Random Market News, 13 July
"In CBO’s estimation, the federal government realized a deficit of $87 billion in June 2017.
CBO estimates that receipts in June 2017 totaled $339 billion—$10 billion (or 3 percent) more than those in the same month last year.
Total spending in June 2017 was $426 billion, CBO estimates—$103 billion more than spending in June 2016.
Among the larger changes in outlays were the following:
Outlays for the Departments of Education and Housing and Urban Development increased by $33 billion and $21 billion, respectively, because of upward revisions to the estimated net subsidy costs of loans and loan guarantees issued in prior years, as discussed above."
"Stockholders Ride China's Developer Wave Despite Warning Signs.
Sunac, Evergrande take on debt to fund great China land-grab."
"Trump says he is considering quotas, tariffs on Chinese steel dumping."
"Inside the Fight Over Saudi Aramco.
The U.K.’s Financial Conduct Authority has outlined plans for a new stock market category that would make it easier for Saudi Aramco to partially list in London — over the strenuous objections of investors."
"GSAM, BlackRock, JPM Crowd into Smart Beta Bond ETFs.
A flurry of factor-based fixed income funds is coming as asset managers see untapped market."
"The situation in the U.S. and elsewhere is dire, and that is why we need to spend time understanding a place that has managed to figure out how to prepare its people for retirement.
That place, in my view, is Australia. Its citizens save more money than people in other countries, and they invest what they save better than most."
"Foundations report highest returns in 3 years — survey.
Private foundations reported an average return of 6.4% in 2016, while community foundations reported returns of 7.3% for the same period, according to a survey conducted by the Council on Foundations and the Commonfund Institute."
"Cheap and Transparent ETFs Dominate in First Half of 2017.
ETFs are hotter than ever, with $250.2 billion in net inflows.
Cost matters, and investors are flocking to funds with rock-bottom expense ratios.
Plain vanilla is a huge investor favorite, with significant gains in market share.
Complex passive strategies are losing market share, especially so-called smart beta funds.
Active management is on the rise, except in its former stronghold of fixed income."
"San Francisco City & County reports 13.7% fiscal-year return.
Mr. Coaker said public equity returns "were very strong," with U.S. stocks gaining 19.3% and international stocks gaining 21.6%.
He said real assets returned 13.2% for the fiscal year and private equity gained 12.1%. Fixed-income results lagged the other asset classes with a 3.6% return.
The pension fund's hedge fund portfolio, which started in October 2016, reported a return 6.4% through May 31."
"The €389bn Dutch pension fund ABP has bought 48 projects from the Dutch Infrastructure Fund (DIF) in a €700m deal."
"Private equity fundraising rivaling 2007 highs — Pitchbook.
U.S. private equity firms raised $113.4 billion in 117 funds in the first six months of 2017, compared to $209 billion raised by 281 funds in all of 2016, according to data released Thursday by PitchBook."
"CalSTRS' investment committee expressed general support Wednesday for a proposed revamp of the system's private equity program to allow for bigger investments in funds, co-investments and purchase of secondary interests.
The revised rules, which are expected to receive investment committee approval by year-end, are designed to allow investment staff more flexibility in building its $16 billion private equity portfolio, facilitating transactions that can be done without investment committee approval."
Implied rate hike probability on July 26th ~3.1%, September 20th ~13.3%; 0% probability of rate cut through June 13th, 2018.
VIX ~9.90. 10-yr treasury vol (TYVIX) ~4.28.
"US Stocks Edge Higher As Dow Books New Record
Wall Street closed modestly in the green on Thursday, as the bullish sentiment continued following Janet Yellen’s testimony to Congress on interest rates and the US economy. Financial and energy stocks led increases, also aided by an over 1 percent climb in oil prices. The Dow Jones edged up 21 points or 0.1 percent to 21553, clinching a fresh record for the second straight day. The S&P 500 gained 5 points or 0.2 percent to 2448. The Nasdaq advanced 13 points or 0.2 percent to 6274.
US June Budget Deficit Larger Than Expected
The US government posted a USD 90 billion budget deficit in June 2017, larger than market expectations of a USD 35 billion gap and compared with a USD 6 billion surplus in the same month of the previous year. Outlays jumped 33 percent to USD 429 billion while receipts increased at a much slower 3 percent to USD 339 billion.
Japan Industrial Output Falls More Than Estimated
Industrial production in Japan dropped by 3.6 percent month-on-month in May 2017, faster than a preliminary figure of 3.3 percent drop and following a 4 percent rise in April, final data showed. It was the fastest fall in industrial output since March 2011, as production declined for: iron & steel (-3.2 percent vs 3.2 percent in April); non-ferrous metals (-2.8 percent vs 1.4 percent); general purpose & business oriented machinery (-2.6 percent vs 8.7 percent); electronic parts (-1.1 percent vs 5.2 percent); electrical machinery (-2.7 percent vs 0.6 percent) and transport equipment (-13.0 percent vs 10.8 percent). In contrast, output rose for petroleum & coal (2.3 percent vs -1.1 percent). On a yearly basis, output gained 6.5 percent, faster than a 5.7 percent rise in April.
KOSPI Continues Record Run
South Korea's KOSPI gained 17.7 points, or 0.7 percent, to 2409.5 on Thursday 13th of July following Fed Chair Yellen's neutral-dovish testimony overnight. After consolidating for the past 2 weeks, the index broke out into new record highs as the Bank of Korea raised its economic growth forecasts from 2.6 percent to 2.8 percent while holding benchmark rates steady. Market movers Samsung Electro-Mechanics and LG Chemicals rose 4.5 percent and 4.8 percent respectively.
Singapore Economy Expands 2.5% In Q2
The Singaporean economy expanded 2.5 percent year-on-year in the June quarter of 2017, equal to a downwardly revised 2.5 percent growth in the prior quarter and below market consensus of a 2.8 percent growth, preliminary estimates showed. On a quarterly basis, the GDP expanded an annualised 0.4 percent, compared to an upwardly revised 1.9 percent contraction in the previous three months and less than market estimates of a 1.1 percent expansion.
Malaysia Retail Sales Rise The Most In Over 3 Years
Retail sales in Malaysia rose 13.1 percent year-on-year in May of 2017, following a 12.9 percent gain in April and marking the fastest increase since February 2014. Wholesale trade increased by 9.0 percent (from 8.6 percent in the previous month) and sales of motor vehicles jumped by 10 percent (from 4.0 percent). On a monthly basis, retail trade went up 2.7 percent, rebounding from a 3.7 percent fall in a month earlier.
New Zealand Manufacturing PMI Dips To 56.2 In June
The Business NZ Performance of Manufacturing Index for New Zealand dropped to 56.2 in June of 2017 from a downwardly revised 58.2 in May. The index has remained in expansive territory since January of 2015. In June of 2017, it was affected by declines in all five components, with employment falling the most (49.5 vs 55.0 in May). The production component fell to 58.0 (vs 59.5) and the new orders component decreased to 58.7 (vs 60.6). Deliveries also declined (57.2 vs 58.2) and finished stocks edged down to 54.5 (vs 54.6).
South Africa Mining Production Rises Faster Than Expected
Mining production in South Africa increased 3.6 percent year-on-year in May of 2017, following a downwardly revised 1.6 percent rise in April and beating market expectations of 1.6 percent. Main positive contributors were iron ore (28.6 percent compared to 29.9 percent in April) and diamonds (61 percent compared to 12.1 percent) while production of platinum group metals shrank 17.5 percent (-6.8 percent). On a monthly basis, mining output edged down 0.2 percent, following a 1.4 percent fall in April.
Namibia Inflation Rate At 17-Month Low Of 6.1% In June
Consumer prices in Namibia increased 6.1 percent year-on-year in June of 2017, easing from a 6.3 percent rise in May. Is is the lowest inflation rate since January last year, as prices went up at a slower pace for transport (5 percent vs 7.1 percent); clothing and footwear (2.7 percent vs 3.4 percent); alcoholic beverages and tobacco (3 percent vs 3.3 percent); furniture (4.2 percent vs 4.9 percent) and communication (4.1 percent vs 4.5 percent). Also, inflation was steady for housing and utilities (9.8 percent) and education (7.8 percent). In contrast, cost accelerated for food and non-alcoholic beverages (4.6 percent vs 3.7 percent); miscellaneous goods and services (6.1 percent vs 5.8 percent); recreation and culture (5.3 percent vs 5.1 percent) and hotels and restaurants (8.7 percent vs 7.6 percent). On a monthly basis, consumer prices edged up 0.1 percent, at the same pace as in the previous month.
Canada 10Y Bond Yield Hits 31-month High
Canada 10 Year Government Bond Yield increased to a 31-month high of 1.92%.
Stocks in Chile Hit All-time High
IGPA increased to an all-time high of 24755.
Stocks in Colombia Hit 30-month High
COLCAP increased to a 30-month high of 1491.
Swedish Krona Hits 46-week High
USDSEK decreased to a 46-week low of 8.3534.
Oat Hits 28-month High
Oat increased to a 28-month high of 312.25 USd/Bu."
"Wal-Mart Will Punish Its Suppliers for Delivering Early [or Late].
The initiative builds on progress Wal-Mart has made in reducing inventory and tidying its 4,700 U.S. stores after the back rooms became so cluttered it often stored surplus products in cargo trailers parked out back.
The new rules begin in August."
"Unsecured creditors of bankrupt panamax containership owner Rickmers Maritime Trust (RMT) will each receive just 11.4% of the amount they are due.
This will come from the final proceeds of $27m, according to an update on the winding-up process."
"Dutch antitrust authorities have launched an investigation into a possible price-fixing scheme in the Netherlands' bunkering industry. The Netherlands Authority for Consumers and Markets (ACM) says that it is examining several firms that are active in the ports of Rotterdam, Amsterdam and Antwerp, and it has already conducted several dawn raids to gather evidence. The inquiry could have implications for the broader industry, as Rotterdam is the world's third-largest bunkering port."
"Less-than-truckload companies benefited from a robust second quarter with revenue growth and stronger volumes and yields year-over-year, according to industry analysts and executives."
"The UK government has launched a new scheme to streamline export finance for UK small and medium-sized (SME) exporters that for the first time will include exporters’ freight forwarding and logistics providers in a bit to boost UK exports after Brexit."
"Last-mile deliveries tend to run closer to 6-to-9 miles, says CBRE research.
While estimates for the actual value of the last-mile delivery market vary, it goes without saying that this e-commerce –driven space has still has lots of room to grow into. This is especially true when considering the rate at which last-mile distribution centers are popping up in close proximity to the population centers of major U.S. cities, according to recently published research from industrial real estate firm CBRE."
"Trucking Tech Investment On Pace For Record Highs In 2017.
Amid the overall influx of capital to both auto tech and supply chain & logistics tech as a whole, it’s no surprise that trucking tech startups are also drawing a rush of investor interest. Annual deals and funding dollars to trucking tech startups hit a record high in 2016, with investors deploying $742M across 59 deals."
"No Blind Spots: 12 Early-Stage Trucking Tech Companies To Watch."
"Open Listings raised $6.5M to help you buy a home without an annoying agent.
Open Listings, the YC-backed startup that lets buyers purchase homes and get a 50% refund on whatever fee their real estate agent would normally make, has raised $6.5M in Series A funding led by Matrix Partners."
"Jefferies gives IBM Watson a Wall Street reality check.
IBM’s Watson unit is receiving heat today in the form of a scathing equity research report from Jefferies’ James Kisner. The group believes that IBM’s investment into Watson will struggle to return value to shareholders."
"Games software/hardware revenue to top $150 billion in 2017."
"Micromotors are powered by bacteria, controlled by light."
"High-speed Hyperloop project ready for key test in Nevada."
"Why Ethereum’s price is dropping.
The currency rose from the $100 range to the $400 range from May to June; and from June to July we’ve seen it drop back down to the $200 range."
Bonus, met the co-founder of the Danish firm behind this at a Founder's event tonight:
Inhabited since prehistoric times, this Nabataean caravan-city, situated between the Red Sea and the Dead Sea, was an important crossroads between Arabia, Egypt and Syria-Phoenicia. Petra is half-built, half-carved into the rock, and is surrounded by mountains riddled with passages and gorges. It is one of the world's most famous archaeological sites, where ancient Eastern traditions blend with Hellenistic architecture."
IN: WPI, 2:30 AM ET
IT: CPI, 4:00 AM ET
EZ: Merchandise Trade, 5:00 AM ET
IT: Merchandise Trade, 5:00 AM ET
US: Consumer Price Index, 8:30 AM ET
US: Retail Sales, 8:30 AM ET
US: Industrial Production, 9:15 AM ET
US: Business Inventories, 10:00 AM ET
US: Consumer Sentiment, 10:00 AM ET
US: Baker-Hughes Rig Count, 1:00 PM ET
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