The Guardian (July 7)
“Fears of a recession have fallen away, with economists saying Australia is set to safely navigate the biggest global oil supply shock in history even as they warn of substandard growth in the year ahead. The de-escalation of the Middle East conflict has been accompanied by a major retreat in global oil prices back to prewar levels, essentially removing the worst-case scenarios.” But pessimism still runs deep amongst households, with consumer confidence at roughly “a 50-year low as many Australians struggle to cope with substantially higher prices after years of above-average inflation.”
Tags: Australia, Consumer confidence, Cope, De-escalation, Economists, Fears, Global oil prices, Households, Inflation, Middle East conflict, Pessimism, Recession, Retreat, Struggle, Supply shock
Institutional Investor (June 11)
“De-dollarization doesn’t mean capital is leaving America.” Investment decisions are often deceptively labeled de-dollarization even though the capital remains in the U.S. and is simply “changing form, swapping fixed financial claims on dollars for ownership of assets that generate cash flow and reprice with inflation.” Sovereign wealth funds and other institutional investors haven’t dumped dollars, “but increasingly avoid holding dollar claims. Bonds are giving way to utilities, pipelines, and logistics networks. Investors are moving away from returns locked in nominal dollars into assets whose income adjusts with inflation.”
Tags: Adjusts, Assets, Capital, Cash flow, Claims, De-Dollarization, Fixed financial claims, Income, Inflation, Investment decisions, Nominal dollars, Ownership, Reprice, Returns, Sovereign wealth funds, U.S.
MarketWatch (May 30)
“Rising gas prices and inflation are causing a majority of U.S. households to fall behind financially… and the longer the situation goes on, the more stress it will place on the economy.” According to Gregory Daco, chief economist at EY Parthenon, the U.S. expansion is supported by a fragile pillar formed by “Three A’s,” namely “Affluent consumers, AI investment and Asset appreciation.” This pillar “masks an important reality. A huge swath of middle-class and lower-income families with little or no savings in stocks have not benefited much from the bull market or the AI boom.”
Tags: Affluent consumers, AI boom, AI investment, Asset appreciation Savings, Bull market, Daco, Economist, Economy, Expansion, Fragile, Gas prices, Households, Inflation, Pillar, Stocks, Stress, Three A’s, U.S.
Barron’s (May 27)
“Stocks are near their all-time highs.” Moreover, “investors are nervous about the numerous risks that could hit stocks and the economy. High oil prices and persistent inflation fears. The possibility that this will push the Federal Reserve to raise interest rates. Worries about artificial-intelligence disrupting software and other sectors.” Nevertheless, Goldman Sachs believes equities “are still good investments” because “rapidly rising earnings could keep pushing up stock prices” and, rather than dumping equities, investors can manage risk in other ways.
Tags: AI, All-time highs, Earnings, Economy, Equities, Fears, Fed, Goldman Sachs, Inflation, Interest rates, Investors, Nervous, Numerous, Oil prices, Stock prices, Stocks
The Times (May 27)
“Corporate leaders who think decades ahead in business become incredibly short-sighted in advocacy, financing ideas that become roadblocks to innovation and growth.” Big Tech is currently finding out about the phenomena that Milton Friedman dubbed “the suicidal impulse of the business community.” For years, Big Tech “helped fund climate activism,” but they now face “backlash as AI data centres drive demand for energy and infrastructure growth.”
Tags: AI, All-time highs, Earnings, Economy, Equities, Fears, Fed, Goldman Sachs, Inflation, Interest rates, Investors, Nervous, Numerous, Oil prices, Risk, Stock prices, Stocks
Reuters (May 22)
“Asia buys about 80% of oil shipped through the shuttered Strait of Hormuz and stress in foreign exchange markets is one of the clearest signs that rising fuel prices are starting to hurt growth.” Asian governments have been left in “an unenviable position. The path to preserving growth is precarious because falling currencies can shake confidence and stoke inflation, but supporting them with higher rates means a hit for consumers and the economy’s growth engine on top of the fuel shock.”
Tags: Asia, Confidence, Consumers, Currencies, Forex, Governments, Growth, Inflation, Markets, Oil, Precarious, Prices, Rates, Shuttered, Strait of Hormuz, Unenviable
Bloomberg (May 21)
“The euro area will slow markedly while suffering the fastest inflation since 2023 as it succumbs to the energy-cost surge from the Iran war.” The European Commission issued new EU forecasts predicting that “output will rise 0.9% this year, notably below the 1.4% expansion last year, and 0.3 percentage points lower than expected in November. For 2027, it revised its outlook down to 1.2%.”
Tags: 2023, 2027, Energy-cost surge, EU, European Commission issued, Forecasts, Inflation, Iran war, Markedly, Output, Slow, Succumbs, Suffering
Bloomberg (May 9)
“A fresh batch of consumer price data in the coming week is likely to affirm Americans’ growing frustration with inflation.” According to a Bloomberg survey, economists are predicting “a sharp 0.6% increase in the consumer price index for April” as “prices at the gas pump have vaulted more than 50% since the US- and Israeli-led war on Iran started in late February.” Moreover, this is likely to begin filtering through to the broader economy. “The swift upturn in fuel prices is likely to be passed on by businesses in the form of higher consumer prices for other goods and services.”
Tags: April, Broader economy, Consumer prices, Economists, Fuel prices, Gas pump, Goods, Growing frustration, Inflation, Iran, Israel, Prices, U.S., Upturn, War
Los Angeles Times (May 4)
“Inflation surged to 3.5% in March — the highest level in nearly three years — as gas prices climbed above $4.40 due to Middle East tensions, yet consumers barely flinched. The U.S. economy expanded at a 2% annual rate in the first quarter while unemployment claims hit a 50-year low, signaling unexpected resilience despite inflation pressures.”
Tags: Consumers, Economy, Expanded, Gas prices, Inflation, March, Middle East, Q1, Surged, Tensions, U.S., Unemployment claims, Unexpected
Barron’s (April 5)
The global economy is in for a “crude awakening.” Even under the best (or least worst) scenario, the Iran “war will shave about a percentage point off global economic growth, taking it down to 2% this year. Growth forecasts for large, developed economies—Japan, France, Germany, Italy, and the United Kingdom—were modest before the war at around 1%. If the conflict extends past June, GDP growth for these countries could evaporate, while inflation keeps rising.”
Tags: 2%, Conflict, Crude awakening, Developed economies, Economic growth, Forecasts, France, GDP, Germany, Global economy, Inflation, Iran war, Italy, Japan, Scenario, UK
