Economy
S&P 500 Breaks Winning Streak As Powell Warns Of More Interest Rate Hikes Ahead; Bitcoin Rallies Over 20%
The S&P 500 fell on the week in the wake of Fed Chair Jerome Powell’s testimony to Congress that FOMC members agree that “it will be appropriate to raise interest rates somewhat further by the end of the year.”The drop was the index’s largest loss in all of June, breaking a weeks-long winning streak for the general market gauge. Other indexes also saw a week of losses. The Dow Jones was also down 2.1% on the week and the tech-heavy Nasdaq Composite lost 1.01%. The tech sector saw $2 billion in outflows in the five trading days ending Wednesday, June 21, the largest in 10 weeks.Powell’s words were taken with disappointment after the Federal Open Market Committee’s decision to pause interest rate hikes for the first time since March 2022, spreading a wave of optimism for investors across sectors.Further raises to interest rates are expected to come from central banks across the globe as inflation proves sticky for most economies.Washington, D.C. received a high-profile visit from India’s Prime Minister Narendra Modi, who was welcomed with great emphasis by the Biden administration. President Joe Biden said the relationship between the U.S. and India “will be one of the defining relationships of the 21st century” as India rises to the top as one of the world’s most influential economic and military powers.FedEx Corp.’s FDX earnings call caused mixed emotions as the company reported a revenue drop of 10.2% ($21.9 billion) for the fourth quarter, coming in below analyst estimates of $22.7 billion. Earnings of $4.94 per share beat estimates of $4.89 per share.Remember Bitcoin? The cryptocurrency embarked on a massive rally, gaining nearly 20% this week, breaking the psychological $30,000 barrier and reaching $31,200 after the announcement of new crypto initiatives by several financial services institutions.What’s Next: On Tuesday, June 27, the New Home Sales report will lend a view into the real estate market for the month of May. On Friday, the Personal Consumption Expenditures index will give a window into the Fed’s preferred inflation measure. Walgreens WBA reports earnings Tuesday, while semiconductor chips manufacturer Micron Technologies MU will release its results on Wednesday, along with food giant General Mills GIS. Sports apparel colossus Nike NKE will post earnings Thursday, while beverage giant Constellation Brands STZ reports Friday.
© Reuters. Russian Central Bank Governor Elvira Nabiullina attends a news conference in Moscow, Russia June 14, 2019. REUTERS/Shamil Zhumatov/File Photo
MOSCOW (Reuters) – Russia’s central bank will need two to three months to make sure that inflation is steadily declining before taking any decision on interest rate cuts, the bank’s governor Elvira Nabiullina told RBC media on Sunday.
The central bank raised its key interest rate by 100 basis points to 16% earlier in December, hiking for the fifth consecutive meeting in response to stubborn inflation, and suggested that its tightening cycle was nearly over.
Nabiullina said it was not yet clear when exactly the regulator would start cutting rates, however.
“We really need to make sure that inflation is steadily decreasing, that these are not one-off factors that can affect the rate of price growth in a particular month,” she said.
Nabiullina said the bank was taking into account a wide range of indicators but primarily those that “characterize the stability of inflation”.
“This will take two or three months or more – it depends on how much the wide range of indicators that characterize sustainable inflation declines,” she said.
The bank will next convene to set its benchmark rate on Feb. 16.
The governor also said the bank should have started monetary policy tightening earlier than in July, when it embarked on the rate-hiking cycle.
© Reuters. FILE PHOTO: Workers walk past an under-construction area with completed office towers in the background, in Shenzhen’s Qianhai new district, Guangdong province, China August 25, 2023. REUTERS/David Kirton/File Photo
SHANGHAI (Reuters) – China’s top planning body said on Saturday it had identified a second batch of public investment projects, including flood control and disaster relief programmes, under a bond issuance and investment plan announced in October to boost the economy.
With the latest tranche, China has now earmarked more than 800 billion yuan of its 1 trillion yuan ($140 billion) in additional government bond issuance in the fourth quarter, as it focuses on fiscal steps to shore up the flagging economy.
The National Development and Reform Commission (NDRC) said in a statement on Saturday it had identified 9,600 projects with planned investment of more than 560 billion yuan.
China’s economy, the world’s second largest, is struggling to regain its footing post-COVID-19 as policymakers grapple with tepid consumer demand, weak exports, falling foreign investment and a deepening real estate crisis.
The 1 trillion yuan in additional bond issuance will widen China’s 2023 budget deficit ratio to around 3.8 percent from 3 percent, the state-run Xinhua news agency has said.
“Construction of the projects will improve China’s flood control system, emergency response mechanism and disaster relief capabilities, and better protect people’s lives and property, so it is very significant,” the NDRC said.
The agency said it will coordinate with other government bodies to make sure that funds are allocated speedily for investment and that high standards of quality are maintained in project construction.
($1 = 7.1315 renminbi)
© Reuters. Russian Central Bank Governor Elvira Nabiullina attends a news conference in Moscow, Russia June 14, 2019. REUTERS/Shamil Zhumatov/File Photo
MOSCOW (Reuters) – Russia’s central bank will need two to three months to make sure that inflation is steadily declining before taking any decision on interest rate cuts, the bank’s governor Elvira Nabiullina told RBC media on Sunday.
The central bank raised its key interest rate by 100 basis points to 16% earlier in December, hiking for the fifth consecutive meeting in response to stubborn inflation, and suggested that its tightening cycle was nearly over.
Nabiullina said it was not yet clear when exactly the regulator would start cutting rates, however.
“We really need to make sure that inflation is steadily decreasing, that these are not one-off factors that can affect the rate of price growth in a particular month,” she said.
Nabiullina said the bank was taking into account a wide range of indicators but primarily those that “characterize the stability of inflation”.
“This will take two or three months or more – it depends on how much the wide range of indicators that characterize sustainable inflation declines,” she said.
The bank will next convene to set its benchmark rate on Feb. 16.
The governor also said the bank should have started monetary policy tightening earlier than in July, when it embarked on the rate-hiking cycle.
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