You Are Now Obsolete: Father/Mother/Employee/Investor/Patient/Customer | Ann Barnhardt Reluctant Preppers
Published on Jul 16, 2017
Have you suffered the disturbing experience of being treated by the system as though you are an unneeded nuisance - and rather than serving your needs, the system is dumping you as though it could go on just fine without you? Are you being displaced from one or many of your natural roles and disenfranchised of your intrinsic rights?
Ann Bernhardt, founder of Barnhardt Capital Management and firebrand for justice, returns to Reluctant Preppers to examine two current news stories that starkly exemplify the surreal inversion that is being perpetrated on ordinary people today: JP Morgan reporting that just 10% of stock trading is from human investors, and Mark Zuckerberg's call for all people to be guaranteed Universal Basic Income (UBI), regardless of whether they work or not.
Don't miss Barnhardt's rousing call for rational people to reclaim our rights and our lives!
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Gregory Mannarino - If the Fed Stops Juicing Markets It’s Over Greg Hunter
Published on Jul 15, 2017
Trader/analyst Gregory Mannarino says, “I’ll tell you what concerns me. Despite the fact we have a stock market at a record high, housing near record high, interest rates near record lows, tax receipts are down, money velocity is near historic lows and our economy is stuck. . . . So, without the Federal Reserve keeping their foot on the floor, and that’s what Janet Yellen is going to continue to do, this will all melt down in a blink of an eye. The Federal Reserve has got to keep the juice going. The moment they decide to take away the juice, all of this is going to correct to fair value. It’s going to do it no matter what. It will either do it when the Fed decides to pull their foot off the pedal, or it’s going to happen from some random event where people are going to start selling. I think it will begin in the debt market.”
Join Greg Hunter as he goes One-on-One with Gregory Mannarino of TradersChoice.net.
Another new week, another day with not much going on. So much, or rather little so, that in its daily wrap Citi starts off with the following: "Pop Art pioneer Andy Warhol, who once said “I like boring things”, would have been a huge fan of today’s session thus far. Though several events of note linger on the horizon for later this week, G10 is firmly on the beach as of this morning."
While it was indeed a generally quiet session (with Japan markets closed), US equity futures continued their run into record territory (ES up 0.1% to 2,458.50), and Europe fractionally lower, the early Monday focus was on the previously discussed turmoil for Chinese markets where despite a solid set of Chinese data small caps tumbled, selling off into the close after further warnings of regulatory scrutiny and deleveraging, and sending the ChiNext index of Chinese small caps down over 5% to the lowest level since January 2015.
European equity markets also weaker from the open, with the industrial sector underperforming after several Scandinavian companies fell heavily after earnings. Offsetting this was some early strength from mining stocks which lifted the FTSE 100 following the strong China indsutrial production and fixed investment data. Gilts rally, supporting bunds and USTs, unwinding Friday sell-off linked to rate-locking prior to expected corporate issuance, peripheral spreads also tighten. USD holds small overnight gains; NZD underperforms after dovish RBNZ comments overnight.
Benefiting from China's strong data, Bloomberg reports that zinc and iron ore were the biggest winners and precious metals joined the advance. However, the jump in miners failed to spur the Stoxx Europe 600 Index, however, which reversed an advance as a report showed June consumer prices in the euro area were unchanged from a month earlier at 1.3%, missing "whisper estimates." And while European data was largely in line with expectations, investors were reported to be locking in gains according to Bloomberg after a three-day rally and ahead of an ECB meeting this week. Stoxx Europe 600 index down 0.1% at 10:20 a.m. in London, was little changed before data, index rose toward 50-DMA earlier in session, but failed to cross above it. With underlying inflation still relatively weak, all eyes on ECB’s meeting this week when the central bank is expected to "hold fire" and wait until September before slowing the pace of its bond-buying program. The dollar strengthened against almost all its G-10 peers and was poised to end a five-day losing streak. Treasury yields slipped.
Outside of China, Asian shares hit a 2-year high overnight. As discussed, the overnight action was entirely in China, where despite the strong GDP data the Shanghai Composite Index retreated 1.4% amid concerns over the implications of a weekend meeting where President Xi Jinping said the central bank would play a greater role in defending against risks. The kiwi fell after the deputy governor of New Zealand’s central bank said a lower currency would help rebalance growth. Japanese markets were closed for Marine Day. South Korea’s Kospi Index advanced to an all-time high.
Not surprisingly, complacency has returned with the Citi global risk aversion macro index back to its pre-crisis average.
In currencies, the Aussie dollar hit its highest level in over two years before it pulled back to $0.7813, while the Canadian dollar touched a one-year high before it settling at around C$1.2659. Britain's Sterling and the euro both eased against the dollar having jumped on Friday as officials from both sides prepared to for Brexit talks in Brussels. Specifically, the pound fell from a 10-month high against the dollar on concern that discord within the U.K. government is worsening before the nation starts the second round of Brexit negotiations with the European Union. Sterling snapped a three-day advance ahead of the talks that are likely to focus on protecting citizens’ rights, which has been a key sticking point so far, Bloomberg reports. The Chancellor of the Exchequer Philip Hammond exposed tensions within the British cabinet at the weekend by stating that transitional arrangements at the end of talks are likely to last a couple of years, far longer than the couple of months suggested by Trade Secretary Liam Fox.
In commodities, oil rose again following the Chinese data, extending gains made last week on signs of lower U.S. inventories and stronger demand. U.S. crude rose 0.3 percent to $46.66 a barrel, while global benchmark Brent added 0.3 percent to $49.07. Gold gained too, rising to $1,229.90 an ounce in London, though it was copper that shone brightest of the metals as it climbed 1 percent to $5,983.50 a tonne, having earlier struck its highest since March 2.
"I'm still bullish on copper. The property backdrop is still good; China economy and industrial production numbers are still good. Orders are coming through from state grid," said analyst Dan Morgan at UBS in Sydney.
In rates, the 10Y held steady at 2.31%, after dropping as much as 2.279% on Friday as the dollar inched 0.1% higher versus the yen to 112.635 yen. Eurozone govt bonds also barely budged, biding their time ahead of this week's European Central Bank meeting for the latest signals on how the central bank plans to scale back its ultra-loose monetary policy. The Bank of Japan too is expected to keep its ultra accommodative policy unchanged when it meets on Wednesday and Thursday. Germany's benchmark 10-year bond yield was at 0.52 percent - down from 18-month highs of 0.58 percent hit a week ago.
Today focus will also shift to earnings season, which will ramp up with the likes of Microsoft Corp. and Unilever set to report.
China’s economy grew faster than expected in the second quarter, putting the nation on track to meet its growth target this year and giving backing to officials in their campaign to corral oncoming financial risk
President Donald Trump is planning to shake up his legal team and is also evaluating options for his communications shop as the FBI and congressional investigations into his campaign’s possible ties to Russia heat up
Senate Republicans anxiously awaiting a key analysis of their revised health bill have more time to wait, and debate on the controversial measure that had been expected this week will also be delayed following a medical scare involving one of its potential backers
Green Courte Partners, a private equity and real estate investment firm, is considering a sale of parking operator The Parking Spot
Amid a stalled turnaround, General Cable Corp. said it’s hired investment bank JPMorgan Chase & Co. to pursue a potential sale of the company
The European Central Bank is on track to unwind its stimulus next year but it’s likely to drag out the process, economists say
China plans to punish billionaire Wang Jianlin’s Dalian Wanda Group Co. for breaching the nation’s restrictions on overseas investments by cutting off funding and denying the conglomerate with necessary regulatory approvals
S&P 500 futures up 0.1% at 2,458.50
STOXX Europe 600 down 0.1% to 386.31
U.S. Dollar Index up 0.1% to 95.27
MXAP up 0.2% to 157.74
MXAPJ up 0.3% to 519.97
Nikkei up 0.09% to 20,118.86
Topix up 0.4% to 1,625.48
Hang Seng Index up 0.3% to 26,470.58
Shanghai Composite down 1.4% to 3,176.47
Sensex up 0.2% to 32,084.90
Australia S&P/ASX 200 down 0.2% to 5,755.47
Kospi up 0.4% to 2,425.10
German 10Y yield fell 1.2 bps to 0.585%
Euro down 0.2% to 1.1449 per US$
Brent Futures little changed at $48.90/bbl
Italian 10Y yield fell 4.1 bps to 1.994%
Spanish 10Y yield fell 2.9 bps to 1.622%
Gold spot up 0.1% to $1,230.30
Asia equity markets somewhat recovered from the early volatility in China to approach the close mostly higher after Friday's gains on Wall St. where the S&P 500 and DJIA printed fresh record highs, while better than expected Chinese data also provided support. The Asia-Pac region was spooked in early trade as the ChiNext board fell as much as 5% after a profit warning from its largest weighted stock Leshi which expects a net loss for H1. This led to similar declines in the Shenzhen Comp. (-1.7%) while the Shanghai Comp. (-0.1%) fell over 2% before better than expected GDP, Industrial Production and Retail Sales data provided much-needed relief. Finally, ASX 200 (-0.1%) was restricted by weakness in telecoms and financials, while Hang Seng (+0.6%) benefited from a firm liquidity injection by the PBoC, and Japanese markets were shut for Ocean Day holiday.
Top Asian News
China Weekend Meet on Finance Founds New Panel, Boosts PBOC
China Is Said to Punish Wanda for Breaching Investment Rules
China’s Stocks Slump Amid Regulatory Concern; Small Caps Plunge
China Insurers Jump as Policy Seen Helping Traditional Players
India Govt Cos to Invest $42b in 60m Tons/y West Coast Refinery
USD/INR 1-Mo Volatility Near Lowest Since 2008, Traders Cite RBI
One Country, Two Markets: Hong Kong Shares Jump Amid China Rout
Goldman Sees EM Slowdown Coming, Recommends Carry Over Stocks
European bourses pared its initial upside to trade marginally in the red through the morning, as summer, subdued trade has been evident. The Stoxx 600 sectors have followed in the indecision with IN outperforming in the FTSE, following the confirmation of Carolyn McCall as the new CEO. The energy sector also supports the indices, as WTI trades through 46.00/bbl. The strong Chinese data overnight has helped bolster the materials sector, up half a percent, as Anglo-American follow IN in the FTSE. Brexit concerns have re-emerged, with commentary from both Hammond and Fox. The latter stating that there are contingency plans across the UK government's departments in the scenario that no deal is reached. Fixed income markets opened with a slight bid across Europe, as the aforementioned concerns are clear. The curve has flattened we do approach the summer trading season: Germany 10/30 curve has flattened from 81.5bps to 73bps, France 10/30 from 107bps to 102.5bps, Italy 10/30 curve flatter from 115bps to 108bps and Spain 10/30 is also flatter from 134.5bps to 126/5bps.
Top European News
Souring U.K. Data May Put Paid to Pound’s Strength: Markets Live
Gilts’ Gain Helps Support Bunds; Unwinds in 20y UST, Data Show
Centrica May Sell Shares in New Gas Production Company
European Miners Lead Stock Gains After Boost From China GDP Data
John Wood, Tullow Oil, Morrison, Outokumpu Short Sellers Active
Boris Johnson: U.K. Govt Has Made a Serious Offer on Citizens
Eurofins Reports Potential Launch of New Sr EU500M Bond
In commodities, gold continues to recede near Friday's highs, following the poor CPI data out of the US. Gold has bolstered the precious metals all to trade in the green today, as markets do not seem too optimistic towards the continuing Brexit negotiation talks. The metal complex has also followed, trading in the green; buoyed Asian trade as the strong Chinese overnight figures have benefited not only China, but also Australasia.
In currencies, FX markets have felt the effect of slow summer conditions, with volatility not helped by the lack of tier one data due today. Much anticipation will be on the ECB later in the week, as central bank speech is light amid the pending decision as well as the Fed blackout period.
After the excitement of China’s data dump this morning there isn’t a
huge amount left over the course of the day with final June CPI report
for the Euro area and the July empire manufacturing print in the US the
only data of note
US Event Calendar
8:30am: Empire Manufacturing, est. 15, prior 19.8
DB's Jim Reid concludes the overnight wrap
In my household there are two important dates this summer. One the birth of the twins and secondly the premier of the new series of Game of Thrones which occurred last night. It aired at 2am in the UK (and perhaps 3am in Europe) so I'll be very impressed if anyone outside of the US readers of this note (aired last night) have seen it yet. No spoilers please as we'll be watching tonight but I'd love to hear from anyone in Europe that got up in the middle of the night to watch it. Had the premier been a couple of months later then I'm sure being awake in the middle of the night wouldn't have been a problem!
So as the battle for the seven Kingdoms intensifies, another slightly less epic battle is playing out around financial markets at the moment and that’s the one between inflation and central bankers. Friday's 4th successive US CPI miss relative to expectations was a frustration to many but the potential Fed dovishness it might imply helped herald a fresh record high in the S&P 500 (+0.47%), the Dow (+0.39%) and saw the Nasdaq (+0.61%) close within a whisker of its alltime high. So the recovery is complete in US equity markets after Draghi's Sinatra speech and the earlier tech sell-off. Although European markets had their best week for just over two months they still remain 2-3% off their highs perhaps held back by a more hawkish ECB and a stronger currency of late. The inflation vs. central bank battle continues in earnest this week with Europe and UK seeing inflation data today and tomorrow followed by the ECB meeting and press conference on Thursday.
Within the ECB the battle is perhaps between Draghi and the rest of the committee as the President was certainly more hawkish in Sintra on June 27th than he was when he spoke for the committee at the last meeting on June 8th. For this week's meeting DB highlights that the main point of interest is seeing how much authority Draghi has over the Governing Council. This will be judged by the strength of the signal at the press conference. According to our economists, the more that Draghi’s new “confidence, persistence, prudence” mantra makes it into the press statement, the more confident the market will be about the Council converging to Draghi’s more constructive view. DB expect Draghi to open the door to a September decision on QE without any pre-commitment.
So all to look forward to. In the meantime the week has already started with a bit of a bang following the latest data dump out of China as well as a number of China-related headlines over the weekend. Starting with the data, the latest June numbers were overall positive. Q2 GDP printed at 6.9% yoy unchanged versus Q1 but ahead of market expectations for 6.8% yoy. In addition, retail sales (+11.0% yoy vs. +10.6% expected; +10.7% previously) and industrial production (+7.6% yoy vs. +6.5% expected; +6.5% previously) both rose more than expected. Fixed asset investment held steady at +8.6% yoy, albeit one-tenth above consensus.
Chinese equity markets had initially sold off at the open ahead of the data. The Shanghai Comp, CSI 300 and Shenzhen were down was much as -2.60%, -2.30% and -4.50% respectively at one stage. That seemed to reflect weekend news about the investigation into a former Communist Party chief for violating party regulations, as well as the PBoC conference over the weekend where more prudent financial regulation was stressed (see more below). However, bourses have recovered somewhat following the data with the CSI 300 now flat, Shanghai Comp now -0.48% and Shenzhen -2.38%. The rest of Asia is largely firmer. The Nikkei (+0.09%), Hang Seng (+0.52%), Kospi (+0.36%) and ASX (+0.14%) are all up.
Back to that conference quickly. Our China economists note that a committee was set up to oversee regulatory issues in the financial sector which in our colleagues’ mind should help the coordination of the regulators in the long term but is unlikely to cause a visible change of policies in the short term. Our economists’ key takeaways were: (1) financial regulation may become more coordinated (2) the government aims to control financial risks without sacrificing growth (3) the effectiveness of the new institutional setup would depend on who will lead this committee and the PBoC (4) President Xi reiterated opening up of the financial sector and promoting RMB internationalization.
The remainder of the weekend newsflow has been fairly light. The FT is running a story about how President Trump’s approval rating has fallen to 36% and down 6pts from April. On a related subject the CBO has also announced that it won’t release its verdict on the Republican health care bill today after Majority leader McConnell announced that he’s postponing plans to begin the Senate debate in the next few days.
Back to that US data on Friday. As noted above, the June inflation numbers disappointed with both headline (0.0% mom vs. +0.1% expected) and core (+0.1% mom vs. +0.2% expected) readings printing below expectations. That now puts the annual rates at +1.6% yoy (down three-tenths) and +1.7% yoy (unchanged) respectively. It’s worth noting also that the six-month annualized core rate is now down to +1.3%. The big driver for the core appeared to be declines in prices for airfares, apparel and new cars which offset higher prices for shelter and medical care. Following the disappointing data our US economists have now lowered their 2017 forecast for core inflation to 1.7% yoy.
That wasn’t all though with the June retail sales stats in the US also coming in a little disappointing. Headline retail sales fell -0.2% mom (vs. +0.1% expected) while both the core ex auto and gas (-0.1% mom vs. +0.4% expected) and control group (-0.1% mom vs. +0.3% expected) components also printed big misses. In addition, the University of Michigan consumer sentiment survey for July declined 2pts from June to 93.1 (vs. 95.0 expected) driven by and large by a fall in the expectations component to 80.2 (from 83.9). The current conditions index did however nudge up to 113.2 (+0.7pts). Interestingly, in contrast to what we saw in the June CPI report, both 1y and 5-10y inflation expectations actually nudged up one-tenth each to 2.7% and 2.6% respectively (the latter is actually the highest since January).
There was one bit of good news to come from the data on Friday though and that was the June industrial production reading which printed at a better than expected +0.4% mom (vs. +0.3% expected) while the May reading was also revised up one-tenth to +0.1%. For completeness, business inventories came in bang on the money at +0.3% mom. All told the Atlanta Fed revised down their Q2 GDP forecast on Friday following all that data to 2.4% from 2.6%. Over in markets, while equities surged to new highs, Treasury yields plummeted lower in the aftermath of the CPI report with the 10y touching 2.277% (down 6.7bps) and to the lowest this month, although interestingly did complete a near u-turn into the close to finish at 2.333% (down 1.3bps).That rebound appeared to be more technically driven than anything else. Bond markets in Europe were broadly down 1-6bps but also saw a similar bounceback into the close. The Dollar stayed lower however with the Dollar index finishing -0.60% and suffering its weakest day since June 27th. Against that we saw a decent rally in EM currencies with the likes of the South African Rand (+1.37%), Russian Ruble (+1.31%) and Polish Zloty (+1.08%) all up over 1%. Gold (+0.91%) also had its strongest day for a month a bit. It’s worth noting that the market pricing (based on Bloomberg’s calculator) for a rate hike by the Fed in September and December is down to 10% and 43% respectively (from 16% and 50% the day prior).
The other story for markets on Friday and which will likely be a growing theme in the weeks ahead was the start of US earnings season. On Friday all eyes were on the banks with JP Morgan, Citi and Wells Fargo all reporting Q2 results which were largely in line to slightly better than expected at both the revenue and earnings lines. As has been the theme in recent quarters however that was against a backdrop of market expectations which have been ramped down in recent weeks. Case in point being JP Morgan where consensus for Q2 EPS was $1.58 (vs. $1.71 reported) after being as high as $1.65 two months ago. Share prices for all 3 banks were anywhere from a half to one percent lower however (and in line with the wider sector) which partly reflects the soft CPI report and lower yields but also some of the more cautious outlook commentary. Wells Fargo focused on weakness in lending volumes while JPM watered down its loan growth outlook and net interest income for the remainder of the year. CEO Jamie Dimon also had some choice words for the lack of policy progress in the US with the analyst call including some colourful language. Dimon added that “it’s almost an embarrassment being an American citizen travelling around the world” and referred to “political stupidity” in Washington.
To the week ahead now. After the excitement of China’s data dump this morning there isn’t a huge amount left over the course of the day with final June CPI report for the Euro area and the July empire manufacturing print in the US the only data of note. Tuesday is busy though and we kick off with China property prices data in the morning. In Europe we’ll get the ECB’s bank lending survey for Q2 followed by the June CPI/RPI/PPI data docket in the UK before we end with the July ZEW survey in Germany. Over in the US tomorrow we’ll get the June import price index reading and July NAHB housing market index print. With nothing of note in Europe or Asia on Tuesday, the focus will be on the US with June housing starts and building permits data. Thursday kicks off in Japan where the overnight data includes the June trade data, but the bigger focus will be on the BoJ meeting outcome. During the European session we’ll get Germany PPI and UK retail sales, shortly before the ECB meeting just after midday. In the US on Thursday we’ll get initial jobless claims, Philly Fed business outlook and conference board’s leading index. It’s a quiet end to the week on Friday with UK public sector net borrowing data the only release of note.
With the Fed entering the blackout period there is no Fedspeak scheduled this week, while over at the ECB and BoE there are also no scheduled speakers. Other events to note however include the EU’s Barnier and UK’s David Davis meeting for a second round of Brexit talks, kicking off today. The inaugural meeting of the US China comprehensive economic dialogue on Wednesday in Washington where the first gathering is due to cover economic and trade issues between the two nations. Finally earnings season ramps up in the US with 69 S&P 500 companies due to report including Netlfix (Monday), Goldman Sachs, BofA, IBM, Johnson & Johnson (Tuesday), Morgan Stanley (Wednesday), Microsoft, eBay (Thursday) and GE (Friday).
Trian Launches Proxy Fight Against Procter & Gamble (WSJ)
El-Erian: Jamie Dimon Is Right to Raise the Alarm (BBG)
Secret Service denies vetting Trump Jr. meeting (Reuters)
Cerberus’s Remington Debt Fizzles as Trump Cools Firearms Fervor (BBG)
Overnight Media Digest
- A Republican push to pass a sweeping health-care law experienced another setback as Senate leaders said they would delay a vote set for this week, sparking fresh doubts about whether congressional leaders can muster support for a marquee GOP policy priority. on.wsj.com/2u02P8L
- Investor Nelson Peltz plans to launch a fight for a board seat at Procter & Gamble, in an effort to jolt the consumer-products giant whose sales and profit growth stalled, according to people familiar with the matter. on.wsj.com/2u0rUke
- A $2 billion private-equity fund that borrowed heavily to buy oil and gas wells before energy prices plunged is now worth essentially nothing, an unusual debacle that is wiping out investments by major pensions, endowments and charitable foundations. EnerVest Ltd, a Houston private-equity firm that focuses on energy investments, manages the fund. on.wsj.com/2tZZ17F
- Iran has handed American academic Xiyue Wang a 10-year prison sentence on spying charges, the news agency for Iran's judiciary said, the latest in a string of such cases against foreigners that have raised alarm in the U.S. and Europe. on.wsj.com/2u0qQwI
- An error by Dow Jones & Co in configuring a cloud-computing service left addresses and other information about subscribers to some of its products, including The Wall Street Journal, exposed to possible unauthorized access. on.wsj.com/2u0eioU
- The co-founder of encrypted messaging app Telegram said Sunday that it will put together a team of moderators who are familiar with Indonesia's language and culture to remove terrorist-linked content after Indonesia's government limited access to the service and threatened a complete ban. on.wsj.com/2u024N0
- Citigroup Inc is revamping some of the benefits on its Prestige card in an effort to sweeten the deal for coveted affluent consumers who exceed high spending thresholds. on.wsj.com/2u0tbaE
Philip Hammond has called for a Brexit transition deal that would give business a cushion of a "couple of years" after the UK leaves the EU as he accused hardliner cabinet members of trying to undermine him.
Barry Callebaut AG Chief Executive Antoine de Saint-Affrique said sales had accelerated in recent months and would return to a "normal rhythm" of growth as global chocolate sales are poised for a revival amid industry innovation and tumbling cocoa bean prices spur growth.
easyJet plc Chief Executive Carolyn McCall is set to be appointed head of ITV plc as early as Monday, as the UK's biggest commercial broadcaster ends its search for a successor to Adam Crozier.
- China's economy had expanded 6.9 percent in the second quarter, unchanged from the year-on-year growth rate in the first quarter. nyti.ms/2twiNFM
- Barclays chief executive John Varley and three other former top managers are expected back in court on Monday to answer charges that they, along with the bank, misrepresented arrangements with the Persian Gulf nation of Qatar when the bank raised money to weather the financial crisis in 2008. nyti.ms/2tvMFCb
- Securities and Exchange Commission upheld dismissal of an administrative case against a former Wells Fargo trader after two commissioners split on whether the evidence proved he had engaged in insider trading. nyti.ms/2twfYEF
- John Cornyn of Texas, a top Senate Republican, vowed to bring the party's health care bill to a vote as soon as possible. Detractors said they would use a delay caused by the absence of Senator John McCain to mobilize further opposition to the measure. nyti.ms/2tvGIFB
Britain is paying hundreds of millions of pounds in hidden costs for a next-generation warplane that will be unable to function properly because of defence cuts, an investigation by The Times has revealed. bit.ly/2tvBIk1
The UK chief executive of Airbus SE Paul Kahn, one of the earliest and most outspoken critics of Brexit, has been pushed out of the Franco-German aerospace giant after less than three years in the role. bit.ly/2tvIHcW
Chancellor Philip Hammond has urged caution over any moves to lift the cap on public-sector pay, arguing that on average workers in the sector remain better compensated than their private counterparts because of their better pensions. bit.ly/2tvfeQw
The next star of Doctor Who has been announced after intense speculation and actor Jodie Whittaker is the first woman to take on the role, playing the 13th Doctor in the BBC1 drama. bit.ly/2tvJKJU
Former Goldman Sachs Group Inc financier Matthew Westerman is increasingly viewed in City circles as a challenger to succeed Stuart Gulliver when the chief executive steps down from the helm of HSBC Holdings Plc next year. bit.ly/2tvcYbI
Philip Hammond is deliberately working to "frustrate" Brexit and treating pro-Leave ministers like "pirates who have taken him prisoner", a Cabinet minister has told The Telegraph. bit.ly/2tv1ogY
The Butterkist popcorn brand is being sold by privately owned Tangerine Confectionery to KP Snacks, Britain's second-biggest owner of bagged snacks. bit.ly/2tZ00GY
At least 26 people have been injured at a theme park in Spain after two train cars collided on a rollercoaster. The accident occurred when a car completed a loop and failed to stop, crashing into the back of another car. bit.ly/2tvKZc2
George A Romero, the legendary film director and creator of the modern movie zombie empire, has died at 77, according to his family. ind.pn/2tvi7k1
Rates of severe anxiety and depression among unemployed people have soared by more than 50 per cent in the last four years as the impact of “harsh” austerity policies take their toll, The Independent can reveal. ind.pn/2tvbnCO
Asian Metals Market Update: July-17-2017 By: Chintan Karnani, Insignia Consultants
It was quite a week last week. For the bears of gold and silver, it was the distance between the slip and the lip. Trump’s Russia connections and a hawkish Federal Reserve came to the rescue of gold and silver bulls. Low inflation will reduce the pace of interest rate hikes. Interest rates in the USA will rise at a faster pace if and only if the Federal Reserve ignores inflation and focusses on other macro factors of the US economy. Global central banks and not just the Federal Reserve do not have room to reduce liquidity by much.
With little on the US economic docket in the coming days as the summer doldrums arrive, with Citi saying that "though several events of note linger on the horizon for later this week, G10 is firmly on the beach as of this morning", this week's focus is on the ECB and BoJ meeting along with minutes from the RBA and the Riksbank. Also important are inflation releases from the UK, New Zealand and Canada along with several China data prints. In EM, there are monetary policy meetings in Indonesia, South Africa, Hungary, Kazakhstan and Hong Kong.
Central banks take centre-stage: watch the ECB and BoJ:
BofA believes that after the "Sintra hiccup", the ECB for next week has to choose between "backtracking" and "assuming". They think the ECB will choose the latter, and toughen its language marginally, by removing the easing bias on QE, while insisting on the need for prudence and a "persistent" monetary stimulus. Looking ahead, we think the ECB may wait for the Fed's decision in September before making a move and wait until October before revealing the quantum of QE buying in 2018.
At its 20 July meeting, the BoJ policy board is expected to keep its short rate unchanged at -0.1% and keep its guidance on QE unchanged. The weakness in YTD inflation means the BoJ board will likely cut its FY17 core CPI forecasts. But with other indicators pointing to a gradual acceleration in growth and prices, the board has little incentive to change policy, and will likely stick to its optimistic FY18/19 projections.
…along with minutes from the RBA and the Riksbank
That RBA is expected to likely downplay recent signs of rising prices given the expected tempering effect of supervisory measures on housing activity. Currency strength also argues against a shift to more hawkish tone at this stage. The Riksbank removed their easing bias at the July 4th meeting in a unanimous decision but nevertheless emphasized their dovish tilt and sensitivity to the ECB. It will be interesting to see the thought process of the various members in the Minutes.
The week ahead in Emerging Markets
There are monetary policy meetings in Indonesia, South Africa, Hungary, Kazakhstan and Hong Kong. Sovereign rating review in Turkey, Saudi Arabia, Czech Rep. and Abu Dhabi.
A weekly breakdown from DB's Jim Reid
To the week ahead now. After the excitement of China’s data dump this morning there isn’t a huge amount left over the course of the day with final June CPI report for the Euro area and the July empire manufacturing print in the US the only data of note.
Tuesday is busy though and we kick off with China property prices data in the morning. In Europe we’ll get the ECB’s bank lending survey for Q2 followed by the June CPI/RPI/PPI data docket in the UK before we end with the July ZEW survey in Germany. Over in the US tomorrow we’ll get the June import price index reading and July NAHB housing market index print.
With nothing of note in Europe or Asia on Wednesday, the focus will be on the US with June housing starts and building permits data.
Thursday kicks off in Japan where the overnight data includes the June trade data, but the bigger focus will be on the BoJ meeting outcome. During the European session we’ll get Germany PPI and UK retail sales, shortly before the ECB meeting just after midday. In the US on Thursday we’ll get initial jobless claims, Philly Fed business outlook and conference board’s leading index.
It’s a quiet end to the week on Friday with UK public sector net borrowing data the only release of note.
With the Fed entering the blackout period there is no Fedspeak scheduled this week, while over at the ECB and BoE there are also no scheduled speakers. Other events to note however include the EU’s Barnier and UK’s David Davis meeting for a second round of Brexit talks, kicking off today. The inaugural meeting of the US-China comprehensive economic dialogue on Wednesday in Washington where the first gathering is due to cover economic and trade issues between the two nations. Finally earnings season ramps up in the US with 69 S&P 500 companies due to report including Netlfix (Monday), Goldman Sachs, BofA, IBM, Johnson & Johnson (Tuesday), Morgan Stanley (Wednesday), Microsoft, eBay (Thursday) and GE (Friday).
Focusing only on the US, here is a summary table from BofA:
Finally, here is Goldman with a focus on the US, together with consensus estimate:
The key economic release this week is housing starts on Thursday. There are no scheduled speaking engagements by Fed officials this week.
Monday, July 17
08:30 AM Empire State manufacturing index, July (consensus +15.0, last +19.8)
Tuesday, July 18
08:30 AM Import price index, June (consensus -0.2%, last -0.3%)
10:00 AM NAHB housing market index, July (consensus 68, last 67): Consensus expects the NAHB homebuilders’ index to tick up in July, after homebuilder sentiment weakened by 2pt. The index remains close to the March cycle high of 71.
04:00 PM Total Net TIC Flows, May (last +$65.8bn)
Wednesday, July 19
08:30 AM Housing starts, June (GS +2.5%, consensus +6.2%, last -5.5%); Building permits, June (consensus +2.8%, last -4.9%): The lagged impact of higher mortgage rates appears to be weighing on single family demand for both new and existing homes, despite an otherwise favorable fundamental backdrop. At the same time, the large pipeline of apartment projects in the planning stages suggests scope for a rebound in that segment. Taken together, we expect a 2.5% rebound in overall housing starts, reversing some of the 5.5% drop in May.
08:30 AM Philadelphia Fed manufacturing index, July (GS +25.0, consensus +24.3, last +27.6): We estimate the Philadelphia Fed manufacturing index pulled back 2.6pt to 25.0 in July, after the index declined 11.2pt to 27.6 in June. We expect the index to retrench a bit, but likely to levels still consistent with a solid pace of expansion in manufacturing activity, given encouraging industrial commentary.
Thursday, July 20
8:30 AM Initial jobless claims, week ended July 15 (GS 245k, consensus 245k, last 247k); Continuing jobless claims, week ended July 8 (consensus 1,950k, last 1,945k): We estimate initial jobless claims edged down 2k to 245k in the week ended July 15. Initial claims can be particularly volatile around this time of year due to annual summer auto plant shutdowns, and we believe the prior week’s increase likely reflected at least some impact from closures around the July Fourth holiday. We expect this increase in auto-related claims filings to reverse in this week’s report, leading to a modestly lower overall reading. Continuing claims – the number of persons receiving benefits through standard programs – have risen over the last month following a sharp decline in the first four months of the year.
Rogue Mornings - Haitian Official Found Dead, Clinton Gate & Fed Balance Sheet (07/17/2017) ROGUE MONEY
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Gold and Silver Market Morning: July 17 2017 - Gold and silver markets are seeing a changed mood for the better! By: Julian D. W. Phillips, Gold/Silver Forecaster - Global Watch
Janet Yellen’s comments Friday were followed by the publication of the latest CPI numbers which showed that the belief that the poor data, issued on Friday, which led the Fed to say it was a temporary setback, looks like turning out to be more permanent. With this in mind and indeed if this proves to be so, we may not see another rate hike in 2017. Equity markets have not yet discounted this, but it is being reflected in the dollar’s exchange rate. Once it is factored in, we expect more ‘bubble’ rises in U.S. equities [albeit against better earnings results from the corporate sector] as the prospect of better yields in these markets, for much longer, attracts funds.
The Sirius Report: With London Paul & V (07/17/2017) ROGUE MONEY
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The USD-index dropped to 10 month lows amid fading hopes of US reforms after Obamacare repeal effectively died last night.
Soft CPI from the UK and NZ weigh on both currencies
Looking ahead, highlights include BoE's Carney and the API Crude report
The Dollar Index sank to its lowest level since September, a fresh 10-month low, after two more Republican defections on Monday night doomed the proposed GOP healthcare plan in the Senate. And while Treasuries rose on concerns about inflationary pressures and the viability of the Trump stimulus agenda, S&P futures rebounded gingerly from session lows, and were up 0.01% after posting nominal declines earlier in kneejerk reaction to the Senate news.
The sliding dollar sent the Euro surging as high as 1.560, the highest since May of 2016, and sending European lower for first time in five days amid concern a stronger euro would damp exporters earnings.
“Any hopes of dollar support from a successful vote on the Senate’s health-care bill look to be vanishing,” said Rodrigo Catril, a currency strategist at National Australia Bank quoted by Bloomberg. “Near term, the dollar path of least resistance is down. We still think the data - inflation in particular - will provide the Fed with enough ammunition to hike in December and boost the dollar, but this is a fourth-quarter story.”
There were no Chinese fireworks today and no ChiNext "Black Tuesday" largely because Beijing was determined to stop the rout after what appeared to be another "national team" intervention in the last two hours of trading. Earlier in the session, Chinese stocks fell after Monday’s selloff as concern about tougher regulations still unnerved the market.
Sunac China Holdings tumbled in Hong Kong after a local media report that banks are reviewing the company’s credit risk. The Shanghai Composite had dropped as much as 0.6% at the midday break local time after falling 1.4% on Monday, its biggest one-day plunge in seven months, while the ChiNext gauge slipped 0.8% after sinking 5.1% on Monday, however the now familiar late trading levitation sent the SHCOMP up 0.4% while the ChiNext closed 0.7% higher. Meanwhile, Sunac China - which we will have more to say about later - plunged as much as 13%. The company, one of China's most aggressive acquirors, has seen its proposed plan to buy Dalian Wanda assets trigger concern among lenders and Beijing.
it was a busy overnight session in macro with the Aussie soaring to the highest since May 2015 after upbeat RBA minutes flagged improved 2Q growth alongside expectations of increased fiscal spending while suggesting growth is picking up and the estimated nominal neutral cash rate at 3.5%. The announcement caught AUD shorts wrongfooted and started a major squeeze while sending Australian 3-month bank bills sharply lower in heavy selling while 3-year yield rose as much as eight bps to 2.11%. To stabilize the financial system ahead of a surge in liquidity demands, the PBOC injected net 170 billion yuan of liquidity which some however said would not be enough and as a result interbank rates jumped the most in one month; the Yuan gained against dollar while the Shanghai Composite 0.6% lower. Dalian iron ore jumped 4.8% with futures hitting the highest level since May on strong demand from Chinese steel mills.
Tempered expectations for Trump's spending plans weighed on European bond yields which edged lower, tracking U.S. equivalents, after the collapse of the second healthcare bill. U.S. 10-year bond yields fell after the news, while German 10-year yields dipped 2 basis points to 0.57 percent when European trading started on Tuesday. In European stocks, the Stoxx Europe 600 Index fell following a grim earnings report from Ericsson AB, which led the decline.
Elsehwhere, the pound tumbled by 100 pips to just above 1.30 after UK CPI disappointed to the downside, sliding to 2.6%, from 2.9%, missing expectation, potentially putting the BOE's rate hike expectations on hold.
Meanwhile, in the US, S&P futures were little changed ahead of earnings reports by Bank of America and Goldman Sachs. IBM reports after the close.
In commodity markets, oil prices steadied as expectations of firm demand, particularly from China, was met ample supply despite Ecuador announcing it would exit the OPEC production cut deal. Brent crude futures eased 0.1 percent to $48.35 a barrel while U.S. crude oil fell 0.2 percent to $45.93. The ongoing dollar weakness sent gold higher for another day, with the yellow metal trading as high as $1,238 overnight.
S&P 500 futures up 0.01% to 2,458
STOXX Europe 600 down 0.3% to 385.64
MXAP up 0.1% to 157.81
MXAPJ up 0.2% to 520.60
Nikkei down 0.6% to 19,999.91
Topix down 0.3% to 1,620.48
Hang Seng Index up 0.2% to 26,524.94
Shanghai Composite up 0.4% to 3,187.57
Sensex down 0.6% to 31,868.93
Australia S&P/ASX 200 down 1.2% to 5,687.39
Kospi up 0.04% to 2,426.04
German 10Y yield fell 1.4 bps to 0.567%
Euro up 0.4% to 1.1527 per US$
Brent Futures up 0.2% to $48.53/bbl
Italian 10Y yield fell 5.2 bps to 1.942%
Spanish 10Y yield fell 3.7 bps to 1.555%
Brent Futures up 0.2% to $48.53/bbl
Gold spot up 0.2% to $1,236.46
U.S. Dollar Index down 0.3% to 94.84
Top overnight news:
U.K. inflation unexpectedly slowed in June, giving respite to Bank of England policy makers concerned that price growth was getting out of hand
Citigroup Inc. has chosen Frankfurt as its newest trading hub in the European Union and plans to present that option to its board of directors this week for approval, according to a person with knowledge of the decision
Policy makers from Stockholm to Bucharest are now waiting for their colleagues at the European Central Bank to kick off unwinding the record stimulus that was unleashed in the aftermath of the global financial crisis. This Thursday, they’ll be watching for any new signals from President Mario Draghi, who hinted last month that the end of the road was approaching
Senate Majority Leader McConnell abandons broad Obamacare replacement vote to seek straight repeal; Trump urges GOP to work on new plan, start from ’clean slate’
RBA minutes say growth likely increased in 2Q; stronger labor market removes ’some of the downside risk’ to wage growth forecast; estimates neutral nominal cash rate of around 3.5%
CBRC told some Chinese lenders to lower returns on wealth products
China should achieve ’clean floating’ yuan exchange rate: Financial News
New Zealand 2Q CPI 0.0% vs 0.2% estimate, y/y 1.7% vs 1.9% estimate
Wells Fargo Buys Rest of $10 Billion ‘Active Quant’ Firm Golden
BNP Paribas Fined $246 Million Over Currency Manipulation
Fed’s Long-Run Miss of Inflation Goal Undermines Rate Hike Case
Medtronic Computer Crash to Crimp Quarterly Sales, CFO Says
Asian equity markets traded higher as investors await quarterly results this week. ASX 200 (-1.1 %) traded negative with the financial and utilities sectors weighing on the index, whilst Nikkei 225 (-0.6%) was also in the red amid a stronger JPY, following safe-haven flows into the Japanese currency after news that two US Republican Senators are to vote against the Senate Healthcare bill. Elsewhere, Shanghai Comp. (+0.4%) and Hang Seng (+0.2%) jumped following the latest PBOC intervention helped by a CNY 170bIn liquidity injection by the PBoC. Finally, 10yr JGBs traded higher amid caution in the region, with flattening seen in the belly of the curve.
Top Asian News
BOJ ETF Buying Is Said to Raise Concern Among Some Officials
China Is Said to Tell Banks to Cut Yields on Wealth Products
China Liquidity Tightens as Tax Demands Outweigh Fund Injections
Chinasoft Rises After Announcing Cloud Partnership with Huawei
Asia’s Biggest Buyout Prompts Concerns on GLP’s Credit Score
S&P Says Wider Indonesia Budget Gap Isn’t Material Policy Easing
Alphadyne Hires Ayad Butt as Portfolio Manager in Singapore
European bourses were marginally affected by the data, with the FTSE benefiting of the lower chance for an august move. Ericson is the clear under-performing stock amid reporting poor results, with the majority of indices being dictated by earnings. Gilts saw the most influential reaction to the UK data, as the UK paper traded up around 70 ticks following the result, the lOy did slow however, around the 126.80 level (July's High). Periphery bonds trade higher, led by Greece which trade at record levels, set to hit the market this week.
Top European News
BC Partners Is Said to Be Close to Deal for GoDaddy’s PlusServer
STM/Infineon M&A Has Large Cost-Cutting Potential: Natixis
REVISED GUIDANCE: EFSF EU3b 10Y, Min. EU500m 2/2056 Tap
Economic Growth, Low Rates Boost Bulgarian Bourse: Karaivanova
European Miners Snap Gains After Run Into Overbought Territory
Gecina Plans to Raise $1.2 Billion to Fund Eurosic Purchase
In currencies, markets awaited the UK, CPI, PPI and RPI figures, where the headline CPI figures missed on expected. Focus will remain on the UK as BoE's Carney is expected to speak at 14.30 London time. GBP saw volatility coming into the figure, and following the result, sterling bears continued to attack the currency. GBP/USD trades back towards 1.30, expected to be physiological support, with further support likely at 1.2980. The headline news overnight, came from the US, where reports emerged that US Republican Senators Moran and Lee are to vote against Senate Healthcare Bill, all but confirming that the bill will not succeed. The dollar weakness was clear, as the news triggered stops through last week's highs in EUR/USD, followed by a break of the 1.15 handle. The pair now trades around highs of the 2015/2016 range, with any break through 1.16, aided by more poor US data and a continued dovish tone from the Fed could see a clear change of direction.
In commodities, the commodity complex continues to be led by precious metals, albeit marginally so. The safe haven flow has been evident following the overnight reports that US Republican Senators Moran and Lee are to vote against Senate Healthcare Bill, as markets begin to prepare for an imminent winter for President Trump. Oil markets trade marginally higher, with WTI bouncing off the 46.00 area, further support from a trendline beginning on July the 10th.
Looking at the day ahead, in the US this afternoon we’ll get the June import price index print along with the NAHB housing market index reading for July. Earnings should be a decent focus for the market today too with Goldman Sachs and Bank of America the latest banks to report (both prior to the open), while Johnson & Johnson (pre-open) and IBM (post-close) are also scheduled.
US event calendar
8:30am: Import Price Index MoM, est. -0.2%, prior -0.3%; Import Price Index ex Petroleum MoM, est. 0.01%, prior 0.0%
Import Price Index YoY, est. 1.25%, prior 2.1%
Export Price Index MoM, est. 0.0%, prior -0.7%; Export Price Index YoY, prior 1.4%
10am: NAHB Housing Market Index, est. 67, prior 67
4pm: Total Net TIC Flows, prior $65.8b; Net Long-term TIC Flows, prior $1.8b
DB's Jim Reid concludes the overnight wrap
Well that was an epic start to Game of Thrones, although the biggest shock was seeing one of the most famous pop star in the world making his acting debut in last night's show. Talking of world famous singers I have an apology for you this morning. For the last three weeks I've had to manually override an autocorrect on my iPad that changes Sintra to Sinatra. I must have done this 30-40 times in the EMR over the last three weeks but yesterday it finally caught up with me and I failed to edit a mention of the latter to the former. This heralded a string of amusing email replies mostly about how Draghi had done it "My Way" last month. Anyway we look forward to him spreading the news later this week at the post ECB meeting press conference.
To be frank, yesterday was relatively dull and my train definitely had an air of emptiness that only arrives with the start of school holidays. Of the main DM equity markets, the S&P, Dow, Nasdaq, Stoxx 600, CAC, IBEX, FTSE MIB, PSI and SMI all finished less than +\- 0.10%. That was even after all the excitement of the huge swings in Chinese bourses 24 hours ago with the Shanghai Comp and Shenzhen in particular seeing high to low swings of 2.81% and 4.09% respectively as the market balanced that strong data versus the potential for tougher financial regulation following the PBoC meeting over the weekend.
By and large it was China-sensitive assets which were really the only markets to see any significant moves yesterday. That was most apparent in base metals with Iron Ore (+1.63%), Copper (+1.18%) and Zinc (+1.04%) all standing out. Bond markets were also a smidgen stronger on fairly limited newsflow and thin volumes as the market awaits the ECB meeting later this week. Benchmark 10y Treasury yields edged down 1.8bps to 2.315% while Bunds finished just over a basis point lower at 0.576% with the periphery down 3-5bps. Away from that Sterling (-0.33%) struggled from the get go yesterday and weakened as the day progressed as the second round of Brexit talks between David Davis and Michel Barnier got underway. There wasn’t any significant new updates to report and instead it’s expected that technical teams will carry on work behind the scenes to iron out the details for EU citizens’ rights in the UK with a further update to possibly come on Thursday.
This morning in Asia the tone for the most part has been modestly risk-off. The Nikkei (-0.62%), Hang Seng (-0.20%), Shanghai Comp (-0.32%) and ASX (-1.27%) have all weakened. This more than likely reflects a combination of news out of both China – where the banking regulator has imposed lower rates on wealth management products – and the news out of Washington that two more Republican senators have opposed the latest version of the health care plan. This doesn't look good for Mr Trump and his legislative agenda. US equity index futures are also in the red, while the USD has weakened -0.43%. Some of the macro data this morning has garnered some attention too. In Australia the latest RBA meeting minutes included a new reference to a neutral nominal cash rate which partly explains a +1.20% rally for the Aussie Dollar. Across the Tasman, New Zealand Q2 CPI disappointed (0.0% mom vs. +0.2% expected) which continues the theme of some disappointing global CPI reports in recent days. As we'll see in the data ahead it's the UK's turn this morning on inflation.
It’s worth noting that following the close last night in the US, Netlifx shares surged as much as 11% following the latest quarterly earnings report. While earnings were largely in line, revenue topped forecasts and subscriber growth surged more than expected. While Nasdaq futures have weakened overnight in line with other bourses following the latest health care developments, it’ll be interesting to see if the results help cap a full recovery in the Nasdaq which was down as much as 4% from the peak on June 9th to the lows on July 6th. It closed last night off just 0.40% from the highs so that Netflix boost might help sentiment in tech stocks again after a more difficult month or so. Moving on. Yesterday also saw a landmark day for the ECB as the CSPP holdings went above €100bn for the first time. To put things in perspective, a similar market cap company would be the 18th largest in the Stoxx 600 and 42nd largest in the S&P 500. It's also roughly equivalent to the annual national output of Kuwait - the 59th largest economy in the world as of 2016.
While we're on such comparisons, the entire ECB balance sheet now stands at €4.21tn, which now has the largest central bank holding in the World. This is comparable to the annual GDP of Japan (€4.30tn) - the 3rd biggest economy in the world and a decent distance ahead of Germany (€3.02tn) - the fourth largest. It's staggering to think of it in those terms.
Back to the more mundane, net CSPP averaged €286mn/day last week, well below the €365mn average since the program started. However last week saw European markets wind down a little with Bastille Day on Friday and the strong buying recently perhaps reflected a desire to front load ahead of what will now be relatively illiquid summer markets. The CSPP/PSPP ratio was 10.4% last week, which is below the long-term average (even before QE was trimmed in April). However the same ratio for the past two weeks is 13.4%. Indeed the evidence from the more than three months of purchases since QE was trimmed continues to be that the CSPP has been trimmed notably less than the PSPP (CSPP/PSPP ratio 13.6% since April compared to 11.6% before then).
Staying with bonds, it was interesting to note the various stories doing the rounds yesterday suggesting that Greece may be returning to the primary bond market for the first time since August 2014. Both Bloomberg and the FT are reporting that Greece is looking to bring a 5y deal to market this week or next following the repayment of a 3y bond yesterday. Notwithstanding the fact that debt relief debates are still yet to be concluded, with 3 bailouts in the last 7 years, and the fact that the country also came close to exiting the Euro, it would make for a fairly symbolic step.
Before we look at today’s calendar, a quick wrap up of the few data releases out yesterday post the China numbers. In Europe there were no surprises to come from the final June CPI revisions with headline CPI confirmed at 0.0% mom and +1.3% yoy respectively (unrevised) and the core confirmed at +1.1% yoy (also unrevised and up from +0.9% in May). In the US the NY Fed’s empire manufacturing survey for July dipped 10pts to 9.8 (vs. 15.0 expected), albeit still above the level seen in both April and May.
Looking at the day ahead now, this morning in Europe the early focus is likely to be on the ECB bank lending survey for Q2 which we are expecting to receive at around 9am BST. Shortly following that we’ll receive the June CPI/RPI/PPI data docket out of the UK where market expectations for headline and core CPI are expected to hold steady at 2.6% yoy and 2.9% yoy, respectively. Following that we’ll receive the July ZEW survey in Germany. Over in the US this afternoon we’ll get the June import price index print along with the NAHB housing market index reading for July. Earnings should be a decent focus for the market today too with Goldman Sachs and Bank of America the latest banks to report (both prior to the open), while Johnson & Johnson (pre-open) and IBM (post-close) are also scheduled.
Wanda Deals in Jeopardy as China Scrutiny Mounts (BBG)
Property Developers Push for Open Drinking on City Streets (WSJ)
Goldman’s Traders Turn In Worst First Half of Blankfein’s Reign (BBG); Goldman's bond trading revenue slumps 40 percent (Reuters)
BofA’s Interest Income Drops Even After Fed Delivers Rate Hikes (BBG)
Russia, after U.S. meeting on diplomatic row, says ready to retaliate (Reuters)
Car engine bans in Germany would put 600,000 jobs at risk: Ifo (Reuters)
Porsche ponders diesel exit, pushes electric cars: CEO (Reuters)
Monetary Policy in Japan Has a New Problem: Amazon (WSJ)
EU's Moscovici upbeat about Portugal, sees 2017 growth above 2.5 percent (Reuters)
Overnight Media Digest
- Senate GOP leaders abandoned their effort to dismantle and simultaneously replace much of the Affordable Care Act, after the defections of two more Republican senators left the party short of the votes needed to pass President Donald Trump's top legislative priority in his first year in office. on.wsj.com/2u3zGcT
- The Trump administration released its road map for remaking the North American Free Trade Agreement that aims to preserve "Buy America" provisions and reduce the U.S. trade deficit, but steps back from some of President Donald Trump' most fiery campaign rhetoric on trade. on.wsj.com/2u3gjR9
- KKR put two executives in line to take over one day for Henry Kravis and George Roberts, the private-equity pioneers atop one of the biggest brands in finance. The New York asset manager elevated Joe Bae and Scott Nuttall to the roles of co-president and co-chief operating officer and added them to its board. on.wsj.com/2u3goEr
- Tesla, which has faced criticism from its investors about a lack of independent directors, named Twenty- First Century Fox CEO James Murdoch and Ebony Media CEO Linda Johnson Rice to its board. on.wsj.com/2u3cc7R
- Signet Jewelers Ltd said Monday that Chief Executive Mark Light has decided to retire for health reasons and will be succeeded by Virginia Drosos, who has served as an independent board member since 2012. on.wsj.com/2u3bIi0
- Uber Technologies Inc said it is suspending its operations in the Chinese gambling hub of Macau, the latest retreat for the ride-sharing giant as it continues to face regulatory pressure from many overseas markets. on.wsj.com/2u3mdlx
The fallout from investigations into foreign exchange price fixing deepened on Monday when US authorities hit BNP Paribas SA with a new fine and former traders at three other banks appeared in court over an alleged conspiracy.
ITV PLC's appointment of Carolyn McCall as its chief executive could cost the UK broadcaster up to 2.5 million pounds after it agreed to fully compensate the easyJet Plc boss for the loss of long-term share options and bonus payments.
The European Commission has accused Teva Pharmaceutical Industries Ltd of anti-competitive behaviour over an agreement it made with US-based rival Cephalon.
Carillion Plc has hired professional services firm EY to assist with a review of its finances, as the UK construction and support services group turns to more outside advisers in a bid to repair its balance sheet.
- Conservative commentator Ann Coulter unleashed a barrage of criticism about Delta Air Lines on Twitter after she was moved to a different seat on a flight on Saturday, prompting the company to publicly return fire and call her comments "unnecessary and unacceptable." nyti.ms/2tAi2vH
- World's largest asset management firm Blackrock said second-quarter earnings had risen 9 percent as investors continued to pour money into the company's expanding fleet of exchange traded funds. nyti.ms/2tA49h5
- KKR named Joseph Bae and Scott Nuttall as its co-presidents and co-chief operating officers, unveiling one of the clearest lines of succession in the private equity industry. nyti.ms/2tAoPoX
- Nearly the entire board of Hampton Creek, a high-profile food start-up responsible for the Just Mayo condiment, resigned last month, leaving only the company's founder and chief executive, Josh Tetrick, as its only member. nyti.ms/2tAclh6
Carillion Plc gave its nervous shareholders some reassurance on Monday as it won two big contracts on the HS2 high-speed rail line and boosted the number of City advisers helping it to cut costs and improve cashflow. bit.ly/2uwRQWF
The owner of British Gas, Centrica Plc, is spinning off its oil and gas production business into a new joint venture with Bayerngas Norge, of Germany, with a view to a potential initial public offering within two to five years. bit.ly/2uwIpXx
Karren Brady, the West Ham United chief executive and regular on The Apprentice, is to take over as chair of Taveta, Sir Philip Green's retail empire, as Anthony Grabiner steps down. bit.ly/2uwNzTt
Lloyd's of London has warned that a serious cyber-attack could cost the global economy more than $120 billion (92 pounds) – as much as catastrophic natural disasters such as Hurricanes Katrina and Sandy. bit.ly/2uwKm6i
The former boss of Barclays and three other ex-directors of the bank have been told that they will stand trial in January 2019 over the bank's emergency fundraising with Qatar almost a decade ago. bit.ly/2uwSjIp
A British tech start-up, Virtualstock, which helps leading UK retailers to better manage their digital marketplaces, said it expects to enter the US market in the coming months and double in size by the middle of next year, as the shift to online shopping continues to ramp up. bit.ly/2uwZmRl
Citigroup Inc will become the latest Wall Street giant to unveil plans to cope with the UK's departure from the European Union this week when it names Frankfurt as the location for a major new trading operation. bit.ly/2uwKxhY
Primark is recalling thousands of men's flip flops after discovering they contain dangerous levels of a cancer-causing chemical. bit.ly/2uwLcjg
ITV Plc has appointed Carolyn McCall, the boss of easyJet Plc, as its new chief executive, taking over from Adam Crozier, who announced in May that he was stepping down. ind.pn/2uwS0NS
Asian Metals Market Update: July-18-2017 By: Chintan Karnani, Insignia Consultants
Lack of news resulted in a weaker US dollar and the continued rise in metals and energies. Trump and his never ending controversies implies stalemate among US lawmakers to pass new legislation. Only war legislations have been passed by republicans. Global safe haven demand has been on the rise. The internet is filled with speculation that the Russia-China energy deal will result in an end to the petrodollar. Tensions in the South China Sea and a NATO expansion in eastern Europe will increase in all kinds of trade between Russia and China.
Gold and Silver Market Morning: July 18 2017 - Gold and silver markets continue to climb! By: Julian D. W. Phillips, Gold/Silver Forecaster - Global Watch
New York closed $2 lower than Shanghai’s close yesterday, with London opening today at a discount to Shanghai’s trading today of $7.10, the same discount to Shanghai we saw yesterday. But London is being pulled up by Shanghai. Shanghai in turn was pulling back today from its high as the Yuan strengthened, bringing Shanghai’s gold price to the same differential as it had yesterday.
Gold Seeker Closing Report: Gold and Silver Rise A Third Day By: Chris Mullen, Gold-Seeker.com
Gold gained $10.40 to $1244.40 in midafternoon New York trade before it edged back lower in the last hour of trade, but it still ended with a gain of 0.66%. Silver rose to as high as $16.31 and ended with a gain of 0.93%.
Millennials in the Work Force - Chat w/ The Flat Rate Master Clyde's Soapbox
Published on Apr 19, 2017
The Flat Rate Master joins me to have a chat about the growing numbers of Millennials in the the work force.
Is it what a lot of folks have been saying or just the way it's been for every new generation in the trades?
In what has been a less exciting session than the previous two, the euro retraced some recent gains as traders grew concerned they may have overestimated the ECB's hawkish bias ahead of Thursday’s rate decision; in turn the dollar edged higher after the collapse of the GOP healthcare bill sent it to the lowest since September on Tuesday.
Not even Citi could infuse any excitement in the overnight session, which its called "Purgatorial":
Markets are more or less flat so far today as we face a temporary dearth of data and speakers. USD remains weak, but there has been no real excuse to continue selling yet. The ECB and the BoJ are both up tomorrow and any potential moves may be linked to pre-positioning/squaring rather than anything that today may offer us…
There is little of note this afternoon that could tickle the fancy of even the most excitable FX watcher – We are staring into the abyss… and DoE inventories are staring right back. As oil is flat so far today, that print could provoke a small twitch. Elsewhere, we get US housing starts and Canadian manufacturing shipments…
In Dante’s inferno, Purgatorio immediately precedes Paradiso. Fingers’ firmly crossed.
European equities got a boost from both the weaker euro and from corporate results, while oil fluctuated and gold fell. The Stoxx Europe 600 gained 0.3% in early trading after falling 1.1% Tuesday, its largest drop this month as concerns emerged that the stronger Euro would pressure exporters, leading to the first decoupling between the EURUSD and the Stoxx in two months.
S&P 500 futures were little changed (up 0.05%) after the cash index closed at another record on Tuesday.
With the USD just off 10-month lows, there continues to be an easing of loosening of financial conditions for emerging markets which also supports equities. After decent gains in Asia on the back of positive signs from China this week, MSCI's world stocks index looked set for a ninth day of gains which would mark its longest winning streak since October 2015.
Cited by Reuters, Marijke Zewuster, Head EM research at ABN AMRO said "Most emerging markets are doing quite well at the moment, especially in Asia. The figures for China are positive. If you look at the underlying figures they are relatively strong at the moment."
In Asia, MSCI's index of Asia-Pacific shares outside Japan and its index of emerging market shares were both up 0.5 percent at their highest since April 2015. China's Monday fireworks were long forgotten, with the CSI 300 index leading winners as mainland stocks rallied sending the Shanghai Composite and ChiNext higher by 1.4% and 1% respectively. Hong Kong’s Hang Seng Index was up 0.6 percent. Japan’s Topix Index swung between gains and losses, while South Korea’s Kospi Index rose 0.2 percent. The Yuan weakened for first time in eight days despite strongest daily fixing since October; seven-day repo falls five basis points after PBOC injects 100 billion yuan of liquidity. Following Tuesday's unexpectedly hawkish RBA announcement, Australian bonds were firmer with the 10-year yield dropping 3 bps. Australia’s S&P/ASX 200 Index rose 0.8 percent as bank shares climbed. Analysts said new capital requirements looked fairly benign.
The U.S. dollar, which dropped sharply on Tuesday after the collapse of the GOP healthcare bill, managed a modest rebound on Wednesday. Against a basket of other major currencies, it was up 0.3 percent at 94.878, but still down around 7 percent on the year and within sight of Tuesday's low of 94.476. The modest USD gains were due to expectations the European Central Bank and the Bank of Japan may strike dovish tones when they meet on Thursday which could dent recent strength in the euro and the Japanese Yen. Meanwhile, the bearish pileup continues, with hedge funds most bearish on the dollar since 2013.
On Thursday, the ECB is expected to adjust their language but substantive changes to their policy will likely come later in the year. The BOJ is expected to raise its growth forecast but cut its inflation outlook, underlining the cautious tone adopted recently by major central banks.
Emerging-market stocks climbed for an eighth-straight day to the highest since April 2015, lifted by strong finish for Chinese equities, iron ore futures also +3.7%, helping AUD and NZD marginally outperform with domestic equity markets. MXN initially rallies after S&P raises country’s outlook.
Treasuries pare rally with longer maturities leading declines; 10-year yield +1bp to 2.27%. USD swap spreads are edging wider across the curve, led by 10-year sector as swapped issuance is expected to dry up after the latest wave of financial issuance pricings, tempting fast-money dip buyers. Open interest points to liquidations of longs in 10-year futures into Tuesday’s rally.
In commodities, WTI crude fluctuated before slipping 0.2 percent to $46.29 a barrel after API reported an unexpected rise in inventories on Tuesday; today's DOE number will be closely watched. Gold dropped 0.3 percent to $1,238.74 an ounce. Iron ore futures jumped 2.6 percent, building on a 7 percent advance over Monday and Tuesday.
Bulletin Headline Summary From RanSquawk
Quiet thus far in Europe with EU bourses trading with marginal gains.
EUR loses its shine amid slight profit taking ahead of tomorrow's ECB meeting.
Looking ahead, highlights include US Building Permits, Housing Starts and DoE Crude Report
S&P 500 futures up 0.04% to 2,458.75
Brent Futures down 0.2% to $48.74/bbl
Gold spot down 0.3% to $1,238.23
U.S. Dollar Index up 0.2% to 94.83
STOXX Europe 600 up 0.2% to 383.29
Dax up 0.05% to 12,437.20
Shanghai Composite up 1.36% to 3,230.98
ChiNext up 1.04% to 1684.77
Hang Seng Index up 0.6% to 26,672.16
Nikkei 225 up 0.1% to 20,020.86
Topix up 0.09% to 1,621.87
MXAP up 0.3% to 158.63
MXAPJ up 0.6% to 524.27
Sensex up 0.5% to 31,856.89
Australia S&P/ASX 200 up 0.8% to 5,732.13
Kospi up 0.2% to 2,429.94
German 10Y yield fell 0.7 bps to 0.547%
Euro down 0.3% to 1.1525 per US$
Italian 10Y yield fell 4.3 bps to 1.9%
Spanish 10Y yield fell 1.4 bps to 1.541%
Natgas down 0.3% to $3.08/Mmbtu
Crude oil up 0.2% to $46.49/bbl
Gold down 0.3% to $1,238.60/oz
Silver down 0.6% to $16.13/oz
Top overnight news
ECB’s Villeroy: Euro-zone economic situation is improving; ECB has defeated the risk of deflation
Japan Cabinet Office monthly assessment: repeats the Japanese economy is on a moderate recovery
Treasuries Soar as Big Futures Trades Show Bulls Are in Control
The ECB’s Frankfurt-based staff are examining scenarios for the future path of quantitative easing ahead of a Governing Council decision that is expected to take place in September or later, according to euro-area officials familiar with the matter
President Donald Trump is now more likely than ever to end his first year in office without a single major legislative accomplishment
Greece’s much anticipated return to bond markets this week has been held off partly due to a ceiling set by the International Monetary Fund on the amount of debt the country can hold, according to three officials familiar with the matter who asked not to be identified as the talks are confidential
ECB said to study QE wind down options for decision seen in fall
China increases U.S. Treasury holdings for a fourth straight month
BOJ easing likely to continue past 2019, ex-director Hayakawa says
S&P raises Mexico’s credit rating outlook to stable
API inventories according to people familiar w/data: Crude +1.6m; Cushing +0.6m; Gasoline -5.5m; Distillates -2.9m
Libya’s ascendant oil boss poses challenge for OPEC and Russia
As OPEC wrestles over oil output, top importer’s demand in peril
BP mulls partnership for pipeline assets, with possible IPO
BHP to double spending in U.S. shale unit amid investor disquiet
Hungry oil upstart outsmarts majors in race for Mexico’s riches
China drafts rules to regulate crude, fuel retailers
Asian stocks traded mixed, following a similar lead in the US where Goldman Sachs' quarterly revenue weighed on the DJIA, while Netflix led the NASDAQ 100 into positive territory following its beat on earnings. ASX 200 (+0.6%) finished positive, with the financial sector providing the support, whilst Nikkei 225 (+0.1%) was choppy amid a lack of news flow and tier-1 data releases to provide a catalyst. Elsewhere, Shanghai Comp. (+0.9%) and Hang Seng (+0.5%) traded in an upbeat fashion, gaining influence from the CNY 140b1n liquidity injection by the PBoC. Finally, 10yr JGBs were flat with some underperformance seen in the long end, while the JGB auction for enhanced liquidity auction added no direction for the market. PBoC set CNY mid-point at 6.7451 PBoC injected CNY 100bln via 7-day reverse repos and CNY 40bln in 14-day reverse repos.
Top Asian News
R&F Properties Is Said to Join Wanda-Sunac Transaction: 21st
New BHP Chairman Flags Board Changes, Asset Review to Investors
Murata, CyberAgent, Japan Post May Be Added to Nikkei 225: Daiwa
Hong Kong Skyscrapers World’s Most Expensive, Knight Frank Says
Apple’s IPhone Manufacturers Join Legal Counter Against Qualcomm
Won Bears Stymied as Rally Defies Rate Hawks and Missiles
In Europen bourses, the week's subdued summer trade continues, with equities trading in marginal green territory in what has been a fairly quiet session thus far. Nonetheless, notable moves has been seen in the Scandi stocks with the likes of Volvo, Swedbank and Assa Abloy all reporting before the European open. Across fixed income markets, German yields have been slipping with the curve slightly steeper, while the move had been exacerbated by a firm 30year auction. Elsewhere, gilts climbed higher after strong demand for the new 5 year gilt at today's auction.
Top European News
French Military Chief Quits After Public Budget Spat With Macron
European Stock Traders’ Draghi Addiction Ebbs Ahead of ECB
Santander Agrees to Buy Back 51% of Elavon: EL Confidencial
London’s Home Price Growth Has Flatlined. What Happens Next?
Aena Parent Is Said Set to Rule Out Bid for Abertis
Cairo, Asia Have Cheapest Taxi Fares in World: Chart (Correct)
In currencies, the AUD has continued to grind higher in Asia to further pull away from 0.79, extending on its post RBA gains, while sentiment has also been boosted by rising iron ore prices. Subsequently, this has further supported AUDNZD which is now hovering around 1.0750. Focus will be on the Australian jobs data tonight, while later in the week RBA speakers could look to tame the upside in AUD. EUR slightly pulled off the mid-1.15 with the rally likely to hold until the ECB monetary policy decision tomorrow. A move to 1.16 looks to be on the card unless Draghi deviates from his recent hawkish comments made at the Sintra conference. JPY holding just north of 112.00 after making a slight breach of that level, however support from 111.80 kept USD/JPY afloat. Of note, the BoJ announce their latest decision on monetary policy tonight, with the general consensus that the central bank will maintain its monetary policy and YCC, while they are also expected to lift growth forecasts and cut inflation targets.
In commodities, Slight recovery in the USD has pressured the commodity complex with Gold prices slipping slightly. Crude prices trickling lower following last night's API crude report which showed a 1.6m1n build in inventories.
Looking at the day ahead, the UK and Europe will be fairly quiet. The US will release data on housing starts for June (est: 1,160k), building permits (est: 1,201K) and MBA mortgage applications. Away from the data, the inaugural meeting of the US-China Comprehensive Economic Dialogue will take place in Washington to discuss economic and trade issues which should be worth a watch. US earnings seasons remains a focus too, with Morgan Stanley, AMEX, Reynolds American and Qualcomm schedule to report.
US Event Calendar
7am: MBA mortgage applications July 14; prior -7.4%
8:30am: Housing starts June; est. 1160k, prior 1092k; Building permits June; est. 1201k, prior 1168k
10:30am: DOE weekly petroleum status report July 14
U.S. crude oil inventories; est. -3500k, prior -7564k
U.S. gasoline inventories; est. -1300k, prior -1647k
U.S. distillate inventory; est. 1200k, prior 3131k
U.S. refinery utilization; est. 0.3%, prior 0.9%
DB's Jim Reid concludes the overnight wrap
We might be inching closer to the dog days of summer but there has still been a steady slate of interesting newsflow for markets to feed off this week. Indeed the last 24 hours has had a bit of everything with data, politics and earnings all in vogue. Softer than expected inflation in the UK, further disappointment with the latest US healthcare bill developments – albeit where expectations were hardly high in the first place – and a fairly mixed read-through from the latest US bank earnings all had a say in markets one way or another yesterday.
Tackling those one at a time, the inflation versus central bank battle continued yesterday following the June inflation report in the UK. Headline CPI missed (0.0% mom vs. +0.2% expected) which pushed the annual rate down three-tenths and more than expected to +2.6% yoy. The core also fell two-tenth to +2.4% yoy, albeit back to where it was in April, after expectations were for no change. Lower prices for clothing, recreation, food and alcohol all appeared to weigh on the slightly softer reading. Interestingly that is the fifth time in the last nine months that YoY headline inflation has deviated at least 0.2ppts from the consensus in either direction (of those five occurrences, two have been misses to the downside) which seems to emphasise some of the difficulty in forecasting inflation at the moment. In any case yesterday’s data will perhaps give the BoE doves a little bit of breathing room at next month’s MPC meeting but the wider story in markets is that the last three global inflation readings (UK, NZ and US) have all disappointed (excluding the Euro area reading given it was more of a rubber stamping). It’s worth noting that in the next week we’ll get inflation prints out of both Canada and Australia so it’ll be interesting to see if the softer
After trading a little firmer leading into the data, Sterling tumbled as much as -0.90% from its highs although only ended the day a shade weaker (-0.11%) after Governor Carney added later in the session that the data doesn’t change the outlook that price gains will remain above target “for a period of time”. Gilt yields were also sharply lower and stayed so into the close. 10y Gilt yields ended the day down 6.4bps at 1.207% and are now down over 10bps in the first two days of this week so far. Other European bond markets were stronger too with Bunds down 2.9bps to 0.547% and the periphery 5bps to 6bps lower. An ECB story was also doing the rounds on Bloomberg suggesting that the Bank is examining scenarios for the future path of QE including the studying of a tapering path, asset purchase extension and reduced pace and combination of the two strategies. That didn’t seem to suggest any new information however and was subsequently downplayed.
Across the pond Treasuries were also well bid (10y -5.5bps to 2.260%) from the off yesterday as the market digested the latest setback in the healthcare bill debacle. After a replacement of the Obamacare bill was ruled out due to a lack of Republican support, it was revealed that a subsequent repeal also lacked the sufficient support. Senate majority leader Mitch McConnell announced that a procedural vote will still be held next week regardless. President Trump had plenty to say but it’s looking more likely that the administration will be moving on to tax reform and infrastructure now, however it remains to be seen how damaging the internal conflicts have been on the outlook for some of the more market-sensitive policies to pass. The USD index fell another -0.55% and is down four sessions in a row to the lowest since August last year.
In fairness the healthcare bill headlines didn’t have a huge impact on risk assets in the US. The initial leg lower for the S&P 500 (which was down as much as -0.35%) appeared to have more to do with the latest earnings reports out of Goldman Sachs and BofA. While both banks reported beats at both the earnings and revenue lines the market picked up on some of the softer finer details of the report. In the case of Goldman’s there was a disappointing read-through from some of the core businesses and particularly FICC. The US bank sector closed down -0.39% and lower for the third session in a row however the broader S&P 500 managed to claw back to a small +0.06% gain and with it, yet another record high. A big boost from Netflix post results on Monday evening saw the Nasdaq turn in a +0.47% gain and so joining the S&P again at a new record high. In fact after falling to a two month low back on July 6th, the index has now turned in a positive session every day since (8 sessions) which is the longest such winning streak since February 2015. Another eye opening stat is that the S&P 500 has now gone 267 days without a 5% correction – the longest such streak since 1996. For completeness European equity markets (Stoxx 600 -1.11%) suffered their weakest day this month largely as a result of the stronger Euro (+0.66%) and some earnings releases.
This morning in Asia, most key bourses are slightly up, with the Nikkei (+0.11%), Hang Seng (+0.41%) and the three Chinese bourses (+0.70% to +1.09%) paring back losses in recent days. The ASX200 strengthened +0.67%, supported by the banks (+~3%), which received a broadly benign regulatory outcome on target capital levels. US equity index futures are also a smidgen firmer, while bond markets in Asia have largely followed the lead from Wall Street and Europe in rallying overnight.
Staying with the ECB, yesterday’s Q2 ECB bank lending survey showed a net easing in credit standards for corporates as well as a strengthening in loan and CAPEX demand. On a forward basis, the survey suggests banks in Germany and Netherlands expect more easing in credit conditions, while Italian banks expect a net tightening. Loan demand is expected to strengthen further, in both corporates and consumer loans, but slightly lower in mortgages. 2Q17 demand for fixed investment by corporates increased in the Euro area, particularly in Italy, Netherlands and Germany. Before we look at today’s calendar, wrapping up the remaining data from yesterday, in the US the NAHB housing index fell 2pts to 64 in July. Whilst still at a high level, the index is down 7pts from the March peak and is at its lowest level since November 16. Over in Germany, the ZEW survey for July was slightly down to 86.4, suggesting little changes over the past month in analysts’ assessment of current conditions or the economic outlook for the German and wider broader euro area economies.
Looking at the day ahead now, the UK and Europe will be fairly quiet. Across the Atlantic, the US will release data on housing starts for June (est: 1,160k), building permits (est: 1,201K) and MBA mortgage applications. Away from the data, the inaugural meeting of the US-China Comprehensive Economic Dialogue will take place in Washington to discuss economic and trade issues which should be worth a watch. US earnings seasons remains a focus too, with Morgan Stanley, AMEX, Reynolds American and Qualcomm schedule to report.
The Man Who Got Americans to Eat Trash Fish Is Now a Billionaire (BBG)
Morgan Stanley's profit boosted by underwriting, wealth management (Reuters)
Wall Street Efforts to Improve Its Image Fail to Sway Americans (BBG)
Overnight Media Digest
- U.S. President Donald Trump and Russian President Vladimir Putin held a second, previously undisclosed talk on the sidelines of the G-20 summit in Hamburg earlier this month, a White House official said. on.wsj.com/2toAJqV
- Discovery Communications Inc is in talks to combine with Scripps Networks Interactive Inc, people familiar with the situation said, a deal that would unite two media companies trying to chart a course in a cable-TV industry being upended by digital consumption. on.wsj.com/2toMdKR
- China's already formidable internet censors have demonstrated a new strength - the ability to delete images in one-on-one chats as they are being transmitted, making them disappear before receivers see them. on.wsj.com/2toldLJ
- Daimler said it would tweak the engine software on more than three million diesel vehicles to improve emissions amid probes in the U.S. and Europe into allegations that the maker of Mercedes-Benz cars cheated on emissions. on.wsj.com/2toKCor
- Chipotle Mexican Grill Inc said it temporarily closed a restaurant in Sterling, Virginia, on Monday after learning about a "small number" of reported illnesses that the company believes are likely to be from norovirus, a common virus that can be spread through food that has been handled by people who are sick. on.wsj.com/2toieTn
- The Trump administration said it was prepared to impose "strong and swift" economic sanctions on Venezuela, including banning its crude oil exports to the U.S., if its president proceeds with a plan to rewrite the constitution. on.wsj.com/2to6zE6
- Crown Castle International Corp has reached an agreement to buy LTS Group Holdings LLC in a roughly $7.1 billion deal that would double its fiber-optic footprint and add key Northeast metropolitan markets. on.wsj.com/2toL3iM
McCormick & Company Inc, the US maker of spices, herbs and flavourings, has agreed to buy the foods business of UK consumer goods company Reckitt Benckiser Group Plc for more than $4 billion.
It will be illegal from next year to charge customers in the UK a fee to use a credit card, the government said. The government said such fees, which can be as high as 20 per cent, would be banned from January.
Wireless infrastructure provider Crown Castle International Corp said on Tuesday it would pay $7.1 billion to acquire privately held Lightower, in a deal expected to greatly expand its fibre holdings in major U.S. cities.
Frankfurt's public prosecutor is ready to drop its investigation into Carsten Kengeter, the Deutsche Boerse AG chief executive, over allegations of insider trading if the exchange agrees to fines totalling more than 10 million euros.
- Tim Pierotti, who once ran a consumer hedge fund for Martin Shkreli, testified that Shkreli threatened him and his family. Pierotti's testimony is at the center of one of eight fraud charges against Shkreli. nyti.ms/2tEPSPX
- Facebook's WhatsApp, was partly blocked by Chinese filters, leaving many unable to send videos and photos and some also unable to send text-based messages. nyti.ms/2tEVVEp
- German automaker Daimler said it would update three million Mercedes cars in Europe to reduce their diesel emissions. It said the measures would be rolled out in the coming weeks and would cost about 220 million euros. nyti.ms/2tF39bm
- In a lawsuit, Uber has been accused of discriminating against New York City riders with disabilities by providing scant access to wheelchair-accessible cars at a time when ride-hailing apps are becoming a common alternative to public transit in the city. nyti.ms/2tEQkxE
The Globe and Mail
** Provincial authorities issued a work permit for a controversial mining project near Williams Lake. The permit authorizes Taseko Mines Ltd to conduct exploration work at the site of the proposed Prosperity Mine, a copper-gold project that has twice failed to obtain necessary federal approvals to proceed. (tgam.ca/2u9sMVo)
** The takeover of Tembec Inc by Rayonier Advanced Materials Inc has been thrown into doubt as major shareholders of Tembec voice their opposition to the friendly $807 million deal. (tgam.ca/2u7Ahug)
** A wind-turbine-blade factory controlled by German Siemens AG is winding down operations, leaving 340 employees in Tillsonburg, Ontario, without work by early next year. (tgam.ca/2u5twcc)
** Canada Jetlines Ltd a start-up airline hoping to bring affordable fares to Canadians, has set its sights on launching an ultra-low-cost carrier next summer under the leadership of a new chief executive. (bit.ly/2tpInRN)
Twenty-First Century Fox Inc has written to the government urging it to reject the "most blatant form of political interference" by Ed Miliband and Sir Vince Cable in its proposed 11.7 billion pound ($15.25 billion) offer for Sky Plc. bit.ly/2uAHwwO
Male presenters at the BBC are twice as likely as their female colleagues to earn more than 150,000 pounds ($195,510) a year, the corporation will admit on Wednesday. bit.ly/2uALkhT
All extra charges added to payments for goods and services made by card are to be outlawed, ending a "rip-off" that costs Britons hundreds of millions of pounds a year, the government has announced. bit.ly/2uAqTBL
Financial Conduct Authority chief executive Andrew Bailey said City firms were getting near to the point where they would have to take steps to move staff and other measures to ensure that they can continue to operate seamlessly once the UK leaves the EU in March 2019. bit.ly/2uAhOsD
McCormick & Co Inc has reportedly agreed to buy Reckitt Benckiser Group Plc's food business for more than 3.1 billion pounds ($4.04 billion), a year after the Schwartz spices maker's efforts to buy Premier Foods Plc were thwarted. bit.ly/2uACnoA
BP Plc is considering spinning off certain U.S. pipeline assets in the U.S. Gulf and Midwest in an initial public offering, the company said in a statement late on Tuesday. bit.ly/2uAI2ee
Adam Crozier, the former ITV Plc chief executive, is being lined up to become chairman of the Vue cinema chain as it examines plans for a blockbuster sale or stock market flotation. bit.ly/2uA4Rij
Foreign hackers have penetrated the UK's critical national infrastructure, including parts of the national grid, a leaked document has revealed. bit.ly/2uA4W5B
The divisions tearing apart the Conservative party have been laid bare as backbench members of Parliament told the prime minister she has their backing to sack disloyal cabinet ministers. ind.pn/2uAn4fV
Asian Metals Market Update: July-19-2017 By: Chintan Karnani, Insignia Consultants
The next two days are very crucial for all metals and energies. Gold, silver, copper and nickel are bullish but need to break key resistances for another wave of rise. If gold, silver, copper and nickel do not break key resistances then there can be a sell off. Zinc and lead are testing key short term support. Either zinc and lead hold those key supports or else there will be a sell off. Crude oil needs to break and trade over $49.00 this week to prevent short sellers from getting the upper hand. Natural gas is bullish but once again like bullion, they need to break key resistances for another wave of rise.
Gold Seeker Closing Report: Gold and Silver End Mixed By: Chris Mullen, Gold-Seeker.com
Gold fell $5.10 to $1237.00 in Asia before it climbed back to $1243.80 in midmorning New York trade and then chopped back lower at times, but it ended with a loss of just 0.04%. Silver slipped to $16.166 before it jumped back to $16.359 and then also fell back off, but it still ended with a gain of 0.12%.
WASHINGTON - With Bitcoin and other cryptocurrency markets recently attracting unprecedented amounts of attention, many are left wondering what the popularity of this new technology means. Digital currencies have the potential to disrupt financial systems across the globe through new business opportunities, technological applications, and by fully distributing control over money. However, while some consider cryptocurrency a much needed innovation, others see it as nothing more than a bubble ready to burst.
By Alex Sazonov (Bloomberg) — Chuck Bundrant was a college freshman with $80 in his pocket when he drove halfway across the country to Seattle to earn a few bucks fishing. The year was 1961.
He hasn’t stopped fishing since.
And today, Bundrant, the founder and majority owner of Trident Seafoods, is worth at least $1.1 billion, according to the Bloomberg Billionaires Index. His wealth is due to a fair measure of pluck. Back in the early 1980s, he persuaded Americans to eat pollock, then considered a trash fish, at fast-food restaurants and, to this day, Trident ships it — along with salmon and cod — to chains including Costco and Safeway.
Along the way, Bundrant cultivated politicians who would pass legislation that aided Trident’s business by keeping foreign fisheries at bay. These days, Trident also is benefiting from health-conscious consumers gravitating to seafood.
The Bloomberg index calculates that Bundrant owns 51 percent of privately-held Trident, which had $2.4 billion in revenue last year, based on information compiled from trade groups. It’s valued by the Bloomberg index at about $2.1 billion, using comparisons to five publicly traded peer companies, including Clearwater Seafoods Inc. and Oceana Group Ltd. Trident operates about 16 processing plants and 41 fishing vessels — and remains defiantly independent.
“We don’t answer to investment bankers like some other seafood companies,’’ the company writes on its website. “We only answer to our customers, our fishermen, and our employees.”
Bundrant declined to comment. He named his son, Joe, chief executive officer in 2013 and is not involved in day-to-day operations, but longtime friend Brent Paine, executive director of trade association United Catcher Boats, recalls him as a “huge risk-taker, someone with an open mind for opportunity.”
Chuck Bundrant’s story is the stuff of industry legend. “He knew nothing about fishing boats, or catching and processing crab and salmon,’’ son Joe said in a corporate video two years ago. “He’d only watched a movie with John Wayne in it called ‘North to Alaska.’ And he heard there was money to be made on the fishing grounds, thousands and thousands of miles from home.’’
As told to Seattle publications and on Trident’s website, Bundrant was taking a break from a pre-veterinary medicine program in Tennessee when he traveled to Seattle, making his way to Bristol Bay, Alaska, where he slept on the docks and took any work he could get.
After a few years, Bundrant was looking for a way to start a business in the industry. He met two other crab fishermen — Kaare Ness and Mike Jacobson — and in 1973 the three put their money together and built the Billikin, a 135-foot boat that changed the seafood industry, according to Trident’s corporate history.
At the time, most fishermen took their haul back to the docks where processing companies pulled the crab meat out before sending it to market, leaving them with less time on water. Bundrant outfitted the Billikin with crab cookers and freezing equipment on board, allowing workers to remain at sea.
By the early 1980s, crab stocks had begun to dwindle and Bundrant decided to turn to pollock, a so-called groundfish that was swarming in the Bering Sea. Pollock was popular in Asia but not so much in the U.S. Bundrant thought Americans would like the taste once exposed to it.
His first sale was to the Long John Silver’s chain, as the story was recounted in a 2013 article in Evansville Business magazine. Bundrant, on a sales call, served it to the restaurant’s CEO, who remarked that he loved the cod — except it was pollock.
That later opened the door to business with McDonald’s and Burger King, as well as with retailers like Costco, all using the less-expensive pollock in sandwiches, fish-and-chips and imitation crab dips.
Access to the broad retail market transformed Trident into a major fish company. Bundrant went on to build a vertically-integrated company that now does everything from harvesting and mass processing fish to selling value-added products such as canned salmon and pollock fish sticks.
“He realized that he needed to be vertically integrated to be able to deliver a large quantity of processed fish to large retailers and institutional-scale consumers,’’ said David Fluharty, an associate professor in marine and environmental affairs at the University of Washington.
Trident teamed up with other U.S. companies and turned to Congress to help limit foreign competition. With the backing of then-Washington Senator Warren Magnuson and Alaska Senator Ted Stevens, Congress passed a law that pushed the boundary where foreign fishing boats could freely operate, to 200 miles offshore from 12 miles.
In 1998, Congress ended the practice of foreign companies getting around the 200-mile restriction by registering as a U.S. business. The law required 75 percent American ownership for companies operating in the Pacific.
“One of the bill’s architects was Bundrant,’’ said Paine of United Catcher Boats. “It helped his business thrive.”
Today, Trident’s business is buttressed by a surging market for fish as consumers seek to add healthy protein to their diets, according to research from the United Nations. An index of fish prices, the Oslo Seafood Index Global, has jumped more than 300 percent over the past five years, propelled by rising salmon demand and higher prices.
Chuck Bundrant has always been fond of Henry Ford, according to Paine. “He told me once: ‘Every industry needs a strong leader, it helps smaller businesses. I am that big leader.’”