Bloomberg Business
– China Dethroned as World’s Most Liquid Stock Market After Curbs. China has lost its title as the world’s most liquid stock market as trading halts and regulatory efforts to curb bearish transactions drive away investors. Daily turnover on mainland exchanges has averaged the equivalent of $202 billion over the past 30 days, down from $288 billion at the start of July. After exceeding turnover on U.S. bourses for about a month through July 8, the value of shares traded in China is now $72 billion lower than in America. Volume in Shanghai on Tuesday was 36 percent below the 30-day average.
The unprecedented boom in Chinese stock trading during the first half of 2015 has fizzled as the Shanghai Composite Index sank 27 percent from this year’s high and mainland exchanges allowed hundreds of companies to halt their shares. The drop in volumes deepened this week as authorities curbed short sales, investigated algorithmic traders and warned investors against placing large sell orders.
– Apple below the 200-dma. Shares in Apple Inc. dropped 2.4 percent to $118.44 yesterday pushing the price below its 200-day moving average for the first time since 2013. Yesterday’s session was the ninth in the last 10 that saw a price drop. Shares in Twitter Inc. dropped to their lowest since the IPO on Monday to $29.27, fueling speculation the company may be becoming a take-over target.
– Puerto Rico. Puerto Rico’s debt crisis escalated yesterday as the island stopped paying into a fund that pays its general-obligation bonds and one if its agencies defaulted for the first time. Without further financing, the government may run out of money in the months ahead, ratings company Standard and Poors said in a statement in Monday. Puerto Rico is due to propose a plan by September 1 for putting off payments on some if its debt.
– Aussie surges. The Australian dollar climbed 1.4 percent against the U.S. dollar after the Reserve Bank of Australia kept interest rates unchanged and left out any references to the necessity of further currency declines in its statement. The Australian dollar had declined to a six-year low of 73.85 U.S. cents on July 31.
– Greece, day two. The Athens stock exchange fell again on its second day of trading since reopening after a five-week suspension. The ASE Index lost 4.9 percent by 10.40 a.m. in Athens, with the banks by far the biggest losers. Piraeus Bank SA fell by the 30 percent limit for the second day in a row, bringing the drop in its share-price to 51 percent since yesterday’s open.
CNN Money
– Puerto Rico just defaulted for the first time. The commonwealth paid a mere $628,000 toward a $58 million debt bill due Monday to creditors of its Public Finance Corporation. This will hurt the island’s residents, not Wall Street. The debt is mostly owned by ordinary Puerto Ricans through credit unions.
The island is struggling with about $70 billion in total outstanding debt, and its economy is in recession. Padilla has put together a team to come up with a plan to restructure Puerto Rico’s debt crisis by the end of the summer.
– Toyota just set a new quarterly profit record. Toyota reported a net profit of ¥646.3 billion ($5.2 billion) on Thursday, a new quarterly record made possible by the weaker yen. The profit figure topped analyst estimates, and revenue increased more than 9% over last year to ¥7 trillion ($56.5 billion). Managing Officer Tetsuya Otake said that favorable foreign exchange rates and cost reduction efforts helped Toyota reach the new record.
Toyota is among the highest profile companies to get a lift from Abenomics, a set of measures championed by Japanese Prime Minister Shinzo Abe to boost the world’s third largest economy. Abe is trying to end years of falling prices and stimulate growth by increasing government spending and using aggressive monetary policy.
The yen has fallen 17% against the dollar over the past year. A weak yen makes Japanese products cheaper for foreign buyers, giving the country’s manufacturers an edge over international rivals.