Thursday, January 28, 2016

Today's Headlines

  • China Stocks Cap Worst Losing Streak in Three Weeks on Economy. Chinese stocks fell for a third day as concern slumping commodity prices and a weakening economy will reduce corporate profits overshadowed the biggest cash injection into the financial markets in three years. The Shanghai Composite Index slumped 2.9 percent to 2,655.66 at the close. Shippers led declines among industrial shares. China Shipbuilding Industry Co. and China CSSC Holdings Ltd. dropped by the maximum daily limit after a measure of commodity shipping costs slid to a 30-year low. China Southern Airlines Co. extended losses to 17 percent in a four-day rout as Daiwa Capital Markets Hong Kong Ltd. said the carrier likely swung to a fourth-quarter loss because of a weaker yuan. Chinese stocks capped their longest losing streak in three weeks amid concern slowing growth and yuan volatility will spur capital outflows. The world’s second-largest economy will absolutely not see a “hard landing” as it has adequate macro-control policy tools, according to commentary in the People’s Daily. “The correction isn’t over and stocks will fall to an even lower level as pressure for yuan depreciation, capital outflows and slowing growth is still quite big,” said Zhang Haidong, chief strategist at Jinkuang Investment Management in Shanghai, who’s now on the sidelines after cutting his stock holdings to less than 50 percent of total assets. All these factors “will weigh on the market,” he said.
  • Alibaba(BABA) Falls as Sales Volume Slows, Adding to China Concerns. (video) Alibaba Group Holding Ltd. shares fell after the Chinese online retailer reported flagging growth in sales on its marketplaces, adding to concerns about the country’s economic slowdown. The shares dropped as much as 3.7 percent in New York at the open, reversing gains in pre-market trading. They declined 1.9 percent to $68.21 at 11:54 a.m.
  • Draghi's Shield Under Attack as Politics Exposes European Risks. Mario Draghi may be the euro region’s great protector, but investors can still get hurt. From Portuguese government bonds to Italian bank stocks, the most stressed parts of the euro region are providing a reminder that the European Central Bank president’s stimulus and safety-net programs don’t bring immunity from losses. It’s an alarm that could prove timely if a series of political risks from Spain to Greece materialize. With the ECB’s crisis-busting Outright Monetary Transactions program unveiled in 2012 and the quantitative-easing plan since last March, markets were mostly anesthetized to politics until now. While they look nothing like they did during the meltdown five years ago, investors wondering when the drugs would start to wear off may have their answer. “The minute there’s a real motivation to sell, it doesn’t matter that someone is buying bonds through QE,” said Charles Diebel, the London-based head of rates at Aviva Investors, which oversees about $351 billion. “As long as nothing really changes you could say that QE provides some support, but in and of itself it doesn’t really.”
  • Euro-Area Economic Confidence Drops to Lowest in Five Months. Euro-area economic confidence slumped more than analysts predicted in January, strengthening the European Central Bank’s case for increasing stimulus. An index of executive and consumer confidence fell to 105 from a revised 106.7 in December, the European Commission in Brussels said on Thursday. That’s the lowest since August and compares to a median estimate for a drop to 106.4 in a Bloomberg survey of economists. The figure for December was previously reported at 106.8.
  • Europe Stocks Snap 2-Day Gain as Roche, H&M Earnings Disappoint. (video) Worse-than-estimated earnings from companies including Roche Holding AG and Hennes & Mauritz AB dragged European stocks lower. Roche slid 3.8 percent, leading drugmakers lower. H&M dropped 4.8 percent after also warning a stronger dollar will continue to weigh on first-quarter profit. Stocks have moved more in step with with crude prices lately, and Europe’s benchmark deepened losses after energy shares pared some gains. The Stoxx Europe 600 Index dropped 1.6 percent at the close.
  • Crude Carriers Cutting Speeds as World Swims in Glut of Oil. (video) The world’s biggest oil companies are asking tanker operators to slow down delivery of crude amid an ever-expanding supply glut on land, Europe’s largest owner of supertankers said. Tankers hauling 2 million-barrel cargoes are delivering them at speeds of about 13 knots, compared with a maximum of 15, Paddy Rodgers, chief executive officer of Antwerp, Belgium-based Euronav NV, said in an interview in London on Thursday. The slower speeds might result in a voyage that would normally take 40 days instead lasting 48. Shore-based supplies are getting so big that it’s probable the need for storage at sea may soon grow, he said.
  • Comcast(CMCSA) Wants to Limit Your Netflix(NFLX) Binges. Comcast Corp. customers used to be able to binge on all the Netflix and YouTube videos they wanted without repercussions. Now many are being put on a diet. In a growing number of cities, the nation’s largest cable company has begun imposing extra fees on Internet customers who use what it considers excessive amounts of data. The move could bring in new revenue to offset losses from cord-cutters dropping pay-TV service to stream videos online.
Zero Hedge: 
CBS News:
  • Veterans groups to Donald Trump: Don't use us to hide from Megyn Kelly. (video) Some veterans groups are pushing back against Donald Trump's veterans fundraising event scheduled for Thursday night, condemning the billionaire's feud with Fox News and his decision to opt out of the Republican primary debate hosted by the cable network. One organization, the Iraq and Afghanistan Veterans of America, pledged to refuse any funds that Trump may try to donate from his Iowa event, to be held at Drake University at the same time the Republican frontrunner was originally scheduled to appear on Fox News' debate main stage.
  • How could the next president reshape the Supreme Court? In the next few years, the Supreme Court may face as many as four vacancies as some of the justices age or enter retirement. That means the outcome of November's elections could be critical in determining the court's future composition. Nearly half of the court -- four of the nine justices -- has served on it for 20 to 30 years and are either over the age of 80 or approaching it.
  • Will They, Won't They? OPEC Denies Russian Talk of Cutting Oil Output. However, nothing in global oil politics is that simple: Bloomberg has reported OPEC delegates as saying that there are no plans for talks. There has been a deathly silence from Riyadh, and Iran–for all that anyone can see–remains set on restoring its past output levels as fast as possible (Prime Minister Rouhani has been in Rome and Paris over the last two days talking to Italian and French oil companies about doing just that).
Daily Mail:
Emerging markets: Big trouble from brittle China

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Emerging markets: Big trouble from brittle China

Full article:
Visit for additional distribution rights. For more articles like this, follow us @euromoney on Twitter.
Emerging markets: Big trouble from brittle China

Full article:
Visit for additional distribution rights. For more articles like this, follow us @euromoney on Twitter.
  • Emerging Markets: Big Trouble from Brittle China. The January fall in emerging market currencies, the exodus of foreign capital and a global bear market in equities all point to a new financial crisis. How China reacts to this threat holds the key for emerging markets.

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