Evening Headlines
Bloomberg:
- China Property Prices Rise 10.3% in July. China’s property prices climbed at the slowest pace in six months in July as the government clamped down on speculation to prevent asset bubbles and keep housing affordable. Prices in 70 major cities climbed 10.3 percent from a year earlier, the statistic bureau’s newspaper, China Information News, reported today. That was less than an 11.4 percent increase in June and the median estimate of 10.5 percent in a Bloomberg News survey of eight economists. China’s banking regulator said Aug. 6 that the government will maintain policies to cool the property market, damping speculation that slowing economic growth would encourage an easing of the measures. The regulator has told lenders to conduct stress tests to gauge the impact of home prices falling as much as 60 percent in the hardest-hit markets, a person with knowledge of the matter said last week. “The government’s resolve on property curbs will be tested as increasing risks to external demand and slowing domestic production and investment cool growth later this year,” Shen Jianguang, a Hong Kong-based economist at Mizuho Securities Asia Ltd., said before today’s release. On the southern tropical island of Hainan, prices in the city of Sanya rose 50.4 percent in July from a year earlier, the biggest increase in the country, while sliding 1.3 percent from the previous month. In Beijing, the gain was 12.4 percent from the same month in 2009. In Shanghai, the increase was 6.8 percent. The value of July property sales fell 19.3 percent to 306.6 billion yuan ($45.3 billion) from a year earlier. By floor area, the decline was 15.4 percent to 64.7 million square meters (696 million square feet). Investment in real-estate development rose 37.2 percent to 2.39 trillion yuan in the first seven months of 2010 from a year earlier, the statistics bureau newspaper said. That compared with 33 percent from July alone and a 38.1 percent gain in the first six months.
- Copper Declines on Concern China's Cooling Property Market May Curb Demand. Copper declined in Asia as some investors deemed the recent rally as excessive amid concerns that demand may slow as China’s property market cools.
- U.S. Refiners Cut Oil Processing Rates, Analysts Estimate: Energy Markets. U.S. refiners probably cut back on crude-oil processing last week as profit margins sank to the lowest level in five months, a Bloomberg News survey showed. Refineries probably ran at 90.7 percent of nationwide capacity, down 0.5 percentage point from the prior week, the median of 11 analyst estimates showed before a government report tomorrow. The margin for refining oil into the motor fuel, based on New York futures prices, fell to $7.505 a barrel yesterday, the lowest level since Feb. 17. Refiners increased operating rates to a 34-month high of 91.5 percent last month. U.S. gasoline demand in the four weeks ended July 30 averaged 9.41 million barrels a day, little changed from 9.4 million in the four weeks ended July 23, according to a report last week from the Energy Department. Supplies have increased for the past six weeks. Gasoline stockpiles were 6.9 percent above the five-year average in the week ended July 30. “You’re in the time of year when you usually see a pretty big drop in gasoline inventories as you get rid of summer grades, and we just haven’t seen that yet,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis. “I keep looking for them to reduce refinery runs to get that gasoline number to a reasonable number.” Oil Supplies were at the highest level in 20 years for the last week in July in last week’s report and 8.9 percent above the five-year average. Oil inventories at Cushing, Oklahoma, the delivery point for New York-traded futures, jumped 5.7 percent in the four weeks ended July 30 to 37.8 million barrels. That’s less than 1 percent below the all-time high set in May, according to the Energy Department. Distillate inventories last week were 25 percent above the five-year average.
- Japan Says Economy is 'Picking Up,' Keeps Assessment Unchanged in August. The Japanese government kept its assessment of the economy unchanged in August and cut its evaluation of factory output after production fell the most in more than a year. “The economy has been picking up steadily and the foundation for a self-sustaining recovery is being laid,” the Cabinet Office said in a monthly report in Tokyo today. The language was the same as that used in July.
- Rights Groups Join Criticism of WikiLeaks. A group of human-rights organizations is pressing WikiLeaks to do a better job of redacting names from thousands of war documents it is publishing, joining the list of critics that claim the Web site's actions could jeopardize the safety of Afghans who aided the U.S. military.
- U.S., BP(BP) Near Deal on Fund. The Obama administration and BP PLC are close to a deal to use future revenues from the oil giant's Gulf of Mexico operations to guarantee its $20 billion cleanup and compensation fund, a move that would give both sides an incentive to continue production in the Gulf, scene of the U.S.'s worst-ever offshore oil spill.
- Ethics Charges Cite Role of Water's Grandson. A central figure in the ethics controversy surrounding Rep. Maxine Waters is her chief of staff, who is also her grandson, according to formal charges unveiled by a House committee Monday. At issue is whether Ms. Waters (D., Calif.) violated congressional ethics rules by urging the Treasury Department in October 2008 to give $12 million in government bailout funds to a minority-owned bank in which her husband owned stock.
- Since 2008, Fed Days Historically Good for Stocks. According to Bespoke, since the zero interest rate policy (ZIRP) was put into effect in December 2008, Fed days have typically been positive for the S&P 500. On the day, the index has averaged a gain of 1.18% with positive returns 85% of the time.
NY Times:
- Oracle(ORCL) Chief Faults H.P.(HPQ) Board for Forcing Hurd Out. , the chief executive of , denounced ’s directors on Monday for forcing the resignation of the H.P. chief executive, , who is a friend of Mr. Ellison’s. Mr. Hurd stepped down Friday after a sexual harassment inquiry found that he had filed inaccurate expense reports. In an impassioned e-mail sent to The New York Times, Mr. Ellison chided H.P.’s board for what he said was a grave mistake. “The H.P. board just made the worst personnel decision since the idiots on the board fired many years ago,” Mr. Ellison wrote. “That decision nearly destroyed Apple and would have if Steve hadn’t come back and saved them.”
Zero Hedge:
Forbes:
- Ahmadinejad Drops A Bomb. A few days ago in remarks made to the young advisers of Iran's Ministry of Education, President Mahmoud Ahmadinejad's chief of staff, Esfandiar Mashai, claimed that his boss, Ahmadinejad, talked about the possibility of Iran enriching Uranium well over 90% and that, "Laser activities can assist in weapon enrichment activities." Ahmadinejad declared this during his visit to an exhibition on the achievements of the Center for Laser Science and Technology in February 2010. Mashai continues that his boss was talking about building a nuclear bomb, and that, "not a single foreign media outlet created an uproar over this, and this shows that they are not worried about the nuclear bomb."
- Nearly Half of Student Notebook Buyers Choosing Macs. A new Student Monitor study revealed this weekend that almost half of college students getting a notebook plan to buy Macs. Of the 87 percent of prospective buyers, 47 percent plan to get some form of MacBook. The figure is an all-time high for Apple and has seen interest in Dell and HP shrink to just 12 and 11 percent each.
- Netflix(NFLX) and Epix Working on Major Digital Partnership to Share Up Pay TV Landscape. In a deal that could transform the landscape for digital movie distribution, start-up pay-TV channel Epix is in serious negotiations to give Netflix exclusive online rights to films from its three equity partners -- Paramount Pictures, Lionsgate and Metro-Goldwyn-Mayer. The five-year arrangement would allow Netflix subscribers to watch movies such as "Iron Man 2," "Dinner for Schmucks" and this week's release "The Expendables" via the company's Internet streaming service, according to several people familiar with the situation.
- Another Piece to Google's(GOOG) Social Puzzle: To Acquire Jambool For $70 Million. Google continues to gobble up companies that will form the backbone of it’s new social strategy and the upcoming war with Facebook.
- Crossroads Poll: Dem Senate in Peril. A new poll conducted for American Crossroads, the independent conservative group founded by Karl Rove and former Republican National Committee Chairman Ed Gillespie, suggests the 2010 landscape might be just volatile enough to give Republicans at least a chance at that prize.
- US Engineer Convicted of Selling Secrets to China. A federal jury in Hawaii on Monday convicted a former B-2 stealth bomber engineer of selling military secrets to China. Noshir Gowadia was convicted on 14 counts, including conspiracy, violating the arms export control act and money laundering.
- Exclusive: Lone Star's BI-LO Up for Sale: Source. BI-LO LLC, a U.S. supermarket chain owned by Lone Star Funds LONESB.UL, is up for sale and has drawn interest from strategic and private equity buyers, a source familiar with the matter said on Monday. U.S. supermarket chains Kroger Co (KR) and Publix Super Markets are among potential bidders and are considering buying at least a significant number of BI-LO stores, the source said.
- Investors Pull $3.7 Billion Form Hedge Funds in June. Investors pulled $3.7 billion out of hedge funds in June, punishing these loosely regulated portfolios for their poor performance in May, according to data released on Monday. Investors added $4 billion in May after having pulled out $3.4 billion in April. Emerging market hedge funds saw the biggest outflows with clients pulling $2.1 billion from these types of portfolios, data compiled by industry research firms BarclayHedge and TrimTabs showed. Managers specializing in fixed income funds pulled in $1.4 billion in new money, marking the biggest flows as investors sought the safety of bonds.
- RIM(RIMM) Likely to Get Ultimatum to Set Up India Server. Top sources in the Department of Telecom told Deccan Herald that the government is firm in its stand that unless the RIM—makers of BlackBerry —set up its server in India and allows the Indian security agencies to intercept its data, it will not be allowed to run its service in the country.
Citigroup:
- Reiterated Sell on (STP), target $7.
- Asian equity indices are -1.0% to unch. on average.
- Asia Ex-Japan Investment Grade CDS Index 114.0 -4.0 basis points.
- Asia Pacific Sovereign CDS Index 110.50 -4.0 basis points.
- S&P 500 futures -.45%.
- NASDAQ 100 futures -.31%.
Earnings of Note
Company/Estimate
- (SMG)/2.45
- (FOSL)/.34
- (DIS)/.59
- (CREE)/.51
- (SPWRA)/.09
- (MYGN)/.33
7:30 am EST
- The NFIB Small Business Optimism Index for July is estimated to fall to 88.0 versus 89.0 in June.
- Preliminary 2Q Non-farm Productivity is estimated to rise +.1% versus a +2.8% increase in 1Q.
- Preliminary 2Q Unit Labor Costs are estimated to rise +1.5% versus a -1.3% decline in 1Q.
- Wholesale Inventories for June are estimated to rise +.4% versus a +.5% gain in May.
- The FOMC is expected to leave the benchmark fed funds rate at .25%.
- None of note
- The $24 Billion 3-Year Treasury Notes Auction, weekly retail sales reports, IBD/TIPP Economic Optimism Index for August, weekly ABC Consumer Confidence reading, Oppenheimer Telecom/Media/Tech Conference, Jefferies Industrial Conference and the JPMorgan Auto Conference could also impact trading today.