The US economy continued showing strong numbers last week with GDP hitting its highest growth since 2014, although, more sustained levels of stubornly slow inlfation are required despite a tigthening in the labor market.
With S&P being under pressure not only by Facebook’s slowing user growth but also by Twitter’s matching 20% decline on slowing active users, the corporate earnings narrative will contiue influencing the markets.
A number of major banking events is due this week though, which will dominate the FX space and influence the markets in a wider range as the US, the UK and Japan decide on interest rates. With the US monthly NFP report also scheduled in this will be a week full of opportunities.
In more detail
Monday 30th of July: The ECB and a number of investors patiently wait for Destatis to release the Harmonised Index of Consumer Prices as it is the most effective indicator used by ECB in order to assess the overall consumer price stability within the Euro area, and hence inflation, which recently reached the 2% target. Out at 12 PM GMT.
Tuesday 31st of July: Bank of Japan Policy meeting is in focus following a week full of speculations around asset purchasing and changes in rates. The European GDP and US Core PCE are to be watched closely as well as following the European CPI on Monday and Fed’s PCE last Friday investors may have a clearer message from the data. Kiwi also delivers it monthly Employment report late at night.
Wednesday 01st of August: FOMC is likely to provide hints surrounding September’s hike despite this month’s rate is expected to remain unchanged. No matter what US President Trump says about the pace of hiking, Fed’s gradual path to changes seems immovable. The UK and US PMIs also take center stage on Wednesday, along with EIAs report on weekly Crude Oil stocks.
Thursday 02nd of August: Bank of England to push hikes past emergency levels after 9 years as Brexit pressure weighs in with consumer spending tightening. BoE is the only bank expected to hike this week. BoJ will deliver the meeting minutes as well near day’s end, at 23:50 PM GMT.
Friday 03rd of August: Analysts expect a wage growth of 0.3% month on month and US hiring marginally below its 3-month average, but still moderate. The focus must again be on the wage growth and stubborn inflation, rather than headline NFP numbers.
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Although foreigners may now invest in A-shares, there is a monthly 20 percent limit on repatriation of funds to foreign countries.
Performance of A-shares.
Since its inception in 1990, including a major reform in 2002, the index has seen great fluctuations. Overall, however, it has grown along with the Chinese economy. The years 2015 to 2016 were a particularly difficult period, with a 52-week performance of -21.55 percent as of July 20, 2016.
As China grows from an emerging market to an advanced economy, there is substantial demand for Chinese equity. Stock exchange regulators continue efforts to make A-shares more broadly available to foreign investors and have them recognized by the global investing community.
In June 2017, the MSCI Emerging Markets Index announced a long-awaited decision it would add stocks to its index. According to CNBC, MSCI will add 222 China A Large Cap stocks to its benchmark emerging markets index gradually beginning in 2018. The MSCI website reveals the stocks it will list include the Bank of China, China Merchants Bank, Guotai Junan, Ping An Insurance, according to a document on Tsingtao Brewery, SAIC Motor, Suning Commerce and Spring Airlines.
Current Dividend Preference.
Participating Preferred Stock.
Convertible Preferred Stock.
Cumulative preferred stock includes a provision that requires the company to pay preferred shareholders all dividends, including those that were omitted in the past, before the common shareholders are able to receive their dividend payments.
Non-cumulative preferred stock does not issue any omitted or unpaid dividends. If the company chooses not to pay dividends in any given year, the shareholders of the non-cumulative preferred stock have no right or power to claim such forgone dividends at any time in the future.
Participating preferred stock provides its shareholders with the right to be paid dividends in an amount equal to the generally specified rate of preferred dividends, plus an additional dividend based on a predetermined condition. This additional dividend is typically designed to be paid out only if the amount of dividends received by common shareholders is greater than a predetermined per-share amount. If the company is liquidated, participating preferred shareholders may also have the right to be paid back the purchasing price of the stock as well as a pro-rata share of remaining proceeds received by common shareholders.
Significance to Investors.