Seeking Alpha
  • Wednesday, October 22, 2014

  • 10:08 PM
    • 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.
    • ETFs: FXI, EWH, PGJ, GXC, YINN, FXP, YANG, MCHI, XPP, YAO, YXI, CHXF, FCA, CN, FCHI, FHK
    | Comment!
  • 11:24 AM
    • The loonie (NYSEARCA:FXC) has reversed earlier retail sales-related losses and turned slightly higher vs. the greenback after the Bank of Canada stays on hold, but warns over bubbly housing markets in Ontario, Alberta, and British Columbia.
    • “Housing activity has been more robust than anticipated, buoyed by continued very low mortgage rates and exhibiting strength beyond a rebound from weather-depressed levels earlier in the year," says the bank. "Sales of existing homes have picked up noticeable since the beginning of the year, to a four-year high … This is contributing to sizable increases in house prices."
    • In other news, the bank has canceled its post-meeting press conference as the Canadian parliament goes on lockdown after a shooting at the National War Memorial. This video shows police exchanging gunfire inside a Parliament Hill building.
    • The TSX Composite is lower by 0.8%. EWC -0.6%
    • Previously: Disappointing Canadian retail sales sends loonie even lower
    | Comment!
  • 10:33 AM
    • A top Toyota (TM -0.2%) exec says the automaker will stick with Takata, despite the airbag supplier becoming the scourge of safety regulators over malfunctioning parts.
    • Toyota had more cars recalled in the U.S. due to the airbag issue than any other automaker other than Honda.
    • Shares of Takata have fallen over 20% this week in Tokyo trading as the recalls continue to pile up.
    | Comment!
  • 9:14 AM
    • Pulled down by lower gasoline prices, and sales of new cars and food, Canadian retail sales fell 0.3% in August vs. a forecast of no change. It's the 2nd consecutive monthly drop in retail sales.
    • After removing the effect of price changes - particularly for gasoline - retail sales in volume terms slipped 0.1%.
    • Time to book that trip to Whistler? The news sends the loonie (NYSEARCA:FXC) lower by 60 basis points, now off 0.6% on the session and buying just $0.8861.
    • ETFs: EWC, CNDA, EWCS, FCAN, QCAN
    | 1 Comment
  • 3:57 AM
    • Following the submission of euro zone countries' budgets to Brussels for review last week, France and Italy will likely hear back today that their budget plans risk breaching EU rules, FT reports.
    • France is required to get its deficit back under the EU ceiling of 3% of economic output by next year but its plan ignored that commitment.
    • Italy must modify its structural budget into balance by 2015, as its public debt currently sits at 135% of GDP, far above the EU ceiling of 60%.
    • ETFs: EWI, EWQ
    | 2 Comments
  • Tuesday, October 21, 2014

  • 3:54 PM
    • Speaking at the Robin Hood Investors Conference, David Tepper says he's short the euro (FXE -0.6%).
    • The hedge funder has been expecting the ECB to go full QE at some point, and is no doubt pleased at this morning's floating of the idea of the central bank adding secondary market purchases of corporate bonds to its just-in-place program of buying ABS.
    • ETFs: FXE, EUO, ERO, DRR, EUFX, ULE, URR
    | 2 Comments
  • 12:36 PM
    | 1 Comment
  • 8:01 AM
    • Pushing Europe to a sizable rally and sending the euro lower, Reuters says the ECB could decide as soon as this year to begin buying corporate bonds on the secondary market. The move would be an expansion of the ABS buying program launched this week.
    • "The pressure in this direction is high," says Reuters' source.
    • The Stoxx 50 (NYSEARCA:FEZ) is up 1.1% and the euro (NYSEARCA:FXE) lower by about 100 pips since the news, now down 0.3% at $1.2765.
    • Board Europe equity ETFs: VGK, FEZ, IEV, HEDJ, EPV, EZU, FEU, FEP, UPV, ADRU, FEEU, EURL, DBEU, EURZ, IEUR, FIEU, HEZU, ESTX
    • Euro ETFs: FXE, EUO, ERO, DRR, EUFX, ULE, URR
    | 13 Comments
  • 6:21 AM
    • The panel chosen to pick candidates for Hong Kong's 2017 election could be made "more democratic", says the territory's leader Leung Chun-ying, just hours before the start of the first public talks between pro-democracy student leaders and government officials.
    • Expectations are low for a major breakthrough in today's talks, although the statement was the first indication of a possible concession to pro-democracy protesters who have blocked city streets for weeks.
    • ETFs: EWH, EWHS, FCHI, FHK
    | Comment!
  • 6:08 AM
    • Key quotes from CAO report:
    • "Industrial production is decreasing recently."
    • "Private consumption appears to be pausing recently."
    • "Business investment shows some weak movements recently, while it is on the increase."
    • "Although weakness remains for the time being, the economy is expected to recover, supported by the effects of the policies, while employment and income situation improve. However, attention should be given to the downside risks of the Japanese economy such as lengthening of the reaction after a last-minute rise in demand and slowing down of overseas economies."
    • ETFs: DXJ, EWJ, FXY, YCS, JGBS, DFJ, JGBD, JYN, NKY, DBJP, EZJ, EWV, YCL, DXJS, SCJ, JPNL, JSC, ITF, JGBL, JPP, JGBT, JPNS, HEWJ, JGBB, FJP, QJPN, JPMV, DXJT, DXJR, DXJH, DXJF, DXJC
    | 1 Comment
  • 4:02 AM
    • Jaguar Land Rover (NYSE:TTM) has opened its first plant in China as part of a manufacturing push aimed at more than doubling global sales by the end of the decade.
    • Last year, the company sold 425K vehicles worldwide, with more than 100K vehicles sold in China, making it Jaguar Land Rover’s single largest market.
    • The plant is part of a 10.9B yuan ($1.8B) investment, and will have a capacity of 130K cars.
    | Comment!
  • 2:40 AM
    • China's economic growth slowed in the third quarter to its weakest in more than five years as it battled a slumping real-estate market and weak domestic demand and industrial production.
    • The world's second-largest economy grew 7.3% between July and September from a year earlier, slightly above the 7.2% forecast by analysts but slowing from 7.5% in Q2.
    • The GDP data reinforces expectations that Beijing will need to unleash further stimulus to avert a sharper slowdown.
    • Shanghai is down 0.7%; Hang Seng is down 0.1%.
    • ETFs: FXI, EWH, KWEB, PGJ, GXC, YINN, FXP, HAO, ASHR, TAO, CHIQ, YANG, CQQQ, CHIX, MCHI, QQQC, PEK, XPP, YAO, YXI, CHXF, ECNS, CHII, FCA, CHIE, CN, CHIM, EWHS, FCHI, KFYP, ASHS, CNXT, CHNA, KBA, FHK
    | 10 Comments
  • Monday, October 20, 2014

  • 3:19 PM
    • Things are volatile out there. Just seven weeks after recommending investors unload Russian stocks, Morgan Stanley does a 180, calling the country a "tactical" buy, i.e. don't buy and sock away in a drawer.
    • “We do not have cause to believe the [Ukraine] situation is deteriorating, and worst case outcomes (such as additional sanctions) now appear a less likely scenario," says Morgan equity strategist Ronan Carr. The Market Vectors Russia ETF (RSX -1%) is lower by 12.2% since Morgan's August 29 sell recommendation.
    • The team at JPMorgan, on the other hand, which has advised selling Russia since July, continues to hold that opinion, noting de-escalation in Ukraine could be six  months to a year out, and sanctions won't be lifted until after that.
    • ETFs: RSX, RUSL, RUSS, RSXJ, ERUS, RBL, RUDR
    | 4 Comments
  • 2:44 PM
    | Comment!
  • 11:41 AM
    • In more bad news for an already-weak global economic recovery, China's GDP growth will slow to 3.9% over the coming decade as productivity gains evaporate and Beijing fails to push through necessary reforms, says the Conference Board.
    • Foreign companies, says the report, should realize China is in "a long slow fall in economic growth ... The competitive game has changed from one of investment-driven expansion to one of fighting for market share.”
    • Putting finer numbers on the forecast, the Conference Board sees economic growth averaging 5.5% from 2015-2019 (vs. last year's 7.7%), and slowing further to 3.9% between 2020-2025.
    • China could reverse the slowdown with market-related reforms, says the CB, but the group is skeptical such changes - sure to cause short-term growth and political pains - will be made.
    • ETFs: FXI, PGJ, GXC, YINN, FXP, YANG, MCHI, XPP, YAO, YXI, CHXF, FCA, CN
    | 2 Comments
  • 8:20 AM
    • The Nikkei has slumped alongside Western markets over the past few weeks - down more than 10% - but gained 4% overnight following Friday's big rally in the States.
    • Also at work is a published report saying Japan's $1.2T Government Pension Investment Fund (GPIF) will boost its allocation target for domestic shares to about 25% from 12%. Foreign holdings of stocks and bonds will be lifted to a combined 30% from 23%, while holdings in JGBs will be cut to 40% from 60%.
    • The GPIF has been expected to announce a higher domestic stock target, but the 25% figure is likely toward the top end - if not exceeding - of market expectations.
    • EWJ +2% premarket
    • ETFs: DXJ, EWJ, DFJ, NKY, DBJP, EZJ, EWV, DXJS, SCJ, JPNL, JSC, ITF, JPP, JPNS, HEWJ, FJP, QJPN, JPMV, DXJT, DXJH, DXJR, DXJF, DXJC
    | Comment!
  • 6:19 AM
    • China is due to report Q3 GDP tomorrow, in what could turn into fresh panic over the state of the global economy.
    • The economy is forecast to have grown 7.2% in the July-September period, the slowest pace since the first quarter of 2009 and down from 7.5% in the previous three months.
    • Over the weekend, media outlets reported that the People's Bank of China is planning an injection of about 200B yuan ($32.7B) into some national and regional lenders to keep liquidity ample and bolster growth.
    • ETFs: FXI, EWH, KWEB, PGJ, GXC, YINN, FXP, HAO, ASHR, TAO, CHIQ, YANG, CQQQ, CHIX, MCHI, QQQC, PEK, XPP, YAO, YXI, CHXF, ECNS, CHII, FCA, CHIE, CN, CHIM, EWHS, FCHI, KFYP, ASHS, CNXT, CHNA, KBA, FHK
    | Comment!
  • 3:56 AM
    • Russia and Ukraine have reached a preliminary agreement on a price for winter gas supplies, easing some concerns that the countries’ dispute could disrupt supplies to Europe via Ukraine.
    • Russia cut off supplies in June, demanding Ukraine pay a debt of some $5B. Lacking the funds to purchase the gas due to its recession, Ukraine has appealed to the IMF for help.
    • Ukrainian President Petro Poroshenko announced that Ukraine had agreed on a price of $385 per 1,000 cubic meters of gas until the end of March.
    | 5 Comments
  • 3:38 AM
    • French Finance Minister Michel Sapin reaffirmed that France would pursue a slow deficit reduction due to its need to maintain its fragile recovery, ahead of a meeting in Berlin with German counterpart Wolfgang Schaeuble.
    • Sapin also reiterated that Germany should lead an effort to boost investment in the euro zone, promising that France would continue to pursue structural reforms.
    • Regarding the country's budget, French Economy Minister Emmanuel Macron announced Sunday that he was sure the European Commission would not reject Paris' 2015 plan although it breaks EU deficit limits.
    • ETFs: EWQ
    | 2 Comments
  • Saturday, October 18, 2014

  • 3:23 PM
    • Moody's downgrades government of Russia's debt rating by one notch to Baa2 from Baa1 and maintains Negative outlook.
    • Key drivers for the downgrade: "i) Russia's increasingly subdued medium-term growth prospects, exacerbated by the prolongation of the Ukraine crisis, including through the impact of expanded international sanctions. ii) The gradual, but ongoing erosion of the country's foreign-exchange buffers due to capital flight, Russian borrowers' restricted international market access and low oil prices."
    • "Given the negative outlook on the rating, Moody's sees limited upward pressure in the next 12-18 months. A stabilization of the rating outlook could be triggered by a resolution of the crisis in Ukraine."
    • ETFs: RSX, RUSL, RUSS, RSXJ, ERUS, RBL, RUDR
    | 22 Comments
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