Rate hike meaning for stocks

- A + A (June 30): All emerging Asian currencies were set for half-yearly losses on Thursday, with the South Korean won set to lose the most, as policy tightening by the US central bank and concerns over global economic outlook spurred selling in Asian assets. The won dropped 8.4% so far this year, while the Philippine peso and Indian rupee were on track to post half-yearly losses of 7.3% and 5.8%, respectively. Emerging markets in the six-month period were battered by capital outflows due to the US Federal Reserve kicking off its tightening cycle, Russia's invasion of Ukraine, and inflation from higher commodity prices. Among local drivers, China's insistence on a zero-Covid policy also spurred selling as the country's repeated imposition of restrictions means a slower economic recovery for the region's largest economy. "The broader market ... they need some more convincing because I think at the back of their mind, they've still got this hesitancy due to the … [Read more...] about Asian currencies set for half-year losses on rate hikes, inflation woes

This article first appeared in The Edge Malaysia Weekly, on June 20, 2022 - June 26, 2022. - A + A ALL eyes are on RHB Banking Group’s newly minted group managing director (MD) and group CEO Mohd Rashid Mohamad as he steers the fourth-largest banking group by assets forward in a tough operating landscape. “It’s very challenging, especially now in a fast-changing market environment, and as we face potential risks such as geopolitical and inflationary,” acknowledges Rashid in his first exclusive interview as group MD/CEO. Competition has intensified, given new entrants into the market, which are not just new banks but also technology companies that compete for the same pie. Rashid adds that this has partly affected the profitability of the industry, along with many other factors. He notes that banks globally no longer see “high ROEs” as before. For RHB Bank Bhd, its return on equity (ROE) in the past 10 financial years hit a high of 13.4% in FY2012 before … [Read more...] about Cover Story: RHB’s Game Plan in ‘fast-changing’ new normal

- A + A LONDON (June 30): Investors knew that, after two years of COVID-19 chaos, 2022 would be a bumpy ride, but nobody expected this - the most turbulent first half global markets have ever seen. To grasp just how torrid things have been, consider two things. MSCI's 47-country world stocks index has suffered its biggest 1H drop since its creation in 1990. At same time, 10-year U.S. Treasury bonds - the benchmark of global borrowing markets and traditional go-to asset in troubled times - have had their worst first half since 1788. Why? Russia's invasion of Ukraine supercharged what was already fast-rising inflation, forcing the big central banks to jack up interest rates and politicians to warn of new world orders. The result? A $13 trillion wipeout in world stocks, a 15.5% plunge Japan's yen, Italy's worst rout since the euro zone crisis, and what is shaping up to be the strongest commodities rally since World War I. Add to that Russia being gouged out the … [Read more...] about Markets in 1H: The almost perfect storm

- A + A (June 30): US consumer spending fell in May for the first time this year and prior months were revised lower, suggesting an economy on somewhat weaker footing than previously thought amid rapid inflation and Federal Reserve interest-rate hikes. Purchases of goods and services, adjusted for changes in prices, decreased 0.4% after a downwardly revised 0.3% gain a month earlier, Commerce Department data showed Thursday. Spending on services advanced while outlays for goods declined. The personal consumption expenditures price index, which the Federal Reserve uses for its inflation target, rose 0.6% from a month earlier and was up 6.3% since May 2021. The core PCE price index increased 0.3%, less than expected. It was up 4.7% from a year ago, the smallest gain since November. The median forecasts in a Bloomberg survey of economists called for a 0.3% decline in inflation-adjusted spending from the prior month and for the overall price index to be up 6.4% from … [Read more...] about US consumer spending cools in sign of economy on weaker footing

- A + A (July 1): US stocks slipped on Thursday, setting the Dow up for its worst first six months since 1962, on concerns that a dogged pursuit by central banks to tame inflation would hamper global economic growth. Fears over slowing growth and surging prices have rippled through markets, with recession worries taking center stage as monetary policymakers across the world look to aggressively raise borrowing costs. Federal Reserve Chair Jerome Powell on Wednesday vowed to not let the U.S. economy slip into a "higher inflation regime", even if it means raising interest rates to levels that put growth at risk. The tech-heavy Nasdaq Composite came off session lows but was still set for its largest declines ever for the first-half, while the benchmark S&P 500 tracked its biggest January-June percentage drop since 1970. All the three main indexes are on course to post their second straight quarterly declines for the first time since 2015. Fed policymakers in … [Read more...] about Wall St slides, Dow set for worst first-half since 1962