Stocks fall as tech shares weigh, gold climbs

Stocks fall as tech shares weigh, gold climbs
The dollar was steady near recent lows as new restrictions in Asia to contain COVID-19 supported safe-haven currencies, while bitcoin extended its slide.
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Updated 18 May 2021

Stocks fall as tech shares weigh, gold climbs

Stocks fall as tech shares weigh, gold climbs
  • Amid a flight to safety, the precious metal is seen as a hedge against rising inflation

NEW YORK: Stock indexes were lower globally on Monday with technology shares on Wall Street falling, while US Treasury yields traded little changed even after a report showing the highest prices ever paid in a May manufacturing survey for New York state.

Concerns over inflationary pressure helped to lift gold prices to their highest in more than three months, however.

The Empire State Manufacturing Survey, produced by the New York Fed, showed the prices paid index rose to a record 83.5, the highest since the data series began in 2001, said Tom Simons, money market economist at Jefferies & Co.

Wall Street’s declines follow the S&P 500’s biggest one-day jump in more than a month on Friday.

While the week is expected to be relatively quiet for economic data, investors will be anxious to see minutes on Wednesday from the Federal Reserve’s policy meeting last month which could shed more light on the policymakers’ outlook of an economic rebound.

“The volatility has picked up because a lot of the good news has been priced in, and last week we finally saw fears of inflation,” said Greg Marcus, managing director, UBS Private Wealth Management.

The spread of the coronavirus was also a drag in some markets, with Singapore reporting the highest number of local infections in months and Taiwan seeing a spike in cases.

The Dow Jones Industrial Average fell 120.02 points, or 0.35 percent, to 34,262.11, the S&P 500 lost 20.43 points, or 0.49 percent, to 4,153.42 and the Nasdaq Composite dropped 121.39 points, or 0.9 percent, to 13,308.58.

The pan-European STOXX 600 index lost 0.05 percent and MSCI’s gauge of stocks across the globe shed 0.26 percent.

In the Treasury market, the yield on benchmark 10-year US Treasury notes was up 1 basis point at 1.645 percent, below a spike to 1.77 percent in late March.

The dollar was steady near recent lows as new restrictions in Asia to contain COVID-19 supported safe-haven currencies, while bitcoin extended its slide.

The dollar index fell 0.116 percent, with the euro up 0.12 percent at $1.2154.

Bitcoin dropped to a three-month low after Tesla Inc. boss Elon Musk suggested over the weekend that the electric automaker may have already sold some of its holdings in the digital currency.

Oil prices edged higher. Brent crude rose 56 cents, or 0.8 percent, to $69.27 a barrel, and West Texas Intermediate (WTI) crude was up 63 cents, or 1 percent, at $66.

In China, meanwhile, retail sales rose 17.7 percent in April from a year earlier, although they fell short of forecasts for a jump of 24.9 percent, while industrial output matched expectations with a rise of 9.8 percent.

Gold prices climbed to their highest in more than three months on Monday. Spot gold jumped 1.3 percent to $1,866.45 per ounce, after hitting its highest since Feb. 1 at $1,867.15. US gold futures gained 1.5 percent to $1,866.40.

“There’s a flight to safety out of the equity markets ... and anticipation that we’re going to continue to see inflation numbers trend much stronger going forward,” said Jeffrey Sica, founder of Circle Squared Alternative Investments.

“The Fed is going to continue to hold on to the notion that the increase in inflation has to do more with the reopening of the economies than to do with any real inflation,” Sica said.

Gold is seen as a hedge against rising inflation. On a technical note, the gold market has breached the 200-day moving average and that’s supporting prices further, said Eli Tesfaye, senior market strategist at RJO Futures.

Elsewhere, platinum rose 0.7 percent to $1,234 per ounce.


Lebanon raises price of bread amid crippling economic crisis

Lebanon raises price of bread amid crippling economic crisis
Updated 4 min 25 sec ago

Lebanon raises price of bread amid crippling economic crisis

Lebanon raises price of bread amid crippling economic crisis
  • Lebanon is grappling with the worst economic and financial crisis in its modern history

BEIRUT: Lebanon’s economy ministry on Tuesday raised the price of subsidized bread for the fifth time in a year amid the tiny country’s worsening economic and financial crisis.
The ministry said the reason behind the latest increase is that the central bank has ended sugar subsidies, which adds to the cost of bread production. .
Lebanon is grappling with the worst economic and financial crisis in its modern history — one that the World Bank has said is likely to rank as one of the worst the world has seen in the past 150 years.
The World Bank said in a report this month that Lebanon’s gross domestic product is projected to contract 9.5 percent in 2021, after shrinking by 20.3 percent in 2020 and 6.7 percent the year before.
Lebanon’s currency has lost 90 percent of its value, breaking a record low earlier this month of 15,500 Lebanese pounds to the dollar on the black market. The official exchange rate remains 1,507 pounds to the dollar.
The central bank has been cutting back on subsidies as foreign currency reserves have dropped from $30 billion at the start of the crisis in October 2019, to nearly $15 billion at the present time.
Most Lebanese have seen their purchase power drop and more than half the population now lives below the poverty line. There are severe shortages in gasoline, medicines and other vital products. Electricity cuts last for much of the day.
The government in June last year raised the price of flatbread, a staple in Lebanon, by more than 30 percent — for the first time in a decade. It has since raised the price three times before Tuesday.
The Ministry of Economy says 910 grams (2 pounds) of bread will be sold for 3,250 pounds. It used to be sold for 2,750 pounds before the latest increase.


Row erupts in parliament as Kuwait approves budget

Row erupts in parliament as Kuwait approves budget
Updated 24 min 51 sec ago

Row erupts in parliament as Kuwait approves budget

Row erupts in parliament as Kuwait approves budget
  • Parliamentary guards entered the hall to restore order as opposition and pro-government MPS quarrelled

KUWAIT CITY: Kuwait’s parliament approved the 2021-22 state budget in a tense session that managed to temporarily break a deadlock with the government that has blocked reforms in the Gulf state.

But chaos broke out after the vote, supported by 32 out of 63 lawmakers in attendance including 50 elected members and government ministers. Parliamentary guards entered the hall to restore order as opposition and pro-government MPS quarrelled.

The session had gone ahead despite opposition lawmakers once again occupying seats reserved for ministers, a tactic they have used in recent weeks to try to highlight their demand to question the prime minister.

Speaker Marzouq Al-Ghanim called for a special session to discuss the budget at a time when the OPEC nation is trying boost state finances and support an economy that shrank 9.9 percent in 2020 due to low oil prices and the coronavirus pandemic.

The budget, proposed by the government in January, had projected 23.05 billion dinars ($76.65 billion) in expenditure for the fiscal year that started on April 1, and a deficit of 12.1 billion dinars.

“We have the right to request a special session because all regular sessions have been disrupted,” Ghanim said.

Ministers stood at an entrance to the hall after MPs took their seats and some lawmakers had rapped on tables to try to disrupt the discussions.

Frequent rows between the government and assembly have over decades led to successive cabinet reshuffles and dissolutions of parliament, hampering investment and reform.

Lawmakers want to question Prime Minister Sheikh Sabah Al-Khalid Al-Sabah over the constitutionality of a motion passed in March delaying any questioning of the premier until the end of 2022 along with other issues such as corruption.

Although the emir has final say over state matters, Kuwait is the only Gulf monarchy to give substantial powers to an elected parliament, which can block laws and question ministers.


Dubai investment arm posts $5.1 billion loss amid pandemic

Dubai investment arm posts $5.1 billion loss amid pandemic
Updated 47 min 46 sec ago

Dubai investment arm posts $5.1 billion loss amid pandemic

Dubai investment arm posts $5.1 billion loss amid pandemic
  • It marks the first loss in years for the investment arm of Dubai government, which boasts a range of assets, including the Middle East’s largest airline, Emirates

DUBAI: Dubai’s state-owned sovereign wealth fund announced Tuesday a net loss of $5.1 billion over the past year, highlighting the toll that the coronavirus pandemic has wrought on the company’s vast assets and the uncertainty around the emirate’s post-pandemic recovery.
The Investment Corporation of Dubai, the huge holding company behind many of the emirate’s industrial powerhouses, reported revenue of $37 billion in 2020, a sharp drop of over 40 percent compared to the year before.
It marks the first loss in years for the investment arm of Dubai government, which boasts a range of assets, including the Middle East’s largest airline, Emirates, the lucrative Dubai Duty Free and master-developer Emaar Properties, which built the Burj Khalifa, the world’s tallest tower. The firm turned a profit of $4.9 billion in 2019.
In reporting the loss, the conglomerate cited the severe effects of the coronavirus on travel, hospitality, retail and real estate — all industries that power Dubai, with its cavernous malls and luxury hotels. With 40 major holdings, the firm is often viewed as a barometer for the health of the city’s service-heavy economy.
Any profits churned out last year largely stemmed from the fund’s holdings in financial services such as Emirates NBD, among the top banks in the United Arab Emirates, which it said remained solid amid the pandemic’s upheaval.
The Investment Corp. report came a week after long-haul carrier Emirates posted a staggering loss of $5.5 billion in 2020 — its first in three decades as the travel industry faced a downturn like no other. The Dubai government extended the struggling airline a $3.1 cash infusion as its revenue dropped 66 percent — a vivid sign of just how critical Emirates Air is to Dubai, a futuristic city-state between Europe and Asia founded on the promise of globalization. For comparison, during the 2015-2016 fiscal year, Emirates netted profits of $1.9 billion — a record it has not repeated since.
In its statement, ICD described the many headwinds of 2020, from grounded flights to low oil prices. Although Dubai is not oil-rich like the UAE’s capital of Abu Dhabi, its economy feeds on petrodollars.
Despite the challenges, Mohammed Al-Shaibani, the company’s CEO, focused on hopes for a rebound in tourism and travel, stoked by the UAE’s vaccination campaign, among the fastest in the world.
“Our businesses are today strongly positioned to seize the opportunities presented by global economic activities now gaining momentum with the international vaccine roll-out,” Al-Shaibani said.


Abu Dhabi opens up free COVID-19 vaccines to tourists

Abu Dhabi opens up free COVID-19 vaccines to tourists
Updated 22 June 2021

Abu Dhabi opens up free COVID-19 vaccines to tourists

Abu Dhabi opens up free COVID-19 vaccines to tourists
  • Infections have risen in the UAE in the past month, and Abu Dhabi still has restrictions on entry, including home quarantine and PCR testing at intervals after arrival

DUBAI: Abu Dhabi, the capital of the United Arab Emirates, is offering tourists free COVID-19 vaccinations that were previously restricted to UAE citizens and residency visa holders.
There is no indication that the change applies to Dubai, the most populous emirate, or the other five emirates that make up the UAE.
Visitors with visas issued by Abu Dhabi and passport holders eligible for tourist visas when they arrive in the UAE through Abu Dhabi can book free vaccines, according to information provided by the Abu Dhabi Health Services Company (SEHA), which operates the emirate’s public health infrastructure.
Holders of expired residency or entry visas are also eligible for free vaccinations, Abu Dhabi Media Office said on June 11.
Job losses and travel restrictions during the pandemic mean some people’s residency visas have expired or have been canceled when they were made redundant.
UAE Health authorities said this month nearly 85 percent of the eligible population had received at least one vaccine dose, but did not say how many had had two doses.
Infections have risen in the UAE in the past month, and Abu Dhabi still has restrictions on entry, including home quarantine and PCR testing at intervals after arrival. People driving from other emirates are tested to show they are not infected.
Travelers from 27 countries including China, Germany and the United States can enter without quarantine on arrival.
SEHA offers COVID-19 vaccines by China’s state-owned drugmaker Sinopharm and by Pfizer/BioNTech in Abu Dhabi.
Dubai Media Office did not immediately respond to a request for comment on whether eligibility criteria was to change. Dubai Health Authority information says vaccines are given only to citizens and holders of valid Dubai residency visas.


OPEC+ said to discuss gradual oil output rise from August

OPEC+ said to discuss gradual oil output rise from August
Updated 22 June 2021

OPEC+ said to discuss gradual oil output rise from August

OPEC+ said to discuss gradual oil output rise from August
  • OPEC+ is returning 2.1 million barrels per day (bpd) to the market from May through July as part of a plan to gradually unwind last year’s record oil output curbs

DUBAI: OPEC+ is discussing a further gradual increase in oil output from August as oil prices rise on demand recovery, but no decision had been taken on the exact volume yet, two OPEC+ sources familiar with the talks said on Tuesday.
The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, is returning 2.1 million barrels per day (bpd) to the market from May through July as part of a plan to gradually unwind last year’s record oil output curbs. OPEC+ meets next on July 1.
“It is highly possible to increase gradually from August,” said one of the sources, adding that no final decision had been made and the exact volumes are yet to be agreed on.
Crude oil prices rose on Tuesday, with Brent hitting $75 per barrel for the first time since April 2019, as investors remained bullish about recovery in oil demand and concerns eased over a quick return of Iranian crude to the market.