2023-11-24 11:06
LONDON, Nov 24 (Reuters) - Investors have poured $40 billion into stocks since Oct. 9, the biggest two-week inflow since February 2022, as equities rallied, Bank of America said on Friday. In the four trading sessions to Tuesday, investors put $16.5 billion into stock funds, BofA said in its weekly Flow Shows research note, citing figures from financial data provider EPFR. Global stocks have surged since the end of October as data has shown U.S. inflation is cooling faster than expected. That has raised hopes among investors that central banks might start cutting interest rates by the middle of 2024. The U.S. S&P 500 stock index (.SPX) has risen 8.6% so far in November, putting it on track for its biggest monthly gain since July 2022. MSCI’s index of global stocks (.MIWD00000PUS), up 8.5% so far, looks set for its biggest monthly rise in three years. Cash funds continued to attract investors, with $40 billion of inflows across the week, BofA said. They currently have juicy yields due to high central bank interest rates. Investors put $4 billion into bond funds, with investment grade corporate bonds receiving $3.1 billion in the biggest inflow in 15 weeks. There were slight outflows from Treasury funds. Bank of America said its ‘Bull and Bear’ indicator was no longer giving a contrarian “buy” signal, after the rush into stocks in recent weeks. https://www.reuters.com/markets/investors-pour-40-billion-into-stocks-two-weeks-markets-surge-bofa-2023-11-24/
2023-11-24 11:04
NEW YORK, Nov 24 (Reuters) - Signs the U.S. stock market rally is broadening from the so-called Magnificent Seven of mega-cap growth and technology companies is bolstering investor hopes for a rally through year-end. Equities have risen sharply, with the S&P 500 (.SPX) up over 8% in November, on the cusp of a new high for 2023, fueled by falling Treasury yields and cooling inflation readings that could signal the end of Federal Reserve rate hikes. Yields fall when Treasury prices rise, and the lower returns on guaranteed fixed-income investments make stocks more appealing. While some big investors are skeptical the rally amounts to more than just a year-end rebound, recent signs of market strength include gains in areas that have lagged this year. In one encouraging sign, about 55% of the S&P 500 were trading above their 200-day moving averages as of Monday. That level breached 50% last week for the first time in nearly two months, according to LPL Financial. "Breadth is finally starting to broaden out to levels more commensurate with bull markets," said Adam Turnquist, chief technical strategist at LPL Financial. "This has been one of the keys to calling this recovery sustainable." Among other signs, the equal-weight S&P 500 (.SPXEW) -- a proxy for the average stock in the index -- rose 3.24% last week. That was substantially more than the 2.24% rise for the market-cap weighted S&P 500 (.SPX), the biggest percentage point outperformance for the equal-weight index in nearly five months. Even so, the S&P 500 equal-weight index has gained just 3% in 2023 against an 18% rise for the overall S&P 500 -- on pace for the biggest such annual percentage-point gap in 25 years. Much of that underperformance is due to the outsized gain in the Magnificent Seven stocks, which collectively hold a 28% weight in the S&P 500 index: Apple (AAPL.O), Microsoft (MSFT.O), Alphabet (GOOGL.O), Amazon (AMZN.O), Nvdia (NVDA.O), Meta Plaforms (META.O) and Tesla (TSLA.O). Overall, the group of stocks makes up nearly 50% of the weighting of the Nasdaq 100, which is up nearly 47% for the year to date. Struggling small-cap and bank stocks have perked up, especially after last week's U.S. consumer price data for October was unchanged from the prior month. The small-cap Russell 2000 (.RUT) is up 5.5% since the CPI data with the S&P 500 banks index (.SPXBK) up 6.5%, versus a 3% rise for the S&P 500. Year-to-date, the Russell 2000 is up 2%, while the S&P 500 banks index has fallen over 6%. Mona Mahajan, senior investment strategist at Edward Jones, said an environment that could be conducive for a broadening of the rally "is starting to take shape." “This environment where rates are cooling, inflation is moderating and the Fed is on the sidelines, that is typically a good backdrop for risk assets,” Mahajan said. “Typically when rates start to move lower, you get valuation expansion and the areas that we could see some more meaningful valuation expansion is outside of large-cap tech,” she said. The equal-weight S&P 500 is trading at a 5% discount to its 10-year average forward price-to-earnings ratio, according to Edward Jones. Still, there are reasons to think that the market rally is not on the verge of a sustained broadening. Investors will get further readings of consumer confidence and inflation next week. Stronger than expected data could spur a selloff in Treasuries, sending yields higher. At the same time, the sharp rally in stocks for the week ended Nov. 17 was accompanied by high demand for upside call options, particularly in parts of the market that have underperformed this year, such as the small-caps focused iShares Russell 2000 ETF (IWM.P). Some of that has already started to unwind. "We saw a huge pickup in expectations for IWM, but now those seem to have stabilized," said Steve Sosnick, chief strategist at Interactive Brokers. The recent surge, which has pushed the broad S&P 500 up approximately 10% over the last three weeks, may not last as investors prepare to close their books for the year, said Jason Draho, head of asset allocation Americas at UBS Global Wealth Management. "A lot of good news is already priced in and investors may be reluctant to chase the rally," he said. https://www.reuters.com/markets/us/wall-st-week-ahead-broadening-us-stock-rally-feeds-investor-optimism-2023-11-24/
2023-11-24 11:02
A look at the day ahead in U.S. and global markets from Mike Dolan As Americans take a quick peek at markets on Friday before resuming a long Thanksgiving weekend, the takeaway will be sustained stock gains, punchier bond yields and a deepening underperformance of Chinese equities. U.S. financial markets re-open after Thanksgiving for a truncated "Black Friday" trading session, where there will likely be as much focus on demand on High Street as Wall St. But subdued market volatility, that saw the VIX "fear index" (.VIX) clock a post-pandemic closing low on Wednesday at just 12.75, was helped by signs of some calming of geopolitical tensions. A four-day ceasefire between Israel and Hamas appeared to be holding shakily on Friday with no major reports of attacks, although both sides were accused of violations. Oil prices, which had lunged sharply lower again over the past two days amid a chaotic postponement of this weekend's OPEC+ meeting, held steady on Friday and U.S. crude hovered just above $76 per barrel. But with seasonal retail now in focus for many stock and economy watchers, S&P500 futures were higher ahead of the open and look set to extend gains to their highest in almost four months - and potentially on course for their best month in three years. Better-than-forecast flash European business readings for November, released on Thursday, tee up equivalent surveys later in the day for the United States and may be contributing to a back-up in bond yields. With some $148 billion of new 2-, 5- and 7-year Treasury notes up for auction next week, benchmark 10-year yields were about 5 basis points higher at 4.48% ahead of Friday's shortened session. The dollar index (.DXY) remained under wraps, however, and edged lower. But with most overseas stocks steady to higher, perhaps the most eye-catching moves involved the relentless drain on Chinese stocks (.CSI300) - which recorded their lowest close in almost a month and are now underperforming the MSCI all-country index (.MIWD00000PUS) by almost 20% for 2023 to date. With data showing plunging foreign direct investment into the world's second-largest economy this year, Friday saw overseas investors selling another net 6.2 billion yuan ($859.79 million) of Chinese shares via the Stock Connect - the biggest daily outflow in more than one month. The decline marked yet another investor shrug at reports of further official moves to shore up China's ailing property sector. The Hang Seng Mainland Properties Index (.HSMPI) dropped 2.2% even after Bloomberg News reported on Thursday that Beijing might allow banks to offer unsecured short-term loans to qualified property developers for the first time. Tension ahead of next year's Taiwan elections didn't help. Taiwan opposition parties, which seek closer China ties, registered separate presidential candidates on Friday after a dramatic split, potentially easing the way for the ruling party, which has defied Beijing's pressure, to stay in power. U.S. chip giant Nvidia has told customers in China it is delaying the launch of a new artificial intelligence chip it designed to comply with U.S. export rules until the first quarter of next year, according to Reuters sources. In Europe, data showed Germany's economy shrank slightly in the third quarter, confirming an initial estimate of a 0.1% fall. Finance Minister Christian Lindner is set to propose a supplementary budget for this year, which includes the suspension of limits on new borrowing after a budgetary crisis caused by a court ruling last week. Dutch party leaders met on Friday for the first time since anti-Islam populist Geert Wilders won Wednesday's elections to begin the difficult and lengthy process of building a coalition. In banking, Britain's Barclays (BARC.L) is working on plans to save up to 1 billion pounds ($1.25 billion) - which could involve cutting as many as 2,000 jobs, mainly in the British bank's back office. Key developments that should provide more direction to U.S. markets later on Friday: * U.S. flash Nov business surveys from S&PGlobal * European Central Bank vice president Luis de Guindos and Bank of Spain governor Pablo Hernandez de Cos speak * U.S. corporate earnings: HWorld https://www.reuters.com/markets/us/global-markets-view-usa-pix-graphics-2023-11-24/
2023-11-24 10:56
SARAJEVO, Nov 24 (Reuters) - A court in Montenegro said on Friday it had approved the extradition of cryptocurrency entrepreneur Do Kwon, leaving a minister to decide if he will be handed over to South Korea or the United States, which both want him. Do Kwon, who is charged in the U.S. with a multibillion-dollar fraud, and his ally were sentenced in June to four months in prison for using forged passports. Police said after arresting them they had found doctored Costa Rican passports, a separate set of Belgian passports, laptop computers and other devices in their luggage. At a hearing in May, the defendants denied the charges pressed by the Montenegrin prosecutor. Kwon's lawyers did not immediately respond to requests for comment when the U.S. charges were announced, but a spokesperson for the company he founded, Terraform Labs, said in July it would fight the "misguided and deeply flawed" U.S. allegations. The High Court in the Montenegrin capital Podgorica said on Friday Do Kwon had agreed to be extradited to South Korea under an abbreviated procedure but that the justice minister would have the final say as multiple states have requested his handover. The decision will be made after Do Kwon completes serving his prison sentence for document forgery, the court said. Do Kwon´s lawyer in Podgorica was not immediately available to comment. A South Korean national, Kwon is the former CEO of South Korea-based Terraform Labs, the company behind the stablecoin TerraUSD that collapsed in May 2022, roiling cryptocurrency markets. He was detained in late March along with Han Chang-joon, Terraform Labs' former finance officer, as they tried to board a flight to Dubai from Podgorica. Following Kwon's arrest, the U.S. District Court in Manhattan made public an eight-count indictment against him for securities fraud, wire fraud, commodities fraud and conspiracy. In late May, a Montenegrin court scrapped a bail of 800,000 euros for the pair, saying it could not be taken as a solid guarantee, nor their promise they would not run away once released from detention. https://www.reuters.com/world/europe/montenegro-court-approves-extradition-cryptocurrency-king-do-kwon-2023-11-24/
2023-11-24 10:56
LONDON, Nov 24 (Reuters) - Tax cuts announced by Britain's government this week will not held rebuild its diminished fiscal headroom, rating agency S&P Global said on Friday, although its finances will get a boost if the UK economy does better than expected next year. "Stabilizing or reducing public debt levels will remain a key challenge," S&P added, which currently has a AA rating for the UK and a "stable" outlook, which signals it is not expected to move in either direction in the near term. https://www.reuters.com/world/uk/tax-cuts-wont-help-rebuild-uks-diminished-fiscal-headroom-sp-global-2023-11-24/
2023-11-24 10:47
KYIV, Nov 24 (Reuters) - Ukraine's top truckers union said on Friday its hopes of a rapid end to Polish trucker protests at the border were fading, as Kyiv prepared to evacuate its hauliers stranded in Poland. Two Ukrainian drivers have died and thousands of trucks have been stuck for days in the winter cold as Polish truckers have blocked the roads to four crossings on the border, a key route for Ukrainian trade during Russia's full-scale invasion. "Frankly speaking, the more we talk to them the less hope we have," Leonid Kostiuchenko, president of the Ukrainian Association of International Carriers, said in an interview on national television. "I spoke to the leader of the protesters and his attitude is that we will block for such a long time that you will... celebrate New Year in a queue. I don't understand this humour." The Polish truckers say they are losing out to Ukrainian companies who offer a cheaper rate and are now transporting goods within the European Union, and not just back and forth to Ukraine. They launched their blockade on Nov. 6, protesting that Ukrainian truckers are exempt from requiring permits to cross the Polish border, a policy change put in place during the war. The Polish protests coincide with concerns in Ukraine that the European Union may not agree next month to launch formal accession talks for it to join the 27-member bloc, a key objective for Kyiv. If the protests drag on for weeks longer, the disruption to trade could affect Ukraine's fragile, wartime economy. The price of motor vehicle gas (LPG), which is widely used to fuel cars, has already surged 30% due to the protests, one fuel analyst said this week. RUNNING OUT OF TIME Some 3,000 Ukrainian haulers are backed up at the border on the Polish side waiting to cross at four checkpoints, Kostiuchenko said. Deputy Infrastructure Minister Serhiy Derkach said late on Thursday that Ukrainian truckers were suffering in bitter, sub-zero temperatures and that there were no food supplies, basic sanitary conditions or ambulances at the scene. "For our part, we have started collecting data for the evacuation of our drivers. We have already run out of time to agree on compromises," Derkach wrote on Facebook. However he added that "local authorities" in Poland had authorised the protests to continue. "Therefore, we will evacuate everyone who expresses such a desire, and we are distributing evacuation forms to drivers and carriers," he said. The truckers union says two Ukrainian truckers have died in their vehicles since the beginning of the blockade. The exact cause of their deaths is unknown, though Polish media have cited police as saying one of them was not connected to the protests. https://www.reuters.com/world/europe/ukraine-ready-evacuate-stranded-truckers-polish-protests-persist-2023-11-24/
