Today - Sunday, March 9, 2014
- Mexico's Federal Telecommunications Institute (IFT) has ordered America Movil (AMX) and Grupo Televisa (TV) to share their infrastructure with rivals as part of an attempt to increase competition in the country's telecom and broadcasting markets respectively.
- The IFT will also regulate Telefonica's prices, and it will force Televisa to publish its advertising prices and stop pressuring advertisers to purchase space on its billboards, cable TV and magazines.
- In addition, IFT has called for bidders for two national broadcast-television networks.
- The upside for America Movil is that once it has complied with the IFT's demands, the regulator may allow the company to start offering TV services.
- Chinese exports dropped 18.1% on year in February vs growth of 10.6% in January and consensus of +6.8%.
- However, the trend may have been distorted by the Lunar New Year holiday and fake invoicing that boosted the data a year earlier, while the severe winter weather in the U.S. may also have had an effect.
- Imports +10.1% vs +10% and +8%.
- China swung to a trade deficit of $22.98B last month from a surplus of $31.86B in January and vs forecasts of $14.50B.
- "We will probably have to wait for next month's data to get a true picture of the export situation, but we shouldn't worry too much," says UBS economist Wang Tao.
- As expected, inflation eased to a 13-month low of 2% on year in February from 2.5% in January. The figure is below the government's 2014 target of 3.5%.
- On month, CPI +0.5% vs +1% previously and consensus of +0.8%.
- PPI declined for the 24th consecutive month, sinking 2% vs -1.6% and -1.9%. "The risk of deflation is rising in the near term," say ANZ economists Liu Li-Gang and Zhou Hao.
- The factors that could be dragging on producer prices include weak consumer demand and the excess capacity of some raw material-industries such cement as glass and steel.
- ETFs: FXI, PGJ, GXC, FXP, YINN, CYB, HAO, KWEB, CNY, ASHR, CHIQ, DSUM, TAO, CHIX, YANG, CQQQ, MCHI, PEK, QQQC, XPP, YAO, CHXX, FXCH, CHII, CHXF, YXI, ECNS, CHIM, CHIE, KFYP, FCA, TCHI, CHLC, CHNA, KBA
Friday, March 7, 2014
11:10 AM| Comment!
- A disruption of natural gas supplies to Europe by an escalation of Russia’s military action in Ukraine may boost LNG demand and prices in Asia and South America, analysts say.
- Russia, which provides Europe with a quarter of its natural gas mainly though Ukraine, has cut supplies twice since 2006; while the current crisis hasn’t interrupted exports, LNG prices will “move through the roof” if flows transiting Ukraine are stopped, Societe Generale says.
- Any potential supply curbs could cause traders to stop selling LNG cargoes out of storage and instead hold them for domestic use, triggering competition for the fuel in South America and Asia.
- ETFs: UNG, DGAZ, UGAZ, BOIL, GAZ, KOLD, UNL, NAGS, DCNG
- More brinksmanship in the Ukraine crisis: Gazprom (OGZPY) says Ukraine has missed today's deadline in paying for February gas deliveries and is threatening to cut off the country's gas supply.
- Russian Pres. Putin and Gazprom already have said Russia will scrap price discounts for Ukraine as of April because Ukraine failed to pay for gas on time.
- Gazprom says Russian gas transit via Ukraine to Europe remains stable.
- A check of asset markets following what's currently being interpreted as a strong nonfarm payroll report (175K jobs added vs. 154K expected; UE rate up to 6.7%): Flat ahead of the number, stock index futures are up by 0.5%; gold is down 1.1%, silver down 3.2%, copper off 2.9%; the dollar is up a bit, but mostly against the loonie after a weak jobs number in Canada.
- DIA +0.5%, GLD -1%, SLV -2.9%, JJC -3%, UUP +0.15%
- Previously: Treasury yields fly higher after payroll report.
- Related ETFs: GLD, SLV, DIA, AGQ, IAU, PHYS, UUP, SIVR, USLV, ZSL, SGOL, UDN, UGL, DGP, DOG, GLL, DXD, JJC, DZZ, UDOW, UGLD, SDOW, DSLV, DDM, DGL, DBS, GLDI, DGZ, DBV, AGOL, DGLD, SLVO, FORX, TBAR, UDNT, UUPT, USV, UBG, CPER, GLDE, GYEN, CUPM, GEUR, USDU, GGBP
- Volkswagen (VLKAY) reports sales of Golf cars grew by 28% in January to keep the model the best-selling car in Europe.
- Overall, the automaker grew sales by 7.8% during the period to beat Ford and Peugeot for the top spot.
- Amid recovering demand in Europe, Opel/Vauxhall and Renault (RNSDF) have lost some market share in recent months.
- Asian shares mainly rise, Europe is mostly down and American stock futures are flat-to-higher ahead of the U.S. jobs report, which is due out this morning.
- Non-farm payrolls are estimated to have risen by 149,000 in February vs 113,000 in January, although soft ADP private-sector jobs data this week may have dampened expectations. Fed policymaker Charles Plosser will take the non-farm reading "with a pinch of salt," because of the severe winter weather.
- The standoff over Crimea could be affecting sentiment in Europe, especially after what seems to have been a fairly fruitless hour-long conversation between Presidents Obama and Putin.
- Japan +0.9% to 15274. Hong Kong flat, China -0.1%, India +1.9%.
- Euro Stoxx 50 -0.5%, London -0.4%, Paris -0.4%, Frankfurt -0.9%, Milan -0.3%, Madrid -0.2%.
- U.S. stock futures: Dow +0.1%. S&P +0.1%. Nasdaq flat.
- Bill Gross has accused departing Pimco (BOND) CEO Mohamed El-Erian of "trying to undermine" him, telling Reuters that he has evidence that El-Erian "wrote" a recent WSJ article that described the breakdown in the men's relationship and didn't portray Gross in a particularly flattering light.
- When asked what the evidence was, Gross replied: "You're on his side. Great, he's got you, too, wrapped around his charming right finger."
- Gross also indicated that he has monitored El-Erian's phone calls.
- A Pimco spokesman later denied that Gross made the comments that Reuters attributes to him, while the WSJ hotly refuted that El-Erian "wrote" the article.
- Pimco's parent company is Allianz (AZSEY).
- Pimco funds: AUD, BABZ, BUND, CAD, CORP, DI, FIVZ, FORX, GOVY
- Mexico's Federal Telecommunications Institute (IFT) is moving to boost competition in the telecom and broadcasting sectors and it is notifying companies that it considers to be dominant.
- In a statement, IFT didn't mention names but it was most likely referring to America Movil (AMOV) in the telecom market and Televisa (TV) in the broadcasting sector.
- The classification is important, as the IFT has new powers to break up dominant players, although the regulator has said in the past that such a move would be a last resort.
- Instead, the agency is implementing other measures such as holding a tender for two new national broadcasters.
- However, the IFT needs to wait for final legislation to be passed before it can fully move ahead with reform.
- Japan has decreed that Bitcoin is not a currency and the government has no laws to define it, although the government said in a statement it can tax transactions.
- The country's banks can't broker Bitcoin transactions or create customer accounts to hold digital assets, Japan said, although brokerages and asset managers can manage clients' Bitcoins.
- The comments come amid calls to regulate Bitcoin and a week after the collapse of Mt. Gox, a leading Tokyo based exchange, due to a massive theft.
- The government's statement also comes after Newsweek marked the return of its print version with a bang by "outing" 64-year-old Japanese-American physicist Dorian S. Nakamoto as the creator of Bitcoin, although he yesterday denied involvement in the digital currency.
- ETFs: BITCN, BTCS
- As expected, China's corporate-bond market has suffered its first ever domestic default, with Shanghai Chaori Solar Energy Science & Technology failing to fully pay 89.8M yuan ($14.7M) in interest that was due today.
- Until now, China had bailed out distressed companies.
- Moody's believes that the default will be a "wake-up call" that will help the growth of China's bond market. It will "signal regulators' higher tolerance for corporate bond defaults amid financial market reforms, which is in line with the current central administration's shift to adopt more market-oriented policies," Moody’s says.
- Meanwhile, the Shanghai government has reportedly given authorization for a city-owned investment company to purchase non-performing loans from local banks. The approval follows similar approval by other municipalities and indicates how Shanghai is preparing for an expected rise in bad debt.
- The markets reacted calmly to Chaori's default and the Shanghai Composite closed -0.1%.
- ETFs: FXI, PGJ, GXC, FXP, YINN, CYB, CNY, DSUM, YANG, MCHI, XPP, YAO, FXCH, CHXF, YXI, HYEM, EMHY, FCA, TCHI, CHLC
Thursday, March 6, 2014
11:10 AM| Comment!
- Analysts thinks there could be a wave of consolidation in the tobacco industry as the slow growth rates seen in the industry appear to be here to stay.
- The story of the week has been Lorillard (LO -1.7%) which is reportedly a target of Reynolds American (RAI -2.8%), but other linkups are expected.
- The rapid emergence of e-cigarettes will play a factor in the M&A activity. The stance of various regulators will be critical in determining where companies place their bets.
- Related stocks: MO, PM, BTI, ITYBY, ITYBF, PHJMF, JAPAF, SFIO, VGR, SWNG, SWMAF, SWMAY.
10:00 AM| Comment!
- IATA reports 2014 starting off strongly for the global airline industry with revenue passenger kilometers up 8% Y/Y.
- Middle East and Asia-Pacific carriers showed the biggest gains for international travel.
- On the domestic side, China sizzled with revenue per kilometer up 20.1%. The U.S. saw a 2.1% rise in domestic travel demand.
- Related stocks: AAL, UAL, DAL, RYAAY, CPCAY, SINGY, CEA, ZNH, CPA, GOL, LFL, DLAKF, AIDIF, QUBSF, JBLU, RJET, SAVE, ALK, HA, AIRYY, MLYAF, AFLYY.
- The euro pops above $1.38 as Mario Draghi - in his post-ECB meeting press conference - gives no indication in the early-going of any consideration of further monetary ease. It had been thought declining inflation might prompt action, but Draghi calls the upside and downside risks to price developments broadly balanced over the medium-term.
- ETFs: FXE, EUO, ERO, DRR, EUFX, ULE, URR
- European stocks have given back nearly all of their earlier gains, the Stoxx 50 now up 0.1%.
- ETFs: VGK, FEZ, DFE, IEV, EPV, EZU, HEDJ, GXF, FEU, GUR, FDD, ESR, FEP, UPV, ADRU, FEEU, EURL, EURZ, DBEU, FIEU
- Earlier: The ECB leaves policy unchanged.