S&P 500 index of major US companies registers near 100% gain on year ago amid expectation of interest rate cuts
A fall in US inflation expected to pave the way for further cuts in interest rates pushed stock markets to record highs on Friday.
Ending a week of gains that began when the Chinese authorities approved a huge economic stimulus package, the S&P 500 index of major US companies soared above 5,750 to register a near 100% gain on a year ago.
Continue reading...Spot price increases to $2,522.99, with record run meaning standard gold bar is worth more than $1m
Gold prices have hit a fresh high as increasing hopes of US interest rate cuts from the Federal Reserve prompted investors to buy more of the precious metal.
The spot price of gold rose to a record $2,522.99 (£1,941.69) on Tuesday morning, up 0.7% on the day. Gold bars generally weigh 400 troy ounces (12.4kg), so a standard gold bar is now worth more than $1m.
Continue reading...Bank officials signal readiness to start interest rate-cutting cycle to ease pressure on households and businesses
Kamala Harris’s hopes of victory in the looming US presidential election have been given a boost by mounting expectations that the US Federal Reserve will cut interest rates from as early as September.
As Democrats gather for the party’s national convention in Chicago starting on Monday, economists on Wall Street said the world’s most powerful central bank was poised to begin a cycle of interest rate cuts before the end of the year.
Continue reading...Shares on Wall Street and in Asia and Europe start to recover after Monday’s rout
Shares on Wall Street rose and many Asian and European markets staged a recovery after this week’s global stock market rout, but analysts warned: “We might not be out of the woods.”
The FTSE 100 index in London rose 18 points, or 0.2%, on Tuesday to close at 8,026.69, after losing 166 points, or 2%, on Monday, its biggest one-day points drop in more than a year.
Continue reading...Europe’s main indices all decline and Japanese equities suffer worst day since 2020 while gold hits fresh record
Stock markets in Europe, Asia and New York tumbled on Friday as fears of a US economic slump grew and technology shares were hit by underwhelming earnings.
Concerns that the US could be sliding towards a recession spurred a global sell-off, which accelerated after a poor employment report on Friday showed that the US jobs market was cooling fast, pushing up the unemployment rate.
Continue reading...Exclusive Harris poll for the Guardian shows 55% believe economy is shrinking, in troubling sign for president’s re-election bid
Nearly three in five Americans wrongly believe the US is in an economic recession, and the majority blame the Biden administration, according to a Harris poll conducted exclusively for the Guardian. The survey found persistent pessimism about the economy as election day draws closer.
The poll highlighted many misconceptions people have about the economy, including:
55% believe the economy is shrinking, and 56% think the US is experiencing a recession, though the broadest measure of the economy, gross domestic product (GDP), has been growing.
49% believe the S&P 500 stock market index is down for the year, though the index went up about 24% in 2023 and is up more than 12% this year.
49% believe that unemployment is at a 50-year high, though the unemployment rate has been under 4%, a near 50-year low.
Continue reading...Rates to stay at 25-year high of 5.25% to 5.5% as central bank says ‘inflation has eased over the past year but remains elevated’
The Federal Reserve announced on Wednesday that it would leave US interest rates at a 25-year high as it continues to assess their impact on cooling inflation and the wider economy.
After a two-day meeting, the Fed announced rates would be unchanged at 5.25% to 5.5%, where they have been since July. But the Fed signaled it still expects to cut rates three times this year.
Continue reading...Live, rolling coverage of business, economics and financial markets as Canada says UK was unwilling to give access to agricultural products
Shares in US chipmaker Intel have slumped in pre-market trading after it revealed a weaker forecast of earnings.
Chipmakers have been flying in recent years as shortages followed by the huge hype over artificial intelligence – which is hungry for processing power – prompted investors to pile into the sector.
Although Intel beat estimates, investors’ disappointment in Intel’s datacentre GPU story’s growth can be primarily attributed to the slower-than-expected product delivery and ramp-up.
Continue reading...Record highs come amid hopes a cooldown in inflation will allow Federal Reserve to cut interest rates several times this year
Wall Street scaled fresh records on Monday, as the S&P 500 and the Dow Jones industrial average each closed at an all-time high.
The S&P gained 0.2% to 4,850.43. The Dow cleared 38,000 for the first time, rising 0.4% to 38,001.81.
Associated Press contributed reporting
Continue reading...Consumer price index exceeds economists’ expectations as Fed weighs when to start cutting borrowing costs
Inflation ticked higher in the United States last month as the Federal Reserve weighs the latest stage of its battle against price growth.
The headline consumer price index increased at an annual pace of 3.4% in December, according to the Bureau of Labor Statistics, up from 3.1% in the previous month, and exceeding economists’ expectations of about 3.2%.
Continue reading...Stubbornly high inflation forces central banks to avoid cuts, but markets expect falls next year
The western world’s largest central banks are poised to keep interest rates on hold this week amid concerns over stubbornly high inflation, despite growing expectations for sharp cuts in borrowing costs next year.
In a crunch week for the global economy, the US Federal Reserve, Bank of England (BoE) and European Central Bank are expected to keep interest rates at their current restrictively high levels to ensure inflation continues to fall back from the highest levels in decades.
Continue reading...On Thursday protesters chanted: ‘Off fossil finance!’ and held a banner reading: ‘Fed Is Burning: Money, Futures, Planet’
The Federal Reserve chair, Jerome Powell, was escorted out of an event Thursday afternoon after a group of climate protesters briefly took the stage before he was due to give a speech. He took the stage after a 15-minute delay.
At the Economic Club of New York, protesters stormed the stage holding a banner that read “Fed Is Burning: Money, Futures, Planet” and chanting “Off fossil finance!” Powell, who was on stage, briefly left the event before returning to deliver his speech as planned. Security officials cleared protesters from the room.
Continue reading...Action came as world leaders begin arriving in New York for the UN general assembly and after Sunday’s march to end fossil fuels
One day after the largest climate march since the start of the Covid-19 pandemic, hundreds of climate activists blockaded the Federal Reserve Bank in New York to call for an end to funding for coal, oil and gas, with police making scores of arrests.
“Fossil fuel companies … wouldn’t be able to operate without money, and that money is coming primarily from Wall Street,” Alicé Nascimento, environmental campaigns director at New York Communities for Change, said hours before she was arrested.
Continue reading...Growth in prices still remains far below the decades-high inflation rates that were seen last summer, when rate peaked at 9.1% in June
US inflation in August rose for the first time since June 2022, rising to 3.7% as a sharp increase in energy prices pushed prices up toward the end of the summer.
Growth in prices still remains far below the decades-high inflation rates that were seen last summer, when the rate peaked at 9.1% in June. Still, an increase in inflation means the US economy is further from the Federal Reserve’s target rate of 2% and will likely make officials consider pushing interest rates up later this year.
Continue reading...Jay Powell tells symposium in Wyoming that inflation is still too high but that US central bank will ‘keep at it until the job is done’
Federal Reserve chair Jerome Powell used a closely watched speech on Friday to warn that the fight against inflation in the US is not over.
Speaking at the Federal Reserve Bank of Kansas City’s annual gathering of central bankers in Jackson Hole, Wyoming, Powell said inflation was still too high and that interest rates may have to rise further to tamp it down.
Continue reading...US Fed will also have to raise rates more aggressively than forecast, says Washington-based body
Interest rates in the UK will need to stay higher for longer than previously forecast in order to tackle stubbornly high inflation, the International Monetary Fund has warned.
The IMF’s regular update on the state of the global economy singled out the US Federal Reserve and the Bank of England as two central banks that will need to raise official borrowing costs more aggressively than it assumed only three months ago.
Continue reading...Banks seek to calm markets as investors fear repeat of First Republic and SVB failures
[NEW]Trading in shares of the California-lender PacWest have been suspended after plummeting 42% amid wider fears about the health of the US’s regional bank sector.
PacWest had sought to calm markets on Wednesday and said it was in talks with several potential investors after its shares plummeted by as much as 60%. But the sell-off continued on Thursday and affected other regional banks.
Continue reading...Report identifies Fed failures before bank collapse but also blames bad management, weakened regulations and lax supervision
The Federal Reserve failed to “take forceful enough action” ahead of the collapse of Silicon Valley Bank last month, the Fed said on Friday in a hard-hitting report that blamed extremely poor bank management, weakened regulations and lax government supervision for the failure.
Silicon Valley Bank’s collapse triggered an ongoing banking crisis for mid-sized US banks. On Friday, trading in another mid-sized bank – First Republic – was briefly halted after its share price fell 48%. The bank revealed on Monday that it had lost $100bn in deposits during last month’s banking crisis.
Continue reading...Progressive Democrat launches offensive on politicians on the left and the right who supported Trump-era deregulation of US banks
Political fall-out in the US from the collapse of Silicon Valley Bank continued on Sunday when leftwing Senator Elizabeth Warren hit the morning talk shows and repeatedly called for an independent investigation into US bank failures and strongly criticised Federal Reserve finance officials.
The progressive Democrat from Massachusetts, who has positioned herself as a consumer protection advocate and trenchant critic of the US banking system, told CBS’s Face the Nation that she did not have faith in San Francisco Federal Reserve president Mary Daly or Fed chairman Jerome Powell.
Continue reading...The central bank has lent about half as much as it provided during the 2008 crisis as banks rush to shore up their financials
Cash-short banks have borrowed about $300bn from the Federal Reserve in the past week, the central bank announced on Thursday.
Nearly half the money – $143bn – went to holding companies for two major banks that failed over the past week, Silicon Valley Bank and Signature Bank, triggering widespread alarm in financial markets. The Fed did not identify the banks that received the other half of the funding or say how many of them did so.
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