Friday, December 9, 2016

Goldman Sachs shares are up 30% since Trump's victory

Goldman Sachs shares are up 30% since Trump's victory

Blankfein fistGoldman Sachs CEO Lloyd Blankfein.Thomson Reuters
GS Goldman Sachs Group
 240.11 -1.24 (-0.50 %)
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Goldman Sachs is once again trading at post-crisis highs on Thursday.
Shares of the Wall Street bank were trading at $241.64 around 1:50 pm ET — up about 30% since President-elect Donald Trump's political victory on November 8.
That's near their highest level on record, $247.92 in 2007.
Goldman Sachs shares have also outperformed every other company on the Dow Jones Industrial Average since the election. It is responsible for about one third of the Dow's "Trump rally."
Analysts from both Deutsche Bank and KBW upgraded the global investment bank in late November.
They said they expect:
  • a better trading environment for fixed income, currencies, and commodities business, which the firm relies on more than peers
  • a rising rates environment
  • wide-sweeping regulatory changes
  • a stronger macro environment, for which Goldman is well-positioned thanks to its revenue upside, good cost control, and valuation below peers
"A stronger economy should benefit many capital market businesses — incl advisory, equity capital markets, and both fixed and equity trading (all areas of strength at GS)," Deutsche Bank's Matt O'Connor wrote on November 29. "This should also be a positive backdrop for investing and lending (even assuming no regulatory changes)."
He also said he expects the firm's recent rollout of its consumer lending platform, Marcus, to build momentum.
Most Wall Street banks have been performing strongly since Trump's political victory, but Goldman Sachs has emerged as a particular winner.
Trump appointed former Goldman Sachs banker Steven Mnuchin Treasury secretary last month, and Steve Bannon, his incoming chief strategist, is also a Goldman Sachs alum. Additionally, Trump is also reportedly considering Goldman Sachs President Gary Cohn for a role in the administration.

South Korean President Park Geun-hye has been impeached

South Korean President Park Geun-hye has been impeached

Park Geun hye South KoreaSouth Korean President Park Geun-hye during an address to the nation at the presidential Blue House in Seoul on November 4.Ed Jones/Pool Photo via AP
SEOUL, South Korea — South Korean lawmakers on Friday impeached President Park Geun-hye, a stunning and swift fall for the country's first female leader amid protests that drew millions into the streets in united fury.
Once formal documents are handed over to the presidential Blue House later Friday, Park will be stripped of her power and her No. 2, Prime Minister Hwang Kyo-ahn, will assume leadership until the country's Constitutional Court rules on whether Park must permanently step down.
Park did not immediately comment, but she convened a cabinet meeting for later Friday where she was expected to speak publicly. The handover of power prompted the prime minister to order South Korea's defense minister to put the military on a state of heightened readiness to brace for any potential provocation by North Korea; no suspicious movements by the North were reported, however.
The Constitutional Court has up to 180 days to decide on Park's fate. She will be formally removed from office if six of the court's nine justices support her impeachment, and the country would then hold a presidential election within 60 days.
National Assembly speaker Chung Sye-kyun said the bill on Park's impeachment was passed by a vote of 234 for and 56 opposed, with seven invalid votes and two abstentions. That well surpassed the necessary two-thirds vote needed in the 300-seat assembly, with the opposition getting strong support from members of Park's party.
Present for the vote were relatives of the victims of a 2014 ferry disaster that killed more than 300 and was blamed in part on government incompetence and corruption; they cheered and clapped after the impeachment was announced. Most lawmakers left the hall quietly, though some could be seen taking selfies as they waited to vote.
Lawmakers from both parties faced huge pressure to act against Park, the daughter of a military dictator still revered by many conservatives for lifting the country from poverty in the 1960s and 1970s.
Once called the "Queen of Elections" for her ability to pull off wins for her party, Park has been surrounded in the presidential Blue House in recent weeks by millions of South Koreans who have taken to the streets in protest. They are furious over what prosecutors say was collusion byPark with a longtime friend to extort money from companies and to give that confidante extraordinary sway over government decisions.
Her approval ratings had plunged to 4%, the lowest among South Korean leaders since democracy came in the late 1980s, and even elderly conservatives who once made up her political base have distanced themselves from her. An opinion survey released Thursday showed about 78% of respondents supported Park'simpeachment.
South Korean lawmakers last voted to impeach a president in 2004, when they accused liberal President Roh Moo-hyun of minor election-law violations and incompetence. The Constitutional Court restored Roh's powers about two months later, ruling that his wrongdoings weren't serious enough to justify his unseating.
The chances of the court reinstating Park are considered low because her charges are much graver. Some legal experts say the court might need more than a couple of months to decide. This is because Park's case is much more complicated than Roh's and because her lawyers will most likely press the court not to uphold the impeachment unless the suspicions against her are proved.
More than 1,500 protesters massed in front of the National Assembly building to urge lawmakers to impeach. Some had spent the night on the streets after traveling from other cities. There were scuffles between angry anti-Park farmers, some of whom had driven tractors to the parliament from their farms, and police.
"Can you hear the roar of the people in front of the National Assembly? We need to overcome the old establishment and create a new Republic of Korea by passing (the impeachment motion)," Kim Kwan-young, an opposition lawmaker said, ahead of the vote, referring to South Korea's formal name. "Our great people have already opened the way. Let's make it so we can stand honorably in front of history and our descendants."
Large crowds were expected to gather Friday evening at a boulevard in front of an old palace gate in downtown Seoul, which has been the center of demonstrations in recent weeks calling for Park's removal. Protesters planned to march close to the Blue House.
The impeachment is a remarkable fall for Park, who convincingly beat her liberal opponent in 2012. Park's single, five-year term was originally set to end February 24, 2018.
The political turmoil around Park comes after years of frustration over a leadership style that inspired comparisons to her father, Park Chung-hee. Critics saw in Park an unwillingness to tolerate dissent as her government cracked down on press freedom, pushed to dissolve a leftist party, and allowed aggressive police suppression of antigovernment protests, which saw the death of an activist in 2016.
She also was heavily criticized over her government's handling of the 2014 ferry sinking; most of those victims were school kids.
Park has repeatedly apologized over the public anger caused by the latest scandal, but she has denied any legal wrongdoing. She attempted to avoid impeachment last month by making a conditional offer to step down if parliament could come up with a stable power-transfer plan, but the overture was dismissed by opposition lawmakers as a stalling ploy.
Talking with leaders of her conservative ruling party on Tuesday, Park said she would make "every available effort" to prepare for the court's impeachment review.
In indicting Park's longtime friend, Choi Soon-sil, and two former presidential aides last month, state prosecutors said they believed the president was "collusively involved" in criminal activities by the suspects. Choi and the two former aides were accused of bullying large companies into providing tens of millions of dollars and favors to foundations and businesses Choi controlled, and enabling Choi to interfere with state affairs.
Park's lawyer has called the accusations groundless.
Park first met Choi in the 1970s, around the time Park was acting as first lady after her mother was killed during a 1974 assassination attempt on her father. Choi's father, a shadowy figure named Choi Tae-min who was a Buddhist monk, a religious cult leader and a Christian pastor at different times, emerged as Park's mentor.
The Choi clan has long been suspected of building a fortune by using their connections with Park to extort companies and government organizations. Choi's ex-husband is also a former close aide of Park's.

Inflationary pressures are stirring in China

Inflationary pressures are stirring in China

China steel manufacturingChina Photos/Getty Images
Fitting with strong economic data released in recent days, Chinese inflationary lifted sharply last month with both consumer and producer price inflation topping expectations in November.
According to the China’s NBS, consumer price inflation rose by 2.3% from a year earlier, above the 2.1% pace of October and forecasts for an increase to 2.2%.
It was the fastest pace seen since April this year.
From a month earlier CPI rose by 0.1%.
The NBS said that food prices grew by 4% from a year earlier, up from 3.7% in October. Pork prices — a staple of the Chinese diet — rose by 5.6%, courtesy of a low base effect in 2015 rather than an increase in prices during the month.
Non-food inflation also accelerated — fitting with an economy that is clearly strengthening — increasing by 1.8% over the year, the fastest pace seen in over a year.
Prices for consumer goods rose by 2.1% year-on-year, up from 1.9% a month earlier, offsetting a slight moderation in services inflation which slowed to 2.4% from 2.5% over the same period. 
Reflective of surging commodity prices and previous weakness late last year, upstream price pressures were even more acute with producer prices jumping 3.3% from a year earlier.
It marked the fastest year-on-year increase since October 2011, and was miles above market forecasts for an increase of 2.2%.
The rebound in producer price inflation has been spectacular over recent months, a stark contrast to what had been seen in previous years when prices in annualised terms had fallen for 54 consecutive months.
China cpi and ppi Nov 2016Business Insider Australia
The acceleration in inflationary pressures fits with a string of strong economic data reports released in China over recent months.
Manufacturing and services PMI reports — which measure changes in activity levels from one month to the next — both hit multi-year highs in November, indicating that operating conditions in both sectors are starting to improve.
Chinese trade data also topped expectations in November with the value of imports and exports both rising from the levels of a year earlier. 
That’s something that hasn’t been seen since October 2014, and adds to evidence that the economy is finishing 2016 on a strong note.
It’s a very different picture to that seen earlier this year when fears about the Chinese economy intensified to such a degree that it led to a period of extreme financial market volatility.
Renewed government fiscal stimulus helped to address those concerns, leading to the recovery seen today. Given recent signs of strength, it will be interesting to see whether that mantra from the government persists in 2017.
Read the original article on Business Insider Australia. Copyright 2016. Follow Business Insider Australia on Twitter.

Thursday, December 8, 2016

The US is $19.9 trillion in debt — here are the countries we owe the most

The US is $19.9 trillion in debt — here are the countries we owe the most

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01:2702:12
The Unites States has a massive monetary debt to the world, with China being one of the countries we owe the most. 
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Lululemon is soaring after beating on earnings and raising its guidance

Lululemon is soaring after beating on earnings and raising its guidance

LULU Lululemon Athl
 69.46 2.66 (+4.00 %)
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Lululemon shares jumped by as much as 16% in pre-market trading on Thursday after the company reported third-quarter earnings that were stronger than analysts had expected. 
After the market close on Wednesday, the maker of yoga clothing said it earned $0.47 per share in an adjusted basis, topping the forecast for $0.43. Its net revenues rose 13% to $544.4 million.
The company told investors on the earnings call that markdowns had little effect on product margins. 
Lululemon is poised to continue benefitting from strong demand for its leggings, according to Piper Jaffray. The bank's semiannual report on teen spending showed that leggings/Lululemon retained its place as the top fashion trend among teens. 
Lululemon raised its full-year guidance, and its outlook for the fourth quarter was as strong as analysts had forecast. The company saw fourth-quarter earnings in a range of $0.96 to $1.01, in line with the forecast for $1. Net revenue was estimated in a range of $765 million to $785 million, just below the forecast for $787 million.
The company said its board had authorized a $100 million share buyback program. 
Lululemon shares gained 14% this year through the market close on Wednesday. Analysts at Bank of America Merrill Lynch and Mizuho upgraded their rating on the stock post-earnings. 

Japanese economic growth has been revised sharply lower

Japanese economic growth has been revised sharply lower

Photo by Adam Pretty/Getty Images
Just three weeks ago the Japanese economy was looking swell.
According to preliminary GDP estimates offered by the government, the economy expanded at a seasonally adjusted annual rate (SAAR) of 2.2% in the September quarter, the fastest pace seen seen since the March quarter 2015.
Great news, a strong result for the previously struggling economy.
However, there was just one problem. It didn’t grow anywhere near that pace.
The latest reading on third quarter GDP, released on Thursday, revealed the economy grew by 1.3% (SAAR), well below the initial estimate and expectations for an upgrade to 2.4%.
Oops.
Explaining the decline in the annualised terms, real quarterly GDP in seasonally adjusted terms was revised down from an increase of 0.5% to 0.3%. Economists had been expecting that figure to be revised up to 0.6%.
The Japanese Cabinet Office said that business investment fell by 0.4%, below the 0% preliminary estimate, which subtracted 0.1 percentage points from quarterly GDP.
Inventories also subtracted 0.3 percentage point from growth, more than 0.1 percentage point decline reported previously.
Those declines were partially offset by an upward revision to private consumption, which accounts for around 60% of the entire Japanese economy.
It expanded by 0.3%, higher than the 0.1% increase seen previously, adding an additional 0.2 percentage points to quarterly GDP.
Public demand was also revised up from an increase of 0.2% to 0.3%, adding 0.1 percentage points to quarterly figure.
The Japanese government recently adopted a new base year for calculating GDP, leading to revisions to prior data. According to economists, this made forecasting the revised GDP figure more difficult on this occasion.
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