- Ukraine Will Accept Russian Aid If Red Cross Hands It Out. Ukraine said it would only accept humanitarian aid arriving on hundreds of trucks from Russia if the supplies are distributed by the Red Cross. Ukraine also demanded that its own customs and border officers examine the shipments first near a checkpoint into the Luhansk region, where pro-Russian separatists have been battling government troops for months. Maria Zakharova, spokeswoman for Russia’s Foreign Ministry, didn’t answer a call to her mobile phone outside of office hours in Moscow. There were conflicting reports on the location of the truck convoy. The location of the convoy remained unclear. Russia’s state-run Rossiya 24 television said the trucks had stopped at a military base in the city of Voronezh, about 350 kilometers (220 miles) by road from Luhansk.
- Putin’s Ukraine Aid Doubted in Market as Hryvnia Sets Record Low. Ukrainians didn’t wait to see what’s inside Russian humanitarian trucks heading to the country. Warnings by NATO that Russia may use its aid convoy for a military invasion triggered “panic,” the central bank in Kiev said yesterday as the hryvnia slumped as much as 6.5 percent to a record 13.715 per dollar. The currency rallied 1.9 percent today to 13.15 by 3:30 p.m. in Kiev, paring its 2014 loss to 37 percent as the bank said it was ready to prevent depreciation. Traders in forward contracts are betting on a further 3 percent slide in three months.
- Kurds Push Attack in North Iraq as Maliki Clings to Power. Kurdish forces fought to retake positions overrun last week by Islamic State fighters in northern Iraq, as Prime Minister Nouri al-Maliki sought to cling to power even after losing the backing of key ally Iran. Kurdish peshmerga troops, bolstered by U.S. airstrikes, fought the Sunni militants near the town of Sinjar, according to Nineveh provincial council member Hisham al-Brefkani. The push came as France said it would supply the Kurds with weapons, and the U.S. and Britain readied plans to rescue ethnic Yazidis trapped by the insurgents in the mountains of northern Iraq.
- Spanish Prices Drop at Fastest Pace Since 2009 Credit Crunch. Consumer prices in Spain fell at the fastest pace since the depths of the credit crunch in 2009 as declining wages curbed the pricing power of retailers. Spanish prices dropped 0.4 percent from a year earlier as measured by a harmonized European Union method. That compared with the median forecast for a 0.3 percent drop in a Bloomberg News survey of 12 economists. Prices slid 1.5 percent on the month while core inflation, which excludes energy and fresh food prices, was zero.
- European Stocks Rise as EON, Swiss Life Climb on Earnings. European stocks rose to their highest level in a week as EON SE and Swiss Life Holding AG (SLHN) reported better-than-expected profit. EON rose the most since September as Germany’s largest utility said higher production at its North Sea fields benefited earnings. Swiss Life rallied 7.1 percent on increased sales of occupational benefits in its home market. Gagfah SA added 2.9 percent after the third-biggest German property company raised its 2014 earnings forecast for a second time. The Stoxx Europe 600 Index gained 0.4 percent to 330.02 at the close of trading.
- Junk-Bond Anxiety Grows as Traders Buy Up Bearish Puts. U.S. options traders are bracing for more losses in junk bonds. Demand for protection against declines has pushed the number of outstanding puts on the iShares iBoxx $ High Yield Corporate Bond exchange-traded fund to five for each call, up from a ratio of 1.6 at the start of 2014, data compiled by Bloomberg show. The eight contracts on the fund with the highest ownership are all bearish. Investors are turning skeptical on the five-year bull market in speculative debt amid concern the gains have gone on too long and that violence in the Middle East and Ukraine will boost demand for safer assets. Speculation that the Federal Reserve will raise interest rates within the next year is also supporting demand for put options, often used as a hedge because their value rises when the ETF (HYG) falls. “Sometimes when an asset class gets to be expensive, you don’t need a catalyst,” Alan Higgins, who helps oversee about $48 billion as U.K. chief investment officer at Coutts & Co. in London, said by phone. “It’s simply that the value is not there.”
- Icahn’s Bubble Worry Meets Onslaught of Debt Complacency. Not even escalating geopolitical conflicts can grind this rally in high-risk debt to a true halt. Consider this: High-yield bonds are up 0.35 percent for August, gaining again after posting their first monthly loss in almost a year. The market’s poised for an annual return of 7.6 percent, building on a 135 percent return in the previous five years. And this: Investors are also bidding up credit-focused closed-end funds that use borrowed money to amplify bets.
- Wall Street Faces Pushback on CMBS Deals as Supply Booms. Wall Street is running into resistance unloading commercial-mortgage backed securities. JPMorgan Chase & Co. (JPM) and Barclays Plc (BARC) sweetened terms on a piece of a $1.2 billion bond deal last week to attract buyers, while Deutsche Bank AG (DBK) and Cantor Fitzgerald LP increased the yield they’re offering on securities today, according to people with knowledge of the matter.
- Macy’s Cuts Sales Forecast as Discounts Fail to Spark Growth. Macy’s Inc. (M) missed quarterly earnings estimates and trimmed its annual sales forecast, indicating that the back-to-school and Christmas shopping seasons won’t make up for a sluggish first half of the year. Second-quarter net income rose 3.9 percent to $292 million, or 80 cents a share, from $281 million, or 72 cents, a year earlier, the Cincinnati-based company said today in a statement. Analysts had estimated 86 cents on average, according to data compiled by Bloomberg. The shares tumbled the most in two years.
Reuters:
- Deere(DE) posts lower quarterly profit, cuts full-year outlook. Deere & Co posted a lower quarterly profit on Wednesday and cut its full-year outlook as declining grain prices discouraged farmers from purchasing its tractors, harvesters and other agricultural machinery. Deere also cut its forecast for South America, where rising interest rates in Brazil and tight credit in Argentina are hurting sales. Deere said it now expects full-year industry sales in the region to fall 15 percent in 2014, down from a previously forecast decline of 10 percent.
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