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Financial Markets and Economy
Here's how the price of food has changed since 1992 (Business Insider)
We recently took a look at the large scale aggregate components the Bureau of Labor Statistics (BLS) uses to estimate inflation. Here, we focus on food.
What Puerto Rico’s missed debt payment means (Market Watch)
U.S. investors could face losses in their municipal bond portfolios in the wake of Puerto Rico missing a bond payment on Thursday for the first time ever.
The U.S. territory has been at the brink of missing a payment on its $72 billion in bonds before but always managed to secure a last-minute financing deal, the most recent lifeline coming from bond insurers of the island’s power utility.
Google Earnings: What to Watch (Wall Street Journal)
Google Inc.GOOGL +3.50% is scheduled to report second-quarter results after the close of trading Thursday. Here’s what to watch for:
–EARNINGS FORECAST: Analysts expect Google to earn $6.70 per share, excluding certain expenses, in the second quarter, according to Thomson Reuters. A year earlier, the company made $6.08 a share.
–REVENUE FORECAST: Analysts expect revenue of $14.27 billion, up 13% from $12.67 billion a year earlier, according to RBC Capital Markets. That excludes traffic-acquisition costs, the revenue Google shares with other companies that syndicate its search results.
Mexico's leading telecom giant is making some radical moves to compete with AT&T (Business Insider)
Mexican telecoms giant America Movil, controlled by billionaire Carlos Slim, will respond to a challenge from U.S. carrier AT&T by offering some subscribers free calls to and data in the United States, and will also invest $6 billion in its network in Mexico, its chief executive said on Thursday.
AT&T has challenged America Movil on its home turf with the purchases of two Mexican wireless operators. America Movil Chief Executive Officer Daniel Hajj said the company would eliminate roaming charges from Mexico to the United States for post-pay customers who opt to pay an extra 50 pesos ($3.16) per month.
Netflix’s stock blows past the Carl Icahn top (Market Watch)
Netflix Inc.’s stock soars to record territory, making sellers like billionaire investor Carl Icahn look a bit silly.
China H-Share Analysts See 20% Gain on Valuations Rarely So Low (Bloomberg)
hinese stocks in Hong Kong are poised to rally 20 percent by December after valuations fell close to the cheapest level in 12 years versus global equities.
China's oil imports may finally be flowing at full capacity (Business Insider)
China has long been concerned about the security of its oil supply. China was a net oil exporter in the 1990s, but as the economy took off, so did its oil consumption levels. China is now the second largest oil consumer in the world, and recently overtook the U.S. as the largest oil importer in the world.
China Eastern Rallies on Profit Forecast as Travel Stocks Gain (Bloomberg)
China Eastern Airlines Corp. rallied to a three-week high in New York as the company plans to add six jets to its fleet a day after forecasting a 263-fold increase in first-quarter profit.
Asia up on Wall Street rise and Greece relief, dollar extends gains (Business Insider)
Asian shares opened higher on Friday, aided by a higher Wall Street and eased tensions over Greece, while the dollar extended gains versus the euro and yen as economic indicators bolstered expectations for a U.S. rate hike by year-end.
MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> was up 0.1 percent. The performance of volatile Chinese stocks, which start trading later in the day, will be watched to see if recent gains are kept.
Big Oil to Battle for Mexicos Deep Crude After First Round Snub (Bloomberg)
Mexico is about to undergo its first subsea land rush.
International energy producers that sat out Mexico’s historic oilfield auction this week will be among the fiercest competitors for potentially massive deepwater prospects that go up for sale as soon as next month, said Ivan Cima, Wood Mackenzie Ltd.’s head of Latin American upstream research.
Why most of the world’s banks are headed for collapse (Business Insider)
You’re likely thinking that a discussion of “sound banking” will be a bit boring. Well, banking should be boring. And we’re sure officials at central banks all over the world today—many of whom have trouble sleeping—wish it were.
This brief article will explain why the world’s banking system is unsound, and what differentiates a sound from an unsound bank. I suspect not one person in 1,000 actually understands the difference. As a result, the world’s economy is now based upon unsound banks dealing in unsound currencies. Both have degenerated considerably from their origins.
These Companies Think You'll Pay for Timeat a Stranger's Kitchen Table (Bloomberg)
“It made little sense for me to pay for a co-working space full time, because I’d then need to pay for a dog walker,” says Sharona Coutts, the chief executive officer of Brooklyn's SpareChair. “And I had no desire to volunteer for the daily Brooklyn-to-Manhattan commute if I didn’t have to.”
The search for a place to work outside her home that allowed her the flexibility she needed led Coutts to launch her site, which matches nomadic workers with temporary places to work.
China's real problem is not the stock market, it's the engines of its economy (Business Insider)
China’s stock market has been on a roller-coaster ride over the past year. It more than doubled in value in the 12 months ending on June 12. Then it took a breathtaking plunge, wiping out a third of its value (more than $3 trillion of wealth) within a few weeks. After an extraordinary government intervention, it stabilized and bounced back 12 percent. No one knows where it will go next. If you do, you should be living on your own private island.
Financial markets everywhere are prone to bubbles, and this may just have been China’s turn. But it is also likely that the boom-bust cycle was exacerbated by real reform lagging financial reform.
Philly Fed Manufacturing Survey decreased to 5.7 in July (Calculated Risk)
Manufacturing activity in the region increased modestly in July, according to firms responding to this month’s Manufacturing Business Outlook Survey.
Jobless Claims in U.S. Fell Last Week for First Time in a Month (Bloomberg)
Filings for U.S. unemployment benefits declined last week for the first time in a month, heading back toward the lowest levels in more than a decade and signaling firings remain muted.
Jobless claims fell 15,000 to 281,000 in the week ended July 11 from a revised 296,000 in the prior period, a Labor Department report showed Thursday in Washington. The median forecast of 46 economists surveyed by Bloomberg called for 285,000.
One of the world's biggest oil companies thinks the worst is over (Business Insider)
Schlumberger thinks the plunge in the oil rig count is near the bottom.
The $100 billion oil-field services giant reported second-quarter earnings on Thursday afternoon that beat on profit but missed on sales.
Importantly, however, the company signaled that it thinks some of the deep cutbacks seen in the oil industry over the last year may be coming to an end.
REMITTANCES EXPLAINED: How funds are transferred across borders, top markets, and the new digital model (Business Insider)
Over the past few centuries, the world has become increasingly globalized. Immigrants are pouring into developed countries like the US, where many jobs pay at higher rates than in home markets. As migrants shuffle around the globe, they have family members and friends back home who they continue to support through cross-border money transfers, called remittances.
Losing a tailwind (Economist)
WHEN supply falls and demand is strong, prices tend to go up. So it has been in America’s stockmarkets. Short-term interest rates at record lows and minuscule yields on government bonds have boosted investors’ demand for equities. And thanks to share buy-backs, the supply of shares has been steadily falling. BCA Research estimates that the number of shares in issue on American stockmarkets has fallen by 6% since 2009. This tailwind for share prices, however, may be starting to fade.
Stock Bubble And Its Buyback Genesis Suddenly Vulnerable (Alhambra Investment Partner)
Having now passed the anniversary of the “rising dollar”, it is interesting to see the related and continued effects on the stock bubble(s). As should be obvious by now, stock buybacks, funded via corporate bonds and loosely categorized C&I loans, are responsible for the post-QE3 nearly uninterrupted rise. Repurchases are forming a separate “liquidity” conduit, indirect leverage if you will, which has already started to fray. Various broader “market” indices have diverged, starting with the Russell 2000 in early 2014 (with the economic slowdown that was supposed to be an anomaly of weather).
Politics
Democrats, Republicans Open Huge Rift on Their Opinions of the Supreme Court (Bloomberg)
The Supreme Court is an increasingly polarizing force among Americans of different political parties, according to the pollster Gallup.
In a poll conducted July 8-12, only 18 percent of Republicans approve of the job the Supreme Court is doing, while 76 percent of Democrats do. Respondents offered their opinions after the court upheld tax credits under the Affordable Care Act and legalized same-sex marriagenationwide in late June.
Hillary Clinton wants to reward companies that share profits with employees (Business Insider)
Democratic U.S. presidential candidate Hillary Clinton announced a new plan to give businesses two-year tax credits for sharing profits with workers at a New Hampshire campaign stop Thursday.
Clinton detailed the first component of her economic platform aimed at raising middle-class incomes at a town hall meeting in Dover, citing local examples of businesses that share profits with employees.
"If you treat somebody like they have a stake in your business, they’re going to stand up a little straighter, they’re going to work a little harder," said Clinton, the front-runner for the Democratic nomination ahead of the presidential election in November 2016.
Technology
Oculus wants in on VR moviemaking, partners with Felix & Paul (Technology)
The consumer launch of Oculus Rift is still many months away (planned for Q1 next year), but every now and then, the company reveals its plans and it gets even the most jaded followers stoked again. This time around, Oculus is going the moviemaking way. The Facebook-acquired outfit has partnered with Felix & Paul Studios for a host of VR experiences that will be available both on the Rift and Samsung Gear VR for Galaxy S6. According to Jason Rubin, Head of Studios at Oculus, the company is "incredibly excited by the artistry and entertainment made possible by the rapidly expanding world of 3D 360 VR moviemaking."
Health and Life Sciences
Behavior in kindergarten linked to adult success (CNN)
In our household, we're still talking about the critically acclaimed box office smash "Inside Out,"Pixar's animated look at the emotions inside a child's brain. It came up most recently when we watchedSerena Williams cruise to another victory at this year's Wimbledon, and my youngest daughter, age 7, remarked that her "Joy" (the character who controls happiness in the movie) must be going wild. During the match, Serena's "Angry" must have been at her brain's control panel, we all agreed.
Teenagers Who Don't Get Enough Sleep at Higher Risk for Mental Health Problems (Scientific American)
Many studies have examined the effects of sufficient versus insufficient sleep on mental health. A new study, published in February in the Journal of Youth and Adolescence, takes a more nuanced look, attempting to determine just how much each hour less per night really costs—where teenagers are concerned.
The researchers surveyed an ethnically diverse sample of 27,939 suburban high school students in Virginia. Although teenagers need about nine hours of sleep a night on average, according to the National Institutes of Health, only 3 percent of students reported getting that amount, and 20 percent of participants indicated that they got five hours or less. The average amount reported was 6.5 hours every weekday night….
Life on the Home Planet
Polar bears fail to adapt to warming (BBC)
Polar bears are unable to adapt their behaviour to cope with the food losses associated with warmer summers in the Arctic.
Scientists had believed that the animals would enter a type of 'walking hibernation' when deprived of prey.
But new research says that that bears simply starve in hotter conditions when food is scarce.
‘Army Of Half-Cloned Mice' Created In China From Artificial Sperm (Popular Science)
Researchers at the Shanghai Institute for Biological Sciences have successfully created artificial mouse sperm that are easily replicable and, when implanted in an egg, more reliably grow into healthy mice. The resulting 125 pups, 39 of which weren't born healthy, could make up a small army of mice to be used for research into genetic diseases.
In 2012, the same researchers created artificial sperm for the first time, which they were able to implant in a natural egg. It only sort-of worked—just two percent of the embryos developed into healthy mice.
