Saturday, August 13, 2016

Today's Headlines

  • S&P 500 Resists Bearish Tug to Post Sixth Advance in Seven Weeks. The steady march higher for U.S. stocks may have slowed to a crawl, but the S&P 500 Index’s sixth advance in seven weeks still managed to defy a chorus of bears warning valuations have become too rich. The benchmark for American equity edged higher by 1.2 points to 2,184.05, two points shy of a record. Energy shares paced gains as crude notched its best week since April, while results from the largest department stores bolstered confidence in the retailing industry. Mixed economic data lowered the odds of an interest-rate hike this year, sending bank shares lower. The rally in U.S. stocks amid a fifth consecutive quarter of declining earnings has inflated valuations to levels last seen in the dot-com era, a warning for some. For bulls, fresh evidence of the American economy’s steady expansion at a pace that isn’t forcing the Federal Reserve to tighten can keep pushing equity prices higher.
  • World Powers Call for Calm as Putin Bolsters Crimea Defense. World powers urged Russia and Ukraine to refrain from ratcheting up a confrontation over Crimea as President Vladimir Putin bolstered the disputed peninsula’s military with some of his army’s most advanced air-defense missile systems. The European Union said there was no independent confirmation of claims that Ukrainian agents had killed two Russian servicemen in Crimea. Putin pledged a “very serious” response as he blamed Kiev for pursuing “terror” activities. The 28-member bloc called on both sides to refrain from intensifying what has led to the worst diplomatic standoff between the two countries since a 2015 truce eased hostilities in Ukraine’s separatist conflict. Germany said that Foreign Minister Frank-Walter Steinmeier will meet his Russian counterpart, Sergei Lavrov, next week in Russia.
  • High-Risk ‘Shadow’ Credit in China Put at $2.9 Trillion by IMF. International Monetary Fund staff said that 19 trillion yuan ($2.9 trillion) of Chinese “shadow” credit products are high-risk compared with corporate loans and highlighted the danger that defaults could lead to liquidity shocks. The investment products are structured by the likes of trust and securities companies and based on equities or on debt -- typically loans -- that isn’t traded, staff members John Caparusso and Kai Yan said in a report released Friday. The commentary highlighted the potential for risks bigger to the nation’s financial stability than from companies’ loan defaults. While loan losses can be realized gradually, defaults on the shadow products could trigger risk aversion that’s harder to manage, the report said.
  • Fear of Military Rule Grows in Benghazi as Elected Mayor Ousted. The army in eastern Libyan replaced the mayor of the North African country’s second-biggest city with a senior intelligence chief, a move criticized by activists as illegal and a prelude to military rule in the region. Colonel Ahmed Laraibi was named mayor of Benghazi on Thursday, the Albayda-based news agency LANA reported. The appointment was made without consulting local legislators, while Benghazi’s municipal council was also suspended, LANA said.
  • A Number of Companies Are Warning About High Consumer Uncertainty. A lot of uncertainty. Consumer balance sheets have strengthened since the financial crisis, but their confidence is still lagging far, far behind. There are a number of things for U.S. consumers to worry about, even if personal finances are fairly strong. An upcoming election in the U.S. and unrest overseas has started to show up in economic data measuring consumer sentiment, which hasn't seen much of an uptick over the past two years despite the stock market's march higher.
Wall Street Journal:
  • Had bullish commentary on (MON), (TJX), (SSP), (BKD), (GE) and (DE).
  • Had bearish commentary on (IBM).
Zero Hedge:

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