2.35k followers • 30 symbols Watchlist by Yahoo Finance
Follow this list to discover and track stocks that have set MACD bearish crosses within the last week. A bearish crossover occurs when the MACD turns down and crosses below the signal line. Our algorithms use 12,26,9 as MACD parameters. This list is generated daily, ranked based on market cap and limited to the top 30 stocks that meet the criteria.
Bank of America Corporation
Merck & Co., Inc.
Thermo Fisher Scientific Inc.
ING Groep N.V. PERP DBT 6.125
E. I. du Pont de Nemours and Company
T-Mobile US, Inc.
Becton, Dickinson and Company
Intuitive Surgical, Inc.
Lloyds Banking Group plc
América Móvil, S.A.B. de C.V.
Micron Technology, Inc.
Kinder Morgan, Inc.
Activision Blizzard, Inc.
Occidental Petroleum Corporation
Energy Transfer LP
Republic Services, Inc.
FleetCor Technologies, Inc.
Microchip Technology Incorporated
IDEXX Laboratories, Inc.
Telefônica Brasil S.A.
Fifth Third Bancorp
Altice USA, Inc.
First Republic Bank
Deutsche Bank Aktiengesellschaft
Jacobs Engineering Group Inc.
The Zacks Analyst Blog Highlights: Booking, Allergan, Honda Motor, Infosys and Activision Blizzard
Amdocs' (DOX) fiscal fourth-quarter performance benefits from new customer gains, strong traction in managed services and solid growth across all regions.
Sysco's (SYY) U.S. Foodservice local case volumes have been rising year over year for 22 consecutive quarters now. The International unit's performance has been mixed.
Brexit uncertainty hurts Britain's labor market, manufacturing sector and trade prospects, leading to slowest annual growth rate of the U.K. economy in nearly a decade.
Likelihood of a soon-to-be-signed U.S.-China trade deal, upbeat holiday season sales expectations and decent earnings have led the Nasdaq-100 ETF to a new high.
(Bloomberg Opinion) -- According to the Thundering Herd, the herd is thundering back into risk-taking. And the greatest spur leading it on has little to do with politics, or the economy, or the corporate sector. Instead, it is driven by that most basic human emotion: fear of missing out. President Donald Trump’s much-heralded New York speech on Tuesday provided almost nothing that was newsworthy, but it did give him an opportunity to gloat — quite accurately — about the state of the stock markets. They have been on a tear, with most of the key U.S. benchmarks breaking out of the ranges in which they have been stuck since early last year, to set new highs. They have done this even though, as the president never ceases to complain, the Federal Reserve raised rates repeatedly last year, before reversing much of that move over the last three months. The problem is to identify just why stock markets have suddenly strengthened. It isn’t because of an end to the trade war. Despite hopes, Trump failed to roll back any tariffs in his speech, or offer any promises on when a deal with China might be signed. His surprise announcement of new tariffs on Aug. 1 plainly forced the S&P 500 Index lower; nothing that has happened on the trade front since then would justify the 9% rally in stocks since markets troughed after that news hit.It is also hard to attribute the rally to the economy. When stocks took a dive late last year, they did so against a background of nasty surprises in the U.S. data, as measured by Bloomberg’s U.S. economic surprise index. In the summer, that data started to surprise much more positively — but stocks were becalmed during that period. The rally has only come since the economic surprise indexes stalled, in mid-September. The S&P’s rally also roughly coincided with the season of corporate earnings announcements for the third quarter, which came in 3.8% ahead of expectations, according to FactSet. But earnings almost always exceed expectations, thanks to the games played by corporate investor relations departments. Over the last five years, they have on average beaten forecasts by more — 4.9%. Further, third-quarter earnings were accompanied by such downbeat assessments of the future that the consensus estimate for earnings growth for the next 12 months has actually gone negative, according to SocGen Quantitative Research. And yet, despite all of this, there is no doubt that market sentiment has turned on a dime. In mid-summer, the U.S. yield curve inverted, a classic recession signal, and many braced for an economic downturn. That’s over. According to Bank of America Merrill Lynch’s latest global survey of fund managers, we have just witnessed the greatest month-on-month improvement in economic sentiment since the survey began in 1994. A month ago, a net 37% of fund managers expected the global economy to deteriorate over the next 12 months; now, a net 6% expect an improvement.What could possibly be behind this? The president may have at least nodded at the answer with his claim that that the U.S. indexes would be 25% higher now if the Fed had negative rates. This is a dubious assertion, as only disastrous economic conditions would prompt the U.S. central bank to take such desperate measures.But that sudden improvement in investors’ sentiment did indeed come as the Fed reversed its policy of five years, and started to expand its balance sheet again. It did this to restore liquidity to the repo market, where banks raise their short-term funding, and the Fed has protested repeatedly that this is not a return to “QE” asset purchases to boost the economy. For all these protestations, the market has treated it as a turning point. Added to this, as mentioned, there is the age-old fear of missing out. The end of the year is coming, when investment managers will be judged on their performance. Those who are behind have an incentive to clamber into the market now, while there is still time. And the rally has been unbalanced, with most gains going to a small group of large U.S. stocks. If the stars align for a broad recovery, there is ample potential for big rallies by smaller companies, and by stocks outside the U.S. The rest of the world has joined in this rally, but there is still a long way to go before they catch up — and nervous investment managers are conscious of this. It is tempting to fit a narrative of economic and trade optimism to the rebound in appetite for risk. But sadly, this looks a lot like a return to the pathology that has dominated throughout the post-crisis decade: markets await free money from central banks, and fear missing out when that money arrives.To contact the author of this story: John Authers at email@example.comTo contact the editor responsible for this story: Beth Williams at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.John Authers is a senior editor for markets. Before Bloomberg, he spent 29 years with the Financial Times, where he was head of the Lex Column and chief markets commentator. He is the author of “The Fearful Rise of Markets” and other books.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.France added to the growing chorus of lawmakers and executives seeing consolidation as an avenue to revive Europe’s ailing banks, ahead of a key meeting that may jumpstart a plan to create a single market for the industry.Prime Minister Edouard Philippe, speaking in an interview in Paris on Tuesday, said mergers to create “critical-size, global actors” in European finance would be a “good thing.” He backed a call by German Finance Minister Olaf Scholz to complete the project for a banking union that would make such deals easier.“Everything that is giving sense to the European Union -- to this exceptional market of 500 million consumers -- in trade, norms and finance, is welcome,” he said in the interview at his office in an upscale neighborhood on Paris’ Left Bank, while declining to discuss the proposal in detail. “At every level, it’s important that Europe takes stock of its power.”Scholz last week signaled Germany may give up its opposition to a key part of the plan for European banking integration as lenders such as Deutsche Bank AG struggle to compete a decade after the financial crisis. But his proposal has yet to be endorsed by the government in Berlin, while a key condition -- stricter rules on banks’ sovereign debt holdings -- has already irked Scholz’s Italian counterpart.The banking union project will be discussed in more detail at a December meeting of European finance ministers, who want to finalize a roadmap so national leaders can start negotiations next year. After seven years during which fiscally conservative northern European countries have been deadlocked with neighbors in the south, progress may be slow.Then there’s the question of who would do the consolidating. France has in the past tried to protect key companies and industries from foreign takeovers. Philippe suggested French banks may be in a strong position to acquire rivals once the regulatory framework is in place.‘I Will Rejoice’“I know some French banks have a reputation of being very innovative and, for some, very competitive,” he said. “If their growth strategy includes alliances, mergers or acquisitions with European or non-European institutions, if these are smart and well-crafted operations, I will rejoice.”While Societe Generale SA has indicated that it would be interested in playing a role in European banking consolidation, the lender is undergoing a radical restructuring to shrink its investment bank. BNP Paribas SA is seen as being in a stronger position to play a role in European consolidation and was two years ago linked with a possible bid for Germany’s Commerzbank AG.France, while backing consolidation in the banking sector, believes its institutions are in a position to be buyers rather than targets, an official in the government said. Consolidation could include foreign stakes in a French bank, but the country’s national champions are solid enough to be the ones buying others, according to the official, who spoke on condition of anonymity.Europe’s banks have fallen behind their Wall Street peers since the global financial crisis in 2008, as stricter regulation and negative interest rates erode profitability. Even U.S. competitors such as Goldman Sachs Group Inc. have said Europe would benefit from a local banking champion.Mustier’s ViewJean Pierre Mustier, the chief executive officer of UniCredit SpA, said in an interview that consolidation in European banking is dependent on higher stock prices because firms need to raise capital for deals. UniCredit was among firms seen as a possible suitors for Commerzbank earlier this year after the German lender’s merger talks with Deutsche Bank broke down.“What needs to happen in Europe for more consolidation is probably for the bank shares to go up, then we might look at it,” Mustier said in a Bloomberg Television interview with Francine Lacqua taped on Tuesday. “One way or another you need to issue capital when you consolidate.”For France, deeper integration of the banking sector is an “absolute priority” and a question of sovereignty so that Europe’s economy doesn’t depend on foreign banks’ willingness to finance it, the French finance ministry said last week in response to the German proposal.President Emmanuel Macron’s premier sees the creation of large European banks as part of a broader call for continental champions. He said the European Commission, the executive branch of the EU, has so far had a “conservative approach” about consolidation to preserve competition within the bloc and protect consumers.‘Critical Size’“It poses a problem, it strips Europe from operators that would have the critical size on global markets,” he said, citing the planned merger of Alstom SA and Siemens AG that was shot down on ground it would create a dominating actor.He reiterated his call to EU Commissioner antitrust chief Margrethe Vestager to revise a “static” position on competition toward a “dynamic” one that would take into account global competition.“It’s in the interest of the EU to see competition rules evolve,” he said. France, he added, would seek to push the EU to reform its policies.(Updates with comments from UniCredit CEO Mustier from 11th paragraph.)\--With assistance from Rosalind Mathieson.To contact the reporters on this story: Helene Fouquet in Paris at email@example.com;Ania Nussbaum in Paris at firstname.lastname@example.org;Geraldine Amiel in Paris at email@example.comTo contact the editors responsible for this story: Ben Sills at firstname.lastname@example.org, ;Dale Crofts at email@example.com, Christian BaumgaertelFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Investing.com - U.S. futures fell on Wednesday as U.S. President Donald Trump continued to keep markets guessing about when and if a trade deal with China will be reached, while testimony from Fed Chair Jerome Powell will be the highlight of the day.
In the aftermath of a trading fiasco that cost JPMorgan Chase some $6bn and opened a chink in the armour of Wall Street’s favourite chief executive Jamie Dimon, one hedge fund was having a whale of a time. BlueMountain Capital Management had harpooned the “London Whale” in 2012 and then been brought in to clean up the mess, pocketing $300m in one trade and cementing the status of its co-founder Andrew Feldstein (pictured above) as a credit whizz. As it happens, that would turn out to be the peak of BlueMountain’s success.
(Bloomberg) -- Soon after Alex Chow fell off the edge of a parking garage in Hong Kong, the allegations began spreading online.Posts circulating in chat groups and on social media claimed the 22-year-old student was chased -- and maybe even pushed -- by police who were clearing protesters with tear gas nearby. Officers blocked an ambulance from reaching Chow, the posts alleged, delaying aid that could have saved his life.Nevermind that the claims were unsubstantiated, that police denied chasing Chow and that mainstream news outlets, including the South China Morning Post, described the circumstances of his fall as unclear. Hundreds of protesters seized on his Nov. 8 death to engage in clashes with police that resulted in one person being shot on Monday.As Hong Kong’s anti-government protests stretch into their 23rd straight week, the city is being inundated with online rumors, fake news and propaganda from both sides of the political divide. The polarizing rhetoric is fueling distrust and violence, making it harder to resolve the crisis that has plunged Hong Kong into a recession and raised doubts about the city’s role as Asia’s premier financial hub.“False information feeds itself to polarize public opinion,” said Masato Kajimoto, an assistant professor at Hong Kong University’s Journalism and Media Studies Centre, who has spent the last seven years studying fake news. “I worry that it reaches a point where reconciliation of this divide is no longer possible.”While the spread of disinformation has become a growing concern around the world, few places have been as affected in recent weeks as Hong Kong. In the past 24 hours alone, local authorities have denied rumors that they ordered police to fire on protesters at will; planned to cap cash withdrawals from banks; and would use emergency powers to shut financial markets and schools. After one of the most violent days since protests started in June, Hong Kong Chief Executive Carrie Lam urged citizens to “stay calm and see the facts.”The city’s protests began with largely peaceful demonstrations against the Chinese government’s growing encroachment on Hong Kong’s freedoms. But as factions of the movement have grown more extreme, so too have the narratives spread by both sides.While protest supporters often demonize the police and the government, pro-establishment camps tend to push narratives describing demonstrators as angry rioters, terrorists and “cockroaches” intent on destabilizing the city and doing the bidding of foreign agents.The proliferation of questionable information has coincided with waning confidence in once-trusted Hong Kong institutions. Nearly 80% of the public is dissatisfied with the government’s performance, up from 40% a year ago, according to the Hong Kong Public Opinion Research Institute. Just over a tenth of the city supports Lam, and only half the population is satisfied with the police force.Hong Kong doesn’t have a fake news law, though Secretary for Security John Lee said this month that “most of the laws in the real world are applicable to the online world,” such as publishing information that threatens public safety. In October, the city’s high court granted an injunction banning anyone from “disseminating, circulating, publishing or re-publishing” internet posts that incite violence on popular platforms including Telegram and LIHKG.Three quarters of the population get their news from the internet today, up from 48% in 2016, according to the Hong Kong Public Opinion Research Institute. In August, a third of people rated the internet as their most trustworthy news source, surpassing television for the first time since the institute began tracking the issue in 1993.One disputed story that spread online in recent weeks involved the death of 15-year-old Chan Yin-lam, whose naked body was found last month floating in Victoria Harbor. Police have called her death an apparent suicide, but some protesters claim Hong Kong’s police, city officials or the Chinese government killed the girl for participating in protests. Several demonstrators responded by showing up at her school to smash glass doors and spread graffiti on the walls.“In more peaceful times maybe I wouldn’t believe those claims that the police or government agents murdered her and are covering up the evidence,” said Ko, a first year law student at the University of Hong Kong who declined to give his last name, as he handed out protest fliers beside a shrine for Chan. “People are scared and don’t trust the authorities anymore. I’m not sure what to believe now.”Spokespeople for the Hong Kong police and government denied the protesters’ allegations. China’s Ministry of Foreign Affairs didn’t respond to a request for comment.“Everyone is angry and not backing down,” said Paul Yip, director of the Center for Suicide Research and Prevention at the University of Hong Kong, who said he hopes to get more clarity on the girl’s death. “Both sides are shouting into their own echo chambers, separated by a high wall that can’t be crossed over. It’s a dangerous point we’ve arrived at.”Once unsubstantiated claims about the protests start spreading on social media, they’re often hard to contain. When violent clashes erupted between demonstrators and riot police at Hong Kong’s Prince Edward MTR station about three months ago, protesters alleged the altercation ended with fatalities after the police and the train’s operator MTR Corp. evacuated the station and closed it off to media and first aid providers.The allegation was denied by police, but the protesters’ story line was amplified after activist Joshua Wong posted on Twitter that lives were sacrificed during the protests, a claim repeated by U.S. House Speaker Nancy Pelosi. Half the city still thinks people were beaten to death by police in the incident, according to a poll by the Hong Kong Public Opinion Research Institute. The backlash has resulted in dozens of vandalized subway stations and a 10 p.m. shutdown of train lines that acts as a de facto city curfew.Both sides have stepped up online efforts to win the battle for public opinion. Hundreds of social media accounts linked to a Chinese government-backed information operation to undermine the protest movement were removed in August, according to Twitter Inc., Facebook Inc. and Alphabet Inc.’s YouTube, which deleted the accounts. New accounts have since appeared pushing the same kinds of narratives, according to research from Astroscreen, a startup that monitors social media manipulation.Pro-government posts often spread photos, memes and videos propagating unsubstantiated rumors of U.S. black hands funding the demonstrations and young female protesters acting as so-called comfort women for male counterparts. Their messages are sometimes amplified by Chinese state media and nationalistic netizen networks known as “fangirls.”Anti-government protesters have used similar tactics as they seek to influence global perceptions of the movement. One protest Telegram channel with 25,000 subscribers assigns three to four tasks each day to keyboard warriors tasked with spreading content, hashtags or narratives on Twitter.The channel has called for supporters to tweet against Activision Blizzard Inc. with the hashtag BoycottBlizzard at least 30 times since the American video-game company punished a player for supporting the protests.Among more than 20,000 accounts that shared the BoycottBlizzard hashtag, Astroscreen found a fifth were created between August and October. Similar tasks have targeted the National Basketball Association and basketball star Lebron James. Blizzard, the NBA and James didn’t respond to requests for comment.Of course, many posts in support of the protest movement and against the city’s authorities are authentic. But there’s evidence that some have gone beyond digital activism and into the realm of misinformation, which researchers define as erroneous posts spread unintentionally. That differs from disinformation, which is false content spread with the specific intent to deceive, mislead or manipulate.For example, a protest supporter last month posted a misleading image depicting Chief Executive Lam using her mobile device during the enthronement of the Japanese Emperor, a sign of disrespect. Within hours, the post was shared thousands of times, including by prominent activist Agnes Chow and local news outlet Apple Daily. It turned out the image was actually taken before the event started, according to a report from Annie Lab, a fact-checking project at HKU’s Journalism and Media Studies Centre.Annie Lab has also found instances of disinformation. One photo purporting to be a CT brain scan of a protester hit by a police baton actually came from a radiology Wiki page before it was doctored and posted on Telegram, garnering more than 120,000 views. It was also published in a since-amended article by the SCMP, according to Annie Lab. The newspaper said it immediately removed the photo upon discovering it hadn’t been verified and has taken steps to ensure the incident isn’t repeated.There’s little sign that such fact-checking efforts have had a meaningful impact on how Hong Kongers digest information related to the demonstrations. In the case of Chow, the 22-year-old student who fell to his death, many protesters continue to believe there’s a sinister explanation.“There are too many suspicious deaths since June,” said Joe, a 35-year-old bank employee and protester who declined to provide his surname. “We cannot let Chow die without justice.”(Adds latest opinion poll in ninth paragraph. An earlier version of this story was corrected to show just over a tenth of Hong Kong supports Lam.)\--With assistance from Josie Wong, Dandan Li, Qian Ye and Matt Turner.To contact the reporters on this story: Shelly Banjo in Hong Kong at firstname.lastname@example.org;Natalie Lung in Hong Kong at email@example.comTo contact the editors responsible for this story: Daniel Ten Kate at firstname.lastname@example.org, Michael Patterson, Chris KayFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Actis LLP and Engie SA have joined a unit of Blackstone Group Inc. in competing to take over three Egyptian power plants co-built by Siemens AG, a deal that might spark greater foreign investment in the Middle East’s fastest-growing economy.Whichever of the six international companies prove successful in their bids will work alongside Egypt’s new sovereign wealth fund, which plans to acquire roughly 30% of the state-owned facilities that cost about 6 billion euros ($6.6 billion) to build and the North African nation inaugurated in mid-2018.France-based Engie told Bloomberg it had submitted an expression of interest in the plants, which have a total capacity of 14.4 gigawatts. China Datang Overseas Investment Co. Ltd. and London-based Actis have also registered interest, according to three people familiar with the plans.They’re facing tight competition: Egyptian Electricity Minister Mohamed Shaker said in May that Blackstone’s Zarou Ltd. and Edra Power Holdings Sdn Bhd of Malaysia are also bidding for role. The head of the wealth fund, Ayman Soliman, has said that half a dozen firms are competing, but declined to identify them. The name of the sixth isn’t clear.The plants, operated by Siemens until 2024, are part of a series of mammoth projects introduced by President Abdel-Fattah El-Sisi that also include a Suez Canal extension and a new administrative capital. A deal could spur further foreign investment in Egypt, which has struggled beyond the oil and gas industry, and help ease the nation’s debt burden. Financing for the plants came via a consortium including Deutsche Bank AG, HSBC Holdings Plc and KfW-IPEX Bank AG, backed by a sovereign guarantee.Repeated phone calls to China Datang’s headquarters in Beijing went unanswered. Actis declined to comment.Egypt will select a financial adviser for the deal next week, which will then arrange negotiations with the interested companies, Soliman said in an interview, declining to identify any of the potential advisers. He expects the pact to be finalized in 2020.HSBC and Citigroup Inc. have bid for the role, while Zarou hired JPMorgan Chase & Co. and Edra enlisted Standard Chartered Plc, according to the three people. The World Bank’s International Finance Corp. has submitted a proposal to “advise on attracting private investors to this project upon request from the Egyptian government,” country manager Walid Labadi said by email.Neither London-based Zarou, Edra, nor any of the banks would comment on any plans involving the power plants.After an investor is selected, Egypt’s wealth fund could establish a joint venture with them to hold the investment. That will be followed by a power-purchasing accord that would let the JV sell the electricity the plants produce to the government. Offering a stake from the power plants on the Egyptian or an international stock exchange is also possible, Soliman said.\--With assistance from Emma Dong and Matthew Martin.To contact the reporter on this story: Mirette Magdy in Cairo at email@example.comTo contact the editors responsible for this story: Alaa Shahine at firstname.lastname@example.org, Michael Gunn, Vernon WesselsFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
T-Mobile US, Inc. CEO John Legere has some leadership qualities that could help him turn WeWork around, but he also comes with little experience in real estate, indicating he's a risky choice. That's according to IPO Edge Editor-in-Chief John Jannarone, who spoke to Cheddar TV in an interview available here. Jannarone pointed out that WeWork's […]
(Bloomberg Opinion) -- A crown jewel of President Xi Jinping’s Made in China 2025 plan is faltering.Tsinghua Unigroup Co. is the business arm of the prestigious Tsinghua University, Xi’s alma mater. The company has been trying to establish itself as a leader in China’s nascent memory-chip industry since 2015, when it famously tried to acquire stakes in U.S. rivals Micron Technology Inc. and Western Digital Corp. Both advances were rejected amid concerns that U.S. regulators wouldn’t approve the deals on national-security grounds. Rebuffed abroad, Unigroup resolved to become a domestic champion and poured its resources into developing flash-memory technology. One of its subsidiaries, three-year-old Yangtze Memory Technologies Co., is already bringing its know-how to production. It’s impressive how fast the unit has developed despite lagging behind rivals in efficiency, Bernstein Research notes.Yet credit investors are getting nervous: Unigroup’s dollar bond due in 2023 has tumbled in recent days, and is now yielding more than 10%. Last week, the chipmaker hurriedly arranged a conference call to reassure investors that its finances were in good order. Surely an asset of such national strategic importance shouldn’t be trading like a junk-rated firm bordering on bankruptcy, management reasoned. A big question hanging over Unigroup is: Who’s its real daddy? As part of China’s university reform, which aims to separate academic institutions from business endeavors, Unigroup’s controlling shareholder Tsinghua Holdings Corp. has attempted to disentangle itself from the company multiple times. The latest rout comes amid a protracted custody battle.Naturally, debtholders shudder every time speculation swirls about Unigroup’s ownership. Last year, its bonds tanked after Tsinghua agreed to sell its shares to an obscure state-owned entity in the second-tier city of Suzhou, only to recover a month later when the university opted for the cash-rich Shenzhen government instead. The bonds plummeted yet again in recent months when Tsinghua abandoned the Shenzhen deal. Then in a conference call last week, Zhao Weiguo, the holding company’s chairman, said Unigroup should remain under the Tsinghua University umbrella, making multiple references to the wishes of the “paramount leader.” For anyone in doubt, that’s Xi.Figuring out who’s holding the purse strings is particularly important for Unigroup, because like all chipmakers it needs billions of dollars in capital outlays. Industry leader Samsung Electronics Co., for example, splashed out about $25 billion annually in capital expenditure over the past five years. Yangtze Memory, Unigroup’s flash-memory business, has already spent more than 20 billion yuan ($2.86 billion) on a new plant in Wuhan and earmarked $30 billion in total spending there. The key difference is that, unlike Samsung, the Yangtze subsidiary is behind on technology and unlikely to break even until 2022 at the earliest, estimates Barclays Plc. Money has to come from the outside. Sure, Unigroup is getting financial support from China’s various venture-capital-like guidance funds and has a big credit line from China Development Bank. But investors worry that’s not enough. Obscure state-owned entities, and even Tsinghua University itself, don’t have pockets deep enough to bankroll Unigroup as it ramps up production, they wager. Revenue at Unigroup rose 7.5% from a year earlier in the first half, but its Ebitda earnings tumbled 27% to a peanut-sized 1.5 billion yuan, driven by a sharp increase in research expenses. As of June, the company sat on 39 billion yuan of cash but had 58 billion yuan of interest-bearing debt due in the year ahead. By now, conspiracy theories abound explaining Tsinghua's decision to scrap its deal with Shenzhen, often considered China’s Silicon Valley. One explanation could be ego: Why would Xi allow his alma mater’s prized asset to be controlled by a mere local state-owned entity?Investors also question whether geopolitics is at play. If Tsinghua offloaded its stake to Shenzhen, Unigroup would become a bona fide state owned enterprise, making it vulnerable to operations restrictions — from intellectual property transfer to preferential taxation — if China strikes a broader trade deal with the U.S. If Unigroup remains under the umbrella of a non-profit university, on the other hand, it could still develop its chip capacity within a gray zone. The naive might argue that Beijing can’t possibly let Unigroup go under. That may well be the case; but as I’ve written, an unhealthy undercurrent is forming in China’s bond market. Increasingly, distressed companies are pushing for quiet deals with institutional investors to delay repayment dates. This is perhaps why investors got even more nervous when news surfaced that Unigroup had asked Credit Suisse Group AG for its help to amend and extend some bank loans. Pinched by the trade war, China is now eager to become self-sufficient, and semiconductors are certainly a good place to start. Last year, China’s trade deficit in chips continued to widen to $228 billion, more than double levels from a decade earlier. But if you think Tsinghua Unigroup will emerge a clear winner from this, think again. As we’ve seen in the past, national service doesn’t necessarily get you a glittering credit score, with local government financing vehicles and regional banks alike now languishing with junk ratings. Unigroup investors would do well to remember that they can't take Xi’s school spirit to the bank. To contact the author of this story: Shuli Ren at email@example.comTo contact the editor responsible for this story: Rachel Rosenthal at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Shuli Ren is a Bloomberg Opinion columnist covering Asian markets. She previously wrote on markets for Barron's, following a career as an investment banker, and is a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Markets were widely anticipating that President Donald Trump would use his speech to the Economic Club of New York on Tuesday to trumpet progress on reaching the first phase of a trade deal with China. Instead, all he said was that an agreement “could happen soon.” That’s not exactly the language markets wanted to hear, which helps explain why equity markets spent much of the rest of the day erasing the bulk of their gains.The S&P 500 Index is now up 23.3% for the year, and whether the rally extends or not is largely dependent on the U.S. and China showing progress in trade talks. But astute market watchers such as Medley Global Macro Managing Director Ben Emons note that Trump’s language toward the talks has become more cautious of late. He’s gone from describing them as “going very well” to saying they are “moving along” to Tuesday’s “could happen soon.” As linguists know, “could” is one of the weaker verbs in the English language because theoretically anything “could” happen. It’s certainly no match for “may.” Emons pointed out in a research note that there was also a softening in Trump’s tone toward the trade talks in April, when the trade hawks gained his ear. The S&P 500 tumbled 6.58% the next month. Some would say this is just semantics, but the ebb and flow of the trade war is the primary driver of markets. The latest monthly survey of global fund managers by Bank of America released on Tuesday showed that 39% of respondents said it’s the biggest risk facing markets, followed by 16% who fear a bond bubble, 12% who cite monetary policy impotence and 11% who said a slowdown in China is the biggest worry.So, does Trump’s language suggest there will a repeat of the May episode for stocks? It’s impossible to know, but the stakes are higher. The Bank of America survey shows that allocations to global equities are higher and average cash holdings are lower, falling to the lowest since June 2013 at 4.2% of assets.NEGATIVE RATES? NO THANKSTrump also took a shot at the Federal Reserve, saying it was hurting the U.S. by not copying other central banks in deploying negative interest rates. On the face of it, getting paid to borrow seems appealing. But that ignores the fact that countries with negative rates have deep economic problems, and many central bankers are finding that they do more harm than good. One of those countries is Japan. Its central bank is actively trying to steepen its yield curve, pushing yields on long-term government bonds back above zero. But instead of worrying what this might do to Japan’s economy, the country’s stock market has been on a tear. The benchmark Topix index is up 15.7% since late August, outperforming the MSCI All-Country World Index, which is up just 8.06% in the same period. The biggest beneficiary of positive rates is the banking system, which is why the Topix bank index has done better, surging 19%. More economists say negative rates don’t really increase borrowing and certainly don’t promote lending. The International Monetary Fund forecast last month that Japan’s economy will expand just 0.9% this year, compared with 2.4% for the U.S. This change in sentiment toward negative rates by central banks is one reason the global government bond market has softened, with yields as measured by the Bloomberg Barclays Global Aggregate Treasuries Index having risen from a three-year low of 1.17% on average in early September to 1.48% as of Monday.COMPLACENCY IS IN THE EYE OF THE BEHOLDERAnother revelation from the Bank of America survey is that fears of a looming global recession have largely vanished. A net 6% of those polled expect a strong economy next year, an increase of 43 percentage points from the October survey and the biggest monthly jump on record. Combine that with the largest allocations toward equities in a year and the declining cash balances, and it’s logical to ask whether investors have become too complacent. The CBOE Volatility Index, commonly known as the VIX, is back down to some of its lowest levels of the year, which is to say it’s not far from its record lows. Nicknamed “the fear gauge,” the measure tracks implied volatility in the stock market. The lower it goes, the less “fear” there is perceived to be among investors. But those who say this is a sure sign of complacency fail to acknowledge the expanded role of central banks in markets. It’s no coincidence that the rally in equities that gathered steam in October came as the collective balance-sheet assets of the Fed, European Central Bank, Bank of Japan and Bank of England rose by 0.6 percentage point to 35.7% of their countries’ total gross domestic product in October, according to data compiled by Bloomberg. The increase from September was the most for any month since March 2017. At the same time, a custom index measuring M2 figures for 12 major economies including the U.S., China, euro zone and Japan shows their aggregate money supply surged by $846.1 billion in October, the most since June. Central banks clearly have put a floor under markets, which should reduce volatility. LATIN AMERICA IS DOWNLatin America is quickly turning into the sick man of emerging markets. The economic problems in Venezuela and Argentina were already well known when protests swept Chile last month. Now there’s strife in Bolivia, resulting in violence, military intervention and the resignation of President Evo Morales, who was granted asylum in Mexico. But that move has caused friction between the U.S. and Mexico, which reversed a pledge not to intervene in affairs of other countries. That may have been a big reason Mexico’s peso sank the most in three months Tuesday, along with a Fox Business report that the U.S. may impose tariffs on autos and auto parts from Mexico. The Bloomberg JPMorgan Latin America Currency Index is down 2.84% since Nov. 1, sliding much further than the 0.43% drop in the MSCI EM Currency Index. On top of that, dollar-denominated bonds issued by borrowers in Latin America have lost 3.25% of their value since early August, according to Bloomberg News’s Paul Wallace. That’s the worst performance among emerging markets, according to JPMorgan Chase & Co.’s indexes. Of 10 emerging markets with the worst-performing dollar debt in November, half are from Latin America. The IMF last month said it expected the region’s economy to rebound next year, expanding by 1.8% compared with 0.2% this year, but the latest developments rightly have investors questioning whether those forecasts need to be downgraded significantly.TOO LITTLE TOO LATEThe optimism in recent weeks that perhaps the U.S. and China were on the cusp of some trade detente has provided some support to the long-suffering agriculture market. One raw material that has done especially well is milk. Class III futures, which represent milk used to make cheddar cheese, are up about 45% in 2019 and heading for the best year since 2007. Prices are already the highest since 2014. Alas, the rally wasn’t enough to save top U.S. milk processor Dean Foods Co., which has filed for Chapter 11 bankruptcy protection. Dean says it’s the largest U.S. processor of fresh fluid milk and other dairy products, but the company has been squeezed by fierce competition and shrinking profit margins, according to Bloomberg News’s Lydia Mulvany and Katherine Doherty. This is potentially significant from a political standpoint. Dairy is especially important to Wisconsin, where Dean Foods has operations. It’s a state Trump narrowly won in the last election and one many political scientists say he needs to hold on to if he hopes to win a second term in 2020. But the struggles of such a high-profile agriculture company could have a large number of those voters questioning whether Trump’s trade strategy is the right one for their industry.TEA LEAVESNow on to Jerome Powell. The Federal Reserve chair begins two days of Congressional testimony on Wednesday, providing lawmakers with an update on where the central bank sees the economy going. It won’t be an easy discussion. Although the U.S. stock market continues to set records, the Federal Reserve Bank of Atlanta’s widely followed GDPNow index, which aims to track the economy in real time, suggests growth of just 1% this quarter. The markets and the economy have clearly diverged. And while there is always the chance for a surprise, Powell will most likely repeat what he said on Oct. 30 after the Fed cut interest rates for the third time since July, which is that monetary policy and the economy are in a good place and that it would require a “material reassessment” of the outlook to justify additional monetary easing.DON’T MISS Even the Fed's Own Research Shows Rates Are Too High: Tim Duy Low Returns Stoke Investor Appetite for Risk: Barry Ritholtz Nobel Winners Offer an Antidote to Donald Trump: Mark Whitehouse Millennials on Cusp of Middle Age Missed Their Boom: Noah Smith Matt Levine’s Money Stuff: If You Own Everything, Why Merge?To contact the author of this story: Robert Burgess at email@example.comTo contact the editor responsible for this story: Daniel Niemi at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Robert Burgess is an editor for Bloomberg Opinion. He is the former global executive editor in charge of financial markets for Bloomberg News. As managing editor, he led the company’s news coverage of credit markets during the global financial crisis.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Explore what’s moving the global economy in the new season of the Stephanomics podcast. Subscribe via Apple Podcast, Spotify or Pocket Cast.Federal Reserve Chairman Jerome Powell is likely to signal again this week that monetary policy is on hold, buttressing the belief that he may steer clear of action through 2020.Surprisingly, that would be an historic anomaly for a U.S. presidential election year. Rather than keeping its head down, the Fed has changed policy in one direction or another in each of the last 10 presidential polling years -- though in 2016 it didn’t act to raise interest rates until after the November election.In 2012 the Fed didn’t move its benchmark rate, which was already at zero, but did announce its third round of large-scale asset purchases in September.“If you look back in history and see what the Fed did in election years, the Fed did everything they had to do,’’ said Roberto Perli, a partner at Cornerstone Macro in Washington. The best way for them to preserve their independence and credibility “is to do what they think is right.’’That hasn’t always shielded them from criticism. President George H.W. Bush famously blamed then-Fed Chairman Alan Greenspan for costing him re-election in 1992 by failing to cut interest rates more aggressively. But it’s particularly vital now for the Fed to make the case that its policies are warranted by the economic outlook because of the relentless public assault on the institution by President Donald Trump.Click here for the World Interest Rate Probability toolBreaking with more than a quarter century of precedent, Trump has repeatedly lambasted the Fed and accused it of keeping credit too tight.“We are actively competing with nations who openly cut interest rates so that now many are actually getting paid when they pay off their loan, known as negative interest,” Trump told the Economic Club of New York Tuesday.“Give me some of that money. I want some of that money. Our Federal Reserve doesn’t let us do it,” Trump said, drawing a laugh from the audience. “It puts us at a competitive disadvantage to other countries.”Powell will have a chance to make his case twice this week, on Wednesday before the Joint Economic Committee of Congress and on Thursday to the House Budget Committee. He’s likely to echo the message he delivered after the latest Fed rate cut on Oct. 30: The economy and monetary policy are in good place in the 11th year of America’s longest expansion.Investors seem to agree. Stock and bond prices have risen in recent days on signs that the U.S. economy is weathering a slowdown abroad and on hopes of a phase-one deal in the U.S.-China trade war.“Things feel a lot less threatening than they did two months ago,’’ said Carl Tannenbaum, chief economist with Northern Trust Corp. in Chicago. “The data for the U.S. has suggested that we’re not on the edge of falling off a cliff.”Front and center in that regard was the October employment report, which showed payrolls rising by 128,000 despite the loss of 41,600 jobs due to the since-ended General Motors Co. strike.Solid PayrollsThe solid jobs report allayed fears that companies spooked by the worldwide slowdown would chop payrolls just as they have done to capital outlays.It also bolstered the Fed’s hopes that the consumer will continue to have the staying power to keep the expansion on track in the face of cutbacks by businesses.Coupled with the policy message coming from Powell, the improved economic data prompted such Fed watchers as Michael Feroli of JPMorgan Chase & Co. and Matthew Luzzetti of Deutsche Bank Securities to rescind their forecasts of further rate cuts.‘Material Reassessment’Powell told reporters on Oct. 30 that it would take a “material reassessment’’ of the economic outlook for the Fed to change its current 1.5% to 1.75% interest rate target range.In their September forecasts, policy makers saw the economy growing by 2% in 2020, inflation rising to near their 2% target and unemployment ending the year at 3.7%, according to their median projection. They’ll update predictions at their Dec. 10-11 meeting.Speaking to Bloomberg Television on Nov. 1, Fed Vice Chairman Richard Clarida said if the central bank saw “accumulating evidence” that it was missing on its mandate for maximum employment or stable prices, or the growth needed to sustain both goals, “we would have to factor that in.”Never BetterWhile saying that he still saw downside risks to the outlook, Clarida also highlighted the financial strength of U.S. households. “In the aggregate, the U.S. consumer’s never been in better shape,” he said.Deutsche’s Luzzetti said it would take a real crack in the labor market and the consumer for the Fed to resume reducing rates. He expects policy to remain on hold next year even though he sees slowing growth pushing unemployment to 3.9%. It was 3.6% in October.The bar to a rate hike seems even higher. Powell said that any decision to raise rates would be tied to the behavior of inflation, which remains stuck below the Fed’s 2% target.“We would need to see a really significant move up in inflation that’s persistent before we would consider raising rates to address inflation concerns,’’ Powell said.In describing the Fed’s current strategy, Powell has referred to the mid-cycle policy adjustment in 1995 and 1996, when Greenspan lowered rates three times after raising them previously.The final cut back then came in January 1996, the start of a presidential election year. The central bank then kept rates unchanged for the rest of 1996.“The Fed is probably on hold for a very long period of time,’’ Northern Trust’s Tannenbaum said.(Adds Trump comments in seventh and eighth paragraphs.)To contact the reporters on this story: Christopher Condon in Washington at email@example.com;Rich Miller in Washington at firstname.lastname@example.orgTo contact the editors responsible for this story: Margaret Collins at email@example.com, Alister Bull, Scott LanmanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Asset manager DWS Group GmbH & Co. has pulled the rungs off the corporate ladder.The firm majority-owned by Deutsche Bank AG plans to scrap titles such as associate, vice president and managing director by the middle of next year, according to an internal memo seen by Bloomberg.“We will build a collaborative work environment with flat hierarchies based on functional roles, skills and capabilities,” the internal memo said. “Each role will have a clearly defined description covering responsibilities and specific expectations and priorities.”A spokesman declined to comment on the memo.Deutsche Bank spun off DWS last year, though still owns nearly 80% of its shares. DWS has been the subject of repeated speculation about a possible merger with firms including the asset management unit of UBS Group AG.While Deutsche Bank sees “some form of consolidation” as necessary to develop DWS into a top 10 global asset manager, it has no plans to give up its majority stake, Chief Financial Officer James von Moltke said in July.While the corporate titles are disappearing, there will still be job expansions or significant role changes for individuals, according to the memo. Roles will take into account “the expertise needed, business impact, team management and expected relationships with other parts of the business. The compensation for each role will be aligned accordingly.”DWS Chief Executive Officer Asoka Woehrmann will retain his job title.To contact the reporter on this story: Suzy Waite in London at firstname.lastname@example.orgTo contact the editors responsible for this story: Shelley Robinson at email@example.com, Chris BourkeFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.