Live Markets A Green Future: Private Financing and Engaging Retail Investors

  • DJI bezels up; Standard & Poor’s 500, Nasdaq dip; Pool Banks, Chips, NYFANG Chips
  • Energy leads the gainers in the S&P 500 sector; Technically weakest group
  • Euro STOXX 600 Index fell ~ 1.3%
  • Bitcoin, Crude Oil Gains; Dollar ~ flat falls gold
  • The 10-year US Treasury yield rose to 1.65%.

Nov 23 – Welcome home for instant market coverage brought to you by Reuters reporters. You can share your thoughts with us at market.research@thomsonreuters.com

A Green Future: Private Financing and Getting Participating Retail Investors (1118 EST / 1618 GMT)

As the dust fades at COP26, much has been said about what it means for governments, businesses and investors, but the consensus view was that trillions of dollars in funding should be mobilized to have real hope of averting the worst. For climate change, and that the private sector is the key.

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It stands to reason that the Asian Infrastructure Investment Bank (AIIB) is looking to increase the amount of private capital it can help put into its projects.

Ludger Schocknecht, vice president and corporate secretary at the Asian Infrastructure Investment Bank, told the Reuters Global Markets Forum (GMF) that the AIIB’s securitization program is “well-joined,” adding that about a third of the participation was from outside Asia itself.

“If you look at the spreads, you’ll be liable over a six-month period for Class A, rated AAA, in the 120-125 basis points range…so, a good return for those investors who want high-rated, good-value bonds.”

Schuknecht said the bank was “even trying to create an environment for individual investors to also invest in the climate space,” which he added would be a first in Asia.

While climate finance was earlier closely related to debt markets and more specifically green bonds earlier, COP26 appears to have reinforced the belief among many investors across the capital structure that funds should be allocated in a more environmentally conscious manner.

“Interest across the suite of solutions – discretionary portfolios, liquid and illiquid funds, structured products and outright deals,” Damian Beatakis, head of sustainable and impact investing at Barclays Private Bank, told GMF.

“For many investors, entry points tend to be investments where they are already active and familiar. If you take a step back, sustainability is the next stage of investing, not just the latest product or trend,” Beatakis added.

(Aaron Seldanha)

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Smaller piece of pumpkin pie: Market shows slowdown (1054 EDT / 1554 GMT)

A single economic indicator released on Tuesday indicates that business activity growth in the US has lost some momentum.

While the manufacturing sector – which represents a larger slice of the total pie – applied the brakes unexpectedly, according to global information firm HIS Markit.

The Markit Preliminary Purchasing Managers’ Index (PMI) for November gave a 59.1 reading for commodity makers, up 0.7 points from October. But Print Services defied the consensus by dropping 1.7 points to 57 points, two points less than expected.

Taken together, the composite number fell 0.9 points to 56.9.

A PMI reading above 50 indicates a monthly expansion.

While the US economy has essentially reopened for business, with prospective demand for goods versus services facing customers approaching some semblance of equilibrium, the supply side of the equation remains in intensive care as shortages of materials and workers continue to constrain activity.

“The economic slowdown underscores how the economy is struggling to deal with persistent supply constraints,” wrote Chris Williamson, chief business economist at Markit. “Input cost inflation rose sharply in November to a new high in the survey, increasing pressure on companies to pass on the recent cost increase to customers in order to protect profit margins.”

“Average prices charged for goods and services have continued to rise at an unprecedented rate,” Williamson adds.

Market Flash PMI

Compared to global competitors, the expansion of US and European factory activity is mainly volatile, with producers of goods across the pond outstripping the US in production and number of employees, but US producers enjoying faster growth in new orders.

Since the end of the pandemic recession – the deepest and shortest economic downturn on record – China has been clearly lagging behind.

Global Manufacturing PMI

On Wednesday, investors will be treated to a veritable indices traffic jam as markets lift out of town to accommodate the Thanksgiving holiday.

You are expected to find (deep breathing), mortgage demand, corporate earnings, durable goods, GDP, consumer spending, PCE inflation, unemployment claims, inventories, new home sales and consumer confidence.

As for Wall Street, the lack of meaningful catalysts to move the market has made its allure on major stock indices, with the S&P 500 on track to its third consecutive day in the red.

Energy (.SPNY) is an outsider on the upside, with higher crude oil prices leading to a sharp rally in the sector.

(Stephen Kolb)

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Could the wall’s path return to the streets? (1015 EST / 1515 GMT)

After opening as a mixed bag, Wall Street’s three major averages managed to turn positive in early trading on Tuesday after US HIS Markit data showed US business activity slowed moderately in November amid labor shortages and raw material delays, contributing to a mid-stream price rally. during the fourth quarter. Read more

However, the S&P 500 (.SPX) and Nasdaq (.IXIC) were less confident of themselves, and quickly slipped back into the red.

At last glance, there were four modestly low sectors with discount technology (.SPLRCT) on most of them. Communications (.SPLRCL), consumer discretion (.SPLRCD), and healthcare (.SPXHC) services are disrupted.

The energy sector (.SPNY) is the biggest percentage gainer for the index as oil rallied to a steady level near $80 a barrel after the US announced plans to release up to 50 million barrels of its reserves to calm the market.

Markets are also still digesting Monday’s news that Jerome Powell has been nominated for a second term as Fed Chair and the fact that expectations were pushed forward on Monday to raise interest rates by June 2022 compared to the previous forecast for July. Read more

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LIRA is in crisis again, but not just global pollution so far (0917 EST / 1417 GMT)

After 11 consecutive days of losses for the lira, the Turkish currency is now firmly back in the crisis zone again. The biggest concerns on investors’ minds right now are where the sell-off will end and what are the chances of contagion?

The Turkish lira fell about 15% on Tuesday, while its benchmark index (.XU100) rose 1.5% on surprising cheap valuations. Turkish banks (.XBANK) have held up well so far, up 19% this month. The broader stock index rose 17% in November after hitting record highs.

Given its limited trade and financial links with the rest of the world, combined with improved external positions in most emerging markets, Simon McAdam of Capital Economics, wrote that any global repercussions are unlikely. Turkish banks have $10 billion in foreign loans on their books, so the pressures of local banks will not have much impact on foreign lending.

“The way this could become uglier for the rest of the world is if President Erdogan keeps his nerve long enough and the lira drops enough to put Turkish banks at risk,” McAdam wrote.

However, some Spanish and other European banks such as BBVA with Turkish exposure through its Garanti subsidiary may continue to underperform throughout the crisis period as they did in 2018, the economist adds.

(Bansari Mayur Kamdar)

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Dow Industries: Inside the Lines (0900 EST / 1400 GMT)

Over the past six months or so, the Dow Jones Industrial Average (.DJI) has been trapped between two logarithmic-scale trendlines:

DJI11232021

On a weekly basis, the Dow closed above its 90-year resistance line in late March. With this action, the polarity of the line has flipped from resistance to support.

Since then, the Dow has bounced back several times, refusing to finish a week without it. It now exists as a support around 34,000.

On the upside, the average leading stocks are facing a resistance line from early 2018. This line capped with strength in mid-August and again earlier this month. There are now about 36,700.

Meanwhile, over the past six months or so, weekly momentum has been waning. The MACD index reached its lowest level in more than a year in mid-October, and although in early November the Dow Jones rallied to new highs, the momentum study managed to make a tepid rally.

The Dow is now down 2.6% from its intraday high of 36,565.73 on November 8. But with the MACD indicator remaining weak, there is still a risk for DJI to continue fluctuating lower to test the support line again. Read more

Ultimately, a weekly close outside the range defined by these two lines may indicate the potential for an acceleration. Exiting below a support line could indicate a failed breakout above a very long-term trendline, with then risking a major reversal.

(Terence Gabriel)

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Terence Gabriel, market analyst at Reuters. The opinions expressed are his own

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