World economy

US banks trading income declines

Bond Portfolios Give US Banks Heavy Losses: From JPMorgan’s $7.4 Billion to BofA’s $3.4 Billion

Fitch explains that for large US banks “the sharp rise in interest rates across the curve led to unrealised losses in AFS (Available-for-Sale) securities portfolios with an estimated negative effect on CET1 ratios of 20-110bp”. Specifically, according to Bloomberg, JPMorgan reported latent losses of about USD 7.4 billion on a total of USD 313 billion of Treasuries and other bonds in its available-for-sale portfolio in the Q1’22 results announced last…


ferrovial texas

Ferrovial: partial divestment in Amey, wins three water projects in Texas

Renta 4 | Ferrovial (FER)‘s partial sale of its UK services affiliate Amey to the fund Rubicon Partners would be at an advanced stage, according to the press. We are talking specifically about the utilities business, focused on electricity and water. This activity invoiced 200 million GBP in 2020 (9.4% of the sales of this division in the UK and 3.5% of total group sales. More residual weighting in terms…


woman BoD

Some 89% of top executives believe there is one too many on the Board

Fernando Rodríguez | Close to nine out of 10 members of Boards of Directors – some 89% – believe that “one or two members should be replaced” on their board. This is according to the latest survey Board effectiveness: A survey of the C-suite elaborated by consultancy PwC and independent organisation The Conference Board, following questions put to 550 top executives from listed companies. Only 29% of those selected think…


Tesla Q4 deliveries

Electric Vehicles Already Account For 9% Of Global Sales

The Santander analysts review the electric car market and explain that “Delivery times for the main models in Europe have increased considerably. The Renault Zoe and Twingo Electric are no longer sold in Germany because delivery times are too long. The waiting time for an Audi Q4 e-tron is now 18 months. This also explains the current success of Stellantis Electric Vehicles in Europe, where their lead times are shorter…


Iran oil

Can Iran Replace Russian Gas Export to Europe?

European Views | The conflict between Russia and Ukraine continues and so do the global gas supply issues. Iran hopes to step in and become Europe’s main gas provider replacing Russian gas export. Iran to Offer Alternative to Russian Gas Export in Europe Being the second-largest gas reserves globally, Iran has 34 trillion cubic metres of natural gas. It’s nearly 17% of the world’s total reserves. Some believe that Iran…


Tesla Bitcoin

What Elon Musk’s US$3 Billion Twitter Deal Means For Him – And For Social Media

Hamza Mudassir (The Conversation) | The world’s richest man, Elon Musk, is now Twitter’s largest shareholder after acquiring a 9.2% stake in the social media platform for just under US$3 billion (£2.3 billion). The announcement drove Twitter’s share price up 27%, and it continued to grow in after-hours trading. This investor enthusiasm is not surprising. Social media platforms have been suffering lately thanks to newly developed pressures in their ecosystems….


Yieldscurve

The Inverted Yield Curve, A Warning, Not An Alarm Bell

A&G | Last week we saw the US 2 year rate move above the 10 year rate. We refer to this phenomenon as a yield curve inversion and it has historically been a leading indicator of recessions, but a very leading indicator. We should bear in mind that the sample is very small, as we only have data for 10 recessions and all 10 have been preceded by an inverted…


china happy

Lockdowns Around Shanghai Are Especially Painful For Cars, Electronics And Chip-makers

Alicia García Herrero (Natixis) | When the Chinese economy sneezes, the global supply chain catches a cold. After the successful containment at the initial stage, China has decided to maintain its dynamic zero-covid strategy against a more contagious albeit milder variant of the virus, namely Omicron. The approach has initiated the lockdown in Shanghai. Given its economic size, trading role, and the contagion risk of lockdowns in the surrounding provinces,…


Inflation

What The US Inflation Data Says

Simon Harvey, Head of FX Market Analysis at Monex Europe | On the one hand, core inflation moderated in March with a sequential slowdown from 0.5% m-o-m to 0.3% m-o-m, while on the other hand, headline inflation beat expectations. Headline inflation rose by 1.2% month-on-month, in line with expectations, while the annualised rate exceeded expectations by 0.1 percentage point to 8.5%. The slowdown in the month-on-month core CPI to the…


inflation board

Inflation, Recession… And What Can Actually Be Done

Miguel Navascués | Although there seems to be no awareness of it, the current problem in the world economy is of cosmic proportions, a problem for which we have no close antecedents. We have huge pockets of liquidity, originated to alleviate the contraction of the pandemic, now that inflation is rebounding with great vigour, and a recession that is already being announced in some indicators; what some translate as an…