Evening Headlines
Bloomberg:
- China Reclaims Spot as World's Biggest Holder of Treasuries. China reclaimed its position as the top foreign owner of U.S. Treasuries after increasing its holdings for the fifth straight month. China’s holdings of U.S. bonds, notes and bills rose to $1.15 trillion in June, up $44.3 billion from a month earlier, according to Treasury Department data released Tuesday in Washington. Japan owned $1.09 trillion, a decrease of $20.5 billion from its total in May. Japan had overtaken China in October as the largest holder of American government bonds, the figures showed. The two countries account for more than a third of all foreign ownership of Treasuries, which gained by $47.7 billion in June to $6.17 trillion, the figures showed.
- China's Crackdown Hasn't Ended $343 Billion Foreign Buying Spree. China’s government has sent shudders through investors and executives this year by cracking down on the nation’s biggest corporates and their record foreign shopping spree. Regulators worried the acquisitions would destabilize China’s financial system, weaken the currency and create yet more debt, repeating Japan’s mistakes of its go-go years.
- China's Panda Bond Market Boom Threatens Dim Sum Debt Survival. The market for foreign issuers of bonds in Chinese yuan is shifting away from Hong Kong towards the mainland, in a sign that the city-state’s once vibrant market for such debt may never reach its past heights. The bond market’s penchant for nicknames for overseas debt markets sets up an irresistible metaphor for the phenomenon: pandas are eating dim sum. Sales of Panda bonds -- the yuan-denominated debt issued in China by overseas companies -- are outpacing Hong Kong’s Dim Sum market this year, boosted most recently by Hungary selling its first onshore note after previously issuing in Hong Kong.
- The World's Shipping Companies Are Going Super-Sized. The hulking container ships that transport sneakers, bananas and barbie dolls around the world keep getting bigger. So are the companies that own them. A massive consolidation is underway in the $500 billion global industry and the survivors now enjoy big economies of scale and increased demand, one year after excess capacity caused the sector’s worst-ever crisis -- the bankruptcy of South Korea’s Hanjin Shipping Co.
- Dollar Gains as Focus Back on Economy, VIX Falls. Asian equities were set for a mixed start to Wednesday after an uninspiring U.S. session that saw the dollar grind higher, with attention turning away from geopolitics and back to economic data. Markets are settling down after a tumultuous few days spurred by heightened tensions between the U.S. and North Korea. The latest data showed American consumers splurged in July, dragging Treasuries lower and buoying the greenback. The CBOE Volatility Index, known as the VIX, continued to fall amid a return to calm in the stock market, while the S&P 500 nudging slightly lower. Futures on Japan’s Nikkei 225 were little changed while contracts on Australia’s S&P/ASX 200 Index and those on Hong Kong’s Hang Seng Index slipped 0.1 percent. South Korean and India markets reopen after a holiday.
- ‘Deep’ Subprime Car Loans Hit Crisis-Era Milestone. Amid all the reflection on the 10-year anniversary of the start of the subprime loan crisis, here’s a throwback that investors could probably do without. There’s a section of the auto-loan market -- known in industry parlance as deep subprime -- where delinquency rates have ticked up to levels last seen in 2007, according to data compiled by credit reporting bureau Equifax.
- Wells Fargo's(WFC) Duke to Replace Sanger as Chair After Scandal. Wells Fargo & Co. said Elizabeth “Betsy” Duke will take over as chair of its board next year as Stephen Sanger and two other longtime directors retire following a sales scandal under their watch. Juan Pujadas will join next month as an independent director, and the bank changed leadership of some of its board committees, the San Francisco-based company said in a statement Tuesday. Mary Jo White, the former head of the Securities and Exchange Commission, helped the board on its review, which came after low levels of approval at the firm’s annual shareholder meeting in April.
Wall Street Journal:
- North Korea Follows Familiar Playbook With Guam Reversal. Cycle of tensions is set for another jolt with next week’s U.S.-South Korea military exercises.
- More Borrowers Are Defaulting on Their ‘Green’ PACE Loans. One of America’s fastest-growing loan types was designed to help homeowners make eco-friendly upgrades.
- Are Retail Sales Dead? Depends Where You Look. Spending shows signs of life—but only shoppers’ chosen stores of the moment.
- A Brief History of Minimum-Wage Disasters. New research finds that job losses are concentrated among older workers, women and blacks. There is absolute unanimity among senior elected Democrats in Washington that government should dictate a higher minimum wage. But this is another issue that deserves debate. New research shows the damage that minimum-wage laws have done to U.S. workers—and not just those employed in restaurants.
Fox News:
CNBC:
Zero Hedge:
Zero Hedge:
Business Insider:
Night Trading
Earnings of Note
Company/Estimate
8:30 am EST
- Asian equity indices are unch. to +.5% on average.
- Asia Ex-Japan Investment Grade CDS Index 83.75 -1.25 basis points.
- Asia Pacific Sovereign CDS Index 22.25 -.5 basis point.
- Bloomberg Emerging Markets Currency Index 73.58 unch.
- S&P 500 futures unch.
- NASDAQ 100 futures -.04%.
Earnings of Note
Company/Estimate
- (CTRN)/.08
- (TGT)/1.20
- (BGG)/.52
- (CSCO)/.61
- (LB)/.44
- (NTAP)/.55
- (SNPS)/.92
- (VIPS)/1.30
8:30 am EST
- Housing Starts for July are estimated to rise to 1220K versus 1215K in June.
- Building Permits for July are estimated to fall to 1250K versus 1254K in June.
- Bloomberg
consensus estimates call for a weekly crude oil inventory decline of
-3,002,910 barrels versus a -6,451,000 barrel decline the prior week.
Gasoline supplies are estimated to fall by -77,090 barrels versus a +3,4245,000
barrel gain the prior week. Distillate inventories are estimated to
fall by -322,000 barrels versus a -1,729,000 barrel decline the prior
week. Finally, Refinery Utilization is estimated to fall by -.43% versus
a +.9% gain prior.
- The FOMC Meeting Minutes for July 26.
- None of note
Other Potential Market Movers
- The weekly MBA Mortgage Applications report, UK Jobless Claims, Oppenheimer Oncology Summit and the (IDXX) Investor Day could also impact trading today.
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