Evening Headlines
Bloomberg:
- China Slowdown May Be Longer Than '09 Financial Crisis. China’s economic slowdown may last
longer than during the global financial crisis because of
worsening external demand and limited lending to smaller
companies, a state researcher said. Growth may slow for a ninth straight period to below 7
percent in the first quarter, Yuan Gangming, an economist with
the Chinese Academy of Social Sciences, said in an interview
Sept. 19 in Beijing.
- U.S. Says Disputed Islands Covered by Defense Treaty With Japan. U.S.
Assistant Secretary of State Kurt Campbell said islands at the heart of
a dispute between Japan and China fall under an American defense pact
with Japan, while urging the sides to resolve the standoff via diplomacy.
“We want to focus more on issues associated with the maintenance of
peace and stability and less on the particular details of this very
complex and challenging matter,” Campbell told a hearing of the Senate
Foreign Relations Committee’s East Asian and Pacific Affairs
subcommittee yesterday. He said the islands fall under a treaty which
obligates the U.S. to defend Japan if it’s attacked. The U.S. doesn’t
take a position on the sovereignty of the islands, known as Diaoyu in
Chinese and Senkaku in Japanese, Campbell said. His comments echoed
those of Secretary of State Hillary Clinton, who said in 2010 that the
islands fall under “mutual treaty obligations” with the Tokyo
government.
- Greek Leaders Struggle With Spending Reductions. Greek Prime Minister Antonis Samaras struggled to clinch agreement with his coalition
partners on an 11.5 billion euro ($14.9 billion) budget-cut
package that’s key to receiving international aid funds. Samaras was handed the third refusal in less than two weeks
yesterday from Democratic Left leader Fotis Kouvelis and Pasok
leader Evangelos Venizelos, the junior partners in the coalition
who met to discuss proposed cuts to wages, pensions and
benefits. Finance Minister Yannis Stournaras and the “troika”
of inspectors from the European Commission, the European Central Bank and the International Monetary Fund have been locked in talks for two weeks on carving out savings.
- Oracle Sales Miss Estimates as Hardware Sales Decline. Oracle Corp. reported fiscal first-
quarter revenue that missed analysts’ estimates as sales of
computer hardware fell for a sixth straight period, curbing
growth as it navigates a shift to cloud-computing services. Sales for the quarter that ended Aug. 31 declined 2.3
percent to $8.18 billion, and profit excluding some items was 53
cents a share, the Redwood City, California-based software maker
said today in a statement. Analysts on average had estimated
revenue of $8.42 billion and earnings of 53 cents, according to
data compiled by Bloomberg.
- U.S. Bancorp(USB) Could Face Moody’s Cut as Competitors Recover. U.S. Bancorp, the nation’s fifth-
largest commercial lender by deposits, may be downgraded one
level by Moody’s Investors Service as rivals recover and pose
stronger competition. “The rating review will consider U.S. Bancorp’s long-term
ability to sustain its consistent, superior performance in light
of increasing competition now that its peers have largely
returned to health and are actively seeking growth,” Moody’s
said today in a statement.
Wall Street Journal:
- Miscues Before Libya Assault. Limited Security in Benghazi, Secrecy Over Safe House, Contributed to Tragedy. The deadly assault on a U.S. diplomatic mission in Libya on Sept. 11
was preceded by a succession of security lapses and misjudgments,
compounded by fog-of-battle decisions, that raise questions about
whether the scope of the tragedy could have been contained. U.S. officials issued alerts and ordered security precautions in
neighboring Egypt ahead of protests and violence on Sept. 11, but
largely overlooked the possibility of trouble at other diplomatic
postings in the region.
- After Spill, Gulf Oil Drilling Rebounds. Production Dipped After Deepwater Horizon Disaster; New Finds
Will Lift Output 28% in a Decade.
- Protesters in Pakistan Clash With Police. Protesters tried to break into a guarded enclave that houses the U.S.
Embassy in Pakistan's capital, in the largest show of anger against an
anti-Islam video during a day that saw smaller demonstrations in
Indonesia, Iran and Afghanistan.
More than a thousand people, including
students affiliated with the Islamist hard-line Jamaat-e-Islami party,
clashed with riot police outside the enclave in Islamabad, which was
cordoned off with hundreds of shipping containers. The State Department issued an alert
Thursday, warning Americans to avoid nonessential travel to Pakistan as
protests are likely to continue and turn violent.
- Syrian Activists Say Airstrikes Kill 30. Syrian opposition activists said a regime airstrike hit a gas station in
the north of the country Thursday, setting off an explosion that killed
at least 30 people and wounding dozens more.
- Fouad Ajami: Muslim Rage and the Obama Retreat. We can't declare a unilateral end to our
troubles, or avert our gaze from the disorder that afflicts the
societies of the Greater Middle East.
CNBC:
Zero Hedge:
Business Insider:
NY Times:
LA Times:
- James Murdoch to control News Corp. TV divisions.
James Murdoch, the 39-year-old son of media mogul Rupert Murdoch, is
expected to take charge of the Fox broadcast network, FX cable channel,
regional sports networks, Fox International channels and National
Geographic channels — some of the most profitable assets in the $34
billion-a-year media conglomerate.
Read
more here:
http://blogs.sacbee.com/capitolalertlatest/2012/08/fiscal-analyst-hundreds-of-millions-at-risk-from-facebook-slide.html#storylink=cpy
Washington Times:
Gallup:
Telegraph:
Kyodo News:
- Cyberattacks hit Japan websites amid Chinese protests over Senkakus.
The websites of at least 19 Japanese public and other institutions,
including banks and universities, have come under cyberattack since
Japan nationalized the Senkaku Islands, also claimed by China, on Sept.
11, the National Police Agency said Wednesday. The cyber-attacks
made it impossible for computer users to access the websites at least
temporarily, while some of the attackers tampered with their contents,
the NPA said. An NPA official said the attacks appear to have
originated in China, judging from the fact that more than half of the 19
sites had been named as the objects of cyberattacks on the message
boards of Chinese hacking groups or on major Chinese chat sites. The Tokyo Institute of Technology said the website of the
university's Center for the Study of World Civilization have come under
attack, causing personal data on 1,068 people who had taken part in the
center's events to be leaked. The data included the participants' names
and telephone numbers.
Sankei:
- Customs
departments in China's Beijing, Shanghai, Tianjin, Qingdao and
Guangzhou have tightened inspections of materials and products imported
by Japanese cos.
China Securities Journal:
- China
May Lower Listed Banks' Dividend Payout Ratio. China may lower the
dividend payout ratio of listed banks to help them retail more profits
for use as capital, citing people familiar with the matter.
- China
Shouldn't Further Loosen Monetary Policy. Consumer prices are currently
more sensitive to demand expansion and loosening of monetary policy may
have lesser impact on growth while at the same time, fueling inflation,
China Securities Journal publishes in its front-page commentary written
by Ren Xiao, a reporter at the newspaper. China is unlikely to cut interest rates in the short-term.
Netease:
- China
to Expand Property Tax Trials. Details to deepen property taxes may be
announced by the end of this year or the beginning of next year, citing
Cong Ming, an official from the State Administration of Taxation.
- China
May Trial Taxing Public on Oil Product Use. China may trial the
collection of oil product consumption tax at petrol stations to help
shift the burden from collecting the tax from corporations to collecting
from the public, citing Cong Ming, an official at the State
Administration of Taxation.
Economic Information Daily:
- Some
Chinese Cities Are Unveiling Large-Scale Land Sales. Some Chinese
cities, including Hangzhou, Nanjing, Wuhan and Wenzhou are introducing
large-scale land sales, citing information from local authorities. More
land sales may break the public's expectations for rising home prices
and exacerbate pressure on the property market rebound.
Evening Recommendations
Jefferies:
- Rated (EMC) Buy, target $33.
Raymond James:
- Rated (MCO) Outperform, target $52..
Night Trading
- Asian equity indices are unch. to +.75% on average.
- Asia Ex-Japan Investment Grade CDS Index 134.0 +3.0 basis points.
- Asia Pacific Sovereign CDS Index 110.0 -2.5 basis points.
- FTSE-100 futures +.39%.
- S&P 500 futures +.30%.
- NASDAQ 100 futures +.29%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
Upcoming Splits
Other Potential Market Movers
- The Fed's Lockhart speaking, Spanish bank audit results and the (PFG) investor day could also impact trading today.
BOTTOM LINE: Asian
indices are mostly higher, boosted by industrial and consumer staple
shares in the region. I expect US stocks to open modestly higher
and to weaken into the afternoon, finishing mixed. The Portfolio is
50% net long heading into the day.
