Stock Markets
Global central banks begin policy shift as inflation cools
© Reuters. FILE PHOTO: European Central Bank (ECB) President Christine Lagarde speaks to the media following the Governing Council’s monetary policy meeting at ECB headquarters in Frankfurt, Germany, July 27, 2023. REUTERS/Kai Pfaffenbach/File Photo
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By Howard Schneider and Francesco Canepa
WASHINGTON/FRANKFURT (Reuters) – Top central banks continued with another round of interest rate hikes this week despite cooling inflation, but have now switched in unison to a more cautious posture about further moves in a sign that a year-long round of global monetary tightening could be at an end.
The U.S. Federal Reserve and the European Central Bank delivered quarter-percentage-point rate increases this week, as expected, and left open the option of further hikes if inflation didn’t continue a decline that has started to come faster than expected on both sides of the Atlantic.
The Bank of England is expected to raise rates again next week following similar positive inflation news, while the Bank of Japan, which meets on Friday, is expected to at least open debate on plans to bring its ultra-loose policies to an end.
Yet the hike-first rhetoric, common among top policymakers since last year, has now been coupled with a broader view of how prices are evolving alongside the economy as a whole, a more comprehensive approach that could allow slower job and economic growth to serve as its own evidence that inflation will continue to fall.
That’s a switch from policymakers’ insistence over the past year that they needed to see actual declines in the pace of price rises to know progress was being made, and one that could inject what Fed Chair Jerome Powell described as a dose of patience into the debate over whether more rate hikes are needed.
The Fed’s benchmark overnight interest rate now stands in the 5.25%-5.50% range, while the ECB’s main rate is 3.75%.
“Given how far we’ve come, we can afford to be a little patient as well as resolute as we let this unfold,” Powell said in a press conference on Wednesday following the Fed’s decision to raise rates for the 11th time in its last 12 meetings. “We want to see economic growth running at moderate or modest levels to help ease inflationary pressures. We want to see continued restoration of supply and demand balance, particularly in the labor market … We see those pieces of the puzzle coming together.”
‘OPEN MIND’
For the ECB, President Christine Lagarde said a slight wording change in its latest policy statement was “not just random or irrelevant,” but meant to communicate that after nine straight rate increases a pause would be on the table at the central bank’s meeting in September, just as it will be for the U.S. central bank.
“We have an open mind as to what the decision will be in September and subsequent meetings,” Lagarde said. “We might hike. We might hold … I hope it is very clear that we are not in the domain of forward guidance.”
New U.S. gross domestic product data on Thursday showed the path to a global pause is far from clear in an economy that continues to confound.
The economy grew at a faster-than-anticipated 2.4% annual rate in the second quarter, well above the 1.8% annual rate that Fed officials regard as the approximate trend consistent with their 2% inflation target. Yet quarterly inflation data came in weaker than expected.
While bond markets took a cue from the faster growth, and pushed yields on Treasuries higher, the days of coordinated global tightening may be numbered.
Though there was “material risk” inflation may still require further hikes, wrote Evercore ISI Vice Chairman Krishna Guha, “in the base case, the ECB – like the Fed – is done raising rates.”
Sterling Construction Company, Inc. (NASDAQ:) has reached an impressive milestone, with its stock price soaring to an all-time high of $137.93. This peak represents a significant achievement for the company, reflecting a robust performance and investor confidence. Over the past year, Sterling Construction has witnessed a remarkable 84.48% increase in its stock value, underscoring the company’s strong market presence and the positive reception of its strategic initiatives. Investors and market analysts alike are closely monitoring STRL’s progress, as it continues to build on its momentum in the construction sector.
In other recent news, Sterling Infrastructure, Inc. announced two key changes in its leadership. The company revealed the upcoming retirement of board member Charles R. Patton, effective from September 1, 2024. Patton, who has been a part of Sterling’s Board since 2013, will step down after over a decade of service, during which he contributed to the Corporate Governance & Nominating Committee and the Compensation Committee.
In parallel, Sterling Infrastructure named Dan Govin as its new Chief Operating Officer. Govin, who brings over three decades of experience in the energy infrastructure industry, is set to lead the company’s strategic and operational initiatives. His past roles include Regional President at Quanta Services (NYSE:) and Senior Vice President of Operations.
In related developments, Sterling Real Estate Trust, a North Dakota-based real estate investment trust, recently held its annual shareholders’ meeting. During the meeting, eight trustees were elected, including Gregory P. Hammes, Timothy L. Haugen, and Michelle L. Korsmo, among others. Additionally, the appointment of RSM US, LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2024, was ratified by the shareholders. These are among the latest developments at Sterling Infrastructure, Inc. and Sterling Real Estate Trust.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
CRH (NYSE:) PLC, a global leader in building materials, has reached an all-time high, with its stock price soaring to $91.22. This significant milestone underscores the company’s robust performance and investor confidence in its growth trajectory. Over the past year, CRH has seen an impressive 66.73% increase in its stock value, reflecting strong market demand and the successful execution of its strategic initiatives. The company’s ability to achieve this record price level amidst a dynamic economic environment speaks volumes about its resilience and the positive outlook shared by its stakeholders.
In other recent news, CRH Plc has seen a series of positive developments. Stifel, a financial services firm, has increased its EBITDA projections for the company by 4% for the years 2024 and 2025, following a positive outlook on CRH’s earnings. This includes the expected contributions from the newly acquired Adbri, which is predicted to add an additional 1% and 2% to the EBITDA in 2024 and 2025, respectively.
In addition, Deutsche Bank has raised its price target for CRH, maintaining a Buy rating on the stock, following the company’s acquisition of a majority stake in Adbri. This move is anticipated to enhance CRH’s materials solutions offerings in Europe.
Furthermore, CRH has appointed Lauren Schulz as its new Chief Communications Officer, a move expected to enhance the company’s global communications strategy.
Additionally, CRH has filed a notification regarding transactions by persons discharging managerial responsibilities, providing transparency into the dealings of the company’s management.
Lastly, CRH has reported strong growth in adjusted EBITDA and margin for the second quarter of 2024, and has raised its full-year adjusted EBITDA guidance to a range of $6.82 billion to $7.02 billion. These recent developments demonstrate the company’s resilience and strategic approach in a competitive market.
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For those monitoring CRH’s trajectory, the stock is trading near its 52-week high, at 99.14% of its peak, with a previous close at $89.27. The company’s next earnings date is set for November 7, 2024, which will provide further clarity on its performance and outlook. With a fair value estimate of $101 by analysts and an InvestingPro fair value of $74.35, investors are presented with a nuanced picture of CRH’s valuation. As the market anticipates CRH’s next financial disclosures, the InvestingPro platform remains a valuable resource for real-time data and expert analysis.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
In a remarkable display of market confidence, Nelnet Inc (NYSE:) stock has achieved an all-time high, reaching a price level of $115.64. This milestone underscores a period of significant growth for the company, which has seen its stock value surge by 27.28% over the past year. Investors have rallied behind Nelnet’s strong performance, propelling the stock to new heights and reflecting optimism in the company’s future prospects. The all-time high represents not just a peak for the year but an unprecedented value in the company’s trading history, marking a momentous occasion for both Nelnet and its shareholders.
In other recent news, Nelnet Inc. has been under the spotlight following strong Q2 earnings and subsequent adjustments by TD Cowen. The firm increased Nelnet’s price target to $98.00, up from $96.00, while maintaining a Hold rating on the stock. This follows Nelnet’s Q2 2024 earnings report, which highlighted an EPS of $1.44, surpassing TD Cowen’s estimate of $1.33. The improved earnings were largely due to reduced operating expenses and a lower provision for losses. However, these gains were slightly offset by a decrease in fee income and a lower net interest income.
In recent developments, Nelnet disclosed its quarterly financial results to the Federal Deposit Insurance Corporation (FDIC). The report provides a snapshot of the financial health of Nelnet Bank, its wholly-owned subsidiary, and includes critical data such as assets, liabilities, and income. This commitment to transparency and regulatory compliance allows investors to gauge Nelnet’s financial stability and growth prospects.
Furthermore, Nelnet’s bank subsidiary, Nelnet Bank, also disclosed its quarterly financials. The report, known as the Call Report, is a significant indicator of the subsidiary’s contribution to Nelnet’s overall financial status. This routine disclosure aligns with the requirements of the Securities Exchange Act of 1934, providing a clear view of Nelnet Bank’s financial standing as of the last quarter.
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In light of Nelnet Inc’s (NNI) recent achievement of an all-time high stock price, several InvestingPro Tips and real-time data points provide further context to the company’s financial health and market performance. Notably, Nelnet has demonstrated a robust track record by raising its dividend for 9 consecutive years and maintaining dividend payments for 18 consecutive years, which signals a strong commitment to shareholder returns. Additionally, analysts remain optimistic about the company’s profitability, expecting net income to grow this year.
From a data standpoint, Nelnet’s current market capitalization stands at $4.15 billion with a price-to-earnings (P/E) ratio of 26.88, which adjusts to a lower ratio of 22.02 when considering the last twelve months as of Q2 2024, reflecting a more favorable valuation for investors. The company’s revenue growth has been modest at 0.7% over the last twelve months, yet it experienced a more significant quarterly surge of 12.82% as of Q2 2024. Importantly, Nelnet’s stock is trading near its 52-week high, at 99.06% of this peak, and has seen a large price uptick of 31% over the last six months. These figures underscore the company’s strong market presence and potential for continued growth.
For those interested in deeper analysis, there are additional InvestingPro Tips available at https://www.investing.com/pro/NNI, which can provide investors with more nuanced insights into Nelnet’s performance and future outlook.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
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