Random Market News, 24
August 2017
"Wall Street Banks Warn Downturn Is Coming.
HSBC Holdings Plc, Citigroup Inc. and Morgan Stanley see mounting evidence
that global markets are in the last stage of their rallies before a downturn in
the business cycle.
Analysts at the Wall Street behemoths cite signals including the breakdown
of long-standing relationships between stocks, bonds and commodities as well as
investors ignoring valuation fundamentals and data. It all means stock and
credit markets are at risk of a painful drop."
"Investors pour back into crisis-era credit product.
Hedge funds are embracing an esoteric credit product widely blamed for
exacerbating the financial crisis a decade ago, as low volatility and near
record prices for corporate debt tempt them into riskier areas to seek higher
returns.
The market for “bespoke tranches” — bundles of credit default swaps that
are tied to the risk of corporate defaults — has more than doubled in the first
seven months of 2017.
Traders in this opaque, over-the-counter market estimate there has been
issuance of $20bn to $30bn this year, compared to $15bn in the whole of 2016
and $10bn in 2015.
High-profile investors including Apollo, Brigade Capital and Blue Mountain
are among those who having been buying tranches with a maturity of two to three
years."
https://www.ft.com/content/c4d815b2-86bc-11e7-bf50-e1c239b45787
Synthetic CDOs. Great timing for
banks to offload risk with the downturn warning above.
"Research Affiliates: Beware of Backtesting.
About two-thirds of smart-beta index track records are not based on real
investment returns but often unrealistic backtests.
While backtesting may be useful for gaining a better understanding of risks
tied to an investment strategy, there’s reason to be cautious. The results can
be influenced by data mining and tend to ignore transaction costs and other
fees that nearly obliterate “outperformance” when real money is actually put to
work, according to Li and West."
"Private Equity and VC Investors Pile Into Eastern Europe.
Investor interest in Eastern European countries continued in 2016, with
private equity and VC investments at their highest since 2009, according to a
new report.
Total private equity investment in the region hit €1.6 billion ($1.9
billion) last year, while total private equity fundraising reached €621
million, a 62 percent increase over the previous year, according to trade group
Invest Europe. Fund of funds accounted for the highest percentage of capital
raised during 2016 (27 percent), followed by pension funds (16 percent)."
"Maersk Tankers invests in quantitative hedge fund CargoMetrics.
Maersk Tankers said on Wednesday it has entered into an equity agreement
with U.S. hedge fund CargoMetrics, giving it access to analytical models and
algorithms to better manage its tanker operations.
Maersk Tankers, a unit of shipping group A.P. Moller-Maersk (MAERSKb.CO),
has invested a "significant" but undisclosed amount in the
Boston-based hedge fund, which will give the firm exclusive right to its
analytical models, algorithms and capabilities.
CargoMetrics links satellite signals, historical shipping data and
proprietary analytics for trading purposes in its systematic investment
platform.
"Data about the ninety-percent of global trade that moves by sea is a
powerful trading edge," said Scott Borgerson, Chief Executive of
CargoMetrics in a statement."
https://www.reuters.com/article/us-maersk-cargometrics-investment-idUSKCN1B30U1
Data dump.
VIX ~12.23. 10-yr treasury volatility (TYVIX) ~4.25.
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 ~5.3%/0.1%.
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.
"US
Jobless Claims Rise Slightly to 234K
The number of
Americans filing for unemployment benefits increased by 2 thousand to 234
thousand in the week ended August 19th from the previous week's unrevised level
of 232 thousand. It compares with market expectations of 238 thousand. The
4-week moving average which removes week-to-week volatility went down by 2.750
thousand to 237.750 thousand, the lowest since May.
Stocks in
Brazil Hit 6-year High
iBovespa
increased to a 6-year high of 70594.
Brazil Bank
Lending Falls the Most in 6 Months
The value of
loans in Brazil declined 0.6 percent month-over-month to BRL 3062 billion in
July of 2017, following a 0.4 percent gain in the previous month. It is the
largest decrease in loans since January as lending to companies went down 1.4
percent to BRL 1463.4 billion and lending to households rose 0.2 percent to BRL
1598.3 billion. Year-on-year, loans decreased 1.7 percent.
French Industry
Morale at Near 10-Year High
French
industrial confidence rose to 111 in August of 2017 from a downwardly revised
108 in the preceding month and way above market consensus of 108. The reading
reached an unprecedented level since December 2007, when the index was recorded
at 113. The balance of industrialists' opinion on their past activity hit its
highest level since June 2011 (23 from 9 in July); and that on personal
production expectations also recovered (15 from 11 in July). Also, business
managers remained confident about the general production prospects for the
sector (20 from 21 in July) and the balance of opinion on global and export
order books were virtually stable. Meanwhile, the composite indicator, compiled
from the answers of business managers in manufacturing, building, services and
retail trade, rose 1 point to 109, the highest level since April 2011.
Stocks in
Poland Hit 9-year High
WIG increased
to a 9-year high of 63372.
Polish
Unemployment Rate Unchanged at 26-Year Low
The
unemployment rate in Poland came in at 7.1 percent in July 2017, unchanged from
the previous month's 26-year low but slightly above market expectations of 7
percent. The number of unemployed decreased to 1.14 million from 1.15 million
in June.
Norwegian Krone
Hits 25-month High
USDNOK
decreased to a 25-month low of 7.8364.
Stocks in South
Africa Hit All-time High
JALSH-All Share
increased to an all-time high of 56414.
Qatar Trade
Surplus Widens Sharply in July
Qatar trade
surplus jumped 78.1 percent to QAR 11.9 billion in July 2017 from QAR 6.7
billion in the corresponding month of the previous year. Exports increased 11.4
percent from a year ago to QAR 18.1 billion, boosted by higher sales of
petroleum oils and oils obtained from bituminous minerals (97.7 percent) and
petroleum gases and other gaseous hydrocarbons (7.8 percent). Among major
trading partners, sales went up to China (247.8 percent), Singapore (151.1
percent) and South Korea (30.5 percent). Meanwhile, imports shrank 35 percent to
QAR 6.2 billion amid sanctions imposed by other Gulf states. Purchases fell for
parts of aircraft and helicopters (-40.5 percent); other groups of commodities
(-36.6 percent); turbojets, turbo propellers and other gas turbines (-19.8
percent); and motor cars and other motor vehicles (-16.6 percent). Imports
declined from the US (-60 percent); China (-26.1 percent); and Japan (-17.2
percent).
Stocks in
Kazakhstan Hit 6-year High
KASE increased
to a 6-year high of 1939.
South Korea
Consumer Confidence Falls In August
South Korea's
consumer confidence dropped to 109.9 in August of 2017 from 111.2 in the
previous month. It was the first decline following six straight increases. The
fall was mainly explained by a 5-point dip in the component of future domestic
economic conditions, which currently stands at 104. Current domestic economic
conditions declined 3 points to 93; future living standards to points to 102;
and current living standards 1 point to 94. Contrastingly, future household
spending edged up one 1 point to 109 and future household income remained
unchanged at 103.
Stocks in Japan
Hit 16-week Low
NIKKEI 225
decreased to a 16-week low of 19354.
Japan 10Y Bond
Yield Hits 16-week Low
Japan 10 Year
Government Bond Yield decreased to a 16-week low of 0.019%.
Corn Hits
37-week Low
Corn decreased
to a 37-week low of 341.25 ¢USD/bu.
Copper Hits
33-month High
Copper
increased to a 33-month high of 3.034 USD/Lbs."
https://tradingeconomics.com/stream
http://www.marketwatch.com/newsviewer#
https://global.handelsblatt.com/
"A second look.
A few weeks ago we ran a piece showcasing what we thought
were stellar Intra-Asia container volumes (Intra-Asia riding high). The
original 1Q17 data from Container Trades Statistics (CTS) indicated that
container trade within Asia (inclusive of Chinese domestic traffic) jumped by a
prodigious 23.5% year-on-year. However, a subsequent revision by CTS included a
significant downgrade in numbers and we felt it only right to present what the
latest growth rate looks like."
http://www.lloydsloadinglist.com/freight-directory/adviceandinsight/A-second-look/70182.htm
"Chaos on key North-South Europe rail route.
Key section of Rhine-Alpine rail freight corridor to
remain closed until October. Intermodal operators diverting traffic to
alternative routes and modes.
The closure of a key section of the Rhine-Alpine rail
freight corridor is set to disrupt shipments between northern and southern
Europe for several more weeks.
Delays to services started on 12 August when tunnel
construction in the town of Rastatt resulted in unexpected damage to the double
track Rhine Valley mainline. A tunnel boring machine that was crossing a few
metres below the railway line caused a serious deformation of the tracks,
making them unpassable for the 170-200 freight trains which typically transit
Rastatt daily."
"Panama Canal welcomes largest capacity vessel to
date.
The Neopanamax vessel CMA CGM Theodore Roosevelt,
which measures 1,200 feet in length and 158 feet in beam and has a container
carrying capacity of 14,885 TEUs, on Aug. 22 became the largest ship to ever
transit the Central American waterway."
"DHL eCommerce gets logistics technology platform
- FarEye on board.
FarEye, a logistics management solution, became a
partner of choice for DHL eCommerce to enhance its customer experience,
optimize its resources and deliver its brand promise "real-time.""
"OOCL takes delivery of 21,000 TEU+ capacity box
ship.
The OOCL Germany, a 21,413 TEU newbuilding constructed
by Samsung Heavy Industries shipyard on Geoje Island in South Korea, is the
second of six 21,000 TEU class vessels on order at the shipyard.
“The vessel has been delivered and is scheduled to
enter our LL1 service on the week of 3 September,” a spokesman told Lloyd’s
Loading List.
The vessels not only meet the current Energy Efficiency
Design Index (EEDI) baseline requirement, but perform 48% better than the EEDI
level required by the International Maritime Organization in 2025."
"Kansas City startup will test sensor-laden roads.
Data collected from the roads will help the city address
traffic congestion & maintenance, and eventually help self-driving cars."
https://www.curbed.com/2017/8/22/16182882/kansas-city-smart-roads-sensors-integrated-roadways
"Africa Leads the World on Drone Delivery: Flights to Begin in
Tanzania in 2018.
Drone delivery is finally getting off the ground. And the action is
happening in East Africa.
Zipline, a pioneering drone startup that began delivering blood packs to
Rwanda’s remote hospitals in October 2016, today announced a major expansion
into Tanzania. In early 2018 the company will begin flying its delivery drones
to more than 1000 health care facilities around Tanzania, bringing urgently
needed medicines and supplies to big hospitals and tiny rural clinics alike.
Meanwhile, the world’s first on-demand delivery service is already up and
running in Rwanda."
http://spectrum.ieee.org/the-human-os/robotics/drones/africa-leads-the-world-on-drone-delivery
"Build-Out: Investors And Executives Sound Off On Construction Tech.
The construction industry has seen increasing levels of development and
discussion in recent years with $1.08B invested across 207 deals since 2013.
Investors and incumbents alike are paying more attention to the industry, as
new crops of startups emerge to tackle industry pain points such as
collaboration, labor concerns, and site safety.
We dug into discussions around the nascent construction tech space by
gathering 12 perspectives from investors, startups, corporations, and industry
leaders."
https://www.cbinsights.com/research/construction-tech-investor-commentary/
"Tesla’s electric semi truck will reportedly get 200 to 300 miles per
charge.
As the report notes, this doesn’t put the Tesla semi in direct competition
with long-haul fuel-powered rigs; those can go upwards of 1,000 miles on a
single tank. But 300 miles is still long enough for a decent chunk of routes
considered at the entry-level of the ‘long haul’ category."
"SpaceX successfully launches its 12th Falcon 9 rocket of 2017.
SpaceX has succeeded with a launch of one of its Falcon 9 rockets today,
for client Taiwan National Space Organization (NSPO). The rocket took off from
SpaceX’s launch facility 4E at California’s Vandenberg Air Force Base as
planned, carrying the NSPO’s FORMOSAT-5 satellite to orbit, where it was
deployed successfully."
https://techcrunch.com/2017/08/24/spacex-successfully-launches-its-12th-falcon-9-rocket-of-2017/
"How RFID tags became trendy.
Fashion brands are using the tech to battle
counterfeits and track inventory more efficiently."
https://www.engadget.com/2017/08/22/rfid-tags-in-fashion/
"Drug Deluge: Keeping Up With the
Compounds.
On June 6, 2017, coinciding with the American
Society for Mass Spectrometry conference in Indianapolis, NIST released the
latest version of its widely used Mass Spectral Library, adding molecular
fingerprints from more than 25,000 compounds, bringing the total number to more
than 265,000."
https://www.laboratoryequipment.com/news/2017/08/drug-deluge-keeping-compounds
"Mathematical mystery of ancient Babylonian clay tablet solved.
UNSW Sydney scientists have discovered the purpose of a famous 3700-year
old Babylonian clay tablet, revealing it is the world's oldest and most
accurate trigonometric table, possibly used by ancient mathematical scribes to
calculate how to construct palaces and temples and build canals.
The new research shows the Babylonians beat the Greeks to the invention of
trigonometry - the study of triangles - by more than 1000 years, and reveals an
ancient mathematical sophistication that had been hidden until now.
Known as Plimpton 322, the small tablet was discovered in the early 1900s
in what is now southern Iraq by archaeologist, academic, diplomat and
antiquities dealer Edgar Banks, the person on whom the fictional character
Indiana Jones was based."
https://phys.org/news/2017-08-mathematical-mystery-ancient-babylonian-clay.html
Startup/SME of the Day.
"Graphite Cova GmbH.
Established in Nuremberg in 1855, the company initially produced pencils, amplifying its range later with arc lamp carbons. In the beginning of the last century, the production was diversified into artificial carbon and electric graphite.
Today, Graphite Cova is a supplier of graphite electrodes, coating for graphite electrodes and special carbon and graphite products applied in almost every industrial area."
http://www.graphitecova.com/en/who-we-are
Graphite electrodes are key
components for electric arc furnaces in steel production.
"Historic Centre of Prague.
Built between the 11th and 18th centuries, the Old Town, the Lesser Town and the New Town speak of the great architectural and cultural influence enjoyed by this city since the Middle Ages. The many magnificent monuments, such as Hradcani Castle, St Vitus Cathedral, Charles Bridge and numerous churches and palaces, built mostly in the 14th century under the Holy Roman Emperor, Charles IV."
http://whc.unesco.org/en/list/616
"World's Oldest Italian Wine Discovered.
Chemical analysis conducted on ancient pottery could dramatically predate
the commencement of winemaking in Italy. A large storage jar from the Copper
Age (early 4th millennium BC) tested positive for wine."
https://www.laboratoryequipment.com/news/2017/08/worlds-oldest-italian-wine-discovered
SG: Industrial Production, 1:00 AM ET
DE: GDP, 2:00 AM ET
DE: Ifo Survey, 4:00 AM ET
US: Durable Goods Orders, 8:30 AM ET
US: Baker-Hughes Rig Count, 1:00 PM ET
http://online.wsj.com/mdc/public/page/2_3063-globalEconomicCalendar.html
https://tradingeconomics.com/calendar (More complete listing, including consensus)