Style Underperformer:
- Large-Cap Value (+.71%)
- 1) Gold & Silver -1.28% 2) Oil Tankers -.93% 3) HMOs -.26%
- AVY, BRO, AEM, MMR, LNCR, GSVC, ZAGG and TAOM
- 1) LEAP 2) WHR 3) RTN 4) S 5) ECA
- 1) USG 2) HK 3) AFAM 4) SMG 5) AN
Tuesday, July 19, 2011
Bear Radar
Style Underperformer:
Bull Radar
Style Outperformer:
- Small-Cap Growth (+1.92%)
- 1) Computer Services +3.48% 2) Networking +2.95% 3) Software +2.26%
- SIMO, NETL, MSTR, IBM, TIBX, BT, IDCC, WBMD, NWSA, ASML, HANS, TZOO, JVA, CRZO, NUVA, ETFC, AOS, HOG, PII, NL, SKY, PDC, FXEN, LEN, MOS, MMI, MGM, TDC, HXL, IPG, CCE, WFC, STLD and ID
- 1) ALL 2) PCYC 3) TLT 4) BHI 5) IDCC
- 1) BA 2) AAPL 3) GOOG 4) IBM 5) MSFT
Tuesday Watch
Evening Headlines
Bloomberg:
- Euro Trades Near One-Week Low Before Debt Summit, Australian Dollar Gains. The euro was 0.7 percent from its lowest level in a week against the dollar on concern European leaders will be unable to agree on steps to contain the region’s debt crisis at a summit this week. The yen traded 0.9 percent from a one-week high versus the euro before Spain and Greece sell as much as 5.75 billion euros ($8.1 billion) of bills today amid concern surging bond yields threaten to boost financing costs. Australia’s dollar pared earlier gains after minutes of the July policy meeting showed the Reserve Bank has scope to extend an interest-rate pause partly because of risks posed by Europe’s debt crisis. “These sovereign issues continue to move from one stumbling block to the next,” said Richard Grace, chief currency strategist and head of international economics in Sydney at Commonwealth Bank of Australia. “The euro is probably going to head back down and test $1.40 again.” European Central Bank President Jean-Claude Trichet reiterated that the ECB rejects any solution to Greece’s debt crisis that involves default, selective default or a credit event in a joint interview with Estonian, Slovakian and Slovenian newspapers. Yields on Spanish and Greek bonds hit euro-era records yesterday. Spanish 10-year yields rose 25 basis points to 6.32 percent, taking the spread over German bunds to 367 basis points. Greek two-year yields surged 291 basis points to 36 percent. Italy’s 10-year yield increased 21 basis points to 5.97 percent. “Europe’s debt problem is getting very serious,” said Kengo Suzuki, manager of the foreign bond department in Tokyo at Mizuho Securities Co., a unit of Japan’s third-largest listed bank. “We can’t really expect concrete measures to come out from the summit. That will likely continue weighing on the euro and accelerating flows into safe haven currencies.”
- Banks Face Tripling of Capital Levels as EU Moves on Basel III Regulations. Banks face demands from the European Union to more than triple the minimum levels of core capital they must hold to stave off insolvency under proposals that some lenders complain will hamper the region’s economic recovery. Michel Barnier, the EU’s financial-services chief, will propose tomorrow a law to implement global rules approved by the Basel Committee on Banking Supervision aimed at bolstering banks resilience to shocks. Lenders will need to raise about 423 billion euros ($595.5 billion) by 2019 to comply with the EU’s version of the Basel III rules, according to a draft of the EU proposals obtained by Bloomberg News. “A lot of existing capital will need to be replaced, it will not count any longer,” said Markus Heidinger, a partner dealing with financial regulation at law firm Wolf Theiss in Vienna. “At best, 10 percent of the work is done. It is just the beginning.”
- Accounting 'Red Flags' Drive Bond Spreads to Record Levels: China Credit. Borrowing costs have risen to record levels for Chinese companies marked with “red flags” by ratings firms for unclear financial reporting and high levels of private ownership. The extra yield investors demand to own the bonds of Nine Dragons Paper Holdings Ltd. (2689), LDK Solar Co. and Road King Infrastructure Ltd. (1098) instead of similar-maturity government debt widened to all-time highs after they were named by Fitch Ratings or Moody’s Investors Service for issues such as having changeable profit margins or long-serving independent directors. The bookkeeping of Chinese corporations has come under scrutiny after short sellers said companies from Longtop Financial Technologies Ltd. to Sino-Forest Corp. (TRE) were overstating profit margins or exaggerating asset holdings. Spreads on the nation’s company bonds widened 23 basis points this year to 146 basis points, compared with a one basis-point advance for company debt in the U.S., Bank of America Merrill Lynch indexes show. “No one knows everything about what’s really going on at some of these companies,” said Scott Bennett, Aberdeen Asset Management Asia Ltd.’s Singapore-based regional head of credit.
- BofA(BAC) Mortgage Settlements Magnify Capital Strain as $50 Billion Gap Looms. Bank of America Corp. (BAC) may have to build its capital cushion by $50 billion and renege again on Chief Executive Officer Brian T. Moynihan’s pledge to raise the firm’s dividend as mortgage losses drain funds. Expenses tied to soured home loans may total $20.4 billion in the second quarter, pulling the bank further from capital ratios demanded under new international standards, the Charlotte, North Carolina-based company said June 29. The gap may equal 2.75 percent of risk-weighted assets starting in 2013 -- at about $18 billion for each percentage point -- crimping Moynihan’s ability to raise dividends and repurchase shares. “They are likely to be in capital-building mode for longer than previously anticipated,” Jason Goldberg, a Barclays Capital analyst, said in an interview. For now, he said, “I’m hard-pressed to see meaningful capital redeployment.”
- Cisco(CSCO) Cuts 6,500 Workers, Record $1.3B in Costs. Cisco Systems Inc. (CSCO), the largest networking-equipment maker, plans to eliminate about 6,500 jobs, or 9 percent of its full-time workforce, to help trim $1 billion in annual costs and step up profit growth.
- Deutsche Bank(DB), SocGen, RBS(RBS) Face Pressure to Boost Funds After Stress Tests. Deutsche Bank AG (DBK), Royal Bank of Scotland Group Plc (RBS), Societe Generale SA and UniCredit SpA (UCG) may face pressure from investors to boost capital after scraping through Europe’s banking stress tests. Deutsche Bank, Germany’s largest bank, had a core Tier 1 capital ratio of 6.5 percent under the test’s adverse scenario. While that surpassed the 5 percent fail rate, it ranked eighth among the 12 German banks that participated and 57th overall among the 90 banks tested. Edinburgh-based RBS had a ratio of 6.3 percent, Societe Generale of Paris 6.6 percent and Milan- based UniCredit 6.7 percent.
- India Government Sees Growth Imperiled With Rising Greek-Like Tax Evasion. As Rama Murthy completes the sale of his three-bedroom apartment in the southern Indian city of Hyderabad, he accepts from the buyer a bag full of rupees -- a part of the purchase price the tax man will never see. “Almost 40 percent of the sale price I got in hard cash,” said Murthy, 39, who works at a software maker. “It’s illegal, but it’s rampant in India to avoid paying tax.”
- Apple(AAPL) Supplier Catcher Surges in Taipei as Citigroup(C) Raises Price Target. Catcher Technology Co., which makes metal casings for Apple Inc. computers, surged to the highest in four years in Taipei after Citigroup Inc. and Macquarie Group Ltd. both raised their share price estimate 22 percent. The stock jumped by the 6.9 percent daily limit to NT$224.50 as of 10:35 a.m. local time, the highest intraday price since July 13, 2007.
- Debt Worries Roil Markets. Worries about government debt rocked capital markets on both sides of the Atlantic Monday, as fears that the Greek crisis will spread combined with concerns at the standoff over the U.S. debt ceiling. The selloff started in Europe, hitting bonds and stocks in countries regarded as vulnerable to contagion from Greece, and spread to the U.S. where the Dow Jones Industrial Average ended at its lowest level since late June after a wild session.
- News of the World vs. WikiLeaks. Only one placed at risk 'the lives of countless innocent individuals.' How does this year's phone hacking scandal at the now-defunct British tabloid News of the World—owned, I hardly need add, by News Corp., the Journal's parent company—compare with last year's contretemps over the release of classified information by Julian Assange's WikiLeaks and his partners at the New York Times, the Guardian and other newspapers? At bottom, they're largely the same story.
- Special Report: Banks Continue Robo-Signing.
- IBM(IBM) Beats, Raises Forecast, Sending Shares Higher. IBM beat earnings expectations and raised its full-year guidance, helped by strong sales of its computers and software. Its shares rebounded in after-hours trading. The tech company reported earnings excluding items rose to $3.09 from $2.61 a share in the year-earlier period. The company also said signings of new business at its services division surged more than expected during the second quarter, and raised its full-year guidance by 10 cents to $13.25 a share; analysts had expected $13.22 a share.
Zero Hedge:
CNNMoney:
- Borders Liquidates: 10,700 Jobs Lost. Borders Group will liquidate its remaining assets after efforts to find a buyer fell through, the bookstore chain announced Monday. The nation's second largest book seller, which filed for bankruptcy protection earlier this year, currently operates 399 stores and employs approximately 10,700 workers.
- Why Are Market Bears So Sleepy? The level of short interest, or number of shares being held by investors who borrow stocks and quickly sell them with the hopes of buying them back later at a lower price, is surprisingly low. According to research from Brockhouse Cooper, a Montreal-based brokerage firm, short interest on the New York Stock Exchange is just 3.4% of overall shares. That's about where this level was in December 2007 before the Great Recession began. And it's off sharply from the peak of 4.9% during the height of the 2008-2009 bear market panic.
- Generic Congressional Ballot: Republicans 44%, Democrats 38%.
- 54% Favor Repeal of Health Care Law, 52% Say Law Will Increase Deficit. The latest Rasmussen Reports national telephone survey of Likely Voters shows that 54% favor repeal of the health care law passed in March of last year, including 43% who Strongly Favor its repeal. Thirty-nine percent (39%) oppose repeal of the law, including 26% who are Strongly Opposed.
- Wynn(WYNN) Profit Tops Street as Vegas Recovers. Wynn Resorts Ltd posted second-quarter profit and revenue that handily topped Wall Street estimates as revenue at its Wynn Macau unit soared 36.7 percent and business in Las Vegas improved.
- High Fertilizer Prices Help Mosaic(MOS) Beat Street. Rising fertilizer prices and robust food demand helped Mosaic Co post a better-than-expected quarterly profit on Monday. Shares of Mosaic rose 1.6 percent to $67.50 in after-hours trading.
- Murdoch Has Board Backing. News Corp independent directors are fully behind Rupert Murdoch, a board member told Reuters on Monday, as his iron grip on his vast media empire came under question because of the hacking scandal that already has consumed his London newspaper company.
- Cattle shipped from Japan's Yamagata and Niigata prefectures, as well as from Fukushima, may be contaminated with radioactive cesium, citing reports from the local governments. Farmers in the three prefectures have shipped a total of 648 cows fed with straw that contained high levels of cesium, the report said.
- China's central government called for a crackdown on the "infiltration and sabotage" activities of separatist forces in Tibet. China needs to firmly safeguard national unification and stability in Tibet, citing a message by the Chinese central government.
- Chinese Vice President Xi Jinping vowed to fight against separatist activities by the "Dalai group," and "completely destroy" any attempt to undermine stability in Tibet and unity in China, citing Xi who made the comments during a speech in Lhasa.
- Investors Steering Clear of Property. Confidence among investors in Hong Kong housing drops 58pc, more than any other asset class, as soaring values price people out of the market.
- The southern Chinese city of Shenzhen will from Aug. 1 not allow home prices to rise on a month-to-month basis. Authorities from the districts of Baoan and Longgang are notifying property companies that home-price targets for the second half of this year will limit month-on-month price increases to zero. The previous target had capped home-price gains to below the economic growth rate, according to the report.
- Chinese central bank adviser Zhou Qiren suggested contracting money supply and increasing the supply of goods to manage inflation. It is hard to expect good results if authorities only curb inflation by cracking down on high prices, Zhou said, according to the report.
- The Chinese Academy of Social Sciences called on the city of Beijing to use strict measures to rein in population growth in the nation's capital.
Citigroup:
- Reiterated Buy on (HAL), raised estimates, boosted target to $70.
- Reiterated Outperform on (MOS), target $85.
- Rated (F) Outperform, target $19.
- Asian equity indices are -.75% to +.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 127.0 +4.0 basis points.
- Asia Pacific Sovereign CDS Index 128.75 +3.25 basis points.
- S&P 500 futures +.26%.
- NASDAQ 100 futures +.26%.
Earnings of Note
Company/Estimate
- (CMA)/.54
- (HOG)/.72
- (KEY)/.20
- (KO)/1.16
- (BTU)/1.06
- (MMR)/-.14
- (STT)/.97
- (UNH)/.89
- (BK)/.56
- (BAC)/.29
- (OMC)/.92
- (AMTD)/.29
- (JNJ)/1.24
- (GWW)/2.11
- (WFC)/.69
- (FRX)/.96
- (GS)/2.30
- (SYK)/.90
- (CMG)/1.67
- (ALTR)/.64
- (ISRG)/2.71
- (RVBD)/.21
- (YHOO)/.18
- (CTAS)/.43
- (VMW)/.47
- (CSX)/.44
- (AAPL)/5.87
- (FTNT)/.08
8:30 am EST
- Housing Starts for June are estimated to rise to 575K versus 560K in May.
- Building Permits for June are estimated to fall to 595K versus 612K in May.
- None of note
- The Fed's Hoenig speaking and the weekly retail sales reports could also impact trading today.
Monday, July 18, 2011
Stocks Falling into Final Hour on Soaring Eurozone Debt Angst, US Debt Ceiling Concerns, Financial Sector Pessimism, Global Growth Worries
Broad Market Tone:
- Advance/Decline Line: Substantially Lower
- Sector Performance: Almost Every Sector Declining
- Volume: Below Average
- Market Leading Stocks: Outperforming
- VIX 21.46 +9.88%
- ISE Sentiment Index 102.0 +67.21%
- Total Put/Call .93 -13.89%
- NYSE Arms 1.78 +44.78%
- North American Investment Grade CDS Index 99.25 +2.24%
- European Financial Sector CDS Index 174.05 +10.31%
- Western Europe Sovereign Debt CDS Index 302.17 +3.78%
- Emerging Market CDS Index 226.07 +2.29%
- 2-Year Swap Spread 29.0 +1 bp
- TED Spread 21.0 +1 bp
- 3-Month T-Bill Yield .00% unch.
- Yield Curve 255.0 unch.
- China Import Iron Ore Spot $174.40/Metric Tonne -.11%
- Citi US Economic Surprise Index -98.0 +1.9 points
- 10-Year TIPS Spread 2.33% +4 bps
- Nikkei Futures: Indicating -105 open in Japan
- DAX Futures: Indicating +40 open in Germany
- Slightly Lower: On losses in my Tech, Biotech and Retail sector longs
- Disclosed Trades: Added to my (IWM)/(QQQ) hedges and then covered them
- Market Exposure: 75% Net Long
Today's Headlines
Bloomberg:
- Italian, Spanish Yields Soar to Records; German Bunds Climb on Safety Bids. Italian and Spanish 10-year bond yields surged to euro-era records while German bunds rallied as contagion from the sovereign-debt crisis spread, piling pressure on Europe’s leaders to find measures to contain the turmoil. Yields on two-year Greek, Irish and Portuguese debt also reached the highest since the introduction of the 17-nation shared currency, while benchmark bund yields sank to within 12 basis points of an eight-month low. European Central Bank President Jean-Claude Trichet reiterated his opposition to Greek debt restructuring as euro-area leaders prepared to meet in Brussels on July 21. Stocks fell on concern European banks may need to raise as much as 80 billion euros ($113 billion) of capital following stress tests on the lenders last week. “It does not seem as if we are going to see an immediate solution to the debt crisis, so investors prefer to stay on the cautious side, and this is being reflected in German bunds,” said Kornelius Purps, a fixed-income strategist at UniCredit SpA in Munich. “There is no genuine reason to price Italy and Spain down. It’s general contagion. It’s an alarming signal to European leaders to come up with a solution that doesn’t create more contagion.”
- Core Europe Infected by Crisis as France CDS Surge to Record. The cost of insuring European sovereign debt rose to records on concern the region’s crisis is spreading to its core. Credit-default swaps on France surged 9 basis points to a record 123 and Germany climbed 4 to 64, the highest since March 2009, according to CMA prices at 4:30 p.m. in London. Greece, Ireland, Italy, Portugal and Spain also rose to records, helping push the Markit iTraxx SovX Western Europe Index of swaps on 15 governments up 7.5 basis points to an all-time high of 305.5. Contagion to France and Germany “reflects the reality that the euro zone is in complete crisis,” said Gary Jenkins, head of fixed income at Evolution Securities Ltd. in London. “If we get anywhere close to looking at France, it’s game over.” European leaders are holding a special summit this week as they seek to contain the debt crisis, after stress tests published July 15 failed to reassure investors the region’s banks could withstand a sovereign default. European Central Bank President Jean-Claude Trichet reiterated the ECB won’t accept bonds from a defaulting nation as collateral, putting it at odds with politicians pushing for private investors to share the burden of rescuing Greece. Contracts on Greece jumped 92 basis points to 2,507, signaling an 88 percent probability of default within five years. Ireland climbed 47 basis points to 1,181, Italy increased 20 to 326 and Portugal rose 54 to 1,200, while Spain jumped 26 to 375 and Belgium was 8 higher at 213. The Markit iTraxx Financial Index linked to senior debt of 25 banks and insurers increased 3.5 basis points to 192.5 and the subordinated index climbed 7 to 336.5, both the highest since Jan. 11, according to JPMorgan Chase & Co. As many as 20 banks may need to bolster capital after eight lenders failed the stress tests, JPMorgan analysts said after the results were published. Swaps on peripheral banks led the rise in financial debt risk, with Banco Popular Espanol SA (POP) soaring 73 basis points to a record 652, according to CMA. The region’s phone companies also rose to all-time highs, with Hellenic Telecommunications Organization SA (HTO) in Athens surging 430 basis points to 1,142 and Madrid-based Telefonica SA (TEF) jumping 22 to 273. Contracts on the Markit iTraxx Crossover Index of 40 companies with mostly high-yield credit ratings increased 9 basis points to 469, the highest since Dec. 2, JPMorgan prices show. The Markit iTraxx Europe Index of 125 companies with investment-grade ratings rose 2.75 basis points to 125.5 basis points, the highest in more than a year.
- Forint Drops to Record Low Against Franc on Debt; Polish Zloty Depreciates. The forint and zloty slid to record lows against the Swiss franc and Hungarian stocks lost the most in three months on concern the euro-area’s debt crisis may cause emerging European economies to slow and lenders to pull out. The Hungarian and Polish currencies both sank as much as 1.7 percent to their weakest levels against the franc since Bloomberg started tracking the data more than 13 years ago. The BUX equity gauge slumped 3.7 percent in Budapest, the most since April 18. The euro-region’s debt crisis threatens to hurt the export- led economic recovery in the European Union’s east, according to Morgan Stanley and Royal Bank of Scotland Group Plc. The risk that western lenders will reduce their presence in the region is another spillover from the debt crisis, they said. “Risks of contagion from the euro area are rising,” Pasquale Diana, a Morgan Stanley economist in London, wrote in a report today. “The central and eastern European currencies will depreciate aggressively versus the dollar, Swiss franc and yen in the event that we see more serious contagion.”
- EU Leaders Will Consider Bank Levy to Aid Greece, Welt Says. Euro region leaders meeting this week in Brussels will consider combining a special bank levy with a bond buyback program in a second aid package for Greece, Die Welt reported today, without saying where it got the information. The fee would have to be paid not only by banks doing business with Greece, the newspaper said in its print edition. Investors would be asked to sell their bonds back to the Greek government and accept losses of as much as 40 percent, depending on maturities, the newspaper said, citing calculations by the Berlin-based Finance Ministry that estimate a debt cut by 20 billion euros ($28.1 billion) from bond buybacks. Germany’s proposal to ask investors to roll over Greek debt is seen as too risky as it may involve a temporary default and is unlikely to be considered, the newspaper said. The July 21 meeting in Brussels is to take basic decisions on the shape of the second aid package for Greece, it said. Chancellor Angela Merkel is resisting calls by Finance Minister Wolfgang Schaeuble -- made behind closed doors -- to cut Greece’s debt in a way that wouldn’t necessarily be voluntary for bondholders as she’s worried about the debt crisis spreading to other countries, Die Welt said.
- BofA(BAC) Mortgage Settlements Magnify Capital Strain as $50 Billion Gap Looms. Bank of America Corp. (BAC) may have to build its capital cushion by $50 billion and renege again on Chief Executive Officer Brian T. Moynihan’s pledge to raise the firm’s dividend as mortgage losses drain funds. Expenses tied to soured home loans may total $20.4 billion in the second quarter, pulling the bank further from capital ratios demanded under new international standards, the Charlotte, North Carolina-based company said June 29. The gap may equal 2.75 percent of risk-weighted assets starting in 2013 -- at about $18 billion for each percentage point -- crimping Moynihan’s ability to raise dividends and repurchase shares. “They are likely to be in capital-building mode for longer than previously anticipated,” Jason Goldberg, a Barclays Capital analyst, said in an interview. For now, he said, “I’m hard-pressed to see meaningful capital redeployment.”
- General Mills CEO Says Ethanol Subsidies Fuel Inflation, FT Says. General Mills(GIS) CEO Ken Powell said U.S. ethanol fuel subsidies were causing higher food prices, in turn increasing inflation, citing an interview with him. General Mills is the world's sixth-largest food producer by revenue, and Powell said if corn prices rise, wheat would follow, and "it's all linked."
- 21 Banks Would Fail Stress Test Based on CDS Spreads: ABN Amro. Capital shortfall would be EU17.5B versus EU2.5B if haircuts increased on debt of Greece, Ireland, Italy, Portugal, Spain based on CDS spreads, ABN Amro says in note. With haircuts of Greece 70%, Ireland and Portugal 30%, Spain 15%, Italy 10%, failures rise to 31 vs 8 in Friday's EU tests; capital shortfall would be EU40B.
- Gold Rallies to Record in Best Run Since 1980. Gold rose to a record $1,607.70 an ounce, heading for the longest rally in 31 years, as debt concerns in Europe and the U.S. boosted demand for the metal as a haven.
- Oil Drops in NY on European Debt Crisis as Euro Tumbles Most in Week. Oil fell as investors bet that Europe’s worsening debt crisis may slow the economy and crimp fuel demand, and as the euro tumbled the most in a week against the dollar. Futures dropped as much as 2.5 percent on speculation that European leaders won’t agree on a way to contain the region’s debt crisis at a summit this week. Crude for August delivery dropped $2.15, or 2.2 percent, to $95.09 a barrel at 10:47 a.m. on the New York Mercantile Exchange. Earlier, it touched $94.85. Futures have risen 25 percent in the past year.
- Singapore Exports Rise Less Than Estimated on Electronics Shipment Slump. Singapore’s exports climbed in June at less than a third the pace estimated by economists as manufacturers shipped fewer electronics goods and sales of pharmaceuticals eased. Non-oil domestic exports rose 1.1 percent from a year earlier, after a revised 7.6 percent gain in May, the island’s trade promotion agency said in a statement today. The median estimate of 16 economists surveyed by Bloomberg News was for an increase of 3.8 percent. Electronics shipments by companies such as contract manufacturer Venture Corp. dropped 17.2 percent in June from a year earlier, after declining 15.2 percent the previous month.
- Misery Index at 28-Year High on Jobless Rise: Chart of the Day. The Misery Index stands at 12.8, the highest in 28 years. The Misery Index is the highest since May 1983 when unemployment was 10.1%, inflation was 3.5% and the economy was recovering from the 1981-82 recession.
- U.S. Farmers Boost Borrowing as Input Costs Rise, Fed Says. U.S. farmers and feedlot operators increased borrowing during the second quarter as costs rose for feed, fertilizer and fuel, according to the Federal Reserve. Non-real estate loans jumped 14 percent from a year earlier, and the average size of operating loans increased 36 percent, the Federal Reserve Bank of Kansas City said in a report on its website. Capital-spending loans fell 36 percent, as farmers reduced purchases of heavy machinery and interest rates rose for the first time in a year, the bank said.
- More Cattle Linked to Contaminated Feed. Local officials in Fukushima prefecture said Monday that 411 more cattle potentially contaminated with radioactive cesium have been shipped around Japan, a development sure to fuel food-safety fears.
- Apple(AAPL) Seeks to Broaden iPhone in China. Apple Inc. is getting closer to offering the iPhone through China's largest mobile carrier, state-owned China Mobile Ltd., further opening a vast market that could be the next growth catalyst for the technology giant. Apple's acting day-to-day head and chief operating officer Tim Cook last month visited China Mobile's offices in Beijing. Both companies declined to comment on Mr. Cook's rare visit, but the carrier confirmed the two companies are in talks about the iPhone.
- China Newspaper Disbands Investigative Team. A prominent Chinese government newspaper disbanded its investigative reporting team, which had won plaudits for its aggressive muckraking, amid a sweeping clampdown on the media and human-rights activists. Reporters at China Economic Times said the decision to eliminate the roughly two-year-old investigative team, whose hard-hitting exposes helped win legitimacy for the newspaper as a public watchdog, was announced at a meeting Monday morning. The move, which was disclosed at a meeting convened by the newspaper's Communist Party Committee, comes as Beijing has been tightening its grip amid concerns over growing internal unrest that have grown sharper following the popular uprisings.
- Italian Bank Shares Nosedive Led by Intesa Sanpaolo. Italian banks, which late Friday passed Europe’s stress tests and were pronounced solid by the Bank of Italy, resumed their sharp downward slide Monday, falling more than lenders elsewhere and making Milan the worst-performing stock market. Adding to the sense of doom was that the slide was led by Intesa Sanpaolo SpA, the country’s largest lender, which recently raised €5 billion in fresh equity and boasted a core Tier 1 ratio of 8.9% in the stress test’s adverse scenario, one of the highest numbers in Europe. Intesa Sanpaolo’s shares were down 4.2% in midday trading and had fallen even more in the morning. Unicredit, Banco Popolare and Banca Monte dei Paschi di Siena were all in hot pursuit. “If the country’s best bank is hit that bad, it means the problem is the country,” said Daniele Tolusso, who manages private accounts at a Milan bank. “Markets don’t think much of the government’s budget and something much more drastic needs to be done,” he said.
CNBC.com:
- More Shoppers to Delay Their Back-To-School Spending. Retailers will be biting their nails this back-to-school shopping season as consumers are expected to put off purchases until nearly the last minute, according to a new report.
- Venezuela Officially Has More Oil Than Saudi Arabia. (graph)
- Obama Would Veto Republican Debt Ceiling Plan.
- A Full Tally of Today's Bank Stock Carnage.
- If Geithner Doesn't Have a Debt Ceiling Plan B, He Needs To Be Fired Immediately.
- Ron Paul on "Debt Ceiling Drama" "We Need to Stop Allowing Secretive Banking Cartels to Endlessly Enslave Us".
- Cantor Announces House to Vote on "Cut, Cap and Balance Act" Tomorrow.
- Mastering The Machine. How Ray Dalio built the world’s richest and strangest hedge fund. Ray Dalio, the sixty-one-year-old founder of Bridgewater Associates, the world’s biggest hedge fund, is tall and somewhat gaunt, with an expressive, lined face, gray-blue eyes, and longish gray hair that he parts on the left side. When I met him earlier this year at his office, on the outskirts of Westport, Connecticut, he was wearing an open-necked blue shirt, gray corduroy pants, and black leather boots.
- Daily Presidential Tracking Poll. The Rasmussen Reports daily Presidential Tracking Poll for Monday shows that 24% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as president. Forty-two percent (42%) Strongly Disapprove, giving Obama a Presidential Approval Index rating of -18 (see trends).
- China's consumer price may increase by about 6.5% in July, citing Chen Dongqi, deputy head of the National Development and Reform Commission's macroeconomic research institute. Expectations for interest rate increases in the second half still exist, Chen said.
- Europe Rating Agency Would Cost 300 Million Euros: Report. A European credit rating agency that would lower companies' dependence on big rating agencies Standard & Poor's (MHP.N), Moody's (MCO.N) and Fitch (LBCP.PA) would cost about 300 million euros ($424 million) to set up, monthly magazine Capital reported. "By the end of 2011, we will have formed a consortium of up to 25 participants, each of whom will invest 10 million euros," the magazine cited Krall as saying in an excerpt of an article to be published on Thursday. The Family Offices that manage wealthy families' assets would be willing to invest several hundred million euros in a new rating agency, one of the people said, but that would not be sufficient to keep the project going in the long run. Another sticking point is how to ensure that the new agency is independent from politics.
- Four Dead in Attack on Chinese Police Station. The violence was the worst Xinjiang has experienced in about a year. Last August, seven Chinese military police were killed when a member of the Uighur minority rammed them with an explosives-laden vehicle in the Xinjiang border region. State television said the latest incident happened in the desert city of Hotan when a mob attacked a police station, taking hostages and setting it on fire. Two hostages, a paramilitary policeman and a guard died in the violence, as well as several of the attackers, it reported. Six hostages were freed. Dilxat Raxit of the Germany-based World Uyghur Congress said residents in Hotan had told his group that police opened fire on a peaceful protest, leading to fighting between the two sides."The people cannot stand the government's repression any longer," he said by telephone. In July 2009, Xinjiang's capital Urumqi was rocked by violence between majority Han Chinese and minority Uighurs that killed nearly 200 people. Since then, China has executed nine people it blamed for instigating the riots, detained and prosecuted hundreds of others and ramped up spending on security, according to state media and overseas rights groups.
- Unsold UK Properties on Estate Agents' Books Hit Record High.
- More US Quantitative Easing Will Be Unconscionable. It is ineffective and dangerous, especially to social fabric of Asia. By pushing up food, fuel, clothing and shelter prices, QE acts as a transfer of wealth from the poor to the rich. Mr. Bernanke may not care, but in developing Asia, QE3 will be a threat to the social fabric. How likely is QE3? "At this point, we are not proposing to undertake that option," Mr. Bernanke said to the Senate Banking Committee in Washington, a day after signalling QE to the House Financial Services Committee. "We just want to make sure that we have the options when they become necessary." Necessary? Why should something so utterly useless and lethal ever become necessary? Just because it is a bold thing to do? "Conscience," Hamlet said, "does make cowards of us all." Another round of QE will be unconscionable.
- China should raise interest rates once or twice more this year as rates are "relatively low," Wang Jun and Liu Xiangdong, two researchers at the China Center For International Economic Exchanges, wrote in a commentary today.
Bear Radar
Style Underperformer:
- Mid-Cap Value (-1.71%)
- 1) Airlines -4.51% 2) Networking -2.41% 3) Homebuilders -2.31%
- BCS, PNFP, DB, BBD, ARCC, CLMT, AZN, E, MRCY, GIL, WBMD, SKYW, HAS, NWS, PETS, CTRP, ANGO, ASMI, PICO, LFUS, SGEN, AIXG, CYMI, MMYT, GEOI, SMCI, MAT, IX, IJH, EMM, TMW, MSB, EXI, EWU, EWM, NST, HAS, ARW, GCI, ALL, XSD, TXI, RGC, END and SKYW
- 1) CLX 2) ADTN 3) SAP 4) BCS 5) EOG
- 1) SPWRA 2) LNKD 3) GME 4) ALGT 5) HK
Subscribe to:
Posts (Atom)