Month: February 2017

Smart cities are coming.

Municipal governments around the globe are employing big data and Internet-of-Things applications to improve many aspects of daily life. Major tech companies like IBM, Cisco and Microsoft are in on the trend, and are battling for a slice of the USD 15 billion that’s projected to be spent on software by 2021, according to Juniper Research.

Urban residents accounted for 54 percent of the total global population in 2014, according to the World Health Organization, and that figure was projected to grow nearly 2 percent each year until 2020.

Juniper Research noted a city’s ability to provide renewable energy, alongside its means to efficiently manage energy storage will be increasingly important.

“Right now North America and China are leading the way, although Trump is likely to dampen what is already slowing U.S. investment,” Steffen Sorrell, principal analyst at Juniper Research said.

President Donald Trump has supported fossil fuel production and repeatedly denied climate change.

“Who would have thought 10 to 15 years ago, that the Far East and China would be leading the globe in smart energy efforts by 2020?” Sorrell said.

Still, many challenges remain for cities on their way to becoming “smart.” Major upfront costs for both infrastructure and software are propelling many governments to turn to public-private partnerships.

CNBC looks at three cities working on becoming “smart”:

The city-state might be the “smart” gold-standard for its extensive effort to collect data on daily living. Its Smart Nation program was launched in 2014 and collects data on many facets of life.

Data is collected in a platform, Virtual Singapore, which helps the government understand how the city is functioning in real-time and potentially predict how crowds might react in an explosion or how infectious disease might spread.

As part of the Smart Dubai initiative, the government has rolled out more than 50 smart services from 22 government entities. It allows people to access everything on one app, Dubai Now.

App users can do everything from pay a speeding ticket, pay an electric bill, renew vehicle registration and track the status of a visa.

One of Wall Street’s biggest bulls is waving the white flag on the ongoing US stock market rally and delivered an unnerving message for investors: A near-term storm is on the horizon for stocks.

Lee, who serves as head of research for Fundstrat Global Advisors, recently announced his firm’s 2017 S&P 500 year-end price target of 2,275, which is approximately 1 percent below current levels. The market watcher expressed concern over value stocks getting off to a weak start this year.

“I think it’s possible that we’re going to have a bumpy first half,” Tom Lee explained on CNBC’s “Futures Now” Thursday. “It won’t be a straight shot upward for stocks. The first half, we’re going to have a draw-down by 5 percent.”

However, Lee encouraged investors to buy the dips, in anticipation of an upswing in the second half of 2017. He is also adamant that a pullback won’t lead to a bear market.

This is in large part because Lee believes the Federal Reserve is no longer the key backstop for markets. Furthermore, Lee is encouraged by the potential for additional gains stemming from the anticipation of pro-growth policies under President Donald Trump.

If executed properly, tax reform, lighter regulation and fiscal expansion should trigger faster economic growth, which Lee says favors value in the markets. Additionally, he says that fiscal expansion occurring in multiple developed economies will help bolster growth in the US

“We essential have a policy ‘put’ in place,” noted Lee. “It’s setting the stage for earnings to be the primary driver [of markets]. That’s how you’re going to pick stocks and sectors.”

‘Pretty amazing’

Indian Prime Minister Narendra Modi tested the public with his controversial banknote policy last year. Now, upcoming state elections will give citizens a chance to grade Modi’s leadership on the matter.

Elections in five states—Uttar Pradesh, Goa, Uttarakhand, Punjab and Manipur—begin this Saturday, with results due out March 11. As the country’s most populous province and one with the biggest share of seats in parliament, Uttar Pradesh is a political bellwether and will be of most importance for the ruling Bharatiya Janata Party (BJP).

Because the polls come on the heels of demonetization, that’s set to be a major theme. “The state poll results will be a key indicator for the 2019 general election on how people viewed Modi’s drive against black money,” Bank of America Merrill Lynch (BofAML) summed up in a recent report.

Nearly three months on, Modi appears to continue to enjoy widespread support, pointed out Jan Zalewski, senior South Asia analyst at Verisk Maplecroft. Despite poor implementation and widespread ill-effects linked to the currency reform, the Prime Minister is still able to enter the election race on a moral high ground because he branded demonetization as an anti-corruption measure, he continued.

Recent opinion polls indicate victory for the BJP, particularly in Uttar Pradesh, where its primary rivals are regional factions, including the incumbent Samajwadi Party (SP) and the Bahujan Samaj Party (BSP). In the other four states, the BJP faces national opposition parties, such as Congress.

European bourses opened lower this Thursday as investors eyed corporate earnings and waited for the latest economic assessments of the Bank of England.

The Pan-European Stoxx 600 was 0.22 percent lower with most sectors trading in the red.

A number of European firms are reporting their latest figures Thursday, including Danske Bank, Ferrari, Vodafone and Glencore.

Deutsche Bank reported a full year net loss of $1.46 billion, an improvement from a net loss of $7.3 billion in 2015.

Shell announced a 8 percent drop in 2016 earnings to $3.5 billion and Vodafone posted a 3.9 percent drop in its third-quarter revenues.

Swedbank reported a slightly higher-than-projected increase in its fourth-quarter earnings due to a pickup in lending volumes.

The Finish firm Nokia presented sales above expectations in its fourth quarter with earnings before profit, taxation and amortization of 108.5 million euros.

While the manufacturing PMI data tend to be more closely watched, China’s pivot toward domestic consumption and away from manufacturing- and investment-led growth means the service sector, which includes consumer industries such as real estate, retail and leisure, has become the majority of the mainland economy.

It is also a key barometer of consumption, which accounts for more than 50 percent of gross domestic product (GDP).

The figures likely signaled that China’s economic growth was stabilizing. Concerns have persisted over the mainland economy’s health, as private-sector debt has surged even as the amount of growth from additional debt has declined.

But the economy in recent months has received a fillip from a pickup in the property sector.

Andy Xie, an independent economist and former chief Asia-Pacific economist at Morgan Stanley, told CNBC’s “Squawk Box” on Wednesday that China’s economy “obviously” was quite strong.

“Since the middle of last year, the economy has experienced a very big recovery,” Xie said, noting that electricity consumption had risen sharply.

But he added, “The issue is, is it healthy? And unfortunately that is not true because we see the currency is under pressure and the forex reserves are falling a lot and the government has to use controls to stop the outflow,” he said. “I think China’s problem is not growth, it’s quality of growth.”

In January, China reported that its foreign exchange reserves fell for a sixth straight month in December, declining by USD 41 billion for the month, to USD 3.011 trillion, the lowest since early 2011. Policymakers have shored capital controls in an effort to stem outflows.

That, along with a sharp rise in the dollar in the wake of Donald Trump’s surprise US presidential election win, has helped to pressure the Chinese currency, with the yuan falling to nearly eight year lows against the greenback, touching its weakest since at least January 2009, during the global financial crisis.

Tommy Xie, an economist at Singapore bank OCBC, pointed to signs in the data that the prices of raw materials remained high, something he expected to feed into the producer price index (PPI). He forecast a rise of as much as 7 percent in January.

In December, China’s PPI climbed to a five-year high, rising 5.5 percent on-year, exiting years of deflation. Producer prices had slumped in recent years amid excess capacity in many industries and a slowdown in global growth. That also signaled not just likely stabilizing economic growth, but also a likely pick up in corporate profits.