August 10
Good evening everyone. Capital injection rumors and stimulus hopes sent Chinese equities on a tear today with the SHCOMP rocketing over 4.9% while the Shenzhen Composite soared almost 4.5%. The ChiNext and the CSI 300 also joined the party, leaping 5.03% and 4.54% respectively. Dismal Chinese data meanwhile kept Hong Kong stocks muted throughout the today, with the Hang Seng Index ending session down 0.13%. Over in Japan, Japanese equities fared a lot better as strong earnings send the Nikkei Average up over 0.4% while the broader Topix gained 0.72%.
Here’s what else you need to know:
Alibaba goes online-to-offline in a big way. In a move that will undoubtedly strengthen its offline presence, e-commerce giant Alibaba has just announced that it will take a 20%, $1.6 billion stake in electronics retailer Suning. WSJ (paywall)
Greek banking shares rise. I know, right? After days of absolutely brutal sell-offs, the Greek banking index soared nearly 9% today amid hopes that Greece may cinch a deal with its creditors as soon as tomorrow. The Telegraph
Mining shares get pummeled. It looks like Hong Kong isn’t the only one feeling the pain from China’s weakening economy. Mining companies from BHP Billiton to Rio Tinto are all trading down at the open. BHP and Anglo American were two of the hardest hit, falling 2.4% and 2.3% respectively. Financial Times (paywall)
Japan’s six-month current account surplus hits five-year high. The land of the rising sun just posted its 12th-straight month of current account gains today, sending the nation’s surplus surging to 8.18 trillion yen – its highest level since the second half of 2010. June’s number still missed estimates though, coming in at 558.6 billion yen compared to a 773.6 billion yen reading expected by analysts. Their trade surplus also fell short, coming in at 102.6 billion yen in June versus a 119.7 billion yen forecast. That’s still way better than May’s 47.3 billion yen deficit though. Reuters
Is the bubble heading to the real estate? Luxury real estate prices are apparently going on a tear, with various sources claiming sky-high transaction prices. A Fortuna Court, Repulse Bay unit for example just sold for HK$98 million – a new record. Hong Kong Economic Journal (Chinese) / Sing Tao Daily (Chinese)
Chinese economic data turns for the worst. Exports from the world’s second-largest economy dropped 8.3% in July, its biggest fall in four months and way worse than the 1.5% slide analysts were expecting. Producer prices meanwhile slipped 5.4% to its lowest reading since October 2009. This is the 40th straight decline for the benchmark. Reuters
China’s currency reserves fall to two-year low. Capital flight, coupled with the PBOC’s yuan intervention sent China’s currency reserves down $43 billion last month, its third straight decline and its sharpest fall since March. China Daily / China.org.cn
Warren Buffett eyes biggest deal yet. Berkshire Hathaway is close to buying Precision Castparts at a price likely to exceed $30 billion. Berkshire has held a 3% stake in the aircraft and oil industry parts maker for more than two years. Precision has underperformed the S&P 500 by nearly 30 percentage points over the past five years, making it a ripe takeover target. Wall Street Journal (paywall)
The unflappable Donald Trump defends record on women. But he’s not apologizing for his remarks about Fox News host Megyn Kelly in an interview with CNN on Friday. Trump said she had “blood coming out of her eyes, blood coming out of her…wherever.” He claims he didn’t intend to be rude just to describe her level of anger Om “Meet the Press,” Trump added: “When I was attacked viciously by those women, of course, it’s very hard for them to attack me on looks, because I’m so good looking. But I was attacked very viciously by those women.” Wall Street Journal (paywall)
France leads markets for 2015. Performance: up 20.64%, followed by the Nikkei with a 18.76% gain, and Shanghai, with 15.75%. S&P 500 is up a weak 0.91% so far. DShort, Advisor Perspectives
Greece getting closer to outline of deal for €86 billion resuce plan. Apparently some European countries are feeling they were a little too tough on Greece. Finland has parted ways with Germany, which is trying to get even more concessions from Athens. Deadline for a deal: August 20. Financial Times (paywall)
“Smart money” no longer betting against gold. Commercial hedgers are maintaining the lowest net short position in gold since 2001, according to data from the Commodities Futures Trading Commission. They tend to be countercyclical — as opposed to short-selling hedge funds, which are momentum players, and are net short for the first time in history. Zero Hedge
Photo: sama093