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Moody’s changes ratings outlook for eight Indian corporates to negative following sovereign outlook change -Full Text

  
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Moody’s Investors Service (“Moody’s”) has taken a number of rating actions on Indian non-financial corporates, following its earlier announcement that it has changed the outlook on India’s Baa2 sovereign rating to negative from stable.

As a result of the sovereign rating action, Moody’s has changed the outlook on the ratings of the following companies:

Bharat Petroleum Corporation Limited (BPCL): Affirmed Baa2 foreign currency issuer and senior unsecured debt ratings and revised outlook to negative from stable. Also affirmed the (P)Baa2 foreign currency senior unsecured rating on the MTN program. The ba1 baseline credit assessment (BCA) is affirmed.

Hindustan Petroleum Corporation Ltd. (HPCL): Affirmed Baa2 foreign currency issuer and senior unsecured debt rating and revised outlook to negative from stable.

Indian Oil Corporation Ltd (IOCL): Affirmed Baa2 foreign currency issuer and senior unsecured debt ratings and revised outlook to negative from stable. The ba1 BCA is affirmed.

Oil and Natural Gas Corporation Ltd. (ONGC): Affirmed Baa1 local and foreign currency issuer rating; revised outlook to negative from stable. Also affirmed the (P)Baa1 foreign and local senior unsecured ratings on the MTN program. The baa1 BCA is affirmed.

Oil India Limited (OIL): Affirmed Baa2 local and foreign currency issuer and foreign currency senior unsecured debt ratings; revised outlook to negative from stable. The baa3 BCA is affirmed.

Petronet LNG Limited (PLL): Affirmed Baa2 foreign currency issuer rating; revised outlook to negative from stable.

Infosys Limited (Infosys): Affirmed A3 local currency issuer rating and revised outlook to negative from stable.

Tata Consultancy Services Limited (TCS): Affirmed A3 local currency issuer rating and revised outlook to negative from stable.

A full list of affected ratings is provided towards the end of this press release.

RATINGS RATIONALE (more…)

European shares extend higher on global growth hopes

  
Analysis, Global Indices
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Euro Stoxx 600 it’s 4 year high. 5th straight day of gains

The European major stock indices are closed and extending higher on global growth hopes.
The Euro Stoxx 600 index is trading at 4-year highs and is up for the 5th straight day of gains.
The provisional closes for other indices are showing:
  • German DAX, +0.8%. The close is the highest level since February 2018
  • France’s CAC, +0.3%
  • UKs FTSE is ending the session flat
  • Spain’s Ibex, +0.4%
  • Italy’s FTSE MIB, +0.6%

Yields are also higher as traders in global debt markets are also hoping global economies will get a boost on more cooperative US China relations.

Euro Stoxx 600 it's 4 year high. 5th straight day of gains_

Think it’s too late? The world’s greatest fund manager didn’t make money until he was 52

  
Analysis, Education
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Jim Simons had modest wealth at 52; now he’s worth $23 billion

Jim Simons
Financial markets — and risk taking in general — are largely the domain of the young. Early adulthood is the time to swing for the fences while middle age is a time for prudence, perhaps risking a manageable part of the nest egg.
Yet that’s not always true. It’s particularly untrue of some of the world’s greatest investors.
Among them is Jim Simons, the king of quants. Yesterday Gregory Zuckerman published “The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution.”
It details how a 40-year old math professor walked away from a job at Stony Brook University to try trading currencies. He had no idea what he was doing but raised $4 million with a few partners. He recruited renowned mathematicians to help him. It didn’t work and losses topped $1 million.
“If you make money, you feel like a genius,” he told a friend. “If you lose, you’re a dope.”
He gathered more data and persevered through the 1980s with a mixed record. In 1989 he lost 4%.
Finally, Simons along with recently recruited colleagues Henry Laufer and Elwyn Berlekamp, started to focus on short-term patterns — Monday’s price action often followed Friday’s, while Tuesday saw reversions to earlier trends.
It worked and the Medallion fund gained 55.9% in 1990. It hasn’t stopped. His fund as generated average returns of 66%, racking up gains of $100 billion. No other fund or manager is even close. A $10,000 investment 30 years ago excluding fees would be worth $40 billion today. Even after fees, it would be worth $195 million.
How the fund makes money is one of the world’s most-closely guarded secrets but it’s story isn’t. Simonds certainly had mathematical talents but he know almost nothing about markets when he started out at age 40 and managed to amass one of the world’s great fortunes.

No records today. Major indices close lower

  
Analysis, US Market
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Nasdaq leads the month charge forward

The major US stock indices are ending the day with declines but it could have been worse.
The final numbers are showing:
  • The S&P fell -9.21 points oro -0.30% at 3037.56. Yesterday was a record close. So the decline today is makes it easy. No record today.  The high price reached 3046.90 . The low was down at 3023.19.
  • The Nasdaq fell -11.617 points or -0.14% at 8292.35. The high reached 8321.80. The low extended to 8248.80
  • The Dow is closing down -140.46 points or -0.52% at 27046.23. The high reached 27188.37. The low extended down to 26918.29
The % changes of the major stock indices today
Today is also month end (Happy Halloween). The major indices are ending the month higher.
  • Dow, up 0.48%
  • S&P up 2.04%
  • Nasdaq up 3.66%.

For the year, the major indices are still showing strong gains after the down year in 2018.

  • Dow, +15.94%
  • S&P, +21.17%
  • Nasdaq, +24.97%.

Trump takes another shot at the Federal Reserve

  
Analysis, Politics
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Trump with the usual stuff

People are VERY disappointed in Jay Powell and the Federal Reserve. The Fed has called it wrong from the beginning, too fast, too slow. They even tightened in the beginning. Others are running circles around them and laughing all the way to the bank. Dollar & Rates are hurting..our manufacturers. We should have lower interest rates than Germany, Japan and all others. We are now, by far, the biggest and strongest Country, but the Fed puts us at a competitive disadvantage. China is not our problem, the Federal Reserve is! We will win anyway.
If you’ve been watching CNBC lately, it sure sounds like Jim Cramer is making a real pitch to be the next Fed chair. There was also talk about turfing Powell after the election in a move that would undoubtedly cause a legal fight.

US stocks close the session higher. Record close for the S&P

  
Analysis, US Market
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New record close for the S&P

The US stocks are closing the session higher after the FOMC cut rates by 25 basis points and Fed chair Powell said that rates would not go higher unless inflation goes higher.
  • The S&P index rose 9.88 points or 0.33% at 3046.77
  • The Nasdaq rose 27.125 points or 0.33% at 8303.97
  • The Dow rose 115.27 points or 0.43% at 27186.69.
In after hours, Facebook beat on the revenues and earnings-per-share
  • EPS $2.12 versus $1.91 expected
  • Revenues $17.65 billion versus an estimate $17.35 billion

Facebook shares are up 2.3% in volatile trading after the close.

The FOMC statement for the October 2019 meeting

  
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FOMC statement for the October 2019 meeting…

October 30, 2019

Federal Reserve issues FOMC statement

For release at 2:00 p.m. EDT

Information received since the Federal Open Market Committee met in September indicates that the labor market remains strong and that economic activity has been rising at a moderate rate. Job gains have been solid, on average, in recent months, and the unemployment rate has remained low. Although household spending has been rising at a strong pace, business fixed investment and exports remain weak. On a 12-month basis, overall inflation and inflation for items other than food and energy are running below 2 percent. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. In light of the implications of global developments for the economic outlook as well as muted inflation pressures, the Committee decided to lower the target range for the federal funds rate to 1-1/2 to 1-3/4 percent. This action supports the Committee’s view that sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective are the most likely outcomes, but uncertainties about this outlook remain. The Committee will continue to monitor the implications of incoming information for the economic outlook as it assesses the appropriate path of the target range for the federal funds rate.

In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its maximum employment objective and its symmetric 2 percent inflation objective. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michelle W. Bowman; Lael Brainard; James Bullard; Richard H. Clarida; Charles L. Evans; and Randal K. Quarles. Voting against this action were: Esther L. George and Eric S. Rosengren, who preferred at this meeting to maintain the target range at 1-3/4 percent to 2 percent.

Implementation Note issued October 30, 2019

Federal Reserve FOMC decision due Wednesday – preview

  
  Analysis
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Via Société Générale, in brief:
  • Fed… likely to cut
  • A more favourable economic outlook, however, suggest two things: First, that recent rate cuts were offered only as an insurance policy and second, that the Fed is likely to pause on any further rate moves. 
  • We see any such pause as short lived. 
  • By spring 2020, economic evidence should, in our view, compel further rate cuts.
  • Balance sheet details are also a key item.
Federal Open Market Committee meet Wednesday 30 October 2019 

Here is what’s on the economic calendar in Asia today – almost bare

  
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2350GMT will bring data on weekly flows of securities (stocks/bonds bought/sold) from Japan.

Upon release these tend to have a negligible impact on forex (unless there is some reason for the market to be focused on them at the time).
Apart from some info due from South Korea and Singapore that’s about it.

US stocks end the session lower and near session lows

  
Analysis, US Market
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S&P index back below the 3000 level. NASDAQ loses -0.72%

The major stock indices slid in the afternoon trading after being higher earlier in the day. The major indices are ending the session in the red, led by the NASDAQ composite index which fell -0.72%
The closes are showing:
  • the S&P index -10.65 points or -0.35% at 2996.07. The high reached 3014.57, while the low extended to 2995.04
  • the NASDAQ composite index fell 58.69 points or -0.72% at 8104.29. The high extended up 28194.62 while the low reached 8101.98
  • The Dow industrial average is closing down -39.27 points or -0.15% at 26788.32.  The high reached 26946.64.  The low extended to 26782.61

After today’s close Chipotle, snap, Texas Instruments, and Whirlpool will be releasing their earnings.

Tomorrow will be 1 of the bigger earnings day’s so far with Microsoft, Boeing, Caterpillar and others expected to release:

Wednesday, October 23

  • Boeing, BA
  • Blackstone Group, BX
  • General Dynamics, GD
  • Owens Corning, OC
  • Ford, F
  • Caterpillar, CAT
  • Celgene, CELG
  • Microsoft, MSFT
  • eBay, EBAY
  • PayPal holdings, PYPL
  • Tesla, TSLA
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