Chillin' out till it needs to be funded
If you still have your Halloween costume on, or celebrating Deepavali in India you might be excused. In fact I almost did, but then I remembered that HSBC had reported today in Asia and so I kept a promise to myself. The HSBC 3Q statement is not the detailed stuff like the Half year report but there is enough. And listening to a clear leader like Stuart (Gullliver) is always a welcome exercise. I hope I would be able to soon as the live event is over and the bank is still toughing it out in key areas like cost and regulatory doldrums being painted by opportunist governments. The serious allegations center around a FX rates fixing scandal out of the biggest FX desk of London (40% of traded volume to 24% from NYC/Chicago). The bank is also trying to appeal a $2.46 Bln awarded against it. In fact HSBC has almost gone kaput on the cost income(Efficiency ) ratios.
Also , we are looking for Twitter going for a safer band instead of the perfectly marked $20 on the top of the range in its final score before the IPO opens 10 days from now on the NYSE , setting up another fit on the NASDAQ ( already thru a flash on TWTR’s decamping for the Big Board) Turkish inflation is still a hot buzz for the Economy and European PMIs pre date the last bank auctions for the year as Draghi takes centerstage to keep the rate at 1.5%. UK is overheated already on Construction(Chinese investors). Also ignore the Factory orders data this week, as they will be either too optimistic or too pessimistic from the last benchmarks, while the PPI and same stores data from chains will be key tomorrow. Also the IBD survey lands a blow tomorrow on investor continuing to be optimistic, not comparable with the recession showing leading indicators or the Consumer confidence data, and the ISM non manufacturing data wll mesh well with robust trade data for October in a week or two
At HSBC USA, Business from legacy NBFC portfolios in the US accrues good income in the quarter from reduction in Loan provisions even as the portfolio and income are cut in half. The bank’s now best of breed Cost Income ratio comparing its own performance has still stayed stuck in the mud at a high 57. The bank has however published record profits from keeping most of its growing mortgage business in Hongkong at a $4.5 Bln pre tax profit
The Latam rush has cost it a third of the business volume this year and the Asia ex Hongkong business lost 10% but YTTD business has stabilised up, keeping a 30% rate on growing profits on year
The Jobs report is coming this week and predictions have hit a low below 150k. October Auto sales, much like September saw GM caught up by Ford, The Japanese including Honda, Toyota and Nissan a quarter of the business and Hyundai alone matching a 50% higher share for nearly 12% of the market. The F Series pick up truck has beat the Silverado hands down now pushing 600k sales in the first nine months , the #2, GM’s Silverado being a lily livered 360k despite the trappings of its shiny black Hollywood (Escalade) exterior , the finance in and outside the US as GMAC returns to the fold and the Fiat sponsored fightback by Chrysler. The increasing Crude and Shale Gas production obviates worries around higher stock of inventories as car sales remain robust despite the lesser usage of gasoline at the pump.
The Latin American situation is not improving in a hurry but the Venezuelan currency crisis may be behind us and the Mexican performance will continue, like the strong showing fro Singapore in Asia. Korea is looking a little worried despite Samsung and Hyundai doing well in US and elsewhere as China markets cause a dip in border/domestic business conditions
As last week saw, the Industrial production uptick and the never before Chicago PMI roll, took the wind of the Anti Taper marks and hopefully the market will correlate with the higher earnings marks all around, despite the high water mark on the equities as Goldman Sachs leads the financials back for an almost live blog by the tick prices on the FX rates and the Eric Holder investigations/settlements. Citi has been trumped again by equity investors in favor of their now the largest BAC investment as 2013 draws to a close in the last 60 days of fourth quarter. Apple and Amazon will continue to be watched the most in the Holiday season too, but luxury chain stores including even JC Penny(despite Bill Ackman) apart from GAP, Macys and Saks could spring a surprise or two very week.
Of course any settlement for JP Morgan could really brighten things up for the Financials especially after US Bank, Signature Bank (US:SBNY) and others celebrated a phenomenal earnings quarter as Janet Yellen took over at the Fed. ALso the Red Sox were seen on a bot, splitting confetti for their World series win over a docile St Louis team (Cards are losing everywhere) , Meredith Whitney is making world changing investments thru a new hedge fund vehicle her friends are launching for her, Community Bank of America awards have been handed out including one to Goldman Sachs ( for record SME lending)
The NFL Playoff picture guide
While the Charles (River) is reveling in Healthcare according to the NY Times , Kansas is still undefeated and so Brady is not coming back to the Superbowl at home (finally) . The Harbaughs and last year’s Superbowl giants are not here either this year and the Superbowl will still see the other Manning as the Broncos tripped up against his old team ut fashioned themselves a great pick me up later. i am still counting Atlanta Falcons among the winners. Apart from the Chiefs of AFC East, the Seahawks from NFC West are the other shoo in for the playoffs . Broncos and Manning however have to get past the Bengals (AFC North) or Patriots (AFC East) in the Wild Cards/Playoffs as their better hit rate, like some of the big banks , gets them into a knotty triangle or two before the big day.
Back on the Economic canvas, China’s Services PMI is picking up from sustained US Exports and that augurs well for both till the Holiday season brings in other gushes. China enjoys a late New Year’s Season around the Superbowl time.