US real estate sector hit by soaring bond yield - (www.ft.com) The
US real estate sector faced heavy selling pressure on Thursday, as Treasury bond prices declined, amid rising expectations that the Federal
Reserve will raise interest rates this year. The market-implied odds that the
Fed increases rates in December have crept higher throughout October, hitting
nearly three-quarters on Thursday from 60 per cent at the start of the month,
as data have reinforced expectations that economic output growth accelerated
after a disappointing first half of 2016. At the same time, an increasing
number of top Fed policymakers have warned over the risks that tightening in
the labour market could eventually push inflation above the central bank’s 2
per cent target if it does not slowly increase its benchmark interest rate,
which remains just slightly above the crisis-era low.
German Bonds in Worst Month Since 2013 Amid
Global Selloff - (www.bloomberg.com) German
bonds headed for their worst month since 2013 as a global selloff deepened amid
speculation major central banks are moving closer to reining in stimulus. Yields
on Europe’s benchmark 10-year securities rose earlier to the highest in almost
six months. Ten-year debt yields in the U.S. and Australia also climbed to
levels last seen in May, buoyed by expectations that the Federal Reserve will
raise interest rates this year and amid signs that global inflation is
accelerating. A report showed consumer
prices in Germany rose this month at the fastest annual pace in two years,
adding to signs that the European Central Bank’s efforts to revive price growth
in the region are paying off.
Auto Lenders Have New Reason to Worry - (www.wsj.com) For
auto lenders, there is trouble on the used-car lot. Several large companies
have warned that prices of used vehicles are likely to weaken, potentially
leading to higher losses on loans on which cars are the collateral. That,
combined with looser terms for loans and the growth of loans going to subprime
borrowers, is sounding a warning for the long credit boom that has spurred auto
sales. Auto-loan balances topped $1 trillion for the first time ever this year.
Actual default rates remain low, but losses are starting to tick up,
leading some big lenders to scale back. That has the credit underpinnings of
the auto boom looking shakier.
EVs
will Crush Jobs in Auto Manufacturing, VW Warns - (www.wolfstreet.com) Volkswagen’s
big kahuna of HR, Karlheinz Blessing – Member of the Board of Management with
responsibility for Human Resources and Organization – dropped another brake
shoe on global employment in auto manufacturing, which has been under pressure
for decades from automation. This time, it’s electric vehicles. Every global
manufacturer is working on a lineup of passenger and commercial EVs. Numerous
EV brands are already on the road, from tiny cars to delivery vehicles. UPS,
FedEx, USPS, and other delivery services are already looking at EVs or are
testing them.
Woe
in the oilfield: 213 companies have now declared bankruptcy - (www.fuelfix.com) Fewer and fewer oil exploration and production
companies are declaring bankruptcy. But more oilfield service companies are. So
far this month, only one North American E&P firm filed for Chapter 11
protection, according to data released on Tuesday by the Dallas law firm Haynes
& Boone. That’s down from two in September, three in August and four in
July. But it’s been an especially tough few months for service companies. As
crude prices began crashing in 2014, drillers started idling rigs. That led to
fewer jobs for the companies that make their money helping producers pump oil
and gas. Moreover, when producers did hire service companies, they often forced
them to heavily discount their rates.
These Are the Charts
That Scare Wall Street - (www.bloomberg.com)
Hamptons Home Prices Fall the Most Since 2013 - (www.bloomberg.com)
China's Xi anointed 'core' leader, on par with Mao, Deng - (www.reuters.com)
Hamptons Home Prices Fall the Most Since 2013 - (www.bloomberg.com)
China's Xi anointed 'core' leader, on par with Mao, Deng - (www.reuters.com)
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