Wall Street News
RBI steps in to stem rupee's freefall. The Indian rupee has experienced a roller coaster day, dropping to another record low of 64.175 before recovering to 63.565 at the time of writing amid speculation of intervention by the Reserve Bank of India. The USD-INR was -0.5% after being higher earlier, while shares were -0.3%. The rupee's precipitous slide over the past few sessions has been prompted by the announcement last week of measures that smelled like capital controls, as well as longer-term factors such as fears about Fed tapering and frustration at the lack of economic reform.
JPMorgan probes keep on piling up. The Department of Justice is reportedly investigating JPMorgan (JPM) over whether it manipulated U.S. energy markets. The speculation comes less than a month after the bank agreed to pay $410M to the Federal Energy Regulatory Commission to settle charges related to such manipulation. For those trying to keep up, the probe adds to inquiries over the bank's hiring practices (see below), the London Whale, metal warehouses and mortgage bonds.
Top Stock News
Global stocks drop on India, Indonesia turmoil, Fed worries. Japanese shares (DXJ, EWJ) slumped 2.6% as the turmoil in India and Indonesia (see below) hit stocks with exposure to those countries. Trading around the world has continued to be otherwise dominated by the obsession with the Fed's prospective tapering as markets await the release of the latest FOMC minutes tomorrow.
Everbright denies it hired JPMorgan in return for job favor. China Everbright Bank has reportedly refuted insinuations that its appointment of JPMorgan (JPM) to help carry out an IPO was linked to the U.S. bank giving a job to the son of Everbright's Chairman. The SEC is reportedly investigating JPMorgan over whether the bank recruited the children of influential Chinese officials in order to win business.
BHP profit drops to $11.8B; to invest $2.6B in potash project. BHP Billiton's (BHP) FY profit before items slumped to $11.8B from $17.2B last year and missed consensus, while revenue fell to $65.97B from $72.23B, hurt by declining commodity prices. BHP intends to invest $2.6B in its Jansen potash project in Canada over the next few years, although it's going to delay output until 2020 at the earliest from the original goal of 2015, and look to sell stakes to partners. Shares were -2.7% premarket.
GlencoreXstrata core profit falls 9%; takes $7.7B charge. GlencoreXstrata's (GLCNF.PK) H1 core EBITDA dropped 9% to $6B but came in at the higher end of estimates, while revenue slipped 2% to $121.4B. As expected, GlencoreXstrata took a goodwill impairment of $7.7B related to the Xstrata acquisition, reflecting the negative mining-industry environment and the "heightened risks of greenfield and large-scale expansion." However, GlencoreXstrata says the integration of Xstrata "has exceeded our expectations," and that synergies will "be materially in excess of previous guidance of $500M per annum." Shares, though, were -3.6% in London.
RBS receives offer of up to £1.5B for branches. W&G Investments, a consortium of investors and pension funds, has bid up to £1.5B to acquire 315 bank branches from RBS (RBS), with the offer comprising £1.1B up front and £400M depending on performance. The bank is selling the outlets as part of the conditions for its £45.5B taxpayer bailout. RBS has received two rival offers, including one involving AnaCap and Blackstone (BX), while the bank is also mulling an IPO of the branches.
Two iPhones about to ship. Backing up many other reports, sources tell the WSJ that Apple (AAPL) has asked Foxconn parent Hon Hai to begin shipping high-end and cheaper iPhones in early September. AllThingsD recently reported an iPhone launch event is set for September 10. Hoping to steal Apple's thunder, Samsung (SSNLF.PK) and Sony (SNE) will reportedly unveil their own devices next month, including a smartwatch called the Galaxy Gear (Samsung) and the latest Xperia handset (Sony).
Top Economic & Other News
Indonesian turmoil continues. Indonesian shares were -3.2% at the time of writing, adding to yesterday's sharp decline. Stocks have been flirting with bear-market territory having slumped around 20% from their highs in May. The rupiah dropped as well and was 10,787.5 to the dollar, with the USD-IDR +2.8%. The turmoil comes amid worries about slowing economic growth, high inflation, a widening current account deficit, concerns that capital outflows will speed up, exposure to China, and the Fed's prospective tapering.
Objections to Detroit bankruptcy filed. Labor unions, pension funds and individuals have submitted their objections to Detroit's request for bankruptcy protection. However, bondholders and bond insurers didn't file their opposition by last night's deadline despite the billions of dollars at stake. It wasn't immediately clear why not. The arguments against Detroit's Chapter 9 filing include that it breaches state and national constitutions, that the city didn't negotiate in good faith - as it should have done - and that it hasn't proven that it's insolvent.