Stock Futures Rise
US and European stock futures rose while an Asian shares benchmark fluctuated in cautious trading, as investors weighed the risk of recession and its impact on interest rates. The Euro Stoxx 50 and the S&P 500 both advanced, while an Asian gauge swung between gains and losses. China Petroleum & Chemical Corp. saw a sharp decline in earnings, leading to a 7.7% plunge in its stock. Chinese developers also saw losses after Greenland Holdings Group warned of further slowing in housing. Industrial profits data in China, which showed a decline in the first two months of the year, also contributed to investor caution.
Protests Erupt in Israel
Protests erupted in Israel after Prime Minister Binyamin Netanyahu sacked a member of his cabinet who opposed his planned judicial reforms. Thousands took to the streets of Tel Aviv and other cities, intensifying demonstrations that have been ongoing since January. Netanyahu’s plan to allow the government to appoint Supreme Court judges is perceived as a ruse to enable his right-wing coalition to pursue a nationalist agenda. Protesters are critical of the prime minister’s actions and have organised protests to make their opinions known.
IMF Warns of Banking Turmoil
The managing director of the International Monetary Fund, Kristalina Georgieva, warned that turmoil in the banking sector posed a threat to global financial stability. Deutsche Bank experienced an exodus of investors after the forced tie-up of Credit Suisse and UBS in the previous week. Speaking in Beijing, Georgieva noted that risks to the world economy were “exceptionally high” due to monetary tightening.
Biden Declares Emergency After Tornado
President Joe Biden declared a federal emergency for large parts of Mississippi following a devastating tornado that hit the state two days earlier. The tornado resulted in at least 26 deaths and dozens of injuries, the largest death toll from a tornado in Mississippi in over five decades. Rescue workers are still searching for survivors.
Major Oil Leak in UK
A major incident was declared in the UK after 200 barrels of reservoir fluid, which contained oil, leaked into Poole Harbour on the south coast. Although the slick is now dispersing and the leak has been contained, the area is home to wading birds and is designated as a Site of Special Scientific Interest. The regulator of the harbour confirmed that the area has been affected by the leak.
Lebanon Confused Over Time
Lebanon is experiencing confusion as to what time it is. The government delayed daylight saving until April 21st to allow the Muslim majority to break their daily Ramadan fast an hour earlier, while the Maronite church, as usual, swapped to summer time early on Sunday. Christian organisations, parties, schools, and news channels are running an hour ahead of their Muslim counterparts, leading to confusion.
German Economy Expectations Improve
The German Council of Economic Experts has become more upbeat regarding the economy, with its expectations improving compared to those of late 2022. Germany’s GDP is now expected to grow by 0.2% this year, rather than contract. Energy prices have dropped from last summer’s highs, which has been a positive development. However, inflation is declining more slowly than many had hoped, dampening consumption. The council expects price levels in Germany to rise by 6.6% this year, followed by 3% next year. There is still a risk of natural gas shortages next winter, according to Klaus Mueller, the head of Germany’s energy regulator, depending on the weather and on consumers continuing to save gas.
Gen Z Debt Increases
According to Credit Karma, Gen Z members had the highest increase in debt in the last quarter of 2022, with their average debt increasing by 3.1% to $16,283. The rise was due to inflation outpacing wage growth, forcing consumers to rely on credit cards to bridge the gap. Although younger borrowers had the lowest average credit card debt at $2,781, the growth rate was the highest among all generations at 5.9%. Additionally, Gen Z drivers saw the highest increase in auto loan debt at 2.3%.
Wind Energy Sector Warns of Supply Chain Crunch
The Global Wind Energy Council has warned of an impending supply chain crunch that will squeeze the global wind sector. It is likely that the “spare capacity” in wind energy manufacturing will disappear by 2026. The US and Europe will be hardest hit, as the wind industry’s supply chain is concentrated in China, while the two countries have set ambitious targets for domestic renewable energy projects. Companies such as Marco Polo are already feeling the squeeze, warning of a “big vacuum” of large vessels required to install offshore turbines.
China’s Economic Rebound Weaker Than Expected
China’s economic rebound is weaker than expected due to consumers emerging from pandemic-led disruptions and a real estate meltdown last year, according to Vincent Clerc, the new CEO of AP Møller-Maersk.(Copenhagen:MAERSK-B) Despite this, trading volumes associated with the Chinese economy remained resilient, with little sign of negative impact from US-led efforts to decouple from China. The Chinese consumer, however, is not currently in a splurging mood, and China has set a growth target of 5% this year, its lowest in decades.
Homeownership Premium Over Rent Widens
The National Multifamily Housing Council analysis shows that due to high mortgage rates and elevated home prices, the monthly payment for a newly purchased home in the US is $1,176 more than renting an apartment. The cost of homeownership has increased by 71% over the past three years, averaging around 20% per year, compared to an average annual rent growth of 6.3%. As a result, the premium owners pay over renters is wider than it has been since the third quarter of 2006.
UCAS Predicts Higher Education Increase
UCAS predicts that the number of people applying for higher education will increase by up to 30% per year to one million people by 2030. The UK higher education sector will need to expand the number of places they offer while maintaining educational standards. But sector leaders warned that with real-terms funding for higher education falling, the supply of quality places may not keep up with demand.
Delay in UK High Speed 2 Rail
According to a report by the public spending watchdog, the decision to delay the UK’s High Speed 2 rail line will add new costs to the project, which has already been beleaguered by years of delays and cost overruns. Ministers announced earlier this month that they will delay the building of the Birmingham to Crewe leg of the line, as well as the final stretch into Euston in central London, in an attempt to control costs amid spiralling inflation. The report recommends reassessing plans for London Euston station.
Retailers Saving on Ocean Transport
Retailers are making significant savings on ocean container transport as shipping prices fall towards pre-pandemic levels, and companies are delaying signing annual contracts to bargain rates down further. The average price for the Asia-to-US container trade has fallen dramatically, with importers and container lines negotiating in a far different environment from last year. Retailers looking to replenish depleted inventories last year rushed to sign deals and paid record amounts to secure scarce space on container ships.
Chinese Car Dealers Face Financial Challenges
Chinese car dealers are facing financial challenges due to a price war and the need to clear gasoline-fueled cars before tougher emissions standards take effect later this year. Despite significant discounts from major carmakers such as BYD Co., Toyota Motor Corp. (NYSE:TM), and Ford Motor Co. (NYSE:F), auto sales, particularly of internal combustion engine cars, have not rebounded from pandemic restrictions. New car sales fell by 20% in the first two months of 2022 compared to the same period last year, with sales of gasoline-fueled cars down 30%.
Nickel Trading Resumes on LME
Nickel trading resumed in Asian hours on the London Metal Exchange after more than a year of suspension following last year’s market turbulence. The market reopened after the runaway short squeeze incident involving top producer Tsingshan Holding Group Co., which led to the cancellation of billions of dollars’ worth of deals. Trading was initially set to reopen a week ago but was postponed after the LME found a few bagged cargoes in its warehouse network that contained stones instead of nickel. However, the LME confirmed that there were no other issues found during its global audit of nickel stored in its warehousing network.
Gold Prices Affect Indian Buyers
The all-time high gold prices in India are affecting local buyers as they head into a key demand period. Gold futures in India jumped to a record 60,455 rupees ($734) per 10 grams last week due to the metal’s haven demand and the weakening rupee. India imports almost all of the gold it uses, mostly from Switzerland and the UAE. The World Gold Council suggests that the increase in gold prices may deter local buyers in India from purchasing gold during this crucial demand period.