OPEC downgrades forecast for oil demand growth in 2019 and 2020, citing economic slowdown

VIENNA, AUSTRIA – 2018/06/20: OPEC logo is seen at the Organisation of Petroleum Exporting Countries (OPEC) building in Vienna. (Photo by Omar Marques/SOPA Images/LightRocket via Getty Images)OPEC downwardly revised its forecast for oil demand growth for the second consecutive month on Wednesday, building the case for another round of production cuts from the Middle East-dominated group of producers. In a closely-watched monthly report, OPEC cut its forecast for global oil demand growth for the


VIENNA, AUSTRIA – 2018/06/20: OPEC logo is seen at the Organisation of Petroleum Exporting Countries (OPEC) building in Vienna. (Photo by Omar Marques/SOPA Images/LightRocket via Getty Images)OPEC downwardly revised its forecast for oil demand growth for the second consecutive month on Wednesday, building the case for another round of production cuts from the Middle East-dominated group of producers. In a closely-watched monthly report, OPEC cut its forecast for global oil demand growth for the
OPEC downgrades forecast for oil demand growth in 2019 and 2020, citing economic slowdown Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-09-11  Authors: sam meredith
Keywords: news, cnbc, companies, 2020, citing, remainder, demand, oil, vienna, economic, report, powerful, downgrades, forecast, slowdown, world, growth, opec


OPEC downgrades forecast for oil demand growth in 2019 and 2020, citing economic slowdown

VIENNA, AUSTRIA – 2018/06/20: OPEC logo is seen at the Organisation of Petroleum Exporting Countries (OPEC) building in Vienna. The 174th OPEC meeting will be held on the 22th June 2018 in Vienna. (Photo by Omar Marques/SOPA Images/LightRocket via Getty Images)

OPEC downwardly revised its forecast for oil demand growth for the second consecutive month on Wednesday, building the case for another round of production cuts from the Middle East-dominated group of producers.

In a closely-watched monthly report, OPEC cut its forecast for global oil demand growth for the remainder of this year to 1.02 million barrels per day (b/d). That’s down 80,000 b/d from its August estimate.

The group, which consists of some of the world’s most powerful oil-producing nations, attributed the downgrade to weaker-than-expected economic data in the first-half of the year and deteriorating growth projections for the remainder of 2019.

In 2020, OPEC said it sees world oil demand increasing by 1.08 million b/d. This represents a downward adjustment of 60,000 b/d from the previous month’s assessment, “mainly to accommodate changes to the world economic outlook.”

The report comes as OPEC and allied non-OPEC partners, sometimes referred to as OPEC+, prepare to meet in Abu Dhabi on Thursday.

The meeting is likely to provide crucial clues about how far some of OPEC’s most powerful players are willing to go to get prices on a firmer footing.


Company: cnbc, Activity: cnbc, Date: 2019-09-11  Authors: sam meredith
Keywords: news, cnbc, companies, 2020, citing, remainder, demand, oil, vienna, economic, report, powerful, downgrades, forecast, slowdown, world, growth, opec


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‘Gold is the way to go’ as interest rates fall, says Mark Mobius

VCG | Visual China Group | Getty ImagesVeteran investor Mark Mobius is bullish on gold as central banks around the world cut interest rates. “All the central banks are trying to get interest rates down, they are pumping money into the system. In the first half of this year, central banks bought 374 metric tons of gold, reported the World Gold Council. The 2019 Central Bank Gold Reserve survey, conducted by the World Gold Council and released in July, also found there was central bank demand for


VCG | Visual China Group | Getty ImagesVeteran investor Mark Mobius is bullish on gold as central banks around the world cut interest rates. “All the central banks are trying to get interest rates down, they are pumping money into the system. In the first half of this year, central banks bought 374 metric tons of gold, reported the World Gold Council. The 2019 Central Bank Gold Reserve survey, conducted by the World Gold Council and released in July, also found there was central bank demand for
‘Gold is the way to go’ as interest rates fall, says Mark Mobius Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-09-09  Authors: huileng tan
Keywords: news, cnbc, companies, council, gold, mark, interest, fall, demand, dollar, banks, mobius, currency, central, way, world, system, rates


'Gold is the way to go' as interest rates fall, says Mark Mobius

A staff member shows gold ornaments at a jewelry store on June 21, 2019 in Huzhou, Zhejiang Province of China. VCG | Visual China Group | Getty Images

Veteran investor Mark Mobius is bullish on gold as central banks around the world cut interest rates. “Physical gold is the way to go, in my view, because of the incredible increase in money supply,” said Mobius, the founding partner of Mobius Capital Partners. “All the central banks are trying to get interest rates down, they are pumping money into the system. Then, you have all of the cryptocurrencies coming in, so nobody really knows how much currency is out there,” he told CNBC’s “Street Signs” on Friday. Amid expectations of slowing global growth, central banks around the world have been lowering interest rates, as they seek to boost money supply in the economy, stoke demand and provide an impetus to growth.

Mobius recommends that investors hold 10% of their portfolios in physical gold, with the rest invested in dividend yielding equities. That’s especially if the dollar gets weaker. In his view, “the U.S. government, the Trump White House, does not want a strong dollar.” “They are certainly going to try to weaken the dollar against other currencies and of course, it’s a race to the bottom. Because, as soon as they do that, other currencies will also weaken,” said Mobius. “People are going to finally realize that you got to have gold, because all the currencies will be losing value,” he added. Gold can retain its value much better than other forms of currency, and is traditionally a safe haven during market volatility. A weaker dollar tends to boost the price of gold as global trade in the yellow metal is denominated in U.S. dollars. “At the end of the day, gold is a means of exchange. It’s a stable currency in some way,” said Mobius.

Central banks are buying gold

Data from the World Gold Council this year point to rising central bank demand for the yellow metal amid global macroeconomic uncertainty. In the first half of this year, central banks bought 374 metric tons of gold, reported the World Gold Council. That was the largest net increase for the first half of the year since at least 2000. “Deep down inside, the central bankers do believe in gold, but they don’t want to say it because … they won’t be able to create new currency,” said Mobius. The 2019 Central Bank Gold Reserve survey, conducted by the World Gold Council and released in July, also found there was central bank demand for gold in the short to medium term. Of those polled, 11% of emerging market and developing economy central banks said they intended to increase their gold reserves over the next 12 months. That was similar to data from 2018 when 12% of such central banks bought gold, giving rise to 652 metric tons of central bank gold demand — the highest level on record under the current international monetary system, noted the World Gold Council. “The planned purchases are being driven by higher economic risks in reserve currencies. In the medium term, central banks see changes in the international monetary system, with a greater role for the Chinese renminbi and gold,” said the World Gold Council in their report. The renminbi is another name for the Chinese yuan. About 40% of emerging market and developing economy central banks cited “anticipated changes in the international monetary system being relevant to their decision to hold gold,” the World Gold Council said.

China also investing in gold


Company: cnbc, Activity: cnbc, Date: 2019-09-09  Authors: huileng tan
Keywords: news, cnbc, companies, council, gold, mark, interest, fall, demand, dollar, banks, mobius, currency, central, way, world, system, rates


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Only Germany and Japan have room for economic stimulus

Never mind that such a thought should not even occur to people watching a 7% of GDP public sector budget deficit, and counting, and a public debt well on the way to 110% of GDP. Japan is another example where a large credit creation has been tried for some time to rev up the economy. Over the last five years, the average annual GDP growth has been 1%, and the inflation rate in July was 0.6%, far below the official target of 2%. There is hope, however, that Japan’s GDP numbers for the first half


Never mind that such a thought should not even occur to people watching a 7% of GDP public sector budget deficit, and counting, and a public debt well on the way to 110% of GDP. Japan is another example where a large credit creation has been tried for some time to rev up the economy. Over the last five years, the average annual GDP growth has been 1%, and the inflation rate in July was 0.6%, far below the official target of 2%. There is hope, however, that Japan’s GDP numbers for the first half
Only Germany and Japan have room for economic stimulus Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-09-06  Authors: dr michael ivanovitch
Keywords: news, cnbc, companies, japans, room, stimulus, economy, monetary, germany, economic, demand, reserves, gdp, banks, public, japan, trillion, growth


Only Germany and Japan have room for economic stimulus

German Chancellor Angela Merkel shaking hands with Japan’s Prime Minister, Shinzo Abe at the opening day of the G-20 summit on July 7, 2017 in Hamburg, Germany. Friedemann Vogel | Getty Images

People complaining about dangers of free money should not have to look too far back to find — and understand — the most recent “original sin.” It all started with the U.S. Federal Reserve’s excessive credit creation and the culpable failures of its bank supervision. That led to the epochal financial crisis and the Great Recession. The ensuing rush to prevent a systemic failure of the U.S. economy was an all-out effort to keep the banks afloat with liquidity provisions, technically called banks’ borrowed reserves at the Fed, culminating in November 2008 at an astounding $700 billion. To get an idea of the panic and the magnitude of the crisis, you can compare that astronomical amount with monthly averages of $240 million that banks were borrowing at the Fed in June and July of 2007. A monetary creation on such a gigantic scale meant that the Fed’s balance sheet kept expanding by leaps and bounds. During 2015, the Fed’s monetary base exceeded $4 trillion, and the banking system was flooded with $2.7 trillion of excess reserves, the money banks could lend.

Focus on trade and leave the Fed alone

Again, in relatively normal, immediate pre-crisis times, the monetary base was fluctuating around monthly averages of $820 billion, and the banks’ excess reserves were roughly stable at about $1.5 billion. Twelve years on, we are not out of the woods yet. As of Aug. 28, the Fed’s monetary base was expanding again toward $3.3 trillion, and the money banks can lend was reported at $1.4 trillion. That indicates that the Fed’s process of “normalizing” credit conditions has been stopped — and reversed — in an apparent move back toward zero interest rates. And, you guessed it, the election-driven Trump administration is pushing for a monetary and fiscal stimulus. Never mind that such a thought should not even occur to people watching a 7% of GDP public sector budget deficit, and counting, and a public debt well on the way to 110% of GDP. Japan is another example where a large credit creation has been tried for some time to rev up the economy. The result is quite modest, to put it mildly. Over the last five years, the average annual GDP growth has been 1%, and the inflation rate in July was 0.6%, far below the official target of 2%. There is hope, however, that Japan’s GDP numbers for the first half of this year may be heralding a much-needed structural change. Indeed, that was one of the rare occasions when net exports shaved 0.25% off the economic growth, leaving the increase in domestic demand to drive the economy’s annual gain of 1%. But how sustainable is that? Private consumption, about 60% of the economy, is quite weak, while increases in residential and business investments are unlikely to continue. Housing demand is undermined by declining demography and family formation, and private sector capital outlays cannot grow if exports continue to fall, as was the case in the first two quarters of this year.

Germany and Japan should boost investments

All that means that Japan’s monetary policy alone cannot deliver a steady and sustained cyclical upturn. Government investments in infrastructure of information technology, life sciences, social welfare and other sectors catering to an aging society would help. A relatively small 2.5% budget deficit could allow that, and a steadier and stronger growth could contribute to reducing Japan’s huge public debt. The European Union economy is essentially a German story, where the imposition of Berlin’s ill-advised fiscal austerity had forced the European Central Bank to rescue the continent’s disintegrating economies and financial systems with aggressive monetary easing. That is still the case, because Germany refuses to support its economy — while peremptorily demanding that France, Italy and Spain, one half of the monetary union’s GDP, continue to consolidate their budgets and keep their public debt down. The way out of this predicament is quite simple and thoroughly feasible: With its budget surplus of 2.3% of GDP, Germany has plenty of space for a meaningful stimulus to its moribund domestic demand. That would allow the rest of the euro area, and the EU, to benefit from rising employment, demand and output, and would also relax budget constraints to growth in other European economies But don’t hold your breath for that. Germany won’t budge. The ECB will have to pick up the pieces with more of its negative interest rates. And, unforgivably, Washington will continue to look the other way – totally ignoring what German and Japanese refusals to properly stimulate their internal demand are doing to half-a-trillion dollars of U.S. exports, whose stronger growth would be a safe and meaningful shot in the arm to the American economy.

Investment thoughts


Company: cnbc, Activity: cnbc, Date: 2019-09-06  Authors: dr michael ivanovitch
Keywords: news, cnbc, companies, japans, room, stimulus, economy, monetary, germany, economic, demand, reserves, gdp, banks, public, japan, trillion, growth


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WeWork is dramatically slashing its IPO valuation to less than $25 billion because of weak demand

Signage is seen at the entrance of the WeWork offices on Broad Street in New York. The valuation targets for controversial real estate company WeWork are being dramatically lowered and the real estate company will not go public next week, sources told CNBC’s David Faber. Even at a $25 billion valuation, the demand is not there, according to the sources. WeWork last raised money at a $47 billion valuation in the private market. WeWork’s earlier valuation came after SoftBank, the company’s biggest


Signage is seen at the entrance of the WeWork offices on Broad Street in New York. The valuation targets for controversial real estate company WeWork are being dramatically lowered and the real estate company will not go public next week, sources told CNBC’s David Faber. Even at a $25 billion valuation, the demand is not there, according to the sources. WeWork last raised money at a $47 billion valuation in the private market. WeWork’s earlier valuation came after SoftBank, the company’s biggest
WeWork is dramatically slashing its IPO valuation to less than $25 billion because of weak demand Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-09-05  Authors: thomas franck
Keywords: news, cnbc, companies, dramatically, weak, demand, neumann, stock, targets, slashing, billion, real, wework, ipo, street, company, valuation, sources


WeWork is dramatically slashing its IPO valuation to less than $25 billion because of weak demand

Signage is seen at the entrance of the WeWork offices on Broad Street in New York.

The valuation targets for controversial real estate company WeWork are being dramatically lowered and the real estate company will not go public next week, sources told CNBC’s David Faber.

Even at a $25 billion valuation, the demand is not there, according to the sources. WeWork last raised money at a $47 billion valuation in the private market.

WeWork’s earlier valuation came after SoftBank, the company’s biggest backer, invested $5 billion in primary growth capital and an additional $1 billion in secondary funding.

WeWork rents out work spaces to start-ups and other businesses and was founded in 2010 by CEO Adam Neumann. According to its website, WeWork is “committed to elevating the collective consciousness of the world by expanding happiness and unleashing every human’s superpowers.”

The company has turned eyes across Wall Street as it works toward an initial public offering both for its lofty valuation targets as well as for a recent controversy involving Neumann. In July, the We Company acquired to pay Neumann $5.9 million in stock for the trademark to “We,” previously the property of We Holdings LLC, an investment vehicle run by the CEO and co-founder Miguel McKelvey.

Neumann later returned the stock payment.


Company: cnbc, Activity: cnbc, Date: 2019-09-05  Authors: thomas franck
Keywords: news, cnbc, companies, dramatically, weak, demand, neumann, stock, targets, slashing, billion, real, wework, ipo, street, company, valuation, sources


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China’s factory activity unexpectedly expands in August, a private survey shows

This photo taken on October 17, 2018 shows a worker inspecting shoes at a factory in Qingdao in China’s eastern Shandong province. China’s manufacturing activity expanded in August, according to results of a private survey released on Monday as production increased, but export sales fell amid the country’s escalating trade war with the U.S. The Caixin/Markit manufacturing PMI was 49.9 in July. The results of the private survey came after official data showed the manufacturing PMI fell to 49.5 in


This photo taken on October 17, 2018 shows a worker inspecting shoes at a factory in Qingdao in China’s eastern Shandong province. China’s manufacturing activity expanded in August, according to results of a private survey released on Monday as production increased, but export sales fell amid the country’s escalating trade war with the U.S. The Caixin/Markit manufacturing PMI was 49.9 in July. The results of the private survey came after official data showed the manufacturing PMI fell to 49.5 in
China’s factory activity unexpectedly expands in August, a private survey shows Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-09-02  Authors: huileng tan
Keywords: news, cnbc, companies, shows, trade, manufacturing, amid, fell, factory, pmi, official, chinas, activity, demand, analysts, survey, data, unexpectedly, expands, private


China's factory activity unexpectedly expands in August, a private survey shows

This photo taken on October 17, 2018 shows a worker inspecting shoes at a factory in Qingdao in China’s eastern Shandong province.

China’s manufacturing activity expanded in August, according to results of a private survey released on Monday as production increased, but export sales fell amid the country’s escalating trade war with the U.S.

The Caixin/Markit factory Purchasing Managers’ Index (PMI) was 50.4 in August — better than than the 49.8 analysts polled by Reuters had expected. The Caixin/Markit manufacturing PMI was 49.9 in July.

PMI readings above 50 indicate expansion, while those below that signal contraction.

The subindex for new orders stayed in expansionary territory in August, but inched down from July, suggesting flat demand for manufactured products, said Zhengsheng Zhong, director of macroeconomic analysis at CEBM Group, a subsidiary of Caixin.

However, “the gauge for new export orders remained in contractionary territory and fell to the lowest level this year in August, reflecting declining foreign demand amid an intensifying trade dispute between China and the U.S., ” Zhong said in a press release.

The two countries imposed new tariffs on each other’s imports on Sunday.

Despite the improved headline PMI reading in August, due in part to improved production activity, the outlook is not rosy with long-term downward pressure, said Zhong.

“Overall demand didn’t improve, and foreign demand declined notably, leading product inventories to grow,” he wrote. “There was no sign of an improvement in companies’ willingness to replenish inventories of inputs or in their confidence. Industrial prices trended down.”

The results of the private survey came after official data showed the manufacturing PMI fell to 49.5 in August, China’s National Bureau of Statistics said on Saturday — that’s compared to 49.7 in July. A Reuters poll showed analysts expected the official PMI to stay unchanged from July.

The official PMI survey typically polls a large proportion of big businesses and state-owned enterprises. The Caixin indicator features a bigger mix of small- and medium-sized firms.

The PMI is a survey of how businesses view the operating environment. Such data offer a first glimpse into what’s happening in an economy, as they are usually among the first major economic indicators released each month.

The China PMI is closely watched by global investors for signs of trouble amid a domestic economic slowdown and the ongoing U.S.-China trade dispute.

Uncertainty looms over the Chinese growth outlook, said Capital Economics analysts on Monday.

“Global demand looks set to weaken further and a long-overdue pull-back in property construction is getting under way,” they wrote in a note following the PMI data release.

“The fiscal support currently in the pipeline is unlikely to fully offset these headwinds and we think authorities will have little choice but to roll out further policy easing measures in the coming months,” added Julian Evans-Pritchard and Martin Lynge Rasmussen.

— CNBC’s Yen Nee Lee and Reuters contributed to this report.


Company: cnbc, Activity: cnbc, Date: 2019-09-02  Authors: huileng tan
Keywords: news, cnbc, companies, shows, trade, manufacturing, amid, fell, factory, pmi, official, chinas, activity, demand, analysts, survey, data, unexpectedly, expands, private


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China’s gas demand growth rate to slow in 2019, government report shows

President Trump ordered US firms to ditch China, but many already…President Trump rattled Wall Street when he demanded U.S. firms move production out of China. But some have already taken steps to do so, and, in earnings calls over the past… Investingread more


President Trump ordered US firms to ditch China, but many already…President Trump rattled Wall Street when he demanded U.S. firms move production out of China. But some have already taken steps to do so, and, in earnings calls over the past… Investingread more
China’s gas demand growth rate to slow in 2019, government report shows Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-09-02
Keywords: news, cnbc, companies, shows, report, growth, rate, wall, steps, slow, chinas, rattled, gas, demand, 2019, firms, production, trump, china, taken, president, street


China's gas demand growth rate to slow in 2019, government report shows

President Trump ordered US firms to ditch China, but many already…

President Trump rattled Wall Street when he demanded U.S. firms move production out of China. But some have already taken steps to do so, and, in earnings calls over the past…

Investing

read more


Company: cnbc, Activity: cnbc, Date: 2019-09-02
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Oil prices fall but set for weekly gain as trade row rhetoric eases

Brent crude was down 28 cents, or 0.46%, at $60.80 a barrel, but was heading for a gain of more than 2% for the week. U.S. West Texas Intermediate (WTI) crude futures fell 77 cents, or 1.36%, to $55.94 a barrel. The contract is set for a gain of over 3% this week. Recession fears are casting a shadow on sentiment and oil prices should keep dancing to the tune of the U.S.-China trade saga”, said Stephen Brennock of oil broker PVM. “Both growth and oil demand are set to remain lacklustre and thus


Brent crude was down 28 cents, or 0.46%, at $60.80 a barrel, but was heading for a gain of more than 2% for the week. U.S. West Texas Intermediate (WTI) crude futures fell 77 cents, or 1.36%, to $55.94 a barrel. The contract is set for a gain of over 3% this week. Recession fears are casting a shadow on sentiment and oil prices should keep dancing to the tune of the U.S.-China trade saga”, said Stephen Brennock of oil broker PVM. “Both growth and oil demand are set to remain lacklustre and thus
Oil prices fall but set for weekly gain as trade row rhetoric eases Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-30
Keywords: news, cnbc, companies, row, fall, set, rhetoric, oil, crude, hurricane, eases, demand, gain, stocks, trade, week, million, slowdown, prices, weekly


Oil prices fall but set for weekly gain as trade row rhetoric eases

Oil prices gave back some of their recent gains on Friday, but were still headed for the biggest weekly increase since early July, boosted by an easing of China-U.S. trade rhetoric, a decline in U.S stockpiles and a looming hurricane in Florida.

Brent crude was down 28 cents, or 0.46%, at $60.80 a barrel, but was heading for a gain of more than 2% for the week. U.S. West Texas Intermediate (WTI) crude futures fell 77 cents, or 1.36%, to $55.94 a barrel. The contract is set for a gain of over 3% this week.

Worries about a slowdown in economic growth and the impact on oil demand due to the trade war between the world’s two biggest oil consumers kept a lid on price gains this week, even as falling inventories indicated a balancing market.

“Upside momentum should not be taken for granted. Recession fears are casting a shadow on sentiment and oil prices should keep dancing to the tune of the U.S.-China trade saga”, said Stephen Brennock of oil broker PVM.

On Thursday, the United States and China gave signs that they will resume trade talks, discussing the next round of in-person negotiations in September ahead of a looming deadline for additional U.S. tariffs.

“The calm is somewhat deceptive as financial markets are still making up their mind on the question of slowdown or downturn,” said Norbert Ruecker of Swiss bank Julius Baer.

“Both growth and oil demand are set to remain lacklustre and thus supplies look ample well into 2020.”

Analysts polled by Reuters slashed their price forecasts for Brent to an average of $65.02 in 2019 – the lowest in more than 16 months – citing softening global demand brought on by an economic slowdown and the trade row.

The approach of Hurricane Dorian towards Florida raised fears that offshore U.S. crude producers may suspend output if the storm passes into the Gulf of Mexico over the weekend.

Dorian is heading for landfall on the Atlantic coast of Florida at the weekend and may enter the eastern Gulf of Mexico next week. It is forecast to strengthen and become more powerful on Sunday, the National Hurricane Center said.

Government data on Wednesday showed U.S. crude stocks dropped last week by 10 million barrels to their lowest since October as imports slowed, while gasoline and distillate stocks each fell by over 2 million barrels.

But the EIA data also showed that U.S. production rebounded to a weekly record of 12.5 million barrels per day, suggesting there is still plenty of supply available.


Company: cnbc, Activity: cnbc, Date: 2019-08-30
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China’s enormous debt ‘no longer can be ignored,’ analyst says

The world’s second biggest economy, which is slowing, is past a point where it cannot ignore its enormous debt anymore, according to an analyst. Fraser Howie, an independent analyst, told CNBC Tuesday that there’s a “whole host of hidden debt” in China, which had kick started stimulus this year as its economy slowed. “China is very much past the tipping point where the debt simply no longer can be ignored. “China … (had) this huge stimulus and turn on the credit taps and they drove all this gl


The world’s second biggest economy, which is slowing, is past a point where it cannot ignore its enormous debt anymore, according to an analyst. Fraser Howie, an independent analyst, told CNBC Tuesday that there’s a “whole host of hidden debt” in China, which had kick started stimulus this year as its economy slowed. “China is very much past the tipping point where the debt simply no longer can be ignored. “China … (had) this huge stimulus and turn on the credit taps and they drove all this gl
China’s enormous debt ‘no longer can be ignored,’ analyst says Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-23  Authors: shriya sharma
Keywords: news, cnbc, companies, china, started, stimulus, ignored, longer, analyst, rate, demand, told, economy, debt, enormous, chinas, slowing, howie


China's enormous debt 'no longer can be ignored,' analyst says

The world’s second biggest economy, which is slowing, is past a point where it cannot ignore its enormous debt anymore, according to an analyst.

Fraser Howie, an independent analyst, told CNBC Tuesday that there’s a “whole host of hidden debt” in China, which had kick started stimulus this year as its economy slowed.

“China is very much past the tipping point where the debt simply no longer can be ignored. The cost of servicing the debt … simply distracts from almost everything else,” said Howie.

China’s total debt — corporate, household and government — rose to over 300% of its GDP in the first quarter of 2019, slightly up from the same period a year earlier, according to a report by the Institute of International Finance.

“China … (had) this huge stimulus and turn on the credit taps and they drove all this global demand,” Howie said. “But there clearly was going to be a cost … and now they are suffering (from) it.”

China’s debt levels rapidly shot up a few years ago as its banks extended record amounts of credit to drive growth, which led to the Asian giant undertaking deleveraging efforts, or the process of reducing debt.

But the trade war has put a dent in its efforts to pare its massive debt as Beijing sought ways to boost its slowing economy, which was at its lowest growth in 27 years. Earlier this year, banks started to increase its lending again, with new loans surging to a record high.

In what some analysts called effectively a rate cut, the People’s Bank of China also this week launched a key interest rate reform — the loan prime rate — that would make borrowing costs for companies cheaper, and theoretically boost investment.

But Howie told CNBC that the issue was really whether there would be demand for more credit.

“The Chinese economy is clearly slowing, there are a lot of headwinds, there’re companies leaving China. China’s becoming a much harder investment case for a number of reasons. So is the underlying demand there or not?” he asked.


Company: cnbc, Activity: cnbc, Date: 2019-08-23  Authors: shriya sharma
Keywords: news, cnbc, companies, china, started, stimulus, ignored, longer, analyst, rate, demand, told, economy, debt, enormous, chinas, slowing, howie


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Oil rises 0.8% despite fears of a global economic downturn

Oil prices rose on Monday despite worries about a global economic slowdown and the ongoing U.S.-China trade war, which has reduced demand for commodities such as crude. However, Kuwait’s Oil Minister Khaled al-Fadhel said fears of a global economic downturn were “exaggerated” and global crude demand should pick up in the second half, helping to gradually reduce oil inventories. “We believe that OPEC needs to cut by a further one million barrels per day in 2020 if they are to defend oil prices at


Oil prices rose on Monday despite worries about a global economic slowdown and the ongoing U.S.-China trade war, which has reduced demand for commodities such as crude. However, Kuwait’s Oil Minister Khaled al-Fadhel said fears of a global economic downturn were “exaggerated” and global crude demand should pick up in the second half, helping to gradually reduce oil inventories. “We believe that OPEC needs to cut by a further one million barrels per day in 2020 if they are to defend oil prices at
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Company: cnbc, Activity: cnbc, Date: 2019-08-12
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Oil rises 0.8% despite fears of a global economic downturn

A drilling crew secures a stand of drill pipe into the mouse hole on a drilling rig near Midland, Texas February 12, 2019.

Oil prices rose on Monday despite worries about a global economic slowdown and the ongoing U.S.-China trade war, which has reduced demand for commodities such as crude.

International benchmark Brent crude futures were at $58.53 a barrel, up 0.02% from their previous settlement. U.S. West Texas Intermediate (WTI) futures were at $54.93 per barrel, up 0.8% from their last close.

Both benchmarks had fallen earlier in the day, with Brent hitting a session low of $57.88 and WTI a session low of $53.54.

“What we have noticed recently is a different perception of risk in different geographies,” said Emily Ashford, executive director of energy research at Standard Chartered.

“Often the price reactions during Asia or London trading are reversed during U.S. trading. Prices seem to be following that pattern today.”

The third quarter is fundamentally the strongest season for oil demand as drivers take to the roads for summer holidays, but the trade dispute between the United States and China has weakened demand and pressured oil prices.

U.S. President Donald Trump said on Friday he was not ready to make a deal with China and even called a September round of trade talks into question.

Germany’s Ifo economic institute said its quarterly survey of nearly 1,200 experts in more than 110 countries showed that its measures for current conditions and economic expectations have worsened in the third quarter.

However, Kuwait’s Oil Minister Khaled al-Fadhel said fears of a global economic downturn were “exaggerated” and global crude demand should pick up in the second half, helping to gradually reduce oil inventories.

OPEC members continue to cut production to drain global oil stocks, with the Saudis cutting more than their agreed quota, but analysts said more reductions were needed to support prices due to a fall in demand and non-OPEC supply growth next year.

“If OPEC cuts are merely extended through 2020, prices are going to fall further from current levels,” Bernstein Energy said in a note on Monday.

“We believe that OPEC needs to cut by a further one million barrels per day in 2020 if they are to defend oil prices at $60 a barrel.”

The International Energy Agency (IEA) said on Friday mounting signs of an economic slowdown had caused global oil demand to grow at its slowest pace since the financial crisis of 2008.

India’s imports of crude oil have also stalled in recent months, tallying with weaker economic growth in the country.


Company: cnbc, Activity: cnbc, Date: 2019-08-12
Keywords: news, cnbc, companies, despite, energy, downturn, trading, crude, fears, rises, economic, wti, prices, trade, global, oil, demand, 08


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Nike acquires A.I. platform Celect, hoping to better predict shopping behavior

Nike announced on Tuesday it has acquired Boston-based predictive analytics company Celect, marking its latest acquisition in a string of deals to bolster its direct-to-consumer strategy. Nike opted to acquire Celect versus “spending two to three years” trying to incubate the same platform in-house, Sprunk said. Prior to buying Celect, Nike had already been on a buying spree. He told CNBC earlier this year: “The bigger vision is to [help Nike] create better shoes.” Nike expects Celect to help re


Nike announced on Tuesday it has acquired Boston-based predictive analytics company Celect, marking its latest acquisition in a string of deals to bolster its direct-to-consumer strategy. Nike opted to acquire Celect versus “spending two to three years” trying to incubate the same platform in-house, Sprunk said. Prior to buying Celect, Nike had already been on a buying spree. He told CNBC earlier this year: “The bigger vision is to [help Nike] create better shoes.” Nike expects Celect to help re
Nike acquires A.I. platform Celect, hoping to better predict shopping behavior Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-06  Authors: lauren thomas
Keywords: news, cnbc, companies, celect, help, platform, behavior, better, nike, acquires, shopping, billion, ai, sprunk, predict, company, digital, nikes, hoping, buying, demand


Nike acquires A.I. platform Celect, hoping to better predict shopping behavior

After years of scooping up brands like Converse and Hurley, Nike is shifting its focus toward buying start-ups that help it behind the scenes.

Nike announced on Tuesday it has acquired Boston-based predictive analytics company Celect, marking its latest acquisition in a string of deals to bolster its direct-to-consumer strategy. Financial terms of the deal weren’t disclosed.

With Celect’s technology integrated into Nike’s mobile apps and website, the shoemaker should be able to better predict what styles of sneakers and apparel customers want, when they want it and where they want to buy it from, Chief Operating Officer Eric Sprunk explained in an interview.

“Our goal is to serve consumers more personally at scale,” he said. “We have to anticipate demand. We don’t have six months to do it. We have 30 minutes.”

Celect, which is based in Boston and was founded in 2013, will immediately be integrated into Nike’s global operations team, the company said. Celect’s co-founders will continue working as tenured professors at the Massachusetts Institute of Technology and plan to consult with Nike on an ongoing basis as part of the deal.

Nike opted to acquire Celect versus “spending two to three years” trying to incubate the same platform in-house, Sprunk said. “It’s really difficult work … predicting the retail shopping patterns and behavior. … This [acquisition] gets us much more accelerated.”

Prior to buying Celect, Nike had already been on a buying spree.

In 2016, it bought Virgin MEGA, a digital design studio based in New York and backed by Richard Branson’s Virgin Group, to help build out its SNKRS app, a commerce platform for shoes launched a year earlier. Then, in March of last year, Nike said it acquired consumer data analytics firm Zodiac in a bid to speed its “digital transformation,” as its sales continued to shift online. In April, it announced its acquisition of computer-vision company Invertex, based in Tel Aviv, Israel. Nike hasn’t disclosed how much it spent on any of these deals.

Invertex was ultimately behind the recent rollout of Nike Fit — a new 3D scanning feature within Nike’s mobile app that’s able to accurately predict what size shoes people should buy. Invertex CEO David Bleicher now heads up a digital studio for Nike in Tel Aviv. He told CNBC earlier this year: “The bigger vision is to [help Nike] create better shoes.”

Nike expects Celect to help reduce out-of-stock rates and run into fewer situations where demand of sneakers and apparel comes unplanned. This could also lead to less pressure on profit margins, if Nike can control inventories better and not have goods overflowing in warehouses that people aren’t buying.

The paradigm of how inventory is planned must change, Sprunk said. It’s always been, when a wholesaler like Foot Locker places an order from Nike, that “signals demand.” But the customer needs to become the ultimate demand signal today, he said.

This feeds directly into how Nike is trying to sell more directly to consumers, shifting a bigger portion of its business away from wholesale channels.

Sales from Nike’s Direct business rose 12% on a currency-neutral basis to $10.4 billion in fiscal 2018 from $9.1 billion in fiscal 2017, according to SEC filings. Direct revenue now makes up about 30% of total Nike brand revenue, the company said, fueled by online growth.

Nike shares are up about 8% year to date, bringing the company’s market cap to $127 billion.


Company: cnbc, Activity: cnbc, Date: 2019-08-06  Authors: lauren thomas
Keywords: news, cnbc, companies, celect, help, platform, behavior, better, nike, acquires, shopping, billion, ai, sprunk, predict, company, digital, nikes, hoping, buying, demand


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