Feb.11 -- Marc Cooper, PJ Solomon chief executive officer, says markets are frothy and investors have to keep looking at the long term. He also shares his views on Bitcoin. He appears on "Bloomberg Markets."
Feb.11 -- Marc Cooper, PJ Solomon chief executive officer, says markets are frothy and investors have to keep looking at the long term. He also shares his views on Bitcoin. He appears on "Bloomberg Markets."
(Bloomberg) -- Tech shares tumbled anew, sending the Nasaq 100 Index down 11% from its all-time high, as investors fled high-valuation stocks for companies whose fortunes are closely tied to the economic cycle.The benchmark for megacap tech dropped 2.9% and is now at the lowest since November. The S&P 500 ended lower after rising as much as 1% as tech shares in the gauge dropped 2.5%. Financial firms and materials producers kept losses from being worse. The Dow Jones Industrial Average hit an all-time high before settling for a 1% gain, buoyed by rallies in banks and Walt Disney Co. Tesla Inc. pushed its five-day rout past 20%. Blank-check companies backed by Chamath Palihapitiya tumbled.The 10-year Treasury rate jumped toward 1.6%, while the dollar strengthened. Brent crude briefly traded near $70 a barrel before pulling back. Gold slumped and Bitcoin traded above $51,000.Investors embraced the prospect for a surge in global economic growth as vaccine distribution improves and the U.S. heads toward passing a $1.9 trillion spending bill. The risks associated with rising Treasury yields remain an overhang amid fears that government aid programs could overheat economic growth.“You will see a lot of volatility in markets,” Kim Stafford, Asia Pacific head at Pacific Investment Management Co., said on Bloomberg Television. “We believe that confidence is improving, especially with vaccines coming online, so we will see an uptick in growth globally. There are a lot of reasons to be confident in the market, but a lot of this is also priced in.”There are also questions about whether equity valuations have become excessive, especially in speculative tech shares. The Nasdaq 100 Index has fallen about 8% since early February.Crash Landing on Stock Heroes of Yesteryear Is Worst in a DecadeHere are some key events to watch:The annual session of China’s National People’s Congress continues in Beijing.Japan GDP is due Tuesday.EIA crude oil inventory report is due WednesdayThe U.S. February consumer price index will offer the latest look at price pressures Wednesday.The European Central Bank holds its monetary policy meeting and President Christine Lagarde is set to do a briefing Thursday.These are some of the main moves in markets:For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
When Elon Musk's Tesla became the biggest name to reveal it had added bitcoin to its coffers last month, many pundits were swift to call a corporate rush towards the booming cryptocurrency. Yet there's unlikely to be a concerted crypto charge any time soon, say many finance executives and accountants loath to risk balance sheets and reputations on a highly volatile and unpredictable asset that confounds convention. "When I did my treasury exams, the thing we were told as number one objective is to guarantee security and liquidity of the balance sheet," said Graham Robinson, a partner in international tax and treasury at PwC and adviser to the UK's Association for Corporate Treasurers.
Stocks were mixed on Monday and Treasury yields climbed further after Congress made headway toward passing another significant COVID-19 relief package.
(Bloomberg) -- One of the best manifestations of the rotation from formerly high-flying growth stocks to value shares can be seen in the divergence of the Nasdaq 100 from the Dow Jones Industrial Average.As the 125-year-old benchmark climbed to another intraday record, the Nasdaq 100 slumped to a level traditionally seen as a correction. It’s the first time since 1993 that the Dow rose and closed within 1% of a record, while the tech-heavy gauge was down more than 10% from its high.“Investors are feeling better about the recovery and looking to own improving fundamentals within large caps outside of tech and growth where valuations are more reasonable,” said Mike Bailey, director of research at FBB Capital Partners. “The focus on better fundamentals at a reasonable price may be driving the Dow to new highs.”All but five of the 30-member Dow index traded higher Monday at the 4 p.m. close in New York, with shares of Walt Disney Co. leading with a 6.3% gain. Visa Inc., Goldman Sachs Group Inc. and Home Depot Inc. each advanced more than 2%. Meanwhile, drops in Apple Inc. and Tesla Inc. weighed on the 36-year-old Nasdaq 100.Shares of other companies that had done well in 2020’s stay-at-home environment, including Microsoft Corp. and Netflix Inc., also dented the tech-centric Nasdaq 100, as did those whose businesses helped consumers work from home during the pandemic, including Zoom Video Communications Inc., which fell almost 8%, and DocuSign Inc., down about 6%.The split-market activity on display is another manifestation of the rotation underway as investors switch into shares of companies whose fortunes are closely tied to the economic cycle. That’s been painful for high-growth, high-valuation tech shares that become less appealing amid bond-market turbulence that’s sent yields on 10-year Treasuries to 1.61%.Earlier: SPAC Froth Turns on Itself With Stocks Plunging 20% in Two WeeksThe rotation is even harsher in once-hot areas like the market for special-purpose acquisition companies, or SPACs, another 2020 craze whose allure has fizzled in recent days. A gauge tracking such firms -- IPOX SPAC Index -- declined 2.6% Monday, its fourth down day out of the last five sessions. A popular SPAC by Chamath Palihapitiya -- the Social Capital Hedosophia Holdings Corp. V, or IPOE -- fell as much as 11% at one point before closing Monday down 9%.“It feels like an attitude adjustment for tech and growth stocks,” said Bailey. “Investors have decided that these Covid winners just got too expensive and now it’s time for a valuation haircut.”(Updates prices throughout.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- The prospect of rising inflation and U.S. Treasury yields may damp emerging-market sentiment, reflected by a slump in Chinese assets despite trade data that pointed to a speedier global recovery from last year’s lockdown.Exports from the world’s second-biggest economy soared in the first two months of the year, data showed Sunday, reflecting a recovery in external demand and providing a much-needed boost for risk assets after a turbulent start to March. Meantime, the U.S. Senate passed a $1.9 trillion stimulus package Saturday that may offer an additional spur to countries such as Mexico whose economies are most sensitive to U.S. growth.Emerging-market stocks fell to a two-month low and currencies were poised for their worst session in a year on Monday as anxiety remains high in the bond market after Federal Reserve Chairman Jerome Powell’s dovish message last week stopped short of trying to rein in the surging yields. An index of dollar-denominated debt in the developing world dropped for a fourth week in its longest losing streak since 2018. Local-currency notes also declined amid selloffs from Poland to Hungary and Mexico.“All fixed-income assets face a challenging market as rates and inflation become more of a threat,” said Abdul Kadir Hussain, Dubai-based head of fixed-income asset management at Arqaam Capital. “Emerging markets are no different. We have already seen outflows from emerging-market fixed-income funds, and I suspect that will continue in the near term.”Last week, exchange-traded fund investors withdrew money from emerging-market bonds, while adding to stocks, as they weighed the prospects of stronger global growth and a pickup in U.S. yields.Inflation data this week will offer evidence of whether that caution is merited. Economists expect consumer prices to have picked up in places such as Taiwan, India and Brazil. Elsewhere, Peruvian policy makers will probably keep the key interest rate at a record low of 0.25%.Listen to the EM Weekly Podcast: Improving China Data; Rising Treasury YieldsInflation WatchTaiwan’s consumer prices probably rose last month after declining in January, according to a Bloomberg survey before the report on Tuesday. Export figures the same day may reveal growth slowed in February after the island exported a record the previous monthThe improving global trade outlook and backdrop for exports will probably buoy the Taiwan dollar, according to Gao Qi, a currency strategist at Scotiabank in SingaporeIndia’s consumer-price inflation probably accelerated further above the central bank’s 4% target, a Bloomberg survey showed. That could limit its capacity to keep monetary conditions accommodativeThose figures may put further upward pressure on Indian bond yields, which are already at a 10-month highA reading of Brazil’s February consumer-price inflation on Thursday will be the last before the central bank meets later this month to decide on the key policy rateEconomists expect that inflation climbed last monthMexico’s February inflation probably increased amid higher non-core prices, data on Tuesday may showArgentina is likely to report another month of high inflation when it releases February figures on ThursdayChile’s monthly inflation eased in February on a drop in food costs, corroborating the central bank’s message that a recent consumer price jump is temporary and stimulus will be kept in placeKey DataChinese data due this week will provide another update on the nation’s economy after authorities announced a conservative growth target for this year at the National People’s Congress on FridayAfter containing the pandemic and becoming the only major economy to expand in 2020, officials now want to address imbalances such as a dependence on investment in property and infrastructure funded by corporate debtOn Sunday, Chinese Foreign Minister Wang Yi warned the U.S. to stop “crossing lines and playing with fire” when it comes to Taiwan, which Beijing claims sovereignty overAggregate financing numbers for February due between March 9 and 15 may show a slowdown due to seasonal factors. Inflation figures on Wednesday are expected to show consumer prices dropped for a second month in February, further enhancing the allure of Chinese bondsBrazil’s January economic activity and retail sales figures will also be released next week, offering clues on the pace of a rebound in Latin America’s largest economyIn politics, traders will watch for progress on an emergency spending bill as it moves through the lower house. Jitters over fiscal spending have contributed to the real becoming the worst-performing currency in emerging markets this yearTurkey’s January current-account deficit due Thursday may narrowThe lira has posted losses for two straight weeksREAD: Economist Who Called 2018 Turkey Crash Sees New Boom, BustSouth Africa will report its fourth-quarter current-account surplus on Thursday, which is forecast to have narrowedThe country is also expected to report manufacturing production data on the same dayOn Friday, Mexico will post January industrial production figures, which will give investors a better look at how activity is recoveringPeruvian policy makers will probably keep a dovish outlook on Thursday by holding borrowing costs at 0.25%, the lowest among major Latin American economies, according to a forecast by Bloomberg EconomicsFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
The Nasdaq's retreat from its all-time highs last month is now officially considered a correction in a bull market. The Nasdaq entered the latest bull market in September, rising more than 30% to its peak. Market-leading tech and tech-adjacent megacap stocks, which account for much of the Nasdaq's total market value, thrived during the pandemic recession.
Spot gold fell 0.7% to $1,689.87 per ounce by 1523 GMT, after hitting its lowest since June 8 at $1,683.68 earlier. The dollar climbed to a three-month peak, while the U.S. 10-year Treasury yield held close to a more than one-year high, increasing the opportunity cost of holding gold, which pays no interest. "We have an economy that is recovering and inflation is materializing; that ultimately means that yields have room to move higher," said Bart Melek, head of commodity strategies at TD Securities, adding that gold could fall further towards $1,660 as a result.
(Bloomberg) -- India’s record foreign-exchange reserves and a rare current-account surplus look set to cushion the nation’s currency and bonds from a global surge in interest rates.While the central bank does have its hands full managing the government’s large debt issuance, strategists see the country in a much stronger financial position now than it was during previous bouts of turmoil in world markets. They cite the rupee, which has eked out a gain this year, defying the slump seen in most emerging-market currencies, and relative stability of India’s bonds.With reserves closing in on $600 billion and a current-account surplus forecast to exceed 1% of gross domestic product, talk of India as one of five fragile emerging markets has mostly faded away. When the description was coined during the taper tantrum in 2013, inflation in India was running at around 10%.Data due March 12 is projected to show consumer prices rising at less than half that level, and well below the 6.6% average of last year. Meanwhile, benchmark 10-year bond yields have largely been capped since last year by the central bank and the nation’s stocks continue to see foreign inflows.“India’s markets are likely to be relatively immune to higher U.S. yields in the weeks ahead,” said Mitul Kotecha, chief EM Asia and Europe strategist at TD Securities Ltd. in Singapore. “India has been a key beneficiary of equity inflows into Asia and we do not see outflows persisting.”Ahead of the CPI figures, here is a series of charts highlighting points of strength in India that have been cited by analysts.Stock InflowsIndian stocks have attracted about $6 billion of foreign inflows this year, the highest in emerging Asia after China, and well above those of the country’s erstwhile “Fragile Five” peers. The prospect of strong economic growth has been underpinned by an early start to India’s coronavirus inoculation campaign, aided by domestically produced vaccines.FX ReservesIndia’s central bank has added $127 billion to its foreign-exchange kitty since the beginning of January last year, the biggest increase among major Asian economies. At the current rate of accumulation, India is on course to pass Russia and take fourth place in global rankings for reserves, behind China, Japan and Switzerland. This large well of reserves should give authorities fire power to deal with any potential capital outflows driven by external shocks, according to Kaushik Das, chief India economist at Deutsche Bank AG in Mumbai.Current AccountIndia is expected to post a current-account surplus of 1.1% of GDP in the current fiscal year, along with a balance-of-payments surplus of $96 billion, according to Emkay Global Financial Serviced Ltd. While the current account may swing back to a small deficit next fiscal year, healthy capital flows may keep the balance of payments positive to the tune of $45-50 billion, helping to support the rupee, according to Madhavi Arora, lead economist at Emkay.Bond ReturnsIndia’s sovereign bonds offer more stable returns than many others in emerging markets, as measured against annualized 60-day volatility in benchmark 10-year securities. The Reserve Bank of India has made over 3 trillion rupees ($41 billion) of bond purchases this fiscal year and plans to buy at least that amount next year, according to RBI Governor Shaktikanta Das, which should help to curb gains in yields.Economic GrowthIndia’s economy is projected by the International Monetary Fund to grow 11.5% in 2021, a pace that is likely to be the fastest of any major economy, which also augurs well for inflows and the rupee.Below are are the key Asian economic data and events due this week:Monday, March 8: Japan balance of paymentsTuesday, March 9: South Korea balance of payments, Japan GDP, Australia NAB Business Confidence, Taiwan CPIWednesday, March 10: China CPI, PPI; RBA’s Lowe gives speech in SydneyThursday, March 11: New Zealand food prices and house sales, Japan PPIFriday, March 12: Philippines trade, India Feb. CPI and Jan. industrial production, Thailand forex reserves, Malaysia industrial productionFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Iran has quietly moved record amounts of crude oil to top client China in recent months, while India's state refiners have added Iranian oil to their annual import plans on the assumption that U.S. sanctions on the OPEC supplier will soon ease, according to six industry sources and Refinitiv data. U.S. President Joe Biden has sought to revive talks with Iran on a nuclear deal abandoned by former President Donald Trump in 2018, although harsh economic measures remain in place that Tehran insists be lifted before negotiations resume. The National Iranian Oil Company (NIOC) has started reaching out to customers across Asia since Biden took office to assess potential demand for its crude, said the sources, who declined to be named because of the sensitivity of the matter.
(Bloomberg) -- Central banks helped save the world economy from depression as the pandemic struck. Now they are dealing with the hard part: managing the recovery amid a difference of opinion with investors.Optimism that Covid-19 vaccines and continued government stimulus offer an escape from the worst health crisis in a century has sent bond yields soaring and pushed bets on rising inflation in the U.S. to the highest in a decade.That’s shifting the ground underneath monetary policy makers who promise to maintain rock bottom borrowing costs and cheap money well into the expansion. In the next two weeks, the Federal Reserve and European Central Bank as well as their counterparts in Japan, U.K, and Canada are all likely to reiterate those pledges, eager to secure a rebound in hiring and avoid the mistakes of the last crisis when some withdrew support too early.The risk now seems skewed the other way. While policy makers welcome a modest rise in bond yields as a signal of confidence in the economic outlook, they worry an unchecked jump would undercut recoveries. They argue any resurgence in inflation will be based on a temporary correction from last year’s slide and that high unemployment will continue to restrain price pressures.It’s a stark turnaround from a year ago, when the world powered down to fight the Covid-19 pandemic and central banks responded with what’s amounted to an unprecedented $9 trillion of monetary support.“Central banks are facing a new challenge,” said Rob Carnell, chief economist for Asia Pacific at ING Bank NV. “How do they keep justifying easy policy as the recovery continues and the inflation figures pick up?”Canada, ECBThe Bank of Canada is first up with a meeting on March 10 when policy makers are likely to indicate they plan to maintain plenty of stimulus well into any strong recovery. It’s a case that Governor Tiff Macklem laid out last month when he argued policy needs to help foster not only the immediate pickup but also facilitate virus-driven structural changes like digitalization.ECB President Christine Lagarde convenes officials the next day when updated forecasts will highlight how the euro-area economy is lagging the U.S. because of slow vaccine rollouts and extended virus restrictions. That puts the bloc at risk should higher global yields spill over into borrowing costs for companies and households.ECB policy makers have surprised investors by downplaying their concerns so far, saying their bond-buying program is flexible enough to address unwarranted tightening but failing to provide any evidence that they’re accelerating purchases. At the back of their minds though is likely to be the experience of 2011 when interest rates were raised twice to combat faster inflation despite a worsening financial crisis, only for the euro zone to slide into a double-dip recession.Powell PressureAt the Fed’s policy meeting on March 16-17, Chairman Jerome Powell will likely reaffirm his looser for longer stance. Powell repeatedly stressed during remarks on Thursday that the Fed was a long way from its goals and was not close to tightening policy. He also played down a likely rise in inflation this year and ducked questions on a possible response to the recent sharp rise in yields.While the move had “caught’ his attention, he said Fed policy was currently appropriate, though it has tools to respond if there is a material change in the outlook.Transcripts of the Fed’s meetings from 2015, when it last began a tightening cycle, suggested policy makers overestimated the potential for accelerating inflation and underestimated the room still left in the economy to generate jobs.What Bloomberg Economics Says...For the U.S., rising bond yields are largely a reflection of confidence in the strength of the recovery. For much of the rest of the world, the spillover of higher borrowing costs is arriving too soon. The Reserve Bank of Australia has already reacted with bigger bond buys. Others may also have to tweak their policy settings.-- Tom Orlik, chief economistClick here for moreTaper TalkThe Bank of England convenes on March 18. It has lined up a further 150 billion pounds ($208 billion) of asset purchases over 2021 with plans to taper weekly buying later in the year.A hugely stimulative budget from Chancellor Rishi Sunak now has economists further discounting the prospect of negative interest rates and instead looking forward to a tightening of monetary policy.The central bank has said that won’t happen until there is clear evidence that spare capacity is being eliminated and it’s closer to sustainably achieving its 2% inflation target, but in February announced it was considering whether to alter previous guidance that it wouldn’t unwind its asset purchases until the bank rate reached 1.5%.Speaking on Monday, Governor Andrew Bailey reiterated the bank doesn’t intend to tighten monetary policy until there’s clear evidence the economy is absorbing excess capacity. He added that risks to the economy remain tilted to the downside, BOJ, PBOCThen it’s the Bank of Japan’s turn on March 18-19, when officials are scheduled to unveil details of a policy review that will look at how it controls yields, negative rates and asset buying. Governor Haruhiko Kuroda has said the central bank is seeking to make its policy framework more effective by fine tuning it rather than overhauling it.He has also signaled there won’t be any changes to the movement range around the 10-year yield target. Still, Deputy Governor Masayoshi Amamiya ssignaled on Monday that the central bank may seek ways to allow more moves in yields. While developed-world central banks will likely be unified in pledging ongoing stimulus, China’s officials are already signaling the opposite. Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission -- the top banking regulator -- said on March 2. he’s “very worried” about risks emerging from bubbles in global financial markets and the nation’s property sector, stoking expectations of policy tapering.That was followed by the government setting a conservative growth target of above 6% for the year, well below what economists forecast the nation will achieve, as Premier Li Keqiang on Friday opened the National People’s Congress in Beijing.The tension between inflation and cheap money is already forcing some emerging market central banks to move. Ukraine unexpectedly raised interest rates to counter the highest inflation in more than a year. Brazil is forecast to start raising borrowing costs on March 17 having promised in August to keep its 2% benchmark for the “foreseeable future.”(Adds comments from UK and Japanese central bankers)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
A growing semiconductor shortage could hamstring the EV boom in 2021. Here’s who could profit in the days ahead
The potential market moving event this week occurred over the weekend when the U.S. Senate passed a $1.9 trillion coronavirus relief package.
To win Senate passage, Biden agreed to make millions ineligible for the third checks.
And will you even get a payment this time, under the new limits the president agreed to?
(Bloomberg) -- Three more directors of Greensill Capital have resigned as the trade-finance company faces a fight for survival following the flight of its top backers.Chairman Maurice Thompson resigned alongside former MSCI Inc. Chief Operating Officer David Brierwood and Patrick Allin, according to company filings seen by Bloomberg. They join four other board members who have stepped down recently, among them the brother of founder Lex Greensill.Read more: Greensill’s Overnight Downfall Was Many Months in MakingA spokesperson for Greensill declined to comment. News of the departures was first reported by the Sydney Morning Herald.Greensill’s trade finance firm is teetering on the brink of insolvency after investors cut ties with him and the German regulator froze his bank in the country. The fall from grace has been swift for a now ex-billionaire with access to U.K. political circles and the counsel of former Prime Minister David Cameron.Read more: Greensill’s Top Client, Gupta Sees Key Cash Source EvaporateGreensill Capital is in talks for Athene Holding Ltd. to buy its operating company and continue to provide billions of dollars of funding to Greensill customers, according to people familiar with the matter. Assets linked to U.K. steel investor Sanjeev Gupta’s GFG Alliance have been excluded from the deal discussions, Bloomberg News reported on March 4.The European Central Bank is asking lenders in the region about any loans they have related to Greensill, according to a person familiar with the matter. The move is standard procedure and doesn’t reflect heightened concern at the watchdog, the Financial Times reported earlier. The ECB declined to comment.Greensill’s efforts to disrupt a niche part of global finance were derailed when credit insurance backing some of his firm’s loans lapsed, eventually forcing Credit Suisse Group AG to freeze a $10 billion group of client funds that bought the debt. The Swiss bank said on Friday it will close the funds down.Greensill’s supply chain finance firm relied on those funds as buyers of the debt securities it issues. The company is also facing a criminal probe of its German banking subsidiary after regulator BaFin found that Greensill Bank AG had improperly accounted for assets of its biggest customer, GFG Alliance.Greensill has said that it received “extensive advice,” from law firms in the U.K. and Germany, “which informed the way in which the assets were classified.” The company immediately complied after BaFin advised it late last year and early this year that it didn’t agree with its accounting, according to Greensill.(Corrects to show Brierwood is former COO in second paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- Tucked away among the Ford, Dodge and Chevy sedans, the 12,000-gallon storage container and the inoperable Caterpillar tractor being auctioned off by the U.S. government is an unusual item: 0.7501 of a Bitcoin.The U.S. General Services Administration typically uses its auctions to sell surplus federal equipment to the general public. With lot 4KQSCI21105001, which goes up for auction in a week, the government is offering an amount of Bitcoin worth about $38,000 at Monday’s price.The government doesn’t say where its surplus digital currency came from. And while it’s a far cry from the 30,000 Bitcoins auctioned off by the U.S. Marshals Service in 2014 after they were seized from the Silk Road marketplace, the GSA auction is one more indication of how Bitcoin is becoming more and more mainstream.On Wall Street, too, there is a newfound openness to the world’s most valuable digital currency: Custody banking giant Bank of New York Mellon Corp. said it will hold, transfer and issue digital currencies, while Mastercard Inc. announced plans to let cardholders transact in certain cryptocurrencies on its network. A Morgan Stanley unit known for picking growth stocks is considering adding Bitcoin to its possible bets and, last week, a person close to Goldman Sachs Group Inc. said the bank plans to reopen a trading desk for cryptocurrencies.The Bitcoins auctioned off by the U.S. Marshals Service in 2014 were estimated at the time to be worth about $19 million, though the winning bid -- by venture capitalist Tim Draper -- wasn’t disclosed. Those coins would be worth $1.5 billion today as the cryptocurrency’s price has skyrocketed to almost $51,000.The GSA auction is scheduled to be held from March 15 to 17.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
It's true: Hurrying with your tax return could put your relief money at risk.
Shares of AMC Entertainment Holdings Inc. soared Monday, as the "meme" stock's bounce from last month's plunge continued, after Wedbush analyst Michael Pachter doubled his price target ahead of the company's earnings report, citing an increasing optimism over the post-pandemic environment.
A former high-ranking Chinese government minister has said that China is at least 30 years away from becoming a “great power” in the manufacturing sector. What Happened: China has been the world’s dominant figure in manufacturing since 2010, according to United Nations data, with $4.8 trillion in industrial added value last year and a nearly 30% global share that is approximately equal to the combined share of the U.S., Germany and Japan. China’s State Council Development Research Center issued a report in January that defined the nation as being in the third tier in a four-tier ranking system based on key criteria including innovation, quality and effectiveness, environmental factors and global competitiveness, according to a South China Morning Post report. In comparison, the U.S., Germany and Switzerland were in the top tier, while Japan, South Korea, Singapore and France were in the second. In a speech before the Chinese People's Political Consultative Conference, the government’s leading advisory body, former Minister of Industry and Information Technology Miao Wei warned that while China reigns in terms of industrial supply chains and accounts for more than one-third of global manufacturing output, its industries’ dependence on U.S. high-tech products including semiconductors remains a strategic obstacle that needs to be overcome. "Basic capabilities are still weak, core technologies are in the hands of others, and the risk of 'being hit in the throat' and having 'a slipped bike chain' has significantly increased," said Miao, who stepped down from his ministry post last year after a decade in office. "The ratio of manufacturing output to GDP has been declining too early and too quickly, which not only weighs on economic growth and affects employment, but also brings security loopholes to our industries and diminishes our economy's ability to withstand risks, and its global competitiveness." Related Link: Beyond Bitcoin: China's Publicly-Listed Beauty App Meitu Buys M Ethereum What Happens Next: Miao said a lack of progress on market-oriented financial reforms including tax relief and a deficit of high-tech talent in manufacturing is keeping the sector from reaching its fullest potential. "China's manufacturing industry has made great achievements in recent years, but the situation of being 'big but not strong' and 'comprehensive but not good' has not been fundamentally changed," he said. "We must maintain our strategic resolve, stay clear-headed and deeply understand the gaps and deficiencies." Miao, who is now vice chairman of the CPPCC’s economic committee, also acknowledged that China’s services sector has overtaken manufacturing as the nation’s main economic force, with 54.5% of its economic output last year coming from the services sector versus 37.8% from manufacturing. “We should emphasize the strategic role and contribution of manufacturing and stabilize its share of the economy,” Miao said. “We should protect our most comprehensive manufacturing system and upgrade our self-reliance in industry and supply chains.” Related Link: Tesla Reaches 6,000 Supercharger Installs In China Miao Wei. Photo courtesy G20 Argentina/Creative Commons. See more from BenzingaClick here for options trades from BenzingaDisney's 'Raya And The Last Dragon' Opens To Disappointing .6M Domestic Box OfficeMarkets Close On Positive Note After Turbulent Week© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
They have been trading longer than many adults, and are learning valuable lessons about investing early. MarketWatch speaks to four teenagers who are taking on the markets.