2023-11-22 02:56

Govt advisers to recommend 2024 growth targets of 4.5-5.5% China to rely on fiscal spending to drive growth next year PBOC may play supporting role with modest policy easing BEIJING, Nov 22 (Reuters) - Chinese government advisers will recommend economic growth targets for next year ranging from 4.5% to 5.5% to an annual policymakers' meeting, as Beijing seeks to create jobs and keep long-term development goals on track. Five of the seven advisers who spoke with Reuters said they favoured a target of around 5%, matching this year's goal. One adviser will propose a 4.5% target, while the other suggested a 5.0-5.5% range. The proposals will be made next month at the ruling Communist Party's annual Central Economic Work Conference that discusses policy plans and the outlook for the world's second-largest economy. Reaching such targets would require Beijing to step up fiscal stimulus, the advisers said, given that this year's growth has been flattered by last year's low-base effect of COVID-19 lockdowns. "We need to adopt expansionary fiscal and monetary policy to stimulate aggregate demand," Yu Yongding, a government economist who advocates for a growth target of roughly 5%, told Reuters. "Corporate investment demand will not be strong as the confidence of companies has not recovered, so we need to expand infrastructure investment," added Yu, who also favours a budget deficit topping 4% of economic output. The other advisers spoke on condition of anonymity due to the closed-door nature of the discussions. Top leaders are expected to endorse the target at the December meeting, although it will not be announced publicly until China's annual parliament meeting, usually held in March. In October, China unveiled a plan to issue 1 trillion yuan ($139 billion) in sovereign bonds by the end of the year, raising the 2023 budget deficit target to 3.8% of gross domestic product (GDP) from the original 3%. Chinese leaders have pledged to "optimize the structure of central and local government debt", suggesting the central government has room to spend more as its debt as a share of GDP is just 21%, far lower than 76% for local governments. "We are stepping up fiscal policy support," said another adviser, to make the "difficult" 2024 target "achievable." Monetary stimulus is expected to play a more limited role as the central bank remains concerned a widening interest rate differential with the West may further weaken the yuan and encourage capital outflows. "The space for monetary policy could be bigger if we have greater tolerance for exchange rate fluctuations," said Guan Tao, global chief economist at BOC International and a former official at the State Administration of Foreign Exchange (SAFE). REFORMS VS STIMULUS China’s economy grew only 3% in 2022, one of its worst performances in nearly half a century. A Reuters poll in October showed that economists expect it to grow 5.0% in 2023 and 4.5% in 2024, although some have since raised their forecasts. In 2022, President Xi Jinping laid out a long-term vision of "Chinese-style modernisation" at a key party meeting, with a goal of doubling China's economy by 2035 that government economists say would require average annual growth of 4.7%. The stuttering post-COVID recovery has prompted many analysts to call for structural reforms that tilt the drivers of economic growth away from property and infrastructure investment and towards household consumption and market-allocation of resources. Absent that, these economists warn, China may begin flirting with Japan-style stagnation later this decade. Beijing has been trying to reduce economic reliance on property, channelling more resources into high-tech manufacturing and green industries, but has struggled to boost consumer and investor sentiment. Policy insiders believe more fundamental changes, especially a revival of market-oriented reforms, are unlikely due to the political environment, under which the state has increased its control over the economy, including the private sector. "If there is no consensus on reforms, we will have to use stimulus to drive growth, even though it will not be sustainable,” a third adviser said. ($1 = 7.2111 Chinese yuan renminbi) https://www.reuters.com/world/china/china-govt-advisers-call-steady-growth-target-2024-more-stimulus-2023-11-22/

2023-11-22 02:54

MUMBAI, Nov 22 (Reuters) - The Indian rupee is likely to open nearly flat on Wednesday in the wake of weakness in Asian peers and Federal Reserve minutes that had little impact on interest rate expectations. Non-deliverable forwards indicate rupee will open at around 83.32-83.35 to the U.S. dollar compared with 83.3550 in the previous session, which was a record closing low. The rally in Asian currencies took a breather and the dollar index managed a bit of a recovery. The Indonesian rupiah was down nearly 1%, pacing losses in Asia, while the dollar index inched up to 103.60, having dropped to a two-and-a-half month low on Tuesday. The rupee "is in a phase where outside cues do not matter" and "it will just meander in a narrow range," a spot forex trader at a bank said. "There is no point in trading the USD/INR when volatility is this low." The 30-day annualize realized volatility on USD/INR is at just 1%, the lowest it has been in nearly 20 years. The beta or the rupee's sensitivity to moves on the dollar has been low. Minutes of the Fed's Oct. 31-Nov. 1 meeting indicated that all policymakers agreed that the central bank should proceed "carefully" and only raise interest rates if progress in controlling inflation faltered. The minutes drew little reaction, considering that investors have already discounted that the Fed will not be making changes to the policy rate at the December or January meeting. There was no impact on the rate cut expectations for next year. Investors are pricing in a rate cut at the May or June meeting and expect a total of 90 basis points of cuts in 2024. "The FOMC (Federal Open Market Committee) minutes largely reaffirmed the Fed’s more cautious tone around tightening, which kept expectations well-anchored for further rate hold over coming meetings," Yeap Jun Rong, market strategist at broker IG Asia, said. KEY INDICATORS: ** One-month non-deliverable rupee forward at 83.38; onshore one-month forward premium at 6.5 paisa ** Dollar index inches up to 103.60 ** Brent crude futures down 0.2% at $82.3 per barrel ** Ten-year U.S. note yield at 4.41% ** As per NSDL data, foreign investors sold a net $71.8 mln worth of Indian shares on Nov. 20 ** NSDL data shows foreign investors sold a net $4.1 mln worth of Indian bonds on Nov. 20 https://www.reuters.com/markets/currencies/india-rupee-gauges-pause-rally-asian-peers-fed-minutes-2023-11-22/

2023-11-22 01:11

Nov 21 (Reuters) - Warren Buffett said on Tuesday he has donated about $866 million of Berkshire Hathaway (BRKa.N) stock to four family charities, and told shareholders "I feel good" as he moves nearer the sunset of his storied investing career. In a regulatory filing, the company said Buffett donated 1.5 million Class B shares of Berkshire to the Susan Thompson Buffett Foundation. Named for his late first wife, the organization works in reproductive health. Buffett donated another 900,000 Class B shares, divided evenly among charities run by his children, Howard, Susan and Peter: the Howard G. Buffett Foundation, the Sherwood Foundation and the NoVo Foundation. The donations supplement the $759 million of Berkshire stock that Buffett donated to the charities at this time last year, also just before the U.S. Thanksgiving Day holiday. Buffett also issued a rare letter to shareholders, again pledging that more than 99% of his wealth would go to charity, with his children serving as executors of his will. He said Berkshire was "built to last" and would remain in good hands. While Buffett has curbed his non-Berkshire responsibilities over the years, he has never publicly signaled a desire to step down, including after a prostate cancer diagnosis in 2012. "At 93, I feel good but fully realize I am playing in extra innings," Buffett said in the letter. Buffett has over the years often referred to his success at remaining healthy despite having the eating habits of a 6-year-old, including a love of junk food and sugary drinks. "I think happiness makes an enormous amount of difference in terms of ... longevity," he told CNBC in April. "I'm happier when I'm eating hot fudge sundaes or drinking Coke." Berkshire did not immediately respond to a request for additional comment. Greg Abel, 61, a Berkshire vice chairman, is slated to succeed Buffett as Berkshire's CEO, while Howard Buffett would become non-executive chairman. "We have the right CEO to succeed me and the right board of directors," Buffett wrote. Buffett is the world's fifth richest person, with a $120.5 billion fortune, according to Forbes magazine. Since 2006 he has donated more than half his Berkshire stock to the family charities and the Bill & Melinda Gates Foundation. The donations totaled close to $52 billion at the time they were made, with the Gates Foundation receiving more than $39 billion. Buffett has run Omaha, Nebraska-based Berkshire since 1965. The conglomerate owns dozens of businesses including the BNSF railroad, Geico car insurance, energy and industrial companies, and familiar consumer brands such as Dairy Queen and Fruit of the Loom. It also recently owned more than $318 billion of stocks, about half of which was Apple (AAPL.O). The Howard G. Buffett Foundation focuses on alleviating hunger, mitigating conflicts, combating human trafficking and improving public safety. The Sherwood Foundation supports nonprofits in Nebraska, and the NoVo Foundation has initiatives focused on girls and women. https://www.reuters.com/business/warren-buffett-says-berkshire-has-right-ceo-succeed-billionaire-2023-11-21/

2023-11-22 00:30

Nov 21 (Reuters) - Tema ETFs has launched a new exchange traded fund (ETF) that tracks popular drugmakers like Novo Nordisk (NOVOb.CO) and Eli Lilly (LLY.N), aiming to tap into growing demand for their weight-loss and diabetes drugs. The Tema Cardiovascular & Metabolic ETF (HRTS.O) invests in companies tackling diabetes, obesity and cardiovascular diseases, according to the New York-headquartered platform's website. Shares in Eli Lilly and Novo Nordisk, which are among the fund's top holdings, have rallied 63% and 50%, respectively, so far this year after their treatments like Ozempic, Wegovy and Mounjaro proved effective in treating diabetes and weight loss and may also help cut the risk of stroke or heart attack. The advances of the class of weight-loss and diabetes therapies known as GLP-1 receptor agonists, are only the tip of the iceberg, said David K. Song, investment partner and head of life sciences at Tema ETFs. "With tools like gene editing, genetic medicines, we have commercial validation of weight loss therapies and an overall renaissance in the field of cardiovascular innovation," he added. "We see significant long term opportunities in this area of life sciences over the next several years." As the global obesity crisis gathers pace, Morgan Stanley Research expects the market for obesity drugs to surge to $77 billion in 2030 from $2.4 billion in 2022, according to a note earlier this year. Other ETFs like the VanEck Pharmaceutical ETF (PPH.O), which has Novo Nordisk among its biggest holdings and total assets of $383.81 million, has seen net inflows of nearly $26 million from August, according to Lipper data. The Tema fund has a net expense ratio of 0.75%. https://www.reuters.com/business/healthcare-pharmaceuticals/tema-etfs-hops-weight-loss-drug-frenzy-with-its-new-cardiovascular-fund-2023-11-21/

2023-11-21 23:59

WASHINGTON, Nov 21 (Reuters) - A severe storm system moving up the eastern seaboard of the United States on Tuesday appeared likely to disrupt the busiest travel period of the year, with more than 55 million people expected to travel before the Thanksgiving holiday. Thunderstorms were forecast from the lower Mississippi Valley to the mid-Atlantic region from Tuesday through Wednesday morning, while snow was expected to fall on parts of northern New England, the U.S. National Weather Service said. The severe weather was likely to cause delays and additional congestion during what the AAA group expects to be the busiest travel period in the country since 2019, before the COVID-19 pandemic. Industry group Airlines for America forecast that U.S. airlines would carry some 29.9 million passengers between Nov. 17 and Nov. 27. That would be an all-time high, up 9% over the 27.5 million in the same period last year and up 1.7 million passengers over pre-COVID record levels. Most of those traveling were expected to drive, AAA said, possibly motivated by a drop in gasoline prices from 2022. Around 49 million Americans were expected to get behind the wheel between Nov. 22 and Nov. 26, up 1.7% from the corresponding period in 2022, AAA said. The heaviest rain and worst driving conditions were likely to be concentrated around the Interstate 95 corridor between Washington and New York, from Tuesday night into early Wednesday morning, said Andrew Orrison, a meteorologist with the National Weather Service. "You're going to have some ponding of water on the roads, especially for the major metropolitan areas," Orrison said. TRAVEL BOUNCES BACK The number of Americans traveling around the holidays has rebounded in full force since the pandemic stymied the travel industry in 2020, AAA's tracking shows. The Federal Aviation Administration on Tuesday said the bad weather would likely cause delays at some airports. The flight tracking website Flightaware showed 60 U.S. flights had been canceled on Tuesday and more than 3,600 delayed. Los Angeles International Airport was expecting 2.5 million passengers in the Thanksgiving travel period, or 92% of its record-setting year of 2019, spokesperson Victoria Spilabotte said. Still, many Americans are willing to brave the crowds to meet with distant family. "It's really hard traveling with a baby for Thanksgiving. I wouldn't recommend it but we're really excited to go see our family," said Ariannah Todd, who was traveling to San Francisco with her husband and nine-month-old baby. https://www.reuters.com/world/us/eastern-us-storms-could-disrupt-years-busiest-travel-period-2023-11-21/

2023-11-21 23:43

Best Buy down on weak outlook Kohl's slips on quarterly sales miss Indexes: Dow down 0.2%, S&P 500 down 0.2%, Nasdaq down 0.6% NEW YORK, Nov 21 (Reuters) - U.S. stocks retreated on Tuesday, with the S&P 500 and Nasdaq snapping five-session winning streaks as retailers declined after some disappointing outlooks and as technology shares fell. Indexes stayed lower after minutes from the latest Federal Reserve meeting showed officials agreed to take a cautious approach to raising U.S. interest rates going forward. U.S. central bank officials also said they would only raise interest rates if progress in controlling inflation faltered, according to minutes from the Oct. 31-Nov. 1 meeting. Stocks had been rallying in recent sessions largely on the view that the Fed may be done hiking rates. "We've had a big move," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles. "The absence of anything to further drive the market higher today is kind of leading to underwhelming price action and some slight profit-taking," he said, ahead of quarterly results and guidance from Nvidia (NVDA.O) after the closing bell. Shares of Nvidia, considered a leader in artificial intelligence chips, ended the regular session down 0.9%, and an index of semiconductors (.SOX) fell 1.9%. Nvidia's shares were down about 2% after the closing bell following the company's quarterly report and guidance. During the regular session, shares of Lowe's Cos (LOW.N) fell 3.1% after the home improvement chain projected a bigger drop in annual comparable sales than previously expected and trimmed its profit forecast for the year. The Dow Jones Industrial Average (.DJI) fell 62.75 points, or 0.18%, to 35,088.29, the S&P 500 (.SPX) lost 9.19 points, or 0.20%, to 4,538.19 and the Nasdaq Composite (.IXIC) dropped 84.55 points, or 0.59%, to 14,199.98. The S&P 500 retail index (.SPXRT) was down 1.2% on the day. Best Buy (BBY.N) shares slipped 0.7% after the electronics retailer said it expects a steeper drop in annual comparable sales. Kohl's Corp (KSS.N) shares dropped 8.6% after the company missed third-quarter sales estimates. Volume on U.S. exchanges was 9.40 billion shares, compared with the 10.93 billion average for the full session over the last 20 trading days. Declining issues outnumbered advancing ones on the NYSE by a 1.76-to-1 ratio; on Nasdaq, a 2.29-to-1 ratio favored decliners. The S&P 500 posted 30 new 52-week highs and no new lows; the Nasdaq Composite recorded 56 new highs and 125 new lows. https://www.reuters.com/markets/us/futures-drift-lower-nvidia-results-fed-minutes-loom-2023-11-21/