China vigilant as US bombers fly over South China Sea

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© Provided by Al Jazeera A pair of B-1B Lancer bombers fly in an undated file photo [Staff Sgt Steve Thurow/US Air Force via Reuters]

China said on Friday it was monitoring US military activities in the South China Sea after two US bombers conducted training flights over the disputed waters.

The US Pacific Command said on its website two American Air Force B-1B Lancer bombers flew a 10-hour training mission from Guam over the South China Sea on Thursday, in conjunction with the Navy's USS Sterett guided-missile destroyer.

The exercise comes after a US warship in late May carried out a "manoeuvring drill" within 12 nautical miles of an artificial island built up by China in the South China Sea.

The US military conducts such "freedom of navigation" patrols to show China it is not entitled to territorial waters there, US officials said at the time.

The latest exercise was part of Pacific Command's "continuous bomber presence" programme, but it did not give details on where it was conducted and did not refer to it as a freedom-of-navigation operation.

"China always maintains vigilance and effective monitoring of the relevant country's military activities in the South China Sea," the ministry said in a statement, referring to the United States.

"China's military will resolutely safeguard national sovereignty, security and regional peace and stability," it said.

China claims nearly all of the South China Sea, through which about $5 trillion in shipborne trade passes each year, a stance contested by Brunei, Malaysia, the Philippines, Taiwan and Vietnam.

The US has criticised China's construction of islands and build-up of military facilities there, concerned they could be used to restrict free movement and extend China's strategic reach.

US allies and partners in the region had grown anxious as the administration of US President Donald Trump had held off on carrying out South China Sea operations during its first few months in office.

Vancouver Housing Market “Ain’t Seen Nothing Yet”

Joannah Connolly

June 9, 2017

With demand unabated and supply constrained, Vancouver’s affordability issues have only just begun, warns leading new home marketer

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The Vancouver real estate market, far from reaching its peak in terms of unaffordability and lack of housing, is merely “dancing on the edges of a massive problem,” according to one leading development marketer.

Speaking to a packed audience at the Urban Development Institute luncheon on new home marketing at the Fairmont Hotel Vancouver June 8, Cameron McNeill of MLA Canada added, “We ain’t seen nothing yet.”

The panel of well-known development marketing bosses, which also included Scott Brown of Fifth Avenue Real Estate Marketing and Daryl Simpson of Bosa Properties, discussed how blistering demand and a trickling supply of new housing is affecting the affordability of homes in the region.

Event moderator and UDI chair Jon Stovell of Reliance Properties asked the panel whether onerous building permit requirements and slow processing times were affecting home prices – to which the reply was unanimously “yes, absolutely, 100%.”

Cameron McNeill observed that the Metro Vancouver region is expected to grow by 250,000 people in next five years, and that it currently takes around six years to get a highrise residential project from conception to occupancy – “if it all goes well”. He said, “And that’s maybe 300 units. The city is 300,000 people bigger by that point.”

McNeill added, “We’re dancing on the edges of a massive, massive problem. And it’s not going to change. I just came back from Hong Kong and everybody I spoke to said to me, ‘That’s nothing.’ We ain’t seen nothing yet. This is just the tip of the iceberg for Vancouver.”

Daryl Simpson pointed out that population growth numbers, and therefore housing demand, would likely be even higher than projected, as projections are based solely on permanent residents and citizens. “One thing they rarely look at student visas and multiple-entry visas. There were 67,000 student visas in BC last year. And you have to think, if they’re flying to BC to study, these are students with means, maybe wealthy families. In 2016, there were 315,000 multiple entry visas – they last 10 years and allow people to fly back and forth. So you need to layer those on top of the permanent residents and citizen population growth.”

Scott Brown said, “You can’t fix demand. And if this is a housing crisis as the media says, where is the multi-stakeholder group figuring out how to speed up supply? If we were going to war we sure as hell would be working out how to arm up quickly. But we spend more time working out how to break things apart than how to fix things. We need to work together. We’re trying, but putting one project a time on the market, there’s so much demand, prices just keep escalating.”

Simpson added, “Look at the 450 acres in False Creek Flats, with 1,400 residential units in total earmarked for that area. That’s three homes per acre. That’s insane. Ask Ryan Holmes of Hootsuite what he needs, it’s not 450 acres of industrial land, its proximate residential units [so employees can afford to live in Vancouver close to work]. Ask Amazon, they’ll say the same thing. Go to Seattle, there are more residential units being built by Vancouver developers – Bosa, Westbank, Onni – right across the street from the Amazon HQ than will be built in the whole of the False Creek Flats.”

 

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Joannah Connolly

Joannah Connolly is the editor and content manager of REW.ca and Real Estate Weekly newspaper, and editor-in-chief of Western Investor and West Coast Condominium. She also moonlights as the host of the Real Estate Therapist call-in show on Roundhouse Radio 98.3FM. A dual Canadian-British citizen, Joannah has 20 years of media experience in Vancouver and London, with a background in construction, architecture and business media.

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Orange juice has moved more than any other commodity this year

Seth Archer

 Jun. 7, 2017, 02:10 PM

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Orange juice investors seem to have lost their zest for the commodity.

Since the beginning of the year, prices for orange juice future contractshave fallen 33.1% from $197 to around $132.

Several factors have contributed to the dramatic drop in price.

Orange juice is about as bad for you as a bag of M&Ms, and Americans have been drinking less juice in recent years. Sales of frozen juice have been hit the hardest, as sales fell by $98 million from 2012 to 2016.

The decline in sales has mirrored a decline in production. Florida is the largest orange producer in the United States, and its annual production in 2016 was the worst since 2005, according to data from the USDA.

These declines have led to a smaller number of traders even interested in the commodity, according to the Wall Street Journal. The decline in orange juice futures contracts has followed the decline in production since 2016.

The sugar crop is also down noticeably in 2017. That commodity has fallen $6.30, or 30.7% so far this year. The best commodity so far this year has been lean hogs, with prices growing around 23%.

Commodities that more commonly make the news have been moving a lot in the last couple of weeks. Oil fell sharply on Wednesday following news of a gain in US reserves when investors were expecting a decline. Gold is on the rise as geopolitical events like the recent terror attacks and upcoming UK election raise uncertainty for investors.

Traders are cranking up their bets against Snap

• Joe Ciolli
 

• 12h
• 8,844
 

REUTERS/Brendan McDermid

Traders haven't been this bearish on Snap since the period immediately following its initial public offering.

The ratio of bearish put contracts on Snap's stock to bullish calls is 1.7-to-1, the highest since March 17, only the fifth day that Snap options were available to be traded.

After an initial shorting frenzy that pushed the ratio as high as 3-to-1, bearishness leveled off for a couple of months. But now that Snap has been drawing the ire of analysts across Wall Street because of concerns over user growth, pessimism is once again mounting.

The most recent criticism came from Nomura on Wednesday. Looking at data around downloads on the Snapchat app, analyst Anthony DiClemente highlighted slowing daily-average user growth through the first two months of the second quarter.

DiClemente doesn't expect near-term monetization growth to pick back up, and he also noted an acceleration in downloads for Instagram. He warned against competitor growth at a time when Snap's user expansion is slowing.

JPMorgan got in on the action on Monday, lowering its price target on the company. The firm also has concerns over fewer people flocking to the platform than expected. It estimated that only 8 million users will join Snapchat in the second quarter of 2017, missing the previous forecast of 10 million.

Of all the underwriters that participated in Snap's IPO, none have been more downbeat than JPMorgan, which received the third-biggest share of stock to sell in the offering. The firm lowered its price target on the stock after a disappointing first-quarter earnings report last month.

Business Insider / Andy Kiersz, data from Bloomberg

Get the latest Snap stock price here.

SEE ALSO: JPMORGAN: Snapchat isn't adding enough users, and the stock could go lower

Chinese trade data tops expectations as imports and exports surge

IMAGE: HTTPS://SECURE.GRAVATAR.COM/AVATAR/51F68BA58EC6BEE3852791D88C641954?S=32&D=MM&R=G

DAVID SCUTT 

JUN 8, 2017, 2:00 PM

image: https://edge.alluremedia.com.au/uploads/businessinsider/2017/01/China-celebrations.jpg

Photo: iStock

Chinese trade data topped expectations in May with imports and exports both growing at a faster annual pace than the levels reported in April.

According to China’s Customs Bureau, exports grew by 8.7% from a year earlier in US dollar terms, faster than the 8% pace of April and above the 7% increase forecast by economists.

Between January to May, exports increased by 8.2% compared to the the same period a year earlier.

image: https://edge.alluremedia.com.au/uploads/businessinsider/2017/06/China-trade-balance-May-2017.jpg

Import growth also impressed, rising 14.8% from the levels of a year earlier. That was an improvement on the 11.9% pace of April and topped expectations for an increase of 8.5%.

In volume terms, imports of copper, crude oil and iron ore all increased, rising to 390,000 tonnes, 37.2 million tonnes and 91.52 million tonnes respectively.

The one exception was coal — likely due to supply disruptions along Australia’s east coast during the month — which fell to 22.19 million tonnes from 24.78 million tonnes in April.

In the first five months of the year, the value of imports lifted 19.5% from the same period in 2016. This reflects a combination of higher commodity prices along with increased demand.

As a result of the strength in imports, the trade surplus grew to $40.81 billion, below the $46.32 billion level expected.

  

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It was slightly higher than the $38.05 billion surplus reported a month earlier.

Financial markets have reacted positively to the trade report, boding well for both Chinese and global demand, bidding up risk assets such as stocks, commodity futures and the commodity-linked Australian dollar in recent trade.

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Read more at https://www.businessinsider.com.au/chinese-trade-data-tops-expectations-as-imports-and-exports-surge-2017-6#LhCGssvwhD5hB4f6.99

ECB stays on hold in June and effectively rules out further rate cuts

• Will Martin
 

• 11h
• 376

Reuters/Denis Balibouse

LONDON — The European Central Bank released its latest monetary policy decisions on Thursday afternoon, following the June meeting of its governing council.

Monetary policy stayed on hold, with the ECB maintaining a deposit rate of -0.4% for banks, a base interest rate of 0.0%, and a quantitative easing (QE) program of up to €60 billion per month.

The decision comes as ECB President Mario Draghi and his fellow governing council members are yet to be convinced that the recent rebound in inflation in the eurozone is durable because wage growth remains sluggish.

While policy did not change, the ECB made a crucial change to the statement accompanying the decision, changing a sentence in the first paragraph from:

"The Governing Council expects the key ECB interest rates to remain at their present or lower levels for an extended period of time,"

to

"The Governing Council expects the key ECB interest rates to remain at their present levels for an extended period of time."

Removing the words "or lower" from the statement effectively means that the ECB is now ruling out taking interest rates further into negative territory in the foreseeable future, removing its easing bias to monetary policy.

"This is a small, but significant, change in the bias of interest rates setting," Pantheon Macroeconomics' Chief Eurozone Economist Claus Vistesen writes in an emailed note.

Draghi will take questions from journalists at 1.30 p.m. BST (8.30 a.m. ET) in the Estonian capital Tallinn at the bank's annual conference away from its Frankfurt HQ. He will likely address the monetary policy decisions, as well as Wednesday's sudden takeover of Banco Popular by fellow Spanish lender Santander as part of an ECB-backed plan to prevent Popular from collapsing.

The euro dropped sharply on the announcement, falling from 1.1244 on the dollar to $1.1225, before climbing a little almost immediately, as the chart below shows:Investing.com

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Cash-rich companies are king in the stock market right now

• Joe Ciolli
 

• 5h
• 3,857
 

King Henry VIII. upload.wikimedia.org

The days of easy money are over.

And with the Federal Reserve expected to hike interest rates later this month, equity investors are seeking companies well-equipped to withstand tighter lending conditions.

In other words, they want to buy stocks with strong balance sheets — ones with easy access to liquidity and minimal debt exposure. And they've already started.

Shares of firms with strong balance sheets are up by 11% this year, outpacing their flimsier brethren by 3.5 percentage points, according to data compiled by Goldman Sachs and Bloomberg. That's the widest spread in 14 months for a period of that length.

The recent outperformance has helped the strong-balance-sheet group close the gap on its weaker peers, which have piggybacked off an unprecedented wave of debt financing to bigger gains throughout the eight-year bull market.

Business Insider / Andy Kiersz, data from Goldman Sachs / Bloomberg

The accommodative lending conditions, combined with an improving economic picture, created ideal conditions for traders looking to take on the added risk of companies with less-than-stellar finances. And it paid off. The weak-balance-sheet group rallied by 50% in 2013, beating the 30% advance in the S&P 500 that was itself the best return since 1997.

But now that the increasingly hawkish Fed has started to tighten, the days of easy gains in highly leveraged stocks appear to be winding down. After all, higher-quality companies are better suited to absorb market shocks and don't experience as much volatility.

The strong-balance-sheet basket maintained by Goldman contains 50 companies across eight core S&P 500 industries that rank highest in measures comparing equity to total liabilities and earnings to assets, compiled in a gauge known as the Altman Z-Score.

As of an update in January, the basket contained Facebook and Google's parent, Alphabet, which make up half of the so-called FANG group (along with Netflix and Amazon) that has led gains in major US indexes this year. The index also held such companies as Starbucks, Monster Beverage, Exxon Mobil, Bristol-Myers Squibb, and 3M.

Get the latest Goldman Sachs stock price here.

SEE ALSO: A crucial stock market signal just got its most bullish reading of the year