Good morning,
Hong Kong sank and the Chinese markets were mixed after a major index maker waffled on whether to include China A shares in the MSCI Emerging Markets index. It will happen, the company said. But not now. The U.S. Treasury issues its monthly budget report Wednesday, which is expected to show a deficit of $98 billion. The Mortgage Bankers Association will publish its index of application activity, a first read on how the residential market is faring in the U.S. And the music wars are heating up: TeliasSonera has bought a 1.2% stake in music streaming service Spotify at a $8.2 billion valuation. Spotify is under the gun now that Apple is launching a rival music service.
U.S. to expand presence in Iraq to battle ISIS. President Obama is expected to announce Wednesday plans to add 400 more U.S. trainers to a new military base in Anbar province. The White House is under fire for its response to the threat of the terror group spreading across the Middle East. Reuters
Citigroup sounds alarm on corporate bond market as just three players dominate. Strategist Stephen Antczak says the market has become far too concentrated. The corporate bond market, which has grown a whopping $3.7 trillion in the past decade, is dominated by hree types of investors: mutual funds, foreign investors, and insurance companies. That’s a big liquidity problem. Bloomberg
The German bund touches 1%. The bond market has been on a roller coaster ride as investors gauge the effects of interest rate policies globally and the torturous negotiations between Greece and its creditors. The stock markets in Europe were mostly flat. Reuters
Japanese insurer buys HCC for $7.5 billion in biggest deal this year. Tokyio Marine agreed to buy the U.S. specialty insurance company for $7.5 billion. The acquisition is expected to be completed between October-December. Reuters
Alibaba founder courts US businesses to use his e-commerce platform. Chinese billionaire Jack Ma told U.S. businessmen at the Economic Club of New York that his firm will overtake U.S. retailer Walmart in sales this year. “We want to help small and medium enterprises in the US use our system,” he said. Financial Times (paywall)
Photo by Stephen Melkisethian via Flickr.