Aurelia Butler

NEW YORK (Reuters) – Investors are expected to increase their allocations to stocks and bonds from cash after even “modest” Federal Reserve interest rate cuts, BlackRock (NYSE:BLK)’s chief financial officer said on Tuesday.Expectations earlier this year that the U.S. central bank would cut interest rates aggressively after hiking them to fight inflation have moderated in recent months as the U.S. economy continues to show momentum despite high borrowing costs.”I think even modest rate cuts are going to fuel a very healthy amount of investor re-risking,” said BlackRock CFO Martin Small, speaking at the Goldman Sachs U.S. Financial Services conference on Tuesday.Lower interest rates are expected to eventually pull yields in money markets down from well above 4%, which is where cash-like instruments like T-bills currently stand. So far, however, there has been little evidence that investors are abandoning cash. Assets in U.S. money markets stood at $6.77 trillion as of last week, data from the Investment Company Institute showed, up from $6.3 trillion in early September.”There’s still enough political and economic uncertainty in the world that cash is an attractive safe haven for clients,” Small said. “Market expectations for rate cuts … are shallower and fewer,” he said, adding that these and other factors had made money market fund balances stickier.The U.S. central bank started cutting interest rates in September by 50 basis points. That was followed by another 25 basis point cut last month, with investors now betting on an additional quarter of a percentage point cut later this month. After that, further easing is largely expected to depend on economic data as well as the path of inflation.Investors now expect interest rates of about 3.7% by the end of next year, which would be about 90 basis points higher than what was priced in September.Still, Small said investors that favor cash were underperforming traditional investment portfolios that blended equities and bonds. “That fear of missing out … is contributing meaningfully to re-risking,” he said.BlackRock’s fixed-income products such as bond exchange-traded funds had seen strong inflows this year, he added.”It’s not the floodgates … but we’ve definitely seen more normalized allocations legging into fixed income,” he said. More

NEW YORK (Reuters) -Ferrari will always make its luxury sports car in its hometown of Maranello, northern Italy, including its first fully electric model expected next year, Chief Executive Benedetto Vigna said on Tuesday.And this will not change, despite new tariffs potentially being introduced on international markets, including the U.S. following the election of Donald Trump as president.”We make cars in Maranello,” Vigna said at the Reuters NEXT conference in New York, replying to a question if Ferrari (NYSE:RACE) would ever consider manufacturing cars in the U.S.”We will sell cars in U.S., but we will make cars in Maranello.”Vigna said he did not anticipate any changes in demand as Trump will soon come into office. The president-elect has floated possible tariffs on European made goods.”Our order book is pretty strong,” Vigna said. “He decides what to do here, we will cope with those new rules… there will be tariffs for us, for everyone. It’s good because when you have the realities changing around you, it’s a way to foster more and more innovation.”Vigna, a former tech executive who took over as Ferrari CEO in 2021, reiterated on Tuesday the company would present its first fully-electric car in the fourth quarter of 2025.Asked about its selling price, which Reuters reported earlier this year it would top 500,000 euros ($526,000), Vigna said it would be set at the very last moment.”It depends on the emotion that we are able to transmit with the car,” he said.Ferrari last year started accepting payments for its luxury cars in cryptocurrencies, but the CEO said the company was not investing in them.”We wanted to provide the opportunity for clients … In any case, we get cash – dollar or euro depending on the country. We love cash,” Vigna said.”We don’t invest in crypto. We don’t want to get crypto and speculate – it’s a way to make purchase seamless.”Payments in cryptocurrencies started in the U.S. last year and are currently also accepted at some European dealerships, Vigna said.Vigna also said Ferrari was “very proud” of a deal it announced earlier on Tuesday, to supply engines and gearboxes to a new Cadillac Formula One team in a multi-year agreement from 2026 the company announced earlier on Tuesday.”We are very glad of this selection, and this makes us proud,” he said. “In our DNA is racing. We have been present in this sport, which is now becoming entertainment, since the beginning.”To view the live broadcast of the World Stage go to the Reuters NEXT news page: ($1 = 0.9499 euros) More

BEIJING (Reuters) -In one of their most dovish statements in more than a decade, Chinese leaders signalled on Monday they are ready to deploy whatever stimulus is needed to counter the impact of expected U.S. trade tariffs on next year’s economic growth.After a meeting of top Communist Party officials, the Politburo, officials said they would switch to an “appropriately loose” monetary policy stance, and “more proactive” fiscal levers.The previous “prudent” stance that the central bank had held for the past 14 years coincided with overall debt – including that of governments, households and companies – jumping more than 5 times. Gross domestic product (GDP) expanded roughly three times over the same period. The Politburo rarely details policy plans, but the shift in its message shows China is willing to go even deeper into debt, prioritising, at least in the near term, growth over financial risks. “From prudent to moderately loose is a big change,” said Shuang Ding, chief economist for Greater China and North Asia at Standard Chartered (OTC:SCBFF). “It leaves a lot of room for imagination.” Tang Yao, associate professor of applied economics at Peking University, says this policy reset is needed, because slower growth would make debt even more difficult to service.”They’ve by-and-large made peace with the fact that the debt-to-GDP ratio is going to rise further,” said Christopher Beddor, deputy China research director at Gavekal Dragonomics, adding that this was no longer “a binding constraint.”It’s unclear how much monetary easing the central bank could deploy and how much more debt the finance ministry could issue next year. But analysts say that works in Beijing’s favour.U.S. President-elect Donald Trump returns to the White House in January, having threatened tariffs in excess of 60% on U.S. imports of Chinese goods. The timing and the ultimate level of the levies, which a Reuters poll last month predicted at nearly 40% initially, will determine Beijing’s response.”They are willing to do ‘whatever it takes’ to achieve the GDP target,” said Larry Hu, chief China economist at Macquarie.”But they will do so in a reactive way,” Hu said. “How much they will do in 2025 will depend on two things: their GDP target and the new U.S. tariffs.” Next (LON:NXT) year’s 2025 growth, budget deficit and other targets will be discussed – but not announced – in coming days at an annual meeting of Communist Party leaders, known as the Central Economic Work Conference (CEWC).Reuters reported last month that most government advisers recommend that Beijing should maintain a growth target of around 5%, even though that pace seemed difficult to reach throughout this year.The tone of the Politburo statement suggests that China won’t lower its growth ambitions for 2025, says Zong Liang, chief researcher at state-owned Bank of China. But it also suggests that China is likely to set an initial budget deficit target of around 4%, its highest ever.”Beijing may want to use the ‘around 5.0%’ growth target to show that it won’t cave to Trump’s threatened 60% tariff and other restrictive measures imposed on China,” said Ting Lu, chief China economist at Nomura, who also expects a 4% fiscal deficit, up from 3% in 2024.A one percentage point increase in the deficit amounts to additional stimulus of about 1.3 trillion yuan ($179.4 billion), but China can add to that if needed by issuing off-budget special bonds or allowing local governments to do so.Beijing is expected to gradually take on greater fiscal responsibility as local municipalities are too deep in debt.’NO.1 TASK’China is facing strong deflationary pressures as consumers feel less wealthy due to a prolonged property crisis and minimal social welfare. Low household demand is a key risk to growth.In an apparent nod to this risk, the Politburo pledged “unconventional counter-cyclical adjustments” and to “greatly boost consumption.”The new wording suggests the composition of stimulus “will likely differ substantially from past cycles, with more focus on consumption, high-tech manufacturing, and risk containment rather than traditional infrastructure and property investment,” Goldman Sachs analysts said in a note. Morgan Stanley (NYSE:MS) also read the statement as suggesting that elevating consumption will be “the No.1 key task for 2025,” but warned that “implementation remains uncertain.”China has issued increasingly forceful statements on boosting consumption throughout the year, but it has offered little in terms of policies apart from a subsidy scheme for purchases of cars, appliances and a few other goods.What else Beijing is prepared to do to boost consumption is another unknown. But demand-focused measures are key to improve the effectiveness of monetary policy easing in an economy that for decades has put production at its core.”Monetary easing in China is far less potent than it used to be,” said Julian Evans-Pritchard, an analyst at Capital Economics.”There is now limited appetite among households and large parts of the private sector to take on more debt, even at lower rates.”($1 = 7.2453 Chinese yuan renminbi)(Graphics by Kripa Jayaram; writing by Marius Zaharia; Editing by Kim Coghill) More

The development comes at a time when Lionsgate — which went public this year via a special purpose acquisition company — is facing corporate governance issues and box-office underperformance, including the recent flop of Megalopolis.”We always welcome the ideas and input of our shareholders,” a Lionsgate spokesperson told Reuters.Anson Funds did not immediately respond to a request for a comment.Gupta said that the studio behind The Hunger Games and John Wick is undervalued and should consider options after it completes a separation from the Starz cable and streaming service, Bloomberg added.Lionsgate would appeal as a takeover target to traditional and digital media companies, along with major technology and artificial intelligence players, the report said.It also added that Lionsgate could consider potential divestitures, including its unscripted television and 3 Arts businesses, according to Anson Funds. Anson has also suggested that Lionsgate should pursue alternative revenue streams, such as diving further into merchandising and events like Broadway shows, and improve its financial disclosures, Bloomberg said. More

$75 per monthComplete digital access to quality FT journalism with expert analysis from industry leaders. Pay a year upfront and save 20%.What’s included Global news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print edition More

(Reuters) – A look at the day ahead in Asian markets. Investors go into Wednesday in a cautious frame of mind as they continue to digest the likely impact of China’s policy signal this week, and following a ‘risk off’ day that saw stocks fall and the dollar and bond yields rise. Asia’s economic calendar on Wednesday is light, with only Japanese producer inflation and South Korean unemployment figures on tap. Reserve Bank of Australia Deputy Governor Andrew Hauser also speaks, following the bank’s policy decision on Tuesday.With U.S. inflation figures to be released later on Wednesday after Asian markets close, potentially a key factor in whether the Fed cuts rates next week or not, investors may be inclined to hold the line and keep risk exposure to a minimum.Tuesday’s market moves would feed into that mindset. World stocks fell for a second day in a row, something that last happened a month ago, while the rise in bond yields and the dollar tightened financial conditions further.Investors may be extra sensitive to any rise in bond yields this week, as the U.S. Treasury sells $125 billion of notes and $85 billion of bills. Japanese government bond yields and the yen may also be sensitive to Wednesday’s producer price numbers from Japan, especially after the substantial upward revision to third quarter GDP growth on Monday.Meanwhile, investors and market watchers continue to try and figure out if Beijing’s historic shift in its monetary and fiscal policy stance this week will be matched by equally bold action. The economy certainly needs it. The latest trade figures on Tuesday were uniformly weak, with the near-4% year-on-year slump in imports last month particularly alarming. That was significantly worse than the bleakest forecast in a Reuters survey of 21 economists of a 3% decline, and highlights how brittle domestic demand is.The 10-year Chinese bond yield fell further on Tuesday to a new all-time low of 1.877%. It has fallen more than 15 basis points so far this month, on track for its steepest monthly fall since July 2021.Some analysts reckon the decline this week is a positive reaction to Beijing’s shift, as it shows investors are anticipating a significant loosening of monetary policy soon. There may be something to that, and substantial policy easing could indeed reflate growth and asset prices. But it’s hard to disentangle the move in yields from the latest trade and inflation data that are a reminder of just how heavy the deflationary and weak demand pressures bearing down on the economy actually are.The Indian rupee, meanwhile, is anchored at a record low, with rate cut hopes rising after the government named career civil servant Sanjay Malhotra to replace outgoing Reserve Bank of India (NS:BOI) Governor Shaktikanta Das.Here are key developments that could provide more direction to markets on Wednesday:- South Korea unemployment (November)- RBA Deputy Governor Andrew Hauser speaks- Japan producer inflation (November) More