Föhrenbergkreis Finanzwirtschaft

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Archive for September 2018

U.S. and EU—but Not Germany— Support Land Swap in Balkans

Posted by hkarner - 30. September 2018

Date: 29-09-2018
Source: The Wall Street Journal

Washington and Brussels favor Serbia and Kosovo redrawing their border along ethnic lines, an approach Berlin says would open Pandora’s box

BRUSSELS—U.S. and European Union leaders are converging toward supporting a plan under which two Balkan countries would redraw their fraught common border along ethnic lines, isolating Germany, the continent’s most influential power, in its rejection of that approach, a confidential document shows.

A recent memo by the EU’s foreign service about how to solve a decade-old standoff between Serbia and Kosovo, reviewed by The Wall Street Journal, shows the EU’s executive body has essentially adopted Washington’s argument and rejected Germany’s.

While the agreement indicates that Europe and the U.S. continue to work closely together on foreign-policy initiatives affecting the region, the rift with Germany also shows Washington’s willingness to ignore objections by the continent’s leading power in its own backyard. Den Rest des Beitrags lesen »

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Europe Is Left in the Dust as U.S. Stocks Roar

Posted by hkarner - 30. September 2018

Date: 30-09-2018
Source: The Wall Street Journal

While U.S. and Japanese shares raced ahead, Europe’s shares were left behind in third quarter

European stocks have been left behind by a rally that has taken the U.S. market to record highs in the third quarter.

Few analysts see the region catching up soon, unless there is clarity on the political and trade concerns that pushed investors to sell.

Investors have withdrawn money from European equity funds in 28 of the past 29 weeks, driving the share of Europe in global portfolios to its lowest since January 2015, when the European Central Bank announced its massive bond-purchase program, according to data from fund tracker EPFR and the Institute of International Finance.

That has largely reversed the tide of cash that poured into the region in early 2017, when an election in France elevated investors’ preferred candidate to power. In contrast, funds in the U.S., Japan and even some emerging-market equities have drawn inflows this year.

The Stoxx Europe 600 index rose less than 1% in the third quarter, compared with a 7.2% gain for the S&P 500 and 8.1% for Japan’s Nikkei Stock Average. The European index is now trading below where it was one year ago, compared with an 8.2% gain in a broad index of world stocks.

“U.S. client interest in Europe is very low right now—almost as low as it gets,” said Richard Turnill, BlackRock’s global chief investment strategist.

As the U.S. economy continues its robust run, the gap between 10-year German and U.S. government bond yields has reached its widest since the euro was launched in 1999, according to data from Tradeweb and Thomson Reuters.

The downbeat sentiment comes even as Europe’s earnings expectations for the year have remained stable, the euro and British pound have stopped climbing, and the region’s economy has shown signs of stabilizing after a tricky start.

Our view on Europe is predominantly politically driven,” said Candice Bangsund, portfolio manager at Fiera Capital, which currently holds a smaller-than-usual allocation to European stocks.

The future trading relationship between the U.K., one of the region’s largest economies, and the rest of the continent remains uncertain as Brexit negotiations drag on. Italy’s new government, meanwhile, has significantly widened its budget-deficit target, raising questions about the country’s debt sustainability and relationship with Brussels.

The U.K. and Italy’s benchmark stock indexes have both seen double-digit percentage falls in their price-to-earnings ratios this year amid the uncertainty.

European companies are also more exposed than those in the U.S. to emerging markets, and the developing world has been hit by a rising dollar, expensive oil and concerns about trade protectionism.

Roughly 19% of revenues from companies listed in the Stoxx Europe 600 come from emerging markets, according to FactSet. That compares with 14% for the S&P 500, an index of large-cap U.S. stocks.

Roland Kaloyan, head of European equity strategy at Société Générale, said the correlations between European stocks and emerging markets recently reached levels last seen in 2010.

But trade protectionism is by far the biggest risk to Europe’s outlook, analysts say.

Europe’s auto sector has been hit particularly hard by worries about tariffs, trading down about 23% from its peak in January.

“Europe is more exposed to protectionism because it has a more open economy and has closer ties to China,” said Silvia Dall’Angelo, senior economist at Hermes Investment Management.

Uncertainty about future trade relations has already hit eurozone exports. In manufacturing, export orders failed to grow for the first time in five years.

All this means there will be bargains in Europe, should more clarity come on the political front, some investors say.

European stocks now trade at 13.9 times future expected earnings, compared with 15 at the start of the year.

European companies are seeing revenue upgrades for the first time in a year, according to strategists at UBS . “A lot of investors are looking at valuations and looking for a reason to come back” to Europe, said Mr. Kaloyan.

If we got some sort of clarity on Italy or Brexit, we could see a rebound.”

Much will also depend on whether investors continue to favor so-called growth stocks such as technology companies, which make up a small portion of European indexes. Tech stocks in the S&P 500 are up roughly 19% this year and now make up 21% of that index. Tech makes up just 5% of the Stoxx Europe 600. Unless value stocks—those that are trading for the lowest prices relative to their earnings or underlying net worth—start to outperform, it will be difficult for Europe to pull ahead, fund managers say.

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The ‘Dumb’ Money Is Bailing on U.S. Stocks. That’s Smart.

Posted by hkarner - 30. September 2018

Date: 29-09-2018
Source: The Wall Street Journal By Jason Zweig

Now more than ever, investors need to consider investing in overseas stock markets
The ‘Dumb’ Money Is Bailing on U.S. Stocks. That’s Smart.

Does it make sense to invest anywhere but in the U.S?

While the S&P 500 is within 1% of its all-time high, European markets are flat, Chinese stocks are in a deep slump and the Japanese market—after a huge recent run-up—has finally clawed its way back to where it was 27 years ago.

Through Aug. 31, the S&P 500 has outperformed international stocks, as measured by the MSCI World ex USA Index, over the past one, three, five, 10, 15, 20, 25, 30, 35, 40 and 45 years, according to AJO, an institutional investment manager in Philadelphia. Had you put $10,000 in each in 1973 and reinvested all your dividends, your U.S. holdings would be worth $1.06 million; your international stocks, $356,000. Den Rest des Beitrags lesen »

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In the struggle for AI supremacy, China will prevail

Posted by hkarner - 30. September 2018

Date: 27-09-2018
Source: The Economist

Or so reckons Kai-Fu Lee, a tech insider, in “AI Superpowers”

AI Superpowers: China, Silicon Valley and the New World Order. By Kai-Fu Lee. Houghton Mifflin Harcourt; 272 pages; $28.

CHINA’S “Sputnik moment” came on May 27th 2017. On that day an algorithm thrashed Ke Jie, the world’s best player of Go, an ancient and demanding Chinese board game. Mr Ke’s defeat by AlphaGo, an artificial intelligence (AI) system developed by DeepMind, a British firm that had been bought by Google, was as much a blow to China’s psyche as the Soviet satellite was to America’s self-esteem in 1957. Within months, China announced ambitious plans to dominate AI by 2030.

Kai-Fu Lee thinks it will succeed. He is well placed to judge. He moved from Taiwan to America at 11, earned a PhD in AI in the 1980s and has been a senior manager at America’s mightiest tech firms, including Apple, Microsoft and Google. Now he runs a Chinese venture-capital fund, which gives him a ringside seat for the contest between what he calls the two “AI superpowers”, China and America.

He thinks China will win because it has the edge in the four determinants of AI success: brains, capital, regulation and data. His verdict on the last three criteria is largely persuasive. For example, China’s internet economy generates vastly more data than any other, particularly in the area of payments—many Chinese merchants eschew coins and currency in favour of digital money. Meanwhile, whereas American cities are restricting self-driving cars, the district of Xiong’an, 60 miles south of Beijing, is being built from scratch to accommodate them (along with 2.5m people). The mayors of Chinese cities are splashing cash on AI startups. Den Rest des Beitrags lesen »

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Just Incredible

Posted by hkarner - 30. September 2018

Date: 29-09-2018
Source: The Guardian by Michael Lewis
Subject: ‘This guy doesn’t know anything’: the inside story of Trump’s shambolic transition team

Michael Lewis, author of Moneyball and The Big Short, reveals how Trump’s bungled presidential transition set the template for his time in the White House

Chris Christie noticed a piece in the New York Times – that’s how it all started. The New Jersey governor had dropped out of the presidential race in February 2016 and thrown what support he had behind Donald Trump. In late April, he saw the article. It described meetings between representatives of the remaining candidates still in the race – Trump, John Kasich, Ted Cruz, Hillary Clinton and Bernie Sanders – and the Obama White House. Anyone who still had any kind of shot at becoming president of the United States apparently needed to start preparing to run the federal government. The guy Trump sent to the meeting was, in Christie’s estimation, comically underqualified. Christie called up Trump’s campaign manager, Corey Lewandowski, to ask why this critical job had not been handed to someone who actually knew something about government. “We don’t have anyone,” said Lewandowski. Den Rest des Beitrags lesen »

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Modernes Banking spaltet die Österreicher

Posted by hkarner - 29. September 2018

Bettina Pfluger, 29. September 2018, 14:00 derstandard.at

Für Bezahlen und Banking gibt es mittlerweile viele Möglichkeiten. Das Verhalten der Kunden teilt Österreich in zwei Hälften, zeigt eine Studie.

Wie stehen die Österreicher zum Bargeld? Bezahlen sie lieber mit Karte oder bar? Nutzen sie Onlinebanking, oder brauchen sie noch eine Bankfiliale? Und wie sieht es mit den Angeboten von Fintechs und Kryptogeld aus? Diesen Fragen ist die Oesterreichische Nationalbank (OeNB) nachgegangen. Die Ergebnisse der Studie „How Austrians bank and pay in an increasingly digitalized world“ zeigen deutlich: „Es gibt eine digitale Trennlinie“, erklärt Doris Ritzberger-Grünwald, Direktorin der Hauptabteilung Volkswirtschaft der OeNB. Die eine Seite agiert digital und modern, zahlt oft mit Karte oder kontaktlos, macht Onlinebanking und braucht die Infrastruktur einer Bank nicht unbedingt. Die andere Hälfte setzt auf Bargeld, geht regelmäßig in eine Bankfiliale und ist „weit entfernt vom Onlinebanking“, sagt Ritzberger-Grünwald. So nutzen 58 Prozent der Österreicher ab dem 15. Lebensjahr Onlinebanking, 32 Prozent besuchen einen Bankschalter höchstens einmal im Jahr, und 50 Prozent bezahlen mit der Karte – gern auch kontaktlos. Demgegenüber stehen 43 Prozent, die zumindest einmal im Monat zum Bankschalter gehen.

Hohe Affinität

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The SEC threatens to ban Elon Musk from running any company

Posted by hkarner - 29. September 2018

Date: 28-09-2018
Source: The Economist

Half of Tesla’s value could disappear with him

ELON MUSK has probably played a greater role in the success of his company than any chief executive in recent memory apart from Steve Jobs, who led Apple to greatness. It is hard to imagine the rise of Tesla, a pioneering electric-vehicle (EV) manufacturer, from obscure startup to world leader without the technical genius, showmanship and sheer audacity of Mr Musk.

So it comes as a shock that the Securities and Exchange Commission (SEC), the main regulator of America’s stockmarkets, now wants to ban Mr Musk for life from serving as a director or senior officer at any publicly listed company, including Tesla. After the close of trading on September 27th, the SEC filed a civil lawsuit against Tesla’s boss (but not against Tesla) alleging that he misled shareholders about his plan to take the company private. The mercurial Mr Musk had tweeted on August 7th, “Am considering taking Tesla private at $420. Funding secured.”

In one of the most significant civil prosecutions of alleged securities fraud in many years, the SEC is now seeking to prove in court that Mr Musk defrauded investors through his bizarre and ill-considered actions. The nub of its argument, as laid out in its official filing document, is that Mr Musk “knew that he had never discussed a going-private transaction at $420 per share with any potential funding source.” Den Rest des Beitrags lesen »

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The NHS genomic service could transform medicine

Posted by hkarner - 29. September 2018

Date: 28-09-2018
Source: The Economist

Its size, universal coverage and lifelong health records make it uniquely valuable for research

FORTY per cent of the babies born in Britain in the week starting on March 3rd 1946 became the first subjects in a project that eventually achieved global scientific renown (and inspired its share of laboratory envy). Along with children from three younger generations, 58,000 in total, those babies have been followed by researchers throughout their lives. Troves of data on everything from child development to ageing have helped to shape health care in Britain and beyond.

Now the National Health Service is launching another big-data programme that could be just as transformative. From October, NHS England will begin to routinely carry out a standard set of genomic tests for some cancers and rare diseases, filling in the patchy use of such tests today. Crucially, for patients who consent, the data from these tests will be held at a national research centre along with their health records. The NHS’s size, universal coverage and cradle-to-grave health records promise to make the database uniquely useful. Den Rest des Beitrags lesen »

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Labour’s creep towards a second referendum creates more uncertainty

Posted by hkarner - 29. September 2018

Date: 27-09-2018
Source: The Economist

The party backs a motion that leaves all options on the table

THE most striking mood-swing at this year’s Labour conference was the growing hostility to Brexit. In place of previous ambivalence, badges screaming “Bollox to Brexit” were everywhere. Fringe meetings were thick with members denouncing a Tory Brexit designed to benefit corporate interests at the expense of workers. And when Sir Keir Starmer, the shadow Brexit secretary, declared that parliamentary deadlock might justify a people’s vote, adding that nobody could say that Remain would not be an option, he received one of the conference’s biggest standing ovations.

Sir Keir claims that the party is united on Brexit, but it is not. A long and much-contested motion, passed at the conference, leaves all options open, including another vote. For all Labour’s pretence at being constructive this week, Sir Keir’s six tests mean that the party is all but certain to oppose any deal Theresa May brings back from Brussels. The party leadership is more Eurosceptic than the membership. It is also more dubious about the idea of a second referendum. Some big trade unions, as well as quite a few Labour MPs, are unhappy being seen to challenge the democratic decision of June 2016. Although polls show rising support for a fresh vote on a Brexit deal (see chart), party leaders fret that calling for it to include a Remain option could drive Leave voters in Labour seats into the Tories’ arms. Den Rest des Beitrags lesen »

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The world’s oldest political party’s new problems

Posted by hkarner - 28. September 2018

Date: 27-09-2018
Source: The Economist

How Brexit weakens and strengthens Britain’s Conservatives
And how it may yet spell their doom

THE Conservative Party has met with triumph and disaster a number of times since the 1830s, and if it has not treated them just the same, it has at least survived them. There were long periods of uninterrupted rule, such as 1951-64 and 1979-97. There were times of marginalisation, even irrelevancy, like that which followed Robert Peel’s decision to repeal the Corn Laws in 1846 and the one that was ushered in by the victory of Tony Blair’s New Labour in 1997. Today, though, it is experiencing something stranger than either: both. The Tories are weak and strong at the same time.

When the party gathers in Birmingham on September 30th for its annual conference, the evidence of weakness will be plain to see. The party does not have a majority in the House of Commons; Theresa May, the prime minister, is clinging to power through a grubby deal with the ten Northern Irish MPs of the Democratic Unionist Party (DUP). The government’s domestic agenda is so threadbare that there will be no Queen’s Speech (which traditionally lays out the government’s agenda at the beginning of the new parliamentary session) this year. Den Rest des Beitrags lesen »

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