{"id":13361,"date":"2019-08-13T07:51:13","date_gmt":"2019-08-13T12:51:13","guid":{"rendered":"http:\/\/leavittbrothers.com\/blog\/?p=13361"},"modified":"2019-08-13T07:51:13","modified_gmt":"2019-08-13T12:51:13","slug":"before-the-open-aug-13-8","status":"publish","type":"post","link":"https:\/\/blog.leavittbrothers.com\/?p=13361","title":{"rendered":"Before the Open (Aug 13)"},"content":{"rendered":"

Good morning. Happy Tuesday. <\/span>
\n The Asian\/Pacific<\/strong> markets are down across-the-board. China, Japan, Hong Kong, South Korea, India, Taiwan, Malaysia, Thailand and the Philippines posted big losses. Europe, Africa and the Middle East<\/strong> are currently mostly down. The UK, Poland, France, Germany, Russia, Greece, South Africa, Finland, Switzerland, the Netherlands, Austria and Sweden are down the most. Saudi Arabia is up. Futures in the States<\/strong> point towards a down open for the cash market. <\/span>
\n—————
\n VIDEO: <\/strong>State of the Market<\/a>
\n—————<\/span>
\n The dollar is down slightly. Oil and copper are down. Gold and silver are up. Bonds are up. <\/span>
\n Stories\/News from Seeking Alpha…<\/span>
\n Investors are jumping into bonds like they’re a hot new stock or commodity, with the U.S. yield curve at its flattest level since 2007. The 30-year Treasury rate tumbled as much as 14 basis points on Monday to close in on its record-low of 2.0882% from July 2016, while the 10-year note fell 10 bps to 1.65%, and at one point was just 5 bps more than two-year notes. The pace of the move means 1.318% – the 10-year’s all-time low set three years ago – is at risk of being broken, unless the Fed maintains a hawkish stance or if Beijing unveils a stimulus package to counter trade war fallout (China’s 10-year sovereign yield is also hitting 2016 lows).<\/span>
\n Wave of selling to continue<\/span>
\n U.S. stock index futures are under pressure for yet another day as risk-off sentiment takes hold of the markets. Hong Kong riots are spiraling, the PBOC set the yuan weaker than the previous session and there are fears of another debt crisis in Argentina. The grim backdrop saw futures tied to the Dow Jones Industrial Average tick down 0.5% following the index’s almost 400-point drop on Monday, while S&P 500 futures declined 0.5% and the Nasdaq fell 0.7%, respectively.<\/span>
\n Ballooning budget deficit<\/span>
\n The U.S. budget gap widened further in July as federal spending outpaced revenue collection, bringing the deficit to $867B in the first ten months of the fiscal year, a 27% increase from the same period a year earlier. For the month, the biggest expenditure – Social Security – was $88B followed by Medicare and National Defense, each at $56B. Customs duties, which include tariffs from imports, jumped by 75% to $56.9B YTD from $32.5B a year earlier.<\/span>
\n ‘Abyss’<\/span>
\n Hong Kong is at risk of sliding into an “abyss,” according to leader Carrie Lam, who continued to sidestep questions at a news conference about the government\u2019s response to weeks of protests. As she spoke to reporters, the Hang Seng index fell by more than 1% to its lowest level since Jan. 4, and closed down 2.1% soon after. Despite an attempt to reopen the Hong Kong International Airport, one of the world’s busiest, all remaining flights were cancelled for a second day after protesters took over terminals.<\/span>
\n Yuan at the right level<\/span>
\n The yuan is at an appropriate level currently and its fluctuations will not necessarily cause disorderly capital flows, according to Zhu Jun, head of the PBOC’s international department. China is able to “navigate all scenarios” arising from Washington\u2019s recent move to label Beijing a currency manipulator, she added, and the renminbi will be a “strong currency” over the medium and long term. The central bank set the official midpoint reference rate for the yuan at 7.0326 per dollar on Tuesday, marking the fourth consecutive session above the key 7 level.<\/span>
\n Germany flirts with recession<\/span>
\n More negative economic stories are being reported across the globe as Germany’s outlook worsened for a fourth month after a string of disappointing figures raised recession risks. The latest… ZEW said its monthly survey showed economic sentiment among investors fell to -44.1 from -24.5 in July, its lowest level since December 2011. In recent weeks, major companies including Continental, Lufthansa (OTCQX:DLAKF) and Daimler (OTCPK:DDAIF) have all slashed their outlooks, warning that momentum might slip even further.<\/span>
\n Italian elections drive hits speed bump<\/span>
\n League leader Matteo Salvini will likely have to wait a week to push ahead with his play for power in Italy after the Senate failed to agree on a date for a confidence vote in the country\u2019s ruling populist coalition. Despite gloomy forecasts, more Italians think the economy is doing better than at any time in the past six years. Similar waiting game in Britain? The EU isn’t likely to shift its position on Brexit for at least a month in order to see how the game plays out in the U.K. parliament.<\/span>
\n Tumblr sold to WordPress owner<\/span>
\n Verizon Media (NYSE:VZ) is unloading its blogging site Tumblr for a nominal fee, to Automattic, the owner of publishing tool WordPress. While the exact purchase price was undisclosed, one source told Axios the deal price was “well below” $20M, while another put it under $10M. Yahoo had paid about $1.1B for Tumblr in 2013, before writing down the site’s value by $230M in 2016. Verizon then took it over through its Yahoo acquisition, but has been looking to revamp the former Oath media group.<\/span>
\n Split on hybrid strategy<\/span>
\n General Motors (NYSE:GM) is exiting hybrids full stop as opposed to the strategy of Toyota (NYSE:TM) and Ford (NYSE:F) to expand U.S. hybrid offerings even as they work on their electric vehicle programs. “If I had a dollar more to invest, would I spend it on a hybrid? Or would I spend it on the answer that we all know is going to happen, and get there faster and better than anybody else,” GM President Mark Reuss told WSJ. GM’s all-in bet on EVs is similar to the strategy of Volkswagen (OTCPK:VWAGY), with China a focus of both automakers.<\/span>
\n What else is happening…<\/span>
\n Oregon becomes 16th state to challenge Sprint (NYSE:S)-T-Mobile (NASDAQ:TMUS) merger.<\/span>
\n New Zealand legalizes salaries paid in crypto.<\/span>
\n Vanguard pulls over two dozen stocks from ethical ETFs (ESGV, VSGX).<\/span>
\n Keurig Dr Pepper (NYSE:KDP) ups environmental footprint with recyclable K-cups.<\/span>
\n Taco Bell-parent Yum Brands’ (NYSE:YUM) CEO Greg Creed to retire.<\/span>
\n American Airlines (NASDAQ:AAL) gets permanent injunction against mechanics’ disruptions.<\/span>
\n First effective Ebola treatments in Congo trial from Regeneron (NASDAQ:REGN).<\/span>
\n Occidental (NYSE:OXY) pledges to quickly pare Anadarko (NYSE:APC) acquisition debt.<\/span>
\n Monday’s Key Earnings<\/strong>
\n Barrick Gold (NYSE:GOLD) -1% in-line EPS, revenue miss.
\n Sysco (NYSE:SYY) +3.1% following a profit beat.<\/span><\/span><\/span>
\n Today’s Economic Calendar<\/strong>
\n 6:00 NFIB Small Business Optimism Index
\n 8:30 Consumer Price Index
\n 8:55 Redbook Chain Store Sales<\/span><\/span><\/span><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Good morning. Happy Tuesday. The Asian\/Pacific markets are down across-the-board. China, Japan, Hong Kong, South Korea, India, Taiwan, Malaysia, Thailand and the Philippines posted big losses. Europe, Africa and the Middle East are currently mostly down. The UK, Poland, France, Germany, Russia, Greece, South Africa, Finland, Switzerland, the Netherlands, Austria and Sweden are down the […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[2],"tags":[],"_links":{"self":[{"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/posts\/13361"}],"collection":[{"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=13361"}],"version-history":[{"count":0,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/posts\/13361\/revisions"}],"wp:attachment":[{"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=13361"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=13361"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=13361"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}