Good morning New York,
FT ALPHAVILLE
Fighting the taper in China: David notes China is leaking and it's probably all America's fault. This is because China is most exposed to the quantity effect of liquidity withdrawal, meaning the country may be the most exposed to QE tapering.
A charted history of robot evolution, and some thoughts on jobs: The robot threat is mounting. But Cardiff notes that while the anecdotal evidence that robotics will soon have a persistent, deleterious impact on even skilled middle-class jobs is both powerfully suggestive and plausible, if the impact is a surge in inequality, the new tech rentiers will presumably be looking around to spend their surplus on something, and that something might be the goods and services of an industry that will hire the newly jobless to produce them.
Software eats the world, charges for privilege: Cardiff cites Charlie Warzel on the idea that the internet's free trial period may be coming to an end. Anecdotal evidence for this comes in the fact that newspapers are increasingly moving towards digital pay plans and that readers are increasingly tolerant of paywalls.
NEWS
Chinese premier Li Keqiang said growth below 7% wouldn't be tolerated, Chinese news outlets reported. (Bloomberg)
Japan's government upgraded its view on the economy, saying deflation was easing and growth was picking up due to its policies of aggressive monetary stimulus and generous state spending. (Reuters)
Help to Buy scheme sparks £1.3bn in house sales: Nearly 7,000 new-build homes have been reserved through the scheme since its launch in April. Assuming an average purchase price of £187,543 indicates the scheme has subsidised an estimated £1.3bn-worth of house purchases in that time, and commits the government to an estimated £260m in lending, according to calculations by the FT. George Osborne today meets lenders and house builders to flesh out how the scheme will work when it comes into force in January. (Financial Times)(Reuters)
Netflix shares fell sharply on Monday in after-market trade on investor disappointment about Q3 subscriber growth outlook, as the company reported that Q2 revenues were up from $889m to $1.07bn, with net income rising from $6.1m to $29.5m. The shares fell 6.6% but are up 230% in the past year. (Financial Times)
Foreign capital is again leaving China: The net outflow of foreign capital in June was the first since November. The PBoC and financial institutions sold a net Rmb41.2bn ($6.71bn) worth of foreign currency in June compared with net purchases of Rmb66.86 in May, according to WSJ calculations based on PBoC data. (Wall Street Journal)
KPN agrees sale of German business: The Dutch telecoms group, has agreed the sale of its German business to a subsidiary of Telefónica of Spain for €5bn in cash plus a stake in the enlarged group worth €3.1bn. (Financial Times)
CFTC probe of banks' metal storage activities looks likely: The CFTC has sent letters to metals warehouse owners demanding they preserve records, people familiar with the matter said, in a sign of a looming regulatory probe of their storage practices. Today, a Senate committee will open hearings on how Wall Street's physical commodities activities.(Financial Times)(New York Times)
Portugal's prime minister says he's determined to restore investor confidence in the troubled economy and to keep the country's controversial €78bn bailout programme on track, as he sought to draw a line under weeks of political uncertainty. Bond yields fell to 6.29% after Pedro Passos Coelho's comments, but deep divisions remain over the pace of unpopular budget cuts. (Financial Times)(Wall Street Journal)
SAC Capital told its staff that evidence shows Steve Cohen "did not even read" the email at the heart of allegations he failed to take proper steps to prevent insider trading at his hedge-fund firm. A white paper prepared by Cohen's lawyers responded to the SEC's civil action against him. (Wall Street Journal)
South Korea is launching a spot gold market in Seoul in an effort to eliminate tax avoidance in illegal gold trading. (Bloomberg)
Markets: Global stocks were eyeing five-year highs as risk asset bulls dominated another trading session. Fresh momentum was being generated by hopes for the Chinese economy, after state media reported that Premier Li Keqiang said that Beijing would strive to keep expansion above 7 per cent. Meanwhile, optimism continued to be underpinned by the perception of "Goldilocks" conditions in the US – where growth was deemed sufficient to buttress corporate profits but not so hot that it unduly hastened a tightening of monetary policy. "Markets have gradually digested the message that Fed tapering need not equate to an earlier onset of policy rate hikes and see this as broadly priced in by now," said analysts at Barclays. "We expect markets to give more weight to fundamental issues in the near term." The FTSE All-World equity index was up 0.3 per cent to 248.3, less than a couple of points below the cyclical closing high touched in May – the best level since the summer of 2008 – as the FTSE Eurofirst 300 added 0.4 per cent and after the Asia-Pacific region rose 1.1 per cent.
