Aurelia Butler

(Reuters) – U.S. stocks were set to open lower on Friday after mixed earnings, while growth stocks cut some losses in a torrid week marked by surging bond yields as investors braced for higher interest rates.In the previous session, Wall Street closed sharply lower after Federal Reserve Chair Jerome Powell backed moving more quickly to combat inflation and said a 50 basis point (bps) increase would be “on the table” when the Fed meets in May.Powell’s hawkish pivot triggered a selloff in megacap growth stocks such as Apple Inc (NASDAQ:AAPL) and Amazon.com Inc (NASDAQ:AMZN), which were already reeling under the dismal results from streaming giant Netflix (NASDAQ:NFLX) earlier this week. The S&P 500 growth index is down about 16% since hitting a record high in late December, while its value counterpart is trading about 2% below its all-time time.”If we see yields continuing to move higher, it’s going to be a depressant on growth stocks,” said Peter Cardillo, chief market economist at Spartan Capital Securities. “The market is fearful of the Fed overchoking the inflation fear and causing a rut in corporate earnings in the future.”The prospect of a more hawkish Fed has led to a rocky start to the year for equities, in particular tech and growth shares whose valuations are more vulnerable to rising bond yields.Google parent Alphabet (NASDAQ:GOOGL), Amazon.com Inc and Meta Platforms Inc edged higher in premarket trading after suffering losses this week.At 08:49 a.m. ET, Dow e-minis were down 117 points, or 0.34%, S&P 500 e-minis were down 11 points, or 0.25%, and Nasdaq 100 e-minis were down 5.25 points, or 0.04%.Schlumberger NV (NYSE:SLB) gained 2.3% after reporting a higher first-quarter profit, as rising oil prices due to Russia’s invasion of Ukraine boosted the demand for oilfield services and equipments.Gap Inc (NYSE:GPS) tumbled 17.4% after the apparel company cut its forecast for quarterly sales, blaming execution challenges at its Old Navy brand and “macro-economic dynamics”. Verizon Communications Inc (NYSE:VZ) slipped over 2% after its full-year revenue forecast disappointed.Of the 88 companies in the S&P 500 that have reported earnings for the first quarter, 80.7% of them have beat market expectations as of Thursday. Typically, 66% of companies beat estimates, according to Refinitiv data.Investors are awaiting a flash reading on S&P Global (NYSE:SPGI) composite PMI data for April after market opens. More

Energy saving tips are an increasingly hot topic — no matter your level of income. Following April’s 54 per cent increase to the energy price cap, I expected my bills to increase, but I wasn’t expecting my monthly direct debit to more than double. My supplier claims this is based on my current usage and will prevent my account from being in the red by the time autumn arrives — at which point, energy prices are forecast to soar further. I’ve challenged the 112 per cent increase, although I could afford to pay it. Others are dealing with the “price shock” of soaring bills by cancelling Netflix subscriptions; AJ Bell has warned people are investing less; retail sales are plummeting and consumer confidence has plunged to a near-record low.But what if you have no slack in your budget?Gemma Hatvani is a woman who knows. Made redundant after working as a business analyst in the energy industry for 16 years, she set up a Facebook group — Energy Support and Advice UK — to help people struggling to pay their bills. “I wanted to give something back, and use my knowledge to help people — and it’s grown and grown,” she says. The group’s 15 full-time volunteers include energy experts and heating engineers advising on how to get bills down — plus what to do if you can’t afford to pay.

Its community of 50,000 members share tips about the benefits of bleeding radiators, installing timer switches to turn off broadband routers at night and hanging curtains over doorways to stop drafts. However, the heartbreaking extremes some go to to cut their consumption and save money caused the group to go viral this week. “Leave a bowl of water in the sun with a black bin liner on top and it will be warm enough to wash up in later,” was one tip widely shared on Twitter, highlighting the miserable reality of life for those who cannot afford to top up expensive prepayment meters. Hatvani is aware of the increasingly desperate lengths people go to, including going to bed fully dressed, using candles placed on a gas hob to heat food, storing leftover boiled water from the kettle in a Thermos or building a homemade hay box (a thermal cooking technique from the postwar era). “I keep having to remind myself it’s 2022,” she says. “It’s like Bear Grylls out there — we’re talking about survival.” Numbers in the Facebook group have surged since April’s bill hikes, and are set to increase further now that Martin Lewis, founder of Money Saving Expert, has become a member.He has been warning for some time that lower income households will either “freeze or starve” this winter unless more government help is forthcoming. This week, the bosses of the UK’s biggest energy firms told MPs of the “totally horrific” consequences if the price cap rises from £1,971 to the expected level of £2,600 in October. By then, Eon expects up to 40 per cent of its customers to be in fuel poverty — spending more than 10 per cent of their income on energy bills — the House of Commons business, energy and industrial strategy committee heard on Tuesday. Keith Anderson, chief executive of Scottish Power, said the crisis was moving “beyond what I think this industry can deal with”, adding the firm had been contacted by thousands of customers unable to pay their bills since April’s increases, even as consumption falls during the summer months. Chris O’Shea, boss of British Gas owner Centrica, said the number of customers late with payments had risen by 125,000 to 716,000 over the past year.The goings-on in Hatvani’s group are a sober reminder of the toll this is going to take on the personal finances of millions of people. There are hundreds of posts a week now from people who cannot afford huge increases to their direct debits, who are seeking advice about how to challenge energy companies. Hatvani’s sister has seen her unit rate for gas climb by over 600 per cent after coming off a fixed-rate deal. “Her supplier wants £500 a month for gas and electric, which is totally unaffordable and more than her rent,” she says. Faced with huge increases, growing numbers of members are saying that cancelling their direct debit and paying what they can every month is the only way they can still afford to live — despite the dire financial consequences.Expert volunteers point out this will immediately make bills more expensive, wiping out the direct debit discount most suppliers offer, and could prematurely end advantageous fixed-rate deals. As energy debts mount up, Hatvani foresees millions more households being pressed to switch to more expensive prepayment meters, where they are charged for energy usage upfront. This week, she spoke to a young family who had resisted having one installed, only to be issued with a warrant by their supplier to enter their home and fit it (the cost of this will be added to their debts). Commonly used as a debt management tool, 4.5mn UK households pay for their energy at point of use — and if they can’t afford it, the lights will literally go out. “Energy companies love prepayment customers, as they get their money straight away,” she says. The charity National Energy Action has predicted that hundreds of thousands of households will manage the bill shock by voluntarily “self disconnecting” and surviving for days with no heat, power or hot water in an attempt to balance budgets.

If people are reduced to living like this, you can see what’s feeding the grim trade in tips involving bowls of water and black bin bags.And the squeeze has only just begun. Politicians, energy companies and charities are all crying out for more to be done — but the big question is: what?It’s obvious that measures outlined in the Spring Statement won’t be anywhere near enough for the poorest families to get through the winter. One idea gaining traction is a deeply-discounted “social tariff” for customers considered “vulnerable” or in fuel poverty that would knock £1,000 off annual bills. There are no easy solutions to funding this. A 10-year clawback, imposing a windfall tax on oil and gas companies, scrapping the price cap and charging middle and higher-income households much more for their power have all been suggested this week.With bad debts rising fast, we can’t wait until October to decide. The extreme energy rationing highlighted by this Facebook group should spur those in power to get ahead of the next phase of the crisis well before temperatures start to drop. Claer Barrett is the FT’s consumer editor: [email protected]; Twitter @Claerb; Instagram @ClaerbThis article is the latest part of the FT’s Financial Literacy and Inclusion Campaign More

Investing.com — Risk-off sentiment pervades global markets as Jerome Powell nails on a 50 basis point rate hike in May. The dollar surges against the pound and the yuan, in particular, as rate hike bets intensify. Oil prices tumble on growing fears about the impact of China’s Zero-COVID policy on national demand. Russia signals it intends to completely dismember Ukraine. Gap stock tumbles after a profit warning and AB InBev is also struggling after confirming a $1 billion hit from exiting its Russia business. Verizon, Amex, and Schlumberger head the list of quarterly reports due. Here’s what you need to know in financial markets on Friday, 22nd April.1. Dollar, bond yields rise after Powell commentsThe dollar surged again overnight and benchmark 10-year bond yields flirted with the 3% level after Federal Reserve Chair Jerome Powell all but confirmed that the central bank will raise its key rate by 50 basis points at its May meeting.Powell had called the U.S. labor market “unsustainably hot” in comments on the sidelines of the IMF’s spring meeting on Thursday, endorsing the assessment given by many other senior Fed officials in the last couple of weeks.By 6:15 AM ET, the 10-year U.S. Treasury yield had eased off to trade at 2.94%, down from an overnight high of 2.97%. The 2-Year yield, more sensitive to short-term interest rate expectations, had risen as high as 2.77% and only eased off marginally to 2.76%.In foreign exchange markets, the dollar index rose 0.4%, while the greenback also surged against the offshore Chinese yuan, which is on course for its worst week since 2015 as the country grapples with a pandemic-driven slowdown.2. Russia aims at conquest of southern UkraineRussia’s armed forces intend to conquer all of southern Ukraine, creating a contiguous zone of control stretching all the way to Ukraine’s border with Moldova, according to a briefing by senior military officials.The plans would deny Ukraine control of any of its ports, cutting access to world markets for its key agricultural and industrial exports. They contrast sharply with President Vladimir Putin’s assertions before his invasion that he didn’t plan any occupation of Ukraine and are a conspicuous expansion of Russia’s war aims from only a week ago when it said it wanted to concentrate on ‘liberating’ the Donbas region of eastern Ukraine.Separately, a pro-Kremlin news site posted, then withdrew, a report citing a closed Defense Ministry briefing that Russia had lost over 20,000 soldiers killed and missing in action since its invasion in February.3. Stocks set to open lower; Gap slumps; Verizon, Amex earnings dueU.S. stocks are set to open in downbeat mood again later, extending Thursday’s heavy losses on the prospect of an aggressive tightening of U.S. monetary policy, even as signs start to emerge of the economy slowing down.By 6:20 AM ET, Dow Jones futures were down 140 points, or 0.4%, while S&P 500 futures were down 0.3% and Nasdaq 100 futures were down in parallel. All three major cash indices had fallen by over 1% on Thursday, with the Nasdaq Composite falling 2.1%.Stocks likely to be in focus later include Gap (NYSE:GPS), which slumped 13.5% in premarket after lowering its forecasts for the current quarter, and AB InBev (EBR:ABI), which said it will take a hit of $1.1 billion as it writes down the 24% stake it holds in a Russian joint venture. Also in focus will be Walt Disney (NYSE:DIS), after lawmakers in Florida voted to end its special tax status in the state.Companies set to report earnings include Verizon (NYSE:VZ), American Express (NYSE:AXP), Newmont Goldcorp (NYSE:NEM) and Schlumberger (NYSE:SLB), while German software maker SAP (NYSE:SAP) fell short overnight with its quarterly figures, which also included a hit from a hasty Russian exit.4. Services rescue Eurozone economy in April; U.K. retail sales plungeThe Eurozone economy held up better than expected in April, as a reopening service sector compensated for a manufacturing sector laboring ever more under the weight of supply chain disruptions, sky-high energy costs and the other knock-on effects of war in Ukraine.S&P Global’s Eurozone composite purchasing managers’ index rose to 55.8 in April, indicating that the post-COVID expansion is still safe in the short term.In the U.K., meanwhile, retail sales slumped in March and consumer confidence in April fell to its lowest since the depths of the 2008-9 financial crisis, against a backdrop of higher fuel prices and a 30-year high in inflation. The pound fell over 1% to $1.2887.5. Oil falls as COVID hits China demand; rig count eyedOil prices fell some 2% overnight as fresh evidence emerged of the sharp drop in Chinese demand due to COVID-19 lockdowns which continue to plague the country.Bloomberg reported that the country’s oil demand has fallen by around 1.2 million barrels a day in April, with demand for diesel, jet fuel, and gasoline falling by around 20% from year-earlier levels. Gasoline demand in eastern China, the country’s economic heart, has fallen some 40% this month, the agency quoted unnamed industry officials as saying.By 6:30 AM ET, U.S. crude futures were down 2% at $101.72 a barrel, while Brent was down 1.6% at $106.58 a barrel.The Baker Hughes rig count and the CFTC’s positioning data round off the week later, as usual. More

(Reuters) – Gold prices fell on Friday as the prospect of aggressive interest rate hikes boosted U.S. Treasury yields and the dollar, denting zero-yielding bullion’s appeal and setting prices on track for their first weekly decline in three. Spot gold was down 0.44% to $1,942.91 per ounce at 1005 GMT. U.S. gold futures eased 0.2% to $1,945.20. “We are dealing with the global economy where interest rate hike expectations continue to move up, as a result yields are moving higher and the dollar is trading stronger, all potential strong challenges to gold at this point,” Saxo Bank analyst Ole Hansen said. However, “gold is holding within the established range… The reason being the market is worried that these very strong expectations for rate hikes in the U.S. may lead to a bigger than expected economic slowdown.”U.S. Federal Reserve Chairman Jerome Powell said on Thursday a half-point interest rate increase “will be on the table” when the central bank meets in May and that it would be appropriate to “be moving a little more quickly.”Benchmark U.S. 10-year Treasury yields extended gains on the Fed’s hawkish tone on tightening policy in its effort to tame soaring inflation. Meanwhile the dollar index scaled a fresh peak since March 2020. [USD/] [US/] Gold is highly sensitive to rising U.S. interest rates and higher yields, which increase the opportunity cost of holding bullion, while boosting the dollar, in which it is priced.Gold is down about 1.3% so far this week. Prices rose to near the key mark of $2,000 per ounce on Monday on safe-haven demand and mounting worries over inflation, only to pull back and hit a two-week low on Thursday. Spot silver fell 1.8% to $24.19 per ounce and was headed for its biggest weekly fall since late January. Platinum slipped 1.3% to $955.28 per ounce and palladium was 1.4% lower at $2,388.21. More