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Global oil pricing worries hit U.S. energy shares as earnings loom

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In the third quarter, the profit of oil producers as a whole should be higher than a year ago, since the average price per barrel increased by about 44 percent compared to the same period last year. But oil prices on Friday recorded a third week-long recession, expanding weaknesses about the fact that slow global economic growth and the US trade war could trigger demand.

U.S. crude CLc1 is on the way to decline by about 8 percent per month, while the S & P 500 .SPNY index in October fell by 12.2 percent compared to the S & P 500 .SPX index by 8.8%. [.N]

In the third quarter, oil prices in the US of CLc1 were $ 69.43 per barrel, which rose sharply from $ 48.20 a year earlier. Analysts expect this to help increase the S & P 500’s quarterly profit by 102.9 percent, which is the largest annual growth expected by sector, according to I / B / E / S from Refinitiv.
This will be the largest annualized expected percentage growth in any sector in a quarter. However, some investors say that this may not be enough to reverse the trend in stocks, taking trade and other concerns into account.

"I expect that profits will be good because prices in the last quarter were good," said Rick Mekler, a partner at Cherry Lane Investments, a family investment office in New Vernon, NJ.

But "it was very difficult for these companies to predict pricing because it was so volatile,” he said. Companies that provide drilling and other work for US producers accuse of short-term slowdown in demand for services due to the pipeline and other constraints, especially in West Texas fields.

While US sanctions against Iranian oil exports may support prices in the coming months, the largest exporters of Saudi Arabia and Russia signal that they expect an increase in production, which should limit growth.
Upcoming profit and loss statements from Exxon Mobil (XOM.N) and Chevron (CVX.N), due on November 2, may reflect these problems. Exxon fell by almost 9 percent in the current month, while Chevron also fell by almost 9 percent.

"We have seen oil prices being sold here throughout the correction we had in the broad market. Competition in the sale, of course, is global growth, and this immediately affected the price of oil, ”said Tim Grisky, chief investment strategist at Inverness Counsel in New York.

UBS analysts expect oil demand to grow more slowly in 2019, at higher oil prices and weaker economic growth.

Another producer, Hess Corp (HES.N), has to report on Wednesday, while ConocoPhillips (COP.N), the largest independent producer of oil and gas in the world, beat analyst estimates for profit in the third quarter, when it reported on Thursday , quoting higher oil prices, but also reducing costs.

Recent losses aside, some capital analysts believe that oil is in a bullish cycle and expects prices to rise next year.
This year, energy stocks sharply outpaced oil prices, which suggests that there is room for further growth in stocks.

"People still think that we are worth $ 40 a barrel. We're not, ”said Robert Luts, president and chief investment officer of Cabot Wealth Management in Salem, Massachusetts, who owns diamondback energy shale maker Diamondback (FANG.O) and other names.

"People misjudge the balance between supply and demand,” said Lutts, who sees oil prices during the year from $ 80 to $ 90 per barrel. Crude oil settled at $ 67.59 on Friday.

Even with the recent sale of the price of CLc1 oil in the United States this year rose by about 11 percent, while the energy consumption index S & P 500 fell by about 8 percent in 2018, and market leader Exxon fell by about 7 percent.

Some money managers also believe that energy stocks are now more attractive, and investors are fleeing high-tech technologies and Internet names in a recent stock market sale and are looking for value names.
Others say it's too early for a bull call for energy.

"To achieve sustainable growth in oil reserves, where they consistently outperform other sectors and where the sector is actually growing as a component of the S & P 500, you need a lot of things, such as limiting supply and global growth.

We are not there now, ”said Bucky Hellwig, senior vice president, BB & T Wealth Management in Birmingham, Alabama.


Pfizer to cut around 2 percent of jobs through early next year

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Pfizer employs around 90,000 people worldwide.

Pfizer spokeswoman Sally Beatty said job cuts were "creating a simpler, more efficient structure and not achieving cost savings.”

Job cuts were originally reported by CNBC.

The move follows the announcement earlier this month that Albert Burla, Chief Operating Officer, will perform Jan Red as Executive Director in January. The company also added new responsibilities for many of its top managers and hired a new chief specialist officer.

Pfizer shares rose 1.8 percent to $ 44.70 in early trading on the New York Stock Exchange. Its shares rose about 20 percent this year, ahead of the Standard & Poors 500 index, which is about 4 percent in the same period.


World stocks wobble as Wall St. cuts losses; oil off after U.S. data

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Crude oil futures fell four times in the first session after data from the US government showed much larger-than-expected crude oil reserves. WTI touched the lowest price in a month.

The US dollar rose as the market expected minutes from the last meeting in the Federal Reserve System. Lower than expected UK-weighted inflation data reduced previous day's earnings.

On Wall Street, IBM fell 6.2 percent, dragging blue chips the day after the company missed its expected earnings. On Tuesday, the S & P 500 posted the largest daily increase since the end of March.

Stocks increased losses when oil prices fell even more, but the steady growth in stocks in the financial sector had the S & P 500 almost break even.

"It’s too early to say that Tuesday’s rally was a" dead cat's rebound ”or market setting base,” said Jorge Kinahan, chief market strategist at TD Ameritrade. "We are going on an incredible day, so it would be unusual to see that some have arrived."
The Dow Jones Industrial Average fell by 29.27 points, or 0.11 percent, to 25,769.15, the S & P 500 fell to 2.61 points, or 0.09 percent, to 2,812.53, and the Nasdaq Composite fell by 3.59 points, or 0.05 percent, to 7,641.90.

European stock indexes reached a one-week high at the start of trading, but then were lowered by 1.9% in the auto stock index. Goldman Sachs said that slow demand in China could affect revenues in this sector.

The pan-European STOXX 600 lost 0.40 percent, while the MSCI reserves index worldwide fell by 0.01 percent.

Shares in emerging markets rose by 0.05 percent. The largest MSCI index in the Asia-Pacific region outside Japan closed at 0.27 percent, and the Japanese Nikkei - at 1.29 percent.
US oil futures fell below $ 70 per barrel after data showed that US stocks rose 6.5 million barrels, which is almost three times higher than analysts' forecasts, while exports fell.

WTI fell by 2.34 percent to $ 70.24 per barrel, and Brent fell by $ 80.28, which is 1.39 percent less than on the same day.
The euro fell 0.39 percent to $ 1.1528, while sterling was last traded at $ 1.314, a decrease of 0.33 percent on the same day.

The Japanese yen weakened 0.03 percent against the US dollar by 112.31 US dollars. The dollar index rose 0.37 percent.

The minutes of the last Fed meeting, to be held on Wednesday, should fuel expectations of further tightening.

The Brazilian real rose against the dollar after data showed that economic activity rose more than expected in August.

US Treasury revenue continued to trade in the range after a massive take-off last week.

The benchmark of 10-year notes fell by 4/32 in price, reaching 3.1709 percent, from 3.156 percent until the end of Tuesday.

The 30-year bond in the past fell by 6/32 in price, which made it possible to get 3.3399 percent, from 3.33 percent at the end of Tuesday.


Most U.S. states lack reserves to weather next recession: S&P

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S & P said that only 20 states have the reserves needed for the first year of the economic recession, without cutting budgets or raising taxes.

"In their fight against recessions, budget reserves are what the states are sending to the front," the report says. "They are an internal source of immediate liquidity and can provide transitional funding to agencies before the budget cuts come into effect."
According to S & P, states faced the worst income deficit in the next recession compared to the Great Recession. This is due to the fact that states rely more on personal income taxes as a percentage of total revenues to the fund than they did ten years ago, with taxes currently contributing 55% of funds to funds, compared to 49% in 2008, says S & P.

In addition to the lack of reserves, states that are at risk of severe financial stress in the first year of the next recession also have higher income volatility and higher fixed costs, including debt payments and pension contributions, S & P. ​​says.

He said an increase in social spending, such as Medicaid, could also help reduce budget deficits.

In the first year of the recession, there are 15 states facing a large income shortfall, 21 states with moderate deficits and 14 states that are expected to have a low deficit.

In the case of a moderate recession, states can see the total deficit of the fund from 9.9% to 11.8% year on year, compared to 8.1% in 2008-2009, S & P. ​​said.

Nevertheless, the state of financial health in the current year has improved compared to last year, and the probability of an economic recession starting from the next 12 months is only 10-15%, S & P. ​​says.
The Moody's Analytics report, also published on Monday, said that the number of states with sufficient reserves to withstand the recession increased to 23 from 16 last year.

There is also a larger number of states that are not significantly ready for even a slight decline: 17 states hold much less money than they need, compared to 15 in 2017, Moody said.

These states are in the order of the least prepared - Louisiana, Oklahoma, North Dakota, New Jersey, Montana, Kentucky, Virginia, Missouri, Arizona, Illinois, Pennsylvania, Wisconsin, Kansas, New Hampshire, Mississippi, Michigan and Arkansas.


Germany's diesel working group recommends hardware retrofits: report

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The Subcommittee of Experts of the National Diesel Forum of Germany will return so-called selective devices for selective catalytic reduction to reduce emissions of nitrogen oxides (NOx), the newspaper said in an excerpt from an article that will be published on Sunday, provided by Reuters on Saturday.

Nevertheless, there is no consensus as to who will pay the modernization bill, which can cost 3,000 euros or more per car, the document says.

He cited the government spokesman as confirming the plan for Chancellor Angela Merkel to take action on measures to reduce NOx emissions this month.

Last week, the court ruled that Frankfurt, the financial center of Germany, would have to ban environmentally friendly older diesel cars from the city center from next February as part of an air quality improvement plan.
The city of Hamburg this year voluntarily blocked the old diesel models from using the selected main roads. Other cities, including Aachen, Dusseldorf and Stuttgart, where Daimler (DAIGn.DE) and Porsche (VOWG_p.DE) live, are also considering bans.

The discussion about air quality was caused by reports of persistent high NOx emissions in the largest cities in Germany and the admission of Volkswagen in 2015 to falsify the testing of diesel emissions in the US using engine control devices.


U.S. fund managers trim bank stocks on profit worries

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According to Goldman Sachs, the average unit fund in the US reduced its share in financial companies by almost 1.1 percentage points in the second quarter to about 14 percent, which is the highest for a quarter compared to 2013.

The departure from banks, insurance companies and mortgage lenders was caused by the fact that the financial sector did not cope with the broad S & P 500 index by more than 5 percent since April.

Many fund managers believe that banks have already reached their peak income. One red flag is that the US Treasury yield curve is flattening, as short-term yields are rising in anticipation of an increase in US interest rates from the Federal Reserve, while long-term yield falls on concerns about economic growth and trade strains. This situation usually compresses the profit of the bank.

Some investors fear that long-term profitability may fall below short-term profitability. Such an inversion of the yield curve, which can signal an impending recession.

"The flops of the yield curve, the harder it is to make money," said Jan McDonald, co-leader of the financial research group Janus Henderson Investors, which controls assets under the management of 370.1 billion dollars, adding that "the funds are inspected and say that if we we will see a weaker growth, we need to get out of the financial state. "

The spread between the yield of two- and 10-year Treasury bonds US2US10 = RR is trading around its very flat for 11 years. The growth of short-term rates leads to an increase in the cost of borrowed funds of the bank, while the drop in long-term rates limits the amount of payments for loans.

Nevertheless, McDonald said that large banks such as JPMorgan Chase and Co (JPM.N), Bank of America Corp (BAC.N) and Citigroup Inc (C.N) remain attractive, even if the sector as a whole does not. He noted that large banks invest in online platforms and mobile applications, which makes them more attractive for millennia and less dependent on expensive affiliates.

"The US retail banking industry is moving from the post-crisis phase of risk management to the fintech phase of managing customer experience," he said.

Ben Kirby, portfolio manager of the investment fund for Thornburg investment income worth $ 15.4 billion. USA, said that its fund is more moving to European banks, such as ING Groep NV (INGA.AS), which is caused, in particular, by the recent sale of shares after a steep decline in the Turkish lira. This year, the Turkish currency fell by more than 40 percent due to growing tension with the United States and fears that the country's central bank is losing its independence under President Tayyip Erdogan.

"For the past 10 years, the US has been a market lover, and this has led to an assessment that is slightly more stretched, and an economic cycle that is a little more mature," Kirby said. "If in Europe it happens earlier, and growth accelerates."

In general, according to Thomson Reuters, in the financial sector S & P 500, the ratio of trading prices to revenues is 14.5, and for the year to date it has grown by 2.2 percent. The broad S & P 500, by contrast, traded with a lagging P / E of 22.06 and is almost 9 percent over the same time.

According to Lipper, investors also retreated from financial activities, and the Financial Sector Select SPDR, ETF, which tracks financial stocks in the S & P 500, while losing $ 1.7 billion. USA as a result of outflows in the last 4 weeks.

Although banks have stronger balances than at the beginning of the financial crisis 10 years ago, "it's difficult for us to find anything that can worry about financial performance," said Tom Plumm, manager of the Plumb Equity Fund, valued at $ 29.7 million.

Instead of banks, Plumb has its largest positions in credit cards and payment companies Visa Inc (V.N) and Mastercard Inc (MA.N), which continue to grow, as more retail purchases are made online rather than in physical stores.

"It's a mistake to get out of the big macro trend too quickly," he said.
Kyle Martin, an analyst at Westwood Holdings Group, a Dallas firm with assets under management of $ 21.6 billion. USA, said that the increase in interest rates and the yield smoothing curve may point to a recession in 2020, which means that financial stocks are less attractive.

The investment bank Houlihan Lokey Inc (HLI.N) looks attractive, despite the prospect of a decline in economic growth, given its focus on mergers and acquisitions in the medium-term market, which should see higher transaction activity, as the threat from a technological malfunction grows, he said.

"Banks are obviously safer than 10 years ago," he said. "At the same time, they will soon see a decline in profits, and the fund manager will not be able not to have the client listed in the application if we move into another crisis."


Ford kills plan to sell Chinese-made vehicle in the United States

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The automaker's decision came because US President Donald Trump is stepping up a trade battle with China, threatening to impose duties on an additional $ 200 billion of Chinese goods.
The Trump Administration has already imposed duties on cars of Chinese production up to 25 percent. Trump separately evaluates the proposal for the introduction of tariffs for all imported cars for reasons of national security.

The Chinese Focus Focus, which Ford called the crossover, would be a niche vehicle for the United States, and the decision to abandon plans to launch it in the US market next year will not cost jobs or significantly affect US automakers' sales, Ford North America head Kumar Galotra told reporters during a conference call on Friday.

"It basically comes down to how we deploy our resources," said Galotra. Given the prospects for high tariffs, Focus Active costs in the US will be much higher.
When asked when the decision was made, Galotra said: "We just did it. Literally."

Halotra said that plans to build and sell Focus Active in Europe and China will move forward.

Ford's decision to abandon Focus Active contrasts with the effort of competitor General Motors Co (GM.N) to seek a release from the new 25 percent US tariffs on its official Buick Envision car.
Envision is a larger car than Focus Active, with an initial price of about $ 35,000. Ford did not set the US price for a compact Focus Active, but it would compete in a segment where prices start at about $ 20,000, leaving less profit to absorb additional import duties.

Ford and its rivals are also closely following the results of the negotiations on the revised North American Free Trade Agreement, which continued on Friday. The representative of Ford declined to comment on the proposed changes to NAFTA's automatic trading rules, and Galhotra did not address them.

Ford said in April that it would reduce most of its traditional passenger car models for the North American market and omit the earlier plan to import Focus Focus sedans from China.
About 95 percent of Ford cars sold in the US are assembled in the US, Canada or Mexico, Galotra said. U.S dealers receive a small sports utility EcoSport from India and small Transit Connect minibuses from Spain.

"At the moment, we do not see a significant risk for these products," said Galotra.


HNA Group trims debt nearly 11 percent, or $11.6 billion, in first half

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The total debt of the HNA Group amounted to 657.41 billion yuan (96.25 billion US dollars) at the end of the first half, which is 10.7 percent or 11.6 billion dollars. USA since the end of 2017.
Despite the decline, the Group's total debt to EBITDA was 21.36 times at the end of the first half of the year.

The company reported that the net profit in the first half was 1.3 billion yuan.

The expulsion of HNA for the sale of assets under pressure from Beijing follows a weight of $ 50 billion, led by former co-chairman Wang Jian, who saw that HNA accumulates assets ranging from a stake in Deutsche Bank AG (DBKGn.DE) to large foreign real estate.
Van died during a business trip in France on July 3.

In early August, HNA Group announced the reshuffle of the management to calm concerns about leadership in the conglomerate.

($ 1 = 6.8 million Chinese yuan)


Ferrari F1 junior Antonio Giovinazzi tops final Formula E test entries

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Ferrari F1 junior Antonio Giovinazzi tops final Formula E test entries

Ferrari Formula 1 protege Antonio Giovinazzi will take part in the Formula E rookie test in Marrakech, as the full entry list is completed.

The Italian made his F1 debut in 2017 as replacement for the injured Pascal Wehrlein at Sauber, and was a contender to join the Swiss team full-time for the upcoming season.

However, Sauber opted for fellow Ferrari junior Charles Leclerc and team regular Marcus Ericsson instead, with Giovinazzi having to settle for a third-driver role.

He will now make an appearance in the January 14 post-race FE rookie test in Marrakech, and will pilot DS Virgin's DSV-03 car alongside BMW racer Joel Eriksson.

Giovinazzi's test opportunity comes against the backdrop of Ferrari president Sergio Marchionne evaluating a foray into the all-electric racing category with his Fiat Chrysler Automobiles company's Maserati brand.

The entry list has also revealed two other names participating in the test, completing a 20-strong line-up.

Mercedes DTM driver Gary Paffett, who has previously stated he would "absolutely" consider following the manufacturer to Formula E when it quits the German series at the end of 2018, will test for Venturi - which currently employs his DTM team-mates Edoardo Mortara and Maro Engel.

Meanwhile, Formula 2 ace Alex Albon will slot in alongside Japanese F3 champion Mitsunori Takaboshi in the Renault e.dams test roster.

Test line-up
Renault e.dams Mitsunori Takaboshi, Alex Albon
Audi Abt Sport Nyck de Vries, Nico Muller
Mahindra Dani Juncadella, Sam Dejonghe
DS Virgin Joel Eriksson, Antonio Giovinazzi
Techeetah Frederic Makowiecki, James Rossiter
NIO Harry Tincknell, Alexandre Imperatori
Andretti Bruno Spengler, Colton Herta
Dragon Racing Maximilian Gunther, Andrea Caldarelli
Venturi Michael Benyahia, Gary Paffett
Jaguar Paul di Resta, Pietro Fittipaldi


Alfa Romeo Giulia Quadrifoglio long-term review

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Alfa Romeo Giulia Quadrifoglio long-term review

The super-saloon version of Alfa’s long-awaited M3 rival has already wowed our road testers, but what’s it like to live with?
Life with a Giulia QV: Month 5
Giulia QV’s fuel gauge quirks – 06 December 2017​

The Giulia’s fuel economy gauge always seemed back to front to me, but a software update has put that right.

Originally, the graph started at 75mpg and descended towards zero with each prod of the throttle, seemingly emphasising how thirsty the car was.

Now it reads upwards. The dot that shows the average is still close to the ‘0’ end, though. Getting the Guilia QV booted and suited – 22 November 2017​

The low tyre pressure warning that was mentioned in the previous report turned out not to be caused by a slow leak, as we first thought, but by a faulty sensor on the Giulia’s nearside rear wheel.

I discovered this when I took the car to Alfa Romeo dealer HWM to get all four tyres replaced.

I’d been looking for an opportunity to find out what sort of aftersales care we could expect from HWM – not only our nearest Alfa dealership but also the world’s oldest Aston Martin dealer and a former racing car constructor – and the need to fit new tyres gave us a good excuse to visit its service centre in Hersham, Surrey.

Given HWM’s history, I suspected it would be an interesting experience, and I wasn’t disappointed. While the work was being carried out on the Giulia, I got to have a good look around the workshop, where a number of lovely customer cars are kept in storage and which is also home to a 1950s HWM Formula 2 racer that’s still owned by the company.

If you’re an Alfa owner, the chances are you’ll enjoy the opportunity to loiter there while your car is being worked on, if you want to.The fact that the Giulia’s tyres needed replacing after just 4000 miles in our hands – all on the road – might seem like a shocking rate of wear, but bear in mind that the QV wears sticky, high-performance Pirelli P Zero Corsa tyres, developed specifically for the car, so you can’t expect them to last as long as more everyday ones. Nor would you want anything less on a car of this calibre – in warm conditions, at least.

The other mitigating factor is that the tyres weren’t brand new when we took delivery of the car, which already had 7000 miles on the clock at that point. The tyres had already been replaced at least once, earlier in the year, so it would appear that the set we’ve just taken off had actually covered between 6000 and 7000 miles.

That’s still a pretty severe wear rate, but I suspect most QV owners will be able to better that in normal road use. Curiously, the front tyres were looking more shot than the rears, with severely scuffed shoulders, suggesting that there’s a price to pay for having such quick steering and phenomenal front-end bite.

The bill from HWM came to £1276, but a bit of online research revealed that it could be reduced by more than £100 by going to a tyre dealer such as Black Circles. Although the job took a little longer than expected to complete (the new tyres were reluctant to seal properly on the rims) and the faulty sensor couldn’t be sorted on the day, the experience was entirely a positive one for me. I’d be more than happy with the standard of service if I’d bought the car from HWM in the first place.The Corsa tyres may be the business when they’re hot and sticky, but they’re less happy in colder, wetter conditions. To be fair, there’s still plenty of grip, but the electronics have to work overtime to rein in the rear wheels’ eagerness to spin up, and the car feels stiff-legged when the tyres can’t get enough heat in them. The rear end tends to react more to bumps with a sideways kick, too.

Since the Giulia is about to take part in our annual Britain’s Best Driver’s Car extravaganza and will therefore be crying out for yet another set of tyres immediately afterwards, that might be the ideal time to try it on winter rubber, hopefully making it feel more comfortable as the temperature gauge heads into single figures.

I wouldn’t normally bother, but I suspect the Giulia will respond well to such a move.

Best of all, Pirelli’s Sottozero winter tyres are available in the right sizes to go onto the QV’s lovely 19in alloys, so I don’t have to mar the car’s brooding good looks.