Economy

The report suggests that global trade is expected to grow at a compound rate of 3.3% through to 2028, surpassing the projected GDP growth of 2.6%. This growth is anticipated to be driven by Southeast Asia and emerging markets, which are becoming key players in global supply chain expansion.S&P Global’s research indicates a shift in supply chain policies toward national security concerns, with rising protectionism and resource-guarding likely to contribute to inflationary pressures. The study also notes that higher financing costs are discouraging investment in supply chain resilience, leading businesses to adopt strategies like reshoring and technology enhancements to mitigate risks and enhance profitability.According to the report, Southeast Asia and Mexico are becoming attractive destinations for foreign direct investment as companies consider reshoring. However, the disparity in workforce growth between developed and developing economies could disadvantage industrialized market supply chains, with politics expected to constrain cross-border labor mobility.The container shipping industry, responsible for transporting 45% of global trade by value, faces challenges in financing its decarbonization efforts. The report identifies the cost burden as a significant obstacle to the industry’s environmental goals.Edouard Tavernier, President of S&P Global Mobility, emphasized the strategic importance of supply chains, stating that the latest edition of “Look Forward” combines S&P Global’s research to spotlight the themes shaping supply chains, equipping decision-makers with perspectives to maintain a competitive edge.This release is based on a press release statement from S&P Global and provides a factual summary of the company’s latest research findings on global supply chains. For further insights, S&P Global encourages interested parties to access the full report on their website.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

1. Futures marginally lowerU.S. stock futures pointed slightly lower on Wednesday, as investors geared up for key earnings from artificial intelligence chipmaking giant Nvidia and minutes from the Federal Reserve’s latest policy meeting.By 03:00 ET (08:00 GMT), the Dow futures contract had shed 33 points or 0.1%, S&P 500 futures had dipped by 4 points or 0.1%, and Nasdaq 100 futures had fallen by 31 points or 0.2%.The main averages slipped in the prior session, with the tech-heavy Nasdaq Composite in particular falling by 0.9%. Weakness in Nvidia shares weighed on the index, in a sign that traders may be balking at the firm’s expensive valuation prior to the release of its fourth-quarter results.But an upbeat sales forecast and a dividend boost lifted Walmart (NYSE:WMT) to a record high, helping put a floor on losses in the Dow Jones Industrial Average. The blue-chip index declined by 0.2%, while the benchmark S&P 500 retreated by 0.6%.2. Nvidia earnings loom largeNvidia will report after the U.S. market close later today, and is expected to clock per-share profit of $4.58 on a revenue of $20.37 billion.The California-based group wiped out about $100 billion in market capital on Tuesday, as investors waited to see whether a massive earnings spike it has previously forecast materialized.The results may also potentially justify Nvidia’s sharp run-up in valuation, currently at a forward price-to-earnings ratio of a little over 32. Given Nvidia’s central role in a recent surge in enthusiasm over the applications of artificial intelligence, markets will be keeping a sharp eye out for any guidance from the company about future AI demand as well.Anticipation ahead of the earnings saw most Asian chipmaking stocks turn skittish on Wednesday. Japanese semiconductor testing equipment maker Advantest Corp. (TYO:6857) and TSMC (TW:2330) — the world’s largest contract chipmaker — fell. Both firms are major suppliers to Nvidia.3. Fed minutes aheadFocus will also be on the publication of minutes from the Federal Reserve’s late-January policy meeting, with markets on the lookout for any cues about the potential trajectory of U.S. interest rates.The central bank kept rates steady during the meeting, but largely downplayed expectations of early interest rate cuts. Fed Chair Jerome Powell in particular said that a move to lower borrowing costs down from more than two-decade highs as soon as March was not his “base case.”Since then, a string of hotter-than-expected U.S. inflation readings have persuaded markets to further price out the prospect of imminent rate reductions. According to Investing.com’s Fed Rate Monitor Tool, traders are now betting that the central bank will roll out its first 25-basis point cut in June.4. Bezos sells more Amazon sharesJeff Bezos has sold a further chunk of shares in Amazon, a filing with the U.S. Securities and Exchange Commission showed on Tuesday, capping off in days a planned offload of up to 50 million shares in the e-commerce titan that was originally expected to end next January.Bezos — Amazon’s founder and now its executive chairman — sold 14 million in Amazon stock that was worth roughly $2.4 billion over three trading days ending on Tuesday, the filing showed.Following the transaction, the billionaire has now netted $8.5 billion from his move to steadily sell stakes in the company in recent weeks. Bezos, the world’s third-richest person according to Forbes, has yet to say what he will do with the proceeds from the sales.5. Oil prices tick higherOil prices edged up in European trade on Wednesday as concerns remained over possible supply disruptions from a sustained conflict in the Middle East, although demand worries placed a lid on the gains.The dollar pulled back marginally before the release of minutes from the Federal Reserve’s latest meeting, offering some relief to overseas buyers of dollar-denominated oil. Traders will be watching the minutes closely as they attempt to gauge if U.S. interest rates will stay higher for longer, a prospect that could dent economic activity in the world’s largest oil consumer.Any major downside in oil prices was largely limited by persistent concerns over the ongoing conflict in the Middle East, which appears to be disrupting some supplies.The U.S. vetoed a United Nations resolution calling for an immediate ceasefire in Gaza, pointing to little signs of deescalation in the Israel-Hamas war. The veto was Washington’s third in recent months.By 08:00 ET, Brent oil futures expiring in April had risen 0.2% to $82.47 a barrel, while West Texas Intermediate crude futures had ticked up by 0.2% to $76.74 per barrel. More

WASHINGTON (Reuters) -The U.S. will announce a major package of sanctions against Russia on Friday over the death of opposition leader Alexei Navalny and the two-year Ukraine war, President Joe Biden said on Tuesday.Biden, speaking to reporters as he departed on a trip to California, did not give details.The latest sanctions on Russia will target a range of items, including the country’s defense and industrial bases, along with sources of revenue for the economy, White House national security adviser Jake Sullivan said.The package will “hold Russia accountable for what happened to Mr. Navalny” and for its actions over the course of the war in Ukraine, White House national security spokesperson John Kirby (NYSE:KEX) said.A senior U.S. official said a sanctions package was already being planned to mark the second anniversary of the war, which Washington will now reconsider and supplement in response to Navalny’s death.The Treasury Under Secretary for Terrorism and Financial Intelligence, Brian Nelson, is discussing sanctions over Navalny’s death on a trip to Europe this week, two sources familiar with the matter said.Nelson, in visits to Germany, Belgium and France ahead of the second anniversary of the Ukraine war, is also discussing Washington’s authority to target those funding Russia’s war production efforts even if they are in third countries, the Treasury said. It said the U.S. is “aggressively pursuing those who attempt to evade our sanctions.”The United States already has issued a wide array of sanctions related to Russia’s invasion of Ukraine on Feb. 24 2022, including on Russian President Vladimir Putin, officials and banks.Washington has also previously imposed sanctions over the 2020 poisoning and imprisonment of Navalny, targeting among them people linked to Russia’s Federal Security Service (FSB) and other officials.Navalny, Putin’s fiercest domestic critic, fell unconscious and died suddenly on Friday after a walk at the “Polar Wolf” penal colony above the Arctic Circle where he was serving a three-decade sentence, the prison service said.Speaking to reporters on a conference call, Kirby said the United States is pressing Russia for “complete transparency” on how Navalny died last Friday. Biden has blamed Putin.”Whatever story the Russian government decides to tell the world, it’s clear that President Putin and his government are responsible for Mr. Navalny’s death,” Kirby said.The U.S. embassy in Moscow has been seeking more information about Navalny’s death, Kirby said, “but it’s difficult to get a point where you can be confident in what the Russians would say about his death.” More

COLOMBO (Reuters) – Sri Lanka’s inflation is expected to return to the government’s 5% target starting from the last two quarters of the year, a Central Bank of Sri Lanka (CBSL) official said on Wednesday, as the economy stabilises from a crippling financial crisis.The economy has shown signs of recovery in recent months, aided by a $2.9 billion International Monetary Fund (IMF) programme, after it went into freefall in 2022 due to a severe foreign exchange shortage.”Inflation is projected to reach 5% in the medium term, which is from about the third quarter to the end of the year,” S. Jegajeevan, the director of CBSL’s economic research department, told reporters.”The high base effect from the tax increases is expected to benefit inflation in early 2025 and possibly even bring it lower than 5%.”The South Asian country defaulted on its overseas debt in May 2022 after depleted foreign exchange reserves triggered worst financial crisis since independence from Britain in 1948.At the start of 2024, Sri Lanka raised its value added tax (VAT) to 18% from 15% to meet revenue targets under the IMF programme, sparking an uptick in its key inflation rate, which rose to 6.4% at the end of January from 4% the month before.The CBSL, which committed to maintaining inflation at 5% under a new act introduced last year, said price increases from the tax hike were unlikely to persist due to subdued demand and the economy operating below its full capacity. More

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SHANGHAI/HONG KONG (Reuters) -China’s stock exchanges on Tuesday said major quant fund Lingjun Investment had broken rules on orderly trading and barred it from buying and selling for three days, as part of wider regulatory efforts to revive market confidence.Orders from Lingjun to dump stocks in early trade on Monday coincided with rapid declines in the benchmark indexes, the Shenzhen and Shanghai stock exchanges said, adding they would restrict the hedge fund’s trading until Feb. 22.One of China’s biggest quant funds, Lingjun manages more than 60 billion yuan, the company says on its website.Lingjun apologised for the negative impact in a statement on its website on Wednesday. The firm said it “holds long-term bullish views on Chinese stocks and will stick to long positions,” adding it will review the problems existing in transactions.Chinese quant funds, which use derivatives and data-driven computer models, have already suffered from a steep market sell-off this year and government curbs on short-selling.China’s blue-chip index dropped to five-year lows early this month.”Regulators are sending a clear signal that money should be handed to managers who profit from long-term investment, rather than swift trades,” Yang Tingwu, vice general manager of Tongheng Investment, said.He said the punishment could accelerate redemptions in quant funds as investors would ask: “Who’s next?”A hedge fund manager who declined to be named said a three-day trading halt was not a huge problem for Lingjun, but was a further blow to confidence in quant funds as regulatory scrutiny intensifies. BROKEN RULESThe Shanghai and Shenzhen bourses said in identical statements on Tuesday that Lingjun’s share dumping via mutiple products violated rules that stipulate programme-trading must not endanger exchange systems or normal trading order.Lingjun dumped a combined 2.57 billion yuan ($357.4 million) in A-shares in a minute between 9:30 a.m. and 9:31 a.m. on Monday, the exchanges revealed. The exchanges said they would strengthen monitoring and analysis of quantitative, especially high-frequency trading. Such trading “has obvious advantages over small investors in terms of technology, information and speed” and could at times contribute to market volatility, the exchanges said. As regulators seek to revive market confidence, China’s securities watchdog, led by newly installed chairman Wu Qing, held a series of seminars with market participants who proposed tighter scrutiny. Chinese quant funds already attracted the attention of regulators last year after criticism, including from smaller investors and long-only funds, of a sector able to profit from share price falls and volatility.The industry has also been blamed for its role in causing the boom-and-bust of Chinese small-caps. China’s quant hedge funds totalled 1.26 trillion yuan at the end of 2021, according to the latest official data. The industry has grow rapidly over the last few years, and has attracted foreign players such as Two Sigma and Winton. ($1 = 7.1936 Chinese yuan renminbi)($1 = 7.1905 Chinese yuan renminbi) More

LONDON (Reuters) – Major U.S. crypto firm Circle will end support for its USDC token on the Tron blockchain network, a decision the company said on Wednesday “aligned with its efforts to ensure that USDC remained trusted, transparent and safe”.Boston-based Circle said in a blog that, effective immediately, it would no longer mint USDC tokens on Tron, a fast-growing platform widely used for transferring stablecoins whose founder is facing regulatory problems in the United States.Stablecoins are digital tokens that are designed to keep a constant value and are backed by traditional currencies.Circle did not give a reason for its decision but said that under its risk management framework it “continually assesses the suitability” of blockchains that support USDC, the second-biggest stablecoin after Tether. It said institutional clients can transfer USDC held on Tron to other blockchains, or redeem the tokens with it for traditional currency, until February 2025. Retail customers can transfer USDC to other blockchains and redeem USDC at crypto exchanges and brokerages, it added. Circle, which in January said it had filed for a U.S. initial public offering, last year terminated accounts held with it by Tron founder Justin Sun and his affiliated companies.Sun, a prominent crypto entrepreneur, was sued last year by the Securities and Exchange Commission for allegedly artificially inflating trading volumes and selling Tron tokens as an unregistered security. Sun said the SEC charges “lack merit”.Circle’s latest announcement affects USDC on the Tron blockchain, “as opposed to an individual user or related business entities”, a spokesperson said.With some $28 billion in circulation, USDC is the eighth-biggest crypto token, according to data firm CoinGecko. USDC worth $335 million are hosted on Tron, Circle’s website says.In November, Reuters reported, citing interviews with financial crime experts and blockchain investigation specialists, that Tron had overtaken Bitcoin as a platform for crypto transfers associated with groups designated as terror organizations by Israel, the United States and other countries. In response to that article, a Tron spokesperson said it did not have control over those using its technology, and that it was not linked to the groups identified by Israel. More

(Reuters) – Australian oil and gas producer Santos reported a 42% drop in its annual underlying profit on Wednesday on the back of persistent weakness in commodity prices and lower production.Oil prices have fallen from the elevated levels seen in 2022 after the Russia-Ukraine war, while demand for liquefied natural gas (LNG) remains pressured by weak global industrial production and a slow economic recovery in China, which reclaimed the title of the world’s top LNG buyer in 2023 from Japan.Santos, which earlier ceased talks of a potential $52-billion merger with larger rival Woodside (OTC:WOPEY) Energy, reported an underlying profit of $1.42 billion for the year ended Dec. 31, compared with $2.46 billion a year earlier. That missed a consensus estimate of $1.49 billion, according to Jarden Research. The Adelaide-based company declared a final dividend of 17.5 cents per share, compared to 15.1 cents apiece declared a year ago.Santos raised its dividend to meet its 40% of operating cashflow payout policy, but failed to deliver extra returns to shareholders to account for the selldown of the PNG LNG project, said Saul Kavonic, energy analyst at MST Marquee. This “raises the question if Santos needs to sell down its jewel assets in order to meet shareholder dividend expectations,” Kavonic added.Santos said its Barossa gas project, where construction of an undersea pipeline was ruled in favour of the company by a court in January, is now 67% complete with first gas now expected in the third quarter of 2025.At full production rates, Barossa is expected to add 1.8 million tonnes per annum to Santos’s LNG portfolio, it said.(This story has been corrected to fix the dividend to 17.5 cents from 17.3 cents in the 2nd bullet) More