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Archive for 13. August 2019

Investors Ponder Negative Bond Yields in the U.S.

Posted by hkarner - 13. August 2019

Date: 12-08-2019
Source: The Wall Street Journal

Last week’s slide in Treasury yields is deepening worries about lackluster growth, low inflation

A steep slide in U.S. government-bond yields last week wrong-footed investors and left some pondering what was once unthinkable: whether interest rates in America could one day turn negative.

Historically, people who lent money out got more money back later, a way to compensate for inflation, for the risk of not being repaid and for forgoing other investments.

Now, though, there is more than $15 trillion in government debt around the world with negative yields. That means, essentially, that savers holding these bonds are paying the government to store their money.

So far, the U.S. has avoided that fate. Less than a year ago, the Federal Reserve was hiking short-term interest rates, and investors were betting that yields—which rise when bond prices fall—on longer-term debt would continue climbing as U.S. growth showed signs of accelerating and as unemployment plumbed historic lows.

The trade dispute between the U.S. and China, slowing global growth and financial-market turmoil late last year changed that. The Fed pivoted in the beginning of 2019 and, late last month, cut short-term rates for the first time since 2008. Den Rest des Beitrags lesen »

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Chinese Auto Makers Go Global as Sales Slow at Home

Posted by hkarner - 13. August 2019

Date: 12-08-2019
Source: The Wall Street Journal

China’s leading brands are building major factories overseas, realizing Beijing’s ambition for them to become global players

China’s car makers have matured domestically and now want to expand overseas. An electric-vehicle assembly line in Qingdao owned by a joint venture including SAIC and General Motors.

Chinese auto makers are investing billions of dollars to establish footholds in foreign markets, from India to Africa and Europe.

China’s car manufacturers once struggled to sell their cars at home, let alone abroad. Now, the cars they are producing are much improved, analysts say, matching foreign rivals on quality and outflanking them on price. Leading Chinese brands are aiming to capitalize by building their first major factories overseas, realizing Beijing’s long-held strategic ambition for homegrown car makers to become globally competitive players.

SAIC Motor Corp., China’s biggest auto maker, in June began testing the Indian market with a new sport-utility vehicle called the MG Hector, releasing 21,000 vehicles it expected to sell over six months; the SUVs sold out in four weeks. Den Rest des Beitrags lesen »

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