Wednesday, November 19, 2014

Today's Headlines

  • Russia deflects Ukraine blame after Germany pushes for talks. Russia's foreign minister Wednesday blamed the conflict in Ukraine on other countries' efforts to increase their security since the collapse of the Soviet Union. A day after Russia and Ukraine clashed over how to move toward a new cease-fire agreement, Russian Foreign Minister Sergei Lavrov said the United States and the European Union had repeatedly "torpedoed" peace efforts. Ukraine, the European Union and the U.S. blame President Vladimir Putin for supporting pro-Russian separatists and stoking a conflict that has killed more than 4,100 people, according to United Nations estimates. "Throughout the Ukrainian crisis our country has consistently sought to help Ukraine to overcome this difficult period in its history," Lavrov said in the Russian lower house of parliament. "Russia can't stand by and watch what's happening in a neighboring fraternal country."
  • Iron Ore Extends Bear Market as Miner Says ‘We Are Price Takers’. Iron ore tumbled to the lowest in more than five years as declining home prices in China added to concern a slowdown in the top buyer will deepen, exacerbating a glut. Producers’ shares fell in London, and Australia’s BC Iron Ltd. (BCI) said that miners had to take the prices on offer.
  • European Stocks Are Little Changed as Miners Fall. European stocks slipped from a seven-week high, with commodity producers falling and Greek shares rising, before the release of minutes from the Federal Reserve’s last policy meeting. The Stoxx Europe 600 Index slipped less than 0.1 percent to 339.15 at the close of trading, after sliding as much as 0.3 percent and gaining 0.3 percent earlier. Miners fell posted the biggest declines among 19 industry groups, while Greece’s ASE Index rallied 4.2 percent, the most in almost a month, for the biggest increase among 18 western-European markets.
  • Junk-Bond Banking Boom Peaks as Firms Drop off Deal List. The explosion of brokers plowing into the lucrative junk-bond underwriting business may be fading. The number of firms managing U.S. high-yield bond sales isn’t growing for the first year since 2008, according to data compiled by Bloomberg. The ranks will likely thin in upcoming years as yields rise, making it more expensive for speculative-grade companies to borrow, according to Charles Peabody, a banking analyst at research firm Portales Partners LLC in New York. “You’re going to see fewer and fewer deals,” he said in a telephone interview. “Underwriting volumes are probably going to decline from here and you’re going to see more of a consolidation or exodus.”
Wall Street Journal:
  • With Wary Eye on Global Tumult, Fed Opted to Stay on Policy Path for Now. Minutes Show Officials Conflicted Over Domestic Economic Improvement and Troubles Abroad. Federal Reserve officials were preoccupied at an October policy meeting with tumult in financial markets, weak economic conditions abroad and risks that low inflation could drift lower. But they forged ahead with a decision to end the central bank’s bond-buying program because the domestic economy and labor market appeared to be on course for further improvement.
Business Insider:
Washington Examiner:
  • S&P sounds warning on Chinese property sector, Russian banks. Credit rating agency Standard and Poor's said on Wednesday that China's over-priced and over-supplied property market and capital-starved Russian banks were likely to face further downgrades in the coming years. In two new emerging market-focused reports, S&P said Chinese property ratings were likely to be hit more than other large markets in Asia, while like in Russia banks in Turkey, South Africa and Brazil also faced difficulties. S&P said in the property report that ratings in Asia would have "a negative bias" next year because of an expected fall in Chinese and Hong Kong house prices. The property sector accounts for more than 15 percent of China's annual economic output, banks provide much of the financing for building and buying, so a prolonged downturn poses possibly the biggest risk to the world's second-largest economy. "Continuing sluggish sales, rising financing cost, and declining access to funding will hit smaller (Chinese) regional a result, we may see further downgrades, and even defaults, at the lower end of our rating spectrum," S&P said.
  • Chinese Govt Against Benchmark Interest Rate Cut. Government is reluctant to cut rates, prefers to use current strategy of lowering financing costs through "undercover" market operations, citing person with knowledge of the matter. Leadership's policy tone is "targeted," aiming to maintain growth in reasonable range, the person said.

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