Friday, December 2, 2016

UK construction growth hits eight-month high, but costs balloon: Markit


UK construction growth hits eight-month high, but costs balloon: Markit


Growth in Britain's construction industry unexpectedly touched an eight-month high in November, but its costs rocketed at the fastest pace since 2011, fueled by sterling's slump after the June vote to quit the European Union, a survey showed on Friday.
The Markit/CIPS UK Construction Purchasing Managers' Index (PMI) edged up to 52.8 from 52.6 last month, helped by improved readings for commercial and civil engineering activity, as well as solid growth in house building.
A Reuters poll of economists had forecast a reading of 52.2.
"UK construction companies experienced a steady recovery in business activity during November, which continues the rebound from the downturn seen over the third quarter of 2016," said Tim Moore, a senior economist at the survey's compiler, Markit.
Companies cited a resumption in projects delayed after the Brexit vote as a factor for the improvement, although optimism about the coming year remained near lows last seen in early 2013.
Britain's economy has performed much better than expected since the Brexit referendum. But a bigger test will come next year, when inflation is expected to rise, eating into households' spending power.
Like Thursday's manufacturing PMI, the latest construction survey pointed to a rapid buildup of inflationary pressure. Its gauge of prices companies paid for materials rose to its highest since 2011.
Wednesday's 10 percent surge in crude oil prices - after OPEC and Russia agreed to restrict production - pushed the dollar cost of oil close to levels not seen in 18 months, and drove home the cost pressures facing British firms.
The fall in sterling caused the Bank of England to raise its inflation forecasts in November to allow for a bigger overshoot of its price target than at any time since it gained independence in 1997.

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Construction firms quickened their pace of hiring for a fourth month in a row, with jobs growth hitting a six-month high.
((Reporting by Adela Suliman, editing by Larry King))



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Trump is about to inherit the 'strongest overall job market in a generation'

Trump is about to inherit the 'strongest overall job market in a generation'

  • 3h
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Donald trump flagBrian Snyder/Reuters
Once again, Friday is jobs day in America.
The Bureau of Labor Statistics will release its report on America's November employment situation at 8:30 a.m. ET.
Here's what economists are forecasting, according to Bloomberg:
  • Nonfarm payrolls: +180,000
  • Unemployment rate: 4.9%
  • Average hourly earnings month-on-month: +0.2%
  • Average hourly earnings year-on-year: +2.8%
  • Average weekly hours worked: 34.4
Going by these forecasts, the job market looks set to wrap up the year on a strong note.
"Despite lots of uncertainty about upcoming Trump policies, the good news is that the incoming administration stands to inherit a stable and growing economy with the strongest overall job market in a generation," said Andrew Chamberlain, the chief economist at Glassdoor, in a note. Private-sector employment is on its longest streak of growth on record. 
Among the data we have that support the case for a strong report are initial jobless claims. In the survey week for the jobs report, the tally of people who filed for unemployment insurance for the first time fell by 28,000 to the lowest level since 1973. Claims have not risen above 300,000 for 91 weeks, the longest streak since when Richard Nixon was president.
labor differentialThe Conference Board's labor differential shows that of late, more people are saying jobs are plentiful versus those who say they are hard to get. Andy Kiersz/Business Insider
Also, consumer surveys have shown that it's a relatively better time to be job hunting.
The Conference Board's labor differential, which shows the tilt of opinions on whether jobs are plentiful or scarce, has been net positive for five straight months, the longest streak since 2007.
Surveys of consumer confidence have taken on more importance in recent weeks — a trend likely to continue in the coming months — following the unexpected election outcome.
Trump's victory showed many Americans' anger at the growing inequality gap.
Since the 1980s, the share of household wealth for the top 0.1% has increased while the opposite has happened for the bottom 90%. And amid all the labor-market gains since the 2008 recession, wage growth has been a disappointing laggard. 
However, in October, average hourly earnings grew to a post-recession high on a year-over-year basis. Economists forecast that the 2.8% pace was sustained again in November.
That's partly because of a continued skills gap. As the unemployment rate shrank, and due to inadequate qualifications, businesses have struggled to find the workers they want to hire. This scarcity tightens the market and gives current workers some more bargaining power.
Also, minimum-wage laws are turning in workers' favor. Voters in Maine, Arizona, Colorado and Washington voted in November to raise the minimum wage to at least $12 an hour by 2020. The federal minimum wage of $7.25 an hour hasn't changed since 2009 and Congress has blocked several attempts to raise it. 
Higher wages would put upward pressure on inflation, move price changes closer to the Federal Reserve's 2% target, and prompt it to continue raising interest rates. Friday's jobs report is expected to cement the expectation for another rate hike at the Fed's December meeting.

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Thursday, December 1, 2016

A Silicon Valley startup that flips houses just got valued at $1 billion

A Silicon Valley startup that flips houses just got valued at $1 billion

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Eric WuEric Wu, the cofounder and CEO of Opendoor. LinkedIn
Opendoor Labs Inc. has joined the "unicorn" club of startups valued at more than $1 billion (£800 million) after its fourth and latest funding round, led by Norwest Venture Partners, Bloomberg reports.
The San Francisco startup, founded in 2014, has a simple business model — it buys houses in cash, makes some minor repairs, and then resells them at a higher price.
Cofounder and CEO Eric Wu's LinkedIn profile says: "Our mission is to make residential real estate liquid, changing the traditional sales process by making it simple to buy and sell real estate online."
It currently purchases homes only in Las Vegas, Phoenix, and Dallas-Fort Worth, according to its website, but it says it's using the $210 million (£168 million) it just raised to expand to 10 cities next year.
The company says 3,875 homeowners "have made a better move with Opendoor" on its website, such as those who need to sell their house quickly.
A UK startup with a similar proposition, Nested, recently raised £3 million ($3.8 million). The London-based Nested, which wants to be "the Amazon for house sales," promises to sell your house within 90 days or lend you a guaranteed amount of interest-free cash to buy your next property.
Earlier this year, the London property-crowdfunding startup Property Partners — which fronts up the cash for a deposit on a property, underwrites the deal, and then crowdsources investors to fund the whole price — laid off 29% of its staff as part of what it's calling a restructuring of the business to "focus on our core business proposition."
The property companies are part of a growing number of startups that brand themselves as"PropTech." A potential problem with these business models is that they are based on the assumption that both rents and property values will continue to rise, which is not an idiotic assumption over the long term, but what if they stop?
At the same time, Phoenix and Vegas, two of Opendoor's three covered areas, were among the areas most affected by the 2007 US property bubble.

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CME Group to set monthly trading record, boosted by Trump: CFO


CME Group to set monthly trading record, boosted by Trump: CFO


By Tom Polansek | CHICAGO
CME Group Inc (CME.O) will set a monthly record for trading volumes in November, a top executive said on Wednesday, as U.S. President-elect Donald Trump's surprise victory has injected uncertainty into markets.
Three of CME's top 10 trading days for volumes have occurred since Trump's election on Nov. 8, and volumes have been averaging more than 20 million contracts per day, said John Pietrowicz, CME's chief financial officer, on a webcast of a JP Morgan investor conference.
That is up about 45 percent from November 2015, when the average daily volume was 13.7 million contracts.
At rival Intercontinental Exchange Inc (ICE.N), volumes in November were set to be up 10 percent from a year ago, although not an overall record, spokeswoman Kelly Loeffler said in an email.
Republican Trump's win may continue to support strong volumes and volatility in markets because he is "an inherently volatile guy who's hard to predict," said Craig Pirrong, a finance professor at the University of Houston.
New York businessman Trump has never previously held public office. He has spoken about stimulating the U.S. economy and improving infrastructure, driving trading in futures and options for products ranging from Treasuries to metals, CME executives said at the conference.
Infrastructure investments would require the use of copper and other commodities and "customers are recognizing, 'Hey there's going to be some price volatility that we hadn't factored in before,'" Derek Sammann, CME's head of commodities and options, said on the webcast.
On Nov. 9, the day after the election, futures and options trading volumes set a one-day record of 44.5 million contracts at CME, which owns the Chicago Mercantile Exchange and other markets. The previous record was 39.6 million contracts on Oct. 15, 2014.
On Nov. 23, CME set a record open interest of 117 million contracts, beating the previous record from June.
CME's Pietrowicz said a new president with new policies could create risks and uncertainty "depending on your points of view." CME's markets were "really providing a lot of opportunity for our customers to take point of view in terms of that kind of level of uncertainty," he said.

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Uncertainty about global oil production has also helped drive trading in energy markets.
ICE Brent crude was headed for a daily volume record on Wednesday, after some of the world's largest oil producers agreed to curb production for the first time since 2008, according to the exchange.
That market was on track for its second largest volume month, ICE said.
(Editing by Jeffrey Benkoe and Grant McCool)



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Steve Cohen is paying $135 million to settle an insider trading case from his old hedge fund

Steve Cohen is paying $135 million to settle an insider trading case from his old hedge fund

Reuters
  • Nov. 30, 2016, 5:16 PM
  • 1,678
steve-cohenSteve Cohen.
NEW YORK, Nov 30 (Reuters) - Billionaire Steven A. Cohen's former hedge fund SAC Capital Advisors LP has agreed to pay $135 million to resolve a lawsuit by shareholders of Elan Corp, who claimed they lost money because it engaged in insider trading in the drugmaker's stock.
The proposed settlement was disclosed in court papers filed on Wednesday in Manhattan federal court and would resolve a class action launched following the arrest of a former SAC Capital portfolio manager, Mathew Martoma, for insider trading. (Reporting by Nate Raymond in New York; Editing by Chris Reese)
Read the original article on Reuters. Copyright 2016. Follow Reuters on Twitter.

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Goldman Sachs is trading at its highest level since the financial crisis

Goldman Sachs is trading at its highest level since the financial crisis

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Lloyd BlankfeinGoldman Sachs CEO Lloyd Blankfein.Jemal Countess/Getty Images
GS Goldman Sachs Group
 224.68 5.23 (+2.40 %)
DisclaimerMore GS on Markets Insider »
Goldman Sachs shares are trading at their highest levels since 2007.
Shares were trading at $218.90 around 12:15 p.m. ET on Wednesday after increasing steadily from $161.27 on August 31.
Analysts from both Deutsche Bank and KBW upgraded the global investment bank on Tuesday.
"For GS, we believe we are moving to a better trading environment for FICC" — fixed income, currencies, and commodities — "trading and GS should benefit more than peers given the company's reliance on trading results and the greater contribution from FICC revenues toward total revenues," KBW's Frederick Cannon, Brian Kleinhanzl, and Allyson Boyd wrote.
"In general, we are more confident in rising rates and better trading versus wide-sweeping regulatory changes, and we believe BAC and GS offer the best exposure to both at still reasonable valuations."
Deutsche Bank's Matt O'Connor upgraded the bank to a "buy" rating, saying it seems well positioned for a stronger macro environment given 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)," he wrote. "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.
Screen Shot 2016 11 30 at 12.28.01 PMYahoo! Finance
Most Wall Street banks have been performing strongly since President-elect Donald Trump's election win earlier this month. The BKX index of bank stocks is up about 15% since the election, versus a 3% rise in the S&P 500.
Trump on Wednesday appointed the former Goldman Sachs banker Steven Mnuchin Treasury secretary. Steve Bannon, Trump's incoming chief strategist, is also a Goldman Sachs alum.
Trump is also reportedly considering Goldman Sachs President Gary Cohn to be his budget chief.

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