Month: April 2024

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Fed Chair Powell stresses the importance of additional proof that inflation is subsiding before cutting interest rates

Powell

Federal Reserve Chairman Jerome Powell stated on Wednesday 3rd April 2024 that policymakers will need time to assess the current inflation situation, leaving the schedule for potential interest rate reductions unclear.

Referring to the stronger-than-anticipated price pressures at the year’s onset, Powell reportedly stated that he and his colleagues are not in a hurry to relax monetary policy.

Market expectations are leaning towards the FOMC initiating policy easing this year, although adjustments to the anticipated timing and scale of reductions have been necessary due to persistently high inflation.

Meanwhile, other economic indicators, especially in the U.S. labour market and consumer spending sectors, remain robust, affording the Fed the opportunity to evaluate the prevailing situation prior to taking action.

The target rate is 2%.

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Intel shares fall after $7 billion operating loss revealed in foundry business

Microchip manufacture

Intel’s stock dropped by 4% during extended trading on Tuesday 2nd April 2024, following the disclosure of long-anticipated financial details for its semiconductor manufacturing division, often referred to as the foundry business, in a filing with the SEC.

The company reportedly disclosed that its foundry business incurred an operating loss of $7 billion in 2023, against sales of $18.9 billion. This represents a greater loss compared to the $5.2 billion operating loss reported by Intel for its foundry business in 2022, which had sales of $27.5 billion.

This is the first time that Intel has disclosed revenue totals for its foundry business separately. Historically, Intel has both designed its own chips as well as its own manufacturing and reported microchip sales to investors.

Other American semiconductor companies such as Nvidia and AMD design their microchips but send them off to Asian factories such as Taiwan’s TSMC for manufacturing.

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Mumbai surpasses Beijing as the billionaire capital of Asia

Billionaires

Mumbai, India’s bustling financial hub, has achieved a remarkable milestone: it now reigns as Asia’s billionaire capital, surpassing Beijing for the first time

According to the Hurun Research Institute’s global rich list, Mumbai boasts 92 billionaires with a combined wealth of $445 billion. This historic feat marks the first time that India’s most populous city has claimed the top spot in Asia.

While New York (with 119 billionaires) and London (with 97 billionaires) lead the global rich list for cities, Mumbai’s ascent is a testament to its thriving energy and pharmaceutical sectors. The city’s entrepreneurial spirit and economic dynamism have propelled it to the forefront of wealth creation in the region.

Beijing, which previously held this distinction, now trails closely behind with 91 billionaires, followed by Shanghai with 87 billionaires. The competition among these financial powerhouses reflects the shifting landscape of global wealth distribution.

Globally, there are currently 3,279 billionaires, representing a 5% increase from 2023. China remains at the helm with 814 billionaires, despite a loss of 155 billionaires over the past year. The United States follows closely with 800 billionaires, while India claims the third spot with 271 billionaires.

Mumbai’s skyline, ever-changing, now reflects its title as Asia’s billionaire capital, highlighting the city’s resilience, innovation, and steadfast quest for prosperity.

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The unexpected global gas glut

Gas

The world’s energy landscape is experiencing an unexpected twist: an oversupply of natural gas.

As economies grapple with the aftermath of the pandemic, the gas market finds itself in a paradoxical situation.

The Glut Unveiled

  • Abundant Supply: The global gas glut stems from a surge in production. Countries like the United States, Russia, and Qatar have ramped up their natural gas output, flooding the market.
  • LNG Boom: Liquefied natural gas (LNG) projects have proliferated, adding to the surplus. New terminals and pipelines facilitate the movement of LNG across continents.

Demand Dilemma

  • Warmer Winters: Milder winters in key consuming regions such as Europe, the U.S., and Asia, have suppressed demand for heating. Gas storage facilities are brimming, leaving suppliers with excess inventory.
  • Geopolitical Tensions: Europe’s reliance on Russian gas has prompted diversification efforts. LNG imports from the United States, Australia, and other sources provide an alternative. However, the North Sea’s production limitations persist.

Price Plunge

  • Price Disparities: While wholesale gas prices in Europe and Asia have tumbled, mainland Europe still faces higher prices due to supply constraints. The U.S. market, despite its glut, operates differently.
  • Investment Paradox: Ironically, this glut coincides with record investments in LNG infrastructure. The mismatch between supply growth and demand dynamics baffles analysts.

Environmental Implications

  • Balancing Act: As gas prices dip, affordability improves for consumers. However, environmental concerns remain. Natural gas, though cleaner than coal, still contributes to greenhouse gas emissions.
  • Policy Challenges: Policymakers must navigate this delicate balance—ensuring energy security while transitioning to cleaner alternatives.

Conclusion

The global gas glut is a paradox: abundant supply alongside record investments. As we navigate this downward super cycle, energy markets remain unpredictable and interconnected globally.

Remember, while gas prices dip, the implications for our planet and energy policies are far-reaching. It’s a delicate balance between affordability and sustainability.

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Gold prices hit another record high!

Gold price hits new record

U.S. gold futures rose more than 2% to trade at around $2,285

Gold prices continued their ascent, reaching a new record high on Monday 1st April 2024, driven by expectations of U.S. interest rate cuts and the metal’s status as a safe-haven asset.

Gold typically has an inverse relationship with interest rates. When interest rates decrease, gold becomes more attractive relative to fixed-income assets like bonds, which tend to offer lower returns in a low-interest-rate environment.

Gold hits new high of 2285

Gold hits new high of 2285