Global Stocks Set To Close 2017 At All Time Highs, Best Year For The Euro Since 2003

With just a few hours left until the close of the last US trading session of 2017, and most of Asia already in the books, S&P futures are trading just shy of a new all time high as the dollar continued its decline ahead of the New Year holidays.
Indeed, markets were set to end 2017 in a party mood on Friday after a year in which a concerted pick-up in global growth boosted corporate profits and commodity prices, while benign inflation kept central banks from snatching away the monetary punch bowl. As a result, the MSCI world equity index rose another 0.15% as six straight weeks and now 13 straight months of gains left it at yet another all time high.
In total, world stocks haven’t had a down month in 2017, with the index rising 22% in the year adding almost $9 trillion in market cap for the year.
Putting the year in context, emerging markets led the charge with gains of 34%. Hong Kong surged 36%, South Korea was up 22% and India and Poland both rose 27% in local currency terms. Japan’s Nikkei and the S&P 500 are both ahead by almost 20%, while the Dow has risen by a quarter. In Europe, the German DAX gained nearly 14% though the UK FTSE lagged a little with a rise of 7 percent.
Craig James, chief economist at fund manager CommSec, told Reuters that of the 73 bourses it tracks globally, all but nine have recorded gains in local currency terms this year.
‘For the outlook, the key issue is whether the low growth rates of prices and wages will continue, thus prompting central banks to remain on the monetary policy sidelines,’ said James. ‘Globalization and technological change have been influential in keeping inflation low. In short, consumers can buy goods whenever they want and wherever they are.’

This post was published at Zero Hedge on Fri, 12/29/2017 –.

“Too Much Tech” – The Growing Peril Of Passive Investing

“Too much of a good thing…” – That’s the message that many passive investors are unknowingly dealing with as they approach the year-end.
In 2012, FANG Stocks (Facebook, Amazon, Netflix, and Google) accounted for less than 3% of the market cap of the S&P 500.
At the end of 2017, those four stocks now account for over 8% of the S&P’s market cap…
And, as WSJ reports, this is not limited to a small handful of stocks, it is worldwide – investors who loaded up on U. S. and Asian stock-index funds might be surprised to learn just what they own now: technology stocks – a lot of them.
Led by Apple Inc., Facebook Inc. and their peers, the weighing of technology stocks in the S&P 500 index has climbed to 23.8% as of Dec. 26, from 20.8% at the end of last year, according to S&P Dow Jones Indices.

This post was published at Zero Hedge on Thu, 12/28/2017 –.

Global Stocks Rise, Copper Soars In Thin Holiday Volumes

European stocks are steady in post-Christmas trading if struggling for traction after a mixed session in Asia, amid trading thinned by a holiday-shortened week and ongoing worries about the tech sector; however a strong rally in commodities – including copper and oil – buoyed expectations for a strong 2018 and helped offset concerns over the technology sector triggered by reports of soft iPhone X demand.
U. S. equity futures nudged higher while the dollar weakened against most G-10 peers as investors await the release of U. S. consumer-confidence data, with much of the spotlight falling on commodity currencies. The OZ dollar holds onto gains as copper surges to a three-year high; oil retreats after reaching the highest close in more than two years following a pipeline explosion in Libya on Tuesday. Treasuries and core European core bond yields are a touch lower.
The Stoxx Europe 600 Index edged lower, with tech stocks hit for the third day amid rumors of weak iPhone demand and leading the decline as chipmakers slumped after analysts lowered iPhone X shipment projections, sending the Nasdaq Composite Index lower overnight. While mining and oil stocks strengthened due to a surge in copper prices to a 3.5 year high (see below), the European STOXX 600 index slipped 0.1% as European tech stocks tumbled on reports that demand for Apple’s iPhone X may be weaker than expected. The equity benchmark index is poised for an annual gain of 8.1%, the best advance in four years. Elsewhere, Volvo rose as China’s Geely bought Cevian’s stake in the truckmaker, making it Volvo AB’s largest stakeholder. IWG surged the most since 2009 after confirming it has received a a non-binding takeover offer from a consortium backed by Brookfield Asset Management and Onex.

This post was published at Zero Hedge on Dec 27, 2017.

Asian Stocks Slide On iPhone X Demand Fears; US Futures Flat In Thin Holiday Trading

For the second day in a row, most Asian markets – at least the ones that are open – were dragged lower by tech stocks and Apple suppliers, with the MSCI Asia Pacific Index down 0.2% led by Samsung Electronics and Taiwan Semiconductor Manufacturing in response to the previously noted report that Apple will slash Q1 sales forecasts for iPhone X sales by 40% from 50 million to 30 million. Most Asian equity benchmarks fell except those in China. European stocks were mixed in a quiet session while U. S. equity futures are little changed as markets reopen after the Christmas holiday.
Away from Asia, stocks remained closed across the large European markets, as well as in parts of Asia including Australia, Hong Kong, Indonesia, the Philippines and New Zealand. Japanese benchmarks slipped from the highest levels since the early 1990s, helping to pull the MSCI Asia Pacific Index down, while shares in Dubai, Qatar and Russia were among the big losers in emerging markets. S&P 500 futures were flat as those for the Dow Jones slipped. The euro edged lower with the pound – although there were no reverberations from Monday’s odd EURUSD flash crash which was only observed on Bloomberg feeds, while Reuters ignored it even if the FT did note it…

This post was published at Zero Hedge on Dec 26, 2017.

Chinese Stocks Spooked By Apple iPhone X Forecast Cut, Nikkei Boosted By BOJ Hopes

With most global markets closed for Christmas, the only overnight action was in Asia, which saw Chinese equities fall with tech stocks and names linked to Apple the worst performers after a report that Apple cut forecast iPhone X sales forecasts, while property firms surged on speculation of coming consolidation. As a result, after opening higher, the Shanghai Composite Index closed 0.5% lower on the day, the blue-chip CSI 300 Index fell 0.3%, the Shenzhen Composite Index retreated 0.9%, while the ChiNext small-cap and tech Index dropped 1.3%. The PBOC’s refusal to conduct a reverse repo for the second day did not boost the market mood.
The biggest Asian losers were Apple suppliers after the Taipei-based Economic Daily News reported that Apple has cut its sales forecast for the iPhone X by 40% from 50 million in Q1 to only 30 million. The report also noted that Foxconn’s Zhengzhou plant stopped recruiting workers. Following the news, Apple supplier Lens Technology Co. dropped 8.4% to be among worst performers on the ChiNext measure; Shenzhen Sunway Communication Co. -2.2%, Luxshare Precision Industry and GoerTek both dropped at least 4%. As the table below shows, it was a sea of red for Apple suppliers.

This post was published at Zero Hedge on Dec 25, 2017.

Mystery Buyer Of ‘Most Expensive Apartment In Asia’ Revealed

A month ago, we highlighted a disturbing new record in the Hong Kong real-estate market – a market that received a ranking of ‘high’ from Algebris Investment’s Alberto Gallo in his annual ranking of the world’s biggest asset bubbles.
According to a report in the South China Morning Post, the record price per square foot for a residence in Hong Kong was obliterated when a mystery buyer purchased two apartments in ‘The Peak’ – an exclusive district.
At 132,000 Hong Kong dollars per square foot, the purchases made them the two most expensive apartments in Asia in terms of square footage. In total, the mystery buyer spent an astonishing 1.16 billion Hong Kong dollars (nearly $200 million) on the two apartments.

This post was published at Zero Hedge on Dec 24, 2017.

Trump Tax Reform Causing Panic in Europe & Asia

While the American press keeps pushing the class warfare along with the Democrats, outside the USA there is a major panic taking place on a grand scale. I have been called into meeting in Europe and even in Asia all deeply concerned about the loss of competition with the United States due to the Trump Tax Reform. Naturally, the American press would NEVER tell the truth how cutting the corporate tax rate will upset the powers that be around the globe.
A German study warns that its economy will be among the losers in the face of the Trump Tax Reform, which they warn will fuel the tax competition between America and Europe, but also the study leader, Christoph Spengel from the Economic Research Institute ZEW, came out and told Reuters:
‘In addition, competition between EU members for US investment will increase; Germany is the loser.’

This post was published at Armstrong Economics on Dec 22, 2017.

Asian Metals Market Update: December-21-2017

‘Spend wisely and Invest lavishly should be life mantra for 2018’
American companies announcing large bonuses for its employees after the passage of Tax bill will result in higher consumption in the first quarter of next year. Higher retail consumption in the USA will result in higher employment and higher profitability. Global stock markets will remain firm and result in rosier projections for economic growth in the USA and China.
Negative news surrounding crypto currencies like hacking etc this week is state manipulated. States know that block chain technology is like the Linux of the world (which is free) and not windows (which is very expensive).

This post was published at GoldSeek on 21 December 2017.

The Racist Subtext Of Philly’s Ban On Bulletproof Glass In Convenience Stores

Shopkeepers in Philadelphia’s neighborhood convenience stores that serve food and beverages, locally referred to as “beer delis,” face a legal prohibition on the thick glass barriers around cashiers that protect them from stickup artists wielding guns, knives, and other weapons.
Because the shopkeepers predominately are Asian, and the customers (and robbers) are mostly black, this imbroglio looks a lot like a racist quest for vengeance against a commercially successful minority group.
Julie Shaw of the Philadelphia Inquirer provides the details:
Despite strong opposition from Asian American beer deli owners and their supporters, Philadelphia City Council voted, 14-3, Thursday to approve a bill that most members said would enhance neighborhoods, but that the merchants fear could jeopardize their safety and livelihood.
Mayor Kenney’s office said he would sign the bill.

This post was published at Zero Hedge on Dec 19, 2017.

The Limits of China’s Economic Power

The countries of East Asia are worried about the coercive power of Beijing’s pocketbook. And perhaps they should be. China is flush with money, and as it continues to pour massive amounts of aid and investment into the region, it’s only a matter of time before Beijing tries to cash in.
China’s overseas investments are being pushed, at least in part, for strategic reasons. This is evident in the high number of projects included in China’s One Belt, One Road initiative that make little commercial sense and fail to perform their stated purpose: to bypass chokepoints that a hostile power could use to asphyxiate the Chinese. In areas such as the Philippines, the primary goal appears to be the cultivation of political influence in foreign capitals or, more cynically, the creation of dependence on Chinese investment or consumers, which Beijing could someday exploit.

This post was published at Mauldin Economics on DECEMBER 18, 2017.

Will Myanmar Embrace Market Reforms?

The economic growth in Myanmar is now among the highest in Asia, and it’s come a long way since the 1960’s when it was considered one of the world’s most impoverished countries. It’s instructive to understand how this change took place, what some of the current economic metrics indicate, and current pressures being placed on Myanmar from the outside.
For starters, the general history of Myanmar (also known as Burma, and the reason for the two names is interesting in itself) is long and fascinating. More recently, Myanmar was conquered by Great Britain (it was actually a part of British India, which was responsible for much of the administration) in 1855, and became relatively affluent in this part of the world, primarily due to the trade of rice and oil.
However, even before British rule, Myanmar was already relatively well off due to its strategic location along important trade routes. Myanmar is located between India and China – Indian influence is still present, even today, and was resented, along with British control – and this trading activity helped offset a country based on self-sufficient agriculture and centralized control via a king.
Britain ruled Myanmar until independence in 1948, when a series of nationalization and central planning efforts created a welfare state. The results were disastrous. Rice exports fell by two-thirds in the 1950’s, along with a 96% decline in mineral exports. In order to maintain central planning efforts, the government resorted to printing money, and runaway prices resulted from this inflation of the money supply.

This post was published at Ludwig von Mises Institute on Dec 18, 2017.

Let Them Eat (Yellow)Cake – Where The Uranium Comes From

Uranium is in high demand, as it is used as fuel in nuclear power plants around the world. Statista’s Dyfed Loesche notes that according to the German Institute for Geosciences and Natural Resources BGR, Kazakhstan is the biggest producer of the radioactive metal. The central Asian country produced around 24,600 metric tons of the substance in 2016. This is a share of close to 40 percent of the worldwide production.

This post was published at Zero Hedge on Dec 18, 2017.

Market Talk- December 15, 2017

Asia drifted with prices for core all closing around -0.5% lower for the day. Volumes were light but the lack of conviction as well as year end book-squaring were the key discussion topics. The Dollars decline did not help Exporters within the Nikkei, but that has been an issue for a few days this week. However, late in the US trading day, we have seen a reversal of these declines with the DXY clawing back some earlier losses and is happy playing high 112’s against the Yen. Stocks had opened weak and did well to recover into positive territory at one stage probably the result of a good Tankan print. However, that was lost again at the cash close. Late in US trading we see futures back up but lets see how cash opens again on Monday. The Hang Seng suffered most with a little over 1% decline. This was due mainly to property and financials trading heavy.

This post was published at Armstrong Economics on Dec 15, 2017.

European, Asian Stocks Slide But US Futures Rebound As Tax Deal Fears Ease

U. S. equity index futures point to a higher open, having rebounded some 10 points off session lows with the VIX stuck on the edge between single and double digits, while European and Asian shares decline as investors assess central banks’ shift toward tighter monetary policy and concern over tax overhaul ahead of final plan.
It has been a groggy end to what is still set to be a third week of gains for MSCI’s global stock index following more upbeat data and signs that central banks including the Federal Reserve will keep treading carefully with interest rate hikes.
On Thursday, US stocks closed 0.41% lower after Republican Senator Rubio said he intends to oppose the tax bill as written unless there was a larger child tax credit (currently $1,100). He said GOP leaders ‘found the money to lower the top (individual tax) rate’, but ‘can’t find a little bit’ more to help working class parents raising children. However, later on, President Trump said he is ‘very sure’ Mr Rubio will vote yes. So still lots of potential changes here before the bills gets voted by the Senate, potentially as soon as Monday, although on Friday, US equities appears sanguine about the risks and have faded most of Thuesday’s weakness.

This post was published at Zero Hedge on Dec 15, 2017.

Stocks Rebound From “Bama Shock”, All Eyes On Yellen’s Last Rate Hike

After an early slide last night following the stunning news that Doug Jones had defeated Republican Roy Moore in the Alabama special election, becoming the first Democratic senator from Alabama in a quarter century and reducing the GOP’s Senate majority to the absolute minimum 51-49, US equity futures have quickly rebounded and are once again in the green with the S&P index set for another record high, as European stocks ease slightly, and Asian stocks gain ahead of today’s Fed rate hike and US CPI print.
‘The big issue now is whether Republicans will push through their tax bill before Christmas,’ said Sue Trinh, head of Asia foreign-exchange strategy at RBC Capital Markets in Hong Kong. ‘And more broadly, U. S. dollar bulls will be more worried that this marks a Democratic revival into 2018 mid-term Congressional elections.’
The negative sentiment faded quick, however, because according to Bloomberg, despite the loss of a Senate seat, it probably won’t affect the expected vote on business-friendly tax cuts, however, as the winner won’t be certified until late December.

This post was published at Zero Hedge on Dec 13, 2017.

Warning From The World’s Biggest Shipping Line On Outlook for World Trade

The optimism on world trade didn’t last very long.
It was only late September when the WTO issued a ‘strong upward revision’ to their estimate for 2017 world trade. WTO economists raised their forecast to 3.6% from 2.4%, which was at the top end of the previous 1.8-3.6% range. This marked a sharp acceleration from the 1.3% growth in 2016. The IMF’s forecast for 2017 world trade, also made in September, was even higher at 4.2%. Now the Copenhagen-based Maersk, the world’s number one container shipping company, is sounding a warning about softer demand and downward pressure on freight rates. According to Bloomberg.
The world’s largest container shipping line says international freight rates are reversing after climbing for most of this year, raising questions about the sustainability of the global trade recovery. Decade-old oversupply issues swamped demand for containerized sea trade in the third quarter, a senior official at Maersk Line Ltd. said in an interview last week. Over 90 percent of trade is routed through ships, making the industry a bellwether for the worldwide economy. “We have started to see some pockets of downward pressure,” said Steve Felder, Mumbai-based managing director of Maersk’s South Asian unit. The global trade order book at around 13.5 percent of capacity isn’t high, “however, given that freight rates are largely determined on the basis of supply-demand balance, they remain fragile,” he said.

This post was published at Zero Hedge on Dec 12, 2017.

US Futures Hit New All Time High Following Asian Shares Higher; European Stocks, Dollar Mixed

U. S. equity index futures pointed to early gains and fresh record highs, following Asian markets higher, as European shares were mixed and oil was little changed, although it is unclear if anyone noticed with bitcoin stealing the spotlight, after futures of the cryptocurrency began trading on Cboe Global Markets.
In early trading, European stocks struggled for traction, failing to capitalize on gains for their Asian counterparts after another record close in the U. S. on Friday. On Friday, the S&P 500 index gained 0.6% to a new record after the U. S. added more jobs than forecast in November and the unemployment rate held at an almost 17-year low. In Asia, the Nikkei 225 reclaimed a 26-year high as stocks in Tokyo closed higher although amid tepid volumes. Equities also gained in Hong Kong and China. Most European bonds rose and the euro climbed. Sterling slipped as some of the promises made to clinch a breakthrough Brexit deal last week started to fray.
‘Strong jobs U. S. data is giving investors reason to buy equities,’ said Jonathan Ravelas, chief market strategist at BDO Unibank Inc. ‘The better-than-expected jobs number supports the outlook that there is a synchronized global economic upturn led by the U. S.”
The dollar drifted and Treasuries steadied as investor focus turned from US jobs to this week’s central bank meetings. Europe’s Stoxx 600 Index pared early gains as losses for telecom and utilities shares offset gains for miners and banks. Tech stocks were again pressured, with Dialog Semiconductor -4.1%, AMS -1.9%, and Temenos -1.7% all sliding. Volume on the Stoxx 600 was about 17% lower than 30-day average at this time of day, with trading especially thin in Germany and France.
The dollar dipped 0.1 percent to 93.801 against a basket of major currencies, pulling away from a two-week high hit on Friday.

This post was published at Zero Hedge on Dec 11, 2017.

The $10 Trillion Investment Plan To Integrate The Eurasian Supercontinent

Authored by Federico Pieraccini of Strategic Culture
The Chinese Belt and Road Initiative (BRI), by lending out money using an alternative currency to the dollar, opens up huge spaces for investment and the strategic transformation of the region.
The overland integration of the BRI, led by China and Russia, aims to create different transit routes for goods as well as different areas of economic development along the new Chinese Silk Road. A great opportunity is thereby opened up for Chinese banks and for private investors interested in creating infrastructure or developing potential industrial poles in the countries involved in this grand Chinese initiative.
Hong Qi, president of China Minsheng Bank, recently said during an economic forum held in Beijing regarding investments in the BRI that there is potentially about $10 trillion worth of investments in infrastructure in the countries that make up the BRI, such as in railways, urban development, logistics and cross-border e-commerce.
At this point, more than $10 billion has already been committed in investments, thanks to companies already present in over thirty countries and regions along the BRI, with the ongoing intention of financing these loans through China’s public and private sectors. According to data from the China Banking Regulatory Commission, a total of nine Chinese banks are involved in the financing of projects, with 62 branches having been opened in 26 countries. A further $10 billion could come from European countries as a result of investments stemming from the China-CEEC forum.
Despite a delay in investment, and especially in the development of such projects, analysts believe that the BRI is the ideal ground for making regional cooperation agreements based on trust and win-win prospects for future integration of the region. Thus, not only are public and private banks involved in investments but the Asian Investment Infrastructure Bank (AIIB) and the Silk Road Fund are also part of the financial package that should lay the foundation for the accelerated development of the Chinese BRI. Confirming a new approach to the development of the BRI, Chinese investors during the first ten months of 2017 proposed projects totalling $11 billion in the 53 countries involved.

This post was published at Zero Hedge on Dec 9, 2017.

Enron Dj Vu? Citi, BofA, HSBC, Goldman, BNP on the Hook as Steinhoff Spirals Down

$21 billion of debt. Off-balance-sheet entities. Moody’s wakes up, downgrades it four notches, with more to come.
Steinhoff International Holdings – which acquired nine companies in the past two years, including Mattress Firm Holding in the US, and which presides over a cobbled-together empire of retailers and assorted other companies in the US, Europe, Africa, and Australasia – issued another devastating announcement today: It cancelled its ‘private’ annual meeting with bankers in London on Monday and rescheduled it for December 19.
This is the meeting when the company normally discusses its annual report with its global bankers. The annual report should have been released on Wednesday, December 6. But on precisely that day, the company announced cryptically that ‘accounting irregularities’ had ‘come to light’ that required ‘further investigation,’ and that CEO Markus Jooste had been axed ‘with immediate effect,’ and that it would postpone its annual report indefinitely.
This is raising serious questions about the company’s viability as a going concern. The lack of transparency doesn’t help.
To soothe investors, the company announced on Thursday that it was trying to prop up its liquidity by selling some units ASAP. And it made more cryptic statements: It ‘has given further consideration to the issues subject to the investigation and to the validity and recoverability’ of some assets of ‘circa 6 billion’ ($7 billion).

This post was published at Wolf Street by Wolf Richter ‘ Dec 8, 2017.

Market Talk- December 8, 2017

Asia started where the US markets off and confidence ahead of payrolls Friday, a government shut-down averted and hopes riding high for a BREXIT deal – which ran on the back of Sterling’s strength. For the Nikkei it felt important that we saw a 1.5% rally today taking us back to returning a roughly flat week. The GDP data certainly helped sentiment blasting the market 1.4% expectation and printing an impressive +2.5%. Yen lost a little as expected (0.4%), but that was a full big figure change and was in-place ahead of the US payrolls number. China’s economic data was also in the news with Trade figures better than forecast, resulting in a strong Hang Seng (+1.2%) and Shanghai (+1.1%) indices. Including the near 1% rally for the SENSEX also, these were strong and confident closes for Asia.

This post was published at Armstrong Economics on Dec 8, 2017.