HONG KONG – Chinese factories eked out a tiny expansion in activity for September as new orders picked up marginally, offering a glimmer of hope for the world’s No. 2 economy, according to a private survey Friday.

The Caixin monthly purchasing managers’ index ticked up to 50.1 for September from the previous month’s 50.0 reading.

The index is based on a 100-point scale with numbers below 50 indicating contraction.

It’s only the second time that the index has signalled an expansion since February 2015.

Chinese manufacturers reported that overall new orders rose for the third straight month while export orders expanded for the first time in 10 months. Factories cut workers at the lowest rate in nine months but the rate of job shedding remained significant, with 8 per cent of companies reporting lower headcounts, the report said.

Smaller workforces combined with the growth in new orders added pressure to factories’ operating capacity, the report said.

Data on China’s outsize factory sector is widely watched for insights into the broader economy, where growth has slowed to its lowest annual rate in a quarter century.

Global demand for Chinese-made toys, electronics and clothing remains weak, complicating Beijing’s efforts to bolster trade and stop job losses in export industries.

Other recent Chinese indicators have offered glimmers of hope as it grapples with a prolonged slowdown. Industrial profits rose at their fastest pace in three years, according to data released Tuesday, while trade figures released earlier in the month came in better than expected.

Caixin’s survey is based on responses from more than 400 firms, most of them small and mid-sized private businesses. The Chinese government is due to release official indexes for factories — mostly larger state-owned companies — and the service sector on Saturday.

Corporate Purges Spur Biggest Rallies on Turkey’s Stock Market – Bloomberg

In Turkey, the government’s forced takeover of a company can spur a rally.

A court in Ankara handed over 18 corporations owned by Akin Ipek to the Savings Deposit Insurance Fund this month because of his ties to an expatriate Muslim cleric the government blames for a failed coup in July. Three of those companies, Koza Altin, Ipek Dogal and Koza Anadolu Metal, are publicly traded, and all are among the five top performing stocks on Turkey’s benchmark Borsa Istanbul 100 Index in September, with the latter headed for its best month in a decade.

The takeover marked the end to about three years of bad blood between Ipek’s companies and Turkish authorities. During that period, some of them had mining licenses revoked, experienced police raids and were the subject of investigations. It began after Ipek was accused of directing cash to the movement influenced by U.S.-based cleric Fethullah Gulen, a man embroiled in a fierce rivalry with President Recep Tayyip Erdogan. Ipek has denied the charges. Erdogan blames Gulen for masterminding the attempted coup, which Gulen has also denied.

“Koza shares are rising on optimism that with the transfer of shares to SDIF, the companies will be able to get licences again and restart production,” Ilyas Safa Urganci, an analyst at Is Investment in Istanbul, said by e-mail. Once the transfer is completed, “the companies will either be privatized again or will be transferred to the Treasury, both of which are seen as better options compared to the years-long dispute that weighed on the stock prices.”

Pressure Ends

Koza Anadolu Metal Madencilik Isletmeleri AS jumped 62 percent since August, poised for its best month since September 2006. Gold miner Koza Altin Isletmeleri AS and energy company Ipek Dogal Enerji Kaynaklari Arastirma Ve Uretim AS surged 25 percent and 54 percent, respectively, while the Borsa 100 climbed 1.5 percent in September.

While the rally points to hopes that an era of political pressure on the companies will end, it also reflects the unpredictable post-putsch environment investors have to navigate. The last company to be seized by the government for alleged ties to Gulen, Asya Katilim Bankasi AS, an Islamic lender also known as Bank Asya, was effectively wiped out, along with its minority shareholders.

Under management by government appointees, none of the three listed companies owned by Ipek has reported financial results for the last three quarters, leaving investors to guess at their financial health.

“Some investors are betting that these companies will more likely be sold and that they’ll go back to their old days,” said Alper Akalin, an Istanbul-based analyst at Deniz Yatirim Menkul Degerler, who has had one of the companies, Koza Altin, under review for a year. “But how can one make sure given the level of uncertainty and lack of transparency?”

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After fatal train crash, investigators seek answers

HOBOKEN, N.J. – Federal investigators are sifting through the wreckage of a train crash in New Jersey to determine what happened before it barrelled through a station and crashed into a barrier, causing a young mother to be killed by falling debris and injuring more than 100 others.

Investigators from the National Transportation Safety Board will be looking to determine how fast the commuter train was going when it crashed at the busy Hoboken station Thursday morning.

Their investigation will seek to answer many questions, including whether a system designed to prevent accidents by overriding the engineer and automatically slowing or stopping trains that are going too fast could have helped if it had been installed on the line.

Investigators planned to pull one of the black-box event recorders from the locomotive at the back of the train Thursday evening. The device contains information on the train’s speed and braking. But it wasn’t safe enough yet for investigators to extract the second recorder from the engineer’s compartment because of the collapsed roof and the possibility of asbestos in the old building, NTSB vice chairwoman T. Bella Dinh-Zarr said.

More than 100,000 people use New Jersey Transit to commute from New Jersey to New York City each day. The NJ Transit portion of the Hoboken station will remain closed on Friday, slowing the morning commute for those making connections there.

As investigators began their probe, the family of Fabiola Bittar de Kroon, the crash’s sole fatality, was in mourning. De Kroon had recently moved to New Jersey from Brazil after her husband got a job with an international liquor company.

She had just dropped her toddler daughter off at daycare before rushing to catch a train, according to daycare director Karlos Magner.

“She was dropping off the daughter, I was closing up the stroller,” he recalled. “We had a good talk for like a minute. And she said she was in a rush.”

Shortly after, the NJ Transit train ran off the end of the track as it was pulling in around 8:45 a.m., smashing through a concrete-and-steel bumper. As it ground to a halt in the waiting area, it knocked out pillars, collapsing a section of the roof.

De Kroon was killed by debris, and 108 others were injured, mostly on the train, New Jersey Gov. Chris Christie said. Scores were hospitalized, some with serious injuries including broken bones.

The engineer, Thomas Gallagher, was pulled from the mangled first car and was treated and released from a hospital. Officials said he was co-operating with investigators. Gallagher has worked for NJ Transit for 29 years, and a union roster shows he started as an engineer about 18 years ago.

New York Gov. Andrew Cuomo said investigators will determine whether the explanation was equipment failure, an incapacitated engineer or something else.

Some witnesses said they didn’t hear or feel the brakes being applied before the crash. Authorities would not estimate how fast the train was going. But the speed limit heading into the station is 10 mph.

“The train came in at much too high rate of speed, and the question is: ‘Why is that?’” Christie said.

Cuomo, a Democrat, and Christie, a Republican, cautioned against jumping to conclusions about the role that the lack of positive train control played or didn’t play in the tragedy.

The NTSB has been pressing for some version of the technology for at least 40 years, and the industry is under government orders to install it, but regulators have repeatedly extended the deadline at railroads’ request. The target date is now the end of 2018.

Over the past 20 years, the NTSB has listed the lack of positive train control as a contributing factor in 25 crashes. Those include the Amtrak wreck last year in Philadelphia in which a speeding train ran off the rails along a curve. Eight people were killed.

In 2011, a Port Authority Trans-Hudson, or PATH, commuter train crash in a separate section of the Hoboken station injured more than 30 people. The NTSB found the engineer failed to control the speed of the train as it entered the station and investigators also determined a contributing factor was the absence of positive train control.

“They’ll have to answer for themselves, but at the end of the day if safety is job one … then you have to have a better record than New Jersey Transit has right now,” said Sen. Bob Menendez, a Democrat from New Jersey, noting that the transit agency said in a 2016 report with the Federal Railroad Administration that it didn’t have positive train control on any locomotive or segment of track.

“That means zero across the board,” he said. “They need to do better than zero across the board.”

A spokeswoman for NJ Transit referred all questions about the investigation, including questions about positive train control, to the NTSB.

Even without positive train control, there are still safeguards in place in Hoboken.

NJ Transit trains have an in-cab system that is designed to alert engineers and stop locomotives when they go over 20 mph, according to an NJ Transit engineer who spoke on condition of anonymity because he was not authorized to discuss the accident.

Trains like the one in Thursday’s crash also are equipped with an alerter system — a sort of dead man’s device — that sounds a loud alarm and eventually stops the train if the engineer goes 15 to 20 seconds without touching the controls.

But it was unclear whether those mechanisms kicked in or would have made a difference if they had.

Michael Larson, an NJ Transit employee working in the terminal about 30 feet away, said he saw the train go over the “bumper block” and lift up into the air, stopping only when it hit the wall of the station’s waiting room.

As the train hurtled into the depot amid concrete dust and dangling electrical wires, “I couldn’t believe what I was seeing,” he said.

Tom Spina, a maintenance supervisor for a private company was in the terminal after having worked the night.

“It was chaotic. There was yelling and screaming, a lot of people in shock,” Spina said. “Things like this we see in movies,” Spina said. “You don’t think you’re going to see it in real life.”

___

Sisak reported from Philadelphia. Associated Press writers David Porter and Josh Cornfield in Hoboken; Deepti Hajela in Morris Plains; Megan Trimble in Philadelphia; Jennifer Peltz and Verena Dobnik in New York; and Joan Lowy in Washington contributed to this report.

End Of Q3 Stock Market Update – Seeking Alpha

We published a Q3 commentary on the US stock market on September 19. That piece is available here. To paraphrase Keynes, things changed and so did we.
In our volatility and leveraged volatility strategy, we had an entry in September and became fully i…

Warm Pacific Ocean ‘blob’ facilitated vast toxic algae bloom

SEATTLE – A new study finds that unusually warm Pacific Ocean temperatures helped cause a massive bloom of toxic algae last year that closed lucrative fisheries from California to British Columbia and disrupted marine life from seabirds to sea lions.

Scientists linked the large patch of warm ocean water, nicknamed the “blob,” to the vast ribbon of toxic algae that flourished in 2015 and produced record-breaking levels of a neurotoxin that is harmful to people, fish and marine life.

The outbreak of the toxin domoic acid, the largest ever recorded on the West Coast, closed razor clam seasons in Washington and Oregon and delayed lucrative Dungeness crab fisheries along the coast. High levels were also detected in many stranded marine mammals.

“We’re not surprised now having looked at the data, but our study is the first to demonstrate that linkage,” said Ryan McCabe, lead author and a research scientist at the University of Washington’s Joint Institute for the Study of the Atmosphere and Ocean. “It’s the first question that everyone was asking.”

McCabe and his co-authors explain how the toxic algae bloom thrived in their study published in the journal Geophysical Research Letters.

Seasonal algae blooms are common each year along the West Coast, but most are not toxic. The scientists found that the algae bloom was dominated by a single species called “Pseudo-nitzschia australis” that is highly toxic.

The algae survived and took advantage of warm, nutrient-poor conditions set up by the patch of water that was warmer at the surface than normal.

Coastal upwelling last spring — a seasonal event that brings nutrient-rich, cooler waters up from the deep ocean — provided nutrients for the algae to bloom into a large population fairly quickly at sea. Finally, a series of late spring storms delivered the bloom to the coast.

“While temperature isn’t everything, it’s serving as a decent proxy,” said McCabe. “We think there’s a linkage between toxic events along our coast and climate variability indices.”

The blob was a one-time event that was not due to global warming, “but we are looking at this event as a potential window into the future as what conditions could look like,” McCabe said.

Kathi Lefebvre, a co-author and marine biologist at NOAA’s Northwest Fisheries Science Center, said the bloom resulted in the highest levels of domoic acid contamination in the food web ever recorded for many species.

Domoic acid accumulates in anchovies, sardines and other small fish as well as shellfish that eat the algae.

Marine mammals and fish-eating birds in turn can get sick from eating the contaminated fish. In people, it can trigger amnesic shellfish poisoning, which can cause permanent loss of short-term memory in severe cases.

Sea lions in California commonly experienced seizures, a common sign of domoic acid poisoning, during harmful algae blooms along that state’s coast. But 2015 was the first year that such harmful effects were documented as far north as Washington state, scientists said.

“This is an eye-opener for what the future may hold as ocean conditions continue to warm globally,” Lefebvre said.

Tesla on Autopilot and bus collide in Germany

BERLIN – Police in northern Germany say a Tesla being driven with its Autopilot system engaged collided with a bus on a highway.

But Tesla says the Autopilot was not at fault.

Ratzeburg police say that the crash happened Wednesday afternoon on a stretch of autobahn about 50 kilometres (30 miles) east of Hamburg. The Tesla driver was slightly injured.

Police said in a statement Thursday that the 50-year-old Tesla driver told officers he had used the Autopilot. It wasn’t immediately clear whether police had themselves confirmed the Autopilot’s use, and calls to the Ratzeburg police precinct weren’t answered late Thursday.

A Tesla spokeswoman in Palo Alto, California, said Thursday the Autopilot system was on and functioned properly in the incident, based on conversations the company had with the driver and authorities.

The system could not have prevented the crash because the bus swerved into the Tesla driver’s lane while the Tesla was next to the bus, the company said.

Tesla updated the Autopilot software this month following a deadly crash in May. In that crash, a driver using the system was killed when his Model S sedan struck a tractor-trailer in Florida.

Ex-TransCanada CEO says Energy East setback a win for anti-development activists

BANFF, Alta. – Delays caused by the replacement of a panel reviewing the Energy East Pipeline project show that Canada’s regulatory system is flawed and must be fixed, says a former CEO of proponent TransCanada.

Hal Kvisle said Thursday the recusal of a National Energy Board panel in early September just after hearings on the controversial project began was a victory for activists whose only objective is to block the process.

“I think it’s another failure of (the) regulatory process in Canada that we can’t even commence a regulatory process without it coming off the rails,” he said in an interview with The Canadian Press.

“It’s regrettable. I’ve been making the point to the government of Canada for about 12 or 13 years there needs to be significant improvements in the regulatory process and here we’re just had it thrown in the ditch again by people whose objective is really just to stop the whole thing.”

The NEB’s review broke down after hearings in Montreal were disrupted by protesters. Critics charged the panel was biased after learning that two of three panellists met last year with former Quebec premier Jean Charest, then a consultant for TransCanada (TSX:TRP).

Kvisle, who spoke on the sidelines of the Global Business Forum in Banff, Alta., says the controversy was a “tempest in a teapot,” pointing out the panellists also met with other interested parties. He retired from the top job at TransCanada in 2010.

Natural Resources Minister Jim Carr has said new panellists will be appointed as soon as possible but the review period could be delayed, as could the NEB’s goal of having a decision on Energy East by March 18, 2018. The new panel is to decide how the review will proceed and whether evidence will need to be heard again.

The 4,500-kilometre pipeline would cost $15.7 billion and carry 1.1 million barrels of oil per day from Alberta to New Brunswick. About two-thirds is already in place as a natural gas pipeline.

Meanwhile, Kinder Morgan Canada president Ian Anderson says he’s optimistic his company’s controversial Trans Mountain Pipeline expansion will be approved by December as scheduled after the federal government green-lighted the Pacific NorthWest LNG project on Tuesday.

“It signals one thing: The federal government is prepared to make some difficult decisions and I think they’ve made one on that file,” said Anderson in an interview at the Banff conference.

The liquefied natural gas project would include the construction of an $11-billion export terminal in northern B.C., expected to produce about 19.2 million tonnes of LNG per year at full capacity. Its proponents have not yet approved its construction.

Trans Mountain, a $6.8-billion Alberta-to-B.C. pipeline expansion, was conditionally approved by the NEB last spring but still requires government approval to proceed.

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Alberta to introduce tax credit for investments in small businesses up until 2019

CALGARY – The Alberta government plans to introduce a tax credit for investments in small businesses in the fall sitting of the legislature.

Economic Development Minister Deron Bilous says there will be a 30 per cent tax credit for investments in Alberta small businesses made between April 14 of this year and Dec. 31, 2019.

The government says the tax credit would support up to 4,400 new jobs over three years and contribute up to $500 million to the province’s GDP.

The tax credit is part of the government’s jobs plan.

Bilous says the government is also restoring training programs for entrepreneurs, cutting the small business tax and protecting a multibillion-dollar tax advantage over other provinces.

Justin Smith with the Calgary Chamber of Commerce says the province has large pools of capital but until today, policy measures were sorely needed to encourage the flow of this capital into the province’s small businesses.

“This tax credit puts the onus on investors to make the final decision on risk and efficiency, while keeping their money in Alberta and putting it toward growth-oriented firms,” Smith said in a news release Thursday.

The tax credit legislation, if passed, will have a budget of $90 million over three years and would be provided on a first-come, first-served basis.

The tax credit will be available for investments in companies that are substantially engaged in proprietary technology research, development or commercialization; interactive digital media development; video post-production; digital animation; or tourism.

The government says investment criteria were developed through extensive consultation with business and investment leaders across Alberta and are designed to encourage economic diversification.

What Happened in the Stock Market Today – Motley Fool

Stock Indexes

Image source: Getty Images.

Stocks posted significant declines on Thursday, with both the Dow Jones Industrial Average (DJINDICES:^DJI) and the S&P 500 (SNPINDEX: ^GSPC) indexes falling by a full percentage point.

Today’s stock market

Index

Percentage Change

Point Change

Dow

(1.07%)

(195.79)

S&P 500

(0.93%)

(20.24)

Data source: Yahoo! Finance.

The banking sector led the broader market lower, and that weakness produced a 1.4% decline in the Financial Select Sector SPDR ETF (NYSEMKT:XLF). Meanwhile, crude oil prices continued to rally following yesterday’s news that OPEC nations will be lowering production. The United States Oil Fund LP (NYSEMKT:USO) gained 2% to bring its five-day return to 9%.

As for individual stocks, Fitbit (NYSE:FIT) and Pier 1 (NYSE:PIR) each made notable moves on Thursday.

Fitbit’s device downgrade

Fitbit shares fell 11% after a Wall Street analyst downgraded the stock to the equivalent of a sell rating, saying shares have plenty of room to add to their year-to-date 50% loss. Pacific Crest’s Brad Erikson said in a note to clients that his firm contacted 15 major retailers about the company’s flagship fitness device, the Charge 2, and found evidence of weak initial demand. While the sales pace won’t spike until closer to the Christmas shopping peak, the Charge 2 appears to be trailing both the Blaze and Alta at this point in their life cycle. In addition, Erickson thinks the launch weakness could be compounded by a general drop in active user growth.

Wearable Tech

Image source: Getty Images.

There isn’t much substance to this downgrade, in my view, given that it plays off of a small data point in what will be a large, complex global product launch. Investors will be better off waiting for complete sales data before rushing to sell their shares.

However, the stock’s sharp move highlights an important risk for Fitbit owners: That its business is highly dependent on a string of successful product launches. The company thinks that good early media reviews for Charge 2 suggest it will be a big hit this holiday season. Yet even scant evidence that points the other way will likely push the stock lower in the short term — at least until hard sales data is available.

Pier 1′s cautious optimism

Pier 1 Imports shares rose despite lackluster quarterly results from the specialty retailer. As the company warned in a prior update, sales at existing locations fell 4.3% and net loss amounted to $0.05 per share compared to the prior year’s $0.04 per share profit. Executives blamed weak customer traffic trends for the shortfall. “Our top-line results reflect soft store traffic levels throughout the second quarter, most notably in July,” CEO Alex Smith said in a press release.

There were a few bright spots in the report, though. Gross profit margin improved, as did e-commerce revenue as a percentage of the total business. Pier 1 is also encouraged by the results from its return to television advertising, which it believes contributed to improved sales and profit trends in August and September.

Still, the company is bracing for a potentially difficult holiday season ahead. Smith and his management team project declining sales of about 2% in each of the next two quarters. Wall Street was apparently expecting a more somber reading of the market, and so shares rebounded slightly on Thursday and recovered some of the almost 40% loss they’ve endured over the last 12 months.

Demitrios Kalogeropoulos has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Fitbit. The Motley Fool is short Pier 1 Imports. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Japanese retailer Uniqlo dips its toes in Canada’s cutthroat retail sector – CBC.ca

When Japanese apparel retailer Uniqlo decided to open its first location in Canada, it sent Yasuhiro Hayashi to Toronto every month for nearly a year to get a read on the Canadian customer.

During each visit, Uniqlo Canada’s chief operating officer would spend the week taking notes on what people wore.

“I didn’t expect that everyone was so unique and multicultural,” said Hayashi, who previously helped launch Uniqlo in Singapore and Indonesia. “That was very surprising in a very positive way.”

Unlike competitors that aim for a particular demographic, Uniqlo is hoping its appeal-to-all business model will succeed in a cutthroat industry that has laid waste to some fashion retailers, such as Aeropostale and Danier Leather.

“We don’t have a specific target customer,” said Hayashi. “That’s our uniqueness. We say we are made for all.”

The company is opening its first store in Canada on Friday, a 28,000-square foot space in the Toronto Eaton Centre wedged between fast-fashion rival H&M and the newly arrived luxury retailer Nordstrom. A second store opening is planned for Oct. 20 at Yorkdale Shopping Centre in north Toronto.

Uniglo Opening 20160929

Clothing is seen at the first Uniqlo retail clothing store in Toronto. When Uniqlo decided to open its first location in Canada, it sent chief operating officer Yasuhiro Hayashi to Toronto every month for nearly a year to get a read on the Canadian customer. (Mark Blinch/Canadian Press)

Founded in 1974, Uniqlo is known for its array of affordable basics — everything from parkas to khakis — in a variety of colours and sizes for children and adults.

“If our clothes are not affordable to the people — the regular real people, not the fashionistas, not just the celebrities, not just the rich, but for all — then I think it defeats our philosophy and what we stand for,” Hayashi said.

Even with more than 1,000 stores worldwide, Hayashi acknowledges Uniqlo may not have the same name recognition in Canada that some of its international rivals had before entering the country.

It’s one of the challenges it will have to overcome if it wants to continue expanding in Canada, something Hayashi says he would like to do but is in no rush to.

“We want to be very cautious,” he said, before alluding to the arrival of one well-known retail behemoth to Canada that went bust.

“Of course, I don’t want to give a name, but some other brands have a little too ambitious plans that didn’t work out so we want to make sure that we serve the customers well and fine-tune the merchandise mix as well.”

Last year, Target abruptly announced it was shutting down all 133 of its Canadian stores only two years after its highly anticipated arrival north of the border. Some of the criticisms levelled against the U.S. retailer were that it expanded too quickly, did not understand the Canadian customer and did not have the right product mix that it featured in its American stores.

Since then, a number of international retailers such as Saks Fifth Avenue, Muji and Nordstrom have opened locations in Canada — albeit with a more slow and steady approach.

Retail analyst Doug Stephens said Uniqlo is priced at the right end of the fast-fashion market, which still has a lot of cachet with Canadian shoppers.

But they’ll have to distinguish themselves if they want to set themselves apart from competitors and win with customers short on disposable income, he said.

“You’re always living on the razor edge at that end of the market,” said Stephens, the founder of Toronto-based consulting firm Retail Prophet.

Another challenge Uniqlo will face is generating customer loyalty, said retail expert Brynn Winegard.

“The Target lessons that we learned is that we don’t want you to come and tell us about us. We want you to be authentically and indigenously you,” said Winegard of retail consultancy Winegard and Company.

“So don’t try to be Canadian. Be authentically Japanese.”

Hayashi said the Toronto stores will largely be the same as its other locations, whether they’re in New York, London or Paris — with a few nuanced differences tailored to Canadian shoppers.

Customers can expect a bigger than usual selection of plaid and flannel shirts. Most sizing will be for a North American fit, but there will also be some smaller sizing to reflect Toronto’s multicultural population. Uniqlo will also sell house slippers, which is commonplace in its Asian locations.

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