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US-China trade war impact on cargo trade routes: SATS CEO Alex Hungate

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A reconfiguration of cargo routes is underway as the trade war between the U.S. and China spills over globally, a logistics industry executive said on Friday.

“We’ve definitely seen an impact in certain trade routes,” said Alex Hungate, president and CEO of airport ground-handler and catering solutions provider SATS.

While there are “strong flows” between countries in the Association of Southeast Asian Nations and China, trade volumes in Greater China — which includes mainland China, Hong Kong, Macau and Taiwan — are “softer,” Hungate told CNBC’s “Squawk Box.”

Listed on the Singapore Exchange, SATS operates in over 60 locations and 13 countries across Asia and the Middle East.

Overall, Greater China would be the most sensitive to the trade fracas, said Hungate.

Where air freight is concerned, Vietnam is a strong performer while trading hub Singapore is “holding up pretty well,” he said, adding that growth in India is also strong.

Hungate confirmed the phenomenon of “front-loading” — where exporters benefit from increased orders before tariffs hit — as he witnessed 300 Harley-Davidson bikes lined up at a freight terminal for shipping.

In October, Harley-Davidson Chief Financial Officer John Olin said the American motorcycle manufacturer was expecting to pay at least an additional $40 million this year to cover the costs of new tariffs across the world. Harley-Davidson is doing everything it can to minimize the impact of tariffs on its profits, he said.

Markets are now keeping their eyes on a much-touted meeting later this month between U.S. President Donald Trump and China President Xi Jinping at the G-20 in Buenos Aires, Argentina for any signs of easing tensions in the trade war.

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Christie’s to auction a pink diamond that could fetch $50 million  

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A Christie's staff holds a 18.96 carat Fancy Vivid Pink Diamond during a preview in Geneva, November 8, 2018. 

Denis Balibouse | Reuters

A Christie’s staff holds a 18.96 carat Fancy Vivid Pink Diamond during a preview in Geneva, November 8, 2018. 

Christie’s puts under the hammer next week the largest fancy vivid pink diamond that the famed auction house has ever sold, expecting to fetch $30 million to $50 million for the nearly 19-carat, rectangular-cut gemstone.

The “Pink Legacy” will be the standout offering at Christie’s fall jewelry auction in Geneva on Tuesday.

The stone once belonged to the Oppenheimer diamond family, and Christie’s says it qualifies as a Type IIa diamond — the most chemically pure stones with little if any nitrogen. It says fancy vivid pink diamonds over 10 carats are “virtually unheard of” in salesrooms.

Christie’s sale kicks off two days of jewelry auctions in Geneva. On Wednesday, Sotheby’s will auction jewelry once owned by French Queen Marie Antoinette that hasn’t been seen in public for 200 years.

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Ron Baron says Dow to hit 500,000 in 50 years, in line with Buffett

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Buy-and-hold billionaire Ron Baron predicted on Friday that the Dow Jones Industrial Average will reach 500,000 in the next 50 years.

Speaking from his annual investment conference in New York, Baron told CNBC the stock market reflects the economy. Therefore, he argued, if gross domestic product doubles every 10 years, so will the market.

Extrapolating that out, Baron said in a “Squawk Box” interview: “The Dow Jones in 50 years will be 500,000.”

Investors can expect on average to make 7 or 8 percent per year in the market, said the founder of Baron Capital. “The stock market is the best vehicle for most people to invest in.”

Baron’s prediction for Dow 500,000 pretty much lines ups with billionaire investor Warren Buffett‘s thinking. Last year, Buffett said he sees the Dow reaching 1,000,000 in 100 years.

The Dow closed on Wednesday at 26,191.

Baron, an ardent critic of buying and selling stocks based on headlines, told CNBC on Friday his firm makes billions of dollars by doing extensive research, and then making long-term investments in what he feels are undervalued companies.

Also like Buffett, Baron said index funds are one of the best places for individual investors to put their money.

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Oil drops for a 10th day, longest losing streak since 1984

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U.S. crude prices fell Friday for a 10th consecutive session, sinking U.S. crude futures deeper into bear market territory and wiping out the benchmark’s gains for the year.

The 10-day decline is the longest losing streak for U.S. crude since mid-1984, according to Refinitiv data.

Crude futures are poised for their fifth straight week of losses as growing output from key producers and a deteriorating outlook for oil demand deepen a sell-off spurred by October’s broader market plunge. The drop marks a stunning reversal from last month, when oil prices hit nearly four-year highs as the market braced for potential shortages once U.S. sanctions on Iran, OPEC’s third biggest oil producer, snapped back into place.

“The market’s not tight. I think there are windows where you could perceive it to be tight, and I think the markets got caught into that,” Christian Malek, head of EMEA oil and gas research at J.P. Morgan, told CNBC on Friday. “The reality is that we’re still in a world where we’re overproducing and we’ve got surplus.”

U.S. West Texas Intermediate crude fell 66 cents, or 1.1 percent, to $60.01 by 12:22 p.m. ET. The contract is now down nearly 1 percent this year. It fell as low $59.26 on Friday, its weakest level in nearly nine months.

WTI fell into a bear market in the previous session, tumbling more than 20 percent from a nearly four-year high last month at $76.90.

International benchmark Brent crude was trading 65 cents lower at $70, down 19 percent from its recent high. The contract touched a seven-month low at $69.13 on Friday.

Brent has fallen in nine of the last 10 sessions, but is still up almost 5 percent this year.

Oil prices spiked in early October on fears that U.S. sanctions on Iran would thin out global petroleum supplies. However, the Trump administration granted temporary sanctions exemptions to eight countries, allowing Iranian crude exports to continue and easing concern about undersupply.

Analysts now expect the loss of exports from Iran to be less severe than anticipated.

Meanwhile, the world’s top three producers, the United States, Russia and Saudi Arabia are also pumping at or near records. Other OPEC members and exporting nations are also turning on the taps.

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