Monday, August 07, 2017

Today's Headlines

  • China's Debt Crackdown Gets a Big Shrug From Global Investors. (video) The Chinese leadership has this year made its strongest commitment yet to curb financial risks and rein in spendthrift local officials, yet the campaign has spurred barely a ripple of concern among global investors. In a recent survey, China hardly registered on the list of dangers eyed by fund managers and strategists that could threaten the "Goldilocks" boom in stocks and credit around the world. That’s a big change from two years ago, when a surprise devaluation of the yuan spooked markets, all the more because it came just weeks after China’s equity bubble had started to burst.
  • HSBC's Steven Major Sounds a Bearish Alarm on European Credit. European investment-grade bonds will become a world of pain if volatility rises from record lows because investors aren’t being compensated for liquidity, default and downgrade risks. On top of those dangers, high debt burdens and aggressive valuations will conspire to crimp capital gains on European bonds this late in the global credit cycle.
  • Europe Stocks Little Changed as Miners Rally Offsets Media Drop. (video) The Stoxx Europe 600 Index slid 0.1 percent at the close. ArcelorMittal led a gauge of mining stocks to the best gains among industry groups as steel and iron-ore prices surged. The measure is overtaking the broader benchmark in 2017 after lagging it in the first half. Media stocks slid 0.6 percent while drugmakers fell for the fourth time in five days.
  • Investors Just Made a Big Bet on Global Growth and a Soft Dollar. (video) Inflows into the Industrial Select SPDR Fund (ticker XLI) approached $1.3 billion last week, the second-highest among U.S. equity exchange-traded funds. Industrials are a segment of the market considered acutely sensitive to global economic activity, and this product’s top holdings include firms with extensive worldwide operations, including General Electric Co., Boeing Co. and Caterpillar Inc. Those companies would tend to be among the chief beneficiaries of a synchronized pick-up in global growth and drop-off in the U.S. dollar, which increases the value of profits generated overseas.
  • The World’s Most Feared Investor.
Wall Street Journal:

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