Evening Headlines
Bloomberg:
- China Bond Defaults Work Wonders in Introducing Pricing for Risk. Just as global investors get a new channel to access China’s $9.8 trillion onshore bond market, it’s starting to look like one that they might recognize. Gone are the days when China’s corporate debt was all pretty much priced the same, with an implicit government backstop giving buyers little reason to demand higher returns from some borrowers over others. Things started changing in 2014, when the Communist Party leadership with little warning began to allow defaults. With a steady rise in delinquencies, investors are now distinguishing among issuers based on perceived credit quality.
- Battle for 261 Million Wallets Grips China's Online Shopping Giants. To foretell where JD.com Inc. is going to expand in Indonesia, follow the cell phone towers. Wider mobile coverage means more consumers starting to shop online, so the Chinese e-commerce company tracks their construction to decide where to market its web store and set up delivery centers. JD has four warehouses in the archipelago, with plans to build another three by the end of the year. Staffing has almost tripled to about 400 people in the past 12 months. Within five years, the Beijing-based company plans to have refrigerated trucks delivering fresh food and frozen goods to homes.
- Asia Stocks Face Mixed Start as Fed Minutes Parsed. Stocks in Asia are headed for a mixed start as investors digested details from the Federal Reserve’s most recent meeting. Equity index futures in Japan and Hong Kong were flat, while contracts signaled gains for Australian shares. The S&P 500 Index posted small gains and technology shares boosted the Nasdaq 100. Oil recovered some losses after slumping toward $45 a barrel, snapping eight days of gains. Futures on the Nikkei 225 Stock Average were flat in Singapore trading. Contracts on Australia’s S&P/ASX 200 Index rose 0.4 percent.
- Your Evening Briefing. (video)
- Reading Between the Fed's Lines. (video)
Wall Street Journal:
- Fed Officials Ready to Start Shrinking Portfolio in Months. June meeting minutes show officials expect their balance-sheet reduction plans to have a limited impact on markets.
- Volvo Gives Tesla a Shock, As Others Plan Electric Push. Volvos, Jaguars, BMWs and Fords, among others, will offer a system that uses battery technology to comply with emissions rules.
- U.S., Russia Spar Over Approach to North Korea Threat. Pentagon notes advances by Pyongyang as U.S. warns regime of further isolation, military option.
- Get Able-Bodied Americans off the Couch. Nearly 95 million people have removed themselves entirely from the job market.
- Hotels, Cruise Lines, Casinos Among Top U.S. Stocks So Far This Year. As consumers shun brick-and-mortar retailers, demand for travel and leisure remains strong.
Zero Hedge:
Earnings of Note
Company/Estimate
7:30 am EST
- Energy Stocks Slammed Most In 4 Months, Nasdaq Bounces Despite "Worse Than Lehman" Bearish Bets. (graph)
- A type of drug used by 50 million Americans has been linked to an increased risk of death. About 50 million people in the US are on PPIs, Al-Aly noted, and there is strong evidence that the drugs are overused. Popular drugs in this class include omeprazole (Prilosec), esomeprazole (Nexium), and lansoprazole (Prevacid).
- Asian equity indices are -.25% to +.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 87.75 -.5 basis point.
- Asia Pacific Sovereign CDS Index 22.25 +.5 basis point.
- Bloomberg Emerging Markets Currency Index 72.37 -.04%.
- S&P 500 futures -.05%.
- NASDAQ 100 futures -.27%.
Earnings of Note
Company/Estimate
- (AZZ)/.69
7:30 am EST
- Challenger Job Cuts YoY for June.
- The ADP Employment Change for June is estimated to fall to 185K versus 253K in May.
- Initial Jobless Claims for last week are estimated at 244K versus 244K the prior week.
- Continuing Claims are estimated to fall to 1940K versus 1948K prior.
- The Trade Balance for May is estimated at -$46.3B versus -$47.6B in April.
- ISM Non-Manufacturing for June is estimated to fall to 56.5 versus 56.9 in May.
- Bloomberg consensus estimates call for a weekly crude oil inventory decline of -1,766,670 barrels versus a +118,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -1,588,890 barrels versus a -894,000 barrel decline the prior week. Distillate supplies are estimated to fall by -118,330 barrels versus a -223,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.63% versus a -1.5% decline prior.
- (MRTN) 5-for-3
- The Fed's Fischer speaking, Fed's Williams speaking, Fed's Powell speaking, Eurozone Factory Orders report, weekly Bloomberg Consumer Comfort Index, weekly EIA natural gas inventory report, (LB)/(FRED)/(BKE)/(CATO) June sales reports, could also impact trading today.
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