Month: May 2013

Rising oil prices: Eurozone’s next big problem?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

After the banking crisis, the oil price is the next major threat to the euro zone, analysts told CNBC, arguing that prices will rise once the shale oil revolution in the United States dies down and that the weakened region could be priced out.

The longevity of the shale oil revolution in the US has divided analysts, with PricewaterhouseCoopers (PwC) predicting the boom in shale oil production will shave as much as 40 percent off oil prices by 2035.

Others argue that ultimately, exports from the Organization of Petroleum Exporting Countries (OPEC) drive supply and demand for the European Union (EU) and as they shrink, oil prices will rise, leaving the euro zone facing an energy supply problem.

Brent crude prices fell by USD 1.80 — their biggest slide since May 1 – on Wednesday after a report from the American Petroleum Institute showed a 4.4 million barrel increase in US crude inventories for the week to May 24. The figure was much higher than a Reuters forecast of a fall of 400,000 barrels.

“I think oil prices as they are right now are going to be unsustainable. There is all this ‘oomph’ about shale oil, but it does not alter the fact that there is still a shrinking amount of exportable capacity in OPEC and that’s what drives the supply and demand scenario for the European Union,” said Daniel Lacalle, senior portfolio manager at investment management firm Ecofin, on Tuesday.

“I think Brent getting stronger to WTI (light sweet crude) is a very likely picture in the coming months,”

As the euro zone is so far behind other developed nations in its attempts to return to growth, it could struggle to meet rising oil costs.

“If the EU doesn`t understand that affordable energy is an absolutely critical part of the solution to the growth problem, it is going to continue digging its own hole, with subsidies and with extremely expensive energy,” added Lacalle.

Lacalle is long oil, predicting that private companies producing shale oil will ultimately need to see a higher return on their capital.

_PAGEBREAK_

“There is very little return on capital employed to deliver from this revolution, so it also needs a price signal. But they are private companies, they want to make money and they need to make, 15 or 16 percent return on capital employed – that is not happening at USD 100 a barrel,” he added.

Nitesh Shah, associate director of research at ETF Securities, said Brent will be driven higher as a result of supply forces within the Middle East and Europe. But he added that OPEC countries manage the price with a “strong hand” and a decline in demand from Europe would trigger the price to fall.

“If the demand from Europe starts to wane significantly, that would move the price and they would tighten up supply. That is a key issue for the OPEC countries – they need make sure whilst they maintain the price, they also maintain the volume of sales to have sufficient revenues to maintain their spending programs.”

Shah said dwindling demand from the EU would be enough for OPEC to become more flexible on the USD 100 a barrel level, which is deemed to be minimum price before supply cuts are considered to boost prices.

“Whilst most of the focus tends to be on the price, each individual country is thinking of the price times the volume – the actual revenues they are going to get – so I think there will be flexibility. If the price was to fall down due to lack of demand form Europe, I think they would be a lot more flexible on that USD 100 level,” he said.

Nancy Curtin, CIO at Close Brothers Asset Management, said shale may hurt some of the African oil producers, but the Gulf States, who are the main exporters to the EU, will not be hit.

“Part of what will prop up the price in oil is structurally, shale gas is more expensive, so it creates cost pressures in the industry. If the world begins to grow again, you are going to have ongoing and continued demand from the emerging world,” she said.

–By CNBC`s Jenny Cosgrave; Follow her on Twitter @jenny_cosgrave.

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Buffett’s Berkshire buys small Virginia newspaper

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Warren Buffett’s Berkshire Hathaway is buying its 29th daily newspaper, this one in Virginia.

Buffett’s BH Media Group will purchase the Roanoke Times from Landmark Media Enterprises on Friday, according to the Times and the Omaha World-Herald.

The price has not been announced.

Landmark has owned the 124-year-old Times since 1969. The World-Herald, Berkshire’s flagship newspaper, reports that the Roanoke Times has a Sunday circulation of about 90,000 and 76,000 on other days, with about 300 employees.

It’s the latest execution of Buffett’s strategy to buy community-oriented newspapers in small and midsize cities that provide information not available from the online sources that are threatening larger publications.

Berkshire’s most recent daily newspaper pickup was the Tulsa World,in February .

In an interview with CNBC’s Becky Quick at the annual shareholders meeting in May, Buffett agreed with partner Charlie Munger’s take on why Berkshire has been buying into a declining industry.

BECKY: When you were explaining why you’ve been buying newspapers, Charlie at one point said, basically you’re saying it’s an exception and you like doing it.

BUFFETT: He has a way of saying things, doesn’t he? (Laughs) He’s right. We’re not doing anything dumb in the sense that we won’t get a return on them, but in terms of moving the needle at Berkshire, it will never do it.

Buffett said he expects an annual return of about 10 percent on Berkshire’s newspapers.

-By CNBC`s Alex Crippen

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Dow 28,000 possible in 6 years: BlackRock’s Fink

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

The bull market in stocks has another five to six years left with the possibility of eight to 10 percent annual growth, Larry Fink, chairman and CEO of investment firm BlackRock, told CNBC on Wednesday.

Doing the math at the high end of Fink’s projections, the Dow Jones industrial average would be at more than 28,000 in 2019.

In the near term, corporate earnings have pretty much kept pace with the recent stock market rally, he said in a “Squawk Box ” interview.

“The SandP [500] is around 15½, 16 times earnings,” he added. “There’s no question in my mind that equities remain … fairly cheap.”

Last week, comments from Federal Reserve Chairman Ben Bernanke and details from the minutes of the central bank’s latest meeting added some concern in the market that the Fed might start to taper its USD 85 billion a month bond-buying program sooner than expected.

“I believe the fixed income market is going to respond with higher rates, but not arguably very high rates,” Fink predicted. “That’s still supporting an equity market.”

“The Federal Reserve may still take its foot off the pedal and we can debate when that will be-whether it’s in September,” he continued, “I actually believe it will be later.”

“The [Fed] chairman also said he’s focused on employment, He’s not focusing on data. And the data is actually mixed. You have consumer confidence much higher, but you have manufacturing data slowing down.”

“The economy is not at full throttle,” he explained, but it feels better than it is because consumer confidence is rising.

Meanwhile, Americans are not saving enough for retirement, which is a bigger issue than tax policy, Fink said.

Bonds are no longer providing sufficient returns, Fink told “Squawk Box,” because longer life spans are making retirement income even more crucial.

“We are going to have to start thinking about ways of creating a different type of mandatory savings policy,” he said, pointing out that “the average American only has USD 25,000 of savings.”

He added, “Only 65 percent of Americans, who can participate in a defined contribution plan, participate.”

Social Security was never meant to be a savings plan, Fink reminded. “Even the highest earner only receives USD 24,000 from Social Security, and yet 70 percent of Americans’ income during retirement comes from Social Security.”

“There’s a duration gap between what we are putting into our pensions in terms of maturities and what our actual needs are,” he said. “You’re not going to want to get your duration in 30-year bonds today at a three percent rate.”

“I believe you are going to get duration through equities,” Fink concluded, emphasizing his bull case for stocks.

_ By CNBC`s Matthew J. Belvedere . Follow him on Twitter @Matt_SquawkCNBC .

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Myanmar to quadruple economy by 2030: McKinsey

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Asia’s latest frontier market, Myanmar, is poised for huge economic growth in the years ahead, according to a new study by the McKinsey Global Institute (MGI), that forecasts its economy could quadruple to about USD 200 billion in 2030 from USD  45 billion in 2010.

Currently, the country’s gross domestic product (GDP) is just 0.2 percent of Asia’s GDP – or about the size of cities such as Delhi and Johannesburg.

“For much of the 20th century, Myanmar largely missed out on the spectacular growth seen across most of the global economy and most recently in its Asian peers. It now has the potential to be one of the fastest-growing economies in emerging Asia,” said Richard Dobbs, a director of McKinsey and Company and MGI.

The resource rich Southeast Asian nation, which embarked on political and economic reform only in 2011, has since seen a lot of interest from investors looking for growth.

(Read More: Myanmar’s Kyat Currency Slumps as Imports Flood in)

Foreign investment into the country was almost five times higher in the fiscal year that ended in March 2013 compared to the previous year, Reuters reported.

Going forward Myanmar’s growth will be driven by a few sectors that include energy and mining, agriculture, manufacturing and infrastructure – together they account for over 85 percent of the country’s total economic potential, according to the report.

Of these, manufacturing is by far the most important and could leverage the opportunity of companies relocating from China and other Asian countries because of rising wages in these economies.

In contrast, Myanmar’s labor costs remain low, providing an opportunity to develop labor-intensive sectors such as textiles, apparel and furniture.

(Read More: Why I have taken a bet on Myanmar)

According to McKinsey data, manufacturing in Myanmar accounted for USD 9.8 billion of total GDP in 2010 and is estimated to grow to USD 69.4 billion by 2030.

The report also points out that, with rising incomes, there is potential to grow the consumer class in the country of some 60 million people.

“As the number of consumers with income for discretionary spending potentially rises from 2.5 million today to 19 million in 2030, consumer spending could triple from USD 35 billion to USD 100 billion,” says Heang Chhor, senior partner, McKinsey and Company.

The report, however, points out that Myanmar’s future success depends on whether this new democracy can maintain political stability and continue with economic reforms.

“To support this higher growth rate, Myanmar has to get all the fundamentals right- political and macroeconomic stability, the rule of law, and enablers such as skills and infrastructure,” according to the report.

(Read More: US Given Banking Green Light to Myanmar Tycoons)

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

If foreigners are net Japan buyers, who’s selling?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Latest data from Japan’s Ministry of Finance (MoF) published on Thursday showed foreign investors remained net buyers of stocks last week – a period during which the country`s equity market suffered its steepest single-day sell-off in two years.

So, who is behind the rout in Japanese equities, which have plummeted more than 12 percent over the past week?

According to market experts, the sell-off that began last Thursday after the benchmark Nikkei 225 came within a whisker of 16,000 – a key psychological level for the index – has been largely driven by domestic retail investors, alongside hedge funds.

“If you look at the foreign buying of Japanese equities, it didn`t change, so that means it was a domestically driven sell-off,” said Paul Grunewald, chief economist, Asia Pacific at Standard and Poor’s Ratings Services.

Foreign investors were net buyers in the country’s stock market last week, even though purchases of 27.4 billion yen (USD 271 million) were less than the previous week`s net buying of 715.8 billion yen.

Optimism over Prime Minister Shinzo Abe’s efforts to revive Japan’s economy has lured previously cautious domestic investors back into the market in the recent months, contributing to the rapid rise in Japanese equities over the past six months.

“Japanese domestic investors are very important – it’s a market that`s driven by retail investors rather than institutional investors, which is different from the US market which is mostly institutional,” said Uwe Parpart, head of research at Reorient Financial Markets.

Individual investors accounted for almost 40 percent of trades by value for the week ended May 17, according to data from the Tokyo Stock Exchange, from around 30 percent at the end of March.

But recent exuberance in the stock market coupled with volatility in the Japanese government bond market has triggered caution among individual investors, said strategists.

“The Nikkei had a strong run; it pushed all the way through 15,000 approaching 16,000 in a short space of time. Profit taking and concern over instability in Japanese bonds is driving local investors to get out of Japanese stocks,” said Stan Shamu, market strategist at trading firm IG Market.

(Read More: The Sun Will Rise: Why Investors Still Love Japan)

And, according to market watchers including Parpart, downside in the market is likely to continue in the near-term.

“We’ve seen a bit of a recovery in the market [this week], but there is no depth to it. We will get a 15 percent correction before we get back on track. That will be a healthy thing as there has been a lot of froth in the market,” Parpart said.

The Nikkei 225 declined as much as 3 percent on Thursday falling below the 14,000 level to trade around 13,923 in the morning session.

– By CNBC’s Ansuya Harjani.

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Facebook, Twitter CEOs talk advertising at D11

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

The D11: All Things D conference hosted two of the most powerful executives in social advertising: Facebook COO Sheryl Sandberg and Twitter CEO Dick Costolo. They both addressed how they’re embracing the mobile format to make ads that are more engaging, and valuable to both brands and advertisers.

Sheryl Sandberg on Mobile

Though the interview kicked off with a conversation about why Sandberg wrote ‘Lean In’ to reverse gender inequality, the conversation focused on Sandberg’s role overseeing all parts of Facebook’s business. And she said Facebook’s attention is firmly focused on all things mobile. Why? Facebook has one in seven minutes of all the time people spend on the desktop, but one in five minutes of the time they spend on mobile devices. And they’re checking

(Read more: Ashton Kutcher: ‘Facebook Is the New Religion,’ Twitter Is Too Crowded)

As for the question of whether the launch of mobile super-app ‘Home’ fell flat, Sandberg says it’s just the first version, and very early days. She says that consumers either love it or hate it, but that the potential is there to transform phones, and make them more “social” and “people oriented. But she acknowledged that it’s still “very early” and “it’ll be a long road.”

Sheryl Sandberg on Ads

Sandberg’s optimism about Facebook’s ad potential comes down to the fact that the company can have narrow focus but also a wide reach, and most companies only offer one or the other.

“We have a Super Bowl every day in the US,” Sandberg says, when you combine mobile and desktop audiences. She sited the example of Samsung launching a new phone with Facebook ads, saying it had a return on investment of thirteen times other Internet ads.

Sheryl Sandberg on New Revenue Streams

It’s all about prioritizing, Sandberg says, in order to not be distracted by the many things the company could be doing. She acknowledged that while an ad network is a good idea, it’s not a goal right now. As for search, she wouldn’t announce anything, but said they’re continuing to tweak it. And she left the door open to incorporate hashtags down the line.

(Read more: No Waze for Facebook as Talks End: Report)

Sheryl Sandberg on Facebook’s ‘Mombook’ Problem

In the face of criticism that Facebook’s losing its cool factor and teens are turned off by their parents joining the service, Sandberg returned to comments from Facebook’s earnings call, saying “it’s not a zero sum game.” She acknowledged that kids are spending more time on Twitter and Tumblr, and even called temporary sharing services like Snapcaht “very important.” But, she wouldn’t make any announcements– for now.

Dick Costolo on the Future of TV

Twitter is doubling down on the TV space, because Costolo says “we’ve recognized that Twitter is the second screen for TV and TV is more fun with Twitter,” calling Twitter the “social soundtrack for TV.”

So Costolo says the company is working to be “complementary to broadcasters in a world where they’ve come to think of tech companies as competitors…. So the notion of this is an instant replay of what’s going on in sports right now, goes out as a tweet, it’s in the fabric of it, it’s great for broadcasters, it’s great for us, great for users.”

(Read more: Nasdaq to Pay $10 Million to Settle SEC Charges Over Facebook IPO )

Dick Costolo on the Value of Twitter Ads

Twitter wouldn’t detail anything about its advertising business’ results, just saying it’s “doing great.” He cited examples of Bonobos, saying its ad spend was 13 times more effective than its other online marketing ad spend, and that Oreos say 10 percent higher purchases.

Dick Costolo on Innovation

The comment that drew the biggest gasp from the audience was the fact that Twitter takes bold steps to drive *fast* innovation amongst its engineers. He says that when developing for mobile, in order to encourage innovation, the company allows developers to test new features with one percent of users without getting approval from senior management or legal.”

He says Twitter’s biggest problem is its lack of simplicity, the fact that its “remarkable language” is hard for newcomers to understand.

-By CNBC`s Julia Boorstin. Follow her on Twitter: @JBoorstin

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Rising mortgage rates, home prices a lethal brew

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Refinances dropped 12 percent last week, while mortgage applications to purchase a home rose three percent and are now up 14 percent from a year ago, according to the Mortgage Bankers Association.

“Rates rose in response to stronger economic data and an increasing chance that the Fed may soon begin to taper their asset purchases,” said the MBA’s Mike Fratantoni in a release.

The Federal Reserve has poured billions of dollars into the mortgage market since the housing crash began, pushing mortgage rates to record lows, but it can’t last forever. Recent remarks by Fed Chairman Ben Bernanke suggest the monthly mortgage market infusions may end sooner than later.

(Read More: Map: Tracking the US Real Estate Recovery )

That has pushed the rate on the 30 year fixed conventional mortgage to 3.90 percent, the highest level in a year and dangerously close to the emotional four percent barrier. This as home prices are jumping higher and faster than expected.

“It’s amazing to see the frenzied pick-up in home buying, as renters get nervous that both home prices and rates will rise quickly,” said Craig Strent, CEO of Maryland-based Apex Home Loans. “They are trying to catch the beginning of the curve here.”

In Cincinnati however, Dan Green, a loan officer with Waterstone Mortgage, said his refinance clients are being hit the hardest, especially those who need lower-cost FHA loans. His home-buying clients seem more indifferent to the situation.

(Read More: Mortgage Rates Surge as Fed Tapering Fears Mount)

“Among the Main Street set, there is little awareness of this month’s change in mortgage rates, let alone the changes of this week,” added Green. “There’s been very little panic among rate-shopping households. There’s an acceptance, almost, a ‘low rates couldn’t last forever’-like attitude.”

Still, rising rates could not come at a worse time for the housing recovery. Home prices rose over ten percent in March, according to the latest surveys from S&P/Case-Shiller. Every one percentage point rise in mortgage rates reduces the average home buyer’s maximum purchase price by 11 percent, figures Green.

(Read More: Home Price Gains Go to Double Digits)

First-time home buyers will be hit hardest by rising rates, just as they were beginning to trickle back into the market. They made up just 29 percent of buyers in April, according to the National Association of Realtors, the lowest level in two years. Historically, they usually account for about 40 percent of the market.

The 30-year fixed mortgage hit a record low rate of 3.47 percent in December of last year. Even though it is still well below historical norms, this small rise is already taking its toll.

“In my world it’s clearly slowing the market and pricing. Right now I have properties that are well-priced yet sitting on the market unsold,” said David Fogg, a real estate agent in Burbank, CA. “Should rates continue to rise, values will likely soften.”

(Read More: Borrowers Becoming Accidental Landlords)

—By CNBC’s Diana Olick

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

The sun will rise: Why investors still love Japan

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Investors in the Japanese and US stock markets may end up nursing the same hangover in 2014, but for now they probably won’t let a little lull spoil the party.

Now that the Nikkei 225 has cooled a bit, questions are arising over whether the index’s nearly 70 percent surge over the past year has gotten overdone.

Read More: Rallies End Sometime, but This One May Not End Soon

The simple answer is that while Japanese equities could be in for a brief pause, the buy-the-dip mentality remains firmly in place.

“When you’re up 60 percent in seven months you’re going to have a bit of a pullback, that’s to be expected,” Erik Davidson, deputy chief investment officer at Wells Fargo Private Bank, said in an interview. “Most U.S. investors are underexposed to Japan. That’s a big, big risk.”

The meteoric surges in both the Nikkei and the US stock markets are underpinned by the same dynamic: Massive central bank stimulus that while only marginally helping economic growth has pushed asset prices skyward.

Japan stocks sustained a shock May 22 when a surge in yields of Japanese Government Bonds – JGBs – along with weak Chinese economic data and fears that the Federal Reserve might pull the plug early on its asset purchase program sparked worries that the rally was coming to a close.

Read More: Here’s How The Party Will End If The Fed Pulls Back

Most Wall Street strategists, though, remain bullish on Japan.

“If they can turn the corner on deflation, the implications from a confidence perspective, from a competitive perspective, from a domestic demand perspective can be huge,” Davidson said.

Investors haven’t been shy about Japanese equities and continue to be buyers despite the recent pullback.

The two most popular exchange-traded funds this year both focus there.

Read More: Forget the Volatility, Nikkei May Test 17,000: Chart

The WisdomTree Japan Hedged Equity fund—popular because it hedges against yen weakness that has come with monetary easing—has taken in USD 7.74 billion of assets in 2013 and is up 44 percent over the past six months.

The iShares MSCI Japan fund has pulled in USD 5.73 billion and has gained 21 percent over the past six months despite losing 9.4 percent in just the past five days.

Bullish sentiment on Japan largely rests on confidence that Prime Minister Shinzo Abe’s economic reforms will spark growth.

“We are bullish on Japanese equities for three reasons,” Citigroup analyst Kenji Abe said in a note to clients. “(1) We expect the economy and corporate earnings to continue recovering as the effects of Abenomics materialize in full. (2) The political environment looks conducive to Abenomics being continued for the next three years. (3) The US economy is looking stronger than it did before the Lehman crisis.”

Business funding activity has surged in Japan this year, with debt capital market volume at USD 41.5 billion, the highest in 15 years and 28 percent greater than the same period in 2012, according to Dealogic.

Read More: Here’s How QE Tapering Could Hurt Asia

As for the rising debt yields, most strategists dismiss it as a product of greater economic activity and a natural outgrowth of central bank easing.

“To the extent that the increases reflect higher expectations for inflation, it might actually be deemed a sign of success, and the real interest rates that matter more for investment decisions and the public debt burden could still be lower than otherwise,” Julian Jessop, chief global economist at Capital Economics, said in a report

“We would be more concerned if JGB yields rose as a result of a surge in yields overseas, or a loss of credibility on fiscal policy,” he added.

As for the long term, the picture may not be so rosy.

Japan faces a number of roadblocks, not the least of which is a rapidly aging population, and may have to pay later for its stimulus measures now—much the same as the US

“I don’t think we’re near the end (of the rally) yet,” Richard Harris, chief executive of Port Shelter Investment Management, said in a CNBC interview. “Looking at the rest of the year, maybe into 2014, the market reacting to liquidity is quite reasonable timing.

“But we’re going to have to ask some very big questions maybe in the first quarter of 2014 as to exactly where we go from here.”

—By CNBC’s Jeff Cox. Follow him on Twitter at @JeffCoxCNBCcom.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Nikkei falls over 5% in steep afternoon sell-off

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Japan’s benchmark index skidded by more than five percent to a one-month low on Thursday after the yen strengthened against the greenback, bringing the benchmark’s total losses to 14 percent since last Thursday’s plunge.

Japanese Economy Minister Akira Amari responded to the fall by saying that investors should not overreact to stock market declines and repeated that economic policies would be pursued without anxiety in regard to recent stock market volatility.

The rest of Asia’s stock indices retreated as fears that the US Federal Reserve could soon taper its asset-purchasing program continued to hurt sentiment.

Australia’s S&P ASX 200 index tumbled one percent to a seven-week low and Seoul’s Kospi pared gains to buck below the 2,000 mark after trading in positive territory throughout the session. The Shanghai Composite continued its range bound trend at the 2,315 level.

Stocks Oversold?

A look at the technical momentum of major indices show that stocks are approaching oversold territory. According to the Relative Strength Index (RSI), a reading of 70 signals overvaluation while one of 30 indicates undervaluation.

The Nikkei currently stands at 44 compared to 82 last Wednesday (the day before its seven percent plunge) while Australia’s benchmark index is at 32, from 62 early last week.

Nikkei Down 5%

Investors engaged in heavy profit-taking after the the yen hit 100.5 per dollar, its highest levels since May 10 in late Asian trade. Real estate stocks were amid the worst hit with Tokyo Tatemono down 10 percent.

Shares of Softbank tanked over four percent after the mobile operator announced it had reached a national security agreement with US authorities concerning their acquisition of Sprint Nextel.

(Read More: The Sun Will Rise: Why Investors Still Love Japan )

News that the government is in talks with India to allow Japanese exports of nuclear reactors didn’t help local power stocks. Tokyo Electric Power sank 6.6 percent.

_PAGEBREAK_

Shanghai Down 0.3%

Pork stocks were in focus after meat producer Shanghui International announced a near USD five billion acquisition of America’s Smithfield Foods.

Shuanghai Development surged 8.5 percent while Dakang Farming rose five percent.

(Read More: China’s Grab of US Hogs Stokes Interest on Hill )

Australia Lower

Resource stocks took a hit following a sharp drop in spot iron ore prices to a seven-month low as the International Monetary Fund downgraded China’s growth expectations. The mainland is the world’s largest consumer of the commodity.

Fortescue Metals slumped 6.5 percent, while global miners BHP Billiton and Rio Tinto fell over 1.5 percent each.

First-quarter business capital expenditure figures showed more Australian companies are scaling back investment plans as the resources boom slows. Analysts say the poor data will boost chances for a rate cut at next week’s Reserve Bank of Australia (RBA) meeting but others argue to the contrary.

(Read More: More Rate Cuts inAustralia? Here’s Why Not)

“A rate cut is unlikely as the drop in the Australian dollar will help ease financial conditions allowing the RBA to wait to examine further data before cutting rates again sometime in the third quarter of 2013,” said Mitul Kotecha, head of global markets research for Asia, Credit Agricole, in a note.

The Australian dollar moved off a one-and-a-half-year low against the greenback to USD .096.

Kospi Pares Gains

South Korean shares gave up its previous two-month high as the Nikkei index accelerated its pace of losses in late afternoon trade.

Exporters rallied with tech heavyweight Samsung Electronics jumping over two percent. The yen’s appreciation gives domestic exporters a greater competitive advantage as it increases the value of their repatriated earnings.

Shares of Korea Electric Power Corp (KEPCO) rallied one percent following a five percent loss on Wednesday after news surfaced that several of its nuclear reactors were shut down over safety concerns.

Also capping heavy losses on the benchmark Kospi index was upbeat economic data. The nation’s industrial output for April rose for the first time in four months, data showed on Thursday,

— By CNBC.com’s Nyshka Chandran. Follow her on Twitter @NyshkaCNBC

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Netflix’s ‘Arrested Development’ a success

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Based on early streaming statistics, Netflix’s launch of ‘Arrested Development’ Sunday was a “success and did have a noticeable effect on network traffic,” according to Cam Cullen, the VP of Global Marketing at Procera, a network intelligence company.

Procera works with 600 Internet service providers worldwide, including six of the top ten cable operators in the United States and three of the top five DSL operators.

The number of subscribers logging into Netflix jumped eight percent while the peak Sunday Internet traffic was 10 percent higher than the prior Sunday, at one of Procera’s cable networks. And considering that this was a holiday weekend, traffic was expected to drop, so “Arrested Development was a significant contributor to that traffic jump,” according to Procera.

(Read More: Look Out Netflix, Amazon-Here Comes YouTube)

Thirty-six percent of all the devices on one cable network Sunday watched at least part of one episode of Arrested Development, which Procera called “a staggering number that indicated a huge success.”

But here’s a more surprising stat: ten percent of those people viewing Netflix made it all the way to the 15th and final episode of the season on Sunday or Monday. And on one University network in the US, Arrested Development represented 10 percent of all Netflix traffic. Now that’s binge viewing.

It’s not an apples-to-apples comparison to Netflix’s ‘House of Cards’, but Procera’s Cullen said, “from our perspective, Arrested Development had about three times the subscriber viewing that we saw from House of Cards.” In terms of how addictive the program was, Procera noted just half a percent of subscribers made it to the13th and final episode in the House of Cards drama.

(Read More: Netflix`s `House of Cards` Binge Strategy )

Considering the fact that House of Cards was considered a hit by critics, and investors, when Netflix reported better-than-expected first quarter results, this should bode well for the streaming video company. Arrested Developments reviews were mixed-a far cry from the nearly universally positive reviews of House of Cards-which might be one reason why the stock pulled back Tuesday.

There’s no denying that Arrested Development is a quirky enough show that was cancelled from broadcast TV seven years ago. Passion for that unique brand of quirkiness could polarize die-hard fans. And people who never got the humor could have tried, and failed to connect with this new version.

(Read More: Kutcher: `Facebook Is the New Religion` )

But at the end of the day, all this subscriber engagement is a good thing for Netflix to hold on to existing subscribers, and generate the kind of buzz that draws in more users.

Netflix CEO Reed Hastings will be joining me for an exclusive interview on CNBC’s “Squawk on the Street” on Wednesday morning. We’ll be asking him whether Netflix’s investment in the show is paying off.

-By CNBC`s Julia Boorstin. Follow her on Twitter: @JBoorstin

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow