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Good morning. Here’s what you need to know.
- Markets in Asia rallied in overnight trade, with Hong Kong’s Hang Seng up 1.2 per cent. Shares in Europe are moderately higher and U.S. futures point to a positive open.
- Chinese manufacturing declined further in August, new data out of Markit Economics shows. The flash PMI reading fell to 47.8 from 49.3 a month earlier. Any reading below 50 indicates contraction.
- The Bank of China posted its slowest quarterly profit growth in more than three years. The country’s fourth largest lender saw first-half profits rise 7.7 per cent to 71.6 billion yuan ($11.3 billion), slightly above estimates. The BoC is the first of the big four banks in China to report earnings.
- Eurozone flash PMI continued to show manufacturing on the decline in the region. Even as German manufacturing rose to a three-month high, the 17-nation composite reading advanced 10 basis points to 46.6 in August from a month earlier. A traveller in Greece sent us these depressing pictures and explained why the economy is a wreck >
- SEC Chairman Mary Schapiro cancelled a highly anticipated vote on new money-market mutual-fund regulations, after a key leader expected to vote with her switched positions. Luis Aguilar, the Democrat who was expected to change his vote, said he was no longer comfortable supporting the proposal as is and wants to re-evaluate the entire cash management industry. Nearly every economist we speak to says the same thing will spur the economy.
- Hewlett-Packard reported net revenues fell some 5 per cent to $29.7 billion during the third quarter, in line with analyst forecasts. The company said it earned $2 billion, or $1.00 a share. However, HP lowered the high end of its guidance for full-year earnings, down three cents to a range of $4.05 to $4.07 a share. The world’s largest companies reveal what’s happening in the economy >
- Qantas canceled an order for 35 Boeing 787’s worth $8.5 billion at list price after posting its first net loss in at least 17 years. Australia’s flag carrier reported a loss of $258 million for the year ending in June after fuel costs rose 18 per cent. This marked the largest cancellation yet for the 787 program.
- Sony will lay off some 1,000 employees within its mobile operation, or 15 per cent of the unit’s staff. Most of the cuts will hit its headquarters in Sweden.
- Initial jobless claims in the U.S. jumped above expectations last week, hitting 372,000. However, the U.S. manufacturing sector rebounded somewhat from an early summer lull, with new PMI figures showing a 50 basis point improvement to 51.9. Still to come: new home sales, which are forecast to increase to an annualized pace of 365,000 sales in July. Follow it all live on Money Game >
- Earnings on tap today include Big Lots and Salesforce.com. Already, the discount retailer missed earnings estimates — at $0.36 a share — and slashed full-year guidance. Salesforce is forecast to earn $0.39 a share when it reports after the closing bell today. These are the 45 stocks big hedge funds love most.