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rssWorth reminding everyone that the yield curve inverted and AND steepened well prior to the last recession…
PBOC denies chatter about RRR cut
Lots of rumors
There was some chatter doing the rounds today that Chinese banks required reserve ratios would be cut on Monday. The PBOC published a Weibo post to say that it’s untrue.
Normally, I’d be in the “don’t believe anything until it’s denied” camp but it would look awfully bad if they went ahead and cut on Monday.
Week ahead: Turkey, Brexit, US jobs
Wall Street wrapped up the first three months of the year in fine form with the S&P 500 clocking its biggest first quarter rise since 1998.
Here’s what to watch in the coming days as the June quarter gets under way.
Turkey elections
Ahead of crucial local elections on Sunday, Turkish markets were in turmoil while its currency, the lira, weakened as president Recep Tayyip Erdogan and his party, Justice and Development Party (AKP), remain eager to retain control over some of the country’s biggest cities.
“Polling suggests the People’s Alliance may lose some key areas like Ankara and, less probably, Istanbul to the Nation Alliance,” note strategists at TD Securities. “A poor showing may result in more unorthodox, pro-growth policies that maintain uncertainties over Turkey.” The AKP formed an alliance with the Nationalist Movement party (MHP) in 2018, which has been dubbed the People’s Alliance.
US-China trade (more…)
China’s Xi is worry about a summit with Trump
Concerned about difficulty in reaching compromise
Nikkei is reporting that China’s Xi is reportedly wary about a summit with US Pres. Trump as a result of the difficulty in reaching a compromise.
The US would receive Xi’s ire if there is not some give and take compromises from the US.
That puts a little damper on the details coming out that progress is being made with the talks.
Recall, that the Trump/Xi meeting has already been postponed. Xi does not want to meet without most, if not all of the details ironed out.
Apple scraps release of AirPower wireless charger
Apple has cancelled the release of its AirPower wireless charger after admitting it would not meet the company’s “high standards.”
In a rare mis-step for a company that prides itself on slick, show-like product launches, Apple said after “much effort” it had concluded the planned charging mat would not be able to go ahead. Friday’s news came despite the AirPower having been advertised on the box of the second generation of Apple’s AirPod headphones, released earlier this month.
“After much effort, we’ve concluded AirPower will not achieve our high standards and we have cancelled the project. We apologise to those customers who were looking forward to this launch. We continue to believe that the future is wireless and are committed to push the wireless experience forward,” said Dan Riccio, Apple’s senior vice-president of hardware engineering.
The AirPower mat was first announced in 2017 alongside news of the iPhone X’s wireless charging capability. The tech giant had said it planned to release the mat in 2018, but little was heard about the product from the company thereafter.
Apple had said the mats would be able to charge up to three devices at once, but last year rumours surfaced of technical problems and that the mats were overheating.
The reversal adds to pressured faced by Apple over product delays in the last two years, which included the late shipment of its HomePod and AirPods speakers. The company has also been plagued by complaints about its third generation MacBook keyboards, for which it apologised earlier this week.
Global stocks’ biggest quarterly rise since 2010 ends on an up note
Driven mostly by Wall Street, global stocks ruled off on their largest quarterly advance since 2010.
The climb over the past three months was sealed on Friday on hopes for progress in US-China trade talks that resumed in Beijing, while a rally in sovereign bonds eased.
The FTSE All World index has risen 11.4 per cent so far in 2019, its biggest quarterly increase since the September quarter of 2010. A 13.1 per cent rise for the S&P 500 was its biggest quarterly rise since the third quarter of 2009, as well as the biggest March quarter rise since 1998.
On Friday, the S&P 500 finished ⅔ of 1 per cent higher, while the Nasdaq Composite added 0.8 per cent.
The levels reached by global equities in their wider rally for 2019 look dependent on signs of resolution in the trade war between the world’s two biggest economies. Concern at the darkening outlook for global growth has drawn investors back into government bond markets over the last week, pushing yields lower.
Optimism on the trade talks drew investors out of government debt on Friday, lifting yields. As investors moved out of Treasuries, the yield on the benchmark 10-year bond rose 1.6 basis points to 2.405 per cent. It surrendered the 2.4 per cent level on Monday for the first time since December 2017, when worries about global growth reverberated across markets, and spent a good portion of today’s session below the level.
The dollar was slightly firmer after US inflation data narrowly missed forecasts and hit an 11-month low. The index tracking the world’s reserve currency fell 0.1 per cent to 97.268.
Earlier in the day, China’s CSI 300 rallied 3.9 per cent. The gain took the mainland index up 28 per cent in the first three months of the year, its best quarterly performance since the end of 2014.
European equities brightened, with gains of 0.9 per cent for Frankfurt’s Xetra Dax 30 and 0.6 per cent for London’s FTSE 100. The region-wide Stoxx 600 added 0.6 per cent, helped by a 2 per cent rise for the mining sector, which is sensitive to sentiment on global growth.
Sterling sank below the $1.30 mark after another rejection of UK Prime Minister’s Brexit withdrawal agreement by parliament. The pound recovered to trade down 0.1 per cent at $1.3025.
US stocks close higher. Major indices end the month with modest gains
Quarterly gains are strong
The major US indices are ending the day higher:
- Dow is up 211.22 points or 0.82% at 25928.68. For the month the index closed marginally higher by 0.05%. For the quarter, the index rose 11.15%
- S&P is ending up 18.97 points or 0.67% at 2834.41. For the month the index rose 1.79%. For the quarter, the gains were 13.07%
- Nasdaq is ending up 60.15 points or 0.78% at 7729.32. For the month, the index rose 2.61%. For the quarter, the gains were an impressive 16.49%
Thought For A Day
Baker Hughes oil rig count 816 vs 824 last week
The weekly Baker Hughes rig count
- Total rig count 1006 vs 1016 last week
- Oil rig count 816 vs 824 last week
- Gas rig count 190 vs 192 last week.
The price of crude is trading at $60.10 up $0.79 or 1.32%. The high reached $60.73. The low extended to $59.41
It is the 4th down week in a row for oil rigs. The high water mark for oil rigs reached 888 in November 2018. Today’s number is the lowest since April 2018.
