PVM Bits Extended | Venice mayor declares disaster as city hit by second worst high tide

Headlines

• Tariffs on EU cars and auto parts. The US faces a deadline today on whether to slap duties on European automobile imports, but automakers expect him to delay his decision by another six months

• Chinese telecoms giant Huawei to give staff $286 million in cash rewards for helping it ride out U.S. curbs

• Climate change is 'cracking open a nuclear tomb' built to contain American waste - The Runit Dome holds the radioactive waste produced by the nuclear bombs detonated on the Marshall Islands between 1946 and 1958

• Global governments 'still coming to terms' with America's energy abundance, State Department official says - US producing 13 million barrels per day!

• Fed's Barkin: Policy in a mildly accommodative place - Fed's Harker - We are about neutral in monetary policy right now, slightly accomodative

• WSJ - 'MSCI Europe is valued at a 30-year low versus US stocks.' (chart) – Saxo/P.Granny says it perfectly - P/B is directly linked to ROE and thus net income margin. The real story is that US has a larger share of technology companies with high profit margin. Secondly, US financials have higher profit margin than European financials. This explains the period 2007-2019. Will it change?

• JPMAM – The consequences of listening to the Armageddonists, 2010-2019 (chart)

• New Zealand did NOT cut rates as expected but the RBNZ noted in their statement "that the risks to the economy in the near term were tilted to the downside"

• Tesla's first European production plant is to be in Berlin

• Trump meets with Recep Tayyip Erdoğan. The US president hosts his Turkish counterpart amid tense relations between the two NATO allies over issues including Syria and Ankara’s purchase of a Russian missile defense system

• Big sacrifices are the only way SA will be saved, says Michael Sachs - Former Treasury official urges the government to make clear, and inevitably painful, political choices

• While all eyes will be on Fed Chair Jerome Powell's testimony before Congress this week, investors would be wise to keep an eye on the October CPI report for the latest on U.S. inflation

• Hong Kong banks urge staff caution amid protests: cancel meetings, watch your families, be safe

Markets : ….all very quiet/too quiet maybe, within relatively tight ranges, perhaps when we should be alert to news on trade or even HK

• JGB 10y yields also moved from -30bp to just -2bp, with many believing that BoJ also wants a steeper yield curve, to help local banks, similar belief in US, or even Europe

• Equity markets : SPX tested 3’100 just before Trump’s speech, which wasn’t all that friendly on China, nor on Europe regrading tariffs – but watch news today on this subject, and China as always. Europe P/B relative to U.S at 30y lows (chart)

• USD slightly firmer again, EURCHF notably lower too, EMG currencies weaker again, perhaps lead by BRL (last week) and ZAR again. CROSSJPY’s also struggling, perhaps a whiff off risk-off in the air

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EQUITIES / BONDS :

• Trump touts wage gains and factory jobs in Economic Club of New York speech

• Trump says dictators should 'come on in' to the US because it might be 'good' for the country

BofA Fund Manager Survey

Recession concerns vanish…..just like that?..astonishing really – but it is fair to say that many (too many) economic views put aside others that watch charts/momentum charts – with little or no consideration of how economic opinions/views change purely on price action of assets (mainly equity mkts)..as though it’s more important to follow opinions/words than where the money is actually flowing/price action, both matters

• Trolling Trump… Chinese telecoms giant Huawei to give staff $286 million in cash rewards for helping it ride out U.S. curbs

• Supreme Court will allow Sandy Hook families to move forward in suit against gun maker Remington

• Automation could replace up to 800 million jobs by 2035: Bank of America Merrill Lynch

• Tesla's first European production plant is to be in Berlin - bbc / spiegel

• Privacy fears over Google's project nightingale

While all eyes will be on Fed Chair Jerome Powell's testimony before Congress this week, investors would be wise to keep an eye on the October CPI report for the latest on U.S. inflation

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Eventually, at some point, it’ll be right, no doubt…but all these guys were a little early..to say the least.Not entirely sure how this chart was done to be honest – so take with a little care..ask JPMAM doe details! And it’s fair to add, that thanks to CB actions (QE, NIRP, ZIRP) and share buybacks is why..many of these guys been wrong

FX RELATED :

• TRY : Trump meets with Recep Tayyip Erdoğan. The US president hosts his Turkish counterpart amid tense relations between the two NATO allies over issues including Syria and Ankara’s purchase of a Russian missile defense system.

• ZAR : Big sacrifices are the only way SA will be saved, says Michael Sachs

COMMODITIES / ENERGY :

• Global governments 'still coming to terms' with America's energy abundance, State Department official says US producing 13 million barrels per day!

• Peak oil demand was always a misnomer. It's the plateau in consumption that we're really talking about, and the IEA says that's coming late next decade

OTHERS / POLITICS :

• Climate change (or something else, it’s just old?) is 'cracking open a nuclear tomb' built to contain American waste - The Runit Dome holds the radioactive waste produced by the nuclear bombs detonated on the Marshall Islands between 1946 and 1958

• Turkey threatens to release detained ISIS members to Europe over EU sanctions

• Proteste in Hongkong: "Am Rande des totalen Zusammenbruchs"

• HongKong rioters set fire to shops, threaten residents' lives

• The siege at a top Hong Kong university continued overnight. Pitched battles raged at the Chinese University of Hong Kong late into the night as protesters faced off with riot police. The standoff there continued this morning and at other universities, while transport networks were severely disrupted across the city.

• …they must have had a good day!.. High on the hog - wild boar dig up and destroy £17,000 worth of cocaine stashed in a forest in Tuscany

• UK election, some MPs fear Boris is sacrificing southern seats to win northern ones off Labour; David Gauke (former justice secretary, expelled by Boris) is standing as an independent

Have a great day

Team PVM