Random Market News, 6 September 2017
"Stocks Rise, Treasuries Fall on Debt-Ceiling Deal: Markets Wrap.
U.S. stocks pushed higher while longer-term government debt fell after lawmakers reached a deal with President Donald Trump to extend the U.S. debt limit and fund the government through mid-December."
"Fed sees pickup in economic growth, but inflation remains muted.
The U.S. economy expanded at a modest to moderate pace in July through mid-August but signs of an acceleration in inflation remained slight, the latest survey conducted by the Federal Reserve showed on Wednesday.
“Prices rose modestly overall across the country,” the central bank said in its Beige Book report of the economy, compiled from anecdotal evidence derived from business contacts nationwide."
'Modest', 'moderately', 'moderate', etc. are top words in a Beige Book word cloud.
"Draghi Kicks Off the QE Exit Debate He Has Long Sought to Avoid.
The European Central Bank president opened a debate about the future path of stimulus on Wednesday after the Governing Council was presented with various scenarios for winding down asset purchases, according to people familiar with the matter."
"Fischer's departure expedites Trump's overhaul of Fed leadership.
Federal Reserve Board Vice Chairman Stanley Fischer's surprise decision to resign in mid-October will enable President Trump to more rapidly reshape the Fed, paving the way for it to roll back post-crisis reforms.
Fischer's departure will leave four vacancies on the seven-member Fed board. Trump's first Fed nominee, Randal Quarles as vice chairman of banking supervision, is expected to be approved by the Senate Banking Committee on Thursday, and he is likely to clear the full Senate soon thereafter."
"Investor Matchmaking Online Has Its Limits.
Matchmakers Palico and Artivest are increasing in popularity, but their full potential is limited by regulation prohibiting private companies from listing asset prices.
Having a clear, full view of the market is a big deal to institutional investors, who remain dissatisfied with the transparency they receive from private-equity firms, according to data room provider Intralinks."
"Negotiating a Path to Dialogue With North Korea.
China's and the United States' views of the situation are as different as the media makes them out to be. But when trying to figure out why, the news often gets it wrong."
VIX ~11.63. 10-yr treasury volatility (TYVIX) ~4.52.
Implied Fed rate hike/cut probability for September 20th is ~0.0%/1.4%, November 1st is ~2.0%/1.3%.
"US Composite PMI Revised Down in August: PMI
The IHS Markit Composite PMI for the US came in at 55.3 in August of 2017, down from a preliminary reading of 56 but above 54.6 in July. It is the highest reading since January as the services sector expanded at the fastest since November of 2015 (56 from 54.7) while manufacturing growth slowed (52.8 from 53.3).
Canada Unexpectedly Hikes the Key Rate to 1%
The Bank of Canada unexpectedly raised its benchmark overnight rate by 25 bps to 1 percent at its September 6th 2017 meeting, surprising markets who expected no changes. It is the second consecutive rise in borrowing cost as recent economic data have been stronger than expected, supporting the Bank’s view that growth in Canada is becoming more broadly-based and self-sustaining. The Bank Rate was also increased by 25 bps 1.25 percent and the deposit rate by 25 bps to 0.75 percent.
Mexican Peso, Canadian Dollar Gain as NAFTA Fears Ease.
The Mexican Peso gained 0.7 percent to 17.7798 per USD and the Canadian Dollar 1.1 percent to 1.2237 per USD around 7:30 PM NY time on Wednesday September 6th of 2017, as the second round of NAFTA talks continued in Mexico City, leaving to the third round the thorny topics—dispute settlements, labor mobility, and rules of origin for the automotive sector.
Brazil Interest Rate Slashed by 100 Bps to 8.25%
The Central Bank of Brazil unanimously cut its key Selic rate by 100 basis points to 8.25 percent on September 6th of 2017, as widely anticipated. It was the eighth straight rate decline, bringing borrowing costs to the lowest since September of 2013 amid slowing inflation and a sticky contraction. The decision was unanimous and no bias was adopted. It follows a 100 bps cut in the July 26th of 2017 meeting.
Brazil Inflation Rate Falls to Fresh 1999 Low of 2.46%
Consumer prices in Brazil increased 2.46 percent year-on-year in August of 2017, slowing from a 2.71 percent rise in July and below market expectations of 2.6 percent. The inflation rate eased for the 12th consecutive month to a new low since February of 1999. It is also the lowest rate for an August month since at least 1980 as a record harvest dragged down food prices.
Stocks in Brazil Hit 9-year High
iBovespa increased to a 9-year high of 73186.
Luxembourg Inflation Rate Highest Since 2013
Consumer prices in Luxembourg increased 2 percent year-on-year in August of 2017, accelerating from a 1.9 percent rise in the previous month. It is the highest inflation rate since June of 2013. Prices went up faster for: transport (1.5 percent vs 0.9 percent in July); housing and utilities (1.7 percent vs 1 percent); recreation and culture (4.3 percent vs 4 percent); furniture and household equipment (1.8 percent vs 0.9 percent) and hotels, cafes and restaurants (2 percent vs 1.8 percent). In contrast, cost slowed for miscellaneous goods and services (2.8 percent vs 2.9 percent); food and non-alcoholic beverages (2.6 percent vs 2.9 percent) and clothing and footwear (0.9 percent vs 4.1 percent). On a monthly basis, consumer prices increased 1.2 percent.
Singapore Composite PMI Rises to 2-1/2 Year High
The Nikkei Singapore PMI rose to 53.2 in August of 2017 from 51.3 in July, to mark the highest reading since January 2015. Output increased at the fastest pace in nine months on the back of greater demand for industrial metals, transport services, and an improving resale housing market. However, growth in export orders slowed markedly due to lower demand from the US. Moreover, employment levels fell for a third straight month, and at the steepest pace in almost a year, with backlogs increasing for the 21st consecutive month. Meanwhile, business outlook improved to a 1-1/2 year high as a result of higher sales forecasts, new marketing strategies, business expansions and product launches. This encouraged firms to increase inventories and purchasing activity. On the price front, input prices moderated and output prices fell for the first time in a year.
Australia Construction PMI Deteriorates to 55.3 in August
The AIG/Housing Industry Association Performance of Construction Index in Australia decreased sharply to 55.3 in August from 60.5 in the previous month. It was the lowest reading since April of 2017, but the seventh straight month with the headline index standing above the 50-point threshold. Excluding the engineering component (58.0 vs 57.5 in July), all five sectors contracted. Commercial construction was particularly weak in August, with the sector’s sub-index declining by 14.1 points to 50.2 points. Meanwhile, the new orders index declined sharply to 57.5 (vs 64.6) and the employment index fell 7.5 points to 51.5."
"Pilot project connects blockchain and "smart" pallets.
By feeding data from Internet of Things-enabled pallets into its digital ledger system, the chemical manufacturer BASF hopes to improve supply chain visibility and decision making.
Like many organizations, the German chemical company BASF wants to improve visibility into its supply chain to help it make faster, better decisions. One way it's trying to do this is by bringing together one of today's hottest technologies—blockchain, a digital ledger system that provides an immutable record of transactions that can be shared and audited by supply chain partners—with one of the most basic of logistics tools, the pallet.
The pilot project will test whether the data from the smart pallets can be uploaded to Ahrma's cloud Supply Chain Big Data system and then transmitted to Quantoz's solution. At this point in the pilot, BASF is not willing to make public exactly how it is using its blockchain-connected smart pallets."
"Daseke adds defense specialization with R&R Trucking.
Daseke Inc. announced a merger with R&R Trucking, a specialized transporter of defense and commercial AA&E (arms, ammunitions and explosives) cargo. This marks Daseke’s fourth company addition since May 1, 2017, the company noted.
“R&R Trucking is highly specialized, transporting the nation's most sensitive cargo. Fewer than 20 companies in the United States are approved to provide transportation for the Department of Defense and the Department of Energy. They are also one of the very few companies approved by the Department of Defense to own and operate high security terminals.”"
"Wilson Logistics buys assets of Haney Truck Lines.
Wilson LogisticsHaney Truck Line Semi-Truck (No. 176, CCJ Top 250) last week announced it purchased select assets of Haney Truck Lines (No. 199), a longtime fixture in the Pacific Northwest trucking industry.
Based in Yakima, Washington, Haney has 400 power units and more than 1,200 trailers. It specializes in heavy haul and truckload transportation in the western U.S., and British Columbia, and Alberta, Canada. Haney traces its roots to several Northwest trucking companies going back to 1923."
"Reflections on a truck stop life.
Nearly 60 years ago, a twist of fate detoured James “Jim” Haslam from a football coaching career into running filling stations. And that detour sparked the rise of what is today the Pilot Flying J truck stop network."
"Sen. Thune, AgTC urge action on 'inequitable' demurrage, detention fees.
In his Sept. 5 letter, Sen. Thune, R-S.D., cited a petition filed in December 2016 by the Coalition for Fair Port Practices regarding what it said has been inequitable assessment of detention and demurrage charges by marine terminal across the U.S."
"Shippers ‘must adapt their ocean contract strategy’.
Rapid consolidation among carriers, cuts in vessel orders, and new tender technology is changing the procurement environment, Drewry warns BCOs [Beneficial Cargo Owners].
International transport and logistics executives using container shipping are facing the biggest shift in their ocean provider base for 20 years due to rapid consolidation among carriers, cuts in vessel orders, and new tender technology, requiring shippers to adapt their procurement and contract strategy, according to ocean freight procurement consultancy Drewry Supply Chain Advisors."
"Identification of Individuals by Trait Prediction Using Whole-genome Sequencing Data.
Researchers from Human Longevity, Inc. (HLI) have published a study in which individual faces and other physical traits were predicted using whole genome sequencing data and machine learning. This work, from lead author Christoph Lippert, Ph.D. and senior author J. Craig Venter, Ph.D., was published in the journal Proceedings of the National Academy of Sciences (PNAS).
The team predicted eye color, skin color and sex with high accuracy, but other more complex genetic traits proved more difficult. The team believes their predictive models are sound, but that large cohorts are needed to make prediction more robust. The team also developed a machine learning algorithm called a maximum entropy algorithm, which had novelty in that it found an optimal combination of all predictive models to match whole-genome sequencing data with phenotypic and demographic data and enabled the correct identification of, on average, 8 out of 10 participants of diverse ethnicity, and 5 out of 10 African American or European participants."
"U.S. House of Representatives passes new bipartisan self-driving car bill.
If it becomes law (which still requires it to pass the Senate), then it would make it possible for companies working on self-driving to field a lot more vehicles per year – as many as 100,000 autonomous test cars annually, in fact.
Basically, the proposed bill would make it possible for companies including Ford, Waymo, GM’s Cruise and others to bypass some safety standards that currently apply to human piloted cars, including requirements like that they have steering wheels and gas pedals on board. This legislation would also supersede state-by-state rules, making it possible for autonomous testing to proceed on a level playing field across the U.S."
"Cryptocurrencies have already recovered from last weekend’s crash.
Well here we are, a day or so later. And the temporary crash seems to have just been a bump in the road. The entire market cap of cryptocurrencies is up 16% from a low of $135B yesterday to $162B today.
Bitcoin is back above $4,600, which is about 13% higher than yesterday. Ethereum is trading around $333, which is 16% higher than the low it hit earlier this week."
"The latest crypto PR craze: ‘Airdropping’ free coins into your wallet.
Token airdrops seem to be a thing in crypto PR right now. An airdrop is basically when a blockchain project decides to distribute free tokens, or coins, to the community. This happens after the project has completed its ICO and the token has become tradeable on the open market."
"By coupling airborne drones with smarter RFID systems, MIT researchers may make missing packages a thing of the past.
Retailers lose $45B worth of inventory every year due to misplaced packages, stolen merchandise, and returned goods. In 2013, Walmart lost up to $3B due to discrepancies between inventory records and actual stock, according to Forbes. Now drone-based package-tracking tech could finally help solve this problem."
"Handheld Mass-Spectrometry Pen Identifies Cancer in Seconds During Surgery.
Scientists have invented a gentle, handheld device that can determine within seconds whether tissue is cancerous or not. The tool could give surgeons precise information during an operation about which tissues should be removed or preserved."
"This High-Tech Vertical Farm Promises Whole Foods Quality at Walmart Prices.
SoftBank-backed Plenty is out to build massive indoor farms on the outskirts of every major city on Earth."
Startup/SME of the Day.
We are building modular machines for agriculture. Our goal is to make food production healthier for humans and healthier for the environment."
"Melaka and George Town, Historic Cities of the Straits of Malacca.
Melaka and George Town, historic cities of the Straits of Malacca have developed over 500 years of trading and cultural exchanges between East and West in the Straits of Malacca. The influences of Asia and Europe have endowed the towns with a specific multicultural heritage that is both tangible and intangible. With its government buildings, churches, squares and fortifications, Melaka demonstrates the early stages of this history originating in the 15th-century Malay sultanate and the Portuguese and Dutch periods beginning in the early 16th century. Featuring residential and commercial buildings, George Town represents the British era from the end of the 18th century. The two towns constitute a unique architectural and cultural townscape without parallel anywhere in East and Southeast Asia."
DE: Industrial Production, 2:00 AM ET
FR: Merchandise Trade, 2:45 AM ET
GB: Halifax HPI, 3:30 AM ET
EZ: GDP, 5:00 AM ET
EZ: ECB Announcement, 7:45 AM ET
US: Jobless Claims, 8:30 AM ET
US: Productivity and Costs, 8:30 AM ET
US: Bloomberg Consumer Comfort Index, 9:45 AM ET
US: Quarterly Services Survey, 10:00 AM ET
US: EIA Natural Gas Report, 10:30 AM ET
US: EIA Petroleum Status Report, 11:00 AM ET
US: Fed Balance Sheet, 4:30 PM ET
US: Money Supply, 4:30 PM ET
JP: GDP, 7:50 PM ET
AU: Home Loans, 9:30 PM ET
CN: Merchandise Trade Balance, 10:00 PM ET
https://tradingeconomics.com/calendar (More complete listing, including consensus)
https://worldview.stratfor.com/article/geopolitical-calendar-week-sept-4-2017 (Geopolitical calendar)