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Stock Markets Failed To Rally On China Trade Deal, Here’s Why

Topline: Although the U.S. and China have finally agreed on an initial deal that’s expected to defuse the 19-month-long trade war and result in a rollback of both existing and scheduled tariffs, the stock market didn’t surge on the news. Instead, markets ended the day largely flat: The S&P 500 finished the day up by less than 0.008%, while the Dow Jones Industrial Average rose 0.012%.

Here’s why stocks didn’t make headway on Friday’s trade news, according to market experts:

  • The market may have already priced in expectations for an agreement prior to Friday: “Stocks already ran up 7% in just the past two months alone on the belief that a deal would be signed,” notes Chris Zaccarelli, chief investment officer at Independent Advisor Alliance.
  • Some experts remain wary: “The devil remains in the details,” points out Bankrate senior economic analyst Mark Hamrick. “We await further word on purported aspects of the agreement including purchases of U.S. farm goods, intellectual property protections, technology transfers and access to China’s financial sector.”
  • “Investors are right to be skeptical,” says Joseph Brusuelas, RSM chief economist. “There’s a limited framework to the deal, since both sides just wanted to agree and avoid the looming tariff deadline on December 15th.”
  • “Contrary to what many believed—and were told in news stories—there is no immediate tariff relief, just an agreement to eventually rollback tariffs later as phase two negotiations progress,” Zaccarelli points out.
  • “I’m still suspicious of a major rollback on existing tariffs,” Nicholas Sargen, economic consultant at Fort Washington Investment Advisors, similarly argues. “Don’t rule out a selective rollback, since Trump needs to maintain bargaining power—he has to keep his powder dry.”
                                   
                                   

Crucial quote: “Is this deal enough to give the US economy an added lift? I doubt it because to get that added lift we need businesses to ramp up capital spending—and they’re going to stay on the sidelines until there’s greater clarity and less uncertainty,” Sargen says. “If trade uncertainty was behind us, we’d have gotten a bigger pop in the market.”

What to watch for: “Both sides need to figure out translation and legal framework first—and if they don’t come to an agreement on that this deal could fall apart very quickly,” Brusuelas says. “We’ll have to see if it survives the weekend and into next week.”

Key background: Officials from both sides have been working tirelessly to hammer out a deal ahead of the looming December 15 tariff deadline. Reports came in on Thursday that negotiators had agreed to terms, and President Trump signed off on them later in the day. Wall Street cheered the good news, sending the stock market to new record highs, though the market’s reaction was notably more tempered on Friday, despite further confirmations that an agreement had been reached.

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I am a New York—based reporter for Forbes, covering breaking news—with a focus on financial topics. Previously, I’ve reported at Money Magazine, The Villager NYC, and The East Hampton Star. I graduated from the University of St Andrews in 2018, majoring in International Relations and Modern History. Follow me on Twitter @skleb1234 or email me at sklebnikov@forbes.com

Source: Stock Markets Failed To Rally On China Trade Deal, Here’s Why

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Hodges Funds’ Eric Marshall discusses opportunities in the stock market amid the US-China trade war with L Catterton Managing Partner Michael J. Farello and Yahoo Finance’s Adam Shapiro, Scott Gamm and Julie Hyman. Subscribe to Yahoo Finance: https://yhoo.it/2fGu5Bb About Yahoo Finance: At Yahoo Finance, you get free stock quotes, up-to-date news, portfolio management resources, international market data, social interaction and mortgage rates that help you manage your financial life. Connect with Yahoo Finance: Get the latest news: https://yhoo.it/2fGu5Bb Find Yahoo Finance on Facebook: http://bit.ly/2A9u5Zq Follow Yahoo Finance on Twitter: http://bit.ly/2LMgloP Follow Yahoo Finance on Instagram: http://bit.ly/2LOpNYz

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Chinese E-Commerce Giants Report Booming Singles Day Sales

A big screen shows the online sales for e-commerce giant Alibaba surpassed RMB 100 billion or US14 billion at 01:03:59 after the Nov. 11 Tmall Shopping Festival started midnight in Shanghai, China Monday, Nov. 11, 2019. (Chinatopix Via AP)

(BEIJING) — Chinese e-commerce giants Alibaba and JD.com reported a total of more than $50 billion in sales on Monday in the first half of Singles Day, an annual marketing event that is the world’s busiest online shopping day.

Singles Day began as a joke holiday created by university students in the 1990s as an alternative to Valentine’s Day for people without romantic partners. It falls on Nov. 11 because the date is written with four singles — “11 11.”

Alibaba, the world’s biggest e-commerce brand by total sales volume, adopted the day as a sales tool a decade ago. Rivals including JD.com and Suning joined in, offering discounts on goods from smartphones to travel packages.

E-commerce has grown rapidly in China due to a lack of traditional retailing networks and government efforts to promote internet use. Alibaba, JD.com, Baidu and other internet giants have expanded into consumer finance, entertainment and offline retailing.

On Monday, online retailers offered discounts on goods from craft beer to TV sets to health care packages.

Alibaba said sales by merchants on its platforms totaled 188.8 billion yuan ($27 billion) between midnight and noon. JD.com, the biggest Chinese online direct retailer, said sales reached 165.8 billion yuan ($23.8 billion) by 9 a.m.

Electronics retailer Suning said sales passed 1 billion yuan ($160 million) in the first minute after midnight. Dangdang, an online book retailer, said it sold 6.8 million copies in the first hour.

Alibaba kicked off the event with a concert Sunday night by Taylor Swift at a Shanghai stadium.

Chinese online spending is growing faster than retail overall but is weakening as economic growth slows and consumers, jittery about Beijing’s tariff war with Washington and possible losses, put off big purchases.

Online sales of goods rose 16.8% over a year earlier in the first nine months of 2019 to 5.8 trillion yuan ($825 billion), according to government data. That accounted for 19.5% of total consumer spending. Growth was down from an annual average of about 30% in recent years.

By JOE McDONALD

Source: Chinese E-Commerce Giants Report Booming Singles Day Sales

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Nov.11 was Singles’ Day in China, the country’s busiest online shopping day of the year. More than 35 billion RMB was spent on two online platforms, Tmall.com and Taobao.com, which are owned by China’s e-commerce giant Alibaba. A total of 170 million transactions were made during the day.

The Fear Fund: Nancy Davis’ ETF Aims To Protect Investors From Scary Stuff, Like Recession And Inflation

Stocks have recovered from last fall’s crash, low interest rates stretch out to the horizon and the VIX volatility index is half what it was at Christmas. Sit back and coast to a comfortable retirement.

No, don’t, says Nancy Davis. This veteran derivatives trader runs Quadratic Capital Management, where her somewhat contrarian view is that investors, all too complacent, are in particular need of insurance against financial trouble.

The Quadratic Interest Rate Volatility & Inflation Hedge ETF, ticker IVOL, is designed to provide shelter from both inflation and recession. Its actively managed portfolio mixes inflation-protected Treasury bonds with bets, in the form of call options, on the steepness of the yield curve.

Those options are cheap, for two reasons. One is that, at the moment, there is no steepness: Yields on ten-year bonds are scarcely higher than yields on two-year bonds. The other is that the bond market is strangely quiet. Low volatility makes for low option prices.

                                   

“Volatility has been squashed by central bank money printing,” Davis says, before delving deep into the thicket of option mathematics. If volatility in interest rates rebounds to a normal level, her calls will become more valuable. Alternatively, she would get a payoff if the yield curve tilts upward, which it has a habit of doing when inflation surges, stocks crash or real estate is weak.

If IVOL is all about peace of mind for the investor, it’s all about risk for its inventor. Davis, 43, has poured her heart, soul and net worth into Quadratic, of which she is the founder and 60% owner. If the three-month-old exchange-traded fund takes off, she could become wealthy. If it doesn’t, Quadratic will struggle.

The fund showed its worth in the first week of August, climbing 2% as the stock market sank 3%. But it needs a much bigger shock to stock or bond prices in order to get big. It has gathered only $58 million so far. A crash had better arrive soon; IVOL’s call options expire next summer. Quadratic, moreover, needs to somehow scale up without inspiring knockoff products from ETF giants like BlackRock.

Davis was a precocious trader. As an undergraduate at George Washington University, she took grad courses in financial markets while earning money doing economic research for a consulting firm. She put some of her paychecks into a brokerage account. “Some women love to buy shoes,” she says. “I love to buy options.”

This was in the 1990s, a good time to indulge a taste for calls. Davis made out-of-the-money bets on technology stocks, which paid off well enough to cover the down payment, in 1999, on a New York City apartment. Nice timing.

There may be a sour grape, but there’s also truth in her current philosophy that hedge funds are not such a great deal for investors. ETFs, she says, are more liquid, more transparent and cheaper.

Davis spent a decade at Goldman Sachs, most of it on the firm’s proprietary trading desk, then did a stint at a hedge fund. At 31 she quit to actively manage two kids. Returning to Wall Street after a three-year hiatus, she worked for AllianceBernstein and then did what few women do, especially women with children: She started a hedge fund.

Quadratic, whose assets once topped $400 million, used a hedge fund platform at Cowen & Co. When Cowen ended the partnership last year, Davis set about reinventing her firm. There may be a sour grape, but there’s also truth in her current philosophy that hedge funds are not such a great deal for investors. ETFs, she says, are more liquid, more transparent and cheaper.

IVOL’s 1% annual fee is stiff, but Davis says it’s justified for a fund that is not only actively managed but also invested in things that ordinary folk cannot buy. If you want to duplicate her position in the Constant Maturity Swap 2-10 call due July 17, you’d need to know what banker to ring for a quote, because this beast is not traded on any exchange. Each of these calls, recently worth $7.71, gives the holder the right to collect a dollar for every 0.01% beyond 0.37% in the spread between ten-year interest rates and two-year interest rates. The spread has to move a long way up before the option is even in the money. But at various times in the past the spread has hit 2%. Could it do that again? Maybe, at which point the option pays $163.

Starting a firm like Quadratic is like buying an out-of-the-money call: long odds, big payoff. Davis is doing what she was doing in college. You can’t stop a trader from trading.

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Source: The Fear Fund: Nancy Davis’ ETF Aims To Protect Investors From Scary Stuff, Like Recession And Inflation

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Nancy Davis, founder and CIO of Quadratic Capital Management, introduces her new ETF that takes advantage of interest volatility and inflation expectations: IVOL. In this interview with Real Vision’s co-founder & CEO Raoul Pal, Davis deconstructs the structure of the ETF, highlights the cost of carry associated with the strategy, and discusses her macro outlook and where she thinks the yield curve is headed next. Filmed on May 29, 2019. Watch more Real Vision™ videos: http://po.st/RealVisionVideos Subscribe to Real Vision™ on YouTube: http://po.st/RealVisionSubscribe Watch more by starting your 14-day free trial here: https://rvtv.io/2KHDkoc About Trade Ideas: Top traders unveil their specific plans for cashing in on the market’s next move. In these short videos, our traders cut straight to the point and lay out their thoughts on the best risk-reward trades of the moment. Each episode concludes with a visual recap of trade details including profit-loss potential and trade duration. About Real Vision™: Real Vision™ is the destination for the world’s most successful investors to share their thoughts about what’s happening in today’s markets. Think: TED Talks for Finance. On Real Vision™ you get exclusive access to watch the most successful investors, hedge fund managers and traders who share their frank and in-depth investment insights with no agenda, hype or bias. Make smart investment decisions and grow your portfolio with original content brought to you by the biggest names in finance, who get to say what they really think on Real Vision™. Connect with Real Vision™ Online: Twitter: https://rvtv.io/2p5PrhJ Instagram: https://rvtv.io/2J7Ddlw Facebook: https://rvtv.io/2NNOlmu Linkedin: https://rvtv.io/2xbskqx The ETF Play on Interest Rate Volatility (w/ Nancy Davis) https://www.youtube.com/c/RealVisionT… Transcript: For the full transcript visit: https://rvtv.io/2KHDkoc NANCY DAVIS: So we invest with options with a directional bias on everything. So our new product that we recently launched, IVOL, is the first inflation expectations and interest rate volatility fund out there. It’s a exchange traded product. RAOUL PAL: Does anybody even know what that means? NANCY DAVIS: So what we do is for an investor, if you’re an equity investor, you want to have tail protection, for instance. It’s hard to own equity volatility as an asset allocation trade because it decays so aggressively. So it’s a more benign way to carry volatility as an asset class from the long side using fixed income vol. It’s not as sensitive as equity vol, but it’s a lot lower level. Like, the vol we’re buying is 2, 2 basis points a day in normal space. So it’s very, very cheap, in my opinion, and it gives you a way to have an asset allocation to the factor risk of volatility without having as much decay as you would in the equity space. And then for a fixed income investor, the big risk there is obviously Central Bank policy, fiscal spending, trade wars, as well as inflation expectations. And we saw a need to really give a fixed income investor a way to capitalize on the deflation that’s been priced into the market for the next decade. I mean, so current US inflation is around 2%. The five-year break-even is 1.59%. So that’s an opportunity in an option space. And so it’s long options with TIPS. And so that gives investors exposure. It gives you inflation-protected income, but also options that are sensitive to inflation expectations. And we think it’s pretty– you know, you’re never going to time these macro calls perfectly. But given the Central Bank in the US is so focused right now on increasing inflation expectations, and there’s been so much talk about the yield curve inverting– and that’s kind of crazy. If you step back and you’re like, all right, we have a $3.9 trillion balance sheet. We have a fiscal budget deficit. We have unclear or radically changing monetary policy. If you look where we are now with so many cuts priced into the interest rate markets in the US versus where we were four months ago, it’s wildly different. And at the same time, interest rate volatility is literally at generational lows. Equity, while people talk about equity vol, I think VIX today is 17. It’s low, I guess, in the context. But when you look at a percentile, like one-year vol over the last decade in equities, it’s about the 70th percentile. So it might be low, but it doesn’t mean it’s cheap. Interest rate volatility is literally at, like, 2, 1, you know, 0.

Stocks Making The Biggest Moves After Hours: Cisco NetApp and Vipshop

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Cisco fell nearly 8% in after-hours trading after announcing better than expected fourth-quarter earnings and weaker-than-expected guidance. The enterprise technology company reported adjusted fourth-quarter earnings per share of 83 cents on revenue of $13.43 billion. Analysts had expected adjusted earnings per share of 82 cents on revenue of $13.38 billion, according to Refinitiv.

For the first quarter, Cisco said it anticipates adjusted earnings per share between 80 cents and 82 cents. The company said it expects flat to 2% revenue growth. Those figures are below analyst projections for earnings of 83 cents per share and revenue growth of 2.5%, according to Refinitiv consensus estimates.

Cisco CEO Chuck Robbins said the company’s business in China dropped 25% amid the U.S.-China trade war and early signs of macro shifts that didn’t occur in the previous quarter.

Shares of NetApp jumped nearly 4% after the data services and management company reported promising first-quarter earnings. The company reported adjusted earnings per share of 65 cents on revenue of $1.24 billion. Analysts had expected earnings per share of 58 cents on revenue of $1.23 billion, according to Refinitiv. NetApp CEO George Kurian said gross margin and cost structure improvements will help the company “navigate the ongoing macroeconomic headwinds”

Vipshop soared 8% after announcing higher-than-expected earnings for the second quarter. The Guangzhou, China-based company reported adjusted second-quarter earnings per share of $1.58 yuan on revenue of $22.74 billion yuan. Analysts had expected earnings per share of $1.01 yuan on revenue of $21.52 billion yuan, according to Refinitiv. Eric Shen, chairman and chief executive officer of Vipshop, cited the company’s growing numbers of active users and acquisition of Shanshan Outlets.

Pivotal Software shares skyrocketed nearly 70% in extended trading after VMware said it will acquire all outstanding Class A shares at $15 in cash. That price represents an 80% premium on  Pivotal’s closing price of $8.30 per share.

By : Elizabeth Myong

Source: https://www.cnbc.com/

 

Trade War Is Hiding China’s Big Problems

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Getty

The ongoing US-China trade war is a distraction from China’s big problems: the blowing of multiple bubbles and the country’s soaring debt, which will eventually kill economic growth.

It happened in Japan in the 1980s. And it’s happening in China nowadays.
The trade war is one of China’s problem that dominates social media these days. It’s blamed for the slow-down in the country’s economic growth, since its economy continues to rely on exports. And it has crippled the ability of its technology companies to compete in global markets.
But it isn’t China’s only problem. The country’s manufacturers have come up with ways to minimize its impact, as evidenced by recent export data. And it will be solved once the US and China find a formula to save face and appease nationalist sentiment on both ends.
One of China’s other big problems , however, is the multiple bubbles that are still blowing in all directions. Like the property bubble—the soaring home prices that makes landlords rich, while it shatters young people’s dreams of starting a family, as discussed in a previous piece here.

New Home Prices 2015-19

New Home Prices 2015-19

Koyfin

Unlike the trade war, that’s a long-term problem. Low marriage rates are followed by low birth rates and a shrinking labor force, as the country strives to compete with labor-rich countries like Vietnam, Sri Lanka, the Philippines and Bangladesh—to mention but a few.
Then there’s the unfavorable “dependency rates” — too few workers, who will have to support too many retirees.
And there’s the impact on consumer spending, which could hurt the country’s bet to shift from an investment driven to a consumption driven economy.
Japan encountered these problems over three lost decades, even after it settled its trade disputes with the US back in the 1980s. China experience many more.
Meanwhile, there’s the infrastructure investment bubble at home and abroad, as discussed in a previous piece here. At home infrastructure investments have provided fuel for China’s robust growth. Abroad infrastructure investments have served its ambition to control the South China Sea and secure a waterway all the way to the Middle East oil and Africa’s riches.

City overpass in the morning

City overpass in the morning

Getty

While some of these projects are well designed to serve the needs of the local community, others serve no need other than the ambitions of local bureaucrats to foster economic growth.
The trouble is that these projects aren’t economically viable. They generate incomes and jobs while they last (multiplier effect), but nothing beyond that—no accelerator effect, as economists would say.
That’s why this sort of growth isn’t sustainable. The former Soviet Union tried that in the 1950s, and it didn’t work. Nigeria tried that in the 1960s ;Japan tried that in the 1990s, and it didn’t work in either of those cases.
That’s why bubbles burst – and leave behind tons of debt.
Which is another of China’s other big problem s.
How much is China’s debt? Officially, it is a small number: 47.60%. Unofficially, it’s hard to figure it out. Because banks are owned by the government, and give loans to government-owned contractors, and the government owned mining operations and steel manufacturers. The government is both the lender and the borrower – one branch of the government lends money to another branch of government, as described in a previous piece here.
But there are some unofficial estimates. Like one from the Institute of International Finance (IIF) last year, which placed China’s debt to GDP at 300%!
Worse, the government’s role as both lender and borrower concentrates rather than disperses credit risks. And that creates the potential of a systemic collapse.
Like the Greek crisis so explicitly demonstrated.
Meanwhile, the dual role of government conflicts and contradicts with a third role — that of a regulator, setting rules for lenders and borrowers. And it complicates creditor bailouts in the case of financial crisis, as the Greek crisis has demonstrated in the current decade.

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I’m Professor and Chair of the Department of Economics at LIU Post in New York. I also teach at Columbia University. I’ve published several articles in professional journals and magazines, including Barron’s, The New York Times, Japan Times, Newsday, Plain Dealer, Edge Singapore, European Management Review, Management International Review, and Journal of Risk and Insurance. I’ve have also published several books, including Collective Entrepreneurship, The Ten Golden Rules, WOM and Buzz Marketing, Business Strategy in a Semiglobal Economy, China’s Challenge: Imitation or Innovation in International Business, and New Emerging Japanese Economy: Opportunity and Strategy for World Business. I’ve traveled extensively throughout the world giving lectures and seminars for private and government organizations, including Beijing Academy of Social Science, Nagoya University, Tokyo Science University, Keimung University, University of Adelaide, Saint Gallen University, Duisburg University, University of Edinburgh, and Athens University of Economics and Business. Interests: Global markets, business, investment strategy, personal success.

Source: Trade War Is Hiding China’s Big Problems

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Private Sector GDP Growth is Kind of Anemic

Today’s GDP report got me curious about something: how does private sector GDP compare to total GDP? That is, if you pull out government contributions to GDP growth, what does purely private-sector growth look like? Here it is:

Private sector growth has been declining since the start of the expansion, and that decline has picked up speed over the past two years. It’s no wonder President Trump was so eager to agree to sizeable increases in the federal budget this week. He knows perfectly well that his tax cut has worn off and he needs all the help he can get from government spending to prop up an increasingly anemic private sector. For the next year, anyway.

Personal consumption was up a healthy 4.3 percent, but business investment plummeted -5.5 percent. Exports were down and imports were flat. Federal government spending added more than usual to GDP by about 0.4 percentage points. State government spending was also higher than average, by about 0.2 percentage points. If government spending had been at normal levels, GDP would have increased 1.5 percent instead of 2.1 percent. Inflation was higher than last quarter.

Overall, this is an OK but not great GDP report for the private sector, saved only by higher government spending.

The most remarkable thing about Donald Trump is how eerily stable his approval rating is. Here is 538’s chart over the past year:

After the Republican tax cut passed in late 2017, Trump’s approval rating rose to 41 percent and it’s stayed within two points of that ever since. I don’t know if this is good or bad—bad for Trump, I suppose, since that’s a tough re-elect number—or if there’s much Trump can do to improve it. But it’s definitely unusual. It sure looks like nearly everyone has their mind made up about Trump and isn’t likely to change it.

 

Source: Private sector GDP growth is kind of anemic

Here’s Why We Suddenly Stopped Hearing About A Recession

Topline: Economists—especially after the stock market took a dive in December—had been warning that a recession was coming, and possibly imminent. But a combination of low-interest rates and an improving labor market has quickly silenced those fears — and complicating the hopes of Donald Trump’s foes in 2020.

  • The risk of a recession decreased last week after the Federal Reserve declined to raise interest rates this year, said Brian Rose, senior Americas economist at UBS Global Wealth Management’s Chief Investment Office.
  • Combined with a stock market bounce-back and a growing economy, investors are now optimistic — a big shift from earlier this year.
  • Major economic predictors showing an increased threat of a recession have scaled back it’s predictions in recent weeks.
  • Asterisk: If President Donald Trump escalates the trade conflict with China by adding more tariffs on Chinese imports—particularly auto parts—the economy could suffer, increasing the chances of a recession, Rose said.

Earlier this year, half of economists surveyed by the National Association for Business Economics predicted a recession in 2020. Another poll of economists by the Wall Street Journal in January put the chances of a recession at 25 percent—the highest since 2011.

Coverage piled on (a few examples: “4 Signs Another Recession Is Coming―And What It Means For You,” “A recession is coming, but don’t flee markets yet,” “The Next Recession Is Coming. Now What?”), with many predicting bad news for Trump (Politico: “Trump advisers fear 2020 nightmare: A recession”). Some industries girded for the worst, like online lenders, who tightened its rules to lessen risk.

And then, suddenly, the panic eased. Now Goldman Sachs economists say there is only a 10 percent chance of a recession. What happened?

The biggest factor in that shift came when the Federal Reserve opted not to not raise interest rates, a pleasant surprise to economists. Rose said lower-than-expected inflation led the Fed to keep rates modest.

The economy, too, has grown, allaying recession fears. According to the latest job numbers, the U.S. has the lowest unemployment rate in 50 years.

“It is hard to have a recession when unemployment is this low and interest rates are this low,” Richmond Federal Reserve president Tom Barkin said on Wednesday.

The biggest risk of recession comes from Trump himself. If he increases tariffs on more goods than the $200 billion in Chinese imports he’s already promised, the risk of a recession increases, Rose said. As trade negotiations remain rocky, investors are increasingly concerned.

“Left on it’s own, there’s little risk to the economy,” he said. “The real risk of a recession comes from policy, particularly trade.”

Barring another recession, positive economic growth should mean good news for Trump in 2020. But as it stands, Trump is still relatively unpopular (his approval rating sits at 46 percent, although that is a high for him). And most forecasters agree the economy won’t grow as much as the White House says it will.

“A normal president with these economic numbers would have job approval somewhere in the vicinity of 60%,” Republican pollster Whit Ayres told the Los Angeles Times. “But Donald Trump is a nontraditional president, and he has, at least at this point, severed the traditional relationship between economic well-being and presidential job approval.”

Still, a recent CNN poll found that 56 percent of Americans approve of Trump’s handling of the economy. And while many Democrats haven’t focused on the latest job numbers, Senator Amy Klobuchar (D-MN), who is running for president, tried spinning the numbers a different way during an appearance on CNN, crediting President Obama with job growth.

I’m a San Francisco-based reporter covering breaking news at Forbes. Previously, I’ve reported for USA Today, Business Insider,

Source: Here’s Why We Suddenly Stopped Hearing About A Recession

The Scariest Economic Chart In The World Right Now May Come From China – Pedro Nicolaci da Costa

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Move over, U.S. economy: The real action in global forecasting these days lies in figuring out what is happening in the world’s second largest economic powerhouse, China.Wall Street is increasingly worried about slowing growth in foreign economies despite strong economic numbers at home. Federal Reserve Chairman Jerome Powell, too, recently identified weakening overseas economies as a major risk to the U.S. outlook. And these days, when investors say overseas, they really just mean China. After all, other emerging economies are viewed as too small individually for potential domestic crises to have large international spillovers…………….

 

 

 

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What Does It Cost To Live Like The Richest People In The World – Andrea Murphy

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Bad news—of a very mild variety—for anyone with a couple billion tucked away in the underground lair out back: Living a truly posh lifestyle has gotten juuust a bit pricier over the last 12 months. Our basket of 40 luxury goods is up 2% since last year, nearly half a point above the increase from 2017. Since we began tracking it in 1982, the Cost of Living Extremely Well Index (CLEWI) has outpaced inflation by an average 2.3%. This year’s increase, though, was more than half a point below that of the Consumer Price Index over the same period…….

Read more: https://www.forbes.com/sites/andreamurphy/2018/10/17/what-does-it-cost-to-live-like-the-richest-people-in-the-world/

 

 

 

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Why Tech Workers And Global Companies Are Choosing Canada – Salim Teja

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Canada was the business world’s best-kept secret. Progress and innovation in Canada — especially in artificial intelligence, clean technology and health care — has been monumental for decades. Yet, we stayed humble through those years of innovation. That is, until the country embraced its position as a destination for commercial investment and a world leader in artificial intelligence.

Now, Canada is empowering new companies to compete on the global stage, hosting massive technology industry events featuring the world’s best innovators and attracting international talent to work on world-changing innovations.

Over the past year, I have seen talent begin to flow strongly from south to north. More than half of the high-growth ventures we support in the MaRS ecosystem reported a significant rise in applicants from the United States last year.

The number of skilled foreign workers seeking employment in Canada has skyrocketed in recent years and the country’s stock rises further each time the Trump administration pushes its restrictive immigration agenda.

Scaling firms actively hiring from overseas include: Element AI, a tenant in the MaRS building that has created 250 new jobs in Canada’s artificial intelligence sector after raising $137.5 million in first-round of funding last year; Drop, a consumer rewards platform that MaRS provides free advisory services to, which had 10 employees at the end of 2017 and recently reached a headcount of 30 in the midst of an aggressive hiring spree following a $21 million Series A raise

Eventmobi, another company MaRS provides free advisory service to which creates apps for events and last year grew to nearly 100 staff with plans to add another 45 positions this year. It’s not just talent heading to startups. Students and scientists are also arriving in record numbers. Recently, 24 top academics from around the world were recruited by the Canada 150 Research Chairs Program, which is spending $117 million on seven-year grants for leading researchers.

They include Wendy Hui Kyong Chun, a professor at Brown University known for her work on fake news and Alán Aspuru-Guzik, a Harvard chemistry professor working on quantum computing and clean energy. A fair amount has been written about America’s technology industry brain drain over the past few years, but I’d argue that Canada’s recent brain gain has more to do with what’s working here – like inclusive public policies – than what’s not working elsewhere.

Through my own work with startups, corporates and government partners, I’ve seen clear evidence that talented engineers, tech entrepreneurs and investors are actively choosing to locate or launch in Canada – especially Toronto. Canada’s public and commercial sectors place a premium on growing entrepreneurial communities and connecting them with the best business and academic institutions. Toronto, Vancouver and Montreal are growing as hubs for startups.

The expanding reputations of these cities is due to their proximity to key corporate markets in the U.S., local population diversity and prestigious academic institutions. In fact, the greater Toronto region is home to thousands of startups and multinational companies. There is also a strong stream of technical and nontechnical recruits from the University of Toronto, a MaRS partner, and the University of Waterloo welcomed by businesses each year.

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Canada’s warmth toward people and startups looking for opportunity has never been more visible – and impactful. The country’s open commercial atmosphere also helps turn ideas into successful businesses and connect people to amplify their work on a global stage. I believe that’s why a growing list of tech giants and enterprises like Google’s Sidewalk Labs, Uber, a tenant in the MaRS building and Microsoft, a MaRS partner, continue to launch and grow significant operations in Canada.

Increased access to venture capital and public funding grants for small businesses have also created a moment of opportunity for startup growth in Canada. The combination of competitive tax rates and business costs and a strong economy form a climate ripe for success. Further, moving your startup to Canada is now easier than ever thanks to government programs designed to welcome promising immigrant-entrepreneurs into a thriving marketplace.

Indeed, Canada is home to some of the world’s best technologists, a welcome business environment and a localized innovation community with global reach. I believe that’s why startup conference Collision has decided to move here from New Orleans in 2019, Amazon shortlisted Toronto for its second headquarters and why the nation provides a compelling environment for young companies to grow.

Canada offers prime real estate to business leaders, venture capitalists, entrepreneurs and a diverse set of people looking for opportunity. If the country was an entrepreneur, that would be its elevator pitch on why people and ventures should choose Canada for talent, technology and trade opportunities.

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