NEW YORK The summer roller-coaster in two of the four big-cap 'FANG' names - Facebook Inc, Amazon.com Inc, Netflix Inc and Google-parent Alphabet Inc - has led to a shift, albeit slight, into value stocks.
* Loonie strengthens 0.56 pct vs greenback
* July inflation higher than expected
* 10-year yield rises to 2.262 percent
By James Thorne
NEW YORK, Aug 17 The Canadian dollar gained
against its U.S. counterpart on Friday after the country's
annual inflation rate accelerated by more than expected,
increasing prospects that the Bank of Canada might raise
interest rates next month.
Canada's annual inflation rate rose 3 percent in July versus
2.5 percent the previous month as energy prices climbed.
Economists polled by Reuters had forecast 2.5 percent annual
At 9:35 a.m. EDT (1335 GMT), the Canadian dollar
was trading 0.56 percent higher at C$1.3078 to the greenback, or
0.7644 U.S. cents. On Monday, it neared a three-week low of
"With that size of a shock, (the Canadian dollar) probably
should have moved more," said Greg Anderson, global head of
foreign exchange strategy at BMO Capital Markets in New York.
"This really does raise the possibility of the Bank of
Canada raising rates in September again."
Money markets expect the central bank to hike its benchmark
interest rate, which sits at 1.50 percent, once more by
The CPI data came a day after a report from Statistics
Canada that showed Canadian factory sales grew by 1.1 percent in
June from May, a positive sign for manufacturing.
Markets remained broadly bullish on the U.S. dollar amid
uncertainty around trade, Anderson said.
U.S. Trade Representative Robert Lighthizer on Thursday said
he hoped there would be a breakthrough in NAFTA trade talks in
the next few days.
The 10-year yield rose to 2.262 percent, from
2.256 percent late on Thursday.
(Reporting by James Thorne
Editing by Susan Thomas)
(Adds byline, table; updates throughout)
By James Thorne
NEW YORK, Aug 16 Investors pulled $506 million
from U.S.-based domestic equity funds while showing an appetite
for emerging market equities during the week ended Wednesday,
according to Lipper data on Thursday.
Emerging market equity funds based in the United States
brought in cash for the fourth straight week, adding $223
Despite widespread concern that a currency crisis in Turkey
might infect European banks and other emerging markets,
“investors weren’t pulling the trigger,” said Tom Roseen, head
of research services at Thomson Reuters Lipper.
U.S.-based international equity funds saw demand slacken,
posting $410 million in withdrawals.
Investors overall were keen on putting money back into play
amid the turmoil, withdrawing $2.2 billion from U.S.-based money
U.S.-based investment-grade corporate bond funds attracted
$1.5 billion for the week, extending an inflow streak since
March, Lipper said.
But investors in exchange-traded funds, who tend to trade
shorter-term market moves, withdrew $434 million from the
investment-grade category, the weakest demand since March.
"These investors might be worried" about inflation, said
Roseen. U.S. consumer prices rose in July, pointing to a steady
increase in inflation pressures.
The following is a breakdown of the flows for the week,
including mutual funds and ETFs:
Sector Flow Chg ($Bil) % Assets Assets ($Bil) Count
All Equity -0.639 -0.01 7,395.830 12,330
Domestic -0.506 -0.01 5,250.346 8,752
Non-Domestic -0.133 -0.01 2,145.485 3,578
All Taxable 0.798 0.03 2,808.493 6,102
All Money -2.189 -0.08 2,720.945 1,038
All Municipal 0.452 0.10 439.285 1,455
(Reporting by James Thorne; Editing by Jennifer Ablan and
By James Thorne
NEW YORK, Aug 15 U.S. fund investors turned up
demand for bonds and global equities during the most recent
week, but pulled back from domestic stocks, Investment Company
Institute (ICI) data showed on Wednesday.
Mutual funds and exchange-traded funds (ETFs) with a focus
on international stocks brought in $1.74 billion, the most since
May, according to ICI data collected over the week ended Aug. 8.
But risk appetite did not extend to domestic equity funds,
which posted $3.4 billion in withdrawals, the largest week of
outflows in a month, according to the trade group.
Investors instead accelerated a march into bond funds,
shifting $6.14 billion into taxable bond funds and $723 million
to municipal bond funds.
"Fixed income on a relative basis has actually become fairly
attractive," said Fritz Folts, chief investment strategist at
3EDGE Asset Management in Boston.
"The strength of the dollar can allow long-term yields to
remain stable for a while."
During the week, investors wrestled with an intensifying
dispute between the United States and China as well as Turkey,
while strong corporate earnings helped lift Wall Street stock
Apple Inc last week became the first publicly
traded company with a market capitalization exceeding $1
So far this year, U.S.-based bond funds have collected an
estimated $167 billion in cash deposits, while demand for
equities is negative over that same period, ICI data showed.
Weekly demand for commodity funds was the weakest in more
than a month, with investors pulling out $450 million. The
strong dollar and negative momentum have made commodities less
attractive, Folts said.
The following table shows estimated ICI flows for mutual
funds and ETFs (all figures in millions of dollars):
8/8 8/1 7/25 7/18 7/11
Equity -1,666 -3,011 419 1,494 -3,155
Domestic -3,407 -2,130 524 1,300 -1,546
World 1,741 -881 -105 195 -1,609
Hybrid -1,447 -2,268 -1,165 -1,829 -1,048
Bond 6,857 5,846 4,417 8,660 7,445
Taxable 6,135 5,682 3,817 6,894 6,416
Municipal 723 164 600 1,765 1,028
Commodity -450 -101 164 -308 101
Total 3,294 465 3,835 8,016 3,343
(Reporting by James Thorne; editing by Trevor Hunnicutt, G
By James Thorne
Aug 15 A currency crisis in Turkey has led to
fears of a contagion effect in emerging markets as far as Latin
America, with potential repercussions for companies holding
large amounts of dollar-denominated debt.
The lira has lost more than 40 percent this year and crashed
to an all-time low to the dollar on Monday, hit by worries over
political calls for lower borrowing costs and by worsening ties
with the United States.
The plunge in the Turkish lira set off a wave of seemingly
indiscriminate selling across emerging market assets, giving
rise to fears that a crisis in one country could spill over to
"When there is a steep depreciation we see pressure in
credit measures," said Marianna Waltz, managing director at
Moody's in Brazil.
Companies that earn large shares of revenue in hard
currencies abroad will be better protected than those with
locally-generated revenues, Waltz said.
Against the dollar, as of Tuesday the Brazilian real
had fallen 2.8 percent and the Mexican peso was 2.9
percent weaker since Thursday's close, the day before the
Turkish lira's 13 percent plunge.
The following Latin American companies have reported a
significant portion of dollar-denominated debt.
Company RIC Industry Gross debt, Dollar-deno Date
(USD) share (pct)
Gruma <GRUMA Corn and $1.20 73 Mar-18
Cemex <CMXCP Cement $10.44 66 Jun-18
Grupo <BIMBO Food $4.66 59 Jun-18
Bimbo A.MX> processing
America <AMXL. Telecoms $34.50 29 Jun-18
Movil SAB MX>
*Foreign exchange rate at 19.90 Mexican pesos per dollar
Company RIC Industry Gross debt, Dollar-deno Report
billions minated ing
(USD) share Date
JBS SA <JBSS Meat $14.50 95 Mar-18
Gerdau <GGBR Steel $4.65 83.7 Jun-18
SA 4.SA> manufacturing
Minerva <BEEF Meat $2.85 77 Jun-18
SA 3.SA> processing
Klabin <KLBN Paper and $5.01 71 Jun-18
SA 4.SA> pulp
BRF SA <BRFS Food $5.32 54 Jul-18
3.SA> production (foreign)
*Foreign exchange rate at 3.89 Brazilian reais per dollar
(Reporting by James Thorne in New York; additional reporting by
Marcelo Rochabrun in Sao Paulo and Julia Love, Sheky Espejo and
Anthony Esposito in Mexico City, Editing by Rosalba O'Brien)
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NEW YORK Investors in U.S. funds traded international equities for domestic stocks during the latest week as earnings beat expectations while trade tensions simmered, Lipper data showed on Thursday.