Home > August 2017 > Aug 11, 2017 Thank You Market, A sell off is the only thing that makes sense

Aug 11, 2017 Thank You Market, A sell off is the only thing that makes sense

August 11th, 2017

Japan is on holiday tonight so a lot of big players not around. The Shanghai Futures sold off hard including the material companies in the China Market. Numbers also came out tonight showing that China Govt Stimulus Money was slower YoY, well duh. FWIW if N Korea does escalate the entire One Road/One Bridge Program of lending may truly have to be put on the back burner. Gold is stronger, Futures are flat before the open of the Europe Session. US Core CPI is the only thing of interest in the US session.

August 2017

  • Trading_Nymph

    China is in such a difficult position..N Korea is their friends. Today in Global Times..Reckless game over the Korean Peninsula runs risk of real war
    Source:Global Times Published: 2017/8/10 23:23:40

    The US and North Korea have both ramped up their threatening rhetoric. The Pentagon has prepared plans for B-1B strategic bombers to make preemptive strikes on North Korea’s missile sites. US Secretary of Defense James Mattis issued an ultimatum to North Korea on Wednesday to “cease any consideration of actions that would lead to the end of its regime and destruction of its people.”

    Meanwhile, North Korea issued plans to fire four intermediate-range missiles to land 30-40 kilometers from Guam and claimed it would finalize the plan by mid-August.

    Some people in Guam have already expressed panic for the first time after the end of the Cold War. The US has already got the worst of the confrontation with North Korea.

    Many people believe the possibility of war is very low. If war really breaks out, the US can hardly reap any strategic harvest and North Korea will face unprecedented risks. North Korea aims to propel the US to negotiate with it, while the US wants to put North Korea in check. Neither can achieve its goal, so they compete to escalate tensions, but neither wants to take the initiative to launch a war.

    The real danger is that such a reckless game may lead to miscalculations and a strategic “war.” That is to say, neither Washington nor Pyongyang really wants war, but a war could break out anyway as they do not have the experience of putting such an extreme game under control.

    In the near future, it would be highly sensitive if US B-1B fighter jets fly over the Korean Peninsula or North Korea launches missiles in the direction of Guam. Both sides would upgrade their alert to the highest level. The uncertainty in the Korean Peninsula is growing.

    Beijing is not able to persuade Washington or Pyongyang to back down at this time. It needs to make clear its stance to all sides and make them understand that when their actions jeopardize China’s interests, China will respond with a firm hand.

    China should also make clear that if North Korea launches missiles that threaten US soil first and the US retaliates, China will stay neutral. If the US and South Korea carry out strikes and try to overthrow the North Korean regime and change the political pattern of the Korean Peninsula, China will prevent them from doing so.

    China opposes both nuclear proliferation and war in the Korean Peninsula. It will not encourage any side to stir up military conflict, and will firmly resist any side which wants to change the status quo of the areas where China’s interests are concerned. It is hoped that both Washington and Pyongyang can exercise restraint. The Korean Peninsula is where the strategic interests of all sides converge, and no side should try to be the absolute dominator of the region.

  • Trading_Nymph

    Shanghai Daily showing housing continues to slow..Weakness continued in Shanghai’s pre-used home market for another month as persistent shrinking transactions failed to cushion against price declines.

    The city’s existing housing index, which tracks month-over-month price changes in 130 areas around the city, fell 0.19 percent from June to 3,996 last month, Shanghai Existing House Index Office said in a report released yesterday.

    The average cost of pre-owned homes rose in 60 areas, fell in 53 areas and was flat in 17 areas.

    “The index fell for the second month despite an insignificantly slower pace as sales of existing houses retreated for the fourth straight month,” the office said. “By proximity to the city center, homes in outlying areas suffered larger setbacks in price than their downtown counterparts and that did help them with comparatively better performance in sales.”

    Sanlin in the city’s Pudong New Area stood out as the best-performing area by sales with monthly transactions surging 70 percent from June to 315 units. That was closely trailed by Jinshan New City, where 310 units of pre-owned homes changed hands last month.

    By inventory, some 166,861 units of pre-used homes were available on the local market for sale by the end of July, a decrease of 1.56 percent from a month earlier, according to data compiled by the office.

    Sales of pre-owned homes dropped for the fourth consecutive month in Shanghai in July to some 11,700 units, a month-over-month decline of 4.2 percent and a year-on-year plunge of 65.3 percent, Shanghai Homelink Real Estate Agency Co said in a report released earlier.

    BusinessReal Estate

  • panther341
  • panther341

    Did you see the sotry about MCD adding 2000 stores in CHina? https://www.reuters.com/article/us-mcdonalds-china-idUSKBN1AO0DD

  • Trading_Nymph

    The CPI is popping the eur/usd. BUT so many sellers of it are coming in around the 1.1825ish range that it appears that it is loosing the gas that the weaker CPI gave it.

  • Trading_Nymph

    No I didn’t thank you Panther. The major investor is the Chinese Govt., Bottomline the Chinese Govt is buying Franchise Stores in a sense cuz MCD is not putting up capital. The 50% plus owner is CITIC Limited and as we know, it’s just part of CITIC Group Corporation Ltd., formerly the China International Trust Investment Corporation, which is a state-owned investment company of the People’s Republic of China,

  • Trading_Nymph

    ROFL, I guess that is part of their “Belt” part of stimulus spending.

  • Trading_Nymph

    CITIC appears to already franchised it out. All that Housing Speculation Money had to go somewhere..From China Daily…The auction of McDonald’s next 20-year franchise rights in China was officially completed on July 31, Chinese state-owned CITIC Group announced on Friday.

    A new venture, jointly established by CITIC Ltd, CITIC Capital, Carlyle Capital and McDonald’s, paid $2.08 billion for the US fast food chain’s business of about 2,700 stores on the Chinese mainland and in Hong Kong, under an agreement reached this January.

    The new company will become McDonald’s largest franchisee outside the US, with CITIC Ltd and CITIC Capital holding a majority 52 percent stake in the new company, while Carlyle Capital 28 percent, and McDonald’s 20 percent.

    China has become McDonald’s third largest market, since the chain opened its first Chinese store in Shenzhen in 1990. In 2016, over 1 billion diners visited McDonald’s on the Chinese mainland.

    However, its growth in China has lost momentum as the dining market has been more competitive. Its market share in China has fallen from 17 percent to 13 percent.

    The chain has suffered a continuous decline in business since 2013. The auction, announced in March 2016, was part of its worldwide strategy to revive growth.

    The auction also attracted Chinese bidders like hotel chain operator GreenTree Inn, China National Chemical Corp., China Cinda Asset Management Corp and Beijing Capital Tourism Co.

  • Trading_Nymph

    Lol, they really can’t see that the Laffer Curve doesn’t work. CPI isn’t moving up, not because of AMZN, but because after all the HISTORICAL MASSIVE Central Bank Action , it just didn’t stimulate the true economy. Car Sales falling finally, (so many subprime car loans are out there…also the lol, the Rental Car Fleets are filled to the brim with cars). So we have falling car prices and Hotels having to cut prices (4% drop in CPI), so we have the perfect storm of cheap hotels and cheap car rentals for my trip, lol.

  • Trading_Nymph

    They tried to spike up eur/usd on the Baker Hughes Rig Count which saw a 3 rig oil build. But the sellers are swarming in. Holding Euro’s over the weekend with this N Korean mess brewing might not be the best play. Notice how Gold/Euro spike down, but it’s moving up too.

  • panther341

    So at the end of the day peeps are saying: options market makers didn’t take the weekend out …. and in some cases they added some premium in …. [usually that happens about noon in a regular week – lately it has been more like 10 AM Eastern on Friday so the premium sellers lose 3 days of premium before it gets sold!]

  • panther341

    have a good weekend!

  • panther341

    Monday lunch at my house: oil down on the concept that there will not be a “supply deficit” in the last half of the year. LOL I didn’t make that up – someone else did. http://www.marketwatch.com/story/oil-prices-head-for-3-week-low-as-supply-worries-persist-2017-08-14