Author Archive for InvestMacro – Page 36

Cocoa prices are surging: west African countries should seize the moment to negotiate a better deal for farmers

By Michael E Odijie, UCL 

The global price of cocoa is spiking, a direct response to dwindling cocoa output in west Africa. In September, cocoa futures reached a 44-year price peak due to mounting concerns over reduced supplies from the region.

The price surge could prove to be a critical moment for cocoa farming and policy in west Africa.

The cocoa-producing belt of west Africa is responsible for generating over 80% of the total global output. Between them, Ghana and Côte d’Ivoire contribute more than 60% to the global output. Ghana is the second-biggest producer in the world and cocoa is a vital component of the country’s economy.

The global price spike has led west African governments to increase the guaranteed producer prices to farmers. Ghana recently raised the state-guaranteed cocoa price paid to farmers by two thirds. The announcement means that Ghana’s cocoa farmers will be paid 20,943 cedis (US$1,837) per tonne for the upcoming 2023-2024 season, up from 12,800 cedis.

Cameroon, the world’s fourth-largest cocoa producer, raised the price cocoa farmers get to 1,500 CFA francs (US$2.50) per kilogram, a 25% jump from the previous rate of 1,200 CFA francs. This increase is even more significant than Ghana’s when factoring in Cameroon’s single-digit inflation. Additionally, the Cote d’Ivoire government has announced a rise in the producer price.

As an economics researcher who has extensively studied and written about cocoa production in west Africa, I contend that the recent shortages can be harnessed to strengthen the position of cocoa producers. This will enable them to address the structural challenges ingrained in the cocoa production value chain. Rising production costs have not been recognised in the value of cocoa beans. Farmers therefore haven’t been able to earn enough income and this has led to unsustainable farming practices.

In my view, west African countries should use the cocoa shortage as negotiating leverage against multinational corporations to address these structural issues. Both Ghana and Côte d’Ivoire must recognise this pivotal moment. They must take the lead, and frame the current production challenges as deep-seated structural problems requiring solutions, rather than as short-term issues.

What’s driving the change?

Ghana’s cocoa regulator recently indicated that its farmers might not be able to meet some cocoa contract obligations for another season. Ghana’s projected cocoa yield for the 2022/23 planting season was the lowest in 13 years, falling 24% short of the initial estimates of 850,000 metric tonnes.

This trend has been repeated across the region, with production falling in Côte d’Ivoire and Cameroon.

Reduced output means demand can’t be met and global prices rise.

The reduction in cocoa output is attributed to short-term and long-term factors.

Commentators typically emphasise the short-term factors:

  • poor weather conditions
  • black pod disease, which causes cocoa pods to rot
  • the decline in the number of cocoa farmers, some of them selling their land to illegal miners
  • a shortage of fertilisers and pesticides, especially since the conflict in Ukraine has curtailed Russia’s export of potash and other fertilisers.

A number of long-term structural issues have beset cocoa farming in west Africa for decades. They shouldn’t be overshadowed by concerns with short-term problems.

The first is the declining availability of forest land and its connection to increasing production costs.

Over the last two decades, depletion of forest land has led farmers to turn to grasslands for replanting cocoa plants. This requires extensive land preparation, regular weeding around the cocoa trees, pruning, and the application of fertilisers and pesticides. What’s more, the plants are highly susceptible to disease. All these things result in increased labour costs.

None of these additional burdens have been incorporated into the pricing for sustainable cocoa production. In light of the new cost structure, cocoa beans have been undervalued for decades. Farmers have become poorer and are exploring alternative sources of livelihood.

The cost of sustainably cultivating cocoa in grasslands must be reflected in the price that farmers receive. Relying solely on market forces will not achieve this. For instance, every year, typically in September, the Ghana Cocoa Board announces the official producer price for cocoa beans for the upcoming cocoa season on behalf of the government. This official price is based on the anticipated export market price, with an understanding in Ghana that farmers should receive approximately 70% of it. However, the resulting market price, and consequently the producer price derived from it, often falls short of covering the costs of sustainable cocoa cultivation.

A path forward

What would it cost for cocoa farmers to cultivate cocoa beans sustainably, and ensure a living income, without contributing to deforestation or resorting to child labour?

If the market price falls below this cost (which isn’t static), then the farmers face exploitation, giving rise to many of the problems that plague the industry.

A few years ago, Ghana and Côte d’Ivoire pioneered the introduction of the “living income differential” – a premium that cocoa buyers would pay on top of the market price to ensure that farmers earned a sustainable income from their produce. Despite its noble intent, the initiative faltered. It was not well thought through. And it came at a time when these countries had diminished bargaining clout in a saturated market. Now is a favourable moment.

The crisis in the sector puts cocoa producers in a stronger negotiating position.

Ghana and Côte d’Ivoire could collaborate with other regional countries, such as Nigeria and Cameroon, to negotiate a better position for their cocoa farmers, ensuring sustainable cultivation. There are many strategies these countries can explore, including supply management (such as buffer stocks, export controls, or quotas), price premiums and value addition.The Conversation

About the Author:

Michael E Odijie, Research associate, UCL

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

Technical Analysis & Forecast 13.10.2023

By RoboForex.com

EURUSD, “Euro vs US Dollar”

EURUSD has completed a wave of growth to 1.0638. The market has formed a consolidation range under this level and, escaping it downwards, continues developing the declining wave to 1.0470. After the price hits this level, a link of growth to 1.0550 is not excluded (with a test from below), followed by a decline to 1.0424.

EURUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

GBPUSD, “Great Britain Pound vs US Dollar”

GBPUSD has completed a wave of growth to 1.2337. By now, the market has formed a consolidation range under this level. Breaking the range downwards, the market completed a declining wave to 1.2171. A link of correction to 1.2222 is not excluded (with a test from below), followed by a decline to 1.2121. This is a local target.

GBPUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

USDJPY, “US Dollar vs Japanese Yen”

USDJPY has completed a wave of growth to 149.81. A link of decline to 149.00 is expected (with a test from above). Next, a link of growth to 150.75 might follow.

USDJPY
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

USDCHF, “US Dollar vs Swiss Franc”

USDCHF has completed a wave of decline to 0.8989. By now, the market has formed a consolidation range above this level and is forming a growing impulse to 0.9122, escaping the range upwards. This is the first target.

USDCHF
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

AUDUSD, “Australian Dollar vs US Dollar”

AUDUSD has completed a rising link to 0.6444. Practically, the market demonstrates the wave of growth as complete. By now, a consolidation range has formed under 0.6444 and, escaping it downwards, the market develops an impulse of decline to 0.6262. This is a local target.

AUDUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

BRENT

Brent continues forming a consolidation range around 86.00. A link of decline to 84.00 is not excluded, followed by a rising link to 89.00. This is the first target.

BRENT
Risk Warning: the result of previous trading operations do not guarantee the same results in the future
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

XAUUSD, “Gold vs US Dollar”

Gold has completed a wave of growth to 1884.80. Today the market has performed a declining impulse to 1867.00 and a rising link to 1876.55. Practically, a consolidation range has formed which the price might later break downwards to 1847.77. This is the first target.

GOLD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

S&P 500

The stock index is forming a declining impulse to 4310.0. Next, the quotes might rise to 4355.0 (with a test from below). Next, a new wave of decline to 4200.0 might begin. This is a local target.

S&P 500

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.

The situation in the Middle East is heating up. Inflation data in China disappointed investors

By JustMarkets

At Wednesday’s stock market close, the Dow Jones Index (US30) decreased by 0.51%, while the S&P 500 Index (US500) lost 0.62%. The NASDAQ Technology Index (US100) closed yesterday negative by 0.63%. Stocks posted moderate losses on Thursday amid a stronger-than-expected US CPI report for September. In addition, weekly US initial jobless claims remained unchanged, which was hawkish for Fed policy. Thursday’s hawkish reports keep the likelihood of another Fed rate hike this year alive. Stocks continued to lose ground Thursday afternoon as T-bond yields rose further amid weak demand at the $20 billion auction of 30-year Treasury bonds.

Concerns that the conflict between Israel and Hamas will spread to the Middle East was another negative factor for stocks amid reports that Israel launched airstrikes on major airports in Damascus and Aleppo in Syria. In turn, Iran has begun moving military equipment to its western border. Whether this equipment will travel further through Iraq toward Israel is still unknown, but the geopolitical risks of another major war have increased significantly in recent days.

The US Consumer Price Index for September came in at 3.7% y/y, unchanged from August and stronger than the 3.6% y/y decline. The core CPI excluding food and energy for September declined to 4.1% y/y from 4.3% y/y in August, which was in line with expectations. US weekly initial jobless claims were unchanged at 209,000, indicating a slight strengthening of the labor market compared to expectations of a rise to 210,000.

FRB Boston President Collins commented that she favors a pause in Fed rate hikes.

Equity markets in Europe traded lower yesterday. Germany’s DAX (DE40) decreased by 0.23%, France’s CAC 40 (FR40) lost 0.37% on Thursday, Spain’s IBEX 35 (ES35) was 0.26% cheaper, and the UK’s FTSE 100 (UK100) closed positive by 0.32%.

ECB Governing Council spokesperson Centeno said yesterday, “At the current level of interest rates, we will make a significant contribution to the 2% inflation target. We will achieve this target by continuing with this monetary policy stance, holding it for some time until we are fully confident that inflation is falling.” Another representative of the ECB Governing Council, Wunsch, said, “If we continue to see inflation figures in line with the forecast, we will not need to raise interest rates again.” Minutes from the ECB’s September 13-14 meeting showed that the risks of too much tightening and too little tightening have become more balanced and the ECB will hold off on raising interest rates.

Crude oil prices gave up early gains on Thursday amid a stronger dollar and after the EIA’s weekly crude oil inventories report showed an unexpected rise in crude stockpiles and US crude production hit a record high. Oil initially opened higher on Thursday on concerns over the escalating conflict between Israel and Hamas. Oil was also supported by comments from Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman, who said oil producers will continue to work together and be proactive to keep the oil market balanced.

Asian markets were predominantly rising yesterday. Japan’s Nikkei 225 (JP225) rose by 1.75%, China’s FTSE China A50 (CHA50) gained 0.85%, Hong Kong’s Hang Seng (HK50) rose by 1.93% and Australia’s ASX 200 (AU200) ended the day positive by 0.04%.

In China, the Consumer Price Index (CPI) was unchanged in September, missing forecasts for a 0.2% y/y rise. In August, the CPI rose by 0.1% y/y. On an annualized basis, core inflation, excluding food and fuel prices, was up by 0.8%, the same as in August. The Producer Price Index (PPI) fell to 2.5% y/y, marking the 12th consecutive negative month, although the rate of decline slowed from August. Economists had forecast a drop to 2.4% y/y. CPI inflation at zero indicates that deflationary pressures in China remain a real threat to the economy. The recovery in domestic demand will not be strong without significant stimulus from the government.

S&P 500 (F)(US500) 4,349.61 −27.34 (−0.62%)

Dow Jones (US30) 33,631.14 −173.73 (−0.51%)

DAX (DE40)  15,425.03 −34.98 (−0.23%)

FTSE 100 (UK100) 7,644.78 +24.75 (+0.32%)

USD Index  106.58 +0.76 (+0.72%)

News feed for 2023.10.13:
  • – Singapore GDP (q/q) at 03:00 (GMT+3);
  • – China Consumer Price Index (m/m) at 04:30 (GMT+3);
  • – China Producer Price Index (m/m) at 04:30 (GMT+3);
  • – China Trade Balance (m/m) at 06:00 (GMT+3);
  • – Sweden Consumer Price Index (m/m) at 09:00 (GMT+3);
  • – Switzerland Producer Price Index (m/m) at 09:30 (GMT+3);
  • – UK BoE Gov Bailey Speaks at 11:00 (GMT+3);
  • – Eurozone Industrial Production (m/m) at 12:00 (GMT+3);
  • – US FOMC Member Harker Speaks at 16:00 (GMT+3);
  • – Eurozone ECB President Lagarde Speaks (m/m) at 16:00 (GMT+3);
  • – US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+3).

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.

Week Ahead: Looming “death cross” teases GBPUSD bears

By ForexTime 

  • GBPUSD set to be driven by technical and fundamental forces
  • Keep eye on UK CPI report, US data dump and Fed speeches
  • Looming “death cross” formation points to further declines
  • GBPUSD remains bearish despite recent bounce
  • Key levels of interest found at 1.2310 and 1.2050

The combination of geopolitical risk and Fed rate expectations injected markets with explosive levels of volatility this week. We could see more action later today due to earnings announcements by Wall Street banks.

And even before things settle down, volatility is likely to intensify in the week ahead thanks to top-tier economic reports and speeches from policymakers among other key risk events:

Monday, October 16

  • CNH: China medium-term lending facility rate
  • JPY: Japan industrial production
  • GBP: BOE chief economist Huw Pill speech
  • USD: US Empire Manufacturing index, Philadelphia Fed President Patrick Harker speech

Tuesday, October 17

  • CAD: Canada housing starts, CPI
  • EUR: Germany ZEW survey expectations
  • GBP: UK jobless claims, unemployment
  • USD: US retail sales, industrial production, New York Fed President John Williams, Richmond Fed President Tom Barkin speech
  • SPX500_m: Goldman Sachs, Bank of America earnings

Wednesday, October 18

  • CNH: China GDP, retail sales, industrial production
  • EUR: Eurozone CPI
  • GBP: UK September CPI
  • USD: US housing starts, Philadelphia Fed President Patrick Harker, New York Fed President John Williams speech
  • NQ100_m: Netflix, Tesla earnings

Thursday, October 19

  • CNH: China property prices
  • AUD: Australia unemployment
  • JPY: Japan trade
  • USD: US initial jobless claims, existing home sales,
  • USD: Fed speak – Federal Reserve Chair Jerome Powell, Chicago Fed President Austan Goolsbee, Atlantia Fed President Raphael Bostic, Philadelphia Fed President Patrick Harker, Dallas Fed President Lorie Logan

Friday, October 20

  • CAD: Canada retail sales
  • CNH: China loan prime rates
  • NZD: New Zealand trade
  • JPY: Japan CPI
  • USD: Philadelphia Fed President Patrick Harker speech

Our focus falls on the GBPUSD which is forming a “death cross” pattern on the daily timeframe.

A death cross happens when an asset’s 50-day simple moving average (SMA) moves below its 200-day SMA. This technical pattern is widely viewed as a signal that prices may continue to fall further in the medium to longer term.

After initially kicking off the week on a positive note amid a weaker dollar, the GBPUSD tumbled aggressively on Thursday thanks to the stronger-than-expected US inflation figures. With the dollar drawing strength from renewed Fed hike bets, the GBPUSD could resume its downtrend.

Here are 3 reasons why GBPUSD could be gearing up for a major move:

  1. UK September Consumer Price Index (CPI)

The latest UK inflation data published on Wednesday, 18th October is likely to influence expectations around the BoE’s next move. Before this key report, the UK will release its latest batch of labour market data on Tuesday, October 17th. Any further signs of the UK jobs market’s cooling may support the argument around the BoE keeping rates on hold for the rest of 2023.

Markets are forecasting:

  • CPI year-on-year (September 2023 vs. September 2022) to cool 6.5% from 6.7% in the prior month.
  • Core CPI year-on-year to cool 6.5% from 6.7% seen in August.
  • CPI month-on-month (September 2023 vs August 2023) to rise 0.5% from 0.3% in the prior month.

As of writing, traders are pricing in a 45% probability of a 25 basis point BoE hike by the end of 2023.

  • Signs of still stubborn inflation may boost bets around the BoE hiking rates one more time before the end of 2023, pushing the GBPUSD towards 1.2310.
  • Should September’s CPI report show signs of cooling inflationary pressures, this could fuel hopes around the BoE keeping rates on hold – dragging the GBPUSD lower as a result.
  1. US data dump + Fed speeches

Dollar volatility could be the name of the game next week due to key US economic data and speeches by a host of Fed officials. After receiving a boost from stronger-than-expected US inflation data, dollar bulls could switch into higher gear if the incoming economic releases support the case for another Fed hike in 2023.

The US Empire manufacturing will be in focus on Monday, with key US retail sales and industrial production figures published on Tuesday and US initial jobless claims on Thursday. These reports will be complemented by speeches from various Fed officials including Fed chair Jerome Powell.

  • If US economic data misses expectations and Fed officials reiterate their dovish remarks, this could hit the dollar as bets rise over the Fed pausing hikes for the rest of 2023.
  • A strong set of economic releases may fuel speculation around the Fed raising rates one more time this year. This may boost the dollar, pulling the GBPUSD lower as a result.
  1. Bearish technical force: Death cross pending

The GBPUSD remains under pressure on the daily charts with the looming “death cross” formation signalling a steeper decline down the road. Although the currency pair experienced a technical bounce from seven-month lows, prices are still trading below the 50, 100, and 200-day SMA while the MACD trades to the downside.

  • Sustained weakness below 1.2310 may keep bears control with the downside momentum opening a path towards 1.2050. A breakdown below this point could trigger a selloff towards 1.1920.
  • Should prices push back above 1.2310, could see prices test 1.2430 – where the 200-day SMA resides.


Forex-Time-LogoArticle by ForexTime

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

Exxon, Apple and other corporate giants will have to disclose all their emissions under California’s new climate laws – that will have a global impact

By Lily Hsueh, Arizona State University 

Many of the world’s largest public and private companies will soon be required to track and report almost all of their greenhouse gas emissions if they do business in California – including emissions from their supply chains, business travel, employees’ commutes and the way customers use their products.

That means oil and gas companies like Chevron will likely have to account for emissions from vehicles that use their gasoline, and Apple will have to account for materials that go into iPhones.

It’s a huge leap from current federal and state reporting requirements, which require reporting of only certain emissions from companies’ direct operations. And it will have global ramifications.

California Gov. Gavin Newsom signed two new rules into law on Oct. 7, 2023. Under the new Climate Corporate Data Accountability Act, U.S. companies with annual revenues of US$1 billion or more will have to report both their direct and indirect greenhouse gas emissions starting in 2026 and 2027. The California Chamber of Commerce opposed the regulation, arguing it would increase companies’ costs. But more than a dozen major corporations endorsed the rule, including Microsoft, Apple, Salesforce and Patagonia.

The second law, the Climate-Related Financial Risk Act, requires companies generating $500 million or more to report their financial risks related to climate change and their plans for risk mitigation.

As a professor of economics and public policy, I study corporate environmental behavior and public policy, including whether disclosure laws like these work to reduce emissions. I believe California’s new rules represent a significant step toward mainstreaming corporate climate disclosures and potentially meaningful corporate climate actions.

Many big corporations are already reporting

Most of the companies covered by California’s climate disclosure rules are multinational corporations. They include technology companies such as Apple, Google and Microsoft; giant retailers like Walmart and Costco; and oil and gas companies such as ExxonMobil and Chevron.

Many of these large corporations have been preparing for mandatory disclosure rules for several years.

Close to two-thirds of the companies listed in the S&P 500 index voluntarily report to CDP, formerly called the Carbon Disclosure Project. CDP is a nonprofit that surveys companies on behalf of institutional investors about their carbon management and plans to reduce carbon emissions.

Many of them also face reporting requirements elsewhere, including in the European Union, the United Kingdom, New Zealand, Singapore and cities like Hong Kong.

Moreover, some of the same U.S. companies, notably banks and asset managers that operate or sell products in Europe, have already started to comply with the EU’s Sustainable Finance Disclosure Regulation. Those regulations require companies to report how sustainability risks are integrated into investment decision-making.

While California isn’t the first place to mandate climate disclosures, it is the fifth-largest economy in the world. So, the state’s new laws are poised to have substantial influence worldwide. Subsidiaries of companies that didn’t have to report their emissions before will now be subject to disclosure requirements. California is in effect exercising its immense market leverage to establish climate disclosures as standard practice in the U.S. and beyond.

California also has a history of being a test bed for future federal U.S. policies. The U.S. government is considering broader emissions reporting requirements. But California’s new rules go further than either the U.S. Securities and Exchange Commission’s proposed corporate climate disclosure rules or President Joe Biden’s proposed disclosure rules for federal contractors.

A chart shows the differences between California's new climate disclosure laws and carbon disclosure and reporting proposals by the SEC and Biden Administration.

The most controversial part of the new disclosure rules involves scope 3 emissions. These are emissions from a company’s suppliers and its consumers’ use of its products, and they are notoriously difficult to track accurately.

California’s new emissions reporting law directs the California Air Resources Board, which will develop the regulations and administer them, to allow some leeway in scope 3 reporting as long as the reports are made with a reasonable basis and disclosed in good faith. It’s also important to note that at this point the disclosure laws don’t require companies to cut these emissions, only to report them. But tracking scope 3 emissions does highlight where companies could pressure suppliers to make changes.

What can disclosures achieve?

The plethora of climate disclosure mandates globally suggest that policymakers and investors around the world perceive climate disclosures as driving actions that protect the environment. The big question is: Do disclosure rules actually work to reduce emissions?

My research shows that voluntary carbon disclosure systems like CDP’s that focus on reporting corporate sustainability outputs, such as having science-based emissions targets, tend not to be as effective as those that focus on outcomes, such as a company’s actual carbon emissions.

For example, a company could earn an A or B grade from CDP and still increase its entitywide carbon emissions, notably when it does not face regulatory pressure.

In contrast, a recent study of the U.K.’s 2013 disclosure mandate for U.K.-incorporated listed firms found that companies reduced their operational emissions by about 8% relative to a control group, with no significant changes to their profitability. When companies report their emissions, they can gain important knowledge about inefficiencies in their operations and supply chains that weren’t evident before.

Ultimately, a well-designed disclosure program, whether voluntary or mandatory, needs to focus on consistency, comparability and accountability. Those traits allow companies to demonstrate that their climate pledges and actions are real and not just a front for greenwashing.The Conversation

About the Author:

Lily Hsueh, Associate Professor of Economics and Public Policy, Arizona State University

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

US CPI comes in above expectations – what should you do with investments?

By George Prior 

US Consumer Price Index (CPI) data published Thursday supports the case that the Federal Reserve will likely implement one more interest rate hike, says the CEO of one of the world’s leading financial advisory, asset management and fintech organizations.

The prediction from Nigel Green of deVere Group comes as September CPI inflation rises 3.7%, above expectations of 3.6%. US CPI is now up for four consecutive months. Core CPI inflation fell to 4.1%, in line with expectations.

He comments: “Taking into account the latest US CPI data, and the minutes from the most recent Federal Reserve meeting, which were published on Monday, we expect there to be one last 25 basis point hike at its two-day meeting beginning October 31.

“The Fed will be conscious of growing uncertainty of the trajectory of the world’s largest economy and the risks of overtightening – especially in times of growing geopolitical uncertainty; while at the same time, want to avoid complacency in the continuing battle against inflation.”

The deVere CEO continues: “As a result, we expect that interest rates will still continue to remain higher for longer.”

Based on the assertion that interest rate hikes are likely to be nearing an end, and high-interest rates are expected to continue, investors may want to consider rebalancing their portfolios.

“Financial institutions, such as banks and insurance companies, tend to benefit from higher interest rates as they can charge more for loans and earn higher yields on their investments. A portfolio allocation to financial services stocks or exchange-traded funds (ETFs) may be considered,” says Nigel Green.

“The energy sector also benefits from a robust economy and high interest rates. It’s typically positively correlated with economic growth and tends to perform well in such environments.

“Certain segments of the consumer discretionary sector, such as automotive, housing, and luxury goods, can perform well when interest rates are high. Consumer spending can remain strong, particularly if the economy is healthy, and these industries can benefit.

“Industrial companies often benefit from increased infrastructure spending and a robust economy. With expectations of continued high interest rates, these companies are likely to see growth opportunities in construction, manufacturing, and transportation.”

He goes on to add: “While technology stocks can be sensitive to interest rate changes, some tech companies continue to thrive in a high-interest rate environment, especially those with strong fundamentals and growth potential.

“Meanwhile, the healthcare sector is typically less sensitive to interest rate changes, making it a relatively stable option for a portfolio, as will essential goods, such as food, beverages, and household products.”

As ever, an investor’s best tool for mitigating risk and seizing opportunities is to remain properly diversified and by working with an independent financial advisor.

The FOMC since March 2022 has raised its key interest rate 11 times, taking it to a targeted range of 5.25%-5.5%, the highest level in 22 years.

Nigel Green concludes: “We don’t think we’re at the end of the hiking cycle just yet, even though we’re close, and rates will continue to be high, potentially impacting your investment portfolio.”

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 offices across the world, over 80,000 clients and $12bn under advisement.

Uranium Prices, Demand Continue Rising in Tight Market

Source: Streetwise Reports  (10/11/23)

Uranium prices and demand are forecast to keep rising through late 2023 amid tight supply, increasing the appeal of uranium stocks, say analysts.

Uranium prices and demand should continue their upward trajectory through the remainder of 2023, according to a recent industry report. Analysts attribute the positive momentum to sustained uranium supply deficits. With inventory levels low and global nuclear capacity expanding, the structurally undersupplied market continues tightening.

In the report, analysts increased their uranium demand estimates through 2030 and 2035. Total nuclear capacity is projected to grow at a 3.6% compound annual rate through 2030. This translates into a 30% rise in annual uranium requirements. New reactor construction in China and India, coupled with plant life extensions in the West, drive the demand growth.

Source: Trading Economics

While primary mine output increases, risks remain regarding achieving targeted production rates. Ongoing supply chain constraints and labor shortages could hinder bringing new capacity online. Even current mine supply faces challenges like coup d’etats, restart delays, and reduced guidance. Analysts emphasize that permitting, technical, and financing risks persist for essential greenfield projects.

With demand climbing and supply challenged, the uranium market will likely stay in a significant deficit for years. Spot prices have already hit 12-year highs of around US$70 per pound. Analysts boosted their long-term outlook to US$75, reflecting inflationary impacts on production costs. They expect an effective Western premium price of US$80 for most miners.

In fact, earlier this month, Katusa Research released a report on uranium, saying, “Today, more nuclear reactors are being built than any year since 1992. All of that has increased demand for uranium, but it’s also accidentally created something much bigger: a source of demand That NEVER EXISTED Before . . . It’s one that’s going to completely change how the uranium market works. The prospect of unquenchable global thirst for uranium has invited speculators into the uranium market.”

These dynamics prompted analysts in the above report to recommend adding leverage by increasing positions in uranium developers and miners.

 

Important Disclosures:

  1. The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional. 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.

For additional disclosures, please click here.

Claudia Goldin’s Nobel Prize win is a victory for women in economics – and the field as a whole

By Veronika Dolar, SUNY Old Westbury 

Economic history has long been chronicled through a male lens, emphasizing the contributions of men and their viewpoints. For proof, just look to the Nobel Memorial Prize in Economic Sciences. It’s been awarded to 90 men since 1969 – and just three women.

The third woman to win the prize, distinguished Harvard labor economist Claudia Goldin, was honored on Oct. 9, 2023, for her decades of work studying the gender pay gap. It wasn’t a victory just for her but for women in the field.

As an economist, I take this issue personally. My field has a huge gender gap. Only 24% of tenure-track faculty in economics are women. In contrast, women make up 43% of tenure-track faculty across academia as a whole.

More than just stocks and bonds

Part of the problem is that economics is often stereotypically associated with finance, money and banking. This narrow perception might not appeal to everyone. Women in particular tend to be drawn to areas that have direct bearing on social challenges.

But economics is about much more than just the stock market. In fact, vast areas of the discipline deal with social issues – health, development, education and, yes, gender inequality.

For instance, labor economists study issues like family leave policies and the gender pay gap – areas that directly affect women’s lives.

It shouldn’t come as a surprise, then, that women have had a greater presence in labor economics than in other subfields.

Women have also historically been drawn to health economics, development economics and education economics. But those fields don’t get as much attention, and the public sometimes doesn’t even recognize them as being part of economics at all.

They may even get the short shrift in Econ 101. A study of introductory economics textbooks found that 75% of people named in them were men. Women weren’t even equally represented in hypothetical examples.

Where are the women?

Not only are women underrepresented as economists, economics as a field has historically ignored the role women play in the economy. Even as the study of family economics gained traction in the 1970s, the pivotal roles of women were often sidelined.

Traditional models often oversimplified households’ decision-making processes and overlooked women’s contributions. This led economists to undervalue the unpaid labor women provided in households and perpetuate stereotypical gender roles in their analyses.

Goldin has challenged these traditional male-centric narratives. Through her groundbreaking research – particularly on wage inequalities and the “motherhood penalty” – Goldin has turned the spotlight on women’s economic roles and challenges.

Her findings reveal the complexities of wage disparities, emphasizing issues like the challenges women face after childbirth. For instance, career interruptions such as maternity leave or reduced work hours to care for children and other relatives can reduce women’s earnings and job prospects in the long term.

It’s vital to note that Goldin’s research doesn’t attribute the gender pay gap to employer discrimination. Instead, her insights advocate for the establishment of robust support systems.

Strengthening child care facilities, improving parental leave policies, offering workplace flexibility and otherwise bolstering policies that support families with kids can play a pivotal role in addressing the wage gap, her findings suggest. In the absence of such supports, women are bound to keep earning less than men after they become parents.

A win for one, a victory for many

Goldin’s Nobel recognition isn’t merely an honor for her individual achievements. It serves as a beacon for women in economics and academia as a whole.

First, her win challenges the historical gender imbalance in such prominent awards, signaling a long-overdue recognition for women’s contributions to economics. It provides hope for young female economists that their work can also achieve such renown.

Beyond this, her Nobel nod underscores a crucial point: Economics is a rich and complex discipline that goes beyond traditional monetary and financial issues. It’s about parenthood. It’s about child care. It’s about people’s struggles. It’s about social change.

In essence, Goldin’s win shows the world just how expansive, inclusive, diverse and interconnected the field really is. Economics isn’t just the dismal science. It’s a human science.The Conversation

About the Author:

Veronika Dolar, Associate Professor of Economics, SUNY Old Westbury

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

 

Can SPX500_m bears keep up their momentum?

By ForexTime 

  • SPX500_m flirts above weekly resistance ahead of US CPI
  • Bears in control on weekly timeframe
  • Three potential targets identified.
  • Bearish scenario invalidated If 4401.1 price level is broken
  • Will key US inflation report support SPX500_m bulls or bears?

The SPX500_m seems to be in the process of a technical bounce on the daily charts with prices flirting above key weekly resistance ahead of the US CPI report later today. Nevertheless, bears remain in firm control on the weekly charts. Even though the current correction wave is strong – it is approaching a point of possible resistance at the trend line.

On the daily timeframe, prices are at a weekly resistance turned support level and the bullish strength is undeniable with an extended correction wave in the current down trend clearly visible. This leaves the field open for either bullish continuation or a bearish intervention and the possible start of a new impulse wave in the down trend. Since both the weekly and the daily trend is downwards, a more detailed bearish opportunity is discussed on the H4 chart.

The H4 chart reveals more details with a strong bullish trend in progress. As mentioned above the higher time frames as well as the effect on traders based on the CPI news event might cause the bears to take over again.

Attaching a modified Fibonacci tool to a trigger level near a last bottom at 4343.3 and dragging it to a stop loss just above a last proper swing at 4401.1, three possible targets can be established:

  • The first possible target at 4314.3 (Target 1) with risk management in sight.

  • The second potential price target at 4273.9 (Target 2) – located just before weekly support level.

  • The third and last price target is feasible at 4236.3 (Target 3) if bears can break through the weekly support level.

If the price at 4401.1 is broken, this scenario is no longer applicable.


Forex-Time-LogoArticle by ForexTime

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

Oil prices are declining amid growing geopolitical risk in the Middle East. The FOMC minutes were mixed

By JustMarkets

At Wednesday’s close, the Dow Jones Index (US30) added 0.19%, while the S&P 500 Index (US500) was up by 0.43%. The NASDAQ Technology Index (US100) closed positive by 0.71% yesterday.

According to the FOMC minutes released on Wednesday last month, the Federal Reserve leadership considered the outlook for the US economy uncertain and said it would “proceed cautiously” in deciding whether to raise the benchmark interest rate further. Such caution is generally seen as an indication that the Fed is not inclined to raise rates in the near future. Economic data over the past few months have indicated that inflation is slowing, according to the September 19-20 meeting minutes. Policymakers added that more evidence of inflation slowing to the Fed’s 2% target is needed to be confident that inflation will slow to the Fed’s 2% target. Officials generally acknowledged that the risks to Fed policy are increasingly balanced between raising rates too high, which hurts the economy, and not raising them enough to contain inflation.

Late Tuesday, San Francisco Fed spokeswoman Daly said that tighter financial conditions could mean the Fed wouldn’t have to do as much in terms of interest rates. Also on Wednesday, Fed spokesman Waller said that the Fed finally got a very good hold on inflation and can now take an observational stance.

The US PPI for September rose by 0.5% m/m and 2.2% y/y, which was stronger than expectations of 0.2% m/m and 1.6% y/y. In addition, the Food & Energy Price Index rose by 0.3% m/m and 2.7% y/y, stronger than expectations of 0.2% m/m and 2.3% y/y.

Equity markets in Europe traded yesterday without any unified dynamics. German DAX (DE40) increased by 0.24%, French CAC 40 (FR40) declined by 0.44% on Wednesday, Spanish IBEX 35 (ES35) added 0.06%, and British FTSE 100 (UK100) closed negative by 0.11%.

The European currency retreated from its best levels amid dovish comments from ECB Governing Council representative and Bundesbank President Nagel, who said a pause could be an option for the ECB at its next policy meeting later this month.

WTI crude oil and gasoline prices fell sharply on Wednesday amid early signs that the war between Israel and Hamas will have a limited impact on oil flows in the Middle East. In addition, Wednesday’s US producer price index report came in stronger than expected, reinforcing speculation that the Federal Reserve will hold interest rates longer, which could dampen economic growth and energy demand.

Asian markets were predominantly up yesterday. Japan’s Nikkei 225 (JP225) increased by 0.60%, China’s FTSE China A50 (CHA50) gained 0.37%, Hong Kong’s Hang Seng (HK50) added 1.29% and Australia’s ASX 200 (AU200) ended the day positive by 0.68%.

Hong Kong’s Hang Seng Index jumped by 1.8% on Thursday thanks to a 3% rise in banking stocks after China’s state fund Central Huijin Investment increased stakes in four major banks.

Japan’s September machine tool orders fell by 11.2% y/y, the ninth consecutive decline.

S&P 500 (F)(US500) 4,376.95 +18.71 (+0.43%)

Dow Jones (US30) 33,804.87 +65.57 (+0.19%)

DAX (DE40)  15,460.01 +36.49 (+0.24%)

FTSE 100 (UK100) 7,620.03 −8.18 (−0.11%)

USD Index  105.73 −0.10 (−0.09%)

News feed for 2023.10.12:
  • – Japan Producer Price Index (m/m) at 02:50 (GMT+3);
  • – UK GDP (m/m) at 09:00 (GMT+3);
  • – UK Industrial Production (m/m) at 09:00 (GMT+3);
  • – UK Manufacturing Production (m/m) at 09:00 (GMT+3);
  • – UK Trade Balance (m/m) at 09:00 (GMT+3);
  • – Eurozone ECB Monetary Meeting Accounts at 14:30 (GMT+3);
  • – US Consumer Price Index (m/m) at 15:30 (GMT+3);
  • – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
  • – US Natural Gas Storage (w/w) at 17:30 (GMT+3);
  • – US Crude Oil Reserves (w/w) at 18:00 (GMT+3);
  • – US FOMC Member Bostic Speaks at 20:00 (GMT+3).

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.