Monday, April 20, 2015
- Research firm Global Blue says Chinese tourists increased their luxury spending by 67% in Q1.
- High-end retailers with stores in Europe received a good portion of the sales after a weak euro attracted tourists to buy in the region over Hong Kong.
- Last year, Chinese tourists increased spending by 18%.
- A reselling trend in China has accounted for some of the brisk growth, while also pressuring prices for luxury brands in China.
- Luxury retailers: Gucci (OTC:PPRUF, OTCPK:PPRUY), Louis Vuitton (OTCPK:LVMUY), Coach (NYSE:COH), Ralph Lauren (NYSE:RL), Michael Kors (NYSE:KORS), Burberry (OTCPK:BURBY), Tiffany (NYSE:TIF), LVMH (OTCPK:LVMHF, OTCPK:LVMUY), Richemont (OTCPK:CFRUY, OTCPK:CFRHF), Remy Cointreau (OTCPK:REMYF, OTCPK:REMYY)
- Responding to weak Q1 economic data, the PBOC cut the required reserve ratio by 100 basis points to 18.5% over the weekend. It's the second RRR cut since November, notes BBVA, which expects a "tremendous" liquidity injection of ¥1.35T into the financial sector.
- The team also takes note of the 100 basis point cut vs. the PBOC's typically moving in 50 basis point increments. Expect more easing, says BBVA - mainly in interest rates which could see 75 basis points in cuts in coming months.
- Shanghai fell 1.6% overnight, with the Hang Seng lower by 2%.
- ETFs: FXI, ASHR, EWH, CAF, YINN, PGJ, GXC, FXP, YANG, CHIX, PEK, MCHI, XPP, YAO, ASHS, YXI, CN, CHXF, FCA, CNXT, CHNA, EWHS, KBA, FCHI, FHK, AFTY
Sunday, April 19, 2015
- ECB president Mario Draghi said Saturday that Europe is rooting for Greece to resolve its problems, but the Hellenic Republic is the only party that can save itself.
- Draghi also referred to a comment he made in August 2012 - when pressed by reporters about a Grexit - affirming that the euro "cannot be reversed."
- Ongoing talks between Athens and its creditors have been going painfully slow, with the latter insisting on a set of detailed structural reforms to approve €7.2B in aid for the cash-strapped country.
- As a result, Eurogroup ministers set an April 20 deadline last week for Greece's next reform proposal.
- ETFs: FXE, EUO, ERO, DRR, EUFX, ULE, URR
- Following the country's soft GDP data last week, China's central bank cut the reserve requirement ratio for all banks by 100 bps to 18.5% on Sunday, adding more liquidity to the world's second-largest economy to combat slowing growth.
- Even with the additional stimulus, China's GDP is expected to tumble to a quarter-century low of around 7% this year from 7.4% in 2014.
- Previously: More monetary ease in China (Feb. 04 2015)
- ETFs: FXI, ASHR, EWH, CAF, YINN, KWEB, PGJ, GXC, FXP, HAO, YANG, TAO, CHIX, PEK, CHIQ, CQQQ, MCHI, QQQC, XPP, YAO, ASHS, YXI, CN, CHXF, FCA, CHNA, CNXT, CHII, ECNS, CHIE, EWHS, CHIM, KBA, KFYP, FCHI, FHK, AFTY
- Saudi Arabia's bourse is on the rise after the Kingdom announced it would open its $530B stock market to direct foreign investment from June 15. Final rules will be published on May 4.
- Up to now, foreigners have been restricted to buying Saudi shares indirectly through swaps or ETFs.
- Tadawul All Share Index +3.4%.
- Previously: Saudi Arabia sets date to open stock market to foreigners (Apr. 17 2015)
- ETFs: GULF, MES
Saturday, April 18, 2015
- The roll-out of 4G LTE high-speed wireless connections in all 2016 General Motors (NYSE:GM) models could provide the automaker with new sources of revenue and jump-start tech initiatives of rivals.
- GM sees OnStar 4G leading to e-commerce revenue from transaction splits (fast-food, hotel rooms, entertainment, advertising), services, and data usage.
- Software upgrades pushed out via broadband connections could also save GM money on repair and warranty costs.
- While execs with GM estimate OnStar will generate $350M in profit over the next three years, some analysts have aimed much higher with their projections.
- Gartner sees 10% of all revenue from the automobile industry generated from connected broadband platforms by 2020 - a formidable mark which explains the increasing presence of Apple and Google in the sector.
- Partnerships between Silicon Valley and Detroit are expected to accelerate.
- GM sits in a nice position to defend its turf against the tech heavyweights through its valuable OnStar property - while BMW (OTCPK:BAMXY), Audi (OTCQX:VLKAY), Nissan (OTCPK:NSANY), and Tesla Motors (NASDAQ:TSLA) are also a few steps away from Internet-based revenue streams.
- Other companies which might benefit to a degree from a connected car explosion: MBLY, NVDA, AMBA, SWKS,SBUX, DPZ, T - add your own in the comments.
Friday, April 17, 2015
- The CPI rose 1.2% Y/Y in March, up from 1% in February, and against 1% expected by forecasters. Core CPI jumped to 2.4% in March vs. 2.1% previously.
- Retail sales rose 1.7% in February, after declining the previous two months.
- The loonie (NYSEARCA:FXC) popped higher to its strongest level since mid-January, but has given back some of those gains. It's currently up 0.35% to $0.8237.
- ETFs: EWC, CNDA, EWCS, QCAN, FCAN
- E-cigarettes are catching on with teenagers, according to a new data read.
- While usage of traditional cigarettes by high school students has declined, e-cigarette demand has increased significantly.
- 13% of all high school students used e-cigs last year to top the rate they used traditional cigarettes for the first time.
- The FDA is still working out how it will treat the e-cigarette category.
- Related stocks: MO, BTI, LO, PM, OTCQB:ECIG, OTCQB:VAPE, OTCPK:HPNN, OTCQB:MCIG, OTCQB:NTRR, OTCPK:VAPR, RAI, OTC:AHII, OTCQX:ITYBY.
- The BOJ held policy steady this month, apparently taking comfort in core inflation staying positive, but Credit Suisse says the rate will turn negative by November, prompting a fresh bout of QE.
- The weaker yen has helped boost inflation of late, says the team, but that effect is wearing off and further weakening is unlikely, especially now that Fed rate hike plans have been pushed off by at least a few months.
- "As such, we see a high likelihood of the BoJ deploying additional easing measures later this year, by which time the central bank will probably be forced to acknowledge that corporate price-setting behavior is being adversely impacted by the threat of the ex-energy core CPI inflation rate dropping into negative territory.”
- Source: Barron's
- ETFs: DXJ, EWJ, FXY, YCS, DBJP, NKY, JYN, EZJ, JPNL, EWV, YCL, HEWJ, ITF, JPP, FJP
- The executive board at Volkswagen (OTCQX:VLKAY) says it backs CEO Martin Winterkorn and plans to extend his contract next year.
- The development should end the recent leadership drama started when chairman Ferdinand Piech undercut Winterkorn.
- The question of who will succeed Piech as chairman is still unresolved.
- Previously: Volkswagen to issue statement on leadership
- All the headlines say it's worry over Greece, but Europe was doing just fine in morning action until news hit about a big expansion in short-selling in China (after markets in China had closed for the session). Chinese futures have subsequently tumbled, and any China ETFs trading in the premarket are sharply lower despite gains in Shanghai overnight.
- Germany (NYSEARCA:EWG) -1.7%, France (NYSEARCA:EWQ) -1.2%, Italy (NYSEARCA:EWI) -1.8%, Spain (NYSEARCA:EWP) -1.8%, U.K. (NYSEARCA:EWU) -0.75%. Stocks in Athens (NYSEARCA:GREK) are lower by 0.9%.
- Previously: China allows big boost in short selling (April 17)
- ETFs: VGK, FEZ, HEDJ, IEV, EPV, EZU, FEU, EURL, FEP, UPV, DBEU, ADRU, HEZU, FEEU, IEUR, FIEU, DBEZ, FEUZ, SBEU
- Hoping to boost the supply of stocks trading in the market, China's securities regulator will allow institutional investors to lend shares for short selling and will also expand the number of stocks that can be sold short.
- The announcement comes alongside the introduction of two stock index futures which will also allow investors to place bets/hedge for lower stock prices.
- The news hit after markets closed, with Shanghai gaining another 2.2% overnight, but FXI -3.5% premarket. ASHR -4.1%
- ETFs: FXI, ASHR, EWH, CAF, YINN, PGJ, GXC, FXP, YANG, PEK, MCHI, XPP, YAO, ASHS, YXI, CN, CHXF, FCA, CNXT, CHNA, EWHS, KBA, FCHI, FHK, AFTY
- Saudi Arabia will open its $530B stock market to foreign investments on June 15, giving international investors direct access to the Middle East's largest economy.
- In 2008, Saudi Arabia began permitting foreign investors indirect access to the market through swaps, but is now looking to fully open the market as it pushes to diversify its petrodollar-dependent economy by boosting the private sector.
- The Saudi Tadawul Index is up 10% YTD.
- Previously: Saudi Arabia to open stock market to foreigners (Jul. 22 2014)
- ETFs: GULF, MES
Thursday, April 16, 2015
- The Shanghai Composite has more than doubled over the past year, and is ahead more than 30% so far in 2015, but Chinese shares could have a tailwind for years, says Mark Hulbert, as international benchmarks catch up with reality.
- According to Jamie Perrett, director of index research at FTSE, China's weight in the FTSE All-World ex-U.S. Index is 4.8%, but once China's "A" shares become fully available to foreign investors - and that process is well underway - the weight would more than double to over 10%. Without putting a number on it, it's not hard to see how this would ignite a huge about of money indexed to international indexes flowing into Chinese shares.
- Hulbert's suggestion: Get ahead of the shift by putting 10% of your own international equity assets in China today.
- Source: Barron's
- ETFs: FXI, ASHR, EWH, CAF, YINN, PGJ, GXC, FXP, YANG, PEK, MCHI, XPP, YAO, ASHS, YXI, CN, CHXF, FCA, CHNA, CNXT, KBA, FCHI, FHK, AFTY
- Philip Morris ((NYSE:PM) +7.7%) rallies after smashing earnings and raising guidance above estimates and its prior view.
- The tobacco company also surprised on the volume side with gains in its Europe Union and Eastern Europe/Middle East/Africa regions.
- Despite some F/X hits, Philip Morris was able to exert some pricing pressure during the quarter to help boost results, note analysts.
- Shares of Philip Morris are at their highest level since mid-January.
- Previously: Philip Morris beats by $0.15, beats on revenue
- Previously: More on Philip Morris' Q1
10:12 AM| Comment!
- Mitsubishi (OTCPK:MMTOF) car registrations +70.0% to 15,114 units in March, according to the European Automobile Manufacturers Association.
- Overall EU registrations +10.6% Y/Y in March, powered by double-digit growth in Spain, Italy, and France. YTD registrations +8.6%.
- Mitusbishi market share: 0.9% vs. 0.6% a year ago.
- Mitsubishi YTD registrations +69.9%.
- EAMA release (.pdf)
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