Brave New World: Oil holds ground despite recovery by Saudis; US GDP growth may flatline in 2020


Ritesh Jain, a Dalal Street veteran, trend watcher and Global Macro Investor, captures global macro investment opportunities and economic, business and financial trends with charts and commentaries in this space.

Geopolitical risks keep oil prices elevated even as some of the more immediate Saudi supply concerns start to ease.

Brent staying about $5 a barrel above pre-attack levels.

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The South Korean economy is closely watched because its exports are said to be a lead indicator of global economic activity.

Now, according to data released last week, the Consumer Price Index (CPI) in South Korea decreased by 0.04% in August from a year earlier. It is the first time that South Korea has experienced consumer price deflation since statistics began to be compiled in 1965.

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Softbank’s $95 billion Vision Fund 1:$25 billion came from Softbank itself, $60 billion came from Saudis and Abu Dhabi and $10 billion from others. Of the 80 investments made, 5 were IPOs, out of which 4 are below IPO price and only 1 (Guardant Health) is up.

As much as 66 per cent of Softbank’s “profits” came from paper gains in illiquid holdings, $4billion of gains came from Oyo whose “valuation” doubled from $5-10 billion. The biggest investor was Oyo’s founder (financed by debt from Japanese bank consortium, who count Softbank as big fee-paying customer) (Josh Wolfe).

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Pictet believes that Q1 2020 US GDP growth could be closer to 0% and similar outlook for corporate earnings.

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