Jumat, 13 September 2019
TSX opens in record territory; US stocks mixed - BNNBloomberg.ca
TORONTO -- Canada's main stock index pushed higher into record territory for a second day in a row as gains fuelled by the financial sector sent the Toronto market higher.
The S&P/TSX composite index was up 92.92 points at 16,736.20 after trading as high as 16,756.11 earlier in the morning. The index had hit an intraday record of 16,696.40 on Thursday.
In New York, the Dow Jones industrial average was up 59.53 points at 27,241.98. The S&P 500 index was up 1.93 points at 3,011.50, while the Nasdaq composite was down 5.83 points at 8,188.63.
The Canadian dollar traded for 75.36 cents US, down compared with an average of 75.73 cents US on Thursday.
The October crude contract was down five cents at US$55.04 per barrel and the October natural gas contract was down 0.2 of a cent at US$2.572 per mmBTU.
The December gold contract was down US$9.10 at US$1,498.30 an ounce and the December copper contract was up 6.10 cents at US$2.715 a pound.
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September 13, 2019 at 08:46PM
London Stock Exchange rejects Hong Kong takeover offer - Fox Business
The London Stock Exchange said Friday it has rejected a near $37 billion takeover offer from Hong Kong Exchange.
Continue Reading Below
"The board unanimously rejects the conditional proposal and, given its fundamental flaws, sees no merit in further engagement," the LSE said in a statement, according to Reuters.
Earlier this week, the Hong Kong Stock Exchange said it started talks to buy the LSE. That offer comes weeks after the London exchange announced a plan to merge with data company Refinitiv in a $27 billion deal.
This is a developing story. Please check back for updates.
https://www.foxbusiness.com/markets/london-stock-exchange-rejects-hong-kong-takeover-offer
2019-09-13 11:42:40Z
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Time for lazy governments to pick up the slack as the European Central Bank gets tapped out - The Globe and Mail
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Mario Draghi is going out with a bang.
At his penultimate rate-setting meeting before he hands the whole sorry show to Christine Lagarde – the former boss of the International Monetary Fund – at the end of October, the president of the European Central Bank hauled out his bazooka for one last time in an effort to revive the European economy and stoke inflation.
The ECB is pushing interest rates deeper into negative territory, sending its deposit rate to minus 0.5 per cent from minus 0.4 per cent; relaunching the bond-buying program (known as quantitative easing, or QE) after a mere nine-month hiatus, at €20-billion ($29-billion) a month; and extending cheap loans to banks.
Mr. Draghi’s fresh stimulus package comes as Europe shows worrying signs of recession. Germany and Italy seem to be lurching back into one. Britain will almost certainly sink into the economic quagmire after Brexit. While Mr. Draghi said there is only a small chance that the 19 euro-zone countries, as a whole, will enter recession, the risk has “gone up.”
Will his package work? Locking in ultraloose monetary policy for several more years may deliver a marginal, but only marginal, lift to the economy and to inflation, which is better than nothing. What would do a better job is a hefty spending package, notably from tightwad Germany, which considers running budget deficits a moral failing.
“Central banks are running out of ammunition,” Andrew Sentance, an economist and former member of the Bank of England’s monetary policy committee, said in an interview Thursday. “Far better to tell the Germans to expand their fiscal policy.”
Mr. Draghi would agree. At the end of every rate-setting decision the ECB has made since he joined the bank almost eight years ago, he has pleaded with governments to get in the game on the fiscal front and work in tandem with the ECB’s monetary stimulus measures, one bolstering the other. He did so again Thursday, forcibly so. “Now is the time for fiscal policy to take charge,” he said.
His pleas have been largely futile – for good reason. In recent decades, governments have empowered central bankers to the point that they, in effect, became the default managers of the economy (and regulators of the commercial banks). Governments stepped back, as if they expected the central bankers to work miracles while fiscal stimulus was relegated to a secondary tool.
The process of empowering central bankers – mission creep, if you will – has its roots in the 1970s and 1980s, when high inflation was wreaking havoc with economies everywhere. Politicians and their lavish vote-buying habits were to blame. Together with trade unions, they gamed the system. Unions would ask for, say, a 4-per-cent pay increase, knowing they would get somewhat less. Governments would agree to 2 per cent or 3 per cent, then use high inflation to compress those wage gains. Repeat process.
After the inflation-era fiascos, the idea of truly independent central bankers took hold. They would be allowed to do what they thought best to contain inflation, boost employment and smooth out business cycles. The Bank of England got the nod from Tony Blair’s new Labour government in 1997, after which the chancellor of the exchequer had no right to call up the bank governor and casually suggest to him that rates should drop a notch or two. The ECB was formally launched a year later in preparation for the introduction of the euro. Both the Bank of England and the ECB were adept inflation busters, though more so the ECB.
The central banks came into their own during the 2008-09 financial crisis. It’s no exaggeration to say the ECB saved the euro from destruction in 2012, when Mr. Draghi said the bank would do “whatever it takes” to keep the euro zone intact. In came a raft of “unconventional” measures, including QE, which propped up the banks, prevented disinflation from turning into destructive deflation – outright falling prices – and pushed down interest rates and the value of the euro. At the time, governments weren’t doing much besides preaching austerity and praying that the central bankers’ voodoo would work.
Inflation went far too low – for years it has been running at about half the ECB’s target rate of almost 2 per cent – and economic growth never returned to robust levels. Now, growth and inflation are stalling again, and the ECB has little power left to reverse the situation. Take negative interest rates, which are designed to encourage commercial banks to open their lending spigots. If they stash their spare cash at the ECB instead of lending it out, they get charged. But will lowering rates by a mere one-10th of a point do the trick? Unlikely.
The slowing economy shows that central banks can only go so far. It’s time for governments to saddle up. That’s not to say central banks should lose their independence and become political creatures again (even if some leaders, notably U.S. President Donald Trump, would adore that), rather that fiscal policy has to be revived to pick up where the central banks left off. In Europe, that would mean persuading German Chancellor Angela Merkel to use spending to boost demand.
If she and other leaders continue to rely largely on the central banks to fix their economic woes, they are bound to be disappointed. Mr. Draghi is giving Europe one more shot of stimulus, then calling it quits. His message is that the ECB is tapped out.
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September 13, 2019 at 02:11AM
Top 5 Things to Know in the Market on Friday - Investing.com
© Reuters.
Investing.com -- Stocks are within touching distance of new all-time highs after China stoked hopes of a trade deal with the U.S. Meanwhile, sterling is at a two-month high as Brexit risks recede, and WeWork's IPO is back on the road. Here's what you need to know in financial markets on Friday, 13th September.
1. China encourages trade hopes
China indirectly encouraged hopes of trade détente with the U.S., as Global Times editor Hu Xijin suggested via Twitter that the Chinese government is leaning on agricultural buyers to of U.S. soybeans and pork.
Hu’s tweets aren’t government policy but have been a reasonably reliable indicator of Chinese thinking on trade in recent months, reflecting the Global Times’s status as a vehicle for Chinese Communist Party thought.
2The news came after President Donald Trump tried to downplay a Bloomberg report on Thursday suggesting that he was prepared to offer a temporary truce, delaying or even rolling back some U.S. tariffs on Chinese goods. Trump told reporters he would “rather get the whole deal done."
2. Stocks close in on all-time highs
The increasing signs of a thaw between the U.S. and China have sent stock markets back to within touching distance of all-time highs.
By 5:45 AM ET, were up 94 points or 0.3%, while and were also both up 0.3%, the S&P contract less than half a percent away from its record high.
The risk-on move found its mirror image in the dollar and in Treasury bond yields. The benchmark note yield rose to 1.80%, its highest in over a month and a comfortable seven basis points above the benchmark. The dollar, meanwhile, fell against the , and offshore
3. Sterling hits highest since July
The rose to its highest in nearly two months overnight, after a newspaper report gave fresh impetus to hopes that a disorderly “no-deal” Brexit will be avoided on Oct. 31.
The Times of London reported that the Northern Irish Democratic Unionist Party had effectively dropped its opposition to a plan that would leave much of its economy subject to EU rather than U.K. regulation after Brexit, something that gives Prime Minister Boris Johnson more room to work out a compromise on the issue with EU negotiators. The DUP’s leader in the House of Commons later denied the report, however.
The pound, which has traded almost exclusively on Brexit risk in recent weeks, rose above $1.24 for the first time since late July and was up 1% against the dollar at $1.2453 by 5:50 AM.
4. Michigan Consumer Sentiment due
The University of Michigan’s survey at 10 AM ET leads a relatively light day for U.S. economic data. The survey comes a day after the index hit its highest level in 2019 – rising 2.4% year-on-year – in a development that gives ammunition to those arguing against aggressive action from the Federal Reserve next week.
Investing.com’s suggests markets no longer view a rate cut next week as a certainty. The implicit probability of action has fallen to 87% from over 92% a week ago.
Federal Reseve Chairman Jerome Powell has argued that uncertainty over trade policy is among the biggest drags on the U.S. economy at present. Any moves to lift that uncertainty would, by that logic, weaken the case for easing.
5. WeWork gets IPO back on the road, WSJ says
WeWork’s parent company is set to begin its IPO marketing next week after agreeing to concessions to outside investors on governance issues, the Wall Street Journal reported.
We Company, as it’s known, intends to list on the Nasdaq, the WSJ added. There was no further update as regards the prospective valuation, which various reports has been slashed from $47 billion to less than $20 billion in recent weeks.
https://www.investing.com/news/economy/top-5-things-to-know-in-the-market-on-friday-1977358
2019-09-13 10:54:00Z
52780381524509
Top 5 Things to Know in the Market on Friday - Investing.com
© Reuters.
Investing.com -- Stocks are within touching distance of new all-time highs after China stoked hopes of a trade deal with the U.S. Meanwhile, sterling is at a two-month high as Brexit risks recede, and WeWork's IPO is back on the road. Here's what you need to know in financial markets on Friday, 13th September.
1. China encourages trade hopes
China indirectly encouraged hopes of trade détente with the U.S., as Global Times editor Hu Xijin suggested via Twitter that the Chinese government is leaning on agricultural buyers to of U.S. soybeans and pork.
Hu’s tweets aren’t government policy but have been a reasonably reliable indicator of Chinese thinking on trade in recent months, reflecting the Global Times’s status as vehicle for Chinese Communist Party thought.
The news came after President Donald Trump tried to downplay a Bloomberg report on Thursday suggesting that he was prepared offer a temporary truce, delaying or even rolling back some U.S. tariffs on Chinese goods. Trump told reporters he would “rather get the whole deal done.
2. Stocks close in on all-time highs
The increasing signs of a thaw between the U.S. and China have sent stock markets back to within touching distance of all-time highs.
By 5:45 AM ET, were up 94 points or 0.3%, while and were also both up 0.3%, the S&P contract less than half a percent away from its record high.
The risk-on move found its mirror image in the dollar and in Treasury bond yields. The benchmark note yield rose to 1.80%, its highest in over a month and a comfortable seven basis points above the benchmark. The dollar, meanwhile, fell against the , and offshore
3. Sterling hits highest since July
The rose to its highest in nearly two months overnight, after a newspaper report gave fresh impetus to hopes that a disorderly “no-deal” Brexit will be avoided on Oct. 31.
The Times of London reported that the Northern Irish Democratic Unionist Party had effectively dropped its opposition to a plan that would leave much of its economy subject to EU rather than U.K. regulation after Brexit, something that gives Prime Minister Boris Johnson more room to work out a compromise on the issue with EU negotiators. The DUP’s leader in the House of Commons later denied the report, however.
The pound, which has traded almost exclusively on Brexit risk in recent weeks, rose above $1.24 for the first time since late July and was up 1% against the dollar at $1.2453 by 5:50 AM.
4. Michigan Consumer Sentiment due
The University of Michigan’s survey at 10 AM ET leads a relatively light day for U.S. economic data. The survey comes a day after the index hit its highest level in 2019 – rising 2.4% year-on-year – in a development that gives ammunition to those arguing against aggressive action from the Federal Reserve next week.
Investing.com’s Fed rate monitor tool suggests markets no longer view a rate cut next week as a certainty. The implicit probability of action has fallen to 87% from over 92% a week ago.
Federal Reseve Chairman Jerome Powell has argued that uncertainty over trade policy is among the biggest drags on the U.S. economy at present. Any moves to lift that uncertainty would, by that logic, weaken the case for easing.
5. WeWork gets IPO back on the road, WSJ says
WeWork’s parent company is set to begin its IPO marketing next week after agreeing to concessions to outside investors on governance issues, the Wall Street Journal reported.
We Company, as it’s known, intends to list on the Nasdaq, the WSJ added. There was no further update as regards the prospective valuation, which various reports has been slashed from $47 billion to less than $20 billion in recent weeks.
https://www.investing.com/news/economy/top-5-things-to-know-in-the-market-on-friday-1977358
2019-09-13 10:21:00Z
52780381524509
Palace Revolt at the ECB, Legitimacy of Policy out the Window - WOLF STREET
Draghi’s desperate shenanigans thicken.
ECB President Mario Draghi, who is on his way out, will, as we’re learning more and more, do anything to push his agenda and make it stick at the ECB long after he leaves, but whatever his agenda may be, it’s clearly unrelated to the European economy which has been buckling under the consequences of his agenda: the destructive weight of negative interest rates and QE. And in the process, he is destroying the legitimacy of the ECB’s policy.
The latest incident was on Thursday. During the press conference following the ECB’s policy meeting, he lied to reporters, claiming that the “consensus was so broad there was no need to take a vote,” when in fact he had a revolt on his hand during the meeting by the presidents of the national central banks that represented half of the economy of the Eurozone, and by members of the Executive Board.
Among the key policy changes the ECB announced on Thursday was the restart of QE to the tune of €20 billion a month and a tiny 10-basis point cut in its deposit rate, from the old negative -0.4% to the new negative -0.5%.
The announcement also included a provision to help banks – which have been getting re-crushed by these idiotic negative interest rates – to survive those negative interest rates: the ECB would exempt part of the banks’ deposits at the ECB from negative rates in a two-tier system.
It was the QE portion of the decision that had triggered the unprecedented revolt during the meeting. “Officials with knowledge of the matter” told Bloomberg that during the contentious meeting, the members of the Governing Council and of the Executive Board who vigorously opposed the restart of QE included but was not limited to:
- Jens Weidmann, President of the Bundesbank
- Francois Villeroy de Galhau, Governor of the Bank of France
- Klaas Knot, President of the Dutch central bank
- Ewald Nowotny, Governor of the Austrian central bank
- Ardo Hansson, Governor of the Bank of Estonia
- Sabine Lautenschlaeger, Member of the Executive Board
- Benoit Coeure, Member of the Executive Board
The countries of the five heads of the national central banks, from Weidmann to Hansson, account for about half of the economy of the Eurozone.
They opposed the restart of QE, but there was no vote – which is common in ECB proceedings when there is a consensus. But there was no consensus. And Draghi simply imposed his agenda.
“Such disagreement over a major monetary policy measure has never been seen during Draghi’s eight-year tenure,” according to Bloomberg’s sources.
Among the key reasons cited against relaunching QE now, according to the sources, was that there is no emergency, and it’s better to save QE for an emergency, such as some big turmoil in the Eurozone following a no-deal Brexit.
Nevertheless, during the press conference after the contentious meeting, Draghi lied to reporters about it, when he told them ridiculously:
“There was more diversity of views on APP [asset purchase program]. But then, in the end, a consensus was so broad there was no need to take a vote. So the decision in the end showed a very broad consensus. As I said, there was no need to take a vote. There was such a clear majority.”
But this wasn’t the first time that Draghi was exposed as having lied blatantly about what had transpired during the policy meeting.
In a speech in June about an unrelated historical topic he said that “additional stimulus will be required,” in form of “further cuts in policy interest rates” and additional bond purchases, and that “all these options were raised and discussed at our last meeting.”
But those were blatant lies too. Sources who were part of the ECB’s June meeting told Reuters that no such options were discussed. Draghi had simply sallied forth on his own, pushing his agenda, and trying to force the ECB’s hand [read… No, Rate Cuts Were Not Discussed: ECB Insiders Out Draghi as Fabricator & Schemer, and Talk to Reuters]
The fact that both of these blatant and manipulative lies – concerning the Thursday meeting and concerning the June meeting – were leaked at all indicates that internally within the ECB, Draghi is going down in flames and that the revolters are offering tidbits of his shenanigans up for public consumption, even as he’s trying to force the ECB on a track it cannot get off after he leaves.
The ECB already has two mega-problems on its hand: Acknowledging that negative interest rates are a destructive experiment that is now blowing up into their faces and that they need to somehow back away from; and acknowledging that QE as standard monetary policy is an economic failure that creates all kinds of wild distortions – though it glued to Eurozone together by having prevented more sovereign defaults after Greece’s default, particularly a default by Italy.
But now the ECB has a third problem on its hand: The legitimacy of its policy decisions has been revealed to be a joke; and that this circus has become a one-man show driven by Draghi’s own agenda.
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https://wolfstreet.com/2019/09/12/ecb-policy-decision-loses-legitimacy-after-unprecedented-revolt-against-draghis-efforts-to-restart-qe-and-draghi-lied-about-it/
2019-09-13 05:44:34Z
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