Archive - Aug 1, 2013

Sheremetyevo Airport says Edward Snowden left one and a half to two hours ago

— Daniel Sandford (@BBCDanielS) August 1, 2013

Despite some whispers that Mario Draghi may finally engage in a rate cut (that 1.33 EURUSD is hardly boosting European exports, although in a world in which central banks can just print "trade" who cares about FX rates), the ECB just delayed the inevitable easing by yet another month.

There is no doubting the massive reserves of fossil fuels still lying close to or just beneath the earth’s surface. One of the key points made in the first edition of Insight back in February is that we must factor in the cost of processing those fossil fuels before they can enter the energy market. The future of energy production is as much as about the economic cost of processing those supplies as it is about the extraction. 

Yesterday's NYPost story about JCP CIT-related credit problems may or may not have been a plant (by a persuasive billionaire nemesis - who knows...) but Citi's Deborah Weinswig isn't hanging around to find out either way, and moments ago slashed its JCP price target from $20 to $11, and cut its rating from Neutral to Sell.

• Headlines only idiots, Schrodinger and Goebbels could love:
  • China Manufacturing Gauge Shows Unexpected Strength (WSJ)
  • China's factory activity shrank for a third straight month in July to its lowest level in nearly a year as new orders fell (Reuters)
• For nuns and analysts alike, bank commodity earnings are a mystery (Reuters)
• US spying comes under fresh attack (FT)
• Summers Backed Yellen for Fed Before Rivals Now Prove More Alike (BBG)
• Good Luck Leaving Your Wireless Phone Plan (WSJ)
• Spain's Rajoy says he was wrong to trust treasurer in party funding scandal (Reuters)
• Shell's Profit Falls on Shale Write-Down (WSJ)
• Why Rand Paul and Chris Christie went to war  (Politico)
• Sony Returns to Profit Aided by TV Business (WSJ)

Crashing Australian and a miss in South Korean PMIs, following days of weak Japanese data, and a divergence in the official and HSBC Chinese manufacturing indicators to a 15 month high (HSBC PMI sliding to 11 month low) was just the bad news Asian market needed to break out higher from the recent range and thanks to the return of overnight USDJPY levitation as well as a modest reverse repo liquidity injection by the PBOC overnight, not only did the Nikkei and Shanghai rise 3% and 1.8% respectively, but US futures are right back to where they were before yesterday's dramatic turnaround in the market following a strongly dovish FOMC statement and just shy of the 1700 once more. As for Europe, while there a smattering of noise following the release of final PMIs which did not change the preliminary picture much (Spain 49.8, vs 50.6 exp; Italy 50.4 vs 49.8 exp; France 49.7 vs 49.8 exp; Germany 50.7 vs 50.3 exp) it is all up to the ECB today to preserve the myth of a European improvement coupled with a EUR currency at or near multi-month highs.

If yesterday was the worst day in years for Bill Ackman following the surge in his proclaimed mega short HLF and the plunge in his beloved JC Penney, today may just redeem Pershing Square's P&L at least slightly following a company press release that denies the report published yesterday by the Post alleging CIT had cut its factoring ties with JCP vendors.