David Fuller and Eoin Treacy's Comment of the Day
Category - General

    U.S. Oil Vanishing From Chinese Tariffs Reveals America's Clout

    This article from Bloomberg News may be of interest to subscribers. Here is a section:

    The removal of U.S. crude from goods targeted by Chinese tariffs is a sign that America has become too big to ignore in the oil market.

    Less than two months after threatening to impose levies on imports of U.S. crude, the world’s biggest oil buyer has now spared the commodity. Only fuels such as diesel, gasoline, propane will be hit with duties on Aug. 23, according to China’s commerce ministry. That’s after the nation’s buyers, including top refiner Sinopec, began shunning American supplies to avoid the risk of tariffs.

    China’s original plan to target U.S. crude came at an inopportune time for the country’s buyers. Sinopec’s trading unit, Unipec, was embroiled in a dispute with Saudi Arabia, saying the producer’s prices were costly and cutting purchases just as it was boosting American imports. Two months on, refiners were faced with the risk of supply disruptions from Iran to Venezuela and paying more to take advantage of booming U.S. output.

    “The U.S. has been and will remain the main source of incremental crude production globally,” said Den Syahril, an analyst at industry consultant FGE. “With several new refineries starting up over the next couple of years, China would thus be wary of taking a decision that could end up severely hurting its domestic refining industry.”

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    Mazda, Suzuki, Yamaha Motor apologise for improper vehicle tests

    This article by Maki Shiraki for Reuters may be of interest to subscribers. Here is a section:

    Mazda Motor Corp, Suzuki Motor Corp and Yamaha Motor Co improperly tested vehicles for fuel economy and emissions, the Japanese government said on Thursday, revealing fresh cases of compliance failures by manufacturers.

    The results came to light after the government had ordered the automakers to check their operations after revelations of improper testing at Subaru Corp and Nissan Motor Co last year.

    The conduct of automakers globally has come under intense scrutiny after Germany’s Volkswagen AG (VOWG_p.DE) admitted in 2015 to installing secret software in hundreds of thousands of U.S. diesel cars to cheat exhaust emissions tests, and that as many as 11 million vehicles could have similar software installed worldwide.

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    Some Mutual Funds Have Avoided the Recent Tech Pain

    This article by Danielle Chemtob for the Wall Street Journal may be of interest to subscribers. Here is a section:

    The average large-cap mutual fund holds 1.3% of its portfolio in Facebook, 0.2 percentage points less than its benchmark; 2% in Amazon, compared with the benchmark’s 2.4%; and 0.3% in Netflix, versus the benchmark’s 0.5%. The funds are overweight only in Alphabet, by 0.19 percentage points.

    Those slim allocations helped shield the funds from the recent losses suffered by Facebook and Netflix that bled over into the broader tech sector and S&P 500. Large-cap growth funds have outperformed the broad stock market index over the past month and year to date, rising 3.9% and 11% over those periods, according to Morningstar. That’s versus gains of 3.3% and 6.6%, respectively, for the S&P 500.

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    Australia Holds Key Rate as Central Bank Sounds Caution on China

    This note by Micheal Heath for Bloomberg may be of interest to subscribers. Here it is in full:  

    The RBA has kept rates low in expectation the stance will gradually tighten the labor market and spur wage gains sufficiently to drive faster inflation. But outside strong economic growth and increased demand for construction workers amid an infrastructure boom, there are few signs of this emerging.

    “The bank’s central forecast for the Australian economy remains unchanged,” Lowe said. “GDP growth is expected to average a bit above 3 percent in 2018 and 2019. This should see some further reduction in spare capacity.”

    The RBA maintains its next move is more likely to be up than down; Lowe, since taking the helm in September 2016, has consistently said that an increase will only come once the economy is near full employment and inflation closer to the central bank’s 2-3 percent target midpoint. Markets aren’t pricing in a rate increase for at least another year, according to bets by swaps traders.

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    Crypto's $600 Billion Crash Hits New Low as Bitcoin Pain Spreads

    This article by Eric Lam for Bloomberg may be of interest to subscribers. Here is a section:

    The SEC postponed its decision on whether to approve the Bitcoin ETF, dealing a blow to bulls who had bet a green light from the regulator would help sustain last month’s tenuous rally. Optimists are counting on the wider adoption of cryptocurrencies to support prices, but regulators and many institutional investors have remained wary amid concerns over security and market manipulation.

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    Musings From the Oil Patch August 7th 2018

    Thanks to a subscriber for this edition of Allen Brooks’ ever interesting report for PPHB which may on this occasion focuses on the impending IMO 2020 regulations for ship emissions. Here is a section: