Connect with us

Business

Sweden’s central bank raises interest rate, more needed to tame inflation By Reuters

Published

on


© Reuters. FILE PHOTO: A view of the entrance to the Swedish Central Bank in Stockholm, Sweden, August 12, 2016. REUTERS/Violet Garant

Written by Simon Johnson

STOCKHOLM (Reuters) – Sweden’s central bank raised its main interest rate by three-quarters of a percentage point on Thursday to 2.5 percent and signaled further increases next year to fight rising inflation.

The Riksbank, which predicted in late February that rates would remain at zero in the coming years, was surprised by the pace of rate hikes this year, due to the ongoing effects of the pandemic and the war in Ukraine.

Advertisement

It received another unpleasant shock from October figures that showed core inflation jumped 7.9%, forcing a more hawkish policy shift at the last scheduled rate-setting meeting of Riksbank Governor Stefan Ingves.

“It is our judgment now that there is one or more interest rate hikes still in the pipeline,” Engeves told reporters.

In its 100th rate decision, Ingvis said that by not reacting now, there was a risk that the Riksbank would do more later.

“We know it’s going to take a hit, but it’s the best thing we can do today to get the Swedish economy back to a 2% pace of inflation,” he said.

At its previous meeting in September, the Riksbank predicted interest rates would peak around 2.5% next year.

Advertisement

However, markets still believe the central bank is behind the curve, seeing interest rates peak around 3.25% in the fall of next year.

“We still believe Rixbank will raise another 50 basis points in February as well,” Swedbank said in a note.

There is not much the Riksbank can do about current inflation, but it wants to prevent prices from rising to higher wages in a self-reinforcing spiral.

At the same time, the economy is expected to contract next year. Mortgage costs are skyrocketing, home prices are plummeting, and many families are already grappling with a cost-of-living crisis.

However, how high the rates will be remains uncertain.

Advertisement

In the United States, the Federal Reserve may soon reduce the pace of interest rate hikes. In Europe, some rate-setters at the European Central Bank worry that aggressive increases will only exacerbate the deflation that everyone expects.

Nordea Banking Group said it expects the Riksbank to rise to 2.75% in February but that it will not rise.

The economy will simply be too weak, economist Torbjorn Isakson said in a note, adding that interest rate cuts would begin in 2024.

Analysts polled by Reuters expected an increase of 75 basis points and that the central bank would raise its forecasts for the price path. The Swedish crown weakened slightly after the policy decision.

Ingvis, who will be replaced by current FSA chief Erik Theden at the start of next year, has steered Sweden’s monetary policy through turbulent times.

Advertisement

During his tenure since 2006, Riksbank has been accused of being too quick to raise prices in the early years and then too slow to give up negative rates, driving up house prices.

“There is always someone out there who thinks they know better than you,” Ingvez said.

Source link

Advertisement
Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published.

Business

Australia’s Economy Grows Less Than Expected in Q3 as Post-COVID Boom Fades By Investing.com

Published

on

By


© Reuters.

by Ambar Warrick

Investing.com – Australia’s economy expanded for a fourth consecutive quarter in the three months to September, data showed on Wednesday, but appeared to be losing momentum amid rising inflation and slowing commodity demand in China.

Data from the Australian Bureau of Statistics (ABS) showed growth of 0.6% for the three months to September 30, slowing from a rise of 0.9% in the previous quarter. The reading also missed market estimates for a growth of 0.7%.

Advertisement

On a year-over-year basis, the growth rate grew 5.9% year-over-year, more than the previous quarter’s growth of 3.6%, but lower than the 6.2% growth estimate.

The Census Bureau said in a statement that growth during the quarter was largely driven by household spending. Strength in the labor market and steady wage growth helped drive consumer spending during the quarter.

But that trend appears to be running out of steam, with inflation now at a 32-year high, while consumer confidence has fallen to its lowest level since the 2020 COVID-19 pandemic. It slowed to 0.8% in the quarter from 1.3% in the June quarter.

This slowdown was also reflected in an unexpected drop in the October reading, which may now herald some weakness in what is arguably the biggest driver of the Australian economy.

Rising interest rates and high inflation also weighed heavily on savings by Australian households during the quarter.

Advertisement

However, the country recorded its fourth consecutive quarter of growth after contracting in the third quarter of 2021 due to the COVID-19 pandemic.

Australia’s economy has recovered sharply after the country eased most COVID-related restrictions earlier this year. But now that boom appears to be running out.

Australian commodity exports declined due to lower demand in the main market in China and lower prices as markets feared weak demand for commodities.

The country posted an unexpected deficit in the third quarter, as the value of its exports fell and strong domestic demand pushed up imports.

The Australian housing market remained under pressure from rising interest rates. Interest rates were raised by 25 basis points on Tuesday, and he indicated that he would take into account economic health when deciding whether to continue raising rates.

Advertisement

The change was slight at around 0.6694 after the reading.

Source link

Advertisement
Continue Reading

Business

Market rally wipes out Powell’s gains as Apple and Exxon slippery; What are you doing now

Published

on

By

Dow futures tilted higher overnight, along with S&P 500 futures and Nasdaq futures. The stock market rally saw another weak session, with apple (AAPL) And the Exxon Mobil (xom) broke below key levels during Amazon.com (AMZN) And the Tesla (TSLA) is moving towards the bottoms of the bear market.




X



The S&P 500 and other major indices were testing or lowering key levels, paring last Wednesday’s big gains after Fed Chairman Jerome Powell’s speech.

Advertisement

This stock market rally has several big gains in one day followed by pullbacks. This made it difficult for stocks flashing buy signals to make headway. It’s not the time to add exposure, but investors should be looking to build up the stock.

United Rentals (URI), United Health Group (United nations) And the United Airlines (UAL) are all trading near Buy points.

UAL stock is on IBD Leaderboard, while the stock URI is in the leaderboard watchlist. United Airlines, Charles Schwab and United Nations stocks are in defect 50. United Rentals was the World Bank’s stock on Tuesday.

Dow jones futures today

Dow futures rose 0.1% above fair value. S&P 500 futures rose 0.1% and Nasdaq 100 futures rose 0.2%.

The 10-year Treasury yield advanced 3 basis points, to 3.54%.

Advertisement

Remember to work in overnight Dow Jones futures contracts and elsewhere that does not necessarily translate into actual trading in the next regular session Stock market session.


Join IBD experts as they analyze actionable shares in the bullish stock market on IBD Live


Stock market rise

The stock market rally quickly eased after Tuesday’s open and continued to trend lower during the day before trimming losses slightly near the close.

The Dow Jones Industrial Average fell 1% on Tuesday Stock market trading. The S&P 500 lost 1.4%. The Nasdaq Composite fell 2%. Small cap Russell 2000 fell 1.5%

Apple stock, a member of the Dow Jones, S&P 500 and Nasdaq composite, fell 2.5% to 142.91, retreating from its 50-day line. XOM stock fell 2.8%, and it is also below the 50-day line and also under a buy point. Exxon shares are struggling with falling oil, gasoline and natural gas prices.

Advertisement

Amazon stock fell 3% to 88.25, closing as low as November 9 at 85.87. Tesla shares fell 1.4 percent to 179.82, off their lowest levels for the day, but after falling 6.4 percent on Monday. TSLA is moving towards 52-week lows but still has some way to go before it drops to the 166.19 mark.

US crude oil prices fell 3.5 percent to $74.25 a barrel.

The 10-year Treasury yield fell 9 basis points to 3.51%, back near its lowest level since Sept. 20.

The stock market’s inverse relationship with Treasury yields may collapse. The increasingly lower 10-year Treasury yield may reflect rising recessionary risks against declining inflation pressures. The yield curve, which continues to invert further, indicates recession fears.

Exchange Traded Funds

Among the major technology ETFs is the iShares Expanded Technology and Software ETF (IGV) lost 1.7%. VanEck Vectors Semiconductor Corporation (SMH) decreased by 2.2%.

Advertisement

SPDR S&P Metals & Mining ETFs (XME(Increased 0.25% and Global Infrastructure Development Fund (ETF) in the USA)cradle) decreased by 0.3%. US Global Gates Foundation ETF (Planes) held on high. SPDR S&P Homebuilders ETF (XHB) fell 1.4%. Energy Defined Fund SPDR ETF (xle(down 2.6% and the Financial Select SPDR ETF)XLF) 0.9%. SPDR Health Care Sector Selection Fund (XLV) decreased by 0.8%.

Reflecting more speculative stories, the ARK Innovation ETF (ARK)ark(down 4% and ARK Genomics ETF)ARKG) 3%. Tesla stock is a major holding across Ark Invest’s ETFs.


Top five Chinese stocks to watch now


Stocks near buy points

United Rentals rose 0.5% to 347.29, just above the 21-day line. URI stock has a 368.04 Buy handle of consolidation dating back to November 2021. A break down of the handle could offer an early entry. Several heavy equipment plays, incl monastery (DE), Larva (cat) And the Titan machines (TITN), also looks strong.

UN stock rose 0.8% to 539.32. The Dow Jones giant has 558.20 buying points from A Flat base Next to a cup with a handle.

Advertisement

UAL stock rose 2% to 45.92 from 45.67 mug with handle Point purchase, according to MarketSmith Analysis. Some other airline and travel stocks are looking strong.


Why simplify this IBD tool burntthe classroom for top stock


Market rally analysis

The stock market rally continues the frustrating trend of jumping four steps forward, and then doing so again over the next few days.

Major indices have fallen strongly for two straight sessions, erasing or undermining the big gains in Federal Reserve Chairman Jerome Powell’s speech last Wednesday.

The S&P 500, which again fell below the 200-day line on Monday, extended its losses on Tuesday to trim the 21-day line. The Russell 2000 Index, which fell below the 200-day and 21-day lines, fell to its lowest close since November 9, with the 50-day line back in play.

Advertisement

The S&P MidCap 400 closed below the 21-day line for the first time since October 20 and fell to test the 200-day mark.

The Dow Jones, which led the market rally, fell below the 21-day line for the first time since October 14, but it is well above the 200-day mark.

The lagging Nasdaq has lowered the 21-day line and is again approaching the 50-day line, just above the 11,000 level.

All of these indexes closed at their worst levels since Oct. 9, ahead of the Oct. 10 gap in the October CPI inflation report.

Last Wednesday’s big gains in the market were baffling at the time, because Fed Chair Powell said nothing different or pessimistic. Major indexes held on Friday, with Treasury yields finally closing lower, despite a hot jobs report that was even more baffling.

Advertisement

But the artistic picture is familiar.

Since the stock market rally began on October 13, major indices have made several big gains in one day – such as October 28 and November 30. But then it quickly backtracked, wiping out most, all, or most of that big gain.

So, with major indices reaching higher peaks and blue chip buy signals, the market’s impulsiveness begins to fade again.


It’s time to market with IBD’s ETF Market Strategy


What are you doing now

So far, the market rally has eventually rebounded each time, recording higher highs along the way. But that doesn’t mean it will happen this time. More importantly, this does not mean that your stocks will rebound.

Advertisement

Until the S&P 500 moves decisively above the 200-day line, investors should be wary of adding exposure. Both the Nasdaq and Russell 2000 falling below their 50-day lines, and the S&P 500 testing its October highs, would be signals to reduce exposure further.

Also note that the November CPI inflation report will be released on December 13th, with the Fed’s year-end interest rate hike and Powell’s press conference the next day. These large events can provide a catalyst for a market breakout up or down.

So investors must be ready to act. This means having watchlists ready, but it also means staying agile and flexible.

Read The Big Picture Every day to keep up with the market trend, stocks and leading sectors.

Please follow Ed Carson on Twitter at @tweet For stock market updates and more.

Advertisement

You may also like:

Do you want to get quick profits and avoid big losses? Try SwingTrader

Best growth stocks to buy and monitor

IBD Digital: Unlock blue-chip stock listings, tools and analytics for IBD

Tesla vs. BYD: Which EV giant is the best to buy?

Advertisement



Source link

Continue Reading

Business

BlackRock has frozen hiring, says CFO

Published

on

By


© Reuters. FILE PHOTO: A BlackRock logo is pictured outside its headquarters in the Manhattan borough of New York City, New York, US, May 25, 2021. REUTERS/Carlo Allegri/File Photo

NEW YORK (Reuters) – BlackRock Chief Financial Officer Gary Shedlin said on the New York Stock Exchange on Tuesday that the company is tightening its belt on hiring and overhead.

Other than critical hires, Schedlin said, the company has frozen hiring.

“We are trying to be more prudent,” he said during a financial conference hosted by Goldman Sachs (NYSE), adding that these measures will put BlackRock in a better position next year.

Advertisement

Source link

Continue Reading

Trending