Hong Kong

Cupertino, We Have A Problem: China's JD.Com Just Cut Prices On Apple Products By 17%

JD.com cut prices of Apple products on the internet marketplace by as much as 17%, according to information on the JD website. Customers can also purchase Apple products in 12 monthly installments with no interest charges and no downpayment." Among the discounts, iPad Air tablet with 16GB memory is priced at CNY 2,399 (USD 365), compared with CNY 2,888 on the Apple online store in China. The iPhone 6s Plus handset with 64GB memory is priced at CNY 6,288, compared with the official price of CNY 6,888.

"No Brainer" Apple Extends Losses Despite Analyst Pleas That Guidance "Better Than Feared"

Apple's guidance was considerably worse than expected, but always spinning positively, analysts proclaim somehows that it was "better than feared." It appears not as AAPL is now down almost 4% despite every sell-side analyst's pleas that "the bottom is in." The ultimate "no brainer" stock is now down over 28% from its highs last year and analyst targets are still at $137 on average - a nearly 50% gain from here. And finally, as if a crashing stock was not enough, Apple's Safari browser is reportedly crashing if users attempt to search - not a great day for Tim Cook.

Futures Slide On Apple Disappointment, Oil Slumps Ahead Of Fed Decision

"Nobody is really sure where we go from here, and nobody is brave enough to make the call,” Peter Dixon, Commerzbank AG’s global equities economist in London told Bloomberg. “Corporate earnings season won’t provide much of a support - markets may find a floor if the Fed is extremely dovish tonight. At least investors will have time to think and reassess valuations."

China Warns Soros Against Starting A Currency War: "You Cannot Possibly Succeed, Ha, Ha"

Soros’s war on the renminbi and the Hong Kong dollar cannot possibly succeed — about this there can be no doubt. Reckless speculations and vicious shorting will face higher trading costs and possibly severe legal consequences. And just as proved in the yuan exchange rate case, the Chinese government has sufficient resources and policy tools to keep the overall economic situation under control and cope with any external challenges.”

Frontrunning: January 26

  • China shares end at 14-month lows after late selling frenzy (Reuters)
  • China Dec gold imports through Hong Kong highest since 2013 (Reuters)
  • China Contagion Fades as European Stocks Pare Drop, Oil Rises (BBG)
  • Apple set for slowest ever iPhone sales growth (Reuters)
  • Saudis, Russia Seen by Iraq as More Flexible on Oil-Output Cuts (BBG)
  • China Probes NEV sector for subsidy fraud (China Daily)

Offshore Yuan Drops To 3-Week Lows As China Injects Another $70 Billion Liquidity

Following the afternoon weakness in US equities, Offshore Yuan has been limping lower into the fix, not helped by comments from a MOFCOM researcher that "China is able to withstand currency fluctuations" implicitly warning carry traders to stay away and suggesting the dollar's dominance would not last long. CNH is now at 3-week lows against CNY, over 300pips cheap - which prompted the major short squeeze last time. Chinese stocks are modestly lower but more worrying is the 7-day slide in Chinese corporate bond yields - the most in 2 months - hinting perhaps that the last bubble standing is bursting.

Jim Bianco: "The Markets Are Telling Us There's A Severe Issue Out There"

"There is some truth to the phrase that the stock market has predicted nine of the last five recessions... but that is a much better track record than the consensus of economists. Every time the financial markets get volatile and messy like this it deserves attention because the markets are trying to tell us that there is a severe issue out there."

"A Historic Wealth Illusion Built On A Foundation Of False Promises"

What began with Greenspan’s early-nineties covert bank recapitalization evolved into Bernanke’s foolish policy to openly inflate risk markets with new central bank Credit. Amazingly, U.S. inflationism took the world by storm. The issue today goes much beyond a stock market correction, a bear market or even global financial crisis. Contemporary central banking has failed. Theories have failed. Doctrine has failed. The inability to spur self-sustaining economic recovery has been a major issue.

Square Holes And Currency Pegs

What will bring down the Chinese and Saudi pegs, along with a long list of other pegs, is, how appropriately, the very same markets they’ve been relying on to NOT function. The bets against Hong Kong’s ability to maintain its USD peg have already started, and China is next, along with the House of Saud (the latter two just take more fire-power). Which of course is exactly why they speak their soothing ‘confident’ words. Words that are today interpreted as the very sign of weakness they’re meant to circumvent.

The Secret Behind The Next Global Crash

The World Economic Forum in Davos is submerged by a tsunami of denials, and even non-denial denials, stating there won’t be a follow-up to the Crash of 2008. Yet there will be. And the stage is already set for it.

"China 2016 Is US 2008" Felix Zulauf Warns "The Outcome Of A Major Yuan Devaluation Would Be Disastrous"

"China is to the current cycle what the US housing market was for the Global Financial Crisis in 2008. It will take years to correct the excesses that were built up in China... the consequences of a weaker yuan would be disastrous...If China devalues, all the other countries in the region will follow suit which will lead to a global deflationary shock. There is a real chance of a bigger correction than many investors realize..."

Oil Spikes As Citi Calls It "Trade Of The Year" Even As OPEC Oil Basket Price Near Lowest On Record

With all eyes on the overnight spike in crude oil prices (up 5% and back over $30, this must be the bottom right?), OPEC remains far from impressed with its basket price hovering at (or near) record low levels at $22.48. In fact, the collapse of the OPEC basket price in the last 3 weeks has been the fastest drop since October 2008. However, no matter the chaos occurring various oil instruments (OIL 40% premium to NAV), Citi has decided this is it and dubbed being long oil from here "the trade of the year."