TIME stocks

A Japanese Day Trader Made $34 Million In the Market This Week

JAPAN-STOCKS
KAZUHIRO NOGI—AFP/Getty Images Japan's Nikkei index had its biggest one-day fall in nearly 10 months in the wake of Monday's carnage on Wall Street.

Not everyone's afraid of volatility

One of the iron-clad laws of trading is that you can’t time the market.

Of course, there’s always the exception that proves the rule. According to a report in Bloomberg, day trader in Japan perfectly timed the global market meltdown this week, netting himself a cool $34 million in the process.

The trader, known only by his internet handle “CIS,” believed there would be a sharp downturn in the markets, and had been “shorting futures on the Nikkei 225 Stock Average since mid-August.” By Monday of this week, he was looking at a paper profit of $13 million, but he didn’t stop there. He wagered that once the U.S. markets opened to a global selloff, it would force the markets lower in Japan too.

After doubling his winnings, CIS pivoted betting correctly that the market had bottomed.

“I do my best work when other people are panicking,” the trader told Bloomberg.

TIME Markets

U.S. Business Group Tells China to Open Insurance and Securities Markets

China Financial Markets
Ng Han Guan—AP A Chinese investor monitors stock prices at a brokerage in Beijing on Aug. 27, 2015

Foreign service businesses are "pessimistic about the regulatory environment"

(BEIJING) — An American business group urged China on Friday to allow more access to its insurance and other service industries, saying foreign skills could help develop its volatile stock markets and cope with disasters like the recent chemical explosion in Tianjin.

Opening largely closed banking, logistics and other markets wider to foreign competitors would support the communist leadership’s effort to nurture service industries and reduce reliance on trade and investment to drive economic growth, the American Chamber of Commerce in China said.

The group’s deputy chairman, Lester Ross, pointed to China’s stock market plunge and the Aug. 12 explosion in Tianjin that killed at least 145 people, and said bringing in more global expertise could help to develop financial markets and reduce the impact of disasters.

“Our hope, frankly, is that the downturn in the market will encourage the Chinese government to open faster,” Ross said at a news conference.

In a report, the chamber also cited potential opportunities in fields including engineering, health care, communications technology, legal services, real estate, entertainment, online commerce and logistics.

The report is part of an annual series but its release comes at a time when stock market turmoil and unexpectedly weak export and manufacturing data have fueled concerns about the health of China’s economy. That has prompted urging from economists for Beijing to move faster on promised reforms aimed at making the economy more productive by opening state-dominated industries to private and foreign competition.

Despite promises of reform, foreign service businesses are “pessimistic about the regulatory environment,” said the chamber chairman, James Zimmerman.

Ross said China’s insurance industry, with a history of just 35 years, lacks the experience of foreign insurers at spotting potential risks and encouraging policyholders to reduce them.

“The more of that China has, the less likely it would be that it’s going to have casualties and disasters like those we have recently seen,” he said.

Zimmerman said Beijing should take action on its own without waiting to complete talks underway with Washington on proposed bilateral investment treaties that are expected to lead to further market opening.

“For the Chinese economy’s own good, they need to move faster,” said Zimmerman.

The chamber also expressed concern about the impact of proposed Chinese anti-terrorism and cybersecurity laws that companies worry could restrict market access for a wide array of foreign communications, computer and other technology.

The number of telecommunications services open to foreign investment is “very, very limited,” and the government’s “exaggerated concern about security” could reduce access further, Ross said.

TIME Markets

Asian Stocks Rise After U.S. Data Calms Investors

<> on August 27, 2015 in New York City.
Andrew Burton—Getty Images Traders work on the floor of the New York Stock Exchange on August 27, 2015

Regional markets took their lead from Wall Street

(HONG KONG) — Asian stocks rose Friday as upbeat U.S. economic data lifted investors’ spirits following days of stomach-churning turbulence sparked by a heavy sell-off in China.

Japan led regional gains, but Shanghai shares were not far behind as markets took their lead from Wall Street, where benchmarks had a strong finish after a government report showed that U.S. second-quarter economic growth was much stronger than initially estimated. The growth data, which also helped oil prices stage an impressive rebound, gave added encouragement to investors seeking bargains in beaten-down shares.

Japan’s benchmark Nikkei 225 index climbed 3 percent to 19,124.85 after lackluster monthly data on inflation and household spending raised hopes of further stimulus.

The Shanghai Composite Index in mainland China rose 2.1 percent to 3,149.35, adding to its 5.3 percent gain Thursday, which was its first increase in six days, during which it shed nearly 23 percent.

World stock markets are returning to calm after the tumult of the past two weeks, which saw Chinese stocks plunge, wiping out gains for the year, on jitters over the economy and a surprise devaluation of the yuan. Analysts warn there may be further volatility ahead.

“Uncertainties regarding China and the emerging world are likely to linger and uncertainty still remains around the Fed,” said Shane Oliver, head of investment strategy at AMP Capital.

However, he added that he believes markets have bottomed out and a “cyclical bull market” is likely to resume. “Despite the recent set-back, share markets are likely to remain in a broad rising trend,” he said.

Recent market turmoil has thrown into doubt expectations for a Federal Reserve interest rate hike in September, with most economists now saying it’s off the table for now. Fed officials hold their annual meeting at Jackson Hole, Wyoming, this weekend, which will be heavily scrutinized for clues on the rate hike timing.

South Korea’s Kospi climbed 1.5 percent to 1,937.16 while Hong Kong’s Hang Seng added 0.7 percent to 21,984.11. Australia’s S&P/ASX 200 gained 0.5 percent to 5,259.00.

On Wall Street, the Dow Jones industrial average climbed 2.3 percent to close at 16,654.77, recouping nearly half of its losses over the past two days following a sharp six-day slump. The S&P 500 index gained 2.4 percent to 1,987.66 and the Nasdaq composite rose 2.5 percent to 4,812.71.

The dollar slipped to 121.09 yen from 121.12 in late trading Thursday. The euro climbed to $1.1254 from $1.1242.

Benchmark U.S. crude oil extended gains, rising 68 cents to $43.24 in electronic trading on the New York Mercantile Exchange. On Thursday the contract posted its biggest one-day gain in six years, leaping $3.96, or 10.3 percent, to $42.56 a barrel. Brent crude, a benchmark for international oils imported by U.S. refineries, rose 74 cents to $48.34 in London.

TIME Markets

U.S. Stocks Close Higher Following Chinese Market Gains

Market
Andrew Burton—Getty Images Traders work on the floor of the New York Stock Exchange during the morning of Aug. 27, 2015 .

The Dow climbed close to 370 points on Thursday

U.S. stocks are closing sharply higher after China’s main stock index logged its biggest gain in eight weeks. A report also showed that the U.S. economy expanded at a much faster pace than previously estimated.

The Dow Jones industrial average climbed 369.26 points, or 2. 3 percent, to 16,654.77 on Thursday. That took the two-day gain for the index to almost 1,000 points.

The Standard & Poor’s 500 index gained 47.15 points, or 2.4 percent, to 1,987.66. The Nasdaq composite gained 115.17 points, or 2.5 percent, to 4,812.71.

Energy stocks surged as the price of oil jumped 10 percent.

Bond prices were little changed from Wednesday, keeping the yield on the benchmark 10-year Treasury note at 2.18 percent.

TIME Markets

Asian Stocks Rise After Wall Street Rebound

Asia stock market
Kevin Frayer—Getty Images A Chinese day trader reacts as he watches a stock ticker at a local brokerage house in Beijing, on Aug. 27, 2015.

Analysts said there are probably more roller-coaster days ahead

(BEIJING) — China’s key stock market index surged 5.3 percent Thursday, its biggest gain in eight weeks, as markets across Asia rose following Wall Street’s rebound, giving investors some relief after gut-wrenching global losses.

The Shanghai Composite Index, whose steep drop in recent days triggered worldwide selling, gained 5.3 percent to close at 3,083.59 points, bouncing back from losses that wiped some 20 percent off its value over the past week. It was the biggest one-day gain since a 5.5 percent rise on June 30.

Elsewhere in Asia, Hong Kong’s Hang Seng rose 2.9 percent to 21,697.31 and Tokyo’s Nikkei 225 added 1.1 percent to 18,574.44. Sydney’s S&P ASX 200 advanced 1.2 percent to 5,233.30 and Seoul’s Kospi gained 0.7 percent to 1,908.00. Markets in Singapore, Bangkok, New Zealand and Jakarta also rose.

European markets also advanced in early trading. France’s CAC-40 added 2.1 percent to 4,597.36 and Germany’s DAX gained 2.4 percent to 10,240.92.

The gains came after Wall Street rocketed up overnight. The Dow Jones industrial average soaring more than 600 points, or 4 percent. That was its third-biggest point gain of all time and its largest since Oct. 28, 2008.

Traders were encouraged by comments from William Dudley, president of the New York Federal Reserve Bank, that the case for a U.S. interest rate hike in September is “less compelling to me than it was a few weeks ago,” given China’s troubles, falling oil prices and weakness in emerging markets.

“Traders took the cue to buy,” said Nicholas Teo of CMC Markets in a report.

Following a six-year run-up in U.S. stocks that has pushed major indexes to all-time highs, investors worry the economy could falter if the Fed raises rates too soon.

U.S. markets looked set for more gains, with futures for the Dow Jones and S&P both up 0.4 percent.

In currency markets, the dollar rose to 120.2220 yen from Wednesday’s 120.1440 yen. The euro edged down to $1.1327 from the previous session’s $1.1337.

Benchmark U.S. crude gained 92 cents to $39.53 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 71 cents on Wednesday to close at $38.60. Brent crude, used to price international oils, rose $1 to $44.14 in London after losing 7 cents the previous day to close at $44.14.

TIME Markets

U.S. Stock Market Closes Sharply Higher After 6-Day Slump

The Dow climbed 619 points on Wednesday

An afternoon surge Wednesday gave the stock market its best day in close to four years, as stocks rebounded from a six-day slump.

The three major U.S. indexes dropped six days in a row heading into Wednesday on concern that China’s economy is weaker than investors had previously thought. That was the longest market slide in more than three years.

The Dow fell about 1,900 points over that period, while the slump wiped more than $2 trillion off the value of S&P 500 companies.

The Dow Jones industrial average rose 619.07 points, or 4 percent, to 16,285. The Standard & Poor’s 500 index gained 72.9 points, or 3.9 percent, to 1,940, giving the index its best day since November 2011. The Nasdaq composite gained 191 points, or 4.2 percent, to 4,697.

Markets have been volatile since China decided to weaken its currency earlier this month. Investors interpreted the move as an attempt to bolster a sagging economy.

Traders are also jittery about the outlook for interest rates. The Federal Reserve has signaled it could raise its key interest rate for the first time in nearly a decade later this year.

New York Fed President Bill Dudley said Wednesday that the case for a rate increase next month had become “less compelling,” in recent weeks, which may have added fuel to the market gains. However, he also stated that the situation could still change before the Fed’s next policy meeting scheduled for mid-September.

Investors were also following the latest corporate deal and earnings news. Technology stocks were among the biggest gainers.

THE QUOTE: “There’s a lot of cash on the sidelines waiting to get in, so to the extent that there’s any sort of bottom seen, that will increase people’s confidence and boldness,” said Erik Davidson, chief investment officer for Wells Fargo Private Bank.

ECONOMIC BELLWETHER: The Commerce Department said orders for durable goods, or items expected to last at least three years, rose 2 percent last month after a 4.1 percent gain in June.

Despite the increase, U.S. manufacturers still face a host of problems from a stronger dollar to falling oil prices and turbulence in China, the world’s second-biggest economy.

OIL DEAL: Cameron International, a maker of equipment for the oil industry, jumped 41 percent after Schlumberger said it was buying the company in a cash-and-stock deal. Cameron rose $17.46 to $59.93.

NEVER MIND: Monsanto shares climbed 8.6 percent on news that the agricultural products maker has decided to abandon its takeover bid for rival Syngenta. The stock gained $7.66 to $97.08.

EUROPEAN ACTION: Germany’s DAX was down 1.3 percent, while France’s CAC 40 fell 1.4 percent. Britain’s FTSE 100 fell 1.7 percent.

ASIA’S DAY: Markets in Asia were mixed. Japan’s Nikkei 225 stock index rose 3.2 percent. But Hong Kong’s Hang Seng index fell 0.5 percent to 21,305.17, and mainland China’s smaller Shenzhen Composite lost 3.1 percent.

ENERGY: The price of oil fell back below $39 a barrel after a U.S. government report showed an unexpected decline in demand for gasoline last week. U.S. oil fell 71 cents, or 1.8 percent, to $38.60.

BONDS AND CURRENCIES: U.S. government bond prices fell. The yield on the 10-year Treasury note rose to 2.17 percent from 2.07 percent late Tuesday. The dollar rose 0.6 percent against the yen to 119.37. The euro dropped 1.3 percent to $1.1380.

METALS: Gold fell $13.70 to $1,124.60 an ounce. Silver dropped 56.9 cents to $14.04 an ounce. Copper fell 6.6 cents to $2.25 a pound.

TIME Markets

U.S. Stocks Surge in Rebound From 6-day Slump

New York Stock Exchange
Lucas Jackson—Reuters A trader works on the floor of the New York Stock Exchange shortly after the opening bell in New York City on Aug. 26, 2015.

Markets have been volatile since China decided to weaken its currency earlier this month

(NEW YORK)—U.S. stocks surged Wednesday in a broad rally, rebounding from a big slump that was driven by worries about the health of the Chinese economy.

The three major U.S. indexes dropped six days in a row heading into Wednesday. That’s the longest market slide in more than three years. The Dow had fallen about 1,900 points over that period, while the slump wiped more than $2 trillion off the value of S&P 500 companies.

Wednesday was the second day that stocks had staged a rally. A strong rebound on Tuesday evaporated in the final minutes of trading and the Dow ended more than 200 points lower after having been up more than 400 earlier in the day.

The Dow Jones industrial average rose 454 points, or 2.9 percent, to 16,123 as of 3:08 p.m. Eastern time. The Standard & Poor’s 500 index gained 54 points, or 2.9 percent, to 1,922. The Nasdaq composite added 95 points, or 2.2 percent, to 4,601.

Markets have been volatile since China decided to weaken its currency earlier this month. Investors interpreted the move as an attempt to bolster a sagging economy.

Traders are also jittery about the outlook for interest rates. The Federal Reserve has signaled it could raise its key interest rate for the first time in nearly a decade later this year. The Fed isn’t expected to deliver a policy update until it wraps up a meeting of policymakers in mid-September.

Investors were also following the latest corporate deal and earnings news. Technology stocks were among the biggest gainers.

THE QUOTE: “There’s a lot of cash on the sidelines waiting to get in, so to the extent that there’s any sort of bottom seen, that will increase people’s confidence and boldness,” said Erik Davidson, chief investment officer for Wells Fargo Private Bank.

ECONOMIC BELLWETHER: The Commerce Department said orders for durable goods, or items expected to last at least three years, rose 2 percent last month after a 4.1 percent gain in June.

Despite the increase, U.S. manufacturers still face a host of problems from a stronger dollar to falling oil prices and turbulence in China, the world’s second-biggest economy.

OIL DEAL: Cameron International, a maker of equipment for the oil industry, jumped 41 percent after Schlumberger said it was buying the company in a cash-and-stock deal. Cameron rose $17.27 to $59.75.

NEVER MIND: Monsanto shares climbed 7.5 percent on news that the agricultural products maker has decided to abandon its takeover bid for rival Syngenta. The stock gained $6.76 to $96.18.

EUROPEAN ACTION: Germany’s DAX was down 1.3 percent, while France’s CAC 40 fell 1.4 percent. Britain’s FTSE 100 fell 1.7 percent.

ASIA’S DAY: Markets in Asia were mixed. Japan’s Nikkei 225 stock index rose 3.2 percent. But Hong Kong’s Hang Seng index fell 0.5 percent to 21,305.17, and mainland China’s smaller Shenzhen Composite lost 3.1 percent.

ENERGY: Benchmark U.S. crude fell 71 cents to $39.10 a barrel in New York. Brent crude, a benchmark for international oils used by many U.S. refineries, fell 70 cents to $43.14.

BONDS AND CURRENCIES: U.S. government bond prices fell. The yield on the 10-year Treasury note rose to 2.17 percent from 2.07 percent late Tuesday. The dollar rose 0.6 percent against the yen to 119.37. The euro dropped 1.3 percent to $1.1380.

METALS: Gold fell $13.70 to $1,124.60 an ounce. Silver dropped 56.9 cents to $14.04 an ounce. Copper fell 6.6 cents to $2.25 a pound.

TIME Markets

China Is Probing Brokers and Regulators for Possible Stock Crimes

China Financial Markets
Mark Schiefelbein—AP Chinese investors monitor stock prices at a brokerage house in Beijing on Aug. 24, 2015

Brokerages have been accused of improperly allowing customers to trade

(BEIJING) — Chinese authorities are investigating four securities brokerages and one current and one former employee of its securities regulator for possible stock market offenses.

Three of the brokerages say they have been told they are being investigated for possibly failing to confirm the identities of clients. The official Xinhua News Agency said eight employees of a fourth brokerage were suspected of illegal securities trading. The agency said a staff member of the China Securities Regulatory Commission and a former staff member were suspected of insider trading.

Authorities announced in July they were investigating possible misconduct in China’s securities market following the collapse of a stock price boom.

Brokerages have been accused of improperly allowing customers to trade without giving their real names and other violations.

TIME Markets

Asian Stocks Post Mixed Results

Tokyo stock rebounds
Kimimasa Mayama—EPA A businessman watches an electronic board displaying Tokyo's benchmark Nikkei Stock Average at a securities office in Tokyo on Aug. 26 2015

Markets have been zigzagging for weeks

(TOKYO) — Asian stocks were mixed Wednesday and Shanghai’s index fell despite Beijing’s decision to cut a key interest rate to help stabilize gyrating financial markets and counter short liquidity.

The benchmark Shanghai Composite Index fell late in the day after spending most of the afternoon in positive territory. It closed down 1.3 percent at 2,927.29 on heavy selling of steelmakers and other heavy industrials.

Most other Asian markets initially wavered but had appeared to regain buying momentum by early afternoon. Japan’s main Nikkei 225 stock index advanced 3.2 percent to 18,376.83, and South Korea’s Kospi gained 2.6 percent to 1,894.09.

But Hong Kong’s Hang Seng index fell 0.5 percent to 21,305.17, and mainland China’s smaller Shenzhen Composite Index lost 3.1 percent.

Elsewhere in Asia, Australian shares gained 0.7 percent to 5,172.80, helped by buying of resource-related shares. Shares also rose in Taiwan but fell in New Zealand and most Southeast Asian markets.

Many in Asia went to bed Tuesday smiling over China’s decision to slash its key interest rate, only to awaken to yet another decline overnight on Wall Street, Nicholas Teo, an analyst at CMC Markets, said in a commentary.

“All of a sudden, China and the performance of the Chinese markets have now taken the lead in determining daily direction for trading in stocks worldwide,” he said. Meanwhile, investors unable to meet margin calls are being forced to sell, regardless of the Chinese central bank’s decision.

“With confidence in the markets completely shattered, the likelihood of buyers meeting these intermittent bouts of forced selling may just be few and far in-between,” he said.

Markets have been zigzagging for weeks on deepening unease over the ramifications of slowing growth in China, the world’s second-largest economy and the driver of much of the global growth of the past decade.

The apparent inability of Chinese regulators to stabilize the markets, has spooked investors already fretting over when the U.S. Federal Reserve will raise interest rates.

Asia got a slow start following a last-minute sell-off that dragged the Dow Jones industrial average down 204.91 points, or 1.3 percent, on Tuesday to 15,666.44. That extended Wall Street’s losing streak to six days, the longest such stretch in more than three years.

The Dow had surged more than 400 points after China cut its interest rates for the fifth time in nine months in a renewed effort to shore up growth. The central bank also increased the amount of money available for lending by reducing the reserves banks are required to hold.

The People’s Bank of China acted after the Shanghai stock index slumped 7.6 percent on Tuesday, on top of an 8.5 percent loss on Monday.

China’s slowdown is crimping demand for oil and other commodities, a ripple effect that already is slowing exports and other business activity across Asia.

Beyond China, traders are waiting for clarity from the Federal Reserve, which has signaled it could begin raising its key interest rate from near zero for the first time in nearly a decade as early as this year. The Fed isn’t expected to deliver a policy update until it wraps up a meeting of policymakers in mid-September.

In other trading, U.S. crude oil rose 1 cent to $39.32 a barrel in electronic trading on the New York Mercantile Exchange. It rose $1.07, or 2.8 percent, to $39.31 on Tuesday. Brent crude oil, which is used to price international trading, gained 6 cents a barrel, to $43.15.

The dollar rose to 119.35 yen versus 118.66 yen late Wednesday. The euro slipped to $1.1509 from $1.1524.

 

TIME Markets

World Markets Recover as China Cuts Interest Rates

An investor looks at an electronic board showing stock information at a brokerage house in Shanghai
Aly Song—Reuters An investor looks at an electronic board showing stock information at a brokerage house in Shanghai, on Aug. 25, 2015.

China's main stock-market index fell for a fourth day before government action

BEIJING — Global markets rebounded Tuesday after China’s central bank cut its key interest rate to support growth in the world’s second-largest economy. Earlier, China’s main stock index closed sharply lower for a fourth day.

European markets recovered almost all their losses from Monday, with most rising at least 4 percent, while U.S. stocks were expected to open higher and oil prices rebounded.

Hours after China’s Shanghai stock index slumped to close 7.6 percent lower — adding to Monday’s 8.5 percent loss and taking the benchmark to its lowest level since Dec. 15 — the central bank swung into action.

It cut its interest rates for fifth time in nine months in a renewed effort to shore up economic growth in the world’s second-largest economy. The central bank said the benchmark rate for a one-year loan will be cut by 0.25 percentage point to 4.6 percent and the one-year rate for deposits will fall by a similar margin to 1.75 percent.

The bank also increased the amount of money available for lending by reducing the minimum reserves banks are required to hold by 0.5 percentage points.

The move came as Beijing appeared to be abandoning a strategy of having a state-owned company buy shares to stem the market slide. There have been no signs of large-scale purchases by the China Securities Finance Corp. during the past week.

“The fear is that the Chinese economy is slowing at an alarming pace and that the domestic policy makers have fallen well behind the curve,” said analyst at Credit Agricole CIB in a report.

Tokyo’s Nikkei 225 earlier closed down 4 percent after sliding 4.6 percent Monday.

But other markets in Asia posted modest recoveries. Hong Kong’s Hang Seng index rose or 0.7 percent, while Sydney’s S&P ASX 200 gained 2.7 percent and Seoul’s Kospi index and Singapore’s Straits Times index also rose.

In morning trading in Europe, France’s CAC-40 jumped 4.6 percent after tumbling 5.4 percent Monday while Germany’s DAX was up 4.4 percent after dropping 4.7 percent the day before. Britain’s FTSE 100 was 3.4 percent higher.

Dow Jones and S&P 500 index futures were both up 3.7 percent, an indication the U.S. market was set to open higher.

Wall Street had a stomach-churning day Monday, when the Dow plunged more than 1,000 points at one point before finishing down 588.40 points, or 3.6 percent, at 15,871.35. The Standard & Poor’s 500 index slid 77.68 points, or 3.9 percent, to 1,893.21, and is now in “correction” territory, Wall Street jargon for a drop of at least 10 percent from a recent peak. The last market correction was nearly four years ago.

In currency markets, the dollar rose to 120.26 yen from Monday’s 118.69 yen. The euro fell to $1.1461 from the previous session’s $1.1591

Oil rebounded from Monday’s steep declines.

Benchmark U.S. crude gained $1.31 to $39.55 per barrel in electronic trading on the New York Mercantile Exchange. The contract plunged $2.21 on Monday to close at $38.42.

 

 

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