Wednesday, August 03, 2016

Today's Headlines

  • Equity Trading Spares No European Bank as Revenue Drops: Chart.
  • Europe’s Banks Should Face 3% Minimum Leverage Ratio, EBA Says. European banks should have at least 3 cents of capital for every euro of assets they hold, the European Banking Authority recommended. The measure would help reduce the risk of lenders taking on too much debt, while its impact on their ability to finance the economy would be “relatively moderate” at that level, the EBA said in a report Wednesday. While the world’s biggest, most systemically important banks may merit a tougher requirement, overall the result will be a more stable financial system, it said.
  • VW Warns of Plunge in China Industry Sales If Tax Cut Lapses. Volkswagen AG said industrywide demand in China will plunge if a tax cut due to expire at the end of the year is allowed to lapse. The German automaker is in talks with both the government and the China Association of Automobile Manufacturers to find out whether the tax cut will be extended, said Volkswagen China chief Jochem Heizmann. Volkswagen Group delivered a record 1.86 million vehicles in the first half in China and Hong Kong, after the government cut the tax on purchases of models with smaller engines to 5 percent from 10 percent. “If the government really stays on their present decision that this will sharply end at the end of this year, you can expect a big negative impact on the first quarter next year,” Heizmann, who’s a member of Volkswagen’s board, told reporters Wednesday in Beijing.
  • China’s IPO Market Is the Hottest It's Ever Been. China’s market for initial public offerings is the hottest it’s ever been, thanks to the securities regulator. The 62 new stocks that have completed their first month of trading this year soared 420 percent on average in the span, the steepest such rally on record, data compiled by Bloomberg show. For a clue as to why: the average size of this year’s offerings has dwindled to $88 million, the smallest since 2005.
  • India Passes Landmark Tax Reform in Modi’s Biggest Win Yet. India’s upper house of parliament on Wednesday unanimously approved the creation of a national sales tax a decade after the move was first proposed, the biggest legislative victory for Prime Minister Narendra Modi since he took office in 2014. The constitutional amendment, one of India’s most significant reforms since the 1990s, now has to be endorsed by the Modi-controlled lower house and then ratified by at least half of all states, a process projected to be concluded before the year ends.
  • Nightmare’ Vancouver Housing Tax Threatens Foreign Tech Talent. (video) Vancouver’s technology industry is in danger of becoming collateral damage in British Columbia’s push to rein in spiraling home prices. The surprise decision last week to impose a 15 percent levy on overseas property investors may make it even harder for Vancouver to attract foreign talent and reach its goal of becoming a Canadian version of Silicon Valley. The city already has two major strikes against it: some of the highest housing costs and lowest wages among North America’s emerging technology hubs. “It’s a complete shock, a nightmare,” Eric Kong, a Singaporean computer scientist who’s in the middle of relocating his family to Vancouver, said in a telephone interview. “If I’d known this, we would’ve gone somewhere else.”
  • Are Emerging Markets at Risk From Cheaper Oil? (video)
  • Europe May Be Over Banked, Here's Why. (video)
  • Banks’ Rebound Fails to Boost Europe Stocks Near Three-Week Low. (video) European equities hovered near a three-week low as skepticism about the region’s growth overshadowed a rebound in banks. The Stoxx Europe 600 Index added less than 0.1 percent, after jumping as much as 0.4 percent and falling 0.4 percent, with trading of companies on the gauge about 20 percent lower than the 30-day average. While lenders such as HSBC Holdings Plc and ING Groep NV rallied after giving financial results, most companies in the Stoxx 600 declined.
  • Iran Adopts Oil Contract as Glut No Barrier to Boost Output. (video) Iran approved a new oil contract model, taking the OPEC nation a step closer to welcoming foreign investment in its energy industry and boosting production even more into an oversupplied market. The contract model was approved at a cabinet meeting Wednesday, according to the official Islamic Republic News Agency. Priority will be given to boosting output at jointly owned oil and gas fields, state radio reported, citing Oil Minister Bijan Namdar Zanganeh. Iran wants to lure international companies that can make long-term investments worth billions of dollars and bring technology after sanctions were eased in January.
  • Evans Says One Fed Rate Hike This Year ‘Perhaps’ Appropriate. Federal Reserve Bank of Chicago President Charles Evans said an interest-rate increase could be warranted this year as the economy picks up steam, even though he’s still worried that inflation is too low. “I do think that perhaps one rate increase could be appropriate this year,” Evans told reporters Wednesday during a media briefing at the Chicago Fed. “At some point, you always make your judgment as to, well, this is close enough in line with what I think the appropriate policy is,” he said of a hypothetical Federal Open Market Committee decision later this year to raise rates. “Given the data improving and my outlook, we could see one rate increase this year, even if I would prefer none until we saw inflation much more strongly.”
  • Chicago Seeks Tax Hike to Avert Insolvency for Largest Pension.
  • Bitcoin Plunges, Rebounds After Hackers Steal $65 Million. (video)
  • Wal-Mart(WMT) Said to Be in Talks to Acquire Amazon Rival
Wall Street Journal:
Fox News:
  • Lawmakers: 'Ransom' to Iran puts Americans at risk. (video) Republican lawmakers are fuming over a bombshell report overnight that the U.S. government airlifted the equivalent of $400 million to Iran this past January – as four detained Americans were released by Tehran – and say the transaction has put more Americans at risk of being taken hostage. The cash transfer, as reported by The Wall Street Journal, was the first installment paid in a $1.7 billion settlement the Obama administration reached with Iran to resolve a failed 1979 arms deal dating from just before the Iranian Revolution. The cash flown to Iran consisted of euros, Swiss francs, and other currencies because U.S. law forbids transacting American dollars with Iran. While the Obama administration denied the cash transfer was done to secure the release of the four Americans, GOP lawmakers said it was tantamount to “ransom.” "Paying ransom to kidnappers puts Americans even more at risk," Sen. Mark Kirk, R-Ill., said in a statement. "While Americans were relieved by Iran’s overdue release of illegally imprisoned American hostages, the White House’s policy of appeasement has led Iran to illegally seize more American hostages."
  • Obama commutes sentences for 214 federal prisoners. President Barack Obama is cutting short the sentences of 214 federal inmates, including 67 serving life sentences. The White House says it's the largest batch of commutations on a single day in more than a century. Almost all the prisoners were serving time for nonviolent drug offenses. The commutations bring to 562 the total number of sentences Obama has shortened. The White House says that's more than the past nine presidents combined. Almost 200 of those who have benefited were serving life sentences. White House counsel Neil Eggleston says Obama will continue granting clemency to more inmates during the final months of his presidency.
  • Kate Spade(KATE) misses profit estimates, slashes full-year forecasts. Accessories and apparel maker Kate Spade reported a lower-than-expected quarterly profit as a strong dollar discouraged tourists from shopping at its stores, and the company slashed its full-year profit and sales forecasts. Kate Spade's shares plunged more than 20 percent in premarket trading on Wednesday.
ABC News:
  • Senior GOP Officials Exploring Options if Trump Drops Out. Republican officials are exploring how to handle a scenario that would be unthinkable in a normal election year: What would happen if the party's presidential nominee dropped out? ABC News has learned that senior party officials are so frustrated — and confused — by Donald Trump's erratic behavior that they are exploring how to replace him on the ballot if he drops out.

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