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5 things to know before the stock market opens September 11, 2019

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1. Dow set for flat open as stock rotation happens ‘under the surface’

Traders work on the floor of the New York Stock Exchange (NYSE) on August 23, 2019 in New York City.

Eduardo Munoz Alvarez | Getty Images

U.S. stock futures were relatively flat on Wednesday morning, after the Dow Jones Industrial Average gained about a quarter-percent, and the S&P 500 and Nasdaq basically closed unchanged Tuesday. Little movement on the S&P 500 over the past two sessions “really does obscure a lot of drama under the surface,” according to CNBC’s Mike Santoli. He pointed out that more than 100 S&P 500 stocks were up at least 2%, while about 80 were down at least 2%, in a rotation from over-owned growth momentum stocks into neglected value names. CNBC’s Bob Pisani looks at the sectors investors are buying. Heading into Wednesday trading on Wall Street, the Dow was riding a five-session, 3% winning streak, putting blue-chips less than 2% away from their July all-time highs.

2. Bond yields continue higher ahead of key central bank meetings

Bond yields continued to move higher, as investors sold government debt over the past few sessions ahead of a flurry of central bank meetings over the coming days. The European Central Bank meets Thursday, with policymakers likely to announce an easing package that could include an interest rate cut. The Federal Reserve meets next Tuesday and Wednesday. U.S. central bankers are widely expected to reduce rates by a quarter-point for the second time this year. President Donald Trump has been pressuring the Fed to cut rates as the U.S.-China trade war threatens to slow global economic growth further.

3. Trump slams the Fed again, tweeting central bankers are ‘boneheads’

President Donald Trump announces his nominee for Chairman of the Federal Reserve, Jerome Powell (L), in the Rose Garden of the White House in Washington, DC, November 2, 2017.

Saul Loeb | AFP | Getty Images

The president was at it again Wednesday morning, tweeting that the central bank should cut rates to zero or even set negative interest rates. Trump called Fed officials “boneheads” for not cutting rates as much as other countries around the world, many of which have negative rates. The president also said the country should refinance its debt load. While it’s unclear how such an idea would work, the Treausry likely would have to be involved. There have been calls recently to issue longer-term debt, such as a 50-year or even a 100-year government bond.

4. China unveils plans to exempt certain US products from additional tariffs

China’s Ministry of Finance announced Wednesday plans to exempt 16 types of U.S. products from additional tariffs, including food for livestock, cancer drugs and lubricants. The exemption, which is scheduled to go into effect Sept. 17, will be valid for a year. The announcement comes as high-level trade officials from China and the U.S. prepare to meet in Washington next month, in hopes that a new round of negotiations can lead to the end of the two nations’ yearlong trade war. Each side has imposed billions of dollars of import tariffs. The American Chamber of Commerce in Shanghai said its latest member survey shows many U.S. businesses in China are getting hurt by the levies.

5. NYSE set to hold a moment of silence to remember 9/11

The nation remembers Sept. 11, 2001 on Wednesday, 18 years since terrorists hijacked four planes and killed 2,983 in New York City, at the Pentagon in Washington, D.C., and in a Pennsylvania field. The New York Stock Exchange, which had closed for six days after the 2001 attacks, pauses for a one-minute moment of silence at 9:20 a.m. ET on Wednesday morning. The 9/11 Memorial & Museum holds its remembrance ceremony, beginning at 8:40 a.m. ET. Remembrances around the nation also include events at the Pentagon and near Shanksville, Pennsylvania, where one of the planes went down.

CNBC’s before the bell news roundup

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Coronavirus latest: Apple supplier Foxconn warns of hit from outbreak

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China’s banks face up to $1.1tn surge in questionable loans, S&P warns

China’s lenders may be hit with an increase of as much as Rmb7.7tn ($1.1tn) in questionable loans as the coronavirus outbreak deals a heavy blow to China’s economy, S&P Global Ratings has warned.

The Covid-19 outbreak, which has prompted China to lock down large swaths of its sprawling economy, will cause some individuals and companies to “have difficulty with debt repayment,” S&P said in a report issued on Thursday in Hong Kong.

In a worst-case scenario in which the outbreak does not peak until April, S&P forecasts China’s economy, the second biggest in the world, will expand 4.4 per cent in 2020. That would mark a dramatic slowdown from the 6.1 per cent growth in 2019 and be the weakest pace since 1990, according to World Bank data.

S&P’s base scenario, in which the virus peaks next month, points to 2020 growth of 5 per cent, which would also be the lowest in three decades. Even in the best case in which the virus peaks in February, GDP growth is forecast at 5.5 per cent.

The “growth shock” would cause the value of non-performing loans in China’s banking sector to surge by Rmb7.7tn to Rmb10.1tn in S&P’s worst-case scenario. In the base case, the figure would jump Rmb5.4tn to Rmb7.8tn. In the best case, the NPLs would rise Rmb3.4tn to Rmb5.8tn. The ratio of NPLs to total loans would be 7.8 per cent, 6 per cent and 4.5 per cent in the worst, base and best case scenarios, respectively.

S&P said it also expects Chinese regulators to relax rules for what counts as a bad loan and potentially give certain loans to affected communities and business “special consideration” in how they are accounted for on bank balance sheets.

The ratings firm said it “may take years for domestic banks to revert to normal standards, with long-term repercussions for the creditworthiness of some institutions.”

China has already begun to take action aimed at stimulating its economy and easing conditions in its financial system. The loan prime rate, a key lending rate, was reduced on Thursday after the People’s Bank of China earlier this week reduced another important medium-term lending rate.



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Best Small Business Ideas in Brazil 2020 Most Profitable Best Small Business Ideas in Brazil 2020

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Best Small Business Ideas in Brazil 2020 Best Small Business Ideas in Brazil 2020 AUTOMATE YOUR BUSINESS Or Continue to Struggle …

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Attorneys say Supreme Court overlooked law in Columbia business owner’s case

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Cole

JEFFERSON CITY, Mo. (KMIZ)

Attorneys for a Columbia man said the Supreme Court of Missouri overlooked precedent and law when it reversed a decision granting him a chance at parole.

Kent Gipson and Taylor Rickard of Kansas City filed the request to rehear the case of Dimetrious Woods with the high court on Tuesday. The motion asks for the court to rehear the case and instead side with a Cole County judge that gave Woods a chance at parole in 2017.

The 6-1 Supreme Court decision said that the state legislature’s repeal of a law in 2014 barring parole for repeat drug offenders should not apply retroactively. Woods was sentenced to 25 years in prison without parole under the scheme in 2007, then sued once the law was repealed.

Woods’ motion said that common law dictates that repealed laws dealing with criminal sentences should apply retroactively. The motion quoted the late U.S. Supreme Court Justice Antonin Scalia who supported that position.

The motion also said the decision could cause unintended consequences for future legislative action in criminal justice.

“For example, if the Missouri legislature decides in the coming years to repeal the death penalty retroactively, which is not an unlikely scenario in light of public opinion and recent repeals in other states, the holding in this case could be used as a cudgel by the executive branch to stymie the voice of the people expressed through their elected representatives that Missouri should not sanction the executions of any unfortunate soul who received the death penalty before or after its repeal,” Gipson and Rickard wrote.

The attorneys and others fear the Supreme Court decision could allow the Department of Corrections to revoke his parole. Rickard said Woods would face a release date in 2036.

Boone / Columbia / Jefferson City / Missouri / Top Stories



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