Today's Headlines
Bloomberg:
- Greece Poised for Troika Talks Amid Bourse Shutdown. Greece’s cash-strapped government is set to begin talks with
creditors on a new bailout agreement, as capital controls and the
shutdown of the country’s financial markets enter a fifth week. Technical experts from the European Central Bank, the International
Monetary Fund and the European Commission are due to begin negotiations
with their Greek counterparts by Tuesday on the many policies Greece
needs to implement over the next three years, in return for emergency
loans of as much as 86 billion euros ($94 billion).
- Hong Kong Is Feeling China's Pain. A slowing Chinese economy and the mainland's anti-corruption and austerity campaigns are keeping tourists and shoppers away. For
Hong Kong, it's been one thing after another. A series of
anti-China and pro-democracy protests last year prompted stores to close
and mainland tour groups to cancel bookings. Meanwhile, a slowing
Chinese economy and President Xi Jinping's anti-corruption and austerity
campaigns have also made the Chinese more wary of buying pricey cognac
and Gucci bags in the city.
- Japan’s Economy Shrank Last Quarter, Top Forecaster Says. The Japanese economy likely contracted last quarter, dragged down by
weak consumer spending and a slump in exports, according to a top
forecaster. The world’s third-biggest economy may have shrank as much as an
annualized 2.5 percent, said Yoshiki Shinke, at Dai-ichi Life Research
Institute. The median estimate of 25 economists surveyed July 9-22 by
Bloomberg is for 0.8 percent growth after the 3.9 percent expansion in
the first quarter.
- Mumbai Is Overflowing with Garbage. (pic) Which
global city uses prime real estate nearly the size of New York’s
Central Park simply to dump trash on? Mumbai. The land-starved peninsula
currently discards 11,000 metric tons of refuse every day in three dump
yards that together occupy more than 740 acres. At going market
rates, that land would be worth as much as $4.4 billion if it were sold
and used for housing. Meanwhile, 6.5 million people, or half of Mumbai’s
population, live in slums without basic sanitation and safe drinking
water.
- Deep-Sea Plan Fails, Leaving Korean Shipyards Struggling. Struggling with technology and a plunge in oil prices that has
discouraged exploration, Korean vessel makers are racking up debt and
could show billions of dollars in losses when they report earnings
starting Monday. It’s the latest example of difficulties for the global
shipbuilding industry, after a glut of vessels and low freight rates
have spelled financial trouble for Chinese yards in recent years,
prompting them to seek government aid.
- Chinese Stocks Decline for Second Day Amid Signs of Weak Growth. China’s stocks fell for a second day, led by technology and energy
shares, as a drop in profits for the nation’s industrial companies
deepened concern the economy is weakening.
The Shanghai Composite Index retreated 1.3 percent to 4,017.44 at 10:10 a.m., extending Friday’s 1.3 percent decline.
- Global Share Slump Continues in Asia as Commodities Extend Drop. Asian stocks fell, following the worst week for global equities this
year, and a selloff in commodities deepened as a report showed China’s
industrial profits declined. The dollar slipped after gaining for five
straight weeks.
The MSCI Asia Pacific Index retreated 0.8 percent by 11:06 a.m. in Hong Kong as Chinese stocks tumbled.
- Oil Bulls Flee at Fastest Pace in Three Years as Glut Expands. Speculators’ conviction that oil will rally weakened at the fastest
pace in three years, just before futures tumbled into a bear market. The net-long position in West Texas Intermediate contracted 28
percent in the seven days ended July 21, U.S. Commodity Futures Trading
Commission data show. Long positions dropped to a two-year low while
short holdings climbed 25 percent.
Wall Street Journal:
- Lawmakers Say Iran Unlikely to Address Suspicions of Secret Weapons Program. U.S. administration says full disclosure about program’s history isn’t critical to verify future commitments. An Obama administration assessment of the Iran nuclear deal provided to
Congress has led a number of lawmakers to conclude the U.S. and world
powers will never get to the bottom of the country’s alleged efforts to
build an atomic weapon, and that Tehran won’t be pressed to fully
explain its past.
- Hillary’s Capital ‘Lock In’. She proposes the highest tax rate since the mid-20th century. Hillary Clinton’s march to the left continues, hitting a new
milestone on Friday when she proposed to nearly double the top tax rate
on long-term capital gains to 43.4% from 23.8%—or the highest rate in
decades. Mrs. Clinton says she wants to overthrow “quarterly
capitalism,” the supposed tendency of companies to be preoccupied with
earnings reports and stock prices at the expense of...
- The Lawless Underpinnings of the Iran Nuclear Deal. The Obama end-run around the Constitution could yet be blocked if states exercise their own sanctions regimes. The Iranian nuclear agreement announced on July 14 is unconstitutional,
violates international law and features commitments that President Obama
could not lawfully make. However, because of the way the deal was
pushed through, the states may be able to derail it by enacting their
own Iran sanctions legislation.
Fox News:
- Paul to try to block Planned Parenthood funding during rare Sunday voting session. (video) Kentucky Sen. Rand Paul, a Republican presidential candidate, said
Sunday that he’ll try this afternoon on Capitol Hill to force a vote to
block federal funding for Planned Parenthood, following the release of
videos showing group officials discussing how they provide aborted fetal
organs for research. "I think the time is now to discuss whether taxpayer dollars should
be going to such a gruesome procedure," Paul told “Fox News Sunday.” "I
really think that time has come in our country to debate -- do people
want their taxpayer dollars going to this kind of procedure?"
MarketWatch.com:
- Upcoming French vote could send shock waves across Europe. The
political backlash creates an opening for the anti-euro, anti-EU
National Front under Marine Le Pen, who continues to surge in polls as a
leading contender for president in 2017. Le Pen, the daughter of National Front
founder Jean-Marie Le Pen, announced this month that she will put her
electability to the test this December in regional elections as she
heads the party’s campaign in the depressed Nord-Picardy region in
northern France.
New York Times Magazine:
Reuters:
- Debt conundrum to keep Greek banks in months-long freeze. Greek
banks are set to keep broad cash controls in place for months, until
fresh money arrives from Europe and with it a sweeping restructuring,
officials believe. Rehabilitating the country's banks poses a difficult
question. Should the euro zone take a stake in the lenders, first
requiring bondholders and even big depositors to shoulder a loss, or
should the bill for fixing the banks instead be added to Greece's debt
mountain? Answering this could hold up agreement on a third bailout deal
for Greece that negotiators want to conclude within weeks.
Financial Times:
- China car market braces for abnormal era of flat sales. Bleak outlook hovers over an industry that has been a cash cow for carmakers. On
the eve of China’s largest car show in April, executives and analysts
braced themselves for a “new normal”: single-digit sales growth after
two fat years. Yet some are beginning to wonder if the world’s
largest car market is actually entering an abnormal era of flat or even
falling sales.
- Greece bailout monitors question access to ministries.
Negotiators from Greece’s bailout monitors will fly to Athens on Monday
to formally begin talks on a €86bn rescue after days of delays over
whether the Greek government would allow creditors to have full access
to staff and facilities. Despite an agreement that gives teams from the
EU and the International Monetary Fund access to some ministries and
data, officials said only middle-ranking technical teams — and not
mission chiefs — would participate for now.
Night Trading
- Asian indices are -2.25% to -.75% on average.
- Asia Ex-Japan Investment Grade CDS Index 111.0 +3.0 basis points.
- Asia Pacific Sovereign CDS Index 61.5 +2.0 basis points.
- NASDAQ 100 futures -.01%.
Earnings of Note
Company/Estimate
Economic Releases
8:30 am EST
- Durable Goods Orders for June are estimated to rise +3.2% versus a -1.8% decline in May.
- Durables Ex Transports for June are estimated to rise +.5% versus a +.5% gain in May.
- Cap Goods Orders Non-Defense Ex-Air for June are estimated to rise +.5% versus a +.4% gain in May.
10:30 am EST
- Dallas Fed Manufacturing Activity for July is estimated to rise to -3.0 versus -7.0 in June.
Upcoming Splits
Other Potential Market Movers
- The German IFO survey, (KMX) analyst day and the (CPHD) analyst event could
also impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and industrial shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finished modestly lower. The Portfolio is 25% net long heading into the week.
