Saturday, May 5, 2018
Weekly Commentary:
Old Roach Motel
by Doug Noland
full column here:
My summary is below:
For the week ending May 4, 2018:
STOCKS:
S&P500 slipped 0.2% (down 0.4% y-t-d)
Dow Industrials dipped 0.2% (down 1.8%)
Dow Utilities declined 0.6% (down 2.8%)
Dow Transports lost 1.7% (down 2.3%)
S&P 400 Midcaps added 0.3% (down 0.2%)
Small cap Russell 2000 gained 0.6% (down 2.0%)
Nasdaq100 jumped 1.7% (up 5.8%)
Biotechs fell 1.6% (up 6.2%)
With gold bullion down $8,
the HUI gold stock index slipped 0.4%
(down 5.7%).
S&P500 slipped 0.2% (down 0.4% y-t-d)
Dow Industrials dipped 0.2% (down 1.8%)
Dow Utilities declined 0.6% (down 2.8%)
Dow Transports lost 1.7% (down 2.3%)
S&P 400 Midcaps added 0.3% (down 0.2%)
Small cap Russell 2000 gained 0.6% (down 2.0%)
Nasdaq100 jumped 1.7% (up 5.8%)
Biotechs fell 1.6% (up 6.2%)
With gold bullion down $8,
the HUI gold stock index slipped 0.4%
(down 5.7%).
U.K.'s FTSE gained 0.9% (down 1.6%).
Japan's Nikkei 225 little changed (down 1.3% y-t-d)
France's CAC40 increased 0.6% (up 3.8%)
German DAX jumped 1.9% (down 0.8%)
Spain's IBEX 35 rose 1.8% (up 0.6%)
Italy's FTSE MIB surged 1.7% (up 11.4%)
Brazil's Bovespa sank 3.8% (up 8.8%)
Mexico's Bolsa fell 2.7% (down 4.8%)
South Korea's Kospi declined 1.2% (down 0.2%)
India’s Sensex slipped 0.2% (up 2.5%)
China’s Shanghai recovered 0.3% (down 6.5%)
Turkey's Istanbul National 100 fell 4.7% (down 11.0%)
Russia's MICEX declined 0.5% (up 8.5%).
France's CAC40 increased 0.6% (up 3.8%)
German DAX jumped 1.9% (down 0.8%)
Spain's IBEX 35 rose 1.8% (up 0.6%)
Italy's FTSE MIB surged 1.7% (up 11.4%)
Brazil's Bovespa sank 3.8% (up 8.8%)
Mexico's Bolsa fell 2.7% (down 4.8%)
South Korea's Kospi declined 1.2% (down 0.2%)
India’s Sensex slipped 0.2% (up 2.5%)
China’s Shanghai recovered 0.3% (down 6.5%)
Turkey's Istanbul National 100 fell 4.7% (down 11.0%)
Russia's MICEX declined 0.5% (up 8.5%).
BONDS & MORTGAGES
US Ten-year Treasury yields declined one basis point to 2.95%
(up 54bps).
Long bond yields were unchanged at 3.12% (up 38bps).
(up 54bps).
Long bond yields were unchanged at 3.12% (up 38bps).
Freddie Mac 30-year fixed mortgage rates
declined three bps to 4.55%
(up 53bps y-o-y).
Fifteen-year rates added a basis point to 4.03%
(up 76bps).
Five-year hybrid ARM rates fell five bps to 3.69%
(up 56bps).
Jumbo mortgage 30-yr fixed rates down two bps to 4.71%
(up 57bps).
declined three bps to 4.55%
(up 53bps y-o-y).
Fifteen-year rates added a basis point to 4.03%
(up 76bps).
Five-year hybrid ARM rates fell five bps to 3.69%
(up 56bps).
Jumbo mortgage 30-yr fixed rates down two bps to 4.71%
(up 57bps).
M2 (narrow) "money" supply expanded $16.1bn last week
to a record $13.964 TN. "Narrow money" gained $524bn,
or 3.9%, over the past year.
to a record $13.964 TN. "Narrow money" gained $524bn,
or 3.9%, over the past year.
Currency Watch:
The U.S. dollar index rose 1.1% to 92.566 (up 0.5% y-t-d).
Commodities Watch:
Goldman Sachs Commodities Index gained 1.3% (up 8.4% y-t-d).
Spot Gold slipped 0.6% to $1,315 (up 0.9%).
Silver was little changed at $16.519 (down 3.7%).
Crude jumped $1.62 to $69.72 (up 15%).
Gasoline slipped 0.6% (up 18%)
Natural Gas dropped 2.2% (down 8%)
Copper increased 0.5% (down 7%)
Wheat surged 5.6% (up 23%)
Corn gained 1.9% (up 16%).
Spot Gold slipped 0.6% to $1,315 (up 0.9%).
Silver was little changed at $16.519 (down 3.7%).
Crude jumped $1.62 to $69.72 (up 15%).
Gasoline slipped 0.6% (up 18%)
Natural Gas dropped 2.2% (down 8%)
Copper increased 0.5% (down 7%)
Wheat surged 5.6% (up 23%)
Corn gained 1.9% (up 16%).
Trump Administration Watch:
May 2 - Wall Street Journal (John D. McKinnon):
"The Trump administration is considering executive action that would restrict some Chinese companies' ability to sell telecommunications equipment in the U.S., based on national-security concerns, said several people familiar with the matter. The move, if it happens, would represent a significant escalation of a growing feud between the U.S. and China over tech and telecommunications. The affected firms likely would include Huawei Technologies Co. and ZTE Corp. , two of the world's leading telecommunications equipment makers. They have found themselves increasingly in an international crossfire. Pentagon officials said this week that they are moving to halt the sale of phones made by the two companies on U.S. military bases around the world."
"The Trump administration is considering executive action that would restrict some Chinese companies' ability to sell telecommunications equipment in the U.S., based on national-security concerns, said several people familiar with the matter. The move, if it happens, would represent a significant escalation of a growing feud between the U.S. and China over tech and telecommunications. The affected firms likely would include Huawei Technologies Co. and ZTE Corp. , two of the world's leading telecommunications equipment makers. They have found themselves increasingly in an international crossfire. Pentagon officials said this week that they are moving to halt the sale of phones made by the two companies on U.S. military bases around the world."
May 3 - Bloomberg:
"Donald Trump's attempt to stem China's technological advance could already be backfiring. His counterpart, President Xi Jinping, has responded to tech-focused pressure from Washington, including a ban on a leading Chinese telecoms company buying American parts, by vowing to pour even more resources into research and achieve home-grown breakthroughs. He urged China last week to 'cast aside illusions' it could rely on others for help. As Trump's team continue talks in Beijing Friday armed with complaints about China's industrial strategy and trade surplus, the hosts said their technological advancement goal isn't on the table. The mix of Trump's tariff threats and the realization that the U.S. wants to stunt its Made in China 2025 development plan -- aimed at dominating industries from transport to robotics -- complicates prospects for detente."
"Donald Trump's attempt to stem China's technological advance could already be backfiring. His counterpart, President Xi Jinping, has responded to tech-focused pressure from Washington, including a ban on a leading Chinese telecoms company buying American parts, by vowing to pour even more resources into research and achieve home-grown breakthroughs. He urged China last week to 'cast aside illusions' it could rely on others for help. As Trump's team continue talks in Beijing Friday armed with complaints about China's industrial strategy and trade surplus, the hosts said their technological advancement goal isn't on the table. The mix of Trump's tariff threats and the realization that the U.S. wants to stunt its Made in China 2025 development plan -- aimed at dominating industries from transport to robotics -- complicates prospects for detente."
April 30 - New York Times (Ana Swanson and Keith Bradsher):
"It sounds like something out of a science fiction movie: In April, China is said to have tested an invisibility cloak that would allow ordinary fighter jets to suddenly vanish from radar screens. This advancement, which could prove to be a critical intelligence breakthrough, is one that American officials fear China may have gained in part from a Chinese researcher who roused suspicions while working on a similar technology at a Duke University laboratory in 2008. The researcher, who was investigated by the F.B.I. but never charged with a crime, ultimately returned to China, became a billionaire and opened a thriving research institute that worked on some projects related to those he studied at Duke. The Trump administration, concerned about China's growing technological prowess, is considering strict measures to block Chinese citizens from performing sensitive research at American universities and research institutes over fears they may be acquiring intellectual secrets… The White House is discussing whether to limit the access of Chinese citizens to the United States, including restricting certain types of visas available to them and greatly expanding rules pertaining to Chinese researchers who work on projects with military or intelligence value at American companies and universities."
"It sounds like something out of a science fiction movie: In April, China is said to have tested an invisibility cloak that would allow ordinary fighter jets to suddenly vanish from radar screens. This advancement, which could prove to be a critical intelligence breakthrough, is one that American officials fear China may have gained in part from a Chinese researcher who roused suspicions while working on a similar technology at a Duke University laboratory in 2008. The researcher, who was investigated by the F.B.I. but never charged with a crime, ultimately returned to China, became a billionaire and opened a thriving research institute that worked on some projects related to those he studied at Duke. The Trump administration, concerned about China's growing technological prowess, is considering strict measures to block Chinese citizens from performing sensitive research at American universities and research institutes over fears they may be acquiring intellectual secrets… The White House is discussing whether to limit the access of Chinese citizens to the United States, including restricting certain types of visas available to them and greatly expanding rules pertaining to Chinese researchers who work on projects with military or intelligence value at American companies and universities."
May 2 - Financial Times (Yukon Huang):
"A high-level US negotiating team will arrive in Beijing later this week to talk about trade and technology wars. These discussions are not really about trade. America has been running trade deficits for forty years, long before China even became a major trading nation. As many experts have noted, America's trade deficits are driven largely by its low savings rates and this has little to do with China. The team's reported request for China to cut its bilateral deficit with the US by $100bn is illogical conceptually and in its practicality. This economic war is more about protecting America's technological edge."
"A high-level US negotiating team will arrive in Beijing later this week to talk about trade and technology wars. These discussions are not really about trade. America has been running trade deficits for forty years, long before China even became a major trading nation. As many experts have noted, America's trade deficits are driven largely by its low savings rates and this has little to do with China. The team's reported request for China to cut its bilateral deficit with the US by $100bn is illogical conceptually and in its practicality. This economic war is more about protecting America's technological edge."
April 30 - Bloomberg (Saleha Mohsin and Randall Woods):
"U.S. Treasury Secretary Steven Mnuchin said he's unconcerned about the bond market's ability to absorb rising government debt after his department said it borrowed a record amount for the first quarter. 'It's a very large, robust market -- it's the most liquid market in the world, and there is a lot of supply," he said… 'But I think the market can easily handle it.' Earlier on Monday the Treasury said net borrowing totaled $488 billion from January through March, a record for that period and about $47 billion more than it had previously estimated…"
"U.S. Treasury Secretary Steven Mnuchin said he's unconcerned about the bond market's ability to absorb rising government debt after his department said it borrowed a record amount for the first quarter. 'It's a very large, robust market -- it's the most liquid market in the world, and there is a lot of supply," he said… 'But I think the market can easily handle it.' Earlier on Monday the Treasury said net borrowing totaled $488 billion from January through March, a record for that period and about $47 billion more than it had previously estimated…"
April 28 - Reuters (Amanda Becker and Lucia Mutikani):
"U.S. President Donald Trump on Saturday threatened to shut down the federal government in September if Congress did not provide more funding to build a wall on the border with Mexico. 'That wall has started, we have 1.6 billion (dollars),' Trump said at a campaign rally… 'We come up again on September 28th and if we don't get border security we will have no choice, we will close down the country because we need border security.'"
"U.S. President Donald Trump on Saturday threatened to shut down the federal government in September if Congress did not provide more funding to build a wall on the border with Mexico. 'That wall has started, we have 1.6 billion (dollars),' Trump said at a campaign rally… 'We come up again on September 28th and if we don't get border security we will have no choice, we will close down the country because we need border security.'"
May 3 - Bloomberg (Shobhana Chandra):
"The U.S.-China trade deficit has gotten even wider. President Donald Trump says that's the wrong direction, which is why he's dispatched a posse of high-level officials to Beijing in hopes of hammering out a better deal. The merchandise trade gap with China widened by 16% to $91.1 billion in the first three months of the year… China is America's biggest trading partner so far this year, compared with the first quarter of 2017, when Canada held the top spot."
"The U.S.-China trade deficit has gotten even wider. President Donald Trump says that's the wrong direction, which is why he's dispatched a posse of high-level officials to Beijing in hopes of hammering out a better deal. The merchandise trade gap with China widened by 16% to $91.1 billion in the first three months of the year… China is America's biggest trading partner so far this year, compared with the first quarter of 2017, when Canada held the top spot."
U.S. Bubble Watch:
May 2 - CNBC (Diana Olick):
"Home prices have been rising steadily since the recession, but the gains are suddenly accelerating as spring demand heats up in an already highly lean and competitive market. Prices surged 7% higher in March compared with a year ago, according to CoreLogic. That is the biggest gain since May 2014. All 50 states saw home values increase, and prices are now higher than they were at the peak of the last housing boom, although that does not account for inflation. 'High demand and limited supply have pushed home prices above where they were in early 2006,' said Frank Nothaft, chief economist at CoreLogic. 'New construction still lags historically normal levels, keeping upward pressure on prices.'"
"Home prices have been rising steadily since the recession, but the gains are suddenly accelerating as spring demand heats up in an already highly lean and competitive market. Prices surged 7% higher in March compared with a year ago, according to CoreLogic. That is the biggest gain since May 2014. All 50 states saw home values increase, and prices are now higher than they were at the peak of the last housing boom, although that does not account for inflation. 'High demand and limited supply have pushed home prices above where they were in early 2006,' said Frank Nothaft, chief economist at CoreLogic. 'New construction still lags historically normal levels, keeping upward pressure on prices.'"
April 30 - Bloomberg (Katia Dmitrieva):
"U.S. consumer spending picked up in March while the Federal Reserve's preferred inflation gauge hit the central bank's 2% target for the first time in a year, reinforcing the outlook for further interest-rate hikes. Purchases rose 0.4% from the prior month, matching estimates, after being little changed in February… The price gauge linked to consumption rose 2% from a year earlier after 1.7% in February; excluding food and energy, which officials see as a better gauge of underlying trends, it was up 1.9%."
"U.S. consumer spending picked up in March while the Federal Reserve's preferred inflation gauge hit the central bank's 2% target for the first time in a year, reinforcing the outlook for further interest-rate hikes. Purchases rose 0.4% from the prior month, matching estimates, after being little changed in February… The price gauge linked to consumption rose 2% from a year earlier after 1.7% in February; excluding food and energy, which officials see as a better gauge of underlying trends, it was up 1.9%."
May 2 - CNN Money (Matt Egan):
"Major companies including Caterpillar (CAT), Halliburton and Harley-Davidson warned in recent weeks of rising costs for everything from steel and crude oil to trucking. President Trump's steel and aluminum tariffs are adding to the pricing headaches. America's factories have been grappling with inflation this year. Prices for manufacturers have increased for five straight months to the highest since 2011, according to the Institute for Supply Management. Labor shortages and transportation delays are even making it harder for some factories to deliver their products on time. 'We expect steel and other commodity costs to be a headwind all year,' Bradley Halverson, Caterpillar's chief financial officer, told analysts…"
"Major companies including Caterpillar (CAT), Halliburton and Harley-Davidson warned in recent weeks of rising costs for everything from steel and crude oil to trucking. President Trump's steel and aluminum tariffs are adding to the pricing headaches. America's factories have been grappling with inflation this year. Prices for manufacturers have increased for five straight months to the highest since 2011, according to the Institute for Supply Management. Labor shortages and transportation delays are even making it harder for some factories to deliver their products on time. 'We expect steel and other commodity costs to be a headwind all year,' Bradley Halverson, Caterpillar's chief financial officer, told analysts…"
May 2 - Financial Times (Joe Rennison and Ben McLannahan):
"Lenders in America's $1.2tn car-loan market are extending terms for as long as eight years, meaning they face a greater risk of defaults and meagre recovery values. Banks and non-banks have entered the market in recent years, looking to increase exposure to a sector that was resilient during the financial crisis. But analysts fear that many have relaxed terms for borrowers too much, particularly in the subprime segment, where losses have historically been much greater. Also, monthly repayments for borrowers have hit an all-time high… The average term on new car loans stood at 67 months - or five and a half years - at the end of 2017, according to… the Federal Reserve Bank of New York, having steadily risen since 2008."
"Lenders in America's $1.2tn car-loan market are extending terms for as long as eight years, meaning they face a greater risk of defaults and meagre recovery values. Banks and non-banks have entered the market in recent years, looking to increase exposure to a sector that was resilient during the financial crisis. But analysts fear that many have relaxed terms for borrowers too much, particularly in the subprime segment, where losses have historically been much greater. Also, monthly repayments for borrowers have hit an all-time high… The average term on new car loans stood at 67 months - or five and a half years - at the end of 2017, according to… the Federal Reserve Bank of New York, having steadily risen since 2008."
May 3 - Bloomberg (Suzanne Woolley):
"American retirees are healthier and wealthier than ever. But wiser? A new report throws a little doubt on that notion. Money manager United Income analyzed data from sources, including the Federal Reserve Board, the U.S. Bureau of Labor Statistics, the Census Bureau, the Internal Revenue Service, and the Centers for Disease Control, to examine the changing the lives of American retirees. One of every six retirees in the U.S. is a millionaire (if you include the value of their homes), according to the new report. Their average wealth has risen more than 100% since 1989, to $752,000, and the share of those who are millionaires has doubled."
"American retirees are healthier and wealthier than ever. But wiser? A new report throws a little doubt on that notion. Money manager United Income analyzed data from sources, including the Federal Reserve Board, the U.S. Bureau of Labor Statistics, the Census Bureau, the Internal Revenue Service, and the Centers for Disease Control, to examine the changing the lives of American retirees. One of every six retirees in the U.S. is a millionaire (if you include the value of their homes), according to the new report. Their average wealth has risen more than 100% since 1989, to $752,000, and the share of those who are millionaires has doubled."
China Watch:
April 30 - New York Times (Keith Bradsher):
"China will refuse to discuss President Trump's two toughest trade demands when American negotiators arrive in Beijing this week, people involved in Chinese policymaking say, potentially forcing Washington to escalate the dispute or back down. The Chinese government is publicly calling for flexibility on both sides. But senior Beijing officials do not plan to discuss the Trump administration's two biggest demands: a mandatory $100 billion cut in America's $375 billion annual trade deficit with China and curbs on Beijing's $300 billion plan to bankroll the country's industrial upgrade into advanced technologies such as artificial intelligence, semiconductors, electric cars and commercial aircraft. The reason: Beijing feels its economy has become big enough and resilient enough to stand up to the United States."
"China will refuse to discuss President Trump's two toughest trade demands when American negotiators arrive in Beijing this week, people involved in Chinese policymaking say, potentially forcing Washington to escalate the dispute or back down. The Chinese government is publicly calling for flexibility on both sides. But senior Beijing officials do not plan to discuss the Trump administration's two biggest demands: a mandatory $100 billion cut in America's $375 billion annual trade deficit with China and curbs on Beijing's $300 billion plan to bankroll the country's industrial upgrade into advanced technologies such as artificial intelligence, semiconductors, electric cars and commercial aircraft. The reason: Beijing feels its economy has become big enough and resilient enough to stand up to the United States."
Global Bubble Watch:
April 30 - Financial Times (Robin Wigglesworth): "Investors are starting to see a pattern in the bond-equity relationship that could have profound and worrying implications for their portfolios. The rare combination of equity and bond prices falling at the same time has become more frequent of late. Since 2000 there have only been 57 trading days where the S&P 500 lost 0.5% or more and the 30-year US Treasury bond yield also rose 3 bps or more, according to Morgan Stanley. But there were a handful of such days in just the last month. While US stocks have regained their footing in April and inflation data out on Monday calmed the bond market, both the S&P 500 and Bloomberg Barclays Aggregate, a popular bond index, lost more than 1% in the first quarter - only the fourth time this has occurred in the past three decades."
May 3 - Bloomberg (Natalie Wong and Erik Hertzberg):
"Toronto home sales are off to the worst start in nine years, as tougher rules for mortgage qualifications and rising interest rates continue to push buyers out of the market. Sales fell for four straight months on a seasonally adjusted basis, with the fewest transactions to start a year since the 2009 recession…"
"Toronto home sales are off to the worst start in nine years, as tougher rules for mortgage qualifications and rising interest rates continue to push buyers out of the market. Sales fell for four straight months on a seasonally adjusted basis, with the fewest transactions to start a year since the 2009 recession…"
Fixed Income Bubble Watch:
April 30 - Wall Street Journal (Daniel Kruger):
"Foreign investors' appetite this year for U.S. debt hasn't grown at the same pace as the government's borrowing needs, which some analysts worry could push bond yields higher and eventually threaten to slow economic growth. Investors in a broad category known as 'indirect bidders,' which includes both mutual funds and foreign investors, have been winning the smallest percentage of the bonds they've bid for since 2011… The average percentage of the auctions won by this group fell for the first time since 2012, a decline some analysts attribute to both lower demand from investors outside the U.S. and their recent tendency to post less-aggressive bids. The behavior of these bidders is crucial for the ability of the U.S. to fund itself, at a time when the budget deficit is forecast to surpass $1 trillion by 2020 and remain above that level for the foreseeable future. Foreign investors currently hold about 43% of U.S. government debt, the lowest since November 2016…"
"Foreign investors' appetite this year for U.S. debt hasn't grown at the same pace as the government's borrowing needs, which some analysts worry could push bond yields higher and eventually threaten to slow economic growth. Investors in a broad category known as 'indirect bidders,' which includes both mutual funds and foreign investors, have been winning the smallest percentage of the bonds they've bid for since 2011… The average percentage of the auctions won by this group fell for the first time since 2012, a decline some analysts attribute to both lower demand from investors outside the U.S. and their recent tendency to post less-aggressive bids. The behavior of these bidders is crucial for the ability of the U.S. to fund itself, at a time when the budget deficit is forecast to surpass $1 trillion by 2020 and remain above that level for the foreseeable future. Foreign investors currently hold about 43% of U.S. government debt, the lowest since November 2016…"
May 3 - Bloomberg (Yakob Peterseil and Cecile Gutscher):
"The leveraged loan market just achieved something it hasn't been able to do since 2008 -- moved within $100 billion of the U.S. high-yield bond market. Fueled by demand from collateralized loan obligations and retail investors eager for protection against rising interest rates, the amount of leveraged loans outstanding has doubled since 2010 to more than $1 trillion, according to… Bank of America Merrill Lynch that cites S&P Global Market Intelligence data. There's around $1.1 trillion parked in high-yield bonds, which have increased by less than a quarter in the same period. 'While the syndicated loan market has been around since the turn of the century, its popularity has seen an unparalleled surge in this credit cycle,' BAML strategists Neha Khoda and Oleg Melentyev wrote…"
"The leveraged loan market just achieved something it hasn't been able to do since 2008 -- moved within $100 billion of the U.S. high-yield bond market. Fueled by demand from collateralized loan obligations and retail investors eager for protection against rising interest rates, the amount of leveraged loans outstanding has doubled since 2010 to more than $1 trillion, according to… Bank of America Merrill Lynch that cites S&P Global Market Intelligence data. There's around $1.1 trillion parked in high-yield bonds, which have increased by less than a quarter in the same period. 'While the syndicated loan market has been around since the turn of the century, its popularity has seen an unparalleled surge in this credit cycle,' BAML strategists Neha Khoda and Oleg Melentyev wrote…"
Geopolitical Watch:
May 3 - Reuters (Steve Holland and Arshad Mohammed):
"U.S. President Donald Trump has all but decided to withdraw from the 2015 Iran nuclear accord by May 12 but exactly how he will do so remains unclear, two White House officials and a source familiar with the administration's internal debate said… There is a chance Trump might choose to keep the United States in the international pact under which Iran agreed to curb its nuclear program in return for sanctions relief, in part because of 'alliance maintenance' with France and to save face for French President Emmanuel Macron… A decision by Trump to end U.S. sanctions relief would all but sink the agreement and could trigger a backlash by Iran, which could resume its nuclear arms program or 'punish' U.S. allies in Syria, Iraq, Yemen and Lebanon, diplomats said."
"U.S. President Donald Trump has all but decided to withdraw from the 2015 Iran nuclear accord by May 12 but exactly how he will do so remains unclear, two White House officials and a source familiar with the administration's internal debate said… There is a chance Trump might choose to keep the United States in the international pact under which Iran agreed to curb its nuclear program in return for sanctions relief, in part because of 'alliance maintenance' with France and to save face for French President Emmanuel Macron… A decision by Trump to end U.S. sanctions relief would all but sink the agreement and could trigger a backlash by Iran, which could resume its nuclear arms program or 'punish' U.S. allies in Syria, Iraq, Yemen and Lebanon, diplomats said."
May 2 - CNBC (Amanda Macias):
"China has quietly installed anti-ship cruise missiles and surface-to-air missile systems on three of its fortified outposts west of the Philippines in the South China Sea, a move that allows Beijing to further project its power in the hotly disputed waters… Intelligence assessments say the missile platforms were moved to the outposts in the Spratly Islands within the past 30 days, according to sources… The placement of the defensive weapons also comes on the heels of China's recent South China Sea installation of military jamming equipment, which disrupts communications and radar systems. By all accounts, the new coastal defense systems represent a significant addition to Beijing's military portfolio in one of the most contested regions in the world."
"China has quietly installed anti-ship cruise missiles and surface-to-air missile systems on three of its fortified outposts west of the Philippines in the South China Sea, a move that allows Beijing to further project its power in the hotly disputed waters… Intelligence assessments say the missile platforms were moved to the outposts in the Spratly Islands within the past 30 days, according to sources… The placement of the defensive weapons also comes on the heels of China's recent South China Sea installation of military jamming equipment, which disrupts communications and radar systems. By all accounts, the new coastal defense systems represent a significant addition to Beijing's military portfolio in one of the most contested regions in the world."
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