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[192.64.237.244]) by mx.google.com with ESMTPS id u13-20020a81db0d000000b0032531743552si3448209ywm.194.2022.08.15.03.55.14 for (version=TLS1_3 cipher=TLS_AES_256_GCM_SHA384 bits=256/256); Mon, 15 Aug 2022 03:55:14 -0700 (PDT) Received-SPF: pass (google.com: domain of delivery_20220815065514.28730737.797725@bouncest.seekingalpha.com designates 192.64.237.244 as permitted sender) client-ip=192.64.237.244; Authentication-Results: mx.google.com; dkim=pass header.i=@seekingalpha.com header.s=sailthru header.b=gXPF3UAi; spf=pass (google.com: domain of delivery_20220815065514.28730737.797725@bouncest.seekingalpha.com designates 192.64.237.244 as permitted sender) smtp.mailfrom=delivery_20220815065514.28730737.797725@bouncest.seekingalpha.com; dmarc=pass (p=QUARANTINE sp=QUARANTINE dis=NONE) header.from=seekingalpha.com DKIM-Signature: v=1; a=rsa-sha256; c=relaxed; s=sailthru; d=seekingalpha.com; h=Date:From:Reply-To:To:Message-ID:Subject:MIME-Version:Content-Type: List-Unsubscribe; i=account@seekingalpha.com; bh=4n+UDeynY2afxInXWblDsBLbRiZeR2GWxgE0lxP80Dg=; b=gXPF3UAiwb2hT8kEOH8KZpLcKw7E+Cj38JGYFpiRKszzqBHKy9jIADi6oazNiM8/Hzg7nJ2Y5ERB tKtE4ep9jqnlODCscj7uRCBhUUvdptzn1yy/cE19KHSfqIj0re5P2ZQNa5UnfY8dMS+72ohcPtVD wIFn41l6239UiZsSF4w= Received: from nj2mta-18.sailthru.com (204.153.121.18) by pmta6.sailthru.com id hv8j1430nq0u for ; Mon, 15 Aug 2022 06:55:14 -0400 (envelope-from ) Date: Mon, 15 Aug 2022 06:55:14 -0400 (EDT) From: Seeking Alpha Reply-To: wsbfeedback@seekingalpha.com To: sterlingwhg@gmail.com Message-ID: <20220815065514.28730737.797725@sailthru.com> Subject: Wall Street Breakfast: China The Outlier MIME-Version: 1.0 Content-Type: multipart/alternative; boundary="----=_Part_1246201_1050472555.1660560914131" Precedence: bulk X-Feedback-ID: 9033:28730737:campaign:sailthru X-TM-ID: 20220815065514.28730737.797725 X-Info: Message sent by sailthru.com customer Seeking Alpha X-Info: We do not permit unsolicited commercial email X-Info: Please report abuse by forwarding complete headers to X-Info: abuse@sailthru.com X-Mailer: sailthru.com X-JMailer: nj1-madbrick.flt X-Unsubscribe-Web: https://email-st.seekingalpha.com/oc/60c1e5c4dba83e59149ff347h3ss1.h3j1/9e6ec31f List-Unsubscribe: , X-rpcampaign: stnjl28730737 X-Spam-Status: No, score=4.0 X-Spam-Score: 40 X-Spam-Bar: ++++ X-Spam-Flag: NO ------=_Part_1246201_1050472555.1660560914131 Content-Type: text/html; charset=utf-8 Content-Transfer-Encoding: quoted-printable
China lowered two key lending rates and injected more cash into its economy= Monday as it looks to keep stimulating the economy. The country remains th= e global monetary policy outlier, with the rest of the major economies tigh= tening in an effort to tame inflation.The People's Bank of China cut its on= e-year lending facility rate by 10 basis points to 2.75% and cut the seven-= day lending rate the same amount to 2%. The PBOC added 2 billion yuan throu= gh seven-day reverse repos.Economists had expected the seven-year rate to s= tay steady. But policymakers are still clearly worried that risks are to th= e downside with strict COVID policies and weakness in housing, even though = plenty of liquidity is stoking inflation pressures.Later in the day, the go= vernment reported a batch of mostly disappointing economic data.China July = Industrial Production rose 3.8% y/y (vs. 4.6% expected) and slightly lower = than the 3.9% figure reported in June. Retail sales increased 2.7% in July = compared with the same period in 2021, below the 5% forecast. In addition, = China's jobless rate for 16-to-24-year-olds hit 19.9%, the highest ever rec= orded. And new house prices were down 0.9% y/y (vs. down 0.5% prior).The Sh= anghai Composite (SHCOMP) was flat. The Hang Seng (HSI) was down 0.5%. Chin= a bond yields were lower.Rebound still seen: Still, the "question is no lon= ger whether we get a rebound (in the Chinese economy), but how much of one,= " Morgan Stanley Economist Seth Carpenter wrote in a note. "Covid-zero poli= cies are slowly easing and we think more relaxation will follow the Party C= ongress in October," Carpenter said. "But will freedom of mobility be enoug= h to reverse the challenges of the housing market? Recent policy action to = address the housing crisis will help, but I fully expect that a much larger= package will be needed. Ultimately consumer and property confidence will n= eed to make a rapid recovery if the rebound can take shape," he added. (2 c= omments)
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<= /a> Read in Browser
 
Economy
China the outlier<= /a>
Shutterstock
China lowered two key lending rates and injected more cash into its economy= Monday as it looks to keep stimulating the economy. The country remains th= e global monetary policy outlier, with the rest of the major economies tigh= tening in an effort to tame inflation.

The People's Bank of China cu= t its one-year lending facility rate by 10 basis points to 2.75% and cut th= e seven-day lending rate the same amount to 2%. The PBOC added 2 billion yu= an through seven-day reverse repos.

Economists had expected the seve= n-year rate to stay steady. But policymakers are still clearly worried that= risks are to the downside with strict COVID policies and weakness in housi= ng, even though plenty of liquidity is stoking inflation pressures.

= Later in the day, the government reported a batch of mostly disappointing e= conomic data.

China July Industrial Production rose 3.8% y/y (vs. 4.= 6% expected) and slightly lower than the 3.9% figure reported in June. Reta= il sales increased 2.7% in July compared with the same period in 2021, belo= w the 5% forecast. In addition, China's jobless rate for 16-to-24-year-olds= hit 19.9%, the highest ever recorded. And new house prices were down 0.9% = y/y (vs. down 0.5% prior).

The Shanghai Composite (SHCOMP) was flat. The Hang Seng (HSI) was down 0.5%. China bond yields were = lower.

Rebound still seen: Still, the "question is no longer = whether we get a rebound (in the Chinese economy), but how much of one," Mo= rgan Stanley Economist Seth Carpenter wrote in a note. "Covid-zero policies= are slowly easing and we think more relaxation will follow the Party Congr= ess in October," Carpenter said. "But will freedom of mobility be enough to= reverse the challenges of the housing market? Recent policy action to addr= ess the housing crisis will help, but I fully expect that a much larger pac= kage will be needed. Ultimately consumer and property confidence will need = to make a rapid recovery if the rebound can take shape," he added. (2 comments)
     
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Consumer
Retail revisions
The bad news for major retailers is likely to continue flowing into the sec= ond half of 2022, according to Morgan Stanley.

While consumer discre= tionary stocks have underperformed in 2022, the sector has surged as of lat= e. For example, the Consumer Discretionary Select Sector SPDR (XLY) has roar= ed about 20% higher in the past month as bulls pounce on signs of peak infl= ation and improving (albeit modestly) consumer sentiment. Retailers, of cou= rse, have been major beneficiaries of this swift sentiment shift.

In= a note to clients previewing Q2 and second-half results across hardlines r= etail ahead of a busy earnings week, equity analyst Simeon Gutman advised t= hat the sector's rally may be short-lived. He observed that about half of t= he companies in his coverage have already cut guidance this year. Yet, desp= ite the preemptive move to temper expectations, Gutman sees it as =E2=80=9C= almost inevitable=E2=80=9D that more negative revisions come during earning= s week.

=E2=80=9COnly the Dollar Stores and (to a lesser extent) [Ho= me Depot] (HD) appear relati= vely insulated in Q2,=E2=80=9D he explained. =E2=80=9CFor the rest, there i= s potential for downward revisions, even from companies that have pre-annou= nced.=E2=80=9D

As such, he retained Buy-equivalent ratings on Dollar= General (DG), Walmart= (WMT), AutoZone (AZO), and Driven Brands (DRVN). He was conversely cautious on more= discretionary names such as Target (TGT), Best Buy (BBY= ), and Williams Sonoma (WSM). (48 comments)
     
Tech
Streaming ratings
Netflix's (NFLX) runaway hit Str= anger Things topped streaming ratings yet again - holding status as the onl= y program to stream a billion minutes for the week, and then some.

T= he show, riding high off an Independence Day weekend release of the end of = its fourth season, streamed 2.947B minutes to easily top Nielsen's most rec= ent weekly streaming ratings (for July 11-17). The offering that came close= st to the horror/sci-fi hit was Netflix's own animated film The Sea Beast, = which doubled up its minutes from the prior week, to 920M.

But Amazo= n Prime Video (AMZN) is keepi= ng up its recent momentum with two top-five programs: Action series The Ter= minal List landed at the No. 3 spot with 887M minutes streamed; and with it= s season over, Amazon's The Boys held a lot of the prior week's viewing to = sit at No. 5 with 828M minutes, just behind Netflix's new take on Resident = Evil (858M minutes), and just ahead of No. 6 - a show on both Netflix and H= ulu (DIS) (CMCSA), Alone (818M minutes). (9 comments)
     
Energy
Saudi Aramco record
Saudi Aramco CEO Amin Nasser said on Sunday it is ready to raise crude oil = production to its maximum capacity of 12M bbl/day if asked to do so by the = Saudi government.

"We are confident of our ability to ramp up to 12M= bbl/day any time there is a need or a call from the government or from the= ministry of energy to increase our production," Nasser reportedly said.
The comments came as Aramco (AR= MCO) reported a 90% surge in Q2 profit to a stronger than expected 181.= 64B riyals ($48.4B), the state oil company's highest quarterly net profit s= ince it started trading shares on the Saudi stock exchange in 2019. (6 comments)
     
Economy
Long inflation road
Last week's inflation data - July's consumer price index and producer price= index - started to show some relief in rising prices, but the U.S. economy= is still a far way off from reaching the Federal Reserve's 2% inflation ta= rget.

Much of the relief came from lower gasoline prices. The bad ne= ws is that the "stickier" prices such as shelter costs kept rising.

= "So this month-to-month 0% increase is better than what we've been seeing, = but there's still a lot of worrying, underlying trends and inflation," said= Robert Frick, corporate economist at Navy Federal Credit Union, in an inte= rview with Seeking Alpha.

"One of the more troubling things that I d= on't think got enough analysis was food costs," he said. Global upward pres= sure on grain prices is fueling baked goods prices. The avian flu has reduc= ed the chicken flocks, and the U.S. milking herd is very low. "So you're go= ing to see a lot of stickiness in food costs," which traditionally are fair= ly flexible - "but not this time around." (23 comments)
     
Today's Market
In Asia, Japan +1.14%<= /span>. Hong Kong -0.67%. China -0.02%. Indi= a Market Closed.
In Europe, at midday, London = +0.07%. Paris <= span class=3D"green" style=3D"color: #008000;">+0.18%. Frankf= urt +0.03%.
Futures at 6:20, Dow= -0.35%. S&P -0.43%. Nasdaq -0.41%. Crude -3.7% to $88.70. Gold = -1.01% to $1797.25. Bitcoin -2.6% to $24,018.1.
Ten-year Treasury Yield -= 2 bps to 2.82%
Today's Economic Calendar
8:30 = Empire S= tate Mfg Survey
10:00 NAHB Housing Market Index
10:50 Fed's Waller Speech
= 4:00 PM Treasu= ry International Capital

Companies reporting earnings today =C2=BB
What else is happening...
Analysts rule out major industry impact= from drug pricing negotiations.

Merck (MRK) potential purchase of Seagen (SGEN) likely back in focus after Daiichi (OTCPK:DSKYF) arbitration loss.
Goldman sees $5 gas coming= back.

Oracle (ORCL)= could be the fourth hypers= caler.

AbbVie (ABBV), Roche= (OTCQX:RHHBY), Regeneron (<= a href=3D"https://email-st.seekingalpha.com/click/28730737.797725/aHR0cHM6L= y9zZWVraW5nYWxwaGEuY29tL3N5bWJvbC9SRUdOP21haWxpbmdpZD0yODczMDczNyZzZXJpYWw9= Mjg3MzA3MzcuNzk3NzI1JnVzZXJpZD0zNTM4NDUxNSZzb3VyY2U9ZW1haWxfd3NiJm1lc3NhZ2V= pZD13YWxsX3N0cmVldF9icmVha2Zhc3QmdXRtX3NvdXJjZT1zZWVraW5nX2FscGhhJnV0bV9tZW= RpdW09ZW1haWwmbGN0Zz02MGMxZTVjNGRiYTgzZTU5MTQ5ZmYzNDc/60c1e5c4dba83e59149ff= 347B50170467" title=3D"Regeneron Pharmaceuticals, Inc.">REGN) could significantly benefit= as AMD market expected to soar.

Musk, Twitter (TWTR), Disney (DIS) and Apple (AAPL= ) make some waves.
Watch these electric vehicle stocks after the climate bill jolted the industry.

Niu Tec= hnologies (NIU) narrows = FY22 sales volume guidance.
=F0=9F=92=A1 Free webinar today

This= week on Seeking Alpha=E2=80=99s free weekly webinar, Mike will talk = about the improved inflation numbers, the extended bear rally, and will bre= ak down another stock on his watchlist.

Tune in today - Monday 8/15 at = 12pm ET. Register for free.
Seeking Alpha=E2=80=99s Wall Street Breakfast Podcast
Seeking Alpha's Wall Street Breakfast podcast brings you all the news you n= eed to know for your market day. Released by 8:00 AM ET each morning, it is= a quick listen that you can put on as you get ready to start your working = day.
 
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