Asian shares hit 21-month highs on Tuesday while the dollar and U.S. bond yields were on the backfoot on the prospect of a less hawkish than previously expected Federal Reserve policy trajectory.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.3 percent in its eighth consecutive day of gains with tech-heavy Seoul and Taipei shares .KS11 .TWII hitting two-year highs while Hong Kong’s Hang Seng .HSI scaled 1-1/2-year highs.
European shares are expected to open slightly higher, with spread-betters seeing a rise of up to 0.1 percent in Britain’s FTSE .FTSE, Germany’s DAX .GDAXI and France’s CAC .FCHI.
Japan’s Nikkei .N225 dropped 0.3 percent, weighed by financial stocks, which were hurt by lower U.S. yields and exporter stocks, which fell on the yen’s gains against the dollar.
While Asian shares have been supported by signs of strong global economic growth, concerns about protectionism cast a shadow after financial leaders of the world’s biggest economies dropped a pledge to keep global trade free and open, acquiescing to an increasingly protectionist United States.
Read More: http://www.reuters.com/article/us-global-markets-idUSKBN16S030
Source: Reuters (21 March 2017)
The world’s most generous dividends are going a-begging as the best quarterly rally since 2012 in emerging markets leaves Russian stocks behind.
Investors are ignoring an estimated payout of 5.3 percent in the next 12 months as they dump Moscow-listed shares on concern the U.S. won’t ease sanctions on Russia as quickly as previously expected. The dividend yield is the highest among markets with at least $100 billion in capitalization and is even higher than sovereign-bond yields. But Russia still can’t attract inflows.
As the performance gap widens between Russia and the rest of emerging markets, the case for buying Moscow shares is getting stronger. Some investors are turning cautious on the rally from India to South Africa and Mexico, as valuations become expensive and volatility tightens to levels that preceded market declines in the past. If those markets stall, a portfolio with higher dividend yields — such as Russia — may outperform.
“In other markets, such a yield costs double in stock valuations,” said Ekaterina Iliouchenko, a money manager at Union Investment in Frankfurt, who oversees about $215 million in eastern European assets. “While the Trump rally is over, unless oil collapses, strong crude and good corporate financial results should bring investors back to the Russian market.”
Source: Bloomberg (20 March 2017)
By Ben Blanchard
BEIJING (Reuters) – Saudi Arabia’s King Salman oversaw the signing of deals worth potentially $65 billion as he began a visit to Beijing on Thursday, as the world’s largest oil producer looks to cement ties with the world’s second-largest economy.
The octogenarian monarch, who has overseen the launch of an ambitious economic reform plan since his accession two years ago, is on a month-long Asian tour.
The visits to countries that are some of world’s fastest growing importers of Saudi oil aim to promote investment opportunities in the kingdom, including the sale of a stake in its giant state firm Saudi Aramco.
Saudi Arabia has sought to boost oil sales to China, the world’s second-largest oil market, after losing market share to Russia last year, by working mostly with China’s top three state oil firms.
Chinese President Xi Jinping told Salman in Beijing’s cavernous Great Hall of the People that his visit showed the importance he attached to relations with China.
Source: Investing.com (16 March 2017)
U.S. stocks ended little changed in light volume on Monday, with traders eyeing a Federal Reserve meeting expected to result in an interest rate increase later this week.
The S&P 500 traded in its tightest range of the year, in and out of slight losses, while the CBOE Volatility index .VIX was on track to close at its lowest in more than a week.
Shares of Mobileye (MBLY.N) jumped nearly 30 percent to a high of $61.51 after chipmaker Intel (INTC.O) agreed to buy the driverless technology maker for $15.3 billion. Mobileye closed up 28.2 percent at $60.62 and Intel fell 2.1 percent to $35.16.
Investors looked ahead to the Fed’s two-day meeting that starts on Tuesday. Traders saw a 94 percent chance that the U.S. central bank will lift interest rates by 25 basis points on Wednesday.
“Other than the Fed on Wednesday, I don’t see anything going on to make any (investment) decisions on,” said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.
Read More: http://www.reuters.com/article/us-usa-stocks-idUSKBN16K1B6
Source: Reuters (13 March 2017)
In a world where investors are betting on stocks tied to economic growth, the U.K. equity market is not the place to be.
According to RBC Wealth Management, British stocks will miss out as traders push equities higher on bets of faster global growth and inflation. That’s because roughly a third of the main British equity gauges are made up of defensive names in the healthcare, consumer goods, utilities and telecommunications sectors that traders tend to perceive as safer investments and scoop up in times of economic turmoil.
Despite global stocks reaching new peaks in recent weeks, firms from JPMorgan Chase & Co. to Natixis SA have recommended that investors stick to the so-called reflation trade, as macroeconomic data will continue to support the stock market. RBC Wealth agrees, noting that the U.K won’t benefit from the trend as much as continental Europe and the U.S. The firm, which oversees roughly $430 billion globally, has an underweight rating on U.K. shares.
Source: Bloomberg (09 March 2017)
The annual rate of growth in UK house prices has slowed to its lowest pace in three and a half years, according to the Halifax.
The UK’s largest mortgage lender said prices increased by 5.1% in the year to February, the lowest since July 2013.
It means the rate of house price inflation has halved in just 11 months.
In March last year, house prices were increasing by 10% a year, according to the Halifax measure. The average price is now £219,949.
The lender said the reason for the slowdown was affordability.
“A sustained period of house price growth in excess of pay rises has made it increasingly difficult for many to purchase a home,” said Martin Ellis, Halifax’s housing economist.
Read More: http://www.bbc.com/news/business-39184583
Source: CNN.com (07 March 2017)
The price of gold has been rising, but perhaps not enough to suit the hot money. Meanwhile, the price of bitcoin has shot up even faster. From $412, one year ago, to $1290 on Friday, it has gained over 200% (and, unlike gold, we can say that bitcoin went up—it’s a speculative asset that goes up and down with no particular limit). Compared to the price action in bitcoin, gold seems boring. While this is a virtue for gold to be used as money (and a vice for bitcoin), it does tend to attract those who just want to get into the hottest casino du jure.
Perhaps predictably, we saw an ad from a gold bullion dealer. This well-known dealer is comparing gold to bitcoin, and urging customers to stick with gold because of gold’s potential for price appreciation. We would not recommend this argument. Whatever the merits of gold may be, going up faster than bitcoin is not among them.
Source: Investing.com (06 March 2017)
Economists have warned the battered pound is set to continue trading at record lows even once Prime Minister Theresa May’s government triggers official proceeding to exit the EU.
Ms May said she intends to trigger Article 50 later this month, effectively starting the formal divorce proceedings with the EU.
But according to a poll of more than 60 banks and research institutions conducted by Reuters, sterling, which is already down 17 per cent against the dollar and 12 per cent against the euro since the Brexit vote, will not recover any time soon.
Most economists predict the pound will continue to trade at $1.23 against the dollar in one month, and drop to $1.21 in the next three to six months.
Source: Independenct (03 March 2017)
Saudi Arabia wants crude oil prices to rise to around $60 a barrel this year, five sources from OPEC countries and the oil industry said.
This is the level the OPEC heavyweight and its Gulf allies – the United Arab Emirates, Kuwait and Qatar – believe would encourage investment in new fields but not lead to a jump in U.S. shale output, the sources said.
The Organization of the Petroleum Exporting Countries, Russia and other producers pledged last year to cut production by about 1.8 million barrels per day (bpd) from Jan. 1. The first cut in eight years is intended to boost prices and get rid of a supply glut.
Crude prices LCOc1 have risen by more than 14 percent since the November pact but are still only trading around $56 a barrel despite record compliance by OPEC and non-OPEC members.
OPEC officials have repeatedly said the group does not target a specific oil price and their focus is on drawing global oil inventories and helping the market to re-balance.
Read More: http://www.reuters.com/article/us-saudi-oil-prices-exclusive-idUSKBN1670JJ
Source: Reuters (28 February 2017)
Federal Reserve officials have said they may need to raise interest rates “fairly soon” if the economy stays strong, minutes of their meeting show.
The first meeting of the Fed since Donald Trump took office as president discussed the possibility of a rate rise as early as March.
Most economists have been forecasting a rise in June.
However, Fed officials appear divided on the timing of a rise amid uncertainty over Mr Trump’s policies.
“Several” expressed fears that unemployment could fall substantially below the Fed’s 4.8% target. That could trigger inflation pressures and force the Fed to boost rates at a faster pace than financial markets expect.
Unemployment in December was 4.7%, although it was back at 4.8% in January.
Paul Ashworth, chief US economist at Capital Economics, said the “fairly soon”‘ phrase in the minutes “clearly leaves the door open to a March rate hike, although … we still think the Fed will delay until June”.
Read More: http://www.bbc.com/news/business-39059743
Source: BBC.com (24 FEbruary 2017)
