Home > Feb 2018 > Feb 7, 2018 Down we Go

Feb 7, 2018 Down we Go

February 7th, 2018

In the US Session we had the Bulls come in at the end of the day over the Budget being sent on to the Senate. This IMHO has NOTHING to do with the reason why we are selling off….mainly Chinese Money pulling away from the global markets and Kuroda/Abe out of Japan not being able to flood the market with Money Arrows. Anyway, Futures are down .90% in the first hour of the Europe Session. Shanghai Futures had Copper and most of the metals down leading into the week of VaCa next week. There is also talk about a Shanghai Based Property Biz that won’t be able to make loan payment next week Fwiw. Oil is flat even with a surprise drop in production out of the API showing U.S. crude inventories falling by 1.1 million barrels . Bitcoin is trying to break through 8000 to the upside. We have Dudley again speaking tomorrow, but Fed Evans who is less dovish will also be speaking.

Feb 2018

  • Trading_Nymph

    From Reuters on Shanghai Property Biz…HNA misses early payment on $272 million trust loan under liquidity pressure – sources
    Shu Zhang, Zheng Li, Matthew Miller
    3 MIN READ

    BEIJING/SHANGHAI (Reuters) – An HNA Group company has failed to make an early payment it had agreed to on a 1.7 billion yuan ($271.9 million) trust product that falls due next week, two sources with direct knowledge of the situation said, the latest indication of financial stress at the highly leveraged conglomerate.

    FILE PHOTO: Illustration photo of the HNA logo December 21, 2017. REUTERS/Thomas White/Illustration/File Photo
    CITIC Trust issued the one-year loan product last year on behalf of HNA Real Estate Group, a property development arm of the Shanghai-listed HNA Infrastructure Investment Group Co.

    Although a payment is officially due on Feb. 16, CITIC Trust had requested early repayment, due to concerns about HNA’s liquidity situation and the upcoming Chinese New Year holidays, the sources said.

    A few days ago, HNA Real Estate provided a promise letter to CITIC Trust stating that it would repay part of the trust loan by Feb. 5, the sources said. That promised early payment failed to materialize due to HNA’s tight liquidity situation, the sources said.

    Details on the size of the early payment for the trust product were not immediately available.

    The uncertainty over HNA’s repayment of the trust loan underscores wider apprehension surrounding the debt-troubled conglomerate, as well the ongoing heated discussions now taking place behind the scenes between the group and its creditors.

    Late Tuesday, HNA Infrastructure published a statement to the Shanghai Stock Exchange asserting that the company was able to meet its loan principal and trust income obligations on time.

    Repayments on the trust product, HNA Infrastructure said, are staggered from Feb. 16 through the end of November.

    The company also it was coordinating with CITIC Trust to “deal with the matter”.

    CITIC Trust would take legal action against HNA if the payment fails to materialize, one of the sources said, pointing to the value of guarantees HNA pledged for the loan.

    The HNA trust loan is guaranteed by the rights to use three plots of land that are part of HNA’s Sun Moon Plaza project, a shopping development located across the road from the provincial government offices, according to a product description.

    HNA Infrastructure Investment Group also provided guarantees for the payment, according to the description.

    CITIC Trust declined to comment.

    HNA said that it wouldn’t comment beyond the Shanghai Stock Exchange statement.

    HNA is facing liquidity pressure and a potential cash shortfall of at least 15 billion yuan in the first quarter of the year, the company told its major bank creditors at a meeting in Haikou last month.

  • Trading_Nymph

    China Global Times take on new Fed Head…Powell hasn’t been in the Fed for very long and he hasn’t made much of a mark there. Nor does he have a strong academic background like Bernanke. Further, he is unlikely to have strong persuasive power in the FOMC. He is likely to be a weaker Fed chairman, one who will find it difficult to control the overall situation.

    The weaker the Fed chairman, the more likely he will choose a one-way rate hike path. There are both rational and irrational reasons to choose such a strategy.

  • panther341

    Oil is very firmly in contango. December 2019 lower than December 2018 and both are lower than spot contract. No carry trade. Very very nice for OPEC. They couldn’t draw it up better. question is what they do now. they signalled that they might end the production cuts early …. it has been amazing that they all cooperated as long as they have. Nobody really expected that.

  • panther341

    your friend AMZN back to 1450 this morning.

  • Trading_Nymph

    Give it time to drop, lol. WYNN is such a China Proxy normally, when it trades on Stevie leaving those gains should fade soon.

  • Trading_Nymph

    Finally a weak 10 year auction. China is just not supporting like crazy. We are at 2.83%….market should fade into the close.

  • panther341

    another wild day in the downsizing world. It feels like I spent the entire day doing stuff that should have taken about 2 hours. o well.

    in the meantime Yum China reported earnings after the close today. https://www.marketwatch.com/story/shares-of-yum-china-fall-on-fourth-quarter-loss-2018-02-07

    I missed the part this afternoon when the market went down. LOL