Today - Friday, October 24, 2014
- Mali has confirmed its first case of Ebola, becoming the sixth West African country to report a case of the virus.
- The patient, a 2-year-old girl who had come from neighboring Guinea, was brought to a hospital in the Malian town of Kayes.
- Mali is Africa’s third-largest gold producer.
- Related gold stocks: GOLD -2.3% premarket; AU
- Ebola Small-cap Index: HEB, TKMR, NLNK, NNVC, INO, OTCQB:GOVX, SRPT, CMRX, PLX, NSPH, BCRX, LAKE, APT, VSR, SMED.
- China's $50B Asian Infrastructure Investment Bank launched today, as the U.S. said it had concerns about the new rival to Western-dominated multilateral lenders, such as the World Bank.
- The new infrastructure bank aims to give project loans to developing nations.
- "We have concerns about the ambiguous nature of the AIIB proposal as it currently stands, that we have also expressed publicly," says State Department spokeswoman Jen Psaki.
Thursday, October 23, 2014
- Crude oil prices sprint higher as Saudi Arabia is said to have cut supply last month, according to a source familiar with the country’s oil policy.
- The Saudis cut supply by 328K bbl/day to 9.36M bbl/day in September, from 9.69M in August, according to the source; total Saudi output in September was 9.7M bbl/day, up from 9.6M in August.
- WTI +1% to $81.30/bbl, Brent +1.2% to $85.77.
- ETFs: USO, XLE, OIL, UCO, ERX, VDE, OIH, SCO, ERY, DIG, BNO, DTO, DBO, DUG, IYE, CRUD, USL, UWTI, PXJ, FENY, DNO, DWTI, RYE, FXN, SZO, OLO, DDG, OLEM, TWTI
- Honda (NYSE:HMC) appoints Koichi Fukuo to the new position in charge of quality reform in the wake of five separate recalls for the Honda Fit model.
- The Japanese automaker will also review quality processes globally.
- Pay cuts for the top management responsible for the Honda Fit will also be enacted for three months.
- The 2nd U.S. Circuit Court of Appeals in NY has dismissed Argentina's appeal of an order directing BNY Mellon (NYSE:BK) to hold onto the $539M it deposited for its restructured bondholders.
- The $539M interest payment played a key role in the country's default, after U.S. District Judge Thomas Griesa directed the bank to retain the funds until Argentina completed negotiations over its $1.33B plus interest owed to holdout creditors.
- ETFs: ARGT
- The IMF is urging Japan to go ahead with its second tax hike next year in order to maintain credibility of its fiscal framework.
- Japan's national sales tax rose to 8% from 5% in April and the government is due to decide by year-end whether to proceed with a second tax increase to 10%.
- The IMF expects Japan's economy to grow by an annualized 3.4% in July-September, rebounding from its deepest slump since the 2009 global financial crisis last quarter following April's tax hike.
- ETFs: DXJ, EWJ, DFJ, NKY, DBJP, EZJ, EWV, DXJS, SCJ, JPNL, JSC, ITF, JPP, JPNS, HEWJ, FJP, QJPN, JPMV, DXJT, DXJH, DXJR, DXJF, DXJC
Wednesday, October 22, 2014
- 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
- 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
- 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.
- 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
- 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
Tuesday, October 21, 2014
- 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
- The key risks to the Chinese growth story are a continued sharp slowdown in property investment, higher-than-expected inflation, and weak export demand, says Deutsche now expecting 7.3% GDP growth this year and 7% in 2015, down from a previously estimated 7.8% and 8%, respectively.
- Last night: China Q3 GDP slows to 7.3%
- Also factored into the analysis is Deutsche's belief that Beijing may be more willing to accept a hard-landing scenario rather than launching further stimulus.
- Yesterday: Conference Board: China growth to drastically slow
- ETFs: FXI, EWH, PGJ, GXC, YINN, FXP, ASHR, YANG, MCHI, PEK, XPP, YAO, YXI, CHXF, FCA, CN, FCHI, CHNA, KBA, FHK
- 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
- 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
- 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
- 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.
- 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
Monday, October 20, 2014
- 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
- The NHTSA issued a broad warning on airbags issued by Takata Corp. - covering as many as 4.7M vehicles.
- Concerns over Takata airbags have already led to recalls at Subaru (OTCPK:FUJHY), GM, BMW (OTCPK:BAMXY), Nissan (OTCPK:NSANY), Honda (NYSE:HMC), Mazda (OTCPK:MZDAY), and Toyota (NYSE:TM).
- The government agency says the issue is especially urgent to drivers in regions of high humidity.
- Complete list of models included in NHTSA warning