Here is what you need to know.
Chinese stocks crashed. The Shanghai Composite (-6.2%) paced the decline in Asia and Thailand’s SET (-2.8%) was hit hard after yesterday’s explosion. In Europe, Britain’s FTSE (-0.6%) leads the way lower while Spain’s IBEX (+0.2%) outperforms. S&P 500 futures are down 3.75 points at 2095.50.
Chinese home prices fell further. Home prices fell 3.7% year-over-year, but are showing signs of bottoming as they ticked up 0.3% on a month-over-month basis. The July reading represented a third straight mum gain. Prices were up in 31 of 70 major cities. China’s yuan was little changed at 6.3942.
UK inflation quickens. Prices in the UK ticked up 0.1% compared to last year, slightly outpacing the flat reading that was expected. The reading matched the June number, which was the hottest since February. As for the core, prices jumped 1.2% YoY, above the 0.8% gain that was anticipated. The British pound is stronger by 0.7% at 1.5702.
Bank Indonesia kept policy on hold. The central bank held its benchmark interest rate at 7.50%, as expected. The decision comes as Indonesian authorities grapple with the impact of further devaluation of China’s yuan and a possible rate hike by the US Federal Reserve sometime this year. Inflation, which is running above 7%, faster than the central bank’s 3% to 5% target, was also a factor, according to Bloomberg. Indonesia’s rupiah strengthened 0.2% to 13,800 per dollar.
BB&T buys National Penn. The transaction, valued at $US1.8 billion worth of cash and stock, pays National Penn shareholders $US13 per share or 0.3206 BB&T shares per National Penn share. The $US13 per share represents a 19% premium to Monday’s closing price. According to Bloomberg, the deal comes just six weeks after BB&T closed on its $US2.5 billion takeover of Susquehanna Bancshares.
Urban Outfitters posted a mixed quarter. The retailer announced earnings of $US0.52 per share, topping the Wall Street estimate by three cents. Revenue rose 6.9% to $US867.5 million, missing the $US881.6 million that analysts were forecasting. The quarter was boosted by the Free People clothing line, which posted a 14% jump in same-store sales.
American Apparel has cash problems. Reuters reports that a regulatory filing shows the retailer has just $US11.2 million in cash, which likely isn’t enough to last for 12 months. The company reported a loss of $US0.11 per share in the second quarter as sales slumped 17%.
Petco is going private, again. According to the Wall Street Journal, Petco has filed for an initial public offering nearly one-decade after it was taken private. The offering is expected to raise approximately $US100 million and give the company a $US4 billion valuation. While a ticker has not been disclosed, Petco will not get ‘PETS,’ which is already used by PetMed Express.
US economic data is light. Housing starts and building permits are set for release at 8:30 a.m. ET. The US 10-year yield is down 1 basis point at 2.15%.
Earnings reports flow. Dick’s Sporting Goods, Home Depot, TJX and Wal-Mart highlight the names set to report ahead of the opening bell, while Weibo leads a light reporting schedule after the close.