|Day's Range||1.9500 - 2.0300|
MOLINE, Ill., Oct. 14, 2019 /PRNewswire/ -- Deere & Company (DE) has signed an agreement to acquire Unimil, a privately-held Brazilian company in the aftermarket service parts business for sugarcane harvesters. "The decision to acquire this company in the aftermarket parts business emphasizes our commitment to customers," said Cory Reed, president of Deere's Worldwide Agriculture and Turf Division in the Americas. Unimil, located in Piracicaba, Sao Paulo, Brazil, was founded in 1999 and has become a well-recognized provider of sugarcane harvester parts.
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. The U.S. and China agreed on the outlines of a partial trade accord Friday that President Donald Trump said he and his counterpart Xi Jinping could sign as soon as next month.As part of the deal, China would significantly step up purchases of U.S. agricultural commodities, agree to certain intellectual-property measures and concessions related to financial services and currency, Trump said Friday at the White House. In exchange, the U.S. will delay a tariff increase due next week as the deal is finalized, though new levies scheduled for December haven’t yet been called off.The agreement marks the largest breakthrough in the 18-month trade war that has hurt the economies of both nations. Importantly, Trump said the deal was the first phase of a broader agreement. The president indicated he could sign a deal with Xi at an upcoming November summit in Chile.While the limited agreement may resolve some short-term issues, several of the thorniest disputes remain outstanding. U.S. goals in the trade war center around accusations of intellectual-property theft, forced technology transfer and complaints about Chinese industrial subsidies.Xi told Trump in a letter -- which the White House distributed on Friday -- that it’s important the countries work together to address each others’ concerns. “I hope the two sides will act in the principle and direction you and I have agreed to, and work to advance China-U.S. relations based on coordination, cooperation and stability,” the letter said.Chinese state news agency Xinhua said negotiators made efforts toward a final agreement, but stopped short of calling Friday’s outcome a deal. The Editor-in-Chief of China’s most prominent state-run newspaper Global Times, Hu Xijin, noted on Twitter that official reports from China didn’t mention Trump’s goal of signing the deal next month, which indicates Beijing wants to keep expectations low.Phase TwoThe Trump administration also said issues related to Huawei Technologies Co. aren’t part of Friday’s deal and will be a separate process. The Chinese telecommunications equipment maker, which was placed on an export blacklist in May, will be discussed in a second phase of the negotiations, the president told reporters later Friday.Equities advanced globally Friday amid growing conviction that the world’s two biggest economies would negotiate a trade truce, though U.S. stocks pared gains after Trump’s announcement near the close of trading. Trump tweeted earlier Friday that if the countries did reach an agreement, he would be able to sign it without a lengthy congressional approval process.Trump’s announcement drew a wary welcome from even Republicans on Capitol Hill.“After so much has been sacrificed, Americans will settle for nothing less than a full, enforceable and fair deal with China,” Senate Finance Committee Chairman Chuck Grassley said in a statement after the announcement. “Farmers in Iowa know far too well that the trade war has caused real financial pain in the heartland. But we need to know more about this deal and follow-through from China will be key.”On Thursday and earlier Friday, Liu and U.S. Trade Representative Robert Lighthizer held the first senior-level discussions between Washington and Beijing since a previous agreement fell apart in May and tariffs were raised in the months after.What Our Economists Say“Past experience is that U.S.–China trade agreements aren’t worth the paper they are written on, and this one hasn’t even been written down. For now, though, indications on trade are a little more positive. If that persists, it could help put a floor under sliding global growth.”Tom Orlik and Yelena Shulyatyeva, Bloomberg EconomicsClick here for the full noteThe U.S. was threatening to increase tariffs on Tuesday on about $250 billion of Chinese imports to 30% from 25%. More duties on $160 billion of Chinese products were targeted for Dec. 15.The threat of those import taxes on U.S. consumers, falling around the holiday season, raised the prospect that the U.S. economy would slide toward a recession heading into Trump’s 2020 reelection bid. The American manufacturing industry, which Trump vowed in 2016 to revitalize, is already contracting in part because of the trade war.The Trump administration said that as part of the deal, China would scale its purchases of U.S. farm goods over two years to an annual total of $40 billion to $50 billion. Trump encouraged U.S. farmers to buy more land and Deere & Co. tractors in response.China in recent weeks had already discussed buying more U.S. products such as soybeans, pork and wheat. Some traders remained skeptical that buying soybeans from the U.S. represented a significant breakthrough in the overall trade talks, Bloomberg reported Friday.Earlier Friday, Trump indicated in a Twitter post that if the countries did reach an agreement, he would be able to sign it quickly.Senator Ronald Wyden, the ranking Democrat on the Finance Committee that has jurisdiction over trade policy, pushed back on Trump’s tweet in a statement Friday to Bloomberg News: “Donald Trump should know that any meaningful trade deal is only legitimate because of the authority granted to him by Congress, and that authority can be taken away,” he said.Under the U.S. Constitution, Congress holds power over international trade. For decades, it has legally delegated trade-negotiating authority to the executive branch. Lawmakers in recent months have grown increasingly wary of what they see as Trump’s abuse of that authority and discussed ways to claw it back, citing the president’s many unilateral tariff measures and a lack of transparency in negotiations.(Updates with remarks from Chinese officials in sixth paragraph)\--With assistance from Jennifer Jacobs, Ye Xie, Isis Almeida, Scott Lanman, Sophie Caronello and Sarah McGregor.To contact the reporters on this story: Jenny Leonard in Washington at email@example.com;Saleha Mohsin in Washington at firstname.lastname@example.org;Josh Wingrove in Washington at email@example.com;Shawn Donnan in Washington at firstname.lastname@example.orgTo contact the editors responsible for this story: Margaret Collins at email@example.com, Kevin WhitelawFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. Chinese and American negotiators are set to start meeting again in Washington on Thursday in the latest round of their so-far fruitless talks to strike a trade deal. If no agreement is reached, the already slowing global economy will face another hurdle, with the U.S. set to raise tariffs on China on Oct. 15 and then on the European Union on Oct. 18.Both China and the U.S. have scheduled further tariff increases for December, and Europe is considering retaliation against any U.S. action. With close to $2 trillion in global trade flows at risk from greater protectionism, according to a Bloomberg analysis, those protectionist actions would depress trade, make businesses more cautious and further damage global demand.Investors are underlining what’s at stake: U.S. stock futures slid after a report in the South China Morning Post suggested Chinese negotiators led by Liu He could cut short their stay -- a report refuted by the White House.“We are not aware of a change in the Vice Premier’s travel plans at this time,” White House spokesman Judd Deere said late on Wednesday in Washington, referring to Liu.Chinese state-media had said Wednesday night that the schedule was still on track.ChinaChina’s economy would be slowing with or without the trade war. But that conflict, which over the last 18 months has broadened to other contentious areas such as technology, state subsidies, human rights, Taiwan and the Hong Kong protests, is also damaging to the economy, as it cuts demand for Chinese exports, damages business confidence and undermines investment.The tit-for-tat tariffs have driven down commerce, with Chinese exports down 9% in the first eight months of this year, and imports from the U.S. falling almost 28% for the same period. China’s total exports over the same timeframe have been basically unchanged, meaning it’s been able to find other countries to sell to, but its imports dropped 5%, with that fall in demand weighing on other nation’s economies.And the uncertainty is hitting Chinese companies, with manufacturers seeing their business contracting for the past five months, and new export orders contracting for 16 months.EuropeThe China-U.S. dispute is just one of the risks facing the global economy, with Brexit and the ongoing dispute between the U.S. and Europe over cars and industrial subsidies also posing a threat to trade flows. The U.S. will put tariffs on as much as $7.5 billion of Scotch whisky, French wine, cheese, planes and other European exports from next week. EU officials hope that won’t happen, but have also drafted retaliatory measures just in case.That threat and the possibility of a no-deal Brexit are some of the factors dragging down European growth, with a sharp slowdown in German services suggesting the pain from its industrial crisis is spreading, and manufacturing contracting across the Eurozone. That German outlook went from bad to worse in September, an unpleasant surprise that marks the latest dismal reading on Bloomberg’s Trade Tracker.The U.SThe global economic slowdown and trade policy are working against the world’s largest economy as well. Manufacturing has slipped into a recession, with factory output declining in the first two quarters of the year, and data last week indicate a further softening as companies tighten up capital spending budgets. At the same time, U.S. economic growth is above trend thanks to steady household spending and the lowest jobless rate in five decades.Meanwhile, supply-chain complications have emerged from the trade war, prompting companies to adapt and avoid tariffs. In the year through August, U.S. imports from China have declined 12.5%, or more than $43 billion, while purchases from Mexico -- the second-biggest supplier of goods to America -- posted the largest increase.(Updates with stock futures in 3rd paragraph.)To contact Bloomberg News staff for this story: James Mayger in Beijing at firstname.lastname@example.orgTo contact the editors responsible for this story: Jeffrey Black at email@example.com, Vince Golle, Sarah McGregorFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Benchmarks closed in the negative territory on Tuesday as U.S. blacklisted 28 Chinese companies and imposed visa restrictions on Chinese officials, dampening hopes on trade negotiations.
We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always […]
Low commodity prices, sluggish farm incomes and the trade war is affecting U.S farmers' equipment purchases, which in turn is weighing down Deere's (DE) results.
Concerns over rising interest rates and expected further rate increases have hit several stocks hard during the fourth quarter of 2018. Trends reversed 180 degrees during the first half of 2019 amid Powell's pivot and optimistic expectations towards a trade deal with China. Hedge funds and institutional investors tracked by Insider Monkey usually invest a […]
On October 1, the ISM released the PMI data for September. At 47.8, the reading pointed to a contraction. President Trump again blamed the Fed.
Deere & Co on Tuesday announced indefinite layoffs for 163 U.S. manufacturing workers at plants in Illinois and Iowa that make agricultural, forestry and construction equipment, citing decreased customer demand. The layoffs come week after the company said it would reduce production by 20% at its facilities in Illinois and Iowa in the second of half of the year to keep inventory in line with retail demand. The world's largest farm equipment maker is reeling from the fallout of the U.S.-China trade war that has slowed purchases from farmers.
(Bloomberg Opinion) -- This past month has been one for the history books — and not necessarily in a good way in many corners of the financial markets.All of this happened over the past four weeks:The rate for general collateral repurchase agreements in the more than $2 trillion repo market reached a record 10%, forcing the Federal Reserve Bank of New York to intervene and prompting a round of soul-searching (and head-scratching) on Wall Street. WeWork’s mounting issues shook the market for initial public offerings. Peloton Interactive Inc. fell as much as 14.6% in its first day of trading, the third-worst “unicorn” IPO debut since 2008. SmileDirectClub Inc. became the first U.S. firm since at least 2008 to raise more than $1 billion and price its IPO above range yet drop in opening trades. Hollywood entertainment company Endeavor Group Holdings Inc. pulled its IPO entirely. Oil prices surged on Sept. 16 by the most on record after an attack on Saudi Arabia’s Abqaiq processing facility. Momentum stocks crashed the most since 2009, relative to value stocks. Benchmark 10- and 30-year U.S. Treasury yields soared by almost 50 basis points in less than two weeks to start the month. The only comparable moves in the past several years happened during the so-called Taper Tantrum in 2013 and after the presidential election in November 2016.Add it all up, and it would seem like a shaky time for companies to tap the bond markets. Indeed, as Bloomberg News reported last week, at least four junk-bond deals have been scrapped this month in a sign of waning appetite for investing in businesses with excessive debt or sectors more sensitive to an economic downturn. Yet these September storm clouds missed the U.S. investment-grade corporate bond market entirely. Just looking at high-grade debt sales from this past month, you’d think there was nothing but sunny skies for financial markets.A whopping 127 investment-grade bond deals cleared the market in September. That easily topped September 2017’s 110 offerings to become the busiest month ever, according to Bloomberg News’s Michael Gambale, who went through 20 years of records. And there’s still one more day to pile on. As it stood at the end of last week, the total monthly volume of about $155 billion fell short of the $177 billion from May 2016 but would still finish as the third highest of all time and the most debt ever issued in September.Now, this wasn’t entirely a shock. Investment-grade companies like Apple Inc., Deere & Co. and Walt Disney Co. borrowed almost $75 billion in the first week of the month, a record since at least 1972. But that was soon after 30-year Treasury yields touched an all-time low of 1.9%, making bond sales way too tempting to pass up. Within two weeks, the yield was approaching 2.4% — still low, to be sure, but a sharp enough increase to saddle some traders with nearly double-digit losses.(1)Clearly, corporate treasurers pressed on unabated. Notably, the impetus to borrow was mostly to refinance debt at a lower cost and extend maturities rather than financing a large merger or acquisition. In other words, companies saw a chance to lock in savings or create a more optimal capital structure and moved forward regardless of the conditions outside the primary market for investment-grade bonds.What’s equally impressive is that in the face of this borrowing binge, corporate bonds largely held their value. Yield spreads remain below their one-year average. Yes, the market snapped a nine-month winning streak, but it declined by only about 0.8%, compared with a 1% drop for U.S. Treasuries. Investors added more than $1 billion to investment-grade funds in the week ended Sept. 25 after pouring in $2.83 billion during the prior period, suggesting the small pullback hasn’t scared them away.High-yield funds, by contrast, suffered outflows in the most recent weekly data as yield spreads widened to a two-week high. It followed an inflow of $3.3 billion, the highest since February. As I wrote earlier this month, investors could have used this large wave of new bonds hitting the market to clean up their portfolios, subbing out junk debt for higher-quality securities. Perhaps that shift is beginning. But it’s hard to give up such high-yielding bonds when momentum is on your side — the speculative-grade market is one of the few in fixed income with a positive total return in September.The incredible run in investment-grade corporate bonds, both in terms of borrowing and investing, suggests that high-quality American companies are the sweet spot in a global debt market still starved for yield and uneasy about the fate of the world economy. It’s telling, for instance, that bonds from the small share of triple-A rated U.S. companies have returned almost 15% in 2019, better than any other rating category and nearly double the gains for Treasuries. And while the line is getting blurred between triple-B and double-B securities, it’s the investment-grade portion that has delivered bigger profits to investors this year.September has always been a popular month for corporate borrowing, so even with benchmark yields settling back into a range, it’s unlikely that companies will flood the market to the same extent in the fourth quarter. That doesn’t mean the party has to end for bond buyers, though. If investment-grade debt could remain so unflappable over the past month, that means it’ll require a serious shock to knock this market off track.(1) The ICE Bank of America Merrill Lynch 30-Year U.S. Treasury Index had a total return of -8.83% from Sept. 3 to Sept. 13.To contact the author of this story: Brian Chappatta at firstname.lastname@example.orgTo contact the editor responsible for this story: Daniel Niemi at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
An upbeat outlook for the construction segment bodes well for Deere (DE), which has been grappling with a weak agricultural sector and higher input costs due to the implementation of tariffs.
Announcement of Periodic Review: Moody's announces completion of a periodic review of ratings of John Deere Credit Compania Financiera S.A. New York, September 18, 2019 -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of John Deere Credit Compania Financiera S.A. and other ratings that are associated with the same analytical unit. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future.