Evening Headlines
Bloomberg:
- Sex Slaves Sold by Islamic State, the Younger the Better. A
senior United Nations official says Islamic State is circulating a
slave price list for captured women and children, and that the group’s
ongoing appeal and barbarity pose an unprecedented challenge. The
official, Zainab Bangura, said that on a trip to Iraq in April she was
given a
copy of an Islamic State pamphlet, which included the list, showing that
captured children as young as one fetch the highest price. The bidders
include both the group’s own fighters and wealthy Middle Easterners.
- In Cash-Starved Greece, Plastic Casts Light Into Shadow Economy. Greece’s banking crisis is having at least one positive outcome, and it’s made of plastic. In a country where cash is king and undeclared transactions still
make up about a quarter of the economy, about 1 million debit cards have
been issued by banks since the government closed lenders for three
weeks and imposed controls on euro bills. Emergency measures that some
officials warned might spur the black market are showing signs of doing
the opposite.
- Gold Declines as Copper Nears Bear Market; China Stocks Swing. Gold
fell and copper neared a bear market amid concern over
slackening demand for commodities and as the U.S. interest-rate outlook
buoyed the dollar. China’s stocks fluctuated after authorities stepped
up efforts to halt a rout. Bullion lost 0.3 percent as of 11:08 a.m. in
Tokyo, while palladium slid to its lowest since 2012. Copper extended
losses and Brent crude traded below $50 a barrel. A gauge of the
greenback’s strength climbed
to the highest level since March, while Australia’s dollar traded near a
six-year low before a monetary policy review. The MSCI Asia Pacific
Index of shares fell 0.1 percent and the Shanghai Composite was down 0.4
percent, after climbing as much as 1.1 percent.
- Rubber Set for Bear Market as China Slowdown Worsens Oversupply. Rubber is poised to enter a bear market as a slowdown in China, the
world’s largest consumer, is worsening a global glut amid rising
shipments from producers. Futures have dropped 20 percent from a 16-month high reached June 1.
The contract for January delivery fell 1.2 percent to 195 yen a kilogram
($1,572 a metric ton) on the Tokyo Commodity Exchange by 11:07 a.m. in
Tokyo. A drop of 20 percent or more from this year’s closing peak will
meet the common definition of a bear market.
- Gas Is Just Another Fossil-Fuel Loser in Obama’s Power Plan. Natural
gas, once seen as a clear winner in President Barack Obama’s
push for cleaner power, wasn’t looking like much of a champ on Monday.
That so-called bridge that gas was supposed to be, leading America
away from dirtier fossil fuels such as coal and toward renewable power,
just got a lot shorter under the final Clean Power Plan released by the
U.S. Environmental Protection Agency. The agency will reward early
investments in wind and solar power to get the nation generating 28
percent of its power using renewables by 2030, up from an initial
proposal of 22 percent.
- Bull market losing biggest supporter as Apple(AAPL) caps 10 percent retreat. The bull market's base just lost another brick. Amid a collapse
in breadth and the threat of falling earnings, add a correction in
Apple shares to the concerns facing investors. The iPhone maker slipped
2.4 percent to $118.44 Monday, extending its decline since February to
11 percent and dropping below another chart threshold, its 200-day
moving average, for the first time since 2013.
Wall Street Journal:
- Impact of EPA’s Emissions Rule on Industry to Vary. Federal regulation will boost outlook for some regions and companies while biting others. A sweeping federal rule intended to slash carbon-dioxide emissions from
power plants will have an uneven impact on the energy industry, boosting
the outlook for some regions and companies while biting others.
- Climate-Change Putsch. States should refuse to comply with Obama’s lawless power rule. Rarely do American Presidents display the raw willfulness that President
Obama did Monday in rolling out his plan to reorganize the economy in
the name of climate change. Without a vote in Congress or even much
public debate, Mr. Obama is using his last 18 months to dictate U.S.
energy choices for the next 20 or 30 years. This abuse of power is
regulation without representation.
MarketWatch.com:
CNBC:
- Oil craters, set to retest lows. (video) Oil prices have now broken below many Wall Street targets and look
set to test the year's lows and beyond, before finding a bottom.
Led by international bench mark Brent crude, futures
were slammed Monday on concerns about new supply coming on the market
and worries about contracting demand from China.
Reuters:
- Brazil auto sales tumble 23 pct in July from year ago.
New auto sales in Brazil remained weak in July as rising interest rates
and unemployment eroded consumer confidence, contributing to a
deepening crisis in the industry responsible for a fifth of the
country's
industrial output. Sales of cars, trucks and buses fell 23 percent from a year
earlier to 227,621 vehicles last month, national dealership
association Fenabrave said on Monday. An extra two working days lifted sales from June by 7
percent, but the daily pace of sales slipped below 10,000
vehicles, making it the slowest July since 2007.
Brazil is one of the world's five biggest auto markets, with
major operations for Fiat Chrysler Automobiles NV,
Volkswagen AG, General Motors Co and Ford
Motor Co, whose earnings have suffered in the slump. Sales are unlikely to pick up in the months ahead, Fenabrave
President Alarico Assumpção Júnior said in a statement
accompanying the monthly data, affirming the group's forecast of
a roughly 20 percent drop in sales this year.
- Commodity currencies under pressure, USD marks time. The Canadian dollar languished at
11 year lows early on Tuesday after slipping along with other
commodity currencies following a selloff in oil prices, stealing
the focus from a subdued U.S. dollar that heald steady against
the euro and yen. The loonie last traded at C$1.3154 per USD, not far
from a low of C$1.3175 set overnight - a level not seen since
August 2004. Trading was light with Canadian markets shut for a
public holiday on Monday.
Evening Recommendations
Night Trading
- Asian equity indices are -.75% to +.50% on average.
- Asia Ex-Japan Investment Grade CDS Index 113.25 +2.0 basis points.
- Asia Pacific Sovereign CDS Index 64.75 +1.75 basis points.
- NASDAQ 100 futures -.10%.
Earnings of Note
Company/Estimate
Economic Releases
9:45 am EST
- The ISM New York for July.
10:00 am EST
- Factory Orders for June are estimated to rise +1.8% versus a -1.0% decline in May.
- The IBD/TIPP Economic Optimism Index for August is estimated to fall to 47.8 versus 48.1 in July.
Upcoming Splits
Other Potential Market Movers
- The
RBA rate decision, weekly US retail sales reports, Needham Interconnect
Conference, (NTCT) investor day and the (NATI) investor conference
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 modestly lower
and to rally into the afternoon, finishing mixed. The Portfolio is 25% net long heading into the day.
