29 October 2018 FT — Articles to Read

29 October 2018


Question: According to MSN: Money, what are six (6) things you should know about a stock market correction?


Banks urged to ready for no-deal Brexit – Pg. 2

–        …lenders should not expect regulators to help them cope with any upheaval caused by the UK’s departure

–        …banks should not expect any leeway in meeting a key regulatory standard set by the agency

–        If Britain leaves the EU without an exit deal, bank bonds issued under UK law will no longer be eligible as MREL unless banks insert contractual clauses to make clear that the SRB can wipe out the securities.  Failing this, banks could issue extra debt to meet their target


Cornell halts China university ties over student crackdown – Pg. 4

–        Cornell University in the US has suspended two academic exchanges and a research programme with China’s Renmin University because of concerns over academic freedoms.  It is the first time in years that a foreign university has halted a partnership with a Chinese counterpart for such reasons


US retail rents pushed to post-crisis highs – Pg. 16

–        Landlords have pushed rents for US retailers to post-crisis highs in spite of the competitive onslaught from Amazon, with asking figures in hotspots rising beyond 10% in the past year

–        The 4% average rise, to be disclosed by CBRE, the property broker, this week, is the latest sign that confidence in bricks and mortar stores is recovering, especially in better-off areas, ahead of the Christmas season

–        Supply has begun to tighten even in shopping malls, a sector particularly hard hit by closures among anchor tenants such as Macy’s and JCPenney

–        The proportion of mall units vacant or coming up for lease declined for the first quarter in seven to 5.8%

–        Miami breached the $30 per square foot level in the third quarter, up 14% form a year ago.  Average asking prices for retailers rose 13% in booming Oakland, California, and 12% in Jacksonville, an emerging financial centre in Florida

–        Nationally, the rate of year-on-year growth cooled from 5% in the second quarter

–        Limited new supply is also making it harder for retailers to secure units in popular markets.  Fewer than 6m sf of retail space was built in the third quarter, a new post-crisis low and a decline from 42m in the same period in 2007


Answer: (1) Stock market corrections happen often; (2) Stock market corrections rarely last long; (3) We can’t predict what will cause a stock market correction; (4) Stock market corrections only matter if you’re a short-term trader (Prof Note: Absolutely UNTRUE!  For example, if one’s portfolio is collateralizing a loan that is callable based on portfolio value, a correction could be very concerning); (5) They’re a great time to buy high-quality stocks at a bargain; (6) They’re also a good reminder to reassess what you own