Thursday, September 01, 2016

Today's Headlines

Posted by Gary .....at 3:14 PM
Bloomberg:
  • Merkel Faces Home-State Defeat Over Immigration. German Finance Minister Wolfgang Schaeuble’s election rally in the Baltic Sea town of Rostock was all going according to script until the discussion turned to refugees. After the elder statesman won praise from the crowd of middle-aged and retired party faithful for his role in the country’s reunification, the goodwill quickly evaporated as he defended Chancellor Angela Merkel’s open-door refugee policy. Then the murmurings from those gathered at the event in the Hanseatic city’s medieval center turned to applause when an audience member stood to challenge Schaeuble. “I want to clearly contradict you: Islam does not belong to Germany,” the man said. “Long after you and the chancellor have your names written in the pages of the history books, Germany will still have to grapple with these massive social problems from this incredible influx of millions of people from a foreign culture, and I’m holding that against you personally.”
  • Euro-Area Factories See Orders Weakening as U.K. Demand Falters. New orders at euro-area factories rose at the weakest pace in 18 months in August as both domestic and export demand faltered amid heightened uncertainty after the U.K. voted to quit the European Union. A Purchasing Managers Index for manufacturing fell to a three-month low of 51.7 in August from 52 in July, IHS Markit said Thursday. The decline, which was steeper than initially estimated, was driven by a slowdown in order growth. The measure remained above the 50 level that divides expansion from contraction. “Euro-zone manufacturers reported a wavering performance in August, with signs that growth could slow further in coming months,” said Chris Williamson, chief business economist at IHS Markit. “Anecdotal evidence suggests that the strengthening of the euro and reduced sales to the U.K. were partly to blame for the order-book slowdown.”
  • China: Too Much Money, Too Little Growth? (video)
  • Japan’s Company Profits Fall, Capital Expenditure Remains Weak. Japan’s capital expenditure data for the second quarter was slightly weaker than expected while company profits slumped as businesses held tight on spending amid a strong yen and sluggish demand at home and abroad.
  • Bears Haunt Brazil as Short Bets Jump on World’s Best Stocks. (video) A tiny exchange-traded fund is signaling that Brazil’s world-beating stock rally may be coming to an end. The $51 million ProShares UltraShort MSCI Brazil ETF, which rewards investors when Brazilian stocks decline, attracted $20 million of inflows over the past two months, according to data compiled by Bloomberg. That’s almost twice the amount of bullish wagers that went into BlackRock Inc.’s $3.9 billion ETF that tracks the country’s equities. At the same time, foreign investors have pulled the most out of Brazil’s local shares since May.
  • Russia Says Oil Output Freeze Not Needed With Price Near $50. Russia sees no need for talks with other major oil exporters on freezing output with prices at around $50 a barrel, according to the Energy Ministry in Moscow. If prices fall, then Russia will consider resuming discussions, the ministry’s press service cited Energy Minister Alexander Novak as saying. The comments from Russia’s government come before OPEC nations and other oil producers meet for talks in Algiers later this month. Russia, the world’s biggest energy exporter, was a key negotiator in talks on an oil-output freeze with Saudi Arabia and other OPEC producers in April. That proposal failed after Iran declined to attend the meeting in Doha and Saudi Arabia refused to proceed with the deal without the participation of its Persian Gulf rival.
  • The Fed Poses a Big Risk to the Emerging Market Inflow Party. Battle-hardened emerging-market investors have seen this movie before: A U.S. Federal Reserve interest-rate hike triggers a jump in nominal local rates in emerging markets, especially those with fixed or semi-fixed exchange rate regimes. Hot money flows out of developing nations, across FX, equity and fixed-income markets. Local currencies weaken against the dollar. And the ensuing jump in the cost of dollar liquidity, and declining portfolio flows, spark fears over the debt-servicing capacity of emerging-market borrowers. In short, the boom-and-bust capital-flow cycles in emerging markets over the past three-decades have roughly followed this script.
  • Iraq Can Crush OPEC's Oil Freeze Believers.
  • We Just Got A Bunch of Bad News From the Clothing World. Despite a seemingly strong U.S. consumer, clothing retailers can't catch a break. The S&P 1500 Apparel Index is tumbling Thursday after a slew of disappointing data from companies in the industry, led by footwear retailer Genesco Inc., which slashed its forecast for the year ending January 31, 2017, due to issues with one of its main divisions, Journeys. Its stock is leading the declines, with shares down more than 30 percent as of 12:00 p.m. in New York.
  • Another Sign Manhattan Real Estate Is Feeling the Pain. Prospective buyers at one Upper East Side condo project are quietly being offered a 5 percent discount. At an almost-completed Midtown building, five-bedroom homes will be divided into smaller units. Brokers whose clients sign deals at a downtown tower before Labor Day are getting $5,000 gift cards. Such tactics have become more common in Manhattan, where developers are coping with a luxury-condo glut and adjusting to a new reality after years of building to meet seemingly insatiable demand. With the market now sputtering, they’re altering sales plans and making behind-the-scenes deals in an attempt to create momentum at their projects before an onslaught of even more competition.
Zero Hedge:
Nikkei:
  • Japan's GDP Shrank .3% in July, JCER Report Says. Housing investment slid 2%, first drop in 6 months, capital spending fell .4%, citing report from Japan Center for Economic Research.

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