"Everyone is always saying rates will rise; it is almost comical,” says Jeff Gundlach, speaking at ETF.com's Inside Fixed Income conference. It's a mistake looking at past economic recoveries as a template for this one, he says, because persistent deflation - owing to a number of factors - makes this cycle different.
While the Fed realizes QE doesn't do a lot of good and is ending it, he adds, the central bank has no reason to hike rates anytime soon.
Gundlach never sticks with just fixed income, and this time he turns to oil, which he believes is headed far lower. "I'm convinced Saudi Arabia wants oil at $70. They love turning the screws on people who mean them harm in the Middle East." Seventy dollar oil, however, will also hurt the booming energy sector here in the States as fracking is hardly worth it at that price.
The HSBC Flash China Manufacturing PMI for October rises to a three-month high of 50.4 from 50.2 in September (which was also the median economist estimate). The final read from HSBC is due on November 3, but this "flash" print is typically based on about 85-90% of total responses.
The manufacturing output subindex in October slipped to a 5-month low of 50.7 from 51.3.
HSBC's Hongbin Qu: "Domestic as well as external demand showed some signs of slowing ... Disinflationary pressures intensified, as both the input and output price indices declined further ... The economy continues to show signs of insufficient demand. This warrants further policy easing."
Shanghai is lower by 0.25% in early action, and the Hang Seng is down about the same.
Making good on a September report from The Information, Twitter (NYSE:TWTR) has launched Fabric, an SDK that gives app developers analytics, distribution, and (via MoPub's mobile ad platform) monetization tools.
The analytics toolkit (Crashlytics) provides data on app performance and crashes. The distribution toolkit (Twitter Kit) allows 3rd-party apps to add embedded tweets, and their users to quickly compose them. It also allows users to sign into apps via their Twitter logins or phone numbers.The monetization toolkit (MoPub Kit) lets an app's ad inventory appear in the MoPub Marketplace.
Aside from boosting MoPub's sales and Twitter's user engagement, Fabric could provide valuable data that would allow Twitter to bolster its own apps and ad sales. CEO Dick Costolo: "It’s not a departure so much as moving beyond Twitter the product and moving into Twitter the company and the platform."
Facebook and Google have been going after developers with their own tool sets, and for similar reasons.
Core Labs (NYSE:CLB) -7.9% AH after reporting mixed Q3 results but offering reduced guidance for Q4.
CLB now sees Q4 EPS of $1.53-$1.56 vs. $1.61 analyst consensus estimate and lowered from a prior outlook for $1.56-$1.61, on revenues of $275M-$280M vs. $292M consensus; also sees Q4 operating margin of 33%, exiting the year at 34%.
CLB expects Q4 North American activity will continue to increase slightly for emerging unconventional oil plays while remain at stable levels in established unconventional tight oil and gas plays; internationally, flat activity levels are seen through year-end 2014 and entering 2015 in response to weaker Brent crude prices.
Nabors Industries (NYSE:NBR) fell today along with most energy companies as oil prices resumed their recent slide, but CEO Anthony Petrello sees something of a silver lining through the market for the company's advanced drilling rigs.
If oil prices hover ~$80/bbl, producers will aim to drill more efficiently, prompting them to turn to NBR’s newest models - which may offset declines in U.S. drilling activity - Petrello said in today's earnings conference call.
"We can’t eliminate the risk [of falling commodity prices] but we can do our best to minimize it," the CEO said.
The advanced rigs may be eating into the U.S. market for old mechanical models, but some of the aging units have found a home in North Dakota, where Petrello says "they perform really well, [and] we’re going to keep running them until they’re no longer useful.”