another site
Today’s breakfast brought to you by: • 5 egg whites
• 1/2 scoop Truetin Cinnabun
• 1/2 banana
• 1/4 c oat bran
• vanilla
• hazelnut drops
• splash of almond milk
• topped with chocolate PB28 mixed with sugar free syrup
1
0
from @hooper_fit – WEBSTA http://ift.tt/1qxtiBr
via IFTTT
For the third month in a row, personal spending missed Bloomberg’s median expectation. However, as incomes rose 0.4% in June so spending also rose 0.4% – its best MoM rise in 3 months. The biggest MoM rise was in energy goods and services (+1.67% MoM – the biggest rise this year) – hardly the things sustainable recoveries are built on.
via Zero Hedge http://ift.tt/1tCgS06 Tyler Durden
If today’s market desperately needed some bad news, it got it moments ago when the July payrolls printed at 209K, below the 230K expected, and far below the June upward revised 298K (was 288K). But is the momentum slowing enough to force the Fed to push QE back? The unemployment rate rose modestly from 6.1% to 6.2%, beating expectations of an unchanged print driven by a decline in the people out of the labor force from 92.1 million to 92.0 million while the labor force participation rate rose by a tiny 0.1% to 62.9%
The labor force charts: the people “out of it” declined by 119K to 92,001, while the LFP rate rose modestly from 62.8% to 62.9%. Fewer people retiring?
And perhaps the most imporant chart: average hourly earnings, rose just 2.0%, following a downwar revision to June’s 2.0% to 1.9%, below the 2.2% expected. So much for those soaring labor costs.
via Zero Hedge http://ift.tt/1naHugu Tyler Durden
While consensus is 230k, the whisper number for non-farm payrolls has ticked up to 270k from London’s earlier 260k according to Bloomberg’s Richard Breslow.
Here’s how the numbers may play out…
245k and equities cut losses and everyone heads to Fire Island on an early train
200k and USD hit, equities fly and everyone heads to Quogue on an earlier flight
300k and bonds get smoked, USD flies, EM vomits, equities utterly confused and floor clerks arrive disheveled and sweaty to a cold dinner in Bensonhurst
Goldilocks or Anti-Goldilocks?
via Zero Hedge http://ift.tt/XofTmY Tyler Durden
In an unscheduled release moments ago the Fed’s Plosser just explained why he was the sole dissenter with the FOMC’s announcement. Here is the punchline: “I cast a dissenting vote because I opposed retaining the statement language that reads “…it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends.” I viewed such language as an inappropriate characterization of the future path of policy and so may limit the Committee’s flexibility going forward.”… “In addition, the economy today is very close to achieving the central tendency outcomes for 2015 reported in the December 2013 Summary of Economic Projections. Specifically, the central tendency projection for unemployment at the end of 2015 was 5.8 to 6.1 percent, and that for inflation was between 1.5 and 2.0 percent. From this perspective, we are nearly 18 months ahead of where the Committee thought we would be just seven months ago.“
He concludes: “the Committee’s statement does not appear to reflect what was once thought to be appropriate policy based on the behavior of unemployment and inflation.”
Poor Plosser still doesn’t get that it was never about the economy but pushing the S&P to the highest possible level before letting it all go.
From the Philly Fed:
Philadelphia Fed President Plosser Gives Statement on Dissenting Vote at the Federal Open Market Committee meeting of July 29–30, 2014
The economy has improved significantly this year, and inflation and unemployment have moved much closer to the FOMC’s longer-term goals. However, neither the pace of the reduction in asset purchases nor its end date has been modified, nor has the time-dependent language associated with the projected liftoff of the federal funds rate been adjusted. Thus, I cast a dissenting vote because I opposed retaining the statement language that reads “…it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends.” I viewed such language as an inappropriate characterization of the future path of policy and so may limit the Committee’s flexibility going forward.
In December 2013, the FOMC began to taper its asset purchase program, indicating that it was not on a preset course, but that the pace depended on the performance of the economy. The Committee also indicated it was likely that it would be appropriate to maintain the current range of the federal funds rate well past the time that the unemployment rate declines below 6.5 percent. At the time this decision was made, the unemployment rate was 7.0 percent, and year-over-year PCE inflation was 1.0 percent. With the recovery appearing somewhat unsteady and with the possibility of inflation falling further, caution and patience seemed prudent.
My own assessment at that time was that the economy would gradually recover. I projected that by the fourth quarter of 2014 the unemployment rate would decline to 6.2 percent, and year-over-year PCE inflation would rise to 1.8 percent. Consistent with that view of gradual economic recovery, I believed that an appropriate monetary policy would require the funds rate to rise to 1.25 percent by year-end 2014. Moreover, I anticipated continued progress toward economic health in 2015, with the unemployment rate reaching 5.8 percent and inflation running at 2.0 percent. Consistent with these outcomes, my associated funds rate was in the neighborhood of 3.25 percent at the end of 2015.
My views on the appropriate funds rate settings were — and continue to be — informed by Taylor-type monetary policy rules that depict the past behavior of monetary policy, which I find useful for benchmarking my policy prescriptions. With the economy having already reached my year-end 2014 forecast for inflation and unemployment, and appearing to be well on its way toward achieving my 2015 forecasts approximately a year ahead of schedule, the funds rate setting remains well behind what I consider to be appropriate given our goals.
In addition, the economy today is very close to achieving the central tendency outcomes for 2015 reported in the December 2013 Summary of Economic Projections. Specifically, the central tendency projection for unemployment at the end of 2015 was 5.8 to 6.1 percent, and that for inflation was between 1.5 and 2.0 percent. From this perspective, we are nearly 18 months ahead of where the Committee thought we would be just seven months ago. Consistent with these projections for 2015, 14 of 17 participants indicated that the federal funds rate should be above zero, with a median value of 75 basis points. Yet the Committee’s statement does not appear to reflect what was once thought to be appropriate policy based on the behavior of unemployment and inflation.
Thus, given the clear progress we have made toward achieving our long-term goals over the past year, and the progress and momentum that appears to be building in the economy and in the broader labor market, I no longer believe that the forward guidance language in the statement is appropriate or warranted.
via Zero Hedge http://ift.tt/XofSPN Tyler Durden
In an unscheduled release moments ago the Fed’s Plosser just explained why he was the sole dissenter with the FOMC’s announcement. Here is the punchline: “I cast a dissenting vote because I opposed retaining the statement language that reads “…it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends.” I viewed such language as an inappropriate characterization of the future path of policy and so may limit the Committee’s flexibility going forward.”… “In addition, the economy today is very close to achieving the central tendency outcomes for 2015 reported in the December 2013 Summary of Economic Projections. Specifically, the central tendency projection for unemployment at the end of 2015 was 5.8 to 6.1 percent, and that for inflation was between 1.5 and 2.0 percent. From this perspective, we are nearly 18 months ahead of where the Committee thought we would be just seven months ago.“
He concludes: “the Committee’s statement does not appear to reflect what was once thought to be appropriate policy based on the behavior of unemployment and inflation.”
Poor Plosser still doesn’t get that it was never about the economy but pushing the S&P to the highest possible level before letting it all go.
From the Philly Fed:
Philadelphia Fed President Plosser Gives Statement on Dissenting Vote at the Federal Open Market Committee meeting of July 29–30, 2014
The economy has improved significantly this year, and inflation and unemployment have moved much closer to the FOMC’s longer-term goals. However, neither the pace of the reduction in asset purchases nor its end date has been modified, nor has the time-dependent language associated with the projected liftoff of the federal funds rate been adjusted. Thus, I cast a dissenting vote because I opposed retaining the statement language that reads “…it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends.” I viewed such language as an inappropriate characterization of the future path of policy and so may limit the Committee’s flexibility going forward.
In December 2013, the FOMC began to taper its asset purchase program, indicating that it was not on a preset course, but that the pace depended on the performance of the economy. The Committee also indicated it was likely that it would be appropriate to maintain the current range of the federal funds rate well past the time that the unemployment rate declines below 6.5 percent. At the time this decision was made, the unemployment rate was 7.0 percent, and year-over-year PCE inflation was 1.0 percent. With the recovery appearing somewhat unsteady and with the possibility of inflation falling further, caution and patience seemed prudent.
My own assessment at that time was that the economy would gradually recover. I projected that by the fourth quarter of 2014 the unemployment rate would decline to 6.2 percent, and year-over-year PCE inflation would rise to 1.8 percent. Consistent with that view of gradual economic recovery, I believed that an appropriate monetary policy would require the funds rate to rise to 1.25 percent by year-end 2014. Moreover, I anticipated continued progress toward economic health in 2015, with the unemployment rate reaching 5.8 percent and inflation running at 2.0 percent. Consistent with these outcomes, my associated funds rate was in the neighborhood of 3.25 percent at the end of 2015.
My views on the appropriate funds rate settings were — and continue to be — informed by Taylor-type monetary policy rules that depict the past behavior of monetary policy, which I find useful for benchmarking my policy prescriptions. With the economy having already reached my year-end 2014 forecast for inflation and unemployment, and appearing to be well on its way toward achieving my 2015 forecasts approximately a year ahead of schedule, the funds rate setting remains well behind what I consider to be appropriate given our goals.
In addition, the economy today is very close to achieving the central tendency outcomes for 2015 reported in the December 2013 Summary of Economic Projections. Specifically, the central tendency projection for unemployment at the end of 2015 was 5.8 to 6.1 percent, and that for inflation was between 1.5 and 2.0 percent. From this perspective, we are nearly 18 months ahead of where the Committee thought we would be just seven months ago. Consistent with these projections for 2015, 14 of 17 participants indicated that the federal funds rate should be above zero, with a median value of 75 basis points. Yet the Committee’s statement does not appear to reflect what was once thought to be appropriate policy based on the behavior of unemployment and inflation.
Thus, given the clear progress we have made toward achieving our long-term goals over the past year, and the progress and momentum that appears to be building in the economy and in the broader labor market, I no longer believe that the forward guidance language in the statement is appropriate or warranted.
via Zero Hedge http://ift.tt/XofSPN Tyler Durden
Up until the last day of July, everything was going great: stocks were solidly up for the month, the DJIA was on the verge of 17,000, and the wealth effect was flourishing, if not the economy. Then yesterday happened, and everything changed: not only did the S&P turn red for the month, but the DJIA slid to red for 2014. So what is the best performing asset class in July? With the PBOC now openly unleashing QE in its economy, no surprise that it was the Shanghai Composite, which returned over 8%, if virtually nothing since 2009. However, don’t expect this to last: for China real estate is orders of magnitude more important than the stock market to boost the wealth effect.
As for the best returning assets class in 2014 YTD: don’t laugh – it’s still Spain and Italy. Expect the day of reckoning for Europe’s periphery to be fast, unexpected and very brutal.
From Deutsche Bank:
The last 48 hours have made a big difference to returns in July with a sell-off in rates, credit, equities and commodities changing the month dramatically over this period and leaving a few more markets down for 2014 now.
DM equities were tipped into negative territory for July while EM stocks had enough outperformance through the rest of the month to largely stay in positive territory despite the weakness in Russian equity markets. China was the key outperformer with the Shanghai Composite (+8.8%) posting its best monthly total return performance since December 2012. The rally in China also benefitted Hong Kong equities with the Hang Seng (+7.3%) recording its biggest monthly gain in two and a half years. Back to the DM world, the Stoxx 600 and S&P 500 were -1.6% and -1.4% respectively – with the former probably negative impacted by the BES-driven weakness in Portugal (-10.5%). A poor month for the DAX (-4.3%) and CAC (-4.0%) has pushed them both into negative total return territory for the year at -1.5% and -1.2%, respectively. The FTSE was down -0.1% on the month keeping it in slightly negative territory for the year (-0.3%) although dividends have helped YTD total returns stay in the green. The DOW is also down YTD now.
Moving on to Fixed Income, it was a mixed month for core rates with Europe outperforming Treasuries. This is perhaps not surprising with core European rates flirting around their all time lows whilst USTs suffered a dip following the strong GDP print just a day before month end thus giving up about half of all of the month’s earlier strong gains. Turning to Credit, it was modest month for IG total returns but nevertheless IG still did better than HY with US HY (-1.7%) underperforming on the ETF outflow story. Staying in fixed income but moving to EM, the overall benchmark was down 0.6% with strength in Asia (+1.3%) neutralising the weakness in Latam (-0.7%) and EEMEA (-1.3%).
The commodity complex had a very weak month with Corn, Wheat, and Brent all down -16%, -6%, and -5% respectively. Incidentally this also came during a fairly encouraging month for the Dollar bulls with the Greenback appreciating about 2% against a basket of major currencies.
To sum up the year to date performance so far, the European peripheral complex is still the key winner with the IBEX (+12%), FTSEMIB (+11%), Spanish Bonds (+10%) and BTPs (+10%) topping our performance ranking chart and returning about twice as much as the S&P 500 (+6%). EM equities have also done surprisingly well this year with a +8% gain to date. The latest July performance in China has also bumped both the Shanghai Composite (+7%) and the Hang Seng (+9%) into our top 10 list. Core DM rates are still in positive territory, though not surprisingly with Bunds (+6%) outpacing Treasuries (+3%). On the other end of the spectrum, the Nikkei (-3%) remains a key laggard while Russia (-5%) is feeling the heat from the ongoing geopolitical volatility. Generally commodities are amongst the worst performers this year largely led by softs.
Visually, the month of July
And YTD:
via Zero Hedge http://ift.tt/1pLCMaG Tyler Durden
Overnight Media Digest
WSJ
* Israel and Hamas agreed to a three-day cease fire in the Gaza conflict with the hope of forging a more lasting peace. (http://on.wsj.com/1puLbSA)
* Central Intelligence Agency officers snooped on computers used by a Senate committee investigating the CIA’s interrogation program, an internal agency report has concluded; a critical finding in a bitter standoff between two government branches. (http://on.wsj.com/Xl5zMt)
* A tanker of oil from Texas has set sail for South Korea, the first unrestricted sale of unrefined American oil since the 1970s. How that $40-million shipment avoided the nearly four-decade ban on exporting U.S. crude is a tale involving two determined energy companies, loophole-seeking lawyers, and an unprecedented boom in American drilling that could create a glut of ultra-light oil. (http://on.wsj.com/1pJ3roq)
* The Sprint Corp and T-Mobile US Inc deal that has been in talks for more than six months was lurched on Thursday when France’s Iliad SA entered with a buyout offer for T-Mobile, causing a clash between the telecommunications industry’s titans. (http://on.wsj.com/1o8WRKT)
* The calm that pervaded financial markets for months evaporated as stocks tumbled in Europe and the United States, with the Dow industrials erasing its gains for the year after suffering its worst one-day loss since February. (http://on.wsj.com/1ob6AR0)
* Argentina’s default on $29 billion in debt brought a stock market selloff and finger pointing by the Argentine government and creditors. But investors held out hope that a resolution to the crisis could be reached. (http://on.wsj.com/1lhyc2p)
* Investors retreated from risky corporate debt on Thursday, sending prices tumbling and deepening fears of an end to a long rally in U.S. junk bonds. This decline reflects fresh signs that the growth in the United States is picking up in earnest, a trend that many global bond managers expect to eventually prompt a Federal Reserve interest rate increase that would likely squeeze bond returns. (http://on.wsj.com/1s8ssgH)
* The energy boom in the United States is reflecting a noticed side effect: American oil and gas companies are paying less in federal income taxes. Energy companies are spending billions of dollars a year to drill in shale formations across the country, sending the nation’s daily oil output up by almost 50 percent in just the past few years. All that spending has made drillers take advantage of incentives in the tax code for drilling and capital expenditures, deferring billions of dollars in income tax. (http://on.wsj.com/1lgFjZa)
* Alibaba Group Holding Ltd <IPO-BABA.N> is backing another California startup, announcing a $120-million investment in gaming company Kabam Inc and a partnership to publish and distribute its free-to-play mobile games. (http://on.wsj.com/1pKyUqp)
* Sony Corp sharply cut its forecast for smartphone sales, dealing a blow to the Japanese electronics maker’s hopes for recovery. (http://on.wsj.com/1n98jl4)
* The Food and Drug Administration on Thursday laid out a proposed new regulatory plan to oversee potentially thousands of laboratory developed medical tests that the agency contends can be prone to errors. (http://on.wsj.com/1tAJ2IU)
FT
French telecommunications company Iliad has made a surprise offer for control of T-Mobile U.S. that values the third-largest U.S. carrier at $29.5 billion.
Companies across the eurozone bloc warned that the crisis in Russia and Ukraine is already impacting business, as the European Union’s toughest sanctions against Russia since the end of the cold war sent ripples through the continent’s boardrooms.
Tesla Motors Chief Executive Elon Musk unveiled plans for a massive expansion in China, with as many as a third of the U.S. electric carmaker’s global network of service centres located in the country by the end of 2015.
Corporate networking site LinkedIn beat analyst expectations in its second quarter, sending its shares up as much as 12 percent in after-hours trading in New York.
French telecoms-equipment maker Alcatel Lucent intends to float part of its submarine-cables division as it aims to complete 1 billion euros ($1.34 billion) of asset sales by the end of next year.
NYT
* Kabam, a video game start-up, said on Thursday that it has received a $120 million investment from Alibaba Group Holding Ltd <IPO-BABA.N>. The new round gives Alibaba a board seat and what is likely a significant stake in Kabam, which said it is now worth more than $1 billion. (http://nyti.ms/1u5mfCj)
* Tesla Motors Inc announced on Thursday that it had an agreement with Panasonic Corp to build a large-scale battery plant in the United States. The planned factory will produce batteries for Tesla’s all-electric vehicles, as well as modules for the stationary storage market. The company said it estimated that the plant and its associated supplier complex, which it is calling the Gigafactory, would employ 6,500 people by 2020. (http://nyti.ms/1puMaSP)
* Federal authorities are sounding alarms about a wide range of fraudulent schemes involving a popular prepaid money card product. Thousands of consumers have been lured into sending money through the card, called MoneyPak. For online fraudsters, the reusable green-and-white paper card that can be used to quickly reload, or transfer, hundreds of dollars in cash onto another prepaid card is often the money conduit of choice.(http://nyti.ms/1xHXNHm)
* In February, General Motors Co hit a milestone of sorts when its sales incentives, as tracked by the research firm Edmunds.com, dropped below those of its domestic rivals. But since its safety crisis began to mount in the spring, the automaker has piled on cash incentives and cheap lease deals to invigorate sales of its passenger cars, particularly the smaller models, joining what some of its competitors have been doing as well. (http://nyti.ms/1rULfy8)
* Target Corp named Brian Cornell as its new chief executive on Thursday, bringing in an outsider to lead the company for the first time as it looked to right itself. Cornell was most recently the chief executive of PepsiCo’s Americas Foods unit. (http://nyti.ms/1tAELVM)
* Lenders to Puerto Rico’s electric power authority are giving the beleaguered utility another two weeks before it has to make past-due payments on its lines of credit. PREPA owes money on two main credit lines – a roughly $250 million line from Citigroup Inc and a $550 million line from a syndicate of banks. (http://nyti.ms/1kaduGz)
* Iliad SA, France’s fourth-biggest mobile company, said on Thursday that it had made a $15-billion bid for a majority stake in T-Mobile US Inc, a company that is roughly 60 percent bigger than it in market value. Under the terms of the deal, Iliad said it would offer $15 billion for a 56.6 percent stake in T-Mobile US. The French company said it valued the remaining stake in T-Mobile US at $40.50 a share, based on unspecific cost savings totaling $10 billion to be created from the deal. (http://nyti.ms/UECYjx)
* Shares in Synchrony Financial, the North American retail finance unit being spun off by General Electric Co , opened largely unchanged on Thursday after it raised about $2.9 billion in its initial public offering. Synchrony Financial, which handles private-label credit cards for major retailers like Gap Inc and Wal-Mart Stores Inc, ranks as the largest IPO this year in terms of money raised. (http://nyti.ms/1obvsrU)
* David Johnson, a former executive at the mortgage finance giant Fannie Mae, is joining FTI Consulting Inc as its chief financial officer. He will take over the role on Aug.25. (http://nyti.ms/1s9rNfJ)
* Four years after federal regulators passed new rules aimed at curbing overdraft fees, the Consumer Financial Protection Bureau is still finding problems with the high fees that banks charge customers when they overdraw their accounts. In a new report released, the agency said overdraft fees continue to pile up for many bank customers, particularly among young people. (http://nyti.ms/WQzA6R)
* The Food and Drug Administration announced on Thursday that it would start regulating medical laboratory testing, saying that tests used to make important treatment decisions must be vetted and validated before they go into use. (http://nyti.ms/1ADV4TH)
* Microsoft Corp has suffered a setback in its efforts to block United States federal prosecutors from seizing a Microsoft customer’s data that is stored overseas. Judge Loretta Preska of the United States District Court for the Southern District of New York on Thursday upheld a magistrate judge’s ruling that the company must turn over the customer’s emails held in a Microsoft data center in Ireland. Microsoft plans to appeal the ruling. (http://nyti.ms/UEEJNO)
Canada
THE GLOBE AND MAIL
* China’s ambassador to Canada, Luo Zhaohui, has said if Ottawa has evidence that Beijing is responsible for a cyberattack on a top Canadian research body, it should turn it over to the Chinese government.
The Canadian government this week said computers at the National Research Council were breached, and pointed to “a highly sophisticated Chinese state-sponsored actor.” (http://bit.ly/1og6pzo)
* The Canadian government has denied a request from freedom-of-expression charity, pen Canada, for auditors’ guidelines on political activity, saying revealing how the Canada Revenue Agency conducts audits could hamper their work. (http://bit.ly/1s9bGOp)
In the business section:
* Wind Mobile SA’s foreign owner has put a C$300 million price tag on the startup wireless carrier, but with a number of players circling the asset, the ultimate outcome may depend on Canada’s efforts to encourage the consolidation of new entrants in the cellular industry. Quebecor Inc said Thursday it is still in talks over financial and strategic arrangements that could culminate in it playing a role in a consolidated fourth national wireless carrier. (http://bit.ly/1qwym9e)
NATIONAL POST
* Prime Minister Stephen Harper is reiterating his government’s hard line against Hamas, saying it is solely responsible for the death and destruction in Gaza. Harper said while no one likes to see the suffering and loss that’s occurring in the Middle East, Hamas is to blame. (http://bit.ly/1xJhpuM)
* Despite attempts by Justin Trudeau-led federal Liberals to win back ethnic voters, the Conservatives continue to raise more money from Chinese-Canadians than any other party, new fundraising data suggest. (http://bit.ly/1uO008c)
FINANCIAL POST
* Wal-Mart Stores Inc’s Canadian business’s new Chief Executive Dirk Van den Berghe’s hiring could be the surest sign yet that the biggest retailer in the world wants to get smaller in Canada. Finding space for its stores in the urban markets of Canada’s major cities has been a stumbling block for the country’s largest mass merchant, which has been rapidly expanding its grocery business to all of its big-box stores across Canada. (http://bit.ly/1pLopDj)
* Quebecor Inc CEO Pierre Dion reiterated his demand that Canada bring in new rules to force down roaming rates before his company consider becoming Canada’s fourth wireless carrier, but he also cautioned that even if Quebecor gets what it wants, it might not take the challenge. (http://bit.ly/1m4qkS9)
Britain
The Times
SHELL CITES ‘ACT OF GOD’ AND BREAKS OFF DRILLING IN STRIFE-TORN EAST UKRAINE
Royal Dutch Shell has mothballed a multibillion-dollar shale gas joint venture in eastern Ukraine amid the escalating conflict with Russia. (http://thetim.es/1qukexc)
WATCHDOG’S PROFIT CLAIMS INFLATED, SAYS CENTRICA
Centrica, the owner of British Gas, has attacked the energy industry regulator for making “false” accusations of profiteering in an escalating rift over the size of household bills for electricity and gas. (http://thetim.es/1kpiesp)
BALFOUR ACCUSES CARILLION AS MERGER COLLAPSES OVER U.S. SALE
Balfour Beatty has ended discussions for a proposed 3 billion pound ($5.07 billion) merger with Carillion and angrily accused its construction industry rival of scuppering the proposed tie-up. (http://thetim.es/1oaqZWk)
The Guardian
SCANDALS DENT PROFITS AT LLOYDS AS PPI BILL RISES 600 MLN STG
Profits at Lloyds Banking Group more than halved in the first six months of the year as its bill for the payment protection insurance scandal increased by 600 million pounds and it paid out penalties for rigging interest rates. (http://bit.ly/1lfitRF)
PADDY POWER ADMITS PERSONAL DETAILS OF 649,000 CUSTOMERS WERE STOLEN IN 2010
Irish bookmaker Paddy Power has revealed its website was hacked in 2010 and personal details of more than 649,000 customers stolen. (http://bit.ly/1xHiWkY)
The Telegraph
SANTANDER: BANK CLAWBACK RULES THREATEN UK
The head of Santander UK, Britain’s fifth-largest high street bank, has said that regulations to introduce seven-year clawbacks on bankers’ bonuses could threaten London’s position as a leading financial centre. (http://bit.ly/1u5197e)
BT PROFITS BOOSTED BY FIBRE AND FOOTBALL
Strong demand for faster internet access helped BT deliver a 7 percent increase in profits for the first quarter, as the company also continued to strip costs out of its struggling IT services division. (http://bit.ly/1qOkr2Y)
Sky News
FORMER LIBOR BOSS QUITS TOP UK POST AT UBS
Mark Yallop, who played a key role in the administration of the scandal-hit Libor benchmark, will leave his role as UBS’s UK chief executive at the end of September. (http://bit.ly/1pIH5DH)
The Independent
ROBERT TCHENGUIZ GETS 1.5 MLN STG IN DAMAGES AFTER BOTCHED SFO INVESTIGATION
Britain’s Serious Fraud Office has agreed to pay property tycoon Robert Tchenguiz 1.5 million pounds in damages in one of the most embarrassing episodes to hit the agency following a botched investigation. (http://ind.pn/1qOj8kQ)
Fly On The Wall Pre-market Buzz
ECONOMIC REPORTS
Domestic economic reports scheduled for today include:
Nonfarm payrolls for July at 8:30–consensus 233K
Unemployment rate for July at 8:30–consensus 6.1%
Personal income for June at 8:30–consensus up 0.4%
Personal spending for June at 8:30–consensus up 0.4%
Markit final manufacturing PMI for July at 9:45–consensus 56.5
U. of Michigan consumer sentiment for July at 9:55–consensus 81.5
ANALYST RESEARCH
Upgrades
ArcBest (ARCB) upgraded to Outperform from Market Perform at Cowen
Barclays (BCS) upgraded to Hold from Sell at Berenberg
DeVry (DV) upgraded to Buy from Hold at Stifel
Expedia (EXPE) upgraded to Outperform from Market Perform at Raymond James
Invesco (IVZ) upgraded to Buy from Hold at Deutsche Bank
Iridium (IRDM) upgraded to Buy from Fair Value at CRT Capital
Marathon Petroleum (MPC) upgraded at Credit Suisse
Marathon Petroleum (MPC) upgraded to Outperform from Neutral at Credit Suisse
OceanFirst upgraded to Outperform from Market Perform at Keefe Bruyette
PG&E (PCG) upgraded to Outperform from Neutral at Credit Suisse
Pharmacyclics (PCYC) upgraded to Buy from Hold at WallachBeth
Progressive (PGR) upgraded to Market Perform from Underperform at Keefe Bruyette
Quanta Services (PWR) upgraded to Outperform from Neutral at RW Baird
Quintiles (Q) upgraded to Buy from Neutral at SunTrust
Red Hat (RHT) upgraded to Positive from Neutral at Susquehanna
Royal Dutch Shell (RDS.A) upgraded to Buy from Hold at Jefferies
Royal Dutch Shell (RDS.A) upgraded to Buy from Hold at Societe Generale
Selective Insurance (SIGI) upgraded to Outperform from Sector Perform at RBC Capital
Signature Bank (SBNY) upgraded to Strong Buy from Outperform at Raymond James
Strayer (STRA) upgraded to Neutral from Underweight at Piper Jaffray
Strayer (STRA) upgraded to Outperform from Market Perform at BMO Capital
Strayer (STRA) upgraded to Outperform from Market Perform at Wells Fargo
SunPower (SPWR) upgraded to Buy from Hold at Brean Capital
Synalloy (SYNL) upgraded to Buy from Neutral at Sterne Agee
Tableau (DATA) upgraded to Buy from Neutral at Mizuho
Downgrades
3D Systems (DDD) downgraded to Neutral from Buy at Citigroup
3D Systems (DDD) downgraded to Neutral from Overweight at Piper Jaffray
Ambev (ABEV) downgraded to Equal Weight from Overweight at Barclays
Bed Bath & Beyond (BBBY) downgraded to Perform from Outperform at Oppenheimer
Boyd Gaming (BYD) downgraded to Neutral from Outperform at Credit Suisse
Campus Crest (CCG) downgraded to Hold from Buy at MLV & Co.
Education Realty (EDR) downgraded to Neutral from Buy at UBS
EnPro (NPO) downgraded to Hold from Buy at KeyBanc
Generac (GNRC) downgraded to Hold from Buy at Canaccord
Hyatt Hotels (H) downgraded to Underperform from Neutral at Credit Suisse
Jive Software (JIVE) downgraded to Neutral from Outperform at Credit Suisse
Montpelier Re (MRH) downgraded to Hold from Buy at Deutsche Bank
Ocwen Financial (OCN) downgraded to Neutral from Buy at Citigroup
Randgold Resources (GOLD) downgraded to Neutral from Buy at UBS
Randgold Resources (GOLD) downgraded to Neutral from Buy at UBS
RenaissanceRe (RNR) downgraded to Equal Weight from Overweight at Morgan Stanley
ServiceSource (SREV) downgraded to Market Perform from Outperform at JMP Securities
Web.com (WWWW) downgraded to Neutral from Buy at SunTrust
Initiations
Arista Networks (ANET) initiated with a Neutral at Citigroup
Casella Waste (CWST) initiated with a Hold at Stifel
Finish Line (FINL) initiated with a Buy at Jefferies
PTC Therapeutics (PTCT) initiated with an Outperform at Oppenheimer
Progressive Waste (BIN) initiated with a Hold at Stifel
Prosensa (RNA) initiated with an Outperform at Oppenheimer
Sangamo (SGMO) initiated with an Overweight at JPMorgan
Sarepta (SRPT) initiated with an Outperform at Oppenheimer
COMPANY NEWS
Tesla (TSLA) announced that it broke ground on a possible Gigafactory location in Reno, Nevada. The company also forecast 100,000 unit run rate by end of 2015, split between Model S, X
Sanofi (SNY) raised its stake in Regeneron (REGN) to 22.5% from 21.6%
Web.com (WWWW) acquired U.K. online directory company Scoot
LinkedIn (LNKD) said cumulative members grew 32% in Q2 to 313M
Array BioPharma (ARRY) received orphan status for ovarian cancer treatment
Genesee & Wyoming (GWR) said North American business outlook favorable in 2014
EARNINGS
Companies that beat consensus earnings expectations last night and today include:
Tesla (TSLA), LinkedIn (LNKD), Expedia (EXPE), ImmunoGen (IMGN), Catamaran (CTRX), Calpine (CPN), Tesco (TESO), Genesee & Wyoming (GWR), Gentherm (THRM), Hilton (HLT), Church & Dwight (CHD), Arena Pharmaceuticals (ARNA), Oil States (OIS), Santander Chile (BSAC), Nevsun Resources (NSU), Empire District Electric (EDE), Territorial Bancorp (TBNK), Ashland (ASH), SurModics (SRDX), Nektar (NKTR), AXT, Inc. (AXTI), BioTelemetry (BEAT), Community Health (CYH), Autobytel (ABTL), Sierra Wireless (SWIR), Planar Systems (PLNR), MaxLinear (MXL), PMC-Sierra (PMCS), Fluidigm (FLDM), Microchip Technology (MCHP), DaVita (DVA), Arch Capital (ACGL), Jones Lang LaSalle (JLL), Jive Software (JIVE), Exelixis (EXEL), Imperva (IMPV), Electro Scientific (ESIO), Seattle Genetics (SGEN), Ellie Mae (ELLI), Standard Pacific (SPF), Brooks Automation (BRKS), ON Semiconductor (ONNN), Fluor (FLR), SunPower (SPWR), Rockwell Medical (RMTI), Omnicell (OMCL), Skullcandy (SKUL), GoPro (GPRO), Genpact (G), Quaker Chemical (KWR), DigitalGlobe (DGI), Tableau (DATA), Trecora Resources (TREC), Green Dot (GDOT), ARRIS (ARRS), Xencor (XNCR), GlycoMimetics (GLYC), Trulia (TRLA), Outerwall (OUTR), Edison International (EIX), Affymetrix (AFFX), DXP Enterprises (DXPE)
Companies that missed consensus earnings expectations include:
PBF Energy (PBF), Shenandoah (SHEN), Global Power Equipment (GLPW), A.V. Homes (AVHI), Cheniere Energy Partners LP (CQP), LRR Energy (LRE), Mercer (MERC), ARMOUR Residential (ARR), Cheniere Energy (LNG), GFI Group (GFIG), Idenix (IDIX), North Valley Banc (NOVB), Immersion (IMMR), Saul Centers (BFS), YRC Worldwide (YRCW), Alphatec (ATEC), ServiceSource (SREV), American Vanguard (AVD), Vocera (VCRA), Northeast Utilities (NU), Synaptics (SYNA), Bill Barrett (BBG), Computer Programs (CPSI), ResMed (RMD), STAAR Surgical (STAA), Live Nation (LYV), Westport (WPRT), HFF Inc. (HF), Boyd Gaming (BYD), Kodiak Oil & Gas (KOG), Bravo Brio Restaurant (BBRG), Matson (MATX), Pharmacyclics (PCYC), FleetCor (FLT), Cerus (CERS), Maxwell (MXWL), Einstein Noah (BAGL)
Companies that matched consensus earnings expectations include:
Exelis (XLS), Eldorado Gold (EGO), Cavco Industries (CVCO), Erie Indemnity (ERIE), SS&C Technologies (SSNC), Southwestern Energy (SWN), MRC Global (MRC), Natural Grocers (NGVC), Ikanos (IKAN), Callidus Software (CALD), Hansen Medical (HNSN), Web.com (WWWW), PerkinElmer (PKI), Addus HomeCare (ADUS), Epiq Systems (EPIQ), Western Union (WU)
NEWSPAPERS/WEBSITES
Analyst says Apple (AAPL) may ship just 3M iWatch units in 2014, Apple Insider reports
Sources say HSBC (HSBC), BNP Paribas (BNPQY) to finance Iliad’s (ILIAF) T-Mobile (TMUS) bid, Reuters reports
General Motors (GM) has offered many discounts in recent months, NY Times says
Alibaba (BABA) makes strategic investment in mobile game developer Kabam, WSJ reports
SeaWorld (SEAS), Southwest Air (LUV) terminate 26-year marketing relationship, WSJ reports
Ford’s (F) executive chairman says CEO transition “smooth,” Detroit News reports
SYNDICATE
Athlon Energy (ATHL) 12.5M share Secondary priced at $46.25
Bacterin (BONE) files to sell common stock and warrants
Baxano Surgical (BAXS) files $26.28M mixed securities shelf
FCB Financial (FCB) 7.52M share IPO priced at $22.00
Hill International (HIL) 8.5M share Secondary priced at $4.25
Loxo Oncology (LOXO) 5.262M share IPO priced at $13.00
Mobileye (MBLY) 35.6M share IPO priced at $25.00
RGS Energy (RGSE) files to sell 4.2M shares for selling stockholders
VTTI Energy (VTTI) 17.5M share IPO priced at $21.00
via Zero Hedge http://ift.tt/1pLCJM7 Tyler Durden
If yesterday’s selloff catalysts were largely obvious, if long overdue, in the form of the record collapse of Espirito Santo coupled with the Argentina default, German companies warning vocally about Russian exposure, the ongoing geopolitical escalations, and topped off by a labor costs rising and concerns this can accelerate a hiking cycle, overnight’s latest dump, which started in Europe and has carried over into US futures is less easily explained although yet another weak European PMI print across the board, with UK manufacturing growing at the slowest pace in a year in July as a cooling in new orders and output ended the first half’s “stellar growth spurt”, probably didn’t help.
This is how Goldman explained the latest manufacturing surveys out of Europe:
The Euro area final manufacturing PMI printed at 51.8 in July, 0.1pt below the Flash and the consensus estimate (Flash, Cons: 51.9). This implies a flat reading relative to the June print. The French component was revised up relative to the flash (+0.2pt), while the German component was revised down (-0.4pt). The July figure showed a loss of momentum in both Italy and Spain, with the manufacturing PMI easing 0.7pt in both countries (against a consensus expectation of around flat outcomes in July).
The Euro area aggregate Final manufacturing PMI printed at 51.8, 0.1pt below the July Flash owing to a considerable 0.4pt downward revision in Germany, outweighing a 0.2pt upward revision in France.
Relative to the June print, the Final July manufacturing PMI shows a 0.4pt increase in Germany (to 52.4) and a 0.4pt decline in France (to 47.8). The Italian manufacturing PMI fell by 0.7pt (to 51.9) against expectations of a stable reading (Cons: 52.5). The Italian PMI has eased 2pt since its recent peak in April, but otherwise remains close to or above the levels observed since the spring of 2011. Its Spanish counterpart also declined by 0.7pt (Cons: 54.5), but remains robust at a relatively high level of 53.9, close to its highest level since mid-2007. Developments outside the EMU4 were mixed: the Dutch PMI rose 1.2pt (to 53.5) while the Greek PMI declined 0.7pt (as in Spain/Italy) to 48.7. The Irish PMI ticked up 0.1pt and remains very solid at 55.4.
However, one can hardly blame largely unreliable “soft data” for what is rapidly becoming the biggest selloff in months and in reality what the market may be worried about is today’s payroll number, due out in 90 minutes, which could lead to big Treasury jitters if it comes above the 230K expected: in fact, today is one of those days when horrible news would surely be great news for the momentum algos. Perhaps more importantly than the jobs number, the Fed will increasingly be looking at the quality composition of jobs (full time vs part time), and whether wages are growing: watch hourly earnings today as the FOMC have shifted towards wages as one of their main criteria for when to become more hawkish. The market is expecting this to stay at 0.2% M/M but the year-on-year number is tipped to increase to +2.2% Y/Y (vs 2.0% previous).
Still, with futures down 0.6% at last check, it is worth noting that Treasurys are barely changed, as the great unrotation from stocks into bonds picks up and hence the great irony of any rate initiated sell off: should rates spike on growth/inflation concern, the concurrent equity selloff will once again push rates lower, and so on ad inf. Ain’t central planning grand?
Heading into the North American open, stocks in Europe are seen lower across the board, with peripheral indices underperforming where Banco Espirito Santo (-6.47%) remained in focus and revived investor angst over the stability of the banking system. The broad based sell off saw DAX index fall to within a touching distance of the low printed in mid-April at 9166.53. Of note, front page of the WSJ reads ‘hedge funds wager on a fall’ saying that many Wall Street money managers who anticipated the US housing bubble see more trouble on the horizon. (WSJ)
Turning to overnight markets, Asian equities are trading lower as a carryover of what we saw yesterday. However, all major bourses are off their respective opening lows and S&P500 futures are up 0.22%. The Asia and Australian iTraxx indices are off the wides of around +4-5bp. Given the sharpness of the EM selloff yesterday, Indonesian USD sovereign bonds have sold off 10bp but there has been some reported buying at the lows. The official Chinese manufacturing PMI was better than consensus estimates (51.7 vs 51.4) and this is also helping risk sentiment recover a bit through the session.
Today’s calendar starts with the final European PMIs this morning. But today’s tone will be largely set by how non-farm payrolls print. The data is due at 1:30pm London. At the same time as payrolls we’ll also get the June personal income/spending numbers which will be accompanied by the PCE data – the June PCE was included in Wednesday’s Q2 GDP data. Following on from all that, we have the non-manufacturing PMI. On the corporate reporting calendar, AXA, ArcelorMittal, SocGen and Chevron will be reporting earnings today.
Bulletin Headline Summary from Ransquawk and Bloomberg
US Event Calendar
FIXED INCOME
Bunds failed to benefit from lower stocks and traded lower, albeit marginally, as the support from month-end and also coupon/redemption related flow which was evident throughout the week waned. PO/GE 10y spread widened by almost 10bps as concerns over the beleaguered lender Banco Espirito Santo (-6.47%) raised fears that state aid may be needed to shore up capital base and in turn undermine country’s financial position.
EQUITIES
Heading into the North American open, stocks in Europe are seen lower across the board, with peripheral indices underperforming where Banco Espirito Santo (-6.47%) remained in focus and revived investor angst over the stability of the banking system. The broad based sell off saw DAX index fall to within a touching distance of the low printed in mid-April at 9166.53. Of note, front page of the WSJ reads ‘hedge funds wager on a fall’ saying that many Wall Street money managers who anticipated the US housing bubble see more trouble on the horizon. (WSJ)
FX
GBP/USD plunged below the 100DMA after UK Manufacturing PMI (55.4 vs. Exp. 57.2) fell to the lowest level in a year, lifting EUR/GBP to two week highs. EUR/USD has been somewhat supported, with option barrier interest ahead of 1.3300 and 1.3350 keeping a floor under the pair. USD/JPY remains higher despite a poor showing from the Nikkei 225 overnight, as higher treasury yields prompted favourable rate differential flows.
COMMODITIES
WTI and Brent crude futures have echoed the trend seen in stocks, with refinery outages in Kansas also limiting crude demand from Cushing, Oklahoma. Spot gold has languished close to recent lows, with the USD still remaining close to 10-month highs and keeping pressure on base metals alongside market expectations of a sooner-than-expected rate hike from the Federal Reserve.
* * *
Finally, DB’s Jim Reid completes the overnight recap
So today’s payroll number comes on the back of a turbulent couple of days for markets after a potent cocktail of a stronger US GDP print, higher yields, a slew of weaker earnings, the aftermath of the Argentinean default and more concerns over Banco Espirito Santo. DB’s Joe LaVorgna has been at the bullish end of the street for some time now and expects payrolls of 250k and a 0.1ppt drop to 6.0% in the unemployment rate today. The market is at 230k and 6.1% respectively. It’s fair to say that given the nervousness, a very strong number could create chaos in the rates, credit and EM markets and cause collateral damage in equities. Equally a more tame release could help markets regain some poise in what is usually the most illiquid month in a structurally illiquid market for many asset classes. It’s also worth watching the trend in hourly earnings today as the FOMC have shifted towards wages as one of their main criteria for when to become more hawkish. The market is expecting this to stay at 0.2% M/M but the year-on-year number is tipped to increase to +2.2% Y/Y (vs 2.0% previous).
The abovementioned cocktail of concerns resulted in the S&P500 (-2.00%) notching up its largest fall in three-months yesterday. It was ironic that US treasuries closed flat on the day, given that the sell-off originated from higher yields yesterday as markets began to question the path of Fed policy. Though yields were virtually unchanged at the close this masked a fair bit of intraday volatility. Indeed 10yr yields traded up as high as 2.61% (or +6bp on the day) following a stronger than expected Employment Cost Index print (0.7% QoQ vs 0.5% expected). From that point, we saw a sharp rally back to unchanged-on-the-day helped by the shock 10pt plunge in the Chicago PMI (52.6 vs 63.0 consensus). No doubt the continued sell down of equities & credit eventually prompted a flight to treasuries in the second half of the session. However, there was also market chatter of large duration extensions into month end, which may have driven the rally in rates back to unchanged. After a period of low volatility, 10yr UST yields have now traded in 16bp range over the last two and a half days. It was also interesting to see that despite the rally in treasuries and a 28% spike in VIX, this was not accompanied by a rise in gold prices which finished at the lows for the day (-1.06%).
Compared to the rates market, the price action in equities and credit was certainly more linear. The Dow (-1.88%) and S&P500 both closed at the lows, on volumes which were 30% higher than the 15-day moving average. Credit sold off across cash & index, and finished at the wides. The sharpest moves were in Xover (264.25bp, +17.625bp) and Eur financial senior (73.25bp, +5.375bp) – the latter driven by renewed concerns around BES and also some disappointing earnings from the likes of BNP. The CDX HY index added 20bp in spread terms to 344bp.
On the topic of HY, we’ve written for a while now that US HY fund flows are worth watching. The latest weekly flow data from EPFR has indicated that US HY funds suffered -$3.72bn of outflows in the week to July 30. This represents 1.2% of AUM and is the fourth consecutive weekly outflow bringing YTD cumulative flows to negative territory (-0.5% of AUM). During these four weeks, the weekly outflows have gotten progressively higher. There was -$421m in flows the week to July 9th, -$2.34bn in the week to July 16th, and -$3.67bn in the week to July 23rd. The latest weekly outflows of -$3.72bn obviously doesn’t capture what happened in the last 24 hours but if we use the largest US HY ETF (iShares iBoxx HY) as an imperfect proxy, that ETF recorded -$363m of outflows yesterday according to Bloomberg. This is the largest one day outflow since February 3rd – on that day the S&P500 fell 2.28%. The iShares iBoxx HY ETF is currently trading at a discount of 0.58% to its NAV which is the largest discount since August 2013. Across the Atlantic, it’s worth noting that Western European HY fund flows have held up well so far with the supportive backdrop of the ECB and still low inflation (we learnt yesterday that July core CPI was 0.8%, unchanged from June). However, Western Europe HY funds registered an outflow of -$297m (or -0.7% of AUM) in the week to July 30th, the largest weekly outflow since June 2013. We think the flows out of the HY should slow down soon unless rates continue to rise, but watch this space.
On a more micro level, there were a number of company-specific stories which exacerbated Thursday’s selloff. On a day where nerves were already heightened, any bad news was quickly and severely punished by markets. An example of this was Adidas which fell 15.4% after the company issued a large profit warning. Amongst its commentary, the sportswear company noted that it was being hit by the downturn in Russia and it would respond by accelerating the closure of its Russian stores because of increasing risks to consumer spending. Volkswagen (-0.37%) reported earnings yesterday and said that Russian sales had declined 8% yoy in 1H14 (FT). In what is likely going to concern policymakers, Adidas and Volkswagen join Siemens, Metro and Royal Dutch Shell in warning about the actual or potential impact of the Russia/Ukraine conflict. The EU’s announcement that it will add Russia’s Sberbank, VTB Group and OAO Gazprombank to its sanction list is unlikely to help. Another micro-level story was Banco Espirito Santo, which fell 42% after resuming trading post its 1H14 results. This together with BNP’s result yesterday set a negative tone for European financials (-1.6%) who underperformed the broader Stoxx600 (-1.3%).
Turning to overnight markets, Asian equities are trading lower as a carryover of what we saw yesterday. However, all major bourses are off their respective opening lows and S&P500 futures are up 0.22%. The Asia and Australian iTraxx indices are off the wides of around +4-5bp. Given the sharpness of the EM selloff yesterday, Indonesian USD sovereign bonds have sold off 10bp but there has been some reported buying at the lows. The official Chinese manufacturing PMI was better than consensus estimates (51.7 vs 51.4) and this is also helping risk sentiment recover a bit through the session.
Today’s calendar starts with the final European PMIs this morning. But today’s tone will be largely set by how non-farm payrolls print. The data is due at 1:30pm London. At the same time as payrolls we’ll also get the June personal income/spending numbers which will be accompanied by the PCE data – the June PCE was included in Wednesday’s Q2 GDP data. Following on from all that, we have the non-manufacturing PMI. On the corporate reporting calendar, AXA, ArcelorMittal, SocGen and Chevron will be reporting earnings today.
A busy end to a challenging week
via Zero Hedge http://ift.tt/1nRDOFp Tyler Durden