China’s wind energy sector faces significant impact due to the coronavirus, Wood Mackenzie warns

The new coronavirus outbreak could have a significant impact on the wind energy industry in China, according to research by Wood Mackenzie. In a statement Monday, the research and consultancy firm said the virus — officially known as COVID-19 — had “brought much of China’s wind turbine component production to a standstill in recent weeks.” While Hubei province — where the outbreak is thought to have originated — had “limited production capacity,” Wood Mackenzie noted that both quarantine and tra


The new coronavirus outbreak could have a significant impact on the wind energy industry in China, according to research by Wood Mackenzie.
In a statement Monday, the research and consultancy firm said the virus — officially known as COVID-19 — had “brought much of China’s wind turbine component production to a standstill in recent weeks.”
While Hubei province — where the outbreak is thought to have originated — had “limited production capacity,” Wood Mackenzie noted that both quarantine and tra
China’s wind energy sector faces significant impact due to the coronavirus, Wood Mackenzie warns Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-02-17  Authors: anmar frangoul
Keywords: news, cnbc, companies, energy, wood, supply, china, turbine, significant, sector, coronavirus, wind, production, warns, impact, outbreak, faces, mackenzie


China's wind energy sector faces significant impact due to the coronavirus, Wood Mackenzie warns

The new coronavirus outbreak could have a significant impact on the wind energy industry in China, according to research by Wood Mackenzie.

In a statement Monday, the research and consultancy firm said the virus — officially known as COVID-19 — had “brought much of China’s wind turbine component production to a standstill in recent weeks.”

While Hubei province — where the outbreak is thought to have originated — had “limited production capacity,” Wood Mackenzie noted that both quarantine and travel restriction measures would “impact an already tight supply situation for key components.”

Wood Mackenzie said this represented “bad news” for wind markets in China and the U.S. — which sources wind turbine parts from China — where developers are trying to finish projects by the end of this year in order to be eligible for subsidies from the government.

“Due to an already tight supply of key components such as turbine blades and main bearings before the COVID-19 outbreak, first-quarter production delays have already reduced annual output of those components by about 10%,” Xiaoyang Li, a senior consultant at Wood Mackenzie, said in a statement.

As of February 16, there had been 70,548 confirmed cases of the coronavirus in China, according to its National Health Commission. More than 1,700 people have died there, authorities say.

Wood Mackenzie’s Li stated that if the outbreak was brought under control in the next few months, components without pre-existing bottlenecks, like converters and generators, should be able to recover from delays in the first quarter.

“In a best-case scenario, the epidemic is contained and production resumes by the end of March,” Li added. “In a bear-case, the epidemic could continue to impact the supply chain well into the middle of the year.”

“Based on these two possibilities, we estimate production delays across the wind turbine supply chain will result in a 10%-50% decrease in 2020 wind installations in China, compared to our Q4 (fourth-quarter) 2019 wind power outlook, which was at 28 gigawatts (GW) capacity.”

China is a wind energy powerhouse. According to the Global Wind Energy Council, it installed 20.2 GW of onshore wind and 1.6 GW of offshore wind in 2018. These figures equate to global market shares of 44% and 37%.

Outside of the Chinese market, Wood Mackenzie said that the “greatest concern” lay in the U.S., which it described as “already struggling with a myriad of supply bottlenecks.”

There, 6 GW of installations aiming for a 2020 commercial operation day had been identified as being “at-risk” before the coronavirus outbreak, Wood Mackenzie noted, needing exemptions from the Internal Revenue Service to “maintain access to 100% value of the Production Tax Credit.” This number was now “likely” to increase, the firm added.


Company: cnbc, Activity: cnbc, Date: 2020-02-17  Authors: anmar frangoul
Keywords: news, cnbc, companies, energy, wood, supply, china, turbine, significant, sector, coronavirus, wind, production, warns, impact, outbreak, faces, mackenzie


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Former New York Knick Al Harrington tells ex-players to be patient with cannabis sector

Harrington, 39, made his rounds in Chicago, the site of the 2020 NBA All-Star Game, to promote his cannabis company, Viola. His stance on the cannabis industry comes at a difficult time for the sector. “And so, the industry gets way overbought, and then it gets way oversold, which is exactly what you’ve seen in cannabis.” Unclear regulations in the U.S. have also contributed to the instability of the cannabis sector. Like Harrington, BioSteel Sports Nutrition Inc. founder Michael Cammalleri is a


Harrington, 39, made his rounds in Chicago, the site of the 2020 NBA All-Star Game, to promote his cannabis company, Viola.
His stance on the cannabis industry comes at a difficult time for the sector.
“And so, the industry gets way overbought, and then it gets way oversold, which is exactly what you’ve seen in cannabis.”
Unclear regulations in the U.S. have also contributed to the instability of the cannabis sector.
Like Harrington, BioSteel Sports Nutrition Inc. founder Michael Cammalleri is a
Former New York Knick Al Harrington tells ex-players to be patient with cannabis sector Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-02-16  Authors: jabari young
Keywords: news, cnbc, companies, tells, knick, sector, patient, cannabis, nba, million, harrington, tax, way, industry, york, states, explayers


Former New York Knick Al Harrington tells ex-players to be patient with cannabis sector

Al Harrington who played 16 seasons in the NBA talks about entrepreneurship and his company Viola that is involved in the cannabis industry during the Legends National Basketball Retired Players Association Conference at Caesars Palace on July 9, 2019 in Las Vegas, Nevada.

Despite the sector’s volatile state after a roller coaster 2019, former National Basketball Association forward Al Harrington continues to steer his fellow athletes to invest in cannabis while remaining patient on investment returns.

“What people have to understand is there is not a lot of profit in legal cannabis right now just because of the way its regulated, the tax structures and different things like that,” Harrington said in an interview with CNBC. “But the one thing I tell them from a risk standpoint is – its prohibition.”

“If you’re going to be a part of something that will be around forever, and we’re on the ground floor of pioneering the industry that I firmly believe will be bigger than the liquor industry and potentially bigger than the cigarette industry. And we know how big both those industries are. That’s the risk, but the reward outweighs the risk.”

Harrington, 39, made his rounds in Chicago, the site of the 2020 NBA All-Star Game, to promote his cannabis company, Viola. The company closed on a $16 million Series A funding round last October, adding new investors from ex-athletes, including former NBA players Josh Childress, Kenyon Martin, and Wilson Chandler.

Harrington, who grossed roughly $89 million in his playing career, played 15 seasons in the NBA, including two seasons with the New York Knicks.

His stance on the cannabis industry comes at a difficult time for the sector. The cannabis ETFMG Alternative Harvest ETF (MJ) is down 4.03% year to date and has dropped 37.41% over the past six months and took a 53.96% hit over the past year. ETFMG founder and CEO Sam Masucci blamed the initial excitement of the sector for its current decline, saying investors over-purchased cannabis companies.

“The prices of these companies get ahead of where they should be; they don’t have the revenue to support it,” Masucci said. “And so, the industry gets way overbought, and then it gets way oversold, which is exactly what you’ve seen in cannabis.”

Unclear regulations in the U.S. have also contributed to the instability of the cannabis sector. Though some states — like Nevada, California, Colorado, and now Illinois, which grossed over $19 million in sales the first 12 days recreational cannabis was eligible to purchase — have legalized cannabis, there is no clear sign when it could be federally regulated like in Canada, which is where many companies in the ETFMG Alternative Harvest ETF are based.

But as more states like New Jersey (which expects $210 million in state tax revenue from cannabis sales, according to the New York Times) and New York (which projects $772 million in tax revenue) get closer to the legalization of cannabis, a federal bill may gain more momentum. The 2018 Farm Bill has already legalized CBD derived from hemp plants and contains no more than 0.3% THC; hence, some form of cannabis is already legal.

“The train’s left the station,” Masucci said. “People are using it whether it’s just straight CBD, hemp derived [or] THC in states where it’s approved.”

Like Harrington, BioSteel Sports Nutrition Inc. founder Michael Cammalleri is also advising former players to research cannabis. Understanding the proper regulatory environment surrounding cannabis will help fuel investment returns.


Company: cnbc, Activity: cnbc, Date: 2020-02-16  Authors: jabari young
Keywords: news, cnbc, companies, tells, knick, sector, patient, cannabis, nba, million, harrington, tax, way, industry, york, states, explayers


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This is the no. 1 S&P 500 sector to avoid here, market bull Jeff Saut says

The S&P 500 ended Friday just 0.2% from records after bouncing more than 1% for the week. But, top market bull Jeffrey Saut isn’t trusting one outperforming sector that carried the index to these heights. The XLU utilities ETF, which tracks the S&P 500 sector, trades at 21 times forward earnings — it hit its highest valuation ever earlier this month. The sector is the second-best performer on the S&P 500 this year. As for the rest of the market, Saut says stocks could be at risk of a pullback,


The S&P 500 ended Friday just 0.2% from records after bouncing more than 1% for the week.
But, top market bull Jeffrey Saut isn’t trusting one outperforming sector that carried the index to these heights.
The XLU utilities ETF, which tracks the S&P 500 sector, trades at 21 times forward earnings — it hit its highest valuation ever earlier this month.
The sector is the second-best performer on the S&P 500 this year.
As for the rest of the market, Saut says stocks could be at risk of a pullback,
This is the no. 1 S&P 500 sector to avoid here, market bull Jeff Saut says Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-02-14  Authors: keris lahiff
Keywords: news, cnbc, companies, amazon, market, utilities, etf, saut, think, sector, 500, ive, bull, jeff, avoid


This is the no. 1 S&P 500 sector to avoid here, market bull Jeff Saut says

Stocks are within a whisker of all-time highs.

The S&P 500 ended Friday just 0.2% from records after bouncing more than 1% for the week.

But, top market bull Jeffrey Saut isn’t trusting one outperforming sector that carried the index to these heights.

“I’m not a big fan of utilities here,” Saut, chief investment strategist at Capital Wealth Planning, said on CNBC’s “Trading Nation” on Friday. “I’ve been in this business for forty-nine years. I’ve been looking at markets for fifty-six years… and utilities are as richly valued as I’ve ever seen them.”

The XLU utilities ETF, which tracks the S&P 500 sector, trades at 21 times forward earnings — it hit its highest valuation ever earlier this month. The sector is the second-best performer on the S&P 500 this year.

“I have no interest in utilities. I think there is a much better valuation metric in the midstream master limited partnerships where you can get … 80% tax differed yields then you get in utilities,” said Saut.

Midstream oil companies focus on the transportation and storage of crude. Example ETF include the AMLP Alerian MLP ETF and the MLPA global X MLP ETF.

The stock market’s unbeatable winner – tech – could continue to lead the rest of the pack higher, he adds.

“I like tech. I mean, I see people selling Amazon and looking for the next Amazon and the fact of the matter is the next Amazon is Amazon!” said Saut.

As for the rest of the market, Saut says stocks could be at risk of a pullback, albeit a slight one before rocketing back up to highs.

“l don’t think it pulls back much. You’ve got some divergences out there. I mean, the Russell 2000 hadn’t made a new all-time high, the Nasdaq has some divergence between volume and breadth. So…I think you can get a 3% to 5% pullback from here, but the primary trend of the market is up,” said Saut.

In fact, Saut says this secular bull market could run another five to 10 years. He notes that valuations are not as stretched as in 2000, and a low interest rate environment should keep the bid under the equity market.


Company: cnbc, Activity: cnbc, Date: 2020-02-14  Authors: keris lahiff
Keywords: news, cnbc, companies, amazon, market, utilities, etf, saut, think, sector, 500, ive, bull, jeff, avoid


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Caterpillar is ‘really, really cheap,’ but two traders warn that it may not be a good buy

“Caterpillar has just been an unloved stepchild of this stock market,” Gina Sanchez, founder and CEO of Chantico Global, said Thursday on CNBC’s “Trading Nation.” And I think Goldman was basically saying, ‘Hey, now they’re really, really, really, really cheap,'” Sanchez said. And if you look at the places Caterpillar is particularly exposed to, it’s oil and mining,” she said. “We’re not seeing that in the mining sector, we’re not seeing that in the underlying commodities prices, and we’re certai


“Caterpillar has just been an unloved stepchild of this stock market,” Gina Sanchez, founder and CEO of Chantico Global, said Thursday on CNBC’s “Trading Nation.”
And I think Goldman was basically saying, ‘Hey, now they’re really, really, really, really cheap,'” Sanchez said.
And if you look at the places Caterpillar is particularly exposed to, it’s oil and mining,” she said.
“We’re not seeing that in the mining sector, we’re not seeing that in the underlying commodities prices, and we’re certai
Caterpillar is ‘really, really cheap,’ but two traders warn that it may not be a good buy Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-02-14  Authors: lizzy gurdus, ivana freitas
Keywords: news, cnbc, companies, gordon, good, caterpillar, oil, stock, traders, really, mining, cheap, buy, sanchez, goldman, sector, seeing, warn


Caterpillar is 'really, really cheap,' but two traders warn that it may not be a good buy

The bulls are out for Caterpillar, at least at Goldman Sachs.

Analysts at the firm upgraded the stock to “buy” on Thursday, citing an “attractive” risk-reward profile for shares of the industrial equipment giant and calling for as much as 20% upside with their $168 price target over the next 12 months. Caterpillar shares closed up less than one-tenth of 1% at $139.72 on Thursday.

Not everyone is as eager to buy into the bull thesis for this China-tied name, however.

“Caterpillar has just been an unloved stepchild of this stock market,” Gina Sanchez, founder and CEO of Chantico Global, said Thursday on CNBC’s “Trading Nation.”

“Every time you got any bad trade news, any bad oil news, any bad anything, they got beat up. And I think Goldman was basically saying, ‘Hey, now they’re really, really, really, really cheap,'” Sanchez said. “So, you’re really buying this as a value story. But going forward, they still have challenges.”

The strategist pointed to two areas of the market that have been seeing outsized moves to the downside of late: oil and mining.

“It’s been really hard to be energy and materials stocks right now. And if you look at the places Caterpillar is particularly exposed to, it’s oil and mining,” she said.

With the International Energy Agency expecting global oil demand to slow for the first time in a decade in the first quarter, and mining companies putting their equipment orders on hold because of an uncertain outlook, that doesn’t exactly bode well for Caterpillar, Sanchez said.

Add in the questions still surrounding the U.S.-China trade negotiations, and potential tariffs could make things especially difficult, she warned.

“If you were to … buy into this Goldman call, you have to believe that something else is going to catalyze this stock,” she said. “We’re not seeing that in the mining sector, we’re not seeing that in the underlying commodities prices, and we’re certainly not seeing it in energy or oil demand.”

“So, I’m not sure that it’s going to be a fun hold, but I think, in the long term, it’s very cheap,” Sanchez said.

Todd Gordon, managing director at Ascent Wealth Partners, said in the same “Trading Nation” interview that the caution was “absolutely warranted.”

“We’ve fallen into a big period of consolidation,” he said of Caterpillar and the exchange-traded fund tracking China’s largest companies, the iShares China Large-Cap ETF (FXI). “There’s no real progress here on that chart.”

To make matters worse, Caterpillar has also been underperforming its own sector, Gordon said, with the stock’s relative ratio to the Industrial Select Sector SPDR Fund (XLI) also on the decline.

“For now, this is dead money,” Gordon said. “I appreciate Goldman’s call. But from an opportunity cost, there’s other places to put your money right now [where] you’re seeing much better performance. So, until these ranges break, OK, then we’ll talk. But, otherwise, stay away.”

Caterpillar is down about 5% year to date.

Disclaimer


Company: cnbc, Activity: cnbc, Date: 2020-02-14  Authors: lizzy gurdus, ivana freitas
Keywords: news, cnbc, companies, gordon, good, caterpillar, oil, stock, traders, really, mining, cheap, buy, sanchez, goldman, sector, seeing, warn


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Energy is the only negative sector in last month, but four stocks could be a buy

The group has declined 11% in the past month, the only negative S&P 500 sector over that stretch. But, the energy space isn’t a hopeless cause, says Bill Baruch, president of Blue Line Capital, who sees pockets of opportunity. Within that ETF, Baruch says a few standout names could be worth a second look. “You want to look for a reasonable price-to-earnings [ratio], low debt on the balance sheet because I think that’s the big problem with energy stocks right now. Concho Resources has fallen 10%


The group has declined 11% in the past month, the only negative S&P 500 sector over that stretch.
But, the energy space isn’t a hopeless cause, says Bill Baruch, president of Blue Line Capital, who sees pockets of opportunity.
Within that ETF, Baruch says a few standout names could be worth a second look.
“You want to look for a reasonable price-to-earnings [ratio], low debt on the balance sheet because I think that’s the big problem with energy stocks right now.
Concho Resources has fallen 10%
Energy is the only negative sector in last month, but four stocks could be a buy Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-02-09  Authors: keris lahiff
Keywords: news, cnbc, companies, sector, stocks, support, buy, etf, think, space, segment, baruch, sees, month, energy, exploration, negative


Energy is the only negative sector in last month, but four stocks could be a buy

Energy is at the bottom of the barrel.

The group has declined 11% in the past month, the only negative S&P 500 sector over that stretch. It was also the worst performer in 2019.

But, the energy space isn’t a hopeless cause, says Bill Baruch, president of Blue Line Capital, who sees pockets of opportunity.

“Let’s start with crude oil. This thing has sold off more than 20%, into bear market territory, but there is a lot of support at $49 as you can see in this chart going back to 2016,” Baruch said Friday on CNBC’s “Trading Nation.”

Baruch is digging in on the exploration and production segment on the belief that crude may be bottoming. He says he’s turned bullish on the XOP oil and gas exploration and production ETF, in particular, after getting bearish at the end of last year.

Within that ETF, Baruch says a few standout names could be worth a second look.

“WPX has rallied 40% in December. That is being dragged down right now by the entire sector. Apache, Occidental Petroleum, there’s other names out there that I think have great support … and they’re going to respond here,” said Baruch.

Gina Sanchez, CEO of Chantico Global, sees opportunity elsewhere in the space, picking hydrocarbon exploration company Concho Resources as her top rebound pick.

“You want to look for a reasonable price-to-earnings [ratio], low debt on the balance sheet because I think that’s the big problem with energy stocks right now. They’ve had to take on a lot of debt,” Sanchez said during the same segment. “That combination makes Concho an interesting story.”

Concho Resources has fallen 10% this year, in line with the XLE energy ETF. It is down a sharper 30% in the past 12 months, double the energy sector’s losses.

Disclaimer


Company: cnbc, Activity: cnbc, Date: 2020-02-09  Authors: keris lahiff
Keywords: news, cnbc, companies, sector, stocks, support, buy, etf, think, space, segment, baruch, sees, month, energy, exploration, negative


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It’s not ‘appropriate’ to compare energy stocks to tobacco, Chevron CEO says

“The reality is the world runs on the energy system that we have today,” Wirth said Friday on CNBC’s “Squawk Box” from Pebble Beach, California. If tobacco use were ceased today, I think the world would be just fine. In the fourth quarter Chevron reported a $6.6 billion loss, driven by a $10.4 billion write-down related to its shale gas production, primarily in Appalachia. Amid this backdrop, Wirth said Chevron is focused on capital discipline, and that the company has sized its operations to co


“The reality is the world runs on the energy system that we have today,” Wirth said Friday on CNBC’s “Squawk Box” from Pebble Beach, California.
If tobacco use were ceased today, I think the world would be just fine.
In the fourth quarter Chevron reported a $6.6 billion loss, driven by a $10.4 billion write-down related to its shale gas production, primarily in Appalachia.
Amid this backdrop, Wirth said Chevron is focused on capital discipline, and that the company has sized its operations to co
It’s not ‘appropriate’ to compare energy stocks to tobacco, Chevron CEO says Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-02-07  Authors: pippa stevens
Keywords: news, cnbc, companies, think, compare, sector, ceo, chevron, tobacco, wirth, world, stocks, energy, oil, company, quarter, today, prices, appropriate


It's not 'appropriate' to compare energy stocks to tobacco, Chevron CEO says

Traditional energy stocks have come under fire as the sustainable investing movement gains traction, but Chevron chairman and CEO Michael Wirth said it’s unfair to compare the sector to other oft-maligned areas of the market given the role oil production has played in societal development. “The reality is the world runs on the energy system that we have today,” Wirth said Friday on CNBC’s “Squawk Box” from Pebble Beach, California. “I think the comparison to tobacco is not an appropriate one at all. If tobacco use were ceased today, I think the world would be just fine. If we ceased use of all hydrocarbon products today, the world would not be fine, and I think that’s the reality.”

Energy was the worst-performing sector in 2019, and amid the combination of low oil prices pressuring profits and the sector falling out of favor with investors, some believe the sector’s best days are behind it. “I’m done with fossil fuels … they’re just done. We’re starting to see divestment all over the world,” Jim Cramer said Jan. 31 on “Squawk Box.” “You’re seeing divestiture by a lot of different funds … we’re in the death knell phase,” he added. But Wirth said the sector can and will recover, and that the stocks will head higher once again. “We’ve been in a rough period of time. Commodity prices had a historic collapse last decade. They’re still very low because we’ve got a well supplied market, and I think companies have had to re-size their investments accordingly,” he said. In the fourth quarter Chevron reported a $6.6 billion loss, driven by a $10.4 billion write-down related to its shale gas production, primarily in Appalachia.

The company also raised its dividend by 8% and said it’s buying back shares and reducing debt. Wirth said that in 2019 the company produced more oil than at any point in its 140 year history. Despite these initiatives, shares of Chevron have lost 7% in the last year. By comparison, the S&P 500 has gained 23%. U.S. West Texas Intermediate crude currently trades around $50 per barrel, which is a far cry from the $100 per barrel it fetched as recently as 2014. Amid this backdrop, Wirth said Chevron is focused on capital discipline, and that the company has sized its operations to compete across a range of oil prices. “I think we just need to continue to deliver results quarter after quarter and I think the investment will be there,” he said.

Coronavirus impact


Company: cnbc, Activity: cnbc, Date: 2020-02-07  Authors: pippa stevens
Keywords: news, cnbc, companies, think, compare, sector, ceo, chevron, tobacco, wirth, world, stocks, energy, oil, company, quarter, today, prices, appropriate


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These are the 5 best stocks to play the ‘remarkable innovation’ in biotech, Mizuho says

(This story is for CNBC PRO subscribers only.) Innovation and growth should drive several biotech and drug stocks higher in 2020, despite political risk around drug pricing, according to Mizuho. The bank initiated its coverage of the sector, finding five stocks worthy of a buy rating. “Overall, we are bullish on the biopharma sector mainly because of the remarkable innovation we are seeing, including in areas such as neuroscience where innovation has historically been tougher to come by,” Mizuho


(This story is for CNBC PRO subscribers only.)
Innovation and growth should drive several biotech and drug stocks higher in 2020, despite political risk around drug pricing, according to Mizuho.
The bank initiated its coverage of the sector, finding five stocks worthy of a buy rating.
“Overall, we are bullish on the biopharma sector mainly because of the remarkable innovation we are seeing, including in areas such as neuroscience where innovation has historically been tougher to come by,” Mizuho
These are the 5 best stocks to play the ‘remarkable innovation’ in biotech, Mizuho says Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-02-06  Authors: jesse pound
Keywords: news, cnbc, companies, smaller, innovation, sector, subscribers, worthy, bank, play, tougher, initiated, biotech, drug, stocks, mizuho, remarkable, best


These are the 5 best stocks to play the 'remarkable innovation' in biotech, Mizuho says

(This story is for CNBC PRO subscribers only.)

Innovation and growth should drive several biotech and drug stocks higher in 2020, despite political risk around drug pricing, according to Mizuho.

The bank initiated its coverage of the sector, finding five stocks worthy of a buy rating.

“Overall, we are bullish on the biopharma sector mainly because of the remarkable innovation we are seeing, including in areas such as neuroscience where innovation has historically been tougher to come by,” Mizuho said in a note to clients.

The bank initiated two large cap stocks with buys, along with three smaller companies.


Company: cnbc, Activity: cnbc, Date: 2020-02-06  Authors: jesse pound
Keywords: news, cnbc, companies, smaller, innovation, sector, subscribers, worthy, bank, play, tougher, initiated, biotech, drug, stocks, mizuho, remarkable, best


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Some analysts are trimming their China GDP forecasts amid coronavirus outbreak

Artyom Ivanov | TASS | Getty ImagesSome analysts and economists are downgrading China’s GDP growth forecast for 2020 as the coronavirus outbreak hits the world’s second largest economy. In 2019, China’s full-year GDP growth was 6.1%, down from 6.6% the year before. They said the negative economic impact will likely be concentrated in the first quarter of the year. Macquarie: Downgrades from 5.9% to 5.6%Macquarie downgraded its forecast for China’s first-quarter GDP growth from 5.9% to 4%. Moody’


Artyom Ivanov | TASS | Getty ImagesSome analysts and economists are downgrading China’s GDP growth forecast for 2020 as the coronavirus outbreak hits the world’s second largest economy.
In 2019, China’s full-year GDP growth was 6.1%, down from 6.6% the year before.
They said the negative economic impact will likely be concentrated in the first quarter of the year.
Macquarie: Downgrades from 5.9% to 5.6%Macquarie downgraded its forecast for China’s first-quarter GDP growth from 5.9% to 4%.
Moody’
Some analysts are trimming their China GDP forecasts amid coronavirus outbreak Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-02-05  Authors: huileng tan
Keywords: news, cnbc, companies, coronavirus, china, outbreak, economic, sector, gdp, virus, chinas, impact, forecasts, trimming, growth, analysts, amid


Some analysts are trimming their China GDP forecasts amid coronavirus outbreak

An outbreak of pneumonia-like disease caused by a coronavirus was registered in Wuhan, a port city of 11 million people, the administrative center of the Hubei province, at the end of December 2019. Artyom Ivanov | TASS | Getty Images

Some analysts and economists are downgrading China’s GDP growth forecast for 2020 as the coronavirus outbreak hits the world’s second largest economy. Economic activity in many cities halted as factories closed for week-long Lunar New Year holidays. The break was extended in some places — a move that will hit global supply chains. Meanwhile, the service sector has also been hit as people are encouraged to stay at home. New movie launches have been cancelled during the country’s peak season for consumer spending. But some have argued that Beijing’s expected stimulus measures may offset the outbreak’s impact on the economy. In 2019, China’s full-year GDP growth was 6.1%, down from 6.6% the year before. “The immediate and most significant economic impact is in China…but will reverberate globally, given the importance of China in global growth as well as in global company revenue,” said Moody’s Investors Service in a report last Wednesday. On the same day, a Chinese government economist said that the country’s first-quarter economic growth may drop to 5% or even lower due to the virus outbreak, Reuters reported, citing a local magazine. Here’s what banks and research houses are predicting for China’s economy this year.

ANZ: Maintain at 5.8%

ANZ is maintaining full-year GDP growth forecast at 5.8% for now, although it has downgraded China’s first-quarter growth from 5.9% to 5.0%. “Industrial activity and exports will decrease due to a decrease in the number of working days,” ANZ economists said. “Supply chain activity will be interrupted as Wuhan is a large industrial hub in central China.” The economists are estimating a loss of 3.5 working days in the first quarter of 2020.

Citi: Downgrades from 5.8% to 5.5%

Citigroup economists are expecting China’s full-year growth to slow from their previous forecast of 5.8% to 5.5%. They said the negative economic impact will likely be concentrated in the first quarter of the year. “Carefully calibrated policy interventions will be critical to mitigate the economic shock and maintain social stability,” they added in a note.

Economist Intelligence Unit: Downgrades from 5.9% to 4.9-5.4%

The EIU said the outbreak could reduce real GDP growth in 2020 by 0.5 to 1 percentage point from its baseline forecast of 5.9% if the outbreak develops into an epidemic comparable to SARS. “The government will implement restrictions on travel and shipments, which will cause disruptions to business activity,” said Imogen Page-Jarrett, a research analyst. “If the outbreak becomes an epidemic, rising expenditure on healthcare for local governments will limit room for spending in other areas,” Page-Jarrett added. “Plans for infrastructure building and other forms of stimulus aimed at putting a floor under economic growth this year could be put on hold.” While sectors like travel, tourism and manufacturing will be the hardest hit, some sectors like pharmaceuticals, online entertainment and e-commerce may pick up. Car sales may also get a boost as consumers stay away from public transport, he said.

Macquarie: Downgrades from 5.9% to 5.6%

Macquarie downgraded its forecast for China’s first-quarter GDP growth from 5.9% to 4%. It is also shaving the country’s full-year GDP growth from 5.9% to 5.6% — assuming the coronavirus outbreak comes under control by the second quarter of the year, said Larry Hu, chief economist for China. “Our outlook for 2020 remains as ‘getting worse before getting better,'” said Hu in a report this week, although it’s still too early to assess the damage, he added. Hu said he wasn’t too concerned about the loss in consumption, as any losses would be an one-off event. “For us, what’s more important is the knock-on effect on property and the corporate sector,” Hu said. “Especially, after four years of up-cycle, the property sector was already at a turning point even before Coronavirus hit,” he said.

Mizuho: Downgrades from 5.9% to 5.6%

“Given the Wuhan virus (2019 nCoV) is exponentially more infectious than either SARS or MERS, devastation could be far more as travel, trade and economic activity face a greater scale of disruptions from larger and more transmissible outbreak,” said Vishnu Varathan, head of economics and strategy for Asia. For the first half of the year, Varathan said he expects China’s GDP growth between 4.8% to 5.2% before picking up to 5.8% to 6.3% for the second half due to pent-up demand.

Moody’s: Maintains at 5.8%

At this time, the ratings agency is keeping its forecast of a 5.8% GDP growth for China in 2020. However, the composition of growth is likely to shift due to the impact of the virus on consumption in the first quarter that will potentially be offset by stimulus measures, said its analysts in a report last week. Even though consumption will bounce back, the recovery will not be as strong as after the SARS outbreak of 2002 to 2003, as there will be “demand destruction,” said Martin Petch, a senior credit officer at Moody’s Investors Service. “I think this time around there will be some demand which has been essentially destroyed,” Petch told CNBC’s “Squawk Box.” “People haven’t traveled during Lunar New Year for example, and it’s unlikely after this period of slower consumer demand that they’ll double up on restaurant spending. For example, they won’t go twice as many times in the coming quarters,” Petch added.

Natixis: Downgrades from 5.7% to 5.5%

The immediate impact of of the coronavirus outbreak will be worse than that during the severe acute respiratory syndrome virus outbreak of 2002 to 2003 as the service sector is now China’s key growth engine, said Alicia Garcia Herrero and Jianwei Xu, economists at Natixis. “Based on the SARS’s experience, the service sector is likely to be more severely affected than the manufacturing sector, especially for the transportation sector, which is an important component of services,” they wrote. China’s economic growth is also going through a structural deceleration due to an aging population and is at the end of a long urbanization process, they added. “In other words, the coronavirus is hitting a weaker economy than was the case with SARS,” they wrote.

Nomura: ‘Significantly lower’ than 6.1%

Nomura said that “the worst is yet to come” in the outbreak as the Chinese government acts on all front to contain the virus after its initial slow reaction. Nomura analyst Ting Lu said in an email to CNBC last week that China’s annual GDP growth could be “significantly” lower than the 6.1% in 2019. The Japanese bank said that the economic impact of the coronavirus could be worse than during the SARS epidemic of 2002 to 2003.

Richard Bernstein Advisors: Fears will ‘knock stuffing out’ of growth

“The coronavirus is a serious issue and there is nothing positive to say about it,” said Richard Bernstein Advisors, an investment firm. It was bleak on the outlook in the first half of the year. “To be frank, the attempts to contain the coronavirus and the associated public fears will knock the stuffing out of China’s 1Q20 and potentially 2Q20 GDP and profits,” said the firm in a note last week. Beijing will likely respond to the economic impact of the coronavirus with even more monetary and fiscal stimulus on top what what is already in the pipeline. “If the virus is contained within the next several months, then Chinese GDP could be significantly stronger than expected during late-2020 and early-2021.”

Vanguard: Maintains at 5.8%

The main impact on China’s economic growth is likely to be that on sentiment, said Qian Wang, Vanguard’s Asia Pacific chief economist. “The good news is that the Chinese government has taken serious actions quickly,” said Wang in a note. The investment advisor is maintaining its outlook for China’s 2020 GDP growth at 5.8%, although the risk is clearly tilted toward the downside, she added. The viral outbreak will threaten China’s growth in the near-term, but Vanguard said there is potential for a rebound in the second half of the year due to anticipated government stimulus.

UBS: Downgrades from 6% to 5.5%


Company: cnbc, Activity: cnbc, Date: 2020-02-05  Authors: huileng tan
Keywords: news, cnbc, companies, coronavirus, china, outbreak, economic, sector, gdp, virus, chinas, impact, forecasts, trimming, growth, analysts, amid


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US services sector growth picks up in January

U.S. services sector activity picked up in January, with industries reporting increases in new orders, suggesting the economy could continue to grow moderately this year even as consumer spending is slowing. A reading above 50 indicates expansion in the services sector, which accounts for more than two-thirds of U.S. economic activity. The ISM survey’s measure of new orders for the services industry increased to a reading of 56.2 in January from 55.3 in December. Order backlogs, however, continu


U.S. services sector activity picked up in January, with industries reporting increases in new orders, suggesting the economy could continue to grow moderately this year even as consumer spending is slowing.
A reading above 50 indicates expansion in the services sector, which accounts for more than two-thirds of U.S. economic activity.
The ISM survey’s measure of new orders for the services industry increased to a reading of 56.2 in January from 55.3 in December.
Order backlogs, however, continu
US services sector growth picks up in January Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-02-05
Keywords: news, cnbc, companies, growth, manufacturing, sector, activity, picks, reading, index, economy, month, ism, services, surveys


US services sector growth picks up in January

Lead waitress Rhonda Abdullah serving the Taylor’s, James and Voncia of Aurora their lunch at the Welton Street Cafe that will turn 20 this year, the last-standing soul food restaurant in the Five Points neighborhood in Denver, Colorado on June 7, 2019.

U.S. services sector activity picked up in January, with industries reporting increases in new orders, suggesting the economy could continue to grow moderately this year even as consumer spending is slowing.

The Institute for Supply Management (ISM) said on Wednesday its non-manufacturing activity index increased to a reading of 55.5 last month, the highest level since August. Data for December was revised slightly down to show the index at a reading of 54.9 instead of the previously reported 55.0.

A reading above 50 indicates expansion in the services sector, which accounts for more than two-thirds of U.S. economic activity. Economists polled by Reuters had forecast the index unchanged at a reading of 55.0 in January.

The report came on the heels of a survey from the ISM on Monday showing manufacturing rebounded in January after contracting for five straight months. The improvement in manufacturing, which accounts for 11% of the economy, reflected easing tensions in the 19-month U.S.-China trade war.

Any recovery in manufacturing, however, is likely to be limited by Boeing’s suspension last month of the production of its troubled 737 MAX jetliner, grounded last March following two fatal crashes. The coronavirus, which has killed hundreds in China and infected thousands globally, is expected to disrupt supply chains, especially for electronics producers.

The economy grew 2.3% last year, the slowest since 2016, after expanding 2.9% in 2018.

The ISM survey’s measure of new orders for the services industry increased to a reading of 56.2 in January from 55.3 in December. Order backlogs, however, continued to contract in January, which could curb growth in the services sector.

The survey’s index for services industry employment slipped to a reading of 53.1 last month from 54.8 in December. This is in line with slowing job growth, both as workers become more scarce and demand for labor cools.

The economy created 2.1 million jobs in 2019, the least since 2011 and down from 2.7 million in 2018. Growth in consumer spending slowed considerably in the final three months of 2019.


Company: cnbc, Activity: cnbc, Date: 2020-02-05
Keywords: news, cnbc, companies, growth, manufacturing, sector, activity, picks, reading, index, economy, month, ism, services, surveys


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Stodgy utilities competing with tech stocks for hottest sector in the market right now

Justin Merriman | Bloomberg | Getty ImagesThe best two sectors so far this year are the fast-growing tech sector and stodgy old utilities, continuing an odd race that has been going on for more than 18 months. The utilities sector gained 6.61% in January, far surpassing the S&P 500, which finished down 0.2% for the opening month. Technology was the next closest sector at 3.89%, and pulled ahead of the utilities for the year with a strong start to February. When looking at the price returns of th


Justin Merriman | Bloomberg | Getty ImagesThe best two sectors so far this year are the fast-growing tech sector and stodgy old utilities, continuing an odd race that has been going on for more than 18 months.
The utilities sector gained 6.61% in January, far surpassing the S&P 500, which finished down 0.2% for the opening month.
Technology was the next closest sector at 3.89%, and pulled ahead of the utilities for the year with a strong start to February.
When looking at the price returns of th
Stodgy utilities competing with tech stocks for hottest sector in the market right now Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-02-05  Authors: jesse pound
Keywords: news, cnbc, companies, sectors, competing, far, percentage, stocks, stodgy, right, tech, hottest, rates, raised, technology, points, market, sector, utilities


Stodgy utilities competing with tech stocks for hottest sector in the market right now

Signage is displayed at the FirstEnergy Corp. Bruce Mansfield coal-fired power plant in Shippingport, Pennsylvania. Justin Merriman | Bloomberg | Getty Images

The best two sectors so far this year are the fast-growing tech sector and stodgy old utilities, continuing an odd race that has been going on for more than 18 months. The utilities sector gained 6.61% in January, far surpassing the S&P 500, which finished down 0.2% for the opening month. Technology was the next closest sector at 3.89%, and pulled ahead of the utilities for the year with a strong start to February. The recent spike for utilities has raised some eyebrows among investors and strategists. “Utilities going parabolic? Now I’ve seen everything!” Matt Malek of Miller Tabak & Co. said in a note to clients during the middle of the sharp jump. The rapid gain may be an anomaly, but the sector’s outperformance is actually a longer-term trend. “Since U.S. economic growth peaked in 2Q18, utilities have far away been the best-performing Level 1 Sector, returning 45.4 percent,” Morgan Stanley’s Michael Wilson said in a note last month, adding that this was roughly double the return of the S&P 500 and 7 percentage points better than the technology sector. When looking at the price returns of the widely traded Utilities Select Sector SPDR ETF, the gap isn’t quite as big, but its still greater than 10 percentage points.

Part of the reason for the strength of utilities is lower interest rates. The Fed raised rates at the beginning of this run, with two hikes toward the end of 2018, but reversed course with three 25 basis point cuts last year. The low-interest rate environment has given utility stocks, which on average have a dividend yield of about 3%, a healthy premium to 10-year Treasurys rates and other low-yield fixed income assets, said Chris Gaffney, president of world markets at TIAA Bank. “I feel like if you’re picking up over 100 basis points with the upside potential of an equity, that’s a pretty good trade,” Gaffney said.

Safe haven with growth?


Company: cnbc, Activity: cnbc, Date: 2020-02-05  Authors: jesse pound
Keywords: news, cnbc, companies, sectors, competing, far, percentage, stocks, stodgy, right, tech, hottest, rates, raised, technology, points, market, sector, utilities


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