US Markets down again – Treasury call

The US financial markets were surprised by the information that the Treasury Secretary Steven Mnuchin had called the country´s largest banks.  The question was about the market liquidity. According to the Treasury, the banks have confirmed that they have liquidity available for lending to consumers, business markets and other market operations.

The Treasury also confirmed that they will have a call on Monday, the Christmas Eve,  with the President´s Working Group on financial markets. The reason for this call is the large market volatility.

According to Bloomberg and Reuters business wires, the markets are really surprised and the big questions is, whether there is systemic risk or not.

The financial markets in the US have had several days downside trend and for example the stock markets have fallen over 10 % in December and are now at the lowest level since May 2017. Another issue on the agenda, is the Federal Reserve and its interest rates policy, also the question of the position of the Federal Reserve´s Chairman Jerome Powell.

The US Goverment shutdowns, which have been going on for three days now, are expected to continue, while no news are in sight.

Today, the financial markets are open only for a shorter time and for example Nasdaq will be closing at 1 EST and NYSE will be closing at 4 EST. On Christmas Day, the 25th December, the markets will be closed.

Today, the markets have continued their fall and for example the Dow Jones has fallen 1,97 %  to 22 003 points, S&P 500 -index  1,67 % to 2376 points and Nasdaq  1,16 % to 6259 points.  For example the markets in the Nordic countries and German are closed.

 

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Global stocks down – BoE considering green tests for banks

The global stock market continued the downward trend on Monday. S&P 500 -index ended down 2,08 % to 2545 points and Dow Jones -index 2,11 % to 23592 points. Tech-index Nasdaq ended down 2,27 % to 6753 points.

Global economic growth concerns continued in the markets. Markets were also looking at the Federal Reserve meeting this week about the future interest rates.

France decided to introduce the digital tax, starting from the January 1st. This means that big tech-companies must pay “digital tax” from their revenues. This will be implemented to big tech companies like Apple, Google, Facebook and Amazon. France expects that the tax will be about 500 million euros a year.

In Europe the stocks were also down. In Germany the Dax-index was down 0,86 % to 10772 points, in France, Paris the CAC 40 -index ended down 1,11 % to 4799 points and in London City, the FTSE 100-index was ended down 1,05 % to 6773 points.

The Bank of England´s governor Mark Carney told to FT, that he is considering of green stress tests for banks. This would mean that the national banks would be tested how they  can manage Climate Change risks and opportunities in their operations.

According to the bank survey, only 10 % of the banks were taking long enough view of the climate related issues. The final decision of the green stress test will be made by the central bank´s financial policy commitee.

In the Brexit-update, the UK Prime Minister Theresa May told that the vote about the Brexit-deal would happen in mid January in the Parliament.

In Asia, Nikkei 225 index was among the few indexes to gain on Monday trading. It ended up 0,62 % to 21506 points., In Hong Kong the Hang Seng  index ended down 0,03 % to 26 087 points.

Euro was unchanged at 1,13 dollars.

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Climate deal agreed in Poland

The Climate deal, which aims to limit the global warming below 2 degree Celcius, was agreed in Poland, Katowice on Saturday. Nearly 200 countries agreed on the actions and methods needed to implement  the Paris Climate Agreement at this COP24 meeting.

The two-weeks negotiations agreed on how the emissions reductions and accounting principes should be done in relation to the Paris Climate target. Delegates believe that this new agreement will help countries to cut the carbon.

The problems have risen about the different definitions, accounting and timetables in each country.

This year’s summit included 24. Conference of the Parties to the United Nations Framework Convention on Climate Change (COP24), 14. Meeting of the Parties to the Kyoto Protocol (CMP 14) and the Conference of Signatories to the Paris Agreement (CMA 1).

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LVMH to buy Belmond luxury hotel group

The world largest luxury Group LVMH (LVMH) announced on Friday that it has reached an agreement to buy the Belmond Luxury Hotel Group (BEL), listed in the New York Stock Exchange. The offer is 25 dollars per class A share. The equity value is 2,6 billion dollars and enteprise value 3,2 billion dollars.

According to the French luxury group LVMH the acquisition complements the other grups´s activities, like the Bvlgari and Cheval Blanc operations. Belmond Group is a luxury hotel and travel operator with 33 hotels wordwide and has several cruises and trains, mainly in Europe.

The company started its business about 40 years ago in Venice, when the Hotel Cipriani was opened. The group´s  12 months revenue was 572 million dollars and ebitda 140 million dollars at the end of September. One of the famous restaurants, Club 21 in New York, is also part of the chain.

The transaction is being finalised after the approval of the Belmond shareholders during the first quarter of 2019 and after the anti-trust clearance in mid-2019.

LVMH´s shares closed down by 1,43 % to 252,20 euros in Paris Euronext and the Belmond´s shares jumped by 39,83 % to 24,68 dollars in New York on Friday.

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Global fall in stocks – growth concerns

Equities fell in the markets globally on Friday trading. The major concerns were the Chinese signs of slowing economy, Brexit-situation and the ongoing  US China tradetalks. Dow Jones fell 2,02 % to 24 100 points, S&P 500  fell 1,91 % to 2599 and technology Nasdaq-index dropped 2,26 % to 6910 points.

The macro data regarding the Chinese retail sales was a disappointment for the markets and the Asian stocks fell as well. Tokio Nikkei 225-index ended down 2,02 % to 21374 points and Hang Seng in Hong Kong fell 1,62 % to 26 094 points.

In Europe stocks in London ended down 0,47 % and FTSE 100 stood at 6845 points. German DAX-index ended down 0,54 % to 10865 and CAC40 -index in Paris ended down 0,88 % to 4853 points.

According to Citigroup analysis, the company earnings are expected to rise on average 8 % in the US next year by the analysts compared to 6 %  growth by markets strategists and 4% by the markets itself. In Europe the difference is wider, while the analysts expect the company earnigns to grow on average by 8 % e and strategists by 2 % in 2019. The markets expectation is -4 %, Bloomberg news reported.

The slowing economy signs have also increased the expectations that the US Federal Reserve would have fewer rate rises in 2019 than earlier estimated. The European Central Bank signaled on Thursday that the ECB in ready to operate and feed the system in case of sudden economic turnarounds and political situations. At the same time the bank also announced the end of the bond buying programm.

The UK EU Brexit deal was on the news as well. The EU leaders declined to open the deal for new negotiations, but there where willingness to help the UK with the border issue. UK Prime Minister Theresa May said in Brussels that she feels that there could be more assurances while the talks will continue. The UK Parliament is going to vote about the deal during January 2019.

Euro fell against US dollar and was down 0,48 % at 1,130 dollars. The UK sterling fell 0,47 % to 1,258 dollars.

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Stocks mixed – ECB to end bond buying

Wall Street ended mixed on Thursday trading. The Dow Jones closed up 0,29 % to 24597, when the S&P 500 -index ended down 0,02% to 2650 and Nasdaq-index down 0,39 % to 7070 points. The markets were having some good news from the US China trade talks, but on the other hand the Brexit-situation in Europe and the moneraty polices were under considerations.

UK Prime Minister Theresa May told the media that she will not be the Party leader for the next elections in 2022.

– What I’m clear about is the next general election is in 2022 and I think it’s right that another party leader take us into that general election, UK Prime Minister Theresa May told on Thursday in Brussels.

The EU leaders were having discussions in Brussels regarding the Brexit-deal and how to help the British Parliament with the deal. Many of the EU leaders pointed out that the deal is a deal and it cannot be reopen, although they wanted to get some kind of solution for the Irish border.

The European Central Bank announced Thursday of the end of the net bond purchasing program. The Central Bank also informed that this does not mean the end of the quantitative easing – the message was that ECB promised to keep feeding stimulus for years into a slowing economy with an unexpected slowdown and political turbulence. The size of the bond portfolio is 2,6 trillion euros.

Euro was trading 1,14 dollars, down 0,03 %. And the UK sterling was up 0,04 % , 1,26 dollars.

 

 

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