Bloomberg:
- Berlusconi Shockwaves in Italy Pose Threat to Euro-Crisis Lull. The instability of the Italian government following the tax-fraud conviction of former Prime Minister Silvio Berlusconi threatens to end a lull in the European debt crisis and derail a nascent economic recovery. Berlusconi’s party has rallied around its leader, possibly seeking a presidential pardon and threatening a mass resignation of deputies in parliament, a move that could bring down Prime Minister Enrico Letta’s government. Letta has told allies that he would quit before being pushed out if support in the chamber dwindles, Italian daily la Repubblica reported on Aug. 3. “If we decide together to do it, then I’m ready,” Lucio Malan, a senator with Berlusconi’s People of Liberty party, or PDL, said on Aug. 2 of a parliamentary walkout.
- Merkel Challenger Says Alienated Voters Are Key to Unseating Her. German Social Democratic candidate Peer Steinbrueck said his party could unseat Chancellor Angela Merkel if it motivates voters lost to the party over the past 15 years, as a poll showed he may be narrowing the gap.
- China Services Growth Picks Up. The non-manufacturing Purchasing Managers’ Index (CPMINMAN) rose to 54.1 in July from 53.9 in June, the Beijing-based National Bureau of Statistics and China Federation of Logistics and Purchasing said yesterday.
- Botulism Scare Halts Fonterra Milk-Powder Sales to China, Russia. China and Russia halted imports of milk powder from Fonterra Cooperative Group Ltd. after the world’s largest dairy exporter warned of a contaminated ingredient. The kiwi dollar fell to an almost one-month low. Russia temporarily suspended purchases of New Zealand dairy products, Scott Gallacher, acting director-general at the Ministry for Primary Industries, said today in Wellington.
- Stagnant South Korea Property Drags on Growth Rebound: Economy. South Korea’s worst property-market slowdown since 2004 threatens to limit the economy’s rebound, as the government’s stop-go policies to stimulate the housing market fail to secure any sustained revival. Apartment transactions in Seoul plunged 80 percent in July from June, when temporary acquisition tax cuts expired, according to data on the city’s website. National home prices were flat or fell for 14 straight months through July, according to Kookmin Bank, the nation’s largest mortgage lender.
- Japan Drives Asian Stocks Lower as Bonds Gain. Asian stocks fell as Japanese shares led the regional index to its first retreat in three days after U.S. jobs data missed estimates. Bonds in Australia and Japan rallied, while New Zealand’s dollar weakened after China banned some milk-powder imports. Copper dropped. The MSCI Asia Pacific Index lost 0.5 percent by 11:21 a.m. in Tokyo.
- Rubber Falls From One-Week High on Concern Demand Will Weaken. Rubber retreated from a one-week high after U.S. jobs data missed estimates and on concern that slowing growth in China, the biggest buyer, may cut demand for the commodity used in tires. The contract for delivery in January fell as much as 2.8 percent to 241.1 yen a kilogram ($2,433 a metric ton) on the Tokyo Commodity Exchange, before trading at 246.1 yen at 10:38 a.m. local time. Futures on Aug. 2 settled at the highest level since July 26.
- Gold Bulls Cut Wagers on Signs U.S. Growth Quickens: Commodities. Hedge funds lowered bullish gold bets for the first time in five weeks as signs of accelerating U.S. growth contributed to the longest retreat in prices in a month. Money managers cut their net-long position by 6.5 percent to 65,517 futures and options by July 30, U.S. Commodity Futures Trading Commission data show. Holdings of short contracts rose 6.8 percent, the biggest increase in six weeks. Net-bullish bets across 18 U.S.-traded commodities contracted 15 percent as investors cut wagers on higher crude prices for the first time in a month and more than doubled bearish bets on copper.
- Goldman Sachs(GS), London Exchange Sued Over Aluminum Supply. Goldman Sachs Group Inc. (GS) and the London Metal Exchange are restraining aluminum supplies and driving up the metal’s price in violation of federal antitrust law, according to a lawsuit. The suit, for which the aluminum products company Superior Extrusion seeks class-action status, was filed Aug. 1 in federal court in Detroit. “Through an interconnected series of agreements in unreasonable restraint of trade, Goldman and LME restrained approximately 1.5 million tons of aluminum in LME Detroit warehousing,” causing delays of as long as 16 months between customer orders and corresponding deliveries, Gwinn, Michigan-based Superior alleged.
- BP(BP) Says Loss on Spill Claims Appeals Could Scuttle Settlement. The settlement BP Plc (BP/) reached last year with most private parties over the 2010 Gulf of Mexico oil spill could be scuttled if a U.S. appeals court doesn’t throw out the interpretation of payments being used by the claims administrator, the company said.
- New York Times(NYT) Sells Boston Globe to John Henry for $70M. New York Times Co., which put its Boston Globe newspaper up for sale this year, agreed to sell the publication to John Henry, owner of the Boston Red Sox baseball team, for $70 million in cash. The deal is $40 million short of the $110 million in pension liabilities said to be owed by the Globe properties collectively known as the New England Media Group, and is expected to close in 30 to 60 days. The sale also includes the Globe website, the Boston.com site, the Worcester Telegram & Gazette, a 49 percent stake in Metro Boston, and the direct-mail marketing company GlobeDirect, the New York Times said in a statement yesterday.
- IPhone Reprieve Seen Aiding Apple(AAPL) Sales, Hurting Samsung. The U.S. decision to overturn an import ban on Apple Inc. (AAPL)’s older iPhones and iPads may help short-term sales and hobble Samsung Electronics Co. (005930) in any settlement talks in the companies’ patent fight. President Barack Obama’s administration, in issuing the reprieve to Apple Aug. 3, lets the company continue selling the iPhone 4, which is priced lower than newer models, said Brian Marshall, an analyst at ISI Group. Less expensive smartphones are selling more quickly than higher-priced models, he said.
- Fukushima Watch: Russia Claims Continued Used Car Contamination. The fallout from Japan’s Fukushima Daiichi nuclear power plant disaster is still being felt in Russia, where customs officials say they continue to detect radiation on second-hand Japanese cars and auto parts being shipped in for sale in Russia’s Far East.
- For Twitter, Free Speech Is a High-Wire Act. As Micro-Blogging Site Expands Globally, It Gets Flak From Many Sides.
- Congress's ObamaCare Exemption. The President intervenes to give Members and staff a break. To adapt H.L. Mencken, nobody ever went broke underestimating the cynicism and self-dealing of the American political class. Witness their ad-libbed decision, at the 11th hour and on the basis of no legal authority, to create a special exemption for themselves from the ObamaCare health coverage that everybody else is mandated to buy.
Marketwatch.com:
- China county in deep hole as mining bubble pops. A financial crisis triggered by falling coal prices is brewing in Shenmu County, in the northwestern province of Shaanxi. Construction projects have been halted, universal health care has run into payment problems and many private bankers have disappeared in the last few months, all indications that another story of legendary development is now just a bubble bursting.
Fox News:
Business Insider:- House Republican leaders outline agenda for immigration, ObamaCare, budget talks. House Republican leaders on Sunday outlined their caucus game plan for a critical next few months and beyond, suggesting a potential compromise on the sequester before an October deadline and a final vote on immigration reform. House Majority Leader Eric Cantor suggested that congressional Republicans are open to a compromise to end the deep, undiscerning cuts to the federal budget known as sequester but said the deal would require Democrats agreeing to entitlement cuts.
- US equity funds see highest-ever inflows in July. U.S. equity funds saw a record inflow of $40.3 billion in July, according to data from TrimTabs, as the S&P 500 and Dow scale new heights in what some are calling an "invincible summer" for the country's stocks.
- Teens and Social Media. (video) When a group of teenagers says Facebook "confuses and scares" them and makes their eyes hurt, there may be a problem. Though Facebook is still considered the most popular social network among teens, their enthusiasm seems to be waning. Some of them blame it on the ads and the games, but they also say it's become too popular with their parents.
- Low-Paying Jobs Are On The Rise. (graph)
Washington Post:
Real News:- Rare interview with Egyptian Gen. Abdel Fatah al-Sissi. In his first interview since the overthrow of President Mohamed Morsi last month, Egypt’s commanding general sharply criticized the U.S. response, accusing the Obama administration of disregarding the Egyptian popular will and of providing insufficient support amid threats of a civil war.
- Greece Won't Get Loan Tranches Without Public-Sector Cuts. If Greece doesn't proceed with public-sector job cuts, the country won't get its next international loan tranches, citing an interview with Finance Minister Yannis Stournaras.
- China to Expand Individual Property Tax Trial. China will expand individuals' property tax reform trial to prepare for its nationwide introduction, citing the Ministry of Finance. The ministry will also study including some high-end consumer goods, high-resource use and polluting goods into its consumption tax.
- China Steel Industry May Incur Annual Losses. China's steel industry may incur annual losses for a "relatively long period," citing Baoshan Iron & Steel's Chairman Xu Lejiang as saying. Xu made the comments in a meeting that was attended by almost 100 Chinese steel companies, the report said. China will not see high growth of steel demand in 2H, citing Xu.
- China
May See Downslide in 4Q, State Researcher Says. A downslide in 4Q is a
possibility, State Information Center researcher Qi Jingmei writes in a
commentary. The Chinese govt will stick to economic restructuring and
won't introduce new regulatory policies to "bail out or support the
market," Qi writes. Govt to seek steady growth by improving market
economy and exploring a new type of urbanization, he said. The Govt is
determined to reduce the real estate bubble, Qi wrote.
- PBOC Won't Cut RRR in Short Term. People's Bank of China has basically no likelihood of cutting banks' reserve requirement in the short-term, says front page commentary written by Xu Shaofeng today. Liquidity in China's banking system is still delicately balanced and economy is deleveraging, he said.
Weekend Recommendations
Barron's:- Bullish commentary on (CMCSA), (VIA), (BEN), (POT), (UBNK), (ISBC) and (FOXA).
- Bearish commentary on (GMCR) and (JE).
- Asian indices are -.50% to unch. on average.
- Asia Ex-Japan Investment Grade CDS Index 143.0 +1.0 basis point.
- Asia Pacific Sovereign CDS Index 113.25 +2.25 basis points.
- FTSE-100 futures +.02%.
- S&P 500 futures -.09%.
- NASDAQ 100 futures -.02%.
Earnings of Note
Company/Estimate
- (TSN)/.60
- (JACK)/.39
- (VNO)/1.21
- (DNB)/1.52
10:00 am EST
- ISM Non-Manufacturing for July is estimated to rise to 53.1 versus 52.2 in June.
- None of note
- The Fed's Fisher speaking, Eurozone Services PMI report and the Australia trade balance could also impact trading today.
