China Invited U.S. Trade Negotiators for More Talks China’s chief trade negotiator has invited his American counterparts for a new round of face-to-face talks, according to people briefed on the matter, as both sides are struggling to strike a limited deal to help de-escalate tensions.
(…) U.S. negotiators have indicated they would be willing to meet in person, according to the people, but that they would be reluctant to trek across the Pacific unless China makes it clear that it would make commitments on intellectual-property protection, forced technology transfers and agricultural purchases.
Chinese Commerce Ministry spokesman Gao Feng said Thursday that the two sides have been keeping in close touch. Chinese officials hope the in-person negotiations can take place before next Thursday’s Thanksgiving holiday in the U.S., but the U.S. side hasn’t committed to a date. (…)
-
Trump Blames Beijing for Lagging Trade Talks President says China isn’t making enough effort in negotiations, signals Apple might be spared fresh tariffs
(…) Asked if he would secure a pact by the end of the year, Mr. Trump said, “China would much rather make a trade deal than I would” and added, “I haven’t wanted to do it yet. Because I don’t think they’re stepping up to the level that I want.”
The president also said he was “looking at” exempting Apple from a coming round of China tariffs. “We have to treat Apple on a somewhat similar basis as we treat Samsung, ” he said. (…)
South Korea-based Samsung Electronics Co. , an Apple competitor, has shifted its smartphone production out of China. Because the devices are produced elsewhere, they aren’t subject to tariffs on China-made imports. (…)
-
China says it will strive to reach ‘phase one’ trade deal with U.S China will strive to reach an initial trade agreement with the United States as both sides keep communication channels open, the Chinese commerce ministry said on Thursday, in an attempt to allay fears talks might be unraveling.
(…) In a dinner speech in Beijing on Wednesday, Chinese Vice Premier Liu He said he was “cautiously optimistic” on a phase one deal, Bloomberg News said, citing people who attended the event ahead of a forum organized by Bloomberg LP.
Liu, China’s chief negotiator at the trade talks, separately told one of the attendees that he was “confused” about the U.S. demands, but was confident the first phase of a deal could be completed nevertheless, Bloomberg added. (…)
On Thursday, the ruling Chinese Communist Party’s main newspaper, the People’s Daily, urged the United States to “rein in the horse at the edge of the precipice” and stop interfering in Hong Kong matters and China’s internal affairs.
“If the U.S. side obstinately clings to its course, the Chinese side will inevitably adopt forceful measures to take resolute revenge, and all consequences will be borne by the United States,” it said in a front-page editorial.
FYI (from the FT):
Global Economy to Stagnate if Trade War Persists, OECD Warns The economy is at risk of settling into a low-growth rut without urgent action to roll back recently erected obstacles to trade and greater investment in tackling climate change, the OECD said.
In its quarterly report on the outlook for the global economy, the Paris-based research body said it continues to expect that world output of goods and services will increase this year at the slowest pace since the financial crisis. But it doesn’t now expect any pickup in global economic growth next year, and only a modest acceleration in 2021. (…)
The OECD lowered its forecast for global economic growth in 2020 to 2.9% from the 3% it expected in September. That would mark an unchanged pace of expansion from 2019. This time last year, the OECD had expected growth of 3.5% in each year. The OECD expects U.S. economic growth to slow to 2% next year and in 2021, from 2.3% this year.
That missing growth is largely attributable to trade disputes, Ms. Boone said, noting they would reduce global economic output by between 0.5% and 0.7% in both 2020 and 2021. (…)
The OECD expects the eurozone economy to grow 1.1% in 2020, almost half the U.S. rate, with a slight pickup to 1.2% in 2021. (…)
EARNINGS WATCH
We now have 468 company reports in. Actual earnings growth for the 468 companies having reported so far is –0.5% on revenue growth of +4.0%. The beat rate is 75%, the surprise factor +4.5% and the blended growth rate –0.4% (+2.2% ex-Energy), down from +0.3% on July 1
By comparison, after 468 reports during Q2, the beat rate was 73%, the surprise factor +5.5% and the blended growth rate +3.0%, up from +0.3% on July 1. Actual earnings growth for the 468 companies having reported was +3.2% on revenue growth of +4.9%.
Excluding the effect of buybacks, Refinitiv estimates that Q3 net income declined 2.4% on revenues up 3.8%, a marked deterioration from Q2 when net income rose 2.0% on revenues up 4.7%. Q4 net income is currently expected to decline 2.2% on revenues up 3.9%. This revenue growth estimate looks on the high side given the decelerating GDP growth rate and soft inflation numbers.
Buybacks will boost EPS by 2.3% in Q4 and 2.1% in the first half of 2020 from +2.0% in Q3’19 and +1.2% in Q2’19.
Trailing EPS are now $163.97, down from $164.29 at the same time in Q2 and 0.3% lower than the $164.43 and $164.31 at the end of August and September respectively.
Q4 estimates keep being ratcheted down to +0.1% (+2.3% ex-Energy from +5.0% 2 weeks ago). This is down from +4.1% on Oct.1.
SENTIMENT WATCH
Stocks are likely to slide in coming weeks because market-timers are too bullish
(…) How bullish are the market timers right now? Consider the average recommended equity exposure among a subset of several dozen short-term stock market timers that my firm monitors on a daily basis. (This average is what’s reported by my Hulbert Stock Newsletter Sentiment index, or HSNSI.) Right now, as you can see from the accompanying chart, this average stands at 65.6%. That’s higher than more than 95% of all daily readings since 2000. (…)
- NDR Crowd Sentiment Poll (NDR vis CMG Wealth): The current weekly sentiment reading is 69.4. It was 67.7 last week. The current regime is highlighted in yellow.
- NDR Daily Trading Sentiment Composite (NDR vis CMG Wealth):
-
Buy high/sell low chart (Ed Yardeni):
TECHNICALS WATCH
- 13/34–Week EMA Trend Chart (CMG Wealth)
Facing Real Estate Slowdown, Billionaire Regrets Building Megamansion Developer Jeff Greene is planning to relist the property for $129 million amid a glut of ultraluxury properties in Los Angeles.
Investors Lose Their Marbles as MSCI U-Turn Spurs 98% Stock Plunge Stock in marble miner ArtGo crashed 98% in a morning, shedding $5.7 billion of market value, after MSCI Inc. dropped plans to add the Hong Kong-listed company to its indexes.
(…) Two weeks ago, New York-based MSCI said it planned to include ArtGo in its MSCI China Index. But on Wednesday, the index compiler reversed course, saying ArtGo wouldn’t make the cut after “further analysis and feedback from market participants on investability.” (…)
Mr. Webb also said index compilers needed to improve their selection criteria, for example by examining if extremely high valuation multiples were justified. “It is too lazy to just look at market capitalization and turnover,” he said. He said this could lead to index-tracking funds suffering if bubbles burst. (…)
Mr. Webb has also criticized MSCI for including Hong Kong-listed China Ding Yi Feng Holdings Ltd. in its indexes. The company had rallied 8,500% in five years, despite reporting annual losses from 2013 to 2017. Since March, the stock has been suspended, and Hong Kong’s securities regulator has said it is investigating the price spike.
FTSE Russell, the index arm of London Stock Exchange Group PLC, added ArtGo to its FTSE Global Equity Index Series China index in September. (…)
So, indexers don’t do any more research than index investors do…