Monday, August 15, 2016

Today's Headlines

  • Germany Urges Russia, Ukraine to Cool Tensions Over Crimea. German Foreign Minister Frank-Walter Steinmeier urged Russia and Ukraine to reduce tensions over Crimea amid what he said was contradictory evidence from the two countries of an alleged attack on the peninsula.n Germany is concerned about worsening security in Crimea and all sides “must refrain from anything that may lead to a further deterioration of the situation,” Steinmeier told reporters after talks with Russian Foreign Minister Sergei Lavrov in the Urals city of Yekaterinburg on Monday. There’s still “no full clarity” about what happened “and we’re waiting for the results of investigations by the Russian and Ukrainian sides,” he said.
  • Vancouver Housing Fever Shows Signs of Easing Even Before Tax. Canada’s hottest housing market may be cooling. Home sales in Vancouver fell a third straight month in July, the Canadian Real Estate Association said Monday, with price gains also showing signs of slowing. The data should be a relief to buyers and policy makers who have been growing increasingly worried about affordability in the city, and suggest Vancouver’s market was slowing even before the provincial government set a foreign buyers’ tax earlier this month. The realtor group cited lack of affordability for falling sales in a market where prices are growing at double-digit rates.
  • Europe Stocks Little Changed as DAX Close to Erasing Annual Loss. (video) European shares were little changed, with Germany’s DAX Index close to erasing its annual drop, as investors assessed recent gains in light of the outlook for earnings and economic growth. Rebounding automakers posted the best performance of the Stoxx Europe 600 Index’s 19 industry groups. Volkswagen AG’s 1.4 percent advance buoyed the DAX, which entered a bull market last week, to within 0.1 percent of recouping its 2016 losses. BP Plc led oil stocks higher as crude extended its advance above $45 a barrel amid speculation that producers will revive talks to stabilize prices. Glencore Plc dragged commodity producers lower. The Stoxx 600 slipped less than 0.1 percent to 346.05 at the close of trading, after earlier rising as much as 0.4 percent. The volume of shares trading hands today was about 60 percent lower than the 30-day average, with some markets, including Italy’s, closed for a holiday.
  • OPEC Could Still Tip Next Year’s Oil Deficit Into Surplus: Chart. The re-balancing of oversupplied oil markets is on track as demand climbs and U.S. shale production falters, according to the International Energy Agency. The world will face a 560,000 barrel-a-day supply deficit in 2017 if OPEC members pump at the same rate as this year, IEA data show. If Iran and Iraq add just some of the new capacity they’re planning, Libya recoups a fraction of the supplies lost to political conflict andNigeria restarts oil fields halted by militant attacks, there’ll be an 810,000 barrel-a-day excess -- a fourth year of oversupply.
  • Iraq Oil Chief Sees End to Kurd Dispute as War Hurts Output. Jabbar al-Luaibi, the former head of Iraq’s biggest crude producer who was appointed oil minister on Monday, said that he sees ways to resolve the energy dispute with the self-governed Kurds in the north of OPEC’s No. 2 producer. Al-Luaibi’s appointment was approved by parliament on Monday as part of a government reshuffle, according to a statement by deputy parliament speaker Humam Hamoudi. Al-Luaibi is former head of the state-owned South Oil Co. which produces most of the country’s crude. He replaces Adel Abdul Mahdi who had suspended his participation in the cabinet in March, citing disarray in government ministries.
  • Why Copper Continues to Perform Poorly. (video)
  • Signs of Bear Capitulation as S&P 500 Pushes Toward Fresh Record. (video) Asset managers are favoring stocks over U.S. Treasuries, while active equity funds are the most bullish since 2008, according to Bank of America Corp. Asset managers bought $6.7 billion of S&P 500 futures and sold $8.6 billion of Treasuries in the week ending August 9, according to a report by Bank of America analysts led by Jue Xiong. Those investors have been rotating from U.S. bonds and into stocks since the start of the third quarter, Xiong said by phone. At the same time, large-cap U.S. money managers are more leveraged to the performance of the S&P 500 than at any time since 2008, a separate analysis by the bank showed. Active investors that follow a long-short strategy are about 56 percent long, the most since July 2015, according to that report. 
  • The U.S. Economy Needs to Kick Its Car Habit. Americans love cars. It would be comforting, though, if the world's largest economy weren't quite so dependent on people buying more of them with borrowed money.
  • Barrack Says U.S. Real Estate Market Is Getting ‘Bubblicious’. Real estate investors could be in for a shock if interest rates rise or demand in some markets continues to fall because “amateurs” are plowing money in at high prices, betting on rent increases that may not continue, said Tom Barrack, the billionaire chairman of Colony Capital Inc. Trends in demographics and technology are undermining traditional holdings such as hotels, office buildings and residential properties, Barrack said in an interview at Bloomberg’s Los Angeles office.
  • Twelve Charts That Show a Massive Divide in How Americans See the Economy.
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