Evening Headlines
Bloomberg:
Bloomberg:
- Japan Set to Give Details of $273 Billion Stimulus Package. (video) Japan’s government is set to announce details Tuesday of a 28 trillion yen ($273 billion)stimulus package, as it seeks to bolster an economy threatened by a strengthening yen and weak consumer spending. Prime Minister Shinzo Abe flagged the size of the package in a speech last week, saying more investment was needed to expand the world’s third-largest economy. He said funds would be used to provide better port facilities for cruise ships and accelerate the construction of a high-speed maglev train line.
- Mr. Yen Sees Rally Toward 90 per Dollar Spurring Intervention. (video) Former Japanese vice finance minister Eisuke Sakakibara said the yen could strengthen toward 90 per dollar as soon as this month and provoke officials to sell the currency to weaken it. Japan’s currency will appreciate gradually toward 100 per dollar, but gains are likely to accelerate beyond that level, said the 75-year-old, who was dubbed “Mr. Yen” for his ability to influence the exchange rate in the 1990s. Sakakibara sees the “intervention zone” lying between 90-95, when dollar weakness should worry the U.S. Treasury Department enough to agree to yen selling by the Finance Ministry, which he sees as a precondition for the intervention to be effective. “It’s extremely likely that the yen will break 100 this year, or even this month,” Sakakibara said in an interview in Tokyo on Monday. “If it breaks 100, it could head for 90 quite quickly. Then it becomes a question of if they intervene.”
- Overseas Yield Hunters Bag Record Share of U.S. Corporate Debt. Foreign buyers are poised to push their record 40 percent share of the U.S. corporate-bond market even higher as they seek to escape negative yields that have swept the globe. While Europe is the biggest overseas owner of the debt with 80 percent of the foreign holdings, investors from Asia were the fastest-growing buyers, according to Nathaniel Rosenbaum at Wells Fargo & Co. Taiwanese life insurers were among the hungriest buyers, buying up the notes to boost exposure to the market after Taiwanese regulatory changes that allowed an increase in allocations to overseas bonds.
- Ringgit Sinks as Crude’s Tumble Bodes Ill for Malaysia Finances. The ringgit led a decline in Asian currencies as slumping oil prices dim the prospects for Malaysia’s export earnings. Brent crude sank 0.8 percent to close at its lowest level in four months on Monday, while U.S. oil slid into a bear market amid renewed concern there is a global supply glut. Malaysia loses 450 million ringgit ($111 million) in annual income for every $1 drop in oil and the nation derives about a fifth of its revenue from energy-related sources.
- Asia Stocks Fall as Japan Awaits Stimulus, Material Shares Drop. Asian stocks fell for the first time in seven days, retreating from an almost one-year high, as Japanese shares slid ahead of the announcement of a $274 billion stimulus package and a slump in oil weighed on energy and commodity companies. The MSCI Asia Pacific Index dropped 0.4 percent to 136.85 as of 9:03 a.m. in Tokyo after closing Monday at the highest since Aug. 17. Material and industrial shares led losses on the regional gauge, while energy producers also retreated, after crude sank into a bear market and sank below $40 a barrel for the first time since April on Monday. Japan’s Topix index lost 0.8 percent as investors weighed earnings and the government was poised to give details on steps to bolster an economy threatened by a strengthening yen and weak consumer spending.
- Oil Retreats to Bear Market as Global Supply Glut Seen Growing. (video) Oil fell below $40 a barrel in New York for the first time since April, falling into a bear market on concern that the global supply glut will expand. Saudi Arabia cut prices to Asian customers as the country continues to fight for market share. Drillers in the U.S. boosted the number of rigs seeking oil for a fifth week, the longest run of gains since last August, according to data from Baker Hughes Inc. U.S. crude and gasoline supplies are at the highest seasonal level in at least two decades. West Texas Intermediate settled 22 percent below its June peak Monday, meeting the common definition of a bear market.
Wall Street Journal:
- U.S. Launches Airstrikes Against Islamic State in Libya. Move aids Libyan ground forces in battle for militant group’s stronghold.
- Rio’s Olympics Woes Sour IOC on Developing World as Games Site. Officials backing away from previous goal of opening up games to broader selection of cities.
- In China, Xi Jinping’s Crackdown Extends to Dissenting Versions of History. Challenge to celebrated war story is flashpoint in president’s push to promulgate an official narrative.
- U.S. Oil Prices Enter Bear Market. Crude settles at $40.06 a barrel, down 22% from early June, when it traded above $50.
- It’s Called Financial Repression, and Governments Around the World Are Doing It. Countries are adopting policies to encourage or require savings to be lent cheaply to the government.
Fox News:
- ISIS details 'Why We Hate You' in new magazine. (video) In the new edition of its full-color, glossy magazine, ISIS mocks those who claim Islam is a peaceful religion, and even wades into the controversy surrounding Donald Trump and the parents of a dead Muslim U.S. soldier. The 15th issue of Dabiq, published on July 31, is titled “Break The Cross” and appears to be primarily directed at those that ISIS considers its enemies, particularly Christians. One section is devoted to the words and actions of Pope Francis and is headlined “In The Words Of Our Enemies.” An editorial titled “Why We Hate You and Why We Fight You” takes aim at Westerners and “apostate ‘Imams’ in the West” who refuse to define ISIS’ motivation as being Islamic. ISIS calls this rhetoric purely political.
CNBC:
- Uber is latest US giant sent packing by China.
- US private capex, inventories indicate American businesses lack confidence on economy. If investment is always an act of faith – because it's a leap into an unknowable future – than the numbers on U.S. capital spending in the first half of this year show worrying signs of declining business confidence. America's investment outlays over that period fell at an annual rate of 2.1 percent, marking a substantial decline from an already lackluster 3.2 percent pace of advance in the second half of last year. And there is worse. Taking a longer view of this bellwether segment of aggregate demand, which represents one-fifth of American GDP, one can see that the spending by U.S. companies on plant and equipment slowed to a growth rate of 0.6 percent in the year to June, compared with a 5.5 percent growth a year earlier.
Zero Hedge:
- This Has Never Happened Outside Of A Recession. (graph)
- Success In Curbing Chinese Capital Outflows Spells Disaster For High End NY/SF Real Estate. (graph)
- A Trader's Angry Rant "Economic Numbers Don’t Mean Anything Anymore". (graph)
- "This Whole Mania Will End Tragically" - Impermanence & Full-Cycle Thinking. (graph)
- China Moves Forward With SDR Issuance In August.
- "End The War On Black People" - BlackLivesMatter Demands Reparations, Investments, Political Power. The demands are fairly extensive and call for, among many other things, the following for Black people: free and open access to all public universities, retroactive forgiveness of all student loan debt, passage of H.R. 40 to study a "Reparation Proposal for African Americans," removal of police from schools, retroactive decriminalization and release of all people held on drug and prostitution-related offenses and a restructuring of local, state and federal tax codes to achieve a "radical and sustainable redistribution of wealth."
- Trump: "I'm Afraid The Election Is Going To Be Rigged".
- Deutsche Bank, Credit Suisse Kicked Out Of Stoxx Europe 50 Index.
- Smith & Wesson(SWHC) Hits All Time High After FBI Reports Record Gun Sales For July.
- 5 Questions Market Bulls Must Answer.
- Ben Inker: This Is The "Shocking Hole" That Will Be Blown In Equities If Rates Spike By 1.5%. (graph)
- Dow Suffers Longest Losing Streak In A Year As Crude Crashes, Credit Craters. (graph)
- The Olympics aren't going to save Brazil.
- Crude oil's 'drain is clogged,' and it's heading into the worst time of the year.
- The post-Olympics hangover is going to hit Brazil extremely hard.
- The bond market gives us a warning sign that would be dangerous to ignore. (graph)
- The huge industry propping up the US economy just cracked.
Economic Daily:
Earnings of Note
Company/Estimate
8:30 am EST
- China P2P Lending Volume Exceeds 1t Yuan This Year. P2P online lending volume in Jan.-July more than doubled from year ago to 1.03t yuan, the first time exceeding 1t yuan in a year, citing data.
- Asian equity indices are -.75% to -.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 118.75 -.5 basis point.
- Asia Pacific Sovereign CDS Index 47.75 +.5 basis point.
- Bloomberg Emerging Markets Currency Index 72.33 -.04%.
- S&P 500 futures +.23%.
- NASDAQ 100 futures +.26%.
Earnings of Note
Company/Estimate
- (AET)/.23
- (ABC)/1.27
- (ADM)/.45
- (AVP)/.03
- (CAH)/1.13
- (CMI)/2.17
- (CVS)/1.30
- (DISCA)/.58
- (ETN)/1.07
- (EMR)/.84
- (EXPD)/.58
- (H)/.46
- (MLM)/2.02
- (TAP)/1.10
- (MOS)/.12
- (PFE)/.62
- (PG)/.74
- (RDC)/.74
- (RCL)/1.02
- (STX)/.61
- (WCG)/1.40
- (AIG)/.94
- (CAR)/.71
- (CERN)/.57
- (DVN)/-.20
- (EA)/-.03
- (NBR)/-.45
- (PZZA)/.54
8:30 am EST
- Personal Income for June is estimated to rise +.3% versus a +.2% gain in May.
- Personal Spending for June is estimated to rise +.3% versus a +.4% gain in May.
- The PCE Core MoM for June is estimated to rise +.2% versus a +.2% gain in May.
- The ISM New York for July.
- Wards Total Vehicle Sales for July are estimated to rise to 17.3M versus 16.61M in June.
- None of note
- The Fed's Kaplan speaking, Eurozone Construction spending, weekly US retail sales, (DAL) July traffic data, (F) July sales call and the Keefe Bruyette Woods Community Bank conference could also impact trading today.