Month: December 2014

China’s 2015 GDP target may be leaked this week

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

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Investors will keep an ear to the ground this week as China’s policymakers gather in Beijing for the country’s Central Economic Work Conference (CEWC) – a closed-door annual meeting that sets economic priorities for the coming year.

Dates for the meeting have not been officially announced, but the meeting is expected to kick off on Tuesday, according to Ta Kung Pao – a Hong Kong-based newspaper with ties to the mainland government. The meeting usually lasts 2-3 days.

Read More China data to dominate week in Asia

A key issue for the CEWC will be setting next year’s gross domestic product (GDP) growth target, viewed as an important signal of policy intentions.

While the targets are typically made public in March during the National People’s Congress, they are occasionally leaked to local media shortly after the meeting.

As growth appears set to fall towards the lower-end of this year’s “about” 7.5 percent target,Beijing is widely expected to propose a target of 7.0 percent – the lowest in a decade.

“The new leadership has proposed the concept of an economic ‘new normal’, which we understand to encompass slower but more balanced growth and increased reforms. We firmly believe that the top leadership is willing to accept slower but more sustainable growth,” said Chang Chun Hua, China economist at Nomura.

Read More China shadow bank collapse exposes grey-market lending risk

“Moreover, support for a lower growth target has recently gained momentum in policy circles,” said Hua.

During October’s China Academy of Social Science conference, participants – many of whom were from government ministries – expressed the view that a target of 7.0 percent for 2015 would be appropriate for China’s long-term potential growth, Hua said.

Mark Williams & Julian Evans-Pritchard, economists at Capital Economics expect the “about caveat” will be added to the 7.0 percent growth target once again to ensure policy flexibility.

Read More China’s economy is slowing faster than you think: CFO

“Even better, though admittedly less likely, would be for policymakers to drop the target altogether while perhaps maintaining their rhetoric of ‘keeping growth within a reasonable range’,” Williams and Evans-Pritchard.

“This would give policymakers greater flexibility without them being seen to be cutting their growth target in response to downward pressure on the economy,” they added.

In addition to setting the growth target, policymakers will also discuss other macro targets – including inflation and money supply – and lay out reform priorities.

Read More China stocks are on fire, but for how long?

Nomura expects the CPI inflation target to be lowered to 3.0 percent from 3.5 percent in 2014 due to lower commodity prices and weaker domestic demand.

However, the bank says the target for money supply growth may be held steady at 13 percent so that monetary policy can be more accommodative.

Meanwhile, on the reform front, policymakers are expected to pledge to accelerate the pace of various reforms including state-owned enterprise reform, rural land reform and interest rate liberalization among others.

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

Why the dollar is still king

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

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A question that has frustrated even the most experienced economists in the last few decades is how the dollar has remained the most prominent reserve currency in the world despite the global share of US output eroding away.

The Bank for International Settlements (BIS), a Basel-based institution that is known as the central bank of central banks, thinks it has found the answer.

Read More The year’s hottest trade is about to get even hotter

“We argue that the dollar’s role may reflect instead the share of global output produced in countries with relatively stable dollar exchange rates – the ‘dollar zone’,” it said in its new quarterly report released on Sunday.

In 1978, economists Robert Heller and Malcolm Knight were credited as first to draw attention to the fact that countries held an average of 66 percent of their foreign-exchange reserves in dollars. Even today that number hasn’t budged much with the latest statistics from the International Monetary Fund showing that just over 60 percent of allocated funds are held in the greenback.

The higher the correlation in price between a given currency and the dollar, the higher the economy’s dollar share of that country’s official reserves, according to Robert McCauley and Tracy Chan, the two authors of the BIS report. The report adds that the dollar’s robustness comes despite an 18 percent decline against major currencies since 1978 and the US economy’s share of global GDP (gross domestic product) shrinking 6 percent in those 36 years.

“The ‘dollar zone’ still accounts for more than half of the global economy. In countries whose currencies are more stable against the dollar than against the euro, reserve composition that favors the dollar produces more stable returns in terms of the domestic currency,” they said.

Read More: Could a strong dollar derail Wall Street’s rally?

“This alternative interpretation implies that currency shares could shift rapidly, as happened between the world wars.”

The survey covers 24 different economies which represent 28 percent of the official foreign exchange reserves from nations outside of the top three biggest economies. it also included samples for the private sector and found a similar correlation in reserve holdings.

“The logic underlying both private and official behavior is straightforward. The dollar looks less risky as an investment or a borrowing currency the more closely the domestic currency moves with the dollar,” McCauley and Chan said. “If correct, these findings have implications for the future of the renminbi.”

Rapid growth of the Chinese economy might therefore not be sufficient for the renminbi to eclipse the dollar in official reserve holdings, they added. This would only be possible if it showed “substantial independent movement” against the major currencies and if its neighbors, they said, calling it a possible “renminbi bloc.”

– By CNBC’s Matt Clinch

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

The overlooked BRIC that’s been the best bet

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

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Over the course of the past year, exchange-traded funds that tracked the BRIC nations (Brazil, Russia, India and China) have had roller coaster-type movements. Sometimes, that can provide occasions for opportunistic investment.

Which BRIC has had the biggest bounce?

We looked at the iShares MSCI Brazil Capped, Market Vectors Russia, iShares MSCI India and iShares China Large Cap ETFs. We measured performance against how much higher each ETF was from its respective 52-week lows—or, in other words, its relative momentum—to see which emerging market nations investors have been favoring amid the volatile ride.

The tale of the EM ETF tape

It’s not Russia. With oil prices falling, and Russia’s own government admitting that its economy will contract by 0.8 percent in 2015, shares of Market Vectors Russia just hit fresh 52-week lows on Dec. 4, and have lost 35 percent of their value in 2014.

The picture is slightly better when it comes to Brazil. While the iShares MSCI Brazil Capped has lost 12 percent year to date, it did manage to close approximately 3 percent above its 52-week low.

Read More: ETFs about to pass $2 trillion in assets

Meanwhile, investors who focused on India and China have reaped much larger rewards, at least when it comes to the bounce from yearly lows.

The iShares China Large Cap has rebounded 27 percent from its March 20 lows, bringing its year-to-date gain to 8 percent. But it’s the iShares MSCI India that takes the BRIC crown when it comes to performance in 2014. Since Feb. 3, it has managed to gain 40 percent, and has done so with a fairly steady climb. Many credit the anticipation and eventual rise to power of current Prime Minister Narendra Modi, who is viewed as being pro-business and economic growth.

As for how some of the key developed market ETFs have fared, the SPDR S&P 500 ETF has gained nearly 20 percent since its low on Feb. 5, and the iShares MSCI Germany has gained 14 percent since its low on Oct. 16, so this is an ETF that is just starting to get some traction over the last couple of months.

A big question remains about just how much the economy can grow given all the headwinds facing the European continent. There’s also what policy actions the European Central Bank may take in terms of its own monetary stimulus program in the coming months.

Read More: This Nifty ETF maneuver is becoming more common

For those investors that base trades on macro, or larger global economic themes, picking the right geographic investments has yielded superior returns, but it remains to be seen if those trends will continue into 2015.

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

Traders will game the Fed in the week ahead

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

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Traders will be searching for any signs the economy and job market are really kicking into higher gear, as Friday’s jobs report suggests.

November saw the strongest employment gains in 35 months, and the market instantly re-priced expectations for the first Federal Reserve interest rate hike for June from September. That was also the timing mentioned by New York Fed President William Dudley in comments earlier in the week.

So, markets in the week ahead will be adjusting to the idea that the Fed is beginning to get the confirmation it needs to start normalizing monetary policy. Bond strategists expect to see a bias toward higher rates, and stock traders are watching to see if the Dow will cross the 18,000 threshold —a big round psychological number just 42 points away from Friday’s closing level.

Good news as bad news?

Economic data in the week ahead includes job opening and turnover data Tuesday; retail sales on Thursday and PPI and consumer sentiment Friday. There are a handful of earnings, including Costco and home builders Hovnanian and Toll Brothers.

The Dow rose 0.7 percent to a record 17,958 in the past week, and the S&P 500 rose 0.4 percent to 2075. The Nasdaq was down 0.2 percent at 4780.

Read More: The ‘You want fries with that?’ jobs report

James Paulsen, chief investment strategist at Wells Capital Management said he expects the Dow to reach 18,000 soon. It crossed 17,000 for the first time on July 3. “My guess is we’ll get there,” he said.

“But it won’t go a lot higher than that, and we pull away before the end of the year,” he added. “I think [the] jobs report has moved up the time table for the Fed, so good news might start be bad news.”

Some Fed watchers have been expecting a June rate hike, but there are many expecting a third quarter hike and some even expecting it in the fourth quarter.

There’s also a small camp that expects a first quarter hike because they view the economy as being stronger than the Fed does. These diverging views will move closer together, as data either supports or refutes the view the economy is getting stronger. That could impact the markets.

“I think the Fed is going to move in June. I think they’re setting it up—including with some of the comments this week that are suggestive of the fact that we’re moving to easy policy as opposed to excessively easy policy,” said Rick Rieder, BlackRock chief investment officer of fundamental fixed income.

Read More: Here’s why tech stocks will go ‘nuts’ in 2015

The Treasury yield curve flattened Friday amid expectations for an earlier rate hike, with a sharp move up in the 2-year note yield to 0.63 percent, a 3-year high. There was a lesser move in the 10-year yield to 2.30 percent. The dollar continued to gain on a stronger US economy and the dollar index was 1 percent higher on the week at 89.39, an eight-year high.

Rieder said the 10-year could move into the 2.75 —2.80 range. “We think the 5-year could be up 75 basis points as we get into 2015,” he said.

CRT Capital chief Treasury strategist David Ader said the market will look to all stronger data through the prism of what it could mean for the timing of Fed rate hikes. He also said the market is looking to the Fed altering some of the language in its statement that discusses keeping rates low for a considerable time.

Ader expects the market to build a concession ahead of the auctions Tuesday to Thursday of $69 billion in 3-year and 10-year notes and 30-year bonds. He said the 2.40 level on the 10-year yield tends to draw in buyers.

Read More: Big beat on jobs report, here’s how stocks react

“The auctions will go okay, maybe a little sloppy,” he said. “I would say the stronger the data is now, the more we’re trying to bring forth Fed rate hikes.”

Markets will focus on key global economic reports this week, starting with Chinese trade data and labor market conditions Monday. Chinese inflation data is Wednesday and retail sales and industrial production Friday. There is also industrial production data from the euro zone expected.

“The Fed has a favorable window to do it because the European Central Bank, the Bank of Japan and the Peoples Bank of China are all easing,” said Rieder. That could help keep long end rates contained, because investors should find the US Treasurys a better bet relative to foreign sovereigns, as they have been, he said.

Perhaps the most important US report will be retail sales, as investors try to sort out what’s happening with holiday sales. So far, the results have been uneven in some of the preliminary reports.

“Of course, auto sales were very strong. The evidence of more chain store sales are sort of middling. You’d have to think with job growth accelerating and gasoline coming down, the environment is very good for consumer spending,” said JP Morgan economist Robert Mellman. Mellman said he expects a 0.4 percent gain in core retail sales, which exclude cars, gasoline and building materials.

US oil futures were down a half a percent in the past week to USD 65.84 per barrel, a five year low. Gasoline futures were down nearly 3 percent to USD 1.77 a gallon.

Monday

Earnings: Vail Resorts, H&R Block, Diamond Foods, Pep Boys

12:30 p.m.: Atlanta Fed President Dennis Lockhart

Tuesday

Earnings: AutoZone, Krispy Kreme, Burlington Stores, HD Supply

7:30 a.m.: NFIB survey

10:00 a.m.: Wholesale trade

10:00 a.m.: JOLTs

1:00 p.m.: USD 25 billion 3-year note auction

Wednesday

Earnings: Costco, Hovnanian, Toll Brothers, Lands’ End, Vera Bradley, Men’s Wearhouse

1:00 p.m.: USD 21 billion 10-year note auction

2:00 p.m.: Federal budget

Thursday

Earnings: Lululemon Athletica, Ciena, Adobe Systems, Quiksilver, Esterline Tech

8:30 a.m.: Initial claims

8:30 a.m.: Retail sales

8:30 a.m.: Import prices

10:00 a.m.: Business inventories

1:00 p.m.: USD 13 billion 30-year bond auction

Friday

8:30 a.m.: PPI

9:55 a.m.: Consumer sentiment

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 won’t stop US oil production growth

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

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US oil production could increase next year to levels not seen since the 1970s, despite OPEC’s efforts to muscle out American shale producers.

While US oil production is predicted to rise by another million barrels a day during 2015 from the current 9 million barrels a day, forecasts are coming down on expectations that OPEC’s unwillingness to cut production will keep a lid on prices well into next year. Lower prices limit new drilling and hit high-cost wells first.

Saudi Arabia may continue to stay away from cuts even if prices continue to move lower: OPEC’s biggest producer now expects Brent crude to stabilize at around USD60 a barrel, which is a level the Saudis could withstand, according to a Dow Jones report Wednesday.

But analysts say the US industry, which has turned around its fortunes with new technologies in less than a decade, is expected to drill the most-efficient wells, and production will continue to grow—even with lower prices. There is also a gusher of new offshore oil production coming online in the Gulf of Mexico.

The Fed in its Beige Book Wednesday made note of the fact that drilling activity in shale production districts remained steady even with a sharp drop in crude prices. North Dakota showed an increase in November, and the Fed said officials there expect production to continue increasing over the next two years.

Citigroup analysts also expect production to rise, and in 2015, it should be in line with the 1 million barrels a day of production growth this year.

Read More: US energy is growing – and so is US ‘power’

“Production is going to continue to grow. Could we see another million barrels a day of growth next year over this year? We happen to think so,” said Edward Morse, global head of commodities research at Citigroup. Morse expects an average Brent crude price of USD80 per barrel next year, but if it’s lower, he says US oil production could still add 800,000 barrels per day.

The rapid growth of US oil production has helped create a surplus of oil, particularly in the Atlantic Basin, and it has already edged out West African imports the US once relied on.

The expectation is that now with sharply lower prices, some shale wells will no longer be economical, and many that were planned will not be drilled. Already, applications for drilling permits have fallen sharply, down 40 percent to just more than 4,500 in November from October’s levels, according to a Reuters report quoting industry data firm DrillingInfo.

Fadel Gheit, senior energy analyst at Oppenheimer, said US shale production will keep growing, but the question is how much, and it will be the price that determines it.

Read More: Private equity bets on energy revolution

“The lowest will be that production will increase by a half million (barrels a day). The highest will be 1.5 million. I would say 600,000 to 700,000 would not be out of line, and we could even have 1 million barrels a day of production growth. Some of these plays will continue because they are cash cows,” he said.

Gheit said there are more than 200 companies drilling US shale, and much of the data on their margins and production levels aren’t known. He said the price of West Texas Intermediate could remain in the USD70s next year, and conceivably see a much sharper, but temporary drop.

WTI was at about USD67 per barrel Wednesday, 37 percent below its June peak. The latest leg downward came after OPEC last week followed the lead of Saudi Arabia and declined to cut production in order to stabilize prices. Saudi Arabia has said it would not go it alone with production cuts and is aiming instead to hold on to market share during the price slump, while shaking out the weakest producers.

“No matter how low oil prices go, there will be no (shale) production shut in. The cash component (cost) will be, say, USD15, USD20, USD25,” Gheit said, noting the expenditure for land and drilling has already been made. “Oil prices will have to go below USD30 for some of these wells to be shut in, and even then the owners need the cash to survive. They will milk the cow until the cow drops dead.”

Morse said one factor that could keep the US shale industry drilling is that there are a high number of incomplete wells that could easily be turned into productive wells. He estimates that there are thousands of such wells in Texas, Oklahoma, North Dakota, Ohio and Wyoming.

Read More: Sorry, Iran—lower oil prices are a win for America

“There are a very large number of incomplete wells that have been drilled, and they’re the cheapest ones to bring on. So, if companies are going to be strapped for cash, the best way to get cash is to complete wells … the average for that completion is USD5 a barrel to complete a well that’s already been drilled,” he said.

Morse said wells are much more efficient than they were just a few years ago.

“Each well currently being drilled in the main shale plays produces more than 550 barrels a day,” he said, noting that it was 150 barrels on average just several years ago. Now those wells run for three months before the decline starts, and costs are much lower, at USD35 to USD45 per barrel, in the Bakken of North Dakota and Eagle Ford in Texas.

Gheit said the industry has learned to be more efficient very quickly.

“Only five or six years ago, wells used to take 70, 80, 90 days to compete. Today they take two weeks. That in itself is a huge accomplishment. The same rig instead of drilling one well, can drill four. Companies now know how to drill faster than ever before. They learned it in trial and error. Companies don’t need as many rigs to drill as many holes in the ground and that in itself is a cost saving,” he said.

Industry production has repeatedly beaten forecasts as wells are drilled, Gheit said. “This is across the industry,” he said.

OPEC is unlikely to be able to exert enough pain to stop the shale producers. “They are not staying in place. … You’re not going to stop the shale revolution. The genie is out of the bottle already. You can’t put it back in,” he said.

But companies will look to reduce costs, and they will cut back on new production. “The question is at what rate (production will grow). Technology will accelerate this rate even if we have lower oil prices. Usually companies become more creative with lower prices,” Gheit said.

US oil production has been about 9 million barrels per day in November, and while other analysts may not share expectations for a million barrels, they see continued growth for US production.

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“It’s going to keep rising, but at a lower growth rate as we get to the second half of 2015,” said Andrew Lipow, president of Lipow Oil Associates. “I think the million barrel increase is going to be revised downward somewhat. … There are less permits being issued for drilling, but you’re just not going to see some of that effect for four months. That’s the trajectory.”

But Lipow said another 500,000 barrels a day of oil is expected to be produced in the Gulf of Mexico over the next two years, taking production there to 1.9 million barrels a day, a record high level.

Just last month, Hess saw the first flows at its majority-owned Tubular Bells offshore field.

“That’s going to be the big surprise. I think the market in general outside of the oil industry thinks that all of a sudden the taps are going to shut and everything’s going to be horrible, but that’s not going to be the case,” said Lipow. “It’s the next tranche of investment that won’t happen.”

Morse expects oil prices to recover with Brent, the international benchmark, averaging USD80 per barrel in the first quarter, and West Texas Intermediate at USD72. His base case is that OPEC should give up and cut production levels in the April and May period. Morse said he expects prices to be supported by seasonal winter demand but then slump, and that could force OPEC’s hand in the spring.

If OPEC does not cut production, he expects Brent to fall to USD65 and WTI to fall to USD58.

“The problem for OPEC is if they don’t blink, and let’s say they do shut down the rate of production growth in the US, and they get a price back to where they like it to be, US production growth starts again,” Morse said.

Morse agrees it will be exploration that will be affected by lower prices, and that would shape production growth in the future.

“It will affect the amount of oil in 2017 but not 2015 and 2016,” he said.

But then there will be other sources of oil coming online, he said, “Mexico is going to open up and there will be lower prices but nobody can afford not to be in Mexico.”

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 gold just can’t win

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

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If no one expected the Swiss vote forcing the central bank to hold more gold to succeed, why is gold tanking?

Over the weekend, Switzerland’s voters overwhelmingly rejected a proposal to require the country’s central bank, Swiss National Bank (SNB), to raise its gold holdings to 20 percent of its assets from around 7 percent currently as well as preventing it from selling any more of its gold holdings.

Read More: Swiss voters resoundingly reject gold, immigration proposals

But while the outcome was well expected, gold still swooned Monday, dropping as low as around USD 1,141 in Asian trade Monday for an around 3 percent decline, a far cry from the more than USD 1,900 an ounce peak set in September 2011.

“Even though the Swiss announcement was well known and the Swiss government isn’t a huge buyer, the market is drawing comparisons with other central banks going down the same road of not increasing [gold holdings] as much as thought,” said David Lennox, a resources analyst at Fat Prophets, noting that central banks have been buying quite a bit lately.

Bear market

Gold’s decline Monday may not represent any developments.

“Gold’s been in a bear market since the high in September 2011,” Barry Dawes, head of resources at Paradigm Securities, told CNBC.

Read More: Swiss set for gold vote amid ‘6,000-year bubble’ warning

Indeed, around USD 4.41 billion has flowed out of gold mutual funds and exchange traded funds so far this year, with another USD 3.78 billion coming out of precious metal funds, according to data from Jefferies.

Oil price drag

Another factor that may be pressuring gold: oil prices have dropped sharply over the past week.

“Oil is taking the entire commodity spectrum down with it, as energy is the major cost of production in most commodities (extraction and transportation),” Julius Baer said in a note Monday.

Read More: Central banks: The new gold bugs?

“Low oil also means low inflation,” the bank added. That’s something that short-circuits demand for gold as an inflation hedge.

No fillip on India’s move

The shiny metal even failed to get a fillip news Friday that India’s central bank took the surprise move of ending rules that required gold importers to re-export 20 percent of their shipments.

It isn’t clear how much of a buying boost the change will bring.

“[The restriction] just drove buying underground,” Lennox said, although he expects buying will become more visible. “Those persons who didn’t want to participate through underground buying and didn’t want to pay the tax should enter the market.”

Price forecasts

Gold’s decline has prompted analysts to once again trot out the oft-repeated predictions that the shiny metal could fall all the way to USD 1,000 an ounce.

Read More: Chinese unmoved by gold price drop, see it cheaper still

“I wouldn’t suggest USD 1,000, but it may not be out of the question,” Lennox said, citing rampant US dollar strength as weighing on the metal.

“We need to see something in other currencies to counter the US dollar and we can’t see that coming out of Japan and Europe next year and of course, China pegs [it’s currency], which doesn’t leave a lot of competitive currencies against the U.S. dollar,” Lennox said.

Read More: Charts suggest sub-USD 1,000 gold is likely

To be sure, Paradigm’s Dawes thinks physical gold might finally be finding a floor.

“The demand for gold is really out of India and China,” Dawes said, noting the importance of European and North American demand has waned. But he expects improved demand from the middle-class in India and China, as standards of living improve there, and as fears of currency debasement persist.

—By CNBC.Com’s Leslie Shaffer; Follow her on Twitter @LeslieShaffer1

Clarification: This story has been updated to reflect that the current gold holdings of the Swiss National Bank is about 7 percent of its total assets, following clarification from the SNB.

http://www.cnbc.com/id/102223258

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

Concerning bond trend that could rule 2015

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 official factory PMI falls to 50.3 in November

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

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China’s factory activity eased more sharply than expected in November, official data showed Monday, underscoring the challenges manufacturers face amid a cooling economy.

The official Purchasing Managers’ Index (PMI) fell to an eight-month low of 50.3, missing a forecast in a Reuters poll for a 50.6 figure and down from the 50.8 reading in October.

The HSBC final PMI reading for November, also released Monday, was unchanged from the flash figure which clocked in at the breakeven level of 50.0 that separates expansion from contraction, after the 50.4 print in October.

The official PMI is focused on larger state-owned factories while the HSBC survey tends to apply to smaller manufacturers in the private sector.

China’s slowing economy prompted the central bank to ease interest rates last month, the first such move in more than two years. The one-year lending rate was cut by 40 basis points to 5.6 percent and the one-year deposit rate was lowered by 25 basis points to 2.75 percent. 

The move had surprised many market watchers who had expected Beijing to stick to its script targeted measures as the economy adjusts to a slower growth rate amid structural reforms.

“I think the government will continue to loosen monetary policies in the coming months. The economy and the PMI have been hovering around 50 for a long time, so the economy is stuck,” independent economist Andy Xie told CNBC following the release of the data.

“The tools for monetary policy is not likely to be effective, but they will try it first. Maybe in a few months time they will try something else,” he added.

China’s economy grew 7.3 percent in the third quarter from the year-ago period, it’s slowest rate since the global financial crisis.

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

Can oil fall all the way to $40?

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