"Asian stocks fell for a second day as stronger growth in U.S. service industries fueled speculation the Federal Reserve will soon be able to reduce economic stimulus." The MSCI fell 0.5% and the Hang Seng was 1.5% lower, with HSBC tumbling 4.8% after yesterday's earnings miss. (Bloomberg)(FastFT)
Today: German factory orders; US June trade balance; JOLTS job openings; Chicago Fed's Evans speaks. Earnings: Credit Agricole, Dexia, Archer Daniels Midland, Porsche, Time Warner, Disney.
Crédit Agricole appeared to post Q2 results early - and they beat, apparently: "According to a presentation published on Monday ahead of the scheduled results announcement on Tuesday, Crédit Agricole made €1bn of pre-tax profit in the second quarter. Analysts has estimated about €778m, according to a poll from Bloomberg." Shares in the bank had risen 2.5% on Monday, but it was not clear when the presentation was published or whether investors had been able to trade on the information. Calls to executives in NY and Paris were not immediately returned. (Financial Times)
HSBC acknowledges US mortgage payout could cost $1.6bn, much higher than expected: "HSBC made the disclosure in a filing alongside its quarterly results and said discovery was "proceeding apace" in the case against it from the Federal Housing Finance Agency, the government regulator that oversees Fannie Mae and Freddie Mac." The amount is higher than forecast -- for example, Credit Suisse analysts had estimated the settlement costs at about $900m. "If applied to some of the defendants with the biggest exposure, such as Bank of America, JPMorgan Chase and Royal Bank of Scotland, their final bill would be more than $7bn each." (Financial Times)
Sony rejected Daniel Loeb's proposal to sell part of its entertainment business through a public offering, saying in a letter released today that holding full ownership of its movies and music divisions are fundamental to the company's future. Loeb had no immediate comment. (Wall Street Journal)
Australia's central bank cut benchmark rates 25bps to 2.5%, as broadly expected by economists and markets. (Statement)
"Private-equity firms are adding debt to companies they own to fund payouts to themselves at a record pace, as fears mount that the window for these deals will close if interest rates rise." (Wall Street Journal)
BP denied allegations it manipulated US natural gas prices in the aftermath of a 2008 hurricane. Regulator the Federal Energy Regulatory Commission made the accusations in an order recommending that the company pay $28.8m to resolve the case. (Financial Times)
Neiman Marcus hired banks to work on an initial public offering, said people familiar with the matter, after the luxury retailer spent the summer exploring a sale to a sovereign wealth fund. Credit Suisse, JP Morgan, and BAML will be lead underwriters, the sources said. (Wall Street Journal)
ON FT ALPHAVILLE:
The WaZos era.
The threats to that consensus European rebound.
HSBC's industrial-strength risk-weighting.
Is there really a global services sector surge?
Meanwhile, in manufacturing...
COMMENT AND CURIOS:
- Paul Myners and Manus Costello: Splitting RBS will waste time and money. (Financial Times)
- Erik Neilsen: Central bank forward guidance means either no new information, confusion, or a risk to credibility. (Financial Times)
- What all the bank analysts think about China's debt problem. (Bloomberg)
- Huzzah, US households are borrowing again. (Bloomberg)
- Dont' get too excited about European banks just yet. (Wall Street Journal)
- How TCI's challenge to EADS is putting Paris on the spot. (Financial Times)
- Everyone (who is rich) wants a NY luxury apartment. (Financial Times)
- Edward Chancellor: China, where white elephants go to die. (Financial Times)
OVERNIGHT MARKETS: DOWN
Asian markets
Nikkei 225 down -29.77 (-0.21%) at 14,228
Topix up +5.07 (+0.43%) at 1,190
Hang Seng down -344.81 (-1.55%) at 21,877
US markets
S&P 500 down -2.53 (-0.15%) at 1,707
DJIA down -46.23 (-0.30%) at 15,612
Nasdaq up +3.36 (+0.09%) at 3,693
European markets
Eurofirst 300 up +0.65 (+0.05%) at 1,225
FTSE100 down -28.29 (-0.43%) at 6,620
CAC 40 up +4.32 (+0.11%) at 4,050
Dax down -8.56 (-0.10%) at 8,398
Currencies
€/$ 1.33 (1.33)
$/¥ 98.10 (98.30)
£/$ 1.54 (1.54)
Commodities ($)
Brent Crude (ICE) down -0.30 at 108.40
Light Crude (Nymex) down -0.22 at 106.34
100 Oz Gold (Comex) down -8.70 at 1,294
Copper (Comex) unchanged 0.00 at 3.17
10-year government bond yields (%)
US 2.63%
UK 2.49%
Germany 1.69%
CDS (closing levels)
Markit iTraxx SovX Western Europe -1.04bps at 88.29bp
Markit iTraxx Europe -1.55bps at 94.47bp
Markit iTraxx Xover -5.46bps at 391.98bp
CDX IG returning soon.
Sources: FT, Bloomberg, Markit
