Economy

More stories

  • 150 Shares169 Views

    in Economy

    Top IKEA retailer warns in Davos that tariffs could drive prices higher

    by

    DAVOS, Switzerland (Reuters) -For budget furniture retailer IKEA, the fewer trade tariffs there are, the better, CEO of Ingka Group, the biggest global IKEA franchisee, told Reuters on Monday as businesses braced for higher possible U.S. tariffs under President Donald Trump.”We, and I think probably all international companies thrive from harmonised tariffs, if you like, and actually, the fewer the better, because at the end of the day there is a risk in any country with tariffs that you need to, as a company, pass it on to the customers,” Jesper Brodin said on the sidelines of the World Economic Forum annual meeting in Davos, Switzerland.Inflation and high interest rates have had a “damaging” impact on consumers over the past few years, Brodin said, adding that he saw demand improving.”We are quite optimistic about the outlook and we already see a shift where people are returning to, I would say, a normal situation when it comes to consumption,” he said.Ingka Group, which runs IKEA stores in 31 countries and accounts for 90% of global IKEA sales, reported a drop in annual net profit and sales last year after cutting prices to lure inflation-weary shoppers back to its big blue stores.Despite weak consumer demand, Brodin said his only real worry was climate change. Pointing to the severe economic impacts of extreme weather events like the Los Angeles fires, he said leaders of Europe, the U.S., and China must find an aligned approach to combating climate change.”There is still a myth out there that adapting to mitigate climate change will be an economic loss, in IKEA we have found that is absolutely the opposite,” said Brodin.”We are here to meet other peers and businesses, government leaders in order to speed up the change because the world is not acting fast enough on this.”Join GMF, a chat room hosted on LSEG Messenger, for live interviews: https://lseg.group/4ajdDTy More

  • 150 Shares109 Views

    in Economy

    Trump inauguration ahead with executive orders in focus – what’s moving markets

    by

    1. Trump’s inaugurationDonald Trump is set to be sworn in as the 47th president of the United States on Monday.In the build-up to his return to the White House, Trump has promised to sign of a wave of executive orders on his first day back in office as part of an early push to act on his campaign promises.Trump is expected to announce more than 200 of these actions, which are legally binding but can still be subject to legal review. The orders are tipped to address a broad sweep of issues, including immigration, environmental regulations, and corporate diversity policies.One key move could see Trump launch mass deportations of illegal immigrants. Media reports have suggested that Trump, who has vowed to carry out the largest deportation program in US history, will call for raids in several major cities in the opening days of his second term in office.Investors have been awaiting more clarity around Trump’s plans, especially their potential impact on inflationary pressures and possible Federal Reserve interest rate cuts this year. Stock markets are due to be closed on Monday in observance of the Martin Luther King Jr. Day holiday.2. TikTok begins restoring US servicesTikTok began restoring services for its 170 million users in the US on Sunday, as President-elect Donald Trump promised to revive access to the short-form video platform when he returns to power.The return of TikTok came a little over 14 hours after the service was halted due to a national-security law requiring it to either rid itself of its Chinese ownership or shutter its operations in the US.Speaking at a rally on Sunday, Trump said “we have to save” the popular app, which has faced scrutiny from US officials over concerns that it could be used by China’s government to track or propagandize American users.Prior to the event, TikTok issued a message saying it was “back in the US”, and thanked Trump in particular.Trump has said he would most likely grant TikTok a 90-day reprieve before the ban can come into effect, adding that he would like the US to “have a 50% ownership position in a joint venture”.3. Trump memecoin dented after wife Melania launches rival tokenTrump’s new cryptocurrency soared before the inauguration, but retreated in value after incoming US First Lady Melania Trump unveiled her own token.”My NEW Official Trump Meme is HERE! It’s time to celebrate everything we stand for: WINNING!” Trump wrote in a post on his social media platform Truth Social.The crypto industry has been buoyed since Trump’s election victory in November, with its proponents hoping he will help usher in a new era of digital asset adoption. Trump, who previously called Bitcoin “a scam”, has pledged that America would be “the crypto capital” of the world once he returned to office.$Trump memecoins, which started selling for $10 each, traded as high as around $70 on Sunday, according to CoinMarketCap. But it pared back some of these gains after the launch of his wife’s coin, $Melania.Meanwhile, Bitcoin notched a fresh record high on Monday, adding on to an advance in the price of the world’s most well-known cryptocurrency since Trump’s election win.4. Earnings this weekInvestors hoping for another strong year in equity markets powered by US corporate profits will get a clearer outlook this week, with a string of companies set to report fourth-quarter earnings.Reports are due out from streaming giant Netflix (NASDAQ:NFLX), healthcare leader Johnson & Johnson (NYSE:JNJ), consumer goods powerhouse Procter & Gamble (NYSE:PG), and credit card issuer American Express (NYSE:AXP).Earnings season kicked off last week with big banks posting strong profits. A surge in dealmaking and solid equity market performance boosted trading revenues at several major Wall Street lenders.Overall, analysts expect S&P 500 companies to report a 10.4% year-over-year increase in fourth-quarter earnings, according to LSEG IBES data from January 15, cited by Reuters.5. Oil dipsOil prices slipped lower Monday, with traders taking risk off the table ahead of Donald Trump’s inauguration.By 03:51 ET, the US crude futures (WTI) dropped 0.4% to $77.11 a barrel, while the Brent contract fell 0.4% to $80.47 per barrel.Trump’s policy announcements on Monday reportedly could include the relaxation of curbs on Russia’s energy sector in exchange for a deal to end the Ukraine war. Oil has risen by 10% so far this month, amid worries about the impact of more Western sanctions on Russian crude. More

  • 100 Shares169 Views

    in Economy

    Take Five: We’ve been expecting you, Mr Trump

    by

    Trump’s inauguration on Jan. 20 as the 47th U.S. president will likely bring with it a Day One-barrage of executive orders on anything from taxes to tariffs, just as the fourth-quarter earnings season gets underway in earnest.Here’s a look at what’s going to matter for markets in the coming week from Rae Wee in Singapore, Lewis (JO:LEWJ) Krauskopf in New York, and Alun John, Karin Strohecker and Amanda Cooper in London.1/ WELCOME BACK, MR TRUMP Investors everywhere are waiting for Trump to begin his second term as U.S. president on Monday. He has pledged to sign a flurry of executive orders on his first day in office, and some speculate he could begin right after his inauguration, before even the ceremonial parade. U.S. markets are closed Monday for Martin Luther King Jr. day, so it may not be until Tuesday that investors can fully react. Any early moves on tariffs will be a particular focus, after the leaks, counterleaks and denials that have already riled currencies and shares in big global manufacturers. Long-dated bond yields have risen ahead of Trump’s inauguration, as traders expect his proposed tax cuts and tariffs to be inflationary and to stimulate domestic growth. But as the U.S. debt-to-GDP ratio is pushing 100%, former policymakers are wondering whether bond vigilantes are lying in wait. 2/ QUARTERLY CHECK UP Investors counting on a solid 2025 for U.S. corporate profits to boost stocks will get a fuller picture of the outlook in the coming week. A wide swathe of Corporate America is set to post results for the last quarter of 2024 and give a view into the year ahead. The coming week includes earnings from streaming firm Netflix (NASDAQ:NFLX), healthcare giant Johnson & Johnson (NYSE:JNJ), consumer products maker Procter & Gamble (NYSE:PG) and credit card company American Express (NYSE:AXP). Major banks kicked off quarterly earnings season on Jan. 15, with profits at some of the biggest U.S. lenders rising, as deal-making picked up and trading was boosted by strong equity markets. Overall, S&P 500 companies are expected to post an increase of 10.4% in the fourth-quarter earnings from the same period the previous year, according to LSEG IBES data as of Jan. 15.3/ WAR & PEACE (AND DAVOS)Trump is expected to continue to shape momentum in wars raging in Ukraine and the Middle East. The Israel-Hamas ceasefire to end the deadly 15-month old Gaza conflict entered into effect on Sunday, starting with the release of Israeli hostages and Palestinian prisoners. Hopes for stabilisation have lifted the region’s bonds and stocks, and could shape oil markets.Bringing peace to Ukraine – nearing its fourth year of war – might take longer than the ‘day one’ fix Trump pledged, but markets are gearing up for how this will reshape the region.Trump is set to virtually address leaders and CEOs, including Ukraine President Volodymyr Zelenskiy and Israeli officials, who are scheduled to gather in Davos from Monday. A pre-summit survey has identified war as the main risk of 2025. 4/ ENERGY BOOSTEuropean policymakers are getting exactly what they don’t want right now – higher borrowing costs and soaring energy prices. Oil has risen by 10% this month alone, egged on by concern about the impact of more Western sanctions on Russian crude, while, right in the middle of winter, natural gas prices have roared higher.More worryingly for Europe, the euro has hit 14-month lows against the dollar, just a whisker above the $1.0 mark. Since Russia’s invasion of Ukraine in February 2022, the United States has become Europe’s biggest supplier of natural gas in liquefied form (LNG) and a major source of crude oil, meaning the weakness in the currency is a double headache. The upcoming December final inflation numbers for the euro zone are unlikely to capture those price increases, meaning a possible nasty surprise later on.5/ WILL THEY, WON’T THEY?The Bank of Japan (BOJ) heads into its first policy meeting of the year. The yen is languishing near six-month lows, though a rate hike could be the panacea for the currency’s pain against a towering dollar, even if only temporarily.And it seems policymakers at the central bank are priming markets for such a move, after both Governor Kazuo Ueda and his colleague Ryozo Himino said the decision would be up for debate at the BOJ’s Jan. 23-24 policy meeting.It helps that U.S. President-elect Trump’s inauguration occurs just a few days before, which gives the BOJ some time to weigh up how his policies could ripple through financial markets.Regardless, traders have reacted to BOJ officials’ remarks by raising their bets on a January rate hike. Futures now point to a 70% chance of a 25-basis-point increase. More