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IMF outlook

In the World, World economy 16th October 2020

Global Public Debt Will Reach 100% Of GDP For The First Time

The world public deficit in 2020 stands at 12.7% of GDP, compared to its forecast of 3.9% in April, and gross public debt could increase  to 100% of global GDP, says the IMF. Thus, it supports more spending and outlines scenarios in which some countries will be able to stabilize their debt, by the middle of this decade, without tax increases or budget cuts. Specifically, its estimates suggest that a public infrastructure investment of 1% of GDP could boost production by 2.7%, creating between 20 and 33 M jobs. 

curacao

In the World, World economy 15th October 2020

Caribbean, European Netherlands Close In on Bailout Deal

The islands — two north of Venezuela, one east of Puerto Rico — are on the brink of financial ruin. Without tourists, their economies have shrunk 20 percent. One in five families rely on food aid. Aruba and Curaçao cut salaries in the public sector by 12.5 percent and required a 20-percent contribution from firms to wage subsidies in order to qualify for a previous round of financial support, but it hasn’t been enough. For another cash injection, the Dutch are demanding that the islands cut red tape, liberalize labor laws and reduce the cost of doing business. The goal, Knops said, is to make their economies more resilient in the long term…

big techs

In the World, World economy 15th October 2020

Big Tech’s Market Might In Five Charts

Sean Markowicz (Schroeders) | The largest US technology stocks – Apple, Microsoft, Amazon, Facebook and Google (Alphabet) – known as the “FAMAGs”, have largely benefitted from the economic fallout of the crisis, as more people rely on their technology to work and shop from home. However, their increasing dominance is raising concerns about the top-heavy composition of the US equity market and the sustainability of the tech rally.

USA stock exchange

In the World, World economy 14th October 2020

US Equities Are Showing Buoyancy In October

After a lackluster September, US equities are showing buoyancy in October. The NASDAQ 100 Index is up over 2.7% while the S&P 500 Index is up over 3.4% month-to-date[1]. While markets were initially disappointed by delays in the much-awaited US fiscal stimulus, it appears that they are now beginning to price in the strong impact it can have whenever it comes – before or after the US presidential election. Which assets stand to benefit and how could investors position themselves?

US elections, Joe Biden

In the World, World economy 14th October 2020

“Markets In General Just Be Really Happy With Biden’s Lead”

Esty Dwek (Natixis)| “Markets in general just be really happy with Biden’s lead because it’s looking less and less likely that you’re going to have a contested election which means that by November 4th, we probably know who the next president is going to be, and if it is this Democratic sweep, then we also know there’s going to be a lotof fiscal spending in 2021.”

yuan digital

World economy 10th October 2020

Will China’s Digital Currency Revolutionize Global Payments?

Daniel Wagner | More than 600 M Chinese already use Alibaba’s Alipay and Tencent’s WeChat Pay to pay for much of what they purchase. Both companies control approximately 90% of China’s mobile payments market, which totaled some $17 trillion in 2019. The Chinese government understands that, via Blockchain, the issuance of its own cryptocurrency is an excellent way to track and record the movement of payments, goods and people: the unsexily named Digital Currency/Electronic Payments (DCEP).

EU agriculture

In the World, World economy 9th October 2020

Agriculture Had Another Good Month

Agricultural and livestock commodities generally had another good month, but some stood out more so than others. Lean hogs made strong gains of 32.1% last month leading the group by a wide margin and entering positive territory year-to-date. In 2019, African Swine Fever in China had cut the country’s pork production by 21.3%, and a further 19% loss in production happened in the first 6 months of 2020 (on a year-on-year basis). As a result, there has been a rapid rise in pork imports notably from the US and Spain.

M&A are increasingly growing in Europe

In the World, World economy 8th October 2020

Mergers And Acquisitions: A Window On The Market

Edmond de Rothschild | As Warren Buffet likes to say, “You never know who’s swimming naked until the tide goes out. The exogenous shocks generated by the crises throw a harsh light on the real state of the market, and the excessive risks taken by investors are evident. The sub-prime mortgage and sovereign debt crises were good examples of this phenomenon. But while the financial shock of 2008 had an immediate impact on mergers and acquisitions and led to a collapse in valuations, what can we say about the effects of the coronavirus crisis?

demographics japon

In the World, World economy 7th October 2020

Demographics Squeeze Advanced Economies’ Long-Term Growth Potential; Big Test For Italy, Japan

Demographics and labour-market inclusion are increasingly important determinants of growth in advanced economies where productivity is in structural decline, but the impact is highly uneven. Italy and Japan are particularly vulnerable to below-par growth. Scope Ratings has examined the impact of demographic trends on long-term economic growth in major economies, assuming productivity growth and employment rates remain constant.