Bloomberg:
- Greece Is Bracing for Even More Economic Pain This Year. (video) The debt-saddled country is heading for another year of contractions. Greece may have bought itself a bit more time with a third bailout, but its economic troubles are set to continue this year, and possibly even get worse. We asked 20 economists where they thought Greece was headed. Their answers below make for a depressing read.
- Tsipras Returns to Parliament in Struggle to Qualify for Bailout. Prime Minister Alexis Tsipras will return to the Greek parliament on Wednesday seeking support from the opposition to help him overcome his own party’s rebellion against the terms of a third bailout. Greek lawmakers are voting on a second package of measures the country’s creditors demanded as a condition for starting discussions on an aid program worth up to 86 billion euros ($93 billion). Tsipras was forced to reshuffle his government last week after lawmakers from his party led by former Finance Minister Yanis Varoufakis opposed the first set of reforms.
- China’s Aftershock Ripples Through Sales of Cognac to Ore. China’s market slump is making itself felt in corporate earnings around the world. French distiller Remy Cointreau SA, U.S. fast-food company Yum! Brands Inc., U.K. luxury-goods maker Burberry Group Plc and South Africa’s Kumba Iron Ore Ltd. are among the companies taking a hit from China, where a monthlong rout in stocks wiped out almost $4 trillion in market value. The International Monetary Fund sees China’s economy expanding this year at the slowest rate since 1990, and said the country is a source of potential risk to global growth. The effect is likely to be be highlighted over the next few weeks as the bulk of the world’s biggest companies report second-quarter earnings.
- Remy Revenue Misses Estimates on Weak Chinese Cognac Orders. French distiller Remy Cointreau SA reported first-quarter sales that missed analyst estimates as Chinese wholesalers continued to hold back on cognac orders. Sales fell 9 percent on an organic basis in the three months through June, the Paris-based company said in a statement Tuesday. Analysts expected a 5.4 percent decline. The stock fell as much as 4 percent. Asia has become less profitable for French distillers since the Chinese government began discouraging extravagant spending, denting the ultra-premium spirits market.
- European Stocks Snap Nine-Day Winning Streak Amid Mixed Earnings. European stocks declined, snapping a nine-day winning streak, amid mixed earnings reports. Novartis AG fell 2.1 percent after reporting lower sales, dragging a measure of health-related companies to the second-worst performance of the 19 industry groups on the Stoxx Europe 600 Index. French distiller Remy Cointreau SA slipped 2.5 percent after posting sales that missed analyst estimates. The Stoxx 600 retreated 1 percent to 402.66 at the close of trading, after earlier rising as much as 0.3 percent.
- The All-In Commodities Debacle. (video)
- Wall Street Lenders Growing Impatient With U.S. Shale Revolution. Halcon Resources Corp. almost ran into trouble with its banks in June 2013. And again in March 2014. And in February 2015. Each time, the shale driller came close to violating debt limits set by its lenders, endangering a credit line that provided as much as $1.05 billion in much-needed cash. Each time, Halcon’s banks, led by JPMorgan Chase & Co. and Wells Fargo & Co., loosened their restrictions, allowing Halcon to keep borrowing. That kind of patience may be coming to an end.
- Credit Traders Restless to Make a Buck Turn to Leveraged Swaps. Credit traders smell blood in the water. More companies are running into financial trouble, and fund managers want to make magnified bets on which ones will be the next to suffer difficulty paying their bills. To do so, investors are using complicated, leveraged credit derivatives called index tranches -- the very same structures that surged in popularity in the run-up to the worst financial crisis since the Great Depression. “People want to take credit risk,” said Peter Tchir, head of macro strategy at Brean Capital LLC in New York. “I’m definitely having more people asking questions about tranches.” The growing temptation to take credit risk with derivatives is easy to understand. It’s gotten harder to trade actual bonds.
Business Insider:
NY Times:
- ISIS Transforming Into Functioning State That Uses Terror as Tool. The Islamic State uses terror to force obedience and frighten enemies. It has seized territory, destroyed antiquities, slaughtered minorities, forced women into sexual slavery and turned children into killers.
Reuters:
- United Tech(UTX) cuts outlook on aerospace, elevator pressures. United Technologies Corp (UTX.N), which agreed on Monday to sell its Sikorsky helicopter business, cut its full-year profit outlook on Tuesday as it warned of pressures in its aerospace systems and Otis elevators businesses. United Tech, whose shares fell 4.1 percent after the company also reported second-quarter results, on Monday said it would sell its Sikorsky helicopter unit to Lockheed Martin Inc (LMT.N) for $9 billion, after saying in June it planned to exit the business following a strategic review.
Financial Times:
- Emerging market unemployment rises sharply. Brazil and Russia lead spike as data improve in developed markets. Unemployment across emerging markets has risen sharply this year, reversing a six-year slide, even as it has continued to fall in developed countries. The figures suggest the slowdown in emerging market growth, driven by a drop in commodity prices and a pullback in global trade, is finally starting to percolate through to labour markets, threatening to drag consumer spending down further.
Telegraph:
- Why it's time for Germany to leave the eurozone. Influential figures including Ben Bernanke have called on Germany pull its weight to end the eurozone's dysfunction. The only alternative is a German exit from the euro.
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