Trump Pledged to Help Small Farms. Aid Is Going to Big Ones By Bloomberg



(Bloomberg) — Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. 

Donald Trump promised he would help embattled small farmers caught in the crossfire of his trade war with China. But big farms so far have been the main beneficiaries of the billions of dollars being distributed in aid payments.

Half of the Trump administration’s latest trade-war bailout for farmers went to just a 10th of recipients in the program, according to an analysis of payments by an environmental organization. The study asserted that payouts have been skewed toward larger operations and wealthier producers.

The top 1% of beneficiaries from the trade aid received 13% of the money distributed in the first round of payments under this year’s Market Facilitation Program, with an average payment of more than $177,000. But the bottom 80% of recipients received an average payment of $5,136, according to the Environmental Working Group, which analyzed records obtained through the Freedom of Information Act.

The analysis echoes the findings of an assessment of last year’s trade aid program that also found benefits were tilted toward large farms. That’s likely to stoke criticism of the cost of the $28 billion bailout and accusations of inequities.

Senate Democrats earlier this month issued a report arguing Trump’s trade aid favors Southern (NYSE:) farmers at the expense of their counterparts in the Midwest and Northern Plains, growers of cotton over soybeans, and large producers over smaller ones.

“America’s farm safety-net is broken,” Anne Weir Schechinger, a senior analyst with Environmental Working Group, said in a statement. “Instead of helping small farmers that have been hurt by the Trump administration’s trade war, Trump’s Agriculture Department is wantonly distributing billions of taxpayer dollars to the largest and wealthiest farms.”

The U.S. Department of Agriculture defended the program in a statement issued through a spokesman, saying the administration “is committed to helping all farmers, regardless of their size, deal with the economic impacts of retaliatory tariffs and unfair trading practices.”

Controversy over the trade aid has grown as the scale of payments has escalated and U.S. farmers have become increasingly dependent on federal aid. The farm rescue is now more than twice as expensive as the 2009 auto industry bailout, which ultimately cost taxpayers $12 billion. Almost 40% of projected U.S. farm profits this year will come from trade aid, disaster assistance, federal subsidies and insurance payments, according to the American Farm Bureau Federation.

The trade aid program came up in Wednesday’s Democratic presidential debate as moderator Rachel Maddow pressed candidate Pete Buttigieg on whether he would continue the rescue subsidies if he is elected. Buttigieg responded he would “but we won’t need them because we’re going to fix the trade war.”

Farmers and rural residents are a critical Trump constituency as the president enters a re-election campaign and a fight to stave off impeachment.

The Trump administration announced an additional $16 billion round of trade aid for farmers this year as the dispute with China drags on. That’s on top of a $12 billion pledge in 2018.

This year’s payments are being made in three tranches. The Environmental Working Group analysis looked at payments made in the first tranche, from Aug. 19 through Oct. 31, totaling about $6 billion.

At least three farms have already received more than $1 million in aid from this year’s first tranche. Smith & Sons, a cotton and sorghum farm based in Bishop, Texas, was paid $1.5 million, according to the group. Forty-five farms were paid more than $500,000.

The program caps payments at $250,000 per person. But Schechinger said the limit can be skirted through partnerships that allow cousins, nieces and nephews living in distant cities to receive the aid payments.

“The caps really don’t apply to very many people,” she said.

Agriculture Secretary Sonny Perdue announced earlier this month the USDA would proceed with a second tranche of aid payments this year, beginning before Thanksgiving.

The environmental group’s funders include individual donors, private foundations and companies, among them organic-food producers such as Stonyfield Farm and Organic Valley.

(Updates with USDA response, additional details and context beginning in seventh paragraph)



Hong Kong’s Wealthy Aren’t Giving Up on the City Just Yet By Bloomberg


© Reuters. Hong Kong’s Wealthy Aren’t Giving Up on the City Just Yet

(Bloomberg) — Is Hong Kong’s run as one of the world’s most important financial hubs coming to an end?

It’s an understandable question after one of the city’s most turbulent stretches since pro-democracy demonstrations erupted in June. The past few days have brought a drumbeat of bad news, raising concerns about the independence of Hong Kong’s judiciary, the future of its trading relationship with the U.S. and the prospect of more violence between police and protesters.

Yet interviews this week with investors, lawyers, bankers, diplomats and businesspeople suggest things will have to get significantly worse before Hong Kong’s moneyed classes give up on a city that has defied doubters time and again.

Optimists say that Hong Kong still offers a unique, if diminished, gateway between China and the rest of the world, and that both sides have too much riding on the city to stand by and watch it crumble.

That sanguine outlook may ultimately prove wrong, of course, and there are plenty of pessimists. But for all the talk of contingency plans and capital outflows, signs of a mass exodus have so far failed to materialize. Here’s what people have been saying about Hong Kong’s future:

Richard Harris, founder of Port Shelter Investment Management, who has been in the city for 50 years

There’s been no change to the taxation regime and there’s likely to be almost no change to corporate law. Those are the sort of things that impact businesses. I think in terms of Hong Kong’s economic framework, it’s still extremely good for doing business, and I can’t see how that would be changed by whatever’s happened.

Henry Kissinger, former U.S. Secretary of State, speaking at Bloomberg’s New Economy Forum in Beijing

I hope that the issue will be settled by negotiation that maintains the principles by which decolonization was carried out some period ago. I believe that this is possible, and it should be likely.

Bill Winters, CEO and executive director at Standard Chartered (LON:) Plc

Not much money has actually moved. We’ve seen clients open accounts in Singapore, Malaysia and Taiwan, in that order, but while the accounts were set up, not a lot of money has actually moved. We’re not seeing a crescendo.

The biggest impact of the Hong Kong protests by us has been on our staff. It’s been hard for them to get to work and there’s elements of stress with conflicts at home between people who disagree. We’ve been in Hong Kong 162 years, we’ve been through SARS, the financial crisis, and our business will keep going.

Ronnie Chan, Hong Kong-based chairman of Hang Lung Properties

I don’t think Hong Kong itself can resolve the situation. Every problem eventually will pass, and the same thing with Hong Kong, it’s just a matter of what form and shape it will be. Hong Kong will recover, how much can we recover is the question.

Fraser Howie, author of “Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise”

No one thinks China is about to collapse so there is a need still for a gateway and only Hong Kong offers that. Free flow of money, capital and people is all still possible in Hong Kong, and there still is a strong commercial law framework.

Hong Kong will be a thorn in Beijing’s side. How that escalation comes I am still unsure but there is no chance of going back. The Hong Kong bubble has popped and will not be re-engineered.

Stephen Innes, chief Asia market strategist at Axitrader Ltd.

After the constant weekend carnage in the streets, financial market concerns must play second fiddle to employer safety and welfare, so I can only assume relocation discussions are happening. When you think about it these days, most non-customer facing jobs are pretty much location-agnostic, so there is little holding back foreign businesses from possibly relocating a bulk of their staff.

Piyush Gupta, CEO of DBS Group Holdings Ltd., on clients slowly moving money to Singapore, the U.K. and other locations

People want an insurance policy on Hong Kong.

Phillip Hynes, head of political risk and analysis, ISS Risk

People were horrified by the violence of last week. But the protests couldn’t survive without sustainable support from the working class, and there’s a surprising amount of support from the middle class.

I’d caution against businesses establishing in Hong Kong now. My assessment of the protest movement is that it will continue for a long time; Hong Kong will never return to the Hong Kong it was before, it’s changed already. We’ve yet to see the impact of societal divisions created here. District elections may further polarize that.

Hong Kong will be an unwelcoming investment and business environment over the next few years, and very volatile.

Pauline Loong, a veteran China watcher and managing director at Asia-analytica in Hong Kong

Hong Kong will always have an international role regardless of political developments. But without confidence that its systems are not being subsumed into that vast opacity of mainland practices, its role would increasingly be confined to one of providing China-related services.

China is too big a market and Hong Kong too important a conduit for Chinese capital flows for anyone to make a move without a war plan on the scale of the invasion of Normandy, and that takes time.





Source link

Vietnam Takes ‘Drastic Steps’ on Fraudulent Exports to U.S. By Bloomberg



(Bloomberg) — Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. 

Vietnam is intensifying efforts to crack down on Chinese exporters trying to route products through the Southeast Asian nation to bypass higher U.S. tariffs, a customs official said.

Vietnam has become one of the top destinations for suppliers looking to avoid U.S. duties on Chinese products amid the trade war, making the country vulnerable to goods fraudulently labeled as “Made in Vietnam,” Au Anh Tuan, head of customs control and supervision in the General Department of Vietnam Customs, said in an interview in Hanoi.

“We’ve seen trade-fraud activities increase strongly since the trade war started,” he said. “We’ve increased cooperation with U.S. authorities to fight against that. We’re taking drastic steps, including compiling a list of 25 items to watch.”

Vietnam’s trade surplus with the U.S. reached nearly $40 billion in 2018. The gap hit almost $41 billion in the first nine months of 2019, up 29% on-year, according to U.S. Census Bureau data.

U.S. Watchlist

“They really need to step up their game in this area,” said Nestor Scherbey, a licensed U.S. customs broker and consultant based in Ho Chi Minh City. “If they don’t pay attention to the country of origin of the goods being exported, they’re going to have trouble.”

In May, the U.S. Treasury Department added Vietnam to a watchlist of countries being monitored for possible currency manipulation. Asked in June if he wanted to impose tariffs on Vietnam, President Donald Trump described the country as “almost the single worst abuser of everybody.” Earlier this month, on a visit to Hanoi, Commerce Secretary Wilbur Ross urged Vietnam to reduce its trade surplus with the U.S.

The U.S. is Vietnam’s largest export market. Capital Economics Ltd. estimates that if Trump imposed 25% tariffs on imports from Vietnam as he did with Chinese goods, it would shave more than 1 percentage-point off the country’s growth rate — more than erasing the approximately 0.5 percentage-point gain Vietnam has seen this year as a beneficiary of the trade war.

Vietnamese officials say the country will buy more big-ticket items from the U.S., including Boeing (NYSE:) Co. planes and liquefied , to help trim the surplus.

Special Scrutiny

Customs officials are focusing on “highly suspicious” sectors — such as electronic components and wooden furniture — that have seen annual exports surge by more than 15%, said Mai Xuan Thanh, deputy director general of the customs department. Hundreds of domestic and foreign companies are under “special scrutiny for suspect exports,” he said.

U.S. authorities have informed their Vietnamese counterparts about big increases of any items from Vietnam that concurrently saw big drops in Chinese shipments to the U.S., Tuan said. Through October, Vietnamese customs had uncovered about 14 significant cases this year of exports with fake labels.

Beginning Dec. 27, Vietnam will suspend transshipment and temporary imports of plywood products headed to the U.S., Industry and Trade Minister Tran Tuan Anh said earlier this month. The National Steering Committee for Anti-Smuggling and Trade Fraud ordered provinces along the country’s borders to step up inspections of goods being imported.

Vietnamese customs last month said it discovered and seized about $4.3 billion of Chinese aluminum falsely labeled “Made in Vietnam” that was meant to be shipped overseas, mostly to the U.S.

“We’ve been putting a lot more resources toward preventing fraudulently labeled exports and illegal trans-shipments,” Tuan said. “This is really hard work given the ongoing trade war.”

(Updates with number of export fraud cases in 10th paragraph.)



Japan’s Exports Drop Most Since 2016 Amid Trade Wars and Typhoon By Bloomberg



(Bloomberg) — Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. 

Japan’s exports suffered their largest drop in three years in October, as the U.S.-China trade war continued to hit global demand and extreme weather disrupted output at home.

Exports fell 9.2% from a year ago, dropping for an 11th month and extending the longest streak of monthly declines since 2016, Ministry of Finance data showed Wednesday. Economists had forecast a 7.5% slide. Exports to China and the U.S., Japan’s two biggest markets, logged double-digit falls. Drops in automobile and steel shipments were major factors, along with damage from last month’s super typhoon.

Key Insights

  • Despite rumblings that Washington and Beijing are nearer to a truce that could roll back tariffs, global manufacturers remain in a funk over the global economy and uncertainty surrounding the trade outlook.
  • Takeshi Minami, economist at Norinchukin Research Institute, said the continued weakness in exports could be a factor that pushes the Japanese government to add to the size of a stimulus package announced earlier this month, partly to shield the economy from the global slowdown. “We may see politicians increasingly calling for a sizable economic package,” he said.
  • Still, the latest data, partly distorted by bad weather, needn’t be a cause for pessimism, Norinchukin’s Minami said, adding that there were further signs that the worst was over for the global tech sector.
  • Speaking after the data was released, a finance ministry official said that manufacturing disruption caused by Typhoon Hagibis may have contributed to October’s drop in auto trade.
  • The export slump has made the economy more dependent on consumer demand at a particularly vulnerable time. A sales tax hike introduced last month is expected to weigh heavily on spending this quarter.
  • South Korean boycotts of Japanese products likely contributed to the drop in Japan’s exports of autos and food to its neighbor, according to economist Yutaro Suzuki at Daiwa Institute of Research Holdings. Since summer, the two countries have been embroiled in their own trade spat stemming from a dispute over Japan’s colonial past. Exports to Korea fell 23% in October.

What Bloomberg’s Economist Says

“The U.S.-China trade war continues to undermine supply-chain demand, and remains the biggest downside risk to Japan’s exports.”

–Yuki Masujima, economist

Click here to read more

Get More

  • Imports slid 14.8% in October, compared with economists’ median estimate of a 15.2% slump.
  • The trade balance was a 17.3 billion yen surplus, the first surplus since June.
  • Exports to China dropped 10.3%, while shipments to the U.S. fell 11.4%.
  • Chipmaking equipment exports were down 5.7% in October, compared with average falls of 16.2% over the six months through September. Exports of chips were up 3.6% in the month, compared with average falls of 2.3% in the prior six months.

(Updates economist comments.)

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



What ECB Watchers Are Eyeing in Lagarde’s First Policy Speech By Bloomberg



(Bloomberg) — Explore what’s moving the global economy in the new season of the Stephanomics podcast. Subscribe via Apple Podcast, Spotify or Pocket Cast.

European Central Bank watchers who monitor its every signal to gauge the future of interest rates would quite like new President Christine Lagarde to give them some clues when she breaks her silence this week.

Three weeks into the role, the Frenchwoman has yet to make a speech on monetary policy. That’s allowed murmurings of unease over the impact of negative interest rates and quantitative easing, emanating from some colleagues as well as from politicians and bankers, to fill the vacuum.

Traders in euro area money markets have pared back expectations for further stimulus, and the chance of another 10 basis-point cut by October has fallen to 40% from around 60% when Lagarde took over. While that has largely been a function of cooling trade tensions, investors want to know how the ECB would respond should the economic outlook weaken again.

“We don’t really know what’s happening behind the scenes,” said Jan von Gerich, chief strategist at Nordea in Helsinki, who recently put back his forecast for more easing from December to March. “Lagarde has not made her monetary policy views and strategic plans clear yet, so the time to try to influence the future course of the ECB is now.”

In her first speech as president earlier this month in Berlin, she told the audience to leave the room if they were looking for views on monetary policy.

Lagarde could start to lift the fog on Friday when she addresses a banking conference in Frankfurt. Otherwise, the next scheduled occasion is Dec. 12, when she will hold a press conference after her first Governing Council meeting and will unveil new economic forecasts, including the first predictions for 2022.

Airing Views

Meanwhile, members of her Governing Council who opposed elements of the stimulus launched by Lagarde’s predecessor, Mario Draghi, in his final weeks have been open about their concerns that there’s little room left for rate cuts.

In Frankfurt last week, France’s Francois Villeroy de Galhau suggested interest rates are unlikely to fall much further. His Dutch colleague Klaas Knot argued the ECB should be more cautious with unconventional tools. Estonian Governor Madis Muller, who opposed September decision to restart QE, said over the weekend that keeping rates where they are makes sense, but added there was a question of how low they could go before losing effectiveness.

JPMorgan (NYSE:) economist Greg Fuzesi has scrapped his call for a rate cut in December and currently predicts no further change, citing the inability to read how policy makers are thinking under their new leadership.

“Even to this day, policy makers have not made any clear forward-looking statements as opposed to trying to digest the September package,” he said in a report last week. “The arrival of Christine Lagarde seems to have slowed this down further.”

Read more: Helicopter Money Might Be the ECB’s Best and Worst Options

Lagarde has good reason to move cautiously. Recent economic reports show the euro area’s downturn seems to be bottoming out and Germany, the largest economy, skirted recession. The ECB’s latest package, however contentious it may have been, could keep providing sufficient stimulus for months to come.

The new president’s initial focus seems to be containing acrimony from that decision. That included the unusual step of taking her Governing Council colleagues on a retreat to a luxury hotel outside Frankfurt to discuss how they’ll work together.

Still, even proponents of the ECB’s policy stance are showing a heightened awareness of the risks it brings. Vice-President Luis de Guindos has grown vocal about potential side effects, telling an audience of business people in Bilbao this month that the negative impact on financial stability is increasingly evident.

Chief economist Philip Lane acknowledged in an interview with La Repubblica published Wednesday that “there will be a lot of discussion about where exactly the limit is” — while insisting it hasn’t been reached yet.

The debate worries ABN Amro economist Nick Kounis. Like von Gerich at Nordea, he too recently pushed back his forecast for a rate cut to March from December, and described the policy message coming from the Governing Council as mixed and lacking clarity.

“Are you trying to convince investors that you’re the kind of institution which can take powerful actions and meet your objectives, or are you actually telling them that you’re out of bullets?” Kounis said. “There is really no in-between.”

(Updates with Lane comment in 14th paragraph)



HSBC Says British Pound May Soar. Or Crash By Bloomberg



(Bloomberg) — Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.

The outcome of Britain’s election next month poses a binary choice for the nation’s currency, according to the largest U.K. bank.

“Nothing is priced in,” said David Bloom, global head of foreign-exchange strategy at HSBC Holdings Plc (LON:), in an interview with Bloomberg Television from Doha. “The political outcome will determine the future of the currency.”

An election result that paves the way to a U.K.-European Union deal on Brexit could send the pound up to $1.45 by the end of next year. Or a no-deal Brexit could see it tumble to $1.10, from just below $1.30 now.

Any resolution is good, Bloom said, either it be another referendum or a Brexit deal. Political wrangling will start to ebb away, the economy could get a fiscal boost and the Bank of England could start considering rate increases. The reverse could see recession fears flare.

Among three election scenarios, a hung parliament — where neither Prime Minister Boris Johnson’s Conservatives nor opposition leader Jeremy Corbyn’s Labour party gets a majority — would be the worst for the currency, Bloom said.

In that case, there would be no majority of lawmakers in favor of a fresh referendum on Brexit, nor favoring any specific Brexit deal. “We could be back in the mud” and “lost in the wilderness.”

While polls suggest a Conservative majority now, the voting scenarios for the Dec. 12 elections are complex, according to Bloom.

“It’s still completely open — anything can happen,” the strategist said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





Source link

Thai Third-Quarter GDP Misses Estimates, 2019 Forecast Cut By Bloomberg



(Bloomberg) — Explore what’s moving the global economy in the new season of the Stephanomics podcast. Subscribe via Apple Podcast, Spotify or Pocket Cast.

Thailand’s economy grew more slowly than expected in the third quarter and the government lowered its forecast for full-year growth as the country deals with the impact of the U.S.-China trade war and a strong currency.

Gross domestic product rose 2.4% from a year ago, the National Economic and Social Development Council said Monday, below the median estimate of 2.7% in a Bloomberg survey of economists. The council cut its 2019 GDP forecast to 2.6% — from an earlier view of 2.7%-3.2% — and said growth should accelerate to 2.7%-3.7% next year.

Thailand’s trade-reliant economy has been hit by slumping exports, a surging currency and mixed performance in the tourism sector. The central bank earlier this month cut its benchmark interest rate to a record low and announced measures to slow gains in the baht, which has been the strongest performer in emerging markets over the past year, rising about 9%.

The council’s secretary general, Thosaporn Sirisumphand, called for more stimulus to supplement a $10 billion package the government approved in August. The global slowdown, drought and volatility remain key challenges for the economy, he said.

“We need to use all tools that we have as there are still a lot of risks that we can’t control,” Thosaporn told reporters in Bangkok. “We can’t be complacent.”

Exports, Currency

While the economy appeared to bottom out in the second quarter — when it grew 2.3%, its slowest pace in nearly five years — the rebound has been more muted than expected, Thosaporn said.

“Baht strength hurt exports and private investment in the third quarter,” he said. “We think the baht strength may continue.”

The baht was at 30.245 per dollar as of 10:35 a.m. in Bangkok, little changed from before the data release.

“The worst is probably now over for the economy, but a strong rebound is unlikely,” Gareth Leather, an economist at Capital Economics, wrote in a research note. “Exports will continue to struggle if, as we expect, global growth slows further. A high level of household debt will also constrain private consumption growth.”

The NESDC said exports now are expected to shrink by 2% this year, compared to the 1.2% contraction it forecast in August. The economy should pick up in the final quarter of the year and accelerate into 2020, driven by government stimulus measures, gradual recovery in exports and an improvement in tourism, the council said.

(Adds quotes from NESDC head in fifth and seventh paragraphs, analyst quote in ninth paragraph.)

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Legendary Oil Trader Says the End of Demand Growth in Sight By Bloomberg



(Bloomberg) — Andy Hall, one of the most successful oil traders of his generation, is now predicting the biggest shift yet in the global market: the end of demand growth.

While the view may not be original, it underscores the gloomy forecast earlier this week from the Paris-based International Energy Agency saying that global oil consumption will plateau in about a decade. The prospect of “peak demand” would end an expansion that dominated the past century and comes as investors and governments face pressure to move away from fossil-fuel-based economies.

“There’s a non-zero chance that by 2030, we will see a plateauing or decline in global oil consumption,” the former hedge fund manager said at an industry event in New York. “It’ll happen because of technology, electric cars, renewable energy.”

Even as new oil supplies from places including the U.S., Brazil, Norway and Guyana soar, there’s growing concern from the oil and gas industry that it’s running up against a shift in energy consumption. That transition will increasingly limit its ability to make ends meet, with some shale firms and oil-service providers already struggling or going under.

“Oil demand has grown exponentially since the end of World War II,” Hall said at the event, which was organized by Orbital Insight and RBC Capital Markets. “It was just a given that oil consumption would grow from here to eternity. Except we knew logically that couldn’t happen.”

Hall, speaking later in an interview, also said that solar and wind energy are already cheaper than coal.

“If the world fully transitions to renewable energy, what is the role of a fossil fuel company?” he said. “I think renewables is the new oil.”

Hall’s career stretches back to the 1970s and includes stints at oil major BP (LON:) Plc and famed trading house Phibro Energy Inc. But he shot to fame during the global financial crisis when Citigroup Inc (NYSE:). revealed that, in a single year, he had a $100 million payout trading oil for the bank. In 2017, Hall closed down his Astenbeck Masters Commodities Fund II, a capitulation of one of the best-known figures in the commodities world.

He quoted Sheikh Ahmad Zaki Yamani, the former Saudi Arabian oil minister who famously said that the Stone Age didn’t come to an end for lack of stones, and the Oil Age will end long before the world runs out of oil.

Global benchmark crude traded little changed at $62.33 a barrel at 8:58 a.m. New York time Friday. While prices are up about 16% this year, they are still well below lofty highs above $100 from earlier this decade.

“Could we see $100 oil again? Absolutely,” Hall told Bloomberg News. “That would only be temporary and hasten the ultimate demise.”

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



U.S. Factory Output Drops by Most Since April on GM Strike By Bloomberg


© Reuters. U.S. Factory Output Drops by Most Since April on GM Strike

(Bloomberg) — U.S. slumped in October by the most in six months as an auto workers’ strike at General Motors (NYSE:) curtailed vehicle production and the trade war continued to weigh on other factories.

The 0.6% decline in output followed a 0.5% decrease the previous month, Federal Reserve data showed Friday. Excluding the 7.1% drop in motor vehicle output, which was the largest since January, factory production decreased a more modest 0.1% for a second month.

Total industrial production, which also includes output at mines and utilities, slumped 0.8% in October, the largest setback since May 2018.

Key Insights

  • The data are consistent with other reports showing cracks in the factory sector as producers grapple with sluggish global demand, slower business investment and the U.S.-China trade war. The Institute for Supply Management’s gauge contracted three straight months, while a separate index showed global manufacturing shrank in October for a sixth month.
  • All major market groups, including consumer goods and business equipment, reported declines in output for at least a second month.
  • Factory production may rebound next month as the striking United Auto Workers reached an agreement with GM late in October. Overall the strike cost the company nearly $3 billion and lasted 40 days.
  • Aside from the slump in automaker output, production also retreated at makers of computers, electrical equipment, chemicals, apparel and fabricated metals.

Get More

  • The median forecast of economists in the Bloomberg survey for manufacturing output called for a 0.7% decline.
  • Of the three main industrial production groups, mining dropped for a second month on weakness in the oil patch, while utilities registered the sharpest drop since June.
  • Capacity utilization, measuring the amount of a plant that is in use, fell to 76.7% from 77.5%. Capacity utilization at manufacturers decreased to 74.7%, the weakest since September 2017.
  • The Fed’s monthly data are volatile and often get revised. Manufacturing, which makes up about three-fourths of total industrial production, accounts for about 11% of the U.S. economy.

(Adds graphic)

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Euro Recovery Odds Seen Rising on Signs of Stabilizing Economy By Bloomberg



(Bloomberg) — Investors awaiting signs whether the is ready to stage a comeback will be closely watching next week’s regional manufacturing report.

The preliminary data, due next Friday, will help investors bet whether Europe is heading for a more robust recovery, or conclude that recent positive signals were short of the mark. The manufacturing PMI is forecast to reveal a stabilizing economy, with Nomura International Plc reporting wider signs of a recovery that could strengthen the common currency into next year.

The euro is currently hovering near a one-month low at $1.1029, while benchmark German bond yields are edging up again after a huge bond rally in the first eight months of the year. Nomura sees the euro trading at $1.10 by year-end before rising about 5% to $1.16 by the end of December 2020.

“In a recovery the euro tends to outperform,” Nomura strategists including Jordan Rochester said in a note. “The good news is that our broad measure of risk sentiment remains in risk-on territory and leading indicators suggest the slowdown could turn into a recovery.”

To be sure, European bond markets are yet to see a decisive turning point in the economic data and recent moves are being driven by sentiment rather than a definitive trend in fundamentals. The same may be said about the euro, which has largely ignored recent developments, including the news that Germany avoided its first recession in six years.

Bloomberg economists see a brighter outlook for the euro-zone next year, and optimism grew on Tuesday when German investor confidence rose to the highest level in six months. This follows continued positive signs from China, where manufacturing continued to pick up in October with new orders rising at the quickest pace in more than six years.

For further clues about the future in Europe, traders will be tuning in to a speech by European Central Bank President Christine Lagarde next Friday. With markets largely pricing out further easing this year, any dovish signals could encourage bets against the euro. But chances appear low that she will signal any significant deviation from current policy at such an early stage in her tenure. Meanwhile, other members of the governing council have this week signaled the ECB is in no rush to further expand monetary stimulus.

  • Minutes of Mario Draghi’s final meeting as president of the ECB are coming up, and may provide detail of discussions about the composition of asset purchases and any need to adjust the issuer limit
  • Speeches from ECB’s Lagarde and Weidmann in Frankfurt
  • Fed releases minutes from its meeting on Oct. 30; Fed speakers include Mester, Williams (NYSE:) and Kashkari
  • In Sweden, Riksbank deputy governors Ohlsson and Jansson will speak about monetary policy
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





Source link