Updated throughout the day
August 31
Good evening everyone. Despite another last hour rally, Chinese markets ended the month on a sour note with the SHCOMP falling 0.82% and the SZCOMP dropping 3.06%. Japan’s Nikkei 225 also tanked 1.28% today largely thanks to this morning’s disappointing industrial output report as well as profit taking ahead of China’s PMI reading tomorrow. Hong Kong’s Hang Seng Index meanwhile ended the session up 0.29%, it did however, post its worst monthly decline since 2011, ending August down 12.46%. Here’s how the rest did for the month:
- SHCOMP: -12.46%
- SZCOMP: -15.18%
- Nikkei 225: -8.07%
U.S. stocks also seem to be spooked by China’s report, with e-mini futures on the S&P trading 0.99% lower, contracts on the Nasdaq 100 slipping 0.89%, while those on the Dow industrials slump 1%. Things aren’t looking so hot in Europe either, with the Dax slipping 1.1% and the Euro Stoxx 50 sliding 0.9%.
Here’s what else you need to know:
Say goodbye to the “National Team.” China’s government has decided to give up trying boost the stock market through massive stock purchases. Instead, senior officials say the government is now going to hunt and punish those suspected of “destabilizing” it. The Financial Times
Japanese industrial output disappoints. Japan did not get the data it wanted this morning. Industrial output from the country showed an unanticipated 0.6% fall in July, much worse than the 0.1% estimate, a sign that weak overseas demand and high inventories are likely hobble the Japan economy’s prospects of recovery.
Who are you and what did you do to Japan? After years of resisting non-Japanese workers, a labor shortage in the land of the rising sun has forced the nation to accept foreign workmen to fill the void. Wall Street Journal
Merkel is now a verb. Chancellor Angela Merkel may be enjoying one of the highest approval ratings among her world leader peers, but the youngin’s over in Germany don’t seem to share that fondness – her name has apparently been turned into a popular verb among Deutschland’s youth, meaning “to do nothing, make no decisions, issue no statements.” NPR
No WhatsApp for you. Hong Kong’s Securities and Futures Commission has recently turned down an odd request from brokers – to use WhatsApp to take down stock orders. The SFC claims that the app “may be easily hacked and thus is not that secure for stock trading,” the brokers however seem to be unconvinced with that reasoning. SCMP (paywall)
State-owned banks are snapping up yuan. They may have quit intervening in the stock exchange but out in the currency markets, Beijing seems to be continuing to pull the strings. The Chinese yuan is currently trading stronger at 6.3805 against the dollar, on the back of large buy orders coming from major state-owned banks. Reuters
Tianjin – a story of corruption and the urge to industrialize at any price. The founders of Rui Hai International Logistics were well-connected businessmen who were able to skirt the rules – even though the factory was based in a solidly middle class city, a model of China’s progress. New York Times (paywall)
Four CITIC execs and a reporter arrested for stock market manipulation. George Chen of the South Morning China Post details the story in his Twitterfeed, based on China’s Xinhua news. Chen reports that Wang Xiaolu of Caixin confessed that her reporting was “irresponsible and inaccurate.” The four arrested at CITIC – the Goldman Sachs of China – include two executive committee members and two department heads. Twitter
Fed’s Stanley Fischer says there’s “good reason to believe that inflation will move higher.” But the board’s vice chairman didn’t tip his hat on the timing of the next rate hike. He was joined by four other Federal Reserve presidents at the annual economic symposium held at Jackson Hole, Wyoming. NexChange
Bad loans rising. Non-performing loans are beginning to hurt China’s state-owned banks as ICBC, China Construction Bank, Agricultural Bank of China, and Bank of China report dwindling net profits amid a worrisome spike in bad loans. Financial Times (paywall)
Hanergy Thin Film to axe over 2,000 employees. The controversial Chinese solar company is reportedly set to lay off over a third of its staff as it shifts from being just a manufacturing equipment maker to an actual developer of solar products. A cancelled deal between the firm and its parent company – its largest customer – appears to have factored in the downsizing as well. Wall Street Journal (paywall)
Thailand makes Bangkok shrine bombing arrests. Security forces raided an apartment building in a Bangkok suburb just before dawn on Saturday and arrested a foreign man police believe was involved in the deadly shrine bombing two weeks ago. New York Times. (paywall)
Japanese protest against military law. Thousands of people have protested outside of Japan’s parliament against a new law allowing the military to deploy overseas for the first time since World War Two. The legislation has already been passed by Japan’s lower house and is expected to be passed by the upper chamber. BBC
Died: Oliver Sack, 82, from melanoma. The neurologist was prolific writer; his books, including The Man Who Mistook His Wife for a Hat, described his patients’ diseases. Vice
Wes Craven passed away. Wes Craven, the man behind classic horror films such as “Nightmare on Elm Street,” “The Last House on the Left,” and “Scream,” passed away Sunday night at his home in Los Angeles. He was suffering from brain cancer. Wall Street Journal
You won’t believe this…
Buzz Aldrin wants to colonize Mars. The second man to ever walk on the moon has recently revealed his master plan to colonize Mars by 2039. It involves the “Aldrin Mars Cycler,” a group of spacecrafts that would effectively function as “a subway-in-the-sky between our planet and our future second home,” as well as Phobos and Deimos – Mar’s moons – which he plans to use as rest stops during the trip.
Photo: Jonathan Gross