Edition:
United States

James Thorne

U.S. value stocks capitalize on 'FANG' stumbles, with room to run

Aug 17 2018

NEW YORK The summer roller-coaster in two of the four big-cap 'FANG' names - Facebook Inc, Amazon.com Inc, Netflix Inc and Google-parent Alphabet Inc - has led to a shift, albeit slight, into value stocks.

CANADA FX DEBT-C$ gains as accelerating inflation raises rate hike prospects

Aug 17 2018

* Loonie strengthens 0.56 pct vs greenback * July inflation higher than expected * 10-year yield rises to 2.262 percent By James Thorne NEW YORK, Aug 17 The Canadian dollar gained against its U.S. counterpart on Friday after the country's annual inflation rate accelerated by more than expected, increasing prospects that the Bank of Canada might raise interest rates next month. Canada's annual inflation rate rose 3 percent in July versus 2.5 percent the previous month as energy prices climbed. Economists polled by Reuters had forecast 2.5 percent annual inflation. At 9:35 a.m. EDT (1335 GMT), the Canadian dollar was trading 0.56 percent higher at C$1.3078 to the greenback, or 0.7644 U.S. cents. On Monday, it neared a three-week low of C$1.3179. "With that size of a shock, (the Canadian dollar) probably should have moved more," said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets in New York. "This really does raise the possibility of the Bank of Canada raising rates in September again." Money markets expect the central bank to hike its benchmark interest rate, which sits at 1.50 percent, once more by December. The CPI data came a day after a report from Statistics Canada that showed Canadian factory sales grew by 1.1 percent in June from May, a positive sign for manufacturing. Markets remained broadly bullish on the U.S. dollar amid uncertainty around trade, Anderson said. U.S. Trade Representative Robert Lighthizer on Thursday said he hoped there would be a breakthrough in NAFTA trade talks in the next few days. The 10-year yield rose to 2.262 percent, from 2.256 percent late on Thursday. (Reporting by James Thorne Editing by Susan Thomas)

UPDATE 1-Investors see opportunity in emerging market funds -Lipper

Aug 16 2018

(Adds byline, table; updates throughout) By James Thorne NEW YORK, Aug 16 Investors pulled $506 million from U.S.-based domestic equity funds while showing an appetite for emerging market equities during the week ended Wednesday, according to Lipper data on Thursday. Emerging market equity funds based in the United States brought in cash for the fourth straight week, adding $223 million. Despite widespread concern that a currency crisis in Turkey might infect European banks and other emerging markets, “investors weren’t pulling the trigger,” said Tom Roseen, head of research services at Thomson Reuters Lipper. U.S.-based international equity funds saw demand slacken, posting $410 million in withdrawals. Investors overall were keen on putting money back into play amid the turmoil, withdrawing $2.2 billion from U.S.-based money market funds. U.S.-based investment-grade corporate bond funds attracted $1.5 billion for the week, extending an inflow streak since March, Lipper said. But investors in exchange-traded funds, who tend to trade shorter-term market moves, withdrew $434 million from the investment-grade category, the weakest demand since March. "These investors might be worried" about inflation, said Roseen. U.S. consumer prices rose in July, pointing to a steady increase in inflation pressures. The following is a breakdown of the flows for the week, including mutual funds and ETFs: Sector Flow Chg ($Bil) % Assets Assets ($Bil) Count All Equity -0.639 -0.01 7,395.830 12,330 Funds Domestic -0.506 -0.01 5,250.346 8,752 Equities Non-Domestic -0.133 -0.01 2,145.485 3,578 Equities All Taxable 0.798 0.03 2,808.493 6,102 Bond Funds All Money -2.189 -0.08 2,720.945 1,038 Market Funds All Municipal 0.452 0.10 439.285 1,455 Bond Funds (Reporting by James Thorne; Editing by Jennifer Ablan and Leslie Adler)

TABLE-U.S. fund investors move cash to foreign stocks, most since May -ICI

Aug 15 2018

By James Thorne NEW YORK, Aug 15 U.S. fund investors turned up demand for bonds and global equities during the most recent week, but pulled back from domestic stocks, Investment Company Institute (ICI) data showed on Wednesday. Mutual funds and exchange-traded funds (ETFs) with a focus on international stocks brought in $1.74 billion, the most since May, according to ICI data collected over the week ended Aug. 8. But risk appetite did not extend to domestic equity funds, which posted $3.4 billion in withdrawals, the largest week of outflows in a month, according to the trade group. Investors instead accelerated a march into bond funds, shifting $6.14 billion into taxable bond funds and $723 million to municipal bond funds. "Fixed income on a relative basis has actually become fairly attractive," said Fritz Folts, chief investment strategist at 3EDGE Asset Management in Boston. "The strength of the dollar can allow long-term yields to remain stable for a while." During the week, investors wrestled with an intensifying dispute between the United States and China as well as Turkey, while strong corporate earnings helped lift Wall Street stock indexes. Apple Inc last week became the first publicly traded company with a market capitalization exceeding $1 trillion. So far this year, U.S.-based bond funds have collected an estimated $167 billion in cash deposits, while demand for equities is negative over that same period, ICI data showed. Weekly demand for commodity funds was the weakest in more than a month, with investors pulling out $450 million. The strong dollar and negative momentum have made commodities less attractive, Folts said. The following table shows estimated ICI flows for mutual funds and ETFs (all figures in millions of dollars): 8/8 8/1 7/25 7/18 7/11 Equity -1,666 -3,011 419 1,494 -3,155 Domestic -3,407 -2,130 524 1,300 -1,546 World 1,741 -881 -105 195 -1,609 Hybrid -1,447 -2,268 -1,165 -1,829 -1,048 Bond 6,857 5,846 4,417 8,660 7,445 Taxable 6,135 5,682 3,817 6,894 6,416 Municipal 723 164 600 1,765 1,028 Commodity -450 -101 164 -308 101 Total 3,294 465 3,835 8,016 3,343 (Reporting by James Thorne; editing by Trevor Hunnicutt, G Crosse)

FACTBOX-Companies in Mexico and Brazil with dollar debt exposure

Aug 15 2018

By James Thorne Aug 15 A currency crisis in Turkey has led to fears of a contagion effect in emerging markets as far as Latin America, with potential repercussions for companies holding large amounts of dollar-denominated debt. The lira has lost more than 40 percent this year and crashed to an all-time low to the dollar on Monday, hit by worries over political calls for lower borrowing costs and by worsening ties with the United States. The plunge in the Turkish lira set off a wave of seemingly indiscriminate selling across emerging market assets, giving rise to fears that a crisis in one country could spill over to others. "When there is a steep depreciation we see pressure in credit measures," said Marianna Waltz, managing director at Moody's in Brazil. Companies that earn large shares of revenue in hard currencies abroad will be better protected than those with locally-generated revenues, Waltz said. Against the dollar, as of Tuesday the Brazilian real had fallen 2.8 percent and the Mexican peso was 2.9 percent weaker since Thursday's close, the day before the Turkish lira's 13 percent plunge. The following Latin American companies have reported a significant portion of dollar-denominated debt. MEXICO Company RIC Industry Gross debt, Dollar-deno Date billions minated (USD) share (pct) Gruma <GRUMA Corn and $1.20 73 Mar-18 B.MX> flour tortilla production Cemex <CMXCP Cement $10.44 66 Jun-18 O.MX> production Grupo <BIMBO Food $4.66 59 Jun-18 Bimbo A.MX> processing America <AMXL. Telecoms $34.50 29 Jun-18 Movil SAB MX> de CV *Foreign exchange rate at 19.90 Mexican pesos per dollar BRAZIL Company RIC Industry Gross debt, Dollar-deno Report billions minated ing (USD) share Date JBS SA <JBSS Meat $14.50 95 Mar-18 3.SA> processing Gerdau <GGBR Steel $4.65 83.7 Jun-18 SA 4.SA> manufacturing Minerva <BEEF Meat $2.85 77 Jun-18 SA 3.SA> processing Klabin <KLBN Paper and $5.01 71 Jun-18 SA 4.SA> pulp BRF SA <BRFS Food $5.32 54 Jul-18 3.SA> production (foreign) *Foreign exchange rate at 3.89 Brazilian reais per dollar (Reporting by James Thorne in New York; additional reporting by Marcelo Rochabrun in Sao Paulo and Julia Love, Sheky Espejo and Anthony Esposito in Mexico City, Editing by Rosalba O'Brien)

Wall Street ends lower as Turkey woes hit banks

Aug 10 2018

NEW YORK U.S. stocks slid on Friday as a deepening economic crisis in Turkey dragged on bank shares and triggered a move out of riskier assets. | Video

Wall Street closes higher as strong earnings cheer investors

Aug 06 2018

NEW YORK The three major U.S. stock indexes closed higher on Monday as investors applauded a strong U.S. earnings season with results from Berkshire Hathaway impressing and Facebook lifting Nasdaq after a report it was planning new services. | Video

Wall Street eyes more gains from Apple, its $1 trillion stock

Aug 03 2018

Shares in Apple Inc edged higher on Friday but stayed close to the $1 trillion valuation milestone the iPhone maker reached a day earlier, even as Wall Street predicted more gains.

Wall St eyes more gains from Apple, its cheapest $1 trillion stock

Aug 03 2018

Aug 3 Shares in Apple Inc edged higher on Friday, bobbing close to the iPhone maker's $1 trillion valuation milestone, but Wall St was just biding its time for more gains.

U.S. domestic stock funds report more demand than peers abroad: Lipper

Jul 26 2018

NEW YORK Investors in U.S. funds traded international equities for domestic stocks during the latest week as earnings beat expectations while trade tensions simmered, Lipper data showed on Thursday.

World News

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