Evening Headlines
Bloomberg:
- Greece's Euro Exit Back on the Agenda Next Year, Economists Say. Don’t pack away the currency presses just yet, Greece’s euro exit may be back on the table next year. There’s still a danger that Greece will be forced out of the euro
region by the end of 2016, according to 71 percent of respondents in a
Bloomberg survey of 34 economists. Seventy percent said they reckon
Greece should be safe for the rest of 2015, though almost half said they
thought the 86 billion-euro ($93 billion) bailout package Prime
Minister Alexis Tsipras is targeting will prove to be too small.
- The Brokers Left Stranded When China’s IPO Party Suddenly Ended. China’s sudden halt to a frenzy of initial public offerings came at
just the wrong time for underwriters Everbright Securities Co., Guotai
Junan Securities Co. and China Merchants Securities Co. The trio are the firms with the largest number of IPOs in limbo --
approved by regulators but yet to be completed -- after the government
imposed an indefinite suspension this month, data compiled by Bloomberg
show. Each has three on hold.
- RBA Says Growth Likely Slowed Last Quarter, Aussie Too High. Australia’s central bank said growth probably slowed last quarter
and the currency is offering less assistance than would be expected
given weaker commodity prices.
“Non-mining business investment had been subdued,” the Reserve Bank of
Australia said in minutes released Tuesday of its July 7 meeting, when
it kept interest rates unchanged at a record-low 2 percent. “Surveys of
businesses’ investment
intentions suggested that it would remain so over the coming year.”
- Asian Stocks Climb, Led by Consumer Shares, as Yen Buoys Topix. Asian stocks rose as a weaker yen buoyed Japanese equities and consumer shares advanced. The MSCI Asia Pacific Index added 0.2 percent to 144.51 as of 9:01
a.m. in Tokyo. Consumer companies led gains, while energy shares were
the worst performers for a second day. Crude oil fell below $50 a barrel
on Tuesday, as gold traded near a five-year low.
- Iron Ore Supply to Overwhelm Weak China Demand, Goldman(GS) Predicts. Rising seaborne iron ore supplies over the next two quarters will
probably overwhelm weak demand from mills in China, according to Goldman
Sachs Group Inc., which said that a global glut was entering its second
year. While housing starts in China have recovered and the infrastructure
has overtaken property to become the largest market for steel, an
improvement this half may not be strong enough to support iron ore, the
bank said in a report. Prices are seen dropping over the next four
quarters, from $49 a metric ton through September to $44 by the
April-to-June period of 2016, according to analysts Christian Lelong and
Amber Cai.
- BHP(BHP) creditors becoming more wary. BHP Billiton Ltd.’s creditors are becoming more wary as plunging
energy and metal prices weigh on the outlook for debt sold by the
world’s biggest miner. The cost of protecting the Melbourne-based producer’s bonds against
non-payment has risen 23 basis points over the past 12 months to 87
basis points as of Friday and is at its highest level in almost five
years versus the local credit-default swap benchmark, CMA data show.
- Gold Leads Commodities ‘Mess’ That Has Many Investors Smarting. Pity the commodity investor. The Bloomberg Commodities Index dropped to a 13-year low Monday,
weaker than after the banking meltdown of 2008 and the euro-zone crisis
of 2012. From oil to copper to sugar, little has escaped the rout in the
year’s worst-performing asset class. “Commodities are a mess,” said Walter “Bucky” Hellwig, who helps
manage $17 billion at BB&T Wealth Management in Birmingham, Alabama,
in a telephone interview. “We are not looking to add to positions.”
CNBC:
- Apple(AAPL) earnings: Can it weather the China storm? (video)
As critical as China has become to Apple's future, the tumbling stock
market there has yet to dampen investor enthusiasm for the iPhone maker.
Heading into Tuesday's quarterly earnings report,
investors are bullish: Shares are up 40 percent in the past year, topped
by an almost 6 percent rally over the last week.
Business Insider:
Information:
- Qualcomm(QCOM) Said Preparing 'Several Thousand' Layoffs. Execs
preparing to lay off as many as several thousand employees as smartphone
prices fall and competition increases, citing people inside and outside
the company.
Evening Recommendations
Night Trading
- Asian equity indices are -.25% to +.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 105.5 -.25 basis point.
- Asia Pacific Sovereign CDS Index 57.25 -1.25 basis points.
- NASDAQ 100 futures +.09%.
Earnings of Note
Company/Estimate
Economic Releases
10:00 am EST
- Revisions: US Industrial Production/Capacity Utilization.
Upcoming Splits
Other Potential Market Movers
- The
Bank of Japan Minutes, German IFO Index, Australian inflation report
and the US weekly retail sales reports could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by industrial
and consumer shares in the region. I expect US stocks to open
modestly higher and to weaken into the afternoon, finishing mixed. The
Portfolio is 50% net long heading into the day.
