Random Market News, 24
"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."
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."
VIX ~12.23. 10-yr treasury volatility (TYVIX) ~4.25.
Implied Fed rate hike/cut probability for September 20th is ~1.4%/0.0%, November 1st is ~5.3%/0.1%.
"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."
"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."
"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."
"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."
"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."
"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."
"How RFID tags became trendy.
Fashion brands are using the tech to battle counterfeits and track inventory more efficiently."
"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."
"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."
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."
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."
"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."
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
https://tradingeconomics.com/calendar (More complete listing, including consensus)