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It has remained below the 50-mark that separates expansion from contraction since July 2022, the longest such streak in the survey that began in April 2004. Output and new orders dropped by the most in eight months and six months, respectively, dragging the headline index lower. Asia's fourth largest economy posted slim growth in the first quarter and has struggled to motor on due to weak external demand. Output prices fell for a second month, as cost pressures eased, though there was also evidence that they were reduced in an effort to stimulate sales. Manufacturers' optimism for future output fell in June to the lowest level since December 2022, a sharp U-turn from hitting a 10-month high in May.
Persons: Usamah Bhatti, Bhatti, Jihoon Lee, Shri Navaratnam Organizations: South, Asia's, PMI, P Global Market Intelligence, Manufacturers, Thomson Locations: SEOUL, Asia, Europe
Blackstone deal is a bright spot in gloomy sector
  + stars: | 2023-06-26 | by ( ) www.reuters.com   time to read: +2 min
NEW YORK, June 26 (Reuters Breakingviews) - The U.S. commercial real estate industry is mired in gloom, but some pockets are still sunny. The portfolio includes 14 million square feet of industrial properties in cities like Atlanta, Phoenix and Dallas, and the deal is premised in part on rising rents. According to the two companies, the net operating income generated by the warehouses is 4% of the acquisition price. Meanwhile, listed real estate investment trusts which own industrial warehouses trade at a narrowing discount to net asset value, according to S&P Global Market Intelligence. In a gloomy sector, so-called big boxes are a bright spot.
Persons: Steve Schwarzman, Avison Young, Jennifer Saba, Aston Martin, Peter Thal Larsen, Oliver Taslic Organizations: YORK, Reuters, U.S, P Global Market Intelligence, Twitter, Siemens, Telecom Italia, Vivendi, Thomson Locations: Atlanta, Phoenix, Dallas, Canada
Federal Reserve Board Chairman Jerome Powell departs after speaking during a news conference following the Federal Open Market Committee meeting, at the Federal Reserve in Washington, DC, on June 14, 2023. The Federal Reserve plans to keep hiking interest rates to stem inflation, which means an increase in corporate default rates is likely in coming months. Earlier this week, Fed Chairman Jerome Powell said to expect more interest rate increases this year, albeit at a slower rate, until more progress is made on lowering inflation. Bankers and analysts say high interest rates are the biggest culprit of distress. While the most troubled companies have been affected recently, he expects companies with more financial stability to have issues refinancing due to high interest rates.
Persons: Jerome Powell, Mohsin Meghji Organizations: Federal Reserve, Moody's Investors, Bankers, Partners, P Global Market Intelligence Locations: Washington ,, U.S, Canada
June 23 (Reuters) - U.S. business activity fell to a three-month low in June as services growth eased for the first time this year and the contraction in the manufacturing sector deepened, closely watched survey data out Friday showed. Nonetheless, it was the fifth straight month that the PMI remained above 50, indicating growth in the private sector. The survey's flash services sector PMI fell to 54.1 from 54.9 in May. Economists polled by Reuters had forecast the services PMI would ease to 54.0. Its flash manufacturing PMI dropped to 46.3 from 48.4 in May and was weaker than economists' median forecast of 48.5.
Persons: Chris Williamson, Williamson, Dan Burns, Chizu Organizations: P Global, PMI, P Global Market Intelligence, Commerce Department, Fed, Investors, Reuters, Thomson Locations: Atlanta
Business activity growth in Europe slowed in June, pointing to a difficult end to the second quarter, according to preliminary data Friday. Speaking to CNBC's Street Signs Europe, Chris Williamson, chief business economist at S&P Global Market Intelligence, described the numbers as "worrying." "Higher interest rates, the rise in the cost of living, all beginning to take their toll," he said. The European Central Bank has been increasing interest rates consistently for the past 12 months in an effort to bring down inflation. Higher rates can lead to higher costs for companies across the bloc, however, and so often become a drag on output.
Persons: Chris Williamson Organizations: P, P Global, P Global Market Intelligence, European Central Bank Locations: Europe
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailHigher interest rates are taking their toll on business activity, economist saysChris Williamson, chief business economist at S&P Global Market Intelligence, breaks down the latest PMIs figures out of the euro zone.
Persons: Chris Williamson Organizations: P Global Market Intelligence
UK economy stumbles but price pressures remain high
  + stars: | 2023-06-23 | by ( ) www.reuters.com   time to read: +2 min
LONDON, June 23 (Reuters) - Britain's economy showed signs of a slowdown this month but inflation pressures stayed high, according to a survey published a day after the Bank of England raised interest rates sharply and said it was ready to do more to tame price growth. The preliminary or 'flash' survey showed Britain's services sector grew at its slowest pace in three months while the manufacturing sector contracted by the most in six months. The BoE is expected to continue raising borrowing costs as it tries to tackle inflation which held at 8.7% in May. The PMI survey showed services firms increased their prices sharply once again this month although a bit less steeply than in May. By contrast, manufacturers cut the prices they charged for the first time in more than seven years.
Persons: Chris Williamson, BoE, Williamson, William Schomberg, Susan Fenton Organizations: Bank of England, P Global Market Intelligence, PMI, Companies, Thomson
Data showed U.S. retail sales unexpectedly rose in May as consumers spent on a range of goods including vehicles. All 11 S&P 500 sector indexes rose, led by health care (.SPXHC), up 1.55%, followed by a 1.54% gain in communication services (.SPLRCL). The S&P 500 climbed 1.22% to end the session at 4,425.84 points. Advancing issues outnumbered falling ones within the S&P 500 (.AD.SPX) by a 7.1-to-one ratio. The S&P 500 posted 48 new highs and no new lows; the Nasdaq recorded 80 new highs and 72 new lows.
Persons: TD Cowen, Ross Mayfield, Baird, who'd, David Russell, Kroger, Shristi Achar, Sruthi Shankar, Noel Randewich, Vinay Dwivedi, Shounak Dasgupta, David Gregorio Our Organizations: Nasdaq, Dow, U.S . Federal, Treasury, Apple, Microsoft, Fed, U.S, Market Intelligence, Dow Jones, Kohl's Corp, Alibaba, People's Bank of China, Thomson Locations: China, Bengaluru, Oakland, Calif
TOKYO, June 15 (Reuters) - Japan's government and central bank will act to stop the yen's decline if it depreciates to the 145 per U.S. dollar level, more than half of economists polled by Reuters said. Fifteen of 28 economists (54%) said the government and the BOJ will take steps such as issuing a warning or intervening into the currency market once the yen weakens beyond 145 per greenback, the June 8-13 poll found. In a separate question on the weak yen's impact on BOJ policy, nine economists (31%) said the central bank's decisions could be swayed by a yen depreciation beyond 145 per dollar. In the poll, all but one - JP Morgan - out of 28 economists corroborated the view, citing an improved bond market functionality and Governor Kazuo Ueda's accommodative remarks so far. BOJ's Ueda has said an end to easy policy would depend on the economy achieving 2% inflation coupled with pay growth.
Persons: Harumi Taguchi, Morgan, Kazuo Ueda's accommodative, Hiroshi Watanabe, BOJ's Ueda, Satoshi Sugiyama, Kantaro Komiya, Veronica Khongwir, Anant Chandak, Christian Schmollinger Organizations: Reuters, Bank of Japan, P, Financial Services Agency, Sony Financial Group, Thomson Locations: TOKYO
related investing news Easing inflation pressures give the Fed room to skip a rate hike. "We have raised our policy interest rate by five percentage points, and we've continued to reduce our security holdings at a brisk pace. The decision left the Fed's key borrowing rate in a target range of 5%-5.25%. The dots moved decidedly upward, pushing the median expectation to a funds rate of 5.6% by the end of 2023. "Given the strong labor market, the Fed has room to crush inflation and they don't want to miss their chance."
Persons: we've, Jerome Powell, Powell, Philip Jefferson, David Russell Organizations: Federal Reserve, Federal, Fed, CPI, PPI Locations: WASHINGTON
Last Thursday, the S&P 500 entered a bull market — up 20% from its recent lows. But the market’s strength has been mostly driven by a handful of mega-cap tech stocks, Alphabet (GOOGL), Meta (META), Apple (AAPL), Amazon (AMZN), and Nvidia (NVDA). Before the Bell: AI is causing a big market boom right now, but that boom also seems to be concentrated in mega-cap tech stocks. Everything you wanted to know about a bull market but were afraid to askThe US entered a bull market last Thursday, finally. A bear in bull’s clothes: A 20% lift from recent lows is generally accepted as the definition of the start of a bull market.
Persons: , Matt Bartolini, Bell, Pets.com, I’m, They’ve, Adam Turnquist, James Demmert, what’s, Jerome Powell’s Organizations: CNN Business, Bell, New York CNN, Bank of America, Apple, Nvidia, Nasdaq, Dow Jones, SPDR, Street Global Advisors, Meta, US, LPL, Big Tech, Main, Research, Investors, Federal Reserve, P Global Market Intelligence, , European Central Bank, ECB Locations: New York, Europe, SPDR Americas, Big, Japan, Taiwan, Hong Kong
Traders have priced in a 73% chance of the U.S. central bank holding interest rates at the current 5%-5.25% range during its monetary policy meeting on June 13-14, according to CMEGroup's Fedwatch tool. "Today's data in terms of higher claims shows that the Fed policy is having a clear effect," said David Russell, vice president of Market Intelligence at TradeStation. The CBOE Volatility index (.VIX), also known as Wall Street's fear gauge, dropped to a fresh pre-pandemic low of 13.73. The U.S. Labor Department is due to release inflation data on June 13, the first day of the Fed meeting. The S&P index recorded six new 52-week highs and two new lows, while the Nasdaq recorded 38 new highs and 29 new lows.
Persons: David Russell, Wells, Ryan Cohen, Piper Sandler, Zhu Jiang, Sruthi Shankar, Shristi, Vinay Dwivedi Organizations: GameStop, Dow, Nasdaq, Treasury, Traders, Market Intelligence, Fed, Nvidia Corp, Apple Inc, Tesla Inc, GameStop Corp, U.S . Labor Department, Bank of Canada, BoC, Dow Jones, Adobe, Lucid, NYSE, Thomson Locations: Wells, U.S, Wells Fargo, China, Bengaluru
The revision was principally due to a second estimate from Germany's statistics office showing that the euro zone's largest economy was in recession in early 2023. The euro zone figure for the fourth quarter of 2022 was also cut to -0.1% from a previous reading of zero. Capital Economics said the outlook for the euro zone economy was poor, with a contraction likely again in the second quarter as the impact of higher interest rates fed through. Eurostat said that household spending stripped 0.1 percentage points, public expenditure 0.3 points and inventory changes 0.4 points from quarterly GDP. Gross fixed capital formation added 0.1 points and net trade a further 0.7 points as imports declined.
Persons: Gross, Philip Blenkinsop, Sharon Singleton Organizations: REUTERS, Gross, Eurostat, Reuters, Economics, P Global Market Intelligence, Thomson Locations: Berlin, Germany, Ireland, BRUSSELS, Greece, Lithuania, Malta, Netherlands, Slovakia
A recipe for a bull market, apparently. “The key difference for us is that you tend to see bull markets coincide with economic expansions, not economic contractions.”Still, since the last bull market, we’ve had a pandemic, a war in Europe, a banking crisis and a debt crisis among other dramas. “Such narrowness is not what new bull markets are built on.”The bottom line: Investors should “avoid getting sucked into this as a new bull market,” said Samana. A nationwide UPS strike would be the largest work stoppage in US history, reports my colleague Vanessa Yurkevich. US Bankruptcies reach highest level in 13 yearsChapter 11 filings in the US have reached their highest levels since the end of the Great Recession, according to new data from S&P Global Market Intelligence..
Persons: “ We’re, ” Sameer Samana, we’ve, , Kevin Gordon, Charles Schwab, Lisa Shalett, they’ve, Vanessa Yurkevich, We’ve, Fred Zuckerman, pare Organizations: CNN Business, Bell, New York CNN, Federal, Wells, Wells Fargo Investment Institute, CNN, Tech, Nvidia, US, Morgan Stanley Wealth Management, UPS, Teamsters, , Brotherhood of Teamsters, 1st, , , P Global Market Intelligence, Bed, P, Retail, City Locations: New York, Wells Fargo, Europe, Samana, America
June 5 (Reuters) - Tighter lending standards from regional banks are making it harder for U.S. hotel developers to secure funding, slowing construction of new hotels at a time Americans' appetite for travel is ripe. Analysts say slower hotel development will also limit profits of blue-chip manufacturers like Caterpillar Inc. , whose commercial real estate customers account for around 75% of construction sales. Overexposed regional banks are now offloading commercial real estate loans at a discount. Troubled regional lender PacWest Bancorp (PACW.O) announced in May it would sell $2.6 billion worth of real estate construction loans. Banks started to reduce their hotel loan portfolios in the first quarter of 2023, an analysis by S&P Global Market Intelligence found.
Persons: Joseph Delli Santi, James Hansen, Andy Ingraham, Ingraham, Evens Charles, Banks, Mitchell Hochberg, Bianca Flowers, Caroline Stauffer, Deepa Babington Organizations: U.S, Silicon Valley Bank, Shopoff, Reuters, Build Central Inc, Hilton, Hilton Worldwide Holdings Inc, Marriott International, Caterpillar Inc, Signature Bank, First Republic Bank, National Association of Black, Developers, Frontier Development, Hospitality Group, Washington D.C, PacWest Bancorp, P Global Market Intelligence, Lightstone, Thomson Locations: Silicon, California, Florida , Texas, Washington, Arizona, New York, Chicago, Bengaluru
Corporate bankruptcies just hit their highest levels since 2010, according to new data. This year's bankruptcies include Party City, Serta Simmons, and the parent of Silicon Valley Bank. There were 54 corporate bankruptcies in the US in May, bringing this year's total to 286, according to new data from S&P Global Market Intelligence. That's the highest number of US corporate bankruptcies recorded for the first five months of the year since 2010, the data provider said. This year's bankruptcies include party goods retailer Party City and mattress seller Serta Simmons, both of which filed for restructuring protection in January.
Persons: Serta Simmons Organizations: Silicon Valley Bank, P Global Market Intelligence, P's, Intelligence, Party City, Bank, Federal Locations: Silicon
Japan's service activity expands at record pace in May
  + stars: | 2023-06-05 | by ( ) www.reuters.com   time to read: +2 min
TOKYO, June 5 (Reuters) - Japan's service sector activity expanded at a record pace in May, a private-sector survey showed on Monday, thanks to a recovery in overseas demand and a surge of foreign tourists as pandemic restrictions were eased further. "The upward trend looks set to continue in the near and medium term," as outstanding business expanded at a record rate and business optimism held near an all-time high. The subindex measuring outstanding business rose at the fastest pace on record as disruptions caused by the pandemic continued to wane. Business expectations for the coming year remained robust, though the pace of increase slowed slightly from April, the survey showed. The composite PMI, which combines the manufacturing and services activity figures, expanded at the fastest pace since October 2013.
Persons: Usamah Bhatti, Kaori Kaneko, Kim Coghill Organizations: Jibun Bank Japan Services, P Global Market Intelligence, Service, PMI, Thomson Locations: TOKYO, Japan
New York CNN —Linda Yaccarino, a former NBCUniversal marketing executive, is preparing to take over the CEO role at Twitter from Elon Musk, weeks after the billionaire announced hiring her for the top spot at the social media company. The New York Times and The Information reported that Yaccarino is expected to officially start as Twitter CEO on Monday, citing sources familiar with the matter. Musk is likely betting on Yaccarino’s ad industry chops to restore Twitter’s flagging advertising business. Even without the CEO title, Musk will retain significant control over Twitter as its owner. Following the DeSantis event, Yaccarino tweeted: “We just heard a rare and unscripted conversation, on a range of important topics, with a Presidential candidate — all launched on Twitter.
Persons: Linda Yaccarino, Elon Musk, Yaccarino, Twitter, Joe Benarroch, Benarroch, “ Let’s, ” Yaccarino, she’d, Musk, Twitter’s, Ella Irwin, , , Yaccarino’s, Robert F, Kennedy, Jr, Ron DeSantis, Organizations: New, New York CNN, Twitter, Elon, The New York Times, New York Times, CNN, CNBC, Democratic, Florida Locations: New York, York, “ Bay, San Francisco
June 5 (Reuters) - Tighter lending standards from regional banks are making it harder for U.S. hotel developers to secure funding, slowing construction of new hotels at a time Americans' appetite for travel is ripe. Analysts say slower hotel development will also limit profits of blue-chip manufacturers like Caterpillar Inc. , whose commercial real estate customers account for around 75% of construction sales. Overexposed regional banks are now offloading commercial real estate loans at a discount. Troubled regional lender PacWest Bancorp (PACW.O) announced in May it would sell $2.6 billion worth of real estate construction loans. Banks started to reduce their hotel loan portfolios in the first quarter of 2023, an analysis by S&P Global Market Intelligence found.
Persons: Joseph Delli Santi, James Hansen, Andy Ingraham, Ingraham, Evens Charles, Banks, Mitchell Hochberg, Bianca Flowers, Caroline Stauffer, Deepa Babington Organizations: U.S, Silicon Valley Bank, Shopoff, Reuters, Build Central Inc, Hilton, Hilton Worldwide Holdings Inc, Marriott International, Caterpillar Inc, Signature Bank, First Republic Bank, National Association of Black, Developers, Frontier Development, Hospitality Group, Washington D.C, PacWest Bancorp, P Global Market Intelligence, Western Alliance, Lightstone, Thomson Locations: Silicon, California, Florida , Texas, Washington, Arizona, New York, Chicago, Bengaluru
The bill to suspend the $31.4 trillion debt ceiling headed to the Senate, which must enact the measure before a Monday deadline, when the government is expected to run out of money to pay its bills. With signs of progress in the debt ceiling saga, focus will now shift to the Labor Department's closely watched jobs report for May, due on Friday, that will help determine whether the Federal Reserve will stick with its aggressive interest rate-hiking cycle. The odds favoring a pause in rate hikes at the Fed's June 13-14 policy meeting were around 71% after the day's datasets. FEDWATCH"We're at the potential beginning of a soft landing," said David Russell, vice president of Market Intelligence at TradeStation. "When you look at the debt ceiling apparently being resolved, we could be in a situation where we wake up from the nightmare of inflation and the risk of a default to the soft landing."
Persons: Goldman Sachs, Chuck Schumer, Philip Jefferson, David Russell, Shreyashi Sanyal, Shristi, Shounak Dasgupta, Maju Samuel Organizations: Dow, Nasdaq, Federal Reserve, ADP, Senate, Democratic, Labor, Federal, Fed, Market Intelligence, Dow Jones, Salesforce Inc, Goldman Sachs Group Inc, Meta, Inc, Macy's Inc, Dollar General Corp, NYSE, Thomson Locations: Bengaluru
NEW YORK, May 31 (Reuters) - The cost of insuring exposure to a U.S. debt default rose on Wednesday, with investors focused on a debt ceiling vote in the House of Representatives later in the day. The U.S. one-year credit default swap (CDS) - a market-based gauge of the risk of default - climbed to 76 basis points (bps) from 56 bps late on Tuesday, data from S&P Global Market Intelligence showed. U.S. five-year CDS also edged up to 43 bps versus 42 bps the previous session. The House Rules Committee late on Tuesday, in the first procedural vote on the legislation, cleared the measure for debate in the full House on Wednesday. Speaker Kevin McCarthy predicted that the evening vote would succeed, telling reporters, "It's going to become law."
Persons: Kevin McCarthy, Karl Schamotta, Schamotta, Gertrude Chavez, Dreyfuss, Will Dunham Organizations: YORK, U.S, P Global Market Intelligence, Republicans, Republican Freedom Caucus, Democratic Party, Thomson Locations: U.S, Toronto
LONDON, May 30 (Reuters) - The cost of insuring exposure to a U.S. debt default fell further on Tuesday, reflecting investor optimism over a tentative deal by U.S. lawmakers to raise the $31.4 trillion debt ceiling. Trading picked up on Tuesday after much of Europe and the United States were closed on Monday for holidays. U.S. five-year CDS fell to 41 bps from 56 bps at Monday's close, the data showed. Some investors though remained apprehensive about the debt limit agreement, as some of the proposed bill's provisions could undermine economic growth. "We suspect these fears are likely overdone," wrote Karl Schamotta, chief market strategist at Corpay in Toronto.
Persons: Joe Biden, Kevin McCarthy, Karl Schamotta, Schamotta, Dhara Ranasinghe, Karin Strohecker Organizations: U.S, P Global Market Intelligence, Democratic, Republican, U.S . Treasury Department, Thomson Locations: U.S, Europe, United States, Monday's, ., Toronto
ET (1900 GMT), to discuss the debt ceiling bill. U.S. 10-year Treasury yields fell about 10 basis points (bps) to 3.72%, while thirty-year yields fell 8 basis points to 3.90%. "What is currently happening since yesterday shows where the debt ceiling premium was actually priced: mostly in bonds," said Ielpo. The cost of insuring exposure to a U.S. debt default meanwhile fell. "I wouldn’t blame the Treasury rally on the debt ceiling deal necessarily... the additional T-bill issuance, quantitative tightening, and difficult bank funding conditions now conspire to less favourable financing conditions to the economy," said Bouvet.
It has overtaken Hong Kong — long one of the top IPO markets — for the first time since 1995, and is outpacing economic powerhouses India, South Korea and Japan. Global IPO slowdownPart of Indonesia’s IPO success this year can be explained by lackluster performances elsewhere. The US IPO market, usually the world’s largest, has suffered given its reliance on particularly rate-sensitive tech companies, Lee said. Mining company Harita Nickel raised $660 million in its market debut last month, Indonesia’s biggest listing so far this year. “Our increasing conviction in [Indonesian companies] comes from how its government maximizes the potential of its bountiful raw materials,” he wrote.
Contributions to 529 college savings programs fell late last year and early this year, according to industry data, as consumers saved less overall and battled high inflation. The state-sponsored savings accounts, named for a section of the tax code, can be used to pay for education expenses, primarily college costs. Still, that was an improvement over the fourth quarter of 2022, when net inflows were $1.5 billion. And those fourth-quarter inflows were significantly lower than the more than $4 billion in the same period of 2021. The drop in contributions was a result of not only reduced overall savings and high inflation but also the postpandemic reopening of the economy, which released pent-up demand for spending, Paul Curley, director of savings research at ISS, said in an email.
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