerns about a slowdown in China sent equities worldwide into a tailspin. The index is down another 4 percent so far this month. “We got quite nervous on the day when the HSI dropped 1,000 points, because our daily revenue vanished 50 to 60 percent in a single day,” Chan said. “Nobody was in the mood to buy an apartment.”
• China: What are the Global Concerns? (video).
• Linking China Dependence, Suffering Commodity Economies. (video)
• German Factory Orders Fell in July in Sign of Bumpy Recovery. German factory orders fell more than expected in July, signaling that growth in Europe’s largest economy may yet be bumpy. Orders, adjusted for seasonal swings and inflation, dropped 1.4 percent after increasing a revised 1.8 percent in June, data from the Economy Ministry in Berlin showed on Friday. The typically volatile number compares with a median estimate of a 0.6 percent decline in a Bloomberg survey. Orders unexpectedly slid 0.6 percent from a year earlier. German exporters are exposed to a potential cooling of global trade as China’s economy slows, meaning companies may have to rely more on domestic demand. Export orders dropped 5.2 percent in July as domestic demand climbed 4.1 percent, the Economy Ministry report showed. Orders from outside the 19-nation euro area slumped 9.5 percent, and orders from within the currency bloc rose 2.2 percent. Orders for consumer goods fell 6.3 percent, investment goods orders shrank 1.6 percent, and basic goods orders slid 0.2 percent. 
• Germany's Stocks Capitulate as Decline Triggers DAX Death Cross. German equities, which have already lost most of their gains for the year, have now fallen into a bearish chart pattern known as a death cross. The DAX Index’s 50-day moving average dropped below its 200-day mean for the first time in a year. For technical analysts, that’s a sign that price momentum is fading. The gauge has fallen 18 percent since reaching a record in April, leaving it up only 3.5 percent for the year.“It’s the market saying we want to see a retest of the August low and touching even a new low,” said Jean-Charles Gand, a senior market strategist at BBSP SAS in Paris. 
• Russia Bows to Cheap Oil as Putin Aide Sees $50 Price for Budget. Russia will assume that crude prices will stay near their present level in calculating next year’s budget as the world’s largest energy exporter adjusts to a downturn on the oil market, according to President Vladimir Putin’s top economic aide. The budget will be based on an average oil price of $50 a barrel, Andrey Belousov told reporters in Vladivostok on Friday. Putin said he’s asking parliament to support a shift to a one-year fiscal plan in 2016 because it’s “impossible” to predict the direction of global markets. Non-OPEC member Russia, whose currency has plunged 45 percent in the past 12 months, is growing resigned to slumping oil, which together with gas accounts for about half of budget revenue. 
• VW, Ford(F) Open Engine Plants in Russia Amid Car Market Plunge. Volkswagen AG and Ford Motor Co. are sticking with long-planned investments in Russian engine factories even as car sales there head toward a six-year low. Volkswagen opened a 250 million-euro ($279 million) plant on Friday, with Russian Prime Minister Dmitry Medvedev attending the inaugural ceremony. The factory near Kaluga, an industrial city southwest of Moscow where Volkswagen already produces vehicles, will have capacity to make 150,000 engines a year for Russian-made VW-brand and Skoda cars, helping reduce prices, Marcus Osegowitsch, head of the carmaker’s Russian unit, said at the event.
• Emerging Markets Quiver as U.S. `Full Employment' Backs Fed Move. Emerging-market stocks and currencies headed for weekly declines as the U.S. jobless rate dropped to a level the Federal Reserve considers to be full employment, bolstering the case for an interest-rate increase. The MSCI Emerging Markets Index slumped 1.7 percent to 787.85 at 11:29 a.m. in New York. The gauge has dropped 4 percent in the last five days, poised for its 15th decline in the 19 weeks since April. Stocks have tumbled 10 percent since Aug. 11, when China unexpectedly devalued the yuan, deepening a rout amid concern that the slowdown in the second-biggest economy will damp global demand. A gauge of 20 developing-nation currencies is heading for a 1.6 percent weekly decline, extending a record low.
• European Stocks Snap Winning Streak, Traders Wait on Fed. (video)
• Lacker Says It’s Time for Fed to End Era of Zero Rates. Federal Reserve Bank of Richmond President Jeffrey Lacker said it’s time for the central bank to end the era of record-low interest rates, now that the impacts from winter weather and energy prices have passed. The Richmond Fed president, who’s historically been more inclined toward tighter policy than most of his colleagues, said Friday that labor-market slack has been reduced to pre-recession levels, and shorter-term inflation measures are tracking the U.S. central bank’s 2 percent target. “I am not arguing that the economy is perfect, but nor is it on the ropes, requiring zero interest rates to get it back into the ring,” Lacker said in the text of a speech in Richmond. “It’s time to align our monetary policy with the significant progress we have made.”
• Glencore Posts Worst Week Ever as Mining Shares Extend Slump. Glencore Plc shares posted the biggest weekly decline since the company went public in 2011 as the selloff in mining shares showed no signs of slowing. The commodities producer and trader slid 6 percent by the London close on Friday, bringing losses for the week to 17 percent. Vedanta Resources Plc, an Indian miner of copper, aluminum and zinc, dropped 12 percent for the biggest retreat in the FTSE 350 Mining Index. Anglo American Plc and Antofagasta Plc sank more than 5 percent.
• Wheat Glut Erodes U.S. Exports as Cheap Russia Grain Wins Buyers. Oil isn’t the only commodity where the largest producers are fighting for market share in a world awash with supply. Russia and the U.S., two of the biggest wheat exporters, are going head-to-head in a battle for customers. Russian shippers, with the advantage of a weak currency and falling freight rates, can undercut most competitors, selling their grain about 16 percent cheaper than cargoes from the U.S.
• Caterpillar(CAT) Downgraded to Neutral at Baird. (video)

CNBC: 

• Europe markets close sharply lower after US jobs report. (video) European stocks closed sharply lower on Friday, as the latest U.S. non-farm payrolls report boosted investors' fears that the Federal Reserve could raise interest rates at its meeting later this month. The pan-European STOXX 600 closed around 2.5 percent lower, extending losses after the jobs report, with all major bourses and down more than 2 percent. The French CAC 40 closed down 2.8 percent, the British FTSE 100 was down 2.4 percent and the German DAX closed unofficially 2.5 percent lower.
• This obscure market is pointing to more pain for stocks. (video) According to McDonald, deterioration in the Asian credit markets actually started before the recent bout of selling in U.S. equities, and has been a reliable indicator for where they are heading. "We actually saw Asian credits significantly deteriorate almost a week before we had the big selloff here," he said. 
• Obamacare's many double-digit price hikes for next year.

Zero Hedge

•  Dow Dumps 600 Points From Last Friday's Panic-Buying Ramp, Drops 10% Year-To-Date. (graph)
• "We've Run Out Of Buyers" - Half Of Homes In New York Are Now Losing Value.
•  Bull Or Bear? (graph)
• Must Be The Weather? (graph) Thomson Reuters Same Store Sales.
• Why Capital Is Fleeing China: The Crushing Costs Of Systemic Corruption.
• Lira Plunges To Record Lows As Turkish Minister Addresses G20. (graph)
• New Record In Waiters And Bartenders Masks First Manufacturing Drop In Over 2 Years. (graph)
• NFLX(NFLX) Down 25% From Highs, Tumbles To June Stock Split Levels. (graph)
• Goldman(GS): "No Rate Hike In September". 
• Is This Why Copper Is Collapsing?
• Record 94 Million Americans Not In The Labor Force; Participation Rate Lowest Since 1977. (graph)
• August Payrolls Miss, Rise Only 173K, Even As Prior Revised Higher; Hourly Earnings Rise More Than Expected. (graph)
• Chinese Warships Came Within 12 Miles Of U.S. Coast.

CNN:

• Biden: I 'would not hesitate' to run in 2016 if family can handle race.