The US is now likely to pull off the perfect ‘soft landing’, with the world’s largest economy avoiding a recession as the latest inflation data comes in cooler than expected.
This is the bullish analysis of Nigel Green, the CEO and Founder of deVere Group, one of the world’s largest independent financial advisory, asset management and fintech organizations, as the consumer price index (CPI) rose just 0.2% in June and was up 3% from a year ago, the lowest level since March 2021.
The deVere chief executive says: “The US CPI data raises hopes that the Federal Reserve is going to be able to bring down inflation without steering the US economy into a recession.
“There had been legitimate concerns that with the aggressive monetary policy to cool red-hot inflation, the central bank might overtighten and push the world’s largest economy into a deep and/or protracted recession.
“However, the battle on rising prices is being won, as the data suggests, meaning the pressure is off the Fed for future rate hikes.”
He continues: “Cooling inflation and a strong and resilient labour market suggests that no recession will come in 2023.
“We believe the Fed has pulled off the perfect soft landing.”
The markets appear to agree. On Wall Street, the S&P 500 and the Nasdaq closed at their highest levels since April 2022 following the US CPI release on Thursday.
With a recession likely to be avoided and a soft landing achieved, investors will be looking ahead to a period of potentially more stable economic growth.
They will be working with a financial adviser to consider rebalancing their portfolios to seize the opportunities that will be presented.
“Tech, especially areas such as software development, cloud computing, artificial intelligence, cybersecurity, and e-commerce, should do well,” says Nigel Green. “Investments in pharmaceuticals, biotech, medical devices, and healthcare facilities will also be appealing.
“During periods of economic stability, governments typically focus on infrastructure development. Therefore, investments in areas such as construction, transportation, energy, utilities, and telecomms infrastructure are likely to get a boost, as will the financial sector.”
The deVere CEO concludes: “We’re not out of the woods yet, but it is increasingly likely the US economy will not face a full-blown recession this year.”
About:
deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients. It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.
The US Federal Reserve won’t be swayed and will raise interest rates this month despite inflation coming in cooler than expected, says the CEO and founder of one of the world’s largest independent financial advisory, asset management and fintech organizations.
Nigel Green of deVere Group’s warning comes as the latest US CPI comes in lighter than economists predicted.
He says: “Despite the data showing that the battle against inflation in the world’s largest economy is being won, we expect the Federal Reserve will resume its interest rate hiking agenda this month.
“The central banks’ officials will argue that there is still work to be done to tame inflation and they are unlikely to be dissuaded from their course of action for the time being.
“While we believe that the Fed will raise rates in July, there is now less justification for further hikes later this year.”
The deVere CEO is urging the US central bank not to raise interest rates past July.
“Investors are increasingly concerned that the Federal Reserve could with further hikes overtighten and that would steer the US economy into a major recession.
“The central bank must also ensure the broader picture is maintained and not be too cautious by overdoing the hikes, which would trigger the US recession deeper and longer.
“As the world’s largest economy, this would clearly have a serious, negative impact on the global economy.
“The most aggressive tightening campaign in decades is not quite finished – but the tide could be turning.
“Against this backdrop, a good fund manager will help you pick out the winners and losers to help you sidestep the risks to your wealth and seize the opportunities to build it for the long-term.”
About:
deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients. It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.
On Tuesday, stock indices closed higher, helped by growth in the energy and technology sectors. At yesterday’s close, the Dow Jones Index (US30) increased by 0.93%, while the S&P 500 Index (US500) added 0.67%. The NASDAQ Technology Index (US100) closed positive by 0.55%.
Today, the US will release inflation data for June. Inflation is expected to fall from 5.3% to 5.0% year-over-year. Core inflation (excluding food and energy prices) is also expected to fall from 4% to 3.1% year-over-year. Although the issue of a rate hike at the July meeting is almost settled, traders are expecting a softer stance from the US Fed after the data release. Several Fed officials said yesterday that the Fed is nearing the end of its rate hike cycle, which sparked a rally in risk assets this week while also sending the dollar lower.
Shares of 3M (MMM) jumped nearly 5% after Bank of America raised its rating on the industrial and consumer products maker to “neutral” from “downgrade.” Wall Street’s major banks will kick off the second-quarter reporting season on Friday. Banks are expected to report higher profits in the second quarter as higher interest payments offset a downturn in deal-making. That said, JPMorgan (JPM) could lead the sector’s growth. Jefferies upgraded JPM to “buy” from “hold,” noting the strength of its balance sheet and earnings potential.
Equity markets in Europe were mostly up yesterday. Germany’s DAX (DE30) rose by 0.75%, France’s CAC 40 (FR40) gained 1.07%, Spain’s IBEX 35 (ES35) added 0.81%, and the UK’s FTSE 100 (UK100) closed positive by 0.12%.
German inflation continues to rise. The consumer price level rose by 0.3% over the last month. In annualized terms, inflation rose from 6.1% to 6.4%. The ECB is likely to continue to hike until September, and then it will depend on new inflation and labor market data.
There are growing expectations that the oil market may tighten in the second half of the year, supported by signs of oil production cuts and Saudi Arabia’s recent pledge to cut production by 1 million barrels per day in July. These have contributed to the rise in oil prices in recent days. The US will also release crude oil inventories data for last week today, where a decline of 2.2 million barrels is expected.
Asian markets were trading higher on Tuesday. Japan’s Nikkei 225 (JP225) was up by 0.04% for the day yesterday, China’s FTSE China A50 (CHA50) added 0.56%, Hong Kong’s Hang Seng (HK50) increased by 0.97% for the day, and Australia’s S&P/ASX 200 (AU200) close positive by 1.50%.
The Chinese Communist Party-backed China Securities Journal reported on Wednesday that Beijing is likely to increase stimulus spending after a series of weak economic indicators in the country. Increased stimulus spending in China is expected to boost economic growth in the country, which in turn could boost oil demand amid rising domestic fuel consumption.
The Reserve Bank of New Zealand (RBNZ) left rates unchanged at 5.5% at its monetary policy meeting (MPC) today. Overall, the statement and minutes showed a dovish tone, raising the possibility that the RBNZ has ended the current tightening cycle, especially given the fact that the New Zealand economy is already in recession. The Reserve Bank said it expects core inflation to fall further from its peak and for core inflation to fall as capacity constraints ease. The Central Bank’s next monetary policy statement will be released on August 16.
S&P 500 (F) (US500) 4,409.53 +10.58 (+0.24%)
Dow Jones (US30) 33,944.40 +209.52 (+0.62%)
DAX (DE40) 15,673.16 +69.76 +(0.45%)
FTSE 100 (UK100) 7,273.79 +16.85 (+0.23%)
USD Index 101.75 −0.22 (−0.21%)
Important events for today:
– Japan Producer Price Index (m/m) at 02:50 (GMT+3);
– New Zealand RBNZ Interest Rate Decision at 05:00 (GMT+3);
– New Zealand RBNZ Rate Statement at 05:00 (GMT+3);
– Australia RBA Governor Lowe Speaks at 06:10 (GMT+3);
– UK BoE Financial Stability Report at 09:00 (GMT+3);
– UK BoE Gov Bailey Speaks at 11:00 (GMT+3);
– US Consumer Price Index (m/m) at 15:30 (GMT+3);
– US FOMC Member Kashkari Speaks at 16:45 (GMT+3);
– Canada BoC Interest Rate Decision at 17:00 (GMT+3);
– Canada BoC Monetary Policy Report at 17:00 (GMT+3);
This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.
In a surprise move, Turkey has ended its veto on Sweden joining Nato, thereby removing all the barriers to its membership of the military alliance.
Hungary quickly followed suit and, as a result of the two countries’ support, a consensus was able to be reached at the 2023 Nato summit in Vilnius, Lithuania. Turkish president Recep Tayyip Erdoğan agreeing to support Sweden’s bid to join will be touted as one of the key achievements of the summit.
Sweden submitted its formal application for membership in May 2022 alongside Finland, which was admitted into the alliance in April 2023.
Sweden, though not a formal member, has had a very close relationship with Nato for almost 30 years, since joining the alliance’s Partnership for Peace programme in 1994. It has contributed to Nato missions. And as a member of the European Union and contributor to the bloc’s common security and defence policy, it has also worked closely with the vast majority of European Nato allies.
In pursuing Nato membership, both Sweden and Finland have dramatically shifted their traditional policy of military non-alignment. A critical driver of this move was, clearly, Russia’s invasion of Ukraine in February 2022. It is also more evidence that Russian president Vladimir Putin has failed to achieve two of his own strategic objectives: weakening solidarity in the alliance and preventing further Nato enlargement towards Russia’s borders.
Finland and Sweden’s accession is of significant operational importance to how Nato defends allied territory against Russian aggression. Integrating these two nations on its north flank (the Atlantic and European Arctic) will help to solidify plans for defending its Ukraine-adjacent centre (from the Baltic Sea to the Alps). This will ensure that Russia has to contend with powerful and interoperable military forces across its entire western border.
Why Turkey lifted its veto
For a few years now, Turkey’s relationship with Nato has been nuanced and strained. Turkey’s objections to Sweden’s accession were ostensibly connected to its concerns over Sweden’s policy towards the Kurdistan Workers’ Party, or PKK.
Turkey has accused Sweden of hosting Kurdish militants. Nato has acknowledged this as a legitimate security concern and Sweden has made concessions as part of its journey towards Nato.
The main material driver of the agreement, however, may always have been a carrot being dangled by the US. American president Joe Biden now appears to be moving forward with plans to transfer F-16 fighter jets to Turkey – a deal that appears to have been unlocked by Erdoğan’s changed stance on Sweden. But it is often the case that a host of surrounding deals and suggestions of deals can help facilitate movement at Nato. Everyone, including Turkey, now seems able to sell the developments as a win to their constituents back home.
The ‘Nordic round’
Sweden’s accession means all Nordic nations are now part of Nato. As well as being significant in operational and military terms, this enlargement has major political, strategic and defence planning implications. Although Finland and Sweden have been “virtual allies” for years, their formal accession means some changes in practice.
Strategically, the two are now free to work seamlessly with the rest of the Nato allies to plan for collective defence. Integrating strategic plans is extremely valuable, particularly considering Finland’s massive border with Russia and Sweden’s possession of critical terrain like the Baltic Sea island of Gotland. This will increase strategic interoperability and coordination.
Nato allies also open their defence planning books to one another in unprecedented ways. Finland and Sweden will now undergo bilateral (with Nato’s international secretariat) and multilateral (with all allies) examinations as part of the Nato defence planning process. They will also contribute to the strategic decisions that undergird that process.
Their defence investments will also be scrutinised (and they will scrutinise the spending of other allies). Initial analysis suggests that while Finland and Sweden have lagged behind their Nordic neighbours’ increases in defence investment since 2014. Finland’s investment in defence leapt significantly leading up to and following its accession to Nato. While we may not know for months if the same is true of Sweden, we may expect similar increases on its part. Alliance norms and peer pressure are powerful.
The expansion of Nato to include Sweden is a major step for all these reasons. But while anyone watching the Vilnius summit will naturally now be asking whether the shift changes the situation for Ukraine’s membership aspirations, an answer is unlikely to be on the near horizon. Any final decision on Ukraine being offered a membership action plan for the time being is a bridge too far, especially in the current context of an ongoing war with an outcome that, as yet, is unpredictable.
At yesterday’s stock market close, the Dow Jones Index (US30) increased by 0.62%, while the S&P 500 Index (US500) added 0.24%. The NASDAQ Technology Index (US100) closed positive by 0.18% on Monday.
The US consumer credit growth slowed to a more than two-year low in May, reflecting the first decline in volume since the pandemic began. Total loans rose by $7.2 billion. This figure, which excludes inflation, was below all forecasts. While low unemployment and steady wage growth have allowed many consumers to continue spending, persistently high prices are forcing others to save.
Societe Generale’s top economist says Central Banks are at the “end of the road” in fighting inflation. A resilient labor market and the apparent strength of the economy mean the US Federal Reserve is likely to raise the interest rate by 0.25% in July. According to CME Group’s FedWatch tool, the market rates the probability of a rate hike at 90%. Nevertheless, hedge funds have shifted to an overall bearish bet on the dollar for the first time since March, believing the Federal Reserve is nearing the end of its interest rate hike cycle. Over the past week, credit investors opened a net short position in the US currency of 20,091 contracts. A week earlier, their long position totaled 5,196 contracts.
Equity markets in Europe were mostly up yesterday. Germany’s DAX (DE30) rose by 0.45%, France’s CAC 40 (FR40) gained 0.45%, Spain’s IBEX 35 (ES35) added 0.04%, and the UK’s FTSE 100 (UK100) closed up by 0.23%.
The UK government and the Bank of England “will do whatever is necessary, for as long as it takes” to bring inflation back to the 2% target, Treasury Secretary Jeremy Hunt said on Monday, reinforcing signs that interest rates will remain high for some time to come. UK inflation hit a 41-year high of 11.1% in October and is falling at a slower pace than in other major economies. Last month, the Bank of England unexpectedly raised its key interest rate by 0.5% to 5% after inflation held at 8.7% in May. Markets expect rates to peak at 6.25% or 6.5% later this year or early 2024.
On Sunday, French Central Bank governor François Villeroy de Galhau opposed a proposal to raise the European Central Bank’s inflation target to 2%. Villeroy, who sits on the ECB’s governing council, also said that interest rate hikes are close to the maximum and that rates will be held at elevated levels long enough for their impact on the economy to be felt.
Oil prices rose in Asian trading on Tuesday on the prospect of supply cuts by the world’s biggest oil producers, while expectations of expanded stimulus measures in major importer China also boosted sentiment. The prospect of supply cuts (Saudi Arabia and Russia have pledged to cut production further) is also bullish for oil prices. Nevertheless, caution over upcoming US inflation data and speeches from the Federal Reserve are holding back gains as markets want more information regarding the US Fed’s future trajectory.
Asian markets traded flat on Monday. Japan’s Nikkei 225 (JP225) decreased by 0.49% for the day yesterday, China’s FTSE China A50 (CHA50) added 0.70%, Hong Kong’s Hang Seng (HK50) was up by 0.89% for the day, and Australia’s S&P/ASX 200 (AU200) closed negative by 0.55%. Most Asian stocks rose sharply on Tuesday amid expectations that the Federal Reserve is close to ending its interest rate hike cycle for this year, while the prospect of additional stimulus measures from China also contributed to sentiment.
A string of weak economic data from China has caused bets to rise that Beijing will take additional stimulus measures to help support the slowing economic recovery. Inflation data on Monday showed that consumer spending is on the verge of deflation, sending mostly bearish signals for Asia’s largest economy. Shares in China’s big real estate developers rose on Tuesday after the People’s Bank said it would extend financial support for the sector until the end of 2024. But despite a slew of stimulus measures, China’s economy is still struggling to recover from COVID-era lows, and weak economic data over the past three months supports that view.
S&P 500 (F) (US500) 4,409.53 +10.58 (+0.24%)
Dow Jones (US30) 33,944.40 +209.52 (+0.62%)
DAX (DE40) 15,673.16 +69.76 +(0.45%)
FTSE 100 (UK100) 7,273.79 +16.85 (+0.23%)
USD Index 101.75 −0.22 (−0.21%)
Important events for today:
– Australia NAB Business Confidence (m/m) at 04:30 (GMT+3);
– UK Average Earnings Index (m/m) at 09:00 (GMT+3);
– UK Claimant Count Change (m/m) at 09:00 (GMT+3);
– UK Unemployment Rate (m/m) at 09:00 (GMT+3);
– German Consumer Price Index (m/m) at 09:00 (GMT+3);
– German ZEW Economic Sentiment (m/m) at 12:00 (GMT+3);
– Eurozone ZEW Economic Sentiment (m/m) at 12:00 (GMT+3);
This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.
Asian markets rose on Tuesday after China strengthened support for its struggling property sector. European futures are pointing to a positive open as attention falls on the pending German ZEW Economic Sentiment Index report. In the currency arena, the dollar has weakened on the back of falling Treasury yields with investors digesting the remarks from numerous Fed speakers yesterday. Regarding commodities, oil is finding support as investors evaluate the demand outlook for China following some measures by Beijing to support its real-estate sector. Gold could push higher in the short term thanks to a weaker dollar and falling Treasury yields. Although the US inflation report is currently in the spotlight, earnings announcements by Wall Street banks on Friday could hijack investor attention.
US June CPI Report in Focus
All eyes will be on the latest US inflation report on Wednesday which has the potential to influence Fed hike expectations. Annual headline inflation is expected to slow to 3.1% in June, a noticeable decline from the 4% reading in May. However, annual core CPI, which strips out volatile energy and food prices, is expected to cool to 5% from 5.3% seen in the prior release. This remains above the Fed’s 2% target but ultimately, signs of cooling inflationary pressures will boost expectations around the Fed’s hiking cycle ending soon after July’s FOMC policy meeting. However, still stubborn inflation prints could fuel speculation around the Fed keeping rates higher for longer.
Commodity Spotlight – Gold
Gold bulls are likely to draw strength from a weaker dollar and falling US Treasury ahead of the US CPI report on Wednesday. Should the report show further signs of slowing inflation, this could fuel speculation around the Fed’s hiking cycle nearing an end. Such a development could boost attraction for zero-yielding gold, potentially pushing prices beyond the $1940 region and higher towards $1960. Should prices remain trapped below $1932, this could open a path back to $1910 and $1900, respectively.
On Friday, at the close of the stock market Dow Jones Index (US30) decreased by 0.55% (-0.56% for the week), S&P 500 (US500) lost 0.29% (-0.53% for the week). NASDAQ Technology Index (US100) closed negative by 0.13% on Friday (-0.43% for the week).
The US labor market added 209,000 jobs in June, while the unemployment rate fell to 3.6% from 3.7%. This number is slightly below economists’ expectations of 225,000 jobs. It’s also a slowdown from the previous month’s reading, which was revised downward by 33,000 to 306,000. But overall, despite some cooling, the labor market remains resilient. The Fed is keeping a close eye on labor market indicators and is concerned that demand for workers will drive more robust wage growth and, in turn, inflation. Therefore, the Fed wants to see an increase in unemployment first to end the tightening cycle.
Another concern for the Fed today continues to be the strong growth shown by the US service sector, as reflected by the ISM Manufacturing PMI, which showed a strong side of the economy in June compared to May. This could keep the service sector relatively strong if the sector does not slow in the second half of the year.
Equity markets in Europe traded flat on Friday. German DAX (DE30) gained 0.48% (-3.61% for the week), French CAC 40 (FR40) added 0.42% on Friday (-4.09% for the week), Spanish IBEX 35 (ES35) decreased by 0.36% (-3.68% for the week), British FTSE 100 (UK100) closed negative by 0.32% (-3.65% for the week).
European Central Bank Vice President Luis de Guindos expressed some optimism that core inflation may peak. A decline in core price growth could lead to a potential pause in rate hikes. But the politician also added that incoming data will also guide the ECB. Yannis Stournaras, governor of the Bank of Greece and one of the ECB’s most dovish policymakers, echoed this view Friday. European Central Bank President Christine Lagarde said Friday that the bank would not “stand idly by” if there were simultaneous increases in profits and wages, given persistently high inflation in the region.
On Sunday, French Central Bank governor François Villeroy de Galhau opposed a proposal to raise the European Central Bank’s inflation target to 2%. Villeroy, who sits on the ECB’s governing council, also said that interest rate hikes are close to the maximum and that rates will be held at elevated levels long enough for their impact on the economy to be felt.
Oil prices fell in Asian trading Monday as investors are cautious ahead of important US economic data on inflation this week, although expected crude supply cuts from Saudi Arabia and Russia will keep oil from falling.
Asian markets were mostly down last week. Japan’s Nikkei 225 (JP225) decreased by 3.37% for the week, China’s FTSE China A50 (CHA50) lost 2.19%, Hong Kong’s Hang Seng (HK50) fell by 3.35%, and Australia’s S&P/ASX 200 (AU200) was negative by 2.24%.
China’s inflation data for June showed a decline. Over the last month, consumer prices declined by 0.2%, and the annual Consumer Price Index remained unchanged at 0.2%. The producer price index, which shows the rate of inflation between factories and plants, fell from minus 4.6% to minus 5.4%, adding to deflationary pressures. On the other hand, deflationary momentum from China may help offset service-driven inflation in developed countries over time.
S&P 500 (F) (US500) 4,398.95 −12.64 (−0.29%)
Dow Jones (US30) 33,734.88 −187.38 (−0.55%)
DAX (DE40) 15,603.40 +74.86 (+0.48%)
FTSE 100 (UK100) 7,256.94 −23.56 (−0.32%)
USD Index 102.27 −0.90 (−0.87%)
Important events for today:
– China Consumer Price Index (m/m) at 04:30 (GMT+3);
– China Producer Price Index (m/m) at 04:30 (GMT+3);
This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.
Stronger-than-expected employment data from ADP reaffirmed fears of further interest rate hikes by Federal Reserve policymakers. At the close of the stock market yesterday, the Dow Jones Index (US30) decreased by 1.07%, and the S&P 500 Index (US500) was down by 0.79%. The NASDAQ Technology Index (US100) closed negative by 0.82% on Thursday.
US employers announced 40,709 layoffs in June, down 49% from the 80,089 layoffs announced in May. Private sector jobs rose to 497,000 in June, much higher than the gain of 267,000 in May and much better than the estimated 220,000. At this point, the labor market is showing no signs of easing, giving the US Fed room to tighten further. Today in the US, the Nonfarm report will be released. Economists forecast that the US economy will add 200,000 jobs in June. The unemployment rate is expected to be 3.6% (now 3.7%), and average hourly earnings will be 0.3%.
Federal Reserve Bank of Dallas President Lorie Logan said yesterday that further interest rate hikes would likely be needed to stimulate meaningful disinflation and return the rate of price growth to the Central Bank’s target level. She added that forecasts from Fed officials showed two more interest rate hikes this year.
Stock markets in Europe were down yesterday. Germany’s DAX (DE30) decreased by 2.57%, France’s CAC 40 (FR40) lost 3.13%, Spain’s IBEX 35 (ES35) was down by 2.21%, Britain’s FTSE 100 (UK100) closed negative by 2.17%.
Head of the German National Bank Nagel said yesterday that, at present, the ECB does not see a threat of excessive policy tightening but does not know yet where interest rates will peak. Nagel also added that rates will remain restrained for an extended period.
Traders are betting on a Bank of England interest rate hike to 6.5% by March 2023. Raising the cost of borrowing to that level would put mortgages further in the Bank of England’s pain zone, making credit less available to businesses and dealing a sharp blow to the economy. It will also exacerbate the difficulties facing the government of Prime Minister Rishi Sunak in the run-up to next year’s elections.
Oil continues to fall in price amid fears of a rate hike. But amid signs of tightening supply and improving demand, oil still has a good chance of going higher. Data on Thursday showed US inventories declined more than expected, with a larger-than-expected drop in gasoline inventories pointing to improved demand for fuel during summer.
Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) fell by 0.86%, China’s FTSE China A50 (CHA50) was down by 0.82%, Hong Kong’s Hang Seng (HK50) lost 2.44% for the day, and Australia’s S&P/ASX 200 (AU200) closed negative by 1.25%.
In Japan, the wage hikes triggered by this spring’s labor negotiations have begun to take effect. Base wages rose by 1.8% in May compared to last year’s period, the most significant increase since February 1995. Wage growth is one of the key trends under scrutiny by the Bank of Japan (BOJ) as the Central Bank considers whether and when it should roll back its super-soft monetary stimulus. BOJ Governor Kazuo Ueda has repeatedly stressed the need for an accommodative policy until wages rise enough to support sustained price growth of around 2%.
New Zealand’s Central Bank is likely to keep interest rates unchanged at 5.50% next Wednesday and leave that level for the rest of the year, marking the end of its 20-month cycle of increases that have already driven the economy into recession. The country’s biggest banks – ANZ, ASB, Bank of New Zealand, Kiwibank, and Westpac – are not forecasting any rate changes next week.
S&P 500 (F) (US500) 4,411.59 −35.23 (−0.79%)
Dow Jones (US30)33,922.26 −366.38 (−1.07%)
DAX (DE40) 15,528.54 −409.04 (−2.57%)
FTSE 100 (UK100) 7,280.50 −161.60 (−2.17%)
USD Index 103.36 +0.32 (−0.04%)
Important events for today:
– Switzerland Unemployment Rate (m/m) at 08:45 (GMT+3);
– German Industrial Production (m/m) at 09:00 (GMT+3);
– UK BoE Gov Bailey Speaks at 10:30 (GMT+3);
– US Nonfarm Payrolls (m/m) at 15:30 (GMT+3);
– US Unemployment Rate (m/m) at 15:30 (GMT+3);
– Canada Unemployment Rate (m/m) at 15:30 (GMT+3);
– US Natural Gas Storage (w/w) at 17:30 (GMT+3);
– Eurozone ECB President Lagarde Speaks at 19:45 (GMT+3).
This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.
The US indices closed lower on Wednesday as minutes from the Federal Reserve’s June meeting showed appetite for policy tightening and interest rate hikes. At the close of the stock market yesterday, the Dow Jones Index (US30) decreased by 0.38%, while the S&P 500 Index (US500) was down by 0.20%. The NASDAQ Technology Index (US100) closed negative by 0.12% on Wednesday.
Highlights of the June FOMC minutes:
Nearly all participants said that inflation risks are prevalent at the moment and remain key to the outlook for the direction of monetary policy;
All Fed officials agreed that continued restrictive monetary policy would be appropriate;
The Fed expects further rate hikes but at a slower pace;
Fed policymakers believe a shallow recession at the end of the year is likely;
Some representatives favored raising rates rather than pausing at the June meeting, noting a “very tight” labor market that threatens to raise wages and inflation.
According to the FedWatch Tool, nearly 90% of traders expect the Fed to resume raising rates in July.
Stock markets in Europe were down yesterday. German DAX (DE30) was 0.63% lower, French CAC 40 (FR 40) decreased by 0.80%, Spanish IBEX 35 (ES35) fell by 1.06%, and British FTSE 100 (UK100) was 1.03% lower.
In the Eurozone, consumer inflation expectations for the next 12 months declined further, while inflation expectations for the three years ahead remained stable. Expectations for economic growth over the next 12 months have become less negative. Consumers expect lower growth in their home prices over the next 12 months.
Gold prices ended lower Wednesday as minutes from the Federal Reserve’s last meeting showed that some central bank officials pushed for an interest rate hike in June. Gold has an inverse correlation to the dollar index and to government bond yields, so a policy tightening is a negative for the precious metals.
The OPEC+ meeting proceeds without surprises. OPEC energy and oil ministers reviewed current oil market conditions and agreed to continue current production quotas for a stable and balanced oil market. Additional crude oil inventories will be released today.
Natural gas continues to be cheaper. The hot weather in Texas and other southern US states has eased slightly, prompting market participants to push gas prices down further to $2.5. Additional natural gas inventories will be released tomorrow.
Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) was down by 0.25%, China’s FTSE China A50 (CHA50) decreased by 1.08%, Hong Kong’s Hang Seng (HK50) lost 1.57% on the day, and Australia’s S&P/ASX 200 (AU200) close negative by 0.35%.
Janet Yellen is set to visit China in an effort to ease tensions between the two economic powers. Treasury Department officials say they don’t expect any diplomatic breakthroughs from Yellen’s trip. But the secretary of state hopes to forge closer ties with China’s new economic leaders to avoid a deeper deterioration in relations between the world’s two largest economies. This week, China announced new restrictions on exports of key minerals used in the manufacture of semiconductors and solar panels. This was China’s response to US export restrictions on China. The Biden administration has restricted the sale of advanced computer chips to China and is considering restricting China’s access to US cloud computing services.
S&P 500 (F) (US500) 4,446.82 −8.77 (−0.20%)
Dow Jones (US30)34,288.64 −129.83 (−0.38%)
DAX (DE40) 15,937.58 −101.59 (−0.63%)
FTSE 100 (UK100) 7,442.10 −77.62 (−1.03%)
USD Index 103.36 +0.32 (+0.31%)
Important events for today:
– Australia Trade Balance (m/m) at 04:30 (GMT+3);
– UK Construction PMI (m/m) at 11:30 (GMT+3);
– Eurozone Retail Sales (m/m) at 12:00 (GMT+3);
– US ADP Nonfarm Employment Change (m/m) at 15:15 (GMT+3);
This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.
More than 3.6 million electric cars are driving around the U.S., but if you live in an apartment, finding an available charger isn’t always easy. Grocery stores and shopping centers might have a few, but charging takes time and the spaces may be taken or inconvenient.
Several states and cities, aiming to expand EV use, are now trying to lift that barrier to ownership with “right to charge” laws.
Illinois’ governor signed the latest right-to-charge law in June 2023, requiring that all parking spots at new homes and multiunit dwellings be wired so they’re ready for EV chargers to be installed. Colorado, Florida, New York and other states have passed similar laws in recent years.
But having wiring in place for charging is only the first step to expanding EV use. Apartment building managers, condo associations and residents are now trying to figure out how to make charging efficient, affordable and available to everyone who needs it when they need it.
Electric cars can benefit urban dwellers
As a civil engineer who focuses on transportation, I study ways to make the shift to electric vehicles equitable, and I believe that planning for multiunit dwelling charging and accessibility is smart policy for cities.
Transitioning away from fossil-fueled vehicles to electric vehicles has benefits for the environment and the health of urban residents. It reduces tailpipe emissions, which can cause respiratory problems and warm the climate; it mitigates noise; and it improves urban air quality and quality of life.
Yet almost a quarter of all U.S. housing structures have more than one dwelling unit, according to the 2019 American Housing Survey. In California, 32.5% of urban dwellings have multiple units, and only a third of those units include access to a personal garage where a charger could be installed.
Even if installing a personal charger is an option, it can be expensive in a multiunit dwelling if wiring isn’t already in place. And it often comes with other obstacles, including the potential need for electrical upgrades or challenges from homeowner association rules and restrictions. Installing chargers can involve numerous stakeholders who can impede the process – lot owners, tenants, homeowners associations, property managers, electric utilities and local governments.
Right-to-charge laws aims for ubiquitous home charging
Right-to-charge laws aim to streamline home charging access as new buildings go up.
Illinois’ new Electric Vehicle Charging Act requires that 100% of parking spaces at new homes and multiunit dwellings be ready for electric car charging, with a conduit and reserved capacity to easily install charging infrastructure. The new law also gives renters and condominium owners in new buildings a right to install chargers without unreasonable restriction from landlords and homeowner associations.
California, Colorado, Florida, Hawaii, Maryland, New Jersey, New York, Oregon and Virginia also have right-to-charge laws designed to make residential community charging deployment easier, as do several U.S. cities including Seattle and Washington, D.C. Most apply only to owner-occupied buildings, but a few, including California’s and Colorado’s, also apply to rental buildings.
Chicago officials have considered an ordinance that would include existing buildings, too.
Sharing chargers can reduce the cost
There are several steps communities can take to increase access to chargers and reduce the cost to residents.
In a new study, colleagues and I looked at how to design shared charging for an apartment building with scheduling that works for everyone. By sharing chargers, residential communities can reduce the costs associated with charger installation and use.
The biggest challenge to shared charging is often scheduling. We found that a centralized charging management system that suggests charging times for each electric car owner that aligns with the owner’s travel schedule and the amount of charge needed can work – with enough chargers.
In a typical multiunit dwelling in Chicago – with an average of 14 cars in the parking lot – a small community charging hub with two level 2 chargers, the type common in homes and office buildings, can cover daily residential recharging demand at a cost of about 15 cents per kilowatt-hour. But having only two chargers means residents are waiting on average 2.2 hours to charge.
A larger charging hub with eight level 2 chargers in the same city avoids the delay but increases the cost of charging to 21 cents per kWh because of upfront cost of purchasing and installing the chargers. To put that into context, the average electricity cost for Chicago residents is 16 cents per kWh.
The future of charging management at multiunit dwellings will be automated for efficiency, with a computer or artificial intelligence determining the most efficient schedule for charging. Optimized scheduling can be responsive to the times renewable electricity generation sources are producing the most power – midday for solar energy, for example – and to dynamic electricity pricing. Automation can also eliminate delays for drivers while saving money and reducing the burden on the electric grid.
The current limited access to home charging in many cities constrains electric vehicle adoption, slows down the decarbonization of U.S. transportation and exacerbates inequities in electric vehicle ownership. I believe efforts to expand charging in multidwelling buildings can help lift some of the biggest barriers and help reduce noise and pollution in urban cores at the same time.
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