November 14, 2019 - Financial Occultist

Yields are mixed

The major European stock indices are closing the day mostly lower. The provisional closes are showing:

German DAX, -0.32%
France’s CAC, -0.11%
UK’s FTSE 100, -0.67%
Spain’s Ibex, -0.17%
Italy’s FTSE MIB, -0.41%

A look at the benchmark 10 year yields is showing a mixed picture with Germany France and UK yields moving lower, while the more risky Spain Italy and Portugal moving higher.

Ever wondered how @Amazon built a sustainable competitive advantage?

14-Nov-19 08:37 pm

Anirudh Sethi

Here’s their flywheel: 1. Lower prices on more offerings 2. Increase customer visits 3. Attract 3rd-party sellers 4. Expand the store, extend distribution 5. Grow revenues per fixed costs 6. Rinse and repeat

LIVE: A live stream from Fed’s Powell testimony before the House Budget Committee

14-Nov-19 08:29 pm

Analysis

Anirudh Sethi

OPEC still sees oil surplus in early 2020 ahead of meeting next month

14-Nov-19 06:31 pm

Anirudh Sethi

OPEC comments in its latest monthly report

Signals that oil markets remain on course for a surplus in early 2020
Expects global supplies to exceed demand by about 645k bpd in 1H 2020
That is even if OPEC producers keep output at current levels

It could be a bit of a push to its other members to pursue deeper cuts next month, though so far many are disinterested in the idea. It’s going to be interesting to take stock of the oil outlook next year in light of recent supply/demand debate.

China officially lifts ban on US poultry meat imports

14-Nov-19 06:22 pm

Analysis

Anirudh Sethi

The move had been previously announced as part of trade talks between both countries but is now made official

China’s customs have announced that they would lift restrictions on the import of poultry meat from the US, effective immediately.

I guess that’s some good news in terms of the way trade talks are progressing – that there’s still some goodwill – but as far as milestones go, this pales largely in comparison to the likes of tariffs and the US’ demand for agricultural purchases.

Eurozone Q3 GDP second reading +0.2% vs +0.2% q/q prelim

14-Nov-19 03:38 pm

Anirudh Sethi

Latest data released by Eurostat – 14 November 2019

GDP +1.2% vs +1.1% y/y prelim

The preliminary report can be found here. Quarterly growth remains unchanged with a slight upwards tilt to the annual growth rate. This continues to reinforce the sluggish economic growth seen in the region in Q3 and likely a similar story in Q4.

China: Trade war began with tariffs, it should end by the US removing them

14-Nov-19 01:51 pm

Analysis

Anirudh Sethi

Comments by the Chinese foreign ministry

China, US in thorough talks on “Phase One” deal
Level of tariff cuts should reflect significance of the first deal

I reckon you can sort of get the sense that both sides are still yet to land on some firm common ground with regards to this deal.

Markets aren’t reading much into the comments here but the remark on the degree of tariffs cancellation reflecting the importance of the “Phase One” deal reads badly in my mind.

China wants the US to commit to removing more tariffs over time and the US won’t budge on that because they risk giving up too much leverage.

Meanwhile, the US wants China to firmly detail their commitments on agricultural purchases and more structural issues but China isn’t willing to do so either.