>>> Asian Update

Asia Mid-Session Market Update: Broad dollar weakness reigns; Aussie import/export price index falls

***Asia Summary***
- Equities markets in the region opened generally higher absorbing the Fed rate decision in stride. Earnings season is now in full swing around the globe with Nintendo in Japan putting out strong results after the close yesterday, in Korea Samsung Electronics reported final Q2 results a bit higher than prelim. The dollar saw a broad sell off over the session, with the biggest moves coming about mid-day. EUR/USD rose to 1.1777, AUD/USD 0.8066 and USD/JPY tested 110.78. Korea’s won gained 1% against the USD, while copper held steady around a 2-year high in London as markets process China’s scrap import ban.

- The PBOC shifted its OMO to using just 7-days, dropping its use of 14-day reverse repos, operations were small with a total net injection of CNY20B. Chinese press said that China is exploring a multi-tiered reserve requirement system in order to address liquidity strains. Offshore yuan nearly reached a 2-month high. Markets were little impacted by economic data in the session.

***Key economic data***
- (BR) BRAZIL CENTRAL BANK (BCB) CUTS SELIC TARGET RATE BY 100BPS TO 9.25%; AS EXPECTED
- (KR) SOUTH KOREA Q2 PRELIM GDP Q/Q: 0.6% V 0.6%E; Y/Y: 2.7% V 2.7%E
- (CN) CHINA JUN SWIFT GLOBAL PAYMENTS (CNY): 1.98% V 1.6% PRIOR
- (JP) Japan investors net bought ¥1.18T in foreign bonds v bought ¥947B in prior week; Foreign investors net bought ¥292B in Japan stocks v bought ¥377B in prior week
- (AU) AUSTRALIA Q2 IMPORT PRICE INDEX Q/Q: -0.1% V 0.7%E; EXPORT PRICE INDEX Q/Q: -5.7% V -5.5%E
- (CN) CHINA JUN INDUSTRIAL PROFITS Y/Y: 19.1% V 16.7% PRIOR

***Speakers and Press***
China
- (CN) Chinese Academy of Social Sciences (CASS) and former PBOC Adviser Yu: capital outflows are more likely to be a larger source of systemic risk in China than high debt - China press
- (CN) China Ministry of Finance (MOFCOM): China to keep increasing imports from US
- (CN) Moody's revises outlook on China banking system to stable from negative
Korea
- (KR) Intelligence authorities see Kim Jong Un's motorcade near missile site, seen as a sign launch is imminent at missile site in northwestern North Korea
- (KR) Bank of Korea (BOK) OfficialChung: consumption and investment led to Q2 GDP growth; see private consumption to continue improving
Japan
- (JP) Japan Govt recommends minimum wage increase of 3% or ¥25 to ¥848/hr (same rate as last year)
- (JP) Luxury goods brands such as Chanel and Cartier said to raise prices in Japan in Aug due to FX rate shifts - Nikkei
Other
- (TW) Taiwan and US to focus on medical sector in trade talks - Taiwan press

***Asian Equity Indices/Futures (00:00ET)***
- Nikkei +0.2%, Hang Seng +0.5%, Shanghai Composite -0.3%, ASX200 +0.3%, Kospi +0.2%
- Equity Futures: S&P500 +0.2%; Nasdaq +0.5%, Dax +0.1%, FTSE100 +0.2%

***FX ranges/Commodities/Fixed Income (00:00ET)***
- EUR 1.1776-1.1721; JPY 111.22-110.78; AUD 0.8065-0.7992; NZD 0.7558-0.7517
- Aug Gold +1.2% at 1,264/oz; Sept Crude Oil -0.1% at $48.69/brl; Sept Copper +0.2% at $2.88/lb
- USD/CNY *(CN) PBOC SETS YUAN REFERENCE RATE AT 6.7307 V 6.7529 PRIOR
- (NZ) New Zealand sells NZ$150M in 3.5% 2033 bonds; avg yield 3.2996%
- (CN) China PBOC OMO injects CNYB in 7 day reverse repos v CNY130B in 7 and 14 day prior
- (JP) Japan MoF sells ¥400.1B v ¥400B indicated in 2-yr 0.1% (prior 0.1%) JGBs; Avg yield: -0.1150% v -0.103% prior; bid to cover: 5.35x v 6.79x prior

***Equities notable movers***
Hong Kong/China
- Sands China, 1928.HK Reports Q2 Net profit $326M v $237M y/y, Rev $1.82B v $1.48B y/y; -0.3%
- Dongfang Electric ,1072.HK Guides H1 Net CNY370M; +7.6%
Japan
- Nintendo, 7974.JP Reports Q1 Net ¥21.3B v ¥7.6Be; Op ¥16.2B v ¥10.6Be; Rev ¥154.1B v ¥62.0B y/y; +7.1%
Korea
- Samsung Electronics,005930.KR Reports final Q2 (KRW) Net 10.8T v 9.8Te; Op 14.07T v 14.0T prelim; Rev 61.0T v 60.0T prelim; to buy back KRW1.67T of shares; flat
Other
-United Microelectronics, UMC Reports Q2 net (NT$) 2.10B v 1.27Be, Rev 37.5B v 37.0B y/y; -8.1%
***US markets on close: Dow +0.5%, S&P500 flat, Nasdaq +0.2%, Russell -0.6% ***

>>> Facebook on Conference Call

Facebook on Conference Call- Stock hits after hour highs after tightening expense costs to lower end of guidance
Zuckerberg addresses the use of AI to improve news driven feeds. growth continues to be broad based across regions, marketer segments, and verticals;
In Q2 the average price per ad increased 24% and the number of ad impressions increased 19%.
Primarily driven by mobile fee to add on Facebook and Instagram. Growth engagement and ad demand remain healthy.
Desktop ad growths will slow in 2H17.
Expect that our strategic focus on driving engagement with mobile video may slow advertising impression growth given the relatively fewer ad impressions with video relative to News Feeds. Early efforts in Messenger monetization not offsettign slow downs
Continue to expect revenue growth rate to decline moving forwar.
Tightening FY17 Expense Guidance to 40-45% y/y from 40-50%
Expect to accelerate headcount growth rate in 2H.
Video investment will contribute to expense growth.
CapEx will be at the lower end of prior range of $7.0-7.5 bln.
Anticipate more data center building in 2H.
Tax Rates in 2H17 will be similar to Q2 (13%)

>>> Facebook beats by $0.20, beats on revs

16:08 | FB | (165.61 +0.33)
Facebook beats by $0.20, beats on revs
Reports Q2 (Jun) earnings of $1.32 per share, $0.20 better than the Capital IQ Consensus of $1.12; revenues rose 44.8% year/year to $9.32 bln vs the $9.19 bln Capital IQ Consensus.
Daily active users (DAUs)- DAUs were 1.32 billion on average for June 2017, an increase of 17% year-over-year.
Monthly active users (MAUs)- MAUs were 2.01 billion as of June 30, 2017, an increase of 17% year-over-year.
Mobile advertising revenue- Mobile advertising revenue represented approximately 87% of advertising revenue for the second quarter of 2017, up from approximately 84% of advertising revenue in the second quarter of 2016.
Capital expenditures for the second quarter of 2017 were $1.44 billion.
Cash and cash equivalents and marketable securities were $35.45 billion at the end of the second quarter of 2017.
Headcount was 20,658 as of June 30, 2017, an increase of 43% year-over-year.
Operating Margin 47% compared to 42% in prior year and Q1.
Effective Tax Rate 13%, expectations were for mid teens.

>>> Barrick Gold beats by $0.05, beats on revs

17:09 | ABX | (16.24 +0.20)
Barrick Gold beats by $0.05, beats on revs; co reaffirms gold and copper production for 2017, aims to reduce $7.9 bln at start of 2017 to $5 bln by end of 2018
Reports Q2 (Jun) earnings of $0.22 per share, excluding non-recurring items, $0.05 better than the Capital IQ Consensus of $0.17; revenues rose 7.4% year/year to $2.16 bln vs the $2.03 bln Capital IQ Consensus
All-in sustaining costs in the second quarter were $710 per ounce, compared to $782 per ounce in the second quarter of 2016
Gold production in the second quarter was 1.432 million ounces
Total debt was reduced by $309 million in the second quarter
Achieving and maintaining a strong balance sheet remains a top priority
Co intends to reduce its total debt from $7.9 billion at the start of 2017, to $5 billion by the end of 2018-at least half of which it is targeting this year
Co continues to expect full-year gold production of 5.3-5.6 million ounces, at a cost of sales of an all-in sustaining costs of $720-$770 per ounce
Co continues to expect full-year copper production of 400-450 million pounds, at a cost of sales an all-in sustaining costs of $2.10-$2.40 per pound

>>> US Close Dow +0.45% S&P +0.03% Nasdaq +0.16%Russell

Closing Market Summary: Stocks Settle Slightly Higher

The Fed's latest policy directive did little to upset equity investors on Wednesday as all three major averages notched new record highs. The S&P 500 (unch) and the Nasdaq (+0.2%) fought hard for their slim gains while the Dow (+0.5%) settled with a more comfortable margin of victory thanks to Boeing's (BA 233.45, +20.99) upbeat earnings report. Meanwhile, the small-cap Russell 2000 underperformed, dropping 0.6%.

As expected, the FOMC unanimously voted to keep the fed funds target range at 1.00%-1.25%. Regarding the central bank's $4.5 trillion balance sheet, the Fed indicated that it expects to begin the paring process "relatively soon", which has been largely interpreted as September. 

Treasuries rallied to fresh session highs following the release of the Fed's policy statement while the U.S. Dollar Index (93.35, -0.56, -0.6%) slid into negative territory from its flat line. The 2-yr yield was hovering three basis points below its flat line in front of the release and eventually settled six basis points lower at 1.34%. Similarly, the benchmark 10-yr yield also dropped six basis points to 2.28%.

The somewhat counter-intuitive reactions in the bond and currency markets have been attributed to the notion that it seems unlikely that the Fed would announce a rate hike at the September meeting if it plans to start paring its balance sheet at that time. The CME FedWatch Tool now points to the March FOMC meeting (from December) as the most likely time for the next rate-hike announcement with an implied probability of 55.1%.

Outside of monetary policy, earnings season was the focal point on Wall Street as another batch of quarterly reports came in largely better than expected. Boeing was maybe the most notable post-earnings advancer, surging 9.9%, after reporting better than expected earnings and raising its earnings guidance for the fiscal year.

AT&T (T 38.03, +1.81) also had a solid performance, pinning the telecom services sector (+3.0%) to the top of the leaderboard. T shares jumped 5.0% after AT&T beat bottom-line estimates.

As for the remaining ten sectors, seven finished in positive territory with gains ranging between 0.1% and 0.9%. The rate-sensitive utilities (+0.9%) and real estate (+0.8%) groups exhibited relative strength, benefiting from the slide in interest rates. 

Meanwhile, the energy sector (+0.1%) eked out a slim victory despite a strong performance from crude oil, which climbed 1.8% to $48.73/bbl. The commodity rallied around the EIA's latest crude inventory report, which showed a much larger than expected draw in U.S. stockpiles for the week ended July 21 (-7.2 million barrels actual vs -3.0 million consensus).

Like energy, the consumer staples space (+0.1%) also eked out a slim victory with soft-drink giant Coca-Cola (KO 45.74, +0.50) advancing 1.1% on better than expected earnings.

On the flip side, the heavily-weighted financial sector weighed on the broader market, dropping 0.6%. The bulk of the sector's loss came in the afternoon session amid the bond market's post-FOMC decision rally. The lightly-weighted materials sector (-0.6%) also registered a notable decline.

Similarly, the influential health care sector (-0.3%) struggled amid broad weakness. Amgen (AMGN 175.89, -5.00) was one of the sector's weakest components despite reporting better than expected earnings/revenues and issuing upbeat revenue guidance. AMGN shares settled with a loss of 2.8%.

Reviewing Wednesday's economic data, which was limited to June New Home Sales and the weekly MBA Mortgage Applications Index:

  • New Home Sales in June hit an annualized rate of 610,000, which was above the revised May rate of 605,000 (from 610,000), and in line with the consensus.
    • The key takeaway from the report is that sales activity was subdued month-over-month despite a 3.4% drop in the median sales price of $310,800. The average sales price, however, was up 4.2% to $379,500, which points to the affordability factor acting as a sales constraint.
  • The weekly MBA Mortgage Applications Index rose 0.4% to follow last week's 6.3% increase.

On Thursday, investors will receive three pieces of economic data--June Durable Orders (consensus 2.9%), the weekly Initial Claims Report (consensus 240K), and June International Trade in Goods (consensus -$64.9 billion). All three reports will be released at 8:30 ET.

  • Nasdaq Composite +19.3% YTD
  • S&P 500 +10.7% YTD
  • Dow Jones Industrial Average +9.9% YTD
  • Russell 2000 +6.3% YTD

CNBC : Would you invest with Steve Cohen?


Would you invest with Steve Cohen?
Steve Cohen is planning to launch a $20 billion hedge fund — and many institutional investors are planning to steer clear of it.
Cohen has been managing his own fortune at Point72 Asset Management, the family office he created in 2014 after his hedge fund firm, SAC Capital Advisors, pleaded guilty to insider-trading charges in the largest securities fraud case ever brought against a hedge fund. As part of the settlement, Cohen closed SAC and paid $1.8 billion in fines. In 2016, the Securities and Exchange Commission announced that Cohen would be barred from managing outside money until January 2018 to settle separate charges that he failed to supervise a former portfolio manager who had engaged in insider trading at SAC.
Cohen himself was never charged with insider trading, and the brevity of his ban sparked immediate speculation about when, not if, he would open a hedge fund after the order expired — not least of all because SAC delivered astonishing annual returns of 29 percent for 21 years. Sure enough, a Wall Street Journal report in late May said Cohen is planning to launch a new hedge fund open to outsiders as early as next year.
More from Institutional Investor:
Private capital managers are charging higher fees
Fund managers warn of European property bubble
Carnegie CIO goes it alone
Cohen may have to rely on a network of rich hedge fund managers and friends, as well as his own money, to get it off the ground, as institutional investors — including corporate and public pension funds, endowments, and foundations — are not likely to pony up money. Of course, Cohen may not need institutional money to reach $20 billion, which is more money than he oversaw at SAC, but he may miss the imprimatur that managing money for a nationally known pension fund or an Ivy League endowment can lend. A representative for Cohen declined to comment.
Institutions won't necessarily stay away because they are skeptical of Cohen's ability to generate returns. Rather, they fear bad publicity. Even talking on the record about possibly investing in Cohen's hedge fund comes with some reputational risk. Almost all of the institutional investors interviewed for this story agreed to speak only on condition of anonymity.
One chief investment officer of a corporate pension plan expects few, if any, pension plans to invest with Cohen. "I can't see anybody with a corporate plan doing something like this. Sooner or later, you have to report to the board," says the CIO. "There's infinite career risk for the CIO who tries to go down that path."
The CIO of a large U.S. public pension fund says underfunded plans could clearly use Cohen's returns, but trustees wouldn't want to expose themselves to the potential bad press. "It's hard to justify the headline risk, which could suck up an enormous amount of time and emotional energy."
Some industry watchers think sovereign wealth funds could be a big source of funds for Cohen, as many are not subject to the kinds of transparency requirements that pensions must adhere to. Endowments, too, could invest with Cohen, as they generally are more secretive about the underlying managers in their portfolios and have historically invested in asset classes and firms that are off the beaten path.
At the same time, endowments are facing political and governance issues, such as calls for divestment from fossil fuels. "It wouldn't look great to get out of something like Exxon stock and then plow money into Cohen, whose former firm was the poster child for bad hedge fund behavior," notes one executive at an asset management firm.
Others have reservations for more traditional reasons. An active manager with $20 billion is too big to be able to outperform in the current market environment, says Jim Dunn, CEO and CIO of Verger Capital Management, which manages money for endowments, including that of Wake Forest University. "There aren't that many good ideas out there," he explains. "It's going to be hard to put that money to work given how low rates are and given fund flows from passive managers that are driving everything up."
Cohen has taken steps to make even his family office more institutional. He has invested in a range of businesses, including crowdsourced quantitative manager Quantopian; spent heavily on compliance for Point72; and brought in a new team with gold-plated pedigrees, including McKinsey executive Doug Haynes, Point72's president.
Though Cohen's reputation may have been tarnished by his regulatory woes, his status as a hedge fund legend remains firmly intact. Even outside finance, the name Point72 evokes prestige. And even if institutional investors give Cohen's new fund a pass, there is one group of potential investors who may not be able to resist it. "He'll get big checks from hedge fund managers," says a former hedge fund executive. "It's their way to give a giant f– you to regulators."

TechCrunch : HERE’s Real-Time Traffic pools live data from Audi, BMW and Mercede

HERE’s Real-Time Traffic pools live data from Audi, BMW and Mercedes-Benz cars

Mapping expert HERE is launching a Real-Time Traffic service that pulls aggregated data from sensors in Audi, BMW and Mercedes-Benz vehicles that are actually out driving the road, making it the first commercial traffic service of its kind that collects real-time information from vehicles from competing carmakers, according to HERE.
The car companies involved are actually all part owners of HERE, however, after the mapping business was spun out of Nokia in 2015 and sold to the competing automakers as a joint venture. The HERE Real-Time Service is available to any customers across any industry, however, and boasts big improvements in features including traffic flow data, with a reach that extends to over 60 countries.
In over 30 of the countries on that list, HERE also offers Traffic Safety Warning information, which will identify incidents on the road, as measured by hard-braking data. This allows real-time notifications to vehicles that could potentially prevent the worsening of these accidents.

HERE is also in the process of adding more commercial vehicles as data sources for the Real-Time Traffic function, with “millions” of active vehicles in terms of consumer Audi, BMW and Mercedes-Benz vehicles on the road already.
Clients for the service could include autonomous car technology companies, but also current Advanced Driver Assistance Systems (ADAS) as well as ride-hailing companies, urban transit authorities, city planners and logistics providers, to name a few.

>>> USGapping down

Gapping down
In reaction to disappointing earnings/guidance:
  • FH -19.1%, USNA -14%, AKAM -6.7%, UHS -6.7%, WYNN -4.4%, CHGG-4.2%, SIX -4.1%, USG -3.8%, CSL -3.6%, AMGN -2.9%, HA -2.9%, DHI-2.7%, ANGI -2.7%, LN -2.6%, SFLY -2.3%, BKU -2%, F -2%, ESRX -1.9%,RHI -1.8%, JNPR -1.5%, HT -1.5%, IR -1.4%, AOS -0.9%, .
Other news:
  • OEC -6.8% (offers prelim Q2 results, prices secondary offering by selling shareholders of 10 mln shares of common stock at $21.85)
  • MC -4.3% (prices 6 mln shares of common stock at $42.00 per share)
  • APRN -3.3% (details several changes to executive leadership team; Co-Founder and Chief Operating Officer Matthew Wadiak stepping down from role)
  • PLX -2.6% (enters exchange agreement of $9 mln of its 4.50% Senior Convertible Notes due 2018 for $8.55 million aggregate principal amount of newly issued 4.50% Senior Convertible Notes due 2022)
  • MLCO -2% (WYNN sympathy)
  • LVS -1.4% (WYNN sympathy)
Analyst comments:
  • DISH -1.7% (upgraded to Overweight from Underweight at Morgan Stanley)
  • LAMR -1.4% (downgraded to Market Perform from Outperform at Wells Fargo)
  • PWR -1.2% (downgraded to Neutral at Robert Baird)
  • JBLU -1.1% (downgraded to Neutral from Buy at Buckingham Research)
  • ZTS -0.8% (downgraded last night to Hold from Buy at Deutsche Bank)