Barron's : Alibaba: Hitting the Jackpot

--> Alibaba's shares will likely price at $66 or higher. The stock could initially move up to $80, and one analyst has a price target of $100.

Alibaba: Hitting the Jackpot

Alibaba could be the hottest deal of the year when the company comes public this week. Shares could pop 20% and rise from there.

Alibaba Group is the next big one. The giant Chinese Internet retailer is expected to come to market with a value of $160 billion. It could easily jump 20% or more.

Alibaba dominates Chinese e-commerce and already is highly profitable, with net income from operations of more than $1 billion in the June quarter on revenue of $2.5 billion. It's more established and profitable than either Facebook (ticker: FB) or Twitter (TWTR) when they went public. And it earns more than either eBay (EBAY) or Amazon.com (AMZN), its closest U.S. peers.

The combination of high growth, strong profitability, a huge market opportunity, and a reasonable valuation at about 23 times next fiscal year's estimated earnings should translate into ample demand when Alibaba (BABA) debuts late this week, selling 320 million American depositary shares in a range of $60 to $66 a share.

The Alibaba bull case is that e-commerce, just 8% of Chinese consumption in 2013, will capture a growing portion of Chinese retail sales as consumer spending continues to rise. Consumption accounts for about 35% of Chinese gross domestic product, roughly half that of the U.S. And bricks-and-mortar retailing is far less developed in China than it is here, especially outside of major cities.

Alibaba fans say China may essentially leapfrog physical retailing and move to e-commerce. Many global branded companies are opting to sell through Alibaba's Tmall platform rather than undertake a costly buildout of Chinese stores. The company accounts for an astounding 80% of Chinese e-commerce, versus less than 20% for Amazon.com in the U.S. And Amazon has much stronger competition.

Assuming the initial public offering is priced at the high end of the range, Alibaba would be valued at $163 billion. It wouldn't be surprising to see the pricing range raised, lifting the high end to about $70 a share. There's talk that the deal already is oversubscribed and that institutional investors have been telling the underwriting group to leave some appreciation potential if the range gets increased.

A $21 billion offering admittedly is a lot to digest. Alibaba probably will be the largest IPO in history, but there's usually plenty of money from retail and institutional buyers for an attractively priced deal. Like Twitter, Alibaba may play it conservatively and underprice its offering, thus avoiding a repeat of Facebook's disastrous 2012 IPO.

How much will Alibaba fetch when its shares begin trading? It's tough to say, but given that many expected it to come public with a $200 billion market value, an $80 stock price looks possible

At $66 a share, Alibaba would be valued at about 29 times projected earnings of $2.24 a share in its fiscal year ending in March 2015, a discount to Facebook and Amazon.com, as well as the other leading Chinese Internet companies, Baidu (BIDU) and Tencent Holdings (TCEHY). Investors appear to be using Tencent, the Chinese Internet-messaging leader, as the main benchmark for Alibaba.

The fiscal-2015 earnings estimate comes from Atlantic Equities analyst James Cordwell, who initiated coverage last week with an Overweight rating and a $100 price target. "Competition is likely to remain intense, but Alibaba's scale, broad reach beyond Tier [1 and 2] cities, and brand support should enable it to broadly maintain its share of the Chinese e-commerce market, which we expect to grow at a 30%-plus compound annual growth rate over the next three years." He sees profits of $2.85 a share in the March 2016 fiscal year and $3.54 in fiscal 2017.

If Alibaba gets valued at 28 times the fiscal-2016 estimate, which would put it in line with Tencent, its shares would trade around $80.

IF ALIBABA SHARES TRADE sharply higher, it could lift Yahoo! (YHOO), since the bulk of Yahoo's value is its 22% stake in Alibaba. Yahoo! shares were up 6% last week, to about $42, continuing a recent rally amid expectation of strong post-IPO share gains for Alibaba. Three key questions about Yahoo! are: What Alibaba share price is now embedded in the stock; will investors sell Yahoo! to buy Alibaba once the pure play becomes available; and can Yahoo! work out a way to sell in a tax-efficient way an estimated $25 billion to $30 billion of Alibaba shares that it will hold after the IPO?

Yahoo's Alibaba stake is worth $35 billion at a price of $66, and closer to $40 billion if Alibaba trades up to $80; the latter is equal to $40 per Yahoo! share. Yahoo's other key assets, notably cash and a stake in Yahoo! Japan (4689.Japan), are worth another $8 a share (assuming a full tax bite). The core Yahoo! business could be worth $8 a share or so. This suggests support for Yahoo! around the current price. Yahoo! plans to sell about 122 million shares in the Alibaba IPO and retain 402 million.

FORMED 15 YEARS AGO by Jack Ma, Alibaba operates two major Chinese e-commerce sites: Taobao and Tmall. The larger Taobao, which accounted for 70% of the company's gross retail sales volume in its fiscal 2014, is an online platform for smaller retailers and other businesses to access Chinese consumers. Tmall is a virtual mall that mainly connects larger branded companies to consumers. Taobao generates the vast bulk of its revenue from advertising-related services, including keyword bidding and display positioning. Tmall gets its revenue from online advertising and seller commissions. Ma's stake in Alibaba is worth about $13 billion.


The company emphasizes that it's a platform for third parties, making it more like eBay than Amazon. 'We do not engage in direct sales, compete with our merchants, or hold inventory," Alibaba said in its prospectus. Gross merchandise volume over the Alibaba retail marketplaces totaled $296 billion in the year ended in June.

The negatives include corporate governance—control of the company will remain with a partnership that includes Executive Chairman Ma—and the status of Alipay, the PayPal-like online-payment system that processes most of Alibaba sales. Alipay is not controlled by Alibaba. There's also the danger that comes from operating in China, a country run by an authoritarian and mercurial government that controls the judiciary.

Another issue is fulfillment. While Alibaba operates a sophisticated logistics platform that coordinates deliveries nationwide, it relies on third parties for delivery. This has greatly reduced its capital-spending needs, but it has left Alibaba at a potential disadvantage with its smaller rival, JD.com (JD), which has fulfillment centers throughout China. Alibaba's average delivery time is three days, while JD.com offers same-day delivery in 43 cities and next-day delivery in another 256 cities, according Atlantic Equities' Cordwell.

While JD.com may have faster delivery, its infrastructure buildout has been costly, and it's currently operating in the red. Alibaba is believed to have told investors at road shows that the three-day delivery time is an average, and that it can make deliveries in leading coastal cities on the same or the next day.

There are few bigger global opportunities than Chinese e-commerce. As the leader in that market, Alibaba looks like a good bet.

FT : Way to Pay

Way to Pay

Apple Pay has put a certain type of Silicon Valley start-up under the spotlight: payments companies. The biggest of these is Square, valued at $6bn after a new round of funding Friday. Far from being cowed by Apple’s move into its turf, Square’s valuation has risen by a fifth in the last six months. In fact its valuation growth is accelerating:

What Square does is provide retailers with point of sale systems (credit card readers), and it plans to make its systems compatible with Apple Pay. This could be expensive; Square does not currently support the near field communication chips that Apple plans to use. For every payment processed –reportedly $30bn annually – the company takes a cut of 2.75% or more, implying roughly $825m in revenues (most of this is paid on to credit card companies and banks). Square’s valuation, at seven times revenues, could look attractive if Apple Pay is simply expanding the pie for all parts of the payments value chain. But what if it’s not? Apple tends to be very, very good at capturing more and more of the value chain for itself. That could shrink the Square.

FT : From Yalta to Kiev

From Yalta to Kiev

It is still called the Yalta European Strategy Meeting. But this year, the annual international forum on Ukraine and and the world is taking place in Kiev, not Yalta. That is because Yalta is now in Crimea, which has been annexed by Russia. To judge from the mood of the conference, nobody expects Crimea to return to Ukraine anytime soon. On the contrary, on Saturday morning Arseniy Yatseniuk, the Ukrainian prime minister, warned the conference that Vladimir Putin’s goal is “to take the entire Ukraine”.

Yatseniuk’s language is uncompromising. But, in fact, compromise is in the air. On Friday it emerged that key parts of Ukraine’s association agreement with the European Union – which was the origin of all the uproar in the first place – will be delayed for a year. Opinion in the corridors of the conference was divided. Some regard this as an unacceptable concession to Russia – tacitly accepting that Russia has a say over what Ukraine does in its dealings with Europe. Others argued that this was a small compromise that is worth making, in the effort to bring the fighting and bloodshed to a close.

The atmosphere at the Yalta conference is understandably very pro-Ukrainian – although there were some Russians on panels and in the audience. An issue that I discussed outside the conference is the formation and ideological bent of some of the volunteer battalions that have been fighting for Ukraine. Put bluntly, some argue that some of these fighting forces do indeed harbour far-right groups – as the Russians constantly allege. One interviewee turned out actually to be a member of the controversial Azov battalion and willingly donned his uniform – arguing that the insignia on his arm stood for national independence, and bore no real resemblance to the “Wolfsangel” symbol that was popular among the Nazis. I asked this character if any of his comrades expressed neo-Nazi sympathies: “I haven’t met any neo-Nazis,” he said. “But you would be amazed at the number of pagans and sun-God worshippers.”

FT : Square raises money amid upheaval in payments market

Square raises money amid upheaval in payments market

Payments start-up Square is raising at least $100m in a funding round that valued the group at $6bn, up from a $5bn valuation earlier this year, according to a new company filing.

The filing, found by market research firm VC Experts, was made earlier this week after weeks of rumours that Square was looking for additional funding.

The company declined to comment, and it is not clear from the filings whether it might yet raise additional capital as part of this round of funding.

Square, whose core product is a card reader that lets small merchants accept credit and debit cards, last raised venture funding in September 2012, when it raised $200m in a round valuing it at $3.25bn. The filing does not identify who its backers in this round are, but CNBC has identified Singapore’s Government Investment Corporation as one of the participants.

The fundraising comes as Square faces financial challenges and a fast-changing payments market. Its core product, processing credit card payments, is a low-margin and competitive business, and the company is not yet profitable. Square secured a credit facility of over $100m in April, the company had confirmed.

Apple is attempting to revolutionise Square’s core business of helping merchants accept credit cards.

Apple Pay, a feature on the newly launched iPhone 6, will let consumers pay for goods with a tap of their iPhones on any card readers enabled with a special NFC chip. Square has said it will be rolling out readers that let merchants accept Apple Pay. It is also readying for launch readers that let merchants accept the “chip and PIN” cards which are soon to be rolled out in the US.

It is also trying to diversify from credit card processing. An attempt at building a mobile wallet failed, but it has since launched a slew of small business services, including data analytics and a cash advance programme.

>>> Premier Oil said to have approached Faroe Petroleum regarding GBP 375m takeo

Premier Oil said to have approached Faroe Petroleum regarding GBP 375m takeover bid 

Premier Oil, an FTSE-250 oil exploration group, was said to have approached listed UK-based rival Faroe Petroleum regarding a takeover bid, The Times reported. The newspaper’s market report section mentioned talk that Premier has offered 140p per share for Faroe, representing a valuation of slightly less than GBP 375m (EUR 470m), but did not cite a source for the rumour.

Faroe Petroleum’s share price closed 4.5p up at 112p in London yesterday, 12 September, giving the company a market capitalisation of GBP 299m.



Source The Times

(BFW) France Wants ‘Dangerous’ Derivatives in Europe’s FTT, Sapin Says

France Wants ‘Dangerous’ Derivatives in Europe’s FTT, Sapin Says
2014-09-13 11:50:54.166 GMT


By Mark Deen
Sept. 13 (Bloomberg) -- French Finance Minister Michel
Sapin says the 11 European countries planning a tax on financial
transactions are working to identify the derivatives that would
be covered.
* Finance ministers from that group of nations met in Milan
during gatherings of European Union finance ministers and
central bank chiefs, Sapin says
* The planned FTT will “include shares but not only shares,”
he says
* “There are two questions: what shares, what types of
shares, taxed in what way? I won’t get into details because
we’re advancing,” Sapin says
* “The other subject, of course, is: which derivatives? We
want to identify the derivatives that carry the most risk”
he says, adding that France’s position is that “taxation is
there to increase the cost of a dangerous product”
* The group of 11 aims to complete technical work on the FTT
by year-end so the tax can be introduced in January 2016,
Sapin says
* He speaks to reporters in Milan


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Jonathan Stearns

Barron's : Swatch Stock, Hurt By Apple, Has 20% Upside

Swatch Stock, Hurt By Apple, Has 20% Upside


Swatch Group's stock has been stuck in a bit of a time warp for the past year, but it could clock higher, despite Apple's long-awaited entry into the watch sector.
The watchmaker's shares (ticker: UHR.Switzerland) could rise 20% in the next 12 months as foreign-exchange rates swing in its favor, the company rebounds from a fire at a parts-making subsidiary, and it distances itself from events that resulted in nonrecurring costs.
Swatch, whose top brands include Omega, Blancpain, Breguet, and Harry Winston, closed Friday at 487.70 Swiss francs, some 20% off their 52-week high of CHF606.50 in November last year. The shares trade at 14.7 times forecast 2015 earnings, a discount of almost 25% to the average multiple in the luxury-goods sector of about 19 times. Cartier owner Compagnie Financière Richemont (CFR.Switzerland) trades at a multiple of more than 18, while LVMH Moët Hennessy Louis Vuitton (MC.France) trades at about 17.
Swatch, which has a market value of more than 26 billion Swiss francs ($27.8 billion), took a 3.3% hit last week, as investors seemed to anticipate that the company would suffer from Apple's (AAPL) first foray into the market for wristwatches. Shares of Fossil Group (FOSL), a maker of moderately priced watches, fell to $103, down 0.5% on the week.
But watch-industry analysts are dismissive of Apple Watch. They note, among other things, that the device will require recharging daily (not that that's held back the success of the iPhone).
Jon Cox, an analyst at Kepler Cheuvreux in Zurich, says the Apple Watch "looks like an iPod mini with a strap around it." He adds, "I'm sure the watch industry is not too concerned."
Priced from $349, the Apple Watch will compete, pricewise, with Swatch's basic and midrange brands like Tissot and its namesake. Swatch earns about 5% of its operating profit from watches that sell for between $200 and $500, so Apple is unlikely to take a big bite out of its earnings.
The Biel, Switzerland company's high-end brands, which typically sell for $3,000 or more per timepiece, brought in 45% of last year's revenue of CHF8.46 billion. Swatch posted profit of CHF1.92 billion, or CHF31.79 per share.
The company is forecast to earn CHF29.51 per share in 2014 and CHF33.16 in 2015.
Swatch's prospects for the remainder of this year and next are encouraging, in part due to the gradual weakening of the Swiss franc, which is about 7% off its peak in the past 12 months. In the first half of 2014, sales were reduced by CHF188 million due to unfavorable exchange rates.
Swatch also has put behind it the impact of a December fire at a parts-making subsidiary in Grenchen, about 10 miles from Biel, which put a strain on production and cost CHF200 million in lost sales.
Operating margin, which fell to just over 20% in the first six months due to the strong franc, the fire, and marketing expenses for the Winter Olympics in Sochi, should begin to recover to more normalized levels. In 2013, operating margin was more than 27%.
Some investors fret about the company's steady buildup of inventory, which has climbed to about 60% of sales, or CHF5.73 billion, from about 30% a decade ago.
However, they won't worry as much if the company can make the most of the positive currency swing and deliver sparkling sales and profits. A consensus of analysts' price targets of about CHF580 points to upside of about 20% from the current price. Investors may want to grasp this opportunity with both hands.
THE BRITISH POUND COULD BE in for a beating if Scotland opts for independence from the United Kingdom when voters go to the polls in a referendum Sept. 18. Sterling slumped last week when one opinion poll gave the separatists a narrow lead. It was a wake-up call for investors.
The pound, which has lost almost 3% in value against the dollar in the past couple of weeks, could fall further if the pro-independence campaign succeeds. U.K. stocks, which have underperformed other European benchmarks in the past month, also could retreat some more.
Yields on gilts, or U.K. government bonds, could rise as Scottish leaders have balked at the division of sovereign debt unless the British government agrees to a currency union. Westminster steadfastly opposes such a pact.
Independence would come at a cost for Scotland. Capital already seems to be flowing out. Some of Scotland's biggest companies, such as investment manager Standard Life (SL.UK) and Royal Bank of Scotland (RBS.UK)—have signaled intentions to relocate to England or to shift some operations south of the border, blows to the aspirations of an independent Scotland.
Victory for unionists probably would result in a relief rally for the pound, which traded Friday at $1.625. London-listed shares also could get a lift. Most polls continue to show that voters favor sticking with the union, but the outcome is too close to call.

>>> Weekly Market Update: Markets Await Fed Signals and Scottish Vote

Weekly Market Update: Markets Await Fed Signals and Scottish Vote


European and US stock indices ground lower all week, commodity prices fell and the dollar only strengthened as global markets prepared themselves for next week's Fed meeting. Anticipation is building that the FOMC will make material changes to the way it talks about its policy exit. On Tuesday, CNBC's Fed watcher Liesman said there was a good chance the Fed could alter or drop its "considerable time" language next week, as both hawks and doves have been increasingly critical of "date-based forward guidance" versus an economy-driven policy. In Europe, attention has been squarely focused on the upcoming Scottish independence referendum as for the first time polling data has shifted enough to make a UK break up a distinct possibility. In Japan, the final reading of Q2 GDP showed the measure to be even worse than the first go-round, raising hopes the BoJ may ride to the rescue after all, helping the Nikkei gain 1.5% on the week. For the week, the DJIA fell 0.9%, the S&P declined 1.1% and the Nasdaq slipped 0.3%.

UK financial markets and the pound have been unhinged by poll on the Scotland independence referendum on September 18th. A poll out last weekend put the "Yes" (to independence) camp ahead of the "No" option for the first time, driving a sharp selloff in the pound, banks and energy companies with North Sea operations. Later polls showed the "No" vote ahead, however in each case the "undecided" vote was 10% or more, making it too close to call. If Scotland were to secede, there would be elaborate negotiations to sort out the new nation's currency, how existing debts would be divvied up between Scotland and England, and much else besides. GBP/USD hit nine-month lows around 1.6050 mid-week.

The 10-year yield drifted higher all week, pushing above 2.60% on Friday, its highest level in nearly two months. USTs followed yields higher in Eurozone, while plenty of new supply sparked selling, a setback from the roaring market in 2014. Selling was also driven by jitters about Fed policy.

The ceasefire holds in Ukraine, despite ongoing reports of breaches by both sides. Ukraine President Poroshenko has gone to great lengths to emphasize the need for diplomacy in resolving the conflict with Russia, and even agreed to delay trade sections of EU-Ukraine Association Agreement until the end of 2015 in order to assuage Moscow's feelings. The US and the EU launched a second round of sanctions on Russia, restricting access to its financial markets and punishing various banks and energy companies.

On the commodities front, both gold and oil futures have continued to fall lower this week on a variety of factors. Gold futures fell to the lowest point in eight months this week as continuing improvements in US economic growth plus the strong dollar curbed demand for the metal as a haven asset. But it is the increasing likelihood of higher interest rates that is ultimately cutting gold off at the knees. Over the last month the WTI futures plummeted to eight-month lows around $90.50 as of Thursday from around $98 in early August, driven by the easing of some geopolitical conflicts and renewed dollar strength. WTI fell 1.1% on the week, while Brent has fallen even harder, down 3.7% on the week, dropping below $100 for the first time in about a year.

Apple unveiled its new, larger iPhone 6 and 6+ models and its highly anticipated Apple Watch device this week. The new iPhones have larger 4.7" and 5.5" screens, and as of Friday the large screen model had already sold out online. Reports suggested Apple could ship up to 80M iPhone 6 units by the end of Q4, making for its biggest quarter of sales ever, by a broad margin. The Apple Watch received somewhat mixed reviews, however it will not launch until early next year.

Demand for Chinese e-commerce giant Alibaba's IPO was so strong that the underwriters closed their books early and will likely raise the price range to around $70/share from the initial $60-66/share range. The final IPO pricing is expected on September 17th with trading to begin the next day.

The dollar rally continued this week, with the trade's center of gravity shifting from low-yielding to high-yielding end of the currency spectrum. EUR/USD was around 14-month lows after testing 1.2860 on Thursday. EUR/CHF ticked up off the 1.20 floor after the SNB's Moser reiterated that the SNB could implement negative interest rates if the floor was under threat. A weaker Yen supported Japanese markets (Nikkei closed at an 8-month high) with USD/JPY at 6-year highs above 107.35 in the week.

China's August economic data suggested a more benign slowdown than feared last month, diminishing the likelihood of broad PBoC easing. Imports fell for the second consecutive month, but the trade surplus hit another record high of $49.8 billion, well above the $40 billion expected. August new yuan lending was also marginally above consensus at CNY702.5B, alleviating credit sector concerns after July lending fell to its lowest levels since early 2010. August CPI did hit a four-month low of 2.0% and M2 money supply grew at a 5-month low pace of 12.8%, but the PBoC said overall money growth is still within a reasonable range and on track to reach 13.0% target this year.

Japan Q2 final GDP showed an even bigger contraction than initially estimated at -7.1% annualized. Private consumption was particularly soft, falling 5.1% on reduced spending following the April sales tax hike, but the biggest downward revision was seen in corporate capex, which was cut to -5.1% from -2.5%. On Thursday, Bank of Japan governor Kuroda and PM Abe held their first direct meeting in 5 months, boosting speculation that the cabinet will call on the central bank to do more heavy lifting on monetary policy as it faces increased pressure to increase sales tax again next year.

>>> US Close Dow-0,36% S&P -0,60% Nasdaq-0,53%

Closing Market Summary: Stocks and Treasuries Settle Near Lows

Equity indices extended this week's losses with a broad-based retreat. The S&P 500 fell 0.6% to end the week lower by 1.1%, while the Russell 2000 (-1.1%) finished with a 0.9% decline since last Friday.

Staying true to the theme observed throughout the week, the energy sector (-1.5%) tumbled out of the gate, thus dragging the broader market down with it. Once again, dollar strength and crude oil weakness contributed to sector's underperformance, but the growth-sensitive group did not see any respite in the afternoon when the Dollar Index (-0.1%) edged lower, while oil made a short-lived appearance in the green. Late-afternoon weakness sent crude oil (-0.6%; $92.26/bbl) to its lowest level in almost a year, while the energy sector widened its September loss to 5.2%.

Meanwhile, the remaining sectors opened closer to their respective flat lines, but could not climb off those levels as the underperformance of small caps and the big loss in the energy sector kept dip-buyers sidelined. Furthermore, the recognition that next week will include an avalanche of global macro data and the latest FOMC policy decision also factored into the cautious approach.

Interestingly, the energy sector was the only cyclical group that ended behind the broader market. The top-weighted
sector—technology—shed
0.4% with the relative strength of
Apple (AAPL 101.66, +0.23) masking the losses among high-beta chipmaker stocks. The PHLX Semiconductor Index lost 1.3%.

Elsewhere, the financial sector (-0.1%) lurked near its flat line throughout the session with Dow component Goldman Sachs (GS 183.17, +2.17) contributing to the relative strength. The stock added 1.2%, while the sector ended the week lower by 0.4%.

Things did not look much better on the countercyclical side where all four sectors settled behind the broader market. Consumer staples (-0.7%) and health care (-0.7%) registered comparable losses with the health care sector pressured by biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 269.57, -3.78) lost 1.4%.

The other two—telecom services (-1.2%) and utilities (-1.8%)—were hampered by higher interest rates. Staying on that point, the 10-yr note retreated throughout the session to register a half-point loss. The benchmark yield rose six basis points to 2.61% after starting the week at 2.46%.

Also of note, the U.S. Treasury has announced a new set of sanctions on Russian banks, energy, and defense companies. The move followed a similar announcement from the European Union.

Today's session saw relatively strong participation with more than 675 million shares changing hands at the NYSE floor.

Economic data included Retail Sales, Import/Export Prices, Michigan Sentiment Survey, and Business Inventories:
  • Retail sales increased 0.6% in August following an upwardly revised 0.3% (from 0.0%), which matched the Consensus 
    • After missing expectations last month, sales rebounded in August and upward revisions were reported for the prior month (to 0.3% from 0.0%); concerns that consumption could weigh down GDP growth were somewhat alleviated. 
    • Excluding motor vehicles, retail sales increased a respectable 0.3% for a second consecutive month and met the consensus expectations 
  • Export prices, excluding agriculture, decreased 0.3% in August after increasing 0.3% in the prior reading 
    • Excluding oil, import prices ticked up 0.1%, which followed last month's unchanged reading 
  • The University of Michigan Consumer Sentiment Index increased to 84.6 in the preliminary September reading from 82.5 in August, while the consensus expected the index to increase to 83.5 
    • That was the highest reading in the Sentiment Index since July 2013 
    • The Present Conditions Index deteriorated in September, dropping from 99.8 in August to 98.5 
    • The Expectations Index rose to 75.6 in September from 71.3 in August 
  • Business inventories increased an in-line 0.4% in July after increasing by the same amount in June 
    • Inventories for manufacturers (0.1%) and merchant wholesalers (0.1%) were known prior to the release. The only bit of new information was that retailer inventories increased 1.0% in July after increasing 0.7% in June 
On Monday, the Empire Manufacturing Index for September will be released at 8:30 ET, while August Industrial Production and Capacity Utilization will be reported at 9:15 ET.
  • Nasdaq Composite +9.4% YTD 
  • S&P 500 +7.4% YTD 
  • Dow Jones Industrial Average +2.5% YTD 
  • Russell 2000 -0.1% YTD 

(BFW) JPMorgan Now Sees First Fed Rate Hike in June vs 3Q 2015

JPMorgan Now Sees First Fed Rate Hike in June vs 3Q 2015
2014-09-12 17:52:57.298 GMT


By James Holloway
Sept. 12 (Bloomberg) -- Sees 25bps increase in Fed funds
corridor to 25bps-50bps, subsequent moves in Sept. and Dec.
bringing corridor to 75bps-100bps by end of 2015, chief U.S.
economist Michael Feroli writes in client note.
* At next week’s meeting, FOMC will likely drop
“considerable time” language; Fed speakers have recently
highligted “increasing discomfort” with phrase, “as it
risks lulling the market into a sense of complacency”
* Fed will also probably provide a “broad outline” of exit
strategy



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