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The Advertiser
a day ago
- Business
- The Advertiser
Markets rally on China-US trade hope, Iran peace deal
Global shares have rallied helped by signs of progress in US-China trade talks, while the dollar held close to its lowest levels in more than three years. World stock markets have rallied to record highs this week, as traders took confidence from a ceasefire between Iran and Israel and markets stepped up bets for US rate cuts. A trade agreement between the US and China on Thursday on how to expedite rare earth shipments to the US was also seen by markets as a positive sign, amid efforts to end the tariff war between the world's two biggest economies. Asian shares hit their highest in more than three years in early trading, and US stock futures pointed to a firm start for Wall Street shares. The pan-European STOXX 600 index was up 0.8 per cent on the day, set for a 1.1 per cent weekly gain - its best week since mid-May. London's FTSE 100 was up 0.5 per cent and Germany's DAX gained 0.6 per cent. The MSCI World Equity Index touched a fresh record high and was set for a weekly gain of 2.8 per cent. The S&P 500 index is up just 4.4 per cent this year overall, following a volatile first half of the year, dominated by US President Donald Trump's "Liberation Day" tariff announcement on April 2, which sent stocks plunging. "What we are having right now is potentially some optimism about some trade deals," said Vasileios Gkionakis, senior economist and strategist at Aviva Investors. "We have... come from quite low levels in the aftermath of the Liberation Day in April. To a certain extent we have also had some mini-selloff on the back of the events in the Middle East, and in that sense we're rebounding." Trump has set July 9 as the deadline for the European Union and other countries to reach a deal to reduce tariffs. Mark Haefele, Chief Investment Officer at UBS Global Wealth Management said that in the near-term, the firm saw greater upside potential in US and emerging markets than in Europe. The dollar remained on the backfoot, hovering near its lowest level in three-and-a-half years against the euro and sterling. The dollar index was down a touch on the day at 97.269 , holding near its lowest in more than three years. The euro was at $US1.1708 ($A1.7867), getting a lift after data showed French consumer prices rose more than expected in June. It held near multi-year peaks hit a day earlier. "We see the US dollar as unattractive," said Haefele at UBS Wealth Management. Markets are focused on US monetary policy, as traders weigh up the possibility of Trump announcing a new, more dovish chair of the Federal Reserve. Traders have stepped up their bets on US rate cuts, and are now pricing in 64 basis points (bps) of easing this year versus 46 bps expected on Friday. The dollar is having its worst start to a year since the era of free-floating currencies began in the early 1970s. "I don't think it's just the repricing of the Fed, I think there is a broader issue here of some tarnishing of US exceptionalism," Aviva Investors' Gkionakis said. Core PCE price data, the US central bank's preferred measure of inflation, is due later in the session. German 30-year government bond yields were on track for their biggest weekly increase in nearly four months after rising this week on expectations of increased borrowing by Germany's government. Oil prices meanwhile rose but were set for their steepest weekly decline since March 2023, as the absence of significant supply disruption from the Iran-Israel conflict saw any risk premium evaporate. Brent crude futures rose 0.5 per cent to $US68.06 ($A103.86) a barrel while US West Texas Intermediate crude was up by the same amount to $US65.54 ($A100.01). Global shares have rallied helped by signs of progress in US-China trade talks, while the dollar held close to its lowest levels in more than three years. World stock markets have rallied to record highs this week, as traders took confidence from a ceasefire between Iran and Israel and markets stepped up bets for US rate cuts. A trade agreement between the US and China on Thursday on how to expedite rare earth shipments to the US was also seen by markets as a positive sign, amid efforts to end the tariff war between the world's two biggest economies. Asian shares hit their highest in more than three years in early trading, and US stock futures pointed to a firm start for Wall Street shares. The pan-European STOXX 600 index was up 0.8 per cent on the day, set for a 1.1 per cent weekly gain - its best week since mid-May. London's FTSE 100 was up 0.5 per cent and Germany's DAX gained 0.6 per cent. The MSCI World Equity Index touched a fresh record high and was set for a weekly gain of 2.8 per cent. The S&P 500 index is up just 4.4 per cent this year overall, following a volatile first half of the year, dominated by US President Donald Trump's "Liberation Day" tariff announcement on April 2, which sent stocks plunging. "What we are having right now is potentially some optimism about some trade deals," said Vasileios Gkionakis, senior economist and strategist at Aviva Investors. "We have... come from quite low levels in the aftermath of the Liberation Day in April. To a certain extent we have also had some mini-selloff on the back of the events in the Middle East, and in that sense we're rebounding." Trump has set July 9 as the deadline for the European Union and other countries to reach a deal to reduce tariffs. Mark Haefele, Chief Investment Officer at UBS Global Wealth Management said that in the near-term, the firm saw greater upside potential in US and emerging markets than in Europe. The dollar remained on the backfoot, hovering near its lowest level in three-and-a-half years against the euro and sterling. The dollar index was down a touch on the day at 97.269 , holding near its lowest in more than three years. The euro was at $US1.1708 ($A1.7867), getting a lift after data showed French consumer prices rose more than expected in June. It held near multi-year peaks hit a day earlier. "We see the US dollar as unattractive," said Haefele at UBS Wealth Management. Markets are focused on US monetary policy, as traders weigh up the possibility of Trump announcing a new, more dovish chair of the Federal Reserve. Traders have stepped up their bets on US rate cuts, and are now pricing in 64 basis points (bps) of easing this year versus 46 bps expected on Friday. The dollar is having its worst start to a year since the era of free-floating currencies began in the early 1970s. "I don't think it's just the repricing of the Fed, I think there is a broader issue here of some tarnishing of US exceptionalism," Aviva Investors' Gkionakis said. Core PCE price data, the US central bank's preferred measure of inflation, is due later in the session. German 30-year government bond yields were on track for their biggest weekly increase in nearly four months after rising this week on expectations of increased borrowing by Germany's government. Oil prices meanwhile rose but were set for their steepest weekly decline since March 2023, as the absence of significant supply disruption from the Iran-Israel conflict saw any risk premium evaporate. Brent crude futures rose 0.5 per cent to $US68.06 ($A103.86) a barrel while US West Texas Intermediate crude was up by the same amount to $US65.54 ($A100.01). Global shares have rallied helped by signs of progress in US-China trade talks, while the dollar held close to its lowest levels in more than three years. World stock markets have rallied to record highs this week, as traders took confidence from a ceasefire between Iran and Israel and markets stepped up bets for US rate cuts. A trade agreement between the US and China on Thursday on how to expedite rare earth shipments to the US was also seen by markets as a positive sign, amid efforts to end the tariff war between the world's two biggest economies. Asian shares hit their highest in more than three years in early trading, and US stock futures pointed to a firm start for Wall Street shares. The pan-European STOXX 600 index was up 0.8 per cent on the day, set for a 1.1 per cent weekly gain - its best week since mid-May. London's FTSE 100 was up 0.5 per cent and Germany's DAX gained 0.6 per cent. The MSCI World Equity Index touched a fresh record high and was set for a weekly gain of 2.8 per cent. The S&P 500 index is up just 4.4 per cent this year overall, following a volatile first half of the year, dominated by US President Donald Trump's "Liberation Day" tariff announcement on April 2, which sent stocks plunging. "What we are having right now is potentially some optimism about some trade deals," said Vasileios Gkionakis, senior economist and strategist at Aviva Investors. "We have... come from quite low levels in the aftermath of the Liberation Day in April. To a certain extent we have also had some mini-selloff on the back of the events in the Middle East, and in that sense we're rebounding." Trump has set July 9 as the deadline for the European Union and other countries to reach a deal to reduce tariffs. Mark Haefele, Chief Investment Officer at UBS Global Wealth Management said that in the near-term, the firm saw greater upside potential in US and emerging markets than in Europe. The dollar remained on the backfoot, hovering near its lowest level in three-and-a-half years against the euro and sterling. The dollar index was down a touch on the day at 97.269 , holding near its lowest in more than three years. The euro was at $US1.1708 ($A1.7867), getting a lift after data showed French consumer prices rose more than expected in June. It held near multi-year peaks hit a day earlier. "We see the US dollar as unattractive," said Haefele at UBS Wealth Management. Markets are focused on US monetary policy, as traders weigh up the possibility of Trump announcing a new, more dovish chair of the Federal Reserve. Traders have stepped up their bets on US rate cuts, and are now pricing in 64 basis points (bps) of easing this year versus 46 bps expected on Friday. The dollar is having its worst start to a year since the era of free-floating currencies began in the early 1970s. "I don't think it's just the repricing of the Fed, I think there is a broader issue here of some tarnishing of US exceptionalism," Aviva Investors' Gkionakis said. Core PCE price data, the US central bank's preferred measure of inflation, is due later in the session. German 30-year government bond yields were on track for their biggest weekly increase in nearly four months after rising this week on expectations of increased borrowing by Germany's government. Oil prices meanwhile rose but were set for their steepest weekly decline since March 2023, as the absence of significant supply disruption from the Iran-Israel conflict saw any risk premium evaporate. Brent crude futures rose 0.5 per cent to $US68.06 ($A103.86) a barrel while US West Texas Intermediate crude was up by the same amount to $US65.54 ($A100.01). Global shares have rallied helped by signs of progress in US-China trade talks, while the dollar held close to its lowest levels in more than three years. World stock markets have rallied to record highs this week, as traders took confidence from a ceasefire between Iran and Israel and markets stepped up bets for US rate cuts. A trade agreement between the US and China on Thursday on how to expedite rare earth shipments to the US was also seen by markets as a positive sign, amid efforts to end the tariff war between the world's two biggest economies. Asian shares hit their highest in more than three years in early trading, and US stock futures pointed to a firm start for Wall Street shares. The pan-European STOXX 600 index was up 0.8 per cent on the day, set for a 1.1 per cent weekly gain - its best week since mid-May. London's FTSE 100 was up 0.5 per cent and Germany's DAX gained 0.6 per cent. The MSCI World Equity Index touched a fresh record high and was set for a weekly gain of 2.8 per cent. The S&P 500 index is up just 4.4 per cent this year overall, following a volatile first half of the year, dominated by US President Donald Trump's "Liberation Day" tariff announcement on April 2, which sent stocks plunging. "What we are having right now is potentially some optimism about some trade deals," said Vasileios Gkionakis, senior economist and strategist at Aviva Investors. "We have... come from quite low levels in the aftermath of the Liberation Day in April. To a certain extent we have also had some mini-selloff on the back of the events in the Middle East, and in that sense we're rebounding." Trump has set July 9 as the deadline for the European Union and other countries to reach a deal to reduce tariffs. Mark Haefele, Chief Investment Officer at UBS Global Wealth Management said that in the near-term, the firm saw greater upside potential in US and emerging markets than in Europe. The dollar remained on the backfoot, hovering near its lowest level in three-and-a-half years against the euro and sterling. The dollar index was down a touch on the day at 97.269 , holding near its lowest in more than three years. The euro was at $US1.1708 ($A1.7867), getting a lift after data showed French consumer prices rose more than expected in June. It held near multi-year peaks hit a day earlier. "We see the US dollar as unattractive," said Haefele at UBS Wealth Management. Markets are focused on US monetary policy, as traders weigh up the possibility of Trump announcing a new, more dovish chair of the Federal Reserve. Traders have stepped up their bets on US rate cuts, and are now pricing in 64 basis points (bps) of easing this year versus 46 bps expected on Friday. The dollar is having its worst start to a year since the era of free-floating currencies began in the early 1970s. "I don't think it's just the repricing of the Fed, I think there is a broader issue here of some tarnishing of US exceptionalism," Aviva Investors' Gkionakis said. Core PCE price data, the US central bank's preferred measure of inflation, is due later in the session. German 30-year government bond yields were on track for their biggest weekly increase in nearly four months after rising this week on expectations of increased borrowing by Germany's government. Oil prices meanwhile rose but were set for their steepest weekly decline since March 2023, as the absence of significant supply disruption from the Iran-Israel conflict saw any risk premium evaporate. Brent crude futures rose 0.5 per cent to $US68.06 ($A103.86) a barrel while US West Texas Intermediate crude was up by the same amount to $US65.54 ($A100.01).
Yahoo
2 days ago
- Business
- Yahoo
Stocks open at record high as investors bet on trade deals, Fed cut
Leading stock market indexes opened in record territory, with investors buoyed by signs of progress on a U.S.-China trade deal. Shortly after the start of trade on Friday, the S&P 500 rose 14 points, or 0.2%, to 6,155 points, surpassing its previous all-time closing high in February of 6,144. The index also briefly edged above its previous record on Thursday in intraday trading. The Nasdaq Composite gained 62 points, or 0.3 %, to 20,227, topping its previous record high of 20,174 on Dec. 16, 2024. The Dow Jones Industrial Average rose 0.4% to 43, 627 but remains below its previous high of 45,014 on Dec. 4, 2024. Markets have made a stunning turnaround since April, when the S&P 500 entered a bear market amid worries over the Trump administration's tariff policies. In recent weeks, investor worries have eased amid calmer rhetoric on tariffs and forecasts that hopes that the Federal Reserve rate will lower interest rates, analysts told CBS MoneyWatch. A sharp rebound in technology stocks have also helped drive the rebound. President Trump said at a White House event Thursday that Washington and Beijing had signed an agreement on trade, although details remain unclear. He added that he expects to have a deal with India soon. David Lefkowitz, head of U.S. equities at UBS Global Wealth Management, thinks investors are pricing in reductions in both trade frictions and geopolitical tensions. "We think the recovery makes sense, considering that most large-cap companies should weather the tariffs reasonably well. In fact, we think the upcoming [second-quarter] earnings season will once again highlight the resilience of corporate profits," he told investors in a note. Despite the renewed optimism, Wall Street analysts warn that financial markets could still face a bumpy road ahead. "We think there's a dangerous amount of complacency on trade/tariffs, a view underscored by the fact markets this morning are celebrating the China 'deal' for a third time," Vital Knowledge analyst Adam Crisafulli said in a report. As the stock market rallied Friday, investors digested new inflation data from the Commerce Department, which indicated that prices rose 2.3% in May compared with a year ago, up from just 2.1% in April. Core inflation — which excludes the more volatile food and energy categories — rose 2.7% from a year earlier, an increase from 2.5% the previous month. Hegseth slams Iran strikes initial assessment that contradicts Trump's take Young Cuban girl asks Trump to lift travel ban stopping her from joining mom in U.S. Jeff Bezos and Lauren Sánchez set for star-studded wedding in Venice Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
2 days ago
- Business
- Yahoo
UBS lifts S&P 500 index's annual target on fading trade tensions
(Reuters) -UBS Global Wealth Management raised its year-end target for the S&P 500 index to 6,200 from its prior forecast of 6,000, banking on softening trade uncertainty. "We think the recovery makes sense, considering that most largecap companies should weather the tariffs reasonably well," UBS said in a note late Thursday. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Axios
5 days ago
- Business
- Axios
Being a millionaire is kind of middle class now
Forget top hats and monocles, millionaires look positively middle class now. Why it matters: The number of "everyday" millionaires — those with wealth between $1 million and $5 million — is soaring. But many of these folks don't necessarily feel rich. By the numbers: There were nearly 52 million "everyday" millionaires in the world last year, per a recent report from UBS. That's four times the number in 2000. Even accounting for inflation, the number of everyday millionaires in 2024 was 2.5 times what it was in 2000. The wealth manager does not break down how many of these folks live in the U.S. But America has, by far, more millionaires than any other country in the world. New American millionaires were minted at a rate of about 1,000 a day last year. There are nearly 24 million millionaires in the U.S., 40% of the global total, and about four times the number than runner-up China. "Millionaires are no longer Monopoly caricatures," says Paul Donovan, chief economist at UBS Global Wealth Management. "It's shifted to encompass a very large portion of the population." State of play: Driving this growth in the U.S. are home prices, which have skyrocketed in recent years, and the rapidly aging population, he says. More and more Boomers are sitting free and clear on homes that have seen their values rise. The share of Americans who own their homes mortgage-free sits at a record high of 40%, and over half of these folks have reached retirement age. This is also a population that has hugely benefited from federal tax policies, like the mortgage interest deduction, and the ability to put money into 401(k)s tax free. Between the lines: Boomers are the first generation to rely on private savings for retirement, mostly through 401(k)s. These plans don't generate steady and predictable income like a pension would. A pension doesn't show in your wealth tally the way a 401(k) does. So even though 401(k)s might make you technically wealthy, they do leave many feeling perpetually insecure, Axios has reported. Reality check: No matter how these folks feel, they are doing very well. 36.8 million Americans lived in poverty in 2023, according to census data. Worldwide, a staggering 3.5 billion people are considered poor. Zoom out: Many people have accumulated their seven-figure wealth without quite realizing it. After Axios put out a call on social media and on a podcast, a few folks said they only just learned they were worth more than $1 million. Zoom in: Some of these folks said they are just getting by. They're house poor, living in pricey homes with little left over after paying the mortgage. "We don't take expensive vacations ever. I drive a 2016 Honda Odyssey with 175,000 miles on it," says Alisha Ard, a stay-at-home mom of four who lives in Ventura County, California, where the median home costs now costs more than $800,000. Ard and her husband have a $1 million mortgage on a $2 million house. "I know we're technically 'millionaires' with our home equity but it isn't really helpful for monthly expenses," she says. Feel rich? Most said no:"My mind was blown when I discovered that I am in fact one of these people," says Glen Czaplewski, who lives with his wife and four-year-old in a townhouse in Denver and works in the insurance industry. He says they keep to a budget and "live a nice life." It's still nothing extraordinary. "It's honestly hard to describe how incredibly pedestrian and normal our lives are," he says. "Somehow we have managed to build a net worth that puts us into the top 5-8%," one self-identified Boomer from Utah tells Axios in an email, asking for anonymity to discuss his personal finances. He says he and his wife, who are both teachers, have a net worth of about $4 million. Does he feel rich? No. Selling the house would be a "wash," he points out, as they would have to pay for some kind of shelter, likely at a high price. Careful long-term investments and frugality landed them here, along with living in a town that's seen real estate prices shoot up. "We do feel secure," he concedes.
The Star
5 days ago
- Business
- The Star
Traders wrestle with stocks' muted reaction
NEW YORK: The stock market's recent calm in the face of rising geopolitical threats had left options traders with a conundrum: sell volatility and risk being blindsided should the Middle East conflict escalate, or buy it and bleed away premiums as actual moves stay subdued. That tension is set to ratchet even higher after the United States attacked Iranian nuclear sites. While the oil market is still likely to have the biggest reaction to the escalating conflict, equities may see an initial jump in volatility as traders try to digest the risks. Oil has surged 11% since Israel launched airstrikes on Iran a little more than a week ago, with crude volatility soaring to levels not seen since Russia's invasion of Ukraine in 2022. By contrast, the S&P 500 Index is down just 1.3%. 'Markets will react, but probably still modestly in equity markets,' said Anthi Tsouvali, a strategist at UBS Global Wealth Management. 'Investors will also have to think about the impact of higher oil on inflation.' Some traders may be growing numb to Donald Trump's flip-flops, or just tired of chasing the headlines. In six months, markets have gone from 'Buy America' to 'Sell America' to now something murkier. They've learned to snap back quickly whenever risks subside, and that could happen again with the latest oil spike, which threatens to keep US inflation higher and slow Federal Reserve rate cuts. It's a dilemma facing volatility traders like Gareth Ryan, the founder and managing director of investment firm IUR Capital. 'Selling volatility at current levels inherently carries the risk of a volatility event, but paying out premiums with the expectation of a spike higher in vol also means holding a wasting asset,' Ryan said last week. For the options market, this environment has led to a muddied picture. On the one hand, implied volatility has dropped significantly from a high two months ago. But on the other, premiums aren't cheap. The collapse of realised swings on major equity gauges is making them look expensive. As of last Friday, the Cboe Volatility Index was near its highest level since April relative to actual S&P 500 volatility. The trend was similar for European stocks and Chinese equities traded in Hong Kong. While the options market was underpricing moves ahead of Liberation Day, making some volatility structures very profitable during the 'gamma shock' it triggered, the environment is different now that headline risk has a smaller impact. As the July 9 tariff deadline approaches, some strategists are saying a long gamma positioning is unlikely to yield the kind of bumper profits seen in April. 'On the more tactical side there is a general lack of scalable opportunities across the board on repo, correlation and volatility – historic dislocations are just not there at the moment,' Antoine Porcheret, head of institutional structuring for the United Kingdom, Europe, Middle East and Africa at Citigroup Inc, said last week. 'But that is part of a deeper long-term trend, notably in retail structured products, which historically was the main supplier of derivatives risks.' JPMorgan Chase & Co strategists, who noted on June 11 that investors' fatigue has set in after the many Trump U-turns, said the July 9 deadline could be postponed, which would create further uncertainty and make it difficult to trade with conviction. Dealing has already shifted to near-term maturities. S&P 500 options volume has dropped since May, with the share of zero-days to expiry contracts reaching a new peak of 59%, a separate JPMorgan report showed last week. One sign that there is a bit more concern among equity traders: The Cboe VVIX Index, measuring the volatility of the VIX, has increased to the higher end of its range over the past year, signalling more interest in buying options for portfolio protection against drastic swings. The conflict, and the muted reaction in stocks, has driven implied volatility for the US Oil Fund relative to the SPDR S&P 500 ETF to the highest level since the early days of Covid in 2020. That's led banks to pitch more dual-binary hybrid trades between oil and equities. 'In such geopolitical and macro environments, hybrids have been a natural tool to use, with recent activity around the oil theme played versus equities, and foreign exchange, through directional and volatility trades,' said Alexandre Isaaz, head of Europe, Middle East, and Africa equities derivatives sales and structuring at Bank of America Corp. To reduce risk while keeping their views, some buy-side investors are using strategies such as stock replacement – when an equity position is put on with options instead. One trader alone spent as much as US$3bil in premium on 2027 calls across a slew of large-cap US companies in recent months. 'I don't sense much fatigue from hedge funds, they are still actively looking for opportunities. On the vol carry side within the QIS (Quantitative Investment Strategies) space there is still demand,' said Porcheret. 'The market is generally underinvested, so the pain trade remains to the upside.' — Bloomberg
