Random Market News, 1 September 2017
Market Info
"BRICS strive to flourish amid rivalries, suspicions.
The leaders of the most populous and powerful developing countries - Brazil, Russia, India, China and South Africa (BRICS) - are meeting in the southeastern Chinese city of Xiamen from September 3-5 for their ninth annual gathering since the club's formation.
Under the theme of "BRICS: Stronger Partnership for a Brighter Future," they will likely attempt to send a message of unity and hope to the rest of the world. It underscores their countries' growing significance and clout amid the widely perceived ongoing shift of power from the industrialized Western nations to the developing world."
http://www.dw.com/en/brics-strive-to-flourish-amid-rivalries-suspicions/a-40319415
"China sees new world order with oil benchmark backed by gold.
Yuan-denominated contract will let exporters circumvent US dollar.
China is expected shortly to launch a crude oil futures contract priced in yuan and convertible into gold in what analysts say could be a game-changer for the industry.
The contract could become the most important Asia-based crude oil benchmark, given that China is the world's biggest oil importer. Crude oil is usually priced in relation to Brent or West Texas Intermediate futures, both denominated in U.S. dollars."
"Sino-Russian widebody jet to use self-developed engines.
Joint venture insists it has the ability of break the duopoly enjoyed by General Electric and Rolls-Royce.
Shanghai-based Commercial Aircraft Corporation of China (Comac) and Russian companies including aircraft assembler United Aircraft Corporation (UAC) and Rostec set up a 50-50 joint venture last year to develop the long-haul passenger plane, with deliveries targeted at beginning in 2025."
"America's Manufacturers and Builders Are On a Tear.
SM report shows fastest factory expansion in six-plus years.
Payrolls at factories, construction firms climbed in August."
Weaker dollar helps.
"Six Biggest Banks Band Together to Build Bitcoin Competitor.
The new “utility settlement coin” to operate under blockchain technology.
Created by UBS, the “utility settlement coin” will be mostly used for clearing and settling transactions over blockchain technology, which cryptocurrency such as bitcoin and ethereum operate under. It will also allow for Barclays, Credit Suisse, Canadian Imperial Bank of Commerce, HSBC, MUFG, and State Street—who will work on the digital currency—to pay each other or buy securities without any waiting period for traditional money transfers, reducing the time and cost of post-trade settlement and clearing."
https://www.ai-cio.com/news/six-biggest-banks-band-together-build-bitcoin-competitor/
"Looming debt ceiling deadline pushing some U.S. fund managers to cash.
U.S. investors are raising cash and buying protection, bracing for a messy fight ahead of the Treasury Department’s Sept. 29 deadline to raise the debt limit, a legal cap on how much the U.S. government is allowed to borrow."
"Fed finalizes rule targeting early termination clauses for megabanks.
The Federal Reserve Board of Governors voted unanimously Friday to approve a final rule limiting the largest U.S. banks’ ability to enter into contracts with early termination clauses, a regulation intended to forestall a liquidity crunch if the bank is under stress."
"Unknown how many firms are flaunting margin rules – expert.
The regulatory grace period for allocation of variation margin ends on September 1."
"OCC, FDIC propose aligning rules with SEC’s 2-day trade settlement cycle.
Office of the Comptroller of the Currency and the FDIC proposed Friday reducing the trade settlement cycle to two days from three days."
"Congress Takes Aim at ‘Predatory’ Activist Hedge Funds.
The Brokaw Act, a bipartisan financial reform bill introduced by Senators Tammy Baldwin (D-WI) and David Perdue (R-GA), would force individuals and mangers to file 13(d) forms within four days of acquiring more than 5 percent of a company’s shares. Currently, investors have 10 days to do so.
The legislation would also require disclosure of short positions of more than 5 percent within four days and identify coordinated groups of hedge funds, known as “wolf packs,” as a single group, basing disclosure requirements on the size of the group’s cumulative stake rather than hedge funds’ individual holdings."
"More DJIA Companies See Higher GAAP EPS Growth vs. Non-GAAP in Q2.
While all publicly traded U.S companies report EPS on a GAAP (generally accepted accounting principles) basis, many U.S. companies also choose to report EPS on a non-GAAP basis. There are mixed opinions in the market about the use of non-GAAP EPS. Supporters of the practice argue that it provides the market with a more accurate picture of earnings from the day-to-day operations of companies, as items that companies deem to be one-time events or non-operating in nature are typically excluded from the non-GAAP EPS numbers."
https://insight.factset.com/earningsinsight_09.01.17
Data dump.
VIX ~10.13. 10-yr treasury volatility (TYVIX) ~3.93.
http://www.cboe.com/products/vix-index-volatility/volatility-on-interest-rates
Implied Fed rate hike/cut probability for September 20th is ~1.4%/0.0%, November 1st is ~0.0%/3.3%.
http://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html/
10yr Sovereigns.
https://www.investing.com/rates-bonds/government-bond-spreads
https://tradingeconomics.com/bonds
FX.
https://www.investing.com/currencies/streaming-forex-rates-majors
https://tradingeconomics.com/currencies
Equity.
https://www.investing.com/indices/major-indices
https://tradingeconomics.com/stocks
Commodities.
https://www.investing.com/commodities/real-time-futures
https://tradingeconomics.com/commodities
News feed.
"Week Ahead
In the US, the most important events will be trade balance, factory orders and ISM non-manufacturing PMI. Elsewhere, the ECB and the RBA will announce their interest rate decisions; Australia will release the first estimate of GDP growth, and the Eurozone and Japan will publish final figures for GDP growth. China inflation rate and foreign trade; and UK industrial output and trade balance will also be in the spotlight.
US Stocks Close Higher To Book Weekly Gains
Wall Street closed modestly in the green on Friday September 1st of 2017, as non-farm payrolls in the US increased by 156K in August, below a downwardly revised 189K in July and lower than expectations of 180K. Job gains occurred in manufacturing, construction, professional and technical services, health care, and mining. The Dow Jones advanced 39 points or 0.2% to 21988. The S&P 500 gained 5 points or 0.2% to 2477. The Nasdaq edged up 7 points or 0.1% to 6435. During the week, all major indices booked gains, with the Dow Jones climbing 0.7%; the S&P 500 1.4%; and the Nasdaq 2.7%.
Mexico Manufacturing Growth Stronger than Expected
The IHS Markit Mexico Manufacturing PMI rose to 52.2 in August 2017 from 51.2 in the previous month and above market expectations of 51.5. Output and new orders rose at a faster pace, supported by a return to expansion in new export sales, and buying activity increased the most since May 2016. As a result, optimism towards the year ahead strengthened and employment growth accelerated. On the price front, input cost inflation eased to its weakest level in over three years while output prices rose at the weakest pace since July 2016.
Stocks in Brazil Hit 6-year High
iBovespa increased to a 6-year high of 71518.
Brazil GDP Growth Beats Expectations in Q2
The Brazilian economy advanced 0.2 percent on quarter in the second quarter of 2017, following a 1 percent growth in the previous period and beating market expectations of a 0.1 percent expansion. Household spending increased for the first time in 2-1/2-years while government spending declined more and investment continued to fall. Year-on-year, the economy advanced 0.3 percent, following a 0.4 percent contraction in the previous period and marking the first annual growth rate since the first quarter of 2014.
Euro Area Factory Activity Growth Accelerates in August: PMI
The IHS Markit Manufacturing PMI for the Eurozone came in at 57.4 in August of 2017, in line with the preliminary estimate and above 56.6 in July. The reading equaled June's 74-month high. Output growth accelerated, boosted by robust domestic demand and rising new export orders. Employment also increased while price pressures strengthened. On the other hand, business confidence fell to an eight-month low although manufacturers maintained a positive outlook for the sector and output is expected to be higher in one year’s time.
Stocks in Norway Hit All-time High
Oslo Bors All-Share increased to an all-time high of 819.3.
China Factory Activity Growth at 6-Month High: Caixin
The Caixin Manufacturing PMI in China rose to 51.6 in August of 2017 from 51.1 in July and beating market consensus of 50.9. It was the third straight month of expansion in manufacturing activity and the fastest since February, as new orders surged to over 3-year high and new export orders increased the most since early 2010. Also, business confidence hit 5-month high and companies expanded their production of schedules. Buying activity went up further, contributing to a further rise in stocks of inputs. Meantime, staff numbers continued on a downward trend, while delivery times lengthened, due to stricter environmental policies. Inflationary pressures intensified as input costs and output charges both rose at faster rates.
South Korea Manufacturing PMI Edges towards Expansion
The Nikkei Manufacturing PMI for South Korea went up to 49.9 in August of 2017 from 49.1 in July. Output declined less than in a month earlier while new orders increased for the third month running and new export orders rose for the first time since January. Also, employment grew slightly in anticipation of an expansion of output. Meantime, unfavourable exchange rate movements led to a noticeable rise in input costs which has eaten into margins. Moreover, modest sales growth continues to be met directly from warehouses, with finished goods stocks declining most since January.
Japan Consumer Sentiment Falls More than Expected
The Consumer Confidence Index in Japan fell to 43.3 in August of 2017 from 43.8 in July while market estimated 43.7. Perception deteriorated for all components: overall livelihood (down 0.6 points from the prior month to 41.7), income growth (down 0.4 points to 41.3), employment (down 0.7 percent to 47.4) and the willingness to buy (down 0.6 points to 42.6).
Gold Hits 42-week High
Gold increased to a 42-week high of 1328 USD/t oz."
https://tradingeconomics.com/stream
http://www.marketwatch.com/newsviewer#
https://global.handelsblatt.com/
Logistics
"C.H. Robinson snags Canadian forwarder in $50m deal.
The third-party logistics provider has expanded its global forwarding footprint with the acquisition of Canadian forwarder Milgram & Company Ltd."
"TraceLink acquires ROC IT Solutions.
Acquisition to enhance real-time information and track and trace capabilities for pharmaceutical supply chain."
http://www.mmh.com/article/tracelink_acquires_roc_it_solutions
"Korber acquires HighJump.
German logistics technology provider Korber AG said today it acquired the supply chain technology vendor HighJump Software Inc. in a deal that could expand Korber's capabilities as an enterprise software vendor and allow it to compete for customers in a sector being squeezed by giants like Amazon.com Inc. and Wal-Mart Stores Inc."
http://www.dcvelocity.com/articles/20170830-korber-acquires-highjump/
"Menzies drives off with green delivery firm Gnewt Cargo.
Logistics group John Menzies has revealed a further acquisition with its distribution arm’s purchase of a London-based delivery firm that it says has the UK’s largest all-electric commercial vehicle fleet."
"TVS Logistics says it is looking for acquisitions in Southeast Asia.
TVS Logistics Services Ltd (TVS LSL), part of the T.V. Sundram Iyengar Sons group, is looking to buy logistics firms in southeast Asia, a region that offers an opportunity worth $500 billion to $600 billion given its strong manufacturing sector, a top company official said."
"Same-day delivery startup Deliv expands to 1,400 cities, rivalling Amazon’s Prime Now."
"Asian air freight export volumes surge.
The Association of Asia Pacific Airlines (AAPA) reported that the region’s airlines saw international air cargo demand surge 10.9% in July, supported by new business orders from developed economies, particularly in Europe.
The average international freight load factor recorded by the region’s carriers of 66% was 3.8 percentage points higher than the same month last year, after accounting for a 4.4% expansion in offered freight capacity.
Load factor improvements are also now being reflected in higher air freight rates. Drewry’s East-West Airfreight Price Index increased 1.9%, month on month, in July and is now almost 1.5% higher than a year earlier."
"Pitney Bowes parcel shipping Index reveals 48 percent growth in parcel since 2014.
Pitney Bowes recently announced a 48 percent increase in global parcel volume over the last two years, as reported by its second annual Parcel Shipping Index.
Parcel volume has grown from 44 billion parcels in 2014 to 65 billion in 2016, and the increase in growth shows no signs of slowing down, with the Index estimating parcel growth will continue to rise at a rate of 17-28 percent each year between 2017 and 2021."
Tech
"Where Major Corporations Like Salesforce And NVIDIA Are Investing In Artificial Intelligence."
https://www.cbinsights.com/research/corporate-venture-artificial-intelligence-investments/
Nice taxonomy of AI sub-sectors. Current AI requires domain-specific data and training.
"What does a significant investment in the Heartland look like? Texas.
The public improvement fund is the first fund of its kind developed by the company — however, rather than committing money to a public improvement fund, Apple could help the city of Waukee improve its infrastructure by paying more in taxes (Apple received $208 million in tax incentives from state and local officials for agreeing to build the data center in Waukee)."
"Monster X-ray laser offers glimpse into nano-world (Update).
The world's most powerful X-ray laser opened Friday in Germany, promising to shed new light onto very small things by letting scientists penetrate the inner workings of atoms, viruses and chemical reactions."
https://phys.org/news/2017-09-monster-x-ray-laser-glimpse-nano-world.html
"Video Friday: Powered Exoskeleton, Drone Shows, and Soft Robotic Mask."
Startup/SME of the Day.
"Darmiyan.
Darmiyan's fully automated proprietary software platform inputs human brain MRI and produces maps that detect Alzheimer’s disease up to fifteen years before symptoms. It is impossible to find a cure for Alzheimer’s without early detection, and that's why drug candidates fail one after another."
Random
"Itaipu Dam.
As one of the world's largest hydroelectric dams this plant took two countries to get built.
This modern wonder of the engineering world is producing more electricity than almost any other hydroelectric power station in the world."
http://www.atlasobscura.com/places/itaipu-dam
Events on 9/4 (ET)
GB: PMI Construction, 4:30
AM ET
EZ: PPI, 5:00
AM ET
JP: PMI Composite, 8:30
PM ET
SG: PMI, 8:30
PM ET
SG: PMI, 8:30
PM ET
CN: General Services PMI, 9:45
PM ET
http://online.wsj.com/mdc/public/page/2_3063-globalEconomicCalendar.html
https://tradingeconomics.com/calendar (More complete listing, including consensus)