rss

European Indices end the session with mixed results

Yields lower after weaker PMI data. ECB ahead tomorrow

The European stocks are endiing the session with mixed results after weaker PMI data and ahead of the ECB meeting tomorrow (do they cut?).
The provisional closes are  showing:
  • German DAX, +0.3%
  • France’s CAC, -0.2%
  • UK UK’s FTSE, -0.6%
  • Spain’s Ibex, +0.7%
  • Italy’s FTSE MIB, +0.57%
In the  benchmark 10 year notes, yields are ending the session lower, with Italian bonds enjoying strong demand today (-10.9 basis points).  France’s yields traded to a record low at -0.126%.
Yields lower after weaker PMI data. ECB ahead tomorrowIn a sign of the apocalypse, investors now accept a lower yield on Greek 10 year debt vs US 10 year debt.  Greek 10 year yield is at 1.992% while 10 year yields in the US area at 2.048% currently.
Greek 10 year yields are now lower than US 10 year yields

Nissan to post 90% profit drop and cut thousands more jobs

— Nissan Motor is expected to report a more than 90% plunge in first-quarter operating profit on Thursday, Nikkei has learned, and will cut up to 7% of its global workforce as it braces for one of the worst years in a decade.

Operating profit in the April to June period will come in at less than 10 billion yen, down from 109.1 billion yen ($1 billion) for the same period a year earlier.

The Japanese automaker issued a statement saying that it expects the result “to be close to the figure reported” in the Nikkei article, which it described as “speculative.”

Sales in the U.S., one of Nissan’s biggest markets, continue to fall, while the costs of developing electric vehicles and autonomous driving technologies are weighing heavily on profits.

The company is now scrambling to reduce production capacity and intends to increase the planned 4,800 job cuts announced in May to more than 10,000 out of a 139,000-strong workforce.

Data from QUICK FactSet shows the automaker’s operating profit also fell below 10 billion yen for January to March. The last time Nissan’s operating performance dropped so sharply was in January-March 2009, when the company recorded a loss of 200 billion yen.

Nissan is scheduled formally to announce the first-quarter results on Thursday afternoon. (more…)

Euro hits fresh lows after bleak German data precedes ECB rate call

The euro hit a fresh two-month low after more disappointing economic data highlighted the currency area’s struggle with weak economic growth.

After another contraction in Germany’s manufacturing sector, according to purchasing managers’ data for July, the euro fell to levels it last touched in late May, down 0.2 per cent at $1.1123. It last closed under that level in mid-2017.

The numbers came in the run-up to Thursday’s hotly anticipated monetary policy call at the European Central Bank. It is expected to pave the way for a return to stimulus at the meeting, in an effort to energise the eurozone’s anaemic economy.

There was a rally for German government debt on the prospect of more stimulus, while the uncertain economic outlook also highlighted the relative safety of Bunds, sending yields toward record lows. The 10-year Bund yield touched minus 0.383 per cent, down 2.6 basis points.

Frankfurt’s Xetra Dax 30 touched a fresh two-week high, helped by a recovery for industrial stocks.

London’s FTSE 100 came off a three-day rally, dropping 0.8 per cent. It was hit by falling metals stocks, which tracked lower iron ore prices, with production expected to resume at a major Brazilian mine.

A resurgent sterling also knocked UK stocks. The pound regained 0.4 per cent to trade at $1.2484 as investors watched events in Westminster on Boris Johnson’s first day as prime minister.

Wall Street’s S&P 500 slipped 0.2 per cent after a series of lacklustre earnings and as investors were faced with the prospect of government scrutiny of the technology sector.

The caution also came as investors measured further signs of an economic slowdown against optimism on US-China trade negotiations.

The IMF on Tuesday lowered its forecast for global economic growth by 10 basis points to 3.2 per cent for this year — the weakest rate of expansion for a decade — and 3.5 per cent for 2020. It cited risks from Brexit as well as global trade tensions.

Hopes for improved relations between the US and China came after it emerged that top Washington officials were seeking to reignite trade talks.

Hong Kong’s Hang Seng index added 0.6 per cent and mainland China’s CSI 300 was up 0.8 per cent.

China reportedly gives the go-ahead for US soybean purchases as goodwill

The Chinese government gives the green light for five companies to buy up to 3 million tons of US soybeans

The purchase will be free of retaliatory import tariffs as trade negotiations are set to continue next week, Bloomberg reports citing people familiar with the situation.

The action here will be part of a goodwill gesture towards the US and there could be a second round of exemptions depending on how talks progress.
As mentioned before, agricultural purchases is something China will have no problem with in dealing with the US on trade but it is the more structural issues that are causing the disagreement between both parties. As such, don’t expect markets to really jump on the news here.

Wisdom from Gerald Loeb

1. The most important single factor in shaping security markets is public psychology.

2. To make money in the stock market you either have to be ahead of the crowd or very sure they are going in the same direction for some time to come.

3. Accepting losses is the most important single investment device to insure safety of capital.

4. The difference between the investor who year in and year out procures for himself a final net profit, and the one who is usually in the red, is not entirely a question of superior selection of stocks or superior timing. Rather, it is also a case of knowing how to capitalize successes and curtail failures.

5. One useful fact to remember is that the most important indications are made in the early stages of a broad market move. Nine times out of ten the leaders of an advance are the stocks that make new highs ahead of the averages.

6. There is a saying, “A picture is worth a thousand words.” One might paraphrase this by saying a profit is worth more than endless alibis or explanations…prices and trends are really the best and simplest “indicators” you can find.

7. Profits can be made safely only when the opportunity is available and not just because they happen to be desired or needed.

8. Willingness and ability to hold funds uninvested while awaiting real opportunities is a key to success in the battle for investment survival.-

9. In addition to many other contributing factors of inflation or deflation, a very great factor is the psychological. The fact that people think prices are going to advance or decline very much contributes to their movement, and the very momentum of the trend itself tends to perpetuate itself.

10. Most people, especially investors, try to get a certain percentage return, and actually secure a minus yield when properly calculated over the years. Speculators risk less and have a better chance of getting something, in my opinion.

11. I feel all relevant factors, important and otherwise, are registered in the market’s behavior, and, in addition, the action of the market itself can be expected under most circumstances to stimulate buying or selling in a manner consistent enough to allow reasonably accurate forecasting of news in advance of its actual occurrence. The market is better at predicting the news than the news is at predicting the market

12. You don’t need analysts in a bull market, and you don’t want them in a bear market.

Reports Deutsche Bank missing out on 500 million euros in income due to problem derivatives

Reuters cite unnamed source (“three bank insiders”) for this

  • Deutsche Bank missing out on 500 million euros in income due to problem derivatives
  • plans auction of equity derivatives portfolio
  • Deutsche Bank long-dated derivatives will be hard to sell without discounts

Reuters on Deutsche Bank turnaround strategy

  • rests in large part on shedding 288 billion euros of unwanted assets
  • Three bank insiders said it will take years, tying up capital that could have generated income of 500 million euros ($557 million) a year

BRB with a link for more

Deutsche Bank

When you are trading crypto, who has time to eat? Even with Warren Buffett

Justin Sunfounder of the cryptocurrency platform TRON and current CEO of BitTorrent had bid $4.57 million to have lunch with legendary investor Warren Buffett.

But he has postponed his lunch date!
Chinese media (Caixin) reported that there have been calls for an investigation into Sun. In which case Chinese  could prevent him leaving the country for anywhere between a month to a year. The report said Sun’s whereabouts were unknown
Sun posted a video of himself in San Francisco (debate rages if its fake or not) to prove he had not been detained in China. Apparentlly he didn’t keep the lunch appointment as he is ill.
Get well soon!
Justin Sunfounder of the cryptocurrency platform TRON and current CEO of BitTorrent had bid $4.57 million to have lunch with legendary investor Warren Buffett.