Seeking Alpha
  • Today - Saturday, August 29, 2015

  • 8:37 AM
    • The sharp rally from Monday's panicky bottom is typical, says Felix Zulauf in a Barron's interview, and these recoveries tend to last for a few days to a few weeks, before the lows eventually get retested. Thanks to the continuing collapse of the Chinese bubble, it's Zulauf's hunch stocks will take out new lows in the next wave of selling.
    • Like Latin America in the early 1980s, Mexico in 1994, Asia in 1997, and Russia in 1998, China has a balance-of-payments issue. The currencies involved in those instances fell 40-70%. Even if the yuan only falls 30% (it's down 10% already) - with China being the world's largest exporter - the price deflation translates into declining sales, profit margins, and profits for companies across the globe.
    • "Central banks can’t solve the problem by providing more liquidity because liquidity isn’t the issue," says Zulauf. "We have plenty of liquidity; we don’t have enough borrowing capacity." What it means is lower prices, lower inflation, and lower interest rates. "The stock market will have to adjust to this new reality."
    • At the start of the year, Zulauf predicted the Fed wouldn't hike rates in 2015, and he's sticking to that view. A tightening now "will probably send the wrong signal to the market, and at the wrong time."
    • Yuan ETFs: CYB, CNY, FXCH
    • China equity ETFs: FXI, ASHR, CAF, YINN, PGJ, GXC, FXP, YANG, CHIX, CHN, PEK, MCHI, TDF, XPP, YAO, GCH, ASHS, YXI, CN, CHXF, FCA, CNXT, CHNA, KBA, JFC, AFTY, CHAU
    • Broad U.S. large-cap ETFs: CRF, VV, USA, SCHX, ZF, FEX, JKD, EEH, EQL, IWL, ERW, FWDD, ZLRG, SYE, SBUS
    | 49 Comments
  • Friday, August 28, 2015

  • 1:51 PM
    • Primark will open its first store in the U.S. on September 10 with an opening in Boston.
    • The chain is targeting teenagers and younger millennials with its low-cost lines.
    • The company has shown strong growth in the U.K. and other areas of Europe.
    • Primark is owned by Associated British Foods (OTCPK:ASBFF, OTCPK:ASBFY).
    | Comment!
  • 1:11 PM
    | 1 Comment
  • 10:07 AM
    • Vodafone (NASDAQ:VOD) has confirmed its plan to launch 4G service in India by year's end, joining a hot space after Bharti Airtel and Reliance Industries pressed their own 4G rollouts.
    • Vodafone has successfully begun tests, it says, and that Mumbai, Delhi, Kolkata, Bengaluru and Kochi -- "important data markets" -- would be part of the first wave.
    • With Airtel as the first mover, launching 4G service in about 300 cities and towns, and Reliance Jio to launch in December with a 1T-rupee investment ($16B), analysts warned of a round of price wars.
    • JPMorgan noted that along with the effect of price cuts, Reliance's re-entry of the market is affecting capex at rivals.
    | 4 Comments
  • 10:01 AM
    • Brazil's economy shrank 1.9% in Q2, missing forecasts for negative 1.7%. Investment fell 8.1% - its eight straight quarter of decline and the longest streak since the current data series started in 1996. Household consumption dropped 2.1%, its worse decline since 2001. Government spending rose 0.7%. The year-over-year inflation rate was 9%.
    • "The drop in consumption shows the crisis of confidence the economy is facing," says an economist. "This is going to be an intense and prolonged recession and I don't see a recovery this year."
    • The lame economic activity could spell doom for Brazil's credit rating - currently just above junk status.
    • The Bovespa is lower by 0.4%. EWZ -1.15%
    • ETFs: EWZ, BRF, BRZU, EWZS, BRXX, BRAQ, BZQ, BRAZ, BRAF, UBR, DBBR, FBZ
    | 3 Comments
  • 6:00 AM
     
    • Japan +3.03%.
    • Hong Kong -1.04%.
    • China +4.82%.
    • India +0.61%.
    • London +0.08%.
    • Paris -0.11%.
    • Frankfurt -0.14%.
    | Comment!
  • 4:12 AM
    | 16 Comments
  • 2:40 AM
    • North Korean leader Kim Jong Un is calling this week's accord between the rival Koreas "a landmark occasion" for improved ties, but said it was the strength of its armed forces that made the deal possible.
    • Officials from the two nations held three-days of marathon talks after an exchange of fire across their border, raising fresh hopes for a push to restore talks and exchanges that had been cut off since 2010.
    • South Korea's KOSPI Index +1.6% to 1,938.
    • ETFs: EWY, KF, KEF, KORU, DXKW, FKO, HKOR, DBKO, QKOR, HEWY
    | 2 Comments
  • 2:05 AM
    • The Bank of Japan's key inflation gauge slumped to zero for a third time this year, heightening pressure on policymakers to offer fresh monetary support to reflate the world's third-largest economy.
    • Although Japan's core consumer price index was unchanged in July from a year earlier, other data provided a mixed picture for the start of the third quarter.
    • Household spending unexpectedly fell, retail sales rose 0.6% from June, and the job market remained tight (job-to-applicant ratio rose to 1.21).
    • Nikkei +3% to 19,136.
    • ETFs: DXJ, EWJ, DFJ, DBJP, NKY, JOF, EZJ, JEQ, JPNL, DXJS, EWV, SCJ, HEWJ, JSC, ITF, JPP, QJPN, FJP, DXJT, JPMV, DXJR, DXJC, DXJH, JHDG, DXJF, JPN, JDG, HGJP
    | 4 Comments
  • Thursday, August 27, 2015

  • 2:48 PM
    • State-owned BAIC Group is close to taking a stake in Daimler (OTCPK:DDAIF) significant enough to be one of the German automaker's largest shareholders, sources tell Reuters.
    • Daimler and BAIC Motor already operate joint ventures together in China to sell Mercedes-Benz vehicles.
    • BAIC also partners with Hyundai in China.
    | Comment!
  • 2:01 PM
    • Reynolds American (RAI +1.6%) and Imperial Tobacco (OTCQX:ITYBY, OTCPK:ITYBF) have received a warning from the FDA over advertising.
    • The agency says the companies need to prove that cigarette brands labeled as "natural" or "additive-free" are lower risk to consumers than traditional cigarettes.
    • Reynolds and Imperial have 15 days to respond to the directive.
    | 2 Comments
  • 11:32 AM
    • Yes, the Fed is likely to hike short term rates 25-50 basis points, says Ray Dalio, but that can hardly be considered a serious tightening cycle given the average tightening over the past century has been 440 basis points.
    • Instead, it would tie with 1936 for the smallest tightening ever - this is important, says Dalio, as the U.S. then was undergoing a deleveraging of the long-term debt cycle similar to what is occurring today.
    • “To be clear, while we might see a tiny tightening akin to what was experienced in 1936, we doubt that we will see anything much larger before we see a major easing via QE."
    • ETFs: SHY, BIL, PLW, VGSH, STPP, SHV, GOVT, FLAT, SCHO, FTT, EGF, DTUS, DTUL, SST, TUZ, TAPR, TFLO, USFR
    | 5 Comments
  • 11:31 AM
    • Macau visitor arrivals fell 3.8% to 2.65M in July, according to the Statistic and Census Bureau.
    • Traffic was up 17% on a month-over-month basis.
    • Same-day visitors were down 6.4% during July, while overnight visitors fell 0.9%.
    • YTD Macau visitor arrivals are down 3.5% to 17.4M.
    • Macau gaming stocks/ADRs are are higher on the day, with most out-performing the broad Chinese markets which took back some ground earlier.
    • Gainers: Galaxy Entertainment (OTCPK:GXYEF +8.7%), Las Vegas Sands (LVS +4.1%), Wynn Resorts (WYNN +4.5%), MGM Resorts (MGM +3.9%), Melcon Crown (MPEL +5.3%).
    | 6 Comments
  • 10:58 AM
     
    • Ferrari is considering a plan to name Sergio Marchionne as its CEO after Amedeo Felisa retires, sources tell Bloomberg.
    • The Ferrari IPO is one of the most highly-anticipated of the year, with some retail analysts seeing significant potential for Ferrari to evolve into a lifestyle brand on top of boosting vehicle sales.
    • Only 10% of Ferrari's outstanding shares will be available in the IPO, a narrow slice which could help to propel volatility.
    • Marchionne is already testing the patience of some proxy advisory firms with the number of boards he sits on. Glass Lewis & Co. issued a full breakdown in a blog post last month.
    | Comment!
  • 7:58 AM
    • Adidas (OTCQX:ADDYY, OTCPK:ADDDF) CEO Herbert Hainer says the company isn't experiencing a crisis in China.
    • The exec notes consumers are still spending on lower-priced items even as they pull back on some luxury items and higher-priced apparel.
    | Comment!
  • 7:38 AM
    • Volkswagen (OTCQX:VLKAY) plans to invest $340M to increase production in South Africa.
    • The German automaker will use the added capacity to export more vehicles out of South Africa.
    | 1 Comment
  • 7:04 AM
     
  • 6:25 AM
     
    • Ukraine has agreed to a restructuring deal with creditors after five months of talks, giving President Petro Poroshenko some breathing room as he seeks to avert default and revive an economy decimated by war.
    • The agreement will see creditors, including U.S. mutual fund Franklin Templeton, accept a 20% haircut on $18B of Ukrainian bonds and push back maturities on government debt by four years.
    • In return they will receive a GDP-linked security that will pay holders a percentage of Ukraine's economic growth from 2021.
    | 1 Comment
  • 6:00 AM
     
    • Japan +1.08%.
    • Hong Kong +3.60%.
    • China +5.34%.
    • India +1.97%.
    • London +2.25%.
    • Paris +2.85%.
    • Frankfurt +2.97%.
    | 1 Comment
  • 4:15 AM
    • More turmoil is hitting Athens after 53 of 201 Syriza party members submitted their resignations, stating that as representatives of the Central Committee they cannot serve the country's new austerity program.
    • As a result, the group's so-called Left Platform faction, led by ex-Energy Minister Panagiotis Lafazanis, has formed a new party called Popular Unity to run against Syriza in the upcoming election.
    • Greeks will head to the ballot box on September 20 to vote for a new government for the second time in eight months.
    • ETFs: GREK
    | 1 Comment
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