Good morning. Here’s what you need to know.
- Asian markets got hammered overnight, following yesterday’s disaster in the US. Things started off awful in Europe, but have comeback quite a bit. US futures are rallying.
- Europe continues to see lots of turbulence, as a resolution to the crisis does not appear forthcoming. Of note are widening German CDS.
- In the US, the comeback in markets comes ahead of the FOMC release at 2:15 ET. The world is waiting for some kind of indication that the Fed will ease, and stabilise markets, but a full-fledged QE may have to wait. Now here is a thorough look at the downgrade and what it means for the economy >
- China’s inflation soared to 6.5% in July, from a year ago, and up from 6.4% in June. This has been its fastest rise in three years and was driven by a 14.8% rise in food prices from a year earlier. It also lowers the odds that China will be able to re-lift the world economy via further stimulus.
- UK continues to get battered by weak economic data. Factory output fell 0.4% in June from the previous month when it was up 1.8%. With a drop in manufacturing, the trade gap widened indicating that recovery is slowing. The riots in London are also beginning to become a concern for investors worried about growth. Meanwhile, German exports fell 1.2% in June to €88.5 billion hurting economic growth. Now check out the 10 countries that will dominate world trade in 2050 >
- Freddie Mac said it would need an additional $1.5 billion in taxpayers funds to help make up for losses from weak housing markets. The company registered a net worth deficit of $1.5 billion in part because of the dividends it needed to pay out to the Treasury. Now here are 15 cities still getting killed by foreclosures >
- In earnings news, AOL posted total revenue of $542.2 million and 16% growth in domestic display ad sales. MGM Resorts International reported Q2 net income of $3.44 billion or $6.22 a share, beating estimates as its operations in Nevada recovered, and it took control of a Macau joint venture. Icahn Enterprises meanwhile, posted Q2 net income of $289 million, on revenue of $3.2 billion, up from $1.9 billion a year ago.
- Tokyo Electric Power Co. posted a $7.4 billion net loss for the three months from April – June as it grapples with compensation costs and the Fukushima Daiichi nuclear disaster. The Nikkei was down 1.68% in overnight trading.
- Indian energy giant Reliance Industries received approval from the government to sell some of its oil and gas blocks to BP for $7.2 billion.
- Gold hit a record $1,778 an ounce in its biggest three-day rally since 2008, as investors turned to the precious metal amidst concerns over the global economy stemming from European and U.S. debt. Check out the only currencies that have outperformed gold this year >
- BONUS – Anne Hathaway was in New York for the premiere of her latest movie One Day.