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Shares slip, yields rise as market awaits likely hawkish tone from Fed

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Shares slip, yields rise as market awaits likely hawkish tone from Fed
© Reuters. FILE PHOTO: Passersby walk past an electric board displaying Japan’s Nikkei share average outside a brokerage in Tokyo, Japan April 18, 2023. REUTERS/Issei Kato

By Herbert Lash and Harry Robertson

NEW YORK/LONDON (Reuters) – Global stocks eased and the benchmark Treasury yield rose close to levels last seen in 2007 as a plunge in U.S. homebuilding in August underscored the balancing act the Federal Reserve faces in signaling its outlook on interest rates this week.

Traders and investors avoided big bets ahead of rate decisions by the Fed on Wednesday, the Bank of England on Thursday and the Bank of Japan on Friday, in a week with policy decisions also expected from other central banks.

Oil prices rose for a fourth straight session, with futures for global benchmark climbing past $95 a barrel, to further exacerbate inflation concerns and question whether rates need to go higher to quash inflation.

The U.S. central bank will likely pause its aggressive hiking of interest rates and also indicate its outlook on rates and economic growth in the months ahead when Fed Chairman Jerome Powell speaks on Wednesday.

“The story is a function of how dovish versus how hawkish he is going to be,” said Steven Ricchiuto, U.S. chief economist at Mizuho Securities USA LLC in New York, referring to Powell.

“The more dovish he is leads to an environment where yields are likely to move higher,” he said. “The less willing they are to assure being restrictive, the more likely inflation is to come back and bother them.”

The impact of rising interest rates crimped demand in U.S. housing as a resurgence in mortgage rates led homebuilding last month to plunge to more than a three year-low.

The yield on benchmark rose 2 basis points at 4.339%, just below the 4.366% level reached on Aug. 22, which was the highest since late 2007.

Stocks slid as expectations interest rates will stay higher for longer put a damper on the market. Futures show the Fed will keep its overnight lending rates above the 5% mark until late July 2024.

MSCI’s gauge of stocks across the globe shed 0.46%, while the pan-regional index in Europe lost 0.18%.

On Wall Street, the fell 0.69%, the lost 0.65% and the dropped 0.84%. The , which gauges the currency against six major peers, was 0.08% at 105.00, not far from Thursday’s six-month high of 105.43.

Investors and central bankers are contending with a sharp rise in oil prices as demand has picked up while Saudi Arabia and Russia have limited supply, and weak U.S. shale output has increased concerns.

futures rose 1.55% to $92.90 a barrel, while Brent was at $95.49, up 1.12%.

Samuel Zief, head of global FX strategy at JPMorgan Private Bank, said central banks should not be overly concerned by the run-up in oil prices, which he said should fade as economies slow.

“What the central banks are really, really focused on, it’s not really the supply-side energy shocks anymore, it’s really the sticky services part of the inflation basket,” he said.

The Bank of England sets policy on Thursday and is expected to hike rates by 25 basis points to 5.5%, in what many investors believe will be the last increase of the cycle.

The Bank of Japan is expected to leave rates on hold in negative territory on Friday, although it too will be scrutinized for clues about the outlook after Governor Kazuo Ueda hinted at a move away from ultra-loose policy.

In Asia, fell 0.87% under the weight of big losses for chip-related stocks including Tokyo Electron.

Japanese markets were closed Monday, when Asian tech stocks were sold off following a Reuters report that TSMC had asked its major vendors to delay deliveries.

Stock Markets

Michael Saylor Makes Epic Bitcoin Call Amid Market Lull: Details

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U.Today – Michael Saylor, chairman and cofounder of MicroStrategy, has made an epic call to the crypto community: “Learn to think in .” Saylor’s message comes at a time when the crypto market is experiencing a lull, with Bitcoin and many major assets showing little to no movement.

Bitcoin fell Friday to its lowest price in nearly a month, reaching lows of $65,005 before slightly rebounding. The price of Bitcoin currently sits at $66,571, per data from CoinMarketCap, up 0.40% on the day, while the current market performance remains mixed, with a handful of cryptocurrencies posting losses on the 24-hour time frame.

As the market is relatively quiet, some, including Saylor, see this as a time for introspection and strategic thinking, hence the call to “learn to think in Bitcoin.”

Saylor began purchasing Bitcoin in 2020 as an inflation hedge and alternative to holding cash. Saylor’s firm, MicroStrategy, has amassed around $12.7 billion in Bitcoin, or more than 1% of all Bitcoin ever created. The largest cryptocurrency by market capitalization has increased by more than 600% since Saylor began purchasing.

Bitcoin has risen by roughly 60% this year, thanks in part to optimism regarding U.S. Bitcoin spot ETFs approved in January. MicroStrategy’s stock has gained by around 135% over the same period.

MicroStrategy upped its convertible note offering by 40% to $700 million last week, announcing plans to utilize the funds to buy more Bitcoin.

While the context of Saylor’s tweet remains subject to interpretation, the call to “learn to think in Bitcoin” might be a reminder to look at the bigger picture, beyond the short-term market volatility.

On the other hand, Saylor’s message might be a call to embrace the financial paradigm ushered in by cryptocurrencies, heralding a fundamental shift in how value and wealth are perceived.

This article was originally published on U.Today

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Stock Markets

Suspect dead, 9 wounded including children in shooting at Detroit area water park

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By Rich McKay and Kanishka Singh

(Reuters) -An armed man shot and injured nine people, including two children, at a water-park near Detroit on Saturday evening before shooting himself after being cornered by police, authorities said.

Authorities called the incident random gunfire and said they cornered the suspect in a house nearby, where he died after shooting himself.

The local sheriff showed an image of a semiautomatic rifle from inside the house to which the unnamed suspect was tracked. A handgun was recovered from the scene of the shooting, officials added. The suspect was described as a 42-year-old man, while the motives for the shooting were not clear.

An 8-year-old boy was in critical condition after being shot in the head while his 4-year-old brother was also wounded but stable. Their mother was in critical condition, too, after being hurt in the abdomen and leg, Oakland County Sheriff Michael Bouchard told reporters.

The other six victims, all aged 30 or older, were in stable condition according to Bouchard.

The suspect had got out of a vehicle in front of Brooklands Plaza Splash Pad park in Rochester Hills, Michigan, about 5 p.m. (2100 GMT) and fired about 30 shots from a 9mm semiautomatic Glock, reloading several times, Bouchard said in a press conference.

Rochester Hills is about 30 miles (50 km) north of Detroit. The neighboring community Oxford Township, also in Oakland County, was the scene of a 2021 mass school shooting where student Ethan Crumbley, then 15, killed four students and wounded six other students and a teacher at Oxford High School.

© Reuters. Rochester Hills, Michigan, June 15, 2024. Eric Seals/USA Today Network via REUTERS

“It’s a gut punch, obviously, for us here in Oakland County,” Bouchard said on Saturday. “We’ve gone through so many tragedies, you know. We’re not even fully comprehending what happened at Oxford.”

Michigan Governor Gretchen Whitmer said on X, “I am heartbroken to learn about the shooting in Rochester Hills.”

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Stock Markets

Ukraine summit sees hard road to peace as way forward uncertain

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By Dave Graham and Sabine Siebold

BUERGENSTOCK, Switzerland (Reuters) -Western powers and their allies at a summit in Switzerland denounced Russia’s invasion of Ukraine on Sunday, but they failed to persuade major non-aligned states to join their final statement, and no country came forward to host a sequel.

Over 90 countries attended the two-day talks at a Swiss Alpine resort at the behest of Ukrainian President Volodymyr Zelenskiy, billed as a “peace summit” even though Moscow was not invited.

Russia ridiculed the event from afar. A decision by China to stay away all but assured that the summit would fail to achieve Ukraine’s goal of persuading major countries from the “global South” to join in isolating Russia.

Brazil attended only as an “observer”. And in the end, India, Indonesia, Mexico, Saudi Arabia and South Africa all withheld their signatures from the summit communique, even though some contentious issues were omitted in the hope of drawing wider support.

Still, the conference provided Kyiv with a chance to showcase the support from Western allies that it says it needs to keep fighting against a far bigger enemy.

“We are responding to Russia’s full-scale invasion of Ukraine not only with a full-scale defense of human life, but also with full-scale diplomacy,” Zelenskiy said.

Leaders including U.S. Vice President Kamala Harris, German Chancellor Olaf Scholz and French President Emmanuel Macron gathered at the mountaintop resort of Buergenstock. U.S. President Joe Biden, in Europe for other events last week, did not attend despite public invitations from Zelenskiy.

The frontlines in Ukraine have barely moved since the end of 2022, despite tens of thousands of dead on both sides in relentless trench warfare, the bloodiest fighting in Europe since World War Two.

In her closing remarks, Swiss President Viola Amherd warned that the “road ahead is long and challenging”.

Russia, as it has for weeks, mocked the gathering.

“None of the participants in the ‘peace forum’ knows what he is doing there and what his role is,” said Dmitry Medvedev, Russia’s former president and now deputy chairman of the country’s Security Council.


After initial Ukrainian successes that saw Kyiv repel an assault on the capital and recapture territory in the war’s first year, a major Ukrainian counter-offensive using donated Western tanks fizzled last year. Russian forces still hold a fifth of Ukraine and are again advancing, albeit slowly. No peace talks have been held for more than two years.

“We know that peace in Ukraine will not be achieved in one step, it will be a journey,” European Commission Chief Ursula von der Leyen said, calling for “patience and determination”.

“It was not a peace negotiation because (Russia’s President Vladimir) Putin is not serious about ending the war, he’s insisting on capitulation, he’s insisting on ceding Ukrainian territory – even territory that today is not occupied.”

In the absence of a clear path to ending the war, Zelenskiy emphasised practical issues, such as nuclear safety and securing food supplies from Ukraine, one of the world’s biggest grain exporters.

The summit’s final declaration called for Ukraine’s control over the Zaporizhzhia nuclear plant and its Azov Sea ports to be restored. But in line with the conference’s more modest stated aims, it omitted tougher issues of what a post-war settlement for Ukraine might look like, whether Ukraine could join the NATO alliance or how troop withdrawals from both sides might work.

“The more allies that can be found to say ‘Things can’t go on like this’, ‘This is too much’, ‘That’s overstepping the mark’, that also increases the moral pressure on the Russian Federation,” said Austrian Chancellor Karl Nehammer.

As Sunday’s talks turned towards issues of food security and nuclear power, some leaders left early.

No country came forward to host another such meeting, with notable silence from Saudi Arabia, mooted as a possible future venue. Foreign Minister Prince Faisal bin Farhan Al Saud said the kingdom was ready to assist the peace process but a viable settlement would hinge on “difficult compromise.”

Since initial peace talks in the first months after the Feb. 2022 invasion, Ukraine has consistently demanded Russia withdraw from all its land, while Moscow has demanded recognition of its rule over territory its forces captured.

Last week, in remarks clearly aimed at the conference, Putin said Russia would not halt the war until Kyiv withdraws its forces fully from four provinces that Moscow only partially controls and claims to have annexed. Kyiv swiftly denounced that as a demand for surrender.

“Of course we…understand perfectly that a time will come when it will be necessary to talk to Russia,” Ukrainian Foreign Minister Dmytro Kuleba said. “But our position is very clear: We will not allow Russia to speak in the language of ultimatums like it is speaking now.”

© Reuters. Stansstad, Switzerland, June 16, 2024. Urs Flueeler/Pool via REUTERS

Western leaders at the summit endorsed Kyiv’s refusal to negotiate under such terms.

“Confusing peace with subjugation would set a dangerous precedent for everyone,” said Italian Prime Minister Giorgia Meloni.

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