China on Track to Hit Growth Target, but Economists Cautious China’s economy steadied in November, boosted by industrial production and retail sales, keeping growth on course to hit the government’s target for the year, though economists caution momentum is flagging.
(…) Value-added industrial output, a rough proxy for economic growth, edged up to 6.2% in November from a year earlier, compared with 6.1% in October, according to official data released Tuesday. (…)
Investment in factories, buildings and other fixed assets in nonrural areas climbed 8.3% in the January-November period from a year earlier, in line with expectations and matching the January-October period. Retail sales grew by a faster-than-expected 10.8% last month, accelerating from October’s 10.0% increase. (…)
Housing sales by value rose 16% year over year in November compared with October’s 38% increase, according to Wall Street Journal calculations based on data released by the statistics agency Tuesday. (…)
Industrial production Fixed-asset investment Retail sales
UPS, FedEx Struggle to Keep Up With Surge in Holiday Orders United Parcel Service and FedEx are straining to keep up with holiday shipping volumes that have blown past expectations, delaying the delivery of some of the millions of online orders shoppers have placed since Thanksgiving.
OPEC Pumped at Record High as Cartel Agreed Output Cut OPEC pumped at record high levels in November posing a challenge to the petroleum cartel’s plans to slash oil output to support crude prices, according to the International Energy Agency.
(…) As “OPEC was deciding to cut production, its crude output in November was 34.2 million barrels a day, a record high, and 300,000 barrels a day higher than in October,” the IEA said in its closely watched monthly report. (…)
The increase was partly driven by the group’s kingpin Saudi Arabia, which pumped at a record 10.63 million barrels a day in November, up 70,000 barrels a day from the previous month.
OPEC would now have to cut 1.7 million barrels a day to reach its ceiling of 32.5 million barrels a day, much more than the 1.2 million barrels a day initially envisioned. Saudi would also have to reduce its output by 572,000 barrels a day instead of 486,000 barrels a day.
Among the other countries producing more oil, Angola increased output by 160,000 barrels a day to 1.67 million barrels a day following the return of a shut oil field. Libya added 70,000 barrels a day to 580,000 barrels a day after blocked oil ports reopened.
As a result, global oil supplies in November edged up to a record high 98.2 million barrels a day, as a drop in non-OPEC output was more than offset by higher OPEC production, the Paris-based agency said.
Despite pledges to cut production by non-OPEC countries such as Russia by 558,000 barrels a day, the IEA downgraded its supply growth forecast for producers outside the cartel by only 255,000 barrels a day next year. The revision to growth of 220,000 barrels a day for non-OPEC will also come in part from a greater-than-expected decline in output in China. Oil output in the country, not a participant in the output cuts, is now forecast to fall by 240,000 barrels a day next year after a decline of 335,000 barrels a day this year.
The IEA said that if “OPEC and its non-OPEC partners stick to their pledges, global inventories could start to draw in the first half of 2017.”
Already, commercial inventories in industrialized countries fell in October for the third month in a row, it said. They have drawn 75 million since reaching a historical high in July, but remain 300 million above the five-year average.
Global oil demand growth is also better than expected and rose by 1.4 million barrels a day in 2016, 120,000 barrels a day above the IEA’s previous forecast, largely due to robust U.S. demand. Robust third-quarter demand in the U.S. and methodological changes for China were the main factors. The agency also upgraded its global oil demand growth forecast by 110,000 barrels a day in 2017 to 1.3 million barrels a day.
Bespoke has these two interesting charts today:
But there are caveats:
(…) Speaking at the National Oil-equipment Manufacturers and Delegates Society (NOMADS) in Houston a few months ago, IHS Markit’s associate direct for Plays and Basins, Reed Olmstead, poked holes in the notion that the industry has dramatically upended the cost of shale production. He broke down the cost reductions into a few categories: “One of these factors is high-grading, where operators are drilling only the better acreage,” said Olmstead. “This item accounted for about 35% of the break-even price reduction.” Arm-twisting oilfield service companies accounted for another 40% of the lower break-even price. Meanwhile, operational efficiencies – the things that would ensure cost reductions are sustained over time – only accounted for 20 percent of the savings, while learning in the field made up an additional 6 percent of the cost reductions. (…)
Mind the Shock as Auto Investing Turns Electric Battery-powered electric cars outsold gasoline ones at the dawn of the automotive age. In a decade or so they may well do so again. Investors need to watch out they don’t get caught on the wrong side of history.
(…) Mercedes-maker Daimler thinks the production cost of engine and battery technology might reach parity in 2025. But the tipping point for consumers, who also factor in subsidies and running costs, will be earlier. (…)
Goldman’s Gary Cohn Named Director of National Economic Council President-elect Donald Trump named Goldman Sachs Group Inc. President Gary Cohn as director of the White House National Economic Council.
(…) Mr. Trump, in a statement, said Mr. Cohn would be his “top economic adviser.”
“He will help craft economic policies that will grow wages for our workers, stop the exodus of jobs overseas and create many great new opportunities for Americans who have been struggling,” Mr. Trump said. “He fully understands the economy and will use all of his vast knowledge and experience to make sure the American people start winning again.” (…)
The NEC director is one of the most influential economic policy decision makers in the U.S. government, a division of the White House that has in the past been used to brainstorm and craft everything from banking rules to tax policy. At times, there can be tension between the NEC and Treasury Department over who is in the driver’s seat of economic policy decisions, and Mr. Cohn’s presence in the White House on a likely daily basis could boost his influence. (…)
J.P. Morgan Chief Executive James Dimon, whose name had been floated as a possible candidate for Treasury secretary, said it would be a “huge mistake” for the transition team to disqualify potential appointees because of private-sector ties.
“You want the best ballplayer on the field, and Gary’s an unbelievable ballplayer,” he said in an interview. “You’re talking about putting someone in the room who’s got wide global knowledge of capitalmarkets, trade, tax… hopefully he can help companies create jobs.” (…)
Mr. Cohn, a registered Democrat, isn’t vocally political and has given money to candidates of both parties. Colleagues described him as a nonideological pragmatist, and analysts said the selection indicated diminishing political risks for the biggest banks in a Trump administration. (…)