Stocks mixed as bond yields tick back up; bank stocks rise

US Federal Reserve Chairman Jerome Powell. (REUTERS/Kevin Lamarque/File Photo)
US Federal Reserve Chairman Jerome Powell. (REUTERS/Kevin Lamarque/File Photo)
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Updated 10 April 2021

Stocks mixed as bond yields tick back up; bank stocks rise

Stocks mixed as bond yields tick back up; bank stocks rise
  • Investors are showing cautious optimism about the economic recovery, especially in the US

NEW YORK: Stocks were slightly higher in trading Friday, as a rise in bond yields helped lift the shares of energy and bank companies in the going. Technology stocks, which have moved in the opposite direction as bond yields, were trading lower.

The S&P 500 index was up 0.2 percent. The Dow Jones Industrial Average was up 0.2 percent as well, while the Nasdaq Composite index was down 0.2 percent.

Bank stocks were among the better performers in trading, as a rise in bond yields translates into higher interest banks can charge to customers to borrow. Wells Fargo was up 1 percent, Bank of America was up 0.7 percent and JPMorgan Chase was up 0.6 percent.

On Thursday, the S&P 500 index gained 0.4 percent to 4,097.17, another record high following records set on Monday and Wednesday. Stocks have benefited this week as bond yields, which had been steadily ticking higher, retreated from highs hit earlier in the month.

But on Friday, bond yields resumed their rise. The yield on the 10-year US Treasury note, which influences interest rates on mortgages and other loans, rose to 1.66 percent from 1.63 percent late Thursday. It had been as high as 1.75 percent on Monday.

Investors are showing cautious optimism about the economic recovery, especially in the US, where vaccine distribution has been ramping up and President Joe Biden has advanced the deadline for states to make doses available to all adults to April 19.

But it’s clear the recovery has a long way to go. The number of Americans who filed for unemployment benefits last week rose again last week, as many businesses remain closed or partially shut down due to the pandemic.

In remarks to the International Monetary Fund Thursday, Federal Reserve Chair Jerome Powell said a number of factors are putting the nation ‘on track to allow a full reopening of the economy fairly soon.’

Investors will be turning their attentions toward company earnings starting next week, when earnings season gets underway. The major banks are among the first to report their results, including JPMorgan, Wells and Bank of America.


Suspected cases of corporate collusion in Saudi Arabia surge in 2021

Suspected cases of corporate collusion in Saudi Arabia surge in 2021
Updated 2 min 39 sec ago

Suspected cases of corporate collusion in Saudi Arabia surge in 2021

Suspected cases of corporate collusion in Saudi Arabia surge in 2021
RIYADH: Cases of suspected collusion in tenders being investigated by the Saudi General Authority for Competition (GAC) rose to 86 in 2021, up from 55 last year and 15 in 2019, Al Arabiya reported.

The value of projects being investigated in the Kingdom amounted to more than SR1 billion ($267 million), Abdulaziz Alzoom, governor of GAC, said in a statement.

In a previous statement, GAC said it had started investigations, research and gathering of evidence with a number of establishments, based on communications it had received from other authorities, and complaints from individuals and companies.

Oil prices rise further on tight supply outlook, eyes on OPEC+

Oil prices rise further on tight supply outlook, eyes on OPEC+
Updated 33 min 57 sec ago

Oil prices rise further on tight supply outlook, eyes on OPEC+

Oil prices rise further on tight supply outlook, eyes on OPEC+
  • U.S. infrastructure bill brightens demand outlook - analysts
  • OPEC+ meeting on July 1, seen cautious with easing output cuts

SINGAPORE: Oil prices climbed for a third straight session on Friday, on track for a fifth consecutive weekly gain, as demand growth is expected to outstrip supply on bets that OPEC+ producers will be cautious in returning more output to the market from August.
Brent crude futures rose 6 cents, or 0.1 percent, to $75.62 a barrel at 6:46 a.m. GMT, heading for a 2.9 percent jump for the week.
US West Texas Intermediate (WTI) crude futures were up 5 cents, or 0.1 percent, at $73.35 a barrel, headed for a 2.4 percent weekly gain.
Both benchmark contracts settled at their highest levels since October 2018 on Thursday.
“Expectations of tightness in global market is the major factor supporting crude oil as demand is recovering while OPEC+ has constrained supply and US stocks are falling,” said Ravindra Rao, vice president for commodities at Kotak Securities.
Oil also got some support on Friday as the approval of US infrastructure bill boosted optimism for energy demand outlook, analysts said.
All eyes are on the Organization of the Petroleum Exporting Countries, Russia and allies — together called OPEC+ — who are due to meet on July 1 to discuss further easing of their output cuts from August.
“(The market) certainly has momentum behind it...It’s really in the hands of OPEC+,” said Commonwealth Bank commodities analyst Vivek Dhar.
On the demand side, the key factors OPEC+ will have to consider are strong growth in the United States, Europe and China, bolstered by vaccine rollouts and economies reopening, offset by rising COVID-19 cases and outbreaks in other locations, analysts said.
“I think OPEC+ will carefully calibrate production hikes from August onwards to meet rising demand without causing significant price fluctuations,” said Margaret Yang, a strategist at Singapore-based DailyFX.
“The market has likely priced-in an August hike in advance,” she added.
ANZ analysts have predicted OPEC+ would step up supply with a small increase of 500,000 barrels per day in August, adding to the 2.1 million bpd they agreed to return to the market from May through July.
The prospect of sanctions being lifted on Iran and more of its oil hitting the market anytime soon has dimmed, with a US official saying “serious differences” remain over a range of issues over Iran’s compliance with the 2015 nuclear deal.


Iraq, UAE’s Masdar sign solar power agreement

Iraq, UAE’s Masdar sign solar power agreement
Updated 49 min 46 sec ago

Iraq, UAE’s Masdar sign solar power agreement

Iraq, UAE’s Masdar sign solar power agreement
  • 2,000 MW of solar to be built according to agreement
  • Cost of deal undisclosed by Iraqi Oil Ministry

DUBAI: The Iraqi electricity ministry signed with Masdar, a United Arab Emirates-based renewable power developer, an agreement to build solar power projects in central and southern Iraq, with a total capacity of 2,000 Megawatts, the Iraqi oil ministry said on Thursday in a statement.
The project is the biggest investment in Iraq’s renewable energy industry, the statement said, without indicating its total cost.
Iraq is planning to build a number of power plants in the coming years in partnership with international and Arab companies. Some will use solar energy, while others will run on fossil fuels, including gas that is produced during the extraction of oil, by introducing it into the electricity production system, Iraq Oil Minister Ihsan Abdul Jabbar told Asharq recently.


Lebanon caretaker PM approves financing fuel imports at weaker exchange rate

Lebanon caretaker PM approves financing fuel imports at weaker exchange rate
Updated 25 June 2021

Lebanon caretaker PM approves financing fuel imports at weaker exchange rate

Lebanon caretaker PM approves financing fuel imports at weaker exchange rate
  • Lebanon is in the throes of a financial crisis described by the World Bank as one of the deepest depressions of modern history
  • Lebanon’s central bank asked the government on Thursday to provide it with a legal basis to lend it foreign currency from its mandatory reserves to fund the subsidised fuel imports

BEIRUT: Lebanon’s caretaker prime minister on Friday approved a proposal to finance fuel imports at the rate of 3,900 Lebanese pounds to the dollar, instead of the previous 1,500 pound rate, amidst worsening gasoline shortages.
The weaker exchange rate, which will effectively decrease the subsidy on fuel, is expected to raise the price of gasoline for consumers but enable the government to supply fuel for a longer period of time.
Lebanon is in the throes of a financial crisis described by the World Bank as one of the deepest depressions of modern history. Fuel shortages in past weeks have forced motorists to queue for hours for dribbles of gasoline.
Lebanon’s subsidy program, introduced last year as the country’s economic meltdown translated to harsher living conditions, covers basic goods such as wheat, medicine and fuel and costs around $6 billion a year.
Half of that amount is spent on fuel.
Lebanon’s central bank asked the government on Thursday to provide it with a legal basis to lend it foreign currency from its mandatory reserves to fund the subsidised fuel imports, an indication that the bank has all but run out of reserves.
Mandatory reserves — hard currency deposits parked by local lenders at the central bank — represent a percentage of customer deposits and are usually not drawn upon except in exceptional circumstances, with the correct legal permission.
Lebanon’s foreign currency reserves stood at slightly more than $15 billion in March. The Central Bank has not given an updated figure since then. 


Iraq targets 90% self-sufficiency in natural gas by 2025

Iraq targets 90% self-sufficiency in natural gas by 2025
Updated 25 June 2021

Iraq targets 90% self-sufficiency in natural gas by 2025

Iraq targets 90% self-sufficiency in natural gas by 2025
  • Iraq currently consumers 3,5000 cubic feet of gas, produces 1,300 cubic feet
  • Iraq imports the rest of its gas from Iran

RIYADH: The Iraqi Ministry of Oil plans to attract a contractor to invest in Akkas gas field, to produce 4,000 million cubic feet of gas by 2025, which represents 90 percent of Iraq’s need for electric power production, said Minister Ihsan Abdul Jabbar.

Iraq will need more gas for electric power by 2030 to keep pace with the rise in the population, which is expected to increase by 10 million people to 50 million by then, he told Asharq.

Iraq will still need to import 15 percent of the gas fuel it needs, he said. Infrastructure is being built in the south to open new outlets to import gas from other countries such as Qatar when needed, he said.

There are currently new projects in the governorates of Dhi Qar and Maysan, Abdul Jabbar said.

Iraq currently consumes about 3,500 million standard cubic feet of natural gas, of which 1,300 cubic feet is produced in Iraq and the rest imported from Iran, while the actual need for Iraq amounts to 4,500 million cubic feet, he said.

Iraq is planning to build a number of power plants in the coming years in partnership with international and Arab companies. Some will use solar energy, while others will run on fossil fuels, including gas that is produced during the extraction of oil, by introducing it into the electricity production system, Abdul Jabbar said.

Iraq plans to end gas flaring altogether by 2025, he said.