International News 31/01

January 31, 2024 No. 14

Wall Street closes higher before the Fed meeting and corporate performance reports.

Wall Street saw gains as the S&P 500 reached another closing high this week. However, sentiment in the US stock market remained thin due to upcoming performance reports from megacap companies, economic data, and the Federal Reserve's monetary policy meeting. On Monday, the Dow Jones Industrial Average rose by 0.59%, the S&P 500 by 0.76%, and the Nasdaq Composite by 1.12%. Most sectoral indices in the S&P 500 gained, especially in the information technology sector, which rose by 1.37%. However, the energy sector was the only one that declined. The bellwether index has increased by 3.3% in the first month of 2024, prompting BlackRock to upgrade its overall US stock view. Market strategist Ryan Detrick warned of potential market volatility due to upcoming events such as earnings reports, Federal Reserve decisions, and geopolitical uncertainties.


Thailand's economy is threatened by recession as household debt swells.

Thailand is experiencing an economic crisis due to high household debt, which has led the Deputy Finance Minister to declare a recession. As a result, the Thai central bank is under pressure to lower interest rates. To boost the economy, the government intends to inject 500 billion baht ($14 billion) by providing direct payments of 10,000 baht ($281) to 50 million Thai citizens. However, the launch of this programme has been delayed. The Deputy Finance Minister suggests lowering the policy rate, currently at 2.50%, at the central bank's next policy review to reduce borrowing costs and ease the burden on the people. The Thai Prime Minister is also urging the central bank to take action. The Bank of Thailand Governor, who has faced criticism for not reducing interest rates despite inflation, is under pressure to act.


Hong Kong court has ordered Evergrande Group to be liquidated.

A Hong Kong court has ordered the liquidation of China Evergrande Group as part of efforts to address China's financial market crisis. Trading in shares of China Evergrande, China Evergrande New Energy Vehicle Group, and Evergrande Property Services has been suspended. The court-appointed liquidator's ability to distribute assets is dependent on recognition from Chinese courts. It is unclear whether the administrator appointed by the Chinese court will cooperate with the Hong Kong court-appointed liquidator to achieve a transparent and fair restructuring or liquidation of Evergrande. According to Chris Beddor, Deputy Director of China Research at Gavekal Dragonomics, Evergrande's situation is unique, as property developers have not seen significant improvements in recent months. The industry is still facing challenges with regards to sales revenue, and this has had a noticeable impact on homebuyer sentiment within the property market.