Style Underperformer:
Sector Underperformers:
- 1) Semis -1.20% 2) Internet -.94% 3) Homebuilders -.83%
Stocks Falling on Unusual Volume:
- INTC, SAP, UTEK, SHW, FCS, EBAY, KIRK, TI, NTRS, BAP, SCSS, AN, CLB, HAWK, SCHL, APH, TSM, ERIC, ALB, DGX, TZOO, GPC, DECK, BUD, ANGI, CELG, MOLX, SI and ANIK
Stocks With Unusual Put Option Activity:
- 1) RAD 2) SHW 3) EBAY 4) EWJ 5) SNDK
Stocks With Most Negative News Mentions:
- 1) NTRS 2) CTRX 3) MRK 4) CNH 5) ALL
Charts:
Style Outperformer:
Sector Outperformers:
- HMOs +2.45% 2) Airlines +2.33% 3) Computer Services +2.16%
Stocks Rising on Unusual Volume:
- BBG, CY, XLNX, BERY, WWAV, OSTK, JCI, NUS, HDB, QSII, CHKP, SINA, BX, UNH, MS, WLT, EWBC, TRN, FRC, SWY and DOV
Stocks With Unusual Call Option Activity:
- 1) ATVI 2) S 3) LEAP 4) SCSS 5) RAD
Stocks With Most Positive News Mentions:
- 1) XLNX 2) BYI 3) QSII 4) UNH 5) GPC
Charts:
Evening Headlines
Bloomberg:
- China’s Easy Money Flows Abroad as Credit Squeeze Hurts at Home. As
China’s cash squeeze claims victims across the nation -- from a
bailout-seeking shipyard to a solar-panel maker missing a bond payment
-- there are places where Chinese money remains cheap and plentiful. Like Nigeria. China
Development Bank Corp. and Export-Import Bank of China are lending
billions of yuan to some of the world’s riskiest regimes at interest
rates hundreds of basis points below the cheapest commercial loans
available at home. That lending in turn generates overseas
contracts to build airports, roads and shopping malls for state-owned
Chinese companies that are mired in debt. “As opportunities go down
and risks go up at home, these policy banks have gained a lot of power
and they want to sustain themselves,” Kevin Gallagher, author of the
2010 book “The Dragon in the Room” about Chinese investment in Latin
America, said in a telephone interview. “The majority of the countries
that are getting the finance are countries with bond spreads
that are through the roof.”
- China’s Thinning Margins Has Marubeni Betting on U.S. China’s
economic slowdown could be
worse than official forecasts and a recovery may not come before 2014,
according to the chairman of Marubeni Corp. (8002), Japan’s biggest
power and agriculture trading company. Thinning cargo volumes and
trading margins suggest China’s gross domestic product may be expanding
at less than the announced 7.5 percent in the second quarter, Teruo
Asada said in an interview in Tokyo, making the U.S. a better prospect for the
trader’s expansion.
- China June Home Prices Rise as Big Cities Post Record Gains. China’s
June new home prices rose in all but one city, led by the biggest
metropolitan centers and underscoring Premier Li Keqiang’s struggle to
rein in speculative investment even as the economy cools. Prices climbed
in 69 of the 70 cities the government tracked last month from a year
earlier, the National Bureau of Statistics said in a statement
today, matching the data in May. The southern business city of Guangzhou
posted the biggest increase with a 16 percent advance from a year
earlier. Prices climbed 13 percent in Beijing and 12 percent in
Shanghai. All three cities had their biggest gains since the government
changed its methodology for the data in January 2011. “With the
economy slowing down and other industries weakening, investors don’t
have many choices but seek out property investment for good returns,”
Yao Wei, China economist at Societe Generale SA in Hong Kong, said by
phone today. “Many of the government measures have targeted the supply,
which actually pushed home prices up further.”
- Talks to Expand Technology Pact Collapse. Negotiations among dozens of nations
aimed at eliminating duties on some electronic devices collapsed
after China proposed excluding many items from the talks. “The
United States is extremely disappointed that it became necessary to
suspend negotiations,” U.S. Trade Representative Michael Froman said
yesterday in a statement on the Information Technology Agreement. “A
diverse group of members participating in the negotiations determined
that China’s current position makes progress impossible at this
stage.”
- Abe Set for Japan Election Win Faces LDP Dissent as Biggest Risk. Japanese Prime Minister Shinzo Abe
is set to win control of both houses of parliament, giving his
Liberal Democratic Party-led coalition the strongest grip on
power since 2007. Winning the election will be the easy part. While a government victory in the July 21 upper house
ballot would end Japan’s recent experiment with two-party
politics, internal dissent looms within months should slowing
growth undermine the promise of Abenomics. Economists forecast
the economy to contract after an April 2014 sales-tax rise.
- China Stocks Fall for Second Day as Property Developers Retreat. Chinese
stocks fell for a second day, led by real estate companies and
commodity producers, amid concern increasing home prices will limit room
for the government to spur economic growth. A gauge tracking developers
slipped 1.2 percent. House prices in Beijing, Shanghai and
Guangzhou rose the most since at least January 2011 last month from a
year earlier, official data showed. The government may expand a tax on
property purchases, Xinhua News Agency reported yesterday. Yunnan Tin
Co. and Jiangxi Copper Co. retreated. The International Monetary Fund
said risks are increasing that China’s growth this year will fall short
of the lender’s forecast. The Shanghai Composite Index (SHCOMP) dropped 0.9 percent to
2,027.32 as of 11:02 a.m. local time, extending yesterday’s 1
percent loss. The CSI 300 Index declined 1.2 percent to
2,255.82.
- Asian Stocks Swing on Bernanke, China Growth Risks.
Asian stocks swung between gains and losses after Federal Reserve
Chairman Ben S. Bernanke said U.S. asset purchases are not on a preset
course and the International Monetary Fund said risks are rising for
slower growth in China. China Shanshui Cement Group slumped 9.8 percent
in Hong Kong after saying first-half profit will drop at least 40
percent from a year earlier. SoftBank Corp., a Japanese mobile phone
operator, jumped 4.5 percent on a report it will form a fuel-cell
venture with Bloom Energy Corp. Woolworths Ltd., Australia’s largest
retailer, fell 1.5 percent after saying it expects to lose A$157 million
($144 million) in the year ended
June for its Masters home-improvement joint venture. The MSCI Asia Pacific Index fell 0.1 percent to 135.76 as
of 11:53 a.m. in Tokyo after rising as much as 0.4 percent.
- Rebar Falls for First Time in Seven Days on Slower China Growth. Steel reinforcement-bar futures in
Shanghai fell for the first time in seven days on the prospect
of slower economic growth in China. Rebar for delivery in January on
the Shanghai Futures Exchange fell as much as 0.4 percent to 3,665 yuan
($597) a metric ton before trading at 3,668 yuan at 10:30 a.m. local
time.
Wall Street Journal:
- Bernanke Plays Down Link Between Jobless Rate, Fed Moves. Federal Reserve Chairman Ben Bernanke played down Wednesday the
unemployment rate's weight in the central bank's calculation of when to
start raising short-term borrowing costs, a fresh example of the
challenge the Fed faces explaining its easy-money policies to an often
perplexed public.
- Regulatory Rift Develops Globally Over Financial System. Global regulators are pursuing disparate approaches to protecting the financial system against future shocks. Global regulators are pursuing disparate approaches to protecting the
financial system against future shocks, fracturing an agreement forged
in the wake of 2008 financial crisis to adopt a coordinated response. Policy makers, at odds over how to reduce risk in the financial
system, are disagreeing over proper capital levels for banks,
derivatives regulation, criminal prosecutions of bankers and even the
appropriate forum for brokering agreement on financial-services issues. Countries like the U.S., U.K. and Switzerland are demanding that banks
build thicker capital cushions to absorb losses and bigger liquidity
buffers than most other European countries are embracing.
- Dell(DELL) Buyout Pushed to Brink. Large Shareholders Expected to Reject Deal.
Dell Inc.'s $24.4 billion buyout plan was foundering late Wednesday
evening, as a group of big investors signaled their intent to vote
against a deal that would remove the technology icon from the public
markets. The new opposition from Vanguard Group Inc., State Street Corp.
and BlackRock Inc. pushed the deal to a new level of brinkmanship,
forcing Michael Dell and his backers to either sweeten the transaction
or risk seeing the deal fail.
- Challenges in Bid to Revamp Banks. Lew,
Bernanke Seek More Action in Fight Against 'Too Big to Fail'. In
separate remarks, Lew and Bernanke call for additional measures to
ensure banks can't threaten the economy.
- The IRS Goes to Washington. New testimony links political vetting to orders from D.C. We're starting to understand why Lois Lerner took the Fifth about her
role in the IRS targeting of conservative groups. The testimony of at
least three more employees in the IRS Washington office is now making
clear that Ms. Lerner and other Washington IRS officials had a direct
hand in slow rolling the tax-exempt applications of conservative groups
in an election season.
Fox News:
- How high did it go? Republicans to step up pressure on IRS at scandal hearing. House Republicans plan to ratchet up scrutiny of the IRS during a
hearing Thursday morning where agency workers are expected to discuss
the involvement of high-level officials in slowing down applications
from Tea Party groups. For the first time, the House oversight committee has invited two key
agency officials to testify. Republican leaders of the committee
claimed Wednesday that one of them recently revealed that the IRS chief
counsel's office -- led by a political appointee -- played a role, along
with embattled IRS official Lois Lerner, in scrutinizing conservative
groups. Rep. Darrell Issa, R-Calif., chairman of the committee, told Fox News
that agency officials in Cincinnati were taking their orders from
Washington, and that the investigation needs to look next at both Lerner
and the counsel's office.
- House votes to delay ObamaCare mandates. The House voted Wednesday to delay key components of ObamaCare, in a
bid by emboldened Republicans to chip away at the law after the
administration acknowledged new problems with its implementation. Republican leaders swiftly organized the votes after the
administration, in early July, said it would delay until 2015 a
requirement that businesses with 50 or more workers provide insurance
coverage or pay a penalty. The House voted 264-161 for a measure that would do exactly that. But
they also voted 251-174 for a measure that would delay the individual
mandate -- the requirement on individuals to buy health insurance -- for
a year as well.
CNBC:
- Ebay(EBAY) earnings: 63 cents adjusted EPS on revenue of $3.88 billion, in line with forecasts. EBay Inc reported solid second-quarter results
on Wednesday but Chief Executive John Donahoe warned of "headwinds" in
the second half of the year, sending shares of the e-commerce company
down more than 6 percent in after-hours action. Second-quarter
net income was $822 million, or 63 cents a share, versus $730 million,
or 56 cents a share, in the same period a year earlier. Revenue rose 14
percent to $3.88 billion. EBay was expected to earn 63 cents a share on
revenue of $3.89 billion, according to Thomson Reuters I/B/E/S. "Macroeconomic
headwinds in Europe and Korea will continue to be a challenge in the
second half of the year," Donahoe said. "But our core businesses are
strong."
- Intel(INTC) cuts 2013 revenue forecast, capex as PC industry sags.
Intel Corp cut its full-year revenue forecast and said it is scaling
back capital spending as it adjusts to a painful contraction of personal
computer sales and economic weakness in China, one of its biggest
markets. The forecast and cut in capital spending were announced on
Wednesday in the company's quarterly earnings report, the first under new Chief Executive Brian Krzanich.
Zero Hedge:
Business Insider:
Institutional Investor:
Reuters:
- Moody's cuts rating on Chicago's bonds due to pensions.
Moody's Investors Service lowered on Wednesday Chicago's general
obligation and sales tax ratings to A3 from Aa3 due to the city's large
and growing pension liabilities and budget pressures related to them.
The move affects $8.2 billion of Chicago's general obligation and sales
tax debt, Moody's said in a statement, adding that its outlook is
negative. "The current administration has made efforts to reduce costs and achieve operational efficiencies, but the magnitude of the
city's pension obligations has precluded any meaningful
financial improvements," the statement said.
Financial Times:
- Maersk
CEO Sees Growth in Demand in Shipping Industry Falling. Maersk CEO
Soren Skou sees annual growth 4-5% in yrs ahead, vs levels close to 10%
before 2008 economic crisis, FT cites him as saying in an interview.
- NSA’s phone and web snooping more far-reaching than thought.
The US’s National Security Agency, the electronic eavesdropping body,
has disclosed that its telephone and internet data collection is far
greater than previously known in the face of unusually sharp
congressional questioning. The disclosures, and the more aggressive stance from members
of the House judiciary committee, underlined how the NSA is losing
support in a Congress which had initially largely backed the White
House’s defence of anti-terror surveillance.
Telegraph:
- China defies IMF on mounting credit risk and need for urgent reform. If you think China's Communist Party fully understands the mess it has created
by ramping credit to 200pc of GDP and running the greatest investment bubble
know to man, read its shockingly complacent response to warnings from the
International Monetary Fund. The IMF's Article IV report on China states - as clearly as the IMF dares -
that excess credit has been pushed to the outer limits of sanity, and that
there is a growing risk of an "adverse feedback loop" as the
financial system and the economy take each other down in a mutually
reinforcing spiral.
As you can see from the first chart, total credit has jumped from 129pc to
195pc of GDP since 2008, and has completely departed from its historic
trend.
Commercial Times:
- Taiwan, Korea Panel Makers Cut Output This Month. Average
utilization rate of panels cuts to 80% in July and is expected to be
lower in August amid weak demand and prices falling, citing David Hsieh,
VP of the Greater China Market at DisplaySearch. Global TV panel
shipments fell 6%-8% in June m/m.
South China Morning Post:
- Hong Kong's Home Prices Seen Falling 45%, Says Midland Unit. Home prices could fall as much as 45% over the next three to five years amid higher property taxes, rising interest rates and a bleak outlook for commercial property, says one real estate agent. Hong Kong Property, controlled by Midland Holdings, the city's only listed real estate agent, made the bearish forecast yesterday. With the government stepping up measures to cool the market, average monthly transactions in the secondary market could drop to 4,500, a level close to that during Sars in 2003. "In the worst scenario, home prices will drop by as much as 45%," Midland said.
- A property slump will affect the whole of Hong Kong's economy. Last week Monitor argued that the gradual tapering of
quantitative easing and the eventual increase in American interest rates
that will follow are likely to trigger a slump in Hong Kong property
prices of 30 per cent or more. That might sound like a good thing. Lots of families would like to
buy. But with the minimum down-payment on a typical Hong Kong flat
now
equal to four years of median household income, many have been priced
out of the market. To them, forecasts of a property slump are welcome.
But property prices do not fluctuate in isolation. In a city where
the property market contributes a fifth of our gross domestic product, a
big fall in prices will inevitably affect activity in all other sectors
of Hong Kong's domestic economy. First of all, a property bear market
will erode consumer demand. With
residential mortgage debt currently standing at 46 per cent of Hong
Kong's GDP, a decline in the value of flats would have a big effect on
household balance sheets.
China Business News:
- Some China Provinces May Face Difficulty With Targets. Some
Chinese provinces may still face difficulty in meeting economic growth
targets this year after targets were lowered earlier in the year.
Financial News:
- PBOC's Ji Says Current Economic Growth 'Reasonable'. The public is probably "overly worried" about economic slowdown as the current growth is "reasonable," according to an article by PBOC's research bureau head Ji Zhihong. GDP growth of 7%-7.5% is "moderate" for China at a time when it is accelerating economic restructuring, Ji wrote.
- Lowest GDP Growth China Can Tolerate Can't Be Fixed. Lowest GDP growth and employment level China can tolerate is unclear
now, Financial News says in a front-page commentary. The judgement of
the markets is that 7.5% is the lowest GDP growth China can tolerate
currently, the commentary said. The judgements of the markets is that 7% is the lowest GDP growth China can tolerate in the medium term, it said.
Evening Recommendations
Night Trading
- Asian equity indices are -.50% to +.50%. on average.
- Asia Ex-Japan Investment Grade CDS Index 137.0 -.5 basis point.
- Asia Pacific Sovereign CDS Index 106.25 unch.
- NASDAQ 100 futures -.28%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
8:30 am EST
- Initial Jobless Claims are estimated to fall to 345K versus 360K the prior week.
- Continuing Claims are estimated to fall too 2959K versus 2977K prior.
10:00 am EST
- Philly Fed for July is estimated to fall to 8.0 versus 12.5 in June.
- Leading Indicators for June are estimated to rise +.3% versus a +.1% gain in May.
Upcoming Splits
Other Potential Market Movers
- The Fed's Bernanke speaking, Spanish/French 10Y auctions, Bloomberg Economic Expectations Index for July, weekly EIA natural gas inventory report and the weekly Bloomberg Consumer Comfort Index could also impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by real estate and technology shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.
Click Here for Today's Market Take.
Broad Equity Market Tone:
- Advance/Decline Line: Modestly Higher
- Sector Performance: Mixed
- Market Leading Stocks: Performing In Line
Equity Investor Angst:
- Volatility(VIX) 13.88 -3.74%
- Euro/Yen Carry Return Index 136.23 +.18%
- Emerging Markets Currency Volatility(VXY) 9.80 -.10%
- S&P 500 Implied Correlation 53.46 -1.31%
- ISE Sentiment Index 131.0 +22.43%
- Total Put/Call .93 -3.12%
Credit Investor Angst:
- North American Investment Grade CDS Index 76.28 -2.05%
- European Financial Sector CDS Index 158.60 -.54%
- Western Europe Sovereign Debt CDS Index 96.88 -.42%
- Emerging Market CDS Index 287.40 -4.2%
- 2-Year Swap Spread 17.0 unch.
- 3-Month EUR/USD Cross-Currency Basis Swap -10.0 +.25 bp
Economic Gauges:
- 3-Month T-Bill Yield .03% +1 bp
- China Import Iron Ore Spot $130.40/Metric Tonne +1.09%
- Citi US Economic Surprise Index -11.30 -6.0 points
- Citi Emerging Markets Economic Surprise Index -32.80 +3.2 points
- 10-Year TIPS Spread 2.12 unch.
Overseas Futures:
- Nikkei Futures: Indicating +130 open in Japan
- DAX Futures: Indicating -2 open in Germany
Portfolio:
- Slightly Higher: On gains in my medical/biotech sector longs
- Disclosed Trades: Added to my (IWM)/(QQQ) hedges, then covered some of them
- Market Exposure: 50% Net Long
Bloomberg:
- China’s Richest Man Sees Economic Growth Slowing in Second Half.
China’s richest man Zong Qinghou said the nation’s growth will slide
further in the second half of the year and proposed cutting taxes and
breaking up monopolies to drive an economic recovery. “People will only invest if there is prospect
of making a profit,” Zong said in an interview in Beijing yesterday.
“Medium and small companies are not willing to take loans. If they can’t
make a profit, why bother taking a loan?” “Economic growth will slow down again in the second half because
there have been no major economic policies rolling out,” he said. Zong’s
prescription for driving a Chinese recovery is in line with Premier Li
Keqiang’s call for a reduced role for the state in the economy, with the
billionaire urging the breaking up of monopolies and easier
administrative approvals from the government. Zong was
pessimistic about the world outlook, saying “the global economy is
declining.” China will recover faster than other countries, he
predicted.
- China Won’t Have Large Stimulus This Year, Finance Minister Says. Chinese
Finance Minister Lou Jiwei said the nation won’t use “large-scale
fiscal stimulus” measures this year, adding to signals that the
government will tolerate a slowdown in the economy. China will
promote growth and boost employment while fine-tuning policies and
keeping the fiscal deficit unchanged, and will also avoid big
adjustments to short-term macroeconomic
policies, Lou said in July 11 comments in meetings with U.S.
officials in Washington.
- Bernanke Says Fed Bond Purchases Not on ‘Preset Course’.
Federal Reserve Chairman Ben S. Bernanke said the central bank’s asset
purchases “are by no means on a preset course” as he sought to tamp down
an increase in borrowing costs that
threatens to slow the economic expansion. “We’re going to be responding to the data,” Bernanke said today to the
House Financial Services Committee. “If the data are stronger than we
expect, we’ll move more quickly” to reduce purchases. If data “don’t
meet the kinds of expectations we have about where the economy’s going,
then we would delay that process or potentially increase purchases for a
time.”
- Putin Warns U.S. Russia Won’t Back Down on Snowden Asylum. President
Vladimir Putin warned the U.S. that Russia won’t yield to pressure to
hand over Edward Snowden, while insisting he won’t allow the fugitive
American to poison ties between the former Cold War foes. “We won’t behave like many countries are behaving,” Putin
told reporters in the Siberian city of Chita, a day after the
former U.S. security contractor bid for temporary asylum in
Russia. “We are an independent country and we have an
independent foreign policy and we will carry it out. I hope our
partners understand this and respond calmly.”
- Currency to Oil Rates Targeted for Tougher Rules After Libor. Benchmarks underpinning markets from
oil to currencies face tougher oversight under plans by global
regulators to prevent any repeat of Libor-style fraud. Rates should be based as much as possible on real
transaction data, rather than estimates, and banks should tackle
conflicts of interest, the International Organization of
Securities Commissions, a Madrid-based group that harmonizes global market rules, said in guidelines published today.
- Fed’s Raskin Urges Higher Bank Capital Standards to Avert Crises.
Federal Reserve Governor Sarah Bloom Raskin said regulators should
prevent asset-price bubbles by boosting the amount and quality of
capital required of banks. Officials also should continue stress
testing of lenders, restrain banks from “excessively” extending loans,
and reduce “overreliance on unstable short-term wholesale funding,”
Raskin said in a speech prepared for delivery today in Washington. She did not comment on the outlook for the economy
or monetary policy in her prepared remarks.
- Egypt Bond Yields, Default Risk Rise as Islamists Shun Cabinet. Egypt’s benchmark bonds fell,
pushing the yield to a week high, after Islamists boycotted the
transitional government and called for renewed protests. The
country’s default risk advanced for a third day. The yield on the government’s 5.75 percent notes due in
April 2020 increased seven basis points, or 0.07 percentage
point, to 8.54 percent, the highest on a closing basis since
July 10, at 2:25 p.m. in Cairo, according to prices compiled by
Bloomberg. Five-year credit default swaps climbed 50 basis
points to 725, according to CMA data.
Wall Street Journal:
- Violent Protests Follow India School-Lunch Poisonings. Free Food Was Provided Under Government's Midday-Meal Program. The food that killed at least 22 children in eastern India was
apparently contaminated with a chemical compound used in pesticides, a
state official said Wednesday, as hundreds of villagers protested the
worst by far in a spate of health scares linked to a public school-lunch
program.
The children, aged between 8 and 12,
became sick, with some vomiting, fainting and foaming at the mouth,
after lunch Tuesday at an elementary school in Gandaman, a village about
65 miles from Patna, the capital of Bihar, one of India's poorest
states.
Fox News:
- UN nominee Power refuses to answer Rubio on US ‘crimes’.
U.N. ambassador nominee Samantha Power faced a largely friendly
audience at her confirmation hearing on Wednesday, but had a rocky and
at-times awkward exchange with Sen. Marco Rubio as he pressed her on
past comments suggesting the U.S. should apologize for its "sins." The
Florida Republican repeatedly asked Power for examples of crimes
"committed or sponsored" by the United States. Her response was that
"the United States is the greatest country on earth" and she "would
never apologize for America."
Rubio, pausing, said: "So your answer to whether we committed or
sponsored crimes is that the United States is the greatest country on
earth." Power ultimately did not say whether she thought the U.S. has
committed crimes. Instead, she cited "mistakes" like the abuse at the
Abu Ghraib prison in Iraq. She also cited her past criticism of the
Clinton administration's inaction with regard to the Rwandan genocide.
MarketWatch:
CNBC:
- For Richard Perry, Japanese bonds are the new subprime. Corporate
bond buyers in Japan today are a lot like investors in subprime
mortgage-backed securities during the housing bubble, hedge fund manager
Richard
Perry said at the Delivering Alpha conference. Perry Capital is shorting
Japanese corporate bonds, looking to profit on a decline in the price
of the bonds. "People don't do the credit work," Perry said. "People rely on credit
agencies." Perry said that one indicator that the market was not paying enough attention
to risk in the Japanese bonds was the fact that bond prices had held steady
while the equities had declined sharply.
- Watch Bharara warn Wall Street: ‘People should be afraid’. (video) In an interview at Delivering Alpha, a conference presented by CNBC and
Institutional Investor, US Attorney Preet Bharara tells Jim Cramer that
anyone on Wall Street who has broken the law shouldn't think they will
escape prosecution because a lot of time has passed or they are using a
secretive technology to communicate.
- Thanks to QE, bubble of 2000 looks like 'day at beach’. Even as global markets continue to be held hostage over the prospect of
the unwinding of the U.S. Federal Reserve's massive monetary stimulus,
Hans Olsen, chief investment officer of Americas at Barclays, argues
that the tapering has to happen, and the sooner, the better.
Zero Hedge:
Business Insider:
New York Times:
- I.M.F. Tells China of Urgent Need for Economic Change. China’s growth has slowed significantly in recent months. But even its
current pace of expansion may be unsustainable unless the country starts
making significant and systemic changes to its economy, and soon, the
International Monetary Fund warned Wednesday. “Since the global
crisis, a mix of investment, credit and fiscal stimulus has underpinned
activity,” the I.M.F. said in a major annual assessment of the Chinese
economy. “This pattern of growth is not sustainable and is raising
vulnerabilities. While China
still has significant buffers to weather shocks, the margins of safety
are diminishing.” The report emphasized downside risks to the Chinese
economy, touching on
familiar themes though imparting more of a sense of urgency than it has
in the past.
Reuters:
- METALS-Copper hits week low after Bernanke, rise in mine output. Copper slipped to its lowest
price in a week on Wednesday after the dollar strengthened on
fresh comments about scaling back the U.S. stimulus programme
and following news of an sharp increase in output at the world's
biggest copper mine. Three-month copper on the London Metal Exchange
closed down 1.5 percent at $6,890 a tonne and touched a session
low of $6,867.25, the weakest since July 10.
FINalternatives:
Telegraph:
Les Echos:
- France Allows Counties to Raise Property-Transaction Tax. The
French government yesterday raised the so-called DMTO tax ceiling to
4.5% in 2014 and 2015 from 3.8%.
Valor Economico:
- Brazil May Face Higher Inflation, Slower Growth in 4Q13. Govt
economic team and President Dilma Rousseff's aides are preparing for
slower economic growth and another inflation hike in the 4Q, citing a
govt official.
Echoing fears that
European policymakers remain in a state of cognitive dissonance –
recognizing the need for root-and-branch overhaul of peripheral banks,
but backtracking on joint liability plans – Christopher Flowers, the
legendary FIG investor who now runs the £2.3 billion ($3.5 billion)
private equity group JC Flowers, sounded the alarm over the negative
sovereign-bank feedback loop.
In a shot across the bows of market bulls, who cite the return of
capital flows to weaker eurozone states, Flowers issued a stark warning:
"There is a scenario where we have a Lehman-type event: we wake up some
Thursday and a big country is in trouble.
"And the ECB will have to decide to support banks x, y, z. And then the
ECB will, in fact, decide to own bank x, y, z.
While we want you to share, we ask you use the functions on-site rather than copy/paste. See T's & C's for details. http://www.euromoney.com/Article/3211790/CurrentIssue/88924/Restructuring-Flowers-slams-Europe-over-inaction.html?copyrightInfo=true
Xinhua:
Style Underperformer:
Sector Underperformers:
- 1) Gold & Silver -2.01% 2) Education -1.41% 3) Restaurants -.81%
Stocks Falling on Unusual Volume:
- CAT, MED, RGLD, UL, EVC, IBN, USB, VSTM, AMT, MAT, PJC, AXP, XPO, BRCM, FBRC, UTEK, TOWR, SFUN, WNC, DWA, RECN, RH, DWRE, POOL, MRTN, PNC, ORA, CLFD, NTRS and GCO
Stocks With Unusual Put Option Activity:
- 1) AMT 2) BRCM 3) AXP 4) PHM 5) JOY
Stocks With Most Negative News Mentions:
- 1) PCG 2) MCD 3) CAT 4) CCL 5) AXP
Charts:
