Monday, November 28, 2016

Today's Headlines

  • China to Curb Megadeals as Regulators Tame Record Overseas Spree. (video) China is planning sweeping curbs on its companies’ overseas acquisitions, including barring most foreign investments of $10 billion or more, people with knowledge of the matter said, as it seeks to tame a record dealmaking spree that’s alarmed officials from Washington to Berlin. The government will generally suspend several categories of deals while still leaving room for some strategic transactions to be executed, the people said, asking not to be identified because the information is private. It will restrict overseas investments of at least $1 billion in industries outside a buyer’s core business, as well as foreign property deals of $1 billion or more by state-owned enterprises, according to the people.
  • China Cites ‘The Art of War’ as Trump Signals Trade Battle. (video) There’s a Chinese saying that stems from the philosophy in Sun Tzu’s ancient text “The Art of War”: You can kill 1,000 enemies, but you would also lose 800 soldiers. Centuries later, the proverb is suddenly apt again, being mentioned frequently in discussions around Beijing. Now, it highlights the potential damage U.S. President-elect Donald Trump could inflict if he makes good on his threat to start a trade war with China, the world’s second-biggest economy.
  • Investor Who Backed Brexit Sees Euro Breaking Up Within 5 Years. Jim Mellon stood out among investors in 2016 as a rare, public backer of Britain’s exit from the European Union. Now, the chairman of the Burnbrae Group is forecasting another breakup. Mellon, who was cited as a supporter of the “Leave” campaign by pro-Brexit lawmaker Michael Gove, predicts the euro will become a future casualty of a rising anti-establishment tide, causing the currency union to splinter within the next five years.
  • OECD Lifts Global Growth Forecasts on Expected Trump Stimulus. (video) The OECD lifted its global growth forecasts for 2017 and predicted expansion in 2018 will reach its fastest pace in half a decade as Donald Trump’s planned fiscal stimulus provides a boost to major economies. World gross domestic product will now expand 3.3 percent next year, up by 0.1 percentage point from September’s forecast, the Organization for Economic Cooperation and Development said in a semi-annual report. The Paris-based organization sees the global economy expanding 3.6 percent in 2018, the fastest pace since 2011.
  • Draghi Warns U.K. Likely to Suffer Most If Hard Brexit Hits.
  • Italian Lenders Slide on Vote Worries to Drag Down Europe Stocks. (video) Italian lenders declined on rising concerns about risks to their financial stability from the upcoming referendum, bringing an end to a three-week rally in European shares. Banca Monte dei Paschi di Siena SpA, the lender burdened by bad loans and under pressure to raise fresh money, tumbled 14 percent. UniCredit SpA and Intesa Sanpaolo SpA fell at least 3.2 percent, dragging the FTSE MIB Index to one of the worst performances in western-European markets. The Financial Times reported yesterday that as many as eight Italian banks risk failing if Renzi loses the vote. The Stoxx Europe 600 Index declined 0.8 percent at the close in London, with the volume of shares changing hands about 17 percent lower than the 30-day average.
  • OPEC’s Last Cut Shows Oil Market Could Get a Whole Lot Messier. (video) Anyone planning to trade the outcome of this week’s OPEC meeting might consider the lessons of the group’s last production cut. Then take a deep breath. In December 2008, as oil demand and prices slumped during the global financial crisis, the Organization of Petroleum Exporting Countries, announced a record output reduction. What was supposed to stabilize the market initially sowed more confusion as the group’s statement bundled together previously announced supply curbs and omitted a breakdown of how much each member would cut -- details of which leaked out days later. While the deal did eventually halt the slide in prices, the Chicago Board Options Exchange Crude Oil Volatility Index, a common measure of market turbulence, stayed near a record over the following two months amid doubts that OPEC members would comply with their new targets.
  • Trump Says He May ‘Terminate’ Relaxing of Cuba Restrictions. (video) 
  • Google(GOOG), Facebook(FB) Leave Rivals Struggling for Digital ‘Nirvana’.
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