Economy

The consumer price index (CPI) rose by 2.6% in October, data showed on November 13, while the core rate, which strips out food and energy, rose 3.3% – in line with market expectations. Citigroup (NYSE:C) stuck to its view of a cut of 50 bps in December, while all major brokerages continue to see a 25-bps cut post the inflation report.Following the CPI data, Powell affirmed in prepared remarks delivered at a Dallas Fed event on November 14 that ongoing economic growth, a solid job market, and inflation above its 2% target means the central bank does not need to rush to lower interest rates.”We now see a greater risk that the FOMC(Federal Open Market Committee) could slow the pace sooner, possibly as soon as the December or January meetings,” Goldman analysts said in a note dated November 14 following Powell’s remarks. Here are the forecasts from major brokerages after the CPI data:Rate cut estimates (in bps) Brokerages Dec’2024 2025 Fed Funds Rate BofA Global 25 Research 50 3.75%-4.00% (end of June) Barclays (LON:BARC) 25 50 3.75%-4.00% (end of 2025) Macquarie 25 100 3.25%-3.50% (through (through June 2025) June 2025) Goldman Sachs 25 3.25%-3.50% (through 100 September 2025) (through September 2025) J.P.Morgan 25 3.75% (through September 75(throug 2025) h September 2025) *UBS Global 25 125 3.00%-3.25% (through Research end of 2025) TD Securities 25 100 3.25%-3.50% (through end of 2025) Morgan Stanley (NYSE:MS) 25 3.375% (Q4 2025) 100 (through June 2025) Jefferies 100 25 3.25%-3.50% (through end of 2025) Nomura 25 25 4.00-4.25% (through end of 2025) *UBS Global Wealth 25 100 3.25%-3.50% (through Management end of 2025) Deutsche Bank (ETR:DBKGn) 25 – – Citigroup 50 – – *UBS Global Research and UBS Global Wealth Management are distinct, independent divisions in UBS Group Here are the forecasts from major brokerages before the CPI data:Rate-cut estimates (in bps) Brokerages 2024 Nov Dec BofA Global 25 25 Research Deutsche Bank 25 25 Barclays 25 25 Macquarie 25 25 Goldman Sachs 25 25 J.P.Morgan 25 25 *UBS Global Wealth 50 Management Citigroup 25 50 More

The spending limits are enshrined in Germany’s constitution, but political parties have bristled at the limitations as Europe’s biggest economy tries to boost a recovery held back by high energy prices following Russia’s invasion of Ukraine.A dispute over spending led to the collapse of Germany’s government last week, when Chancellor Olaf Scholz fired finance minister Christian Lindner, ending a coalition between Scholz’s SPD, Lindner’s pro-market Free Democrats and the Greens.Referring to signs of willingness for reform from the centre-right opposition, SPD leader Lars Klingbeil told the Handelsblatt newspaper: “That’s a good starting point for continuing straight away.”Opposition leader Friedrich Merz of the conservative Christian Democrats (CDU) has said he could be open to reforming the debt brake, which limits Germany’s public deficit to 0.35% of gross domestic product, in certain circumstances.Merz has been tipped to succeed Scholz as chancellor in snap elections set for Feb. 23, with the CDU currently leading in the polls.”Perhaps people will then look back on this moment and understand what an opportunity the democratic centre parties missed here,” said Lars Klingbeil on Friday in social platform X.Now would be the time for a responsible compromise by the Democrats, he said, asking the conservative CDU for an agreement, as reform requires a two-thirds majority in parliament. “First the country, then the party,” he said. “We would be ready.”Within the CDU, the debate about debt brake reform was reopened this year by Kai Wegner, the conservative mayor of Berlin. Several powerful CDU leaders from other regional governments have joined the push for reform because the states are more constrained than the federal government, having no structural leeway to incur new debt.The services sector trade union Verdi welcomed the new openness of Merz to reform the debt brake. “This is an insight into what is necessary,” Verdi’s head Frank Werneke told Reuters. “We have a massive investment backlog in Germany, over 180 billion euros in the municipal sector alone.” If the next government also continues to modernise the armed forces and maintains its support for Ukraine, this will not be possible without additional borrowing, he said. More

LONDON (Reuters) -Unilever is cutting about 1,500 fewer jobs in Europe than initially anticipated and hiring about 1,000 people, primarily those affected by its cost-cutting drive, for its soon-to-be spun off ice cream business, the head of the company’s European Works Council told Reuters. The British company, whose shareholders include billionaire activist investor and board member Nelson Peltz, has been trying to streamline its business over the past year under CEO Hein Schumacher. Prior to his apppointment, Unilever (LON:ULVR) had underperformed for years and was criticised for allowing its brand portfolio to grow to around 400, leaving management with too little time to focus on its best performers.Some investors had also said Unilever was too slow to revive margins in the wake of the Covid-19 pandemic and needed to become leaner.Unilever said earlier this year it would axe 7,500 jobs globally as part of a restructuring to save about 800 million euros ($845 million). It also said it would spin off its ice cream unit which is home to brands including Ben & Jerry’s and Magnum. Unilever’s European Works Council (UEWC) has strongly criticized those decisions, saying a realignment of the ice cream business could have been successfully managed within Unilever. UEWC Chairman, Hermann Soggeberg, told Reuters exclusively on Friday that the company had, however, reached a deal in October with Unilever that would see a reduction of about 1,700 jobs having initially anticipated about 3,200 job losses in Europe. “We have been negotiating intensively with the company throughout the summer,” Soggeberg said.He said Unilever is still making the savings it promised to investors, but was able to significantly reduce the job cuts in Europe through savings projects from 2022 to 2024 and not hiring externally.Soggeberg said about 1,000 additional jobs will be offered at Unilever’s European ice cream company primarily to employees affected by job cuts in the rest of Unilever’s business.”They are planning for growth in ice cream,” Soggeberg said. “We agreed with Unilever that this process to hiring these people will be synchronized with the job cut program.”The ice cream business’ spinoff is expected to complete by the end of 2025, London-listed Unilever has previously said, adding that it would move to a separate head office in Amsterdam.”We remain fully on track to deliver the 800 million euros savings from our productivity programme,” a Unilever spokesperson said. “When we announced the programme, we were determined to mitigate the impact of these changes on our people and so we are pleased that we have achieved this in Europe,” the spokesperson added. ($1 = 0.9464 euros) More

According to LSEG data, investors acquired a massive $37.37 billion worth of U.S. equity funds in their largest weekly net purchase since at least January 2014.Investors expect that Trump’s policies would boost the U.S. corporate sector with lower taxes, more lenient regulation and consolidation across industries through mergers and acquisitions. The small-cap equity funds segment saw robust demand, securing the largest weekly inflow in four months at $7.43 billion net. Meanwhile, the large-cap segment attracted $18.89 billion, the most in six weeks, with multi-cap and mid-cap funds receiving net additions of $2.66 billion and $633 million, respectively.Investors pumped $4.42 billion into financial sector funds, the biggest amount in at least a decade. Industrials and consumer discretionary also drew $1.28 billion and $453 million worth of inflows, respectively.U.S. bond funds continued to attract strong demand, drawing in $5.71 billion in net purchases for the 24th consecutive week. General domestic taxable fixed income funds and loan participation funds saw significant inflows, receiving $2.5 billion and $2.15 billion respectively.Investors, meanwhile, snapped up $76.56 billion worth of money market funds, extending net purchases into a second straight week. More

President-elect Donald Trump’s transition team is planning to kill the $7,500 consumer tax credit as part of broader tax-reform legislation, Reuters reported Thursday.”It would be so counterproductive,” she said when asked about the report. “You eliminate these credits, and what do you do? You end up ceding the territory to other countries, particularly China.” More

ABUJA (Reuters) -Nigeria’s inflation rate rose for the second straight month in October, advancing to 33.88% in annual terms from 32.70% in September mainly due to higher food prices, official data showed on Friday.Inflation quickened sharply in the second half of last year after President Bola Tinubu devalued the country’s naira currency and cut subsidies to try to lift economic growth and shore up public finances.It started to ease in July this year as the impact of the naira devaluation began to fade, but a series of petrol price increases and severe flooding that has wiped out crops again spurred price pressures, exacerbating the worst cost-of-living crisis in decades in Africa’s most populous nation.A report by the National Bureau of Statistics said food inflation reached 39.16% year-on-year in October from 37.77% the previous month, caused by price rises for staples such as rice, maize, bread, potatoes and cooking oil.Torrential rain and floods in 29 of Nigeria’s 36 states this year have destroyed more than 1.5 million hectares of cropland, making millions go hungry and causing mass displacement. The central bank has hiked interest rates five times this year to try to get inflation under control. It is due to announce its final rate decision of the year on Nov. 26. More

(Reuters) -U.S. stock index futures fell on Friday after Federal Reserve Chair Jerome Powell said there was no need to rush interest-rate cuts, pushing up bond yields and pressuring rate-sensitive equities. In a speech on Thursday, Powell pointed to ongoing economic growth, a solid job market, and inflation above the Fed’s 2% target as reasons the central bank can afford to be careful as they determine the pace and scope of rate cuts going forward.U.S. Treasury yields rose broadly after Powell’s comments, while Wall Street’s main indexes closed lower. “Fed Chair Powell telegraphed news that markets didn’t want to hear but news that was clearly manifest in the last CPI report, that the Fed cannot yet declare victory in its campaign to quell inflation,” said Quincy Krosby, chief global strategist for LPL Financial (NASDAQ:LPLA). Traders increased bets that the Fed will keep rates on hold at its December meeting – pricing in a 41.3% chance, compared with 14% a month ago, according to the CME FedWatch tool. They now expect only about 73 basis points of total easing by the end of 2025, per LSEG calculations. All three major U.S. stock indexes are set for weekly losses, as a sharp post-election rally has fizzled out with market focus shifting to the state of the economy and potential inflation risks under a second Donald Trump presidency.Stocks of vaccine makers lost ground after the President-elect selected Robert F Kennedy Jr, who has spread misinformation on vaccines, to head the Department of Health and Human Services. BioNTech (NASDAQ:BNTX) dropped 2.5%, while Moderna (NASDAQ:MRNA) and Novavax (NASDAQ:NVAX) fell more than 1% in premarket trading. Pfizer (NYSE:PFE) dipped 0.5%. Dow E-minis were down 168 points, or 0.38%, S&P 500 E-minis were down 32 points, or 0.54%, and Nasdaq 100 E-minis were down 164.25 points, or 0.78%.Futures tracking the more rate-sensitive, small-cap Russell 2000 dropped 0.1%.Megacap stocks also fell. Nvidia (NASDAQ:NVDA) edged 0.3% lower, Apple (NASDAQ:AAPL) dropped 0.8% and Alphabet (NASDAQ:GOOGL) was down 0.5%. Powell’s comments come after both consumer and producer prices data this week pointed to persistent inflation.Friday’s October retail sales data, due at 8:30 a.m. ET, will provide more signals on how consumers have coped with rising prices. Import and export prices as well as industrial production data are on deck through the day, while remarks from Fed officials Austan Goolsbee, Susan Collins and John Williams are also expected. Applied Materials (NASDAQ:AMAT) fell 8% after the chipmaking equipment supplier forecast first-quarter revenue below Wall Street estimates on Thursday.Warren Buffett’s Berkshire Hathaway (NYSE:BRKa) said on Thursday it made new investments in Domino’s Pizza (NYSE:DPZ) and sold its entire stake in cosmetics chain Ulta Beauty (NASDAQ:ULTA).Domino’s shares were up 7.5%, while Ulta was down 4.9%.U.S.-listed shares of Chinese e-commerce giant Alibaba (NYSE:BABA) gained 4.7% despite missing quarterly revenue estimates. More

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