Since 2015 I’ve stated the raw data published by the Australian Bureau of Statistics (ABS) on gold export to China mainland do not accurately reflect what is imported by China from the land of down under. A written statement from ABS now supports this analysis.
S&P500 index futures were unchanged (up less than 0.1%) following another modest, low-volume levitation in European, Asian shares in a mostly eventless overnight session; oil comes off following gaining overnight with WTI trading just around $43.
An era of slowing growth, falling corporate profits, record debt levels, and currency debauchment has many investors buying gold as a bet against global central banks... but what are the best countries in which to store that gold?
While central banks continue to "print" liquidity, now at a pace of nearly $200 billion per month, they are unable to print trade, perhaps the single best indicator of deteriorating global economic conditions. The latest confirmation came overnight from China, which reported another batch of disappointing trade data including imports which have now declined for 21 straight months, while exports have fallen for 12 of 13 months.
Individual tax/withholding receipts for the month of July – those tax and withholding payments that come straight from wage earner pay stubs – are down 1.0% year over year. YTD non-withheld tax receipts (such as those that come from “Gig economy” workers) are down 6.5%, and July’s comp is 15% lower than a year ago. Last, corporate tax receipts are down 11% YTD, and if the current pace of these payments holds it will be the first negative comp since 2011.
In a mostly quiet session, European and Asian stocks rose, pushed higher by financial stocks and the USDJPY which initially dipped on some hawkish comments by BOJ deputy governor Iwata, only to rebound later in the session, lifting the Nikkei 1.1%, while the Stoxx 600 rose 0.4% led higher by the banking sector. S&P futures are unchnaged after yesterday's last hour ramp. The key event is the BOE decision due in half an hour.
In short, the New Silk Road is all about building alternatives to U.S. power. Part of that, of course, is displacing the U.S. dollar, the world’s premier currency. So it should be no surprise that China’s New Silk Road project is about to make its first big move in the gold market.
European stocks slid to a two-week low amid mixed earnings, as bank stocks extended yesterday’s decline as fears that Italy is not "fixed" have reemerged, not helped by an adverse market reaction to a disappointing Japanese fiscal stimulus announcement, while the AUD first dropped but then jumped after the RBA's priced in rate cut was announced, seen as underwhelming.
Turns out China's capital controls enacted back in December to curb capital outflows might be working... which we're sad to report is bad news for all the 20-something year old I-bankers and tech geniuses reading this post from the comfort of their $2mm, 800 square foot apartments in New York and San Fran.
Concluding a vicious, money-losing ridesharing price war in China, overnight Didi Chuxing, the dominant ride-hailing service in China, announced it would acquire Uber’s operations in the country, ending a battle that cost the two companies billions as they competed for customers and drivers.
Following last Friday's shocking weak US GDP print, Asian stocks jumped to an 11 month high on reduced prospects of a near-term rate hike, while the region also digested mostly encouraging in conflicting Chinese PMI data. European bank stocks initially rose following the release of the 2016 stress test then declined, tempering gains in global equity indexes, amid investor skepticism over the usefulness of stress-test results and weaker oil prices.
Another 508 people renounced their US citizenship last quarter according to documents published this morning by the Internal Revenue Service. This brings the total number of US ‘renunciants’ under the Obama administration to 17,359.