Monday, March 07, 2016

Today's Headlines

Posted by Gary .....at 3:04 PM
Bloomberg:
  • China Said to Plan Crackdown on Loans for Home Down-Payments. Chinese regulators plan to impose new rules to end the practice of homebuyers taking out loans to cover down-payments, as they step up scrutiny of financing risk in the property market, according to people familiar with the matter. The rules will bar lenders including developers, housing agencies, small-loan companies and peer-to-peer networks from offering loans for down-payments, said the people, who asked not to be named because the matter isn’t yet public. Regulators including the central bank and the China Banking Regulatory Commission will also ask commercial banks to scrutinize mortgage applications and reject those where down-payments come from loans offered by such institutions, the people said. China is planning the crackdown amid concerns about rising risks in the loan markets and warnings from officials that home prices in some top-tier cities are increasing too fast. Shanghai’s most-senior official said the city’s property market has “overheated” and should be more tightly controlled after a recent surge in residential housing prices. “If implemented strictly, this move could slow home sales as it will have a psychological impact on investors," said Liu Yuan, Shanghai-based research director at Centaline Group, China’s largest property agency.
  • Why China Remains a Big Economic Worry. (video)
  • German Factory Orders Drop as Global Slowdown Weighs on Economy. German factory orders fell for a second month in January in a sign that a global slowdown and weak domestic pricing power may be hurting Europe’s largest economy. Orders, adjusted for seasonal swings and inflation, dropped 0.1 percent from the prior month, when they slid 0.2 percent, data from the Economy Ministry in Berlin showed on Monday. The reading, which is typically volatile, compares with a median estimate for a decrease of 0.3 percent in a Bloomberg survey. Orders climbed 1.1 percent from a year earlier. While Germany is benefiting from record-low unemployment that’s boosting domestic demand, corporate confidence has been hit by market volatility and concerns that the euro area’s recovery might fade. Exporters are struggling with a China-led slowdown in emerging markets.
  • European Stocks Fall From Five-Week High, Led by Italian Banks. Traders questioning the longest run of weekly rallies since October sent European stocks lower, while a rise in oil prices helped equities pare losses in the final hour of trading. The Stoxx Europe 600 Index slid 0.3 percent, trimming a decline of as much as 1 percent. Italian lenders were once again leading declines, with Banca Monte dei Paschi di Siena SpA and Banco Popolare SC falling more than 4 percent. Concern over their bad loans sent them to their lowest prices since at least 2012 last month. The nation’s FTSE MIB Index dropped 1.2 percent for the biggest drop among western-European markets.
  • China Delays Emergency Oil Storage Completion to Beyond 2020. China has pushed back completion of its emergency petroleum stockpiles to beyond the original 2020 deadline. The world’s largest energy consumer will finish construction of the second phase of its strategic oil reserves and begin preliminary work on additional sites by 2020, according to the 2016-2020 Five Year Plan released over the weekend. The country’s previous plans called for three phases to be completed by the end of the decade. “China may have reached its current storage capacity limit and it takes time to build up new” reserve sites, said Lu Wang, an analyst at Bloomberg Intelligence in Hong Kong. “Some SPR will be stored underground, which might take more time to build and cause the delay."
  • Clinton Doubles Down Against Fracking in Debate, Raising Alarms. Hillary Clinton’s promise during a debate Sunday to aggressively regulate fracking deepens the divide between Republican and Democratic presidential candidates on oil and gas development and signifies her continued shift to the left on environmental issues. In the Democratic presidential debate in Flint, Michigan against Vermont Senator Bernie Sanders, Clinton said she wouldn’t support fracking in states or local communities that don’t want it, if it causes pollution, or if the chemicals used aren’t disclosed. "By the time we get through all of my conditions, I do not think there will be many places in America where fracking will continue to take place," Clinton said.
  • Junk Bond Indexes Are Getting Junkier. (graph) Downgrades are changing debt benchmarks. As ultra-low oil prices have forced a quick reevaluation of the energy sector's fortunes, credit rating companies have been downgrading energy companies, including Chesapeake Energy Corp. and Whiting Petroleum Corp. The downgrades have fed into the high-yield bond indexes often used by investors to benchmark their returns.  
  • Micron(MU) Falls After Nomura Downgrades Stock on Oversupply of DRAM. Micron Technology Inc. shares tumbled Monday after Nomura downgraded the stock on concerns the U.S.’s largest maker of memory chips will continue to underperform until the industry for dynamic random access memory cuts production. The shares fell as much as 7 percent after Nomura analyst Romit Shah downgraded the stock to reduce from neutral and cut his price target to $8 from $12. Recent checks in Taiwan and Korea indicate that the supply of DRAM is growing and "there seems to be no intention to cut production," Shah said in a note Monday.
  • U.S. Commercial Property Prices Drop for First Time in Six Years. U.S. commercial real estate prices dropped in January for the first time since 2010, a sign of weakening demand by investors after a six-year rally that pushed values to records. The Moody/RCA Commercial Property Price Index slipped 0.3 percent from December, Moody’s Investors Service said in a statement Monday. The decline was led by office and industrial buildings, which each had a price drop of more than 1 percent. “This is a significant milestone that signals that a shift in sentiment among commercial-property investors is under way,” Moody’s said in the statement.
  • Off-Campus College Dorms Now Resemble Spring-Break Hotels. Investors have poured billions into off-campus housing, building luxury complexes that resemble resorts. Two resort-style pools, with deckside cabanas. A beach volleyball court, professional-grade barbecues, and around-the-clock staff. Sounds like a good place for a college student to spend spring break—if she didn't already live there. Purpose-built student housing such as the Stadium Centre apartments—the 710-bed complex described above, a short walk to Florida State University's Tallahassee campus—has become increasingly upscale over the past decade, driven by rising enrollments and an infusion of new capital.
Wall Street Journal:
  • China to Shift Debt Burden in Tax Overhaul. The central government will take on more borrowing to take pressure off indebted local authorities. China’s central government will take over some of local authorities’ debts in a move to help them regain footing and to allow Beijing to cut business taxes.
  • Justice Department, SEC Investigating Visium. Hedge fund run by Jacob Gottlieb tells investors it is being probed over trading and valuation issues. Visium Asset Management LP, a hedge-fund firm that manages more than $8 billion, is being investigated by the Justice Department and the Securities and Exchange Commission over trading and valuation issues, the company’s managing partner, Jacob Gottlieb, told employees Monday morning, according to people close to the matter.
MarketWatch.com:
Fox News:
  • Cruz sees success in GOP-only contests. (video) A pattern is starting to emerge that holds both promise and peril for Republican presidential front-runner Donald Trump: Trump does better in “open” primary contests where members of either party can vote, while Texas Sen. Ted Cruz tends to do better in "closed" contests limited only to registered Republicans. The pattern could lend credence to Cruz’s claim that he’s the “consistent conservative” in the race, and continue to pose challenges for Trump as more closed contests – including the critical Florida primary – loom on the election calendar.
  • North Korea again threatens to strike US, South Korea with nukes. (video) North Korea on Monday issued its latest belligerent threat, warning of an indiscriminate "pre-emptive nuclear strike of justice" on Washington and Seoul, this time in reaction to the start of huge U.S.-South Korean military drills. Such threats have been a staple of young North Korean leader Kim Jong Un since he took power after his dictator father's death in December 2011. But they spike especially when Washington and Seoul stage what they call annual defensive springtime war games. Pyongyang says the drills, which were set to start Monday and run through the end of April, are invasion rehearsals.
CNBC:
  • Fischer sees inflation hints; Brainard urges calm. Two key Federal Reserve officials said Monday they expect inflation to get closer to the central bank's target. In separate prepared remarks in Washington, neither Fed Vice Chairman Stanley Fischer nor governor Lael Brainard made direct reference to next week's meeting of the Federal Open Market Committee. But Brainard argued for patience in rate increases amid possible risks that inflation and U.S. economic activity will fall. 
  • Trump 'fundamentally unstable': Ex-Bush 43 aide. (video) "Anybody who says they think they know what he's going to be [like as president], they don't know what they are talking about because he will change what he's going to be," Fratto told CNBC's "Squawk Box."
Zero Hedge:
Business Insider:

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