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Fri, 23rd June 2017

Anirudh Sethi Report

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Archives of “according to jim” Tag

Bill Gross: “Market Risk Is Highest Since Before The 2008 Crisis”

Speaking at the Bloomberg Invest summit in New York, Bill Gross (of the recently merged Janus Henderson) who may or may not have been talking his bond book, issued a loud warning to traders saying U.S. markets are at their highest risk levels since before the 2008 financial crisis “because investors are paying a high price for the chances they’re taking.” Well, either that, or simply ignoring the possibility of all ETFs having to sell at once.

“Instead of buying low and selling high, you’re buying high and crossing your fingers,” Gross said Wednesday quoted by Bloomberg.

Apple Unveils “HomePod” Speaker, Long After Amazon, Google

Once again, it took Apple just a few years to catch up to Amazon and Google.

As was widely leaked in advance, during its annual developed conference in San Jose, Apple entered the field of voice-controlled, “internet of things” speakers for the home, when it unveiled a connected home speaker dubbed the HomePod, which however won’t be available until the end of the year. The speaker is Apple’s first major new hardware product since the Apple Watch’s release in 2015 – which has been classified by many as a dud – and comes at a time for the company when the tech giant is seeking new revenue streams after becoming heavily reliant on the success of the iPhone.

EU mulling secret plan B for Greece, sources say

In the wake of last week’s Eurogroup impasse, European officials are mulling a plan B for Greece that would sideline the International Monetary Fund, curb debt relief and reduce the need for austerity after 2019, Kathimerini understands.

According to sources, European officials have already started discussing an alternative plan that could be put into effect in the fall, after September elections in Germany, which have made Berlin cautious of any politically contentious moves.

The plan being considered would ensure that the IMF is no longer in the “driving seat of the Greek bailout program,” the sources said, adding that it would offer Greece less debt relief than it had hoped for but also less austerity in 2019 onward, after the current bailout has expired.

That would mean Athens could revoke some of the tough austerity measures it pushed through Parliament last month. The pension cuts and tax increases are due to come into effect in 2019 and 2020 respectively.

However, a worse deal for Greece as regards debt relief would be a hard sell for the government of Prime Minister Alexis Tsipras, who has basically reneged on all pre-election promises and is keen to deliver something concrete with respect to the country’s debt. His government has already started shifting its narrative away from an insistence on a “comprehensive solution on the debt” to a “solution that will pave the way for accessing the markets.”

The H-1B “Scam” Exposed

The federal H-1B program is intended to allow foreign workers into the US to do high-skill jobs for which employers can’t find qualified domestic workers. In reality, it’s a way for US employers to lower their labor costs, ignoring the large pool of fully qualified (but more expensive) US workers in favor of cheap foreign labor.

This isn’t a small program, either; in 2014 there were 124,326 new applications approved and 191,531 renewed. Since this is a three-year program with one possible renewal, the total number of H-1B foreign workers in the US is triple that, or close to a million lower-wage workers in positions that should otherwise go to US workers at much higher wages.

Where are those workers coming from? According to a recent report to Congress, in 2012 most – 64% – come from India, with no other country sending anywhere close to that many (China came closest at 7.6%).

Infographic: India & China Accounted For 82% Of H-1B Visas In 2016  | Statista

Half Of Canadians Have $200 Or Less In Savings

Two months ago, when quoting the CEO of cell phone insurer Assurant, who appeared on Bloomberg TV to discuss business trends, one of his quotes caught our attention: “the reality is, half of Americans can’t afford to write a $500 check,” Colberg said. We decided to look into the CEO’s claim about the woeful state of US finances. What we found is that according to a recent Bankrate survey of 1,000 adults, 57% of Americans don’t have enough cash to cover a mere $500 unexpected expense. Turns out the CEO was right. And while that may appear dire, it is a slight improvement from 2016, when 63% of U.S. residents said they wouldn’t be able to handle such an expense.

The Bankrate survey findings echoed research published last year by the Federal Reserve, which found that 46% of respondents said they would be challenged to come up with even less, or $400, to cover an emergency expense, and would likely borrow or sell something to afford it. When the Fed asked what types of emergency expenses Americans had actually faced in the last year, more than one out of five cited a major unexpected medical expense. The average expense: $2,782, or almost seven times higher than the Fed’s hypothetical $400 surprise bill.

How does this stunning statistic compare to some other developed nations?

It turns out that the state of half of US finances, deplorable as it may be is positively shining, not to mention “twice as good”, when compared to the country’s neighbor to the north, where a recent Ipsos survey on behalf of accounting firm MNP, found that more than half of Canadians are living within $200 per month of not being able to pay all their bills or meet their debt obligations. Needless to say, if $500 in savings is bad, half that amount is outright bizarre.

Apple receives $1tn valuation call from Drexel Hamilton

Apple on Monday landed a $1tn valuation after analysts at Drexel Hamilton boosted their price target on the stock.

Brian J White at Drexel Hamilton maintained his “buy” rating on the stock and boosted its price target to $202 a share — the highest on Wall Street — from $185 previously. That values the iPhone maker at more than $1tn based on its outstanding share count of 5.2bn shares on May 8.

Apple’s shares were up as much as 2.9 per cent to an all-time high of $153.25 on Monday.

Moreover, he notes that Apple has “proven its resilience through its unique ability to develop hardware, software and services that work seamlessly together. We believe this positions Apple very well to capitalise on the trend toward more ‘things’ becoming a computer.”

Looking ahead, he notes that Apple’s quarterly results will be less important as investors focus on the iPhone 8 this fall, capital distribution plans, “depressed valuation” and possible innovations.

“Top Iron Ore Forecaster Says Prices Will Sink Back Below $50”

Heightened interest in all things related to iron ore

Bloomberg with this from Justin Smirk, senior economist at Westpac (placed first in predicting prices in the first quarter, according to data compiled by Bloomberg):
  • To average $62 in Q3 
  • $59 in Q4
  • And to a low in 2018 of $41
“As supply builds up and prices come off, people will begin to question the wisdom of holding on to inventories,” Smirk said in a phone interview on Friday. “The signs are now pushing in one direction: while we’ll get some volatility, the momentum is just on a downward trend now.”

Macron, Le Pen Take Lead In French Presidential Election: Live Feed

The first results are in and according to IPSOS exit polls, Macron leads with 23.7% of the vote, Le Pen is second with 21.7%, with Fillon and Mellenchon tied for third at 19.5%. However, according to official results, from the French interior ministry, Le Pen is leading with 24.3% of the vote, Macron is at 21.4%, while Fillon has 20.3%.

Meanwhile, according to French official data:

  • LE PEN GETS 24.2% IN FRENCH INTERIOR MINISTRY PRELIMINARY COUNT
  • MACRON GETS 21.4% IN FRENCH INTERIOR MINISTRY PRELIMINARY

And an update:

  • LE PEN AT 24.9%, MACRON AT 21.1%: INTERIOR MINISTRY AT 8:13PM
  • FILLON AT 20%, MELENCHON AT 18%%: INTERIOR MINISTRY AT 8:13PM
  • FRENCH INTERIOR MINISTRY 8:13PM DATA BASED ON 5.25M VOTERS

Elsewhere, Benoit Hamon, the candidate for the incumbent Parti Socialiste of Francois Hollande, has just conceded defeat after a dismal showing of around 6%. He spoke to supporters and the press in a packed out hall and made an instantaneous endorsement for Emmanuel Macron.

  • HAMON SAYS ENDORSES MACRON TO BEAT LE PEN IN SECOND ROUND: BBG

Earlier:

While we urge taking early polls with a big grain of salt, according to a Harris poll, Macron is in the lead with 24.5% of the vote, follow by Melenchon and Le Pen in second place with 20% of the vote.

  •     Macron (EM-*): 24.5%
  •     Melenchon (FI-LEFT): 20%
  •     Le Pen (FN-ENF): 20%
  •     Fillon (LR-EPP): 18%

 

India : P-NOTE INVTS HIT 4-MONTH HIGH OF RS 1.78L-CR IN MAR

Investments in domestic capital markets via participatory notes (P-notes) have surprisingly surged to 4-month high of Rs 1.78 lakh crore at the end of March despite stringent norms put in place by Sebi to curb inflow of illicit funds. P-notes are issued by registered Foreign Portfolio Investors to overseas investors who wish to be a part of the Indian stock markets without registering themselves directly. They however need to go through a proper due diligence process.

According to Sebi data, total value of P-note investments in Indian markets – equity, debt and derivatives -increased to 1,78,437 crore at March-end, from Rs 1,70,191 crore at the end of February. Prior to that, the total investment value through P-notes stood at Rs 1.75 lakh crore in January-end and Rs 1.57 lakh crore in December-end. In March, investments through the route had touched the highest level since November, when the cumulative value of such investments stood at Rs 1,79,648 crore.    

China’s Tencent takes 5% stake in Tesla

Chinese investment group Tencent Holdings – which is involved in a range of ventures from social media and e-commerce to mobile games – has revealed its latest holding: a stake in US electric carmaker Tesla.

Tencent said in a regulatory filing with the US Securities and Exchange Commission on Tuesday that it holds 8,167,544 shares in Elon Musk’s Tesla, translating to a 5 per cent stake in the company. The move makes it Tesla’s fifth-largest shareholder, behind others including Mr Musk himself, according to Bloomberg data.

 Tencent, along with Chinese peers Baidu and Alibaba, is a prolific dealmaker, and one of the most highly valued emerging market stocks.

Tesla shares were up 2.5 per cent in pre-market trading following the news.

The reporting of Tencent’s stake comes after Tesla turned to Wall Street in search of a $1bn cash injection as it seeks a bigger financial cushion for the forthcoming launch of its mass-market Model 3 later this year.

Mr Musk – whose other ventures include solar-energy company SolarCity, which has since been acquired by Tesla, as well as SpaceX, which specialises in space travel – has said that the ambitious plan to launch the first mass-market electric vehicle later this year would put Tesla’s finances “close to the edge”.