Random Market News, 19 June
"U.S. Tech Stocks Rally; Dollar Gains, Bonds Slide: Markets Wrap.
Nasdaq 100 leads rebound in American shares; oil steady.
Hong Kong shares gain before MSCI decision on China A-shares."
"Office Oversupply Looms, But Global Economies Look Solid, Commercial Real Estate Economist Says [from Cushman & Wakefield].
China, some US cities could face glut due to aggressive development."
"Analysts Raised EPS Estimates for Banks as Fed Increased Rates."
"Markets must grasp that the Fed is no longer their best friend.
Ignoring the US central bank’s policy guidance will only lead to greater disappointment."
By Mohamed El-Erian.
"IMF's new program to preapprove emergency access to dollars.
Novel approach hoped to help emerging economies avert currency crises."
Possibly due to competition from newer International Finance Institutions.
"Germany's Angela Merkel slams planned US sanctions on Russia.
Gabriel and Kern's comments centered on the Nord Stream 2 pipeline project to pump Russian natural gas via the Baltic Sea to Germany, which involves Russia's Gazprom along with European energy firms including Germany's Wintershall and Austria's ÖMV.
"Europe's energy supply is a matter for Europe, and not for the United States of America!" wrote Kern and Gabriel, who was previously the German economy minister."
"Amazon’s Whole Foods Purchase Sends Worldwide Retail Stock Shock.
Acquisition shows value of brink-and-mortar establishments for food purchases, UBS says."
"CalPERS' CIO raised the possibility of the pension fund severely cutting its private equity portfolio because issues of fee transparency by general."
"Equip Super, Rio Tinto Super to merge, create A$14.2 billion fund."
"Systematic strategies saw 29 percent of hedge fund industry inflows over the last seven years, according to a Barclays report."
"On June 12, 2017, the U.S. Treasury Department released its report to the President, "A Financial System That Creates Economic Opportunities – Banks and Credit Unions,"... The report sets forth the Treasury Department's analysis and recommendations on a wide range of bank and credit union regulatory reform proposals..."
Orrick's helpful synopsis of the 149 pages of proposals.
"Joseph Mariathasan: The Macron phenomenon.
Indeed, the contrast between the UK’s political chaos, the US’s Trump phenomenon, and France is stark. Macron’s party claimed 60% of the seats in the weekend’s election. With such a majority, he is in a strong position to – as his supporters hope – transform the position of France."
Implied rate hike probability on July 26th ~1.2%, September 20th ~14.5%; 0% probability of rate cut through June 13th, 2018.
VIX ~10.37. 10-yr treasury vol (TYVIX) ~4.20.
"US Shares Jump On Monday As Tech Stocks Rise
Wall Street closed in the green on Monday, as large-cap technology stocks rebounded following two weeks of decline to nudge the S&P 500 and Dow to fresh records. Apple and the so-called FANGs led the way, climbing almost 3 percent in the session. Contrastingly, commodities continued to slump and crude oil touched a 6-week low of 44.6 per barrel, raising questions about their impact on inflation expectations and the Fed’s hawkish tone. The Dow Jones advanced 145 points or 0.7 percent to 21529. The S&P 500 gained 20 points or 0.8 percent to 2453. The Nasdaq surged 87 points or 1.4 percent to 6239.
French Stocks Close Higher After Macron Wins Majority
The CAC 40 closed up 47 points, or 0.9%, at 5,311 on Monday after Emmanuel Macron's centrist coalition won a majority in the second round of France's parliamentary elections on Sunday.
Mozambique Keeps Key Rate Steady At 21.75%
The central bank of Mozambique left its benchmark interbank money market rate unchanged at 21.75 percent on June 19th 2017, mentioning a slight slowdown in inflation amid falling internal demand and a stronger metical. Policymakers also kept the standing lending facility steady at 22.75 percent; the deposit facility rate at 16.25 percent and the reserve ratio at 15.5 percent.
Qatar Trade Surplus Widens 41.7% YoY In May
Qatar trade surplus jumped 41.7 percent year-on-year to 10.7 billion riyals in May of 2017 from 7.5 billion riyals a year ago. Exports surged 18.4 percent to 20.2 billion riyals, boosted by sales of petroleum gases and other gaseous hydrocarbons (21.6 percent) and petroleum oils and oils obtained from bituminous minerals (13.1 percent). Sales went up to Japan (16 percent); South Korea (9.3 percent); Singapore (81 percent); India (7.9 percent) and China (118.4 percent). Imports declined 0.3 percent to 9.5 billion riyals as purchases fell for motor cars and other motor vehicles (-0.6 percent); other groups of commodities (-1.7 percent) and electrical apparatus for line telephony/telegraphy, telephone sets (-36.7 percent). Imports declined from the US (-5.5 percent); China (-6.4 percent), and the UAE (-5 percent).
Mexico 10Y Bond Yield Hits 31-week Low
Mexico 10 Year Government Bond Yield decreased to a 31-week low of 6.864%.
Wheat Hits 51-week High
Wheat increased to a 51-week high of 472.25 USD/Bu.
Rice Hits 52-week High
Rice increased to a 52-week high of 11.52 USD/cwt."
Companies then used that debt as leverage to extract forced labor and trap drivers in jobs that left them destitute."
"GM Expects To Move 600 Supplier Jobs From Mexico to Texas.
GM is one of several manufacturers rethinking the wisdom of shipping intermediate products through far-flung supply chains. Once thought of as a strategy to lower costs, overreliance on a global parts network is perceive to be a risky bet due to political shifts, protectionist measures and even natural disasters."
No mention of OECD's BEPS (Base Erosion and Profit Sharing) here, but transfer pricing is a significant consideration for international firms.
Also, Efficient Manufacturing with newer technologies make local production more viable (and "environmental arbitrage" less necessary).
"An innovative Belgian ‘beer train’ has made its first delivery from brewery to supplier, and its new thrice-weekly service is set to take some 5,000 lorries off the roads every year, thanks to a unique new environmentally-friendly collaboration."
"Lineage Logistics has acquired European cold storage provider Partner Logistics, marking its first foray into international logistics."
"Pharma’s Future: 100+ Startups Working Across Alzheimer’s, Diabetes, Cancer, And More."
"Can the U.S. Grid Work With 100% Renewables? There's a Scientific Fight Brewing."
"Accenture, Microsoft team up on blockchain-based digital ID network."
"China goes on shopping spree for industrial robots."
"Time Warner Inc and Snap Inc said on Monday they had entered into an agreement to develop original shows for messaging service Snapchat over the next two years.
The companies did not disclose the financial terms but a source familiar with the matter said the deal was valued at $100 million."
Random Place of the day.
This Cistercian abbey in Catalonia is one of the largest in Spain. At its centre is a 12th-century church. The austere, majestic monastery, which has a fortified royal residence and contains the pantheon of the kings of Catalonia and Aragon, is an impressive sight."
"Census: More Americans 18-to-34 Now Live With Parents Than With Spouse."
Paris Air Show, 19-25 June.
Germany DE: PPI, 2:00 AM ET
USA US: Current Account, 8:30 AM ET
USA US: Redbook, 8:55 AM ET
Japan JP: BoJ MPB Minutes, 7:50 PM ET