Another Asian central bank cuts interest rates — analysts say the region’s not done easing yet

Indonesia’s surprise interest rate cut is the latest in a wave of monetary policy easing in Asia, and analysts say central banks in the region have to ease monetary policy further as growth threatens to stall. Bank Indonesia on Thursday cut its key policy rate by 25 basis points to 5.5% to support growth amid an increasingly fragile global economy. A total of 17 out of 19 economists polled by Reuters had expected the central bank to keep policy steady in August after last month’s easing. A lower


Indonesia’s surprise interest rate cut is the latest in a wave of monetary policy easing in Asia, and analysts say central banks in the region have to ease monetary policy further as growth threatens to stall. Bank Indonesia on Thursday cut its key policy rate by 25 basis points to 5.5% to support growth amid an increasingly fragile global economy. A total of 17 out of 19 economists polled by Reuters had expected the central bank to keep policy steady in August after last month’s easing. A lower
Another Asian central bank cuts interest rates — analysts say the region’s not done easing yet Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-23  Authors: yen nee lee
Keywords: news, cnbc, companies, central, inflation, regions, monetary, global, easing, growth, rates, policy, rate, economy, say, indonesias, analysts, bank, interest, asian, cuts


Another Asian central bank cuts interest rates — analysts say the region's not done easing yet

Indonesia’s surprise interest rate cut is the latest in a wave of monetary policy easing in Asia, and analysts say central banks in the region have to ease monetary policy further as growth threatens to stall.

Bank Indonesia on Thursday cut its key policy rate by 25 basis points to 5.5% to support growth amid an increasingly fragile global economy. A total of 17 out of 19 economists polled by Reuters had expected the central bank to keep policy steady in August after last month’s easing.

Perry Warjiyo, Indonesia’s central bank governor, told CNBC on Friday there’s room to cut interest rates this time because inflation for the year is expected to remain within its target range of 2.5% to 4.5%. That will help Indonesia to maintain its growth momentum at a time when the ongoing tariff fight between the U.S. and China has held back global economic activity, he explained.

A lower interest rate environment generally encourages businesses and consumers to spend more, which boost the economy but could cause inflation to rise. Prices rising too much and too quickly are harmful for the economy, so central banks typically adjust monetary policies to keep inflation in check.

“This is a preemptive move to support our growth momentum and to anticipate the possibility of downward risks on the global economic outlook going forward,” Warjiyo told CNBC’s “Street Signs.”

The central bank expects Indonesia’s economy to grow between 5% and 5.4% this year. Last year, the country — Southeast Asia’s largest economy — grew by 5.17%.


Company: cnbc, Activity: cnbc, Date: 2019-08-23  Authors: yen nee lee
Keywords: news, cnbc, companies, central, inflation, regions, monetary, global, easing, growth, rates, policy, rate, economy, say, indonesias, analysts, bank, interest, asian, cuts


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post

IMF chief economist says it’s getting harder to find bright spots in the global economy

The outlook for the global economy keeps getting bleaker, the chief economist at the International Monetary Fund said Friday. “As the year is progressing, it’s getting harder to find those bright spots,” Gita Gopinath told CNBC’s Steve Liesman. “There was the potential of recovery, and we’re still expecting that for many parts of the world … but I’ve got to admit it’s getting harder to see that.” One of the risks we keep flagging is risks on the trade front,” Gopinath said. “The developments tha


The outlook for the global economy keeps getting bleaker, the chief economist at the International Monetary Fund said Friday. “As the year is progressing, it’s getting harder to find those bright spots,” Gita Gopinath told CNBC’s Steve Liesman. “There was the potential of recovery, and we’re still expecting that for many parts of the world … but I’ve got to admit it’s getting harder to see that.” One of the risks we keep flagging is risks on the trade front,” Gopinath said. “The developments tha
IMF chief economist says it’s getting harder to find bright spots in the global economy Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-23  Authors: fred imbert
Keywords: news, cnbc, companies, economist, chief, going, growth, harder, world, trade, getting, gopinath, imf, bright, risks, economy, youtube, global, spots


IMF chief economist says it's getting harder to find bright spots in the global economy

The outlook for the global economy keeps getting bleaker, the chief economist at the International Monetary Fund said Friday.

“As the year is progressing, it’s getting harder to find those bright spots,” Gita Gopinath told CNBC’s Steve Liesman. “There was the potential of recovery, and we’re still expecting that for many parts of the world … but I’ve got to admit it’s getting harder to see that.”

Gopinath’s comments come as economic growth overseas has slowed down. In Germany, the manufacturing sector is contracting. Meanwhile, China’s economy grew at its slowest pace in 27 years in the previous quarter.

The slowdown is taking place as China and the U.S. wage a trade war against each other.

China unveiled on Friday a series of tariffs targeting $75 billion in U.S. products. U.S. autos are among the goods being targeted. President Donald Trump escalated the already tense situation by ordering U.S. companies to move their operations out of China.

“Global growth is subdued, and we describe it as fragile. There are many downside risks. One of the risks we keep flagging is risks on the trade front,” Gopinath said. “The developments that we’re seeing as recently as today give us great concern about what’s going to happen to growth going forward.”

Subscribe to CNBC on YouTube.


Company: cnbc, Activity: cnbc, Date: 2019-08-23  Authors: fred imbert
Keywords: news, cnbc, companies, economist, chief, going, growth, harder, world, trade, getting, gopinath, imf, bright, risks, economy, youtube, global, spots


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post

Dallas Fed’s Kaplan says he’d like to avoid cutting rates again in September, but has ‘open mind’

Dallas Fed President Robert Kaplan would like to avoid additional stimulus but is keeping an “open mind.” Kaplan said the Fed’s GDP forecast of 2% growth this year has risks to the “downside.” Holding up is the consumer economy, the biggest part of the economy. Kaplan also addressed concerns about the inverted yield curve. Earlier on Thursday, Kansas City Fed President Esther George said the July rate cut “wasn’t required ” and Philadelphia Fed President Patrick Harker said he doesn’t see the ca


Dallas Fed President Robert Kaplan would like to avoid additional stimulus but is keeping an “open mind.” Kaplan said the Fed’s GDP forecast of 2% growth this year has risks to the “downside.” Holding up is the consumer economy, the biggest part of the economy. Kaplan also addressed concerns about the inverted yield curve. Earlier on Thursday, Kansas City Fed President Esther George said the July rate cut “wasn’t required ” and Philadelphia Fed President Patrick Harker said he doesn’t see the ca
Dallas Fed’s Kaplan says he’d like to avoid cutting rates again in September, but has ‘open mind’ Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-22  Authors: maggie fitzgerald
Keywords: news, cnbc, companies, dallas, fed, yield, rates, hed, open, feds, rate, president, consumer, cutting, kaplan, economy, curve, months, avoid, growth, mind


Dallas Fed's Kaplan says he'd like to avoid cutting rates again in September, but has 'open mind'

Dallas Fed President Robert Kaplan would like to avoid additional stimulus but is keeping an “open mind.”

“I’d like to avoid having to take further action but I think I’m going to have an open mind about taking action over the next number of months if we need to,” Kaplan told CNBC’s Steve Liesman on Thursday from the Federal Reserve’s economic policy symposium in Jackson Hole, Wyoming.

Kaplan said the Fed’s GDP forecast of 2% growth this year has risks to the “downside.”

“Even though the consumer is very strong and a key underpinning to the economy, manufacturing sector is weak and probably weakening and global growth decelerating is probably finding its way to seep into the U.S. economy,” said Kaplan.

U.S. manufacturer growth slowed to the lowest level in almost 10 years in August, according to data released Thursday. The U.S. manufacturing PMI (purchasing managers’ index) was 49.9 in August, down from 50.4 in July and below the neutral 50.0 threshold for the first time since September 2009, according to IHS Markit.

Holding up is the consumer economy, the biggest part of the economy. In the second-quarter, personal consumption expenditures rose 4.3%, the best performance in six quarters.

“As long as the consumer stays strong we are going to have solid growth,” said Kaplan.

Kaplan also addressed concerns about the inverted yield curve. He said he is less “obsessed” with the little movements in the curves “back and forth.”

“I’m more focused on the fact that the whole curve has moved down over the last three and a half months and the fed funds rate at two to two and a quarter is now above every rate along the curve which to me is a bit of a reality check that says it’s possible our monetary policy stays a little tighter than I would have thought three or four months ago,” he said.

Earlier on Thursday, Kansas City Fed President Esther George said the July rate cut “wasn’t required ” and Philadelphia Fed President Patrick Harker said he doesn’t see the case for additional stimulus.

Following their comments, the bond market’s main yield curve inverted briefly for the third time in less than two weeks on concern that maybe the Fed wouldn’t do enough to save the economy from a recession.

Kaplan is a nonvoting member this year of the Fed’s Open Market Committee.


Company: cnbc, Activity: cnbc, Date: 2019-08-22  Authors: maggie fitzgerald
Keywords: news, cnbc, companies, dallas, fed, yield, rates, hed, open, feds, rate, president, consumer, cutting, kaplan, economy, curve, months, avoid, growth, mind


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post

Digital wave and values-based business are driving Salesforce’s growth, CEO says

Modern corporations have shifted focus to partner with companies that are value-focused, Salesforce’s Keith Block said on CNBC Thursday. That’s why Salesforce joined about 200 other businesses to proclaim that pleasing shareholders is no longer their main goal, Block said. “A lot of this, Jim, is really powered by this wave of digital transformation that we’re seeing all over the world,” he said. “Everybody needs to get closer to the customer, everybody is trying to improve that customer experie


Modern corporations have shifted focus to partner with companies that are value-focused, Salesforce’s Keith Block said on CNBC Thursday. That’s why Salesforce joined about 200 other businesses to proclaim that pleasing shareholders is no longer their main goal, Block said. “A lot of this, Jim, is really powered by this wave of digital transformation that we’re seeing all over the world,” he said. “Everybody needs to get closer to the customer, everybody is trying to improve that customer experie
Digital wave and values-based business are driving Salesforce’s growth, CEO says Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-22  Authors: tyler clifford
Keywords: news, cnbc, companies, business, world, valuesbased, companies, youre, ceo, growth, wave, seeing, salesforce, thats, driving, shareholders, block, really, salesforces, digital, quarter


Digital wave and values-based business are driving Salesforce's growth, CEO says

Modern corporations have shifted focus to partner with companies that are value-focused, Salesforce’s Keith Block said on CNBC Thursday.

That’s why Salesforce joined about 200 other businesses to proclaim that pleasing shareholders is no longer their main goal, Block said. The co-CEO was responding to a question from Jim Cramer about how the company is having an “Impact Per Share” — what companies are doing to promote eco-friendly and sustainability initiatives.

On top of catering to shareholders, “it’s about stakeholders, it’s about your employees, it’s about you partners and suppliers. It’s about the community, it’s about the environment,” Block said in a “Mad Money” interview. “When we speak to CEOs all over the world, they want to know what our values are all about. And if they’re going to bet their business on us, they want to be aligned with those values.”

The Business Roundtable, a group of chief executive officers from major U.S. corporations led by J.P. Morgan Chase’s Jamie Dimon, released a statement earlier this week about the “purpose of a corporation,” which comes at a time where more and more consumers are care about shopping at mission-driven businesses.

After the market closed Thursday, Salesforce delivered shareholders a beat-and-raise quarter. The company topped earnings and revenue expectations while upping its guidance for the full year, CNBC reported.

Revenue grew 22% to $4 billion in the quarter and the full-year outlook was increased to $16.9 billion, which would equate to 27% year-over-year growth, Block said in the “Mad Money” one-on-one.

“A lot of this, Jim, is really powered by this wave of digital transformation that we’re seeing all over the world,” he said. “Everybody needs to get closer to the customer, everybody is trying to improve that customer experience, and that’s where Salesforce really brings value to the table.”

When it comes to tariffs on Chinese imports and services, Salesforce appears to be immune, Cramer said. In response, Block said it’s because companies won’t stop investing into digitizing their operations.

“That’s why you’re seeing this growth, you’re seeing these results,” he said. “And we’re just co-innovating and co-creating with these companies and that’s why we’re having so much success on their behalf.”

Shares of Salesforce rose slightly on Thursday ahead of its earnings call. The stock climbed 7% in after hours trading.


Company: cnbc, Activity: cnbc, Date: 2019-08-22  Authors: tyler clifford
Keywords: news, cnbc, companies, business, world, valuesbased, companies, youre, ceo, growth, wave, seeing, salesforce, thats, driving, shareholders, block, really, salesforces, digital, quarter


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post

Corporate earnings show trade war straining US economy as companies lean on shoppers to prop up profits

Federal Reserve members expressed concerns last month about weak sectors of the economy like manufacturing. But strong job growth, wages that are rising — if slowly — and robust consumer spending are fueling the economy and some pockets of strong earnings. Consumers still spending but growth has slowedU.S. consumer spending, which drives the lion’s share of the economy, is growing but at a slower pace. In June, U.S. consumer spending increased 0.3%, down from the 0.5% monthly increase posted in


Federal Reserve members expressed concerns last month about weak sectors of the economy like manufacturing. But strong job growth, wages that are rising — if slowly — and robust consumer spending are fueling the economy and some pockets of strong earnings. Consumers still spending but growth has slowedU.S. consumer spending, which drives the lion’s share of the economy, is growing but at a slower pace. In June, U.S. consumer spending increased 0.3%, down from the 0.5% monthly increase posted in
Corporate earnings show trade war straining US economy as companies lean on shoppers to prop up profits Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-22  Authors: leslie josephs
Keywords: news, cnbc, companies, straining, strong, prop, companies, spending, consumer, growth, month, war, economy, target, shoppers, lean, corporate, profits, quarter, trade, earnings


Corporate earnings show trade war straining US economy as companies lean on shoppers to prop up profits

Looking for reasons to be optimistic about the U.S. economy? Try the aisles of Target. Target’s stock soared more than 20% to a record $103 a share on Wednesday after the retailer reported a 17% jump in second-quarter profit, higher sales and a sunnier full-year outlook as its big investments in same-day delivery and in-store pickup services drew more customers. The retailer and some of its big competitors like Walmart are standouts in what’s shaped up to be a lackluster earnings season for U.S. companies on the whole. The S&P 500, with more than 94% of its companies reporting the most-recent quarterly earnings, is on track for a ho-hum 1.2% increase in quarterly profits from a year earlier, according to data compiled by Refinitiv as of Wednesday afternoon. Sales at the 500 largest publicly traded U.S. companies rose by an average of 4.7% in the last quarter, the slowest growth rate since the third quarter of 2016.

Unwelcome news

The performance is unwelcome news at a time of stock market volatility and when forecasters are trimming economic growth outlooks, trade tensions are intensifying and driving up the cost of imported goods and economists are scratching their heads to figure out if we are headed for recession. “We’ve reached a very high plateau, but it is a plateau,” said David Kelly, chief global market strategist at J.P. Morgan Asset Management. “The economy is slowing.” The U.S. economy expanded by 2.1% in the second quarter, the lowest rate since the first quarter of 2017 and down from 3.1% in the first three months of this year. Federal Reserve members expressed concerns last month about weak sectors of the economy like manufacturing. They said trade uncertainty amid the tit-for-tat trade battle with China, coupled with global growth worries, continues “to weigh on business confidence and firms’ capital expenditure plans,” according to minutes from the Fed’s July meeting. At that meeting, the Federal Reserve cut interest rates for the first time in a decade, but the minutes released Wednesday said the move shouldn’t be viewed as a “pre-set course ” for future cuts, meaning companies may not be able to count on borrowing at lower rates. But strong job growth, wages that are rising — if slowly — and robust consumer spending are fueling the economy and some pockets of strong earnings. “The economy doesn’t look like it’s heading into a recession because the consumer is still strong,” said Jeremy Zirin, head of Americas equities at UBS Global Wealth Management’s Chief Investment Office.

Consumers still spending but growth has slowed

U.S. consumer spending, which drives the lion’s share of the economy, is growing but at a slower pace. In June, U.S. consumer spending increased 0.3%, down from the 0.5% monthly increase posted in May, the Commerce Department said late last month. But a slew of earnings reports from retailers shows that companies are still growing while their weaker competitors struggle as U.S. consumer shopping habits continue to shift. “The underlying U.S. consumer is doing well, making more money, they’re employed and, more importantly, they’re spending more money,” Bank of America CEO Brian Moynihan said in an interview on CNBC on Tuesday, adding that the bank’s own customers are spending more. “The U.S. consumer continues to spend, and that will keep the U.S. economy in good shape.” U.S. airlines, for example, which make money from flying passengers and from selling frequent-flyer miles to banks that offer rewards to customers who spend with co-branded or other rewards credit cards, are on track for a 10th consecutive year of profitability. Executives at large carriers said on earnings calls last month that the strong U.S. economy helped them grow revenues.

Not all retailers are equal

But the spoils aren’t spread equally. On the retail front, big-name stores like Target and Walmart, which invested in their companies to better take on Amazon, have posted strong results. “There are clear winners and losers in the industry today … and the winners are companies like Target investing in stores,” Target CEO Brian Cornell said on a media call after reporting earnings Wednesday. He didn’t name companies specifically but said there are “share donors” aiding Target’s performance. Stores that anchor U.S. malls like troubled J.C. Penney and Macy’s continue to struggle as fewer consumers seek out such big shopping complexes to buy clothing, accessories and other goods. Instead, one-stop shopping destinations like Target and Walmart are appealing to more consumers with their revamped in-house brands, broad selection of national labels, speedy delivery options and real estate spread across the U.S., putting them closer to customers’ homes. J.C. Penney’s stock last month fell below $1, putting it at risk of being delisted by the New York Stock Exchange. “These retailers exemplify the bifurcation taking place in retail between larger cap, off-mall based chains and on-mall retailers facing chronic traffic declines,” said Retail Metrics founder Ken Perkins. He said many apparel chains are the ones still “struggling.” Urban Outfitters this week reported a 35% decline in second-quarter profit and slower sales. L Brands, parent of lingerie company Victoria’s Secret, posted higher-than-expected profits this week but weaker sales. Barneys New York filed for bankruptcy protection this month and said it planned to close stores in Chicago, Las Vegas and Seattle. Even executives at companies that are doing well are cautious. Home-improvement giant Home Depot beat earnings estimates this week but trimmed its outlook because of the potential impact of tariffs on its business.

Weak patches

There are weaker patches in the economy though. Lower fuel prices hurt energy company performance in the last quarter, while global trade tensions, weaker growth and tariffs weigh on the materials and the industrial sectors. Boeing’s 737 Max crisis stemming from two fatal crashes prompted the company to post its biggest loss ever in the second quarter. It has also slowed production and halted deliveries, impacting several suppliers including already-struggling General Electric, which makes engines for the beleaguered jets with its French joint-venture partner Safran. “I think it’s always better when the economy is firing on all four cylinders,” said Kate Warne, chief strategist at Edward Jones, who noted that companies in general “have had more headwinds this year.” However, profit growth appears weak in comparison with last year, when large corporations reported a surge in profits after the big corporate tax cut, she said.

Fragile business confidence


Company: cnbc, Activity: cnbc, Date: 2019-08-22  Authors: leslie josephs
Keywords: news, cnbc, companies, straining, strong, prop, companies, spending, consumer, growth, month, war, economy, target, shoppers, lean, corporate, profits, quarter, trade, earnings


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post

CBO expects deficit to grow more than projected, warns that tariff hikes could harm growth

Federal deficits are expected to swell to higher levels over the next decade than previously expected, the nonpartisan Congressional Budget Office said in a new report Wednesday. The CBO also said that President Donald Trump’s tariffs are projected to shrink gross domestic product by 2020, and warned that further tariff hikes could stifle economic growth. The new deficit projection for 2019 rose $63 billion from the last report, which came out in May. “The nation’s fiscal outlook is challenging,


Federal deficits are expected to swell to higher levels over the next decade than previously expected, the nonpartisan Congressional Budget Office said in a new report Wednesday. The CBO also said that President Donald Trump’s tariffs are projected to shrink gross domestic product by 2020, and warned that further tariff hikes could stifle economic growth. The new deficit projection for 2019 rose $63 billion from the last report, which came out in May. “The nation’s fiscal outlook is challenging,
CBO expects deficit to grow more than projected, warns that tariff hikes could harm growth Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-21  Authors: kevin breuninger ylan mui, kevin breuninger, ylan mui
Keywords: news, cnbc, companies, hikes, higher, growth, cbo, warns, federal, grow, report, deficit, expects, budget, outlook, expected, tariff, projected, economic, harm


CBO expects deficit to grow more than projected, warns that tariff hikes could harm growth

Federal deficits are expected to swell to higher levels over the next decade than previously expected, the nonpartisan Congressional Budget Office said in a new report Wednesday.

The CBO also said that President Donald Trump’s tariffs are projected to shrink gross domestic product by 2020, and warned that further tariff hikes could stifle economic growth.

The U.S. budget deficit is expected to hit $960 billion in 2019, and average a whopping $1.2 trillion per year between 2020 and 2029, according to the CBO’s look-ahead at the U.S.’ budget and economic outlook over the next decade.

The new deficit projection for 2019 rose $63 billion from the last report, which came out in May. The CBO says this is mainly because of the massive new budget deal, which passed both houses of Congress and was signed into law by Trump on Aug. 2.

“The nation’s fiscal outlook is challenging,” CBO director Phillip Swagel said in the report. “Federal debt, which is already high by historical standards, is on an unsustainable course.”

Swagel said that the debt is projected to rise even higher after 2029, due to the aging of the U.S. population, growth in health care spending and rising interest costs.

The White House did not immediately respond to CNBC’s request for comment on the new CBO report.


Company: cnbc, Activity: cnbc, Date: 2019-08-21  Authors: kevin breuninger ylan mui, kevin breuninger, ylan mui
Keywords: news, cnbc, companies, hikes, higher, growth, cbo, warns, federal, grow, report, deficit, expects, budget, outlook, expected, tariff, projected, economic, harm


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post

Fed sees tariffs as ‘persistent headwind’ to economic growth

Federal Reserve members worried over future growth are highly concerned about the U.S.-China tariff battle, citing the issue multiple times during discussions at the central bank’s July meeting. Members spoke about trade on multiple occasions, saying it was one of the chief headwinds for the economy, according to meeting minutes released Wednesday. “Participants generally judged that the risks associated with trade uncertainty would remain a persistent headwind for the outlook, with a number of


Federal Reserve members worried over future growth are highly concerned about the U.S.-China tariff battle, citing the issue multiple times during discussions at the central bank’s July meeting. Members spoke about trade on multiple occasions, saying it was one of the chief headwinds for the economy, according to meeting minutes released Wednesday. “Participants generally judged that the risks associated with trade uncertainty would remain a persistent headwind for the outlook, with a number of
Fed sees tariffs as ‘persistent headwind’ to economic growth Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-21  Authors: jeff cox
Keywords: news, cnbc, companies, tariffs, uschina, sees, multiple, wednesdayparticipants, uncertainties, fed, growth, trade, times, economic, uncertainty, persistent, headwind, view, minutes, worried


Fed sees tariffs as 'persistent headwind' to economic growth

Federal Reserve members worried over future growth are highly concerned about the U.S.-China tariff battle, citing the issue multiple times during discussions at the central bank’s July meeting.

Members spoke about trade on multiple occasions, saying it was one of the chief headwinds for the economy, according to meeting minutes released Wednesday.

“Participants generally judged that the risks associated with trade uncertainty would remain a persistent headwind for the outlook, with a number of participants reporting that their business contacts were making decisions based on their view that uncertainties around trade were not likely to dissipate anytime soon,” the minutes said.


Company: cnbc, Activity: cnbc, Date: 2019-08-21  Authors: jeff cox
Keywords: news, cnbc, companies, tariffs, uschina, sees, multiple, wednesdayparticipants, uncertainties, fed, growth, trade, times, economic, uncertainty, persistent, headwind, view, minutes, worried


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post

Climate change to slow global economic growth, new study finds

Climate change will exact a toll on global economic output as higher temperatures hamstring industries from farming to manufacturing, according to a new study published by the National Bureau of Economic Research. In other words, if global GDP doubles or halves by 2100, the results suggest real GDP per capita would still be 7.22% below where it would be otherwise. The first tested the impact of climate change in the absence of climate change policies (known as “RCP 8.5” in the table), implying a


Climate change will exact a toll on global economic output as higher temperatures hamstring industries from farming to manufacturing, according to a new study published by the National Bureau of Economic Research. In other words, if global GDP doubles or halves by 2100, the results suggest real GDP per capita would still be 7.22% below where it would be otherwise. The first tested the impact of climate change in the absence of climate change policies (known as “RCP 8.5” in the table), implying a
Climate change to slow global economic growth, new study finds Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-20  Authors: thomas franck
Keywords: news, cnbc, companies, average, increase, temperatures, growth, global, degrees, celsius, climate, temperature, researchers, study, finds, change, economic, gdp, slow, capita


Climate change to slow global economic growth, new study finds

Hogs are stranded on the roof of a farm June 18, 2008 as floodwaters continue to overrun the town of Oakville, Iowa.

Climate change will exact a toll on global economic output as higher temperatures hamstring industries from farming to manufacturing, according to a new study published by the National Bureau of Economic Research.

Record-breaking heat across the globe made headlines throughout July, and now researchers say a persistent increase in average global temperature by 0.04 degrees Celsius per year, barring major policy breakthroughs, is set to reduce world real GDP per capita by 7.22% by 2100.

The researchers — hailing from the International Monetary Fund, the University of Cambridge and the University of Southern California — found little evidence that precipitation had an impact on GDP, but instead observed a large temperature-related effect.

The U.S. is expected to see its GDP per capita decline 10.5%, China’s by 4.3% and the European Union’s by 4.6% over the next 81 years as a result of temperature fluctuations. In other words, if global GDP doubles or halves by 2100, the results suggest real GDP per capita would still be 7.22% below where it would be otherwise.

In the nearer term, and assuming no major policy changes and continued greenhouse emissions, the climate-related drag on global GDP per capita is projected to surpass 2.5% and exceed 3.7% in the U.S. by 2050.

“A persistent above-norm increase in average global temperature by 0.04 Celsius per year leads to substantial output losses, reducing real per capita output by 0.8%, 2.51% and 7.22% percent in 2030, 2050 and 2100, respectively,” the researchers wrote. “Furthermore, we show that our empirical findings apply equally to poor or rich, and hot or cold countries.”

Using a panel data set of 174 countries over the years 1960 to 2014, the team tested two scenarios. The first tested the impact of climate change in the absence of climate change policies (known as “RCP 8.5” in the table), implying an annual increase of 0.04 degrees Celsius.

The other scenario corresponded to the December 2015 Paris Agreement that President Donald Trump decided to abandoned (known as “RCP 2.6” in the table). That scenario implies an annual increase of 0.01 degrees Celsius.

In the first scenario, which assumes an increase in average global temperate of 0.04 degrees Celsius, the researchers found that the U.S. faces a GDP decline above 10% by 2100 if global temperatures continue to rise at their historic pace. In the second scenario, which abides by the Paris Agreement’s global annual temperature increase of 0.01 degrees Celsius, the U.S. would still see a comparatively large, albeit smaller 1.88% GDP reduction.

Part of the outsized impact is due to the fact that temperatures in the U.S. are rising faster than the rest of the world, the researchers wrote, with the nation’s average annual increase of 0.026 degrees Celsius well above the globe’s 0.018-degree annual average.

“Our results provided evidence for the damage climate change causes in the United States using [gross state product], GSP per capita, labour productivity, and employment as well as output growth in ten economic sectors,” the researchers wrote.

Long-run GDP Impact by Region

Source: “Long-term Macroeconomic Effects of Climate Change” (2019), Kahn et al.

“While certain sectors in the U.S. economy might have adapted to higher temperatures, economic activity in the U.S. overall and at the sectoral level continues to be sensitive to deviations of temperature and precipitation from their historical norms.”

Countries that derive a large proportion of their GDP from agriculture could be most at risk. Excessive heat or rainfall can not only kill crops like corn and soybeans, but delay fieldwork and stall equipment shipments.

Though the new study did not find evidence that increased rain damages economic growth, one business leader says increased precipitation can dampen profits. Commenting on Friday, the chief economist at farm equipment maker Deere noted that doubts surrounding crop production have already weighed on government corn production estimates.

“The wettest 12-month period in U.S. history brought flooding and record planting delays across major corn and soybean growing regions,” Luke Chandler said on Deere’s fiscal third-quarter earnings call. “The result was heightened uncertainty around row crop production.”

“This uncertainty was reflected in the USDA’s latest estimates released this past Monday, which surprised the market, particularly the forecast of national corn production,” he added. The U.S. Department of Agriculture reported on Aug. 12 that soybean production is down 19 percent from 2018 while corn growers are expected to decrease their production 4 percent from last year.

But relief from the unusual weather looks unlikely. The recent deluge of recent meteorological data shows a persistent pattern of record-breaking heat.

The U.S. National Oceanic and Atmospheric Administration announced on Thursday that July was the hottest month ever recorded, shrinking the Arctic and Antarctic sea ice to historic lows.

The 2015 Paris Agreement seeks to combat those effects: It was designed to prevent global temperatures from rising by more than 2 degrees Celsius above pre-industrial levels. It mandates 195 national signatories — nearly every country in the world — to devise a plans to cut emissions in an attempt to stem the impact of climate change.

The average global temperature in July was 1.71 degrees Fahrenheit above the 20th-century average of 60.4 degrees, making it the hottest July in the 140-year record. Meanwhile, nine of the 10 hottest Julys have occurred since 2005, with the last five years ranking as the five hottest.


Company: cnbc, Activity: cnbc, Date: 2019-08-20  Authors: thomas franck
Keywords: news, cnbc, companies, average, increase, temperatures, growth, global, degrees, celsius, climate, temperature, researchers, study, finds, change, economic, gdp, slow, capita


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post

Goldman says buy dividend stocks amid diving yields

Investors have piled into safe-haven Treasurys recently, pushing bond yields to their historic lows last week as stocks sold off. Goldman predicted the S&P 500 annualized dividend growth to be 3.5% during the next decade. Goldman screened stocks with strong dividend growth and high dividend yields, based on their dividend estimates and payout ratios. The average stock in its basket has a dividend yield of 3.8% versus 2.1% for the typical S&P 500 stock. AT&T, Kohl’s and data storage company Seaga


Investors have piled into safe-haven Treasurys recently, pushing bond yields to their historic lows last week as stocks sold off. Goldman predicted the S&P 500 annualized dividend growth to be 3.5% during the next decade. Goldman screened stocks with strong dividend growth and high dividend yields, based on their dividend estimates and payout ratios. The average stock in its basket has a dividend yield of 3.8% versus 2.1% for the typical S&P 500 stock. AT&T, Kohl’s and data storage company Seaga
Goldman says buy dividend stocks amid diving yields Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-19  Authors: yun li
Keywords: news, cnbc, companies, 500, yields, amid, dividend, yield, goldman, diving, buy, company, sp, strategist, stocks, growth


Goldman says buy dividend stocks amid diving yields

In a falling rate environment, Goldman Sachs is advising clients to buy high-dividend payers, which it says are trading at their cheapest levels in nearly 40 years relative to stocks with low yields.

“With the 10-year Treasury yield at just 1.5% and the Fed likely to cut two more times this year, investors should look for opportunities in dividend stocks,” Goldman chief U.S. equity strategist David Kostin said in a note Friday.

Investors have piled into safe-haven Treasurys recently, pushing bond yields to their historic lows last week as stocks sold off. If the market remains shaky in the face of a slowing global economy and the intensified trade war, investors may look to stocks with more steady dividend income, according to Goldman.

The market is pricing in “an overly pessimistic” level of dividend payouts with the swap-market prices implying merely 0.7% growth over the next decade, Kostin pointed out. Additionally, the valuation gap between high- and low-dividend-yield stocks is close to the widest it has been in the last 40 years, the strategist said.

However, the reality is that U.S. companies are increasing dividends steadily with the S&P 500 dividends rising by 9% in the first and second quarters this year, he said. Goldman predicted the S&P 500 annualized dividend growth to be 3.5% during the next decade.

Goldman screened stocks with strong dividend growth and high dividend yields, based on their dividend estimates and payout ratios. The average stock in its basket has a dividend yield of 3.8% versus 2.1% for the typical S&P 500 stock.

AT&T, Kohl’s and data storage company Seagate Technology all have a dividend yield of about 6% and make the Goldman list of about 50 stocks. Food processing company Archer-Daniels Midland, Citizens Financials and real estate company Simon Property Group are also among those big dividend growers.


Company: cnbc, Activity: cnbc, Date: 2019-08-19  Authors: yun li
Keywords: news, cnbc, companies, 500, yields, amid, dividend, yield, goldman, diving, buy, company, sp, strategist, stocks, growth


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post

Caution is warranted but US ‘should avoid a recession,’ economists say

The U.S. and global economy should avoid a recession in 2020, with a combination of strong retail sales, potential monetary policy easing and service sector robustness expected to mitigate slowing growth, according to several leading economists. However, underlying factors across major economies indicate that recession fears may be overblown, economists have suggested. A note from UBS Global CIO Mark Haefele on Monday said this reinforces belief that the U.S. economy should avoid a recession. “T


The U.S. and global economy should avoid a recession in 2020, with a combination of strong retail sales, potential monetary policy easing and service sector robustness expected to mitigate slowing growth, according to several leading economists. However, underlying factors across major economies indicate that recession fears may be overblown, economists have suggested. A note from UBS Global CIO Mark Haefele on Monday said this reinforces belief that the U.S. economy should avoid a recession. “T
Caution is warranted but US ‘should avoid a recession,’ economists say Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-19  Authors: elliot smith
Keywords: news, cnbc, companies, trade, yields, say, suggested, yield, economists, warranted, caution, economy, avoid, recession, global, rates, ubs, growth


Caution is warranted but US 'should avoid a recession,' economists say

The U.S. and global economy should avoid a recession in 2020, with a combination of strong retail sales, potential monetary policy easing and service sector robustness expected to mitigate slowing growth, according to several leading economists. A choppy week for global markets last week saw a substantial sell-off in equities, while the bond market spooked investors as the U.S. 10-year/2-year Treasury yield curve inverted, an event widely seen as a warning sign of recession. Meanwhile, the German economy contracted while eurozone GDP (gross domestic product) growth halved to 0.2% for the second quarter. However, underlying factors across major economies indicate that recession fears may be overblown, economists have suggested. Over the weekend, German finance minister Olaf Scholz indicated that Europe’s largest economy would be willing to take fiscal measures if a recession loomed, shifting the government’s tone. Meanwhile, the People’s Bank of China announced a program of interest rate reform aimed at stimulating an economy reeling from the impact of the trade war.

U.S. consumers to the rescue

Strong retail sales figures for July suggested that U.S. consumers are continuing to prop up the economy, partially offsetting the drag on business confidence from the U.S.-China trade conflict. Sales climbed 0.7% month-on-month in July, a fifth successive increase, reiterating the American consumer’s role in providing lifeblood to the economy. A note from UBS Global CIO Mark Haefele on Monday said this reinforces belief that the U.S. economy should avoid a recession. Assuming no trade war escalation, UBS has assigned just a 25% chance that the U.S. economy will contract for two consecutive quarters in 2020. “But despite the strength of the consumer side of the U.S. economy, we do expect falling business activity to pull U.S. growth below trend, forcing the Fed to cut rates more than we had previously expected,” Haefele added.

However, latest data showed that factory output fell by 0.4% in July, while manufacturing output has now contracted in five of the past seven months, mirroring a broader slowdown worldwide led by China and Germany. What’s more, a swift resolution to the trade war remains unlikely, Haefele suggested, meaning business investment will remain subdued globally, delaying an expected pick-up in growth which had been anticipated for the second half of 2018. UBS now expects U.S. economic growth of around 1.8%, below trend, in 2020. “So, while we don’t believe a recession is looming, and we remain cautiously positive on global equities, we now expect a longer period of lower rates,” the note said, adding that UBS now expects the U.S. Federal Reserve to cut rates by 25 basis points three more times – in September, December and March.

Robust underlying factors

HSBC Global Asset Management has also played down the risk of recession, both stateside and globally, retaining a pro-risk stance in its multi-asset portfolios. Global co-CIO Joseph Little highlighted on Monday that equity markets have performed well year-to-date, despite this month’s sell-off. He added that the “valuation gap between equities and relatively expensive bonds continues to increase,” but advocated a more cautious short-term approach given the downside risks to growth. “The global economy is in a difficult place, but investor pessimism could be overdone. Looking at the growth outlook, US activity is being buttressed by a solid labor market,” Little said. “Meanwhile, the recent weakness in euro zone data has been driven mainly by a large downturn in the industrial sector.” While there is no clear indication of a turnaround here, the services sector remains robust, offsetting the impact of dwindling industrial performance.

Furthermore, muted global inflation trends have kept the door ajar for further monetary policy easing, and Little suggested that alongside an expected further Fed rate cut and a stimulus package from the European Central Bank (ECB) this year, fiscal policy could also play an increasingly important role. For instance, the U.K. government has signaled a large program of spending and tax cuts, while Germany has now indicated that it is prepared to deploy fiscal stimulus should its economy continue to lag. With regards to bond yields, which touched all-time lows across Europe last week, Little said there is no precedent for an inversion at such low government bond yields, but “yield curves have to invert further before they reach the levels that have preceded previous recessions.” An inverted yield curve is generally considered a recession predictor. When short-term yields climb over longer-dated yields, it shows that borrowing costs in the shorter-term are more than the longer term. In these cases, businesses could find it more expensive to expand their operations. Meanwhile, consumer borrowing could also fall, thus leading to lesser consumer spending in the economy. All of these could lead to a subsequent contraction in the economy and a rise in unemployment.

New all-time highs for equities in 2020

While respecting the historical significance of the U.S. yield curve inversion in preceding recessions, J.P. Morgan equity strategists led by Mislav Matejka highlighted a number of variables which at present are inconsistent with such events. “Typically, the curve inversion is a sign that real policy rates have become too high; lending conditions are tightening and banks are beginning to restrict access to credit; high yield credit spreads are worsening; and the labor market has started to deteriorate,” Matejka said in a note on Monday. “This time around, high yield spreads are well behaved, real rates are not much above zero, and claims remain resilient.”


Company: cnbc, Activity: cnbc, Date: 2019-08-19  Authors: elliot smith
Keywords: news, cnbc, companies, trade, yields, say, suggested, yield, economists, warranted, caution, economy, avoid, recession, global, rates, ubs, growth


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post