GUNDLACH: The dollar is overdue for a rally

• Akin Oyedele
 

• 18h
• 20,821

DoubleLine Funds

DoubleLine Capital Founder Jeff Gundlach held his quarterly webcast on global markets and the economy on Tuesday. 

The main takeaways included: 

• The dollar is overdue for a rally, even after many investors inaccurately believed that it would rise because the Fed was raising rates. 
• Commodities are very cheap compared to equities, and this is great for investors looking for "long-term secular timing."
• On politics, President Donald Trump would likely deliver 'tax-reform lite,' and we will have to accept that North Korea is armed with nuclear weapons. 
• On bitcoin, Gundlach said: "I'm going to let this mania go on without me." 

In his second-quarter webcast in June, Gundlach advised short-term stock traders to raise cash, and warned that low volatility should not be seen as a new template for the market.

A little over a month later, he told Reuters that he had bought S&P 500 put options in a bet that volatility would rise. The trade, he said, was "like free money." Volatility spiked briefly early in August but has remained near historic lows. 

Gundlach's flagship fund has also been in the news. The Wall Street Journal reported in August that assets under management at DoubleLine's Total Return Bond Fund fell 13% from their peak last September to $54 billion at the end of July.

Gundlach, who recently joined Twitter as @TruthGundlach, criticized the story before it was published. He later told Bloomberg he was reducing positions in the firm's funds to invest in higher-quality credit assets, which could be costly to performance in the short term. 

Here are highlights of the webcast:

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Shares in Apple suppliers across Asia promptly crashed after the launch of the latest iPhone

SAM JACOBS

SEP 13, 2017, 4:33 PM

Getty/Mike Powell

Major suppliers for iPhone parts are tanking in Asian trade.

It follows the unveiling of Apple’s latest model iPhones overnight — the iPhone 8 and iPhone 8 Plus as well as the iPhone X.

The South China Morning Post (SCMP) reported that a number of supplier companies on the Shengzhen and Shanghai stock exchanges saw their share prices fall today.

Zhejiang Quartz Crystal Optoelectronic Technology — a company which supplies optical filters for the iPhone camera — led the falls, dipping by as much as 9% in the morning session.

The stock was bid up in the week leading up to the launch, but a short time ago it was down more than 6% in afternoon trade:

Investing.com

Other Chinese suppliers that dipped following Apple’s announcement ranged from acoustic component-makers to touch-panel manufacturers.

The SCMP reported that losses weren’t restricted to companies from mainland China – component manufacturers in Hong Kong and Taiwan were also lower.

Taiwan company Pegatron Corporation, which assembles the iPhone, a short time ago was down more than 3%.

Investing.com

Rival manufacturer Foxconn, which is also listed in Taiwan and made news in July when it announced plans to build a $US10 billion factory in the US, was down by 0.9%.

Hong Kong-listed Cowell E Holdings, which makes camera parts for both Apple and Samsung phones, a short time ago was almost 6% lower.

Following the launch of the latest model iPhone, the reaction on US markets was minimal — Apple shares edged 0.4% lower on a broadly positive day for US stocks.

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Hurricanes Irma and Harvey cause Goldman Sachs to slash its outlook for the US economy

• Joe Ciolli
 

• 12h
• 1,468

 More Charts

 
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Goldman Sachs has cut its third-quarter GDP forecast following a pair of catastrophic hurricanes.

The firm now sees GDP expanding by 2% during the period, down 0.8 percentage points from its previous forecast.

Goldman currently estimates that Hurricane Irma will result in $30 billion in total losses, adding to the $85 billion of damage already caused by Hurricane Harvey, which rocked the city of Houston last month.

"The uncertainty around all of these figures is high, but there is little doubt that the combined impact of Harvey and Irma will be particularly severe," Spencer Hill, an economist at Goldman, wrote in a client note. "We continue to expect a sizeable drag from hurricanes on Q3 growth."

One way that Goldman measures how a natural disaster will affect economic growth is by assessing the share of the population that's ultimately impacted. At present time, Hurricane Irma has affected 6.1% of the populace, making it the 10th-most impactful natural disaster in US history by this measure. That makes Irma's effects even more widespread than Hurricane Katrina in 2005 and last month's Hurricane Harvey.

Hurricane Irma has affected more than 6% of the population of the US, making it the 10th-most widespread natural disaster in the nation's history.Goldman Sachs

"While property losses and evacuations do not directly enter the GDP accounting, major hurricanes and natural disasters have nonetheless been associated with a near-term slowdown in many major growth indicators," Hill wrote. "We believe the huge property losses and relatively broad-based societal footprints of Hurricanes Harvey and Irma suggest a relatively large impact on near-term growth."

So which areas will be most adversely affected? Goldman predicts that consumption, inventories, housing, and the energy sector will suffer the most.

For energy in particular, the post-hurricane implications for oil demand could reduce GDP. Meanwhile, the sheer number of people impacted by both disasters will surely weigh on consumption, the firm says, highlighting that just five out of 403 Walmart stores in Florida were open on Monday morning.

Treasury Secretary Steve Mnuchin weighed in on the potential GDP effect in an interview with CNBC on Tuesday, agreeing that the measure will take a hit in the short run, but argued that "we will make it up in the long run as we rebuild."

As more information comes in, keep in mind that Goldman's GDP forecast is a moving target. Its estimates and inputs could change at any time, most notably if damage totals shift in any meaningful way.

In their words: "If Irma’s damages are significantly higher — or if Florida flooding continues to weigh on consumer spending and housing/investment activity into late September and October — we would expect additional downside to near-term growth."

Get the latest Goldman Sachs stock price here.

SEE ALSO: How US hurricanes affect the bond market

Bitcoin is back below $US4,000 after the JP Morgan CEO called it a fraud

SAM JACOBS

SEP 13, 2017, 2:22 PM

Photo by Bryn Lennon/Getty Images

Bitcoin is trading back under $US4,000 for the first time in almost a month.

It’s now fallen more than 20% from a high of $5,000 in early September.

Here’s today’s price action:

Investing.com

It’s been another interesting 24 hours for the cryptocurrency, with prices dipping overnight after JP Morgan CEO Jamie Dimon called it a “fraud“.

Bitcoin also topped the list on a monthly survey of 214 fund managers as the most crowded trade in the funds management industry.

Other major cryptocurrencies are also being sold off in Asian trade. A short time ago, Bitcoin Cash was at a one-month low around $US500.

Ethereum isn’t faring much better, down almost 7% for the session at around $US270.

The selling appears to be due to lingering fears around the enforcement of strict regulatory measures in China.

After banning initial coin offerings (ICOs) last week, the latest reports indicate that Chinese authorities may also ban the use of cryptocurrency exchanges.

Among the top-15 cryptocurrencies by market capitalisation in US dollars, China-based NEO has suffered the heaviest falls this afternoon.

A short time ago, it was down 13% to below $US20, after trading above $US50 in August:

Investing.com

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UN Security Council unanimously steps up sanctions against North Korea

• Michelle Nichols, Reuters

• 17h
• 2,312

North Korean leader Kim Jong Un. KCNA

UNITED NATIONS (Reuters) - The United Nations Security Council unanimously stepped up sanctions against North Korea on Monday over the country's sixth and most powerful nuclear test on Sept. 3, imposing a ban on the country's textile exports and capping imports of crude oil.

It was the ninth sanctions resolution unanimously adopted by the 15-member council since 2006 over North Korea's ballistic missile and nuclear programs. The United States watered down an initial tougher draft resolution to win the support of Pyongyang ally China and Russia.

Textiles were North Korea's second-biggest export after coal and other minerals in 2016, totaling $752 million, according to data from the Korea Trade-Investment Promotion Agency. Nearly 80 percent of the textile exports went to China.

The resolution imposes a ban on condensates and natural gas liquids, a cap of 2 million barrels a year on refined petroleum products, and a cap on crude oil exports to North Korea at current levels. China supplies most of North Korea's crude.

A U.S. official, familiar with the council negotiations and speaking on condition of anonymity, said North Korea imports some 4.5 million barrels of refined petroleum products annually and 4 million barrels of crude oil.

(Reporting by Michelle Nichols; Editing by Leslie Adler)

SEE ALSO: South Korea's President Moon and Putin share an understanding on North Korea

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Citigroup is bracing for trading revenues to take a plunge

• Reuters

• Sep. 11, 2017, 9:55 AM
• 767
 

It's looking bleak for traders right now.Thomson Reuters

C Citigroup

 68.91 1.20 (+1.80 %)

DisclaimerGet real-time C charts here »

NEW YORK (Reuters) - Citigroup Inc third-quarter total markets revenue is running about 15 percent less than a year earlier when volatility was boosted by reactions to the Brexit vote and U.S. elections, Chief Financial Officer John Gerspach said on Monday at an investor conference.

Gerspach's outlook was similar to the 12 percent decline anticipated by Barclays analyst, and conference host, Jason Goldberg, in a preview for the event being held through Wednesday.

(Reporting by David Henry in New York; Editing by Chizu Nomiyama)

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