What to watch for today
Ben Bernanke will deliver his semiannual monetary policy report to Congress. Investors are awaiting any word about when the Federal will taper its bond buying stimulus program (paywall) and the expected impact on interest rates. Here are three things to watch, including whether he plans to leave when his term expires in January.
A steady second quarter for finance. Bank of America is expected to report a 4% increase in profits, aided by the recovery in the US housing market. American Express is also forecast to report improved earnings and revenue. Of special interest will be cardholders’ spending and payment trends, and any progress on the company’s efforts to rein in costs.
A cloudy second quarter for tech. IBM could post muted earnings due to weakness in international markets, which account for nearly 25% of the company’s sales. Intel too may disappoint investors as falling sales of PCs dent demand for its chips. EBay is expected to report strong earnings on the back of steady revenue growth at its PayPal online payments division (quadrillion-dollar errors notwithstanding, see below).
A crucial austerity vote in Greece. The Greek parliament will vote on a new round of austerity that involves unpopular measures like the overhaul of the country’s civil services. The package must be passed for Athens to access the first tranche of the $8.7 billion worth of bailout loans approved last week. Workers unions went on a 24-hour strike on Tuesday to protest the proposed measures.
While you were sleeping
Barclays fined $487.9 million for energy market manipulation. The U.S. Federal Energy Regulatory Commission said the bank and four former traders rigged markets in the Western US from November 2006 to December 2008.
China foreign direct investment surges. June’s non-financial FDI levels hit a two-year high of $14.4 billion, and a new report from the UN said that the mainland and Hong Kong pulled in $196 billion last year, surpassing the $168 billion invested in the United States.
Ford vs Japan. The automaker’s top executive in Washington blasted the deliberate weakening of the yen ahead of Japan’s joining of Trans-Pacific Partnership talks, saying Tokyo had taken inadequate steps to open up its domestic market to foreign companies.
UK same-sex marriage bill advances. The House of Commons passed the measure with the support of Prime Minister David Cameron but over the objection of many in the Conservative Party. It is expected to be approved by the Queen by the end of the week.
EU credit card fee cap. A draft European Commission plan would limit lucrative card transaction fees, trimming billions of euros in revenue from EU banks.
Yahoo’s acquisitions and product overhauls didn’t boost revenue yet. Second quarter sales at the US internet company fell 7% from a year earlier, and earnings per share increased just enough to meet analysts’ expectations. CEO Marissa Mayer’s 1 year honeymoon may be coming to an end.
Quartz obsession interlude
Christopher Mims on why Nintendo faces an existential crisis on its 30th anniversary. ”When the original Nintendo Entertainment System was released, nothing else at its price point was fast and responsive enough to create a gaming experience that was as satisfying. Thirty years later, even a $40 Android tablet can run Angry Birds. We are surrounded by high-resolution screens and fast hardware, in our phones, tablets, soon, even our watches, and Nintendo can either figure out how to create compelling experiences on these devices, or it can continue to shrink along with the market for dedicated gaming hardware.” Read more here.
Matters of debate
The Federal Reserve’s policies are paving the way for a market collapse worse than 2008. The US economy only looks stable.
Mexico’s self-defense groups are doing what the government can’t. The urge to disband and disarm these armed vigilantes should be put on hold until Mexico can shape up its security sector.
San Francisco’s transport strike epitomizes the US inequality problem. Americans distrust unions and consider the poor greedy.
Reforms in Myanmar are only skin deep. The military is still very much in charge.
The Three Gorges garbage patch. The enormous dam on the Yangtze has produced a huge area of floating household refuse.
Instagram is Kuwait’s hottest business platform. The photo-sharing service is becoming popular among local entrepreneurs selling everything from makeup to sheep.
A low-tech mosquito deterrent. A simple electric fan can outperform chemicals and bug zappers.
A PayPal error in your favor. Ebay’s electronic payments company accidentally credited a user with a quadrillion dollars.
Entrepreneurs are creating plants that will glow in the dark. One day they may replace street lights.