Asian Morning Briefing: Global Stocks Rebound After Selloff

 
                       LAST    CHANGE   % CHG 
DJIA                 17630.27   189.68   1.09% 
Nasdaq                5089.21    49.43   0.98% 
S&P 500               2093.25    25.61   1.24% 
Japan: Nikkei 225    20328.89   -21.21  -0.10% 
Hang Seng            24503.94   151.98   0.62% 
Shanghai Composite       3663   -62.56  -1.68% 
S&P BSE Sensex       27459.23  -102.15  -0.37% 
Australia: S&P/ASX     5584.7     -5.2  -0.09% 
UK: FTSE 100          6555.28    50.15   0.77% 
 
 
                    PRICE CHG  YIELD 
U.S. 2 Year             -1/32  0.666 
U.S. 5 Year             -4/32  1.589 
U.S. 10 Year            -9/32   2.25 
Australia 10 Year        0/32  2.768 
China 10 Year            3/32    3.5 
India 10 Year            1/32  7.976 
Japan 10 Year            2/32  0.406 
German 10 Year           0/32      0 
 
 
                          LAST(MID)  CHANGE 
Australia $ (AUD/USD)        0.7333   0.0063 
Yen (USD/JPY)                123.56     0.31 
S. Korean Won (USD/KRW)     1160.61    -6.95 
Chinese Yuan (USD/CNY)       6.2096   0.0007 
Euro (EUR/USD)               1.1058  -0.0031 
WSJ Dollar Index              88.15    -0.01 
 
 
               LAST   CHANGE  % CHG 
Crude Oil      47.74    0.35   0.74% 
Brent Crude    53.01   -0.46  -0.86% 
Gold          1095.2    -1.7  -0.15% 
 

        MARKETS AT A GLANCE
        (Data as of approximately 5 p.m. ET)
        SNAPSHOT:
        Global stocks rebounded and U.S. Treasury bonds pulled back Tuesday as investors focused on upbeat corporate earnings and the Federal Reserve's monetary-policy meeting. Gold prices edged lower, weighed down by a stronger dollar. The global oil benchmark fell to its lowest price since January on concerns about the persistent global glut of crude, while U.S. prices rose ahead of weekly inventory data.
        OPENING CALL:
        Since China's stock boom turned bust more than a month ago, the Chinese government has put out measure after measure to stanch the bleeding. But the rescue effort is missing one feature found in markets elsewhere: a senior figure stepping forward to stop the panic.
        "There is no Alan Greenspan or Mario Draghi in China," says Peng Junming, a former official at China's central bank and now chief investment officer at Empire Capital Management, a Beijing investment firm. He referred to the former U.S. Federal Reserve chairman and the president of the European Central Bank, respectively, both known for their public assurances in times of crisis.
        The reason? Senior Chinese officials, who are appointed by the top echelon of the Communist Party, are often "afraid of saying anything that could displease or overshadow their bosses," Mr. Peng said. "This has to do with the long-standing Chinese bureaucracy."
        EQUITIES:
        Global stocks bounced back Tuesday, as a relatively muted decline in Chinese shares allowed investors to focus on upbeat corporate earnings and the Federal Reserve's monetary-policy meeting.
        Tuesday's gains in the U.S. and Europe afforded traders a break from a global selloff that had dragged the Dow Jones Industrial Average to its lowest level in nearly six months. Driving the selloff were worries that the plunge in Chinese stocks that began in June was a harbinger of slower growth in the world's second-largest economy.
        The Dow and the S&P 500 both wiped out Monday's losses. The Dow climbed 189.68 points, or 1.1%, to 17630.27.
        Investors are looking ahead to Wednesday's statement from the Federal Reserve after its two-day meeting began Tuesday, seeking clues on the timing of an interest-rate increase that some expect as early as September.
        "The only question will be the timing of the liftoff," said Aaron Clark, portfolio manager at GW&K Investment Management, which manages $25.4 billion. "The Fed wants to add some bullets back in the chamber so it can have some room to ease in a downturn."
        In corporate news, Baidu's stock declined 15%, weighing on other Internet stocks, after its projected revenue for the current quarter missed Wall Street's expectations.
        China's shares fell for a third straight day Tuesday as the second wave of heavy selling this month hit the market, raising questions as to whether Beijing will roll out new measures to prop up stocks.
        FOREX:
        The dollar advanced against the euro and the yen on expectations that the Federal Reserve will soon provide more clarity on the timing of its first increase in U.S. borrowing costs in more than nine years.
        The dollar gained 0.3% against the common currency, backing away from a two-week low it reached Monday, as one euro bought $1.1058 in late-afternoon trade. The dollar rose 0.3% versus the yen to Yen123.55, rebounding from its weakest level against the Japanese currency since July 10.
        Investors await the conclusion of the Federal Open Market Committee's two-day policy meeting on Wednesday afternoon to learn whether the central bank is moving closer to raising short-term interest rates from near zero, where they've been held since December 2008.
        The dollar strengthened as investors shifted toward an expectation for the Fed to signal that it is preparing to increase rates as early as September, said Joe Manimbo, senior market analyst at Western Union.
        Higher U.S. rates would draw yield-seeking investors to the dollar.
        "The market's long been in wait-and-see mode," Mr. Manimbo said. "It needs a more bullish catalyst to pile back into the dollar, and the Fed could provide that" on Wednesday.
        BONDS:
        U.S. Treasury bonds pulled back as global stocks rebounded after a recent selloff while the Federal Reserve started its two-day policy meeting.
        New debt sales also contributed to lower bond prices. The Treasury sold $26 billion in two-year notes Tuesday and is scheduled to auction $35 billion in five-year notes Wednesday and $29 billion in seven-year notes Thursday.
        In late afternoon trading, the yield on the benchmark 10-year Treasury note was 2.252%, compared with a three-week low of 2.228% on Monday. Yields rise as prices fall.
        The $12.7 trillion U.S. government debt market, a bedrock for global financing, is girding for an interest-rate statement Wednesday from the Fed. Investors will zero in on clues about whether the central bank may start raising benchmark short-term interest rates in September or wait longer to act.
        While the U.S. economy has been strengthening after a soft patch earlier this year, rising global uncertainty driven by plunging commodities and renewed turmoil in China's stock market are potentially complicating the Fed's plan to raise benchmark short-term interest rates for the first time in nearly a decade.
        "In my opinion it is too soon to signal a hike," said Jim Caron, global fixed-income portfolio manager at Morgan Stanley Investment Management, with $406 billion in assets under management. "The risk is the Fed hikes prematurely and hurts the economy. Why not wait until December? What's the harm?"
        COMMODITIES:
        The global oil benchmark fell to its lowest price since January on concerns about the persistent global glut of crude, while U.S. prices rose ahead of weekly inventory data.
        Both Brent, the global benchmark, and the U.S. oil benchmark recently entered bear markets--defined as a 20% drop from a recent high--on investor worries that the markets would remain oversupplied through the end of the year. Production is still robust, despite large spending cuts by oil companies, and analysts say demand could decline after the busy summer-driving season ends.
        Brent crude for September delivery settled down 17 cents, or 0.3%, to $53.30 a barrel on ICE Futures Europe, the lowest settlement since Jan. 30.
        Gasoline futures settled down 1.72 cents, or 0.9%, at $1.8032 a gallon, the lowest level since April 9.
        "The global 'glut' of crude oil (the driving factor in prices at present) looks to outpace demand well into the near future," said brokerage Powerline Group in a note.
        The U.S. oil benchmark settled up 59 cents, or 1.2%, to $47.98 a barrel on the New York Mercantile Exchange, snapping a four-session losing streak.
        Gold prices edged lower, weighed down by a stronger dollar and worries of a hawkish Federal Reserve.
        TODAY'S HEADLINES:
        Twitter Revenue Jumps
        Twitter said second-quarter revenue grew 61%, a reassuring sign that its advertising business is working its way past a temporary hiccup.
        Intel, Micron Claim Memory-Chip Breakthrough
        Intel and Micron say they developed a new breed of memory chips that could bring dramatic performance gains to computers, smartphones and other kinds of high-tech products.
        Owners of Interstate Hotels & Resorts in Talks to Sell Company
        The U.S.-Chinese joint venture that owns Interstate Hotels & Resorts, the largest independent hotel-operator in the U.S., is in discussion to sell the company, according to people familiar with the matter.
        U.S. Consumer Confidence Falls
        Consumers unexpectedly took a dimmer view of the U.S. economy this month. The Conference Board research group said its index of consumer confidence fell to 90.9 in July from a revised 99.8 in June.
        Home-Price Growth Remained Solid in May
        Home prices made solid gains in May, according to an S&P/Case-Shiller report, as home price growth appears to be largely flattening out after a long, uneven recovery.
        Gilead Sales Soar on Hepatitis Drugs
        Gilead Sciences said its two key hepatitis C drugs, Sovaldi and Harvoni, generated about $4.9 billion in sales in the second quarter, topping Wall Street estimates.
        BP Posts $6 Billion Loss
        BP swung to a loss as earnings were hit by lower oil prices and a multibillion-dollar charge relating to its recent Deepwater Horizon settlement.
        Ford Posts 44% Jump in Profit
        Ford said steady demand for pickup trucks and SUVs pushed its North American operation's second-quarter profit to record levels, helping offset softer conditions in China and continued losses in Europe.
        UPS Earnings Surge
        (MORE TO FOLLOW) Dow Jones Newswires

        July 28, 2015 17:30 ET (21:30 GMT)
        United Parcel Service reported strong earnings, delivered optimistic rest-of-the-year guidance and outlined its plans for controlling costs during this year's peak holiday season.
        AIG Names New Investment Chief
        American International Group said it is buying First Principles Capital Management and tapped the private-investment management firm's top executive as its new investment chief.
        RECENT DJ EXCLUSIVES:
        Owners of Interstate Hotels & Resorts in Talks to Sell Company
        China Pushes to Rewrite Rules of Global Internet
        Rental Demand Supplies Home-Building Opportunity -- Heard on the Street
        Don't Check Out of Marriott -- Ahead of the Tape
        Pfizer's Dollar Dilemma Adds Pressure for Deal Making
        TODAY'S CALENDAR
        (Times in GMT, followed by country and event)
        2350 JPN Jun Preliminary Retail Sales
        0200 SKA Jun Department store sales
        0300 SKA Jun New deposit, loan rates
        0600 GER Aug GfK consumer climate survey
        0645 FRA Jul Consumer confidence survey
        0830 UK Jun Bank of England effective interest rates
        0830 UK Q2 Insolvency statistics
        0830 UK Jun Monetary & Financial Statistics
        0830 UK Jun Money and Credit - Lending to Individuals, Lending to
        1000 UK Jul CBI Monthly Distributive Trades Survey
        1100 US 07/24 MBA Weekly Mortgage Applications Survey
        1315 US IMF Managing Director Christine Lagarde Online Press Conference
        1400 US Jun Metropolitan Area Employment & Unemployment
        1400 US Jun Pending Home Sales Index
        1430 US 07/24 EIA Weekly Petroleum Status Report
        1800 US U.S. interest rate decision
        2350 JPN Jul Provisional Trade Statistics for 1st 10 days of Month
        2350 JPN Jun Preliminary Industrial Production
        (END) Dow Jones Newswires

        July 28, 2015 17:30 ET (21:30 GMT)

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