08 Mar

NQ100m close to forming “golden cross”. What’s next?

By ForexTime

But such a bullish technical signal may be well and truly lost amid the onslaught of macro events that are set to dictate how global financial markets fare the rest of this month.

 

What is a “golden cross”?

A golden cross is when the asset’s 50-day simple moving average (SMA) crosses above its 200-day SMA.

Such an event indicates that this asset’s prices have been climbing of late, enough to be higher than its longer-term average.

At the time of writing, the gap between those two widely-followed technical indicators now stand at less than 10 points on the NQ100m.

When it happens, the “golden cross” typically sends a “bullish” signal to traders, suggesting there could be more gains in store.

NOTE: The NQ100m is based on the benchmark Nasdaq 100 index, which tracks the overall performance of US tech stocks such as Apple, Amazon, and Alphabet.

 

How has NQ100m performed after forming a “golden cross” on the daily charts?

Here’s a look back at the previous two episodes:

  • 22 May 2020: NQ100m went on to climb by 76.2% (after “golden cross”) to post its highest-ever close on December 27, 2021 – the current record high.
  • 2 April 2019: NQ100m rose by 29.6% on its way to a pre-pandemic high in February 2020, before lockdowns worldwide and the fear factor that coursed through global financial markets then sent the NQ100m plummeting below its 200-day SMA.

In both instances, after a “golden cross” on the daily charts, the NQ100m then duly surged to fresh record highs!

What’s next after a “golden cross”?

If such a bullish technical event does happen for the NQ100m, equity bulls (those hoping stocks will move higher) will be looking to eventually revisit this past Monday’s (March 6th, 2023) intraday high of 12471.4.

 

However, it’s different this time (or so goes the market cliché)!

From a macro fundamental perspective, the Nasdaq 100 finds itself in a completely market environment compared to the situation surrounding prior “golden crosses” back in 2019 and 2020.

And here’s the biggest difference:

The US Federal Reserve (central bank) has been aggressively raising interest rates since 2022 in order to try and cool down inflation that’s raging at its highest levels in decades!

The ongoing Fed rate hikes are in stark contrast to the:

  • April 2019 episode: prior Fed rate hikes coming into 2019 had resulted in US rates peaking at 2.5% (only about half of today’s rates of 4.75%) and the Fed would eventually start cutting interest rates later that year.
  • May 2020: US interest rates were at a record low of near 0%, to help cushion the economic impact from Covid-19.

 

Recall that, tech stocks generally do not like the prospects of interest rates moving higher.

This is because:

  1. Higher interest rates translate into higher repayments on loans.
  2. And many tech companies rely on borrowed money to grow. And they’ve enjoyed plenty of cheap (near-zero interest rates) money over the past decade.
  3. Hence, with more money now needed to repay borrowings, that’s less money that the company can use to grow its business, or to be kept as profits.
  4. Shareholders and investors would rather see those profits sooner rather than later. Hence, they are less willing to buy stocks in tech companies while US interest rates move higher.

    Result = the Nasdaq 100 is still about 26% lower from its all-time high posted back in November 2021.

Hence, as stated at the top of this article, be mindful that any bullish technical signals emanating from any immediate “golden cross” may be lost amidst the incoming macro events.

 

What could move the NQ100m this month?

  • March 10th: US nonfarm payrolls (NFP) report a.k.a. jobs data
  • March 14th: US consumer price index (CPI) a.k.a. inflation data
  • March 22nd: Fed rate decision

 

If markets are shown higher-than-expected readings for the US jobs/inflation data in the days ahead, and/or if the Fed triggers a larger-than-25 basis point hike later this month …

such events should drag the Nasdaq 100 lower as market fears are revived that US interest rates will have to move even higher beyond current forecasts of 5.6%.

 

In the above scenario, expect NQ100m bears (those hoping prices will fall) to test support around the 11,923 mark.

This is a significant support region, because:

  • That’s where we find the 23.6% Fibonacci level from its November 2021-October 2022 drop
  • This is also around where the 200-day and 50-day SMAs are converging.

This confluence of technical indicators could form a strong support region for the NQ100m, barring an utter capitulation in risk sentiment.

 

Ultimately, global financial markets (including the NQ100m) are set to remain primarily driven by the shifting expectations surrounding how high the Fed will have to eventually send US interest rates.

Markets can only have greater confidence about the next bull run for the NQ100m once traders and investors can get used to the eventual peak for US interest rates, with hopes that the Fed can also start thinking about lowering rates once more.

Until then, the fear of even-higher US interest rates is likely to limit gains for the NQ100m.

 

READ MORE: (26 January 2023) SP500m close to forming “golden cross”. What’s next?

(After forming a “golden cross” the SP500m went on to hit all upside levels cited in the article.)

Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Financial News Stock Market News
07 Mar

Fed’s Powell warns of higher rates, investors urged not to forget other metrics

By George Prior

Federal Reserve Chair Jerome Powell’s high-stakes appearance before Congress should act as a reminder to investors to consider other metrics besides inflation and interest rates, says the CEO and founder of one of the world’s largest independent financial advisory, asset management and fintech organizations.

The observation from deVere Group’s Nigel Green follows the US central bank chief telling lawmakers on Tuesday that it will likely raise interest rates more than expected amid strong economic data and that it is prepared to move more aggressively if the “totality” of fresh reports suggests stronger measures are needed to tame inflation.

In a hearing before the Senate Banking Committee, Mr Powell said: “The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated… If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes.”

Following the hearing, Nigel Green noted: “Investors were looking for clues from Powell as to whether he favours another 25-basis point rate increase at the next Federal Open Market Committee meeting, or if he might consider a heftier 50-basis point increase.

“The Fed chair was perhaps more hawkish than many analysts had expected, and stocks tumbled after he warned that interest rates could remain higher for longer.”

He continues: “Despite the hawkish tone, when in the decision-making process, I remind investors that even though there’s still a way to go, we’re likely closer than we have been to getting back to the central bank’s target and would urge them to focus more on earnings and margin than on inflation and interest rate news.

“If you’re serious about building wealth, you should be looking at sectors and companies that can maintain margin despite inflation and interest rate hikes.

“Margin is an often overlooked yet important metric for investors to consider when evaluating investment opportunities. It can provide insight into the company’s profitability, efficiency, and competitive advantages, and can impact investor sentiment and stock prices.”

In this environment of higher rates for longer than had previously been anticipated, some companies are going to find it difficult to maintain margin and, as we have recently seen, are failing to report earnings as had been expected.

“In other words, if costs are going up firms can’t maintain margin, so that company is unlikely to be a good investment until things change,” noted the deVere CEO in a recent media note.

He identified four key sectors that he expects to be resilient in this current environment.

“We’re looking at sectors that can maintain margin, despite inflation and interest rate hikes. These include healthcare, luxury goods, energy and agriculture.

“Healthcare is a robust sector as people will always need to stay healthy – this has come into focus more than ever since the pandemic. Also, despite wider market volatility, there’s strong earnings potential due to ageing populations and other demographic changes. Plus, healthcare is becoming increasingly tech-driven, which offers fresh opportunities.”

He went on to say: “Luxury goods can maintain margin due to the inherent aspirational ‘elite and exclusive’ aspect of the sector.

“We’ll look at energy because there’s a shortage of energy in the world right now.

“Agriculture is another one as populations in emerging markets around the world are eating more meat. As they eat more meat, there needs to be more grain produced.”

As ever, it’s critical that investors ensure their portfolios are suitably diversified across asset classes, sectors, currencies and regions so as to make the most of the considerable opportunities that will inevitably present themselves.

Following Powell’s appearance on Capitol Hill on Tuesday, Nigel Green concludes: “Of course, investors shouldn’t dismiss the Fed’s signals about future rate hikes, but they must also consider other investment metrics too, in particular, margin.”

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

Bonds Economics & Fundamentals Opinions
07 Mar

Aussie gravitates deeper down. Overview for 07.03.2023

By RoboForex.com

The Australian dollar in pair with the US dollar lost balance and dropped. The current quote is 0.6707.

At the meeting that closed today, the Reserve Bank of Australia lifted the interest rate by just 25 base points to 3.6% per annum. This decision went in line with the forecasts.

This is the tenth increase in the interest rate in a row. By market expectations, the RBA will lift the rate once again in Q2 and then will make a pause in tightening the monetary policy.

The regulator supposes that inflation in Australia has reached its peak. According to the RBA, the monetary policy should remain tight to bring the CPI back to its target values, which is the range between 2 and 3%.

The Australian economy is slowing down, and the RBA has mentioned it several times. Moreover, a drop in consumption of households is noticeable because the monetary conditions are becoming tighter. The employment sector also proves deficient. At the same time, the growth of wages is speeding up, answering the lack of workforce.

The CB is watching the wage-price spiral and still states certain risks in this area.

AUD dropped, reacting to the view of the RBA.

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Financial News Forex and Currency News
07 Mar

The RBA raised the interest rate by 0.25%. The ECB is set for a rate hike above the 4% level

By JustMarkets

The US Treasury yields rose yesterday ahead of Powell’s speech to Congress, which could give clues as to the US Federal Reserve’s future monetary policy. Investors and funds are starting to hedge and close their trades after the good rally in the last days of last week. At the close of the stock market on Monday, the Dow Jones (US30) increased by 0.12%, and the S&P 500 (US500) added 0.07%. The NASDAQ Technology Index (US100) decreased by 0.11%.

The US Federal Reserve Chairman Jerome Powell will address Congress today to present the central bank’s semiannual monetary policy report. He will address the Senate on Tuesday and the House of Representatives on Wednesday. His comments will be scrutinized for hints about whether a broader rate hike is being considered this month after recent data pointing to solid inflation. Powell’s hawkish bias could trigger a sell-off in the stock market in favor of the dollar index as a defensive asset. Conversely, any hint from Powell that the US Fed is abandoning its hawkish stance could cause Treasury yields to fall further, pushing the dollar index down and the stock indices up.

Shares of Apple (AAPL) jumped about 2% after Goldman Sachs issued a “buy” recommendation on the stock, citing the tech giant’s strong position in services. Meanwhile, shares of Tesla (TSLA) fell more than 2% after the electric-car maker cut prices in the US for the second time this year to boost demand. Tesla also suffered from Morgan Stanley ruling out the electric carmaker as a “better choice” in favor of Ferrari. Morgan Stanley raised its target Ferrari NV (RACE) price to $310 a share.

Stock markets in Europe were mostly up Monday. Germany’s DAX (DE30) added 0.48%, France’s CAC 40 (FR40) gained 0.34%, Spain’s IBEX 35 (ES35) jumped by 0.49%, Britain’s FTSE 100 (UK100) closed yesterday down by 0.22%.

The European Central Bank should raise interest rates by 50 basis points at each of the next four meetings as inflation remains resilient, said Robert Holzmann, head of the Austrian central bank. Holzmann is considered the ECB’s most hawkish spokesman. The four steps advocated by Holzmann would raise the deposit rate to 4.5%, well above the current projected rate of 4%. Holzmann also urged the ECB to accelerate the reduction of the bank’s balance sheet by stopping full reinvestment in its Pandemic Emergency Purchase Program (PEPP). All debt maturing in the PEPP scheme must now be fully reinvested in the market until 2024.

Asian markets were also mostly up yesterday. Japan’s Nikkei 225 (JP225) jumped by 1.11%, China’s FTSE China A50 (CHA50) fell by 0.80%, Hong Kong’s Hang Seng (HK50) ended the day up 0.17%, India’s NIFTY 50 (IND50) added 0.67%, and Australia’s S&P/ASX 200 (AU200) ended the positive by 0.62%.

China set its GDP growth target for this year at about 5%, lower than last year’s target of about 5.5%. Last week’s stronger-than-expected data on activity in China’s manufacturing and service sectors point to an economic recovery. Given that China is Australia’s largest export market, any improvement in China’s growth outlook could improve Australia’s growth prospects.

The Reserve Bank of Australia raised its benchmark interest rate by 25 basis points. The rate rose from 3.35% to 3.6%. The monetary policy statement indicates that the RBA is leaving the door open for further increases. The move was expected as inflation rose to its highest level in three decades last quarter, and there are still no signs of inflationary pressures easing.

The Bank of Japan has set the discount rate at 0.10% and remains in control of the yield curve (YCC), targeting a range of 0.50% near zero for Japanese government bonds (JGBs) for up to 10 years. The 10-year JGB trades steadily near the upper bound of 0.50%, forcing the BoJ to intervene frequently. Incoming Bank of Japan (BoJ) Governor Kazuo Ueda clarified last week that he would take the same stance as outgoing Governor Haruhiko Kuroda. The BoJ will meet this week, where current governor Haruhiko Kuroda will speak for the last time in office.

S&P 500 (F) (US500) 4,048.42 +2.78 (+0.069%)

Dow Jones (US30)33,431.44 +40.47 (+0.12%)

DAX (DE40) 15,653.58 +75.19 (+0.48%)

FTSE 100 (UK100) 7,929.79 −17.32 (−0.22%)

USD Index 104.53 −0.50 (−0.48%)

Important events for today:
  • – Australia Retail Sales (m/m) at 02:30 (GMT+2);
  • – China Trade Balance (m/m) at 05:00 (GMT+2);
  • – Australia RBA Interest Rate Decision (m/m) at 05:30 (GMT+2);
  • – Australia RBA Rate Statement (m/m) at 05:30 (GMT+2);
  • – Switzerland Unemployment Rate (m/m) at 08:45 (GMT+2);
  • – US Fed Chair Jerome Powell Testifies at 17:00 (GMT+2);
  • – Switzerland SNB Chairman Jordan speaks at 20:30 (GMT+2);
  • – Australia RBA Gov Lowe speaks at 23:55 (GMT+2).

By JustMarkets

 

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.

Economics & Fundamentals Financial News
07 Mar

Volatile Week Ahead As Risk Events Eyed

By ForexTime 

The next few days could be wild and incredibly volatile for financial markets thanks to key central banks meetings, a semi-annual Congress appearance from Jerome Powell, and the latest US jobs data.

Asian shares edged higher on Tuesday morning following the mixed cues from Wall Street overnight as investors geared up for this week’s key risk events and economic releases. US and European futures seem to be pointing to a mixed open, with all attention directed towards commentary from Fed Chair Jerome Powell later today. In the FX space, the dollar remained subdued offering more space for G10 currencies to retaliate. Gold remains shaky this morning, and could be exposed to more pain if Powell strikes a hawkish tone later today.

In other news, the Reserve Bank of Australia hiked interest rates to the highest level in over 10 years. As expected, the central bank announced a 25-basis point hike, taking the cash rate to 3.6%. However, the RBA signaled a pause in its tightening cycle which triggered a selloff in the aussie. Taking a quick look at the technical picture, the AUDUSD remains under pressure on the daily charts with prices pressing against the 0.6700 support level. A solid bearish breakout beyond this level may open a path toward 0.6600.

Big week for USD as Powell and NFP eyed

It has been a choppy affair for the dollar over the past few days due to the absence of a fresh fundamental spark. But upcoming events could inject fresh life into the currency and set the tone for March.

Later today, Fed Chair Powell provides his semi-annual report to the Senate Banking Committee. Any hints around the Fed veering away from 25bp hikes in future meetings have the potential to move markets. The central bank head will address the House Financial Services Committee on Wednesday and is expected to reiterate a similar message. If Powell sounds hawkish, this could essentially revive dollar strength and rate hike bets. Alternatively, a dovish-sounding Powell may temper expectations around rates staying higher for longer, resulting in dollar weakness.

Before the main course and potential market shaker on Friday in the form of the NFP jobs data, investors will be served appetisers in the form of the ADP’s monthly report and the weekly initial jobless claims. Market sentiment could receive a slight boost if these reports exceed forecasts.

All eyes will be on the US jobs report at the end of the week, which is expected to show that the US added 215,00 jobs in February compared to the blowout 517,000 seen in January. Ultimately, another robust jobs report may reinforce expectations around the Fed holding rates higher for longer, in turn supporting dollar bulls. If the NFP report disappoints, this may raise questions about the dollar’s renewed strength, especially if rate hike bets cool.

Commodity spotlight – Gold

After bagging its best week since mid-January, gold has kicked off the new week on a shaky note.

The next few days promise to be eventful for the precious metal as investors brace for Powell’s Testimony and US economic data including the highly anticipated NFP. Price action suggests that gold bulls could be back in town. However, the risk events over the next few days may determine whether the current momentum results in a more pronounced bullish reversal or simply a dead cat bounce. A hawkish-sounding Powell coupled with another strong jobs report could spell nothing but trouble for gold. Alternatively, a cautious Powell and disappointing jobs report could keep the party going for gold bugs.

Taking a quick look at the technical picture, a strong daily close above the 50-day SMA around $1870 could encourage a move toward $1880 and $1900, respectively. Sustained weakness could open a path back towards $1845, $1825, and $1800.

Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Economics & Fundamentals Financial News
06 Mar

Brent Keeps Trying to Grow

By RoboForex Analytical Department

The crude oil sector fights with the news flow, trying to climb higher. A Brent barrel now costs 85.25 USD.

China has changed its forecast for economic growth in the country to 5.0% from 5.5% earlier. This made capital market really unhappy because it had really counted on the demand on energy carriers from China. Last year, the Chinese GDP grew by just 3%. Hence, the decrease in the target for 2023 might be an attempt to place more realistic goals and reach them efficiently. However, at the moment things look bad.

For now, the market has few fundamental reasons for optimism, yet local waves of purchases happen.

On H4, Brent has formed a consolidation range around 83.83. With an escape upwards, a pathway to 87.52 will practically open. After this level is reached, a link of correction to 83.83 might happen, followed by further growth to 87.52. And this is just a half of the wave. After the goal of growth is reached, a decline to 83.83 might follow, and then — growth to 94.80. Technically, this scenario is confirmed by the MACD: its signal line is above zero in the histogram area suggesting growth to new highs.

On H1, the structure of the fifth wave of growth to 85.80 has been completed. Today a consolidation range is forming below it. An escape downwards and a link of correction to 83.83 are not excluded. With an escape upwards, the wave might continue to 87.50. The target is local. After it is reached, a link of decline to 83.83 and growth to 90.00 might follow. Technically, this scenario is confirmed by Stochastic. Its signal line is above 20, aimed strictly upwards.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

Energy Financial News
06 Mar

US race for digital dollar fuels case for Bitcoin

By George Prior

With the US government’s work on a potential digital dollar accelerating, meaning a digital greenback could soon be a reality in the US, the case for Bitcoin becomes “significantly stronger.”

This assessment from Nigel Green, CEO and founder of deVere Group, one of the world’s largest independent financial advisory, asset management and fintech organizations, comes as Nellie Liang, the US Treasury Department’s undersecretary for domestic finance, noted that the federal government will start meetings in the “coming months” on a Central Bank Digital Currency (CBDC).

Speaking last week in a speech for the Atlantic Council, Ms Liang said that US officials are “actively evaluating whether a CBDC is in the national interest,” and highlighted some of the potential benefits of a Federal Reserve-backed digital currency, noting it “could help preserve the dollar’s global role” and possibly reduce frictions in cross-border transactions.

Nigel Green observes: “This is the clearest sign yet that a digital US dollar could soon become a reality, pending Congressional approval.

“With the world’s largest economy now ramping up efforts, the global race to CBDCs is now intensifying.

“It’s estimated that more than 80% of central banks around the world are considering launching a central bank digital currency or have already done so. It appears that the US is now determined not to be left behind and is accelerating the project.

“It seems to have become a critical matter of global leadership, as China is the most economically powerful country to lead CBDC implementation.”

Proponents of CBDCs say digital payments can be processed faster than traditional cash or check payments, reducing transaction times and increasing the speed of commerce.

In addition, transaction costs could be cheaper to process than traditional cash or check payments, potentially reducing costs for businesses and consumers. A digital system could provide greater access to financial services for people who may not have access to traditional banking services.

“Whilst CBDCs might have many advantages, including convenience, efficiency and transparency, what they do not have is privacy,” says Nigel Green.

“In effect, the digital dollar is Big Brother-style surveillance technology.

“These state-backed, programmable digital currencies will provide governments greater oversight of citizens’ transactions in real-time, potentially leading to the collection of sensitive personal information.

“This could include information about individuals’ spending habits, income, and other financial activities. This has raised concerns about the potential for government abuse of this information, such as the use of financial data to monitor and control individuals’ behaviour.
“It’s an extra lever of control that they’ve never had before.”
This, says the deVere Group CEO, is why Bitcoin and cryptocurrencies, will become increasingly attractive.

“Why? Because they still have all the plusses of being digital, – speed, efficiency and convenience – but they are fundamentally different as they run on an open, immutable blockchain.

“They are global, decentralized – with no one authority able to control – borderless, tamper-proof and censorship-resistant.”

Despite the US Treasury appearing to prepare for the launch of a digital dollar, there are a growing number of voices in opposition.

Representative Tom Emmer has introduced legislation in the House of Representatives that could limit the Federal Reserve from issuing a central bank digital currency, or CBDC.

Last month, Emmer affirmed that he had introduced the “CBDC Anti-Surveillance State Act” in order to protect Americans’ right to financial privacy.

According to the lawmaker, the bill would prevent the Fed from issuing a digital dollar “directly to anyone,” bar the central bank from implementing monetary policy based on a CBDC, and require transparency for initiatives related to a digital dollar.

“Any digital version of the dollar must uphold our American values of privacy, individual sovereignty, and free market competitiveness,” he said. “Anything less opens the door to the development of a dangerous surveillance tool.”

Nigel Green concludes: “The US joining the CBDC race more fully underscores that digital is inevitably the future of money .

“It’s increasingly clear that in the not-too-distant future, we will have a multi-faceted system of currencies, including fiat, CBDCs, and crypto.

“Whilst there are pros and cons to all, for many people programmable, trackable CBDCs will be unattractive due to the privacy and government monitoring concerns.

“What’s urgently needed is sensible, informed public conversation.”

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.

Cryptocurrencies Financial News
06 Mar

With Inked Deal, Oil & Gas Co. To Own 100% of Subsidiary

Source: Bill Newman  (3/3/23)

With the transaction close, the acquirer will also assume total interest in the now jointly owned oil asset, noted a Research Capital Corp. report.

CanAsia Energy Corp. (CEC:TSX.V) agreed to buy Andora Energy’s common shares owned by minority shareholders for US$1.7 million (US$0.044 per share) in cash, reported Research Capital Corp. analyst Bill Newman in a March 2 research note. This will take CanAsia’s ownership of Andora’s common shares to 100% from 88.2%.

The deal is expected to close by this month’s end, noted Newman, and will likely catalyze CanAsia’s stock.

“We view this transaction as positive,” Newman added.

Research Capital maintained its Speculative Buy recommendation and CA$0.50 per share price target on CanAsia, noted Newman. The stock is currently trading at CA$0.22 per share, which implies a significant, or 127%, potential return on investment from here.

Stake in Resource To Change

Newman pointed out that with the transaction, the portion of the Sawn Lake resource net to CanAsia will increase to 100%, according to the updated resource previously prepared by Sproule Associates and effective Dec. 31, 2022.

The risked best estimate contingent resource net to CanAsia will increase to 248,200,000 barrels (248.2 MMbbl) from 218.9 MMbbl.

Accordingly, the after-tax net present value discounted at 15% of this resource will change to CA$198 million (CA$198M), or CA$3.98 per share, previously CA$175M, or CA$3.51 per share.

Disclosures:
1) Doresa Banning wrote this article for Streetwise Reports LLC. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: CanAsia Energy Corp. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with: None. Please click here for more information.

3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.

4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of

 


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Disclosures:
1) Doresa Banning wrote this article for Streetwise Reports LLC. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: TAG Oil Ltd. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with: None. Please click here for more information.

3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.

4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of CHECK a company mentioned in this article.

Disclosures for Research Capital Corp., CanAsia Energy Corp., March 2, 2023

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Energy Financial News
06 Mar

Eli Lilly is cutting insulin prices and capping copays at $35 – 5 questions answered

By Dana Goldman, University of Southern California and Karen Van Nuys, University of Southern California 

Pharmaceutical giant Eli Lilly is slashing the list prices for some of its most popular insulin products by 70% and capping insulin copays at US$35 for uninsured patients and those with private health insurance. These changes follow efforts by the federal government, the California state government, nonprofits and some companies to make insulin more affordable for the more than 7 million Americans with diabetes who require it.

The Conversation asked Dana Goldman and Karen Van Nuys, two scholars who have researched insulin pricing, to explain why Eli Lilly is dramatically cutting the cost of some of its insulin products and to sum up how it may improve access to this essential medical treatment.

1. Why is Lilly reducing prices now?

High insulin prices have not earned any U.S. manufacturer many friends, with list prices increasing 54% from 2014 to 2019.

Most troublingly, an estimated 1.3 million uninsured people with diabetes and patients with inadequate insurance have resorted to rationing their insulin. Skipping doses because of high insulin prices has sometimes had tragic and even deadly consequences.

But growing competition has shaken up the insulin market in recent years.

For example, Walmart introduced its own private-brand insulin in 2021. Mylan, a large generic drugmaker, developed a version of long-acting insulin called Semglee, priced 65% lower than its branded competitor. But few consumers use those products.

Efforts to produce cheaper insulin by the nonprofit drugmaker CivicaRx and the state of California are several years out and won’t provide immediate relief.

Then there’s the Inflation Reduction Act, a big spending package Congress approved in 2022. It capped insulin out-of-pocket costs at $35 for Americans with Medicare, a government health insurance program that covers people over 65.

And, in fact, Lilly itself has been trying to disrupt insulin prices. In 2019, the drugmaker introduced insulin lispro, a lower-cost version of its blockbuster insulin, Humalog.

2. What does this mean for Americans who need insulin?

Part of the problem with the existing system is that some patients, especially if they’re uninsured or have high deductibles, end up paying the list price – which can mean spending $1,000 or more a month on insulin. This can be a crushing financial burden.

Lilly’s new $35 out-of-pocket cap means that privately insured patients and those without insurance requiring insulin will spend no more than that monthly for copays. Its 70% reduction in the list price of two popular name brand insulins, Humalog and Humulin, will bring some financial relief. And the company has also reduced its generic lispro’s list price to $25 a vial, down from $126.

The evidence is clear that these price reductions will improve patient adherence – which means fewer missed doses of this lifesaving medication.

3. How might Lilly’s actions affect the whole industry?

Lilly has put pressure on its biggest competitors, Novo Nordisk and Sanofi, to follow suit.

These lower prices could also make Lilly’s insulins affordable to cash-paying patients. As a result, these insulins could be added to the list of drugs provided by pharmacies that are disrupting the U.S. prescription drug industry, like Mark Cuban’s Cost Plus Drug Co. and Blueberry Pharmacy. These companies provide low-cost drugs with transparent markups or through membership programs, typically without insurance.

4. Why did insulin get so expensive in the US?

That lispro, Lilly’s own, cheaper authorized generic insulin, hasn’t completely displaced the equivalent name brand Humalog in the market by now may seem surprising. But it is the result of the complex U.S. prescription drug distribution system.

Insulin prices are the result of a complex set of negotiations between manufacturers and pharmacy benefit managers, which act on behalf of insurers. The three largest – CVS Caremark, Express Scripts and Optum Rx – handle about 80% of all prescriptions.

These middlemen negotiate directly with Lilly and other insulin manufacturers, focusing on two key sums: the list price and the rebate. Manufacturers are paid the list price but then must pay a rebate to the pharmacy benefit managers.

How do pharmacy benefit managers get manufacturers to pay rebates? They maintain formularies – lists of drugs that patients in a health plan can access. If an insulin manufacturer wants to supply diabetes patients, it needs to remain on those formularies. And doing so requires the manufacturer to pay bigger rebates. Otherwise, pharmacy benefit managers can exclude the manufacturer.

In 2016, OptumRx, which negotiates insulin prices for about 28 million people, excluded only four types of insulin from its formulary. By 2022, OptumRx was excluding 13 insulins.

Keeping insulin on formularies, in short, has required high rebates, and list prices have increased along with them. Ironically, as insulin list prices have been rising, manufacturers have been making less money off of insulin sales, while middlemen have been making more. The key to true price competition is to ensure access to all versions of insulin and to convince patients and providers that people with diabetes can substitute lower-cost versions without compromising their health.

5. What might happen next?

The Federal Trade Commission, a government agency that probes anti-competitive practices, and Congress are now investigating pharmacy benefit managers’ rebate and formulary practices, among other things. These investigations, along with Lilly’s moves, may lead other insulin manufacturers to lower their list prices.

And once its competitors decide whether they will follow Lilly’s example, pharmacy benefit managers will be under a lot of scrutiny to see whether they give preferred formulary placement to the lowest-cost insulin products, or to those that pay the highest rebates.The Conversation

About the Authors:

Dana Goldman, Dean of the Sol Price School of Public Policy; Professor of Pharmacy, Public Policy, and Economics, University of Southern California and Karen Van Nuys, Executive Director of the Value of Life Sciences Innovation program; Fellow at the USC Schaeffer Center, University of Southern California

This article is republished from The Conversation under a Creative Commons license. Read the original article.

 

Financial News Healthcare Stock Market News
06 Mar

The ECB will remain hawkish until the summer. UAE plans to exit OPEC

By JustMarkets

The recent string of strong economic data has caused investors to rethink how much more Fed tightening is needed to slow the economy significantly. Investors have begun to realize that the Fed will stop raising rates probably before early summer, and the current price levels in the stock market are a great opportunity to buy or average portfolios. This caused the indices to rise sharply at the end of last week. At the close of the stock market on Friday, the Dow Jones Index (US30) increased by 1.17% (+1.47% for the week), and the S&P 500 (US500) added 1.61% (+1.33% for the week). The NASDAQ Technology Index (US100) jumped by 1.97% on Friday (+1.49% for the week). The S&P 500 (US500) broke a three-week losing streak, and the Dow Jones Industrial Average (US30) posted its first weekly gain since late January.

The fourth-quarter reporting season is coming to a close, and all but seven companies in the S&P 500 have reported. According to Refinitiv, results for the quarter beat consensus forecasts 68% of the time.

Federal Reserve Bank of Richmond President Thomas Barkin said Friday that he could envision a scenario in which the central bank would raise the US benchmark interest rate to a range of 5.5%-5.75%. Barkin also added that inflation might cool faster than he expects, implying a shallower rate trajectory. But it is more likely that inflation will persist, requiring the Fed to do more. That said, the policymaker does not expect a rate cut before the end of 2023.

(DE30) gained 1.64% (+1.48% for the week), French CAC 40 (FR40) added 0.88% (+1.48% for the week), Spanish IBEX 35 (ES35) jumped by 0.47% (+2.29% for the week), British FTSE 100 (UK100) closed on Friday with 0.04% (+0.87% for the week).

The latest Eurozone inflation report showed that price pressures remain persistently high in the single block, especially for core inflation. The ECB will meet in mid-March to announce its next 50bp interest rate hike. And this scenario is already almost entirely factored into prices. Several ECB policymakers have recently warned that ECB rate hikes should continue until core inflation turns around. With the head of the ECB expecting core inflation to remain high through the summer, there is a high probability that the ECB will undertake another 0.5% rate hike at its May meeting.

On Friday, the Wall Street Journal reported that there is an internal debate in the United Arab Emirates over the prospect of leaving OPEC. The UAE’s decision to leave the Organization of Petroleum Exporting Countries would reduce the group’s authority to set oil prices, which account for nearly 38% of global production. The Emirates produces more than 3 million barrels a day and is OPEC’s third-largest oil producer. Analysts say oil prices are likely to be in the $75 to $80 a barrel range.

Saudi Arabia raised oil prices for Asia and Europe for April. The reason is rising demand from China, the world’s biggest oil importer. Aramco sells about 60% of its crude supply to Asia, mostly under long-term contracts whose prices are reviewed monthly. China, Japan, South Korea, and India are the biggest buyers. According to some experts, as the heat approaches, demand will only increase, which, given the current supply, could push oil prices back up to $100 a barrel.

Asian markets mostly declined last week. Japan’s Nikkei 225 (JP225) jumped by 2.21% over the week, China’s FTSE China A50 (CHA50) gained 1.90%, Hong Kong’s Hang Seng (HK50) jumped by 3.77%, India’s NIFTY 50 (IND50) added 0.89%, and Australia’s S&P/ASX 200 (AU200) was negative by 0.32%.

China maintained its language on Taiwan in its annual report to the country’s legislature, suggesting that President Xi Jinping maintains his policy on the self-governing island even as global tensions rise. “We must promote the peaceful development of relations on both sides of the Taiwan Strait and advance the process of China’s peaceful reunification,” Premier Li Keqiang said in a work report to the National People’s Congress. On the one hand, this is great news for the de-escalation of relations between China and Taiwan along with the United States. On the other hand, at the same time, China has increased defense spending by 7.2%, which contrasts slightly with plans to resolve things diplomatically. But it should be noted that since Russia’s invasion of Ukraine, the world has begun “military reform” – almost all countries have begun to increase military budgets, especially European countries.

For its part, the Biden administration is close to tightening regulations on some foreign investments by US companies in order to limit China’s ability to acquire technology that could improve its military power. This is another attempt by the White House to hit China’s military and technology sectors at a time of increasingly strained relations between the world’s two largest economies.

In the commodities market, futures on natural gas (+18.37%), platinum (+8.37%), gasoline (+6.76%), sugar (+6.41%), palladium (+5.06%), WTI oil (+4.63%), Brent oil (+3.42%), copper (+3.01%), silver (+2.76%) and gold (+2.51%) showed the biggest gains last week. Futures on orange juice (-8.82%), coffee (-5.06%), and wheat (-1.84%) showed the biggest drop.

S&P 500 (F) (US500) 4,045.64 +64.29 (+1.61%)

Dow Jones (US30)33,390.97 +387.40 (+1.17%)

DAX (DE40) 15,578.39 +250.75 (+1.64%)

FTSE 100 (UK100) 7,947.11 +3.07  (+0.039%)

USD Index 104.53 -0.50 (-0.48%)

Important events for today:
  • – Switzerland Consumer Price Index (m/m) at 09:30 (GMT+2);
  • – UK Construction PMI (m/m) at 11:30 (GMT+2);
  • – Eurozone Retail Sales (m/m) at 12:00 (GMT+2);
  • – Canada Ivey PMI (m/m) at 17:00 (GMT+2).

By JustMarkets

 

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.

Economics & Fundamentals Financial News
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