Bloomberg:
- Jaguar Land Rover China Slump Drags Down Tata Motors Profit. A slump in China sales at Jaguar Land Rover amid a market slowdown dragged down profit at its Indian parent Tata Motors Ltd. for a fourth straight quarter. Net income fell 49 percent to 27.7 billion rupees ($434 million) in the three months through June, the Mumbai-based company said. That trailed the 31.4 billion-rupee median of 31 analysts’ estimates compiled by Bloomberg. Profit at Jaguar Land Rover dropped 29 percent to 492 million pounds ($764 million). Jaguar Land Rover retail sales plunged 33 percent in China in the quarter, resulting in a 1 percent decline in worldwide deliveries. The luxury unit has cut its sales targets and prices in China as automakers from Toyota Motor Corp. to BMW AG warn about a slowdown in the world’s biggest auto market. “Jaguar Land Rover is the most hit in China because they were the fastest growing premium carmaker,” Max Warburton, an analyst at Sanford C. Bernstein Ltd., said by telephone. “It’s a broad market problem in China and every carmaker is going to have get used to making less money in China.”
- Prada Sales Miss Estimates as China Luxury Slump Persists. Prada SpA reported first-half revenue that missed analysts’ estimates as demand for its handbags and wallets in Hong Kong and Macau continued to wane. Sales rose 4 percent to 1.82 billion euros ($2 billion), the Milan-based luxury goods maker said Friday in a statement. Analysts predicted 1.87 billion euros, based on the median of nine estimates compiled by Bloomberg. The Asia-Pacific region, Prada’s most important market, showed a “similar negative trend” to the first quarter, when Greater China sales fell 19 percent excluding currency effects, Prada said.
- Carney Is Right to Identify China as Risk: Mackinnon. (video)
- Sumitomo Metal Reduces Profit Target as China Demand Slows. Sumitomo Metal Mining Co., Japan’s biggest nickel producer, cut its first-half profit forecast as China’s slower demand weakens commodity prices more than anticipated. Net income is expected to fall to 45 billion yen ($361 million) for the six months to Sept. 30, down 19 percent from a year earlier and below its May estimate of 46 billion yen, the company said Friday in a statement. Sales are pegged at 465 billion yen, unchanged from its previous forecast, while its operating profit target was cut by 5.5 percent to 52 billion yen. The company kept its full-year earnings guidance.
- Economists Think Brazil Will Get Downgraded to Junk in the Next Few Years. A rating cut will be one more setback for the already struggling economy. From another economic recession to a juicy corruption scandal embroiling President Dilma Rousseff, Brazil has had a tough 2015. It's now looking down the barrel of another likely event: a junk rating of its government bonds.Latin America's largest economy has a 70 percent chance of losing its investment grade rating in the next few years, according to the median estimate in a Bloomberg News survey of economists.
- German Industrial Production Drops as Chinese Slowdown Looms. German industrial production unexpectedly decreased in June, highlighting the risks for Europe’s largest economy from weaker growth in emerging-market countries such as China. Output, adjusted for seasonal swings and inflation, fell 1.4 percent after rising a revised 0.2 percent in May, data from the Economy Ministry in Berlin showed on Friday. The typically volatile number compares with a median estimate of a 0.3 percent gain in a Bloomberg survey. Exports fell 1 percent while imports dropped 0.5 percent.
- Emerging Currencies, Stocks Head to Weekly Drop on Fed Outlook. Emerging-market currencies headed for a seventh straight weekly decline and stocks slumped as data showing the U.S. economy continued to strengthen bolstered the case for the Federal Reserve to raise interest rates. A Bloomberg gauge tracking 20 developing-nation currencies slid 1 percent this week as of 11:28 a.m. in New York. The ruble led the decline, dropping 3.9 percent as crude, Russia’s biggest export, slumped deeper into a bear market. The real fell 2.6 percent and Brazilian bond yields surged as concern mounted that the country’s credit rating will be cut to junk. The MSCI Emerging Markets Index slid 1.9 percent this week to 884.93, led by technology and energy stocks.
- European Stocks Slide on Media Tumble and U.S. Rate Rise Bets. (video) European stocks fell for a second day, with media shares leading declines, while U.S.-payrolls data fueled bets the Federal Reserve will raise rates. The Stoxx Europe 600 Index dropped 0.9 percent to 397.07 at the close. Shares extended losses in late trading, cutting their weekly gain to 0.2 percent.
- Hedge Fund Losses From Commodity Slump Sparking Investor Exodus. Investors are demanding their money back as losses mount. When even Cargill Inc., the world’s largest grain trader, decides to liquidate its own hedge fund, that’s a sign that commodity speculators are in trouble. Hedge funds focused on raw materials lost money on average in the first half, the Newedge Commodity Trading Index shows. Diminishing investor demand spurred Cargill's Black River Asset Management unit to shut its commodities fund last month. Others enduring redemptions include Armajaro Asset Management LLP, which closed one of its funds, Carlyle Group LP's Vermillion Asset Management and Krom River Trading AG. While hedge funds are designed to make money in both bull and bear markets, managers have a bias toward wagering on rising prices and that’s left them vulnerable in this year’s slump, said Donald Steinbrugge, managing partner of Agecroft Partners LLC. The Bloomberg Commodity Index tumbled 29 percent in the past year and 18 of its 22 components are in a bear market.
- Interest Rates Are Already Hurting Mortgage REIT ETFs. And this one in particular. R.E.M. is the name of an alternative rock band that formed in the early 1980s. REM is the name of an exchange-traded fund that began trading in 2007. The iShares Mortgage Real Estate Capped ETF, or REM, has quietly amassed more than $1 billion in assets since 2010 as yield-thirsty investors have been lured in by the fund's juicy 14 percent yield. For perspective, that’s more than three times the yield of the mega-popular $26 billion Vanguard REIT ETF (VNQ).
- Gross Sees Global Economy Dangerously Close to Deflation. Bill Gross, money manager at Janus Capital Group Inc., said the global economy is “dangerously close to deflationary growth.” Once there is a “whiff of deflation, things tend to reverse and go badly,” Gross said Friday in a Bloomberg Radio interview with Tom Keene. Gross pointed to how the CRB Commodity Index isn’t just at a cyclical low, but lower than in 2008 when Lehman Brothers Holdings Inc. went bankrupt.
- Why Marco Rubio May Have Won the First Republican Debate. It was Donald Trump's show, but the Florida senator made the case that only he can beat Hillary Clinton.
Zero Hedge:
- Here Comes The Next Crisis "Nobody Saw Coming".
- WTI Crude Breaks To $43 Handle After Another Rise In Oil Rig Count (To 3 Month Highs). (graph)
- The Chart That No Stock Market Bull Wants To See. (graph)
- Wal-Mart(WMT) Wage Hikes Backfire (Again) As Angry Employees Threaten To Quit.
- Deja Deja Deja Vu For Energy Stocks. (graph)
- Why Obama's Favorite Student Debt "Relief" Program Will Cost Taxpayers $100 Billion.
- S&P 500 Tumbles Into Red For 2015, Breaks Below Key Technical Support. (graph)
- Since 2007: 1.4 Million Manufacturing Jobs Lost; 1.4 Million Waiter/Bartender Jobs Gained. (graph)
- Americans: Driving More, Spending Less, Losing Faith? (graph)
- Prime Aged Workers Tumble In July, Workers 55 And Over Surge To New All Time High. (graph)
- Energy Credit Risk Hits 1000bps As WTI Crude Nears $43 Handle. (graph)
- Americans Not In The Labor Force Rise To Record 93.8 Million, Participation Rate At 1977 Level. (graph)
- July Payrolls Rise 215K, Less Than Expected; Annual Earnings Growth Miss, Unemployment Remains At 5.3%. (graph)
Business Insider:
Telegraph:
- Germany protests against 'half-finished' Greek bail-out deal. Berlin's finance ministry pushes for more time as Athens says it is "nearly ready" and could vote on a deal within two weeks.
RIA:
- Donetsk Rebels Warn on Possible Surge in Ukraine Violence. Donetsk rebels say violence may worsen as Ukraine blocks agreement to pull back weapons, citing rebel leader Alexander Zakharchenko. Ukraine said 7 soldiers wounded as fighting resumes near Luhansk.