Today's Headlines
Bloomberg:
- Greece Seeks Resolution to Aid Deal as Creditor Talks Progress. The Greek government is seeking to conclude talks on a rescue program by Tuesday, leaving enough time for national parliaments to assess the deal so funds can be disbursed for an Aug. 20 payment to the European Central Bank. The four institutions representing Greece’s creditors -- the ECB, the International Monetary Fund, the European Commission and the European Stability Mechanism -- made progress over the weekend on the details of a plan that would make as much as 86 billion euros ($93 billion) available to Greece, according to three people with knowledge of the discussions.
- Chinese Spurn Unprecedented Car Discounts Amid Slowdown. Consumers like Shen represent the biggest threat to China’s new-vehicle market, which overtook the U.S. in 2009 to become the world’s biggest. With the Chinese economy flagging, and government curbs on car registrations and stock market volatility deterring would-be car buyers, the auto industry is pulling out unprecedented offers to drum up sales.
- China's Slumping Car Sales Push Bitauto to Eighth Weekly Decline. Bitauto Holdings Ltd. fell for an eighth straight week, the longest slump on record, amid deepening concern that a slowdown in Chinese auto sales is eroding the car-listing website operator’s revenue growth. The American depositary receipts tumbled 22 percent to $30.64 in New York last week. It was the worst performance on the Bloomberg China-U.S. Equity Index, which gained 1.7 percent.
- Australian Property Market Seen Easing as Banks Rebuff Borrowers. Last month, Australian banks raised interest rates for property investors and introduced tougher loan-to-value standards in response to a move by regulators to rein in the riskier corners of the country’s house price boom. With interest rates stuck at record lows due to the slowdown in the wider economy, the central bank and the Australian banking regulator have been grappling with ways to prevent a property price bubble.
- China’s Falling Exports Put Aussie, Kiwi Dollars on Back Foot. The currencies of Australia and New Zealand retreated following gains of at least 1 percent Friday, after disappointing trade data in China deepened concern that demand for commodities will weaken in their biggest export market. Australia’s dollar had the steepest decline among major currencies against the greenback on Monday, after reports in China over the weekend showed exports shrank five times more than economists estimated and producer prices fell by the most in almost six years. The Aussie and kiwi had dropped last month as commodities plunged and bets increased that the Federal Reserve will raise interest rates next month.
- Malaysian Stocks Set for Correction as Scandal Spurs Outflows. Malaysian stocks fell, with the benchmark gauge poised to enter a technical correction, as investors pulled funds amid concern about the political scandal enveloping Prime Minister Najib Razak and the worsening economic outlook. The FTSE Bursa Malaysia KLCI Index slid 1.3 percent to 1,661.41 at 10:04 a.m. local time, on course for the lowest close since March 2013. The measure has lost more than 10 percent from its April 21 peak. The ringgit was little changed at its lowest level since 1998.
- Asian Stocks Retreat on China Data, Bets for U.S. Rate Increase. Asian stocks fell after China reported bigger-than-expected slides in exports and producer prices and U.S. jobs data boosted trader expectations for a Federal Reserve interest-rate increase next month. The MSCI Asia Pacific Index declined 0.1 percent to 140.89 as of 9:01 a.m. in Tokyo.
- China Steel Flood Deepens as Mills Face Slowing Local Demand. China is shipping ever more steel into world markets as its economy slows, leading to lower prices, reduced earnings at global producers and more trade disputes. Mills in the country that produces half the world’s steel are maintaining output as domestic demand falters, exporting the surplus. Overseas sales surged 9.5 percent to 9.73 million metric tons in July, the highest level in six months, customs data released on Saturday showed. Exports expanded 27 percent to 62.13 million tons in the first seven months, the highest ever for the period, according to data compiled by Bloomberg.
- Copper Bears Keep ‘Stranglehold’ on Market as Stockpiles Rise. Hedge funds are betting that the worst is yet to come for copper. Prices for the metal used in everything from homes to cars to appliances are stuck in the worst slump in more than two years. Stockpiles jumped 11 percent in Shanghai last week. With China’s economy showing little signs of recovery, money managers are increasing wagers that copper will fall further, pushing their net-short position to the most bearish since April 2013, U.S. government data show. Speculators held a net-short position in copper of 33,547 futures and options contracts as of Aug. 4, according to Commodity Futures Trading Commission data released three days later. That compares with 25,746 a week earlier.
- Carly Fiorina Says Donald Trump's Perceived Menstrual Cycle Insinuation Is Nothing New. The former Hewlett-Packard CEO sees an all too familiar pattern in the billionaire's comments about Fox host Megyn Kelly.
Wall Street Journal:
- Industry, States Set to Fight EPA Greenhouse Gas Rules. Lawsuits would challenge rules requiring significant cuts in power-plant carbon emissions. Industry representatives and a group of state attorneys general are preparing to file lawsuits soon to challenge Obama administration rules requiring significant cuts in power-plant carbon emissions.
- Oil Futures Signal Weak Prices Could Last Years. The oil market indicates that prices could stay lower for longer, delivering a fresh blow to hard-hit energy exploration-and-production companies.
- Move to Allow U.S. Oil Exports Accelerates. Big voices in the oil industry and Congress now support a move that would have been unthinkable not long ago: opening the U.S. oil industry to exports. Big voices in the oil industry and Congress now support a move that would have been unthinkable not long ago: opening the U.S. oil industry to exports.
- Chinese Companies Pay Debt Premium. Companies are paying higher interest rates, compared with Asian peers. China’s stock market, its currency and economy all face pressure, and now those factors have some of the country’s leading corporations paying a premium to borrow.
- To Feed Billions, Farms Are About Data as Much as Dirt. Startups such as Google-funded Granular offer software to run farms with precision, efficiency. Mark Bryant is a farmer in Ohio with 12,000 acres, on which he raises corn, soybeans and soft red winter wheat. He is rarely on a tractor, because that isn’t how farms work anymore.
- Obama’s Sanctions Gift to an Assassin for Iran. The nuclear deal lifts sanctions on men like Anis Naccache, who tried to assassinate my great uncle. Congress is debating whether the nuclear agreement between Iran and the great powers goes far enough to curb Tehran’s illicit activities. But equally deserving of scrutiny are the nefarious characters whose names would be removed under the deal from Western sanctions lists.
Fox News:
- Trump defends his treatment of women, tries turning tables on Bush. (video) Republican presidential candidate Donald Trump on Sunday defended himself against accusations of being disrespectful to women, saying he cherishes them and has merely fought back after being “viciously attacked” by female detractors. “I cherish women,” Trump, the New York real estate tycoon now atop the 2016 GOP field, said on CNN’s “State of the Union.” “I said nothing wrong whatsoever.”
CNBC:
- Hackers steal data on 2.4m Carphone Warehouse customers. Up to 2.4m Carphone Warehouse customers may have had their personal information and bank details compromised, after the mobile phone retailer said its systems had been breached by a sophisticated cyber attack.
Zero Hedge:
Business Insider:
- America's slums are exploding. The number of people living in high-poverty areas—defined as census tracts where 40 percent or more of families have income levels below the federal poverty threshold—nearly doubled between 2000 and 2013, to 13.8 million from 7.2 million, according to a new analysis of census data by Paul Jargowsky, a public-policy professor at Rutgers University-Camden and a fellow at The Century Foundation.
Reuters:
- China's much-hyped healthcare reform drive stuck in first gear. Li Tiantian, a Chinese doctor turned tech entrepreneur, is a leading light of the country's much-trumpeted healthcare reform drive. His medical networking platform DXY.com links two million doctors across China and has attracted funding from tech giants like Tencent.
- Indonesia urges U.S. Fed to hurry up and raise rates. Indonesia wants the U.S. Federal Reserve to hurry up and raise interest rates because uncertainty over when it will tighten has created downward pressure on the rupiah, the country's chief economics minister said.
- Portugal cautioned by IMF over debt sustainability. Even if they had been compiled by his own spin-doctors, Portugal’s latest unemployment figures could hardly have been better for Pedro Passos Coelho, the country’s centre-right prime minister.
Nikkei:
- Geithner Says Fed Rate Increase Wouldn't Derail Economy. The U.S. economy is more stable than it was before the 2008 financial crisis, former Treasury Secretary Timothy Geithner was quoted as telling the Nikkei newspaper in an interview. Global financial system is stronger now, could absorb Fed move, he said.
Xinhua:
- Lock-Up Shares Worth 55B Yuan to Become Tradable. About 2.9 billion shares from 27 companies will become tradable on the Shanghai and Shenzhen bourses. The amount, up from the 43.7 billion yuan in shares unlocked this week, will add pressure on China's struggling stock market.
Night Trading
- Asian indices are -.50% to +.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 113.75 +.5 basis point.
- Asia Pacific Sovereign CDS Index 65.25 +.5 basis point.
- S&P 500 futures +.21%.
- NASDAQ 100 futures +.18%.
Earnings of Note
Company/Estimate
- (AES)/.27
- (DF)/.26
- (NAT)/.33
- (SYY)/.51
- (XONE)/-.24
- (MTZ)/.10
- (MDR)-.05
- (SHAK)/.03
- (TTWO)/.36
- (TDW)/.17
Economic Releases
10:00 am EST
- The Labor Market Conditions Index for July.
- None of note
Other Potential Market Movers
- The Fed's Lockhart speaking, Japan Consumer Confidence Index, (UAL) July Traffic report and the Jefferies Industrials 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 higher and to weaken into the afternoon, finished mixed. The Portfolio is 25% net long heading into the week.
