Bloomberg Business
-Markets take a tumble: Markets on Tuesday were hit with a familiar cocktail of concerns over lower oil prices, the health of banks, central bank impotence, and a weakening economy following the release of mediocre U.S. auto sales and lukewarm consumer spending data. Tuesday’s fall means the S&P 500 has notched its first back-to-back declines since the aftermath of the U.K.’s decision to quit the European Union and futures are pointing to a 0.23 percent decrease as of 4:55 a.m. ET on Wednesday. Asia stocks are heading for their steepest drop in more than a month with Japan’s Topix index sinking more than 2 percent after the yen jumped 1.5 percent in the last session. The Stoxx Europe 600 Index slipped 0.1 percent. On the plus side, oil seems to have halted its decline below $40 a barrel with futures up 0.2 percent early Wednesday morning.
-Bouncing bond yields: Bill Gross, erstwhile bond king, doesn’t much like sovereign debt, reiterating a previous warning that record low yields on government bonds «aren’t worth the risk.» His warning follows a growing chorus of caution on sovereign debt, with the average yield on bonds in Bank of America Corp.’s G-7 Government Index climbed to 0.58 percent, the highest level in five weeks. Japanese government bond prices have taken their steepest tumble in more than three years as investors fret over the Bank of Japan nearing the limits of unconventional monetary policy. Meanwhile, analysts at JPMorgan Chase & Co. note that: «At its core, market sentiment on developed market government bond yields have shifted in recent days, driven by less dovish outcomes at central bank policy meetings, but also by expectations of more fiscal stimulus.»
-British services shrink ahead of the BOE: Britain’s services sector – the largest part of its economy – is shrinking at the fastest pace in seven years following the Brexit referendum. Markit’s Purchasing Managers Index plunged to 47.4 in July from 52.3 in June, below the 50 level that signals contraction. The gauge hasn’t been this weak since March 2009 and will likely add weight to arguments for the Bank of England to cut rates this week. The U.K.’s central bank is widely expected to ease monetary policy further when it meets on Thursday.
-Trump’s 401(k) advice: Speaking of fiscal stimulus, Republican presidential nominee Donald Trump has proposed a plan to rebuild U.S. infrastructure that costs «at least double» the amount that rival Hillary Clinton has floated, in what would amount to a massive new government program worth more than $500 billion. Trump also warned that artificially low rates set by the Federal Reserve are inflating the stock market and recommended 401(k)-holders get out of equities, just like he did (naturally).
CNN Money
-Earnings galore: Office Depot (ODP), Clorox (CLX), Crocs (CROX) and CNN’s parent company, Time Warner (TWX), are all releasing earnings before the open. Then 21st Century Fox (FOXA), Allstate (ALL), Denny’s (DENN), Herbalife (HLF), Transocean (RIG), TripAdvisor (TRIP) and Tesla Motors (TSLA) are set to release earnings after the close. The Tesla results come after the electric car manufacturer announced it would buy solar energy firm, SolarCity (SCTY). Tesla’s stock has taken a tumble lately after being a hot investment for years. It’s down 13% in the past 12 months.
-Stock market movers — AIG, ING, HSBC: Shares in AIG (AIG) look set to jump at the open after the insurance giant reported better-than-expected results on Tuesday after the close. And shares in European banks ING (ING) and HSBC (HSBC) are leading financial stocks higher after reporting earnings. ING stock is up 8% in early trading while HSBC is up about 3%. HSBC said it would buy back $2.5 billion in shares. The moves mark a small recovery for Europe’s banking sector. Many major European bank stocks are down by more than 50% over the past year. They’ve been pummeled by worries about their financial health, along with negative interest rates, slow economic growth and the U.K. Brexit vote.
– International market overview: European markets are mixed in early trading, while most Asian markets ended the day in the red. In India, lawmakers look set to approve a long awaited Goods and Services Tax, which could streamline the tax system and make life much easier for businesses.
-Tuesday market recap: The Dow Jones industrial average was down 0.5% on Tuesday, its seventh consecutive daily loss. The S&P 500 declined by 0.6% and the Nasdaq fell 0.9%.
-Hackers steal bitcoins worth millions in attack on exchange: Hackers have stolen bitcoins worth about $65 million after attacking a major digital currency exchange. The exchange, Bitfinex, responded by halting trading, deposits and withdrawals, prompting a plunge in the Bitcoin price. «We are investigating the breach to determine what happened, but we know that some of our users have had their bitcoins stolen,» the company said in a blog post on Wednesday. The hackers made off with 119,756 bitcoins, said Zane Tackett, Bitfinex’s director of community and product development, in an email to CNNMoney. That’s the equivalent of more than $65 million at current prices.