Financial Markets and Economy
Fed shouldn’t wait for higher wages before raising interest rates (Market Watch)
The first Friday of the month arrives with the usual mixture of trepidation and hope: trepidation that job creation may sputter; hope that wages will finally show some sign of life. Financial markets’ obsessive focus on a single report from a single month has always seemed a bit misplaced. Then again, the employment report has for decades provided both inspiration and motivation for the Federal Reserve.
Crude Carnage Continues As Goldman Warns "Storage Is Running Out" (Zero Hedge)
WTI Crude is back below $45 again this morning – pressing towards 2015 and cycle lows -after Goldman Sachs' Jeffrey Currie warns 'lower for longer' is here to stay, with price risk "substantially skewed to the downside." His reasoning are manifold, as detailed below, but overarching is oversupply (Saudi Arabia has a challenge in Asia as it battles to maintain mkt share, the Russians are coming, andother OPEC members want a bigger slice) and, even more crucially, storage is running out. As Currie concludes, this time it is different. Financial metrics for the oil industry are far worse.
Futures Flat, China Slides Again, Oil Tumbles Near 2015 Lows (Zero Hedge)
It has been more of the same in the latest quiet overnight session where many await tomorrow's NFP data for much needed guidance, and where Chinese markets opened weaker, rose during the day, then went through a mini rollercoaster, then sold off in the afternoon. The Shanghai Composite and HS China Enterprises indices finished down .9% and .3%, respectively.
This one chart shows how China's anti-corruption campaign put an end to extravagant parties (Business Insider)
The Chinese government's anti-corruption campaign hit luxury shops hard as the gifting expensive items for company executives dwindled — but spare a thought for the country's corporate caterers.
U.S. stocks: Futures hint at choppy session as nonfarm payrolls near (Market Watch)
Wall Street was poised for another volatile session on Thursday, with stock futures rising only slightly, as investors continued to gauge whether incoming data strengthen the case for a Federal Reserve rate hike.
Jobless-claims data due out premarket are likely to be viewed in that context. But the main focus is still the top-tier jobs report on Friday, which traders have been waiting for all week.
Inventing A Retail Job That Doesn't Suck (Fast Company)
For Enjoy, keeping the tech experts who deliver and set up your gadgets happy isn't incidental—it's the business model.
As employees filter in for their morning meeting at the New York City headquarters ofstartup electronics retailer Enjoy, they situate themselves in pods of couches and eclectic coffee tables that dominate the Noho loft space. All of the phones, laptops, drones, and other technology products that they sell, meanwhile, sit sequestered in a small corner conference room behind frosted-glass walls.
Boom to Busted Glass as Dubai Brokers Chase Ebbing Sales (Bloomberg)
The jagged hole that used to be the glass front door of Dubai’s S&K Estates Agents sums up the state of the city’s home-selling business.
Someone smashed the entrance after the company known as Smith and Ken shut downits offices overnight, citing a “drastic” drop in first-half revenue. The dearth of deals that sparked S&K’s collapse and the loss of 80 jobs is likely to cause more pain in the Middle East’s biggest and most volatile property market.
German factories just destroyed expectations with an explosion in orders (Business Insider)
German factory orders just blew the doors off, with the strongest increase recorded in 2015 so far.
The June figures were just released by Destatis, Germany's statistical agency.
Orders rose by 2% from May alone, and surged upwards by 7.2% compared to the same month last year.
European stocks step lower; U.K.’s ‘Super Thursday’ in focus (Market Watch)
European stocks declined Thursday, edging away from a two-week high, as some shares came under pressure as they traded without dividend rights.
The Stoxx Europe 600 SXXP, -0.42% was off 0.4% at 402.50. The pan-European index closed Wednesday’s session higher by 1.3%, the best close since July 20.
Thursday’s decline was led by losses in the energy group SXEP, -1.48% as oil pricesCLU5, -1.20% moved lower. Oil prices on Wednesday fell to their lowest level since mid-March after a larger-than-expected fall in U.S. crude inventories was overshadowed by a rise in supplies of oil products.
If You Think Apple Shares Are Doing Badly, Check Out Samsung (Bloomberg)
As investors fret about a plunge in Apple Inc., the losses in Samsung Electronics Co. are even deeper.
US defense contractors are increasing their sales to the rest of the world (Business Insider)
While the US is spends far and away the most on defense annually, US contractors the government buys from are increasingly looking outside of the US for sales.
3 Charts To Watch During Today BoE’s "Super Thursday" (Zero Hedge)
Today the Bank of England releases its rate decision, minutes and quarterly inflation report (QIR) all at 1200BST with the QIR press conference to be held by Governor Carney at 1245BST. Given the volume of information on offer, the release is likely to be met with volatility.
China stocks nudge down on worries about Beijing support (Market Watch)
China’s shares fell and bank shares pressured Australia on Thursday, but Japan’s market rose ahead of a key jobs report in the U.S. later this week.
The Shanghai Composite Index SHCOMP, -0.89% was ended 0.9% lower at 3661.54 and the smaller Shenzhen Composite 399106, -0.69% shed 0.7% to 2113.65 as investors continue to assess the level of regulators’ commitment to support mainland stocks. China’s main stock index is 29% off its mid-June peak and has fallen 11% since July 23.
Aurobindos 117% Rise Among Worlds Best on U.S. Growth (Bloomberg)
Aurobindo Pharma Ltd.s stock surge in the past year is among the highest for the worlds drugmakers, as the Indian company weathers a U.S. clampdown on foreign manufacturers of generics and wins more product approvals.
The Two Essential Entrepreneurial Types (HBR)
In my research on innovators, I like to draw the distinction between “path finders” and “path creators.” Rarely does the metaphor seem so apt as in the case of Federico Bastiani. He is the originator of the “social streets” movement now spreading across Italy, so the innovation he created literally involves a path: the street in which he and his family live in Bologna.
Baht Tumble to Six-Year Low Ties Bank of Thailand Hands on Rates (Bloomberg)
The bahts descent to a six-year low as investors flee is making it harder for the Bank of Thailand to revive an economy beset by an El Nino-induced drought.
The Tale of an Anxious Economic Recovery, Told by a Revived Textile Mill (NY Times)
Founded 150 years ago, the Faribault Woolen Mill in Minnesota survived the Great War and the Great Depression, not to mention World War II. But it almost did not make it through the Great Recession.
The mill went dark for 18 months in 2009 and 2010, and liquidators tagged its looms for shipment overseas. All its workers were laid off.
Greece’s banking sector on track for biggest weekly loss ever (Market Watch)
There are selloffs—and then there’s the recent flight from Greek bank stocks.
Tesla's stock drops 6% after bad news from Musk (CNN)
Tesla changed its answer for how many electric cars it expects to deliver this year, sending its stock price down more than 6% Wednesday afternoon.
In March the company said it planned to deliver 55,000 cars in 2015. But its latest report revised that estimate to "between 50,000 and 55,000" cars.
Luxembourgs Euro Note Love Affair Raises Eyebrows Over Taxes (Bloomberg)
While the European single currencys existential crisis drags on in Athens, it turns out Luxembourg likes its euros — a lot — as foreigners with accounts in the Grand Duchy try to stay one step ahead of the taxman.
Copper Drops With Aluminum as Bets Climb on Fed Rate Increase (Bloomberg)
Copper posted a fourth drop in five sessions as a jump in stockpiles added to signs of ample supply amid slowing demand in China, the world’s biggest user.
Inventories tracked by the London Metal Exchange surged on Wednesday, extending gains to the highest since January 2014. China equities dropped as concern grew that government intervention is driving away investors. Copper pared gains from Tuesday as optimism faded that China’s plan for more stimulus would help spark rebounds for industrial metals.
Carney Opens Dam to BOE Policy Torrent as Super Thursday Arrives (Bloomberg)
Call it Super Thursday or Mega Thursday or Blockbuster Thursday. One thing it won’t be is dull.
Bank of England Governor Mark Carney is about to swamp the market with a torrent of reports alongside the outcome of the most exciting policy meeting this year. At noon in London, the BOE will release its August interest-rate decision, officials’ votes and new forecasts. It’s the realization of Carney’s push to revamp communications making by releasing all elements of the Monetary Policy Committee’s decisions at once.
Media stocks hammered as cord cutting threat looms (CNN)
Media company stocks have performed fantastically well this year, but now Wall Street is demanding a reality check.
There was an across the board sell-off on Wednesday. It was apparently triggered by new concerns and anxiety about cable cord-cutting.
European Bank Profit Rebound Signals Revamps Starting to Pay Off (Bloomberg)
The largest banks in the euro area posted their highest combined profit in more than four years, a sign the beleaguered industry may be turning the corner.
Have We Hit a Peak in the Job Market? (24/7 Wall St)
On May 16, initial weekly jobless claims bottomed out at 266,500. Not only is this the lowest number since the recession, it is the lowest number since April 15, 2000, barely one month after the Nasdaq topped. Before that, weekly jobless claims have not been as low since 1972. How much further down can we go, if any?
More signs that the job market is getting pretty tight came out when Netflix Inc. (NASDAQ: NFLX) announced unlimited maternity and paternity leave for its employees for one year following birth or adoption. This was shortly followed by Microsoft Corp. (NASDAQ: MSFT) with a similar announcement expanding its own maternity/paternity leave policy to 12 weeks paid. What this signals is intense competition for labor in the tech sector.
China’s stock market stimulus has cost over $1 trillion so far (Quartz)
Since China’s stock markets tumbled from their mid-June peak, Beijing has rolled out amassive stimulus package, with mixed results.
The intensity of China’s stock market stimulus has raised concerns that the government is putting the country’s entire financial system at risk. It has also spooked small retail investors, who have responded by trying to front-run the government, selling before government support dries up, making the Shanghai Composite Index incredibly volatile in recent weeks.
China Just Revamped its Stimulus Playbook in a Bid to Boost Growth (Bloomberg)
A boom in the financial sector—spurred by a parabolic rise in share turnover—helped China's economy grow by 7 percent in the first half of 2015, according to official figures.
But the financial sector's unsustainable contribution to growth means that Chinese policymakers need an additional segment to pick up the slack if they're to continue meeting economic targets.
The avenue Beijing has chosen to build upon is a familiar one: infrastructure investment.
UK industrial production unexpectedly crashed in June (Business Insider)
UK industrial production declined 0.4% in June, surprising analysts who predicted a 0.1% increase.
Mining and quarrying fell a huge 3.8% month-on-month, according to the Office of National Statistics, as the commodities price rout worsened.
The fall was balanced out by manufacturing output posting an increase of 0.5%, a little higher than estimates of 0.4%.
Mondi First-Half Profit Gains 31% as Volumes, Prices Increase (Bloomberg)
Mondi Ltd., the largest producer of industrial bags in Europe and North America, said first-half profit rose 31 percent as volumes and prices increased.
Earnings per share excluding one-time items rose to 67.8 euro cents from 51.9 cents a year earlier, the Johannesburg-based company said in a statement on Thursday. Sales gained 9.9 percent to 3.46 billion euros ($3.78 billion).
Politics
How to cash in on a Trump presidency (Market Watch)
Forget the American electorate. Donald Trump’s biggest fan may be a Cornishman who likes to play the odds.
Leading British bookmaker William Hill reports that it has collected a total of £2,171.50 (or $3,387) in 17 different wagers from a Cornish client, who’s betting that Trump will secure the Republican presidential nomination, if not win the presidential election outright. Depending on the type of bet (nomination or presidential victory) — and the odds at the time it was placed — the payoffs range from 7-to-1 to 33-to-1.
Obama Weighs Requiring Paid Sick Leave for Government Contractors (Inc.)
President Barack Obama is considering signing an executive order requiring all federal contractors to offer paid sick leave to their employees, two individuals familiar with the deliberations said Wednesday.
The executive order, which is in the works but not yet final, would mandate that companies doing business with the federal government allow their workers to earn at least seven days of paid leave per year. Workers could use those days when they are sick or caring for sick relatives, said the individuals, who weren't authorized to comment on the order and requested anonymity.
What if the Democratic presidential primary were as bizarre as the GOP one currently is? (Salon)
The Democratic National Committee and MSNBC announced Wednesday afternoon the name of the 10 candidates who will be participating in the first Democratic presidential debate of the 2016 electoral season. Only the top 10 candidates in the most five most recent polls will be allowed to participate in the debate, which will be moderated by MSNBC's Rachel Maddow, Chris Matthews, and PBS's Gwen Ifill.
The meteoric rise of media mogul Oprah Winfrey (23%) is posing a threat to both establishment favorite Hillary Clinton (13%) and insurgent socialist Bernie Sanders (11%), both of whom must be concerned with what the beloved Chicago politician-in-trainingmight say given that she's vowed to "hurt anybody" who criticizes her.
Technology
A Ban on Autonomous Killer Robots Is Inevitable (Popular Science)
In 2013, a company that makes smartphone screen protectors filmed a drone firing a handgun. Bad decisions involving armed robots are only going to get worse.
Last week, the Future of Life Institute (FLI) released an open letter calling for a ban on autonomous weapons. The institute defines these as systems that can “elect and engage targets without human intervention,” and proposes that, “Artificial Intelligence (AI) technology has reached a point where the deployment of such systems is—practically if not legally—feasible within years, not decades…”
Dooger Bank wind farm plan off Teesside coast (BBC)
A giant offshore wind farm that could provide power for up to two million homes has been given the go-ahead by the government.
Dogger Bank Teesside A and B would feature 400 turbines, with power cables coming onshore near Redcar to connect with the National Grid at Lackonby.
Health and Life Sciences
Scientists discover molecular cell cycle clock that controls stem cell potency (Phys)
Singapore scientists from A*STAR's Genome Institute of Singapore (GIS) have, for the first time, found further evidence of how the differentiation of pluripotent cells is tied to and controlled by the cell cycle clock. This deeper understanding of how cells become differentiated is extremely important when considering therapeutic potentials.
Embryonic stem cells (ESCs) are cells that have not differentiated into specific cell types, and are said to be in a pluripotent state. The cell cycle is divided into four phases: G1, S, G2 and M. Previous studies have shown that cell differentiation of ESCs is initiated only in the G1 phase, attributed to G1-specific properties that contribute to lineage specification. The absence of these properties in the other three phases was believed to passively hinderdifferentiation.
Life on the Home Planet
Concern over Scottish marine protected areas (BBC)
Fishermen's leaders have warned the creation of Marine Protected Areas around Scotland's coast could result in a modern-day "clearance" that would devastate small fishing communities.
Environmentalists have described the claims as "exaggerated".
And creel fishermen have told BBC Scotland they have been subjected to intimidation after speaking out in favour of the conservation measures.
California Fire, Aided by Drought, Defies Tactics to Defeat It (NY Times)
As firefighters on Wednesday embarked on their sixth day of battling the largest of the many wildfires that have flared across the state, fire officials said the Rocky Fire, which has grown to consume nearly 70,000 acres here in the northern reaches of wine country, was still nowhere near under control and may not be until perhaps Monday.
The Rocky Fire, which was impeded slightly by humid overnight conditions, has already defied firefighters’ expectations for how such blazes typically behave, and has crossed highways, fire lines and other barriers meant to contain it. Feeding on tinder-dry terrain and woodlands that have been parched by drought, the Rocky Fire is now 106 square miles and has forced the evacuation of 1,480 people; about 13,000 have been urged to leave their homes.
