Monday, August 01, 2016

Today's Headlines

  • Stress-Tests Results Fail to Revive Faith as Europe Banks Fall. (video) While the stress tests showed most of the region’s banks would keep an adequate level of capital in a crisis, investors remained skeptical about the results. Lenders in the benchmark Stoxx Europe 600 Index slipped 1.8 percent, reversing a gain of as much as 1.3 percent. UniCredit SpA sank 9.4 percent, while Britain’s Barclays Plc dropped 2 percent as it fared worse than Deutsche Bank AG, down 1.8 percent. Italy’s Banca Monte dei Paschi di Siena SpA, the worst performer in the regulators’ exam, rallied as much as 11 percent as it said it’s working on a plan involving private investors to help bolster its finances. By the end of the day, it had pared most of its gain.
  • Hardest Hit, Weakest Capital: European Stress Tests in Charts. (video) The latest round of European banking stress tests showed that many lenders still need to lift their capital levels, and some need to do it quickly. While there was no pass or fail mark, two of the 51 banks tested by the European Banking Authority fell below the regulatory minimum threshold, the regulator said late Friday. Eight had common equity Tier 1 ratio of less than 7.5 percent under the adverse scenario. Those firms could face extra scrutiny from regulators or investors, analysts at Barclays Plc wrote in a note to clients before the publication.
  • Korea Exports Fall for 19th Month as Policy Makers Await Rebound. Exports fell 10.2 percent (estimate -6.7 percent), the trade ministry reported Monday; the drop was larger than the most pessimistic projection by economists. That was the 19th straight monthly drop. Imports fell 14 percent (estimate -10.5 percent). Exports to Vietnam increased 7.6 percent; to Japan fell 2.1 percent; to EU dropped 4.3 percent; to China fell 9.3 percent and to U.S. dropped 14.3 percent.
  • Hong Kong Move to Bar Pro-Independence Candidates Jolts Election. The Hong Kong government’s decision to bar pro-independence candidates from next month’s legislative election risks giving the fringe issue more prominence in the campaign. The Hong Kong Electoral Affairs Commission on Sunday said it disqualified Yeung ­Ke-cheong, of the Democratic Progressive Party of Hong Kong, from competing in the Kowloon West district. Yeung was the second candidate barred after refusing to sign a new pledge to uphold Hong Kong’s Basic Law, which says the former British colony is an “inalienable” part of China.
  • Short Sellers Pile Into Mexico as It Lands in U.S. Crossfire. From stocks to bonds to the beleaguered peso, markets are sounding the alarm about Mexico’s future under a new U.S. president. An exchange-traded fund focused on the Latin American nation’s shares has the most bearish bets of any country, while hedge funds including Finisterre Capital in London are pouring into credit-default insurance on Mexican bonds. Societe Generale SA projects the peso will keep underperforming emerging-market peers as the country comes under attack in one of the most rancorous U.S. election campaigns in memory.
  • Uber’s China Deal Moves Ride-Sharing Giant a Step Closer to IPO. (video)
  • History No Friend to Emerging-Market Currencies as August Lands. (video)  Currencies of developing nations have had a great run since the aftermath of the Brexit vote, posting an advance in the past month or so that’s been bettered just once in 4 1/2 years. Now their gains may be about to come to an abrupt halt -- all because of a quirk of history.
  • Banks Lead Europe Stocks Lower on Skepticism After Stress Tests. (video) Lenders dragged down European equities amid investor skepticism even as stress-test results showed most of the firms would keep an adequate level of capital in a crisis. The Stoxx Europe 600 Index slipped 0.6 percent, reversing an increase of as much as 0.6 percent. Italy’s Banca Monte dei Paschi di Siena SpA, which jumped as much as 11 percent as it said it’s working on a plan involving private investors to help bolster its finances, erased almost all its gains by the end of the day. UniCredit SpA, the second-worst performer in the exam, sank 9.4 percent. Britain’s Barclays Plc and Deutsche Bank AG slid more than 1.8 percent. Energy producers also weighed on the market amid losses in oil, with Royal Dutch Shell Plc down 3.2 percent.
  • Offshore Rig Owners Fall Most in More Than Month on Drop in Oil. The world’s largest owners of offshore drilling rigs fell the most in more than a month as oil’s drop below $40 extended their pain. Diamond Offshore Drilling Inc. fell 5.7 percent to $21.42 at 12:22 p.m. in New York after earlier dropping as much as 7.4 percent, the worst intraday tumble since May 9. Competitors Transocean Ltd., Ensco Plc and Noble Corp. all had their biggest intraday fall since July 5.
  • Fragile U.S. Economy Now Facing a Slowdown in Building Boom. Construction has been one of the few pockets of strength in the U.S. economy -- until recently. Construction payrolls have declined since March and spending in May rose less than 3 percent from a year earlier, the lowest rate since 2011. Coming after super-charged growth of 10 percent last year, the question now is whether the sputtering is just a blip or something more lasting that portends a significant drag on the economy.
  • Goldman: Investors Aren't Rewarding Share Buybacks Like They Used To. A potential headwind for equity markets.
  • Pregnant Women Should Avoid Miami Zika Outbreak Area, CDC Warns. Women who are pregnant or thinking of becoming pregnant should avoid travel to an area in Miami that is the center of a small-but-growing number of mosquito-transmitted Zika cases, the U.S. Centers for Disease Control and Prevention said Monday.
Wall Street Journal:
Zero Hedge:

No comments: