Powell Ratchets Up Concern on US Fiscal Path
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Fed Chair Jerome Powell and US Treasury Secretary Janet Yellen express rising concerns over US debt. Powell's recent comments suggest an evolution in his views on the US fiscal path. The article highlights the dissonance in comments between Powell and Yellen from one year ago. Contact information for feedback and tips is provided.
#UsDebt #JeromePowell #JanetYellen #FiscalPath
https://www.bloomberg.com/news/newsletters/2024-02-07/powell-ratchets-up-concern-on-us-fiscal-path
A Soft Landing for the US Economy Could Slip Away
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Businesses and consumers can withstand overly restrictive borrowing costs for only so long. Stocks and bonds rallied at the end of last year on the hope of a seemingly improbable combination of dynamics playing out to support financial assets in 2024 — cooling inflation, solid economic growth, a resilient labor market, and as much as 150 basis points of interest-rate cuts. Economic growth to start the year, but some recent data and comments from Fed Chair Jerome Powell have made that nirvana-like set of conditions less probable. A couple of key business sentiment measures have raised the possibility that a pickup in production could fuel a pickup in inflation. At the same time, Powell has said that the Fed wants further evidence of a sustainable easing in price pressures before cutting rates.
Athens Airport Stock Rises in Debut on Greek Stock Exchange
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Athens International Airport SA jumped 15% at the start of trading on the Athens Stock Exchange, in the country’s biggest initial public offering in more than two decades. The stock began trading at €9.4 a share, compared to the IPO price of €8.2, the high end of the initial range.
#AthensAirport #GreekStockExchange #InitialPublicOffering #StockMarket
Biden Wins Nevada Democratic Primary, AP Says
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Joe Biden has won the Nevada Democratic primary, according to the Associated Press. He faced no serious challenger in the first battleground state contest of the 2024 cycle. Biden focused on appealing to Nevada's Black and Latino voters and criticized Republican Party frontrunner. He won Nevada by two percentage points in 2020.
https://www.bloomberg.com/news/articles/2024-02-07/biden-wins-nevada-democratic-primary-ap-says
Sovereign Debt Ratings Keep Proving Worthless
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Greece's Hellenic Republic debt has delivered a return of 14% over the past years, the highest among sovereign borrowers with investment-grade credit ratings. Greece was only upgraded to BBB- by S&P Global Ratings in October, demonstrating the futility of using traditional ratings of creditworthiness. Greece raised money at a lower cost than investment-grade rated countries on average. Market prices show Greece would be able to borrow right now at an interest rate about 18 basis points less than countries rated AA.
#SovereignDebt #CreditRatings #Greece
https://www.bloomberg.com/opinion/articles/2024-02-07/sovereign-debt-ratings-keep-proving-worthless
Made in America May Be Stamped on China Stimulus
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Beijing is closely watching the Federal Reserve's moves as they may hold the key to a successful recovery in China's economy. China's efforts to boost its economy have been met with disappointment, with initiatives being cautious and vague. The country has limited room to maneuver without a decisive shift by the Fed, as officials fear weakness in their currency. The People's Bank of China can make small cuts in borrowing costs, but the effect is likely to be muted. Punitive measures, such as tightening trading restrictions, will only sap confidence.
#China #Economy #Stimulus #FederalReserve #InterestRates
Biden’s Economic Woes Look a Lot Like Another President’s
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Joe Biden's approval rating is in the high 30s, and people are angry about the country's recent economic turmoil, including inflation. His opponents have seized on his advanced age as an electoral liability. The article compares Biden's economic problems in the 2024 election to Ronald Reagan's in 1984. Reagan faced similar challenges with a low approval rating and a struggling economy. The article suggests that Biden's reelection campaign may face similar difficulties.
Stock Market Today: Dow, S&P Live Updates for February 6 - Bloomberg
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Chinese shares rallied after authorities intensified rescue efforts, defying broader weakness in Asia as hopes ebbed for a swift Federal Reserve pivot toward policy easing. The Hang Seng Index rose 2% while the mainland benchmark of CSI 300 was up 1.8%. The gains came after Beijing took more steps to stem a stock rout, such as widening trading curbs on investors including quantitative funds. A move by the nation’s sovereign wealth fund to further increase holdings of exchange-traded funds also lifted investor mood.
#StockMarket #Dow #S&p #China #FederalReserve
https://www.bloomberg.com/news/articles/2024-02-05/stock-market-today-dow-s-p-live-updates
Five Things You Need to Know to Start Your Day: Asia
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China tightens trading restrictions on domestic institutional investors and some offshore units to stem the rout in stocks. Caps are imposed on some brokerages' cross-border total return swaps with clients, limiting a channel used by China-based investors to short Hong Kong stocks. Chinese brokers using the channel to buy mainland shares for their offshore units are told not to reduce their positions. Investors are withdrawing cash from US-listed ETFs tracking Chinese stocks.
What Economic Models Say About the 2024 Presidential Election
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Two prominent economic models offer a somewhat better view for President Joe Biden's reelection campaign against Donald Trump. While polls generally paint a grim picture for Biden, the economic models provide some optimism for the incumbent.
Balancing Trade with China
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Eswar Prasad, Cornell University Senior Professor of International Trade Policy, discusses the current balance of trade between the US and China. He explains that the Trump tariffs on China have continued under President Biden, leading to a decrease in imports from China. The trade deficit with China is likely to show the smallest goods trade deficit relative to US GDP in the last 20 years. However, it is unclear whether imports from China have fallen or if they have been diverted through other countries. Prasad also addresses the differences between Trump and Biden's trade policies and the potential effects of a 60% tariff on goods from China. He mentions that the uncertainty surrounding trade policy creates challenges for investors and businesses, both foreign and domestic. Prasad notes that while there may be opportunities in China's economy, there is a significant amount of uncertainty in every dimension. He also discusses the potential winners in the context of deteriorating trade relations between the US and China, highlighting countries such as India, Vietnam, and Mexico that have more open trade relationships with the US. Prasad concludes by emphasizing the need for policies that restore confidence in China's economy and direction.
#Trade #Us #China #Tariffs #Imports #TradeDeficit #Investment #Uncertainty
https://www.bloomberg.com/news/videos/2024-02-05/balancing-trade-with-china
US, China Officials to Meet in Beijing, Furthering Economy Talks
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US and Chinese officials will hold talks on economic issues in Beijing this week. A five-person delegation from the US Treasury will meet Chinese counterparts as part of the 'economic working group' established last year. The discussions will cover topics including the macroeconomic outlook, investment-screening regimes, and coordination on debt and climate change.
#Us #China #Economy #Talks #Beijing
US Economy Is Remarkably Strong Compared to Europe, OECD Economist Says
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The US economy is showing "remarkable strength" compared with Europe, according to OECD Chief Economist Clare Lombardelli. The OECD revised up its forecasts for US growth next year while cutting expectations for most of the euro area. Lombardelli attributes the weaker European economies to the tightening of monetary conditions and the shocks of the energy price surge in recent years. The euro area is now expected to expand only 0.6% in 2024.
#UsEconomy #Europe #Oecd #EconomicGrowth
Axa’s Thomas Buberl Wants to ‘Scale Up’ Corporate Business
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Axa SA's CEO Thomas Buberl plans to 'scale up' the firm's business insuring corporate risks in the next phase of growth. The company has shifted its focus from life insurance to property & casualty and health insurance to make it less sensitive to financial markets. Buberl expects more claims in the marine and aviation industry as geopolitical crises multiply. Axa is expected to unveil a new strategic plan later this month.
#Axa #ThomasBuberl #CorporateBusiness #Insurance #Property&Casualty #HealthInsurance #GeopoliticalCrises
Bloomberg Daybreak: Asia 02/05/2024
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The article discusses the recent market developments and policy responses in Asia. It mentions the US strikes on Iraq, the expectations around the Fed's rate cuts, and Beijing's pledge to stabilize its local stock market. It also covers the weak Chinese economy, the deflationary cycle, and the potential impact of additional trade tariffs. The article highlights the need for policy collaborations, including monetary and fiscal easing, to address the challenges faced by the Chinese economy. The market volatility and concerns about forced liquidation of pledged shares are also discussed. Additionally, the article mentions the flow of funds into foreign stock ETFs as investors seek alternatives to the onshore market.
#Asia #MarketDevelopments #PolicyResponses #UsStrikes #FedRateCuts #Beijing #ChineseEconomy #DeflationaryCycle #TradeTariffs #ForcedLiquidation #ForeignStockEtfs
https://www.bloomberg.com/news/videos/2024-02-05/bloomberg-daybreak-asia-02-05-2024
Atlantic Council's Wechsler on US Strikes Against Houthis
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William Wechsler, Senior Director of the Rafik Hariri Center & Middle East programs at the Atlantic Council, discusses the US strikes against Iran's forces and its proxies in the Middle East. The goal of the strikes is to reestablish deterrence that has been lost in recent months. The success of reestablishing deterrence depends on the actions of Iran, its partners, and its proxies. Iran does not want a regional war because it would lose, and the US does not want a regional war because it would be devastating for the region and put US interests at risk. However, there is a potential for misunderstanding and escalation once the bombs start dropping. Iran and its proxies have a history of steadily escalating and waiting to be pushed back. The US and Iran are likely to have tough rhetoric in an election year, but the most important thing is the ongoing diplomatic discussions led by Secretary Blinken in the region. The US is trying to create a new relationship between the US, Saudi Arabia, and Israel, which is a worst-case scenario for Iran. The US and its allies have the ability to support Ukraine, support Israel, and protect their own interests in the region simultaneously. The conflict in the Middle East raises the threat of a wider regional war, but both the US and Iran want to avoid that outcome. The US and Iran are unlikely to shift their relations significantly this year, as Iran sees 2024 as an opportunity to push the US out of the region. The US and its allies have the ability to walk and chew gum at the same time, supporting multiple fronts and protecting their interests. The ongoing diplomatic discussions aim to broker a ceasefire and create a new geopolitical sentiment in the region. The US wants to end its forever war, but the conflict in the Middle East and the ongoing war in Gaza raise the risk of a broader regionalization. Hamas has not yet accepted a significant deal on the table for a ceasefire, but the ball is in their court. The conflict in the Middle East has humanitarian consequences, and a ceasefire could be achieved if Hamas wanted to.
#UsStrikes #Iran #MiddleEast #Deterrence #RegionalWar #Diplomacy #Ceasefire #Geopolitics
Powell Tells ‘60 Minutes’ Fed Is Wary of Cutting Rates Too Soon
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Federal Reserve Chair Jerome Powell said Americans may have to wait beyond March for the central bank to cut interest rates as officials look for more economic data to confirm that inflation is headed down to 2%. In an interview with CBS’s 60 Minutes, Powell explained the central bank’s rationale for eventual reductions to a broad public audience. He emphasized the need for more time to see if the recent good economic readings are a true indicator of where inflation is heading. Powell stated that the Federal Open Market Committee is unlikely to reach a level of confidence about inflation's path by its March meeting. He also mentioned that policymakers do not factor politics or elections into their policy decisions. The interview provided Powell an opportunity to communicate to a broader audience just days after the Fed's decision to hold interest rates unchanged. Treasuries fell across all maturities in Asia as Powell's comments underscored the likelihood that bond investors had overshot in pricing for rapid rate cuts.
#JeromePowell #FederalReserve #InterestRates #Inflation #EconomicData
An Economic Revolution Comes Late Down Under
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The Reserve Bank of Australia (RBA) is implementing a reform to hold press conferences after rate decisions, a practice that is common for central banks globally but was resisted by the RBA. This marks a significant change for the RBA, which had fallen behind best practices in communication. The new governor, Michele Bullock, will make her debut press conference following a rate decision on Tuesday. The RBA's move to embrace communication reflects the growing importance of talk as a critical part of monetary policy.
#ReserveBankOfAustralia #CentralBank #MonetaryPolicy #Communication #PressConference
Pennsylvania Supreme Court Takes Aim at Politics of Cruelty
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The Pennsylvania Supreme Court directed a lower court to consider a challenge to the state's 1982 prohibition on Medicaid funding for abortions in cases other than rape and incest. The 3-2 decision was seen as an invitation to declare the ban a violation of the state's Equal Rights Amendment. Texas, where abortion is effectively banned, leads the nation in pregnancies resulting from rape. Texas Governor Greg Abbott's comment dismissing concerns about women forced to bring a rapist's fetus to term is criticized after over 26,000 pregnancies resulted from rape.
#Abortion #PennsylvaniaSupremeCourt #MedicaidFunding #EqualRightsAmendment #Texas #Rape
NYC, LA, Dallas to Learn Which Will Host World Cup Final in 2026
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FIFA will unveil the match schedule for the 2026 World Cup on Sunday, including the location of the final. New York, Los Angeles, and Dallas are the top contenders to host the final. New York's MetLife Stadium, Dallas' AT&T Stadium, and Los Angeles' SoFi Stadium are the potential venues. The final decision will be announced by FIFA President Gianni Infantino. The US will host the later rounds of the tournament, while Canada and Mexico are co-hosting the 2026 World Cup.
#Fifa #WorldCup #2026 #NewYork #LosAngeles #Dallas