U.S. equities notch yet another record. U.S. and China affirm their commitment to the phase-one trade deal. Jack Ma's Ant Group files for an IPO in Hong Kong and Shanghai. Here are some of the things people in markets are talking about today. U.S. equities rose to all-time highs for a third day running, with investors counting on the Federal Reserve to stay accommodative as the economy recovers from the coronavirus pandemic. The S&P 500 and the Nasdaq Composite notched fresh highs, with Facebook rallying after unveiling a series of tools designed to expand shopping on its social media platforms. Treasury yields increased and the dollar weakened. S&P 500 futures opened little changed. Stocks in Asia were set for a more muted open, with futures down in Japan and Australia and flat in Hong Kong. New Zealand equities will resume Wednesday after a cyber attack halted trading late Tuesday. Oil held gains as traders eyed Tropical Storm Laura, which is expected to strengthen into a hurricane before making landfall later this week. U.S. gasoline futures rose to the highest level since March on concern over possible fuel shortages. The U.S. and China reaffirmed their commitment to the phase-one trade deal in a biannual review, demonstrating a willingness to cooperate even as tensions rise over issues ranging from data security to democracy in Hong Kong. The two countries discussed steps China has taken, including ensuring greater protection for intellectual property rights and removing impediments to American companies in financial services and agriculture, the U.S. Trade Representative said. Both sides agreed to create conditions to push the deal forward, according to China's Ministry of Commerce. Resolving the trade war between the U.S. and China has emerged as a rare area of cooperation as the relationship sours on a number of other fronts. Yet Beijing is far behind where it needs to be to meet its promises to increase purchases of agricultural, energy and manufactured goods from the U.S. Billionaire Jack Ma's Ant Group filed for an initial public offering in Hong Kong and Shanghai to bankroll its expansion in financial services and bolster its lead as China's largest online payments platform. The Hangzhou-based company will issue no less than 10% in new shares of its total capital, according to its filing with the Shanghai exchange. Ant generated 72.5 billion yuan ($10.5 billion) in revenue in the first half, after full-year sales of 120.6 billion yuan in 2019, it said. The firm posted a profit of 21.2 billion yuan in the first half. The simultaneous listing could mark one of the biggest debuts in years, and may even top Saudi Aramco's record $29 billion IPO, a person familiar said. The firm is targeting a valuation of about $225 billion, based on an IPO of about $30 billion if markets are favorable, people familiar with the matter have said. A Canadian court rejected a bid by Huawei Technologies Chief Financial Officer Meng Wanzhou for access to documents withheld from her by the Canadian government on national security grounds. The government's decision to restrict access to six documents involving Canada's spy agency was warranted, and the information contained in them is "not relevant" to Meng's allegations that her December 2018 arrest in Vancouver was conducted unlawfully, according to a written judgment. Meng is seeking to have a Canadian court dismiss a U.S. extradition request on alleged trade-sanctions violations, arguing that there was an abuse of process during her arrest. She accuses Canada of "coordinated state misconduct," saying its police and border officials worked together in secret with the U.S. Federal Bureau of Investigation and its authorities questioned her for hours and obtained passwords to her electronic devices before formally charging her. The investigation into former McDonald's Chief Executive Officer Steve Easterbrook continues to expand, with the restaurant chain now looking into whether he covered up improprieties by other McDonald's employees, according to a company executive familiar with the situation. The board is working with outside counsel to investigate an allegation the ousted chief may have helped conceal other employees' behavior, said the McDonald's executive, who isn't authorized to speak publicly. It's also looking into the company's human resources department and how it functions, the executive said. Easterbrook's attorney didn't reply to requests for comment. Easterbrook was fired in November over a consensual relationship with an employee, but the company received a tip months later that he had been involved in multiple affairs with workers. He has denied the claims, contending McDonald's had the information about his relationships with employees when it negotiated his separation agreement. What We've Been ReadingThis is what's caught our eye over the past 24 hours: And finally, here's what Tracy's interested in this morningThere's an argument that value investing has failed in recent years because of outdated accounting rules. In this scenario, the criteria for selecting "value" companies aren't well-suited to a modern economy that rewards investing in intangible assets like research and brand development over investing in tangible ones like plants and equipment. So here is the story of a South Korean asset manager who programmed a new machine-driven value ETF with a twist. The twist is that this one can estimate a firm's intangible assets based on financial statements and patent databases and make judgments about value based on what the asset manager argues is a more comprehensive view of a company's assets. As my Bloomberg colleague Justina Lee points out, the ETF's resulting holdings are very different to what you might expect from traditional value investing. Its top three holdings as of last month were Amazon, Alphabet and Facebook — three of the most expensive stocks around. What's interesting here is that by changing the denominator of the market-to-book calculation, the gap (GAAP?) between undervalued and overvalued seems to have changed very rapidly.  You can follow Tracy Alloway on Twitter at @tracyalloway. | 
Post a Comment