Economy Week Ahead: Inflation, Jobless Claims, Retail Sales

The outlook for the global economy darkened as a stream of data from Europe and Asia suggested growth faltered in the third quarter, hobbled by world-wide supply-chain snarls, sharply accelerating inflation and the impact of the highly contagious Delta variant.

U.S. inflation accelerated last month and remained at its highest rate in over a decade, with price increases from pandemic-related labor and materials shortages rippling through the economy from a year earlier.

The Labor Department said last month’s consumer-price index, which measures what consumers pay for goods and services, rose by 5.4%

The gap between yields on shorter- and longer-term Treasury’s narrowed Wednesday after data showed inflation accelerated slightly in September, fueled by investors’ bets that the Federal Reserve may need to tighten monetary policy sooner than expected. Measures of inflation in China and the U.S. highlight this week’s economic data.

China’s exports, long a growth engine for the country’s economy, are expected to increase 21% from a year earlier in September, according to economists polled by The Wall Street Journal. That is down from a 25.6% gain in August. Meanwhile, inbound shipments are forecast to rise 19.1% from a year earlier, retreating from the 33.1% jump in August.

The International Monetary Fund releases its World Economic Outlook report during annual meetings. The latest forecasts are likely to underscore the relatively quick economic rebound of advanced economies alongside a slower recovery in developing nations with less access to Covid-19 vaccines.

China’s factory-gate prices for September are expected to surge 10.4% from a year earlier, a pace that would surpass its previous peak in 2008, according to economists polled by The Wall Street Journal. Higher commodity costs have led to the rise in producer prices this year, but so far that hasn’t fed through to consumer inflation. Economists forecast the consumer-price index rose only 0.7% from a year earlier in September.

September’s U.S. consumer-price index is expected to show inflation remained elevated as companies passed along higher costs for materials and labor. Rising energy prices likely contributed to the headline CPI, while core prices, which exclude food and energy, might start to reflect climbing shelter costs.

The Federal Reserve releases minutes from its September meeting, potentially offering additional insight on plans to start reducing pandemic-related stimulus.

U.S. jobless claims are forecast to fall for the second consecutive week as employers hold on to workers in a tight labor market. The data on claims, a proxy for layoffs, will cover the week ended Oct. 9.

U.S. retail sales are expected to fall in September. U.S. consumers appear to be in decent financial shape, but Covid-related caution, rising prices and widespread supply-chain disruptions are tamping down purchases. The auto industry has been especially hard hit by a semiconductor shortage—separate data released earlier this month show U.S. vehicle sales in September fell to their lowest level since early in the pandemic.

By: WSJ staff

Source: Economy Week Ahead: Inflation, Jobless Claims, Retail Sales – TechiLive.in

.

Related Contents:

Biggest U.S. Retailers Charter Private Cargo Ships To Sail Around Port Delays

Source: Biggest U.S. Retailers Charter Private Cargo Ships to Sail Around Port Delays – WSJ

.

Related Contents:

East Asia’s Economies Face Slowing Growth and Rising Inequality, World Bank Warns

HONG KONG—Most countries in East Asia face major setbacks in recovering from the coronavirus, the World Bank said, adding to concerns that the resurgent pandemic will widen the economic divide between the region and the Western world.

With the notable exception of China, economic activity across the region has sputtered since the second quarter amid outbreaks of the Delta variant of the coronavirus and relatively slow vaccine rollouts, leading some multilateral institutions to cut growth forecasts for most economies in the region and warn about longer-term problems such as rising inequality.

Overall, the economy of East Asia and the Pacific is on track to expand by 7.5% this year, according to forecasts released Tuesday by the World Bank Group, up from its April forecast of 7.4%. But that improvement is all China, now expected to grow 8.5%, up from 8.1%. The outlook for the rest of the region worsened, with the bank now forecasting growth of just 2.5% this year, down from 4.4% in April.

“The economic recovery of developing East Asia and Pacific faces a reversal of fortune,” said Manuela Ferro, an economist at the Washington, D.C.-based institution. The U.S. economy is expected to outpace the world as a whole by expanding 6% this year, the Organization for Economic Cooperation and Development forecast last week.

In Asia, meanwhile, the pandemic’s persistence threatens to deliver “an impoverishing double whammy of slow growth and increasing inequality,” the World Bank warned, calling it the first time the region has faced such an outlook since the turn of the century. The bank sees 24 million more people below the poverty line in Asia this year than it projected earlier.

Last week, the Manila-based Asia Development Bank cut its growth outlook for developing Asia to 7.1%, from 7.3% in April, in large part because Covid-19 outbreaks led to major lockdowns that slowed manufacturing activity in Southeast Asia, a regional export hub. The ADB now forecasts 3.1% growth this year for Southeast Asia, where countries have struggled to ramp up vaccinations, down from 4.4% previously.

Myanmar, Malaysia and Cambodia are among the countries that have imposed lockdowns and social-distancing rules in recent months as Covid-19 infections surged. That has exacerbated global supply-chain disruptions, delaying production of finished goods from clothes to cars as well as commodities, including coffee and palm oil.

Vaccination rates have picked up in Asia, though they still trail the West. As of the end of August, less than one-third of the region’s population had been fully vaccinated, compared with 52% in the U.S. and 58% in the European Union, according to the ADB.

The World Bank predicts that most Asian countries will push vaccination rates up to 60% by the first half of 2022, which it says will allow for a fuller resumption of economic activity—though it won’t be enough to eliminate infections.

Moreover, Asia’s advantage in the global goods trade—a bright spot for the region for much of the past year—is expected to fade.

Export demand for a range of goods, such as machinery and consumer electronics, has slipped as companies and individuals from richer Western countries shift their spending patterns. Supply capacity in those markets has also started to normalize, while higher shipping costs risk further eroding appetite for imports from Asia.

“Global goods import demand peaked in the second quarter of 2020 and regional exports face stronger competitions as other regions recover,” says the World Bank report.

MARKET TRENDS

We have revised our forecast for China’s 2021 growth from 8.4% to 8.2% to account for recent COVID outbreaks and economic underperformance.,China is experiencing a rash of COVID outbreaks driven by the Delta variant. New cases have emerged in cities across the country, such as Nanjing, Ningbo, and Wuhan.,Several indicators signaled a slowdown in July relative to June: industrial value-added growth fell from 8.8% YOY to 8.3% YOY; retail sales growth slowed from 12.1% YOY to 8.5% YOY; urban unemployment rose from 5.0% to 5.1%.

KEY DEVELOPMENTS

Xi Jinping is shifting the government’s focus away from pursuing growth at any cost toward sharing the fruits of growth more evenly across society. This push is reflected in the rising use of the phrase “common prosperity,” which has started to appear frequently in communications across the government, schools, and media.,While the details behind the “common prosperity” push are not yet clear and policy implementation timelines may be extended, the implications of this shift will be wide-ranging.

In the coming years, China’s leadership will show less forbearance to wealthy individuals and large corporations; instead, it will expect them to support its goals for social equality through measures like direct transfers, donations, program development, and tax changes.,China’s regulatory landscape will also shift in favor of industries that are seen to serve lower-income segments and against those seen to serve higher-income segments. For example, companies serving rural and less developed parts of the country are likely to receive a helping hand, while companies selling luxury items and high-end real estate are likely to face increased barriers in the market.

By: Stella Yifan Xie at stella.xie@wsj.com

Source: East Asia’s Economies Face Slowing Growth and Rising Inequality, World Bank Warns – WSJ

.

Related Contents:

 

SoftBank Makes First Saudi Deal Together With Wealth Fund’s Unit

SoftBank Group Corp. has made its first investment in a company based in Saudi Arabia, partnering with a unit of the kingdom’s sovereign wealth fund to lead a $125 million financing for customer communication platform Unifonic.

Proceeds will be used to fund growth in the Middle East and expansion into Asia and Africa, Unifonic co-founder and Chief Executive Officer Ahmed Hamdan said in an interview. The company will also look at acquisitions in those regions to help it expand faster, he said.

The Unifonic deal is funded through SoftBank’s Vision Fund 2, and follows on from July’s $415 million fundraising by Dubai-based cloud kitchen startup Kitopi, which was SoftBank’s first in a business based in the United Arab Emirates and took that company’s valuation past $1 billion. Last month, it also co-led a financing round for Turkish e-commerce company Trendyol.

SoftBank’s foray in the Middle East comes with a growing number of so-called unicorn businesses worth at least $1 billion. More investors from outside are looking to bet on a shift to online services that has lagged other regions.

Read more on SoftBank’s deals in Middle East and Africa:

Swvl, a Dubai-based provider of mass transit solutions, said in July it expects to list on Nasdaq in a combination with special-purpose acquisition company Queen’s Gambit Growth Capital, with an implied equity value of about $1.5 billion.

Unifonic provides cloud-based software to send automated messages. As the pandemic spread, businesses turned to these services to send one-time passwords or shipping updates to customers. The company processed 10 billion transactions last year, charging a small fee for every message it sends to customers.

Hamdan declined to comment on the latest valuation, but said the company is forecasting sales for the year of more than $100 million and will start planning a listing on a global exchange in the next three years.

“Being able to attract one of the top international funds to invest in Saudi Arabia is a big milestone that will encourage more foreign direct investment to come into the digital and technology space,” Hamdan said. “We will optimize to list on a global market that can provide the best valuation.”

STV, Sanabil

Founded by Ahmed and his brother Hassan Hamdan in 2006, Unifonic was largely self-funded for the first decade. It raised $21 million in 2018 led by STV, a $500 million venture fund established by Saudi Telecom Co.

Sanabil, a unit of Saudi Arabia’s Public Investment Fund, was also an investor in the company. The PIF, as the wealth fund is known, put $45 billion into the first Vision Fund, which backed many of the largest technology startups including Uber Technologies Inc., Opendoor Technologies Inc. and DoorDash Inc.

“Over the next five years, we see the business growing by 10 times,” Hamdan said. “So we could process 100 billion transactions, impact 400 million people, and potentially be working with 50,000 companies.”

The valuation of Twilio Inc., which operates a similar business and is listed on the New York Stock Exchange, has more than tripled to almost $60 billion since the pandemic forced more transactions to move online.

By:

Source: http://bloomberg.com

.
.
Related Contents:

Why Big Investors Are Quitting Chinese Stocks – Bloomberg Wealth

Chinese companies once ticked a lot of boxes for investors trying to follow the market’s old adages.

Diversify, they say. Well then, why not look beyond the world’s largest economy to its second? Maybe you’ve got Facebook, Amazon and Google in your portfolio already. Shouldn’t you also be thinking about Tencent, Alibaba and Baidu? You can buy them on Robinhood, after all.

Check your politics at the door, they say. So in an era when China is a bipartisan flashpoint, why not tune out the rhetoric and focus purely on returns?

That all sounds promising in a theoretical world. But in the practical one we inhabit, investing in China has become riskier, particularly this summer. In this excellent breakdown, Matt Levine of Bloomberg Opinion explains in terms you will actually understand how opaque it is to own U.S.-listed China stocks.

When you buy shares of a Chinese company listed outside of China, what you are actually buying is “an empty shell that has certain contractual relationships with the Chinese company,” Levine explains.

Sound tenuous? SEC Chair Gary Gensler thinks so. The commissioner worries that Americans just don’t know enough about Chinese companies listed on U.S. exchanges. A few weeks ago, he blocked initial public offerings of certain firms until they boost disclosures of risks posed to shareholders.

This is all coming in the context of some serious developments in China. There are mounting concerns about human rights abuses in Xinjiang and the crackdown in Hong Kong. Both have led to negative views of the country globally and pose ethical and financial dilemmas for investors increasingly thinking about the moral side of investing.

And a Chinese clampdown on capitalism has spooked investors. At its most extreme, it erased $1.5 trillion from Chinese stocks. It has hit Chinese tech companies hard. It’s prompted superstar fund manager Cathie Wood to pare her China exposure. Wood’s ARKK ETF is now sitting with no exposure to shares of companies in the world’s second-biggest economy. Other high profile investors have taken similar steps, including George Soros and Paul Marshall, co-founder of one of the world’s largest hedge funds.

And it’s not just tech. In mid-June, Chinese President Xi Jinping indicated that private tutoring — a huge expense for middle-class Chinese families — should not be such a burden. The country went on to ban for-profit tutoring, a huge deal in the $100 billion education tech sector.

Yet with proof that there is an adage for almost any angle, I offer you another: Buck the consensus view. HSBC Chairman Mark Tucker says investment opportunities in China are “too big to ignore.” And while he wouldn’t recommend Chinese equities in general, one market expert in our latest “Where to Invest” series says he would recommend two ETFs that have exposure to Chinese solar and battery technology.

Where do these adages lead us? Probably to another: Trust yourself, not some old saying. — Charlie Wells

By:

Source: Chinese Stocks: Should You Invest in the World’s Second-Largest Economy? – Bloomberg

.

Related Contents:

Asia Becomes Epicenter of Market Fears Over Slowdown in Growth

Asia is emerging as the epicenter for investor worries over global growth and the spread of coronavirus variants. While their peers in the U.S. and Europe remain near record highs, Asian stocks have fallen back in recent months amid slowing Chinese economic growth and a glacial rollout of vaccines. The trend accelerated Friday with the benchmark MSCI Asia Pacific Index briefly erasing year-to-date gains for the second time in as many months.

“Asia was seen as the poster child in pandemic response last year, but this year the slow vaccination rollout in most countries combined with the arrival of the delta variant means another lost year,” said Mark Matthews, head of Asia research with Bank Julius Baer & Co. in Singapore. “I suspect Asia will continue to lag as long as vaccination rollouts remain at their relatively sluggish levels and high daily new Covid counts prevent them from lifting mobility restrictions.”

The growing jitters in the region comes as investor concerns shift from runaway inflation to an early withdrawal of stimulus by central banks. China’s authorities signaled earlier this week they may soon unleash more support for the economy, suggesting the world’s fastest-pandemic recovery may be weaker than it appears.

A fresh regulatory crackdown on Chinese tech stocks this week has also impacted investor sentiment in the region. The Hang Seng China Enterprises Index fell briefly into a technical bear market Friday, led by weakness in the sector.

While Asia bore the brunt of the retreat in global equities, havens in other asset classes from Treasuries to the yen have rallied, and the rotation toward economically-sensitive cyclical stocks from their high-priced growth counterparts continued to unwind.

“It’s a sign of how challenging the reopening process is,” Marvin Loh, State Street senior global market strategist, said in an interview with Bloomberg TV. “What the PBOC is going through as well as these variants that keep popping up around the world shows it’s going to be an uneven process. Maybe a normalization tightening policy is not necessarily going to be as fluid.”

Covid Challenge

Covid 19 remains a key challenge. In Japan, Tokyo has declared a renewed state of emergency to combat the resurgent virus, banning spectators from the Olympics and pushing the Nikkei 225 Stock Average toward a correction. South Korea is intensifying social distancing measures in Seoul while Indonesia is battling a virus resurgence that has crippled its health system.

“Asian equities are being particularly impacted by the rebound in coronavirus cases in the region, fears about the impact of that on regional growth and concern that we may now have seen the best of the rebound globally,” said Shane Oliver, head of investment strategy with AMP Capital Investors in Sydney. “Asian shares may have led the way on this but coronavirus concerns may also weigh on global shares generally.”

For the APAC region, recent trade deals will likely invigorate and deepen economic integration over the coming few years. In late 2020, China, Japan, South Korea, Australia, New Zealand and 10 Association of Southeast Asian Nations (ASEAN) members signed the Regional Comprehensive Economic Partnership (RCEP) agreement after eight years of negotiation.

When fully implemented in 2022, RCEP will represent the world’s biggest trading bloc, covering about 30% of global GDP and trade. In addition, China concluded a Comprehensive Agreement on Investment (CAI) with the EU on the last day of 2020. The EU is China’s second-largest trading partner and the CAI will cover broad market access, including to key sectors such as alternative energy vehicles and medical services.

Although these trade deals will not have an immediate economic impact, in the medium term the treaties should cement Asia as the world’s most dynamic economic bloc embracing free trade, investment and globalization. They should also help to counter the disruptive geopolitical tensions and encourage the post-pandemic economic recovery in Asia.

.
Critics:
The economy of Asia comprises more than 4.5 billion people (60% of the world population) living in 49 different nations. Asia is the fastest growing economic region, as well as the largest continental economy by both GDP Nominal and PPP in the world. Moreover, Asia is the site of some of the world’s longest modern economic booms, starting from the Japanese economic miracle (1950–1990), Miracle on the Han River (1961–1996) in South Korea, economic boom (1978–2013) in China, Tiger Cub Economies (1990–present) in Indonesia, Malaysia, Thailand, Philippines, and Vietnam, and economic boom in India (1991–present).
 
As in all world regions, the wealth of Asia differs widely between, and within, states. This is due to its vast size, meaning a huge range of different cultures, environments, historical ties and government systems. The largest economies in Asia in terms of PPP gross domestic product (GDP) are China, India, Japan, Indonesia, Turkey, South Korea, Saudi Arabia, Iran, Thailand and Taiwan and in terms of nominal gross domestic product (GDP) are China, Japan, India, South Korea, Indonesia, Saudi Arabia, Turkey, Taiwan, Thailand and Iran.
 
East Asian and ASEAN countries generally rely on manufacturing and trade (and then gradually upgrade to industry and commerce), and incrementally building on high-tech industry and financial industry for growth, countries in the Middle East depend more on engineering to overcome climate difficulties for economic growth and the production of commodities, principally Sweet crude oil.
 
Over the years, with rapid economic growth and large trade surplus with the rest of the world, Asia has accumulated over US$8.5 trillion of foreign exchange reserves – more than half of the world’s total, and adding tertiary and quaterny sectors to expand in the share of Asia‘s economy.

References

 

 

 

 

 

$900 Million Wealth Advisor Is Top Choice For Wealthy Asian Immigrants

1

The Los Angeles area is home to the third largest Chinese population in the U.S. behind New York and the San Francisco Bay Area, and it’s the perfect place for Sean Yu’s $900 million business.

Yu, 42, is managing director of The Sean Yu Group at Morgan Stanley Private Wealth Management where he oversees money for first-generation immigrants from China and Taiwan. Yu, who immigrated to the U.S. from Taiwan at the age of 12, says many of his clients are doctors living the American dream, and looking for ways to grow and maintain their wealth.

That particular segment of clients helped grow his business when he first launched it in 2003. More recently, he’s added clients from a new wave of immigrants who, unlike his early clients, are arriving to the U.S. with loads of money ready to be invested. Yu says they are typically Chinese nationals looking to access U.S. markets to help diversify their portfolios.

For the full list of Forbes‘ Best In-State Wealth Advisors and more, click here.

Managing money for international clients can be tricky. “Immigrants to this country are more used to brokerage-style advice from Singapore or Hong Kong” that tends to be more transactional, he says. “I tell them we are more like an endowment, looking at asset allocation and risk among varied factors,” Yu adds.

Wealthy clients often have high expectations from their financial advisors, and investors from China are accustom to big returns. Yu makes sure these clients know what they’re getting into as he aims to create a long-term relationship. “It is much harder to make money here, compared to in China, so in addition to focusing on that, I talk to clients a lot about adding community value with their money through a donor advised fund or similar type of vehicle. If they want to stay here for the long run, I want to help them make sure they know what is important to them and what isn’t.”

https://i0.wp.com/www.genesis-mining.com/files/banner/970x90/GM-970x90-BIT-ENG-Banner.gif?resize=777%2C72&ssl=1

It seems to be working. Yu estimates his average client, typically worth $30 to $50 million, gives him roughly $10 million to invest and manage. The firm, ten employees including Yu, works with 100 households and new clients are required to have at least $5 million in assets to join.

Yu relies on two investment advisors to help with retirement and other financial planning aspects of the business while he focuses primarily on client portfolios. Yu says his current asset allocation mix is 60% in bonds and 40% in stocks. Yu plans to allocate more assets towards private equity through trusts which he hopes will benefit his next generation of clients: the children and grandchildren of existing clients.

Follow me on Twitter or LinkedIn. Send me a secure tip.

I’m a wealth management staff writer at Forbes based in New York. Prior to joining Forbes, I was on the same beat for Private Asset Management. I also covered public policy and compliance for compliance reporter and the auto industry for the New York Daily News. A lifelong New Yorker, I got my M.A. from the Craig Newmark Graduate School of Journalism at the City University of New York. Email thoughts and tips to JBisnoff@Forbes.com. Follow me on Twitter at @JBisnoff.

Source:https://www.forbes.com/sites/jasonbisnoff/2020/02/10/900-million-wealth-advisor-is-top-choice-for-wealthy-asian-immigrants

 

Subscribe to France 24 now : http://f24.my/youtubeEN FRANCE 24 live news stream: all the latest news 24/7 http://f24.my/YTliveEN Visit our website : http://www.france24.com Subscribe to our YouTube channel : http://f24.my/youtubeEN Like us on Facebook : https://www.facebook.com/FRANCE24.Eng… Follow us on Twitter : https://twitter.com/France24_en\

3

 

 

 

%d bloggers like this: