Economy

Transportation ministry officials said in a brief statement that previously announced increases in the rates for public bus, plane and train transportation, among others, would be delayed until further notice, citing the previous day`s announcement to delay a hike in fuel prices.The two announcements have thrown into disarray a wider plan for price rises announced in December that the communist-run government said was necessary to reign in a ballooning fiscal deficit. Critics have attacked the policies as inflationary, ill-timed and lacking incentives to boost ailing domestic production.On Wednesday, the administration of Cuban president Miguel Diaz-Canel put off a controversial 500% increase in gasoline prices planned for Feb. 1, saying a cyberattack from outside Cuba had thwarted implementation, officials said.Many Cubans, already strapped for cash amidst a grinding economic crisis and widespread shortages, breathed a sign of relief following this week`s announcements.The planned price hikes, initially announced in December and early January, rocked Cuba, where residents have long depended on a vast program of state subsidized food, fuel and medicine to survive.The government has also said it will also raise prices in the coming months for liquefied gas, used for cooking, as well as electricity consumed by top-tier users, but has promised to protect the vulnerable from rising costs. More

The company saw strong demand for its derivatives products, as traders rushed to secure their positions amid geopolitical crises and economic volatility that triggered massive market swings across asset classes.CBOE reported a 9% rise in fourth-quarter net revenue to $499 million from a year earlier, driven by a 21% jump in its futures segment and a 15% growth in options. Revenue per contract in options increased 20%, while total average daily volumes rose 2% from a year earlier. Exchange operators’ gains from trading were partly offset by a dearth in new listings as geopolitical pressures and the U.S. Federal Reserve’s aggressive interest rate hikes to curb inflation induced a two-year-long lull in the IPO market. Some investors are expecting a turnaround in capital markets on mounting bets of a soft-landing — where inflation is controlled and chances of a recession are low — with social media firm Reddit, cloud security company Rubrik and software startup ServiceTitan all expecting to go public this year. On an adjusted basis, Chicago-based CBOE posted a profit of $218.8 million, or $2.06 per share, for the three months ended Dec. 31, compared with $192.2 million, or $1.80 per share, a year earlier.Cboe’s strong quarterly profit follows a similar upbeat performance from peer Nasdaq that reported a 24.6% growth in profit on Wednesday. More

NYCB on Wednesday boosted its provisions for credit losses by 345%, part of which was allocated to its commercial real estate (CRE) portfolio, re-igniting worries over defaults as high interest rates and remote work dampen office demand.NYCB’s shares have nearly halved in value over the last two sessions, while the KBW Regional Banking Index, a key gauge of the banking industry, has plunged nearly 8% over the period. The stock reaction has hit investor confidence to re-engage in bank stocks, BofA analysts said. “It could potentially cause investors to take a wait-and-watch approach until additional visibility emerges on macro, Fed policy and earnings per share outlooks.”Meanwhile, shares of Japan’s Aozora Bank slumped to a three-year low in Tokyo after it took a huge loan-loss provision against U.S. office loans.The disclosure from Aozora Bank on Thursday “lit a match” to underlying CRE fears but the reaction in U.S. bank stocks was overdone, Citi analyst Keith Horowitz said.”We remain constructive long term on the regional banks. Our general view is that the large cap banks in our universe have been very focused on relationship lending and we don’t view foreign bank CRE as the best data point,” Horowitz said. More

Stay informed with free updatesSimply sign up to the More

According to data from LSEG, U.S. investors purchased equity funds of about $1.83 billion on a net basis, breaking a four-week-long selling streak.A Commerce Department report last week, showed that the U.S. economy grew much faster than expected at 3.3% in the last quarter, allaying concerns of an impending recession.By segment, large-cap funds secured $3.43 billion, the most in a week since Dec. 27, 2023. Conversely, multi-, mid-, and small-cap funds lost $1.52 billion, $1.35 billion and $759 million, respectively in net selling.Among sector funds, tech received $1.28 billion, the highest in seven weeks, followed by $271 million worth of net purchase in the industrials sector. The utilities sector, meanwhile, witnessed about $1.01 billion worth of outflows.Simultaneously, U.S. bond funds attracted $7.09 billion, the biggest amount in a week since Jan. 3.U.S. general domestic taxable fixed income funds drew $4.62 billion, the largest in three weeks.Short/intermediate investment-grade, and municipal debt funds also secured $2.63 billion and $1.48 billion respectively, while short/intermediate government & treasury funds faced $5.43 billion worth of net selling.Additionally, investors poured about $40.39 billion into U.S. money market funds, turning net buyers after two weeks of net selling in a row. More

According to data from LSEG, global equity funds secured a net $7.43 billion in inflows during the week, contrasting with outflows seen during the previous five weeks.A Commerce Department report last week showed the U.S. economy grew much faster than expected at 3.3% in the last quarter, allaying concerns of an impending recession.Meanwhile, data last week showed the U.S. personal consumption expenditure index – the Federal Reserve’s preferred inflation gauge – rose moderately in December, bolstering expectations that interest cuts are coming in the months ahead.By region, Asian equity funds attracted $3.7 billion, the biggest inflow in three weeks. U.S. and European funds pulled in a net $1.83 billion and $1.14 billion, respectively.Investors put $1.98 billion into tech sector funds, continuing a buying trend into a third successive week. Industrials also attracted $579 million, while the utilities sector saw $1.04 billion in outflows.Debt funds were in demand for the sixth week in a row, with investors pouring about $12.5 billion into global bond funds on a net basis.Global high yield funds received $4.25 billion, marking their seventh successive week of net purchases. Government, and loan participation funds also saw $1.5 billion and $452 million worth of net buying.Concurrently, money market funds obtained $32.89 billion, their first weekly inflow in three weeks. In the commodities segment, precious metal funds received about $50 million, a significant drop from $511 million worth of net purchases in the previous week. Energy funds, meanwhile, saw $77 million worth of net buying.Data covering 29,702 emerging market funds showed equity funds saw $361 million worth of net purchases, the first weekly inflow in three weeks, while bond funds suffered about $711 million worth of net selling. More

BERLIN, El Salvador (Reuters) – James and Nicki Malcolm moved to El Salvador from New Zealand to be part of a bitcoin dream sold by President Nayib Bukele in 2021 when he made the Central American nation the first in the world to accept the cryptocurrency as legal tender.Months later Bukele sketched his plans for Bitcoin City, a tax-free crypto haven powered by geothermal energy from a volcano, to a sea of enthusiasts at a beach club presentation that included an avatar of himself on a spaceship. As the popular Bukele readies himself to win a second term this Sunday, ground has yet to be broken on Bitcoin City. But, undeterred and still inspired, the Malcolms, along with 15 other foreigners and a Salvadoran couple, have convinced more than 100 businesses to accept bitcoin in the coffee-producing mountain town of Berlin in eastern El Salvador.”Adoption is huge for us — it’s what we feel is important and how bitcoin will win,” said Nicki, a former mortgage advisor who is part of the effort to turn Berlin into its own crypto mecca. “Bukele put the flag in the ground.” Bukele is pressing ahead with his plan to make the country a cryptocurrency haven, hurting the country’s chance of a quick cash injection from the International Monetary Fund (IMF) even as credit agencies warn state coffers are running dangerously low.On his social media feed, Bukele gloats about spikes in Bitcoin’s value and touts infrastructure plans in videos set to club music. But that belies a stark reality: El Salvador’s economy is mostly stagnant and posts the slowest economic growth in Central America. Extreme poverty has doubled since 2019 and almost half the population lives with food insecurity. “It’s unusual for someone to use bitcoin,” said Kevin Valle, 24, a Salvadoran produce vendor in Berlin’s main market. “What I can say is the cost of my tomatoes and onions has doubled, and people are worried about low employment and salaries.”In 2022 the country’s public debt hit a 30-year record at $25 billion.After initial negotiations with the IMF for a billion-dollar deal fell apart earlier in his first term, Bukele’s government has since gone back to the table, and even hired the IMF’s former Western Hemisphere director last April.The IMF has recommended El Salvador remove bitcoin’s legal tender status during negotiations over financial support.The Fund did not respond to request for comment. But the 42-year-old firebrand’s resolve has been stiffened by Bitcoin’s recent rally. The cryptocurrency’s comeback has pushed El Salvador’s alleged investments – no one really knows the size of its holdings – into the black. ‘Nayibtracker.com,’ an unofficial website tracking El Salvador’s bitcoin portfolio based on Bukele’s social media, puts it at $121.6 million on an initial $119.8 million investment, a 1.5% return.After a recent announcement by the U.S. Securities and Exchange Commission (SEC) to allow U.S.-listed exchange-traded funds (ETFs) that track bitcoin, Bukele’s vice president told Reuters the government will be doubling down on its crypto law in a second term.The country’s adoption of the cryptocurrency alongside the dollar is largely not to blame for the overall state of the economy, say some economists, who point to low foreign direct investment and government overspending.But amid questions over state spending habits and a clear liquidity problem, critics note bitcoin has yet to bring significant benefit. Economists like Tatiana Marroquin have questioned Bukele’s decision to gamble an unknown amount of taxpayer dollars that could be used elsewhere on a risky investment. Vice President Felix Ulloa told Reuters initial investor skepticism “was reversing.” Through a carefully-crafted media machine that keeps dissent in check, Bukele projects the image of a more modern, economically astute El Salvador. But it is his massive crackdown on violent criminal gangs, at the expense of civil liberties, that has propelled him to dizzying heights of popularity with Salvadorans. Bukele says he works for Salvadorans and once responded to concerns about democracy by changing his bio on X to “World’s Coolest Dictator.”EMPTY WALLETSTo date, most Salvadorans ignore bitcoin. They worry about the cryptocurrency’s volatility in a cash-based economy where many live hand-to-mouth. Some 88% of Salvadorans did not use it in 2023, according to a survey by the University of Central America’s public opinion institute. Just 1% of remittances were sent in bitcoin. Nearly two dozen people Reuters spoke to said they did not care to understand the cryptocurrency, but they were increasingly concerned about the lack of jobs and rising costs of housing and food.Paired with security wins, Bukele’s bitcoin swing has rebranded El Salvador, helping boost tourism. In Berlin, business owners say they conduct a handful of bitcoin transactions a day, mainly from tourists. At Bitcoin Beach, ground zero for crypto in El Salvador, tourism has shot up. Many local businesses are happy about the influx, but several bemoaned skyrocketing prices, particularly of land as foreigners accumulate beachfront property. While they handle a small number of bitcoin transactions, they complain about problems with Chivo, the digital wallet hastily created in 2021 by the government for Salvadorans to hold and send bitcoin. “It was not well executed. Things that needed to happen just didn’t happen,” said Philip Ong, a Singaporean Bitcoin entrepreneur who said he invested $1 million to set up a San Salvador office. He told Reuters he “strongly supports” Bukele’s bitcoin vision. But he left El Salvador last year — in large part, he said, because there was “no momentum.” More

New research finds that former President Donald J. Trump’s tariffs did not bring back U.S. jobs, but voters appeared to reward him for the levies anyway.The sweeping tariffs that former President Donald J. Trump imposed on China and other American trading partners were simultaneously a political success and an economic failure, a new study suggests. That’s because the levies won over voters for the Republican Party even though they did not bring back jobs.The nonpartisan working paper examines monthly data on U.S. employment by industry to find that the tariffs that Mr. Trump placed on foreign metals, washing machines and an array of goods from China starting in 2018 neither raised nor lowered the overall number of jobs in the affected industries.But the tariffs did incite other countries to impose their own retaliatory tariffs on American products, making them more expensive to sell overseas, and those levies had a negative effect on American jobs, the paper finds. That was particularly true in agriculture: Farmers who exported soybeans, cotton and sorghum to China were hit by Beijing’s decision to raise tariffs on those products to as much as 25 percent.The Trump administration aimed to offset those losses by offering financial support for farmers, ultimately giving out $23 billion in 2018 and 2019. But those funds were distributed unevenly, a government assessment found, and the economists say those subsidies only partially mitigated the harm that had been caused by the tariffs.The findings contradict Mr. Trump’s claims that his tariffs helped to reverse some of the damage done by competition from China and bring back American manufacturing jobs that had gone overseas. The economists conclude that the aggregate effect on U.S. jobs of the three measures — the original tariffs, retaliatory tariffs and subsidies granted to farmers — were “at best a wash, and it may have been mildly negative.”“Certainly you can reject the hypothesis that this tariff policy was very successful at bringing back jobs to those industries that got a lot of exposure to that tariff war,” one of the study authors, David Dorn of the University of Zurich, said in an interview.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More