What to watch for today
Emerging markets nervously watch the Fed… The recent emerging market sell-off could intensify after minutes of the US central bank’s July meeting come out, if they suggest that policy hawks who want a quicker end to the Fed’s $85-billion-a-month asset purchase program have the upper hand.
… and their own economic data. South African inflation is likely to have risen to 6.2% in July, above the central bank’s comfort range of 3-6%. Malaysia’s GDP should show growth, but weak exports may push the current account towards a deficit. The rand has already fallen 17% this year against the dollar, while the ringgit has lost close to 7%.
The US housing recovery continues. Pundits expect a rise in sales of existing homes, even though mortgage rates have also edged up. If data on Friday show that new housing starts are also up, overall US home sales could hit a three year high.
An early secret session of Bo Xilai’s trial. Though his trial officially begins on Thursday, the disgraced Chinese politician could face a secret first hearing on his alleged abuse of power and corruption. On Tuesday, Bo’s son spoke out, saying he has been denied contact with both of his parents for the last 18 months.
Earnings roundup. Hewlett-Packard is likely to report muted earnings as PC sales continue to shrink. Heineken, the world’s number three brewer, is set to report improved performance (paywall) as people buy more high-end beer. China Telecom and US retailers Staples and Target will also report.
While you were sleeping
Egypt stayed quiet despite Mohammed Badie’s arrest. The Muslim Brotherhood issued a low-key statement (paywall) in response to the arrest early Tuesday of its spiritual leader, and there were no major protests.
Does Greece need another bailout? German finance minister Wolfgang Schäuble said Greece will need more aid to stave off bankruptcy. But his statements are at odds with the public stance of chancellor Angela Merkel, who has said it is too early to talk about new funding.
Mining giants took a hit. Glencore Xstrata took a $7.7 billion write-down after a recent merger, but it’s too early to say if Glencore actually overpaid for Xstrata. Meanwhile, BHP Billiton reported a 30% drop in profit as falling demand in China pushes down commodity prices, but the world’s largest miner has found a new China-related bet: a $2.6 billion investment in a potash mine.
US retailers had mixed results. Home Depot beat analyst expectations thanks to the US housing recovery. Best Buy had its best quarterly profits in two years as cost-cutting bore fruit. However, JC Penney’s losses widened in a quarter marked by management turmoil. And Barnes & Noble disappointed investors: earnings plunged, the chairman halted his plans to buy out the firm’s bookstores, and the company, in a U-turn, said it would continue making its Nook e-readers.
A Goldman Sachs error roiled option prices. A technical problem triggered a wave of wrong orders for options and drove some contract prices sharply lower (paywall).
The Czechs will vote soon. The parliament voted to dissolve itself and hold early elections, following the bribery scandal that brought down the government in June.
Quartz obsession interlude
Todd Woody on why California’s oil industry has shot itself in the foot. “The oil industry had seemed on the verge of defeating attempts to regulate hydraulic fracturing, or fracking, in California. But revelations that some oil companies were already using the technology (which involves injecting chemical-laced water under high pressure to break up rock formations containing oil and natural gas) off the coast of southern California have revived a campaign to impose strict controls on it.” Read more here.
Matters of debate
Emerging markets are not on the brink of collapse. The fallout of Federal Reserve’s tapering will only be a short-term bump (paywall).
Tunisia’s president could be the next to fall. Events in Egypt could push Tunisia’s already shaky government over the edge.
Abenomics doesn’t go far enough. Japan’s government needs a firm plan on how to stop wasting public money.
JP Morgan’s hires of Chinese politicians’ offspring aren’t that big a deal. It’s a time-honored practice even in the US.
Americans don’t want to live to be 120, even if they could. The older especially think living much longer isn’t a great idea.
The deejay behind the “Harlem Shake” didn’t receive a dime. The money from the wildly successful YouTube video went to corporations like Google and Apple, recording labels, and middlemen.
Up to half of North Korean adults are addicted to crystal meth. So says a new study.
Brutal shifts killed a banking intern. An exchange student working at Bank of America in London died after too many all-nighters.
You can actually think yourself stronger. There’s evidence that raising your expectations can extend your cognitive and physical limits.