Tuesday, February 07, 2017

Today's Headlines

  • Cracks Are Appearing in Australia’s Trillion-Dollar Debt Pile. The Reserve Bank of Australia frequently seeks feedback on the health of the economy. It might want to call the debt counselors soon. Homeowners, consumers and property investors around Australia are making more calls to financial helplines as three warning signs back up the spike in demand: mortgage arrears are creeping up, lenders’ bad debt provisions have increased and personal insolvencies are near an all-time high. “Its steadily out of control -- I don’t know of too many financial counseling services where demand doesn’t exceed supply,” said Fiona Guthrie, chief executive officer of Financial Counselling Australia, who says the biggest increase in calls is from people suffering mortgage stress. “There are more people who have got mortgages that they can’t afford to pay.”
  • German Industrial Output Unexpectedly Falls Most in 8 Years. German industrial production unexpectedly fell in December as the timing of Christmas holidays damped manufacturing and construction. Output, adjusted for seasonal swings and inflation, dropped 3 percent from November, when it advanced a revised 0.5 percent, the Economy Ministry in Berlin said on Tuesday. The volatile indicator’s worst reading since early 2009 compares with a median estimate for a 0.3 percent increase in a Bloomberg survey. Production was down 0.7 percent from a year earlier.
  • Europe Stocks Rise as FTSE 250 Hits Record, Property Gauge Jumps. (video) European stocks advanced as the FTSE 250 Index of midcaps jumped to record close and real estate companies gained. Property companies were buoyed as bonds rallied across Europe and lifted shares that are bought as proxies for fixed income. The effect hurt banking shares, which retreated for a second day along with German debt yields, amid simmering worries over Europe’s political risks, and after BNP Paribas’s results missed estimates. The U.K.’s FTSE 250 climbed 1 percent to an all-time high. The Stoxx Europe 600 Index closed 0.3 percent higher, with the property sector gaining 1.7 percent.
  • Bond Bear Market Is Still on Hold as Four Indicators Flash Green.
  • Illinois Faces Further Downgrades If Budget Deal Not Reached. Illinois’s failure to resolve the nearly two-year political impasse over the budget could trigger further cuts to its bond rating, which is already the lowest among U.S. states, S&P Global Ratings said. The report from the company comes as lawmakers weigh measures that would raise taxes, cut pension costs and borrow to cover a backlog of unpaid bills. The bi-partisan plan, put together by the leaders of the Senate, could stop the state’s rating from slipping further, though any upgrade wouldn’t happen during the next two years, S&P said.
  • Trump and U.S. Nuclear Power Find Common Ground in Jobs Push. Nuclear power providers, battered by low prices and competition from cheap natural gas, say they can help President Donald Trump fulfill a campaign promise to put more people to work.
Wall Street Journal:

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