Real US household income rose in 2023 for first time in four years
==========

Real US household income increased by 4% in 2023, the first annual gain since 2019; median income reached US$80,610 compared to US$77,540 in 2022; incomes remain US$600 lower than in 2019; White households saw income increases while Black, Asian, and Hispanic families saw no significant change; real median earnings for full-time working men rose twice as fast as women; official US poverty rate fell to 11.1%, while supplemental poverty measure rose to 12.9%; economic issues are central in the presidential election campaign with Vice President Kamala Harris proposing tax credits and lower prescription drug costs, while Donald Trump blames the Biden Administration for high living costs.

#UsEconomy #HouseholdIncome #PovertyRate #Inflation #2023 #PresidentialElection #KamalaHarris #DonaldTrump #CensusBureau #IncomeReport

https://theedgemalaysia.com/node/726266


US small business sentiment ebbs in August amid rising uncertainty
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US small-business confidence fell in August 2024, with the National Federation of Independent Business (NFIB) reporting a 2.5 point drop in the Small Business Optimism Index to 91.2; this follows a surge in July to the highest level since February 2022. The Uncertainty Index rose two points to 92, the highest since October 2020, amid concerns over the upcoming Nov 5 presidential election and weak sales expectations. Economists noted that small business sentiment may be influenced by political factors, particularly with the tight contest between President Joe Biden and Republican candidate Donald Trump. The net share of businesses expecting higher inflation-adjusted sales volumes fell nine points to -18%. Forty percent of owners reported unfilled job openings, primarily in skilled positions within transportation, construction, and manufacturing. Plans for job creation declined, while capital investment intentions increased. The Federal Reserve is expected to cut interest rates by 25 basis points next week, following a year of maintaining rates between 5.25%-5.50%.

#SmallBusiness #OptimismIndex #EconomicOutlook #Inflation #JobOpenings #PresidentialElection #FederalReserve #InterestRates #CapitalInvestment #Uncertainty

https://theedgemalaysia.com/node/726257


BOJ said to see little need to hike key rate next week
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Bank of Japan (BOJ) officials see little need to raise the benchmark rate at 0.25% during the meeting on Sept 20, 2024; they are monitoring financial market volatility and the impact of the July rate hike; the Nikkei 225 experienced its largest plunge in history on Aug 5, 2024; most economists expect the BOJ to wait until December or January for another rate hike; second-quarter economic growth was slightly slower than initially estimated but remains strong; Deputy governor Shinichi Uchida stated rates won't rise during market instability; the ruling Liberal Democratic Party's leadership election on Sept 27, 2024, may influence future monetary policy; BOJ officials are also observing potential weaknesses in the US economy; the BOJ's policy board meeting coincides with expected US Federal Reserve interest rate cuts.

#Boj #InterestRates #MonetaryPolicy #Japan #Economy #FinancialMarkets #Nikkei225 #UsEconomy #Politics #Inflation

https://theedgemalaysia.com/node/726205


Coal India to spend US$8 bil on coal-fired plants near mines
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Coal India Ltd plans to invest about 670 billion rupees (US$8 billion) to build coal-fired power plants near its mines; approval for 4.7GW of generation secured for construction over the next six to seven years, primarily in Odisha; an additional 2GW under discussion; part of a broader plan to add 88GW of thermal generation capacity by 2032; electricity demand in India expected to surge, maintaining reliance on coal, which constitutes around 75% of the power mix; Coal India aims to also develop renewable energy and critical minerals; India targets net zero by 2070; environmentalists criticize the government for insufficient decarbonization efforts.

#CoalIndia #Investment #CoalfiredPlants #RenewableEnergy #India #ElectricityDemand #NetZero #Environment #ThermalGeneration #Odisha

https://theedgemalaysia.com/node/726203


Hedge funds flock to Japan as market heats up
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Japan's hedge fund sector sees a net increase of over 10 funds since 2023; at least five more funds are launching in Q3 and Q4 2024; hedge fund liquidations in Asia outpace launches due to China's market struggles; Japanese equity markets reached all-time highs in July 2024; Soichi Utsumi of Shinka Capital Management highlights positive changes in Japan's economy; ActusRayPartners plans to launch a new Japan strategy targeting US$100 million; Tetsuo Ochi of MCP Group notes rising interest rates benefit long-short strategies; Dai-ichi Life invests 10 billion yen (US$70 million) in a new fund to support emerging managers.

#HedgeFunds #Japan #Investment #MarketTrends #Finance #Equity #Economy #CapitalMarkets #FundLaunches #InterestRates

https://theedgemalaysia.com/node/726069


Risk-on momentum in stocks succumbs to mounting growth worries
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The stock market rally is faltering due to growth concerns; S&P 500 fell 4.25% last week; Nasdaq 100 experienced its largest drop since November 2022; US payrolls growth data indicates a cooling labor market; global growth worries include China and Germany; Federal Reserve interest-rate cut anticipated; S&P 500 up 13% in 2024; MSCI World Index up 10%; strategists predict only 1% gain for S&P by end of 2024; Nvidia Corp. significantly influences market sentiment; geopolitical tensions and US election uncertainties add to market risks; Kamala Harris and Donald Trump are key candidates; potential corporate tax changes could impact S&P 500 earnings; market sentiment expected to remain fragile.

#Stocks #Market #Economy #Growth #S&p500 #Nvidia #FederalReserve #UsElection #China #Germany

https://theedgemalaysia.com/node/725977


New Thai PM to push ahead with cash stimulus to revive economy
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Thailand's new Prime Minister Paetongtarn Shinawatra, sworn in on September 7, 2024, plans to implement a US$14 billion cash stimulus to combat low growth and household debt. The digital wallet program will provide 10,000 baht to 50 million adults, with 14.5 million expected to benefit in the first phase. Paetongtarn, the youngest leader at 38, aims to continue previous policies to boost tourism and agriculture. The Thai economy is projected to grow 2.5% this year, lagging behind neighbors. She is the third Shinawatra family member to lead Thailand and faces challenges in maintaining her coalition and attracting foreign investment.

#Thailand #Economy #Stimulus #PaetongtarnShinawatra #CashHandout #Tourism #ForeignInvestment #ShinawatraFamily #Politics #HouseholdDebt

https://theedgemalaysia.com/node/725948


My Say: Malaysia sees economic optimism through increased IPOs and GLIC investments
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Malaysia's economy shows resilience with a Q2 GDP of 5.9%; IPO proceeds for the first seven months of 2024 rose 15% year on year to US$674 million; Johor Plantations Group raised RM735 million, marking the largest IPO in over two years; Bursa Malaysia targets 42 IPOs in 2024; GLICs committed RM120 billion in domestic direct investment over five years; key sectors for investment include electrical and electronics, palm oil, sustainable energy, and pharmaceuticals; Bank Negara Malaysia projects GDP growth at the upper end of 4% to 5%; potential risks include global economic volatility and interest rate fluctuations.

#Malaysia #Economy #Ipos #Glics #Gdp #Investments #BursaMalaysia #FinancialMarkets #EconomicGrowth #Sectors

https://theedgemalaysia.com/node/725641


Musk dares the world to take on X as he scoffs at Brazil’s ban
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Brazil bans X amid disinformation concerns; Musk challenges global response; Supreme Court Justice Alexandre de Moraes leads inquiry into Musk's influence; Musk's support for Bolsonaro complicates matters; 51% oppose Moraes's ban; EU warns X over harmful content; US regulators lack authority due to Section 230; Musk's Starlink accounts frozen; local elections in Brazil test Bolsonaro's movement; potential for X's return depends on Musk's compliance.

#ElonMusk #Brazil #X #Disinformation #SocialMedia #SupremeCourt #Bolsonaro #FreedomOfExpression #Eu #Us

https://theedgemalaysia.com/node/725937


Oaktree’s Marks says Fed cuts won’t take US rates below 3%
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Howard Marks, co-chairman and co-founder of Oaktree Capital Management, stated that US interest rates will settle between 3% and 4% after Federal Reserve cuts, which are expected to begin in September 2024. He believes rates will not return to zero or near-zero levels, emphasizing that the emergency over inflation has ended. The Fed's meeting is scheduled for September 17-18, 2024, with traders divided on the extent of cuts. Oaktree manages US$193 billion as of June 30, 2024, and Marks noted that economic growth may slow and profit margins could erode, indicating a return to a 'normal' economic state. He also expressed confidence that China will not isolate itself globally, needing global cooperation to achieve its growth targets.

#FederalReserve #InterestRates #OaktreeCapital #HowardMarks #EconomicGrowth #China #Inflation #FinancialMarkets #Investment #UsEconomy

https://theedgemalaysia.com/node/725608


Subway eyes $2.3 billion asset-backed debt sale
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Subway plans to borrow $2.3 billion through asset-backed securities; this is the second time in 2024 the company is tapping this market; Subway was purchased by Roark Capital Group in April 2024; in May 2024, it sold $3.35 billion in bonds backed by franchisee fees, marking the largest securitization of its kind; the latest sale is led by Barclays Plc and Morgan Stanley; it will refinance a term loan and includes restaurants worldwide; the deal would be the fourth largest whole business securitization; previous Subway bond offering saw nearly $20 billion in orders; overall ABS market issuance is up to $242 billion this year compared to $192 billion last year.

#Subway #DebtSale #AssetbackedSecurities #RoarkCapital #Bonds #Barclays #MorganStanley #Franchise #FinancialMarket #Securitization

https://theedgemalaysia.com/node/725451


Goldman sees US GDP hit if Trump wins, boost if Democrats sweep
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Goldman Sachs economists predict US GDP could decline by 0.5 percentage points in the second half of 2025 if Donald Trump wins the November election due to tariffs and tighter immigration policies; a 20-percentage-point increase in China tariffs and reduced immigration are expected; if Kamala Harris wins with Democratic control of Congress, GDP growth could see a slight boost due to new spending and expanded tax credits; in a divided government scenario with Harris, policy changes would have neutral effects; Trump's campaign argues forecasters underestimated growth post-2016; Goldman expects immigration under Harris to be 1.5 million annually, compared to 1.25 million under Trump; Trump's tariffs could lead to a 30-40 basis point inflation increase.

#GoldmanSachs #UsGdp #Trump #Harris #Election #Economy #Tariffs #Immigration #Inflation #Politics

https://theedgemalaysia.com/node/725443


Harris says US Steel should remain American owned and run
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Vice President Kamala Harris and President Joe Biden declared that US Steel Corp should remain American-owned, opposing its proposed sale to Japan's Nippon Steel Corp; Harris emphasized the importance of US Steel as a historic American company during a Labor Day event in Pittsburgh on September 3, 2024; Biden reiterated his stance, stating US Steel will remain an American company; the deal, valued at US$14.10 billion, faces opposition from the United Steelworkers union and local senators; Nippon Steel announced an additional US$1.3 billion investment in US Steel's unionized mills; the takeover is under review by the Committee on Foreign Investment in the US; the political debate intensifies ahead of the November elections.

#UsSteel #KamalaHarris #JoeBiden #NipponSteel #LaborDay #UnitedSteelworkers #Pennsylvania #Takeover #Investment #Politics

https://theedgemalaysia.com/node/725281


Steel industry leaders in US have high hopes for revival in 2025
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American steel executives express optimism for a demand rebound in 2025; driven by an improving US economy and large infrastructure projects; Mike Barnett, president of Grand Steel Products, highlights consumer spending as a key factor; Nippon Steel Corp's proposed US$14.10 billion takeover of US Steel Corp faces political opposition; steel demand in H1 2024 was 50.9 million tons, down 0.4% from last year; US steel futures down 37% since January; Federal Reserve signals potential rate cuts; Biden's Infrastructure and Investment Jobs Act of 2021 allocates US$550 billion for steel projects; CRU analyst Alexandra Anderson warns of challenges with new steel capacity; US raw steel production rose 1.1% in 2023 to 89.7 million net tons; ongoing trade issues with cheap foreign steel and global price slumps; US presidential election could impact investor sentiment.

#SteelIndustry #UsEconomy #Infrastructure #NipponSteel #UsSteel #BidenAdministration #MarketOutlook #TradeIssues #PresidentialElection #ConsumerSpending

https://theedgemalaysia.com/node/725118


Hunt for Fed-pivot winners sparks a rush to Malaysia, Indonesia
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Global investors are increasing investments in Indonesia and Malaysia due to expectations of benefits from US Federal Reserve monetary easing; sound fiscal policies and emerging tech sectors like EVs and data centers are attracting funds; John Lin from AllianceBernstein highlights responsible fiscal behavior as a key factor; Indonesia saw US$1.80 billion in foreign stock purchases, the highest since April 2022; Malaysia's foreign stock buying reached US$491 million, the highest since March 2022; both countries are experiencing significant economic growth; risks include leadership transitions and potential volatility in AI investments; optimism is high with upgrades from Nomura and HSBC; the ringgit and rupiah are among the top gainers against the dollar; Fed chair Jerome Powell indicated a potential rate cut in September.

#Investment #SoutheastAsia #Indonesia #Malaysia #FederalReserve #Economy #Stocks #Technology #PalmOil #ForeignInvestment

https://theedgemalaysia.com/node/725074


The Week Ahead: Bank Negara OPR decision, implementation of US tariff on Chinese imports in focus
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Bank Negara Malaysia's monetary policy decision is expected on Sept 5, 2024, with a consensus to maintain the policy rate at 3%; US to finalize tariff increases on Chinese imports, including EVs and semiconductors, with tariffs rising from 25% to 100% for EVs by 2024; President Biden announced tariffs worth US$18 billion in May 2024; US and China to hold a work meeting on Sept 7, 2024, co-chaired by Wang Shouwen and Marisa Lago; Bank of Canada to announce a policy rate decision on Sept 4, 2024; US employment data for August to be released on Sept 6, 2024, with estimates of 165,000 non-farm payroll increase; Asian countries to release August CPI data starting Sept 2, 2024.

#BankNegara #UsTariffs #China #MonetaryPolicy #EconomicData #Cpi #Employment #Evs #Semiconductors #Biden

https://theedgemalaysia.com/node/725064


US fiscal profile unlikely to change much after elections, says Fitch
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Fitch Ratings affirmed the U.S. credit rating at 'AA+' on Aug 29, 2024; predicts U.S. fiscal profile remains unchanged post elections; highlights high fiscal deficits and debt burden; Kamala Harris leads Donald Trump 45% to 41% in a Reuters/Ipsos poll; upcoming elections on Nov. 5, 2024, crucial for U.S. economic policies; tax cuts from 2017 likely to be extended; Fitch downgraded U.S. credit rating last year after debt ceiling agreement raised borrowing limit to $31.4 trillion; U.S. governance standards below 'AA' rated peers.

#FitchRatings #UsEconomy #CreditRating #KamalaHarris #DonaldTrump #FiscalPolicy #Debt #Elections #TaxCuts #Governance

https://theedgemalaysia.com/node/724929


Asian stocks set to rebound after upbeat US data
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Asian stocks are expected to rise following positive US growth data indicating a potential soft landing for the economy; US equity futures in Australia surged while Japan's edged higher; the S&P 500 closed near 5,590, with the Dow Jones Industrial Average reaching an all-time high; the Nasdaq Golden Dragon Index rose 2.6%; the US economy showed stronger growth in Q2, with consumer spending revised upward; analysts suggest that as long as the tech sector remains stable, market gains could continue; traders are watching Tokyo inflation data for potential Bank of Japan rate hikes; Commonwealth Bank strategists predict another BOJ rate increase later this year; US Treasuries experienced slight losses, with a $44 billion seven-year note sale; the yield on 10-year bonds rose to 3.86%; oil prices increased due to strong economic data and supply issues in Libya.

#AsianStocks #UsEconomy #FederalReserve #Inflation #MarketTrends #Nikkei225 #S&p500 #OilPrices #Treasuries #BankOfJapan

https://theedgemalaysia.com/node/724902


Citigroup sticks to bullish dollar call as election draws near
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Citigroup Inc. maintains a bullish outlook on the US dollar ahead of the presidential election in November 2024, despite the dollar's potential steepest monthly drop since December 2023. The bank's foreign-exchange strategy team predicts a rally against various currencies, including the euro, Chinese yuan, and Mexican peso, influenced by the possibility of a Donald Trump victory. The dollar has fallen approximately 1.7% in August 2024, attributed to expectations of the Federal Reserve cutting interest rates. The strategists note that the economy's performance and Fed pricing will likely be more significant for the dollar's direction than the election itself.

#Citigroup #UsDollar #PresidentialElection #DonaldTrump #FederalReserve #CurrencyStrategy #InterestRates #EconomicOutlook

https://theedgemalaysia.com/node/724901


Saudi Arabia signals ambition to host Olympic Games
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Saudi Arabia, led by Crown Prince Mohammed bin Salman, is considering a bid to host the Olympic Games as part of its economic transformation agenda. Prince Faisal bin Bandar bin Sultan Al Saud stated that hosting the Olympics is a logical step for the country. The kingdom has invested heavily in sports, including a record US$60 million prize pot for the first Esports World Cup held in Riyadh. Saudi Arabia has a 12-year deal with the International Olympic Committee to host the inaugural Esports Olympics in 2025 and will host the Asian Winter Games in 2029 and the FIFA World Cup in 2034. The Olympics will be hosted by Italy, the US, France, and Australia from 2026 to 2032, with Egypt and Qatar also considering bids for future events.

#SaudiArabia #Olympics #CrownPrince #Sports #Esports #EconomicTransformation #FifaWorldCup #AsianWinterGames #InternationalOlympicCommittee #PrinceFaisal

https://theedgemalaysia.com/node/724597


US consumer confidence rises in August
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US consumer confidence index increased to 103.3 in August 2024 from 101.9 in July; economists expected little change at 100.3; Dana Peterson, chief economist at the Conference Board, noted weakening assessments of the current labour situation; share of consumers viewing jobs as 'plentiful' fell to 32.8% from 33.4%; 16.4% of consumers said jobs were 'hard to get', up from 16.3%; Fed Chair Jerome Powell indicated imminent interest rate cuts; financial markets expect a 25-basis-point rate reduction next month; benchmark interest rate maintained at 5.25%-5.50% for over a year; consumers' 12-month inflation expectations dropped to 4.9%, lowest since March 2020.

#ConsumerConfidence #LabourMarket #FederalReserve #InterestRates #Inflation #Economy #Us #August2024 #ConferenceBoard #DanaPeterson

https://theedgemalaysia.com/node/724524


Special Report: Data centres crucial to draw investments
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Minister of Digital Gobind Singh Deo emphasizes the importance of data centres for the digital economy; Malaysia saw a 23% year-on-year increase in approved investments to RM329.5 billion in 2023; digital economy contributed 23% to GDP from 2021 to 2023, with a target of 25.5% by 2025; Google invested US$2 billion in a data centre in Shah Alam, expected to support 26,500 jobs and generate RM15.04 billion in economic impact; criticism exists regarding data centres' value addition and resource consumption; Gobind advocates for embracing data centre investments to attract global investments and enhance economic performance.

#DataCentres #DigitalEconomy #Investments #Ai #Malaysia #GobindSinghDeo #Google #Gdp #EconomicImpact #Infrastructure

https://theedgemalaysia.com/node/723476


Malaysia, India to upgrade bilateral FTA — Zafrul
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Malaysia and India aim to enhance their economic relationship through an upgraded Free Trade Agreement (FTA) following Prime Minister Anwar Ibrahim's visit to New Delhi; Anwar and Indian PM Narendra Modi discussed cooperation in digital economy, semiconductor manufacturing, AI, infrastructure, food security, and tourism; Investment Minister Tengku Zafrul Abdul Aziz announced plans to upgrade the Malaysia-India Comprehensive Economic Cooperation Agreement (Miceca) signed in 2011; Both prime ministers set a three-month timeframe to identify focus areas for the upgrade; Trade between Malaysia and India reached US$16.5 billion in 2023; Malaysia is the 11th largest destination for Indian exports and 12th largest source of imports; Malaysia's exports of electrical and electronics products to India have increased, while the share of primary commodities has decreased; Anwar highlighted the semiconductor sector's potential for cooperation, noting Malaysia's position as the sixth largest semiconductor exporter.

#Malaysia #India #Fta #Trade #Semiconductors #Economy #AnwarIbrahim #NarendraModi #Zafrul #Miceca

https://theedgemalaysia.com/node/724131


US Fed’s preferred price gauge to reinforce rate cuts
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US inflation figures expected to support imminent interest-rate cuts; core inflation projected to rise 0.2% in July, annualized rate at 2.1%; consumer spending forecasted to increase 0.5%, strongest in four months; Fed chair Jerome Powell acknowledges progress on inflation at Jackson Hole symposium; second-quarter GDP revision expected at 2.8% growth; Canadian GDP data suggests 2.2% growth ahead of rate cuts on September 4; eurozone inflation data due, expected slowdown from July's 2.6%; Brazil's inflation data may show easing from 4.45%; Mexico's central bank to release quarterly inflation report.

#UsFed #Inflation #InterestRates #Gdp #ConsumerSpending #Canada #Eurozone #Brazil #MonetaryPolicy #Economy

https://theedgemalaysia.com/node/724129


US Fed mortgage bond holdings play 'central' policy rule, paper says
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Federal Reserve mortgage bond holdings are crucial for monetary policy; paper presented at Kansas City Fed's Jackson Hole conference on Aug 25, 2024; Fed's bond purchases since spring 2020 increased holdings to around US$9 trillion by summer 2022; mortgage bond holdings rose from US$1.4 trillion in March 2022 to US$2.7 trillion; paper states banks and Fed each reduced mortgage spread by about 40 bps during 2020/21, leading to US$3 trillion increase in mortgage originations; current Fed holdings down to US$7.3 trillion, with mortgage holdings at US$2.3 trillion; QT process slower than expected due to housing market conditions.

#FederalReserve #MortgageBonds #MonetaryPolicy #QuantitativeEasing #QuantitativeTightening #HousingMarket #Economics #InterestRates #JacksonHole #FinancialMarkets

https://theedgemalaysia.com/node/724123


Market pricing in too many Fed rate cuts, El-Erian warns
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Mohamed El-Erian warns that traders are overestimating the number of US Federal Reserve rate cuts expected by year end; he suggests a more realistic easing of 75 basis points instead of the market's expectation of up to 100 basis points; Fed minutes indicated a case for cuts discussed in July; employment growth data supports the likelihood of cuts; traders are looking for insights during the Fed's annual symposium in Jackson Hole, Wyoming, where Fed chair Jerome Powell will speak on the economic outlook.

#FederalReserve #InterestRates #MohamedElerian #MarketExpectations #EconomicOutlook #JacksonHole #Treasuries #EmploymentData #RateCuts #FinancialMarkets

https://theedgemalaysia.com/node/724024


Wall Street braces for ‘reality check’ from Powell
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Wall Street anticipates Jerome Powell's speech at Jackson Hole; bond yields rise and stocks decline as traders expect less aggressive interest-rate cuts; Treasuries fall, particularly shorter maturities; S&P 500 drops 0.9%, Nasdaq 100 falls 1.7%; Powell likely to favor gradual rate cuts, with Fed officials suggesting a measured approach; Andrew Brenner notes Fed easing expected in September but not 50 basis points; Mohamed El-Erian warns market overestimates rate cuts; jobless claims indicate gradual labor market cooling; US manufacturing shrinks, existing-home sales rise.

#WallStreet #JeromePowell #InterestRates #FederalReserve #Stocks #Bonds #Economy #MarketAnalysis #JacksonHole #FinancialNews

https://theedgemalaysia.com/node/723951


Investors advised to stay invested after global rout
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Investors were unsettled by a global equity sell-off on August 12, 2024, with the Nikkei 225 dropping 12.4% due to the unwinding of Japanese yen carry trades and US growth concerns; the FBM KLCI fell 4.6% to 1,536.48 points, its worst day since March 2020, but recovered to 1,590.38 points by August 15, 2024; analysts recommend staying invested, citing potential in tech and blue-chip stocks; US GDP grew 2.8% in Q2 2024, but weak employment data raises recession fears; Bank of Japan's Kazuo Ueda defends rate hikes; expectations for US rate cuts next month; MIDF Research sets FBM KLCI year-end target at 1,750; foreign investors net bought RM299.6m in Malaysian equities last week.

#Investors #GlobalMarket #Equities #Nikkei225 #FbmKlci #BankOfJapan #UsEconomy #TechStocks #Bluechip #InvestmentStrategy

https://theedgemalaysia.com/node/722594


Alternative Views: Global market volatility — expect the unexpected
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The US Federal Reserve is expected to cut interest rates by 25bps in September 2024; current rate is between 5.25% and 5.5%; US inflation rate at 2.9%, lowest since 2021; US unemployment rate rose to 4.3% in July 2024; concerns about a possible recession; China’s Q2 2024 growth at 4.7%, below expectations; China’s economy still recovering from a property bubble; Japan raised interest rates from 0% to 0.25% on July 31, 2024; US$1 trillion in cross-border loans from Japan; yen currently at 148 against the US dollar; potential for market volatility if Fed does not cut rates; global capital markets recovering post-August 5 turmoil; Malaysia’s FBM KLCI index above 1,600 points; ringgit at RM4.42 against the dollar.

#UsFederalReserve #InterestRates #Inflation #ChinaEconomy #Japan #MarketVolatility #Recession #EconomicGrowth #YenCarryTrades #Malaysia

https://theedgemalaysia.com/node/723273


Japan’s economy sees consumption-led rebound in tailwind for BOJ
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Japan's economy rebounded in Q2 with a 3.1% annualized growth, driven by an increase in private consumption; The rebound in personal spending is attributed to wage increases and a tax rebate; The Bank of Japan (BOJ) is looking for evidence that wage gains will spur personal spending and generate stable demand-led inflation; BOJ governor Kazuo Ueda stated that the board would continue hiking rates if economic data were in line with forecasts; The data create a supportive background for the government as the ruling Liberal Democratic Party (LDP) prepares to select a new prime minister; Private spending is expected to gain momentum with recent wage growth; Recent strengthening of the yen may soothe shoppers' concerns about price hikes; Japan's exports have increased for seven months through June, supported by demand for chip-making gear; Japan continues to benefit from inbound tourism; A record 17.8 million foreign visitors came to Japan in H1 2024, spending ¥2.1 trillion in Q2 2024; The yen has recently gained amid expectations of a narrowing US-Japan interest rate gap; The International Monetary Fund warns of a potential risk to global growth from interest rates staying higher for longer.

#Japan #Economy #BankOfJapan #Consumption #WageGains #Inflation #Government #LiberalDemocraticParty #Exports #Tourism #Yen #InterestRates #GlobalGrowth

https://theedgemalaysia.com/node/722854


US junk debt investors cautious of leveraged loans as economy slows
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Leveraged loan deals are expected to pick back up after a stabilization in markets over the past week; Borrowers pulled back on leveraged loan deals last week, following disappointing jobs data on Aug. 1 and Aug. 2; A total of six leveraged loans worth $3.3 billion sold last week, which falls well short of the $10 billion weekly average this year; One junk-rated loan deal sold on Monday, airline JetBlue Airways' five-year term loan; Leveraged loan funds reported $3.1 billion in outflows last week, which is the most since March 2020; The Morningstar LSTA US Leveraged Loan Index fell 0.55% on Aug. 5, the worst daily performance for the index since the collapse of Silicon Valley Bank in March 2023; A gap between net loan supply and investor demand since the Fed began hiking rates in 2022 should sustain demand for new loan deals through the end of this year; Further signs of an economic slowdown and aggressive Fed rate cuts could prove detrimental to certain leveraged borrowers' refinancing or new loan plans.

https://theedgemalaysia.com/node/722840


US producer prices rise less than forecast, dragged by services
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US producer prices rose 0.1% in July, less than the forecasted 0.2% gain; The producer price index for final demand rose 2.2% compared to a year ago; The PPI excluding food and energy categories was unchanged in July; The core PPI rose 2.4% from a year ago; Services costs decreased 0.2%, while prices of goods climbed 0.6%; Traders pushed up odds of a half-point rate cut in September; The weakness in final demand services reflected a reversal in margins during the month after a large increase in June

#UsProducerPrices #Inflation #ServicesCosts

https://theedgemalaysia.com/node/722678


Most Asian shares jump ahead of key US, regional economic data
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Shares in major Asian emerging economies gained on Monday; Taiwan's benchmark stock index led regional gains and was up 1.4%; South Korean shares jumped 1.2%; MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.4%; Malaysian ringgit and South Korean won depreciated 0.5% and 0.6% respectively against the US dollar; China is set to issue retail sales and industrial production figures on Thursday; Chinese yuan and Shanghai stocks were down about 0.2%; Philippine central bank's key policy rate decision on Thursday; Malaysia's second-quarter gross domestic product (GDP) data on Friday; Bank of America analysts expect Malaysia's second-quarter final GDP to be revised upwards by 30 basis points (bps) to 6.1% on a year-on-year basis; Philippine peso weakened 0.1%; Indian rupee was flat; Indonesian rupiah edged 0.3% lower; US consumer prices and retail sales for July due later in the week; Markets are pricing in a 53.5% chance of a 25 bps cut and a 46.5% probability of a 50 bps interest rate cut at the Fed's September meeting; Data on US industrial output, regional manufacturing, and consumer sentiment expected later this week.

#AsianShares #UsEconomicData #RegionalEconomicData #StockMarket #Currencies #China #Philippines #Malaysia #UsConsumerPrices #RetailSales #FederalReserve

https://theedgemalaysia.com/node/722476


Small US inflation pickup won’t derail US Fed rate cut in September
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US inflation is expected to have risen 0.2% in July, but this is not enough to prevent the Federal Reserve from cutting interest rates next month. The recent easing of price pressures has given the Fed confidence to lower borrowing costs and focus on the slowing labor market. The July jobs report showed a decrease in hiring and an increase in the unemployment rate, triggering a recession indicator and a global stock market sell-off. Economists expect a slight pickup in inflation after June's low reading, particularly in core services excluding housing. However, the slowdown in shelter costs that began in June is expected to continue. Other upcoming data includes retail sales, inflation expectations, small business sentiment, industrial production, and new home construction. The Bank of Canada's rate cuts and key data from the UK, China, Norway, and New Zealand are also expected.

#UsInflation #FederalReserve #InterestRates

https://theedgemalaysia.com/node/722390


US yields dip after volatile week, traders eye inflation data
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US Treasury yields fell after a volatile week driven by concerns about the US economic outlook; Investors turned to key inflation data for clues about the potential size of an expected September rate cut; Yields have regained ground after a dramatic bond rally sent them to more than one-year lows on Monday; A bigger-than-expected drop in jobless claims on Thursday eased worries about an imminent US recession; Consumer price data on Wednesday is expected to show inflation continuing to edge down closer to the Fed's 2% annual target; Fed policymakers are increasingly confident that inflation is cooling enough to allow interest-rate cuts; The odds of the Fed cutting interest rates by 50 basis points in its next policy meeting is now seen at 55%; Yields on interest rate-sensitive two-year notes were last down 1.6 bps at 4.028%; Benchmark 10-year note yields fell 6.5 bps to 3.932%; The yield curve between two- and 10-year Treasury notes flattened 5 bps to -10 bps

#UsTreasuryYields #InflationData #InterestrateCuts

https://theedgemalaysia.com/node/722358


US Fed has cut rates amid stock swoons before. Not this time
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Speculation arises that the Federal Reserve may cut interest rates before its next scheduled meeting in September due to a slowdown in the US job market and global stock-market turmoil. However, analysts believe that the Fed is unlikely to move sooner and that the current economic data do not warrant an emergency intermeeting rate cut. Former New York Fed president Bill Dudley also considers an intermeeting cut to be very unlikely. Fed chair Jerome Powell is expected to provide further guidance on the potential rate cut at the September meeting based on upcoming data on jobs, inflation, consumer spending, and economic growth. In the past, the Fed has cut rates between policy-setting meetings in response to events such as the Russian financial crisis, the technology stock swoon, the September 11 attacks, the global financial crisis, and the Covid-19 pandemic.

#UsFederalReserve #InterestRates #StockMarket #Employment #PriceStability

https://theedgemalaysia.com/node/722240


Trump signals interest in influencing US Fed decisions if he regains White House
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Republican candidate Donald Trump stated that US presidents should have a say in decisions made by the Federal Reserve, indicating his interest in infringing on the central bank's independence if he becomes president again; Trump allies have drafted proposals to erode the Fed's independence; Trump believes he has a better instinct than those on the Federal Reserve or the chairman; Trump should be consulted on interest rate decisions and Fed banking regulation proposals should be subject to White House review if he becomes president; The Fed chair and board members are nominated by the president but enjoy operational independence; Economists worry that Trump's influence on the Fed could lead to policy missteps; Current Fed chair Jerome Powell's term expires in 2026; Trump has criticized Powell's interest rate hikes and threatened to fire him during his presidency.

#DonaldTrump #UsFederalReserve #InterestRates #CentralBank #Independence

https://theedgemalaysia.com/node/722219


Barkin Says Fed Has ‘time’ to assess economy, determine response
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Federal Reserve Bank of Richmond President Tom Barkin says the central bank has time to assess whether the US economy is normalizing or softening; Barkin is optimistic about inflation readings in the coming months; Fed officials are shifting focus to the labor market; Financial markets reassess the Fed's stance on interest-rate policy after July jobs report; Investors are pricing in about a percentage point of interest-rate cuts this year; Some economists expect a jumbo half-point rate reduction at the next gathering in September; The Fed's preferred price gauge rose 2.5% in June from a year earlier; Barkin believes inflation is settling down and will continue to do so.

#FederalReserve #UsEconomy #Inflation #InterestRates #LaborMarket

https://theedgemalaysia.com/node/722215


S&P 500 notches biggest rally since November 2022
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The S&P 500 experienced its largest rally since November 2022 as US initial jobless claims tumbled the most in nearly a year, easing concerns about a slowdown in the US economy. All major groups in the S&P 500 advanced. Treasuries dropped across the curve, led by shorter maturities. The S&P 500 rose 2.3%, the Nasdaq 100 climbed 3.1%, and the Russell 2000 added 2.4%. Nvidia Corp. led gains in megacaps, and Eli Lilly & Co. soared on a bullish outlook driven by sales of its weight-loss drugs. Treasury 10-year yields rose four basis points to 3.99%. Swap traders trimmed bets on aggressive Federal Reserve easing in 2024. Cryptocurrencies surged. US stocks remain at risk of more severe declines if growth continues to decelerate and the Fed does not show urgency in easing monetary policy, according to Dubravko Lakos-Bujas at JPMorgan Chase & Co. UBS Group AG's Solita Marcelli remains confident US stocks will continue their upward trajectory in the coming months. Liz Young Thomas at SoFi believes there is more volatility to come and cooler economic and earnings data that will need to be digested for the remainder of the year. Neil Dutta at Renaissance Macro Research questions whether the Fed should be easing soon and whether a large upfront move is likely or not.

#S&p500 #UsLaborMarket #StockMarket #Bonds #JoblessClaims #FederalReserve

https://theedgemalaysia.com/node/722213


Treasuries gain before US data offers clues on growth outlook
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Treasuries gained as investors awaited data on the US labour market and remarks from a Federal Reserve official for more clarity on the path of monetary policy; Yields fell across the curve, with Fed rate-cut bets little changed on the day; Bond markets swung wildly in the past days as investors became more worried about the outlook for the US economy after a bleak jobs report last week; The market will be watching a US$25 billion auction of 30-year Treasuries at 1pm as 'the final test of investor appetite for US government bonds this week'; JPMorgan Chase & Co now sees a 35% chance that the US economy will tip into recession by the end of this year, up from 25% at the start of last month; Swaps are currently pricing 112 basis points (bps) of easing from the Fed this year, compared with about 65bps just over a week ago, with the chance of a half-point cut in September seen at 70%; For the ECB, expectations are for 72bps of additional easing this year, with a quarter-point cut fully priced in September, and for the BOE, traders expect another 48bps of cuts.

https://theedgemalaysia.com/node/722172


Malaysia's care economy potentially worth US$25.5b — deputy minister
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Malaysia's care economy has a potential worth of US$25.5 billion (RM114.2 billion), according to Deputy Economy Minister Datuk Hanifah Hajar Taib. The global market potential from the ageing population is projected to be US$4.56 trillion by 2025. Malaysia can leverage this trend to enhance societal well-being and productivity through new economic sectors such as the caregiver economy. Malaysia's industries could benefit from the growing demand for healthcare services, including opportunities in healthcare and long-term care tourism, medical equipment supplies, and advanced medical technologies employing artificial intelligence and robotics. Private companies are encouraged to develop products and solutions targeting the elderly and the caregiver economy.

https://theedgemalaysia.com/node/722130


Municipal bonds see biggest rout in nearly a year as economic views swing
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Municipal bonds experienced a significant sell-off as investors reduced their flight to quality bid; Yields on 15-year benchmark bonds surged 13 basis points, the largest increase in almost a year; The longest-dated securities saw yields rise by 10 basis points, erasing earlier gains; The volatility in the state and local government bond market is due to investors reassessing the rally in safer assets; Chicago delayed its $643 million bond sale due to the market swings; The sell-off is driven by a rapid change in investor expectations around the economy; Investors are now more optimistic about the macro economy and strong micro fundamentals.

https://theedgemalaysia.com/node/722083


JPMorgan boosts US recession chance to 35% by end of 2024
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JPMorgan Chase & Co now sees a 35% chance of a US recession by the end of 2024, up from 25% last month. The bank cites weakening labor demand and signs of labor shedding as reasons for the increased risk. However, JPMorgan economists still believe there is a 45% chance of a recession by the second half of 2025. The bank also predicts a 30% chance of the Federal Reserve and other central banks keeping interest rates high, down from a previous 50% assessment. JPMorgan expects the Fed to cut rates by half a percentage point in September and November. Goldman Sachs also recently increased its probability of a recession in the next year to 25%. If a recession were to occur, JPMorgan economists believe central banks would respond with immediate easing measures.

https://theedgemalaysia.com/node/722076


Walt Disney warns of 'moderation in demand' at parks, as profit slips
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Walt Disney predicts a 'moderation in demand' at its theme park business in the coming quarters; Operating income at the parks is expected to be down 'mid single-digits' in the fiscal fourth quarter; Ben Barringer, technology and media analyst at Quilter Cheviot, says the parks results pour fuel onto the fire of concern about a slowing US economy; April-June operating income nearly tripled at Disney's Entertainment unit, with the combined streaming businesses of Disney+, Hulu, and ESPN+ posting a profit for the first time; Disney's experiences segment, which includes parks and consumer products, recorded an operating income drop of 3%; Adjusted earnings-per-share reached US$1.39 for Disney's fiscal third quarter, topping analyst estimates; Chief executive Bob Iger touts success in the entertainment division, where Disney's combined streaming businesses turned a profit a quarter ahead of projections; The movie studio is showing signs of resurgence with the success of "Inside Out 2" and "Deadpool & Wolverine"; The Entertainment division reported operating income of US$1.2 billion in the quarter; The Disney+, Hulu, and ESPN+ streaming services produced operating profit of US$47 million; Demand slid at domestic parks, cruise ships, consumer products, and some international parks delivered improved results;

#WaltDisney #ThemeParks #Profit #Demand #Entertainment #Streaming #Revenue

https://theedgemalaysia.com/node/722044


Brace for choppy oil market in near-term, say analysts
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Analysts are advising caution as the oil market is expected to remain volatile in the near term; Oil prices dropped to as low as US$75 on July 5, the lowest since December 2023, before rebounding later in the day; Brent crude added 0.27% to US$76.69 per barrel, while West Texas Intermediate advanced 0.37% to US$73.47 per barrel; Prices plunged last week as fears of a recession in the United States gathered pace and previously bullish investors sold their petroleum positions; The possibility of supply disruptions in the Middle East is helping to keep prices from falling off a cliff; SPI Asset Management managing partner Stephen Innes said that despite tensions in the Middle East, there has not been a major disruption to oil production; The US presidential election on November 5 could impact the future of the US oil and gas industries; Recent escalations in the Middle East, including the killing of Hezbollah and Hamas leaders, have heightened fears of a broader regional conflict; Venezuelan President Nicolas Maduro's victory in the election could influence Venezuela's oil production and the global oil supply; Geopolitical risks in the Middle East and supply concerns from Venezuela could influence market dynamics; OPEC+ may reevaluate production cuts if Brent crude prices remain weak; BMI expects the current weaknesses in the oil market to persist due to weak market conditions for demand; BMI's near-term view is that oil prices are set to rebound from the current levels, closer to the US$80 per barrel level; There is a growing expectation of a supply surplus later this year and into 2025 if OPEC+ countries proceed with their plan to start unwinding some of their voluntary cuts; Recent increases in fuel and crude stocks indicate that demand is failing to keep pace with supply.

#OilMarket #Volatility #SupplyDisruptions #MiddleEast #UsPresidentialElection #Venezuela #Opec+

https://theedgemalaysia.com/node/721983


Penang CM leads investment and trade mission to US
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Chief Minister Chow Kon Yeow is leading Penang’s investment and trade mission to the United States (US) from Sunday until Aug 14; The mission aims to renew ties and forge relationships with the corporate headquarters of American investors in Penang; It also aims to encourage the expansion of Penang sites and attract new investments; The mission seeks to update American companies on the latest developments and opportunities available in Penang; Penang recorded RM71.9 billion in investment inflows in 2023, the highest in Malaysia

https://theedgemalaysia.com/node/721598


Flaring economic worries threaten US stocks rally
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Economic fears are roiling Wall Street as concerns grow over the Federal Reserve's interest rates; US job growth slowed in July, heightening fears of a recession; Tech stocks have tumbled, with the Nasdaq Composite down over 10% from its July high; Investors are worried that elevated borrowing costs may be hurting economic growth; Earnings reports from companies like Caterpillar and Walt Disney will provide more insight into the health of consumers and manufacturing; Futures markets suggest growing unease about the economy, with a 70% chance of a 50-basis-point rate cut in September; The Cboe Volatility index hit its highest level since March 2023; Investors are flocking to safe-haven bonds and defensive sectors like healthcare and utilities; Some investors believe the data is just a reason to lock in profits after a strong market rally.

#UsStocks #EconomicWorries #FederalReserve #InterestRates #JobGrowth #Recession #TechStocks #BorrowingCosts #EarningsReports #FuturesMarkets #CboeVolatilityIndex #SafehavenBonds #DefensiveSectors

https://theedgemalaysia.com/node/721561


US rejects Vietnam's request to lift 'non-market economy' tag
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The Biden administration rejected Vietnam's request to be classified officially as a "market economy". Vietnam has been pressing for the status change since President Joe Biden's visit in September last year. The "non-market" economy label affects Vietnam in anti-dumping complaints. The US Commerce Department cited extensive government involvement in Vietnam's economy as the reason for the rejection. Vietnam has signed numerous free trade agreements and wants greater access to the US market. Changing Vietnam's market status has faced bipartisan Congressional push-back. Vietnam was removed from the US monitoring list for currency manipulation in 2022. Contact information for The Edge Communications is provided.

https://theedgemalaysia.com/node/721547


US national debt breaches record US$35 tril
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The US national debt breached US$35 trillion for the first time in history on July 29, 2024, according to data from the Treasury Department. This comes after surpassing the US$34 trillion mark in January 2024 and the US$33 trillion mark in September 2023. The national debt was around US$907 billion four decades ago. The largest budget item was Medicare/Medicaid at US$1.79 trillion.

https://theedgemalaysia.com/node/720866


Shutdowns may cost Bangladesh US$10b, industry group says
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Bangladesh's worst political violence since Prime Minister Sheikh Hasina extended her grip in power in January elections could cost the economy US$10 billion (RM46.38 billion), a major setback for the nation looking to shore up its foreign exchange reserves. The curfews and internet shutdown to quell a student protest over a government jobs quota is estimated to have a US$10 billion impact on the economy and costs are expected to climb further, according to Zaved Akhtar, president of the Foreign Investors' Chamber of Commerce and Industry (FCCI). Bangladesh is in a precarious position with its dwindling foreign exchange reserves, which means negotiations for more money with creditors and the International Monetary Fund will take on renewed urgency. The reserves have fallen to US$21.8 billion last month and the garments sector, a key earner of dollars, struggles to fully reopen. Bangladesh unblocked the mobile internet Sunday after 11 days of near-complete blackout and the authorities eased the curfew with longer daytime breaks to help businesses. However, security forces have arrested about 10,000 people in the past 12 days, raising concerns the crackdown will widen after the protests died down. Hasina has blamed the opposition for capitalizing on the student protests and carrying out militant-like attacks after the top court ruled to abolish most of the government jobs quota system. Amnesty International said the violence has left 200 people dead, while the home ministry put the initial death count at 147.

https://theedgemalaysia.com/node/720753


US 30-year fixed-rate mortgage edges up to 6.78%, Freddie Mac says
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The average rate on the US 30-year fixed-rate mortgage increased to 6.78% for the week ending July 25, according to Freddie Mac. This is slightly higher than the previous week's rate of 6.77%. However, it is still about half a percentage point below its peak earlier this year. Chief Economist Sam Khater noted that despite the lower rates, buyers are hesitant to enter the market, as reflected in declining new and existing home sales. Existing home sales fell 5.4% in June, marking the fourth consecutive monthly drop. Housing inventory has increased to the highest level in nearly four years, indicating a shift from a seller's market to a buyer's market. Rising home owners insurance premiums are also impacting housing affordability. However, economists expect home borrowing costs to decrease later this year as the Federal Reserve plans to cut interest rates.

#Mortgage #HousingMarket #InterestRates #HomeSales #FreddieMac

https://theedgemalaysia.com/node/720750


Yellen says US$3 tril needed annually for climate financing, far more than current level
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US Treasury Secretary Janet Yellen stated that the global transition to a low-carbon economy requires $3 trillion in new capital each year through 2050, far above current annual financing. Yellen emphasized that neglecting climate change and biodiversity loss is not just bad environmental policy but also bad economic policy. Wealthy economies provided and mobilized a record $116 billion for climate finance in 2022, with 40% coming from multilateral development banks (MDBs). Yellen called on MDBs to expand their missions and lending capacity to include fighting climate change and catalyze new business models to mobilize investments that support nature and biodiversity. Yellen also launched a new initiative with Amazon basin countries to combat nature crimes threatening biodiversity and the Amazon ecosystem.

#JanetYellen #ClimateFinancing #LowcarbonEconomy #NetzeroEmissions #BidenharrisAdministration #G20FinanceLeaders #MultilateralDevelopmentBanks #WorldBank #InteramericanDevelopmentBank #AmazonBasinCountries #NatureCrimes #Biodiversity #AmazonEcosystem

https://theedgemalaysia.com/node/720650


Italian PM Meloni on mission to mend ties with Xi ahead of US vote
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Italian Prime Minister Giorgia Meloni is heading to China for the first time since abandoning the Asian nation’s flagship investment pact; Meloni seeks to stabilize ties with Beijing ahead of a volatile US election; Meloni will meet President Xi Jinping and Premier Li Qiang during her visit; Meloni views Xi as someone who could become an important stakeholder in the Ukraine war if Washington were to pull support; Meloni has sought to pitch herself as a diplomat able to speak to leaders across the ideological spectrum; Meloni will need to balance her goal of strengthening ties with China with the EU’s tougher stance on trade toward Beijing; Meloni is expected to bring up Moscow’s invasion of Ukraine and the Israel-Hamas conflict during her talks with Chinese leaders; the EU has toughened its stance toward China, sometimes at the prodding of President Joe Biden; with Donald Trump leading polls in the US election, the EU will need to decide how to align itself between the world’s two largest economies; Meloni’s trip comes after Italy quit Xi’s Belt and Road infrastructure investment initiative; Meloni’s outreach can demonstrate to other European nations the benefits of enhancing cooperation with China; EVs are likely to be on the agenda, as the EU has moved forward to impose provisional tariffs on EVs made in China; China has threatened to retaliate if the EU moves ahead with the levies

#ItalianPrimeMinister #GiorgiaMeloni #China #UsElection #XiJinping #LiQiang #UkraineWar #Washington #DonaldTrump #Eu #TradeTensions #BeltAndRoadInitiative #Diplomacy #Evs #Tariffs

https://theedgemalaysia.com/node/720648


Yellen rejects Roubini claim of ‘manipulation’ in Treasuries
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US Treasury Secretary Janet Yellen firmly rejects economist Nouriel Roubini's accusation of Treasury securities manipulation; Yellen assures there is no such strategy and it has never been discussed; Roubini and co-author Stephen Miran estimate that the Treasury's move last fall lowered 10-year Treasury yields by a quarter of a percentage point; A senior Treasury official criticizes the Roubini paper, pointing out factual mistakes about the volume of Treasury bill issuance; Treasury official says the calculation of how much issuance was shifted out of coupon-bearing securities to bills was incorrect and misleading; Treasury official also says the number provided in the paper is based on outdated predictions from the Treasury Borrowing Advisory Committee (TBAC) and leaves out the second quarter of this year when tax revenue allowed the Treasury to pay down bills by about $300 billion; Yellen supports the Treasury's approach to debt issuance as outlined by Joshua Frost, the Treasury's assistant secretary for financial markets; Yellen's comments were made during an interview on the sidelines of a gathering of Group of 20 finance chiefs in Rio de Janeiro.

https://theedgemalaysia.com/node/720640


Treasuries rally as data points to a September rate cut
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Treasuries are rising as data suggests a September rate cut; Two- and 10-year yields down by about five basis points (bps) to 4.38% and 4.2%, respectively; US government debt on pace for a third-straight month of gains; Traders expect at least two quarter-point rate reductions this year; Lindsay Rosner of Goldman Sachs Asset Management believes a rate cut in September is likely; US inflation rose at a tame pace in June; US consumer sentiment eased in July to an eight-month low; Former New York Fed president William Dudley and Mohamed El-Erian have expressed opinions on rate cuts; Shorter-term Treasuries have led the rally, pushing the yield curve steeper; The yield curve is becoming less inverted; The steepener trade has gained momentum; Interest-rate swaps have priced in five quarter-point cuts in the next six policy meetings; Some investors are cautious about the bond rally and rate pricing;

#Treasuries #InterestRates #Inflation #FederalReserve #RateCut

https://theedgemalaysia.com/node/720633


The New Global Economy: The US needs a techno-industrial strategy
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China's economy is facing crises that could spell doom for its economic 'miracle'; US leadership in artificial intelligence (AI) is creating economic value and boosting productivity; US lacks production capacity in advanced industries crucial to competitiveness and national security; China has emerged as the world's manufacturing superpower; US must implement a techno-industrial strategy with three pillars: production, markets, and people; US must invest in manufacturing-innovation programs, secure supply chains, and invest in human capital; China's efforts to shift towards advanced industries threaten to surpass the US economically and gain a strategic advantage; US can leverage existing advantages to cement its leadership in the industries of the future.

#UsEconomy #ChinaEconomy #TechnoindustrialStrategy #AdvancedIndustries #ArtificialIntelligence #Manufacturing #SupplyChains #HumanCapital

https://theedgemalaysia.com/node/719828


The Trump trade misses $153 billion of munis pricing in tax risk
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A $153 billion pocket of the municipal-bond market is trading like a tax on all but the wealthiest Americans will return to bite the middle class. Trump-era tax cuts set to expire next year increased the exemptions on a tax for high-earning taxpayers known as the alternative minimum tax (AMT). Muni bonds subject to the tax trade at yields higher than tax-exempt securities. Concerns that a broader swath of investors will fall under the tax's umbrella have widened the gap in yields between AMT and non-AMT bonds. The Tax Cuts and Jobs Act (TCJA) reduced the number of filers subject to the AMT, but when it expires, 7.2 million taxpayers will be subject to the AMT starting in 2026. A Trump victory or a "Blue Wave" in the elections could result in the extension of the current AMT tax regime. Many separately managed account managers are avoiding AMT bonds, and AMT spreads have widened because ETFs and most mutual funds can't buy AMT bonds.

https://theedgemalaysia.com/node/720287


US goods trade deficit shrinks; new home sales extend decline
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The US trade deficit in goods narrowed in June for the first time this year; The goods trade gap contracted 2.5% to US$96.8 billion; Goods exports increased 2.5% to US$172.3 billion; Imports of goods gained 0.7% to US$269.2 billion; The housing market has been the sector hardest hit by the US central bank's aggressive monetary policy tightening; New home sales slipped 0.6% to a seasonally adjusted annual rate of 617,000 units in June; The median new house price dipped 0.1% to US$417,300 in June; The inventory of new homes rose in June to 476,000, the highest level since February 2008

https://theedgemalaysia.com/node/720293


Red Lobster moves closer to bankruptcy sale to lenders
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Red Lobster is moving closer to a bankruptcy sale that would put lenders, including Fortress Investment Group, in charge of the company after no other bidders stepped up with an offer to repay the struggling US restaurant chain's debt. Red Lobster filed for bankruptcy in Florida in May with about US$300 million in debt and a plan to close some restaurants and sell itself to its lenders or a higher bidder. The company had planned to conduct an auction on Tuesday, but it received no qualified bids. Without a better offer, Red Lobster will hand over its equity to its lenders in a debt-cancelation deal and continue to operate with fewer locations. Red Lobster entered bankruptcy with about 550 casual dining restaurants in the US and 54 restaurants in other countries. It posted a US$76 million net loss in 2023 and blamed its bankruptcy on high inflation, unsustainable rent costs, and poor management decisions including an "endless shrimp" promotion that caused US$11 million in losses.

https://theedgemalaysia.com/node/720130


Modi pledges US$24 bil for jobs, financial aid for allies
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India Prime Minister Narendra Modi pledges 2 trillion rupees (RM111.79 billion) for jobs and education; Finance Minister Nirmala Sitharaman announces employment-linked incentives for businesses; Modi allocates 150 billion rupees in financial aid to Telugu Desam Party; Modi needs to balance demands of coalition partners without increasing budget deficit; Government aims to lower deficit to raise India's credit ratings.

#India #NarendraModi #Budget #Employment #FinancialAid

https://theedgemalaysia.com/node/719994


G20 finance ministers meet to seek consensus before US election
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Finance ministers and central bankers from the Group of 20 (G20) are meeting this week in Rio de Janeiro to seek consensus on economic policy ahead of the US election. The G20 negotiators have agreed to avoid discussing the conflicts in Ukraine and Gaza to prevent them from dominating the talks. Brazil, the host of the meeting, hopes to shift the focus to economic cooperation on issues such as climate change and poverty. They also aim to gain support for a proposed global tax on the super-rich, which has already received backing from Belgium, Colombia, France, Spain, the African Union, and South Africa. The proposal calls for an annual 2% levy on fortunes exceeding US$1 billion, potentially raising up to US$250 billion per year from around 3,000 individuals. The G20 meeting in Rio is the last finance track meeting before the G20 summit in November, which coincides with the US elections.

#G20 #FinanceMinisters #UsElection #Ukraine #Gaza #EconomicPolicy #ClimateChange #Poverty #GlobalTax #Superrich

https://theedgemalaysia.com/node/719929


Dollar edges lower following Biden’s election exit
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The dollar slipped and Asian stocks fell after Joe Biden ended his reelection campaign and endorsed Vice President Kamala Harris; China’s central bank cut a key short-term interest rate; A Bloomberg gauge of the US currency’s strength fell 0.2% Monday after the US President bowed to pressure from the Democrats and pulled out of the November election race, while the Mexican peso climbed; Stocks opened lower in Japan and South Korea, adding to weakness in Australia; The People’s Bank of China said it will lower the seven-day reverse repo rate to 1.7% from 1.8%; Investors have mulled for weeks a greater prospect Trump will win the November election following Biden’s weak debate performance, only for bets on a Trump win to accelerate last week following an assassination attempt on the former president; The dollar rose for the first time in three weeks, while emerging market assets suffered amid fears of higher trade tariffs, increased US-China tensions and looser US fiscal policy; The question for investors is whether to stick with such trades now that Biden has dropped his bid for reelection; Markets may be jumpy as traders wait to see if Harris secures her party’s nomination and weigh if she can then gather enough momentum to challenge Trump’s lead in the polls; In commodities, oil and gold rose in early trading Monday; The S&P 500 dropped 0.7% on Friday to cap its worst week since April, while the Nasdaq 100 slumped about 1%; China’s one- and five-year loan prime rates are expected to remain unchanged later Monday as the nation’s central bank shrugs off anemic second-quarter growth; Elsewhere this week, traders will be focused on economic activity data in Europe, US second quarter growth and a slew of corporate earnings; Tesla Inc. and Alphabet Inc. will be the first of the “Magnificent Seven” to report earnings on Tuesday

#Dollar #AsianStocks #JoeBiden #KamalaHarris #China #UsElection

https://theedgemalaysia.com/node/719771


Trump welcomes China to build cars in US in departure from Biden
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Former president Donald Trump expresses openness for Chinese automakers to build cars in the US to boost the economy, signaling a departure from the Biden administration's approach. Trump mentions that large factories are being built in Mexico by China to make cars for the US market, but he wants those plants to be built in the US instead. He threatens to impose tariffs as high as 200% on each car to prevent them from entering the country. Trump's comments align with his previous remarks in March welcoming Chinese auto companies to build plants in the US. In contrast, Biden has scrutinized vehicles with links to China and has sought to exclude firms with Chinese government ownership from tax benefits. Both Trump and Biden want to appear tough on Beijing as they potentially face each other in the November election. Trump also vows to end an "electric vehicle mandate" on day one if he takes office.

#DonaldTrump #JoeBiden #UschinaTrade #Automakers #Tariffs #ChineseGovernment #ElectricVehicles

https://theedgemalaysia.com/node/719652


Chinese investors dump record amount of US stocks and bonds
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Chinese investors sold a record amount of US stocks and bonds in May, totaling $42.6 billion worth of long-term securities; Sales in the first five months of this year reached $79.7 billion, an all-time high for the January-May period; The sales were driven by risk reduction due to uncertainty around the US presidential election and possible political influence to reduce US dollar holdings; More than half of the sales were in Treasuries, followed by agency debt and stocks; China's holdings of Treasury notes and bonds have dropped $440 billion since the end of 2017; The prospects for Federal Reserve policy easing and a weaker dollar might discourage Chinese investors from holding too many dollar assets

#ChineseInvestors #UsStocks #UsBonds #Treasury #RiskReduction #UsPresidentialElection #PoliticalInfluence #Treasuries #AgencyDebt #Stocks #FederalReserve #WeakerDollar

https://theedgemalaysia.com/node/719614


Private credit pushes deeper into risk Wall Street is fleeing
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The private credit industry is transforming into the world's new banks, with a greater tolerance for lending risks; Squeezed borrowers are turning to private lenders for stop-gap measures as they struggle to engage with public markets; Private credit funds are reaching further for deals as leveraged buyouts stay scarce; Borrow-now, pay-later deals and payment-in-kind debt are proliferating; Companies with little hope of a turnaround are being passed over by private credit funds; Lenders are implementing protections in deals to guard against asset shifting and loopholes

#PrivateCredit #Risk #Lending #Borrowers #FederalReserve #InterestRates #PublicMarkets #StopgapMeasures #LeveragedBuyouts #InterestMargins #Returns #Debt #Restructuring #PaymentinkindDebt #SyntheticPik #Bankruptcy #Protections #AssetShifting #Loopholes

https://theedgemalaysia.com/node/719613


Oil prices edge up on US inventories but China caps gains
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Oil prices inched up on Wednesday as US oil stockpiles declined, offsetting signs of weakening demand in China. Brent crude oil futures rose 27 cents to $84.00 a barrel, while US West Texas Intermediate crude futures gained 35 cents to $81.11. Crude oil inventories in the US fell by 4.4 million barrels in the week ended July 12. However, concerns over Chinese demand continue to weigh on investor sentiment as China's economy grew at its slowest rate since Q1 2023.

#OilPrices #UsInventories #China #Demand

https://theedgemalaysia.com/node/719349


US Fed-induced world stagnation deepens debt distress
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The last decade and a half has seen protracted worldwide stagnation, worsened by the 2008 global financial crisis, the Great Recession, the Covid-19 pandemic, US Federal Reserve-led interest rate hikes, and escalating geopolitical economic warfare. Unconventional monetary policies, mainly 'quantitative easing' (QE), encouraged more borrowing as more credit became available and affordable. However, the resulting borrowing surge has returned to haunt economies since 2022-23 when interest rates spiked. Developing countries, heavily indebted and with little policy space, face more constraints and vulnerability. Debt stress has grown tremendously in the last two years, especially for developing countries borrowing heavily in major Western currencies. China's lending to developing countries has fallen since 2016, and private capital has fled to the US and other Western markets. Negotiating with private creditors in markets has proved difficult, and there is little hope for significant debt relief or strong recovery in the Global South.

#UsFederalReserve #DebtDistress #WorldwideStagnation #Borrowing #DevelopingCountries

https://theedgemalaysia.com/node/718951


US retail sales unchanged in June, beating forecasts for slight drop
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US retail sales were unchanged in June, following an upwardly revised 0.3% gain in May. Economists had forecast a 0.3% drop in retail sales. However, the outlook for sales is unfavorable as households are becoming more price sensitive and focusing on basic needs. Retail sales excluding automobiles, gasoline, building materials, and food services surged 0.9% in June. Growth estimates for the April-June quarter were around a 2% rate before the retail sales data.

#UsRetailSales #EconomicGrowth #ConsumerSpending

https://theedgemalaysia.com/node/719249


BofA's 2Q profit falls on shrinking interest income
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Bank of America's (BofA) profit fell in the second quarter (2Q) as its income from interest on loans shrank and it set aside more money to cover potential credit losses. The second biggest US lender earned US$6.9 billion (RM32.23 billion), or 83 cents per share, in 2Q ended June 30, compared with US$7.4 billion, or 88 cents per share, a year earlier. BofA's net interest income (NII) in 2Q fell 3% to US$13.7 billion. Provisions for credit losses were US$1.5 billion, higher than US$1.1 billion a year earlier. BofA expects NII in 4Q to be US$14.5 billion, higher than the US$14.4 billion analysts were predicting. BofA's investment banking fees jumped 29% to US$1.6 billion.

#BankOfAmerica #2qProfit #InterestIncome #NetInterestIncome #CreditLosses #InvestmentBankingFees

https://theedgemalaysia.com/node/719237


Thailand approves US$2.8b soft loan scheme for commercial banks
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Thailand's cabinet approves a 100 billion-baht (US$2.8 billion) soft loan scheme for commercial banks to lend to borrowers at below-market rates. The Government Savings Bank will offer liquidity to commercial banks through loans at an interest rate of 0.01% so they can lend to small businesses at a rate of no more than 3.5% per year. The scheme aims to help smaller businesses obtain loans and inject capital into the system. Prime Minister Srettha Thavisin promises additional measures next week, including support for high electricity prices, to stimulate growth in the economy.

#Thailand #SoftLoanScheme #CommercialBanks #SmallBusinesses #InterestRates #EconomicRecovery #GovernmentSupport

https://theedgemalaysia.com/node/719205


JPMorgan raises US$9b of bonds in post-earnings spree
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JPMorgan Chase & Co sold US$9 billion of bonds in the US investment-grade market, with the longest portion of the offering yielding 1.07 percentage point above Treasuries. The issuance comes after the bank reported record profit and a multibillion-dollar gain tied to a Visa Inc share exchange. Wells Fargo & Co, Citigroup Inc, and Goldman Sachs Group Inc are also expected to sell debt after posting earnings. The top banks are expected to borrow more than usual due to falling yields and upcoming US elections. JPMorgan credit analyst Kabir Caprihan expects US$21 billion to US$24 billion of issuance from the six biggest domestic banks. Risk premiums on investment-grade bonds have narrowed, and the overall cost to sell debt has fallen to the lowest in five months. JPMorgan was among six companies issuing US$18.1 billion of dollar bonds on Monday.

#Jpmorgan #Bonds #InvestmentgradeMarket #Earnings #DebtIssuance #UsEconomy

https://theedgemalaysia.com/node/719153


BlackRock assets hit record US$10.6 tril as markets soar
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BlackRock's assets reached a record high of US$10.65 trillion in the second quarter, with a 9% increase in profit. The company's shares rose 1.2% in premarket trading. The surge in stock markets and investor interest in AI-linked stocks contributed to the growth in BlackRock's assets under management, which increased from US$9.43 trillion to US$10.65 trillion. The company's investment advisory and administration fees rose 8.6% to US$3.72 billion. Net income for the quarter was US$1.50 billion, compared to US$1.37 billion in the same period last year.

#Blackrock #Assets #Profit #StockMarkets #AilinkedStocks

https://theedgemalaysia.com/node/719045


How regulators are using banks to illuminate shadow banks
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The Federal Reserve has proposed new rules to gather details about banks' exposure to shadow banks. Regulators are concerned about systemic risks in lightly regulated and opaque shadow banks. The Fed wants banks to report detailed information about their lending to shadow banks, including entity type, collateral, and ownership by financial sponsors. However, regulators will still be blind to large portions of the sector. The Bank of England and the G20's Financial Stability Board are also collecting data on shadow banks. The Fed's proposal aims to collect granular information for stress tests, but it will take time to implement. Private equity firm Vista Equity is in talks to cede control of Pluralsight to private credit lenders. Regulators need to consider how private credit interacts with various entities, not just banks.

#FederalReserve #ShadowBanks #Regulation #SystemicRisks #PrivateCredit #BankOfEngland #G20 #StressTests

https://theedgemalaysia.com/node/719012


Taiwan, India threaten China’s top spot in emerging market equity portfolios
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Taiwan and India are emerging as formidable rivals to China's top spot in emerging market equity portfolios. Both countries now command more than 19% weightings each in the MSCI EM Index, compared to China's 22.8%. Taiwan's rise is notable considering its market capitalization is less than a third of mainland China's. The Taiex Index has risen 33% this year, bolstered by gains in Taiwan Semiconductor Manufacturing Co. India's Nifty 50 Index has advanced more than 12% in 2024. The number of EM Ex-China fund launches this year is just three short of last year's annual record. Earnings are a crucial factor, with forward earnings estimates for Taiwan and India increasing by at least 13% each, while China's earnings revision is slow. Emerging Asia ex-China's equity markets recorded net inflows of nearly $9 billion since the start of June, with South Korea, India, and Taiwan among the top recipients.

#Taiwan #India #China #EmergingMarkets #EquityPortfolios

https://theedgemalaysia.com/node/718877


Unconventional Economic Wisdom: There is no debating who would be better for the US economy
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The article discusses the economic-policy records of US President Joe Biden and Donald Trump. It highlights that Trump's claims of credit for economic growth are unfounded, as the promised surge of investment never materialized and there was a wave of stock buybacks instead. Biden's economic record has been impressive, with the passage of the American Rescue Plan and the Bipartisan Infrastructure Law. The article also argues that Trump's proposals would cause higher inflation, greater inequality, and negative effects on the labour market, deficit, and exports. It concludes that there is no debate on who would be better for the economy: Biden or Trump.

#UsEconomy #JoeBiden #DonaldTrump #EconomicPolicy #AmericanRescuePlan #BipartisanInfrastructureLaw #Inflation #Inequality #LabourMarket #Deficit #Exports

https://theedgemalaysia.com/node/718283


Vietnam's VinFast delays US electric car plant amid market slowdown
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Vietnamese electric vehicle (EV) maker VinFast is delaying the launch of its planned $4 billion factory in North Carolina to 2028 and cutting its delivery forecast for this year by 20,000 units. VinFast, founded by Vietnam's richest man Pham Nhat Vuong in 2017, will now deliver 80,000 vehicles this year, down from the initially planned 100,000. Sales at VinFast rose 24% to about 12,000 vehicles in the second quarter. The company expects strong sales growth in the second half of the year and will delay the launch of its North Carolina factory to 2028. VinFast logged a net loss of $618 million in the first quarter and is set to announce its second-quarter results on Aug 15.

#Vinfast #ElectricVehicle #Ev #NorthCarolina #PhamNhatVuong

https://theedgemalaysia.com/node/718871


US consumer sentiment falls to eight-month low on high prices
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US consumer sentiment unexpectedly declined to the lowest level in eight months in early July as high prices continued to weigh on Americans’ views of their finances and the economy. The sentiment index fell to 66 in July from 68.2, according to the preliminary reading from the University of Michigan. Consumers’ expectations for inflation over the next year fell for a second month, to 2.9%. Almost half of consumers expressed complaints that high prices are eroding their living standards. The recent downward path for inflation has provided some relief to consumers who felt squeezed by the post-Covid spike in inflation. The labour market has showed signs of cooling, with unemployment rising to 4.1% in June. The current conditions gauge fell to 64.1, its lowest since December 2022. Buying conditions for durable goods dropped to 85, the lowest in just over a year. Consumers’ perception of their financial situation now and in the future deteriorated in July, with each falling to the lowest level since October. The November presidential election may be weighing on consumers’ expectations for the economy.

#UsConsumerSentiment #HighPrices #Inflation #Economy

https://theedgemalaysia.com/node/718862


US producer prices rise moderately in June
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US producer prices increased moderately in June, with the producer price index for final demand rising 0.2% after being unchanged in May. In the 12 months through June, the PPI increased 2.6% after advancing 2.4% in May. The government reported that consumer prices fell for the first time in four years in June. With the Federal Reserve now wary of labor market weakness, economists and financial markets are increasingly betting on a rate cut in September, with another reduction in borrowing costs expected in December. Fed chair Jerome Powell acknowledged the improving inflation environment but also highlighted the risks to the labor market.

#UsProducerPrices #Inflation #InterestRates

https://theedgemalaysia.com/node/718834


US treasuries wipe out 2024’s loss as traders bet on rate cuts
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US treasuries have erased this year’s declines as cooling inflation boosts bets on Federal Reserve interest-rate cuts. US treasury Index is up 0.3% this year, reversing losses of as much as 3.4% back in April. The latest move followed data that showed US inflation slowed further last month, fuelling the view among traders and economists that the Fed will start easing policy in coming months. Investors are looking for more evidence that price growth is broadly decelerating to decide whether the Fed has room to deliver more than two quarter-point cuts this year, a scenario they see as a one-in-three chance. Markets are now almost fully pricing in a 25 basis-point rate cut in September, compared with odds of only about 70% before Thursday’s CPI report.

#UsTreasuries #InterestrateCuts #Inflation #FederalReserve

https://theedgemalaysia.com/node/718788


As tide goes out on private credit, smaller firms look exposed
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Funds with less than $1 billion of assets received the least amount of cash on record last year. Large firms got more than four fifths of the $200 billion raised by private credit globally in 2023. Limited partners are choosing well-known giants over smaller managers. A growing number of newcomers are being forced out of the private credit market. Fidelity International and Polen Capital Management had to rethink plans to expand into Europe. Smaller firms are in danger of being swallowed up by better-capitalized rivals. Smaller firms can outperform on returns by lending to smaller companies. Investors are less interested in putting their money with the smallest managers. Higher default rates in the portfolios of small managers are the result of triggers on covenants often lacking on larger loans. Larger managers may imperil their own futures by squeezing out the smallest managers.

#PrivateCredit #SmallerFirms #LimitedPartners #MarketConcentration

https://theedgemalaysia.com/node/718770


China's exports top forecasts, but falling imports point to more stimulus
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China's exports grew 8.6% YoY in June, beating forecasts, while imports shrank 2.3%, indicating weak domestic demand. The trade data suggests manufacturers are front-loading orders ahead of expected tariffs. Analysts warn that sustaining strong export sales is a major risk for China's economy. The trade surplus in June was $99.05 billion, the highest on record. The US has highlighted the surplus as evidence of one-sided trade favoring China. China is expected to roll out more policy support measures and boost fiscal stimulus to kickstart domestic consumption. Economists and investors are awaiting the Third Plenum on July 15-18 for further developments.

#China #Exports #Imports #Stimulus #DomesticDemand #Tariffs #TradePartners #Economy

https://theedgemalaysia.com/node/718738


CNN to cut 100 jobs in major overhaul to focus on digital, memo shows
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CNN plans to cut about 100 jobs as part of a consolidation and digital focus strategy. The news outlet will merge its news-gathering and digital news teams, invest in video operations, and launch pay-per-view news products. CNN Worldwide CEO Mark Thompson aims to build a billion-dollar digital business. The company will launch a stand-alone subscription product for news and plans to create TV Future Lab to produce content for the Max streaming platform. Thompson also outlined changes to editorial workflows, including centralized planning and a new 'story manager' role. The plan will be discussed in a town hall meeting.

https://theedgemalaysia.com/node/718583


Intuit to cut about 1,800 jobs as it looks to increase AI investments
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Intuit, the parent company of TurboTax, plans to cut about 1,800 jobs, or 10% of its workforce, as it focuses on its AI-powered tax preparation software and other financial products. The company will close two sites in Edmonton, Canada, and Boise, Idaho. However, Intuit will rehire 1,800 new employees primarily in engineering, product, and customer-facing roles. The layoffs will cost Intuit between US$250 million and US$260 million, with most of the charge expected to be incurred in the fourth quarter. Intuit plans to increase investments in generative AI and expand into new markets, including Canada, the United Kingdom, and Australia.

#Intuit #JobCuts #AiInvestments #Turbotax #TaxPreparationSoftware #FinancialProducts

https://theedgemalaysia.com/node/718581


JPMorgan upgrades Malaysia amid economic reforms, renewed investor confidence, data-centred investments — interview
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JPMorgan has upgraded its rating on Malaysia from 'underweight' to 'neutral' due to policy reforms, data-centred investments, and infrastructure buildout. Malaysia recorded a 4.2% GDP growth in Q1 2024 and earnings growth of 10-11%. The upgrade is also reflective of a governance reset following the 1MDB scandal. Foreign investors are returning to Malaysia, with a net inflow of $200 million in Q2 2024. Malaysia's potential as a technology hub is attracting interest, particularly in sectors like chip packaging, data centres, EVs, green energy, and solar projects. JPMorgan's upgrade reflects economic growth, effective policy implementation, and improving governance.

#Malaysia #Jpmorgan #EconomicReforms #InvestorConfidence #DatacentredInvestments #PolicyReforms #InfrastructureBuildout #GdpGrowth #EarningsGrowth #GovernanceReset #1mdbScandal #ForeignInvestors #TechnologyHub #ChipPackaging #DataCentres #ElectricVehicles #GreenEnergy #SolarProjects

https://theedgemalaysia.com/node/718568


US commercial property crash is set to deepen the pain elsewhere
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Distressed investors see an opportunity to buy troubled US real estate assets as the commercial property crash continues. Private equity firms have set aside $400 billion for property investment, with 64% targeted at North America. The fear is that a strong US bias will delay the work out of troubled loans and properties in other parts of the world. Almost $1 trillion of debt linked to commercial real estate will mature this year in the US, creating more options for buyers of distressed assets. The number of US banks at risk would exceed levels seen in the 2008 financial crisis if CRE values fell by only 20% from their peak. The overall pool of private equity capital for commercial real estate has shrunk by 26% globally. Banks in Germany update valuations of buildings they have financed less regularly than peers in the US. European Banking Authority chair Jose Manuel Campa expects a further increase in non-performing loans.

#UsCommercialProperty #DistressedInvestors #PrivateEquity #RealEstateAssets #CommercialRealEstate #UsBanks #GlobalEconomy

https://theedgemalaysia.com/node/718511


US favoured over China in dozens of countries, Pew survey says
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A survey conducted by the Pew Research Center shows that the US has a more favourable image than China in 35 high- and middle-income countries. In 18 high-income countries, more than twice as many people view the US positively compared to China, with the gap most pronounced in Poland, Japan, the US, and South Korea. However, in the 17 middle-income countries surveyed, both countries were viewed similarly. While middle-income countries generally had a more positive view of China, the US maintained a slight edge even among the poorer group of nations. In terms of leaders, middle-income countries had similar confidence in US President Joe Biden and Chinese President Xi Jinping. In contrast, the 18 rich countries surveyed had a more negative view of China and Xi, with only 24% having a favourable opinion of China and 17% having confidence in Xi. China's economic influence has increased in 11 of the 15 countries where sentiments were tracked, including Brazil, India, Kenya, and Argentina. Different nations had mixed views on whether these changes were positive. The survey also found that China is gaining popularity in some parts of the world, with Singapore being the only rich nation where more adults preferred China over the US.

#Us #China #PewResearchCenter #PublicOpinion #GlobalInfluence

https://theedgemalaysia.com/node/718484


Returns of US$7.2 tril green sector outpaced only by tech stocks
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The green economy had the second-best financial performance of any equity sector over the past decade, with total returns of 198%. Only the technology industry surpassed the green economy's returns. Energy management and efficiency were the best performers within the green sector. Renewable energy was a laggard. The green economy has a market capitalization of US$7.2 trillion and a compound annual growth rate of 14% over the past decade. Companies with green revenues account for about 8.6% of global listed equity markets. The FTSE Russell Environmental Opportunities All Share Index is used as a proxy for the green sector and has outperformed the FTSE Global All Cap by 82% since 2008. Energy management and efficiency have a compound annual growth rate of 17% over the last five years. AI and data centers may become a new driver for green economy expansion. Overcapacity in sectors such as solar and trade barriers related to renewable-energy equipment and electric-vehicle manufacturing are headwinds for the green economy. Protectionism can both accelerate and slow down the green economy.

#GreenEconomy #TechnologyIndustry #EnergyManagement #RenewableEnergy #MarketCapitalization

https://theedgemalaysia.com/node/718257


Bits + Bytes: A Miscellany of Technology
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Malaysia Digital Economy Corporation (MDEC) and the government are focused on implementing and realizing the investments made by global tech giants such as Amazon Web Services (AWS) and Microsoft. The government is fostering a collaborative environment where both investors and the public can witness the digital economy flourish. Major investments by technology giants like AWS and Microsoft in Malaysia’s data center industry are set to provide supply chain opportunities for small and medium enterprises (SMEs) in the country. Nearly 70% of total debit and credit card transactions were contactless following the pandemic. The average e-payment transaction per person rose 31.5% to RM9.5 billion in 2022 from RM7.2 billion in 2021. Gen Z and Baby Boomers prioritize efficient shipping and product variety over discounts when shopping online. The World Bank has appointed economist Zafer Mustafaoglu as the new country director for the Philippines, Malaysia, and Brunei. Malaysia’s social entrepreneurship movement has untapped potential, and the ASBhive-Hasanah Impact Challenge offers RM250,000 in grants to support social enterprises focused on education, community development, and the environment.

#Malaysia #DigitalEconomy #TechnologyInvestments #ContactlessTransactions #Epayments #OnlineShopping #SocialEnterprises

https://theedgemalaysia.com/node/717896


Gold hovers near two-week high as weak data fuels US rate cut bets
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Gold prices eased on Thursday but hovered near a two-week high hit in the previous session, after softer-than-expected US economic data fuelled hopes that the Federal Reserve could cut interest rates as soon as September. Spot gold fell 0.1% at US$2,353.14 per ounce as of 0637 GMT, after hitting highest level since June 21 in the previous session. US gold futures lost 0.3% at US$2,363.10. US economic data on Wednesday, including weak services and ADP employment reports, showed a slowing economy. A separate report showed an increase in initial applications for US unemployment benefits last week. Traders are now looking out for US nonfarm payrolls (NFP) data, due on Friday. Markets are now pricing in a 73% chance of the Fed cutting interest rates at its September meeting, according to the CME FedWatch Tool. Lower rates reduce the opportunity cost of holding non-yielding gold.

#Gold #UsRateCut #EconomicData #FederalReserve #InterestRates

https://theedgemalaysia.com/node/717875


UPS plans to close Baltimore facility, lay off 540 workers - report
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A UPS customer center in Baltimore is set to close on August 23, resulting in the layoff of 540 employees. This follows a previous layoff of 118 employees at the same location in March. The closure was reported in a Maryland state filing and will affect hundreds of workers. The news was reported by Freight Waves.

#Ups #Baltimore #FacilityClosure #Layoffs

https://theedgemalaysia.com/node/717672


Powell says US Fed needs more evidence of falling inflation before cutting rates
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Federal Reserve chair Jerome Powell stated that the US central bank requires more data before cutting interest rates, in order to ensure that recent weaker inflation readings accurately reflect underlying price pressures. The Fed's preferred measure of inflation did not increase in May, and the 12-month rate of price increases has decreased to 2.6%, still above the central bank's 2% target. Powell emphasized the need for confidence in the levels of inflation and noted that the US economy's strength allows for a cautious approach. However, he acknowledged that the risks to the Fed's inflation and employment goals have come closer to balance. The timing of an initial rate cut will depend on upcoming employment and inflation reports, with investors anticipating a quarter-percentage-point rate reduction at the Fed's September meeting.

#FederalReserve #InterestRates #Inflation

https://theedgemalaysia.com/node/717642


BIS sends government debt warning before important elections
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The Bank for International Settlements (BIS) warned that rising government debt levels ahead of major elections could disrupt global financial markets. Global government debt is already at record levels, and upcoming elections in the US, Mexico, South Africa, France, and Britain carry risks. BIS General Manager Agustin Carstens emphasized the need to cut the rise in public debt and accept that interest rates may not return to pre-pandemic ultra-low levels. While central banks have successfully controlled inflation, Carstens urged them to persevere and not rush rate cuts. Premature easing could reignite inflationary pressures and lead to costly policy reversals.

#Bis #GovernmentDebt #GlobalFinancialMarkets #Elections #InterestRates #Inflation

https://theedgemalaysia.com/node/717366


Jobs, inflation data may break the US Treasury market out of narrow range
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Yields on benchmark US 10-year Treasuries have been bouncing between about 4.20% and 4.35% since mid-June. The upcoming US employment data, followed by inflation numbers and Federal Reserve Chairman Jerome Powell's testimony, could change the outlook. The market is waiting for the other shoe to drop. A recent survey showed fund managers the most underweight bonds since November 2022. Some investors believe inflation is unlikely to return to pre-pandemic levels and the US economy is likely to show a higher level of underlying strength, limiting the longer-term downside for bond yields.

#UsTreasuryMarket #Jobs #InflationData #FederalReserve #BondYields

https://theedgemalaysia.com/node/717292


US economy shows further signs of slowing under high rates
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Wide-ranging economic data illustrates a downshift in US growth over the first half of the year tied to both the Federal Reserve’s higher-for-longer borrowing costs policy and lingering inflation. The government marked down personal spending to an annualized 1.5% in the first quarter. Other data showed declines in orders and shipments of certain business equipment, the widest trade deficit in two years, weakness in the job market, and a slide in homebuying. The Atlanta Fed’s GDPNow forecast now pegs second-quarter growth at 2.7%. The impact of mortgage rates around 7% on the housing market was illustrated by the National Association of Realtors index of contract signings for previously owned homes slumping to the lowest level in records back to 2001. Signs of financial strain suggest cooler growth in the coming months, with after-tax personal income rising just 1.5% in the first quarter compared with a year earlier. Labor demand is moderating, with continuing jobless claims climbing to the highest level since 2021. The value of core capital goods orders matched the biggest drop this year, and core capital goods shipments decreased 0.5%, the most in three months. The US merchandise trade gap swelled to $100.6 billion in May, the widest in two years, as exports dropped.

#UsEconomy #EconomicGrowth #FederalReserve #BorrowingCosts #Inflation

https://theedgemalaysia.com/node/717157


Stocks and futures struggle ahead of key US data
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US equity-index futures slipped and Treasury yields ticked higher ahead of economic data that will help set the path for Federal Reserve policy. Reports on economic growth and weekly unemployment claims are on traders’ radar Thursday before tomorrow’s key inflation figures. Micron Technology Inc.’s disappointing sales outlook highlighted the risks of relying on artificial intelligence chip makers to fuel the stock rally. Europe’s stock benchmark was little changed, with traders in holding mode ahead of Sunday’s French elections. Stocks in Japan, Hong Kong, South Korea and China all declined, putting the MSCI Asia Pacific gauge on course for its first loss in three days. MSCI Inc.’s key gauge for Chinese stocks is on course for a technical correction as traders struggle to find catalysts ahead of a July meeting of the nation’s top leaders. In commodities, gold steadied after a two-day decline, while oil traded in a narrow range ahead of the next round of US economic data. Iron ore held a two-day gain, supported by signs that Chinese demand may pick up after property measures took effect across the country’s mega cities.

#Stocks #Futures #UsData #FederalReserve #EconomicGrowth #UnemploymentClaims #Inflation #ArtificialIntelligence #ChipMakers #StockRally #Europe #FrenchElections #Japan #HongKong #SouthKorea #China #MsciAsiaPacific #ChineseStocks #Commodities #Gold #Oil #IronOre #ChineseDemand #PropertyMeasures

https://theedgemalaysia.com/node/717078


Fed’s key inflation gauges may offer path to rate cuts
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The US Federal Reserve's favored inflation yardsticks are expected to show minimal monthly advances, potentially paving the way for interest rate cuts. Economists project no change in the May personal consumption expenditures price index and a 0.1% gain in the core measure that excludes food and energy. The report is also expected to show 2.6% annual advances in both the overall and core gauges. Fed officials have stated that they need to see months of progress in inflation data before considering rate cuts. The labor market is still performing well, providing flexibility on the timing of rate cuts. Other upcoming data includes personal spending figures, consumer confidence, and housing contract signings. Central bank decisions in Sweden, Mexico, and Zimbabwe are also anticipated.

#UsFederalReserve #Inflation #InterestRates #Economy

https://theedgemalaysia.com/node/716418