Today - Thursday, May 7, 2015
- The International Monetary Fund warns the balance of risk in the Asia-Pacific region is tilted toward the downside due to rising debts and a stronger U.S. dollar.
- Although Asia is still seen as a global growth leader, the agency sees a slowing trend.
- The region is forecast to have a growth rate of 5.6% in 2015 and 5.5% in 2016, according to the new IMF survey.
- Positive factors for Asia in the near future include moderating commodity prices, strong labor markets, and solid demand from the U.S. and Europe.
- ETFs: FXI, DXJ, EWJ, TUR, VNM, EPI, EWA, EWY, INDY, EWS, ASHR, THD, EWH, SCIF, EPHE, CAF, IDX, YINN, KWEB, PGJ, EIDO, GXC, EWM, FXP, EWT, INDL, PIN, INDA, HAO, INP, EPP, INXX, YANG, VPL, TAO, CHIX, PEK, CHIQ, CQQQ, DFJ, MCHI, AAXJ, INCO, QQQC, DBJP, SCIN, ENZL, NKY, AIA, ASEA, SMIN, XPP, AUSE, EWSS, YAO, IDXJ, EZJ, JPNL, DXJS, EWV, ASHS, YXI, CN, CHXF, FCA, CHNA, CNXT, AZIA, CHII, CHIE, ECNS, KROO, SCJ, EWHS, AXJL, DVYA, CHIM, HEWJ, JSC, ITF, KBA, KFYP, KORU, JPP, FCHI, ADRA, DXKW, FKO, HKOR, EWAS, FTW, PAF, FHK, FAUS, DBKO, QJPN, FPA, JPX, FJP, JPMV, DXJT, DXJR, DXJC, QKOR, AXJS, DXJH, QAUS, JHDG, AFTY, UXJ, DBAP, AXJV, IPAC, QTWN, DXJF, PAK
Wednesday, May 6, 2015
- Shanghai has already had a big run - more than doubling over the past year - but it's "ready to enter one of the great bull markets that we've seen," says Mike Novogratz, who runs the Fortress Macro Fund.
- "You've seen official there blink. Now they are in all-out fiscal easing, and my view and our view is that they will succeed ... The Chinese have gambling in their blood. Now the government says, we want to you to participate in market-like casinos."
- Source: Barron's
- Previously: Investors want their money back from struggling Fortress hedge fund (Feb. 26)
- ETFs: FXI, ASHR, CAF, YINN, PGJ, GXC, FXP, YANG, PEK, MCHI, XPP, YAO, YXI, CN, CHXF, FCA, CHNA, KBA, AFTY
2:50 PM| 1 Comment
- Nearly 20 years after The Maestro uttered his famous warning on stocks, Janet Yellen - speaking at a D.C. conference - says about the same thing for valuations today (the bull market continued for four years after Greenspan spoke, in part helped by his coming to the rescue every time a correction loomed).
- Philip Morris International (NYSE:PM) reaffirms its previous 2015 EPS guidance of $4.32-$4.42 at its annual shareholder meeting.
- The company expects free cash flow this year to be roughly in-line with last year's level.
- Shareholders are voting on board nominees and executive compensation at today's meeting.
- SEC Form 8-K
- PM +0.8% premarket.
- IATA reports global airline passenger traffic increased 7.4% in March.
- The pace is an acceleration from February's traffic growth of 6.4%.
- The increase in traffic came against a 5.6% gain in capacity.
- International flights were up 7.0% on a revenue passenger kilometer basis, while domestic routes increased 8.0%.
- March international passenger demand by carrier region: Europe +5.4%, Asia-Pacific +11.1%, North America +2.7%, Middle East +9.8%, Latin America +4.3%, Africa -1.1%.
- Load factor across the airline industry rose 130 bps Y/Y to 80.0%.
- Global airline stocks: AAL, UAL, DAL, RYAAY, OTCPK:CPCAY, OTCPK:SINGY, CEA, ZNH, CPA, GOL, LFL, OTCPK:DLAKF, OTCPK:QUBSF, ALK, HA, OTCPK:AIRYY, OTCPK:MLYAF, OTCPK:AFLYY, VLRS, LUV, AVH, OTCPK:JAPSY, OTC:AFRAF, OTC:EJTTF, OTC:WJAFF, OTC:WJAVF, OTCQX:ESYJY, OTCPK:ICAGY.
- Related ETFs: JETS
- BMW (OTCPK:BAMXY) will wait to see how things progress in Russia before building a new assembly plant in the nation, according to CEO Norbert Reithofer.
- Though most automakers have put the brakes on capacity growth in the region due to the slumping auto market, luxury sellers have fared a little better than their peers.
- BMW reported Q1 results this week.
- The automaker saw revenue increase 14.7% Y/Y to €20.917B ($23.49B) during the quarter.
- BMW Q1 report
- Asian stocks outside of Japan (which is closed for holiday) fell again today, marking the second heavy sell-off this week after the RBA cut rates and reports that Chinese brokerages are tightening margin requirements.
- Data on Tuesday showed that the U.S. trade deficit widened in March to its highest level in more than six years, sending Wall Street down to its biggest one-day percentage decline since March.
- Australia: S&P ASX 200 -2.3%. Asia: Shanghai -1.6%; Hang Seng -0.4%; BSE Sensex -2.4%.
- ETFs: FXI, EWA, ASHR, EWH, CAF, YINN, KWEB, PGJ, GXC, FXP, HAO, YANG, TAO, CHIX, PEK, CHIQ, CQQQ, MCHI, QQQC, XPP, AUSE, YAO, ASHS, YXI, CN, CHXF, FCA, CNXT, CHNA, CHII, CHIE, ECNS, KROO, EWHS, CHIM, KBA, KFYP, FCHI, EWAS, FHK, FAUS, QAUS, AFTY
- Previously: Bull run in China takes a big breather (May. 05 2015)
Tuesday, May 5, 2015
- Chinese heavyweight automakers Dongfeng (OTCPK:DNFGY, OTCPK:DNFGF) and FAW Group are reported to be in talks on a merger.
- Both companies have fallen under the eyes of the government amid President Xi Jinping's effort to reel in corruption.
- A combination of the two automakers would create the 6th largest car manufacturer globally.
- The bear case on cable is all the way down to $1.39, says Morgan Stanley's Ian Stannard, with a lot of that downside assuming a government can't be formed quickly after the polls.
- He notes a "sense of urgency" thanks to the proximity of the financial crisis forced a coalition to be quickly put together after the 2010 election, but the parties this time are going to demand more.
- Recent polling certainly indicates a hung parliament, meaning either the Tories or Labor would have to reach an agreement with smaller parties in order to lead.
- The election is on Thursday.
- ETFs: FXB, GBB
- Adidas (OTCQX:ADDYY, OTCPK:ADDDF) reports sales rose 9% to €4.083B ($4.556B) in Q1 on a currency-neutral basis.
- Sales in Europe +11% to €1.143B ($1.276B).
- Sales in North America +7% to €591M ($659.6M).
- China was a bigger contributor during the quarter with the region seeing sales growth of 21% to €597M ($666.45M).
- Reebok sale were up 9% as training and studio products showed strong demand.
- Net profit came in at 221M ($246M) vs. €234M consensus estimate.
- Adidas earnings press release (.pdf)
- The German 10-year Bund yield was below 0.10% as recently as two weeks ago, but it's up another 11 basis points today to the relatively sky-high level of 0.50%, and dragging along the rest of Western bond yields.
- Italian 10-years are up 28 bps to 1.76%; Spain up 28 bps to 1.74%; U.K. up 14 bps to 2.0%.
- "The bond market meltdown goes on," writes SocGen's Kit Juckes, though he believes it to be more correction, rather than a trend change.
- In the U.S., the 10-year yield is up another three basis points to 2.18% - about its highest level of 2015.
- Previously: Bill Gross: Bunds are short sale of a lifetime (April 21)
- ETFs: TBT, TLT, TMV, TBF, EDV, TMF, TTT, ZROZ, TLH, SBND, VGLT, UBT, DLBS, TLO, BUNL, TENZ, ITLY, LBND, ITLT, GGOV, BUNT, DLBL, TYBS, VUSTX
- Amid local news reports of a number of Chinese brokerages tightening margin requirements, the Shanghai Composite reversed a higher open to close lower by 4.05% overnight.
- The market there is up about 80% since November, so these sorts of short-term panics shouldn't be too surprising.
- Particularly hard hit were banking shares (NYSEARCA:CHIX), with China Construction Bank, Bank of China, and Bank of Communications each lower by about 5%.
- 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
- Mondelez International (NASDAQ:MDLZ) and D.E. Master Blenders (OTC:DEMBF) land conditional approval from the European Commission on their proposed merger after agreeing to divest a few brands in certain regions.
- The newly-created Jacobs Douwe Egberts is expected to strike revenue of more than €5B ($5.56B).
- Pierre Laubies will be the pure play coffee company's CEO.
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