The rapid rise in US Treasury yields has led to concerns about the fundamental outlook for emerging markets (EM). In particular, investors fear that higher risk-free yields will translate into unsustainably high borrowing costs for EM companies. While analysts from Julius Baer acknowledge the headwind for the developing world, they also believe that perception is generally more negative than reality.
Peter Isackson via Fair Observer | For the past 18 years (the entire 21st century), one of the strongest brands in modern industrial history, General Electric (GE), has been losing share value. In recent days — just before replacing its CEO — GE’s worth fell to about 20% of its peak market value in 2000
Caixin | After a decade of runaway credit expansion and regulatory loosening, the nation’s $40 trillion financial system is teeming with giants. Not only have China’s biggest financial companies kept growing bigger and more complex, but formerly little-known firms are now some of the largest on Earth.
The IMF has cut its global growth forecast in the October update to its World Economic Outlook (WEO) on the protectionist threat and the emerging markets situation. The Fund also reflects how those countries who confronted the last financial crisis with a better fiscal position were those countries who suffered smaller falls in GDP.
If the scenario of a Bolsonaro victory is fulfilled in the second round, analyst Paul Greer from Fidelity expects that highly necessary fiscal reform of Brazil will be extremely difficult to achieve given that he will have to work with the centralist parties and the PT to approve any law.
Signs of a future increase in inflation are becoming increasingly visible. Natixis IM explains some of these global clues. First it is US long-term inflation outlook, which is currently situated around 2-3% and trending clearly higher.
The government of India took control of Infrastructure Leasing & Financials Services (IL&FS) last week in order to ensure its liquidity and solvency as well as to preserve stability in the financial system. For analysts at Julius Baer, “this should alleviate concerns on the money, debt and capital markets but does not equate to a bail out.”
On Sunday 7 October, all Brazilians between the ages of 18 and 70 are being called to the polls to elect their next President .”This is an important election because the future administration will have the responsibility to tackle Brazil’s growing fiscal imbalances, and this will require challenging structural reforms”, analysts at AXA IM say.
There is news which has global resonance and influence because its importance. Such is the case with the increase in the minimum wages of Amazon employees by around 2$ to 15$/hour (a bit more than 13 euros). The measure will enter into effect on 1 November. According to Alphavalue´s analysts, “this not only blocks the competition (Walmart), but also confirms the shortage of manpower in the US”.
via The Conversation | NAFTA is out but the United States-Mexico-Canada-Agreement (USMCA) is in. But how different is USMCA from NAFTA? Who loses and who wins?