Germany should heed the call of its deeply worried business community

Speaking in German, the French official apparently struck a chord by pleading for a European response to American and Chinese challenges. After two years of constant prodding, Germany relented last Friday to approve the French project of a euro area budget. In the last two quarters, the beleaguered French government boosted public spending and wage growth to calm an ongoing public unrest. As a result, the rate of French economic growth during that period was double that in Germany. That could ha


Speaking in German, the French official apparently struck a chord by pleading for a European response to American and Chinese challenges. After two years of constant prodding, Germany relented last Friday to approve the French project of a euro area budget. In the last two quarters, the beleaguered French government boosted public spending and wage growth to calm an ongoing public unrest. As a result, the rate of French economic growth during that period was double that in Germany. That could ha
Germany should heed the call of its deeply worried business community Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-17  Authors: dr michael ivanovitch
Keywords: news, cnbc, companies, germany, deeply, worried, business, economic, german, growth, budget, public, france, heed, european, gdp, french, community


Germany should heed the call of its deeply worried business community

A worker at the Siemens gas turbine factory on January 8, 2010 in Berlin, Germany. Sean Gallup | Getty Images

Germany accounts for nearly 30% of a monetary union consisting of 19 European economies. That’s how dangerous it is to see the world’s fourth-largest economy stuck in a virtually stagnant quarterly pace during the 12 months to March. And here’s more: Measured at annual rates, the German economy at the beginning of this year was moving along at less than half the capacity of its potential and non-inflationary growth rate — a monumental waste of the country’s human and physical capital. The German business community is blaming the government for high corporate taxes (31% compared with a European average of 22%), high energy costs, inadequate digital infrastructure, lack of high-speed fiber optic connections in most of the country’s industrial parks, unclear economic and political orientations, and more.

Exports should not be the only way out

At their meeting earlier this month, the members of a powerful Federation of German Industries (Bundesverband der Deutschen Industrie – BDI) voiced their declining confidence in government policies at a time when they were facing increasing pressures from Chinese and American competitors. That’s what they told an uneasy audience of 1,500 people, headed by German Chancellor Angela Merkel and her economic and finance ministers. German businesses wanted no “national champions” and bureaucratic meddling. They asked for effective economic and financial policies to support small- and medium-sized companies — the country’s celebrated Mittelstand — that represent 99% of German companies, generate about three-quarters of all jobs, and account for more than half of the nation’s GDP. They probably knew they were asking far too much of a moribund governing coalition, trashed in recent European parliamentary elections and facing a certain demise if the wishes of 52% of German voters were met for new national elections. That should be an urgent consultation because, according to the latest opinion polls, Germany has a minority government with the center-right parties — Merkel’s Christian Democratic Union (CDU) and its sister party, Christian Social Union (CSU) — polling 24%. The junior coalition partner, Social Democrats, polled 13%. That was a gloomy business meeting in Berlin. But suddenly, and very curiously, people cheered up to give a standing ovation to the French Economy and Finance Minister, Bruno Le Maire. Speaking in German, the French official apparently struck a chord by pleading for a European response to American and Chinese challenges. France and Germany, he said, should act together in the spirit of “complementarity” rather than “rivalry” to stay ahead in emerging new areas of top technologies. The French were also pleased with a call for revival of a wobbly French-German partnership. After two years of constant prodding, Germany relented last Friday to approve the French project of a euro area budget. But instead of calling it a budget and agreeing to hundreds of billions of euros demanded by the French, Paris had to settle for the new “budgetary instrument for competitiveness and convergence” with only 17 billion euros ($19.08 billion) over a period of seven years. A Pyrrhic victory of sorts, because that will get new votes for the eurosceptic Marine Le Pen’s National Rally (RN) to see Paris acting as Berlin’s junior partner subservient to German interests.

France will pay

Yes, President Emmanuel Macron and Le Maire have nothing to cheer about watching the German confusion and disarray that will end up exacting a large cost in terms of French jobs and incomes. France and the rest of Europe — and, incidentally, the U.S., too — should have expected Germany to rev up its economy and buy more goods and services from its main trade partners. With a budget surplus of 1.7% of GDP, public debt of 60.9% of GDP, and a trade surplus on goods and services of 8% of GDP, Germany was supposed to lead the European (and global) economic recovery by stimulating its domestic spending and opening up its markets. But that won’t happen. As always, France, the rest of Europe and the U.S. will foot the bill of German economic revival as German companies step up their sales on external markets to survive. That’s called Germany’s export offensive – big time. Countries like France and the U.S., with a typically low political tolerance for weak economic growth, will suffer the most from the onslaught of German companies’ export sales. Washington can still do something to scare them off, but there is nothing that France can do in a perfectly functioning customs union with its neighbors across the Rhine river.

Here is an example of how that goes. In the last two quarters, the beleaguered French government boosted public spending and wage growth to calm an ongoing public unrest. As a result, the rate of French economic growth during that period was double that in Germany. Predictably, German exports to France picked up at an annual rate of 3% in the six months to April, after virtually no growth during 2018. No wonder German business leaders gave a standing ovation to the French finance minister. That could have sounded like an encouragement to keep up the good work by spending the money he did not have, and messing up the French public finances in the process. Germany will call him out on that later this year. Berlin, and its Brussels sidekicks, are just too busy now setting up Italy for penalties and disciplinary procedures for its excessive public debt and an intolerably high budget deficit of 2.4% of GDP – unless U.S. President Donald Trump tweets to save the day for his Roman friends. Bravely looking at a budget deficit increase of 77% in the first four months of the current fiscal year, Trump could probably scare the Germans with a tweet to lay off the struggling Italians.

Investment thoughts


Company: cnbc, Activity: cnbc, Date: 2019-06-17  Authors: dr michael ivanovitch
Keywords: news, cnbc, companies, germany, deeply, worried, business, economic, german, growth, budget, public, france, heed, european, gdp, french, community


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Wall Street sees major growth potential for Luckin in untapped Chinese coffee market

Picture of a cup of coffee at a Luckin Coffee location. Fred Dufour | AFP | Getty ImagesBeijing-based coffee chain Luckin Coffee is catching the eye of Wall Street analysts who are hoping the newly public company’s technology-driven business model will fuel growth in an underpenetrated coffee market in China. Since Luckin was founded less than two years ago, the company has sold more than 110 million cups of coffee, according to Keybanc Capital Markets. Needham’s Vincent Yu has a buy rating on L


Picture of a cup of coffee at a Luckin Coffee location. Fred Dufour | AFP | Getty ImagesBeijing-based coffee chain Luckin Coffee is catching the eye of Wall Street analysts who are hoping the newly public company’s technology-driven business model will fuel growth in an underpenetrated coffee market in China. Since Luckin was founded less than two years ago, the company has sold more than 110 million cups of coffee, according to Keybanc Capital Markets. Needham’s Vincent Yu has a buy rating on L
Wall Street sees major growth potential for Luckin in untapped Chinese coffee market Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-14  Authors: maggie fitzgerald
Keywords: news, cnbc, companies, sees, coffee, china, major, 2019, rating, untapped, starbucks, market, stock, potential, street, luckin, growth, according, wall


Wall Street sees major growth potential for Luckin in untapped Chinese coffee market

Picture of a cup of coffee at a Luckin Coffee location. Fred Dufour | AFP | Getty Images

Beijing-based coffee chain Luckin Coffee is catching the eye of Wall Street analysts who are hoping the newly public company’s technology-driven business model will fuel growth in an underpenetrated coffee market in China. Luckin, which is the second-largest coffee chain in China, soared nearly 50% on its first day of trading on the Nasdaq in May. Despite the stock being down slightly since then, it has garnered quite a few favorable ratings from Wall Street. Since Luckin was founded less than two years ago, the company has sold more than 110 million cups of coffee, according to Keybanc Capital Markets. Luckin has opened 2,370 stores in its lifetime and plans to add 2,500 in 2019. More than 90% of its stores are smaller “pick-up” shops designed in close proximity to its customers.

Charles Zhengyao Lu, chairman and founder of Luckin Coffee Inc., center left, and Jenny Qian Zhiya, chief executive officer of Luckin Coffee Inc., center right, react as stocks start trading during the company’s initial public offering (IPO) at the Nasdaq MarketSite in New York, U.S., on Friday, May 17, 2019. Victor J. Blue | Bloomberg | Getty Images

Luckin says technology is the core of its business. The company uses big data analytics and AI to analyze its customers behavior and transaction data. Its self-developed mobile apps have given Luckin “significant advantages in cost and customer engagement to drive mass market coffee consumption in China” according to Credit Suisse, which has an outperform rating on the stock and a $24 target price. The stock ended the week just above $18. Similar to other fresh IPOs like Lyft, Uber, and Beyond Meat, Luckin is not yet a profitable company. In 2018, the chain reported net sales of $125.3 million and a net loss of $241.3 million. However, Needham expects the coffee chain’s profit to break even in the third quarter of 2019. Needham’s Vincent Yu has a buy rating on Luckin Coffee and a target price of $27.

China’s untapped coffee market

Luckin’s opportunity in China is “one of the world’s greatest retail growth opportunities,” according to KeyBanc Capital Markets, which has an overweight rating on the stock and a $22 price target. In a tea-dominated culture, coffee is a “highly underpenetrated” market in China, said Credit Suisse. Coffee sales in China are expected to grow significantly in the next few years, according to market research company Frost & Sullivan, which is cited by many of the analysts covering Luckin. “We forecast per capita consumption of freshly brewed coffee to accelerate from 1.6 cups per/year per capita in 2018 to 5.5 cups per capita per year in 2023,” the research firm said. The market has grown from 15.6 billion yuan in 2013 to 56.9 billion yuan in 2018, and is estimated to reach 180.6 billion yuan in 2030. This growth represents a 25% compound annual growth rate from 2018 to 2023, according to Frost & Sullivan. “We believe a faster pace of life, changing consumer habits (younger generation adopting a western lifestyle) and increasing disposable income will continue to drive the growth of the coffee market in China,” Credit Suisse’s Tony Wang said in a note to clients. Morgan Stanley, which calls Luckin’s stock “high quality, affordable and convenient,” expects Luckin to grow its sales by 30 times between 2018 and 2021, “driven by store expansion, strong customer growth” and “purchase frequency increase.” Morgan Stanley has an equal-weight rating on Luckin and a price target of $21. However, Bernstein, which doesn’t cover the stock, suggests China’s coffee market may never reach the expected levels. China’s current cup-per-capita rate is a fraction of Japan’s, Bernstein’s Sara Senatore said in a research note. “But at a similar stage of market development, Japan’s per capita rate was already 10x higher, suggesting China may never achieve coffee consumption rates that exist in present-day Japan,” Senatore noted.

A customer exits a Luckin Coffee outlet in Beijing, China, on Tuesday, Jan. 15, 2019. Gilles Sabrie/Bloomberg | Bloomberg | Getty Images

A threat to Starbucks

Luckin is attempting to overtake Starbucks as the largest coffee chain in China. Starbucks, which is celebrating its 20th anniversary in China this year, has been building its presence in the world’s second-largest economy for the past couple of decades. However, Luckin is expected to have more locations than Starbucks in China by the end of 2019, according to Stifel, which put a hold rating on Starbucks citing Luckin’s growth. In China, Starbucks is leading in the taste and mobile app categories in terms of sales drivers; however, competitors of Starbucks, which includes Luckin, are leading in the service, convenience and price categories, according to a Citi Research study. Luckin’s heavy discounting sets it apart from the world’s biggest coffee chain. KeyBanc Capital Markets suggests Luckin’s prices come at a 50% discount to Starbucks. Needham’s Vincent Yu said Starbucks’ high prices are “driving customers away” in China. Earlier this year, Starbucks chief Kevin Johnson said it is “unlikely” that Luckin surpasses Starbucks by the end of 2019.


Company: cnbc, Activity: cnbc, Date: 2019-06-14  Authors: maggie fitzgerald
Keywords: news, cnbc, companies, sees, coffee, china, major, 2019, rating, untapped, starbucks, market, stock, potential, street, luckin, growth, according, wall


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IEA sees oil demand growth falling to lowest level in years as global economy stalls

The International Energy Agency (IEA) slashed its estimate for global oil demand growth for the second consecutive month on Friday, citing intensifying trade concerns amid fears of a global recession. On the demand side, the IEA followed OPEC by downwardly revising its global oil demand growth forecast for 2019 on Friday. The energy agency said it now expects oil demand growth to reach 1.2 million barrels per day (b/d) this year. Looking beyond the end of 2019, the IEA expects global oil demand


The International Energy Agency (IEA) slashed its estimate for global oil demand growth for the second consecutive month on Friday, citing intensifying trade concerns amid fears of a global recession. On the demand side, the IEA followed OPEC by downwardly revising its global oil demand growth forecast for 2019 on Friday. The energy agency said it now expects oil demand growth to reach 1.2 million barrels per day (b/d) this year. Looking beyond the end of 2019, the IEA expects global oil demand
IEA sees oil demand growth falling to lowest level in years as global economy stalls Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-14  Authors: sam meredith
Keywords: news, cnbc, companies, 2019, iran, trade, oil, stalls, growth, economy, sees, demand, global, falling, lowest, iea, level, bd, opec


IEA sees oil demand growth falling to lowest level in years as global economy stalls

The International Energy Agency (IEA) slashed its estimate for global oil demand growth for the second consecutive month on Friday, citing intensifying trade concerns amid fears of a global recession. The energy agency’s closely-watched report comes as world oil markets have undertaken a dramatic shift in recent months, switching from supply-side risks like OPEC’s output cuts or U.S. sanctions against Iran and Venezuela to worries about deteriorating demand growth. Crude futures have turned a 45% price rally in the first four months of 2019 into a fall of more than 15% since the start of April. “The main focus I think we should be looking at here is that until very recently the geopolitical factors related to Iran and Venezuela and Libya… they were at the forefront of people’s minds,” Neil Atkinson, head of the oil industry and markets division at the IEA, told CNBC’s “Street Signs Europe” on Friday. “Now we are starting to see that confidence in demand is taking over and that is the main driving factor behind the current state of the oil market.” International benchmark Brent crude traded at around $61.25 Friday morning, down around 0.1%, while U.S. West Texas Intermediate (WTI) stood at $52.15, nearly 0.3% lower.

‘Cannot be complacent’

A recent slide in oil prices was temporarily reversed on Thursday, following attacks on two oil tankers in one of the world’s key shipping routes. The incident in the Gulf of Oman off the coast of Iran pushed crude futures up as much as 4.5% in the previous session. It was the second time in less than a month that tankers had been attacked in the world’s most important zone for oil supplies, with hundreds of millions of dollars’ worth of oil passing through the shipping lane every year. Washington quickly blamed Iran for the attacks, but Tehran has denied the allegation. “I think we are realizing that, although we cannot be complacent, the situation is not yet representing a major threat to the security of oil supplies to the very important Strait of Hormuz,” the IEA’s Neil Atkinson said. On the demand side, the IEA followed OPEC by downwardly revising its global oil demand growth forecast for 2019 on Friday. The energy agency said it now expects oil demand growth to reach 1.2 million barrels per day (b/d) this year. That’s a downward revision of 100,000 b/d from the IEA’s previous projection. Global oil demand is estimated to have risen by just 250,000 b/d year-on-year in the first quarter of 2019, the IEA said, reflecting the lowest annual growth since the fourth quarter of 2011 — when the price of Brent averaged $109. Looking beyond the end of 2019, the IEA expects global oil demand growth to rebound to around 1.4 million b/d in 2020. “A clear message from our first look at 2020 is that there is plenty of non-OPEC supply growth available to meet any likely level of demand, assuming no major geopolitical shock, and the OPEC countries are sitting on 3.2 million b/d of spare capacity,” the IEA said Friday. “This is welcome news for consumers and the wider health of the currently vulnerable global economy, as it will limit significant upward pressure on oil prices.”

Saudi Arabia’s Energy Minister Khalid al-Falih attends a press conference at the end of the 13th meeting of the Joint Ministerial Monitoring Committee (JMMC) of OPEC and non- OPEC countries in Baku on March 18, 2019. Mladen ANTONOV | AFP

The IEA cited various reasons for slowing global oil consumption, including: a warm winter in Japan, a slowdown in the petrochemicals industry in Europe, tepid gasoline and diesel demand in the United States and the worsening trade outlook. The U.S. and China have imposed tariffs on billions of dollars’ worth of one another’s goods since the start of 2018, battering financial markets and souring business and consumer sentiment. Expectations that trade officials from world’s largest economies will clinch a deal on the side-lines of a G20 meeting in Osaka on June 28-29 have been fading in recent days. OPEC also cited persistent trade tensions between Washington and Beijing as a risk to economic growth and fuel demand.

OPEC+


Company: cnbc, Activity: cnbc, Date: 2019-06-14  Authors: sam meredith
Keywords: news, cnbc, companies, 2019, iran, trade, oil, stalls, growth, economy, sees, demand, global, falling, lowest, iea, level, bd, opec


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Retailers fight back: Bricks-and-mortar brands are figuring out online sales, and their stocks are soaring

Lululemon on Wednesday said online sales this past quarter grew 35%. Target’s online sales were up 42%, and Walmart reported 37% digital growth. Dick’s Sporting Goods’ online sales were up 15%. Much of Target’s growth online has also stemmed from these services. During the first quarter of fiscal 2019, Target said its same-day delivery service with Shipt, curbside and in-store pickup drove more than half of its 42% e-commerce sales growth and 25% of same-store sales growth.


Lululemon on Wednesday said online sales this past quarter grew 35%. Target’s online sales were up 42%, and Walmart reported 37% digital growth. Dick’s Sporting Goods’ online sales were up 15%. Much of Target’s growth online has also stemmed from these services. During the first quarter of fiscal 2019, Target said its same-day delivery service with Shipt, curbside and in-store pickup drove more than half of its 42% e-commerce sales growth and 25% of same-store sales growth.
Retailers fight back: Bricks-and-mortar brands are figuring out online sales, and their stocks are soaring Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-13  Authors: lauren hirsch lauren thomas amelia lucas, lauren hirsch, lauren thomas, amelia lucas
Keywords: news, cnbc, companies, best, retailers, store, figuring, fight, stores, online, shoppers, target, walmart, growth, soaring, bricksandmortar, sales, brands, stocks


Retailers fight back: Bricks-and-mortar brands are figuring out online sales, and their stocks are soaring

Even as analysts have called the doom of retail as Amazon’s might and influence grows stronger, some have bounced back — often with the help of their online business.

A number of retailers and restaurants over the past few weeks have reported explosive growth of e-commerce sales. Lululemon on Wednesday said online sales this past quarter grew 35%. Target’s online sales were up 42%, and Walmart reported 37% digital growth. Dick’s Sporting Goods’ online sales were up 15%. Best Buy’s digital business in the U.S. grew 14.5%.

Investors have been rewarding this growth. Walmart and Lululemon shares both hit a 52-week high Thursday. Walmart’s stock has gained 16% so far this year, while Lululemon’s stock is up more than 42% since January. Starbucks is up nearly 30%, while Chipotle has gained 70% this year.

“Now, it’s easier in some ways to be a late mover,” in retailing online, Sucharita Kodali, a retail analyst at Forrester Research, said in an interview.

Timing could be what’s giving companies such as Lululemon and Walmart a leg up. They didn’t have to “reinvent the wheel” online, she said, but instead have been able to take “best practices” from other companies such as Amazon, which started as an online bookstore in 1995. In Walmart’s case, that’s included acquisitions of start-ups such as Jet.com that have given it a bench of young and experienced tech talent.

Meanwhile, what’s giving these retailers such a strong muscle online is something Amazon can’t match, at least today: bricks-and-mortar stores. Traditional retailers are finally getting the hang of offering services such as curbside pickup and buy online pick up in store, helping boost online sales but also cutting back on shipping costs for the company.

Lululemon, for example, spoke this quarter about expanding buy online pick up in store options. About 150 of its roughly 440 stores now offer the service, the company said, and it plans to expand the option across its entire store base by the end of the third quarter.

Much of Target’s growth online has also stemmed from these services.

During the first quarter of fiscal 2019, Target said its same-day delivery service with Shipt, curbside and in-store pickup drove more than half of its 42% e-commerce sales growth and 25% of same-store sales growth. Sales at stores open at least a year were up 4.8% during the period, outpacing estimates.

The financial benefit of all this for Target is that when customers pick items up in stores, it’s 90% cheaper for the retailer than when it has to ship something from a warehouse, the company has said.

“Even today, on any given day, upwards of 50% of our orders are delivered next-day and it’s using our stores and their proximity as that advantage in our overall strategy,” Target CEO Brian Cornell told analysts last month. “We’re leveraging the fact that we’re so, so close to the guest … and convenience is a big part of our strategy.”

For Walmart, much of its recent online efforts have been centered around grocery. The retailer is planning to have 1,600 stores equipped for grocery delivery and 3,100 hubs for in-person grocery pickup by the end of this year. It’s said 90% of the U.S. population lives within 10 miles of at least one of its stores.

“Clearly, we think our stores are a competitive advantage,” Walmart CFO Michael Dastugue told analysts at a UBS-hosted conference in March.

The best “omnichannel” retailers in the country today, meaning the companies that are best utilizing their stores to help with their e-commerce businesses and vice versa, are Walmart, Target, Home Depot, Best Buy, Macy’s, Dick’s Sporting Goods, Kohl’s, Nordstrom, Lowe’s and J.C. Penney, and in that order, according to a study by Internet Retailer.

It looked at things such as which retailers allowed shoppers to return online orders to a store, showed in-store stock status on the web, priced matched in-store offers with online promotions and even offered free, in-store Wi-Fi.

“Retailers that aren’t making omnichannel a priority do so at their peril, as shoppers are demanding these services,” the report said. Seventy-eight percent of shoppers check inventory online for a certain store before heading there, and 68% of all shoppers say they’ll do more of this in 2019, the firm found in surveying 1,100 consumers.


Company: cnbc, Activity: cnbc, Date: 2019-06-13  Authors: lauren hirsch lauren thomas amelia lucas, lauren hirsch, lauren thomas, amelia lucas
Keywords: news, cnbc, companies, best, retailers, store, figuring, fight, stores, online, shoppers, target, walmart, growth, soaring, bricksandmortar, sales, brands, stocks


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China’s Vice Premier Liu He calls for more measures to support economy

Liu He, China’s vice premier, speaks as U.S. President Donald Trump, right, listens during a meeting in the Oval Office of the White House in Washington, D.C., U.S., on Thursday, April 4, 2019. Chinese regulators should step up support for the economy and keep ample liquidity in the financial system, Vice Premier Liu He said on Thursday, suggesting Beijing would soon unveil more policies to bolster growth amid rising U.S. trade pressure. Beijing has plenty of policy tools and is capable of deali


Liu He, China’s vice premier, speaks as U.S. President Donald Trump, right, listens during a meeting in the Oval Office of the White House in Washington, D.C., U.S., on Thursday, April 4, 2019. Chinese regulators should step up support for the economy and keep ample liquidity in the financial system, Vice Premier Liu He said on Thursday, suggesting Beijing would soon unveil more policies to bolster growth amid rising U.S. trade pressure. Beijing has plenty of policy tools and is capable of deali
China’s Vice Premier Liu He calls for more measures to support economy Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-13
Keywords: news, cnbc, companies, support, liu, chinas, calls, premier, room, vice, trade, cut, policy, rates, reserve, economy, growth, easing, measures


China's Vice Premier Liu He calls for more measures to support economy

Liu He, China’s vice premier, speaks as U.S. President Donald Trump, right, listens during a meeting in the Oval Office of the White House in Washington, D.C., U.S., on Thursday, April 4, 2019.

Chinese regulators should step up support for the economy and keep ample liquidity in the financial system, Vice Premier Liu He said on Thursday, suggesting Beijing would soon unveil more policies to bolster growth amid rising U.S. trade pressure.

Beijing has plenty of policy tools and is capable of dealing with various challenges, Liu said at a financial forum in Shanghai.

Despite a slew of support measures and policy easing since last year, China’s cooling economy is still struggling to get back on firm footing, and last month’s sudden escalation in U.S.-Sino tensions has raised fears of a full-blown trade war that could trigger a global recession.

Liu’s comments came after a day after data showed China’s credit growth was weaker than expected in May, reinforcing market expectations that more monetary easing is needed. Factory activity contracted in May and imports fell the most in nearly three years, highlighting soft demand.

“At present, we do have some external pressures, but those external pressures will help us boost our self-reliance in innovation and accelerate the pace of high-speed development,” said Liu, who is also the lead negotiator in the U.S.-China trade talks.

The government will roll out more strong measures to promote reforms and opening up, added Liu.

People’s Bank of China chief Yi Gang said last week that there was “tremendous” room to make policy adjustments if the trade war worsens.

“We have plenty of room in interest rates, we have plenty of room in the required reserve ratio rate, and also for the fiscal, monetary policy toolkit, I think the room for adjustment is tremendous,” Yi said.

Earlier on Thursday, China Daily, citing economists, said China is expected to adjust money and credit supply in coming weeks, including cuts to interest rates or reserve ratio requirements, to counter “downside risks” if trade tensions escalate.

Further cuts in banks’ reserve requirement ratios (RRR) were already expected this year, especially after the trade conflict escalated last month. Both sides hiked tariffs on each other’s goods, and Washington is threatening more.

Last month, the PBOC stepped up efforts to increase loan growth and business activity, announcing a three-phase cut in regional banks’ reserve requirements to reduce financing costs for small and private companies.

It has now cut six RRR times since early 2018.

Unlike previous downturns, however, the central bank has been reluctant to cut benchmark interest rates so far. Analysts believe it is held off on more aggressive measures due to concerns that such a move could risk adding a mountain of debt leftover from past stimulus sprees.

More forceful easing could also trigger capital outflows and add pressure on the Chinese yuan, which has slid nearly 3 percent against the dollar since the trade flare-up last month.

Sources told Reuters in February that the PBOC considered a benchmark rate cut a last resort. But some analysts now think one or more cuts are likely if the trade dispute spirals out of control and the U.S. Federal Reserve starts cutting its rates, giving the PBOC more room to manoeuvre.

Citing experts, China Daily said financial institutions were facing tighter liquidity in June, and said authorities want to spur faster credit growth to meet economic growth targets.

Beijing has set a growth target of around 6 to 6.5 percent for this year, easing from 6.6 percent in 2018, which was the slowest rate of expansion the country has seen in nearly 30 years.

Analysts at Bank of America Merrill Lynch believe China’s GDP growth could fall to 5.8 percent this year and 5.6 percent in 2020 if the trade war intensifies.


Company: cnbc, Activity: cnbc, Date: 2019-06-13
Keywords: news, cnbc, companies, support, liu, chinas, calls, premier, room, vice, trade, cut, policy, rates, reserve, economy, growth, easing, measures


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The Fed should cut rates next week, but it won’t, Wharton’s Jeremy Siegel warns. Here’s why.

Stocks have rallied within range of records on high hopes for a rate cut, possibly as soon as next week. “They should cut rates, but they won’t — not quite yet,” Siegel told CNBC’s “Trading Nation ” on Wednesday. Siegel says the Fed will first want to lay the groundwork for a rate cut before it takes action, a process requiring a longer time frame beyond next week’s meeting. Even when the Fed cuts rates next, Spiegel says it might be too little to spur the kind of economic growth anticipated. So


Stocks have rallied within range of records on high hopes for a rate cut, possibly as soon as next week. “They should cut rates, but they won’t — not quite yet,” Siegel told CNBC’s “Trading Nation ” on Wednesday. Siegel says the Fed will first want to lay the groundwork for a rate cut before it takes action, a process requiring a longer time frame beyond next week’s meeting. Even when the Fed cuts rates next, Spiegel says it might be too little to spur the kind of economic growth anticipated. So
The Fed should cut rates next week, but it won’t, Wharton’s Jeremy Siegel warns. Here’s why. Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-13  Authors: keris lahiff
Keywords: news, cnbc, companies, rate, wont, cut, week, little, growth, fed, really, whartons, jeremy, meeting, heres, market, siegel, think, warns, rates


The Fed should cut rates next week, but it won't, Wharton's Jeremy Siegel warns. Here's why.

Stocks have rallied within range of records on high hopes for a rate cut, possibly as soon as next week.

Investors could be waiting a little longer, warns Wharton professor of finance Jeremy Siegel.

“They should cut rates, but they won’t — not quite yet,” Siegel told CNBC’s “Trading Nation ” on Wednesday. “I think they’re going to put out a directive that says in their next meeting which will be July 31st after the June meeting that they’re very likely to cut rates and I think the market will be satisfied with that. ”

The Federal Open Market Committee is set to meet Tuesday, culminating with a decision on Wednesday afternoon. Markets are pricing in a 20% chance of a 25-basis-point cut at the June meeting, according to CME fed funds futures, with those odds jumping to 66% at the July meeting.

Siegel says the Fed will first want to lay the groundwork for a rate cut before it takes action, a process requiring a longer time frame beyond next week’s meeting.

“The Fed is very deliberate. Before they move, they like to make announcements and speeches. They haven’t really had a chance to really prepare those. We still could get a cut. There may be some dissents among the Fed officials saying I want to cut now, but I say the odds are a setup for a cut that will come at the end of July,” he said.

Even when the Fed cuts rates next, Spiegel says it might be too little to spur the kind of economic growth anticipated.

“The Fed is a little bit too slow,” he said. “There should be a 50-basis-point cut. Given where the 10-year [Treasury note] is right now, we should be below on the funds rate than the 10-year, and even 25 basis points won’t really put us below. So I really think there should be more.”

The 10-year has come back from the year’s lows last week, though still trades at its lowest level in nearly two years. Yields fall when bond prices rise, an indication that investors are flocking to safe-haven assets such as Treasurys. The effective fed funds rate guides banks on the interest rate at which they lend excess reserves. A lower rate encourages more lending and borrowing.

Beyond the Fed, investors also need a resolution on the trade war before the stock market can make larger strides higher, says Siegel.

“Right now projections are Q2 growth is 1.5%. That would be the slowest during the Trump presidency. … If the tariff clouds continue to gather in second half of the year, we may barely reach 2%,” he said. “Short term, it’s going to be hard to make big gains with the trade clouds and the interest rate clouds hanging over the market.”

The U.S. economy ended 2018 with economic growth at 2.9%. A slowdown to sub-2% would mark its lowest level since 2016.


Company: cnbc, Activity: cnbc, Date: 2019-06-13  Authors: keris lahiff
Keywords: news, cnbc, companies, rate, wont, cut, week, little, growth, fed, really, whartons, jeremy, meeting, heres, market, siegel, think, warns, rates


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Lululemon rallies but another athleisure stock is racing ahead of the pack

Lululemon worked up a sweat Thursday, rallying more than 5% after topping quarterly estimates and upping its outlook. But, another athleisure stock is besting Lululemon and the rest of the competition: Under Armour. The workout gear stock has surged 49% this year, tracking for its best annual performance in five years. “This stock has been making a base for more than a year and it has finally just broken out of this base,” Johnson said Wednesday on CNBC’s “Trading Nation. ” “There still is room


Lululemon worked up a sweat Thursday, rallying more than 5% after topping quarterly estimates and upping its outlook. But, another athleisure stock is besting Lululemon and the rest of the competition: Under Armour. The workout gear stock has surged 49% this year, tracking for its best annual performance in five years. “This stock has been making a base for more than a year and it has finally just broken out of this base,” Johnson said Wednesday on CNBC’s “Trading Nation. ” “There still is room
Lululemon rallies but another athleisure stock is racing ahead of the pack Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-13  Authors: keris lahiff
Keywords: news, cnbc, companies, stock, pack, lululemon, trading, ahead, growth, rallies, athleisure, armour, bapis, valuation, racing, wear, times, base, johnson


Lululemon rallies but another athleisure stock is racing ahead of the pack

Lululemon worked up a sweat Thursday, rallying more than 5% after topping quarterly estimates and upping its outlook.

But, another athleisure stock is besting Lululemon and the rest of the competition: Under Armour. The workout gear stock has surged 49% this year, tracking for its best annual performance in five years.

It’s about to sprint even higher, said Craig Johnson, chief market technician at Piper Jaffray.

“This stock has been making a base for more than a year and it has finally just broken out of this base,” Johnson said Wednesday on CNBC’s “Trading Nation. ”

“We can kind of measure the height of this base and make a suggested move based upon the chart that would potentially put us back into the mid-$30s so it still seems like a very good risk-reward in here,” he said.

A rally back to the mid-$30s marks 33% upside and would take the stock back to levels not seen since October 2016.

“There still is room for this stock to continue to move higher here and we would be buying this breakout,” Johnson said.

Under Armour is also a buy based on a broader bullish case for the entire industry, said Michael Bapis, managing director of FX strategy at BK Asset Management.

“Athleisure has completely revolutionized all of fashion,” Bapis said during the same “Trading Nation” segment. “This is a growth story. This is going to grow probably 5% over the next few years. It’s a matter of who can capture that growth because there are so many different lines of business within it. It’s footwear, it’s leisure wear, it’s athletic wear, and the list goes on and on.”

On Under Armour, specifically, even though it has had a massive run this year, Bapis said it’s still worth the high price.

“It’s trading at a super-high valuation but you have to consider, it’s a growth space and in growth spaces in high-growth times, valuations really kind of go out the window,” Bapis said. “We’re long this space, we’re long those companies and I think we’re going to continue to grow there.”

Under Armour trades at 63 times forward earnings, an expensive valuation compared with the broader XLY consumer discretionary ETF which trades with a 20 times multiple.

Disclosure: Vios Advisors owns Under Armour.

Disclaimer


Company: cnbc, Activity: cnbc, Date: 2019-06-13  Authors: keris lahiff
Keywords: news, cnbc, companies, stock, pack, lululemon, trading, ahead, growth, rallies, athleisure, armour, bapis, valuation, racing, wear, times, base, johnson


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IPOs are one of the hottest trades of the year, doubling the market’s return

The IPO market keeps getting hotter, but how much more juice is left? IPO unicorns this yearThe Renaissance Capital IPO ETF, a basket of the 60 or so most recent large IPOs, is up 34% this year, more than twice the performance of the S&P 500. “If you’ve got extremely fast growth and a market opportunity, investors are comfortable knowing that profits will come later,” said Matt Kennedy, who analyzes IPOs for Renaissance Capital. Of 64 IPOs that have priced this year, 25 (40%) have priced at the


The IPO market keeps getting hotter, but how much more juice is left? IPO unicorns this yearThe Renaissance Capital IPO ETF, a basket of the 60 or so most recent large IPOs, is up 34% this year, more than twice the performance of the S&P 500. “If you’ve got extremely fast growth and a market opportunity, investors are comfortable knowing that profits will come later,” said Matt Kennedy, who analyzes IPOs for Renaissance Capital. Of 64 IPOs that have priced this year, 25 (40%) have priced at the
IPOs are one of the hottest trades of the year, doubling the market’s return Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-13  Authors: bob pisani
Keywords: news, cnbc, companies, markets, return, hottest, growth, large, priced, ipos, trades, doubling, market, range, meat, ipo, fast, renaissance


IPOs are one of the hottest trades of the year, doubling the market's return

Ethan Brown, founder and chief executive officer of Beyond Meat Inc., center, rings the opening bell during the company’s initial public offering (IPO) at the Nasdaq MarketSite in New York, U.S., on Thursday, May 2, 2019.

The IPO market keeps getting hotter, but how much more juice is left? CrowdStrike Holdings, a cybersecurity company that a week ago was discussing going public at $19 to $23 a share, priced at $34 and opened at $63.50.

Pet e-tailer Chewy upsized its IPO ahead of its Friday debut.

They are not alone. In February, IPO watchers were fearful an avalanche of IPOs would cause a crash in the market, but the big tech unicorns have been winners so far.

IPO unicorns this year

The Renaissance Capital IPO ETF, a basket of the 60 or so most recent large IPOs, is up 34% this year, more than twice the performance of the S&P 500.

What’s going on? “If you’ve got extremely fast growth and a market opportunity, investors are comfortable knowing that profits will come later,” said Matt Kennedy, who analyzes IPOs for Renaissance Capital.

Surprisingly, prices are holding up well. Of 64 IPOs that have priced this year, 25 (40%) have priced at the high end of the range or above.

IPO pricings this year (64 IPOs)

Above range: 12

High end: 13

Midpoint: 18

Low end 11

Below range: 10

Source: Renaissance Capital

Kennedy noted that four of these companies — Beyond Meat, Zoom, CrowdStrike and PagerDuty — exhibited similar characteristics: fast growth and a large market opportunity.

Beyond Meat is disrupting the food industry. Zoom is profitable with a large market opportunity with video conferencing. Crowdstrike’s endpoint security business is also growing fast. Pinterest has a somewhat unique niche — not quite social media, more like a discovery play, and priced below its last round of funding.

The lone unicorn disappointments this year: Uber Technologies and Lyft, down 6% and 19% respectively. What do they lack the others have?

Kennedy noted that investors are not impressed with the economics of ride hailing — specifically, the deep losses. In addition, both suffered from valuation issues (neither had a successful publicly traded peer), and both priced well above their last round of funding.

Still, there’s nothing like an up market to boost IPOs. The S&P 500 is up 15% this year. That leaves these names vulnerable should there be a larger market downturn.

And one of the most appealing characteristics of the winners — rapid growth — could quickly turn against them.

“The risk is that they are priced to perfection, so if there is any slowing of growth expectations they will get hit hard,” Kennedy said.


Company: cnbc, Activity: cnbc, Date: 2019-06-13  Authors: bob pisani
Keywords: news, cnbc, companies, markets, return, hottest, growth, large, priced, ipos, trades, doubling, market, range, meat, ipo, fast, renaissance


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Gold climbs on Fed rate cut speculation, growth concerns

Gold will continue to shine amid a weak dollar, says author and gold pro Jim Rickards. Gold prices gained momentum on Wednesday as the dollar dipped on speculation the U.S. central bank would cut interest rates this year amid concerns about waning global economic growth. U.S. gold futures were up 0.4% to $1,336.60 per ounce. Adding to concerns, U.S. consumer prices barely rose in May, likely increasing pressure on the Fed to cut interest rates this year. Lower interest rates make safe-haven asse


Gold will continue to shine amid a weak dollar, says author and gold pro Jim Rickards. Gold prices gained momentum on Wednesday as the dollar dipped on speculation the U.S. central bank would cut interest rates this year amid concerns about waning global economic growth. U.S. gold futures were up 0.4% to $1,336.60 per ounce. Adding to concerns, U.S. consumer prices barely rose in May, likely increasing pressure on the Fed to cut interest rates this year. Lower interest rates make safe-haven asse
Gold climbs on Fed rate cut speculation, growth concerns Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-12
Keywords: news, cnbc, companies, session, climbs, speculation, rate, fed, concerns, rates, gold, cut, trading, futures, dollar, higher, ounce, growth, interest


Gold climbs on Fed rate cut speculation, growth concerns

Gold will continue to shine amid a weak dollar, says author and gold pro Jim Rickards.

Gold prices gained momentum on Wednesday as the dollar dipped on speculation the U.S. central bank would cut interest rates this year amid concerns about waning global economic growth.

Spot gold was trading 0.5% higher at $1,332.80 per ounce, a rebound from the previous session when it fell to a 10-day low of $1,319.35.

U.S. gold futures were up 0.4% to $1,336.60 per ounce.

“Today, global equities are weaker, there is some safe-haven buying, and buying ahead of the U.S. Fed meeting next week,” said Bob Haberkorn, senior market strategist at RJO Futures.

“If the Fed cuts rates in June, youre going to see some substantial gains here in the precious metals market … People are trying to get ahead of that and add some gold to their portfolio.”

Global equities snapped a seven-day winning streak after U.S. President Donald Trump said he had no interest in moving ahead with a trade deal with China unless Beijing agreed to four or five “major points.”

Adding to concerns, U.S. consumer prices barely rose in May, likely increasing pressure on the Fed to cut interest rates this year.

Fed policymakers will meet on June 18-19. Markets have priced in at least two U.S. rate cuts by the end of 2019. Futures imply around an 80% chance of a rate cut as early as July.

Lower interest rates make safe-haven assets such as gold, which does not yield interest, more attractive while weighing on the dollar. The U.S. currency was trading largely unchanged against a basket of currencies on Wednesday.

Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell marginally to 756.18 tonnes on Tuesday from 756.42 tonnes on Monday.

The gold bulls have the overall near-term technical advantage and regained momentum today, ” Jim Wyckoff, senior analyst at Kitco, said in a note. He added that the next upside price target would be a close in August futures above June’s high of $1,352.70.

Among other metals, silver was up 0.6% to $14.79 per ounce, while platinum inched 0.2% higher to $814.50.

Palladium was little changed at $1,394.30 per ounce, having hit a six-week high of $1,404 earlier in the session. The autocatalyst metal was trading higher for a fifth consecutive session.


Company: cnbc, Activity: cnbc, Date: 2019-06-12
Keywords: news, cnbc, companies, session, climbs, speculation, rate, fed, concerns, rates, gold, cut, trading, futures, dollar, higher, ounce, growth, interest


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Oil prices fall more than 2% after another big jump in US crude stockpiles

Oil pumpjacks in the Permian Basin oil field are getting to work as crude oil prices gain. Oil prices sank on Wednesday after government data showed a large increase in U.S. crude stockpiles for the second week in a row and as the market continues to grapple with concerns about weakening fuel demand. Brent crude, the international benchmark for oil prices, was down $1.22, or 2%, at $61.07 around 12:10 p.m. Crude futures fell to a nearly five-month low last week after EIA figures showed crude sto


Oil pumpjacks in the Permian Basin oil field are getting to work as crude oil prices gain. Oil prices sank on Wednesday after government data showed a large increase in U.S. crude stockpiles for the second week in a row and as the market continues to grapple with concerns about weakening fuel demand. Brent crude, the international benchmark for oil prices, was down $1.22, or 2%, at $61.07 around 12:10 p.m. Crude futures fell to a nearly five-month low last week after EIA figures showed crude sto
Oil prices fall more than 2% after another big jump in US crude stockpiles Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-12  Authors: tom dichristopher
Keywords: news, cnbc, companies, stockpiles, big, fall, energy, fell, prices, jump, low, crude, million, growth, demand, oil, week


Oil prices fall more than 2% after another big jump in US crude stockpiles

Oil pumpjacks in the Permian Basin oil field are getting to work as crude oil prices gain.

Oil prices sank on Wednesday after government data showed a large increase in U.S. crude stockpiles for the second week in a row and as the market continues to grapple with concerns about weakening fuel demand.

U.S. commercial crude inventories rose by 2.2 million barrels in the week through June 7, according to the U.S. Energy Information Administration. Analysts in a Reuters poll had expected stockpiles to fall by 481,000 barrels.

Brent crude, the international benchmark for oil prices, was down $1.22, or 2%, at $61.07 around 12:10 p.m. ET (1610 GMT). Brent hit a session low at $60.30 in early morning trading.

U.S. West Texas Intermediate crude futures fell $1.35, or 2.5%, to $51.92 per barrel. WTI fell as low as $51.46 earlier in the session.

Crude futures fell to a nearly five-month low last week after EIA figures showed crude stocks surged to the highest level since July 2017. Brent is now down 19% from its 2019 high in April, while WTI is trading 22% lower over the same period.

“At a minimum, these results are going to keep traders on the sidelines, or more likely, pressing crude until it stops going down,” Michael Bradley, equity strategist at energy investment bank Tudor, Pickering, Holt & Company, said in a research note.

Oil prices have been supported by expectations that OPEC and its allies will continue to prop up prices by limiting production, but buffeted by concerns that the U.S.-China trade war will weigh on global economic growth and fuel demand.

President Donald Trump on Tuesday said he is holding up negotiations until Beijing agrees to return to the terms of negotiations laid out earlier in trade talks.

“It is constant concern about the demand outlook because of what’s happening with the situation with China,” said John Kilduff, founding partner at energy hedge fund Again Capital.

Stocks and other assets have been bolstered by hopes that the U.S. Federal Reserve will cut interest rates and stimulate growth, but energy commodities need more evidence that economic activity will rebound, Kilduff added.

“Oil is reacting to the disease, while other assets are reacting to the cure more,” he said.

EIA on Tuesday cut its forecast for global oil demand growth to roughly 1.2 million barrels per day in 2019, down from last month’s projection of about 1.4 million bpd. OPEC and the International Energy Agency are scheduled to update their demand outlook on Thursday and Friday, respectively.

OPEC and other major producers are set to meet in the coming weeks to discuss their policy of withholding 1.2 million bpd from the market.


Company: cnbc, Activity: cnbc, Date: 2019-06-12  Authors: tom dichristopher
Keywords: news, cnbc, companies, stockpiles, big, fall, energy, fell, prices, jump, low, crude, million, growth, demand, oil, week


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