Evening Headlines
Bloomberg:
- China Imports Slump for 11th Month, Export Decline Moderates. China’s
imports slumped for an 11th month, the longest losing streak
in six years, underscoring the heavier headwinds to growth at home and
abroad. Imports slipped 17.7 percent in yuan terms in September,
widening from a 14.3 percent decrease originally reported in August.
Overseas shipments fell 1.1 percent in September in yuan terms, the
customs administration said Tuesday, compared with a 6.1 percent decline
in August. The trade surplus was 376.2 billion yuan ($59.4
billion). The data signal increasing risk China’s economic slowdown will
be a heavier drag on global growth. The
People’s Bank of China’s surprise devaluation of the yuan in August has
helped exports stabilize, even as slowing property investment has
discouraged imports. "Although
intensified policy support should help bolster infrastructure
investment growth in coming months, it will unlikely fully offset the
still sizable headwinds coming from China’s property and financial
services sectors," analysts at UBS Group AG led by Harrison Hu wrote in a report ahead of the data.
- Singapore Set to Ease as Currency Faces Rerun of '97 Asia Crisis. Singapore’s
central bank is poised to ease monetary policy for the second time in
2015 in an effort to revive dwindling growth, economists predict. The
Monetary Authority of Singapore, which manages the economy through
guiding the
currency rather than setting interest rates, will boost stimulus when it
meets Wednesday, according to 16 of 25 economists surveyed by
Bloomberg. The remainder predict no move. The MAS eased policy at an
unscheduled meeting in January, saying it would seek to slow the pace of
the local dollar’s gains versus its trading partners. At the first of
this year’s two scheduled meetings in April, it refrained from further
action.
- Home Flipping Frenzy in Sydney Sparks Warnings on Housing Risks. Lana
Taylor quit a job at Unilever Plc to buy, renovate and sell
homes in Sydney, where prices have increased in 13 of the past 15 years.
Taylor, a marketing manager at the consumer goods company until October
2013, and two friends started Three Birds Renovations in July last
year. Since then, they have bought and sold three homes in Sydney’s
northwestern suburbs and made a gross profit of about
A$600,000 ($441,000). They are working on the fourth, which will be
ready for sale by Christmas. “We aim to flip the property in six
weeks,” said Taylor, 37. “We are kind of living the dream, where three
friends, three mums are buying and renovating houses for a living.”
- Asian Stocks Slide as Japan Reopens, Investors Await China Data. Asian stocks dropped, with the regional benchmark index retreating
from a seven-week high, as Japanese shares slipped after a holiday and
investors awaited China’s trade data. The MSCI Asia Pacific Index
fell 0.3 percent to 133.76 as of 9:00 a.m. in Tokyo after closing Monday
at the highest since Aug. 20.
Wall Street Journal:
- SEC Readies Clawback Rules for Punishing Bad Accounting. When errors are found in a company’s books, the responsibility often
falls on the finance chief and chief executive who signed off on the
numbers. And it is up to the board of directors to decide whether they
should be penalized by returning some of their compensation.
- The Mullahs Say Thanks. Iran becomes more belligerent in the wake of the nuclear deal.
President Obama and his foreign-policy admirers—a dwindling lot—hoped
that the nuclear deal would make Iran more open to cooperation in the
Middle East and with the U.S. Mark this down as another case in which
the world is disappointing the American President. Iran’s
judiciary on Monday announced that Jason Rezaian, the Washington Post’s
Tehran correspondent, has been convicted. He was on trial for
“espionage.” Security forces arrested Mr. Rezaian and his wife,
journalist Yeganeh Salehi, in July 2014. Ms. Salehi
Fox News:
- Former ISIS hostage says 'Jihadi John' beat him, forced him to dance Tango. A Danish photographer who endured months of torture at the hands of
Islamic State extremists says the terrorist killer known as “Jihadi
John” forced him to stand for days and dance the Tango at a prison in
Syria. Daniel Rye Ottosen, 26-- the last ISIS hostage to be released alive
last June-- revealed details about his experience in captivity in an
interview Sunday with Denmark radio network DR. The identity of “Jihadi John”-- the British terrorist infamous for
beheading at least 4 hostages—became public last spring. Mohammed
Emwazi, 26, was born in Kuwait, raised in London, and graduated from
Westminster University before going to Syria in 2013 to fight with ISIS.
CNBC:
- Why US banks soon will be singing the blues. (video) Fading
hopes for a rate hike in 2015 and other factors are making analysts
nervous about just how the quarterly profit reports will shape up.
JPMorgan Chase gets things started for the Big Four on Tuesday, with
Bank of America and Wells Fargo on tap Wednesday and Citigroup due
Thursday. Goldman Sachs reports Thursday as well and PNC will report
Wednesday.
Reuters:
- U.S. hedge funds' favorite stocks lose more than rivals - data. Publicly listed companies that
are popular with U.S. hedge funds lost more money than sector
rivals when stock markets tumbled in the last few months, new
data from research firm Symmetric.io show.
Hedge fund managers, who often promise strong returns in all markets,
were caught off guard when stocks sold off on fears of slower growth in
China, falling energy prices, and worries about a potential U.S.
interest rate hike. Some funds are nursing double digit declines, their
deepest since 2008, according to the data that Symmetric will release to
clients on Tuesday. Reuters reviewed the data on Monday. David Einhorn's Greenlight Capital is off 17 percent while
Larry Robbins' Glenview Capital is down 13 percent.
Evening Recommendations
Night Trading
- Asian equity indices are -.75% to unch. on average.
- Asia Ex-Japan Investment Grade CDS Index 141.0 -.5 basis point.
- Asia Pacific Sovereign CDS Index 79.0 .25 basis point.
- NASDAQ 100 futures -.09%.
Earnings of Note
Economic Releases
6:00 am EST
- The NFIB Small Business Optimism Index for September is estimated to fall to 95.5 versus 95.9 in August.
Upcoming Splits
Other Potential Market Movers
- The Fed's Bullard speaking, Fed's Dudley speaking, German ZEW Index, China Trade Balance report, China inflation report, US weekly retail sales reports, (MYL) business update and the (BSX) investor update could also impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by financial and industrial shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.
