Tuesday, September 08, 2015

Morning Market Internals

Posted by Gary .....at 11:14 AM
NYSE Composite Index:
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Monday, September 07, 2015

Tuesday Watch

Posted by Gary .....at 10:01 PM
Today's Headlines 
Bloomberg:
  • China Large-Caps Drop in Sign State Funds Absent. China’s biggest companies plunged in Shanghai on speculation state-backed funds had stopped buying. The Shanghai Composite Index declined 2.5 percent to 3,080.42 at the close in a fourth day of declines. Industrial & Commercial Bank of China Ltd. led losses on the SSE 50 Index, which sank 4.9 percent. 
  • China's Foreign Exchange Reserves Fall in August on Yuan Support. (video) China’s foreign-exchange reserves fell by a record last month as the central bank sold dollars to support the yuan after the biggest devaluation in two decades spurred bets on continued weakness. The currency hoard declined by $93.9 billion to $3.56 trillion at the end of August, from $3.65 trillion a month earlier. Economists surveyed by Bloomberg had forecast a median $3.58 trillion. The yuan weakened in offshore trading and 10-year Treasury futures contracts fell after the data.
  • GM Posts Fourth China Sales Drop in Five Months. General Motors Co. said sales in China declined for the fourth time in five months, deepening its slump in the world’s largest auto market. GM and its China joint ventures delivered 248,815 vehicles in August, 4.8 percent fewer than a year earlier, according to a statement on its website Monday. The company attributed the drop to “softness in the overall vehicle market.” The largest U.S. automaker’s exposure to the slowdown in China’s car sales has contributed to its stock slumping to an almost 2 1/2 year low on Aug. 25. GM is among the global automakers that are tempering their forecasts for industywide demand after years of plowing billions of dollars into Chinese factories to keep up with a market that surpassed the U.S. in 2009. 
  • Emerging Currencies Drop as Ambiguity on Fed Timing Hurts Stocks. Emerging-market currencies weakened to a record and stocks fell as investors grappled with the prospect for higher U.S. interest rates. Malaysia’s ringgit tumbled to a 17-year low and a bomb attack in Turkey sent the lira plunging to a record. A gauge tracking 20 developing-nation currencies declined for a fifth day, losing 0.3 percent to a record, as the ringgit depreciated 1.6 percent and the lira slid as much as 1.2 percent to 3.0465 per dollar. Investors have dumped riskier assets since China’s shock devaluation almost a month ago worsened the outlook for trade with the world’s second-largest economy, while also making a Federal Reserve interest-rate increase this month less certain. 
  • Indonesian Rupiah Rout Swells Cost of $304 Billion Foreign Debt. Investors selling the rupiah on concern Indonesia will suffer a debt crisis risk a self-fulfilling prophesy. The rupiah has slumped to its lowest level since the peak of the Asian financial crisis, when Indonesia was bailed out by the International Monetary Fund. Its nine-week decline is the longest since June 2004. That’s unfortunate timing for the nation’s government, banks and companies that owe a record $304 billion in foreign debt, almost three times the country’s $105.4 billion of international reserves, according to central bank data.
  • EU Prepares Plan to Relocate 120,000 Refugees. The European Union will this week announce plans to redistribute 120,000 migrants who have arrived in Greece, Italy and Hungary, as the bloc moves to address the biggest refugee crisis since World War II. European Commission President Jean-Claude Juncker will unveil the proposals on Wednesday, saying the best way to cope with the sudden influx of people fleeing war and poverty in Syria and elsewhere in the Middle East and north Africa is to spread them across the 28-nation bloc -- from Finland in the north to Spain in the south.
  • Asset-Backed Debt Losses Mount as Draghi Support Proves Feeble. Investors in Europe’s asset-backed securities market thought they’d scored a win when Mario Draghi endorsed the debt last year. Now the notes are poised for their first annual decline since 2011 after five straight months of losses. Bonds backed by business loans, mortgages and credit-card debt from the Netherlands to Spain lost an average 0.5 percent this year through Sept. 4, according data compiled by Barclays Plc. That’s on track for the first annual decline since the securities lost 2.6 percent in 2011, the data show. The European Central Bank’s attempts to encourage lending in the region by buying asset-backed bonds have underwhelmed investors, leading to a reversal of gains in some securities that rallied after investors prepared for large ECB purchases. The Greek debt crisis and turmoil in Chinese equity markets have also contributed to losses.   
  • Spain's Bonds Yield Most Versus Italy in 2 Years Before Election. In Spain’s government-debt market, the nation’s elections in December are dominating investor sentiment and outweighing the impact of the European Central Bank’s bond-buying program. Spanish securities underperformed their regional peers on Monday, pushing the yield premium 10-year bonds have over Italy’s to the most in two years. The elections come as the Catalonia region bids for independence while anti-austerity parties may force traditional parties into coalitions. The uncertainty of the election result is being priced into bond markets, according to Amundi, a European money manager with more than 954 billion euros ($1.1 trillion.) 
  • Yen Bulls Are Back: Morgan Stanley Ranks It Cheapest of All. An unlikely event is developing as the Federal Reserve moves closer to its first interest-rate increase in almost a decade: Yen bulls have re-emerged. Japan’s currency is on course to avoid a record fourth-straight annual loss as a stuttering global economy revives haven demand and weakens the case for the Fed to raise rates more than once in 2015.
  • European Stocks Rebound From Weekly Drop as Miners Lead Gains. European stocks rose, following a selloff that wiped out two days of gains. The Stoxx Europe 600 Index advanced 0.5 percent to 354.81 at the close of trading, after earlier rising as much as 1.2 percent. Shares extended a weekly loss on Friday as mixed U.S. jobs data stoked concern about an impending Federal Reserve rate increase and the strength of the global economy. 
  • Asian Stocks Rise Before China Trade Data as Japan Shares Climb. Asian stocks rose, with the regional benchmark index climbing from its lowest close since 2012, as Japanese shares advanced and investors awaited trade data from China.The MSCI Asia Pacific Index added 0.1 percent to 124.25 as of 9:07 a.m. in Tokyo. Japan’s Topix index gained 0.3 percent after a revised report showed gross domestic product shrank less than previously reported.
  • Oil Extends Decline as Russia Rules Out Deal With OPEC on Output. Oil declined for a second day after another Russian official ruled out cooperation on production cuts with OPEC, adding to signs that a global oversupply will persist. Brent lost 4 percent in London. Russia won’t join the Organization of Petroleum Exporting Countries and isn’t able to cut production in the same way, said OAO Rosneft Chief Executive Officer Igor Sechin. Russia’s Deputy Prime Minister Arkady Dvorkovich said last week there is no way the country can artificially reduce supply. Oil has fluctuated the past three weeks as concerns over slowing demand in China fueled volatility in global markets. Prices are down more than 25 percent from this year’s closing peak in June on signs the surplus will persist. OPEC members are sustaining output and U.S. crude stockpiles remain almost 100 million barrels above the five-year seasonal average. WTI for October delivery dropped $1.79, or 3.9 percent, to $44.26 a barrel on the New York Mercantile Exchange. The contract slid 70 cents to $46.05 on Friday. The volume of all futures traded was about 74 percent below the 100-day average. All electronic transactions Monday, when trading was halted at 1 p.m., will be booked with Tuesday’s for settlement purposes because of the Labor Day holiday.
  • Surging Atlantic Crude Adds to Seasonal Pressure on Prices. The North Sea and Nigeria will ship the most crude in more than three years in October, adding to downward pressure on oil prices just as demand wanes from refiners shutting down for seasonal maintenance. Output of North Sea grades will reach the highest since May 2012 next month, according to loading programs compiled by Bloomberg. Supplies from Nigeria, the biggest oil producer in Africa, are set to reach a level not seen since August of that year.
  • Asian Shrimp Imports Are Chewing Up U.S. Suppliers. The most-popular seafood in the U.S. isn’t very American anymore, but it sure is getting cheaper. A surge of imported shrimp from Indonesia, Ecuador and India has sent prices plunging by more than a third in the past year. While that’s good news for consumers, who eat more of the crustaceans than any aquatic creature, including salmon and tuna, record supplies from foreign shrimp farms is compounding the strain on U.S. fishermen, who have seen their share of the domestic market shrink to about 10 percent.
Wall Street Journal: 
  • Uncharted Waters in Iran Deal Partisanship. Nuclear pact likely to survive challenge in Congress, but lack of GOP support would be almost unprecedented. Congress returns this week from its August recess and dives immediately into a bruising debate over the nuclear agreement with Iran. The argument will be nasty and highly partisan. In the end, the deal almost certainly will survive. And then the nation will launch into uncharted waters.
  • San Francisco Fed’s Williams Sees Rate Increase ‘This Year,’ If Risks Dissipate. John Williams seems on the fence, and his views tend to reflect the center of thinking inside the Fed. “All of the data that we have had up until nowhas been, I think, encouraging. It …has been about as good, or better, than I was expecting, in terms of the U.S. economy,” Mr. Williams said. “But there are some pretty significant—and I would say have now grown larger—headwinds that have developed.”
  • Glencore Scraps Dividends, Raises Cash to Cut Debt. Measures include a $2.5 billion equity issue partly taken up senior executives. Mining giant Glencore PLC said Monday it will scrap dividend payments and sell up to $2.5 billion in stock among other measures in preparation for the possibility that commodity prices might fall even further during a period of global market turmoil. 
Fox News:
  • Congress returns to tight deadlines, key votes on Iran deal, Planned Parenthood. Congress returns Tuesday to face several key decisions and short-term deadlines -- including votes on the Iran nuclear deal and a spending bill that, if connected to efforts to defund Planned Parenthood, creates the potential for another government shutdown. The House and Senate could vote as early as this week on the Iran nuclear deal. Both GOP-controlled chambers are expected to pass motions of disapproval for the deal. But President Obama is expected to veto the motions and ultimately complete his historic foreign policy deal because neither chamber has the two-thirds majority to override the presidential veto.
  • Biden walks with big labor, to cheers of 'Run, Joe, run'. Vice President Joe Biden, who is contemplating a 2016 presidential bid, on Monday kicked off a Labor Day parade in Pittsburgh with a fiery, pro-worker speech that concluded with hundreds of union employees and others chanting “Run, Joe, run.” "I am hot. I am mad. I am angry," roared Biden after telling the crowd that too few Americans are benefiting from continually increasing U.S. productivity. “Productivity went up 73 percent, but wages only went up 9 percent. … Something is wrong folks,” Biden said before the parade, on a stage he shared with AFL-CIO President Richard Trumka. “CEOs now make 400-times as much as the average worker.”
Reuters:
Financial Times:
Sueddeutsche Zeitung:
  • IEA's Birol Says Oil Prices to Say Low. Oil Prices to stay low for time being without new geopolitical events, Fatih Birol IEA's executive director says in interview.
Economic Information Daily:
  • Chinese Banks Should Reduce Risks From Rising Bad Loans. Chinese banks should reduce risks from non-performing loans in 2H in the face of high NPL ratios in Zhejiang and Jiangsu provinces and steel trade, solar and shipping industries, according to a commentary.
Weekend Recommendations
  • None of note
Night Trading
  • Asian indices are -.50% to +.50% on average.
  • Asia Ex-Japan Investment Grade CDS Index 142.75 +6.25 basis points.
  • Asia Pacific Sovereign CDS Index 86.75 +5.25 basis points.
  • S&P 500 futures +.83%.
  • NASDAQ 100 futures +.71%.

Earnings of Note
Company/Estimate 
  • (CASY)/1.40
  • (PLAY)/.23
  • (KFY)/.46
  • (MW)/1.05
  • (PBY)/.13
Economic Releases
6:00 am EST
  • The NFIB Small Business Optimism Index for August is estimated to rise to 96.0 versus 95.4 in July.
10:00 am EST
  • The Labor Market Conditions Index for August is estimated to rise to 1.5 versus 1.1 in July.
3:00 pm EST
  • Consumer Credit for July is estimated to fall to $18.6B versus $20.74B in June.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Fed's Kocherlakota speaking, China Trade Balance report, $24B 3Y T-Note auction, Barclays Energy-Power Conference, Barclays Consumer Staples Conference, Citi Tech Conference and the Rodman and Renshaw Investment 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, finishing mixed. The Portfolio is 25% net long heading into the week.

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Weekly Outlook

Posted by Gary .....at 4:25 PM
Week Ahead by Bloomberg. 
Wall St. Week Ahead by Reuters.
Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week modestly lower on Fed rate hike worries, China bubble-bursting fears, Asian currency concerns, commodity weakness, technical selling and European/Emerging Markets/US High-Yield debt angst. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 25% net long heading into the week.
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Today's Headlines

Posted by Gary .....at 12:37 AM
Bloomberg:    
  • China's Banks Getting Less Strict on Bad Loans, Moody's Says. China’s banks are getting less strict in recognizing bad loans, failing to include some debts that have been overdue for at least 90 days, according to Moody’s Investors Service. The ratings company cited its analysis of the first-half results of 11 listed banks including Industrial & Commercial Bank of China Ltd. and China Construction Bank Corp., in a statement in Hong Kong on Monday. Moody’s argues that the pace of the increase in loans overdue for at least 90 days isn’t being reflected in increases in overall bad-loan numbers in a struggling Chinese economy. The Moody’s assessment highlights investors’ concerns that Chinese lenders’ bad debts may be understated, a factor dragging on their shares. While the industry’s nonperforming loan ratio stood at 1.5 percent as of June 30, Guotai Junan Securities Co. calculated in May that 16 listed lenders’ shares were priced as if their soured credit stood at an average of more than 11 percent.
  • Bearish China ETF Assets Swell as Investors Bet on More Declines. As the chaos in China’s stock market rattles global investors, the asset growth in two new exchange-traded funds that seek to profit from either daily gains or losses in mainland equities show U.S. traders are decidedly bearish. A Direxion Investments ETF structured to make money when stocks fall has boosted its assets more than 60 times to $253 million as of Sept. 3 since it began trading in June. That’s one of the fastest growth rates among almost 200 exchange-traded funds launched in the U.S. this year, according to data compiled by Bloomberg. Direxion’s leveraged bullish fund has expanded assets by a factor of less than three to $55.8 million since it was created in April.  
  • Mobius to Beijing: Quit Fighting the Market and Let Stocks Fall. (graph) How do you get a bottom-up stock picker, a chart watcher and an economist to agree? Try asking them about Chinese equities. Mark Mobius, Tom DeMark and George Magnus -- world-renowned forecasters who view markets through three very different lenses -- are all finding common ground with their predictions that Chinese shares have further to drop. They say government efforts to prop up the $5.1 trillion market are futile, a view that’s gaining traction among analysts after an unprecedented two-month rescue effort failed to spark a sustained rally.
  • Hong Kong Home Prices May Start to Slump in 2016, JPMorgan Says. Hong Kong’s property prices may correct next year despite gains in the second half of 2015, as an economic slowdown in China and Hong Kong starts to weigh on real estate, according to JPMorgan Chase & Co. Residential prices may start to fall by 5 percent to 10 percent annually starting in 2016, Cusson Leung, head of Hong Kong research, conglomerates and property for JPMorgan, said in a briefing on Friday.  
  • Indonesia Is More Exposed to Capital Flight Than Malaysia, Says S&P. Rocked by a political scandal and falling oil prices, Malaysia has been dominating headlines in recent months as the ringgit leads a drop in Asian currencies. That’s taken the spotlight off the economy of neighboring Indonesia, which Standard & Poor’s says is more exposed to capital flight. “The thing about Malaysia is that the capital market is deeper there, so there’s less reliance on foreign capital among corporates or banks to fund their growth,” said Kyran Curry, S&P’s director of sovereign ratings in Singapore. “Indonesia is much more vulnerable to shifts in outflows and inflows. We’re worried about Indonesia’s foreign-exchange reserves.”  
  • Ringgit Falls to New 1998 Low as Asia Selloff Sends KLCI Lower. Malaysia’s ringgit dropped to a new 1998 low and stocks fell as sentiment continues to sour for emerging-market assets amid slowing Chinese growth and prospects for a U.S. interest-rate increase. The ringgit came under renewed pressure on Monday from a decline in Brent crude and the narrowing in the oil-exporter’s trade surplus. Data on Friday showed a mixed picture of the U.S. jobs market, which is key for determining when the Federal Reserve will tighten policy. While the unemployment rate fell to a seven-year low, non-farm payrolls numbers missed estimates. Higher U.S. borrowing costs may spur more capital outflows from developing nations, just as China’s slowing economy curbs risk appetite.
  • Aussie Shanghaied With Chinese Stocks Flagging Slump to Six-Year Low. For currency dealers, trading in Australia’s dollar and the Shanghai Composite Index are fast becoming the same thing. The Aussie is moving almost in lockstep with China’s tumbling equity gauge, helping it slide to a six-year low last week. Their correlation underlines Australia’s dependence on the Asian nation, which buys more than 30 percent of its exports and whose economic slowdown is infecting markets worldwide. The Australian dollar rebounded Monday from a six-year low and extended gains as Chinese markets opened in positive territory after being closed during last week’s World War II victory parade.
  • Saudi Central Banker Sees No Threat to Currency's Dollar Peg. Central bank Governor Fahad Al-Mubarak said Saudi Arabia will stick with its currency peg as long as oil underpins the economy, dismissing speculation that the country’s currency system is coming under pressure. Investors have increased bets that Saudi Arabia and others in the region will be next to drop their pegs after China devalued the yuan and Kazakhstan allowed its currency to float. One-year forward contracts for the Saudi riyal, an indicator of where investors expect it to trade, are near the highest since 2003. 
  • Draghi's QE Dispenses Unwanted Results to European Stock Buyers. Mario Draghi’s stimulus program hasn’t quite succeeded at unleashing the desired animal spirits across Europe. Here’s the evidence: six months in, and 96 percent of companies in the Euro Stoxx 50 Index have actually gotten cheaper relative to earnings. The European Central Bank’s plan to flood the financial system with cash by purchasing bonds was supposed to ignite the same celebration of risk-taking it did in the U.S. six years ago. In fact, the opposite has happened, culminating in as much as $526 billion of share values being wiped out last month.
  • Dubai Stocks Drop With Mideast Markets on Fed Rate-Increase Bets. Dubai stocks declined with most Middle Eastern equities after the U.S. jobless rate dropped to a level the Federal Reserve considers to be full employment, bolstering the case for an interest-rate increase and depressing demand for riskier assets. Saudi equities rose. The DFM General Index retreated 0.8 percent to close at 3,542.14, following six weeks of losses, the longest streak in almost four years.   
  • Asian Stocks Swing With Chinese Shares After Holiday; Yen Drops. Asian stocks fluctuated as early gains by Chinese shares evaporated after national holidays. U.S. equity-index futures advanced, while the yen declined.The Shanghai Composite Index fluctuated after rising as much as 1.8 percent after the open, while a gauge Chinese companies in Hong Kong pared gains after closing at a two-year low Friday. Japanese shares swung between gains and losses as the yen slipped. The MSCI Asia Pacific Index slid 0.6 percent by 11:34 a.m. in Tokyo after the early gains in China had seen it erase a drop of as much as 1 percent. The Hang Seng China Enterprises Index added 0.5 percent. The measure that tracks Chinese companies listed in Hong Kong has risen one day out of the previous 15 and registered its lowest close since July 2013 on Friday.
  • Oil Drops a Second Day as Venezuela Seeks OPEC Summit Amid Glut. Oil declined for a second day as Venezuela proposed an OPEC summit to stabilize prices amid a global glut. Futures slid as much as 2 percent in New York. Producers from outside of the Organization of Petroleum Exporting Countries including Russia will be invited to the meeting, Venezuelan President Nicolas Maduro told state-owned broadcaster Telesur. Cutting output for a short-term price gain isn’t the cure for the “sickness” affecting global markets, Russian Energy Minister Alexander Novak said Friday. Brent for October settlement lost as much as 83 cents, or 1.7 percent, to $48.78 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $3.56 to WTI.
 Wall Street Journal:
  • Emotional Debbie Wasserman Schultz Backs Iran Nuclear Deal. Florida Rep. Debbie Wasserman Schultz, the chairwoman of the Democratic National Committee, said Sunday she would vote to support the Iran nuclear deal. Although she said she still has some concerns, Ms. Wasserman Schultz told CNN’s “State of the Union” that the deal’s opponents had provided no evidence that an alternative plan, such as applying economic pressure to force Iran back to the negotiating table, would work.
  • The West’s Refugee Crisis. What happens in the Middle East doesn’t stay in the Middle East. The photograph of 3-year-old Aylan Kurdi, who drowned trying to flee to Greece with his brother and mother, has focused the world on Europe’s Middle Eastern refugee crisis. Demands for compassion are easy, but it’s also important to understand how Europe—and the U.S.—got here. This is what the world looks like when the West abandons its responsibility to maintain world order.
Fox News: 
  • 'Who needs this?' Police recruits abandon dream amid anti-cop climate. (video) Police departments face a recruiting shortage amid a growing anti-cop mood that some fear has taken the pride out of peacekeeping and put targets on the backs of the men and women in blue. Open calls for the killing of police have been followed by assassinations, including last week's murder in Texas of a Harris County sheriff's deputy. Instead of dialing back the incendiary rhetoric, groups including "Black Lives Matter" have instead doubled down at demonstrations with chants of "Pigs in a blanket, fry em like bacon." Public safety officials fear the net effect has been to demonize police, and diminish the job. 
Zero Hedge:
Reuters: 
Contra Corner:
Financial Times:
  • US shale oil industry hit by $30bn outflows. US shale producers reported a cash outflow of more than $30bn in the first half of the year, in a sign of the challenges facing the US’s once-booming industry as the slump in oil prices begins to take effect. The shortfall points to a rise in bankruptcies and restructurings in the US shale oil industry, which has expanded rapidly in the past seven years but has never covered its capital expenditure from its cash flow. Capital spending by listed US independent oil and gas companies exceeded their cash from operations by about $32bn in the six months to June, approaching the deficit of $37.7bn reported for the whole of 2014, according to data from Factset, an information service.
  • Capital flight now the big concern for slowing China. In the four quarters to the end of June, such outflows, (which do not include debt repayment) have totalled more than $500bn according to data from Citigroup. China’s mountain of foreign reserves, once around $4tn, are now down to less than $3.7tn and are expected to drop further to $3.3tn by the end of the year, Citi calculates.
Economic Daily News:
  • TSMC's Factory Utilization Falls as Demand Slows. TSMC won't utilize 100% of its 8-inch wafer fab capacity in 4Q as demand from non-Apple(AAPL) clients misses expectations, citing people in the semiconductor industry. Utilization of 12-inch wafer plants also declines; with smaller competitors, such as Globalfoundries, starting price cut to grab orders. MediaTek also cuts 3G chip prices to help boost demand.
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Saturday, September 05, 2015

Today's Headlines

Posted by Gary .....at 11:44 PM
Bloomberg: 
  • China’s Zhou Kept Repeating the Bubble ‘Burst’ at G-20 Meeting. Zhou Xiaochuan, governor of China’s central bank, couldn’t stop repeating to a G-20 gathering that a bubble in his country had “burst.” It came up about three times in his explanation Friday of what is going on with China’s stock market, according to a Japanese finance ministry official. When asked by a reporter if Zhou was talking about a bubble, Japanese Finance Minister Taro Aso was unequivocal: “What else bursts?” A dissection of the slowdown of the world’s second-largest economy and talk about the equity rout which erased $5 trillion of value was a focal point at the meeting of global policy makers in Ankara. That wasn’t enough for Aso, who said that the discussions hadn’t been constructive.  
  • Japan Isolated by China Complaints as G-20 Embraces Zhou's Plans. Japan was left isolated among Group of 20 nations after Finance Minister Taro Aso criticized a Chinese plan to stabilize its financial markets. While most policy makers at a two-day meeting in Ankara publicly welcomed China’s explanation of how it plans to minimize the disruption from its economic transition, Japanese Finance Minister Taro Aso said the presentation was too short on detail to be useful. Aso was the only delegate to complain about the plan, according to two officials at the talks who asked not to be named. “The issue with China is overblown,” Saudi Arabia’s central bank Governor Fahad Al-Mubarak said in an interview with Bloomberg Television in Ankara. “We’re confident that China is on the path of reform.” 
  • Lagarde Says Fed Must Be Sure of Jobs and Prices Before Moving. The U.S. Federal Reserve must be certain that the job market and inflation are strong enough to justify raising interest rates, the head of the International Monetary Fund said after a Group of 20 meeting focused on the pressure the increase may place on the global economy.
  • Volatility Is Back in Global Currency Markets Before Fed Meets. (graph) With the countdown to the Federal Reserve’s September meeting underway, volatility is returning to global currency markets. A gauge of price swings extended its longest streak of gains since January this week amid anxieties about the Fed’s path and a renewed focus on China’s slowdown. Foreign-exchange investors pared positions and moved to traditional havens even as U.S. economic reports show continued growth.
  • Maybe Computers Weren't to Blame for August's Stock Selloff After All. Pssst. Maybe it was your money manager. Risk parity—the "all-weather" investment strategy pioneered by Ray Dalio's Bridgewater Associates—has been grabbing all sorts of attention in recent weeks, of the wrong kind. The strategy, in which funds tend to automatically adjust portfolios of bonds, stocks, and other assets in response to higher market volatility, has been blamed by some for exacerbating the recent selloff by shifting holdings into cash. Bloomberg News reported that Bridgewater's All Weather Fund itself is said to have lost 4.2 percent in August. Meanwhile, JPMorgan analyst Marko Kolanovic, who has been vocal about the selling pressures caused by such quantitative funds, said on Thursday that heightened volatility means that risk parity players would probably have to get rid of another $100 billion in stocks in the next one to three weeks.
  • VIX Not Budging as Stocks Drop Anew in Week of S&P 500 Setbacks. Want evidence this selloff isn’t like the others? Consider that the VIX, the market’s fear indicator, has now spent 11 straight sessions above 25 -- a level that before August it had touched on just five days since 2011. Or the Standard & Poor’s 500 Index, which through Friday has swung up or down an average of 2 percent a day for more than two weeks. Prior to Aug. 20, the 2015 average was around 0.6 percent. The Dow Jones Industrial Average has suffered declines of more than 270 points in five of the last 12 sessions, the biggest cluster of selloffs since the summer of 2011.
 Wall Street Journal: 
  • Thousands of Migrants Pour Into Austria, Germany After Hungary Trek. European foreign ministers discussing how to respond to crisis. Thousands of migrants poured into Austria and Germany on Saturday, as escalating tensions in Hungary forced the two countries to open their borders to one of the largest waves of displaced people since World War II.
  • Ben Carson’s Insurgency. The real conservative outsider has been staging a quiet rise. Republican voters have been expressing in every way they can that they’re fed up with Washington and the political class. But as angry as they are about the Obama era of governance, that doesn’t mean they’ll want an angry presidential nominee—or accept brashness as a substitute for conservative reform. Witness the rise of Ben Carson.
  • Khamenei the Democrat. The Ayatollah issues a new demand on the nuclear deal. President Obama got the votes he needs this week to survive Congressional rejection of his Iran deal, and now the Administration is looking to bring a few more Senators on board so Democrats can filibuster a final vote on the deal. If the absence of U.S. democratic accountability disturbs you, consider its expression in Iran. We aren’t entirely jesting.
Fox News: 
  • Clinton acknowledges paying State Department staffer to maintain private email server. (video) Democratic presidential candidate Hillary Clinton on Saturday confirmed that she and her family personally paid a State Department staffer to maintain the private email server that Clinton used when she led the agency. “We obviously paid for those services and did so because during a period of time we continued to need his technical assistance,” the former secretary of state told reporters after a campaign stop in Portsmouth, N.H.
Zero Hedge
Business Insider:
  • Wall Street could be 'pulling in their reins' ahead of 3rd-quarter earnings. Slowing growth in emerging markets and currency fluctuations in anticipation of a U.S. interest rate hike may push third-quarter revenue and earnings estimates lower this month. Wall Street expects a 3.4 percent decline in earnings for the S&P 500 for the quarter. Estimates have already fallen for 9 out of 10 of the benchmark index's sectors so far this year, according to Thomson Reuters data. S&P revenue is expected to fall 2.8 percent for the quarter, led by steep declines in the energy and materials sectors.
NY Times:
  • U.S. Warns Russia Over Military Support for Assad. Secretary of State John Kerry told his Russian counterpart on Saturday that the United States was deeply concerned by reports that the Kremlin may be planning to vastly expand its military support for President Bashar al-Assad of Syria, warning that such a move might even lead to a “confrontation” with the American-led coalition, the State Department said.
Financial Times:
  • EM turmoil and strong franc cast shadow over Swiss luxury industry. The biggest problems have come in Asia, where demand has faltered in China and Japan, and collapsed in Hong Kong. But other markets have also proved difficult: the gyrations of the rouble have hit Russian demand — and sales in the UAE, an increasingly important market, have declined.
Telegraph:
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Friday, September 04, 2015

Market Week in Review

Posted by Gary .....at 6:37 PM
  • S&P 500 1,921.22 -3.40%*
photo uuu_zpslrxsgq8o.png
The Weekly Wrap by Briefing.com.

*5-Day Change
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