Monday, September 12, 2016

Today's Headlines

Posted by Gary .....at 3:03 PM
Bloomberg:
  • Yuan Traders Most Bearish in Almost Four Months as Costs Surge. Traders are the most bearish on the yuan in almost four months as rising odds of a U.S. interest-rate increase boost the dollar and the cost of borrowing the Chinese currency in Hong Kong jumps. Twelve-month non-deliverable forward contracts traded at a 2.87 percent discount to the spot rate, compared with Friday’s 2.9 percent that was the biggest gap since May 18, data compiled by Bloomberg show. The offshore yuan erased the day’s losses amid intervention speculation. The three-month Hong Kong Interbank Offered Rate climbed 95 basis points, the most since February, to 4.21 percent, according to Treasury Markets Association data.
  • Russia Stock Rally May Be Over, Technical Indicator Shows: Chart. 
  • Morgan Stanley: The Expansion in Developed Markets Might Be Over. As traders are settling back into their routine after the slow summer months, things have started taking a turn for the worse in global markets. Now one indicator is even pointing to the end of the expansion in developed markets. According to new research from Morgan Stanley, so many developed countries are showing enough signs of slowing, that its cycle indicators — which take macro, credit and corporate factors into account — are leading analysts led by Chief Cross-Asset Strategist Andrew Sheets to conclude that a downturn could be coming sooner than some may think.
  • Losses Deepen in Europe’s Worst Bond Market as Draghi Stands Pat. In rally or rout, Portuguese bonds are stuck as Europe’s worst performers. Yields jumped to their highest since July after European Central Bank President Mario Draghi downplayed the need for more economic stimulus, which has included purchases of billions of euros of government securities through its quantitative easing program. Portugal was already the worst-performing market in the euro region and as European bonds tumbled at the end of last week it once again suffered the most.
  • OPEC Flips Forecast to Predict Rebound in Rival Supply Next Year. (video) OPEC flipped its forecasts for rival supplies in 2017, predicting an increase in output from outside the group instead of a decline, the latest sign that the global surplus is persisting. Production from outside the Organization of Petroleum Exporting Countries will grow by 200,000 barrels a day next year, according to the group, which a month ago had projected a drop of 150,000 a day. The gain is driven by the startup of the Kashagan oil field in Kazakhstan. That means the organization’s total output of 33.24 million barrels a day in August was 757,000 a day higher than the average amount the world will need from OPEC in 2017. 
  • E&P Debt Recoveries Hit ‘Catastrophic’ Level, Moody’s Says. Creditors of energy exploration and production companies that went bankrupt last year recouped less than half the usual amount for their claims, and 2016 is shaping up just as bad, according to Moody’s Investors Service. Recovery rates for 15 U.S. E&P bankruptcies averaged a “catastrophic” 21 percent last year, well below the historical average of 59 percent, Moody’s said in a report released Monday. Senior unsecured bondholders were hammered even more, averaging just 6 cents on the dollar. Collectively, the debacle could be worse than the telecom industry’s collapse in the early 2000s, measured by both the number of companies that go bust and the recoveries, Moody’s said.
  • Bubble Bursting in Less Than a Week for Payment-in-Kind Bonds. (video) Bonds that allow issuers to defer interest payments are nosediving less than a week after they were sold amid a sell-off of fixed-income assets. Ardagh Group SA’s 845 million euros ($948 million) payment-in-kind toggle notes due September 2023 are indicated at 95.5 cents on the euro, down 4.5 cents from when the Luxembourg-headquartered packaging company sold them on Wednesday, according to data compiled by Bloomberg. German auto components maker Schaeffler AG’s 750 million euros of notes due September 2026 are quoted 97.2 cents down from a sale price of 100 cents on Thursday, the data show.
  • Clinton Health Another Land Mine for Suddenly Vulnerable Markets. (video) Investors nursing wounds after the worst selloff in three months for equity and debt markets got another stress to ponder after concerns over Hillary Clinton’s health flared anew. The 68-year-old Democratic presidential nominee, whose polling edge over Donald Trump has soothed traders who fear ruptures to U.S. policy and see virtue in political gridlock, is suffering from pneumonia and became overheated and dehydrated during a Sept. 11 commemoration Sunday, forcing her to leave abruptly, her doctor said. Clinton was prescribed antibiotics and advised to modify her schedule so she can rest. Volatility is already resurfacing in markets that had purred along for two months inured to everything from politics to weakening global growth, with the S&P 500 Index getting jarred Friday out of its tightest trading range ever in a selloff that erased about $500 billion of share value. While investors and analysts were reluctant to speculate on Clinton’s health, they said expectations she will prevail in November have been a factor in the calm and predicted the scrutiny will intensify.
  • Seven College Endowments Report Annual Losses in Choppy Markets. Seven public U.S. university endowments with assets of more than $1 billion including the University of California reported fiscal 2016 investment losses as lackluster economic growth and volatility drubbed markets. College endowments are poised to take the worst slide in performance since the 2009 recession. Funds with more than $500 million lost a median 0.73 percent in the year through June 30, according to the Wilshire Trust Universe Comparison Service. The Wilshire data, from fund custodians, excludes fees while most schools report returns net of fees.
  • Some of the Biggest Hedge Funds Are Bleeding Cash. Some of the biggest and best-known hedge funds can’t hang on to client capital. Richard Perry, who started his hedge fund 28 years ago, has seen assets in his Perry Capital shrink to $4 billion, from $10 billion last September. That 60 percent drop comes as the firm’s main fund fell 18 percent from the end of 2013 through July. Perry isn’t the only manager struggling. John Paulson’s assets, on the decline since 2011, are down an additional 15 percent this year. And Dan Och, who like Perry cut his teeth at Goldman Sachs Group Inc., is now managing $39.2 billion at his Och-Ziff Capital Management Group, compared with $44.6 billion at the start of the 2016.
  • It’s the End of an Era as S&P 500 Breaks Out of Range: Chart.
CNBC:
Business Insider:

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