Money‚ Markets & Macroeconomics

High food prices put populism on India’s table

22 Aug 2023

The cost of onions and tomatoes are soaring ahead of state elections, ramping up pressure for government relief measures. Modi’s fiscal prudence has helped tame inflation and supports his appeal to global investors. The latest crisis could push everyone out of their comfort zone.

World Bank’s green overhaul is slowly taking shape

21 Aug 2023

The multilateral lender needs $200 bln more annually to make the world’s $3 trln green transition goal less of a pipe dream. Its shareholders have pledged just $50 bln over 10 years. President Ajay Banga’s new plan is a start, but he will need more ideas to reach the target.

Yuan slide half pulls Beijing out of its inertia

21 Aug 2023

It is scrambling to stop the currency’s slide against the US dollar but warning signs of diminishing returns on Chinese assets keep coming and will maintain capital flight pressure. The bill will be hefty the longer President Xi Jinping lets the economy search for a bottom.

Crypto survivors will be severely scarred

17 Aug 2023

Digital asset custodian BitGo says it raised money at a $1.7 bln valuation, days after a rival filed for bankruptcy. As with stablecoins, exchanges, and currencies, winners are emerging in crypto. Stumbles will still happen, though – a painful but necessary process.

Capital Calls: Walmart’s Goldilocks moment

17 Aug 2023

Concise views on global finance: The $431 bln US retailer’s valuation has held up much better than Target and Amazon, validated by another strong quarter. But it has done that only by keeping its multiple steady.

Fickle Big Tech customers wash away Adyen’s moat

17 Aug 2023

Shares in the Dutch payment group slumped 25% after first-half earnings missed forecasts. The former market star is seeing margins eroded by a hiring push. But the real issue is that users can easily switch to cheaper rivals. To fix that, the company needs a broader client base.

ECB core obsession raises risk of policy mistake

17 Aug 2023

Euro zone inflation excluding energy and food costs is rising 5.5%, faster than the headline number. Frankfurt hawks want to keep rates high until that ‘core’ measure nears 2%. But the narrower gauge can lag the main one: focusing on it raises the odds of excessive tightening.

Capital Calls: Selling Salesforce

15 Aug 2023

Concise views on global finance: After successfully agitating for change at the $200 bln software developer, Jeff Smith’s Starboard and Dan Loeb’s Third Point are offloading their stakes. It’s probably a good time to pocket gains considering the challenges ahead for Big Tech.

Russia’s jumbo rate hike leaves Putin in hot water

15 Aug 2023

A plunge in the rouble and the Kremlin’s prodding forced the central bank to raise borrowing costs by 3.5 percentage points. The currency’s muted reaction leaves the president with more bad choices: restrict welfare spending or hope that even tighter policy can curb inflation.

A less friendly Hong Kong awaits global investors

15 Aug 2023

The city ditched a requirement for Chinese firms to hold separate votes on certain matters for onshore and offshore shareholders. It hits at the outsize influence BlackRock and others long exercised via Hong Kong and is another reason to buy mainland shares instead.

Capital Calls: Exor/Philips

14 Aug 2023

Concise views on global finance: The Agnelli family is making a well-timed bet on the troubled 18 bln euro conglomerate that makes everything from toothbrushes to defibrillators.

Capital Calls: FC Barcelona’s $1 bln SPAC deal

11 Aug 2023

Concise views on global finance: The Spanish soccer club is merging its media arm with a blank-check firm. Pinning its value on the franchise’s social-media followers is worthy of a red card.

American price elasticity stretched to the limit

10 Aug 2023

At 3.5%, US weekly wages are steadily outpacing inflation for the first time in two years. PepsiCo and P&G, vendors of staples like soda and diapers, have retained power to charge shoppers more. It may be a while, however, before producers of discretionary goods can do so again.

Next job-market challenge: the Great Unresignation

4 Aug 2023

Recent labor shortages pushed up hiring costs for US companies. But firms including Wells Fargo and State Street now say fewer staff quit than they expected, so they’re having to give them a push. It’s the kind of wrinkle that makes seemingly healthy jobs data harder to read.

UK net-zero ‘pragmatism’ is an odd way to get real

4 Aug 2023

PM Rishi Sunak says he cares about decarbonisation, but is also signing off new oil schemes. Uncertain energy transition costs make that a logical political strategy. But the government’s own data suggest relying on volatile gas over renewable power could be an expensive mistake.

Rate jujitsu is no blow to Japan’s foreign assets

4 Aug 2023

The central bank’s shock tightening of monetary policy last week sparked fears investors would rush to repatriate the $5.4 trln of assets they hold overseas. Low yields at home and funds’ caution after years of disappointment will ease any tide. Big debtors like the US can relax.

Capital Calls: Robinhood, Influencers, Inflation

3 Aug 2023

Concise views on global finance: The $10 bln brokerage’s first profitable quarter does little to quell growth fears; Adidas and AB InBev are unexpectedly resilient amid an online storm; the Bank of England has a longer inflation fight on its hands than its peers.

Bank of England rate dilemma holds little mystery

2 Aug 2023

Governor Andrew Bailey must decide on Thursday whether to raise borrowing costs by a quarter or half a percentage point. The choice will make little difference to the long-term path of interest rates. Inflation is falling and monetary policy alone cannot boost sluggish UK growth.

Wild weather turns up heat on EU debt stragglers

2 Aug 2023

Scorching temperatures have ruined harvests, strained infrastructure and dimmed southern Europe’s tourist appeal. If heatwaves’ frequency intensifies, the bill to prevent and fix damages will rise. Fiscal laggards like Italy and Greece may need extra help from Europe.

Republicans struggle to diverge from Bidenomics

1 Aug 2023

White House hopefuls such as Ron DeSantis are decrying the president’s record, which includes adding 13 mln jobs. Their agendas also prioritize US factories and energy independence, areas already allocated some $480 bln. It will take more creativity to break from existing policy.