Evening Headlines
Bloomberg:
- Tsipras Kicks Off Bailout Pitch with Math Already in Question. Greek Prime Minister Alexis Tsipras started his pitch for a bailout
that’s sparked a revolt in his own party and is struggling to get off
the ground as international officials ask new questions about the
country’s finances. As Tsipras went on national television to argue
for a deal that he
only agreed to with “a knife on my neck,” European officials are at a
loss on how to put together a bridging loan that will keep Greece from
defaulting on the European Central Bank and its own citizens next week.
One person familiar with the matter said that Greece’s finances seem
to get worse with every meeting and governments are now reluctant to
help out with even short-term funds.
- China Rout Could Cut Banks’ Equities Revenue 22%, JPMorgan Says. Global investment banks may see revenue from trading stocks slide 22
percent on average in the second half of the year from the first half
because of the turmoil in China, according to analysts at JPMorgan Chase
& Co. Should the market swings in China persist “it might impact the
trading volumes in the second half” as clients reduce activity and the
pace of new stock sales slows, analysts led by Kian Abouhossein wrote in
a report on Tuesday.
- Bank of Japan Keeps Record Stimulus, Trims Inflation Outlook. The Bank of Japan refrained from increasing its monetary stimulus as
officials count on the economy shaking off recent weakness and
inflation picking up toward its target. The central bank will
continue to expand the monetary base at an annual pace of 80 trillion
yen ($648 billion), it said in a statement on Wednesday in Tokyo. It
lowered its inflation projection for the fiscal year through March 2016
to 0.7 percent from 0.8 percent and forecast 1.9 percent for the
following year.
- Daewoo Ship Falls to Lowest in 7 Years on Loss, Debt Concerns. Daewoo Shipbuilding & Marine Engineering Co., the world’s
second-largest shipbuilder, fell to its lowest price in almost seven
years in Seoul trading on concerns that it may report losses and could
need to restructure its debt. Shares of Daewoo Ship slumped by the daily 30 percent limit to 8,750
won, its lowest intraday price since October 2008, as of 10:22 a.m. in
Seoul. The stock is the worst performer on the MSCI Asia Pacific Index
Wednesday.
- China Stocks Slump for Second Day as GDP Fails to Lift Sentiment. China’s stocks fell for a second day after better-than-expected
economic data failed to boost investor confidence in the world’s
worst-performing equity market and more companies resumed trading.
The Shanghai Composite Index slumped 3.1 percent to 3,801.78 at 11:01
a.m. local time. About six stocks dropped for each that rose. The
number of halted companies fell by 96 from Tuesday to 689, or 24 percent
of overall listings on mainland exchanges.
- Asian Stocks Rise on U.S. Retail Sales Ahead of BOJ, China Data. Asian stocks rose before a Bank of Japan policy decision and data on
China’s economy as a fall in U.S. retail sales fueled bets the Federal
Reserve won’t raise interest rates in September. The MSCI Asia Pacific Index added 0.3 percent to 143.92 as of 9:05
a.m. in Tokyo. Sales at American retailers unexpectedly dropped in June,
upending optimism over the strength of a rebound in consumer spending.
- World’s Top Steelmaker Says Output Waning as Demand Stumbles. Mills in the world’s biggest steelmaker are churning out less even as economy shows signs of stabilizing. Crude-steel production in China shrank 1.3 percent to 410 million
metric tons in the first half compared with the same period of 2014,
according to the National Bureau of Statistics on Wednesday. June’s
output fell 0.8 percent from a year ago.
- Yellen Faces Tough Time Convincing Traders She’ll Act This Year. The
central bank chair is scheduled to address U.S. lawmakers Wednesday and
Thursday in Washington, after saying last week it will probably be
appropriate to increase borrowing costs “later this year.” A Morgan
Stanley index based on futures trading shows the Fed won’t act until
early 2016. The central bank will meet four more times this year.
Wall Street Journal:
- Tehran’s Nuclear Triumph. The deal leaves Tehran on the cusp of a bomb while sanctions vanish. President
Obama was right on Tuesday to hail his nuclear agreement
with Iran as historic, though not because of his claim that it will
“prevent Iran from obtaining a nuclear weapon.” The agreement all but
guarantees that Tehran will eventually become a nuclear power, while
limiting the ability of a future President to prevent it. We say this
after reading the 159-page text, complete with five annexes, which
offers a...
MarketWatch.com:
Zero Hedge:
Business Insider:
Telegraph:
Evening Recommendations
Night Trading
- Asian equity indices are -.50% to +.75% on average.
- Asia Ex-Japan Investment Grade CDS Index 108.5 -.25 basis point.
- Asia Pacific Sovereign CDS Index 59.25 +.25 basis point.
- NASDAQ 100 futures +.18%.
Earnings of Note
Company/Estimate
Economic Releases
8:30 am EST
- PPI Final Demand for June is estimated to rise +.2% versus a +.5% gain in May.
- PPI Ex Food and Energy for June is estimated to rise +.1% versus a +.1% gain in May.
- PPI Final Demand for June is estimated to fall -.9% versus a -1.1% decline in May.
- Empire Manufacturing for July is estimated to rise to 3.25 versus -1.98 in June.
9:15 am EST
- Industrial Production for June is estimated to rise +.2% versus a -.2% decline in May.
- Capacity Utilization for June is estimated at 78.1% versus 78.1% in May.
- Manufacturing Production for June is estimated to rise +.1% versus a -.2% decline in May.
10:30 am EST
- Bloomberg
consensus estimates call for a weekly crude oil inventory decline of
-1,242,380 barrels versus a +384,000 barrel gain the prior week.
Gasoline supplies are estimated to rise by +437,500 barrels versus a
+1,215,000 barrel gain the prior week. Distillate inventories are
estimated to rise by +1,727.500 barrels versus a +1,641,000 barrel gain
the prior week. Finally, Refinery Utilization is estimated to rise +.16%
versus a -.3% decline prior.
2:00 pm EST
- US Fed release Beige Book.
Upcoming Splits
Other Potential Market Movers
- The
Fed's Yellen testimony to House, Fed's Mester speaking, Fed's Williams
speaking, weekly MBA mortgage applications report, Bank of Japan policy
decision, China retail sales report and the (PAYX) investor day could
also impact trading today.
BOTTOM LINE: Asian
indices are mostly higher, boosted by commodity and consumer shares
in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.
