Car depreciation can be a killer but not with these vehicles. Here are 10 SUVs that are actually worth good money on the used market after five years.
“A DEFINING moment for the auto industry.” That is how usually restrained analysts at Sanford C. Bernstein, a research firm, described the news that China’s government wants to move towards a ban on gas guzzlers. On September 9th, Xin Guobin, vice minister of industry and information technology, told an automotive conference in Tianjin, a grimy industrial city near Beijing, that the government is developing a long-term plan to phase out vehicles powered by fossil fuels. The news reverberated around car firms, for which China is the largest market. William Russo of China’s Gao Feng Advisory, a consultancy, who was previously a senior executive at Chrysler, says China is simply far too big to lose out on. “If China says no more fossil-fuel powered cars, global carmakers must follow.” No timeline for a ban was suggested. China already has ambitious medium-term goals for automotive efficiency and climate change, including a cap on carbon emissions by 2030. Experts reckon...
Росстандарт объявил о массовом отзыве машин Jeep и Chrysler из-за неполадок с подушками безопасности.
Афера «дизельгейт», изрядно подмочившая репутацию Volkswagen и лишившая свободы на 40 месяцев вовлечённого в неё инженера Volkswagen Джеймса Ляна (James Liang), не обошла стороной и других автопроизводителей. В аналогичных махинациях с занижением показателей выбросов в атмосферу дизельными двигателями обвиняется и французский концерн Peugeot Citroen. И если прежде упоминания о недобросовестных схемах Peugeot Citroen не подкреплялись фактами из материалов следствия, то теперь обман подтверждается документально, грозясь превратиться в скандал мирового уровня похлеще «дизельгейтов» Volkswagen и Renault/Fiat-Chrysler вместе взятых. Transportepress.com
Компания "Крайслер" вновь обнаружила на своих автомобилях проблемы с подушками безопасности. Причем, на устранение дефектов приглашают даже довольно старые экземпляры 2004 года выпуска.
Российское подразделение итало-американского автоконцерна Fiat Chrysler приняло решение об отзыве на территории России 3,4 тысячи автомобилей. Причина - проблемы с подушками безопасности, сообщает Росстандарт.
Российское подразделение концерна Fiat Chrysler (ООО «ЭфСиЭй Рус») отзывает более 3,4 тыс. автомобилей Jeep Wrangler и Chrysler 300. Отзыву подлежат машины, реализованные с апреля 2004 по май 2013 года, сообщает Росстандарт.
Российское подразделение концерна Fiat Chrysler (ООО «ЭфСиЭй Рус») отзывает 3,423 тыс. транспортных средств Jeep Wrangler и Chrysler 300. Об этом сообщается на сайте Росстандарта.Под отзыв попадают автомобили, проданные с апреля 2004 года по май 2013 года. «Причиной отзыва является газогенератор фронтальной подушки безопасности переднего пассажира, который может разрушиться из-за излишнего внутреннего давления при нормальном срабатывании подушки безопасности»,— говорится в сообщении.Отмечается, что возникновение неисправности наиболее вероятно на автомобилях, которые долгое время находились в условиях высокой влажности.
Неожиданно бурно прошли допвыборы в отдельных районах Татарстана. В ожесточенной борьбе в Елабуге советник гендиректора «Эссена» Ильшат Шаймуратов обошел провластного соперника с отрывом всего в 22 голоса. Рамиль Комаров лидировал в Альметьевске, невзирая на обвинения в подкупе избирателей, а в Нижнекамске директор хлебокомбината победил на фоне скандала с его «хлебной палаткой», выставленной на участке. За событиями следил «БИЗНЕС Online».
Having started off with a sharp gap lower following Sunday's news of the latest, 6th nuclear test by North Korea, global stocks and US futures pared losses in the overnight session, despite reports of North Korean preparations for yet another missile launch, while the yen trimmed its risk-off gains even as gold kept its upside and the South Korean Kospi closing 1.2% lower, with traders asking whether "this time will be different:, or inversely, will today's market reaction will be a carbon copy of what happened last Monday, when stocks gapped sharply lower on North Korea missile launch fears, only to surge 1% by the end of the week, as shown in the chart below. Still, concern that U.S. President Donald Trump has few viable options to rein in North Korea has disrupted a three-week-long rally in emerging markets, sending stocks to the biggest loss since Aug. 11: The MSCI index of world stocks dropped 0.7%, led by consumer-discretionary and industrial-goods sectors, as the relative strength index, a measure of momentum, fell to 60 from 68 on Friday. The South Korean Kospi extended declined at the close, down 1.2% after Yonhap reported South Korea had detected North Korea’s preparation for an ICBM missile launch. The index fell as much as 1.7% at the open Monday before paring back some of its decline to a 0.9% drop; volatility among South Korean stocks surged as much as +15%, although absent further escalation, that spike will likely be faded in the coming days. Europe's Stoxx Europe 600 Index declined, with all industry sectors in the red, after a Monday morning report from Yonhap that Pyongyang is preparing to launch an intercontinental ballistic missile heightened investors’ unease. European equity markets opened lower and stay within a tight range, with tech and banking lagging. Both USD/JPY and U.S. equity futures fell, but have stayed within overnight ranges and in the case of the Yen, much of the latest gains have been unwound, while European government bonds advanced and Swiss franc led currency gains. The euro strengthened even as economists expect European Central Bank President Mario Draghi to express concern Thursday about the currency’s rise. Industrial metals including copper and nickel extended a rally. US Treasuries and bund futures briefly hit session highs on Korean concerns before fading. The German curve steepened, with focus on upcoming supply this week. Having surged to the highest level since the Trump election victory, spot gold edged modestly lower from overnight high, tagging $1,334 in early trading. Currencies, as a group, erased losses thanks to an advance in offshore yuan; otherwise, most currencies are lower against the dollar. Meanwhile, China’s onshore yuan extended gains to a 15-month high as North Korea’s nuclear test failed to dent bullish sentiment on the currency. The Chinese exchange rate traded in Hong Kong’s overseas market rose for a 14th day, the longest rally on record. In onshore markets, the CNY climbed 0.5% to 6.5245 per dollar; the currency climbed 1.35% last week, the strongest showing in CFETS data going back to April 2007. The PBOC strengthened the yuan reference rate by 0.37%, the most since Aug. 10, to 6.5668 against the greenback. It wasn't just the Yuan that proved immune to Korean worries: shares in mainland China rose as strength in commodity producers outshone concerns about North Korea saying it successfully tested a hydrogen bomb over the weekend. Hong Kong’s benchmark fell for a third day. The Shanghai Composite Index rises 0.4%, most in a week, to 3,379.58 What happens next for global risk is in the hands of China and the US as the North Korean conflict is rapidly escalating into a proxy war of the world's two most powerful nations. US markets are closed on Monday for holiday. Top Overnight Headlines South Korea has continued to detect preparations related to another ICBM launch by North Korea according to a Defense Ministry official Trump says U.S. considers new sanctions, stopping all trade with any country doing business with North Korea; Mattis says ’many military options’ available Mnuchin says debt limit hike should be linked to Harvey aid China says using force to resolve the North Korea issue isn’t an option: Reuters China says U.S. President Trump’s trade threat over North Korea is "unacceptable" and "unfair" U.K. government has proposed extending the next round of Brexit negotiations on a rolling week-by-week basis until breakthrough is reached on financial settlement according to people familiar: Politico U.K. Aug. Construction PMI: 51.1 vs 52.0 est; weakest reading since July 2016, Markit note reduced levels of commercial building U.K.’s Davis dismisses reports of GBP50 billion EU payment as ’nonsense’ Portugal outlook changed to positive from stable by Moody’s Ex-PBOC adviser urges free float of yuan rate: Securities Journal In European equities, risk-off sentiment following North Korea's nuclear test has hit European shares in early trading this Monday, with all sectors in negative territory, led by financials. In regards to stock specific movers, Fiat Chrysler are down around 3 percent after its CEO said that Fiat had received no offer for the firm. In fixed income, EGB's trading a better levels following the aforementioned newsflow out of North Korea. Peripheral bonds outperforming against their German counterpart as spreads tighten. Eyes could be on the performance of PGB's vs. Bunds after Moody's placed Portgual's sovereign rating on positive outlook, as such a possible upgrade to investment grade from junk may see the spread narrow to YTD lows at mid-220bps. In currencies, JPY/CHF: Safe haven flow dominating sentiment to begin the week, which came after reports that North Korea successfully launched its most powerful so-called H-Bomb to date. In turn, USD/JPY slipped to the mid-109s while USD/CHF broke through 0.96 as risks are seemingly skewed to the downside as markets digest and monitor the situation. Aside from the tensions on the Korean Peninsula, concerns over the US debt limit will keep a lid on risk appetite, providing further headwinds for the greenback. The soft NFP report on Friday and dampened risk sentiment has underpinned EUR this morning. Although the currency remains below 1.1900 as the ECB meeting is likely to cap near term gains as speculation mounts over potential comments from Draghi and Co. regarding the recent appreciation in EUR. In commodities, WTI and Brent crude futures slipping this morning, more notably in Brent as WTI is somewhat supported as several refineries resume activity. RBOB gasoline futures easing after emergency stocks had been released amid early indications that the damage to infrastructure were not as bad as initially feared. * * * DB's Jim Reid concludes the overnight wrap With August behind us and the weather here in the UK yesterday already starting to resemble autumn it feels like the final push into the end of the year is well and truly on. This week should be an interesting one with the highlight likely coming this Thursday with the ECB meeting. We aren’t expecting any policy announcements - indeed our economists expect Draghi’s strategy to be one whereby he and the ECB wrap the QE exit step in dovishness when it is announced in October – but the risk is perhaps that Draghi says very little at all and buys even more time for the ECB. In this regard, what Draghi does or doesn’t say about the euro is what most in the market will probably be looking out for. It feels like the consensus expect Draghi to address the recent appreciation but we’d imagine that he will probably have to also strike a bit of a delicate balance given that the data is holding up pretty well still. Draghi’s job was perhaps made ever so slightly easier by that fact that the single currency closed on Friday 1.75% off Tuesday’s highs but it is still up 3.50% since the ECB last met back in July. Anyway that is for Thursday. In the meantime, it feels like déjà vu writing this again this morning as the weekend headlines are once again dominated by the latest North Korea missile test. Yesterday’s test was called a “perfect success” by the Korean Central News Agency with the underground explosion supposedly ten times more powerful than previous detonations. The explosion also caused a magnitude 6.3 earthquake and all the talk is that the test has reached new ground in terms of potential magnitude and power. President Trump responded to the latest test by saying that “the United States is considering, in addition to other options, stopping all trade with any country doing business with North Korea”. Treasury Secretary Mnuchin confirmed that he is drafting a sanctions package to send to Trump and Defence Secretary Mattis said that the US has “many military options” when questioned about a possible response. Other world leaders also had their say. Germany Chancellor Angela Merkel said that North Korea’s latest actions had reached a “new dimension” while Russia’s Putin and China’s Xi Jinping also responded and agreed to “appropriately deal with” the latest test. An emergency UN meeting has been called for today. The latest development has seen markets in Asia start the week with a risk-off tone although moves overall have been fairly modest still. In terms of safe havens, Gold is up +0.61%, while the Yen and Franc are +0.41% and +0.38% respectively. Equity markets across Asia are down with the Nikkei (-0.86%) and Kospi (-0.79%) standing out the most, while the ASX 200 (-0.49%) and Hang Seng (-0.47%) are also in the red. Markets in China are flat. It’s worth noting that the US is off today for the Labour Day holiday so we will have to wait until tomorrow to see how cash markets across the pond respond although S&P 500 futures are down around -0.32% as we go to print. In terms of other news from the weekend, in Germany, Merkel and her Social Democratic opponent Martin Schulz took part in a TV debate where they clashed over refugee policy with Merkel standing by her view on keeping the country’s borders open and Schulz attacking Merkel for her early response to the refugee crisis in 2015. This was actually the only live TV debate between the two leaders before the election on September 24th and the latest polls show Merkel as holding a roughly 13-14% lead over Schulz after the latter had at one stage closed that gap completely earlier in the year. According to Bloomberg two flash polls released after yesterday’s debate were scored a draw and a Merkel win. Elsewhere, here in the UK, Brexit Secretary David Davis called a Sunday Times report suggesting that PM Theresa May was to approve a £50bn Brexit Bill as “nonsense”. The report also suggested that May won’t disclose any details on kick starting trade talks until after the Tory Party conference in October. Conversely, EU negotiator Barnier said the British people need to be “educated” about the price they will pay for quitting the EU. Meanwhile in the US it’s worth noting that Congress will return from the August recess on Tuesday with the debt ceiling debate almost certain to be front and centre. Over the weekend Mnuchin noted that the debt limit should be linked into a package of relief for victims of Tropical Storm Harvey. The suggestion on Friday was that the House could plan a vote on funding as a standalone bill this week but the latest comments suggest that this is less likely now. Assuming lawmakers don’t get in the way of relief efforts, one would imagine that this perhaps lowers the risk around the debt ceiling as time ticks down towards the end of month deadline. Now just recapping the macro data on Friday. In the US, the main focus was a softer than expected August employment report, with the change in nonfarm payrolls coming in at 156k (vs. 180k). Adding to the disappointment, the unemployment rate was a tad higher at 4.4% (from 4.3%) and average hourly earnings rose just 0.1% mom (vs. +0.2% expected), leaving growth at +2.5% yoy. However, we would still characterize the labour market as being in solid shape and note that the August reports can be impacted by difficulties in seasonaladjustment around the holiday period. Further, our US economics team notes that they would not be surprised to see subsequent positive revisions (since 2010, August payrolls have been revised up by +55k on average between the initial and third prints). Elsewhere, the August ISM manufacturing was higher than expected at 58.8 (vs 56.5 expected), marking the best reading since March 2011. Moving along, the University of Michigan consumer confidence print was softer than expected at 96.8 (vs 97.5) but the final Markit US manufacturing PMI was revised up slightly to 52.8 from 52.5. In Europe, UK’s manufacturing expanded at the strongest pace in four months, with the August PMI at 56.9 (vs. 55.0 expected). In Italy the manufacturing PMI was also higher than expected at 56.3 (vs. 55.3 expected) while the final reading for 2Q GDP was confirmed at +0.4% qoq and +1.5% yoy. Elsewhere, other final Markit manufacturing PMIs were broadly in line with the flash estimates, with the Eurozone at 57.4 and France at 55.8, but Germany was a tad lower at 59.3 (vs. 59.4 flash). By the end of play markets ended slightly firmer with the S&P 500 closing +0.20% and Stoxx 600 up +0.60% driven by gains in mining names. Bond yields rose in the US and Europe, with UST 10y up 5bp to 2.166% and core European bond yields up around 2bps. The US dollar index was broadly unchanged on Friday and has dipped 0.20% this morning. Elsewhere, WTI oil edged up 0.3% and US gasoline prices fell 1.8% on Friday (first decline in the week) and have fallen a further 2.8% this morning. Taking a step back, it’s worth noting that the current rally in the S&P 500 is the 3rd longest since WWII without a 3% selloff, but our asset allocation chief strategist Binky Chadha remains constructive. He noted that the market remains overdue for a pullback and rising domestic and geopolitical risks provide plenty of potential catalysts. But as in past episodes, he views the economic and market context dominating. On the economic front, Binky sees further upside to global growth, with PMIs having further to recoup pre dollar and oil shock levels, a strengthening in the US labour markets and capex, while Binky also expects earnings growth to sustain in the double digits. On the market front, he sees the demand-supply picture for US equities becoming more supportive with inflows on a turn up in data surprises and higher rates as inflation picks up.
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Trump Tries to Recharge His Base in Arizona Rally (WSJ) Trump Threatens Government Shutdown Over Border Wall Funding (BBG) Trump defends response to Charlottesville violence (Reuters) Trump Assails Media in Angry Defense of Charlottesville Response (BBG) North Korea presses rocket program, but amid signs of drama easing (Reuters) Military conflict with North Korea can be avoided: Germany's Merkel (Reuters) ECB chief Draghi: QE has made economies more resilient (BBC) Wage Hikes in China Bring Jobs, Factories Back to Japan (BBG) U.S. Navy Relieves Admiral of Command After Collisions (WSJ) U.S. Readies New Steps to Pressure Pakistan (WSJ) Wall Street Banks Warn Downturn Is Coming (BBG) The Case for Buying Venezuelan Bonds (WSJ) Billionaire Trump Donors Miss Post-Election Stock Gains (BBG) Trump hints at pardon for Joe Arpaio (Hill) Saudis Open Iraqi Border and Forge Ties to Counter Iran (WSJ) Pakistan says U.S. must not make it a 'scapegoat' for Afghan failures (Reuters) Saudi Aramco IPO Spurs Rush to Privatize in Middle East (WSJ) Why Energy Traders Got the Eclipse So Wrong (BBG) Wal-Mart and Google Partner to Challenge Amazon (WSJ) True price of an Uber ride in question as investors assess firm's value (Reuters) Big U.S. Banks Could See Profit Jump 20% With Deregulation (BBG) Trains in Vain: Epic CSX Traffic Jam Snarls Deliveries, From Coal to Fries (WSJ) Qatar’s Plucky Plan to Outlast the Saudi Embargo (BBG) Overnight Media Digest WSJ - U.S. President Donald Trump, in his first campaign rally after the violence in Charlottesville, Virginia, attacked the news media and his fellow Republicans who were critical of his response to the protest. on.wsj.com/2ipBuej - Four mutual-fund companies have marked down their investments in Uber Technologies Inc by as much as 15 percent, the first such price cuts that suggest these investors are souring on the ride-hailing giant following a scandal-ridden year. on.wsj.com/2ipppFF - Chevron Corp Chief Executive John Watson is planning to step down as the energy giant seeks new leadership for a changing oil world, according to people familiar with the matter. on.wsj.com/2ipt9Hj - Google and Wal-Mart Stores Inc are joining forces in a partnership that includes enabling voice-ordered purchases from the retail giant on Google's virtual assistant, challenging rival Amazon.com Inc's grip on the next wave of e-commerce. on.wsj.com/2iqn0Lh - The U.S. government is considering restricting trades in Venezuelan debt as it seeks to punish President Nicolas Maduro for undermining the country's democracy, according to people familiar with the matter. on.wsj.com/2ipBQ4s - LG Electronics Inc said it will spend about $25 million to build a factory for electric car parts in the Detroit suburb of Hazel Park, Michigan, as the company seeks new engines of growth while it reels from losses at its once-lucrative mobile business. on.wsj.com/2io6ZFm - The U.S. Navy plans to remove the commander of the fleet that has suffered four recent collisions in Asia and the deaths of several sailors, U.S. officials said. on.wsj.com/2ipFZFK FT Britain will outline its plans on Wednesday to escape the "direct jurisdiction" of the European Court of Justice after Brexit. Britain posted a budget surplus in July for the first time in 15 years, according to data from the Office for National Statistics on Tuesday. The United States imposed new North Korea-related sanctions, targeting Chinese and Russian firms and individuals for supporting Pyongyang's weapons programs. The European Commission has started an in-depth investigation of Bayer AG's planned $66 billion takeover of U.S. seeds group Monsanto Co, saying it was worried about competition in various pesticide and seeds markets NYT - A Chinese court has ruled that three domestic shoemakers must pay New Balance $1.5 million in damages and legal costs for infringing the American sportswear company's signature slanting "N" logo, in what lawyers said was the largest trademark infringement award ever granted to a foreign business in China. nyti.ms/2vd3jYZ - European antitrust regulators opened an in-depth investigation on Tuesday into Bayer AG's $56 billion deal for Monsanto Co, a transaction that would create the world's largest integrated pesticides and seeds company. nyti.ms/2g3YOx8 - According to two company officials, Fiat Chrysler Automobiles NV has been in discussions with a number of Chinese companies about potential equity investments or other deals involving its Ram pickup division and the Jeep brand. nyti.ms/2vXdnIr - Last Wednesday, even as top executives were abandoning President Donald Trump's business advisory councils after his remarks on white supremacist violence in Charlottesville, other industry leaders were busy making their interests known to a business-friendly White House. nyti.ms/2vd9wEv - Alphabet Inc's Google and Wal-Mart Stores Inc said Google would start offering Walmart products to people who shop on Google Express, the company's online shopping mall. It's the first time the world's biggest retailer has made its products available online in the United States outside of its own website. nyti.ms/2xr5BED - ESPN has removed an announcer from its broadcast of the University of Virginia's first football game next month because he has the same name as a Confederate general memorialized in statues that are being taken down across the country. nyti.ms/2wCZOig Canada THE GLOBE AND MAIL ** Toronto-Dominion Bank will begin building out a trading hub in Ireland that could form the core of its contingency plan for London-based staff left in limbo by Britain's looming Brexit. (tgam.ca/2xbKl6J) ** The Liberal government has agreed to hold an emergency parliamentary committee hearing on Canada's ability to defend itself against an attack by North Korea, including whether the government should join the U.S. ballistic missile defence system. (tgam.ca/2xbWskc) ** Canada has asked the U.S. and other top intelligence allies to keep a tight watch on far-right extremists, who are increasingly grabbing international attention with anti-immigration messages and violent attacks, Public Safety Minister Ralph Goodale said. (tgam.ca/2xbS2cT) NATIONAL POST ** Lisa Raitt, the Conservative Party's deputy leader under Andrew Scheer, says she's been deep in discussions with doctors and small business owners over the government's tax plan, in a bid to contest the proposed tax crackdown on private corporations. (bit.ly/2xbRQKQ) Britain The Times - The future of subprime banking group Provident Financial Plc was thrown into doubt after a mammoth profit warning, the resignation of its chief executive, a belated admission that it was being investigated by regulators and the reversal of a promised dividend. bit.ly/2g48sQo - The Bank of England should shut down its 115 billion pound ($147.43 billion) cheap funding scheme for high-street lenders because it has served its purpose and is now undermining policy, a top economist, Simon Ward, has said. bit.ly/2g3gmtl - Dalian Wanda Group, China's largest commercial property company has walked away from its 470 million pound acquisition of Nine Elms Square as Beijing clamps down on the wave of cash flooding into overseas property. bit.ly/2g3kzNP The Guardian - Airports have joined forces to press the government to urgently strike a post-Brexit deal on flights between the United Kingdom and the European Union, warning that the current uncertainty alone would be enough to see bookings drop by up to 41 percent. bit.ly/2g2BxMf - Public sector net borrowing last month, excluding the nationalised banks, was in surplus by 184 million pounds, the first surplus in that month since 2002, the Office for National Statistics (ONS) said on Tuesday. City economists had expected the government to record a 1 billion pound deficit. bit.ly/2g2Cd4f The Telegraph - Vodafone Group Plc is in talks with BT Group Plc's network subsidiary Openreach about a joint investment in new ultrafast fibre-optic broadband for British cities. bit.ly/2g3RkdG - Dominic Chappell, who bought BHS for 1 pound, is to be prosecuted by The Pensions Regulator for failing to provide information related to his purchase of the now defunct retailer. bit.ly/2g3R8uY Sky News - Lidl has overtaken Waitrose to become Britain's seventh largest supermarket. The German-owned business grew sales by 18.9 percent in the 12 weeks to Aug. 13, taking its market share to 5.2 percent, according to industry data from Kantar Worldpanel. bit.ly/2g2pC12 - BHP Billiton Plc, the world's biggest mining company by stock market value, has said it has decided to offload its U.S. shale oil operations and is "actively" looking at exit options. bit.ly/2g3KaWO The Independent - The Cheshire-based firm Innospec Ltd is selling lead fuel additives, banned because of their "catastrophic" effects on human health, to Algeria, the last remaining country in the world where they are still legal. ind.pn/2g3Sl5u
Trump commits to a 'fight to win' in Afghan war (Reuters) Stay or Go? Some Trump Aides Are Pressed From All Sides (WSJ) Futures higher as traders pick up beaten-down stocks (Reuters) Divers Search Compartments of Ship for Missing Sailors (WSJ) Why Do U.S. Navy Ships Keep Colliding? (BBG) North Korea Threatens ‘Absolute Force’ as U.S., South Hold Drills (WSJ) The Unintended Consequences of Quantitative Easing (BBG) Ross Levinsohn Named CEO, Publisher of Los Angeles Times (WSJ) Big protests expected as Trump plans Phoenix rally (Reuters) Millennial Americans Are Moving to the 'Burbs, Buying Big SUVs (BBG) Identity Thieves Hijack Cellphone Accounts to Go After Virtual Currency (NYT) BHP Flags Exit From Shale as Full-Year Profits Surge Five-Fold (BBG) Elliott Notches Win as BHP Eyes Sale of U.S. Shale Assets (WSJ) Oil prices steady ahead of U.S. stocks data (Reuters) After U.S. destroyer collision, Chinese paper says U.S. navy a hazard (Reuters) Macy’s Hires eBay Executive Amid Management Shakeup (WSJ) China's 'big four' banks raise billions for Belt and Road deals (Reuters) Famed Plaza Hotel Is On the Block (WSJ) Trump’s team and lawmakers making strides on tax reform plan (Politico) Booming Metals Rally Signals Optimism on Global Growth (WSJ) Could Puerto Rico Be the Next Hot Tax Haven? (BBG) Muslim divorce law 'unconstitutional', rules India's top court (Reuters) South Korea, U.S. fail to reach agreement on possible revision to FTA deal (Reuters) California Crackdown on Cars Reinforced by Road Emissions Uptick (BBG) Overnight Media Digest: WSJ - President Donald Trump said he would expand the U.S. mission in Afghanistan but take a different approach from his predecessors by being tougher on Pakistan and refraining from telegraphing troop levels. on.wsj.com/2imqFJO - The U.S. Navy announced an "operational pause" and has begun a broad investigation after the USS John S. McCain collided with a merchant vessel, leaving 10 sailors missing, the second such incident in as many months. on.wsj.com/2im7vUB - Tronc Inc is undergoing a broad management shake up at its flagship newspaper, the Los Angeles Times, bringing in internet and media industry veteran Ross Levinsohn as its new chief executive and publisher. on.wsj.com/2ill46q - Activist investors scored a victory after BHP Billiton Ltd said it was looking to sell its onshore U.S. oil-and-gas operations. on.wsj.com/2illE46 - CNN is launching a daily news show for Snapchat called "The Update," the latest reflection of how media companies are stepping up their interest in the mobile messaging platform. on.wsj.com/2imJZXq - Jeep, the crown jewel of Fiat Chrysler Automobiles NV and a world-wide symbol of American military and manufacturing might, has an interested Chinese suitor, Great Wall Motor Co Ltd, the latest sign of an industry in the midst of a global reshuffling. on.wsj.com/2imTohs NYT - In a growing number of online attacks, hackers have been calling up Verizon Communications Inc, T-mobile US Inc , Sprint Corp and AT&T Inc and asking them to transfer control of a victim's phone number to a device under the control of the hackers. nyti.ms/2vYNZAr - Tronc Inc, the parent company of The Los Angeles Times, abruptly replaced the newspaper's top leadership on Monday. Ross Levinsohn, a longtime media executive who held a senior position at Fox's digital group and was once considered a top candidate to lead Yahoo, was named publisher and chief executive of The Times. nyti.ms/2xn2jlZ - A Los Angeles jury on Monday ordered Johnson & Johnson to pay $417 million in damages to a medical receptionist who developed ovarian cancer after using the company's trademark Johnson's Baby Powder on her perineum for decades. nyti.ms/2vk41mu - The National Academies of Sciences, Engineering and Medicine, which was conducting a scientific study of the public health risks of mountaintop-removal coal mining said in a statement they were ordered to stop work because the Interior Department was conducting an agencywide budgetary review. nyti.ms/2x8iDrw - Statements and evidence provided to German investigators by Zaccheo Giovanni Pamio, former head of thermodynamics in Audi's engine development department, suggest that knowledge of emissions fraud reached higher in the ranks of management than Volkswagen has admitted. No members of the company's management board have been charged, although investigations are continuing. nyti.ms/2wz8fuN Britain The Times * The former chief executive of Lloyds Banking Group Plc and one of his top lieutenants are suing the bailed-out lender for hundreds of thousands of pounds in unpaid bonuses in a move that risks sparking public outrage. bit.ly/2g1MPAx * Nicholas Macpherson, the former Treasury mandarin who oversaw the introduction of quantitative easing eight years ago, has compared money printing to "heroin" for policymakers and said it is "time to move on". bit.ly/2g0erFY The Guardian * Ford Motor Co has announced a car and van scrappage scheme allowing customers to trade in and scrap any brand of older vehicle for at least 2,000 pounds ($2,578.80) in a bid to get dirtier vehicles off the roads and boost its sales in UK's flagging car market. bit.ly/2g03eoP * Activist group Avaaz has hired lawyers and launched the first steps of a judicial review against Ofcom following its report into the 11.7 billion pound bid by Rupert Murdoch's Twenty-first Century Fox for the 61 percent of Sky Plc it does not already own. bit.ly/2fZmzGV The Telegraph * French supermajor Total SA has become the second largest North Sea operator at a stroke with a surprise $7.45 billion (5.79 billion pounds) deal swoop on Danish oil and gas firm Maersk Oil. bit.ly/2g094GU * Britain is to keep all of Europe's business standards after Brexit by applying to remain a full member of Europe's three business standards agencies after March 2019, the head of the UK's official standards agency told the Telegraph. bit.ly/2g0v6cG Sky News * Theresa May is facing pressure to transform her approach to shaping Britain's post-Brexit trade links amid scepticism from business leaders about the scale and ambition of a forthcoming trip to Japan. bit.ly/2fZCLHS * British wealth manager Rathbone Brothers has confirmed that it is in talks over a 2-billion-pound merger with UK-based financial services provider Smith & Williamson, in a bold move that would accelerate the consolidation of the wealth management sector. bit.ly/2g0YejK
Last week AutomotiveNews reported rumors that at least one Chinese automaker had made a bid for Fiat Chrysler (FCA) at a slight premium to the company's prevailing market price though it was reported rejected. While it's unclear whether an official bid was made, this morning Reuters is confirming that China's Great Wall Motor Company has expressed interest in acquiring FCA, sending the company's shares to a new 52-week high. China's Great Wall Motor Co Ltd is interested in bidding for Fiat Chrysler Automobiles (FCA), a company official said on Monday, confirming reports it is pursuing all or part of the owner of the Jeep and Ram truck brands. "With respect to this case, we currently have an intention to acquire. We are interested in (FCA)," an official at Great Wall Motor's press relations department told Reuters by phone. He declined to give his name and gave no further details. In a statement, Fiat Chrysler said it had not been approached by Great Wall Motor, and was busy with implementing its current five-year business plan. The industry publication cited a Great Wall spokesman confirming interest, but saying the Chinese automaker had not made a formal offer or met with FCA's board. Not surprisingly, FCA's iconic Jeep brand, which Morgan Stanley figures is worth about 150% of FCA's overall market value all by itself, is the crown jewel the Great Wall covets. "Our strategic goal is to become the world's largest SUV maker," Automotive News quoted the spokesman as saying. "Acquiring Jeep, a global SUV brand, would enable us to achieve our goal sooner and better (than on our own)." "Jeep is the most logical choice since (Great Wall) wants to be the largest SUV maker in the world," said Yale Zhang, head of Shanghai-based consultancy Automotive Foresight. Ram could be an option, but "the Jeep brand is recognized globally. I think Great Wall Motor is eyeing a global strategy, not just the United States," Zhang added. Jeep, which traces its roots to the iconic World War Two military vehicle, targets sales of 2 million vehicles in 2018, up from 1.4 million in 2016. Marchionne has said deliveries from the SUV brand could eventually rise to as many as 7 million a year as demand for sporty vehicles is set to keep rising. In a recent note, Morgan Stanley estimated Jeep's enterprise value at 23 billion euros ($27 billion) - nearly 150 percent of the whole of FCA's market value. Meanwhile, with a market value of almost $20 billion, an acquisition of FCA would be by far China's largest overseas automotive industry deal - and possibly one of its largest ever overseas purchases - dwarfing Geely's 2010 billion acquisition of Volvo cars. And, of course, FCA shareholders are applauding the interest in pre-market trading. Interest from China comes amid a push by the government to acquire international assets in order to gain further access to markets outside China. A government directive dubbed China Outbound pushes Chinese businesses to acquire international assets from their industries and operate them "to make their mark," much as Geely has done since acquiring Volvo in 2010. Bloomberg reported last week that Chinese companies plan to spend $1.5 trillion acquiring overseas companies over the next decade — a 70 percent increase from current levels. "Right now, Chinese automakers enjoy the full support of the leadership in Beijing to go and make it happen," Dunne said. "That's something brand new, and it's really picked up since 2015." Along with Volvo, Dunne pointed to Italian tire maker Pirelli and German robotics giant Kuka as Chinese acquisitions supported by the China Outbound policy. Of course, given Trump's focus on domestic auto production and intellectual property violations by China, something tells us this particular deal will be somewhat 'complicated' politically.
Trump to present vision for U.S. strategy in Afghanistan war (Reuters) Trump Struggles to Move Past Bannon, Starting With Afghanistan (BBG) Final Plans Under Way as Solar Eclipse Nears (WSJ) Yellen, Draghi Head to Jackson Hole Amid Inflation Unease (BBG) Moscow calls U.S. visa move attempt to stir up unrest in Russia (Reuters) Cohn Solidifies Lead in Race to Replace Yellen, Economists Say (BBG) Britain confident of moving onto second phase of Brexit talks (Reuters) First Round of Talks to Revamp Nafta Reveals Friction (WSJ) Ten Sailors Missing After U.S. Warship Crash Near Singapore (BBG) ADP Rejects Board Nominees From Ackman’s Pershing Square (WSJ) Marchionne’s Fiat Review Spurs Great Wall Interest in Jeep (BBG) Sempra Energy Reaches Deal to Buy Oncor After Outbidding Berkshire (WSJ) Total Buys Maersk Oil for $5 Billion (WSJ) China Banks' Interbank Lending Falls for First Time Since 2010 (BBG) 'America First' protesters face off with opponents at California beach rally (Reuters) Texas university removes 'white supremacy' statues overnight (Reuters) China's Great Wall confirms interest in Fiat Chrysler (Reuters) Imam Emerges as Suspect in Barcelona Attack (WSJ) Lebanon foiled suicide bomb attack on Australia-Abu Dhabi flight (Reuters) Intel Says New PC Chip Is ‘Once-in-a-Decade’ Performance Boost (BBG) Uber raises Hong Kong fares amid legal tangles (Reuters) Your Car Is Now Worth Less Than You Think (BBG) Rosneft, Trafigura close $12.9 billion purchase of India's Essar Oil refinery (Reuters) Overnight Media Digest WSJ - Opening-round talks to remake the North American Free Trade Agreement revealed early fissures dividing the U.S. from Mexico and Canada, including a Trump administration proposal to require a "substantial" portion of autos and auto parts produced under the pact be made in the U.S. on.wsj.com/2ijkBlt - Sempra Energy has reached a deal to buy Oncor for $9.45 billion after swooping in to snatch the power-transmission company away from Warren Buffett's Berkshire Hathaway Inc . on.wsj.com/2iijqmf - Ten U.S. sailors were missing and five were injured after the guided-missile destroyer USS John S. McCain collided with a merchant vessel near the Straits of Malacca and Singapore, U.S. Navy officials said, making it the second destroyer accident in just over two months. on.wsj.com/2ijplHG - The Samsung conglomerate is pressing ahead with efforts to build a full-fledged prescription-drugs business, inking a deal with Takeda Pharmaceutical Co to develop novel drugs for hard-to-treat diseases. on.wsj.com/2iimI8S - Electronic Arts Inc and the National Football League are teaming up to create an annual videogame tournament aimed at a different kind of esports competitor: the player sitting at home on the couch. on.wsj.com/2ijOe66 - Jerry Lewis, the frantic funnyman whose knack for broad comedy took him from the Borscht Belt of upstate New York to the pinnacle of 20th-century stardom, has died, according to his manager. He was 91. on.wsj.com/2ij2uff FT This week UK will propose a "new and unique" court to oversee post-Brexit relations between the Britain and the European Union, as the Conservative government tries to force the pace of exit talks. BT Group Plc's EE is planning to threaten the telecoms regulator Ofcom with a High Court challenge on Monday, over its planned auction of mobile spectrum. Three asset managers -- Union Investment, Erste and Acadian -- have banned investments in German carmakers from some of their funds, after Brussels announced an investigation of alleged industry collusion. Britain's National Grid Plc has warned that using a powerful and fast electric car charger at home will trip a main fuse if owners use other "high demand" energy items, such as kettles, ovens and immersion heaters, at the same time. NYT - Prodigy Finance, the lender that makes loans to international postgraduate students, said on Sunday that it had raised $40 million in new equity financing. It also said it had secured a $200 million credit line from an undisclosed bank. nyti.ms/2vVs7pL - Preservation Foundation of Palm Beach and the Palm Beach Zoo and Conservation Society became the latest nonprofit groups to cancel galas at President Donald Trump's Mar-a-Lago Club in Palm Beach, Florida. nyti.ms/2xhMUmZ - Apple Inc, Facebook Inc and Google have signaled to Hollywood that they are serious about entering a television landscape that Netflix Inc and Amazon.com Inc shook up just a few years ago. Their arrival will make an already hypercompetitive industry even more ferocious. nyti.ms/2x5brvZ - For the past five months, a group of litigants has been trying to hold Andrew Anglin, the founder of the neo-Nazi website the Daily Stormer, to account for some of his actions. Serving him papers has been a daunting task. nyti.ms/2fXZbcG - Marketing specialists and risk management consultants predict that it would be difficult for Tiki to move past the perception that it had been embraced by racist organizations after bamboo torches produced by Tiki Brand were used to light the way by white nationalists protesting the removal of a statue of Robert E. Lee in Charlottesville, Virginia. nyti.ms/2fWTRq9 Canada THE GLOBE AND MAIL ** As the Canada-Europe free-trade deal comes into force, Maersk Line is adding new service between Montreal and ports on the Mediterranean Sea in a bid to tap new flows of goods. tgam.ca/2vRZVpu ** The United States has formally demanded the Chapter 19 dispute resolution panels favoured by Canada be scrapped from the NAFTA and broached the thorny subject of government procurement and contracting in the first round of trade talks. tgam.ca/2vRC4WF ** Former Haisla Nation chief councillor Ellis Ross has said an international consortium led by Royal Dutch Shell Plc is committed to crunching numbers to determine the economic viability of the LNG Canada project in Kitimat. tgam.ca/2vROKwL NATIONAL POST ** After controversial events were canceled at two Toronto campuses this week, Conservative Party Leader Andrew Scheer said universities have the right to decide which "outside groups" they give platforms to. bit.ly/2vRskMj Britain The Times - IVP, a venture capital firm based in Silicon Valley which has backed Snapchat, Twitter and Netflix, is understood to be in advanced talks to invest tens of millions of pounds in Transferwise. bit.ly/2ij4zrC - O2 Chief Executive Mark Evans has told BT Group Plc and Three that a dispute about the airwaves could damage the economy and harm consumers. bit.ly/2ij4Nis The Guardian - Plans to hit rail commuters with the biggest fare rises in five years will force many key workers, including nurses and teaching assistants, to quit their jobs, the biggest public-sector union Unison warned on Saturday. bit.ly/2ihrSSF - Silver Reel, the Swiss finance and production company behind films including the upcoming Breathe, Andy Serkis's directorial debut featuring Andrew Garfield and Claire Foy, is launching a 50-million-euro ($58.76-million) fund to make TV drama in Britain, taking advantage of the weakening of the pound since the Brexit vote. bit.ly/2ijrUcy The Telegraph - The Financial Times has reported a small profit for its first year under Japanese ownership, following its debt-fuelled 844 million pound ($1.09 billion) takeover by the publisher Nikkei. bit.ly/2iiLZA4 - Glennmont Partners, formerly BNP Paribas Clean Energy Partners, said the institution-only refinancing of Sleaford Biomass Plant is the largest of its kind in the sector to date. bit.ly/2iiX3Nu Sky News - IVP, whose roll-call of deals includes Snapchat parent Snap, Twitter and Netflix, is close to a deal to invest tens of millions of pounds in TransferWise. bit.ly/2ihq785 - More than a third of parents dip into their savings to fund back-to-school costs of almost 175 pounds, according to Nationwide Current Accounts' annual survey. bit.ly/2iiQ3jG
As the US awaits its first full solar eclipse since 1918, S&P500 futures, together with Asian and European stocks started off the week off fractionally in the red after the cash index fell to its lowest level in five weeks on Friday, with the "Bannon rally" fading on growing concerns about the US political situation, while tensions ratcheted up again as the US and South Korea began massive military drills and North Korea responded, threatening a “merciless strike” on the US. Markets are looking ahead to this week's Jackson Hole symposium where Mario Draghi may or may not pre-announce the start of ECB balance sheet tapering. With overnight markets doing little of note, a quick preview of today's main event: the full solar eclipse which is the first such event to cross the contiguous United States since 1918. Of the main financial centres there will be a partial eclipse in New York (c70%), Boston (c63%), Chicago (c86%) and LA (c61%). To celebrate, Royal Caribbean's week long "total-eclipse" cruise offers passengers get the best opportunity to see the event at sea, while Bonnie Tyler has been hired to perform her 1983 classic "Total Eclipse of the Heart" while the skies darken. Meanwhile, as the US waits to fade to darkness, world stocks struggled at a five and a half week low on Monday, though metals surged in Chinese trading with zinc at its highest in a decade, copper hitting a nearly three-year high and iron ore's gains in the last two sessions stretching to 5 percent. The dollar was little changed after rising from a four-month low against the yen Friday, as speculation the currency will get a boost from the Steve Bannon’s exit from the White House was offset by concern about the joint military drill in South Korea. The USD/JPY dipped in European trade, holding above a four- month low reached on Friday. Trading was muted and bids for the dollar were limited amid concerns about a new North Korean escalation/provocation/retaliation and as traders await the start of Jackson Hole, which begins Thursday. “Arguably Bannon’s departure was more about egos than policy change, but markets seem to have opted for the hopeful narrative that it is a step away from protectionist trade policies,” said Sean Callow, a senior currency strategist at Westpac Banking Corp. in Sydney. “If so, this would reduce trade tensions and limit safe haven flows into the yen.” South Korea’s won led modest gains in Asian emerging-market currencies as the MSCI EM Asia Index of stocks resumed its advance. Government bonds were mixed after a rally in U.S. Treasury yields reversed. The Bloomberg Dollar Spot Index and the yen rose. Caution before the Jackson Hole symposium late in the week means that “gains in Asian emerging currencies may be opportunistic and shallow rather than driven by conviction,” said Vishnu Varathan, head of economics and strategy at Mizuho Bank in Singapore. The Topix index slid 0.1% with volume was about 16 percent below the 30-day intraday average, while the Nikkei 225 lost 0.4% as banks and technology companies weighed on the gauges after yen’s three-day ascent against the dollar. Australia’s S&P/ASX 200 Index dropped 0.4 percent, with BlueScope Steel Ltd. tumbling as much as 23 percent after the company reported disappointing earnings. Hong Kong’s Hang Seng Index added 0.4 percent and the Shanghai Composite Index was up 0.6 percent. The MSCI Asia Pacific Index slid 0.1 percent. European stocks fell for a third session, though M&A activity helped shipping giant Maersk jump and the rally in metals sent Rio Tinto, BHP Billiton and Anglo American higher. The Stoxx Europe 600 Index fell 0.1 percent in early European trading. The MSCI All-Country World Index declined 0.1 percent to the lowest in almost five weeks on a closing basis. Germany’s DAX Index tumbled 0.4 percent. The U.K.’s FTSE 100 Index dipped 0.2 percent. The MSCI Emerging Market Index jumped 0.2 percent. Futures on the S&P 500 Index decreased 0.1 percent to the lowest in more than five weeks. While global stocks started the week generally on the backfoot, the same can not be said for industrial metals with zinc surging to the highest level since October 2007 at $3,180.50 a tonne, "Dr. Copper" rallied to $6,593 a tonne, its highest since November 2014, and nickel, used in stainless steel, gained over 2 percent to a 2017 peak. Iron ore futures soared 6.6% before Dalian Commidity Exchange imposed a daily purchases and sales limit for Jan & Feb delivery to 6000 lots. "I'm looking at the prospect for the global economy and looking at the price of metals and there seems to be a significant disconnect between the two," said CMC markets strategist Michael Hewson. "But it's certainly helping the mining sector, which has been beleaguered for quite some time." In addition to (geo)political tensions, and worries about the looming debt ceiling negotiation, Fed Chair Janet Yellen and ECB President Mario Draghi will be among the officials addressing this year’s annual conference hosted by the Kansas City Fed. The Jackson Hole summit comes as central banks in advanced economies grapple with ending years of unprecedented monetary easing, even as stubbornly tepid inflation clouds the outlook. “The key event this week is the Jackson Hole central bank policy forum which begins on Thursday,” Citigroup strategists including Peter Goves wrote in a note to clients. “The market spotlight will likely focus on Yellen, given the generally low U.S. inflation environment and the likelihood of Fed balance sheet reduction occurring relatively soon.” As the following Bloomberg chart shows, traders are starting to hedge for potential Jackson Hole-induced volatility with one-week EURUSD implied-realized vol premium rising rapidly. Comments last week from Fed officials suggested the stock market's steady rise, still low long-term bond yields and a sagging dollar are strengthening the Fed's intent to raise interest rates again this year despite caution about weak inflation. "People focus on inflation but in the Fed's minutes policymakers spend a lot of time discussing whether bond yields are too low or asset prices are too high. If Yellen questions market stability, markets will expect a tighter policy," said Hiroko Iwaki, senior bond strategist at Mizuho Securities. Oil markets steadied after big gains on Friday, which were triggered by a drop in crude inventories. WTI traded at $48.46 per barrel, down 0.1 percent, while Brent futures were down 0.2 percent at $52.63 per barrel. In rates, the 10Y U.S. Treasuries yield stood at 2.19%, having slipped on Friday to 2.162% - its lowest since late June. German Bunds were steady at 0.4 percent. Greece's government bond yields dipped early after Fitch became the second ratings agency to upgrade it to "Single B" status, marking another milestone in the debt-laden state's slow journey away from default territory. Market Snapshot S&P 500 futures up 0.1% to 2,427 STOXX Europe 600 unchanged at 373.30 MXAP down 0.1% to 159.04 MXAPJ up 0.03% to 523.33 Nikkei down 0.4% to 19,393.13 Topix down 0.1% to 1,595.19 Hang Seng Index up 0.4% to 27,154.68 Shanghai Composite up 0.6% to 3,286.91 Sensex down 0.6% to 31,351.93 Australia S&P/ASX 200 down 0.4% to 5,725.85 Kospi down 0.1% to 2,355.00 Brent futures down 0.2% to $52.62/bbl Gold spot up 0.3% to $1,288.47 U.S. Dollar Index up 0.1% to 93.51 German 10Y yield fell 1.2 bps to 0.402% Euro down 0.1% to $1.1746 Italian 10Y yield rose 0.4 bps to 1.741% Spanish 10Y yield fell 3.0 bps to 1.531% Top Overnight News Donald Trump returns to the Oval Office in danger of becoming increasingly isolated from the Republican establishment he needs to enact his agenda and the grassroots activists inspired by just-departed chief strategist Stephen Bannon U.S. utility owner Sempra Energy has agreed to buy control of Texas power distributor Oncor Electric Delivery Co. for $9.45 billion, topping a bid by Warren Buffett’s Berkshire Hathaway Inc. just last month As the world’s top central bankers gather in Wyoming this week, their relief about a stronger global economy will be tempered by a growing unease that inflation remains inexplicably low ADP’s board voted unanimously not to nominate any of Pershing Square Capital Management’s three candidates for election to the board at ADP’s 2017 annual meeting of stockholders Goldman Sachs, seeking a rebound in its commodities business after a bout of losing trades dented earnings, has a plan built around hiring fresh stars and luring new clients Money managers pushed their net-bullish bets on gold to the highest since October, and investments through exchange-traded funds also jumped, as investors seek insurance amid concern political uncertainty will derail U.S. economic growth Financial regulators should increase coordination and step up punishment for violators to crack down on regulatory arbitrage, PBOC Vice Governor Yin Yong said at a forum on Saturday U.S. Trade Representative Robert Lighthizer officially starts a probe into China’s intellectual-property practices China’s not running a trade surplus with every nation; South Korea’s $72.2 billion excess with Asia’s largest economy tops a list of more than 40 nations that export more to the country than they import from it, followed by Switzerland and Australia, data compiled by Bloomberg show Total Chases Growth With $5 Billion Purchase of Maersk Oil Sempra Bests Berkshire With $9.45 Billion Offer for Oncor Unintended Consequences of MiFID: Job Losses, Trading Turmoil? Yellen, Draghi Head to Jackson Hole With Prices Missing Goal Ten Sailors Missing After U.S. Warship Crash Near Singapore Trump Struggles to Move Past Bannon, Starting With Afghanistan China Expresses ‘Strong Dissatisfaction’ With U.S. Trade Probe Britain and EU Clash Over Brexit Timetable for Trade Deal Asian equity markets traded mostly lower with the Nikkei 225 down by 0.4% amid geopolitical tensions on the Korean peninsula. Tensions ratcheted up again as the US and South Korea were set to begin military drills. North Korea responded, threatening a "merciless strike" on the US. Nevertheless, the Kospi was relatively resilient, trading lower by just 0.14%. The ASX 200 (-0.37%) had conformed to the downbeat tone in Asia however had been driven by some major earnings throughout the majority of the session with Fortescue Metals rising over 6% after doubling their dividend. Chinese markets were higher, lifted by the telecoms sector after China Unicom confirmed a share placement to tech titans Alibaba, Tencent and Baidu. JGBs traded marginally higher after the break, after initially trading sideways for much of the morning. Some were pinning the late uptick to JPY 3.13fin of T-bill redemptions on Monday, one of only two lots of redemptions at all in August. BoJ Governor Kuroda said the Balls commitment to achieving the price goal as early as possible remains unchanged. Top Asian News Qatar Is Said to Tell Banks to Seek Overseas Funding Amid Spat Asian Central Banks Lean on Wide Mandates as Fed Eyes Tightening China Overseas Land in Talks on Potential M&A Opportunities: CEO Hermina Hospital Is Said to Pick Arrangers for $200 Million IPO Missiles in Golf Course Hurt Lotte in China as It Plans Bonds Marchionne’s Fiat Review Spurs Great Wall Interest in Jeep Brand Iron Ore Will Hold in $70s, RBC Says in a Challenge to Bears Fortescue Finds It Hard to Escape Junk Ratings Despite Debt Cuts European bourses trading with minor losses this morning with the Euro Stoxx 50 slipping 0.3%. All sectors trading in the red with financials the notable laggard this morning, BNP shares trading lower by 1.6% amid reports that Belgium could place more shares in the bank. Elsewhere, Fiat Chrysler shares are outperforming after Great Wall Motor announced that they are engaged with talks over a possible offer. Investors paying a close eye on Greek bonds this morning with yields initially edging lower after Fitch upgraded Greece to B- from CCC; outlook positive. DBRS confirmed Ireland at A (high), stable trend and confirmed Belgium at AA (high) , stable trend. German finance ministry says monthly data suggests further economic expansion; emissions scandal is a medium term risk to the economy. Top European News Rosneft, Trafigura Seal $12.9 Billion Deal for India’s Essar Oil Shell Is Said to Mull Buying Israel, Cyprus Gas for Egypt Plant Goldman Warns Euro Gains May Be Russian Bonds’ Achilles Heel Big Data Convert Channels Big Brother to Take Russia’s Pulse Bunds Underpinned as Risk Assets Suffer; Demand in UST Futures Global Ports Holding Plunges After 1H Loss on Turkish Ports Pound Vulnerable as U.K. Prepares to Provide Brexit Plan Details In currencies, it has been a calm start to the week given the quiet newsflow thus far, the greenback up marginally by 0.1% to remain within close proximity to 93.50. USD also unfazed by North Korean anger at South Korean and US forces beginning military exercises. EUR slightly offered this morning ahead of the main risk event in which Draghi is set to speak at the Jackson Hole Symposium later this week, as such positioning for this could see EUR longs reduced. As a reminder, source reports last week indicated that Draghi was set to stick to his dovish stance, which could weigh on EUR/USD. Influence of today's option expiries could grow with 720m1n and 918mln set to roll off at 1.1700 and 1.1795-118.00. JPY firmer across the board with equities taking a slight dip this morning, USD/JPY now tripping below 109.00 to hover around intra-day lows. More US political concerns with regards Trump's administration could continue to send USD/JPY lower with a possible move towards the YTD low at 108.11. In commodities, oil prices are slightly softer this morning, however do remain at elevated levels following a fall in the Baker Hughes rig count on Friday. Focus will shift towards the joint OPEC-Non-OPEC technical committee which is set to convene today. Libya's Sharara oil field (280K bpd) has been closed since Saturday because of a pipeline blockade, according to sources. Libya has declared a force majeure on loadings of Sharara crude from the Zawia terminal. Russian Energy Minister Novak said it is important that OPEC and non-OPEC members honor the oil production commitments they have made US Event Calendar 8:30am: Chicago Fed Nat Activity Index, est. 0.1, prior 0.1 DB's Jim Reid concludes the overnight wrap Good luck if you're in the US today as a rare chance to see a total eclipse beckons. Apparently this is the first such event to cross the contiguous United States since 1918. Of the main financial centres there will be a partial eclipse in New York (c70%), Boston (c63%), Chicago (c86%) and LA (c61%). If it wasn't for the fact that I'm on call to rush to the hospital at any point in the next week I'd be sorely tempted by the Royal Caribbean's week long "total-eclipse" cruise where passengers get the best opportunity to see the event at sea. The coup de grâce though is that Bonnie Tyler has been hired to perform her 1983 classic "Total Eclipse of the Heart" while the skies darken. What could be more perfect? In case my wife gives birth a few days early I googled what it means to be born under an eclipse and as usual the internet is a feast of information. Apparently Mr Trump was born under a South Node Lunar eclipse in Sagittarius. There was then a whole article about how this has impacted his personality and leadership skills. Anyway apparently babies born under solar eclipses are natural born leaders so if I get the call today I'll be earmarking them to be the first joint Prime Ministers of the UK in say 40 years time! Be warned! My wife is now under strict observations every two days with a view that the consultant might want to pull the trigger at any moment. We have a hard long stop of next Tuesday as the consultant thinks there are risks of going further than 36 weeks given all the variables and her interpretations of our regular check-ups. Fingers crossed it’s a safe and successful week. My wife and I are both bags of nerves!! There might be a few less nerves about the next few days in markets than many felt a few weeks ago. Back then, Thursday's commencement of the annual Jackson Hole Symposium seemed to be a natural place for Mr Draghi to signal that exit from QE was soon to be accelerated. However a combination of still soft global inflation data and the Euro's recent ascent has made it unlikely that the event will be a watershed moment. Expect him to be upbeat on the economy but the hawkish/dovishness indicator might be swayed one way or the other on how much attention the Euro gets in his remarks. Draghi is expected to speak in the afternoon on the 25th August, with remarks focusing on the themes of the conference. Before then, don't relax until the summit opens as Mr Draghi is warming up for the trip by speaking at the Lindau economics symposium in Germany on 23 August and as such he could front run himself! So two symposiums back to back! Impressive stuff. Our Fixed Income Strategists now actually think that the Fed could be more important at Jackson Hole. The running theme of this year’s symposium is “Fostering a Dynamic Global Economy” and the full line up of speakers and presentations will be released at 4PM EST on Thursday. It seems that Mrs Yellen will be speaking Friday morning at 10AM EST on financial stability. Our strategists noted that in the US there is a tension between softer inflation and easy financial conditions and given the topic of Yellen's speech is 'financial stability' she may lean towards prioritising one side or the other. Overall the market will probably be most sensitive as to whether a December hike is more or less likely after her comments. The imminent halting of reinvestment seems to be considered a fine deal. This morning in Asia, markets have broadly softened following leads from the US on Friday. Trading volumes are thin, with the Nikkei (-0.41%) and Kospi (-0.10%) slightly down, but Hang Seng (+0.52%) and the Chinese bourses were up c0.3% as we type. We have long planned joint South Korean-US military drills today but it's remarkable how quickly the North Korean situation has calmed down but also quite interesting that markets still closed notably lower last week. Indeed US equities were initially higher on Friday on reports that President Trump’s controversial Chief strategist, Steve Bannon had resigned, but ended the day slightly down, with the S&P (-0.18%), the Dow (-0.35%) and the Nasdaq (-0.09%). Within the S&P, the utilities and energy (+0.57%) sector posted modest gains, but was broadly offset by losses in real estate, telcos and discretionary consumers names. European markets were also lower, with the Stoxx 600 down 0.71% with all sectors in the red, led by the real estate (-1.25%) sector. Elsewhere, the Dax (-0.31%) and FTSE (-0.86%) declined modestly, but the Italian FTSE MIB bucked the trend, to be up +0.12%. Over in government bonds, yields were mixed but little changed. The UST 10y increased 1bp across the curve (2Y: +1bp; 10Y: +1bps), but core European bond yields fell 1bp at the longer end of the curve, with bunds (2Y: +0.3bp; 10Y: -1bps) and French OATs (2Y: -0.4bp; 10Y: -1bp), but Gilts (2Y: +1bp; 10Y: unch) were unchanged. Elsewhere, Italian BTPs (2Y: +1bp; 10Y: +1bp) were slightly higher in yields. Turning to currencies, the USD dollar index weakened 0.2%. The Euro gained 0.3% against both the USD and Sterling, while Sterling/USD was broadly flat. In commodities, WTI oil was up 3%, with the OPEC’s full technical committee scheduled to meet today to discuss compliance with production targets. Iron ore continued to increase, up 3.4% following signs of stronger steel demand from China. Elsewhere, precious metals were slightly down on Friday (Gold -0.3%; Silver -0.4%). This morning, other metals were modestly up (Copper +0.6%, Aluminium +1.1%) and Zinc was up 2.7% following reports that LME stock had fallen to the lowest level since 2008. Away from the markets, China’s State Council formalised its campaign against irrational acquisitions offshore last Friday, with new rules that will restrict domestic firms investing in offshore real estate, hotels, film, entertainment and sports clubs, while investments in gambling and pornography will be banned. Companies are encouraged to support domestic projects in the government’s “Belt and road” initiative. Elsewhere, Treasury secretary Steven Mnuchin has said he will stay in the Trump administration despite being urged to quit from a letter co-written by 300 of his fellow Yale graduates. We'll wrap up with other data releases from Friday. In the US, the University of Michigan’s consumer sentiment index was higher than expectations at 97.6 (vs. 94), the highest reading since January. The return in confidence should be supportive for consumer spending growth going forward. The Atlanta Fed’s GDPNow estimate of Q3 GDP growth currently stands at 3.8% saar, whilst the NY Fed’s estimate closed the week at a more restrained 2.1% saar. Sitting between those estimates but at the higher end, the St Louis Fed’s model has growth pegged at 3.5% saar. Elsewhere, Germany’s July PPI was higher than expected, at 0.2% mom (vs. 0% expected) and 2.3% yoy (vs. 2.2% expected) and Canada’s July inflation was in line at 0.0% mom and 1.2% yoy.
The global risk-off mood accelerated overnight on Trump "stability concerns", coupled with fallout from the Spain terrorist attack and lingering North Korea tensions, even if the VIX is off its latest highs, trading just above 15. Investors fled into German and U.S. Treasury bonds and bought gold for the third day in a row, as the appeal of such top-notch assets grew further due to a deadly attack that killed at least 13 people in Barcelona. "In a week where we started by worrying about nuclear war, markets have quickly moved on from this, with yesterday's weak session more of a response to fears that Mr Trump's strategy for the economy and business is falling apart and later the terrible terrorist attack in Barcelona," is how DB's Jim Reid summarized the week's psychedelic events. Concerns that Trump’s stimulus is in peril spiked following speculation that his top economic advisor, former Goldman COO Gary Cohn, was set to resign roiled markets on Thursday until reports that he’d opted to stay on board steadied the ship, however heightened terror fears added to the risk off sentiment after at least 13 people died when a van plowed into pedestrians in Barcelona. The terror attack was a reminder of lingering geopolitical risks, with nerves still raw after last week’s escalation of tensions on the Korean peninsula. USD/JPY dropped below 109.00 and EUR/JPY 128.00; EUR/USD and GBP/USD both run upside stops as USD weakens across the board. Core fixed income markets rally, curves bull flatten with 10Y bund yield falling below 40bps. Spot gold hits YTD high just below $1300/oz, while a strong close for Dalian iron ore futures once again lifts China industrial metals. ING Bank analysts predicted the dollar would remain pinned near current levels, at the expense of the yen. "Tail risks such as geopolitics, protectionism and the unwind of easy central bank money all provide valid reasons to remain cautious in chasing risk," they told clients. "Dollar/yen continues to capture this nervousness and could move down towards the 109.00 level." European stocks tumbled, with Spanish shares leading losses, as two Spanish terrorist incidents added to investor worries about U.S. policy chaos under the Trump administration. The Stoxx Europe 600 Index dropped 1% percent, reducing the weekly rebound to just 0.3%. In the US, S&P futures were largely flat while Asian dropped with the dollar on rising US political turmoil. Gold, yen and oil gained despite another weekly increase in US shale production. Credit spreads widen, iTraxx Crossover touches widest level seen during North Korea troubles. Travel and hospitality shares led the 1% drop in the Stoxx Europe 600 along with banks, while industries across the board were caught in the downturn. Spain’s IBEX index dropped more than 1 percent. Equities fell from Tokyo to Sydney earlier after the S&P 500 Index on Thursday tumbled 1.5 percent, its second-biggest drop for 2017. The VIX soared higher for the second time in one week, while core bonds across the euro region advanced. In Asia, Japan’s Topix fell 1.1% at the close, down 1.2% over the week, while Australia’s S&P/500 Index ended 0.6% lower. The seemingly impervious to anything, including nuclear war Kospi index ended barely changed 0.1 percent lower. Hong Kong’s Hang Seng Index fell 0.6%. The MSCI Asia Pacific Index lost 0.5 percent, paring gains for the week. “The terror attacks in the U.S. and Spain just add to all the other geopolitical mess,” Simon Quijano-Evans, a strategist at London-based Legal & General Investment Management Ltd., said in a note to clients. “At some stage that is likely to culminate into a more extreme market reaction.” In rates, yields have fallen in recent days following the ECB comments and amid the dash for defensive assets, with 10-year Bunds at a one-week low of 0.41 percent while 10-year Treasuries traded just off one-week lows hit on Thursday; 10Y Gilts fell one basis point to 1.075%. The turmoil also benefited gold, with spot prices for the metal rising 0.4 percent to the highest in more than two months and on track for its second week of gains. Brent crude futures rose 0.35 percent, rising off three-week lows hit on Thursday as the dollar continued to weaken and signs appeared that supply is becoming tighter in the world's biggest energy consumer, the United States. Today's data include August Michigan consumer sentiment. Deere, Estee Lauder, Foot Locker and Ascendis Pharma are among companies reporting earnings. Market Snapshot S&P 500 futures down 0.01% to 2,427.25 STOXX Europe 600 down 0.9% to 373.47 MXAP down 0.5% to 159.06 MXAPJ down 0.6% to 522.83 Nikkei down 1.2% to 19,470.41 Topix down 1.1% to 1,597.36 Hang Seng Index down 1.1% to 27,047.57 Shanghai Composite up 0.01% to 3,268.72 Sensex down 1.1% to 31,438.75 Australia S&P/ASX 200 down 0.6% to 5,747.11 Kospi down 0.1% to 2,358.37 Gold spot up 0.4% to $1,293.58 U.S. Dollar Index down 0.07% to 93.55 German 10Y yield fell 1.9 bps to 0.407% Euro up 0.1% to $1.1738 Brent Futures up 0.3% to $51.17/bbl Italian 10Y yield fell 1.8 bps to 1.737% Spanish 10Y yield rose 10.4 bps to 1.543% Top Overnight News European Union officials accepted the U.K.’s request to delay the start of the next round of Brexit talks to enable British officials to have time off on Britain’s Aug. 28 “summer bank holiday,” according to two people familiar with the plans Yellen speech at Jackson Hole confirmed for Friday, Aug. 25 at 10 a.m. New York time, topic will be financial stability; Draghi speech same day at 3 p.m. New York time Trump: advisory council for infrastructure will not move forward, according to a White House spokesperson China govt. to further limit outbound investments in foreign property, hotels, sports and gambling Barcelona: five suspected terrorists killed by police; Islamic State claims responsibility Five suspected terrorists killed by police following Barcelona attack China home prices rise in 56 cities vs 60 prev as property market cools Energy Capital Is Said to Plan $5.5 Billion Calpine Takeover Ping An Undervalued Even After 50%-Plus Gain, President Says Gap’s Old Navy Chain Keeps Retailer’s Turnaround Hopes Alive Roche, Sanofi May Move on House Democrats MS Drug Price Probe Guangzhou Auto Says No Plans to Buy Fiat Chrysler: Reuters Fed’s Kashkari repeats there’s no rush to raise rates; Kaplan urges patience, would like ’more progress on inflation’ before next hike JPMorgan Hires Chen From Deutsche Bank For Senior China Role James Murdoch to Donate $1m to Anti-Defamation League: Yahoo July U.S. Total Video Game Sales Up 19% to $588m: NPD Gap CEO Says Gap Brand ‘Stable and Steady,’ Not Yet Satisfying Bunge Expands Soy Crush in Brazil, Cites Long-Term Positive View Holidays on Hold as Bond Market Defies Usual August Slowdown Quants Deliver Swift 10% Gain on Iron Ore From New BNP Model Five Suspected Terrorists Killed After Twin Attacks on Spain Elliott Is Said to Signal Backing for $6.3 Billion Stada Buyout Merkel Jeered by Immigration Foes in Biggest Campaign Unrest Yet Applied Materials Machines in Demand as Data Use Explodes ROST Boosts FY EPS View, Midpoint Beats Est.; Shares Rise 8.4% Bulletin Headline Summary from RanSquawk European equities enter the North America crossover amid yesterday's terror incident and further turmoil in Washington JPY has been the main beneficiary in FX markets with macro newsflow otherwise relatively light Looking ahead, highlights include: Canadian CPI, Uni. Of Michigan and Kaplan In Asian trading, all major Asia-Pac indices traded in negative territory as the risk averse tone triggered by terror incidents in Spain and resignation rumours related to Trump's chief economic advisor Cohn, rolled over to the region. ASX 200 (-0.56%) dampened from the open with the largest weighted financials sector leading the declines as all big 4 banks traded with firm losses, while Nikkei 225 (-1.18%) exporters felt the brunt of the safe-haven flows into FY. Hang Seng (-1.08%) and Shanghai Comp. (+0.01%) also mirrored the global risk averse tone, although downside was stemmed in the mainland after the PBoC switched to net weekly injection in its operations vs. last week's drain and as participants mulled over the latest property price data which suggested the effectiveness of curbs to cool the over rampant sector. 10yr JGBs were marginally higher with mild support seen amid the negative backdrop in global equities, while the BoJ were also in the market for JPY 1.05fin of JGBs with maturities of up to 10yrs. Top Asian News Malaysia GDP Growth Beats Forecasts as Economy Expands 5.8% After Alibaba Bonanza, Manager Said to Plan New Asia Hedge Fund Company Founders Find Fighting Back Has a Cost in India Japan Stocks to Watch: JT, Kyoei Steel, NGK Insulators, Tosoh Iron Ore in China Ends Week With Bang as Demand Seen Holding Up Ping An’s Tech Push Undervalued by Investors, Ren Says: Q&A Conflict With Infosys’ Founders Prompts CEO Sikka to Quit U.S. Equities See Further Outflows, Europe Sees Inflows: BofAML Falling House Prices in Shenzhen Don’t Bode Well for Steel Kingsgate Surges as Thailand Lifts Gold Mine’s Suspension Across European markets sentiment has soured with the Eurostoxx falling over 1%, sector wise the losses are broad based with travel stocks among the worst performers following yesterday's terror attacks in Barcelona. Financials also taking a hit this morning after reports that banks are being sued by the FDIC over the Libor-rigging scandal. Flight to quality flow keeping EGBs afloat, the German curve is slightly bull flattening while the 10Y yield is approaching 0.4%. Peripheral debt spreads wider with the Italian 10Y yield edging higher. Top European News Commerzbank Early Retirement Offers Accepted by Almost 40% City of London Only Sign of Brexit Weakness, Kingspan CEO Says Straumann Stopped Share Sale as Investors Wanted Bigger Discount Sistema Requests Break in Hearing After New Documents Submitted Czechs Move to Strip Election Favorite of Immunity Before Vote In currenices, JPY firmer across the board amid the fall seen across equity markets and as such USD/JPY is eying 109.00 to the downside, while support in the short term is situated at 108.70-80. USD softer against its major counterparts, EUR and GBP higher by 0.25% with the later making a move to breach 1.29. However, the backdrop of Brexit continues to weigh on GBP/USD and curb the upside. CAD: Today will see the release of the Canadian CPI figures where expectations are for a slight pick-up in inflation. Although, a miss on this could see USD/CAD make a push through 1.27. In commodities, safe-haven commodities supported with gold prices moving to intra-day highs. Elsewhere, the softer USD also sees crude prices ticking up as Brent crude breaches USD 51. Another day of gains for base metals, Zinc rising near 2%. Looking at the day ahead, in the US, the University of Michigan sentiment index (94 expected) will be released. Further, the Fed’s Kaplan will speak again today. US Event Calendar 10am: U. of Mich. Sentiment, est. 94, prior 93.4; U. of Mich. Current Conditions, est. 112.9, prior 113.4; U. of Mich. Expectations, est. 81.5, prior 80.5 U. of Mich. 1 Yr Inflation, prior 2.6%; U. of Mich. 5-10 Yr Inflation, prior 2.6% DB's Jim Reid concludes the overnight wrap In a week where we started by worrying about nuclear war, markets have quickly moved on from this with yesterday's weak session more of a response to fears that Mr Trump's strategy for the economy and business is falling apart and later the terrible terrorist attack in Barcelona. The S&P 500 (-1.54%) fell sharply for its 2nd worst day of the year with the VIX surging 32.5% to 15.55, the fifth highest close of the year. We've now gone through last week's 'fire and fury' lows. The hits kept coming yesterday with speculation that Trump's key economic advisor Gary Cohn was about to resign sending an early US session shock to markets. He is seen as the glue holding Trump's pro-business agenda together. The fears are that if he goes you take a further step back from tax cuts and deregulation. Notably the VIX moved from just over 12 to nearly 13.74 in 25mins as the news swept through the markets. The story was denied and markets calmed a little but sold off sharply into the close as the shocking news broke from Barcelona that terrorists killed 13 people as a vehicle rammed into pedestrians. This morning in Asia, markets are following the negative leads from the US and are lower. The Nikkei (-1.33%), Hang Seng (-0.71%) and Chinese bourses (c.-0.2%) are all down. Elsewhere, the annual military drills between US and South Korean troops starting Monday seem to be having little impact on the markets, with the Kospi down 0.20%. Now onto the ECB minutes. They noted that “concerns were expressed about the risk of the (Euro) overshooting in the future” and that policy makers discussed making “incremental” changes to their forward guidance. Later on, Draghi told reporters that the incoming data confirmed the strength of the Eurozone economy, but on inflation “we need to be persistent and patient, because we’re not there yet…” and “a very substantial degree of monetary accommodation is still needed for underlying inflation pressure to gradually build up”. Members have retained their pledge to the asset purchase program and Draghi noted later that “the last thing that the council may want is an unwanted tightening of the financing conditions”. Given the focus on the Euro and Draghi, DB’s Mark Wall has just published a report highlighting the spectrum of Draghi’s comments on the exchange rate since becoming the President of the ECB. Draghi will speak at the Jackson Hole meeting but is not now expected to set expectations for the timing of a decision on QE. That said, Mark argues that Draghi’s view on the macro should be no more cautious than he was back at the July ECB council meeting. Across the pond, the Fed has confirmed that Yellen will speak on the topic of financial stability at next week's Jackson Hole symposium. Back to the market’s performance yesterday. US equities have all weakened, with the S&P (-1.54%), the Dow (-1.24%) and the Nasdaq (-1.94% and marking the third largest daily decline in 2017). Within the S&P, all sectors were in the red, with the financials hit harder (BAC -2.27%; WFC -1.69%), in part as nervousness around Cohn hit the sector as he is expected to help deliver tax cuts, an easing in bank regulations and drive bond yields higher. European markets were also down, the Stoxx 600 fell -0.6%, with all sectors excluding utilities in the red. Similarly, financials were also more impacted, with large banks down -1.5% to -2.5%. Across the region, the DAX (-0.49%), FTSE 100 (-0.61%), CAC (-0.58%) and the Italian FTSE MIB (-0.89%) all fell. Bond yields also fell in both US and Europe, with the UST10y down 4bps and core European yields down 2bps. Across the region, the decline in bond yields were fairly uniform at the long end of the curve, with bunds (2Y: +1bp; 10Y: -2bps), Gilts (2Y: -1bp; 10Y: -2bps) and OATs (2Y: +1bp; 10Y: -2bps) all lower i yield even if at the 2y part of the curve, changes were a bit more mixed, but little changed. This morning, UST10y has reversed a little, with yields back up 1.6bps. Turning to currencies, earlier in the day the USD had strengthened against the euro, with EUR/USD down as much as -1%, but the aforementioned developments in the US saw the dollar retreat and allow the Euro to close down -0.4% for the day. Elsewhere, Euro/Sterling and Sterling/USD both dipped 0.2%, while the US dollar index finished +0.1% higher for the day. In commodities, WTI pared back from three consecutive days of losses to be up +0.7% yesterday. Precious metals were little changed (Gold +0.4%; Silver -0.5%), while industrial metals increased on the back of traders speculation of tighter supply (Copper +2.3%, Zinc +4.6%, Aluminium +2.5%), although some of the gains were offset this morning. Away from the markets and the Gary Cohn story, tension continues to grow in US politics and may add to doubts on Trump’s pro-growth reforms. Republican senator Corker has told reporters that “..the president needs to….move away beyond himself…move to a place where daily he’s waking up thinking about what is best for the nation.” Further, another Republican senator Scott said “what we want to see from our president is clarity and moral authority.” Elsewhere, Trump was also busy himself, twitting “publicity seeking (Republican senator) Graham falsely stated that I said….such a disgusting lie.” and that Republican senator Flake is “toxic” and a “non-factor in the senate”. Elsewhere, the German Constitutional Court has raised concerns that ECB’s public sector purchase program (PSPP) might violate the prohibition of monetary financing in EU law. The highest German court has referred the complaint to the European Court of Justice (ECJ) for "preliminary ruling". DB’s Boettcher does not expect an ECJ decision on the motion before Q1 2018. This could push a final verdict by the GCC into late 2018, thus into a period when we expect the ECB to have progressed on winding down QE. Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. In the US, data was mixed but broadly in line. The July industrial production was a tad lower at 0.2% mom (vs. 0.3% expected), whilst manufacturing output fell 0.1% mom (vs. 0.2% expected), with the 3.6% mom decline in auto production (the third consecutive monthly decline) being the biggest weight in the month. Elsewhere, the Philadelphia Fed business index was higher than expected at 18.9 (vs. 18) and the July conference board leading index was in line at 0.3%. Employment indicators remain solid, with initial jobless claims at 232k (vs. 240k) and continuing claims at 1.953m (vs. 1.955m). Across the pond, UK’s July retail sales was higher than expectations at 0.5% mom for exauto (vs. 0.1% expected) and 1.5% yoy (vs. 1.2%). Elsewhere, the Eurozone’s July inflation was in line at -0.5% mom, while the final inflation reading was unchanged at 1.2% yoy (core inflation). The French unemployment rate edged down to 9.2% in 2Q, meeting market expectations. Looking at the day ahead, the German PPI’s will be out as this note is published, then the Eurozone’s June current account stats and construction output data are due. In the US, the University of Michigan sentiment index (94 expected) will be released. Further, the Fed’s Kaplan will speak again today.
Trump policy doubts, weak inflation to weigh on Wall Street (Reuters) Trump Remarks on Violent Rally Rattle Aides, Risk Agenda (WSJ) Trump blasts Republican senators over Charlottesville criticism (Reuters) Trump's crisis spurs talk of White House departures (Reuters) Apple denounces neo-Nazis as Spotify bans ‘white power’ tracks (Guardian) The 48 Frantic Hours Before CEOs Broke With Trump (BBG) ECB Officials Expressed Concern Over Risk of Euro Overshoot (BBG) Euro dives to three-week low after ECB points to overshoot (Reuters) Saudi Crude Exports Fall Just as Domestic Stockpiles Dwindle (BBG) Goodbye contango? Oil's long march toward backwardation (Reuters) North Korea shows the Capitol Building being obliterated by red missiles (Daily Mail) What will Kim do next? Sixth nuclear test seen critical for North Korea (Reuters) Robert Mueller May Not Be The Savior The Anti-Trump Internet Is Hoping For (NPR) U.S. General Says Trump Has Final Say on Unilateral Korea Strike (BBG) The Growing List of Money Managers Cutting Their Exposure to Junk Bonds (BBG) Despite Economic Growth, Many in Europe Still Lack Steady Jobs (WSJ) For Bull Market in U.S. Stocks, You’re Only as Young as You Feel (BBG) Alibaba beats on earnings as e-commerce remains core revenue driver (Reuters) Bannon Says He Fights Mnuchin, Cohn Daily for Tough China Policy (BBG) Henry Hub Emerges as Global Natural Gas Benchmark (WSJ) Wal-Mart Sales Rise as Retailer Dodges Industry Malaise (WSJ) Overnight Media Digest WSJ - Business leaders disbanded two CEO councils created by the White House, a move they said was protesting Donald Trump's failure to sufficiently condemn racism, marking a dramatic break between U.S. companies and a president who has sought close ties with them. on.wsj.com/2w3vk9d - Apple Inc has set a budget of roughly $1 billion to procure and produce original content over the next year, as the iPhone maker shows how serious it is about making a splash in Hollywood. on.wsj.com/2w3Njwm - Facebook Inc dismantled a popular anonymous discussion board for employees last year that had become a forum for conservative political debate that sometimes degenerated into racist or sexist comments. on.wsj.com/2w3zOMU - Recent moves by tech companies including Alphabet Inc's Google, GoDaddy Inc, Uber and GoFundMe to crack down on white supremacists thrust them into unusual territory for corporations that often take a more hands-off approach. on.wsj.com/2w3R19g - President Trump's comments faulting both sides in Saturday's deadly white nationalist protest in Virginia rattled his staff and risk setting back his policy agenda in Congress. on.wsj.com/2w3LqQ5 FT - The Energy & Utilities Alliance, a group of energy companies, is pressing a Parliamentary inquiry into the consequences of the closure of Centrica Plc's Rough storage site off the Yorkshire coast. - Amazon.com Inc has boost its UK investment with new fulfilment centre in Bristol that will create 1,000 new permanent jobs. Ahead of the facility's opening which is slotted for 2018, Amazon will begin recruiting operation managers, engineers, human resources specialists. - An official data published on Wednesday shows the number of EU nationals working in the UK has hit a record high with an estimated 2.37 million EU workers. This is the highest figure since records began two decades ago and was driven by a large increase in the number of Bulgarian and Romanian citizens who have found employment in the UK. - Hedge fund Elliott Management acquired a specific class of debt worth about $60 million from Fidelity Investments that gives it the power to approve or block Berkshire Hathaway Inc's $18 billion agreement to buy Oncor. NYT - U.S. President Donald Trump announced that he would dissolve two councils of business leaders after a decision by the members of his Strategic and Policy Forum to disband. nyti.ms/2fMFB36 - A growing number of Federal Reserve officials see a need to adjust the central bank's assumptions on the economy, according to an account of the latest policy meeting. nyti.ms/2fMj2eT - Eboni Williams, a host of the show "the Specialists" on Fox News, derided Trump in exceptionally blunt terms over his response to the violence at a white supremacist rally in Virginia on Saturday. In the days since her segment aired, Williams said she had received nearly 150 menacing messages from people who denounced her remarks and called her a traitor, a racist, a "disgrace," and anti-American. nyti.ms/2fNFPH2 - The Trump administration opened talks with Canada and Mexico on the North American Free Trade Agreement by asserting that the current deal had failed. nyti.ms/2fMP7Dg - Some of China's biggest technology players are backing a plan to invest nearly $12 billion in one of the country's telecommunications giants, China Unicom Hong Kong Ltd, the latest move in a broader government push to shake up the country's bloated state-run companies. nyti.ms/2fMH3lP Canada THE GLOBE AND MAIL Fidelity Investments Canada ULC is gearing up to enter the crowded market for exchange-traded funds, with the company on the hunt for an executive to develop ETFs to sell in this country. tgam.ca/2vLtwPw The Saudi Arabian government is defending the recent deployment of Canadian-made armoured vehicles against residents of the kingdom's eastern province, saying security forces found it necessary to use "military equipment" to fight terrorists who threatened the safety of its population. tgam.ca/2w4qlVJ The federal government has pledged more than C$21 million ($21.00 million) in humanitarian assistance to help respond to an unprecedented famine in Yemen and parts of Africa, matching donations made by Canadians to registered charities earlier this year. tgam.ca/2w4b3A9 NATIONAL POST The executive chairman of Sears Canada Inc, Brandon Stranzl, has stepped down in order to focus on making a bid for the insolvent retailer, currently operating under court protection. bit.ly/2w54sWo Grocery chain Loblaw Companies Ltd and Canadian Imperial Bank of Commerce have terminated their 19-year President's Choice Financial partnership as the bank unveiled its own digital brand on Wednesday. bit.ly/2w4CEkK Britain The Times - The U.S. government has filed what could be the largest Libor scandal-related lawsuit yet against some of Britain's biggest lenders, alleging that their role in rigging borrowing rates had played a part in the collapse of American banks once worth more than $400 billion. bit.ly/2w2StIX - The Financial Reporting Council said that it had fined PwC an initial 6 million pound ($7.73 million) and had severely reprimanded it for "extensive" misconduct relating to RSM Tenon Group Plc. bit.ly/2w2StIX The Guardian - U.S. President Donald Trump was forced to disband two White House business councils disintegrating around him on Wednesday in the wake of his controversial remarks about the weekend violence in Charlottesville. bit.ly/2w3lt31 - Figures from the Finance and Leasing Association, which represents about 86 percent of borrowing against vehicles in UK, show the number of used cars bought using finance increased by 7 percent in June compared with the same month a year ago. bit.ly/2w3lt31 The Telegraph - Activist investor Elliott Advisors has shelved its legal battle against Dulux maker Akzo Nobel NV after its bid to oust the company's chairman was last week rejected by a Dutch court. bit.ly/2w2rJIu - Fiat Chrysler Automobiles NV is signing up to the group of BMW, Intel Corp and Delphi Automotive Plc and Continental AG to develop systems for self-driving cars. bit.ly/2w3srFs Sky News - The bakery chain Greggs Plc is in talks to join a truck cartel claim being brought by the Road Haulage Association which could total almost 4 billion pounds ($5.16 billion). bit.ly/2w3n74W - Billing blunders by energy firms cost customers more than 102 million pound ($131.47 million) last year in the UK, figures reveal. A survey by energy switching site uSwitch found around 1.3 million households were overcharged by an average of 79 pound ($101.82) each by suppliers -- and some are still waiting for a refund. bit.ly/2w31AJt The Independent - Amazon.com Inc has unveiled plans for a new warehouse near Bristol in Britain that is set to create over 1,000 jobs in a bid to meet growing customer demand. The online retail company says it will start recruiting engineers, operations managers, HR and IT specialists in 2018 ahead of the Severn Beach site's opening next year. ind.pn/2uHY9YJ - The UK Government is preparing a crackdown on the rapidly increasing proportion of top degrees being awarded by universities, amid fears that the value of higher education is being eroded. ind.pn/2w2NXKk
Two weeks ago we reported that July auto sales were a disaster: recall sales for bloated with inventory GM were down 15% YoY, Ford off 7% and Chrysler down 11% - despite record incentive spending - as overall auto sales declined and disappointed for yet another month. And yet, according to this morning's retail sales report from the Census Bureau, sales for "motor vehicle & parts stores" rose much more robustly than anyone had anticipated, rising 1.2%, the fastest pace since December. This number was so bizarre, and so out of context with recent sales data, that SouthBay Research threw up all over it in its morning note today. Here's why: Retail Sales m/m: 0.6% Retail Sales ex Autos m/m: 0.45% Retail Sales ex Autos & Amazon m/m: 0.3% Consumer Retail Spending was Actually Mild, As Expected Auto Sales growth unbelievable Amazon Prime Day juiced the results Don't believe the auto sales data. Per the BEA, unit sales were flat m/m (+90K). Meanwhile, per JD Power, July average retail prices were $950 lower than June's as auto dealers struggled to make sales and incentives averaged $3.9K, the highest on record and $100 higher than June. Hmmm, no rise in auto sales per the real world and the BEA. Coupled with a fall in net prices. But in fantasy land, the Census Bureau announces a $1.2B m/m jump in sales and a 7%+ y/y rise. Amazon Prime Day Was Huge...and will Cut August Sales Nonstore Retail Sales jumped $700M m/m. That's the Amazon Prime Day effect. I modeled it lower and that's the source of my miss this month Reasons for Caution: Government Data is Overstating Reality The Retail strength does reinforce my view that macro data favors the US in 2H and that the dollar is oversold. But the Retail headline figure is wrong and analysts were correct: consumer spending as captured by Retail is sluggish. The fact that reality is badly captured by the Retail figures is concerning insofar as it affects the Fed's decision making. The opportunity is to recognize that consumer spending in the real world will pull back and it will also be missed by the official data. With Consensus unprepared for the pull back, it will deliver a greater shock. Meanwhile, here's a quick look at SouthBay's proprietary "Vice Index." For those who are unfamiliar, the vice index tracks US consumer spending on alcohol, marijuana, prostitution and gambling, Vices are a special form of discretionary spending that is highly sensitive to near-termeconomic conditions: i) Cash based: depends on free cash flow; ii) Luxury spending: wants not needs; iii) Significant dollar amount: not pricey but not cheap. Vice spending is broadly representative of the US consumer: i) Broad-based: Every socioeconomic and demographic group participates; ii) High-volume transactions: Over 100M discrete events per year. The reason why this index is of particular interest, is because vices predict retail spending with a 4-month lead. Luxury spending is the 1st thing to be affected by changes in household finances. This is what the index shows:
After learning over the weekend that Trump plans to call for an investigation into China over allegations that the nation violated U.S. intellectual property rights and forced technology transfers, we learn that several Chinese companies may have submitted bids for Fiat Chrysler (FCA) in a deal that would include the company's iconic Jeep brand. According to AutomotiveNews, at least one Chinese automaker made a bid earlier this month for FCA at a slight premium to the company's prevailing market price but it was rejected for being too low. Representatives of a well-known Chinese automaker made at least one offer this month to buy Fiat Chrysler Automobiles at a small premium over its market value, Automotive News has learned. The offer was rejected for not being enough, a source said. Meanwhile, other sources independently identified executives from other large Chinese automakers conducting their own due diligence on a potential purchase of FCA, including meeting last week with representatives of U.S. retail groups about a potential acquisition. A source said FCA executives have traveled to China to meet with Great Wall Motor Co. And Chinese delegations were seen last week at FCA's headquarters in Auburn Hills, Mich. It's unclear which Chinese automaker or automakers are pursuing FCA. Different sources have pointed to involvement by different ones — Dongfeng Motor Corp., Great Wall, Zhejiang Geely Holding Group or FCA's current joint venture partner in China, Guangzhou Automobile Group. But it is also unclear which company or companies are likely to follow through or succeed. Unsurprisingly, FCA isn't talking, nor are any of the four Chinese automakers. But if a sale proceeds, the quintessentially American Jeep brand — once owned by the Germans and most recently by the Italians/Dutch — may soon be owned by the Chinese. According to AutoNews, any sale likely would involve FCA's highly profitable Jeep and Ram brands, as well as Chrysler, Dodge and Fiat, but would exclude Maserati and Alfa Romeo which would be spun off. Interest from China comes amid a push by the government to acquire international assets in order to gain further access to markets outside China. A government directive dubbed China Outbound pushes Chinese businesses to acquire international assets from their industries and operate them "to make their mark," much as Geely has done since acquiring Volvo in 2010. Bloomberg reported last week that Chinese companies plan to spend $1.5 trillion acquiring overseas companies over the next decade — a 70 percent increase from current levels. "Right now, Chinese automakers enjoy the full support of the leadership in Beijing to go and make it happen," Dunne said. "That's something brand new, and it's really picked up since 2015." Along with Volvo, Dunne pointed to Italian tire maker Pirelli and German robotics giant Kuka as Chinese acquisitions supported by the China Outbound policy. Of course, given Trump's focus on domestic auto production and intellectual property violations by China, something tells us this particular deal will be somewhat 'complicated' politically. That said, FCAU shareholders seem to be somewhat optimistic this morning...
Совместно с РБК начинаем уникальный эксперимент, какого не было в мировой деловой практике. Трансформация большой компании в прямом эфире. Каждую неделю - актуальные, живые, снабжённые цифрами и фактами статьи о Трансформации Билайна. Каждую неделю - не только о хорошем и о том какие мы молодцы, обязательно о том, где мы допустили ошибки или прямо говоря зафакапились. Каждую неделю - о том, что произошло, происходит и будет происходить на пути больших изменений.Это не кейс, в котором заранее все известно. Это не кейс, в котором все уже в прошлом. Это не кейс, в котором читателю нельзя ничего изменить. Включайтесь. Критикуйте. Помогайте. Советуйте. Открываю в соцсетях для этого новый тег #ТрансформируйсяИлиУмри. Об этом моя первая статья с аналогичным названием. Начинаем!Нам по жизни спокойнее и комфортнее, если все происходит как-то эволюционно, без рывков и потрясений. Но в реальной жизни такая комфортная стратегия не дает никаких преимуществ. Ни человеку, ни организации. На самом деле такая эволюционная стратегия приводит к самым печальным результатам. Рано или поздно.Самая эффективная и при этом безусловно очень рискованная стратегия в бизнесе, особенно в трудные времена, — это кардинальная, глубокая, порою очень болезненная и всегда трудная Трансформация.Когда без Трансформации не обойтисьВ принципе, изменения в окружающем мире происходят постоянно и изменения в Компании должны стать просто частью процесса, частью культуры. Но есть пять простых признаков, когда нужно начинать Трансформацию немедленно, прямо сейчас. Или угасание, жалкое существование, или, еще хуже, смерть бизнеса неизбежно придут рано или поздно.#1Компания долгое время теряет позиции на рынке своим конкурентамЭто очевидный случай, когда нужно начинать прямо сейчас. Если Компания последовательно и неизбежно теряет позиции на рынке, теряет Клиентов, то спасением может быть только радикальная Трансформация. Таких примеров в истории огромное количество — Chrysler в автомобильной индустрии в 70-е годы 20 века до прихода Ли Якокки, Apple до возвращения Стива Джобса в компанию. И этот список можно продолжать почти до бесконечности.Если падаешь на рынке, проигрываешь конкурентам , то твой путь — радикальная Трансформация.#2Бизнес-модель в индустрии кардинально меняетсяЭта ситуация гораздо более серьезная, чем описанная выше. Ведь остановить падение по отношению к конкурентам гораздо проще, чем остановить структурные изменения в целой индустрии. Посмотрите как стремительно поменялась бизнес-модель в индустрии car on demand, когда Uber и подобные сервисы просто меняют правила игры и все начинает работать совершенно по-другому.В телекоммуникационной отрасли все происходит чуть медленнее, но тоже все очень сильно меняется. Сервис для Клиента все больше не просто связь и подключение к интернету, а то, что можно сделать с помощью девайса и мобильного приложения. Телекоммуникационные компании все больше теряют связь с Клиентом, на их место приходят OTT (over the top) сервисы — Facebook, WhatsApp и подобные им приложения.Если в индустрии меняется бизнес-модель — жди беды и начинай Трансформацию прямо сейчас, иначе будет поздно.#3Новые технологии приходят и все меняетсяЭто продолжение того, что описано в #2, потому что бизнес-модель, собственно, тоже технология — технология взаимодействия субъектов. Новые технологии создают другие возможности для того, чтобы делать то же самое для Клиентов, но гораздо более эффективным способом или делать что-то совершенно новое для Клиентов. Технологии гидроразрыва пласта, поставленные на поток в массовом порядке, кардинально изменили ландшафт нефтяной индустрии, позволив осваивать месторождения нефти и газа, которые до этого были вообще не месторождениями, по сути. А сейчас дают большое количество нефти и газа и меняют расклад сил в индустрии, кардинально влияют на баланс спроса и предложения. Технология 3G в индустрии мобильных телекоммуникаций кардинально изменила рынок, поскольку сделала скорости мобильного интернета приемлемыми для того, чтобы свободно смотреть сайты, пользоваться почтой, картами и смотреть видео. Это кардинально изменило самого Клиента, его привычки и способы коммуникаций. Те, кто это пропустили — сильно потеряли. Те, кто это увидел и начал двигаться раньше — выиграли. Но дело даже не том, чтобы традиционные телеком-игроки вовремя начали развитие 3G. Дело в том, что скоростной мобильный интернет запустил целую цепочку революционных преобразований в огромном количестве индустрий, не только в телекоме. Uber, например, был бы мертворожденным ребенком, если бы не было мобильного интернета.Если появляются новые технологии, которые меняют традиционные представления о том, как делать бизнес и что предоставлять Клиенту, — Трансформируйся или умри.#4Темпы роста доходов в индустрии падают с каждым годомЕсли темпы роста индустрии падают с каждым годом и даже если они все еще имеют положительные значения — жди беды и готовься к худшему. Посмотрите, как взлетела и потом поэтапно сокращалась в темпах роста индустрия по производству компьютеров. Вспомните, какими яркими брендами, звездами корпоративного рынка Америки и всего мира были еще каких-то пятнадцать-двадцать лет назад компании по производству компьютеров — Dell, Compaq, IBM, HP. Но сейчас все по-другому. Потому что индустрия поменялась в связи со спросом. И выиграл тот, кто вовремя сориентировался — кто-то сменил индустрию и вовремя полностью вышел из этого бизнеса (IBM), кто-то продолжает сражаться, радикально меняя бизнес-модель (Dell), кто-то диверсифицировался настолько, что перестал быть чисто производителем компьютеров, и преуспел (Apple). Но те, кто не менялись, погибли — их купили и они трансформировались принудительно после покупки (Compaq) или полностью растворились.Если индустрия начинает двигаться к стагнации в доходах — затевай Трансформацию в своей Компании.#5Маржинальность и количество зарабатываемых денег в индустрии сокращаетсяВыручка от твоих услуг, конечно, хороший индикатор для того, чтобы вовремя понять, когда и насколько радикально нужно меняться. Есть еще один не менее важный показатель, который определяет здоровье и любой компании, и целой индустрии — это сколько в конечном итоге остается денег на конце. То есть кэш после всего, что ты заработал на Клиенте и отдал другим для того, чтобы можно было заработать. В конечном итоге если кэша на конце нет, то компания и целая индустрия не может жить бесконечно долго, этому точно придет довольно печальный конец.Если маржинальность бизнеса и количество генерируемых денег неуклонно сокращается (для большинства компаний из интернет-бизнеса это, скорее, показатель темпов сокращения отрицательного денежного потока), то надо что-то делать. Суровые законы экономики таковы, что сокращающийся положительный денежный поток легко может стать отрицательным. Для него переход нулевой отметки не является чем-то экстраординарным. Бизнес не является безубыточным по определению, за исключением индустрий, где государство регулирует тарифы по модели “Затраты+”. Но такие индустрии мы не берем в расчет — это самые ужасно скучные и непривлекательные индустрии в мире. Это вообще не бизнес по сути.Бизнес в любом массовом ритейле, где чувствительность к маржинальности крайне большая, может быть убит падением маржинальности даже при росте выручки. Именно поэтому ритейл все больше идет в интернет и онлайн продажи, где затраты на предоставление Клиенту того же сервиса при правильном подходе существенно меньше.Мастодонты digital-бизнеса, самые дорогие стартапы в свое время, не находя возможностей монетизации и зарабатывания денег, разоряются, если вовремя не прислоняются к более крупным игрокам, у которых модель зарабатывания денег уже сформирована и развивается. И дальше больше! Потому что жить постоянно в убыток, без света в конце туннеля по зарабатыванию денег или возможности продажи тому, кто уже знает, как зарабатывать, невозможно.Поэтому, если компания и целая индустрия начинает меньше зарабатывать денег — надо что-то менять. И менять серьезно! К сожалению, как правило, в таких ситуациях компании выбирают более легкий путь и сваливаются в усиление “доения” своих действующих Клиентов. Поднимают цены или ограничивают уровень сервиса. Что лишь усугубляет проблему и создает критическую угрозу для будущего. А там не за горами и #1, усугубленный всеми остальными пунктами.Поэтому, если маржа падает и зарабатываемый кэш тает — начинай Трансформацию.Достаточно только одного совпаденияЧтобы сильно озаботиться проблемами вашего бизнеса, не нужно ждать, когда все из признаков случатся. Любой из этих признаков — уже серьезный звонок для начала изменений. Если звонят все — то, боюсь, уже поздно. Вы что-то пропустили какое-то время назад. И чем тяжелее ситуация, тем радикальнее и быстрее нужно действовать.Действуйте прямо сейчас. И получите удовольствие и от самого процесса изменений, и от его результатов, если получится.Ваш Михаил СлободинЕсли статья оказалась интересной — поделись. Мне будет приятно и другим читателям будет понятно, что это действительно полезно и интересно.