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š Mystery bond shopper.
Things are not going well in China. Policymakers have cut rates in an attempt to boost growth. The property market isnāt holding up well either. But one canny developer has found a way to sell its bonds on the cheap to a mystery buyer. I wonder if theyād also be interested in my student debt?
Weekend roundup
Hereās what you missed while you were living your best life:
šØš³ China surprised investors by cutting key rates. Beijing lowered a short-term policy rate and its benchmark lending rates on Monday, in an effort to boost growth. That comes after weaker than expected Q2 data last week.
š¬ Ryanair slumped after reporting a 46% fall in quarterly profit. The budget airline said it expected fares to be lower than previously expected in the coming months. Other European airline stocks also dropped.
š¤ Delta struggled to restore normal operations after last weekās cyber outage. The airline is battling operational issues after the outage hit its crew tracking system. It has canceled another 1,250 flights beyond the 3,500 it had already scrapped.
Featured weekend story
Credit: Wong Zihoo
Mystery bond buyer clears a Chinese developerās debt
A major Chinese real estate developer is trying a new way to solve its debt problems. China Fortune Land Development (CFLD) is selling deeply discounted bonds to a mystery buyer, which is then writing off the debt.
Little is known about the buyer, Bazhou Yongsen. The company was established in 2016 in the same city where CFLD is based, according to Bloomberg ($), citing company registration platform Tianyancha. It also reported that some bondholders didnāt meet anyone from Bazhou Yongsen or knew where the money for the bond purchases were coming from.
Some investors say the strategy could be a model for dozens of troubled real estate companies that are struggling to pay creditors. It relies on a willingness to accept āhaircutsā ā big discounts on bonds ā and recover a small amount of cash, rather than wait years for larger payouts that may not come.
CFLD is also a significant company in the story of Chinaās property crisis. Its default in 2021 marked the start of the affair, which led to more than $140 billion of real estate bonds in default.
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What to watch this week
Treasury yields fell as investors considered Joe Biden dropping out of the presidential race and looked ahead to a week of important data. S&P 500 futures ticked higher after the indexās worst week since April.
ā¼ | Nasdaq | 17,726.94 | -0.81% |
ā¼ | S&P | 5,505.00 | -0.71% |
ā¼ | Dow | 40,287.53 | -0.93% |
ā¼ | 10-Year | 4.216% | -0.026 |
ā² | Bitcoin | $67,256.99 | +0.74% |
ā² | Oil | $80.40 | +0.34% |
Indices at 12:00 AM (ET)
Here are your upcoming market events:
š US PCE. Economists expect Fridayās reading of the Fedās favorite inflation gauge to show a 0.1% increase in June, bringing the three-month annualized rate below the central bankās 2% target. That would confirm market expectations of a rate cut in September.
š Earnings. Tesla and Alphabet report Tuesday, with IBM, Ford, and General Motors among other big names releasing numbers later in the week.
šŖšŗ Eurozone PMIs. The data on Wednesday will be closely watched after the ECB held rates on Thursday and said future moves were ādata-dependent.ā
Off-balance sheet items
Hereās what weāre reading this week:
šļø Itās time to do away with ādry promotionsā (HBR). Instead of providing solid career opportunities, all too often companies resort to filling vacancies from outside. And when they do promote people, many employers give them ādry promotionsā ā more responsibility without more money.
ā°ļø How billionaires die (Intelligencer). The more money you have, the longer you live ā untilā¦
š Why you donāt need to exercise every day (The Seattle Times). Keeping fit requires consistency, motivation and discipline ā establishing a routine and sticking with it. But building fitness also involves regularly breaking that routine and getting enough rest. In fact, choosing when not to work out can be as important as the exercise itself.
Chart of the week
The bottom line
OneDrive: file saved auto saved
me: where?
OneDrive:
ā memes.xlsx (@ExcelHumor)
12:27 PM ā¢ Jul 20, 2024
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