Good morning! Here’s what you need to know in markets on Tuesday.
The pound is heading to parity with the euro, according to HSBC. HSBC analyst David Bloom and his team believe the Bank of England will cut interest rates down to 0.10% in November, pushing the pound to 1:1 parity with the euro. The pound will fall to just $1.10 with the US dollar by the end of 2017, Bloom believes.
There’s a big problem with Netflix, according to Crispin Odey. Voracious consumers are watching Netflix’s content more quickly than the online streaming service can replenish it, Odey said during his hedge fund’s second-quarter phone call, a 53-minute recording of which was obtained by Business Insider’s Rachael Levy.
The richest people in the world are spooked. They’re keeping more cash in their pockets, a sign of fearfulness. Liquidity, or the proportion of their net worth in cash or cash equivalents, is now at 22.2%, according to a report by the research firm Wealth-X.
Adidas and Nike are making a mistake ditching golf equipment, according to Deutsche Bank. In a note to clients about Dick’s Sporting Goods, analyst Mike Baker noted that rounds of golf played have been growing over the past two years, and the growth appears to be accelerated.
Chinese consumer price inflation ebbed in July, rising by the slowest amount seen since January. According to China’s National Bureau of Statistics (NBS), consumer prices rose by 1.8% from July last year. The increase was in line with market expectations, but marginally softer than the 1.9% pace seen in June.
The Reserve Bank of India left monetary policy unchanged on Tuesday. India’s central bank kept its benchmark repo rate at 6.5%, the cash reserve rate at 4% and the reverse repo rate at 6%. The RBI’s August meeting was the last to be chaired by outgoing governor Raghuram Rajan, who will return to academia at Chicago university’s Booth Business School.
Walmart is buying Jet.com in the largest e-commerce acquisition in history. Walmart will pay about $3 billion in cash plus about $300 million of Walmart shares for the two-year-old e-commerce site. “We’re looking for ways to lower prices, broaden our assortment, and offer the simplest, easiest shopping experience because that’s what our customers want,” Walmart CEO Doug McMillon said in a statement.
China has warned Britain that bilateral ties stand at a “crucial historical juncture” over London’s deferral of an 18 billion pound ($23.47 billion) nuclear power project. China’s Ambassador to the UK Liu Xiaoming wrote in the Financial Times that he hoped London would keep its door open to China and that the British government would continue to support the nuclear project and come to a decision as soon as possible.
BP reportedly wants to sell its $3 billion stake in a Chinese joint venture. British oil major BP is seeking buyers for its 50 per cent stake in a Chinese petrochemicals joint venture, its single largest investment in China, in a deal that would fetch $2-$3 billion, people familiar with the matter told Reuters. BP has hired an investment bank to sell its shareholding in SECCO as part of a drive to cash out of businesses where it lacks control, the people added. A successful deal would mark BP’s first significant exit from a business in China.
It’s production day in the UK. On Tuesday, Britain’s Office for National Statistics will release data on the state of both manufacturing and industrial production in the country during June. The release will be the ONS’ first data on the state of British industry since the vote to leave the European Union.