Author: Consultant

Indian leader Narendra Modi tells Putin: Now is not the time for war

Indian Prime Minister Narendra Modi appears to have directly rebuffed Moscow’s invasion of Ukraine, telling Russian President Vladimir Putin that now is not the time for war.

In what was the latest in a series of setbacks for the Russian leader, Modi told him of the need to “move onto a path of peace” and reminded him of the importance of “democracy, diplomacy and dialogue”.

The comments from Modi came during a face-to-face meeting on Friday, on the sidelines of a regional summit, and highlighted Russia’s increasing isolation on the diplomatic stage. They came just a day after Putin conceded that China, too, had “questions and concerns” over the invasion.

https://www.cnn.com/2022/09/17/world/modi-putin-russia-ukraine-war-rebuke-intl-hnk/index.html

British pound hits a 37-year low as UK economy skids

The British pound slumped to a 37-year low on Friday after new data showed that shoppers are pulling back spending as inflation squeezes household budgets, underscoring fears that the economy may already be shrinking.

The currency fell below $1.14, its lowest since 1985, after the Office for National Statistics said that retail sales in August dropped 1.6% month-over-month, the biggest decline since December 2021 and significantly worse than economists had expected.

“I think the UK is in recession already,” said Michael Hewson, chief market analyst at CMC Markets UK.

The pound has been hammered by a string of weak economic data, but also the steep ascent of the US dollar, a safe haven investment that sees inflows in times of uncertainty. The greenback is now near its strongest level in about two decades against a basket of top currencies, bolstered by expectations of another big rate hike by the Federal Reserve next week.

But the economic outlook in the United Kingdom means the pound is suffering more than most. It’s lost more than 15% of its value against the dollar this year, compared to a 12% decline in the euro.

A plan by Prime Minister Liz Truss to subsidize energy bills for households and businesses could ease the pain this winter, but may not be enough to restore growth. The Bank of England forecast a lingering recession before her plan was announced.

Investors have also been unsettled by indications that the government will pay for its energy program, which could cost as much as £150 billion ($171 billion), by sharply increasing the UK national debt. Chancellor Kwasi Kwarteng is expected to deliver more details next Friday.

The UK generally imports more than it exports. That means a weaker pound pushes up the cost of fuel, food and other goods, making it even harder for the Bank of England to get prices under control.

The central bank, which is due to make its latest policy announcement on Thursday, has been aggressively hiking interest rates in a determined bid to bring down inflation, which stood at 9.9% in August.

It now faces a huge dilemma: Another big increase in borrowing costs could weigh on the economy even more. Not keeping pace with the Fed, however, could push the pound even lower.

Hewson said he believes the pound will now fall toward $1.10 after breaking the $1.14 mark.

An Indian tycoon just ousted Jeff Bezos as world’s second-richest person

Jeff Bezos just lost his status as the world’s second-richest person, dropping to No. 3 as Indian business mogul Gautam Adani rapidly climbs the ranks of Bloomberg’s Billionaire Index.

Elon Musk, still the No. 1 wealthiest person with $260 billion to his name, may need to watch his back. Adani has taken less than 10 months to reach the No. 2 spot after starting the year in 14th.

It’s the first time a person from Asia has ranked so highly on Bloomberg’s list, which has long been dominated by white tech entrepreneurs.

Adani’s $146.9 billion fortune, largely tied up in holdings of his sprawling Adani Group conglomerate, still trails well behind Musk’s $260 billion. The group operates a range of businesses including ports and coal that have thrived in recent years.

Shares of some Adani companies have jumped more than 1,000% since June 2020 — reflecting investor optimism about the conglomerate’s strength in areas like infrastructure and renewable energy that Prime Minister Narendra Modi has prioritized for development. Shares of his flagship Adani Enterprises are up more than 115% in 2022.

https://www.cnn.com/2022/09/16/economy/worlds-richest-person-musk-adani-bezos/index.html

Puerto Rico braces for approaching Tropical Storm Fiona, which may strengthen into a hurricane

Tropical Storm Fiona could strengthen into a hurricane by the time it hits Puerto Rico on Sunday, bringing with it the threats of flooding and mudslides, the latest update from the National Hurricane Center said.

The storm, already bearing down on Puerto Rico about 80 miles south of the city of Ponce, is tracking westward with sustained winds of 65 mph, and heavy rain and tropical storm-force winds are already occurring across the US Virgin Islands and much of Puerto Rico.

Fiona’s center, on the current forecast, is expected to approach Sunday morning before moving near or over southwestern Puerto Rico later this afternoon or evening.

The impacts are already being felt, with more than 90,000 customers in Puerto Rico without power as of 7:30 a.m. ET Sunday, according to PowerOutage.us. On St. Croix, a weather station at Teagues Bay reported a wind gust of 59 mph, while Henry E. Rohlsen Airport reported a wind gust of 55 mph.

https://www.cnn.com/2022/09/18/weather/tropical-storm-fiona-sunday/index.html

Storm lashes Alaskan shore, bringing severe coastal flooding and prompting evacuations

The remnants of Typhoon Merbok have been battering Alaska’s western coast since late Friday, bringing flooding powerful enough to uproot buildings and forcing residents to seek shelter.

Alaska Gov. Mike Dunleavy on Saturday declared a disaster for impacted communities as heavy rains lashed the coast, filling roadways with water and debris.

By Saturday night, the governor was reporting impacts to roads, oil storage and possibly sea walls. Authorities were still assessing whether the storm affected water supplies and sewage systems in the state’s western towns, Dunleavy said in a Saturday night briefing.

About 450 residents in coastal communities have sought shelter in schools, according to Bryan Fisher, director of the state’s Division of Homeland Security and Emergency Management.

There were no reports of injuries or fatalities related to the storm as of Saturday night, said Maj. Gen. Torrence Saxe of the Alaska National Guard, adding that “there likely will be a military response” with aircraft ready to help with evacuations if necessary.

Water continues to surge early Sunday, with levels expected to peak above the high tide line of 3-5 feet at Deering, 4-6 feet at Kotzebue, and 5-7 feet at Shishmaref and Kivalina, according to the National Weather Service.

Millions told to evacuate as Typhoon Nanmadol heads for Japan

About two million people in southwestern Japan have been ordered to evacuate ahead of a powerful typhoon forecast to hit the region on Sunday, according to public broadcaster NHK-World Japan.

Unprecedented storms and rainfall could strike Japan’s southwest island of Kyushu, the Japan Meteorological Agency (JMA) warned on Sunday, calling the typhoon “large and very strong.”

“In Kagoshima Prefecture, there is a risk of storms, high waves and storm surges like never experienced before,” the JMA wrote, adding that it could cause a “large-scale disaster.”

Weather officials have issued an emergency warning for Kagoshima Prefecture on Kyushu island, NHK reported.

Residents in 965,000 households have been ordered to evacuate across the seaside cities of Miyazaki, Kagoshima, and Amakusa.

A level five alert, the highest on Japan’s disaster warning scale, was issued to more than 14,000 people in the city of Nishinoomote on Kyushu island, NHK reported.

https://www.cnn.com/2022/09/17/asia/japan-typhoon-nanmadol-intl-hnk/index.html

Tsunami warnings issued after 6.9-magnitude earthquake hits Taiwan

Hazardous tsunami waves are possible along coastlines within a 300-kilometer (186-mile) radius of a 6.9-magnitude earthquake that hit southeastern Taiwan on Sunday, the United States Geological Survey (USGS) has said.

The quake hit the Chishang township in rural southeastern Taiwan and had a depth of 10 kilometers.

Japan’s Meteorological Agency issued a tsunami warning for Miyako island in the East China Sea, but the agency later removed the warning.

Photos showed collapsed buildings in southern Taiwan following the powerful earthquake. The USGS initially registered it at 7.2, before downgrading it to 6.9.

Three people are trapped under the rubble of one building, the island’s official Central News Agency (CNA) reported. A fourth person was rescued.

About 20 passengers were evacuated after a train derailed in the area, but there were no casualties from the incident, the Taiwan Railway Administration said.

Kolas Yotaka, a former presidential spokeswoman who is running for local elections in Hualien county, said that damages were also reported at a local school.

https://www.cnn.com/2022/09/18/asia/taiwan-earthquake-tsunami-warnings-intl/index.html

Calendar: Sept 19 – Sept 23 2022

Monday September 19

Japan and U.K. markets closed

(8:30 a.m. ET) Canada’s industrial product and raw material price indexes for August. Estimates are month-over-month declines of 1.0 per cent and 2.5 per cent, respectively.

(8:30 a.m. ET) Canadian household and mortgage credit for July.

(10 a.m. ET) U.S. NAHB Housing Market Index for September.

Earnings include: AutoZone Inc.

—

Tuesday September 20

Japan CPI

Germany PPI

(8:30 a.m. ET) Canadian CPI for August. The Street is forecasting a decline of 0.1 per cent from July and up 7.3 per cent year-over-year.

(8:30 a.m. ET) U.S. housing starts for August. Consensus is an annualized rate increase of 0.3 per cent.

(8:30 a.m. ET) U.S. building permits for August. Consensus is a decline of 4.2 per cent on an annualized basis.

(3:30 p.m. ET) Bank of Canada deputy governor Paul Beaudry speaks at the University of Waterloo on “Pandemic Macroeconomics: What We’ve Learned, and What May Lie Ahead”

Also: U.S. Fed meeting begins

Earnings include: Aurora Cannabis Inc.

—

Wednesday September 21

Bank of Japan monetary policy meeting (through Thursday)

(10 a.m. ET) U.S. existing home sales. Consensus is an annualized rate decline of 2.3 per cent.

(2 p.m. ET) U.S. Fed announcement and summary of economic projections with chair Jerome Powell’s press briefing to follow.

Earnings include: General Mills Inc.; Lennar Corp.

—

Thursday September 22

Japan department store sales

Euro zone consumer confidence

(8:30 a.m. ET) Canada’s new housing price index for August. Estimate is a decline of 0.3 per cent from July and up 6.5 per cent year-over-year.

(8:30 a.m. ET) U.S. initial jobless claims for week of Sept. 17. Estimate is 218,000, up 5,000 from the previous week.

(8:30 a.m. ET) U.S. current account balance for Q2.

(10 a.m. ET) U.S. leading indicator for August.

Earnings include: Accenture PLC; Costco Wholesale Corp.; FedEx Corp.

—

Friday September 23

Japan markets closed

Euro zone PMI

(8:30 a.m. ET) Canadian retail sales for July. The Street is expecting a decline of 2.0 per cent from June.

(8:30 a.m. ET) Canadian manufacturing sales for August.

(2 p.m. ET) U.S. Fed chair Jerome Powell delivers opening remarks at a Fed Listens webinar.

FedEx warning sets stock for worst day, deepens slowdown fears

FedEx Corp.’s FDX-N -21.97%decrease shares tracked their worst day on Friday after the delivery heavyweight pulled its forecast, feeding into fears of a global demand slowdown while piling more pressure on its new chief executive for a quick turnaround.

The preliminary results sent the stock tumbling 24% to about $155.95, with the company poised to shed about $12.5 billion in market capitalization.

The gloomy outlook comes amid investor anxiety that the U.S. Federal Reserve’s rapid pace of interest rate hikes to tame soaring inflation threatens to tip the economy into a recession.

“We suspect that headwinds from an inflation-fatigued U.S. economy, a resource-constrained European economy, and second-order effects from lockdowns in China proved too much to overcome,” Cowen analyst Helane Becker said.

The U.S. firm joins global logistics peers such as Hong Kong’s Cathay Pacific Airways and France-based transporter CMA CGM in signaling that consumers are saving for essentials such as gas and food ahead of the holiday season as surging prices discourage casual shopping.

Rival United Parcel Service shed 4.0%, XPO Logistics dropped 6.9% and e-commerce giant Amazon.com AMZN-Q -2.94%decrease slipped 3.1%. The Dow Jones Transport index slipped nearly 5%., while the broader S&P 500 fell about 1%.

Across the Atlantic, Germany’s Deutsche Post shed 6.1%, London’s Royal Mail fell 7.5% and Copenhagen-based DSV dropped 6.4% after the news.

Work cut out

Analysts also blamed company-specific problems and missteps over the last few years for the woes, stepping up pressure on CEO Raj Subramaniam, who was appointed to the job in March, to do more to win back investor confidence.

“We have noted high levels of investor skepticism directed at management’s ability to reach its long-term targets. With earnings misses like this, that skepticism seems increasingly warranted,” Credit Suisse analysts said.

The results raise “uncomfortable questions regarding whether the organization may simply be too complex and too unwieldy to be capable of achieving satisfactory financial results over the long-term,” they added.

FedEx also faced activist investor demands after stiff competition and easing growth in parcel volume dented its profitability.

The Memphis-based company is also dealing with contractor unrest after it misjudged holiday season volume last year. One of its largest contractors, a Tennessee businessman, pressured FedEx last month to boost compensation. FedEx later cut ties and sued him.

FedEx on Friday declined to comment beyond the press release on its preliminary results.

Subramaniam warned on CNBC on Thursday that he believes a global downturn was impending.

In response to a question of whether the economy is “going into a worldwide recession,” Subramaniam said “I think so. But you know, these numbers, they don’t portend very well.”

The stock’s drop on Friday, if losses hold, will surpass its previous steepest one-day percentage decline of 16.4% on Black Monday in 1987.