Rolling electricity blackouts were blamed, in part, for stalling South African president Cyril Ramaphosa’s initiative to spark economic growth. Instead, the country slid into its second recession in two years. South Africa’s economy shrank 1.4 percent in 2019’s fourth quarter; analysts had expected a much milder 0.2 percent contraction. The nation’s economy contracted at the same 0.2 percent in 2019...
INDIA: ECONOMIC DOWNTURN TURNING WORSE
India’s economy, once the world’s fastest-growing among large nations, slowed to a 4.7-percent annual growth rate in 2019’s fourth quarter. The government’s hopes to speed that pace have now come down with the coronavirus. “There’s no real sign of recovery,” said Shumita Deveshwar, chief Indian researcher at TS Lombard. Now the virus has put “a big cloud over India,” she...
THE AMERICAS: GETTING WORSE ~ Development Bank Warns Latin American Countries
The Inter-American Development Bank warned last week that Latin American nations must improve public services and enlist businesses to reduce inequality and create societies that operate more fairly or their economies will continue to suffer. The Bank noted that the region’s political culture has shifted from dictators forcing obedience on a populace to popular uprisings demanding leaders provide better services...
Energy Stocks Hit Harder Than Most
The average price of energy stocks in the S&P 500 fell almost twice as far recently as the broader index’s value. The shares were down 7.4 percent in five consecutive trading sessions across late February and early March, while the broader index’s aggregate value lost 4 percent over the same period. Oil stocks led the decline in energy shares. The...
Mortgage Rates: Lowest in Decades
The Fed’s 3 March rate cut has dropped U.S. mortgage interest rates to historic lows just as real estate’s prime selling season begins. The average rate on a 30-year fixed mortgage has fallen from 3.45 percent to the never-before-seen 3.29, according to lender Freddie Mac. Mortgage rates are closely linked to those of 10-year Treasury notes, which fell below 1...
New York Fed Expands Repo Loan Fund
The New York Federal Reserve is increasing its available amount of overnight loans to banks from $100 billion to $150 billion through Thursday of last week to ensure that banks and trading houses have the cash needed to keep the markets from melting down. As well as increasing the overnight amount, the bank also is expanding its two-week repo loan...
Fed Rate Cut Boosts Bonds, Doesn’t Slow Stock Sell-Off
Despite the U.S. Federal Reserve’s 3 March rate cut of 0.5 percent, which took the yield on 10-year Treasury notes to a historic lows, it failed to slow the stock markets’ slide. As Fed chair Jerome Powell was announcing the cut and answering reporters’ questions last week, the Dow Jones Industrial Average fell another 603 points. Market players aren’t convinced...
VIRUS VICTIMS: TOURISM, TRADE SHOWS, THEATERS, SPECIAL EVENTS
The Louvre, St. Peter’s Basilica, the La Scala opera house, and other cultural meccas of Europe are begging for visitors. Thousands of tourists have canceled airline tickets, hotel reservations, and plans to visit conferences and trade shows since the coronavirus outbreak struck northern Italy and began to travel across the continent. Some Paris restaurants and nightclubs report sales down by...
REAL ESTATE INVESTMENTS CATCH THE VIRUS
Retail landlords may see stores miss lease payments as shoppers avoid public places, cutting stores’ sales, profits, and cash flow. The FTSE Nareit Allk REITS Index, which includes all real estate investment trusts traded on major U.S. stock exchanges, dove 12.3 percent last week, a far worse performance than broad-based market index funds. “People were selling everything that had held...
CAR SALES GET SICK
Vehicle sales have plunged along with stock markets in response to the coronavirus outbreak. In February, China’s sales were down 80 percent compared to the same month in 2019. South Korea’s sales were at 20 percent – their lowest level since 2009. Germany’s sales fell 10.8 percent, Japan’s dropped 10.7 percent, and Italy’s 8.8. The virus isn’t entirely to blame,...