Connect with us

Economy

U.S. stocks rise on support from corporate profits, and the Dow Jones gains 314 points

Published

on

U.S. stocks rise on support from corporate profits, and the Dow Jones gains 314 points

U.S. stocks rise on support of corporate profits…and Dow Jones rises 314 points

On the first day of the week, far from the tragic events in the besieged Gaza Strip, US stocks resumed their rise, with corporate earnings reports expected to be released soon, about which there is generally great optimism.

By the end of Monday’s trading, major stock indexes recovered Friday’s losses as the Dow Jones Industrial Average rose 314 points, representing 0.93% of its value, and gave the world’s most popular index its best day since September.

The S&P 500 index rose 1.06%, while the Nasdaq index’s gains reached 1.20%, and eleven S&P sub-indexes for various sectors of the economy rose.

About 11% of the companies that make up the S&P index are preparing to report their results this week, led by Johnson & Johnson, Bank of America, Netflix and Tesla.

In Europe, stocks opened the week on a higher note on Monday, supported by gains in the financials and mining sectors, while investors resisted risk amid the possibility of escalating conflicts in the Middle East.

The European STOXX 600 index rose 0.2% in today’s trade close as mining and retail stocks led gains.

Israeli forces continued to bombard Gaza on Monday after diplomatic efforts to arrange a cease-fire to allow foreign nationals to leave and bring aid into the besieged Palestinian territory failed.

The volatility index of European stocks hit an eight-week high, Reuters said.

The mining index rose 1.8%, thanks to a rise in base metals prices and hopes for increased demand from China. The index’s gains were supported by a 2.4% rise in SSAB shares after JP Morgan raised its rating on shares of Swedish Steel. .

See also  Qatar's trade balance surplus narrowed to 19.6%

Shares in financial institutions rose 1%, with UBS shares up 1.9% after Canadian bank RBC raised its rating on Swiss bank shares. The British Financial Times Index rose 0.6%.

Concerns about the strength of the euro zone’s labor market and fears of conflict in the Middle East have kept investors on edge recently, although reports from Federal Reserve policymakers on monetary easing have eased some concerns.

Oil futures fell more than a dollar a barrel on Monday, on expectations that the United States will soon reach a deal with Venezuela to ease sanctions on its crude exports. The conflict between Israel and Palestinian resistance does not appear to threaten oil supplies in the short term, traders said.

Brent crude futures were down $1.24, or 1.4%, at $89.65 a barrel, while West Texas Intermediate crude futures were down $1.03, or 1.2%, at $86.66 a barrel.

Venezuela’s government and opposition said they would resume political talks this week after a nearly year-long hiatus, while the United States has reached a preliminary agreement to ease sanctions on Venezuela’s oil sector, according to reports. A Latin American country next year.

“The reported deal will help … boost the country’s oil production from record lows,” said William Jackson, senior emerging markets expert at Capital Economics.

He added: “But the sector needs massive investments to restore production to 10-year levels… This will not significantly affect the deficit in the global oil market in the near term.”

Both crude oil prices rose about 6% on Friday, the biggest daily gain on a percentage basis since April, as investors took into account the possibility that the scope of the conflict in the Middle East could widen.

See also  The dollar hit a 16-month low amid expectations of a US interest rate hike

On the week, Brent posted record gains and rose 7.5%, its biggest weekly gain since February, while West Texas Intermediate crude rose 5.9%.

John Gilduff, partner at Again Capital, said: “As of Monday, the impact of the conflict in the Middle East on crude oil supplies has been successful.”

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Economy

Oil loses 2% as investors worry about OPEC plus cuts

Published

on

Oil loses 2% as investors worry about OPEC plus cuts

Oil prices settled up more than 2% – yesterday, Friday – after a volatile trading week as the market anxiously watched the latest round of OPEC Plus production cuts and a slowdown in global production activity.

Brent crude futures for February delivery were down 2.45% at $78.88 a barrel, while US West Texas Intermediate crude futures were down 1.9% at $74.07.

For the week, Brent posted a decline of about 2.1%, while the West Texas Intermediate posted a decline of more than 1.9%.

On Thursday, oil-producing countries in the OPEC Plus alliance – which includes members of the Organization of the Petroleum Exporting Countries (OPEC) and other countries including Russia – agreed to cut global oil production by about 2.2 million barrels on the world market. per day in the first quarter of next year, including… extending current voluntary cuts by 1.3 million barrels per day from Saudi Arabia and Russia.

The OPEC Plus alliance – which accounts for more than 40% of the world’s oil – is focused on cutting production, with prices falling from around $98 a barrel in late September, amid fears of weaker economic growth in 2024.

A survey showed that the US manufacturing sector is still weak, with the factory employment rate falling last November.

On Friday, talks to extend a week-long ceasefire between Israel and the Palestinian Islamist movement (Hamas) collapsed, leading to renewed fighting in Gaza that could disrupt global oil supplies, Reuters reported.

See also  Tips for protecting your privacy online
Continue Reading

Economy

A private credit boom leads to a new crisis

Published

on

A private credit boom leads to a new crisis

If this is a “golden moment” for private lending, where will things go? What are the risks? Higher interest rates and turmoil in regional banks earlier this year have boosted confidence in the recovery of private credit. According to data provider Preqin, the market is expected to grow from $1.6 trillion to $2.8 trillion this year. BlackRock takes a more optimistic view, predicting the market will grow to $3.2 trillion.

Mark Rowan, CEO of private equity firm Apollo, sees “de-banking” in its early stages, while John Gray, chairman of BlackRock, coined the phrase “golden moment” to describe conditions in private capital at the start of the year. .

If the new banking rules under Federal Reserve regulations are considered a catalyst, capital requirements for the commercial banking industry in the US are likely to increase by up to 35%, according to Oliver Wyman, the world’s leading management consultancy. company — and no wonder Jamie Dimon said. , head of JP Morgan, said private lenders would be “very happy.”

How things develop in the market will be a key issue not only for large firms and banks in the private market, but also for traditional asset managers who have begun to use the capabilities of the private market to avoid the extreme rise of passive asset management. . This coincides with at least 26 traditional asset managers buying or launching new private credit units in the past two years.

This shift confirms the extent to which the structure of the financial market has changed. 20 years ago, when I was working at Morgan Stanley, I noted in a research paper that investor flows would split into barbells. On the one hand, investors would flock to passive, exchange-traded funds to get record returns. They are cheap and convenient. On the other hand, investors looking for higher returns will use asset allocation with specialist fund managers who invest in private equity, hedge funds and real estate. For traditional “major” fund managers, caught between the two, they will be pressured to make their investment machines more specialized or merge to increase their size, which has already been achieved.

See also  The dollar hit a 16-month low amid expectations of a US interest rate hike

According to ETFGI, ETFs have grown from $218 billion in 2003 to $10.3 trillion last October, but what’s surprising is how unbalanced the situation has become in terms of returns, with management fees likely to account for half of the investment sector. to alternative asset managers in 2023 from 28% in 2003.

Central banks are now scaling back their quantitative easing, which was implemented to support economies and markets, which has traditionally supported corporate profits. Without these tailwinds, the pressures on fund managers become more severe. So, how will the transition to private lending proceed?

Currently, Preqin estimates that just 10 companies have received 40% of private credit resources in the last 24 months. There are three reasons why private credit growth has disproportionately favored these large firms.

First, a good amount of growth is expected from the sale of investment portfolios by regional banks, which have to reduce their debt and are forced to sell good assets. The central bank’s new rules signal an inability for big banks to step up. In light of the large portfolio sizes and the speed required for transactions, the acquisition of these assets is a specialized venture that is in the interest of large companies that can underwrite the risks.

Second, a growing number of deals require more money, and August saw a new record for the largest loan, reaching $4.8 billion for fintech firm Finastra. The third and most important reason is that banks prefer to enter into partnerships so as not to lose access to customers. Even though tougher rules mean they have to divest assets, banks want to continue lending and partnering to help manage deal flows, which could benefit larger firms.

See also  Oil rises 3.5% in one week... Brent closes above $98 a barrel

Several major banks have already closed deals and more are expected to follow. Citi is the latest bank to report its intention to launch a new unit in 2024.

A changing interest rate regime will mean loan losses rise as funding costs normalize and exposed weak balance sheets, which will be a source of challenges for private lenders. It may be unwise for new companies to try to exploit the growth. This requires a strong focus on the risks and rewards of selection and contracts, and teams that specialize in reconciliation, which many of the major players in the market have.

Of course, there will be key opportunities, such as hard credit or energy infrastructure credit, that are places that efficient companies can tap into, but they may not be on the scale that traditional companies need to maximize opportunities.

In general, a complete and comprehensive shift in capital allocation awaits us, requiring a major shift towards private credit, as Howard Marks recently argued, but the coming tide will not smooth all boats.

Continue Reading

Economy

Demand for gold from central banks around the world continues to rise…banks bought 337 tonnes in the third quarter, bringing the total to 800 tonnes at the start of the year with a growth rate of 14%…selling only one. Tons in 9 months.

Published

on

Demand for gold from central banks around the world continues to rise…banks bought 337 tonnes in the third quarter, bringing the total to 800 tonnes at the start of the year with a growth rate of 14%…selling only one.  Tons in 9 months.


Islam Saeed wrote

Friday, December 1, 2023 06:30 PM

Communication Central banks Worldwide, demand for gold in 2023, according to reports World Gold CouncilIn gold trends in the third quarter, central banks’ demand for gold increased by 337 tonnes – the third largest purchase level in a quarter – but this was 459 tonnes less than what banks bought in the third quarter of 2022. tons

Since the beginning of the year, demand by central banks has increased by 14% year-on-year, reaching a new record level of 800 tonnes of gold.

Gold holdings reported by global central banks rose by a net 77 tonnes in September, as banks’ total sales of 78 tonnes were just 1 tonne, indicating strength in central banks’ gold purchases.

The World Gold Council showed that outflows from gold investment funds continued in October, but at a slower pace than in September, with outflows of $2 billion in October, the fifth consecutive monthly loss.

Since the start of the year, the funds’ investment holdings have declined by 6%, while the total value of assets managed by the funds has increased by 3% due to rising gold prices. Global outflows from gold-backed funds have reached US$13 billion since the start of the year. Equivalent to 225 tonnes of gold lost.

Gold neared a 6-month high in November on strong expectations in markets that the Federal Reserve has ended its interest rate hike cycle, and the time has come to set a date for a rate cut. Positive for gold prices.

See also  Tips for protecting your privacy online

Spot gold – at the time of writing the Gold Billion Technical Report – was trading at $2043 an ounce, up 0.4% after yesterday’s drop of 0.4% to a record low of $2031 an ounce.

In November, gold prices rose 2.6% to $53 an ounce, from a 6-month high of $2052 an ounce and a low of $1931.

Gold is on track to post a 2.2% gain this week, and prices are up around $43 an ounce, marking a third straight week of gains. October and November.

On the other hand, we see the US dollar post its biggest decline in a year in November, while the dollar index fell 2.9% to its lowest level in nearly 4 months. The Federal Reserve is holding off on raising interest rates, and it’s expected to start cutting interest rates in the first half of 2024.

As for the 10-year US government bond yield, it fell 12.3% in November to a nearly 3-month low of 4.247%, raising the prospect of gold gains due to its inverse correlation with gold. With bond yields, in addition to lower opportunity costs. As an alternative to gold, it does not provide income to its holders.

The current time frame sees the price of gold fluctuate below the resistance level of $2050 per ounce, before undergoing a negative correction in light of pressure on the price, before the price of gold reaches its all-time high targets of $2080 per ounce, then registers a target of $2100, and if the price breaks above the 2035 level, the dollar , until the 2025-2020 region, $ per ounce, after which the 2010 dollars support level will begin. ounce.

See also  Oil rises 3.5% in one week... Brent closes above $98 a barrel

Following are the key events that influenced the gold price movement last November:

– Demand for safe havens, including gold, in financial markets has weakened as the war in Gaza has not reached a current ceasefire.

– The consumer price index (a key inflation indicator) in the United States of America fell to 3.2% in October, beating expectations of 3.3% and the previous reading of 3.7%.

The core personal consumption expenditure index (the Fed’s preferred inflation gauge) fell in October, bringing the annualized rate to 3.5%, down from the previous reading of 3.7% expected.

– Moody’s Credit Rating Agency downgraded the US outlook to negative after holding it steady while keeping the credit rating at its highest Aaa rating.

Moody’s pointed to rising downside risks related to US credit and debt as the main reason for downgrading the outlook.

– Minutes from the Federal Reserve Bank meeting showed bank members maintaining a tight monetary policy and a willingness to raise interest rates further if necessary, but with more caution.

Reports from members of the Federal Reserve show that if inflation rates continue to fall for more than a month, the bank may abandon some of its monetary tightening policy.



Continue Reading

Trending

Copyright © 2023