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posted on 30 August 2016

Early Headlines: Asia Stocks Mostly Up, Dollar Off, Oil Firm, Global Growth, Bond Traders See Inflation, UK Investors Calm, No Skirts In India, China's Corp. Debt And More

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Early Bird Headlines 30 August 2016

Econintersect: Here are some of the headlines we found to help you start your day. For more headlines see our afternoon feature for GEI members, What We Read Today, which has many more headlines and a number of article discussions to keep you abreast of what we have found interesting.




  • Traders Turning Bullish on Growth Buy Stocks From ABB to Samsung (Bloomberg) Global equity traders are no longer panicking about the world's slowest growth rate in seven years. They're warming up to shares of companies that are most sensitive to the economic cycle -- miners, technological and industrial firms -- while turning away from utilities and consumer staples. The FTSE All World Cyclical Index is on track for its best two-month showing since 2012 relative to the FTSE All World Defensive Index, with members including Japan's Toyota Motor Corp., Korea's Samsung Electronics Co. and Switzerland's ABB Ltd. soaring more than 12%.

  • Oil prices rise as dollar comes off two-week high (Reuters) Oil futures edged up on Tuesday as the U.S. dollar backed off a two-week high hit the day before, although doubts that crude producers would agree next month to an output freeze continued to drag on prices. The U.S. dollar has retreated from Monday's peak as investors look ahead to jobs data this week that Federal Reserve Vice Chair Stanley Fischer has said will be important to whether the U.S. central bank raises interest rates soon. A weaker dollar makes oil purchases cheaper for buyers using other currencies, potentially spurring demand. Brent crude futures LCOc1 were trading at $49.38 per barrel at 0505 GMT, up 12 cents from their previous close. U.S. West Texas Intermediate (WTI) crude was up 17 cents at $47.15 a barrel.

  • Oil Discoveries at 70-Year Low Signal Supply Shortfall Ahead (Bloomberg) Explorers in 2015 discovered only about a tenth as much oil as they have annually on average since 1960. This year, they'll probably find even less, spurring new fears about their ability to meet future demand.

  • Titans of Bond Trading Say Ignore Fiscal Stimulus at Your Peril (Bloomberg) There have been so many false alarms warning of inflation's imminent return over the past decade that it's hard to keep track. There was the initial unease after the Federal Reserve cut interest rates to zero, and another scare when it started buying up massive quantities of bonds. And then there's the time the European Central Bank drove its benchmark rate into negative territory. The titans of the bond-investing world are undaunted. Many of them are once again predicting -- and, more importantly, actually gearing up for -- a pickup in inflation. The feeling is growing that the affection for austerity is fading and governments will start spending again on things like infrastructure.


  • Rank-and-file Republicans fear lame-duck vote on pricey funding bill (The Hill) Rank-and-file House Republicans are dreading voting on a huge spending deal in the lame-duck session - but they may have no choice. Funding for the federal government dries up at the end of September, forcing Congress to move a stopgap spending bill just weeks before the Nov. 8 presidential election. Members of the conservative House Freedom Caucus are pushing to extend government funding into early 2017, wary of a massive bipartisan spending deal in the lame-duck. But GOP leaders and House Democrats are already laying the groundwork for a short-term continuing resolution, or CR, that will set up a vote on a catch-all spending bill right before the holidays.

  • Most Depressed Adults in the U.S. Remain Untreated (Reuters, Scientific American) Only 28.7% of those who screened positive for depression received any treatment during the survey year. Overall, 8.1% of adults received treatment for depression, but only a minority of those had screen-positive depression (29.9%) or serious psychological distress (21.8%). The most common treatments for depression were antidepressants (87.0%), followed by psychotherapy (23.2%), anxiolytics (13.5%), antipsychotics (7.0%), and mood stabilizers (5.1%).


Last month I spoke to Italian Prime Minister Matteo Renzi about the country's constitutional reform referendum later this year. He has suggested in the past that, if he loses this vote, he will resign and nothing he said to me recently convinced me otherwise. Italy has had 63 governments in 70 years so greater stability is desperately needed, yet voters are pretty evenly split according to the polls.

Why aren't investors more concerned? Especially when you consider that Italian banks faced huge selling pressure after the Brexit vote amid fears of a need for a larger scale bailout. These things haven't gone away and the last thing the country needs is political upheaval at this moment.

Italy isn't the only consideration in the fourth quarter. According to the polls, Donald Trump winning is just as unlikely as a Brexit win was two months ahead of the referendum. Didn't Brexit teach us not to count our chickens? Yet investors seem totally nonplussed.



  • U.S., India to discuss business ties, tensions with Pakistan (Reuters) U.S. Secretary of State John Kerry and Commerce Secretary Penny Pritzker began two days of talks on Tuesday with the Indian government to boost business ties, and to encourage dialogue with Pakistan over the disputed region of Kashmir.

  • Female tourists should not wear skirts in India, says tourism minister (The Guardian) India's tourism minister has said foreign women should not wear skirts or walk alone at night in the country's small towns and cities "for their own safety". Discussing tourist security in the north Indian city of Agra, site of the Taj Mahal, Mahesh Sharma said foreign arrivals to India were issued a welcome kit that included safety advice for women.

North Korea


  • Digging Into China's Growing Mountain of Debt (Bloomberg) Data that breaks the country's borrowing into its bank, corporate, government, and household components can help you get a more-nuanced picture. China's debt is predominantly in the corporate sector and a lot of the corporate sector is government owned. Econintersect: Jubilee anyone?


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