OVERNIGHT MARKETS AND NEWS
September E-mini S&Ps (ESU15 -0.23%) are down -0.26% and European stocks are down -0.67% at a 1-1/4 month low as exporters fell on concern a slowdown in China and other developing economies threatens exporters’ earnings. A drop in basic-resource companies is undercutting European stocks as well, with Glencore Plc down over 6% on concern that slower growth in China will undercut its demand for commodities. Asian stocks closed mixed: Japan -1.61%, Hong Kong -1.31%, China +1.23%, Taiwan -1.90%, Australia +1.45%, Singapore -0.28%, South Korea -0.40%, India +0.36%. China’s Shanghai Composite reversed losses from as much as 5% and recovered from a 2-week low and closed higher after several Chinese companies disclosed that government-backed funds had purchased their shares. Chinese Stocks had sold-off sharply Tuesday and early Wednesday on concern over reduced government support for equities after China Securities Finance Corp., the state agency appointed to support stock prices, said it will reduce its purchases of stocks as volatility declines. Japan’s Nikkei Stock Index tumbled to a 3-week low on concern an economic slowdown in China will depress demand for Japanese exports.
The dollar index (DXY00 -0.10%) is down -0.12%. EUR/USD (^EURUSD) is up +0.15% after Germany’s Parliament overwhelmingly approved a third bailout package for Greece. USD/JPY (^USDJPY) is down -0.04%.
Sep T-note prices (ZNU15 +0.05%) are up +2.5 ticks.
The Japan Jul trade balance unexpectedly widened to a -268.1 billion yen deficit, more than expectations of -53.0 billion yen and the biggest trade deficit in 5 months. Jul exports rose +7.6% y/y, more than expectations of +5.2% y/y, and Jul imports fell -3.2% y/y, less than expectations of -8.2% y/y.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) Weekly MBA mortgage applications, (2) Jul CPI (expected +0.2% m/m and +0.2% y/y), (3) Jul CPI ex food & energy (expected +0.2% m/m and +1.8% y/y), and (4) Minutes of the Jul 28-29 FOMC meeting.
