Tuesday, November 17, 2015

Today's Headlines

Posted by Gary .....at 3:02 PM
Bloomberg: 
  • Paris Terror Unites East Europe Against Merkel's Refugee Plan. (video) Eastern European nations are toughening their opposition to German Chancellor Angela Merkel’s plan to force them to take in refugees, arguing that the European Union’s immigration policies may have aided last week’s terrorist attacks in Paris. Bulgarian Foreign Minister Daniel Mitov on Tuesday called discussions on quotas for migrants “absurd” following the events in Paris, while Poland’s incoming Prime Minister Beata Szydlo said a day earlier the EU should review its stance on immigration, pledging to accept refugees only if they don’t endanger security. At least 129 people were killed in Paris on Friday, with a Syrian passport found next to the body of one of the suicide bombers registered on the Greek island of Leros, suggesting the holder may have come into Europe claiming to be a political refugee. The EU is increasingly split along east-west lines over how to deal with the immigration crisis as the European Commission estimates 3 million asylum seekers may be heading toward the bloc by 2017.
  • Foreign Companies Scrap Paris Events After Terror Attacks. Corporate events planned for Paris are going dark as Europe’s worst terror attack in a decade spurs foreign companies to scrap visits because of concerns over security and travel disruptions. The Netherlands’ ABN Amro Bank NV, Japan’s Sharp Corp., and home-sharing startup Airbnb Inc. are among companies that have curtailed or canceled events or asked employees to avoid travel to Paris after the Friday assaults that killed at least 129 people. The cancellations show the uphill struggle faced by France to convince businesspeople, investors and tourists that it can maintain security after its second major terror incident in less than a year. Unlike January’s Charlie Hebdo attacks, which mostly targeted the journalists at the satirical newspaper, Friday’s assaults felt entirely random, indiscriminately killing Parisians and visitors at cafes, restaurants and a concert hall. 
  • Wall Street Is Running the World's Central Banks. Wall Street is again leading to the corridors of central banks. From Minneapolis to Paris, investors and financiers are increasingly being hired to help set monetary policy less than a decade since the banking crisis roiled the world economy and chilled their public-sector employment prospects. Academic studies of historical voting records at central banks suggest the new trend may mean an increased bias towards tighter monetary policy. Last week’s appointment of Neel Kashkari to run the Federal Reserve Bank of Minneapolis as of January means a third of the Fed’s 12 district banks will soon be run by officials with past ties to Goldman Sachs Group Inc. Kashkari also worked for Pacific Investment Management Co. and managed the U.S. Treasury’s $700 billion rescue of banks during the financial crisis. The New York Fed’s William Dudley was Goldman’s chief U.S. economist for almost a decade before joining the central bank in 2007, while recently appointed Dallas Fed President Robert Steven Kaplan spent 22 years at Goldman and rose to become its vice chairman of investment banking. Although Patrick Harker joined the Philadelphia Fed from the University of Delaware he also served as an independent trustee of Goldman Sachs Trust. Fed Vice Chairman Stanley Fischer and Atlanta Fed President Dennis Lockhart both spent time working for Citigroup Inc. Fed Governor Jerome Powell worked as an investment banker early in his career for Dillon, Read & Co., which eventually became part of Switzerland’s UBS Group AG.
  • Energy Shares Lead European Stocks to Biggest Rally in 6 Weeks. Oil-and-gas producers strengthened gains, leading an advance in European shares for a second day. Total SA and Royal Dutch Shell Plc climbed 3.4 percent or more. France’s CAC 40 Index proved resilient in the wake of Friday’s terror attacks, rising 2.8 percent for the biggest gain in developed markets, after closing little changed yesterday. Europe’s stocks advanced the most in six weeks, helped by a falling euro and oil prices that have held above $40 a barrel, according to Guillermo Hernandez Sampere, head of trading at MPPM EK in Eppstein, Germany. The Stoxx Europe 600 Index rose 2.5 percent at the close of trading, as 570 of its stocks rose.
  • Copper Sags to Six-Year Low as Investors Sell on Surplus, China. Copper fell to a six-year low as investors added to bearish positions amid expectations for a global supply glut and slowing demand in China, the world’s biggest consumer. Short positions in the metal increased 39 percent, the most since January 2014, according to U.S. Commodity Futures Trading Commission data released Monday. A rally for Chinese stocks fizzled Tuesday after technology and small-company shares plunged, as the Asian nation heads for the slowest economic growth in 25 years. The metal has lost 25 percent this year.
  • OPEC Delays Long-Term Strategy Amid Rift Over Production. OPEC’s board of governors was unable to agree on the group’s long-term strategy plan and won’t present it to oil ministers when they meet on Dec. 4 in Vienna, two OPEC delegates with knowledge of the matter said. Approval of the plan is delayed until at least the next meeting of the board of governors in 2016, said the delegates, who asked not to be identified because the plan isn’t public. Calls to the headquarters of the Organization of Petroleum Exporting Countries in Vienna weren’t immediately answered. 
  • Swelling Global Grain Glut Spurs Largest Bearish Bet Since June. Overflowing grain bins prompted money managers to expand their wagers on lower crop prices by almost ten times in the space of a week. Global inventories of corn, wheat and soybeans will each rise to all-time highs before next year’s North American harvests, the U.S. government forecasts. While grain prices have already dropped to five-year lows, hedge funds are predicting more losses as stockpiles expand. The funds are holding the biggest bearish bet on the crops since June. 
  • Will Fed Tightening Expose the Bear in a Bull Run? (video)
  • Druckenmiller Among Top Managers Who Cut Back U.S. Stocks. (video) Some of the world’s top hedge fund managers scaled back their U.S. stock investments last quarter as markets tumbled. The value of Stan Druckenmiller’s disclosed U.S.-listed equity holdings dropped 41 percent to $868 million, according to a filing from the billionaire’s family office. The listed holdings at Louis Bacon’s Moore Capital Management fell 39 percent to $1.65 billion, while at David Tepper’s Appaloosa Management, they dropped 30 percent to $2.82 billion.
  • Merchants of Debt. Big problems get a whole lot bigger when big debt is involved. The prime example is energy companies, many of which borrowed record amounts of cash during the recent commodity boom only to run into trouble as soon as oil prices headed south. But another important one can be found in overly leveraged U.S. retailers, which are struggling in the face of a structural shift in consumers’ spending habits. Macy’s, for example, the largest U.S. department-store company with about $7 billion of debt outstanding, plunged the most in more than seven years last week after the chain missed third-quarter sales estimates and cut its annual profit forecast. Its bonds had already dropped almost 3 percent in the year leading up to the earnings and kept on falling after that as investors worried about the company’s future viability, Bank of America Merrill Lynch index data show. It’s not alone.
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  • SGX flags concerns about financial accounting by several China-linked firms. (video) Companies at risk include those from the textile and sporting goods, manufacturing, heavy industries, packaging, electrical and electronics, retail and chemical sectors, according to Singapore Exchange's Chief Regulatory Officer. The Singapore Exchange (SGX) on Tuesday (17 Nov) expressed concern about write-offs made by by some companies with" large" operations in China, and said it is closely monitoring the disclosures made. "Several companies with large operations in China have recently announced adverse and significant changes in their financial positions under perplexing circumstances," Chief Regulatory Officer Tan Boon Gin wrote in a column published on the SGX website. "In some instances, the companies reported customer claims for compensation more than 10 times the value of the original sales which is the subject to the claim. In others, trade receivables written off ballooned and explanations offered did not provide clarity or comfort," Mr Tan said.

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