OPEC deal is a blow for tankers, as shipping rates stage a recovery in November

The Baltic Dry Index (BDI), an indicator of the shipping rates for bulk commodities, climbed 50 percent over the course of November, but the OPEC deal to reduce oil production and other issues could prove harmful to the industry, according to experts.

Earlier in the week, members of OPEC agreed to reduce oil production in order to reduce oversupply. The decision was great news for oil prices and commodity stocks, but may prove to be a big negative for the shipping tanker industry, according to Rahul Kapoor, director of Drewry Financial Research Services.

“Shipping is a volume game, so higher OPEC production has supported the tanker rates over the past few years,” Kapoor said.

“We don’t have the numbers yet, we don’t know how much has been cut and we’ll have to look at the compliance, but if all were to come true in terms of cuts, this would be negative for the market.”

Oil tanker

Jean-Paul Pelissier | Reuters

Following the announcement on Wednesday that an OPEC deal would be achieved, shares in several tanker companies fell. For instance, shares in Belgium-based crude oil shipping company Euronav have fallen around 9 percent since Wednesday morning, and shares in KNOT Offshore partners are down around 2.3 percent.

Despite this, rates in the shipping industry have been improving in recent months.

The BDI hit an all-time low of 290 in February, but has gradually recovered due to growing demand. The index shot up from around 830 at the start of November to around 1,200 points by the start of December.

This movement was driven by the capesize segment of the BDI (these are the largest ships used for transporting coal and other raw materials), explained Kapoor.

“That had a pretty big move, basically the rates went up from around $5,000 (per day to hire a vessel) to all the way up to $15,000 to $18,000. That’s why the move in the Baltic Dry Index looks very amplified,” he told CNBC during a phone interview.

Shipping rates have been recovering for the last six months as China’s economy stabilized, according to Kapoor. Year-to-date, the index is up around 150 percent.

“At the start of the year, we were penciling in a very, very negative demand growth from China, but demand growth has been pretty good from the last few quarters.”

However, problems remain for shipping and rates are still historically low, according to Zvi Schreiber, CEO of freight rate database Freightos.

“Despite the recent uptick in maritime prices, overcapacity continues to impact carriers; 2016 prices were close to 50 percent lower than 2014 ocean prices,” he told CNBC via email.

Market consolidation, such as Moller-Maersk’s announcement this week about buying the German shipping line Hamburg Süd, may not be enough to improve rates.

“Acquisitions by the carriers with large enough war chests to weather the storm is inevitable but fewer ship owners doesn’t mean fewer ships or less capacity. It may bring a brief respite but the underlying overcapacity has not changed and is in fact getting worse,” Schreiber said.


Early movers: SBUX, BIG, LULU, SQ, GCO, GPS, AAL, TWTR, JNJ & more

Check out which companies are making headlines before the bell:

Starbucks — Howard Schultz is stepping down as Chief Executive Officer. Chief Operating Officer Kevin Johnson will become CEO, with Schultz focusing on a new line of high-end coffee shops.

Smith & Wesson — Smith & Wesson beat estimates by 12 cents with adjusted quarterly profit of 68 cents per share, with the gun maker’s revenue also beating forecasts. However, the company did give weaker than expected current quarter guidance.

Big Lots — The discount retailer reported an adjusted quarterly profit of four cents per share, compared to expectations of a one cent per share loss. Revenue did fall below forecasts, and same-store sales were flat compared to estimates of a 1 percent increase, but Big Lots raised its full-year earnings forecast above current Street estimates.

Lululemon — Canaccord downgraded the yoga wear maker to “sell” from “hold,” saying that while Lululemon has improved its supply chain processes, this particular retail category is facing stiffening headwinds.

Square — The mobile payments company was upgraded to “buy” from “hold” at Deutsche Bank, which said the company’s business model is set to capitalize on positive industry trends.

Genesco — The specialty retailer reported adjusted quarterly profit of $1.28 per share, well above estimates of 93 cents, despite missing on the top line. Genesco’s bottom line performance was helped by better expense management as well as share buybacks.

Ulta Salon Cosmetics — The cosmetics retailer reported quarterly profit of $1.40 per share, three cents above estimates, with revenue also above forecasts. Ulta also provided an upbeat current quarter outlook, as it sees continuing momentum in revenue growth and same-store sales.

Vascular Solutions — The medical device maker agreed to be acquired by medical technologies provider Teleflex for $56 per share in cash, or about $1 billion.

Gap — The parent of Gap, Old Navy, and Banana Republic said November comparable store sales fell 1 percent, hurt by general sales weakness as well as a recent warehouse fire. However, the apparel retailer did say it saw improving trends during the second half of the month.

Workday — Workday reported an adjusted quarterly profit of three cents per share, compared to consensus forecasts for a four cents per share loss. The maker of human resources software also saw revenue come in above estimates on rising subscription sales.

American Airlines Group — The airline is cutting 25 percent of its scheduled flights to Cuba for 2017, in a move based on travel demand.

Twitter — Twitter acquired app maker Yes for an undisclosed amount, and appointed Yes founder Keith Coleman as head of its product team. He’s the third product chief for Twitter in less than a year.

Johnson & Johnson — J&J and its DePuy Orthopaedics unit plan to appeal a jury decision that it must pay more than $1 billion to six plaintiffs who claimed to be injured by the unit’s hip implants.

Archer Daniels Midland — ADM sold its 19.9 percent stake in Australian grain handler GrainCorp, three years after trying but failing to acquire that company.

Five Below — Five Below reported quarterly profit of 10 cents per share, beating estimates by a penny, although the discount retailer’s revenue and comparable store sales came up short of analyst forecasts. The company does say it is pleased with the start of the holiday shopping season.

G-III Apparel — G-III fell short on both the top and bottom lines for its latest quarter, and also lowered its full-year forecast. The apparel maker said conditions in the industry remain challenging. G-III is the company behind a wide variety of brands such as Donna Karan, Bass, Calvin Klein and Kenneth Cole.


Fed’s Brainard cites promise, risks of ‘fintech’

Robot Trading System On The Stock Market

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New technology that can speed the processing of loans or evaluate credit using only an internet search could revolutionize the financial sector, Fed Governor Lael Brainard said on Friday.

But those innovations must protect consumers and the financial system, and not let practices like redlining take root in the developing “fintech” industry, she said.

“‘Run fast and break things’ may be a popular mantra in the technology space,” Brainard said in remarks prepared for delivery to a conference on financial innovation at the Fed. “It is ill-suited to an arena that depends on trust and confidence.”

“There are more serious and lasting consequences for a consumer who gets, for instance, an unsustainable loan on his or her smartphone than for a consumer who downloads the wrong movie or listens to a bad podcast.”

Some of the applications and innovations being developed by financial technology firms could be of great benefit to households and small businesses, Brainard said. It might, for example, allow cash-strapped workers to be paid continuously, as they earn, rather than waiting on a paycheck and relying on high-interest payday loans in the meantime.

But “it would be a lost opportunity if, instead of expanding access in a socially beneficial way, some fintech products merely provided a vehicle to market high-cost loans to the underserved, or resulted in the digital equivalent of redlining,” she said.

The Fed is studying the full range of “fintech” innovations and ideas that are beginning to transform the nuts and bolts of the financial system. These range from software that bases credit analysis on an applicant’s online profile and behavior, to the sophisticated blockchain technology that allows financial companies to share an encrypted ledger.

Along with ensuring those technologies comply with existing consumer protections and safety and soundness provisions, fintech carries the extra weight of guarding against hacking and other cyber threats.

Brainard said the aim in the Fed’s review is to let innovation continue, while also being “vigilant to ensure risks are well understood and managed.”


The top 10 investment ideas for 2017

New Year's Eve in Chicago

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In 2017, we face a polarized political environment. The likes of Brexit, the U.S. election result, and key upcoming votes in Europe are likely to make investors more uncertain, not less. In a recent survey, a quarter of UBS’s Industry Leader Network of entrepreneur clients cited the political landscape as the biggest potential change for their business in 2017 – a greater proportion than for any other factor.

Despite localized concerns, however, the broader backdrop should be positive for investors next year. Global GDP growth should rise from 3.1 percent to 3.5 percent, driven partly by pro-growth policies in the U.S. Inflation should pick up. As in prior years, U.S. and European monetary policy should remain accommodating, while China is likely to ensure its economic slowdown remains gradual. This should benefit select U.S. and emerging market investments. Investors should also look at income-paying and alternative assets as high-grade bond returns come under pressure.

Here in more detail are UBS Wealth Management’s top 10 investment ideas for 2017.

  1. U.S. equities. Despite the post-election rally, we retain an overweight position. U.S. earnings should rise 8 percent next year, fueled by the stabilization in oil prices, accommodative monetary policy and possible fiscal stimulus.
  2. Select equity sectors. For U.S. investors, U.S. financials and healthcare should benefit from less burdensome regulation; while U.S. tech should experience tailwinds from new areas of spending like cloud computing. For non-U.S. investors, Asia Pacific real estate investment trusts offer attractive yields relative to government bonds when compared with global averages.
  3. Emerging market equities. Low global interest rates and stabilizing GDP growth and commodity prices should provide a continuing boost next year.
  4. Select emerging market currencies. Depressed global rates also help make higher-yielding emerging market currencies – the South African rand, the Brazilian real, the Russian ruble, and the Indian rupee – attractive compared with developed market peers that are also sensitive to fluctuations in global growth – namely, the Australian and Canadian dollars and the Swedish krone.
  5. Yield enhancers. For taxable U.S. investors, selective holdings in quality U.S. municipal bonds will continue to play an important role despite potential post-election tax changes. Non-U.S. investors should consider companies offering reliable incomes in the Eurozone, Japan, and Switzerland, where high-grade bond yields remain ultra-low.
  6. .U.S. senior loans. The asset class currently yields 4 percentage points more than investment-grade corporate bonds, making it attractive even if default rates rise to long-run averages.
  7. U.S. Treasury Inflation-Protected Securities. TIPs should benefit from potential fiscal stimulus and higher wage growth, in addition to the stabilization of commodity prices.
  8. Underweight position in nominal U.S. Treasuries. Despite the post-election dip, prices remain under threat from upward trends in inflation and rates.
  9. Select commodity-related investments. For U.S. investors, master limited partnerships offer relatively attractive incomes and should benefit from growing oil & gas production and infrastructure development. For non-U.S. investors, precious metals palladium and platinum should be supported by a rise in industrial activity, political uncertainty and declining real rates.
  10. Alternative investments. In 2017, returns from listed equities and bonds will probably be moderate. Select investments within hedge funds and private markets, whose returns are less correlated to listed assets, are likely to help diversify portfolios.

Finally, investors will need to consider trends and asset classes that are less affected by policy. Ongoing urbanization, technological innovation, population growth and aging are creating long-term opportunities in a number of areas, such as equity and impact investments in emerging market healthcare. If they wish to protect and grow their wealth effectively, investors should diversify broadly across regions, asset classes, and longer-term themes as well as embracing ideas that should serve them well in the year ahead


Himachal Pradesh: Government to fill 4000 vacancies in elementary schools soon

In order to bring the weak students on par with meritorious students, initiatives like ‘Prerna and Prayas’ have been taken and instructions have been issued to the teachers to conduct separate classes for weak students and pay more attention to them to improve the learning levels, said the Director of Elementary Education Manmohan Sharma

The recruitment would be conducted for the following posts through batch-wise appointments and direct appointment

The recruitment would be conducted for the following posts through batch-wise appointments and direct appointment

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The State Government will fill 4000 posts of different categories in elementary schools soon to meet the shortage of teachers and other staff, a senior official said on December 1.

The recruitment would be conducted for the following posts through batch-wise appointments and direct appointment and the staff crunch faced by the department would be eased, Director Elementary Education Manmohan Sharma said.

Views of Director of Elementary Education Manmohan Sharma:

  • He said that there was vast network of about 16,000 government schools in the state but in spite of this, the students were shifting from government to private schools, even in rural areas
  • Emphasising on the need for quality education, Sharma said all out efforts were being made by the government to improve the quality of education
  • “Teachers are being exposed to new techniques and innovation and continuous evaluation system has been introduced to gauge the learning levels,” he said
  • In order to bring the weak students on par with meritorious students, initiatives like ‘Prerna and Prayas’ have been taken and instructions have been issued to the teachers to conduct separate classes for weak students and pay more attention to them to improve the learning levels, the Director added.

The teachers have also been instructed to prepare specific strategies for weak students to make teaching interesting to motivate the students towards studies.

Read: Academia need to be part of India’s growth story instead of mere spectators: Prakash Javadekar Read: ‘Sonam Gupta Bewafa Hai’ leaves impression in IIT exam

Click here for more education related news.


Microsoft’s ‘Holoportation’ will virtually beam you into another room

Microsoft is bringing a whole new level to remote social interaction with “Holoportation.”

The prototype technology allows users to see, hear, and interact with others remotely as if both are present in the same physical space. 3D cameras capture and record a users movements and construct a temporally consistent 3D model. That data is then compressed and sent out to be reconstructed anywhere in the world.

Because interactions are recorded, they can be replayed and manipulated (such as by shrinking), giving users the sense of reliving that moment in time.

Researchers have now made the system mobile by installing it in a car.

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How Windows 10’s data collection trades your privacy for Microsoft’s security

How Windows 10 data collection trades privacy for security

How Windows 10 data collection trades privacy for security

Windows 10’s aggressive data-collection capabilities may concern users about corporate spying, but enterprises have control that consumer-edition Windows users do not: Administrators can decide how much information gets sent back to Microsoft.

But enterprises need to think twice before turning off Windows telemetry to increase corporate privacy. That’s because doing so can decrease the effectiveness of Windows 10’s security features.

Microsoft isn’t merely vacuuming up large amounts of data because it can. The company has repeatedly reiterated its stance that Windows 10 does not collect the user’s personal data, but rather anonymized file data that is then used to improve overall user experience and Windows functionality.

With the current shift to Windows-as-a-service, Microsoft plans to release more updates to the operating system more frequently, and it will use telemetry data to understand how people are actually using Windows and applications. Microsoft can use the information to figure out what new features are needed or to prioritize changes to existing components.

For Microsoft, more data means more security

But the telemetry data is used for more than how to improve or evolve Windows. There is an actual security impact, too.

Knowledge is power, and in the case of Windows 10, that usage data lets Microsoft beef up threat protection, says Rob Lefferts, Microsoft’s director of program management for Windows Enterprise and Security.

The information collected is used to improve various components in Windows Defender, such as Application Guard and Advanced Threat Detection (these two features are available only to customers with Windows 10 Enterprise with Anniversary Update and Enterprise E5 subscriptions). As Windows 10’s built-in security tool, Windows Defender uses real-time protection to scan everything downloaded or run on the PC. The information from these scans is sent back to Microsoft and used to improve protection for everyone else.

For example, Windows Defender Application Guard for Microsoft Edge will put the Edge browser into a lightweight virtual machine to make it harder to break out of the browser and attack the operating system. With telemetry, Microsoft can see when infections get past Application Guard defenses and improve the security controls to reduce recurrences.

Microsoft also pulls signals from other areas of the Windows ecosystem, such as Active Directory, with information from the Windows 10 device to look for patterns that can indicate a problem like ransomware infections and other attacks. To detect those patterns, Microsoft needs access to technical data, such as what processes are consuming system resources, hardware diagnostics, and file-level information like which applications had which files open, Lefferts says.

Taken together, the hardware information, application details, and device driver data can be used to identify parts of the operating system are exposed and should be isolated into virtual containers.

How Windows 10 telemetry levels affect security and administration

IT admins can control what telemetry is sent back to Microsoft using group policy objects—if they are using an enterprise version of Windows 10 and a Microsoft administration tool, of course. (Consumer versions of Windows don’t provide this capability, which is why there are now third-party telemetry blockers on the market, though not all telemetry can be blocked.)

The Privacy option in Settings lets administrators choose one of three telemetry levels: Basic, Enhanced, and Full. Windows 10 Home and Pro are set by default to Full. Windows 10 Enterprise and Education are set by default to Enhanced. But there’s a fourth level called Security available only in Windows 10 Enterprise and Education editions, and only through group policies (not via Settings).

Available to admins only, Security level sends the least data. The Security level sends less telemetry to Microsoft than the Basic level does. And it collects enough technical data about Windows’s Connected User Experience and Telemetry component settings, the MSRT (Malicious Software Removal Tool), and Windows Defender to keep Windows, Windows Server, and System Center secure.

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At the Security level, only OS information, device ID, and device class (server, desktop, mobile device) are sent to Microsoft, along with the MSRT report that contains information about the infection and IP address. Windows Defender and System Center Endpoint Protection provide diagnostic information, user account control settings, UEFI (Unifieid Extensible Firmware Interface) settings, and IP addresses. (If this latter information shouldn’t be sent, then turn off Windows Defender and use a third-party tool instead.)

If the goal is to not have any data go to Microsoft, using the Security level is the best option. But it has one big drawback: Windows Update won’t work, because Windows Update information—such as whether the update installation succeeded or failed—does not get collected at the Security level. MSRT also won’t run if Windows Update is not working.

Thus, it requires a lot of IT involvement to keep the systems updated and secure if the telemetry level is set to Security.

Basic level is the least a user can choose within Windows. For most users focused on privacy, the Basic level is probably the best option for limiting what gets sent to Microsoft. The Basic level sends device information like application compatibility and usage information in addition to the information sent from the Security level. This can include the number of crashes and the amount of processor time and memory an application used at a time. System data can help Microsoft know whether a device meets the minimum requirements to upgrade to the next version.

Data from the Basic level helps identify problems that can occur on a particular hardware or software configuration. The types of data collected include device attributes, such as camera resolution, display type, and battery capacity; application and operating system versions; networking devices, such as the number of network adapters; IMEI number (for mobile devices) and mobile operator network; architecture details, such as processor, memory type, and firmware versions; storage data, such as number of drives, type, and size; and virtualization support.

The Basic level also collects and transmits compatibility details, such as how add-ons work with the browser, how applications work with the operating system, and whether peripherals like printers and storage devices would work with the next version of the operating system.

Enhanced level aids user-experience improvements. The Enhanced level, the default setting for Windows 10 Enterprise and Education, also sends data on how Windows, Windows Server, System Center, and applications are used; how they perform; and their reliability. This includes operating system events, such as those from networking, Hyper-V, Cortana, storage, and file system; operating system application events, such as those from Server Manager, Mail, and Microsoft Edge; device-specific events such as data from Microsoft HoloLens; and all crash dumps.

Data collected from the Enhanced level helps Microsoft improve user experience because the company can use the detailed information to find patterns and trends in how the applications are being used.

Enhanced is the minimum level needed for Microsoft to identify and address Windows 10, Windows Server, and System Center quality issues.

The Full level makes your PC an open book. The Full level—the default for consumer versions of Windows—is the free-for-all level that has privacy folks worried, because it includes significant technical data, which Microsoft claims is “necessary to identify and help to fix problems.”

At the Full level, devices send information related to reliability, application responsiveness, and usage along with all crash dumps.

Data collection has changed in Windows

Telemetry data is not new to Windows 10. Microsoft used telemetry in previous versions of Windows and Windows Server to check for updated or new Windows Defender signatures, verify Windows Update installations, and gather reliability information through the RAC (Reliability Analysis Component) and Windows CEIP (Customer Experience Improvement Program).

What’s changed is that Windows 10 has expanded the scope to better understand the type of hardware being used, basic system diagnostics, logs of how frequently features are being used, what applications have been installed, how users are using those applications, and the reliability data from device drivers.


ZUK Edge now pictured in white/gold, to be priced at $390

A new Gionee smartphone has been certified by the Chinese telecommunication authority TENAA. Listed as Gionee GN5005, the device is powered by a quad-core 1.25GHz processor and sport a 5-inch HD display.

RAM is 3GB, while internal memory is 16GB. In terms of camera, the handset features an 8MP rear unit and a 5MP front shooter. Weighing in at 140g and measuring 144.3×70.5×8.6mm, the phone runs Android 6.0 Marshmallow, and packs in a large 4,000mAh battery.

Color options revealed by the listing include gold. Pricing and availability information isn’t yet known.


ZUK Edge now pictured in white/gold, to be priced at $390

The ZUK Edge is anything but a secret after being certified by TENAA a month ago, and subsequently appearing for some live shots (and again, and again). While the two color schemes were already confirmed by these sightings, we’re now treated to a high-res render of the white/gold option.

What that does for us is give us a much better idea of body proportions and screen-to-body ratio (pretty good) than the previous murky shots. Also it serves as yet another confirmation that the ZUK Edge won’t be much of an Edge, in the curved screen sense – just some 2.5D glass treatment.

ZUK Edge in white/gold
ZUK Edge in white/gold

As for specs, TENAA’s listing was pretty detailed and we know that the FullHD 5.5-incher will be powered by the Snapdragon 821 and will sport a 13MP rear camera and an 8MP front-facing one. While the Chinese regulator quoted 4GB of RAM, an Antutu listing later cited 6GB, so there may be two versions.

Today’s leak gives us another number, though, and that’s price – at CNY 2,699 ($390), the ZUK Edge is set to be one of the most affordable Snapdragon 821 devices. Just as a reminder, the launch date has been confirmed for next week.