Month: August 2014

Millennials are reshaping India’s travel industry

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

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The rise of the Millennials in India is changing the face of the business travel and forcing hoteliers to refocus their efforts to tap this increasingly wealthy and mobile market.

Take Gayatri Gupta. The Pune-based, 34-year old spends two weeks per month in New Delhi for her job.

“My hotel has become a second home. Hotel staff from the bell captain to the concierge know my name, favorite foods and choice of music. I also get a loyalty discount and a room with the best view,” the independent soft skills trainer said.

Gupta said her expenditure on business stay is down 60-70 percent.

“Five to seven years ago, it was impossible to get a hotel room in Gurgaon (Delhi’s new commercial hub) below USD300. Today I can get a clean, modern, well-designed room in a new hotel for USD80-USD120 a night.”

Read More: Donald Trump plans investment in India

India’s USD 135 billion tourism and hospitality industry is in the throes of a change. While rosy projections for a USD 418.9 billion market by 2022 led hoteliers to increase room capacity, an economic downturn over the past 5 years has dampened reality. Slowing economic growth over the past 5 years, soaring inflation, weak demand and high supply has shifted pricing power to the buyer.

It has also shifted hoteliers’ focus from the leisure traveler to the more resilient business travel market. According to the Global Business Travel Association, India was the world’s 10th largest business travel market in 2013, up from 24th in 2000.

“More people across the organizational hierarchy are travelling. Better air connectivity to second-tier towns means new demand is cropping across different price points and age groups,” said Akshay Kulkarni, Regional Director, Cushman & Wakefield Hospitality.

Read More: Modi at the helm, and the rupee…falls

A new breed of business traveler

No longer is the typical hotel customer a middle-aged executive clad in a pin-stripped suit. Instead, he is a blue-jeans wearing executive with an informal and casual air, most likely to be in his thirties. With over 150 million Indians belonging to the Millennial category (born between 1980-2000), it’s a coveted catch for the hotel industry.

This category also has a very large number of female professionals, like Gupta. Women account for 41.6 percent of those enrolled in higher education and are entering the professional hierarchy in a big way. Further, they already account for an estimated 30 percent of the economically active workforce and nearly 25 percent of domestic business travelers.

“Self-assured, optimistic, globally connected and curious, the Millenials are poised to take the hotel industry by storm,” Ernst &Young said in a 2014 report on Global Hospitality.

New product and service offerings

To cater to the tighter wallets and smart spending habits of young business travelers, the Tatas launched the Ginger brand, which operates in 30 business locations from the ‘steel’ city of Jamshedpur to ‘call center’ hub at Pimpri. Brands like Keys, Lemon Tree, Tune, Fern and Sarovar are also pushing the market beyond top-tier cities.

“For the first time in India, travelers can now get standardized products and comparable service wherever they go,” says P. R Srinivas, Director of hospitality, Cushman & Wakefield, India.

Millennials are speed demons, according to the Ernst & Young report. To meet their demand for instant gratification over face-to-face interaction or friendly services, hotels are increasingly providing check-in kiosks, TV checkouts, pre-authorized credit card sanctions and room key access to everything from vending machines to the gymnasium.

Yet, they are highly social. Hotels like The Lemon Tree and Keys have fun zones complete with pool tables, electronic dart boards and gaming consoles, never mind the budget positioning.

“We believe that if we provide products or services to their customized need, we will not only get loyalty but peer-to-peer marketing from their friends and followers,” said Sanjay Sethi, managing director of Keys Hotels.

Catering the customization card further are women-only floors at hotels like The Lemon Tree and Ginger to provide enhanced safety and privacy. The Hyatt Regency Hotel even offers a women’s only bar ‘Escape’ in Chennai, a first-of-its-kind offering in India.

Read More: China to top US business travel spending by 2016

To keep up with Millennials posting their experiences online and researching hotels through crowd-sourced review sites, hotels are shifting their customer care online.

“We spend a significant part of our budget now on maintaining high online visibility to stay ahead in the game,” says Sethi.

It seems the whole paradigm of competitive advantage has changed. It’s no longer about just the product, price, service or feature on offer. Rather it is about building a rapport and trust with the new generation customer in a world that is always-on and always connected. 

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

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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

Is Dubai’s property market still too hot?

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

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If you wanted to make a quick buck in property, Dubai would have been the place to do it in the last couple of years. And the desert of superlatives is still going strong despite a partial slowdown.

According to CBRE Group , apartment prices increased by a more modest 3.2 percent in the second quarter of 2014, bringing gains over the last year to 21 percent. But that`s exactly the problem.

Memories of the last real estate bubble that blew up in 2009 and exposed a debt-laden Emirate are still fresh.

Read More: DP World Chairman tells CNBC: Dubai never had a property bubble

“In our view, the residential market is getting close to the top and we would perhaps expect growth for another 12-18 months, but certainly not at the rate we`ve been seeing. It`s been unsustainable,” Craig Plumb, Head of Research, MENA, at Jones Lang LaSalle (JLL), told CNBC.

The government has moved to cool the rally, doubling transaction fees to four percent and introducing revised caps on mortgages at the end of last year. Still, the International Monetary Fund (IMF) has warned repeatedly over the summer that more measures are needed to avoid a replay of the previous disaster.

“The threat of another period of anomalous growth as we saw in 2007-08 was curbed through the effective combination of government backed legislation and general affordability has helped to rein in growth. This is reflected in the falling number of transactions, particularly at the top end of the villa market,” Steve Morgan, Chief Executive at Cluttons Middle East, explained to CNBC.

Some of Dubai`s biggest developers have also moved on their own to ban real estate brokers from reselling off-plan properties before handover.

Plum agreed further policy action was warranted. “Yes, they`ve done more than they did last time. Whether they have done enough? There is probably a need to do more things,” he added.

Beyond the announcements of Dubai`s architectural grandeur is the untold story of delayed projects and those that never saw the light of day. CNBC visited several abandoned construction sites and spoke to many investors hurt by the last property crash; nobody agreed to appear on camera due to ongoing litigation or fear of retribution.

Read More: Dubai property market still sparkling…for now

There is another fundamental difference this time round. Turmoil in the Arab World, from Libya to Syria, means wealth is often looking for a new home, and most roads lead to Dubai. If you`ve got money, there are plenty of ways to spend it here without getting asked too many questions. Case in point: An estimated 70 percent of property transactions are in cash.

Mahesh Menda, a prominent investor who came to Dubai over three decades ago and was among the first buyers at one of the Emirate`s most prestigious addresses, is no stranger to the property market`s volatility.

“Even today, if I had to buy land, or say a luxury apartment, the best price I pay in one of the best towers is a thousand dollars [per square foot], give or take 10-15 percent. I compare that to New York, to London, to Bombay…this was going for a song”.

According to the Dubai Land Department, the top foreign buyers of property in Dubai are from India, the United Kingdom, Pakistan and Iran.

Read More: San Diego real estate cools off: Will rest of Californiafollow?

A rapidly growing pipeline of projects is only fueling the “bubble talk” in the city`s offices and cafes. The government plans to build a mall bigger than the world`s biggest it already has, an entire addition to downtown Dubai with villas, hotels and residential apartments. In total, JLL forecasts more than 40,000 additional units to come online through 2016.

Strong economic growth will fill a large chunk of that space. The IMF expects expansion to average 5.5 percent until the end of the decade, underpinned by the city hosting the world`s fair, the Expo in 2020.

You have to visit Dubai to get a sense of the scale of the construction boom that is underway. And with more grandiose projects announced, the next few years will be a real test for whether the Dubai property market has actually matured.

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

Why Shiller is ‘dead wrong’ on US stocks’ valuation:Analyst

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

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Yale professor Robert Shiller’s recent warning on the valuation of US stocks, bonds and housing sent ripples through global markets, but one analyst told CNBC the professor is “dead wrong.”

Shiller’s comments come as Wall Street’s major indices continue to power higher. On Tuesday, the NasdaqComposite touched a fresh 14-year high, boosted by reports offering a benign view on inflation and a better-than-expected view on the housing market. Meanwhile, the S&P 500traded within seven points of its recently-set all-time high.

But Shiller highlighted worrying signs from the cyclically adjusted price-earnings ratio (CAPE) ratio – a stock price measure he helped create, which measures the S&P 500’s average inflation-adjusted earnings over the previous 10 years.

Read More FOMC minutes a market diversion until Jackson Hole

The professor and economist told CNBC’s “Halftime Report” on Tuesday that the ratio stands at 25, a level that has been surpassed only three times since 1881 – the years surrounding 1929, 1999 and 2008. The ratio averaged 15.21 in the 20th century and stood at 23 last year.

But according to Jack Boroudjian, chief investment officer at Index Financial Partners, Schiller’s warning is unwarranted and stocks have much further to run.

“He is dead wrong. This market is not too expensive,” Bouroudjian told CNBC Asia’s “Rundown” on Wednesday, noting that the most common price-to-earnings measure for the S&P 500 is around its historical norm.

Read More ‘Everything is pricey’: Robert Shiller

“Shiller uses a strange equation. I think there is a significant flaw in using average 10 year average earnings as the denominator in the P/E ratio… Most of us in the real world calculate the fair value of the market by looking at the forward earnings and then the multiple. Today, forward earnings are running around $120 for the SandP 500 for 2014, so the multiple is roughly 16.2,” he said.

“There is no speculation in this market; if we saw speculation we would see a P/E [ratio] of around 20… now it is basically at the norm and this is one of the reasons why in this low-interest environment there is so much upside potential,” he added.

Shiller is not alone, however. A growing chorus of naysayers warned of a potential correction in the S&P 500, which is up 197 percent since March 2009. But Boroudjian believes the index will see further upside.

“We have huge community of unbelievers, and this is the most disrespected rally of my lifetime,” said Boroudjian.

“We’ve watched the stock market go up 1,000 percent in the last ten years, but we have had so many people in the last five years looking at the at 10-year yield and saying this is a warning signal. Well, guess what? That has kept people on the sidelines and it`s a shame because they`ve missed out in the greatest rally of our lifetime,” he added.

Other analysts told CNBC they also believe the S&P 500 could see further upside.

Read More How to play the housing recovery: Pros

“The S&P 500 can be shown to be trading above most of the stock price measures that you can use – so you can certainly point to it [and say that stocks look expensive],” said Evan Lucas, market strategist at IG.

“But if you look at the S&P 500 over the past few weeks amid all the geopolitical uncertainty it only moved down 3-4 percent. Nothing in the trend suggests it`s broken. Yes, there are bearish metrics and they will come to roost soon-ish. But there is no reason to see anything in the macro data that would put the S&P on a downward trajectory yet,” said Lucas, adding that he sees the SandP 500 gaining another 2,000 to 2,100 points by year-end.

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

China banks on first-time buyers to prop up housing

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

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Jiang Lu is the proud owner of a 450 square foot apartment in the Chinese capital of Beijing. The 28-year-old web editor invested her entire life savings and took advantage of easier mortgages in China to buy her new 250,000 dollar home.

“It is very easy to get a mortgage. Any bank will give one to you,” she said. “Without one, I wouldn`t even think about buying.”

Jiang is one of the first time buyers Chinese authorities hope will help prop up China`s flagging property market.

Read More: Chinese home buyers play the waiting game

In Beijing and many other cities across China, the housing market is starting to weaken.

New home prices dropped in July for the third month in a row with 64 out of 70 cities surveyed showing month-on-month declines. Based on data from the National Bureau of Statistics on Monday, the average price of new homes slid 0.9 percent from June, slipping faster than June`s 0.5 percent drop.

“The acceleration in home price declines is probably due to more projects offering discounts and slower sales in July,” Bank of America Merrill Lynch analysts said in a research note.

Read More: Is China property done dirt cheap?

Housing sales in China have dropped this year in total value by 10.5 percent compared to last year, according to official data.

China`s home prices have been skyrocketing for years, with the government encouraging development and offering few other ways for regular citizens to invest their cash. Concerned that prices were becoming out of reach for average citizens, policymakers began to put in restrictions in 2010 to stop speculators.

After several false starts, the market appears to be cooling finally but there are now fears the market could fall too fast and trigger a hard landing.

Read More: China property stocks jump on hopes curbs will be relaxed

With property so important to China`s growth, accounting for an estimated 20-percent of GDP, some economists worry about the impact a housing downturn could have on China`s economy and the rest of the world. The country`s real estate market drives global growth with construction fueling prices in commodities. Louis Kuijs, chief China economist with RBS, believes China will step in with further policies to prevent any dramatic correction.

“As we expected, several cities in the last two months eased restrictions on housing purchases,” Kuijs writes in a research note. “In the coming months, we expect more policy initiatives in that direction, given the key role of real estate in the economy, the subdued overall economic outlook in H2 2014, and the determination of senior leaders to meet the overall GDP growth target of 7.5 percent.”

Read More: Small Chinese cities steer away from GDP

Beijing recently moved to encourage big banks to step-up lending,especially to lower-income and first-time home buyers. Local authorities are also putting in measures such as tax rebates, encouraging potential buyers like Jiang to invest despite falling prices.

“Sure, there are risks involved,” she said. “But I`m a risk-taker so I just close my eyes and march ahead.”

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

How to deal with Jackson Hole ‘rate rage’

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

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Will the cry of the hawks echo from the Tetons and drown out the coo of the doves? As investors look ahead to this week’s Jackson Hole symposium for central bankers, one of the key worries is that attendees from the US Federal Reserve will make more hawkish statements than expected – in particular, signaling early US interest rate rises.

But despite the “taper tantrum” in the markets last year, after the Fed first hinted it would taper quantitative easing, investors shouldn’t concentrate too heavily on any “rate rage” ensuing from Jackson Hole. Instead, they should stay focused on the facts – which today speak in favor of low interest rates – and position themselves in response.

Investors cannot simply dismiss the Wyoming-based symposium; the forum has witnessed significant Fed statements in recent years. Then-Fed Chair Ben Bernanke used his Jackson Hole speech to hint at future monetary policy changes in 2010, 2011, and 2012. Given the current starting point, any such change at this year’s symposium would almost have to be hawkish.

The Jackson Hole symposium will also be one of the first opportunities for leading economists to oppose Fed Chair Janet Yellen’s dovishness and call for an earlier rate hike. One of my colleagues recently used the term “rate rage” to describe any future sharp market reaction to the prospect of increases in US rates. But investors should look through any rage that comes as a result of the symposium, and stay focused on the facts as they relate to the Fed and its view of the underlying economy.

True, US GDP growth is robust, inflation is approaching the Fed’s 2-percent target, and the current 6.2 percent US unemployment rate is not far from the 5.2-5.5 percent rate which the Fed considers consistent with full employment.

However, investors should recall that Yellen is a labor market economist who has been both persistent and consistent in her view that labor market participation should increase as the economy recovers. This means that broader labor market measures carry far more weight in this economic cycle than the usual mix of growth, inflation, and unemployment rates.

Looking here, the U6 unemployment rate, which takes into account part-time workers and those marginally attached to the labor force, remains far below pre-crisis levels. More than 1.2 million people who are considered out of the labor force are currently seeking a job, with little fiscal stimulus emerging from Washington to help.

And wage inflation is very low. To push up the personal consumption expenditure (PCE) inflation measure targeted by the Fed, wage inflation would have to rise from its current rate of around 2 percent, to 3-4 percent year-on-year.

Of course, if economic growth continues, unemployment falls, inflation and wages rise and broader measures of the labor market suggest that spare capacity is declining, Yellen will respond with tighter policy. But if they don’t, she won’t.

So how should investors respond to this? It’s not about judging whether policy is right or wrong, but working out what is likely. So while the hawks may cry, the data suggests that current policy will be maintained for now, and investors can remain comfortable with positive positions in equities and high-yield credit. 

But to prepare for volatility, investors should remain cautious on adopting an overweight position in government bonds, which offer little insulation against higher rates, and especially the dollar-denominated sovereign debt of emerging market issuers that have demonstrated a particular sensitivity to higher US borrowing costs.

Overall, the Jackson Hole Symposium will be one of the first opportunities for leading economists to oppose Yellen’s dovishness. As such, investors should not be surprised by circling hawks – and they shouldn’t concentrate too heavily on any “rate rage”. Instead, they should stay focused on the facts, and continue to position themselves positively in response.

– Commentary by Mark Haefele, the global chief investment officer at UBS Wealth Management.

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

Why now’s the time to buy iron ore

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

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Iron ore has taken a beating this year, with prices correcting over 30 percent from their year-to-date high of USD135 a tonne in January, but one analyst told CNBC this presents the perfect buying opportunity.

“It is time to tactically get long iron ore swaps and Fortescue Metals,” Conor O`Malley of independent research firm View from the Peak said in a note.

While a weakening real estate market in China, which accounts for around two-thirds of global iron ore purchases, coupled with a flood of ore supply suggests further gloom for the market, O`Malley said this shouldn`t put investors off.

“Accepting all of the above, it is still time to buy iron ore exposure as we move into the Chinese winter,” he said.

Among factors that underlie iron ore`s vicious decline this year are reports that commodities like iron ore and copper are being used as collateral for financing deals in China, raising concerns that a crackdown by authorities would dampen demand.

But View from the Peak`s O`Malley is confident that the market`s dynamics will turnaround soon: “A 30 percent correction in any commodity market will produce a supply reaction. Iron ore is no different,” he said.

He pointed out that weak prices forced a number of Chinese iron ore miners offline, resulting in tighter domestic supply. This should put upward pressure on prices especially as the market heads into the harsh Northern winter which normally reduces supply, he said.

O`Malley said iron ore prices potentially have another USD 8 per tonne to fall, but noted upside potential of USD 17 from current levels, making the risk-ratio compelling.

Other analysts agreed that the price of iron ore shows signs of stabilizing around current levels of USD 93 per tonne.

“I actually feel that we are at a reasonable area. It`s at one of those points where it`s not cheap and it`s not expensive,” said Jonathan Barratt, chief investment officer at Sydney-based wealth management firm Ayers Alliance.

“About two months ago I would have said we could have gone a lot lower, but now because we`ve held these levels I`m more optimistic that she should be quite stable,” he added.

Barratt pointed to some other positive factors: the recent drawdown in inventories in China – which suggests appetite for buying could become stronger – and the fading of the panic over the issue of commodities being used as collateral.

“It`s been like a lot of the issues that we`ve seen come out of China where it becomes an issue and they look after it… and as time has passed it looks like that issue has been taken care of,” he added.

David Lennox, market strategist at Fat Prophets, told CNBC he sees iron pries rallying to USD 100 per tonne by year-end, driven by Chinese demand as they continue to switch from lower quality/high-cost domestic iron ore to high quality/low-cost product from the likes of Rio Tinto and BHP Billiton.

“Imports into China should continue to keep quality iron ore in tight supply over the remainder of 2014 and 2015,” he said.

In July, China`s iron or imports rose 11 percent on month as buyers took advantage of lower prices. Australian miners likely stand to benefit most; Australia`s share of Chinese iron ore imports was 61 percent of the total in June and 56 percent in the first half of the year compared with an average of 51 percent in 2013.

“We believe downside is limited but the risk is that China switches off the import tap and then there could be some real downside risk,” he added.

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

Why Apple’s iPhone 6 is stressing out developers

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

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Ahead of Apple’s likely iPhone 6 launch in September, app developers are scrambling to make sure their apps will work on iOS8, which is expected to launch alongside the new smartphone.

Read More: Apple’s likely next iPhone launch is Sept. 9: Re/code

The new operating system is both an opportunity and a headache for the company’s nine million registered developers, as they face the challenge of building apps for as-yet unknown products, and meeting consumers’ sky-high expectations about usability.

The software update is the biggest release on the platform since the launch of Apple’s App store in 2008, company CEO Tim Cook said at the Worldwide Developers Conference this year.

Building for the Internet of Things

Apple’s app ecosystem is a big money maker. In January, Apple revealed that customers spent more than USD 10 billion on the App Store in 2013, and that developers had earned USD 15 billion.

And with iOS8 expected to pave the way for Apple’s ecosystem to grow beyond mobile devices, developers see another huge opportunity.

One of the most significant features of the new operating system is app extensions, which are basically a way for third-party applications to talk to each other. Extensions make it possible for third-party apps to work with things such as Apple’s new Homekit app, which is for managing technology in the home, and HealthKit, which is for managing wearables and healthcare.

Read More: The best iPhone 6 photo leak yet … from TMZ?

Essentially, the new extensions are Apple’s way of getting developers to begin building apps for devices beyond the iPhone.

It’s the company’s push into the so-called “Internet of Things,” said Matt Johnston, chief strategy officer at Applause, a company that tests apps. But building for new platforms presents difficulties, he added.

“The short answer is it’s a big headache, but there’s also a lot of opportunities that come with it,” Johnston said. “Developers are no longer testing their application in a silo, but they are having to test their application and how it interacts with this TV and other third-party apps.”

“Testing is going to get a lot more complex because there is a new set of challenges to launch these native experiences,” he added.

The fact that Apple is reportedly releasing two new iPhones of different sizes would also add to developers’ problems, said Ashish Toshniwal, CEO of Y Media Labs, a firm that builds iPhone and Android apps for large companies, including eBay and Lonely Planet.

Two new devices of different sizes means developers will have to design their app for each phone.

While Apple offers developers tools in iOS8 like its unified storyboard feature, which helps developers build apps for multiple form factors at the same time, it’s still not a perfect solution, Johnston said.

“Anyone who has launched software knows these things may work in lab testing, but they could fall apart once they’re in the user’s hands,” Johnston said.

And that’s a developer’s biggest fear, he added.

Getting ahead of the game

Developers can’t risk their apps not working properly on Day One of launch because consumers will hold their feet to the fire, Johnston said.

“Loyal users have come to expect perfection from big brand name apps. They have come to expect that this stuff is just going to work,” he said. “But as things become more complex, it’s become easier to fall down on this expectation and users are relentlessly unforgiving in the app economy.”

To avoid a mishap at launch, developers have started preparing for the iOS8 launch earlier than they have in previous years, Johnston said.

Applause, which performs software testing for app quality, has seen most of its clients get a jump-start on preparing their apps for the big update, Johnston said. He said that on average his clients are beginning to prepare for the update about a month earlier than they did on iOS7 last year.

App developers are also not planning to take advantage of any of the newest capabilities enabled by extensions right out of the gate, Johnston said. At first, they will be focusing on just getting their app to work properly on the new system and then will introduce more capabilities as they adapt, he said.

While not every app will make use of every new feature, there are a few new functions that most apps will eventually adopt, Toshniwal said. For example, the Touch ID feature, which enables apps to authenticate a user before allowing access, is applicable to many apps, as well as the new “actionable notification” function, which allows users to respond to messages or push notifications from the lock screen without having to open up the app, he said.

“iOS8 is a strong step in the right direction. There is a bit of a learning curve, but most developers are already getting up to speed,” Toshniwal said. “With any update there is a little bit of a headache.”

“But overall, it’s a huge upgrade,” he said.

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

Fed surprises with hawkish tone, but will Yellen?

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

Listen to the Article (6 Minutes)

Markets are now anticipating a more hawkish tone from the Fed, but maybe not from Fed Chair Janet Yellen when she addresses the annual Jackson Hole symposium Friday.

Against the backdrop of the Grand Tetons in Wyoming, the Fed gathers Thursday and is expected to debate the health of the labor market. Minutes released Wednesday from the Fed’s July meeting showed that officials discussed raising interest rates sooner, but they continue to disagree on how much the labor market is improving.

Stocks rose after the minutes were released, and the dollar and yields on shorter duration bonds also rose, as traders anticipated a Fed moving to hike rates. The Fed is in the process of unwinding its quantitative easing bond program, and is widely expected to move on raising rates in the middle of next year.

But the Fed broke new ground with its July meeting minutes, signaling that it is thinking about a return to normalcy and potential policy paths to get there. It noted that both employment and inflation are moving closer to mandated goals.

“The biggest thing that was hawkish was they’ve all been surprised on the upside with how rapidly the labor market has improved,” said Mesirow Financial chief economist Diane Swonk. “There is also a split among them about whether wages are accelerating. The staff report says no, but certain regions are saying maybe they are.”

Read More: Five reasons the Fed should raise rates

The July minutes mirror the recent public comments of Fed officials, with some like outspoken Dallas Fed President Richard Fisher, saying the economy and labor have improved enough to warrant earlier rate hikes. But Yellen, at the core of the Fed, has said while there is improvement, there are still big problems like a large number of long-term unemployed, too many people working just part-time and a low participation rate.

“Certainly there was a sense things happened faster than they thought, which means a faster rate hike, but they weren’t willing to pull the trigger. They weren’t willing to change guidance yet. They’ve been fooled more than once by this economy. It’s still data driven …They’re not popping champagne corks here,” Swonk said. Fed officials were concerned about the sharp contraction in first-quarter GDP plus the geopolitical developments that have been unnerving markets.

Read More: Is the Fed too hawkish?

LPL Financial’s John Canally said the Fed’s candor in its minutes took the bond market by surprise. “I think they anticipated this week to be another dovefest. I think from a market perspective, they are surprised. If Yellen comes out of the box Friday morning and says there’s lots of slack in the labor market and we’re not thinking about raising rates, this will all go back out the door,” said Canally, investment strategist and economist.

The Fed discussed the levers it could use to get to higher rates, including interest paid to banks on reserves and the target Fed funds rate.

Yellen speaks at the Fed gathering Friday morning, and European Central Bank President Mario Draghi delivers his address that afternoon.

Read More: Jackson Hole confab will zero in on labor

“The Fed’s on the back end of expansion and tapering and eventually raising rates. We know the direction. We don’t necessarily know the timing and exact details,” said Robert Sinche, global strategist at Pierpont Securities. “It’s not clear what the ECB does next … Draghi accomplished a lot without doing much.”

Sinche said the markets have been anticipating some move by the ECB, as the European economy shows signs of weakening. A form of quantitative easing, or bond buying, is one strategy. “In the case of the ECB and Draghi, I just think there’s a lot of uncertainty about unconventional policy,” Sinche said. “It’s not just a short term policy issue. This is the kind of thing you discuss at Jackson Hole.”

As for the Fed, he said it may have intentionally left Wall Street economists off the Jackson Hole invitation list this year in an effort to shift the discussion toward a longer term debate and not make it as policy focused as it was when Ben Bernanke was Fed chair. “I would think she would bias her comments to say as little as possible,” he said.

Read More: Investors basically have no fear about volatility

Milton Ezrati, Lord Abbett market strategist and senior economist, said that Yellen’s attempt to focus on longer-term issues may in fact make her sound hawkish. “She’s talking about the labor market in an amorphous way. It gives her tremendous maneuvering room….If she’s like (Bernanke), and I suspect she will be … he always used Jackson Hole to take the longer view. The longer view always sounds more hawkish,” he said. “Anybody who has any optimism about the real economy is going to sound hawkish at the Fed.”

Besides the Fed Thursday, traders are watching some key data including weekly jobless claims at 8:30 a.m. EST; existing home sales at 10 a.m.; the Philadelphia Fed survey at 10 a.m. and leading indicators at 10 a.m.

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Why manufacturing PMI still matters for China

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

Listen to the Article (6 Minutes)

Come Thursday, markets will be digesting a new round of manufacturing data from China, when HSBC releases the flash estimate of the Purchasing Manager`s Index (PMI) for August.

It`s a reading investors and analysts pay close attention to every month for a pulse check on the world`s second-largest economy, never mind that it`s infamously volatile or the fact that the figure will hold less credence as China re-balances away from a focus on the heavy industries towards domestic consumption.

Liu Li Gang, chief China economist at ANZ , who expects this month`s PMI to come in at 51.3, a tad lower than the 18-month high of 51.7 recorded in July, says like it or not, the PMIs will continue to move Chinese markets in a way few other indicators can.

For a country where credibility of data often invokes skepticism, these PMIs serve as good counterpoints to China`s data deluge every month.

“It is a good leading indicator, markets tend to pay attention because it is a private survey that focuses on China`s small and medium sized companies; an important segment of the country`s manufacturing industry,” he said.

Together with the China official manufacturing PMI, which includes surveys of big state-owned firms, the indicator could flag if Beijing`s stimulus released earlier this year was enough to keep the country`s economy buzzing, or if more easing is necessary, Liu added.

But hanging the hat solely on China`s manufacturing surveys is not enough, analysts say. With domestic consumption becoming a key driver of growth, Dariusz Kowalczyk, senior economist and strategist at Credit Agricole, says the services PMI readings will start to have bigger sway.

Last year, the services sector made up about 46 percent to China`s GDP, overtaking the manufacturing sector`s contribution of 44 percent.

“The services PMI is important because the sector represents the largest segment of the Chinese economy, so what happens with services will have significant impact on China`s GDP,” said Kowalczyk.

Besides clues on new business expectations which give a gauge of demand for the services industry, services PMIs also tracks the real estate market, and is valuable leading indicator on expectations in the sector, he added.

To be sure, there is still debate over which PMI to prioritize. Liu of ANZ says manufacturing surveys still trump their services counterparts, because there remains no clear trend that China`s transition towards a service-based economy will overtake the importance of factory activity to the economy.

Louis Kuijs, China economist at RBS, agrees with Liu, questioning the credibility of services PMI in telling the China story. “In my opinion, the non-manufacturing PMI doesn`t correlate much with the services industry, because it does not track sentiment in restaurant, travel, insurance and e-commerce sector. It mostly tracks services catering to the manufacturing industry such as logistics and trade-related insurance, which is not indicative of China`s real services economy.”

While Kowalczak supports a focus on the services PMI, he concedes that the manufacturing readings can be “more telling. That`s because “the manufacturing sector fluctuates more than services industry, and hence they are a better gauge of China`s overall growth momentum in the short-term,” he said.

Beyond the headline figure, sub-indexes such as new orders and prices do give a clearer indication of China`s growth picture, Kowalczak adds. “Information (from sub-indexes) such as employment and inventories do provide color, but it`s the new orders that tell the key story because it reflects the industry`s demand outlook,” he noted.

Still, wading through Chinese economic data can be daunting, especially when accuracy is frequently challenged by market watchers. Some analysts advise against fixating over small decimal moves; rather, investors should focus on readings that impact decisions by Chinese policy-makers, which aren`t necessarily PMIs.

“For me, the most important readings are the monthly industrial production, fixed asset investments and electricity utilization,” said RBS` Kuijs. “Why? Because that`s probably the data that Chinese policymakers respond to when they formulate their growth plans,” he said.

Copyright 2011 cnbc.com

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