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Earnings season for banks begins Oct. 15, when J.P. Morgan Chase, Citigroup and Wells Fargo are scheduled to announce their Q3 results. However one CIO says earnings are not the focus in the market.
Even though the Aussie and Kiwi were boosted by the news, I don’t think it was particularly bullish because the older tariffs remain in place, and a decision had not been made over additional U.S. tariffs scheduled for December.
The coming week’s docket of economic reports and earnings releases comes just following the Trump administration’s announcement of a partial trade deal with China late last week.
It is a big week ahead, with corporate earnings, trade talks, Brexit and economic data in focus. There’s also the IFM meetings and the EU Summit.
(Bloomberg) -- Want to receive this post in your inbox every day? Sign up for the Balance of Power newsletter, and follow Bloomberg Politics on Twitter and Facebook for more.As the impeachment crisis worsens for U.S. President Donald Trump, it seems all roads lead to his personal lawyer Rudy Giuliani, who is now embroiled in scandals stretching from Ukraine to Iran.In northeastern Syria, terrified civilians are trying to work out the safest way to flee as Turkish forces entered towns along the frontier between the two countries, just days after Trump said U.S. troops in the area wouldn’t stand in the way of Ankara’s military offensive.Another conflict causing ripples throughout the world — the trade war — is showing a flicker of hope. After months of escalation, Trump offered a tacit embrace of something he has resisted for months: A partial deal. Dig deeper into these issues and take a look at some of Bloomberg’s most compelling political photos from the past seven days.Trump Urged Top Aide to Help Giuliani Client Facing DOJ ChargesFueling long-standing concerns about Trump’s governing style, it’s emerged he pressed then-Secretary of State Rex Tillerson to persuade the Justice Department to drop a case against an Iranian-Turkish gold trader who was a client of Giuliani. Tillerson refused, while others were shocked by the request, Nick Wadhams, Saleha Mohsin, Stephanie Baker and Jennifer Jacobs report.Turkey Gears for High-Risk War Against a Familiar Foe in SyriaTurkey’s armed forces face a familiar opponent as they launch a major offensive in northeastern Syria. As Selcan Hacaoglu and Marc Champion write, they’ve been fighting versions of the Kurdish People’s Protection Units, or YPG, for 35 years.Trump Mines Weak Spots in Foreign Leaders for Battles at HomeHe might be working to salvage his presidency, but Trump can still smell weakness in others. In his efforts to discredit his domestic enemies, he’s solicited help from Ukraine’s rookie president, a collapsing Italian government, an Australian battling China and Boris Johnson of Brexit-divided Britain, John Follain, Volodymyr Verbyany and Jason Scott report.When This $2 Trillion Market Turns, Start Worrying About BrexitFor post-Brexit Britain, the kindness of strangers and their money will be more vital than ever, Anooja Debnath and John Ainger write. Prime Minister Boris Johnson has amped up his rhetoric that the U.K. will leave the European Union at the end of this month — even if there is no basis for a future relationship.The Plane Crash That Helped a European Leader Take Over a NationThe news that a Polish air force plane had crashed in dense fog in April 2010 transfixed a nation. Among the dead were Poland’s president, his wife and dozens of top officials. The repercussions from that transformed the country from one of Europe’s great successes into one of its biggest renegades. Marek Strzelecki and Rodney Jefferson report.Trump’s China Deal Yields Plenty of Questions, and CriticsWith the partial agreement with China he announced yesterday, Trump is back in dealmaker mode after months of escalation. But as Shawn Donnan reports, that doesn’t mean the new grand bargain he once promised with Beijing is any more than a small step closer to reality, or that a curtain is being drawn on the uncertainty his trade wars have brought to the global economy.Moment of Truth on China Is Coming for Rest of Corporate AmericaLong before Daryl Morey’s fateful tweet — the one that set the NBA on a collision course with China — the nation had a history of employing economic might to twist corporate arms in Asia. As Matt Townsend reports, it was one of China’s most aggressive efforts yet to bend a western company to its will.Stay Radical or Get Pragmatic? AMLO’s Party Has to Decide For most of its five short years in existence, Mexico’s Morena party has revolved around one politician: Andrés Manuel López Obrador. AMLO, as he’s known, was elected president in a landslide last July. Now his leadership is at a crossroads, Eric Martin writes.GM’s Electric Future Means Prosperity for One Michigan Town, Disaster for AnotherEvery decade or so, GM undergoes a transformation to ensure the company’s long-term survival, write Bryan Gruley and David Welch. Invariably, these makeovers turn some communities into winners and others into losers — in this case, they’re separated by just 35 miles.Two Mammoth Power Plants Are Sinking Eskom and South AfricaSouth Africa’s economy was roaring along in 2007, on the back of the global commodities boom, when power shortages struck bringing mines and smelters to a halt. State power utility Eskom Holdings swiftly opened the spending taps, but botched implementation of the expansion plan has haunted the country ever since, write Paul Burkhardt and Michael Cohen.And finally ... The Arctic is emerging as a potential geopolitical flashpoint for the U.S., Russia and China as shipping routes get unblocked, Marc Champion writes. Melting ice is opening access to new energy resources faster than predicted, and it’s prompting a nascent great power struggle as the political and economic map of the world is transformed. \--With assistance from Muneeza Naqvi.To contact the author of this story: Ruth Pollard in New Delhi at email@example.comTo contact the editor responsible for this story: Karl Maier at firstname.lastname@example.orgFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- The United Auto Workers made a counter proposal to General Motors Co. late Friday that would end a nearly month-long strike if the automaker agrees, capping a tumultuous day in which the union and company traded barbs and blame.UAW Vice President Terry Dittes offered no specifics on the proposal in a letter sent to members and published on the union’s website. GM had been awaiting a response to its latest offer made Monday, which a person familiar with the matter said included $9 billion of total investment in U.S. plants, about $2 billion more than the carmaker vowed to make in mid-September.Analysts say the strike has cost GM more than $1 billion of lost profit. The automaker’s senior executives appealed to rank-and-file employees late this week, portraying UAW leadership as dragging their feet in responding to its proposals.“We object to having bargaining placed on hold,” Scott Sandefur, GM’s vice president of North American labor relations, wrote to Dittes late Thursday in a letter obtained by Bloomberg. “As we have urged repeatedly, we should engage in bargaining over all issues around-the-clock to get an agreement.”The public war of words escalated midday Friday, with the UAW issuing an open letter accusing GM of stalling negotiations to “starve UAW-GM workers off the picket lines” and protect its own interests. The union said its negotiators remain committed to bargaining day-and-night to find an agreement.“These delaying tactics have human costs. Families are suffering, from Detroit to Texas to New York,” the letter said. “This strike has been and continues to be about securing the American workers’ future.”Showing FrustrationThe UAW’s walkout has halted production at 34 U.S. plants and disrupted output at factories in Mexico and Canada. While GM publicly released details of its first formal offer to the union on Sept. 15 -- the day the UAW called the strike -- the company had until this week kept a lid on public criticism of union leaders, who themselves are dealing with a credibility crisis.GM was upping the pressure on UAW brass Friday in a bid to clinch an agreement before the strike enters a fifth week.“GM is frustrated with the pace of negotiations,” said Art Schwartz, a former GM labor negotiator who’s now a consultant in Ann Arbor, Michigan. “They gave the union a comprehensive offer on Monday, and it’s Friday and they haven’t had a response yet. If I had members out on strike, I would be responding within hours.”GM shares rose 2.6% on Friday, paring their decline since the strike began to 8.5%. While credit-rating companies initially warned of risk to the automaker if the walkout lasted more than a couple weeks, they’ve been reluctant to downgrade.“GM has adequate liquidity to contend with a strike of this duration,” Bruce Clark, lead U.S. auto analyst for Moody’s Investors Service, wrote in a report Friday. The carmaker would start to forgo significant earnings if the walkout extends into late November, he said.Earlier Friday, GM released a broad outline of the offer made at the beginning of the week, saying it would boost wages and lump-sum payments while also preserving health care benefits. Gerald Johnson, GM’s executive vice president of manufacturing, wrote to employees the automaker was prepared to enhance profit-sharing, including by lifting the cap on how much is paid out based on the company’s earnings.UAW members also would receive bigger ratification bonuses than in 2015, when each worker was paid an $8,000 signing bonus. And the offer gives temporary workers a clear path to permanent status, Johnson said.“The strike has been hard on you, your families, our communities, the company, our suppliers and dealers,” Johnson wrote to employees. “We have advised the Union that it’s critical that we get back to producing quality vehicles for our customers.”Security ConcernThe investment offer from GM was aimed at sewing up one of the union’s major remaining concerns -- that underused plants could end up being idled or closed during the life of the agreement. UAW Vice President Terry Dittes said in two letters this week that the union wanted the company to offer more job security.GM’s initial formal offer made in mid-September included plans to build electric trucks at a plant in Detroit, which is scheduled to run out of work in January, and to construct a battery plant in Lordstown, Ohio, where the company has idled a compact car plant. Those two investments remain parts of GM’s plans, the person said.“GM definitely has moved; whether the union has moved off their demands, we don’t know,” Schwartz said. “Maybe they’re not responding quickly because the leadership is worried about ratification. They’re probably more worried about ratification than actually getting the deal done.”(Updates with TK in TK paragraph. An earlier version of this story corrected the investment figure in the headline and first paragraph.)To contact the reporters on this story: David Welch in Southfield at email@example.com;Keith Naughton in Southfield, Michigan at firstname.lastname@example.orgTo contact the editors responsible for this story: Craig Trudell at email@example.com, ;Crayton Harrison at firstname.lastname@example.org, Chester DawsonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Facebook Inc.’s effort to create a cryptocurrency was dealt a blow on Friday after several key partners, including Mastercard Inc., Visa Inc., EBay Inc., Stripe Inc. and Mercado Pago, abandoned the project. The defections followed fierce criticism from global regulators and lawmakers, and have prompted some industry-watchers to question whether the Libra program can survive.The news comes days before the Libra Association, the group that will oversee the digital currency, prepares to convene its members and ask them to sign a charter agreement. The meeting is slated to take place on Monday in Geneva. A Libra Association spokeswoman said on Friday that the gathering will proceed as planned, and that it would announce the first list of official partners once a formal charter is signed.In a statement, the spokeswoman said the group was "focused on moving forward and continuing to build a strong association" as it worked to create "a safe, transparent, and consumer-friendly implementation of a global payment system that breaks down financial barriers for billions of people."When Facebook launched plans for Libra in June, a critical part of its pitch was that major players in the payments and tech industry were supporting it. The cryptocurrency would be run out of Geneva by the organizations that comprised the Libra Association, not solely by Facebook. But now that that alliance appears to be eroding, the project’s future is uncertain."I don’t think Facebook can do this by itself," said Michael Pachter, an analyst for Wedbush Securities told Bloomberg TV. "Short of a big bank stepping in like JPMorgan, I don’t think this could ever happen."In a tweet on Friday, David Marcus, the Facebook executive spearheading the effort, said that the exit of six partners would not derail the effort. "I would caution against reading the fate of Libra into this update," he wrote. "Change of this magnitude is hard. You know you’re on to something when this much pressure builds up."Whether or not Libra implodes, the exits highlight the extreme challenges that lie ahead for the project, which if successful could have a sweeping impact on the global financial system. "It may very well fail completely," said Lisa Ellis, an analyst at MoffettNathanson. Even if it survives, progress will take much longer and "it’s likely to fall into some level of obscurity," she added.Facebook has faced fierce backlash since the company announced plans for Libra. Politicians and regulators around the world have called on Facebook to halt its progress, and some have suggested Libra could be used for illegal money laundering or trafficking schemes.Despite the scrutiny from public officials and the exodus of partners, Facebook remains committed to Libra, according to a person familiar with the matter who asked not to be identified because they were not authorized to speak publicly. Some people inside the company think the defections are partly driven by established payments providers worrying about a new entrant encroaching on their turf, the person said.In the months since its announcement, Facebook has frequently found itself in the spotlight over the cryptocurrency. Marcus went to Washington in July to testify before Congress about Facebook’s plans. Later this month, Chief Executive Officer Mark Zuckerberg is scheduled to appear before the House Financial Services Committee to answer even more questions about Libra.Earlier this week, two U.S. senators cautioned Visa, Mastercard and Stripe to reconsider their involvement in the project. Senators Sherrod Brown of Ohio and Brian Schatz of Hawaii said that Libra poses a risk to not only the financial system, but the payments companies’ broader business. "We urge you to carefully consider how your companies will manage these risks before proceeding," they said a letter to the companies.Mastercard said in a statement that it will "remain focused on our strategy and our own significant efforts to enable financial inclusion around the world," adding, "We believe there are potential benefits in such initiatives and will continue to monitor the Libra effort." Visa said the company would also continue to evaluate whether to join in Libra in the future, and that the company’s "ultimate decision will be determined by a number of factors, including the Association’s ability to fully satisfy all requisite regulatory expectations."In a statement on Friday, EBay expressed its support for the project, but said it would focus on rolling out its own payments products. “We highly respect the vision of the Libra Association; however, eBay has made the decision to not move forward as a founding member,” an EBay spokesman wrote in the emailed statement. “At this time, we are focused on rolling out eBay’s managed payments experience for our customers."Payments giant Stripe, one of the most high-profile startups to sign onto the project, signaled it remained open to working on it in the future. “Stripe is supportive of projects that aim to make online commerce more accessible for people around the world. Libra has this potential,” said a company spokesperson. “We will follow its progress closely and remain open to working with the Libra Association at a later stage.”The Libra Association is composed of about two dozen organizations, including Facebook. A Lyft Inc. spokeswoman confirmed on Friday that the ride-hailing company remains a member. Other companies that have not signaled plans to leave include Uber Technologies Inc., Spotify Technology S.A., Coinbase Inc. and telecom providers Iliad SA and Vodafone Group Plc. PayPal Holdings Inc. dropped out last week. (Updates with David Marcus comment in 6th paragraph.)\--With assistance from Candy Cheng, Lizette Chapman, Spencer Soper and Lydia Beyoud.To contact the reporters on this story: Kurt Wagner in San Francisco at email@example.com;Julie Verhage in New York at firstname.lastname@example.org;Jenny Surane in New York at email@example.comTo contact the editors responsible for this story: Jillian Ward at firstname.lastname@example.org, Anne VanderMey, Robin AjelloFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Earnings season kicks off next week with the big banks reporting first. Analysts say the key for earnings at the large financial institutions will be expense control.
Based on the early price action, the direction of the AUD/USD the rest of the session on Friday is likely to be determined by trader reaction to the resistance cluster at .6809 to .6811.
On Thursday, Barclays CEO Jes Staley called pressure on the stock “deeply frustrating,” citing three causes for its poor performance: Brexit, low interest rates, and lingering regulatory measures that stemmed from the financial crisis.
The Australian dollar initially fell for the week but has rallied significantly as Hope has reentered the market for some type of agreement between the United States and China.
The stock market may be on a trade-talk induced high, but market analysts say a sustainable rally can’t be supported without fundamental strength in earnings.
The Australian dollar rallied nicely during the trading session on Friday, as optimism continues to spread about the US/China trade talks. That being said, nothing has actually happened so it will be interesting to see whether or not there is some type of news that moves this market one way or the other.
Prices could surge further later in the session if the two countries could agree to at least a partial agreement on issues such as currency and agriculture buying. This would leave more controversial issues such as protections against Chinese theft of U.S. intellectual property, for later negotiations.
IBM's blockchain, cloud and ML capabilities, among others, are expected to have witnessed robust adoption in the third quarter. However, stiff competition and high debts may have been concerns.
(Bloomberg) -- What could the automotive sector learn from the recent fiasco around rental-office company WeWork? A lot, according to some Sanford C. Bernstein analysts.The collapse of WeWork’s attempted IPO is not only a warning sign for technology startups with inflated valuations -- funded by investors pouring money into unprofitable companies in search of the next Amazon or Netflix -- but, strangely, augers ill for many new companies in the auto industry.They too have have benefited from venture capital money that swarmed into ride-hailing, autonomous driving and electric-vehicle technologies, a team of Bernstein analysts including Max Warburton and Robin Zhu wrote in a note to clients.“It’s hard to think of an industry that’s been the target of as much venture capital spending as automotive,” the analysts wrote, noting that WeWork backer SoftBank has been the single biggest investor in “disruptive” automotive-related technology. The Japanese firm has big holdings in Uber, Ola, Grab, GM Cruise and other autonomous startups, which have all attracted billions more from other investors. “The investment going into these firms has created huge concern and crushed the valuations” of traditional carmakers, the analysts said.The Bernstein analysts said many ride-hailing, mobility & autonomous-driving startups don’t look to have a viable, profit-generating model -- which could be an obstacle when they want to go public. “If their backers can’t exit, then at some point the supply of cheap capital will dry up,” the analysts said.Many electric-vehicle startups have run into challenges recently, with NIO close to failure, Byton possibly being absorbed into FAW and Dyson canceling its electric car project, the analysts said. Faraday and Lucid may never even get started. “Most of these startups will likely fold,” they said, adding that only Rivian, which is backed by Amazon, may prove an exception.“The truth is barriers to entry in autos remain high. Making cars is hard,” the analysts said, adding that the move to electric cars will be expensive and will probably be led by traditional auto companies, with far less disruption than feared.To contact the reporter on this story: Esha Dey in New York at email@example.comTo contact the editors responsible for this story: Brad Olesen at firstname.lastname@example.org, Scott Schnipper, Jim SilverFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Wells Fargo (WFC) is seeing favorable earnings estimate revision activity and has a positive Zacks Earnings ESP heading into earnings season.
Coke (KO) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.
American Express (AXP) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.