Month: March 2016

Asia markets extend gains; Nikkei up 0.6%, ASX up 1.6%

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

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Asia markets were higher on Thursday, after US stocks extended gains overnight following Federal Reserve chair Janet Yellen’s cautious stance on the path of tightening earlier this week.

Japan’s Nikkei 225 was up 0.57 percent in morning trade, while across the Korean Strait, the Kospi traded flat.

Australia’s ASX 200 was up 1.58 percent, boosted by advances in the financials, energy and materials subindexes, up 1.74, 1.97 and 1.73 percent respectively.

The country’s so-called Big Four banks – ANZ, Commonwealth Bank of Australia, Westpac and NAB – advanced more than 1 percent each. They have lost ground recently amid concerns about potential losses related to their exposure to the resources sector.

But in a strategy note on Tuesday, Macquarie said that it remains positive on the banking sector, citing valuations and dividend yields.

“Impairment and capital concerns are real but we think overdone. We believe the sector is one of the few to offer pricing power,” Macquarie said.

On the currency front, the dollar continued to weaken in the wake of Yellen’s relatively dovish comments, which assuaged concerns about the possibility of an April interest rate hike. Prior to Yellen’s remarks, other Fed members had made more hawkish statements.

The US dollar index, which measures the strength of the dollar against a basket of currencies, traded at 94.811 as of 8:18 a.m. HK/SIN time, compared with 94.841 overnight. On Tuesday, it finished at 95.160.

The Australian dollar traded at USD 0.7666 Thursday morning local time, up from levels around USD 0.75 last week.

Angus Nicholson, market analyst at IG, said in a note that as long as the Fed keeps “talking down the dollar,” the Australian currency will remain strong.

The Japanese yen remained at the 112 handle against the dollar, with the dollar/yen pair trading at 112.30. Major exporters traded up, with Toyota adding 0.38 percent, Nissan up by 0.53 percent and Honda higher by 3.06 percent.

In corporate news, on Wednesday after market close, Taiwan’s Foxconn said it has agreed to acquire Japanese electronics maker Sharp. Reuters reported Foxconn will pay about USD 3.5 billion for a two-thirds stake, nearly USD 900 million less than its initial offer. Shares of Sharp were down 5.19 percent.

Shares of airbag maker Takata gained 5.07 percent Thursday, after dropping 19.45 percent on Wednesday. Bloomberg News, citing a person familiar with the matter, reported that Takata estimates the comprehensive callback of its airbag inflators would amount to about 2.7 trillion yen (USD 24 billion). Takata declined to comment on the story, said Bloomberg.

Toshiba shares advanced 7.78 percent, after the company announced on Wednesday it finalized a deal to sell an 80.1 percent stake in its home appliances unit to China’s Midea Group, according to Japanese newspaper Nikkei. The deal is worth roughly 53.7 billion yen (USD 477 million), Nikkei said.

Oil prices were slightly up overnight, with US crude futures settling higher by 4 cents at USD 38.32 a barrel. The global benchmark Brent settled up 12 cents at USD 39.26.

Overnight, major indexes closed higher, with the Dow Jones industrial average up 0.47 percent, the S&P 500 adding 0.44 percent and the Nasdaq composite higher by 0.47 percent.

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

Japan February industrial output down 6.2% MoM

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

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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

Asia trades mixed, with Nikkei off 0.5% and Kospi up 0.5%

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

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Asia markets were mixed Wednesday morning, following a higher finish in US equities overnight after remarks from Federal Reserve chair Janet Yellen appeared dovish enough to assuage concerns about a near-term interest rate hike.

Japan’s Nikkei 225 was off by 0.51 percent immediately after market open, while across the Korean Strait, the Kospi was up 0.49 percent.

Before market open, Reuters reported Japan’s industrial output data showed fragile factory activity due to sluggish demand both at home and abroad. Industrial output fell 6.2 percent on-month in February, compared with a expectations from a Reuters poll for a 6 percent decline, following a 3.7 percent gain in January.

Australia’s ASX 200 was up 0.54 percent in early trade, buoyed by a 1.04 percent gain in the financials subindex. Banking stocks were mostly positive, after the country’s so-called Big Four banks sold off sharply on Tuesday on concerns over potential bad debt from their exposure to the resources and energy sectors.

Shares of ANZ were up 0.26 percent, Commonwealth Bank of Australia added 0.7 percent, Westpac rose 0.13 percent and NAB gained 0.62 percent Tuesday morning.

Overnight, speaking to the Economic Club of New York, Yellen noted in prepared remarks that it is appropriate for policymakers to proceed “cautiously.” She noted recent readings on the strength of the US economy since the beginning of the year have been mixed. On the policy front, she said research suggests that, with a funds rate at zero and increased uncertainty, the best policy is greater gradualism. Still, the Fed can hike if the economy grows faster, she said.

Evan Lucas, market strategist at IG, said in a morning note that Yellen’s speech has “painted a very dovish picture for the inflation outlook in 2016 and although she didn’t directly use this term, she clearly sees the US economy as two-speed.”

“Employment and net wealth have been positives over the past seven years, yet net exports and manufacturing are shrinking and dragging on growth, which is causing a mixed picture,” Lucas added.

In the wake of Yellen’s comments, the dollar index, which measures the strength of the dollar against a basket of currencies, retreated to the 95 handle, trading at 95.188 as of 8:09 a.m. HK/SIN, compared with levels above 96 before the remarks.

The Japanese yen strengthened against the dollar, with the dollar/yen pair trading down 0.2 percent at 112.46, compared with levels above 113 earlier in the week. Major exporters were lower, with Toyota off 1.64 percent, Nissan off 2.27 percent and Honda down 1.48 percent. A stronger yen is a negative for exporters as it lowers the value of their repatriated profits and makes their products less competitive overseas.

Down Under, the Australian dollar also strengthened after Yellen’s remarks, fetching USD 0.7647, compared with levels around USD 0.7530 on Tuesday prior to the speech.

Oil prices fell overnight, with US crude futures settling USD 1.11 lower at USD 38.28 a barrel, while the global benchmark Brent settled down USD 1.13 at USD 39.14.

Reuters reported that the decision by Kuwait and Saudi Arabia to resume oil production at the jointly operated 300,000-barrel-per-day Khafji field, at a time when production is supposed to be frozen, triggered the selloff in oil.

US equities closed up overnight, with the Dow Jones industrial average higher by 0.56 percent, the S&P 500 up by 0.88 percent and the Nasdaq composite adding 1.67 percent.

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

Asian markets trade mixed, Nikkei off 0.8%, Kospi up 0.4%

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

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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

US doing fine, world isn’t: Fed’s John Williams

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

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A member of the US central bank’s monetary policy-setting committee believes global developments are preventing the world’s largest economy from returning to normalized interest rates.

John Williams, President & CEO of the Federal Reserve Bank of San Francisco, told CNBC on Monday that he believe the US economy is doing “quite well,” pointing to stable inflation and strong employment growth.

“The real issue is the global financial and economic developments, there’s uncertainty about what’s happening around the world and how that feeds back to the dollar and the US economy,” he told ‘Asia Squawk Box.’

Williams reiterated that the central bank’s policy decisions would remain data dependent, singling out inflation as one of the Fed’stop concerns.

“We’ve been missing our 2 percent inflation goal for three and a half years or so, global disinflationary factors are still holding inflation down…The data to me isn’t so much about the labor market continuing to improve, I’m very positive on that, it’s more about inflation moving back to 2 percent in the context of very strong headwinds,” he explained, citing the strong dollar and low commodity prices.

“We have a domestic mandate…but that said, we understand that we’re in a global economy so what happens in Brazil or China has a huge impact on the US in terms of our inflation and employment goals.”

Unlike in Europe and Japan however, slow inflation won’t push the Fed to introduce a negative interest rate policy (NIRP), Williams noted, adding that the US has other policy tools at its disposal, including quantitative easing and forward guidance.

“We’re in a very different situation where we”ll be raising interest rates over the next few years and we’re in much stronger economic position [than Europe or Japan] so it’s not a tool that I see us using.”
His remarks come as global markets seek clarity from Federal Reserve officials for clues on whether the central bank will hike rates at its April policy meeting.

Expectations of an increase have risen following hawkish commentary from several members of the Federal Open Market Committee (FOMC) last week, including Williams.

Atlanta Fed President Dennis Lockhart and Williams both believe a hike during the scheduled April 26-27 review is warranted, while St. Louis Fed President James Bullard said “the next rate increase may not be far off.”

The comments spooked Wall Street however, as it contradicted Fed Chair Janet Yellen’s dovish-sounding statement earlier in March.

When asked about the mixed policy messages, Williams insisted that the FOMC was united in its vision.

“I would say there’s broad agreement on the committee that our basic strategy, which is to gradually remove policy accommodation and raise interest rates over the next couple of years, has strong support. The real question is when we should raise rates, what pace we should raise rates. That’s going to be driven by the data so we’ll have to wait and see.”

Markets will now be paying close attention to Yellen’s speech at the Economic Club of New York on Tuesday as well as Fed Vice-Chair William Dudley’s address on Thursday for further hints on the central bank’s outlook.

Friday’s employment report will also be scrutinized for proof of the economic recovery. Societe Generale expects at least 24,900 jobs were created in March, which would mark an improvement from February’s 24,200.

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

Brussels attacks: Can Europe keep its open borders?

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

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French President François Hollande tweeted on Tuesday that the attack on Brussels was an attack on all of Europe. When it comes to the economy, he may be more right than he knows.

After attacks in Belgium’s capital claimed the lives of at least 31 people, the country reintroduced border checks. That move, and the attacks themselves, raise further questions about the future of an open borders policy that is critical to the movement of people and commerce in most of the European Union.

The region’s Schengen Agreement, originally signed in 1985, allows travelers to cross borders of participating countries without immigration controls or passport checks. Currently it includes 22 EU countries, plus four European Free Trade Association member states.

“Today’s attacks are certainly not good news for Schengen. When countries first started instituting border controls across Europe in September, it was a question of managing the flow of migrants,” Ian Bremmer, Eurasia Group president, told CNBC in an email Tuesday. “With Paris, suspending Schengen became a question of national security. Brussels fits into this latter category.”

The Brussels attacks struck as Europe is still recovering from terrorist attacks that killed 130 people in Paris last fall. Security experts and some European citizens are likely to call for tighter border controls that can make it harder for terrorists to move from country to country.

“I think that like many other agreements, the Europeans will try to keep Schengen in place. But countries will be more willing to ignore the rules and introduce border controls if they feel they have to do it,” Adriano Bosoni, senior Europe analyst at geopolitical research firm Stratfor told CNBC on Tuesday.

“Once you are in Europe, the first place you land in Europe, you’re wherever you want to go in Europe,” retired U.S. Army Col. Jack Jacobs told “Squawk Box” on Tuesday. “It’s been astonishing for decades, how the Europeans could be as complacent as they have been about security when the borders are completely and totally open.”
Why open borders matter

But open borders are fundamentally important to the European economy. Many companies based in the region have structured their operations across borders, with factories and offices in multiple countries. Those firms would face an immediate increase in transportation and labor costs simply to move goods between their assembly plants.

Bremmer pointed out that 1.7 million people cross European borders every day to get to work.

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

ISIS claims responsibility for Brussels attacks: Media reports

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

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A series of deadly explosions rocked Brussels on Tuesday, targeting the Belgian capital’s main airport and metro system.

Belgian officials said the airport and subway bombings killed at least 31 people and injured nearly 200, according to reports. They raised the terror threat level and shut down public transit.

Belgian Prime Minister Charles Michel called Tuesday a dark moment for the country.

“What we feared has come to pass. Our country has been struck by attacks which are blind, violent and cowardly,” Michel told a news conference.

Two explosions, one of which was likely a suicide attack, hit Zaventem airport’s main departure hall, NBC News reported. Photos from the scene showed injured victims and debris. Trains to the airport were suspended, VRT said, and the airport was evacuated and all flights suspended.

Following a blast at the metro station of Maelbeek, close to the European Union institutions in central Brussels, the city’s public transport authority said all metro stations were closed. The crisis center tweeted: “Stay where you are.”

The Belgian ministry of health said the airport bombing killed at least 11 people and left 81 injured. Yvan Mayeur, the mayor of Brussels, said 20 people were believed dead and 106 injured in the metro bombing.

Deputy Prime Minister Didier Reynders said no information suggested the attack was linked to the arrest of Salah Abdeslam, a suspect in last year’s Paris attacks, in Brussels. The so-called Islamic State claimed responsibility for the attack, according to reports, citing a news agency affiliated with the terrorist group.

Belgian police are searching a residence that may have served as a staging ground for the attack, a senior US intelligence official told NBC News. Officials are still trying to determine whether another attack is imminent.

Speaking in Cuba on Tuesday morning, U.S. President Barack Obama pledged to support Belgium in bringing the attackers to justice.

“We stand in solidarity with them, condemning these outrageous attacks against innocent people,” he said.

Obama spoke with Michel on Tuesday, offering assistance in investigating the attacks, the White House said.

Eye witness Charlotte Van Driessche, who was on the metro behind the one under attack, told public broadcaster VRT: “We heard a loud bang … there was chaos immediately as everyone suspected the attack was linked to the blast in Zaventem …There was a huge amount of panic … There was a terrible smell, a real smell of burning.”

Photos posted on Twitter show significant damage to the airport. VRT said at least one of the explosions happened near the check-in desks for American Airlines. American Airlines told CNBC in an e-mailed statement it had accounted for all of its employees and contractors with no reported injuries.

Belgian news agency Belga said shots were fired and Arabic was shouted before the two explosions, Reuters reported.

tarbucks said initial indications showed a blast went off near one of its stores in the airport. The company said one employee was injured and it has accounted for all other workers.

The Mormon church also said three missionaries were injured in the airport blast. They were listed in critical condition.

Belgium has been on high terror alert since the Paris attacks on Nov. 13. The blasts come four days after the capture of Abdeslam.

Former French Prime Minister Dominique de Villepin told CNBC that the attacks were “tragic events” but added that Europe could only “reduce” the threat of terrorism.

“I do believe that our strategy should be very different than the one it is. Much less military approach than a political approach, trying to find solutions in the Middle East and we are far from doing that,” he said.

European stocks traded lower following the bombings and gold rallied. U.S. stocks also opened lower.

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

Asia mixed but muted; ASX off 0.2%, Kospi up 0.4%

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

Listen to the Article (6 Minutes)

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