Random Market News, 5 July 2017

 

Market Info. 1

Logistics. 5

Tech. 6

Random.. 6

Events on 7/6 (ET) 6

 

 

Market Info

 

"Improving economic and earnings data in international markets are helping drive equity markets upward, and attractive valuations relative to the U.S. add to the prospect of better future returns abroad. In the U.S., investors started to question the path of Fed rate hikes given weaker than expected inflation data.

Commodities were the sole negative return as oil prices fell steeply amidst concerns over a supply glut stemming from persistent U.S. production."

https://am.jpmorgan.com/gi/getdoc/1383391730106

 

"China takes major step to opening up bond markets.

Fund managers and other institutional investors can trade in Chinese bonds without having to set up an onshore account, after China’s central bank officially opened its “Bond Connect” programme with Hong Kong.

China’s total government and corporate debt market is estimated to be worth $9trn."

https://www.ipe.com/countries/asia/china-takes-major-step-to-opening-up-bond-markets/10019749.article

 

"New Orders, Production, Backlog of Orders and Employment Growing; Supplier Deliveries Slowing; Inventories Contracting; Prices Increasing at Slower Rate."

https://www.instituteforsupplymanagement.org/ISMReport/MfgROB.cfm?navItemNumber=12942&SSO=1

 

"U.S. Auto Sales Fall as Fewer Vehicles Go to Rental Chains.

GM, Ford and Fiat Chrysler moving away from practice of dumping unwanted inventory into rental lots."

https://www.wsj.com/articles/u-s-car-sales-fall-in-june-1499088635

 

"Rand Slumps as ANC Said to Weigh State Ownership of Central Bank."

https://www.bloomberg.com/news/articles/2017-07-05/rand-slumps-as-anc-said-to-weigh-state-ownership-of-central-bank

 

"Pension fund governance - Netherlands: New models.

More pension funds are replacing the traditional board model with the so-called ‘reverse mixed’ structure.

All those adopting this model deem it an improvement, often formalising existing practice.

Non-executive board members need to get used to their dual role of internal supervisory board member.

Good preparation, in particular clarifying responsibilities for the various tasks, will smooth the transition.

A skilled external chair is crucial for a correct implementation of roles."

https://www.ipe.com/reports/special-reports/pension-fund-governance/pension-fund-governance-netherlands-new-models/10019690.article

 

"ADIA long-term returns fall; fund continues Asia focus.

Over the 20 years ended Dec. 31, ADIA returned an annualized 6.1%, down from 6.5% at the end of 2015. Over 30 years the fund returned an annualized 6.9%, compared with 7.5% the previous year.

The year saw "continued momentum" by the fund's private equities department in increasing exposure to direct deals, alongside its partners, and broadening ADIA's focus in the "rapidly developing Asian private equity markets, particularly in China and India.""

http://www.pionline.com/article/20170704/ONLINE/170709997/adia-long-term-returns-fall-fund-continues-asia-focus

http://www.adia.ae/En/pr/2016/

 

"The Puzzling Equity Premium Quietly Leading You to Pitfall.

While stock returns have for decades outperformed risk-free rates in the U.S., the idea that this premium is an immutable, inherent feature of the asset class strikes Institutional Investor columnist Christopher Schelling as naive."

http://www.institutionalinvestor.com/article/3724672/asset-management-equities/the-puzzling-equity-premium-quietly-leading-you-to-pitfall.html

 

"The Largest Companies by Market Cap Over 15 Years."

http://www.visualcapitalist.com/chart-largest-companies-market-cap-15-years/

 

Data dump.

 

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

 

Implied rate hike probability on July 26th ~3.1%, September 20th ~18.4%; 0% probability of rate cut through June 13th, 2018.

http://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html/

 

VIX ~11.07. 10-yr treasury vol (TYVIX) ~4.64.

http://www.cboe.com/products/vix-index-volatility/volatility-on-interest-rates

 

News feed.

 

"Fed Ready To Reduce Its Balance Sheet Soon

The Federal Reserve is ready to start reducing its USD 4.5 trillion asset portfolio within a couple of months and the effect of such normalization on financial markets is expected to be limited, minutes from last FOMC meeting showed. Policymakers viewed the recent softer inflation as temporary, mainly reflecting idiosyncratic factors. The Fed last raised the target range for the federal funds rate by 25bps to 1 percent to 1.25 percent during its June 2017 meeting.

 

US Stocks End Mixed On Wednesday

Wall Street closed mostly in the green on Wednesday, as gains in technology stocks compensated for losses in energy shares caused by a more than 4 percent decline in crude oil prices after the latest data showed that OPEC's exports rose for the second consecutive month in June. The Dow Jones edged down 1 point to stay practically flattish at 21478. Contrastingly, the S&P 500 gained 4 points or 0.2 percent to 2433. The Nasdaq jumped 41 points or 0.7 percent to 6151.

 

US IBD/TIPP Economic Optimism Index At 10-Month Low

The IBD/TIPP Economic Optimism Index fell to 50.2 in July of 2017, from 51.3 in the previous month and below market expectations of 51.6. It was the lowest reading since September of 2016, as confidence fell following the failure of an ObamaCare replacement bill and growing questions about how well Congress and Trump were working together. The six-month economic outlook decreased 2.8 percent to 48.4 and the confidence in federal economic policies dropped 3.2 percent to 42.2. In contrast, the personal financial outlook went up by 2.8 points to 60.

 

Stocks in Vietnam Hit 9-year High

VN increased to a 9-year high of 780.84.

 

Mexican Peso Dips 0.6% On Disappointing Economic Data

The USDMXN increased 0.1099 or 0.60% to 18.3099 around 4:15 PM NY time on Wednesday July 5 from 18.2000 in the previous trading session. Consumer confidence in Mexico decreased to 84.4 in June 2017 from a downwardly revised 85.1 in May. Meanwhile, gross fixed investment declined by 2.7 year-on-year in April, also disappointing expectations.

 

Mexico Private Investment Falls The Most Since 2009

Private investment in Mexico declined 8.6 percent year-on-year in April 2017, following a downwardly revised 3.8 percent rise in the previous month and worse than market expectations of a 6 percent fall. It is the largest contraction in private investment since October of 2009, as investment in machinery and equipment fell 6.6 percent, after increasing 12.6 percent in March. Also, construction investment contracted at a faster pace (-9.9 percent vs -1.7 percent), as both investments in residential activity (-7 percent vs 6 percent) and in non-residential one (-12.4 percent vs -7.9 percent) slumped. On a monthly basis, private investment shrank 1.3 percent, compared to a downwardly revised 0.7 percent rise in March.

 

Uruguay Inflation Rate Lowest Since 2005

Consumer prices in Uruguay increased 5.31 percent year-on-year in June 2017, easing from a 5.58 percent rise in May. It is the lowest inflation rate since December of 2005, as prices slowed for: food and non-alcoholic beverages (0.09 percent vs 1.14 percent in May); housing (8.43 percent vs 8.47 percent); restaurants and hotels (8.80 percent vs 9.22 percent); miscellaneous goods and services (7.15 percent vs 7.32 percent) and clothing and footwear (5.02 percent vs 5.35 percent). In contrast, cost rose faster for transport (4.55 percent vs 4.10 percent); health (8.61 percent vs 8.49 percent); recreation and culture (4.13 percent vs 3.33 percent) and furniture and household equipment (5.65 percent vs 5.59 percent). On a monthly basis, consumer prices went up 0.15 percent, following a 0.13 percent increase in May.

 

Brazil Private Sector Activity Contracts In June

The IHS Markit Brazil Composite PMI fell to 48.5 in June of 2017 from 50.4 in May, well below market expectations of 49.8. The reading pointed to the first contraction in private sector activity in three months, as services shrank (47.4 from 49.2) and manufacturing slowed (50.5 from 52).

 

Russia Consumer Confidence Improves In Q2

Consumer confidence in Russia increased to -14 in the second quarter of 2017 from -15 in the previous period. It was the highest reading since the third quarter of 2014, as households were less pessimistic about the country's economic situation over the next 12 months (-3 from -4 in Q1); personal financial situation (-4 form -6) and conditions for major purchases (-29 from -30).

 

Pakistan's Rupee Hits 3-1/2-Year Low

The Central Bank of Pakistan weakened the rupee to the lowest level since December 2013 amid concerns over slowing economy due to political uncertainty in the country. The currency lost around 3.1% to 108.1 against the USD by 1:30 PM London time on Wednesday, the biggest fall in nine years.

 

Kenya Private Sector Activity Falls At Record Pace: PMI

The Stanbic Bank Kenya PMI fell to 47.3 in June of 2017 from 49.9 in My. It is the lowest reading since the series began, pointing to a record contraction in private sector activity. Output shrank, new business stagnated and employment rose only marginally. The weakness in demand led to reductions in purchasing activity and input stocks for the first time in the survey history. Firms continued to face higher input prices, but continued to offer discounts amid reports of intense competition.

 

Zambia Private Sector Activity Expands In June

The seasonally adjusted Stanbic Bank Zambia PMI came in at 51.5 in June 2017, little-changed from the previous month's 51.6. Output expanded for the first time in two years and new order growth quickened to an eight-month high. Also, employment rose for the second month running and purchasing activity grew the most in two years, in line with improving client demand. On the price front, input cost inflation continued to ease and output prices fell for the fourth consecutive month.

 

Eurozone Retail Sales Rise More Than Expected In May

Eurozone's retail sales increased 0.4 percent month-over-month in May 2017, following a 0.1 percent gain in April and beating market expectations of 0.3 percent. Trade of fuel jumped 1.7 percent (from -0.6 percent in April) and that of non-food products grew 0.6 percent (from -0.7 percent), boosted by higher sales of textiles, clothing and footwear (1.1 percent from -1.7 percent). In contrast, sales of food, drinks and tobacco dropped 0.4 percent after rising by 1.1 percent in the previous month. Year-on-year, retail sales increased 2.6 percent, the same pace as in April.

 

Japan Services PMI Rises To 22-Month High

The Nikkei Services PMI in Japan went up to 53.3 in June of 2017 from 53 in May. It was the ninth straight month of expansion in services activity, and the highest level recorded since August 2015 as new orders increased for the eleventh straight month and new business continued to increase solidly. Employment rose for the sixth month in a row and the rate of job creation climbed to a 4-year high. On the price front, input prices continued to increase (currently on a 4-1/2 year streak) as input cost inflation rose to a 5 month high driven by higher wage costs and higher raw material costs. Positive sentiment was recorded in June, but eased slightly from May."

 

https://tradingeconomics.com/stream

http://www.marketwatch.com/newsviewer#

 

Source: JPMorgan Asset Management, Guide to the Markets 3Q 2017

https://am.jpmorgan.com/gi/getdoc/1383465814898

 

Logistics

 

"Asia cargo volumes stall in June.

Air and ocean volume growth on the Transpacific and Asia-Europe trades stalled in June and optimism ahead of the peak season is starting to subside, according to the latest APAC Forwarding Index survey results."

http://www.lloydsloadinglist.com/freight-directory/news/Asia-cargo-volumes-stall-in-June/69721.htm

 

"Air cargo demand up 10% in first five months.

Global air freight demand rose, year on year (YoY), by almost 13% in May 2017, according to figures from the International Air Transport Association (IATA) and WorldACD, pushing up growth for the first five months to more than 10%."

http://www.lloydsloadinglist.com/freight-directory/news/Air-cargo-demand-up-10-in-first-five-months/69720.htm

 

"New Panama Canal Boosts Ship Sizes.

One year after the widening of the Panama Canal more Asia-ECNA container services are transiting the Central American waterway at the expense of other routes, according to Drewry Maritime Research.

Nonetheless, the upgrade in the size of ships used on the Asia to East Coast North America via Panama trade (the most common trade using the canal) has been spectacular, rising by nearly 60% since May 2016, from 4,900 TEU to around 7,800 TEU as of June 2017."

https://www.porttechnology.org/news/panama_canal_boosts_ship_sizes

 

"Kerry Logistics buys 50% stake in Asian intermodal broker LPL.

Hong Kong-based 3PL Kerry Logistics Network has acquired 50 percent stake in Lanzhou Pacific Logistics Ltd., joining with China Railway Container Transport Co. Ltd. which oversees the management and operations of the entity."

http://www.americanshipper.com/main/news/kerry-logistics-buys-50-stake-in-asian-intermodal-68006.aspx?taxonomy=Transportation

 

Tech

 

"Dubai online retailer Souq.com says sale to Amazon completed

Dubai-based Souq.com, the Middle East's biggest online retailer, says its sale to Amazon has been completed."

https://phys.org/news/2017-07-dubai-online-retailer-souqcom-sale.html

 

"BMW’s i3 battery now being used for Torqeedo’s electric boat motors."

https://techcrunch.com/2017/07/05/bmws-i3-battery-now-being-used-for-torqeedos-electric-boat-motors/

 

"Payments giant Worldpay agrees to a $10B acquisition offer from Vantiv.

A day after payments company Worldpay confirmed that it had been approached by Vantiv and JPMorgan for a possible acquisition, today the company confirmed that it has agreed to the terms of an offer from one of them, Vantiv. The US payments company is offering £3.85 per share, working out to around £7.7 billion (or just under $10 billion) for the company, which competes with Verifone, PayPal, Stripe and a number of other companies in the area of online and point-of-sale payments."

https://techcrunch.com/2017/07/05/worldpay-vantiv/

 

"Baidu’s Apollo platform becomes the ‘Android of the autonomous driving industry’.

Baidu now claims one of the largest partner ecosystems for an autonomous driving platform in the world: Its Apollo autonomous driving program now counts over 50 partners, including FAW Group, one of the major Chinese carmakers that will work with Baidu on commercialization of the tech."

https://techcrunch.com/2017/07/05/baidus-apollo-platform-becomes-the-android-of-the-autonomous-driving-industry/

 

"Einride debuts prototype T-pod, an autonomous electric truck that can also be controlled remotely.

Swedish company Einride has officially unveiled the first full-scale prototype of its futuristic autonomous electric truck.

Each pod is 23 feet (7 meters) in length and can hold 15 “standard” pallets, for a total weight of 20 tons when full. The pods will be able to travel 124 miles on a single charge, and Einride is currently developing compatible charging stations to power the vehicles."

https://venturebeat.com/2017/07/04/swedens-einride-debuts-prototype-t-pod-an-autonomous-electric-truck-that-can-also-be-controlled-remotely/

 

"Autonomous Vehicles vs. Kangaroos: the Long Furry Tail of Unlikely Events.

The question raised by this long and sometimes furry tail of unlikely events (including unconstrained extra-Australian macropods) is to what extent autonomous car companies should reasonably be expected to anticipate and devote resources to preparing for things that almost never happen."

http://spectrum.ieee.org/cars-that-think/transportation/self-driving/autonomous-cars-vs-kangaroos-the-long-furry-tail-of-unlikely-events

 

Random

 

"Gunung Padang.

These broken shards of ancient ruin may hide an ancient pyramid.

The hill isn’t an actual hill, it’s a buried pyramid that may have been built between 9,000 and 20,000 years ago."

http://www.atlasobscura.com/places/gunung-padang

 

Events on 7/6 (ET)

 

Germany  DE: Manufacturers' Orders, 2:00 AM ET

Switzerland  CH: Consumer Price Index, 3:15 AM ET

USA  US: MBA Mortgage Applications, 7:00 AM ET

USA  US: Challenger Job-Cut Report, 7:30 AM ET

USA  US: ADP Employment Report, 8:15 AM ET

USA  US: International Trade, 8:30 AM ET

USA  US: Jobless Claims, 8:30 AM ET

USA  US: Gallup Good Jobs Rate, 8:30 AM ET

Canada  CA: Merchandise Trade, 8:30 AM ET

USA  US: Bloomberg Consumer Comfort Index, 9:45 AM ET

USA  US: PMI Services Index, 9:45 AM ET

USA  US: ISM Non-Mfg Index, 10:00 AM ET

USA  US: EIA Petroleum Status Report, 11:00 AM ET

USA  US: Money Supply, 4:30 PM ET

 

http://online.wsj.com/mdc/public/page/2_3063-globalEconomicCalendar.html

https://tradingeconomics.com/calendar (More complete listing)