Random Market News, 29 June
2017
"Wall Street fell sharply on Thursday, with the S&P 500 and the
Dow industrials suffering their worst daily percentage drops in about six
weeks, as a recent decline in technology shares deepened and outweighed
strength in bank shares."
http://www.reuters.com/article/us-usa-stocks-idUSKBN19K1FI
"The sell-off in the European government bond market was reversed
yesterday as the ECB did some been ‘backtracking’ on the statements from Mario
Draghi on Tuesday. We have seen this before when tapering is being discussed in
the ‘open air’ by members of the ECB. The initial reaction has been a
significant sell-off in the European government bond markets as well as a strengthening
of the euro. However, this is disinflationary and thus the ECB has been quick
to alter its statements."
http://danskeresearch.danskebank.com/Link/DanskeDaily/$file/DanskeDaily.pdf
"Are free private equity co-investments really free?
Co-investments typically offered on a no-fee no-carry basis have become an
incredibly sought after private equity investment opportunity, with an entire
cottage industry built around them.
Most LPs will never get to see the best co-investment deals. LPs typically
only get to co-invest if a deal is so big that a private equity fund decides
not to fund the entire deal itself.
Even though an LP doesn't have to pay for the co-investment in a particular
deal, there are many fees along the way that dim the appeal of these
opportunities.
In addition to these costs, many LPs simply don't have the infrastructure
to take advantage of co-investment opportunities because they lack the in-house
capacity or expertise to screen the opportunities, perform the due diligence,
negotiate term sheets, etc."
Co-investments are also used to
avoid pension liability in portfolio company bankruptcy. Many PE co-investors
are pension funds.
"NY Comptrollers, CalSTRS Retaliate Against Mylan Board.
Now that Mylan’s June 22 shareholder vote totals are public —revealing the
EpiPen maker’s decision to ignore majority shareowner votes—New York’s city and
state comptrollers, as well as the California State Teachers Retirement System
(CalSTRS) are calling for an immediate board reform."
https://www.ai-cio.com/news/ny-comptrollers-calstrs-retaliate-mylan-board/
"Moody's first podcast series."
NPL securitization. Probably need
to work extra hard for this.
"Global Fixed Income Views 3Q 2017.
Everything's a Proxy for QE.
Given the strength of synchronized global expansion, Above Trend Growth
remains our base case scenario (with a probability of 65%, down from 70% in
Q2). However, continued low inflation would support a Sub Trend Growth scenario
(with a probability of 25%, up from 20%).
The biggest risks to this base case—a slowdown in China’s growth, an oil
market collapse or an overly hawkish Federal Reserve (Fed) do not appear
imminent. Both our Recession and our Crisis scenario probabilities are
unchanged at 5%."
https://am.jpmorgan.com/us/institutional/library/global-fixed-income-views
"Goldman's Commodity Analysts Ask: How Did We Get It So Wrong?
Goldman says an under-appreciation of some rules of commodity investing
contributed to its misjudging of the market.
In a separate note on Wednesday, Goldman cut its WTI forecast for the next
three months by $7.50 a barrel to $47.50.
The contract for August delivery settled at $44.93 on Thursday in New York."
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 ~2.5%,
September 20th ~12.8%; 0% probability of rate cut through June 13th,
2018.
http://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html/
VIX ~11.44. 10-yr treasury vol (TYVIX) ~4.63.
http://www.cboe.com/products/vix-index-volatility/volatility-on-interest-rates
News feed.
"US Stocks Decline As Tech Rout Deepens
Wall Street closed deep in the red on Thursday, as
equities fell the most in seven weeks triggered by a rout in technology shares.
Banks shares outperformed after the US Fed cleared stock repurchases. The Dow
Jones retreated 168 points or 0.8 percent to 21287. The S&P 500 lost 21
points or 0.9 percent to 2420. The Nasdaq plunged 90 points or 1.4 percent to
6144.
US Corporate Profits Fall 2.7% In Q1
Corporate profits in the United States fell by USD
44.0 billion, or 2.7 percent, to USD 1,567.4 billion in the first quarter of
2017, following a 2.3 percent rise in the previous period and worse than a
preliminary reading of a 2.5 percent drop, final figures showed. The
undistributed profits shrank by USD 53.8 billion, or 8.5 percent, to USD 575.6
billion while net dividends rose USD 9.8 billion, or 1 percent, to USD 991.8
billion. Also, net cash flow with inventory valuation adjustment, the internal
funds available to corporations for investment, went down by USD 48.2 billion,
or 2.2 percent, to USD 2,143.9 billion.
US Jobless Claims Above Expectations
The number of Americans filing for unemployment
benefits increased by 2 thousand to 244 thousand in the week ended June 24th
from the previous week's revised level of 242 thousand and above market
expectations of 240 thousand. Claims have now been below 300,000 for 121
straight weeks, the longest such stretch since 1970. Meanwhile, the 4-week
moving average, which removes week-to-week volatility, declined 2.75 thousand
to 242.25 thousand last week.
Argentina Industrial Production Breaks Contraction
Streak
Industrial Production in Argentina expanded 2.7
percent in May of 2017 over the same month in the previous year from an
upwardly revised 2.6 percent decline in the previous month. Consensus expected
a 3.5 percent expansion. Industrial production grew for the first time since
January of 2016. Expansion was mainly explained by car manufacturing, which
advanced 17.4 percent in May after declining 7.5 percent in April.
Stocks in Vietnam Hit 9-year High
VN increased to a 9-year high of 774.49.
Singapore Bank Loans Increased to Record High In May
Bank loans in Singapore increased to a record high of
SGD 633.2 billion in May of 2017 from SGD 631.2 billion in April, as consumer
loans went up further to SGD 252.2 billion (from SGD 251.8 billion in the
previous month) and lending to businesses rose to SGD 381 billion (from SGD
379.4 billion). Loans increased for financial institutions (SGD 90.3 billion
from SGD 90.1 billion in April); and business services (SGD 8.7 billion from
SGD 8.69 billion). Compared to May 2016, bank loans rose by 6.8 percent from
SGD 592.8 billion.
China Factory Activity Expands For 11th Straight Month
The official NBS Manufacturing PMI in China stood at
51.7 in June of 2017, above April's 51.2 and above the market consensus of 51.
Faster growth was reported for production and new orders which expanded for the
eight consecutive month, while raw material inventories declined at a slower
rate and both employment and supplier delivery times worsened. Also, input
prices rebounded from a contraction and factory prices declined for a third
straight month albeit at a slower pace.
Japan Industrial Production Falls The Most In 6 Years
Industrial production in Japan shrank 3.3 percent
month-on-month in May of 2017, compared to a 4 percent rise in April and below
market estimates, preliminary data showed. It was the steepest decline in
industrial output since April 2011, as production contracted for most
categories: iron & steel (-3.2% vs +3.2%), non-ferrous metals (-2.8% vs
+1.4%), fabricated metals (-6.3% vs +1.4%); general purpose & business
oriented machinery (-2.6% vs +8.7%), electronic parts (-1.1% vs +5.2%),
electrical machinery (-2.7%vs +0.6%), transport equipment (-11.7% from +10.8%);
ceramics, stone & clay products (-1.6% vs +0.6%); chemicals (-2.2% vs
+1.7%); plastic products (-0.6% from +0.9%); textiles (-1.8% vs 1.4%);
construction goods (-4.8% vs 2%); and durable consumer goods (-11% vs +8.1%).
In contrast, output rose for petroleum & coal (+2.3% vs -1.1%). On a yearly
basis, output gained 6.8%, faster than a 5.7% rise in April.
Japan 10Y Bond Yield Hits 15-week High
Japan 10 Year Government Bond Yield increased to a
15-week high of 0.076%.
UK Consumer Confidence At 11-Month Low
Consumer confidence in the United Kingdom fell to -10
in June of 2017 from -5 in May, worse than market expectations of -7. It is the
lowest value since July of 2016 as personal finances were assessed less
positive (0 from 4); the index for the economic situation in the next 12 months
fell (-23 from -21) and the major purchase index worsened to 1 to 9.
German Inflation Rate Unexpectedly Rises To 1.6% In
June
German consumer prices are expected to increase by 1.6
percent year-on-year in June 2017, following a 1.5 percent rise in the previous
month and beating market consensus of a 1.4 percent gain. Cost of services rose
at a faster pace while goods inflation slowed, as energy prices showed no
growth from a year earlier. On a monthly basis, consumer prices are expected to
increase by 0.2 percent, also above market expectations of a flat reading.
Swiss Franc Hits 33-week High
USDCHF decreased to a 33-week low of 0.95605.
Wheat Hits 54-week High
Wheat increased to a 54-week high of 482.5 USD/Bu."
https://tradingeconomics.com/stream
http://www.marketwatch.com/newsviewer#
"Logistics companies lack focus when it comes to pricing.
They have too little focus and not enough guidance when it comes to
pricing, a recent study by global strategy and marketing consultancy,
Simon-Kucher & Partners, concludes."
"New wave of freight technology unveiled.
Second set of 10 startups showcase ‘out of the box’ logistics innovations
as part of the Logistics Tech Accelerator programme."
Some more firms from 3PL &
Supply Chain Summit 2017.
https://www.youtube.com/watch?v=OGSc9h5S410
"California leads the way in addressing transport infrastructure
The bill would establish the Freight Transportation Infrastructure Trust
Fund, funded through a national 1 percent waybill fee on the transportation
cost of goods."
http://www.logisticsmgmt.com/article/california_leads_the_way_in_addressing_transport_infrastructure
"WWL execs indicted in ro-ro shipping collusion case.
One current and two former executives of Wallenius Wilhelmsen Logistics
have been charged with bid rigging and price fixing in the roll-on/roll-off
shipping market, according to the U.S. Justice Department’s federal court in
Baltimore."
http://www.americanshipper.com/main/asd/wwl-execs-indicted-in-roro-shipping-collusion-case67945.aspx
"D-FW warehouse construction slips 40 percent from last year, and
labor shortage is one factor.
At midyear, 14.6 million square feet of industrial buildings were under
construction in Dallas-Fort Worth. That's a 40 percent reduction from the
second quarter of 2016, according to preliminary estimates from Cushman &
Wakefield of Texas."
"Amazon.com Inc. will go forward with plans to build a Romulus
warehouse that would create a promised 1,600 jobs after the Michigan Strategic
Fund board approved Tuesday a $5 million grant for the online company."
http://www.detroitnews.com/story/business/2017/06/27/amazon-michigan/103226436/
"Smart Transformers Will Make the Grid Cleaner
and More Flexible.
The solid-state transformer is poised to remake the electrical
distribution grid."
"New Technique Enables Safer Gene-editing Therapy.
Scientists from The University of Texas at Austin took
an important step toward safer gene-editing cures for life-threatening
disorders, from cancer to HIV to Huntington's disease, by developing a technique
that can spot editing mistakes a popular tool known as CRISPR makes to an
individual's genome. The research appears today in the journal Cell."
https://www.laboratoryequipment.com/news/2017/06/new-technique-enables-safer-gene-editing-therapy
"Visualizing Where Major US Banks Have Invested
in Fintech.
Since 2012, the top ten US banks by assets under
management have participated in 72 rounds totaling $3.6B to 56 fintech
companies."
https://www.cbinsights.com/blog/fintech-investments-top-us-banks/
"Aerospace leader Lockheed Martin has invested in
U.S. nanosatellite company Terran Orbital, the latest example of how legacy and
novel players alike are looking at smallsats and the industry of cheap,
lightweight satellites in general as a key area of opportunity for the growing
commercial space sector."
"More than half of major malware attack’s victims
are industrial targets.
A new report from cybersecurity firm Kaspersky Labs
examining the targets — and intended effects — of this week’s massive malware
attack comes up with some significant insights."
https://techcrunch.com/2017/06/29/kaspersky-petya-expetr-not-ransomware-industrial-targets/
"China will launch a series of artificial
intelligence (AI) projects and increase efforts to cultivate tech talent as
part of a soon to announced national AI plan, the China Daily said on Friday,
citing a senior official."
http://www.reuters.com/article/us-china-tech-idUSKBN19L00R
"Uber’s Advanced Technologies Group has a new
version of its testing transport truck for autonomous tech. The new model
features an updated technology stack, including a 64-channel spinning LiDAR
array, which is something never used previously on any of the former Otto’s
test trucks."
https://techcrunch.com/2017/06/29/uber-atg-upgrades-its-autonomous-truck-test-fleet-with-new-tech/
"Ford CTO Ken Washington today announced that the
automaker will create a robotics and AI research team to explore AI beyond
autonomous cars.
“This is the next step in Ford’s automation story,”
Washington said. “Ford is poised to drive into the future by expanding
automation of mobility products and services.”"
https://venturebeat.com/2017/06/29/ford-forms-robotics-research-team-to-explore-ai-beyond-cars/
"Sacred City of Caral-Supe.
The 5000-year-old 626-hectare archaeological site of
The Sacred City of Caral-Supe is situated on a dry desert terrace overlooking
the green valley of the Supe river. It dates back to the Late Archaic Period of
the Central Andes and is the oldest centre of civilization in the Americas.
Exceptionally well-preserved, the site is impressive in terms of its design and
the complexity of its architectural, especially its monumental stone and
earthen platform mounts and sunken circular courts. One of 18 urban settlements
situated in the same area, Caral features complex and monumental architecture,
including six large pyramidal structures. A quipu (the knot system used in
Andean civilizations to record information) found on the site testifies to the
development and complexity of Caral society. The city’s plan and some of its
components, including pyramidal structures and residence of the elite, show
clear evidence of ceremonial functions, signifying a powerful religious
ideology."
http://whc.unesco.org/en/list/1269
"Forget birds and trains, spotters are haunting storage yards seeking
rare versions of the ubiquitous metal boxes.
A small group of connoisseurs has taken up “container spotting,” hanging
around shipping yards to identify the globe-trotting metal boxes by color,
size, vintage, origin country and other details.
Rare finds are what “makes it all worth it,” said Mr. Fox, an
Indianapolis-based logistics-company salesman. “Blue Gateway container!”"
https://www.wsj.com/articles/shhh-look-its-a-lesser-spotted-refrigerated-maersk-container-1498581066
Probably quite useful for secured
financers.
And travel with the containers!
https://www.freightercruises.com/voyages.php#anchor_menue
DE: Retail
Sales, 2:00 AM ET
FR: Consumer
Mfgd Goods Consumption, 2:45 AM ET
FR: PPI, 2:45
AM ET
CH: KOF Swiss
Leading Indicator, 3:00 AM ET
DE: Unemployment
Rate, 3:55 AM ET
GB: GDP, 4:30
AM ET
EZ: HICP Flash, 5:00
AM ET
US: Personal
Income and Outlays, 8:30 AM ET
CA: IPPI, 8:30
AM ET
CA: Monthly GDP,
8:30 AM ET
US: Chicago PMI,
9:45 AM ET
US: Consumer
Sentiment, 10:00 AM ET
CA: BOC Business
Outlook Survey, 10:30 AM ET
US: Baker-Hughes
Rig Count, 1:00 PM ET
http://online.wsj.com/mdc/public/page/2_3063-globalEconomicCalendar.html