Economy

HAVANA (Reuters) – Cuba’s efforts to restore power to the island were derailed for a third time late on Saturday, Cuban authorities said shortly before midnight, leaving millions in the dark and raising fresh questions over the viability of the government’s bid to reestablish electrical service.Cuba’s national electrical grid first crashed around midday on Friday after the island’s largest power plant shut down. The grid collapsed again on Saturday morning, state-run media reported. By early evening, authorities reported some progress restoring power before announcing the grid had once again collapsed.”Tonight at 10:25 p.m. the total disconnection of the national electro-energetic system occurred again,” the Havana Electric company said on Telegram late on Saturday. The post was later removed from the company’s Telegram feed. It was not immediately clear why the post was removed, but millions were still without power on early on Sunday.Cuba’s energy ministry said shortly after the Havana Electric post that it was working to reestablish service, adding that “another disconnection” had occurred in the “western sub-system,” which includes the capital Havana.”The process of reestablishing the electrical system continues to be complex,” the ministry said on X.A third grid collapse marks a major setback in the government’s efforts to quickly restore power to exhausted residents already suffering from severe food, medicine and fuel shortages. Reuters reporters witnessed two small protests overnight, one in Marianao and the other in the Cuatro Caminos area of Havana. Various videos of protests elsewhere in the capital began to crop up on social media late on Saturday, though Reuters was not able to verify their authenticity.Internet traffic dropped off sharply in Cuba on Saturday, according to data from internet monitoring group NetBlocks, as vast power outages made it all but impossible for most island residents to charge phones and get online. “Network data show that Cuba remains largely offline as the island experiences a second nationwide power outage,” Netblocks said on Saturday.Even before the grid failures, a dire electricity shortfall on Friday had forced Cuba’s Communist-run government to send non-essential state workers home and cancel school for children as it sought to conserve fuel for power generation.The government has blamed weeks of worsening blackouts – as long as 10 to 20 hours a day across much of the island – on deteriorating infrastructure, fuel shortages and rising demand. Cuba also blames the U.S. trade embargo, as well as sanctions instituted by then-President Donald Trump, for ongoing difficulties in acquiring fuel and spare parts to operate and maintain its oil-fired plants.The U.S. has denied any role in the grid failures. More

Entering Q4 2024, consumers have largely benefited from strong tailwinds, but are now facing potential headwinds from policies and geopolitical uncertainties. Despite these risks, Barclays strategists said they “remain optimistic that this will amount to a softening in spending rather than a looming downturn.”Recent summer spending data was solid, suggesting that US consumers have managed to maintain a strong footing through challenging times. However, subtle signs of slowing in consumption growth have begun to emerge, particularly when analyzing recent credit card data. This indicates that while spending remains generally positive, the pace of growth is tapering off.One notable trend is the divergence in consumer behavior across income levels. Higher-income households have maintained their spending, but lower-income consumers are beginning to cut back, especially in discretionary categories.This income-based divergence is particularly evident in the analysis of credit card data, which shows that although overall spending trends are positive, there are “subtle signs of slowing in consumption growth.”“Credit card issuers reiterated a positive tone around spend trends, but our analysis highlights the stress imbalances between higher-income and lower-income consumers,” the report says.According to Barclays, the upcoming holiday season could see more bifurcated spending patterns, with the US presidential election likely influencing consumer confidence, especially as lower-income households focus on value and higher-income households sustain spending.Moreover, data from September revealed some weakness in back-to-school spending, which might signal a weaker end-of-year retail performance.Despite concerns about rising delinquencies in consumer credit, Barclays maintains that the situation is not overly concerning at this stage. The pace of new delinquencies is slowing, “indicating that they may be near their peak,” strategists noted.They see the US consumer as a key pillar of strength for the economy and the US dollar, and expect that “a softish landing and hawkish upside surprises to maintain that strength.”“US consumption has been in a sweet spot for a while now, aided by favorable labor supply trends and a large stock of excess savings that is being put to use,” Barclays strategists explained.“This has allowed the US economy to grow consistently above trend, bucking recession risks thanks to the virtuous cycle between consumer spending, net hiring, and income. For all its swings, the resulting modest cutting cycle envisaged for the Fed has contributed to sustaining historically elevated dollar valuations.”Strategists note that the recent rise in the US dollar, following the Federal Reserve’s 50 basis point rate cut, may seem unexpected at first glance. However, they explain that this movement aligns with historical trends.They highlight that the “totality of the data” since the initial rate cut continues to signal a “soft landing,” even though labor data has shown some signs of softening in recent months. More

The brokerage has downgraded the consumer discretionary sector, while upgrading healthcare, signaling a shift towards defensive investments amid concerns about limited fiscal support and macroeconomic challenges.The consumer discretionary sector has been moved to “underweight” from an “equal-weight” status, as the lack of detailed consumption-oriented stimulus measures raises doubts about near-term growth prospects. In contrast, the healthcare sector was upgraded to “equal-weight” from “underweight.” This revision reflects a focus on cash-generating assets and resilience, considering the uncertainties surrounding China’s economic policy trajectory and global trade dynamics.The reshuffling includes updates to Morgan Stanley’s focus list. The analysts have replaced Anta Sports, a prominent player in consumer discretionary, with Cosco Shipping Energy Transportation, citing stronger fundamentals and potential gains from global oil shipping demand. In healthcare, China Resources Sanjiu was added to both the China/HK and A-share thematic lists. Known for its over-the-counter drug portfolio, Sanjiu is positioned to benefit from stable earnings, dividend payouts, and China’s state-owned enterprise reforms​.Morgan Stanley’s outlook reflects a broader effort to align with more stable returns as fiscal policy remains gradual and geopolitical tensions linger. Analysts have expressed caution about the potential impact of US trade policies and elections, which could disrupt specific sectors in China, further justifying the pivot towards healthcare and other defensive investments.The note mentions that uncertainties remain high, with China’s fiscal expansion anticipated to proceed incrementally. Morgan Stanley’s economics team projects additional fiscal stimulus worth approximately RMB 2 trillion for the remainder of 2024, followed by another RMB 2–3 trillion in debt swaps in 2025. Against this backdrop, the focus on sectors less vulnerable to external shocks reflects a tactical shift aimed at navigating market volatility in the coming months.This reallocation suggests Morgan Stanley’s preference for sectors offering cash flow certainty over speculative growth plays, marking a shift in its investment strategy amid the unpredictable economic environment. More

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The tropical storm is located about 25 miles (40.23 km) southeast of Belize City, packing maximum sustained winds of 50 miles per hour, according to the NHC.The Miami-based forecaster on Saturday said that Nadine will then move across Belize, northern Guatemala, and southern Mexico this afternoon through Sunday. Weakening is expected after the storm moves inland, and it will likely dissipate by late Sunday, the forecaster added. More

The regulations aim to improve transparency and standardization of export control policies and to boost export control capabilities of items that may be used either for civilian or military purposes, said Xinhua.The United States says Beijing is supporting Russia’s war effort in Ukraine by supplying dual use goods, including microelectronics, that can help it build weapons. China says it has not provided weaponry to any party, and that normal trade with Russia should not be interrupted.The new regulations put in place a permit system for the export of dual use goods and create a list of restricted goods. Exporters of such goods will have to disclose the ultimate user and the intended use of the exported goods.This week Washington sanctioned two Chinese companies and a Russian affiliate involved in making and shipping attack drones and warned the two countries to halt cooperation boosting the Ukraine war effort. More