Fri, 23rd June 2017

Anirudh Sethi Report


Archives of “June 15, 2017” Day

Trump: Very good numbers to be announced soon on GDP

Trump comment

Revisions to US Q1 GDP are due on June 29. The first reading on second quarter GDP is due July 28. Is Trump leaking his own data?

Probably not. Even the Q1 revision probably isn’t close to being tabulated yet. The thing is, Trump is so loose with his words that it’s only a matter of time until he says that kind of thing the day before a major release.

Also, on the economy and stock markets. Trump said he’s seeing ‘a lot of good numbers’. He must not be looking at the same numbers as we are.

Bitcoin Plunges To 2-Week Lows On Triple-Whammy Of Concerns

After ralying over 80% in the last month, Bitcoin prices are tumbling (down 25% from record highs to 2-week lows) as cryptocurrencies face uncertainty on three fronts.



As iBankCoin reports, investors are spooked over recent cyberattacks, uncertainty surrounding a Bitcoin platform upgrade, and proposed legislation which adds cryptocurencies a list of reportable assets under existing anti-money laundering laws.

Cyber attack

De Beers launches world’s largest diamond exploration ship

Diamond producer De Beers has launched the world’s largest diamond exploration ship that will operate in waters off of Namibia, as it looks for higher value gemstones in the face of growing supply from emerging competitors.

The 113 meter-long SS Nujoma can sample for diamonds at double the speed of other ships in the company’s fleet and help extract higher value diamonds than on land, the chief executive of De Beers said.

Bruce Cleaver, De Beers chief executive, said:

Offshore diamond mining is becoming increasingly important in meeting global demand for diamonds as many of the major onshore deposits have now been discovered.

The spending on the ship comes as De Beers and Russia’s Alrosa, the world’s biggest diamond producers, face rising supply from new mines run by a host of smaller companies. 

Analysts at RBC Capital Markets forecast that total diamond supply will increase by 4 per cent to 145m carats in 2018 “before retreating as older mines begin to reach the end of their lives.”

New production from companies including Firestone Diamonds, Petra Diamonds, and Stornoway Diamond will rise from 4.5m carats this year to 8.5m carats by 2020, they estimate.

That includes projected supply from the Gahcho Kué mine in Canada’s Northwest Territories, which De Beers is developing in a joint venture with Mountain Province Diamonds.

Beijing removes assistant chair of China’s banking regulator

China’s State Council has removed the assistant chair of the China Banking Regulatory Commission after he was reported by local media to be under investigation in connection with a loan scandal.

The State Council on Thursday revealed it had removed Yang Jiacai from his position as assistant chair of the banking regulator at the end of an announcement that detailed the dismissal of four other officials from various other government institutions. It gave no reason for the dismissals.

In April, respected news magazine Caixin reported that Mr Yang had been placed under investigation for alleged links to a loan scandal in Hubei province involving the Bank of Communications. It also cited unnamed sources as saying he had been relieved of his duties since April 10.

Analysts debate possible September start for Fed balance sheet run-off

Federal Reserve chair Janet Yellen said on Wednesday that the central bank could begin shrinking its $4.5tn balance sheet “relatively soon“, and while she demurred on a specific date, some analysts have now pegged that announcement for September — although others aren’t so sure.

Over the past few months, analysts have tried to piece together a clearer picture of the Fed’s timing for moving on the three expected interest-rate increases this year, as well as when it intends to start the process of unwinding its massive balance sheet.

On Wednesday, the Fed moved forward with its second rate rise of 2017 and unveiled some details of its plan to shrink the balance sheet that has grown to a massive size in the wake of the financial crisis. That has left analysts to ponder when to expect the Fed’s next moves at its four remaining meetings of the year. 

In a note following today’s announcement, Bank of America Merrill Lynch analysts said in a report that they now expect the balance sheet normalisation to begin in September, with the third rate increase of 2017 penciled in for December:

Overnight US Market :Indices have volatile afternoon, but recover into the clo

Ups and downs.  S&P and Nasdaq down. Dow up and sets another record close.

I guess you can say, the market is still nervous about the tech heavy Nasdaq-like stocks and are more comfortable with putting money to work in the Dow (or perhaps even bonds).  As a result, the Dow is the winning index after all the volatile dust settled (it closed at a record level), and the Nasdaq is the loser. The S&P ended down but is hanging closer to the Dow.
More specifically:
  • The Nasdaq fell -25.47 points to 6194.89, but was down as much as -66 point at the lows (to 6153.54).
  • The S&P index fell -2.43 points to 2437.92. It traded as low as 2428.34
  • The Dow was up +46.09 points to 21374.56. The low reached 21294.09. The high 21391.97
The note and bonds yields are lower but the 2 year yield recovered much of the earlier declines (yield curve flatter):
  • 2 year 1.335%, down -2.8 bps. The low yield reached 1.2823%. The high was 1.3633%
  • 5 year 1.7186%, down -6.2 bps. The low yield moved to 1.6708%. The high was up at 1.7813%
  • 10 year 2.1290%, down -8.1 bps. The low yield reached 2.101%, but the high was up at 2.2092%
  • 30 year 2.773%, down -9.18%, The low yield fell to 2.759%, and high was up at 2.864%.