Month: May 2015

Europe is emerging ‘out of the woods’: OECD

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Rate hike appropriate this yr if economy improves: Yellen

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

A US interest rate hike will be appropriate this year if the economy improves, Fed Chair Janet Yellen said on Friday.

The central banker, who delivered a speech to the Greater Providence Chamber of Commerce, said that the pace of increases will be gradual, and that it will take several years for rates to normalize. Still, she said her expectations indicate that a rate increase may occur this year.

“If the economy continues to improve as I expect, I think it will be appropriate at some point this year to take the initial step to raise the federal funds rate target and begin the process of normalizing monetary policy,” she said. “To support taking this step, though, I will need to see continued improvement in labor market conditions, and I will need to be reasonably confident that inflation will move back to 2 percent over the medium term.”

Yellen acknowledge recent economic sluggishness, but said that the first-quarter slowdown was largely transitory. She added that she expects US economic data will improve.

The Fed chair predicted moderate growth this year and beyond, explaining that economic headwinds are waning.

US stocks moved slightly higher after headlines from Yellen’s speech.

Turning to the labor market, Yellen said it is “approaching full strength,” and that unemployment should fall to near 5 percent by the end of the year.

She cited the fact that more are quitting their jobs as evidence that people have “greater confidence in their ability to find a new job.”

Still, Yellen said continued low wage growth shows that the labor market is “not fully healed” despite unemployment approaching its long-run level.

“Higher wages raise costs for employers of costs, but they also boost the spending and confidence of consumers, and would signal a strengthening of the recovery that would ultimately be good for business,” she explained, adding “nationally there’re at least some encouraging signs of a pick up so far this year.”

Read More: Why traders were watching Yellen’s speech

Pointing to highly publicized wage increases at Target and Wal-Mart, Yellen said this news “also might be a sign that larger wage gains are on the horizon.”

Hours ahead of her speech inflation showed a flicker of life, with the consumer price index, once stripped of volatile food and energy components, recording a 0.3 percent rise in April.

Though the Fed uses another measure for its 2 percent target, the CPI report on Friday showed prices increasing across a broad set of items.

Yellen did not appear to give much consideration to that report in her address, saying that inflation remains below the Fed’s target, and predicting that it will rise as the economy strengthens and temporary factors recede.

The central banker did acknowledge, however, that weak growth abroad has weighed on the US economy, but she said that Europe appears to be on firmer footing.

Read More: US consumer prices soft, underlying inflation pushes up

“The tone of the speech is that we’re still data-dependent and the progress so far in the economy does not justify an immediate move,” Paul Christopher, chief international strategist at Wells Fargo.

Advisors, told Reuters. “She’s mentioning the international economy by way of reinforcing her point that there’s still plenty of weakness perceived or possible around the world.”

The Fed has kept rates near zero since 2008 and bought USD3.5 trillion in bonds to pull the economy from a recession that had sent joblessness as high as 10 percent.

Unemployment has now been cut almost in half and runs near estimates of full employment, and monthly jobs growth so far this year has averaged 194,000. On Thursday, unemployment claims reinforced the labor market’s resilience.

Read More: Fed minutes can hinder policy debate: Willams

While inflation is below target, oil prices are off their lows and the soaring dollar has come down from peaks scaled in March, which should support US  prices.

To be sure, the harsh winter, strong dollar, a seaport labor dispute and cuts in energy-sector spending could show the economy actually contracted in the first quarter after preliminary data said it grew by a puny 0.2 percent. Some of that gloom lingers on, with unexpected weakness in consumer spending, business investment, and a growing trade deficit fueling concerns that the Fed’s “liftoff” could be pushed back, possibly until sometime next year.

A New York Fed survey of primary dealers showed the majority still expected the central bank to raise rates this year, but expectations shifted toward September and December compared with the previous February poll where still nearly a third bet on a June liftoff.

—Reuters contributed to this report.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Draghi: Growth is ‘too low everywhere’ in Europe

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

European Central Bank head Mario Draghi said that “growth is too low everywhere” in the 19-country eurozone despite a modest recovery.

Draghi made the blunt remark as he opened a conference on the unemployment problem plaguing several of the European Union member countries that share the euro currency.

“Recently, economic conditions have improved somewhat in Europe,” he said at the ECB’s conference on inflation and unemployment in Sintra, Portugal. “But growth is too low everywhere.”

He said that inflation was too low — a sign of economic weakness — and that “people in Europe are frustrated by the lack of growth they have witnessed in recent years.”

Read More: ECB controversy over speech that sank the euro

Draghi’s remarks come as the eurozone shows increasing signs of recovery. The economy grew 0.4 percent in the first quarter, and growth this year may be strong enough to start whittling down an unemployment rate of 11.3 percent, economists say.

Still, it could take years to achieve a significant reduction in the jobless rate, which remains painfully high in the weaker member countries. Youth unemployment is 50 percent in both Greece and Spain.

Draghi’s growth call was echoed by a top US Federal Reserve official at the conference. Fed Vice Chair Stanley Fischer said the euro’s crisis has led to new institutions such as EU-level banking supervision and procedures to wind up bad banks to spare taxpayers the costs of bailouts.

Fischer said the euro appeared to have weathered the current crisis but warned that “in the longer run,” the monetary union “will not survive unless it also brings prosperity to its members.”

US officials have pressed Europe to tackle its growth problem. The eurozone remains a key market for many US firms and its health is an important factor for the global economy.

Read More: Greek crisis talks as Tsipras, Merkel meet

The eurozone has struggled with a crisis over too much government and bank debt since Greece reported its deficit was out of control in 2009. Greece, Portugal, Ireland, and Cyprus have been bailed out by other members, and Spain got a bailout for its banks.

European governments are facing lower than desired growth and high unemployment as they restrain spending to try to reduce debt. Governments such as those in France and Italy are struggling to make their economies more business-friendly.

Fischer said that recent measures taken to strengthen the 16-year-old euro — such as EU level supervision carried out by the ECB — would probably not have been agreed on by political leaders without the euro crisis.

But he said that the union faced further challenges, such as the lack of a common budget. Leaving budget decisions to individual governments risks overspending by some. It also deprives the union of a common fiscal pot to even out recessions in individual countries.

“The decision to use the single currency to drive the European project forward was a risky one, and at some stage or probably in several stages, it will be necessary to put the missing fiscal framework into place,” Fischer said.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Morgan Stanley explains why Apple could rise 50%

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asia mostly higher, but Nikkei lags ahead of BOJ decision

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Japanese shares opened flat as investors await the latest policy decision from the Bank of Japan (BOJ), while other bourses in the region tracked their US peers higher on the final trading day of the week.

The BOJ is expected to maintain its expansionary monetary stimulus at the conclusion of its two-day meeting on Friday. The central bank kept policy steady last month, but cut its forecasts for economic growth and inflation in its outlook statement.

Overnight, US stocks finished modestly higher, with the S&P 500 settling at a record high amid slightly lower bond yields and as investors read mixed economic data as a sign that interest rates could stay lower for longer.

The S&P 500 added 0.23 percent to 2130.82, topping its previous record close of 2129.20 and posting its 10th record closing high for the year. Led by robust gains in Apple and Amazon shares, the tech-heavy Nasdaq notched up 0.4 percent, while the Dow Jones Industrial Average ended unchanged.

Nikkei flat

Japan’s Nikkei 225 index was off to a cautious start ahead of the BOJ decision. A weaker yen trading at 121.04 against the US dollar, compared to 120.3 in the previous session, did little to lift sentiment.

Early-trade laggards include exporters and banking counters. Canon slumped 2 percent, while Nintendo and Sony fell 1.4 and 1.6 percent, respectively.

Meanwhile, Shinsei Bank and Mitsubishi UFJ Financial Group shed 0.4 and 0.3 percent, respectively.

ASX gains 0.4 percent

Australia’s S&P ASX 200 index got a lift from resources plays, which climbed in tandem with firmer commodity prices.

After crude oil prices gained 3 percent overnight, Oil Search and Santos opened up more than 2 percent each, while Woodside Petroleum climbed 1.8 percent. Miners also cheered higher iron ore prices; Rio Tinto and BHP Billiton elevated 1.2 percent each while Fortescue Metals added 0.9 percent to Thursday’s 2.4 percent rally.

By contrast, retailer Oroton slumped 22.27 percent after sounding a profit warning before the market open.

Kospi adds 0.3 percent

South Korea’s Kospi index edged up ahead of a long weekend. The Seoul bourse will be closed on Monday for a public holiday.

Outperforming the bourse, Hyundai Heavy Industries and Hyundai Mipo Dockyard rose 2.6 and 3.2 percent, respectively, on the back of upbeat analyst expectations for new ship orders and growth in operating profit.

SK Telecom, the country’s top mobile carrier, advanced nearly 1 percent after seeing a record number of new user sign-ups for its new rate plan. The data-focused plan offers unlimited calls and text messages, with charges based solely on the amount of downloaded data.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Tech bubble deflating? Maybe just a bit

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Disruptive digital tech threat keeps me awake: Uday Kotak

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Guess who’s back? The US Dollar shines

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asian equities open mixed; China flash HSBC PMI eyed

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Asian equity markets opened mixed on Thursday, as an uninspiring finish on Wall Street overnight and data due out of China kept investors on edge.

China flash Markit/HSBC purchasing managers’ index (PMI) for May, scheduled for release at 0945 SIN/HK, is estimated to come in at 49.3, according to a Reuters poll, signalling that the Asian economic giant’s massive factory sector remains in contraction.

The forecast is slightly above the final HSBC reading of 48.9 in April, but below China’s official print at 50.1 last month. The 50-point line demarcates expansion from contraction.

Overnight, US stocks failed to hold record levels and finished narrowly mixed after Fed minutes mostly confirmed market expectations for a rate hike later this year. As a result, the Dow Jones Industrial Average shed 0.15 percent, while the S&P 500 and the tech-heavy Nasdaq ended nearly flat.

Nikkei gains 0.4 percent

Japan’s Nikkei 225 scaled a 15-year peak of 20,264 points, with a weaker yen overnight helping sentiment. In early Asian trade, the US dollar was fetching 121.14 yen.

The Tokyo bourse got a boost from the country’s upbeat first-quarter growth figures on Wednesday, hitting 20,278 points during intra-day trade, marking its highest level since end-June 2000.

Exporter plays were mostly buoyant; Panasonic jumped more than 2 percent, while Suzuki Motor and Nikon advanced 0.5 percent each.

Meanwhile, the Bank of Japan kicks off its two-day policy meeting on Thursday.

ASX adds 0.2 percent

Australia’s S&P ASX 200 index ticked up in early trade amid mixed trading among banking and resources heavyweights.

Within the financial sector, Macquarie Group added 0.2 percent at the open, while National Australia Bank led declines among the major lenders with a slump of nearly 1 percent.

Major miners appeared to shrug off a 2.4 percent drop in iron ore prices overnight; Rio Tinto and BHP Billiton opened up 0.7 and 0.5 percent, respectively, while Fortescue Metals slipped 0.2 percent.

Outperforming the bourse, building products group James Hardie Industries leaped 12.6 percent after reporting a 12 percent rise in full-year profit.

Kospi flat

South Korean shares hovered near Wednesday’s three-week closing high as its top weighted stocks saw a lackluster open.

Following a two-day rally, Samsung Electronics eased 0.2 percent, while Hyundai Motor and Shinhan Financial receded 0.6 and 1.5 percent, respectively.

However, tech stocks helped to cap losses. SK Hynix opened up 0.9 percent, while LG Display and LG Electronics ticked up 0.3 and 0.2 percent, respectively.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Nikkei hits nearly 4-week high after strong Q1 GDP

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

In Japan, a better-than-expected gross domestic product (GDP) for the first three months of 2015 delivered a boost to its stock market early Wednesday, while other bourses in the region mirrored the mixed finish on Wall Street overnight.

Asia’s second-largest economy expanded an annualized 2.4 percent from the previous quarter, beating expectations for growth of 1.5 percent, indicating that Japan may be headed toward a path of steady growth.

Overnight, Wall Street handed over a mixed lead amid renewed gains in bond yields and the dollar. Investors were also retreating to the sidelines ahead of the Federal Reserve meeting minutes due on Wednesday, analysts say.

While the blue-chip Dow rose marginally to a second straight record high, the Nasdaq Composite slipped 0.17 percent and the S&P 500 stepped slightly into the negative territory, a day after clinching its third consecutive record high.

Meanwhile, stock markets in Europe surged 1.7 percent following dovish comments by an executive member of the European Central Bank (ECB). Benoit Coeure, a member of the ECB’s Executive Board, hinted that the central bank is ready to “front-load” its current quantitative easing (QE) program.

Nikkei rises 0.8 percent

Japan’s benchmark Nikkei 225 cheered the encouraging GDP print by climbing to a nearly four-week high of 20,176. The Tokyo bourse hurled itself over the 20,000 mark on Tuesday for the first time in nearly three weeks.

Gainers were led by financials and consumer-related plays. Food company Nisshin Group topped the leaderboard with a rise of 5.05 percent, while cosmetics brand Shiseido surged 4.9 percent. Major banks such as Sumitomo Mitsui Financial Group and Resona Holdings rose 2.6 and 1.8 percent, respectively, while Nomura Holdings charged up 1.7 percent.

Investors continue to cheer news of share buybacks; Askul jumped 13.6 percent, while Konica Minolta elevated 2.9 percent.

Shares of Takata Corp slumped as much as 10.8 percent after the Japanese air-bag manufacturer announced plans on Tuesday to double a recall of defective air bags to nearly 34 million vehicles. According to the U.S. authorities, that would mark the largest automotive recall in American history.

ASX drops 0.5 percent

Australia’s S&P ASX 200 index dipped to a nearly two-week low, stung by steep losses in the resources sector.

Santos lost 4.3 percent, while Woodside Petroleum and Oil Search tanked 1.3 and 2.6 percent, respectively, after crude oil prices settled down 3.65 percent at USD 57.26 a barrel overnight. Iron ore miners also extended losses, with Fortescue Metals and BHP Billiton down 7.7 and 3.6 percent, respectively.

The banking sector, which accounts for nearly 30 percent of the Sydney bourse, also kicked off trade on the back foot. National Australia Bank and Westpac Banking led losses by losing 0.9 percent each.

Despite a jump in a measure of Australia’s consumer sentiment, retailers nursed losses across the board. Myer and JB Hi-Fi retreated 2.4 and 0.4 percent, respectively.

Kospi adds 0.4 percent

South Korea’s Kospi index edged up in early trade, as its top-weighted stock Samsung Electronics and carmakers attracted hefty buy orders.

Samsung rallied 1.6 percent, while Hyundai Motor and Kia Motors advanced 0.6 and 1.4 percent, respectively.

GS Engineering & Construction (GS E&C) receded nearly 3 percent after the builder called off a USD 1.41 billion order to build petrochemical plants in Kazakhstan.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow