Good Friday 30 Mar 2018


Shows:  watch Nightly Business Report. watch PBS NewsHour. watch Bloomberg Technology.
Spacex: watch Falcon 9 Launch, Adding to Iridium’s NEXT Constellation. More. Report
FX:        chart USD Today. USD Year. AUD Today. AUD Year.


In Portfolioticker today

read_this Hey Jarvis, how did we go today?

Markets in USA and Australia are closed for the Good Friday Holiday. While currency markets continued to operate today, our portfolio valuations closed with yesterday’s values.

Selected Tech News Headlines

  • Amazon Severs Ties With Top Lobbying Firms in Washington: “Amazon.com Inc. cut ties with Washington’s biggest lobbying firm and brought on new advisers following passage of the tax overhaul bill last year and in the face of new challenges in the age of President Donald Trump. The shakeup occurred last Friday, a week before Trump briefly sent Amazon’s stock tumbling with a Twitter attack on the world’s largest online retailer. Trump charged that Amazon doesn’t pay enough in state and local sales taxes, hurts retailers and gets an unfair edge on the back of the U.S. Postal Service. Amazon ended its relationship with Akin Gump Strauss Hauer & Feld LLP, the law firm that attracts more lobbying revenue than any other K Street operation, and Squire Patton Boggs, last Friday, according to a person familiar with the decisions. At the latter firm, Amazon’s lobbyists included former Senate Majority Leader Trent Lott. In their place, Amazon hired Paul Brathwaite of Federal Street Strategies LLC and Josh Holly of Holly Strategies Inc., according to the person. Both formerly worked as outside lobbyists for Airbnb Inc. and Oracle Corp. at the defunct Podesta Group, which was once dubbed the “King of K Street,” before becoming entangled in Special Counsel Robert Mueller’s investigation into Russian meddling in the 2016 election.” Bloomberg
  • Under Armour says 150 million MyFitnessPal accounts breached: “Under Armour Inc said on 29 Mar 2018 that data from some 150 million MyFitnessPal diet and fitness app accounts was compromised in Feb 2018, in one of the biggest hacks in history, sending shares of the athletic apparel maker down 3% in after-hours trade.” Reuters
  • U.S. regulator approves SpaceX plan for broadband satellite services: “The top U.S. telecommunications regulator on Thursday gave formal approval to a plan by Elon Musk’s SpaceX to build a global broadband network using satellites. “This is the first approval of a U.S.-licensed satellite constellation to provide broadband services using a new generation of low-Earth orbit satellite technologies,” the Federal Communications Commission said in a statement. The system proposed by SpaceX will use 4,425 satellites, the FCC said.” Reuters

FX: USD/AUD

USD

DXY movements
^ Bloomberg Dollar Spot Index (DXY) movements today (mouseover for 12 month view) Chart: Bloomberg

AUD

AUD movements
^ AUD movements against the USD today (mouseover for 12 month view) Chart: xe.com

Oil and Gas Futures

U.S. crude production rose by 6,000 barrels per day (bpd) in Jan 2018 to 9.964 million barrels per day, the Energy Information Administration said in a monthly report on Friday. EIA Report

The agency revised the Dec 2017 report up by 9,000 barrels to 9.958 million bpd. The gains were driven by a rise in offshore production, which rose 5 percent to 1.62 million bpd from 1.55 million bpd. Production decreased modestly in the major oil producing states of Texas and Alaska, while North Dakota’s production rose slightly to 1.16 million bpd a day, EIA said.

U.S. natural gas production in the lower 48 states dipped by 1.4 percent to 86 billion cubic feet per day (bcfd) in January, though that still represented a 9.9 percent increase from a year ago, according to EIA’s monthly production report. Production fell by 2.8 percent in Texas, the top natural gas producer, to 22 bcfd, and was also lower in Pennsylvania and Louisiana.

Production in Oklahoma rose to 7.51 bcfd, a new record for that state, the third biggest producer in the lower 48.Reuters

flag_usa US: Net International Investment Position: Q4 and Year 2017

Press Release Extract [us_iip]

Fourth Quarter 2017

The U.S. net international investment position decreased to −$7,845.8 billion (preliminary) at the end of the fourth quarter from −$7,739.7 billion (revised) at the end of the third quarter, according to statistics released by the Bureau of Economic Analysis (BEA). The $106.1 billion decrease reflected a $727.2 billion increase in U.S. assets and an $833.3 billion increase in U.S. liabilities.

us_iip1_20180330

The $106.1 billion decrease in the net investment position reflected net financial transactions of –$52.4 billion and net other changes in position, such as price and exchange-rate changes, of –$53.8 billion.

The net investment position decreased 1.4 percent in the fourth quarter, compared with an increase of 3.3 percent in the third quarter. The net investment position decreased an average of 5.0 percent per quarter from the first quarter of 2011 through the second quarter of 2017.

U.S. assets increased $727.2 billion to $27,632.8 billion at the end of the fourth quarter, mostly reflecting increases in portfolio investment and direct investment assets.

  • Assets excluding financial derivatives increased $809.8 billion to $26,010.4 billion. The increase resulted from other changes in position of $658.8 billion and financial transactions of $151.0 billion. Other changes in position mostly reflected:
    1. foreign equity price increases that raised the value of portfolio investment and direct investment equity assets and
    2. the appreciation of major foreign currencies against the U.S. dollar that raised the value of foreign- currency-denominated assets in dollar terms.

    Financial transactions mostly reflected net acquisition of portfolio investment debt securities and direct investment equity assets.

  • Financial derivatives decreased $82.6 billion to $1,622.5 billion, mostly in single-currency interest rate contracts and foreign exchange contracts.

us_iip2_20180330

U.S. liabilities increased $833.3 billion to $35,478.6 billion at the end of the fourth quarter, mostly reflecting increases in portfolio investment and direct investment liabilities.

  • Liabilities excluding financial derivatives increased $910.5 billion to $33,884.4 billion. The increase resulted from other changes in position of $706.3 billion and financial transactions of $204.2 billion. Other changes in position mostly reflected U.S. equity price increases that raised the value of portfolio investment and direct investment equity liabilities. Financial transactions reflected net incurrence of liabilities in all major investment categories.
  • Financial derivatives decreased $77.1 billion to $1,594.2 billion, mostly in single-currency interest rate contracts and foreign exchange contracts.

us_iip3_20180330

Year 2017

The U.S. net international investment position increased to −$7,845.8 billion (preliminary) at the end of 2017 from −$8,318.4 billion at the end of 2016. The $472.6 billion increase reflected a $3,783.4 billion increase in U.S. assets and a $3,310.8 billion increase in U.S. liabilities.

U.S. assets increased $3,783.4 billion to $27,632.8 billion at the end of 2017, mostly reflecting increases in portfolio investment and direct investment assets that were partly offset by a decrease in financial derivatives.

  • Assets excluding financial derivatives increased $4,369.9 billion to $26,010.4 billion. The increase resulted from other changes in position of $3,157.5 billion and financial transactions of $1,212.4 billion. Other changes in position mostly reflected:
    1. foreign equity price increases that raised the value of portfolio investment and direct investment equity assets and
    2. the appreciation of major foreign currencies against the U.S. dollar that raised the value of foreign-currency-denominated assets in dollar terms.
  • Financial transactions reflected net acquisition of assets in all major investment categories, except reserve assets.

  • Financial derivatives decreased $586.5 billion to $1,622.5 billion, mostly in single-currency interest rate contracts and foreign exchange contracts.

us_iip4_20180330

U.S. liabilities increased $3,310.8 billion to $35,478.6 billion at the end of 2017, mostly reflecting increases in portfolio investment and direct investment liabilities that were partly offset by a decrease in financial derivatives.

  • Liabilities excluding financial derivatives increased $3,864.3 billion to $33,884.4 billion. The increase resulted from other changes in position of $2,276.4 billion and financial transactions of $1,587.9 billion. Other changes in position mostly reflected U.S. equity price increases that raised the value of portfolio investment and direct investment equity liabilities. Financial transactions reflected net incurrence of liabilities in all major investment categories.
  • Financial derivatives decreased $553.5 billion to $1,594.2 billion, mostly in single-currency interest rate contracts and foreign exchange contracts.

Bureau of Economic Analysis, “U.S. Net International Investment Position. Fourth Quarter and Year 2017“, 30 Mar 2018 (08:30) More

flag_usa Spacex Launches 10 Iridium Satellites With Reused Falcon 9 Rocket

SpaceX has successfully launched its Iridium -5 mission, which carries 10 satellites to add to Iridium’s NEXT global communications constellation. This is the fifth set of 10, out of a total of 75 that SpaceX is launching for client Iridium, and today’s launch used a first stage Falcon 9 booster originally employed last October for the third Iridium NEXT satellite launch.

The launch included reuse of a flight proven rocket, but it did not include a recovery attempt for the first stage booster this time around. SpaceX attempted to recover one half of the fairing used during the launch, which is the protective metal shielding that covers the cargo as the rocket blasts through the atmosphere en route to space. The fairing alone is worth around $6 million, and SpaceX CEO Elon Musk has indicated that it would be relatively easy to refurbish this part for repeat flight, provided their recovery plan works.

SpaceX was once again unsuccessful in recovering the fairing, per Musk. The parafoil that controls the fairing’s descent twisted during its return to Earth, and so the component crashed into the water a high velocity instead of alighting softly on the barge as intended.

Meanwhile, the 10 satellites were deployed as planned to their target low-Earth orbit, and will join the NEXT constellation, providing commercial communications capabilities to Iridium clients on the ground.

This is SpaceX’s fifth Falcon 9 launch of 2018, and its sixth launch of the year overall when you include the Falcon Heavy launch which took place in February. That was a significant milestone for the company, and additional Falcon Heavy launches are planned for later this year, as well as another Falcon 9 launch on April 2: The twelfth commercial resupply mission SpaceX will fly for the International Space Station.TechCrunch

flag_japan Japan update

Housing Starts. Feb 2018

Housing starts in Japan declined by 2.6% year-on-year in Feb 2018, after the prior month’s three year-low of a 13.2% drop and less than market expectations of a 3.9% fall. Construction fell at a softer pace for rented houses (-4.6% from -10.8% in Jan 2018) and two-by-four (-3% from -3.4%) while rebounded for built for sale (3.4% from -27.5%). Meantime, dwelling slumped for private houses (-6.1% from 0.1%) and continued to decrease for prefabricated (-8% from -7%).

Housing Starts in Japan averaged 2.56% from 1961 until 2017, reaching an all time high of 67.63% in Mar 1972 and a record low of -43.96% in Sep 2007.TradingEconomics

Unemployment. Feb 2018

The unemployment rate in Japan rose slightly to 2.5% in Feb 2018 from 2.4% in Jan 2018 while markets estimated 2.6%. Meanwhile, the jobs-to-applicants ratio unexpectedly slipped to 1.58 from 1.59 in the preceding month and missing consensus of 1.6.

Unemployment Rate in Japan averaged 2.73% from 1953 until 2018, reaching an all time high of 5.50% in Jun 2002 and a record low of 1% in Nov 1968.TradingEconomics

Currency: USD/JPY

JPY movements
^ JPY movements against the USD over the past month (mouseover for inverse) Chart: xe.com

Stockmarket: Nikkei 225


^ Nikkei 225 movements today [Chart: Google Finance]

flag_china China update

Trade Forecast

China will import USD 8 trillion of goods and attract USD 600 billion of foreign investment in the next 5 years, Foreign Minister Wang Yi said on Friday. China’s overseas investment will reach USD 750 billion in the next 5 years, the foreign ministry said in a statement on its website, citing Wang at a conference in Vietnam.

Wang said China would widen market access and open up its financial sector.

The practices of unilateralism and protectionism would be a form of regression, and not only would they lead to a dead end, they would damage one’s own interests, he said.Reuters

Industrial Profits. Jan-Feb 2018

In the first two months of 2018, the profits made by industrial enterprises above the designated size achieved 968.9 billion yuan, a year-on-year increase of 16.1 percent.

In the first two months, the profits of state-holding industrial enterprises above the designated size gained 291.81 billion yuan, an increase of 29.6 percent year-on-year; that of collective-owned enterprises reached 3.69 billion yuan, an increase of 2.8 percent; that of joint-stock enterprises stood at 682.95 billion yuan, up by 21.0 percent; that of foreign funded enterprises, and enterprises funded from Hong Kong, Macao and Taiwan achieved 225.96 billion yuan, increased by 2.0 percent; and that of private enterprises gained 283.08 billion yuan, an increase of 10.0 percent.

In the first two months, the profits of mining and quarrying reached 877.9 billion yuan, an increase of 42.1 percent year-on-year; that of manufacturing was 810.0 billion yuan, an increase of 12.5 percent; that of production and distribution of electricity, heat, gas and water reached 71.11 billion yuan, up by 35.2 percent.

In the first two months, within 41 branches of industrial divisions, the industrial profits of 29 industrial divisions increased year-on-year, that of 1 remained at the same level, and that of 11 decreased. In view of the profit growth of major industries, the profits of mining and washing of coal increased by 19.6 percent year-on-year, that of extraction of petroleum and natural gas increased by 1.4 times, that of manufacture of textile up by 3.0 percent, that of processing of petroleum, coal and other fuels increased by 17.6 percent, that of manufacture of chemical raw material and chemical products increased by 20.1 percent, that of manufacture of non-metallic mineral products increased by 56.8 percent, that of manufacture and processing of ferrous metals increased by 97.7 percent, that of manufacture of general-purpose machinery up by 8.5 percent, that of manufacture of special-purpose machinery up by 15.6 percent, that of production and supply of electric power and heat power up by 38.3 percent, that of processing of food from agricultural products decreased by 0.1 percent year-on-year, that of manufacture and processing of non-ferrous metals decreased by 11.9 percent, that of manufacture of motor vehicles decreased by 1.8 percent, that of manufacture of electrical machinery and equipment decreased by 5.3 percent, that of manufacture of computer, communication equipment and other electronic equipment decreased by 8.2 percent.

In the first two months, the revenue from principal activities of industrial enterprises above the designated size reached 15.9 trillion yuan, increased by 10.0 percent year-on-year. The costs of principal activities were 13.3 trillion yuan, up by 9.5 percent. The profit rate of revenue from principal activities was 6.1 percent, an increase of 0.33 percentage points year-on-year.

By the end of February, the total assets of industrial enterprises above the designated size was 105.7 trillion yuan, increased by 7.4 percent year-on-year; the total liabilities reached 59.6 trillion yuan, increased by 6.0 percent; the total owners’ equity was 46.1 trillion yuan, increased by 9.3 percent. The asset-liability ratio was 56.3 percent, a decrease of 0.8 percentage points year-on-year.

By the end of February, the total volume of receivable accounts for industrial enterprises above designated hit 12.6 trillion yuan, went up by 9.7 percent year-on-year. The total value of finished products for industrial enterprises accounted for 3,878.6 billion yuan, increased by 8.6 percent.

In the first two months, the costs for per-hundred-yuan turnover of principal activities stood at 83.98 yuan, a decrease of 0.33 yuan year-on-year; the expenses for per-hundred-yuan turnover of principal activities stood at 8.42 yuan, an increase of 0.06 yuan; the revenue from principal activities brought by per hundred yuan assets was 90.2 yuan, an increase of 2.1 yuan; the revenue from principal activities per capita was 1173 thousand yuan, an increase of 119 thousand yuan; the turnover days of finished goods were 17.4 days, a decrease of 0.2 days; the days sales outstanding hit an average of 47.4 days, a decrease of 0.2 days.

National Bureau of Statistics of China, “Industrial Profits Increased in the First Two Months of 2018“, 30 Mar 2018 More

Currency: USD/CNY

CNY movements
^ CNY movements against the USD over the past month (mouseover for inverse) Chart: xe.com

Stockmarket: CSI300

CSI300 movements
^ CSI 300 movements today [Chart: Google Finance]