Veteran corporate executive Luis M. Ramirez began a new role on Sept. 12 as general manager and CEO of the Massachusetts Bay Transit Authority, despite controversy over his lack of public transit management experience and financial scrutiny of Global Power Equipment Group, an engineer and manufacturer of which he was CEO until 2015.
The Pittsburgh International Airport’s $1.1-billion proposed modernization recently received local approval but still needs the Federal Aviation Administration’s authorization. Green-lighted by the Allegheny County Airport Authority on Sept. 12, the renovation of the 25-year-old facility would include a new land-side terminal, adjacent to the renovated air-side terminal. The plans also call for an expanded security checkpoint and an improved baggage system, along with new roads and a new parking garage. The four-year project, which airport officials say will not be funded with local tax revenue, could start as early as 2019.
WASHINGTON (Reuters) – The U.S. Federal Reserve left interest rates unchanged on Wednesday but signaled it still expects one more increase by the end of the year despite recent weak inflation readings.
New economic projections released after the Fed’s two-day policy meeting showed 11 of 16 officials see the “appropriate” level for the federal funds rate, the central bank’s benchmark interest rate, to be in a range between 1.25 percent and 1.50 percent by the end of 2017.
That is one-quarter of a point above the current level. Financial markets were barely moved by the Fed decision and the new economic projections and based on the immediate market reaction it looked as if the Fed was right when it said that the portfolio runoff would be as exciting as “watching paint dry”.
“The labor market has continued to strengthen … economic activity has been rising moderately so far this year,” the Fed said in its policy statement. It added that the near-term risks to the economic outlook remained “roughly balanced” but that inflation was being watched “closely.”
The interest rate outlook for next year remained largely unchanged, with three hikes envisioned. But the U.S. central bank slowed the pace of projected monetary tightening from there.
It forecasts only two increases in 2019 and one in 2020. It also lowered again its estimated long-term “neutral” interest rate from 3.0 percent to 2.75 percent, reflecting concerns about overall economic vitality.
The Fed, as expected, also said it would begin in October to reduce its approximately $4.2 trillion in holdings of U.S. Treasury bonds and mortgage-backed securities by initially cutting up to $10 billion each month from the amount of maturing securities it reinvests.
That action will start a gradual reversal of the three rounds of quantitative easing the Fed pursued between 2008 and 2014 to stimulate the economy after the 2007-2009 financial crisis and recession.
The limit on reinvestment is scheduled to increase by $10 billion every three months to a maximum of $50 billion per month until the central bank’s overall balance sheet falls by perhaps $1 trillion or more in the coming years.
The U.S. dollar rose against a basket of currencies .DXY after the release of the Fed’s policy statement. U.S. stocks extended losses while yields on U.S. Treasuries rose slightly.
FILE PHOTO – A police officer keeps watch in front of the U.S. Federal Reserve building in Washington, DC, U.S. on October 12, 2016. REUTERS/Kevin Lamarque/File Photo
Fed Chair Janet Yellen is scheduled to hold a press conference at 2:30 p.m. ET (1830 GMT).
The policy statement and accompanying projections showed the Fed still in the middle of a balancing act between an economic recovery that has kept U.S. unemployment low and is gaining steam globally and a recent worrying drop in U.S. inflation.
Three of the hawkish policymakers appeared to move their expected policy rate down to account for only one more hike by the end of 2017, leaving a core 11 clustered around a likely December increase. The Fed has raised rates twice this year.
The Fed noted that the recent hurricanes in the United States would affect economic activity but are “unlikely to materially alter the course of the national economy over the medium term.”
Forecasts for economic growth and unemployment into 2018 and beyond were largely unchanged. Gross domestic product is now expected to grow at a rate of 2.4 percent this year, 2.1 percent next year and 2.0 percent in 2019.
The unemployment rate is forecast to remain at 4.3 percent this year before falling to 4.1 percent next year and remaining there in 2019.
Inflation is expected to remain under the Fed’s 2 percent target through 2018 before hitting it in 2019.
There were no dissents in the Fed’s policy decision.
Researchers at Columbia Engineering have solved a long-standing issue in the creation of untethered soft robots whose actions and movements can help mimic natural biological systems. A group in the Creative Machines lab led by Hod Lipson, professor of mechanical engineering, has developed a 3D-printable synthetic soft muscle, a one-of-a-kind artificial active tissue with intrinsic expansion ability that does not require an external compressor or high voltage equipment as previous muscles required. The new material has a strain density (expansion per gram) that is 15 times larger than natural muscle, and can lift 1000 times its own weight.
Their findings are outlined in a new study.
Previously no material has been capable of functioning as a soft muscle due to an inability to exhibit the desired properties of high actuation stress and high strain. Existing soft actuator technologies are typically based on pneumatic or hydraulic inflation of elastomer skins that expand when air or liquid is supplied to them. The external compressors and pressure-regulating equipment required for such technologies prevent miniaturization and the creation of robots that can move and work independently.
“We’ve been making great strides toward making robots minds, but robot bodies are still primitive,” said Hod Lipson. “This is a big piece of the puzzle and, like biology, the new actuator can be shaped and reshaped a thousand ways. We’ve overcome one of the final barriers to making lifelike robots.”
Inspired by living organisms, soft material robotics hold great promise for areas where robots need to contact and interact with humans, such as manufacturing and healthcare. Unlike rigid robots, soft robots can replicate natural motion — grasping and manipulation — to provide medical and other types of assistance, perform delicate tasks, or pick up soft objects.
To achieve an actuator with high strain and high stress coupled with low density, the lead author of the study Aslan Miriyev, a postdoctoral researcher in the Creative Machines lab, used a silicone rubber matrix with ethanol distributed throughout in micro-bubbles. The solution combined the elastic properties and extreme volume change attributes of other material systems while also being easy to fabricate, low cost, and made of environmentally safe materials.
After being 3D-printed into the desired shape, the artificial muscle was electrically actuated using a thin resistive wire and low-power (8V). It was tested in a variety of robotic applications where it showed significant expansion-contraction ability, being capable of expansion up to 900% when electrically heated to 80°C. Via computer controls, the autonomous unit is capable of performing motion tasks in almost any design.
“Our soft functional material may serve as robust soft muscle, possibly revolutionizing the way that soft robotic solutions are engineered today,” said Miriyev. “It can push, pull, bend, twist, and lift weight. It’s the closest artificial material equivalent we have to a natural muscle.”
The researchers will continue to build on this development, incorporating conductive materials to replace the embedded wire, accelerating the muscle’s response time and increasing its shelf life. Long-term, they will involve artificial intelligence to learn to control the muscle, which may be a last milestone towards replicating natural motion.
The Federal Energy Regulatory Commission has approved construction of a high-pressure pipeline that will carry natural gas from the shale fields of Appalachia, across northern Ohio and into Michigan and Canada, a decision that effectively ends a fight of more than two years from opponents concerned about safety and property rights.
CLEVELAND (AP) The Federal Energy Regulatory Commission has approved construction of a high-pressure pipeline that will carry natural gas from the shale fields of Appalachia, across northern Ohio and into Michigan and Canada, a decision that effectively ends a fight of more than two years from opponents concerned about safety and property rights.
The planned $2 billion NEXUS Gas Transmission project is a partnership between Calgary, Alberta-based Enbridge and Detroit-based DTE Energy. The 255-mi.-long pipeline will be capable of carrying 1.5 billion cu. ft. of gas per day, enough to meet the needs of about 15,000 homes for a year.
The commission issued a certificate of public necessity and convenience, the project’s last major regulatory hurdle.
Despite the opposition, there wasn’t much chance the project wouldn’t be approved as long as the NEXUS partnership was willing to pay for it. The Natural Gas Act of 1938 gives private companies wide latitude to build pipelines in the U.S., and FERC has no known history of disapproving projects like NEXUS.
“Receiving this stamp of approval is a testament to our strong history of consultation and successful project execution,’ said NEXUS Gas Transmission President Jim Grech in a statement.
Jon Strong of Medina County’s Guilford Township in northeast Ohio scoffs at the notion that property owners were consulted in any meaningful way. He became one of the leaders of a fight that began with an effort to convince NEXUS and FERC’s staff to move the pipeline south to farmland and away from semi-rural communities like Strong’s and cities like Green in neighboring Summit County. Green officials provided detailed plans for alternate routes that both NEXUS and FERC’s staff rejected as having no advantage over company’s preferred route.
A federal lawsuit filed by opponents against FERC over the approval process was dealt a blow in August when a magistrate wrote that U.S. District Court was the wrong venue for their complaint.
Strong’s 11-acre property sits directly in the pipeline’s path. Construction will result in the clearing of a 450-ft. long, 100-ft. wide swath of property. Once the pipeline is buried, he won’t be allowed to plant or build anything on top of a 50-ft. wide easement the company requires for access to the pipeline. His house is well within the expected 1,500-ft. blast zone should a catastrophic failure occur.
Strong called the FERC approval process “an elaborate sham.’ He said the agency and its staff willfully ignored residents and their concerns.
“It’s a bureaucratic means to a predetermined outcome,’ he said.
Strong and others refused to allow NEXUS surveyors onto their property, even when they were accompanied by armed sheriff’s deputies. Property owners have no choice now. What’s left for holdouts is negotiating easement rights that preserve what they can use of their property and gets them the best possible price for land used by the pipeline.
Throughout the fight, Strong and others were realistic about their chances of prevailing. Yet Strong said he’d do it again. He said it’s brought positive change to his community and has awakened a spirit of activism that’s led him to run for a seat on the Guilford Township board of trustees.
“Going through this process made me appreciate my community,’ he said. “It feels like a family now, not just a place where you live.’
Researchers are looking at advanced materials for roads and pavements that could generate electricity from passing traffic.
Engineers from Lancaster University are working on smart materials such as ‘piezolectric’ ceramics that when embedded in road surfaces would be able to harvest and convert vehicle vibration into electrical energy.
The research project, led by Professor Mohamed Saafi, will design and optimise energy recovery of around one to two Megawatts per kilometre under ‘normal’ traffic volumes — which is around 2,000 to 3,000 cars an hour.
This amount of energy, when stored, is the amount needed to power between 2,000 and 4,000 street lamps. As well as providing environmental benefits, this would also deliver significant costs savings for taxpayers.
It currently costs around 15p a kilowatt hour to power a street lamp. Therefore 2,000 to 4,000 lights can cost operators — which in the UK tend to be local authorities, or the Highways Agency for motorways and trunk roads — approximately between £1,800 and £3,600 per day. Researchers say the cost of installing and operating new road energy harvesting technology would be around 20 per cent of this cost.
Professor Saafi said: “This research is about helping to produce the next generation of smart road surfaces.
“We will be developing new materials to take advantage of the piezoelectric effect where passing vehicles cause stress on the road surface, producing voltage. The materials will need to withstand high strengths, and provide a good balance between cost and the energy they produce.
“The system we develop will then convert this mechanical energy into electric energy to power things such as street lamps, traffic lights and electric car charging points. It could also be used to provide other smart street benefits, such as real-time traffic volume monitoring.”
When the technology has been developed it will undergo field trials in the UK and other areas of the EU.
The “spaceship campus,” as it is nicknamed, was designed by Foster + Partners, with Steve Jobs giving extensive direction. Here are some of the specs.
📅 Fri September 15, 2017 – National Edition Emily Buenzle
The campus is built on 175 acres, with enough space for more than 12,000 employees.
When construction workers’ snapchats of the unfinished Apple Park in Cupertino, Calif., went viral last month, it was easy to see that the complex boasted some pretty impressive features.
Construction, which began in 2013, is expected to be complete by the end of the year, but you don’t have to wait until then to find out more about the facility’s features.
The “spaceship campus,” as it is nicknamed, was designed by Foster + Partners, with Steve Jobs giving extensive direction, Digital Trends reported. Here are some of the specs:
The campus is built on 175 acres, with enough space for more than 12,000 employees.
The main ring measures in at 2.8 million sq. ft.
The Steve Jobs Theater is constructed in another, smaller ring that measures 165 ft., and includes 20-ft. glass walls and a carbon fiber roof. Stairs starting at the ground-level glass structure bring attendees into the theater itself, which seats 1,000, built into a hill. Elevators next to the stairs rotate around as they travel down into the theater.
The 100,000-sq.-ft. Fitness and Wellness Center includes a dental practice and yoga space.
There is enough parking, both above and well below ground, for 8,600 cars.
Although the campus had an original price tag of $3 billion (not to mention a completion date of 2015), the cost jumped to $5 billion in 2013, Digital Trends reported. As of now, there is no word on the project’s final cost, but here are the numbers for a just a few features:
The land itself is said to have cost about $160 million.
Estimates for the theater are $161 million.
The fitness center has a price tag of $74 million.
A tunnel weighs in at $25 million.
The complex’s design is meant to draw workers together with the nature that is all around them, hence the years and yards of curved glass walls. Employees have the opportunity to take one of the 1,000 available bicycles to travel between buildings, while enjoying the sights of the property’s orchard, pond, meadow and 9,000 trees as they go, Digital Trends reported.
In addition to its awe-inspiring looks, the complex is practically built, as well:
The main building has a steel base, allowing for the structure to move almost five ft. without losing power if an earthquake strikes.
For additional earthquake safety, the walls are made of safety glass to prevent breakage.
The building “breathes” with ventilation and circulation systems that include tubes of water in the concrete floor and ceilings to put a cap on particularly high or low temperatures. According to project lead Stefan Behling, “The flaps and the opening mechanism all have to relate to sensors that measure where the wind is coming from and how the air goes through it.”
Sloping glass extends out on each level, adding shade and prevents the rain from splattering on the glass walls.
There are nine separate entrances, including a series of four-story doors that can open to let in nice weather.
The café seats 4,000 and is able to serve 15,000 lunches each day.
The complex runs on 100 percent renewable energy, which Apple CEO Tim Cook said is powered by “one of the world’s largest on-site solar installations,” Digital Trends reported.
SEOUL (Reuters) – South Korea’s Hyundai Motor Co (005380.KS) will launch its first new sedan under the premium Genesis marque in Seoul on Friday, hoping to cement the brand’s place in the luxury segment and make up for its lack of a strong SUV line-up.
U.S. pop singer Gwen Stefani will perform for about 10,000 people at a gala event to launch of the G70, the third sedan to carry the Genesis name but the first to be marketed exclusively under Hyundai Motor’s (005380.KS) fledgling premium brand.
Starting from $33,000, the sporty four-door offers bang for the buck as it takes on rivals including affiliate Kia Motor’s (000270.KS) Stinger sedan and BMW’s (BMWG.DE) 3 series.
But analysts say the G70 will not solve Hyundai’s troubles in the United States, where sports utility vehicles (SUVs) are all the rage and the two previous Genesis-branded sedans failed to take off.
“Look at Cadillac, with just one crossover, the brand is struggling in the U.S. It will be much the same story for Genesis until they can get a crossover to market,” said Dave Sullivan, product analysis manager at U.S. consultancy AutoPacific.
“It’s not because the G70 will be a bad product … The sedan lineup just doesn’t match consumer demand.”
The G70 debuts in South Korea on Friday followed by the United States next year. Hyundai has not said when it would enter China and Europe, which are dominated by German premium brands.
Hyundai’s China sales tumbled more than 60 percent in the second quarter due to its lack of a strong SUV line-up and political tensions between China and South Korea over North Korea’s nuclear weapons program.
In the United States, SUVs made up 35 percent of Hyundai’s total U.S. sales from January to August this year, far lower than the industry’s 62 percent, according to U.S. researcher Autodata.
The Genesis project is being closely watched by Hyundai Vice Chairman and heir apparent Chung Eui-sun, as he prepares to take over the world’s No.5 auto group from his father, 79-year-old Chairman Chung Mong-koo.
As the first Genesis model which was not previously sold as a Hyundai, the G70 will be a key test of the two-year-old marque’s ability to survive in a fiercely competitive field.
Its chief rival will be Hyundai affiliate Kia’s slightly cheaper Stinger, which shares the same platform as the G70 and launched in late April. Other rivals include BMW’s 3 series, Audi’s (NSUG.DE) A4 and Mercedes-Benz’s (DAIGn.DE) C-class.
Hyundai has said the Genesis line-up will grow to six by 2020, with the addition of a sports coupe and two SUVs.
Reporting by Hyunjoo Jin; Editing by Miyoung Kim and Stephen Coates
NEW YORK (Reuters) – Rising shares of Boeing pulled the Dow Jones Industrial Average up to a record high on Thursday, while the S&P 500 fell as investors saw higher-than-expected inflation increasing the chances of an interest rate hike.
The Dow Jones Industrial Average .DJI rose 48.89 points, or 0.22 percent, to 22,207.07, the S&P 500 .SPX lost 2.44 points, or 0.10 percent, to 2,495.93 and the Nasdaq Composite .IXIC dropped 31.10 points, or 0.48 percent, to 6,429.08.
Reporting by Chuck Mikolajczak; Editing by Nick Zieminski
A team of researchers from the University of Houston has reported a breakthrough in stretchable electronics that can serve as an artificial skin, allowing a robotic hand to sense the difference between hot and cold, while also offering advantages for a wide range of biomedical devices.
The work, reported in the journal Science Advances, describes a new mechanism for producing stretchable electronics, a process that relies upon readily available materials and could be scaled up for commercial production.
Cunjiang Yu, Bill D. Cook Assistant Professor of mechanical engineering and lead author for the paper, said the work is the first to create a semiconductor in a rubber composite format, designed to allow the electronic components to retain functionality even after the material is stretched by 50 percent.
The work is the first semiconductor in rubber composite format that enables stretchability without any special mechanical structure, Yu said.
He noted that traditional semiconductors are brittle and using them in otherwise stretchable materials has required a complicated system of mechanical accommodations. That’s both more complex and less stable than the new discovery, as well as more expensive, he said.
“Our strategy has advantages for simple fabrication, scalable manufacturing, high-density integration, large strain tolerance and low cost,” he said.
Yu and the rest of the team – co-authors include first author Hae-Jin Kim, Kyoseung Sim and Anish Thukral, all with the UH Cullen College of Engineering – created the electronic skin and used it to demonstrate that a robotic hand could sense the temperature of hot and iced water in a cup. The skin also was able to interpret computer signals sent to the hand and reproduce the signals as American Sign Language.
“The robotic skin can translate the gesture to readable letters that a person like me can understand and read,” Yu said.
The artificial skin is just one application. Researchers said the discovery of a material that is soft, bendable, stretchable and twistable will impact future development in soft wearable electronics, including health monitors, medical implants and human-machine interfaces.
The stretchable composite semiconductor was prepared by using a silicon-based polymer known as polydimethylsiloxane, or PDMS, and tiny nanowires to create a solution that hardened into a material which used the nanowires to transport electric current.
“We foresee that this strategy of enabling elastomeric semiconductors by percolating semiconductor nanofibrils into a rubber will advance the development of stretchable semiconductors, and … will move forward the advancement of stretchable electronics for a wide range of applications, such as artificial skins, biomedical implants and surgical gloves,” they wrote.
LONDON (Reuters) – World shares returned to a record high on Monday, on relief that hurricane Irma looked to be losing strength in the United States and that North Korea’s anniversary celebrations at the weekend passed without any new missile test.
MSCI All Country World Index .MIWD00000PUS, which tracks roughly 2,400 stocks in 47 countries, climbed a new peak as Europe’s insurers jumped 2.2 percent .SXIP on hopes Irma would not prove as costly as feared.
The relief over North Korea and a weaker yen JPY= had also given Tokyo .N225 its best session since June in Asia [.T], as investors began to lose their appetite for safer assets like gold XAU= and U.S. Treasuries US10YT=RR.
Irma caused a number of deaths and knocked out electricity to 3 million homes and businesses on its way up the Florida coast. But it had weakened to a category one hurricane and was expected to slow into a tropical storm during the day and to a tropical depression by Tuesday.
Winning a reprieve from risk aversion, the dollar .DXY registered its biggest gains in the currency markets in 10 days. It added 0.5 percent against its perceived safe-haven Japanese counterpart the yen JPY and clawed back ground against the high-flying euro as an ECB policymaker flagged caution about the single currency’s recent rise.
“The good news was that the eye of Hurricane Irma took a path west of Miami and has since weakened to a Category 1 storm so that damage in Florida – whilst still severe… appears not to be quite as catastrophic as had been feared last week,” said Daiwa Capital Markets strategist Chris Scicluna.
“And thankfully there was no bad weekend news out of North Korea either.”
Japan’s Nikkei .N225 had risen 1.4 percent after Pyongyang held a massive celebration to congratulate the nuclear scientists and technicians who steered the country’s sixth and largest nuclear test a week earlier.
The United States and its allies had been bracing for another long-range missile launch to mark the 69th anniversary of North Korea’s founding on Saturday.
The sense of relief lifted E-Mini futures for the S&P 500 ESc1 by 0.5 percent, while yields on 10-year Treasury notes rose 3 basis points to 2.09 percent US10YT=RR, barely budging in European trading.
South Korea’s main index .KS11 added 0.8 percent, while MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS gained 0.4 percent.
“It’s too early to say the (North Korean) risks are gone, but one thing for sure is that market players now think the situation won’t get worse as it did some weeks ago,” said Lee Kyung-min, a stock analyst at Daishin Securities in Seoul.
Lee said many foreign investors and domestic institutions were purchasing South Korean tech and chemicals shares as quarterly earning season neared.
The dollar hovered at 108.50 yen JPY=, up from Friday’s 10-month trough of 107.32. Against a basket of currencies, it added 0.15 percent to 91.490 .DXY still close to last week’s 2-1/2-year low of 91.011.
An investor takes a photograph using his phone as he stands in front a board displaying stock prices at the Australian Securities Exchange (ASX) in Sydney, Australia, July 17, 2017. REUTERS/Steven Saphore
The euro eased to $1.2020 EUR=, having hit a top of $1.2092 on Friday amid speculation the European Central Bank was closer to starting a wind-back of its stimulus programme.
ECB officials last week generally agreed their next move would be to cut their bond purchases and discussed a range of options, Reuters reported.
RELAXED YUAN CONTROLS?
China’s central bank was also a focus in Asia after sources said it planned to scrap reserve requirements for financial institutions settling foreign exchange forward yuan positions with effect from Monday.
Analysts suggested that the official confirmation suggested an anxiousness in Beijing to quash one way bets on a rise in the yuan as outflows ease and exporters face strain.
“The removal potentially makes it easier for traders to purchase the USD, easing the pressure for yuan appreciation,” said analysts at ANZ in a note.
“The change likely signals some discomfort about the stronger yuan and its impact on Chinese exports.”
The dollar was up 0.3 percent against the offshore yuan at 6.5269 yuan CNH=, off a low of 6.4437.
There were also reports Beijing was planning to shut down local crypto-currency exchanges, dealing a blow to bitcoin’s recent stellar rally.
Bitcoin was quoted at $4,300 BTC=BTSP on the BitStamp platform, off a recent record high of nearly $5,000.
In commodity markets, gold softened 0.7 percent to $1,337.81 an ounce XAU=, away from a one-year peak of $1,357.54.
Oil prices regained a little ground after the Saudi oil minister discussed the possible extension of a pact to cut global oil supplies beyond March 2018 with his Venezuelan and Kazakh counterparts.
The news of the talks on Sunday helped offset the downward pressure on oil prices amid worries that energy demand would be hit hard by Hurricane Irma.
U.S. crude CLcv1 was trading 36 cents firmer at $47.84 a barrel, while Brent LCOcv1 rose 22 cents to $54.00.
Additional reporting by Wayne Cole in Sydney; editing by John Stonestreet and Jon Boyle
NEW YORK (Reuters) – High dividend yield stocks such as telecoms and utilities are looking more tempting as investors become increasingly nervous about the outlook for equities and as U.S. Treasury yields hover near a 10-month low.
The wide spread between the 10-year Treasury note and high-dividend payers, coupled with these stocks’ reputation as a safer play, could tempt investors to move away from high growth names.
A nuclear test from North Korea on Sunday rattled investors when markets opened on Tuesday after the extended holiday weekend, pushing the yield on benchmark 10-year Treasury notes US10YT=RR to a 10-month low.
“If rates can stay down here you will see people begin to return to those days of owning high dividend stocks,” said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey.
Investors typically prize high dividend players in a low rate, low growth environment, as they search for high yielding and stable instruments.
Fund managers already seem to be picking up some of these stocks. On a sector basis, weekly inflows for utilities were among the strongest, relative to assets under management, at 1.9 percent according to data from Credit Suisse through Sept. 1.
Stocks in the telecom and utilities sector have some of the highest dividend yields in the S&P 500. Telecom CenturyLink (CTL.N) has a dividend yield of 11.4 percent, top in the index. Utilities FirstEnergy (FE.N) and Southern Co (SO.N) both have dividend yields above 4.5 percent.
Meckler said investors are now more confident these sectors can compete with the yield on the 10-year at such a low level.
Goldman Sachs CEO Lloyd Blankfein issued a note of caution about the disparity between bond yields and equities at a conference in Germany on Wednesday, saying “When yields on corporate bonds are lower than dividends on stocks, that unnerves me.”
Stubbornly low bond yields can be of concern to equity players because they are forced to take bigger risks as they search for higher returns. They also raise red flags about the health of the economy.
Yields fell even further on Friday, to 2.016 percent, after New York Fed President William Dudley struck a less hawkish tone about rate hikes, while still defending them, in a Thursday night speech.
FORK IN THE ROAD
The dividend yield on the telecom sector .SPLRCL is 5.2 percent while the utilities sector .SPLRCU holds a 3.4 percent yield compared with a 2.4 percent yield for the broad S&P 500 index.
Those sectors have had divergent fortunes this year, however, with utilities up more than 12 percent while telecoms have dropped more than 14 percent, the worst among the major S&P sectors.
Telecoms also show a forward price to earnings ratio (PE) of 12.9, well below the 17.6 of the S&P 500. Utilities, however, are slightly more expensive with an 18.4 ratio, which could make them less attractive to investors even with the dividend premium.
In a recent note to clients, analyst Craig Moffett at MoffettNathansan said valuations for Verizon and AT&T were “enticingly low” with dividend yields “particularly attractive relative to the 10-year Treasury.”
The utilities sector has a strong 50-day negative correlation to the 10-year yield of 0.87, indicating the opposite directions they have traveled in. Telecoms, while still a negative 0.24, have a looser bond.
As investors weigh increasing risks for equities, including stretched valuations in what is typically a difficult period for stocks, the high dividend payers may be a safer play in a market that could be primed for a pullback.
Tension with North Korea, economic disruption from major hurricanes and political wrangling in Washington are also among the issues investors have to contend with.
“September and October are historically trying months for equities and add on to that geopolitical risk, it is somewhat prudent to be taking a little bit off the table here,” said Anthony Conroy, president at Abel Noser in New York.
Reporting by Chuck Mikolajczak; editing by Megan Davies and Chizu Nomiyama
BEIJING/SEOUL (Reuters) – Hyundai Motor Co (005380.KS) is at loggerheads with its Chinese partner over efforts to cut supplier costs, as they grapple with cut-throat competition and the impact of a stand-off between Beijing and Seoul, four people familiar with the dispute said.
Hyundai, along with affiliate Kia Motors (000270.KS), has been caught up this year in a political row over a missile defense system deployed in South Korea but opposed by China. That came against the backdrop of increased competition from local automakers, already making life tough in the world’s biggest market.
Until last year, Hyundai and Kia ranked third in China by sales. But sales for Hyundai alone have slumped 41 percent from January to July, making this the biggest crisis since Hyundai entered the Chinese market in 2002.
Hyundai and its local partner BAIC Motor Corp Ltd (1958.HK) are divided over how to solve the issue. Hyundai wants to protect its South Korean supply chain, while BAIC favors shifting to cheaper Chinese suppliers, the people said.
“BAIC wants to solve this aggressively and is aggressively pursuing it by asking Hyundai to change its sourcing strategy significantly and immediately,” said the head of a Hyundai supplier based in Seoul familiar with the matter. He added the idea was to source more locally from cheaper suppliers.
Hyundai wants to solve this more gradually “over perhaps 5-10 years and do so in phases,” the person added.
BAIC declined to comment.
A Hyundai Motor spokesperson told Reuters: “Hyundai Motor and Kia Motors have been continuously trying to source competitive parts in China.”
The stand-off underscores the depth of a crisis facing Hyundai and its suppliers in China, heavily reliant on sales to Hyundai Motor and Kia Motors.
South Korea approved the full deployment of the Terminal High Altitude Area Defense (THAAD) system on Monday – a day after North Korea conducted its sixth and most powerful nuclear test – and says it is needed to counter growing threats from North Korea.
China has strongly opposed the system and says its powerful radar poses a threat to its national security.
“China has started to become a grave for South Korean automakers and suppliers,” said Lee Hang-koo, a senior research fellow at Korea Institute for Industrial Economics & Trade, adding suppliers were being hit the hardest.
South Korean firms are squeezed between cheaper Chinese suppliers and European rivals which are technologically more advanced, making it challenging for them to diversify their customers beyond Hyundai Motor, he said.
Parts from South Korean suppliers are around 30-40 percent more expensive than those from local Chinese suppliers, industry sources say.
Hyundai last week replaced the head of its China operations, following months of tumbling sales. It was forced to suspend production temporarily at its four China plants last month over issues of non-payment to a supplier.
Reporting by Norihiko Shirouzu in BEIJING and Hyunjoo Jin in SEOUL; Writing by Adam Jourdan; Editing by Ian Geoghegan
Here is some of what the USDOT’s departments have been doing to help the Hurricane Harvey Relief effort.
📅 Tue September 05, 2017 – National Edition
USDOT said its contributions to the disaster rescue and recovery effort has and will encompass financial assistance, deployment of personnel, emergency regulatory relief and all the tools they have which can be helpful.
The Department of Transportation and all operating agencies continue to work closely with officials in Texas as well as FEMA and Department of Homeland Security to assess the destruction caused by Hurricane Harvey as they begin to move from rescue to the recovery process.
USDOT said its contributions to the disaster rescue and recovery effort has and will encompass financial assistance, deployment of personnel, emergency regulatory relief and all the tools they have which can be helpful.
USDOT’s Crisis Management Center has been fully staffed 24/7 since before Harvey made landfall. Per the President’s directive, USDOT has been coordinating closely with the Federal Emergency Management Agency (FEMA) and is providing support to the National and Regional Response Coordination Centers, as well as directly to local and state officials and transportation stakeholders in the affected areas.
On Tuesday, within an hour of a request from Governor Abbot, Secretary Chao directed the Federal Highway Administration (FHWA) to make $25 million in Emergency Relief funds immediately available to restore emergency access and initiate critical repairs to damaged roads and bridges. The Department will make available more than $100 million in financial support to meet the infrastructure needs of Texas and other affected states. DOT has approximately 40 staff from the modal administrations on the ground coordinating, getting transit assets back up and running, finding drivers for buses and trucks and more.
On Thursday, Secretary Chao traveled to the region with Vice President Mike Pence to survey the damage left behind by Hurricane Harvey.
While on site in Texas, and in response to one of the major emerging problems, the lack of fuel, Secretary Chao signed an Emergency Declaration removing restrictions on fuel delivery, so that fuel trucks from 27 states and jurisdictions can deliver much-needed energy to Texas and other hurricane-impacted areas as quickly as possible. This was the second of two declarations issued by the Department; Secretary Chao also issued a Regional Declaration of Emergency to help alleviate a potential shortage of available drivers who are critical to delivering necessary supplies to the impacted communities in Texas, Louisiana and other states.
On Friday, the Maritime Administration (MARAD) activated two National Defense Reserve Fleet vessels for a FEMA mission to support relief efforts in Texas. The State University of New York (SUNY) Maritime College’s training ship, EMPIRE STATE VI, and the Massachusetts Maritime Academy’s training ship, KENNEDY, received orders to set sail within 10 days for the 4 to 5 day transit from the east coast to the gulf coast of Texas. MARAD also received notification from FEMA to activate the Texas Maritime Academy’s training vessel GENERAL RUDDER, which will remain in-port at Galveston. Once moored on site, the self-contained vessel will support recovery efforts by providing power, housing, food and water to first responders. Combined, these three vessels can house over 1,200 workers thereby freeing up local hotel resources for displaced individuals.
The Federal Aviation Administration (FAA) has had over 1000 personnel tasked with the storm effort, including specialized Air Traffic Management support to facilitate Search and Rescue missions.
A team from the Federal Highways Administration has been on the ground before the storm made landfall, providing technical assistance to the TXDOT. Roads in the impacted areas continue to be inundated with water, with many closures. The FHWA stands ready to deploy more than 250 engineers who can be on the scene within 48 hours to begin expedited inspections of roads and bridges in the affected area. We are learning more by the hour and are working with our state partners to assess conditions as quickly as the water recedes.
DOT has established a Routing Assistance Hotline to support the transport of Federal and State response personnel, equipment and goods into Texas and Louisiana.
PHSMA is actively engaged in monitoring disruption to off-shore gas and petroleum production and distribution. These are just a few of the USDOT actions underway.
Here is some of what the USDOT’s departments have been doing:
TX Division leadership planning visit with TX DOT regional staff in Corpus Christi, Rockport and Victoria the week of Sept. 4, to discuss joint damage assessments.
FHWS’s TX/LA division staff will supplement TX Dot’s inspection staff. They are prepared to shift resources from other parts of the country if additional support is needed.
PHMSA issued an Emergency Waiver Order for the Hazardous Materials Regulations (HMR, 49 C.F.R. Parts 171-180) to persons conducting operations under the direction of EPA Region 6 within the Hurricane and Tropical Storm Harvey disaster and emergency areas of Texas and Louisiana.
PHMSA and FMCSA helped the Texas National Guard’s 6th Chemical, Biological, Radiological, Nuclear, Explosive (CBRNE) Enhanced Response Force Package (CERFP) conducting response and decontamination efforts in the Crosby, Texas facility explosion and fire. PHMSA connected the team with plume modeling experts to understand the risk from a large tank of sulfur dioxide and other base chemicals still at the facility.
PHMSA issued an emergency stay of enforcement of certain regulations for interstate pipeline operators on Sept. 1.
FRA opened Emergency Docket and has advised all railroads that the docket is open.
FRA has established an internal system to review and respond to waiver requests within three hours.
FRA and industry partners will begin railroad inspections to conduct damage assessments as soon as weather permits.
FMCSA continues to work closely with PHMSA and FHWA on special permitting for carriers carrying hazardous materials and for size and weight.
FMCSA issued a Regional Emergency Declaration on Sept. 1, that will provide direct relief to the fuel shortages due to refinery delays and interruption of delivery through pipelines. This declaration will allow 26 states and the District of Columbia the ability to transport fuel.
The Governors of Kansas, Alabama, North Carolina, and Georgia have issued an emergency declaration based upon fuel shortage concerns.
MARAD received a Mission Assignment from FEMA for the vessels TS Kennedy, TS Empire State, and TS General Rudder to support the humanitarian relief efforts in the areas of Beaumont (TS Empire), Houston (TS Kennedy), and Galveston (TS Rudder), TX.