Month: September 2016

Deutsche Bk shares spike after report it is near DOJ settlement

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

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Shares of Deutsche Bank jumped 14 percent Friday in New York after AFP, citing a source, reported that the bank may be near a USD 5.4 billion settlement with the U.S. Department of Justice.

CNBC has not independently confirmed the report, but if accurate, that settlement would be well below the reported USD 14 billion opening bid by the DOJ in its talks with Deutsche.

Deutsche Bank declined to comment to Reuters on the report.

With gains of more than 12.5 percent, Deutsche Bank shares were tracking for their best day since 2011 and on pace for weekly gains of more than 1 percent.

Germany’s biggest bank fell under fresh scrutiny two weeks ago when it surfaced that theDepartment of Justice was demanding USD 14 billion to settle the bank’s mortgage lending activities during the housing bubble, before the recession. Its market value was below USD 17 billion as of Thursday’s close.

Shares of Deutsche Bank plunged Thursday on reports that a handful of its big hedge fund clients were limiting their exposure to Deutsche Bank, though the bank has characterized those media reports as “unjustified concerns.”

As of June 30, Deutsche Bank said it had 5.5 billion euros (USD 6.17 billion) in litigation reserves, according to a presentation the bank gave during quarterly earnings.

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

European stocks open 1.4% lower as Deutsche Bank tanks 7%

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

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European stocks opened sharply lower on Friday as concerns over the systemic risk posed by German banks weighed on investor sentiment.

European stocks follwed the trend in Asia’s trading session on Friday where markets were lower across the board on the final trading day of the quarter, after concerns over Deutsche Bank’s stability drove down sentiment in US markets Thursday.

Concerns over Deutsche Bank sent its US-listed shares to an all-time low on Thursday and weighed on the broader financial sector. Shares of the German lender tanked over 7 percent on Friday.

The three major US indexes hit session lows shortly after Bloomberg reported that approximately 10 hedge funds were reducing their exposure to the embattled European bank. Deutsche later told CNBC this is “typical” when doing business with hedge funds. The bank’s US-listed shares fell 6.67 percent, and dropped as much as 9.02 percent to USD 11.19, an all-time intraday low.

European investors will also be keeping an eye on Commerzbank on Friday after the German lender said that it was cutting thousands of jobs.

Euro zone flash inflation data for September and the region’s unemployment figures for August are due on Friday, offering the latest indication on the health of the euro zone’s economy.

There are no major earnings Friday.

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 Deutsche Bank crisis: How we got here, and where we are

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

China Caixin factory PMI picks up slightly in September

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

OPEC oil deal doesn’t change our price outlook: Goldman Sachs

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

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The OPEC deal to cut oil production may provide a short-term support for prices, but chances are it won’t change the supply outlook much, Goldman Sachs said.

“If this proposed cut is strictly enforced and supports prices, we would expect it to prove self-defeating medium term with a large drilling response around the world,” Goldman’s analysts said.

Reuters and other media outlets reported from Algeria on Thursday that OPEC members had agreed to cut oil output for the first time since 2008. Reuters reported OPEC members would limit production to a range of 32.5 million to 33 million barrels per day, down slightly on August’s output of 33.2 million barrels a day, but there were few details availabe on the deal.

Oil prices surged about 5 percent in response, with West Texas Intermediate trading at USD 46.75 per barrel. Without a deal, analysts had said oil could plunge to USD 40 or lower.

Goldman estimated the proposal would keep production on average at 480,000-980,000 barrels a day below the bank’s forecasts through 2017.

“Strictly implemented in the first half of 2017 and all else constant, the production quotas announced today should be worth USD 7 a barrel to USD 10 a barrel to the oil price,” the analysts said.

But they added, “Compliance to quotas is historically poor, especially when oil demand is not weak.”

Goldman also noted that risks were “skewed to the upside” on production from countries not targeted by the quota deal, pointing out that output from Libya and Iraq was already 180,000 barrels a day above the bank’s expectations.

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 August retail sales slip renews pressure on policymakers

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

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Japan’s retail sales fell more than expected in August for the sixth straight month of annual declines due to falling sales of clothes and home appliances – keeping policymakers under pressure to find ways of beefing up household spending.

Retail sales fell 2.1 percent in August from a year earlier, more than a median market forecast for a 1.8 percent annual decline, data from the Ministry of Economy, Trade and Industry showed on Thursday.

The weak reading underscores the relative fragility in Japan’s economy, with slow wage growth and gloomy prospects of recovery weighing on household spending.

“I don’t expect consumer spending to continue falling but future gains are likely to be very modest,” said Hiroaki Muto, economist at Tokai Tokyo Research Center.

“The government has already got the stimulus package it wanted. We need to see more incoming data to determine if the situation is bad enough to force the Bank of Japan to lower its assessment of consumption.”

Retail sales fell 1.1 percent from the previous month, the first decline in three months, the data showed.

Japan’s economy grew faster over April-June than initially estimated due to upward revisions to capital expenditure and inventories, but there are concerns from a recent run of weak data on exports, factory output and household spending.

The parliament will soon start to deliberate a government stimulus package with planned spending of 7.5 trillion yen by the national and local governments on infrastructure projects in an attempt to boost domestic demand.

Economists say the package, which is sure to be passed in parliament, could support growth but still worry whether wages will rise fast enough to spur consumer spending.

The BOJ overhauled its policy framework last week to focus on controlling interest rates after more than three years of aggressive money printing failed to ignite inflation.

The new framework could face its first major test when the BOJ updates its economic forecasts in early November, some economists say.

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

World’s largest IPO this year goes over like a wet firecracker

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

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It may have been the world’s largest initial public offering (IPO) in two years, but shares of Postal Savings Bank of China (PSBC) hit the Hong Kong market like a wet firecracker on Wednesday.

Around midday, the shares were trading at 4.77 Hong Kong dollars ($0.62), just smidgeon higher than their HK$4.76 IPO price, which Reuters reported was itself at the bottom of the HK$4.68-HK$5.18 marketing range.

It’s a wet performance after PSBC raised $7.4 billion in the share sale, making it the largest IPO globally since internet giant Alibaba raised $25 billion in 2014.

But analysts noted that even at the low end of the pricing range, PSBC’s shares had a top-heavy valuation at a bit above book value, compared with other mainland banks priced at around 0.8 times book value.

Additionally, six cornerstone investors snapped up 77 percent of the shares. While those investors won’t be allowed to sell for six months, that created an overhang of potential selling when the lockup period expires on shares of China’s sixth-largest bank, which has around a half-billion Chinese customers.

Soros Fund Management may have been among the institutional investors, with China media Caixin reporting, citing sources with knowledge of the investment, that the asset management company founded by storied billionaire investor George Soros had subscribed to the IPO. A representative for George Soros didn’t immediately return an email requesting comment sent outside office hours.

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

Small army of Fed speakers, OPEC on tap for Wednesday

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

Listen to the Article (6 Minutes)

A flurry of Fed speakers, including the Fed chair, will keep markets busy Wednesday.

There are also mortgage applications at 7 a.m. EDT, durable goods data at 8:30 a.m. EDT and oil inventory data at 10:30 a.m. EDT. OPEC, meanwhile, is meeting in Algeria and could continue to create volatility in oil prices after headlines from there triggered a near 3 percent plunge Tuesday.

Fed Chair Janet Yellen appears before the House Financial Services Committee at 10 a.m. on supervision and regulation.

The Fed chair was personally criticized in the presidential debate Monday night by GOP candidate Donald Trump, who said the Fed’s decision to keep rates low was political and that it’s creating a bubble in the stock market.

“It has to worry the markets that potentially you could have a president getting into a nasty dispute with the chairman of the Fed in early 2017. That’s something the market would not like to see. I think the Fed has not done a very good job communicating. It’s a cacophony of confusing comments. There’s reason to criticize the Fed, but the personal attack on Yellen is unprecedented,” said Greg Valliere, chief global strategist at Horizon Investments.

Traders are watching to see if Yellen is in the political hot seat on banking regulation and supervision when she appears before the committee.

“She has some very vocal critics in the House. She always gets a rough time during Q and A from [Rep. Jeb] Hensarling and people like that,” said Valliere, chief global strategist at Horizon Investments. “I’m sure she’ll get a thorough grilling.”

Michael Hanson, senior economist at Bank of America Merrill Lynch, said some members of the House committee may argue that the regulations are too harsh, particularly for small banks.

Besides Yellen, Fed speakers Wednesday include Minneapolis Fed President Neel Kashkari at 8:45 a.m.; St. Louis Fed President James Bullard makes welcoming comments at a St. Louis Fed community banking conference at 10:15 a.m. EDT; and Chicago Fed President Charles Evans speaks at the same conference at 1:30 p.m. EDT. There are also appearances by Cleveland Fed president Loretta Mester at 4:35 p.m. and Kansas City Fed President Esther George, who speaks at 7:15 p.m.

“There’s a lot of speakers. I don’t know that there’s going to be a lot of informative commentary. We’re in a situation where, I think, the Fed is gradually moving toward a majority of people supporting a rate hike by the end of the year,” Hanson said.

Hanson said if the data is in line and inflation looks like it is picking up, the Fed should raise rates at its December meeting, after passing on a hike last week. “It’s not a done deal but it does feel, based on what we’ve heard from Fed officials, that they’re leaning in that direction,” he said.

Durable goods orders for August are expected to be down 1.4 percent, after an increase of 4.4 percent the month earlier. That number could affect GDP forecasts for the third quarter.

“There’s a little bit of a sense that the rebound from the first half is not quite as good as thought. That’s another reason not to rush a rate hike in September,” said Hanson. He said September ISM manufacturing data should get a lot of attention when it’s released in the first week of October, after it showed a surprising contraction in August.

“If we get the data weakening to the downside, and that’s sustained, the Fed will probably get a little more cautious. The confidence numbers on the consumer side have been good, housing is generally good, the labor market has been OK. Some of the indicators have been less so, like the PMIs, ” he said.

There are a few earnings reports Wednesday including Paychex, BlackBerry and Actuant. Nike will also get attention, after it fell more than 2 percent late Tuesday following its earnings report.

Stocks closed higher Tuesday, with the Dow up 133 at 18,228, and the S&P 500 up 13 at 2,159. West Texas Intermediate crude settled at $44.67, a decline of $1.26 per barrel.

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