Evening Headlines
Bloomberg:
- Political Hotspots May Bubble Up on G-20 Sidelines in China. This weekend the leaders of 20 of the world’s major economies gather in China to talk about issues ranging from the global economy to the threat of terrorism. As usual, it’s the sideline tensions that may capture attention. Last year’s summit in Turkey was overshadowed by Islamic State’s deadly attacks on Paris just days before. The violence, which left 130 people dead and hundreds wounded, spurred a flurry of meetings on the sidelines, mostly about Syria, where a civil war helped create the conditions for the terrorist group to grow. The previous year in Australia, talks were dominated by Russia’s occupation of Crimea and its alleged support for Ukraine separatists. The host country’s then leader, Tony Abbott, threatened to "shirtfront" -- or tackle -- Vladimir Putin, who ended up leaving the summit early. As leaders prepare to meet in China, there are several hot-button issues to watch for:
- Pimco’s Baz Says Japan In a Bind as Total Debt Tops 600% of GDP. There’s “very little” that Japan can do about its mounting debt pile, which presents a potential risk to growth, according to Pacific Investment Management Co.’s Jamil Baz. With a government debt load that’s 2 1/2 times the size of annual gross domestic product and a total national borrowing burden that’s six times as large, “Japan is suffering from the excesses of the past” and the country “is in a bind right now,’’ the fund manager’s head of client analytics said in an interview in Sydney last week. Japan’s economy is still struggling to gain traction even after policy makers hit it with repeated doses of budgetary stimulus and unprecedented monetary easing to drag the country out of its deflationary funk. The Bank of Japan’s adoption of negative interest rates has pushed down debt financing costs for now, but repeated delays to a planned sales tax increase, a new 28 trillion yen ($272 billion) fiscal boost from Prime Minister Shinzo Abe and the pressures of an aging population mean the borrowing pile is likely to keep on growing.
- Asian Futures Look Beyond U.S. Losses as Yen, Oil Nurse Declines. Most Asian index futures shrugged off a retreat in the U.S., signaling gains for the last day of August following a selloff in the yen. The resurgent dollar weighed on crude oil. Futures on stock gauges in Sydney and Hong Kong edged higher, even as a drop in Apple Inc. helped drag the S&P 500 Index down 0.2 percent Tuesday, almost erasing its August advance. Nikkei 225 Stock Average futures climbed in Osaka and Singapore as Japan’s currency traded near its weakest level in a month versus the dollar. U.S. crude fell for a third session, ahead of government data expected to show American oil stockpiles rose last week, reviving concern over a glut in the commodity. Gold traded near an almost six-week low.
- Mystery Shrouding Oil on Chinese Islands Puzzles Crude Markets. China’s got the world puzzling over its oil hoard. From underground caverns by the Yellow Sea to a scattering of islands in the Yangtze River delta, the government has been stockpiling crude for emergencies in a network of storage sites dotted around the country. Record purchases this year by the world’s biggest energy consumer have helped oil prices recover from the worst crash in a generation. What the country plans to do next could determine where they go from here. The difficulty is that nobody outside China really knows for certain. The government won’t say how much it’s holding or when the tanks will be full. Energy Aspects Ltd. says the country will probably keep buying and fill up commercial tanks if it has to, while the likes of JPMorgan Chase & Co. say the purchases may soon stop. The difference in opinion is equivalent to about 1.1 million barrels a day, or more than the Asian country buys from Saudi Arabia.
Wall Street Journal:
- The CIA’s Venture-Capital Firm, Like Its Sponsor, Operates in the Shadows. In-Q-Tel provides only limited information about its investments, and some of its trustees have ties to funded companies.
Fox News:
- FBI to release Clinton probe files, as candidate pressed to answer new questions ‘under oath’. (video) Hillary Clinton is facing the possibility of new revelations on her personal email scandal on multiple fronts, as the FBI prepares to release some of the documents from its investigation in a matter of days – and a watchdog group sends the Democratic presidential nominee a detailed set of questions she’s expected to answer “under oath” by next month.
Zero Hedge:
Earnings of Note
Company/Estimate
8:15 am
- Another Donor Email Seeking Another Favor; Huma Worries The "Problem Is She Keeps Emailing HRC Directly".
- Food Deflation Driving "Least Profitable Year In 20 Years" As Farmers And Grocers Get Crushed. (graph)
- Debt, Deficits & Economic Warnings. (graph)
- With Japan's Unemployment Rate At 21 Year Lows, "A Hidden Problem" Is Revealed.
- Michael Lewitt: "We're In The Late Stages of Ponzi Finance".
- Oil Extends Losses After Big Distillates Inventory Build. (graph)
- Deutsche Bank Calculates How Much Of The S&P's Value Is Due To Central Banks. (graph)
- Obama Admits 10,000 Syrian Refugees: This Is Where They Are Headed.
- Soros Seeks To "Reshape American Justice System" By Pouring Funds Into "Powerful" District Attorney Races.
- Crude Carnage & A Confident Consumer Send Stocks Lower, USD Higher. (graph)
- The FBI recovered 30 of Hillary Clinton's emails regarding the Benghazi attack.
- People are freaking out over Canada's housing market.
- Midtown Manhattan has a ton of empty office space.
- Asian equity indices are -.25% to +.50% on average.
- Asia Ex-Japan Investment Grade CDS Index 113.25 unch.
- Asia Pacific Sovereign CDS Index 42.0 +.25 basis point.
- Bloomberg Emerging Markets Currency Index 72.38 unch.
- S&P 500 futures -.02%.
- NASDAQ 100 futures -.04%.
Earnings of Note
Company/Estimate
- (BOBE)/.44
- (BF/B)/.37
- (CHS)/.22
- (CTRP)/-.02
- (BLOX)/.06
- (OXM)/1.38
- (CRM)/.22
- (SMTC)/.33
- (SCVL)/.27
8:15 am
- The ADP Employment Change for August is estimated to fall to 175K versus 179K in July.
- Chicago Purchasing Manager for August is estimated to fall to 54.0 versus 55.8 in July.
- Pending Home Sales MoM for July are estimated to rise +.7% versus a +.2% gain in June.
- Bloomberg consensus estimates call for a weekly crude oil inventory gain of +825,000 barrels versus a +2,501,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -1,010,000 barrels versus a +36,000 barrel gain the prior week. Distillate supplies are estimated to fall by -155,000 barrels versus a +122,000 gain the prior week. Finally, Refinery Utilization is estimated to fall by -.62% versus a -1.0% decline the prior week.
- (CHD) 2-for-1
- The Fed's Rosengren speaking, Fed's Kashkari speaking, Fed's Evans speaking, Australia Retail Sales report, China Manufacturing PMI and the weekly MBA Mortgage Applications report could also impact trading today.
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