Author: xPortfolios

There is a persistent murmur in financial markets that the Trump administration may push through a grand bargain to weaken the overvalued U.S. dollar. But there are multiple problems here, not least Europe's likely unwillingness to play ball.For any repeat of the dramatic 1985 "Plaza Accord" between the U.S. and its main allies to weaken a then-stratospheric dollar exchange rate and ease America's widening deficits, the clue is probably in the name: "Accord".Even though Washington could again conceivably offer such a deal in return for shelving threatened import tariffs, there's considerable doubt that coordinated dollar sales would make any sense beyond sowing financial volatility.And there's even more of a doubt that euro zone nations would be either willing or able to take part.The European Central Bank underlined again on Thursday that it's still in firmly credit easing mode, as the euro zone economy struggles amid multiple internal and external uncertainties.And it's this contrast with a far hotter U.S. economy and a tighter Federal Reserve that explains much of the dollar's prevailing strength - along with many years of overwhelming westward-bound transatlantic investment flows to outperforming U.S. equity and debt.Further ECB easing is likely through this year and a weaker euro…

In a week when AI chipmaker Nvidia suffered the biggest one-day loss of value on record and the Federal Reserve said it was in no hurry to cut rates again, a few gauges underscore markets' vulnerability to big swings.Investors and analysts said the sell-off in tech stocks this week, driven by the popularity of China's DeepSeek AI model, highlights the market ructions that can occur when heavy speculation meets unexpected bad news.Here are five signals that highlight some of the tensions simmering.1/HEAVY BETTINGDespite Monday's ructions investors remain bullish about U.S. tech and President Donald Trump's plans for tax cuts and deregulation, heightening risks of market gyrations if this widespread consensus proves wrong.Short-term speculators have in recent months taken on more debt to magnify their gains, with levels of so-called gross leverage among hedge funds that trade U.S. stocks hitting their highest since 2010 in January, Morgan Stanley data showed.Citi's equity positioning model, derived from futures contracts, shows traders are heavily betting on further gains for Wall Street's tech-focused Nasdaq 100 (.NDX)."Everyone is sort of piled in. They're super optimistic," GAM chief multi-asset strategist Julian Howard said.These trends are making some long-term money managers nervous, with JPMorgan attributing part of Nvidia's…

Stock markets in the Gulf ended mixed on Thursday ahead of more corporate earnings, with the Dubai index ending four sessions of losses.Saudi Arabia's benchmark index (.TASI) fell 0.2%, with Al Rajhi Bank (1120.SE) losing 1.4%.In the previous session, the lender advanced 4.7%, after Al Rajhi reported an 18.7% surge in its net profit to 19.72 billion riyals ($5.26 billion) for 2024. The bank proposed a second-half cash dividend of 1.46 riyal per share, up from 1.15 riyal a year earlier.Alinma Bank (1150.SE) dropped 2.3% despite reporting a higher annual profit.Dubai's main share index (.DFMGI) added 0.5%, led by a 2.3% leap in blue-chip developer Emaar Properties (EMAR.DU).Among other gainers, Dubai Financial Market (DFM.DU) gained 1.3%, ahead of its results.In Abu Dhabi, the index (.FTFADGI) added 0.2%, with Abu Dhabi Commercial Bank (ADCB) (ADCB.AD) climbing 3.7%, rising for a third consecutive session.On Monday, ADCB reported a higher fourth-quarter net profit of 2.57 billion dirhams ($699.78 million), along with an annual dividend of 0.59 dirhams.Additionally, the bank projected a doubling of net profits to 20 billion dirhams within five years.In Qatar, the index (.QSI) eased 0.1%, hit by a 0.6% fall in Qatar National Bank (QNBK.QA) and a 1.9% slide in…

Wall Street shares rallied on Thursday, as investors cheered earnings from Meta (META.O), but shunned Microsoft (MSFT.O), while the dollar dipped, further boosting gold prices.The Federal Reserve held rates steady on Wednesday, in line with expectations, with Fed Chair Jerome Powell saying there would be no rush to cut them again, leaving the dollar to drift on Thursday.Gold often benefits from a weaker dollar and neared record-highs as U.S. stock markets opened.The first earnings from the group of so-called "Magnificent Seven" megacap tech stocks met with a mixed reaction from investors, many of whom are now scrutinising these companies' AI spending plans in light of the emergence of low-cost Chinese startup DeepSeek that upended equity markets this week."The market has been priced for perfect results from big tech, they have also been used to big tech massively outperforming expectations in recent years," Kathleen Brooks, research director at XTB, said.Microsoft beat quarterly revenue estimates, but a downbeat outlook for its cloud computing business pushed its shares down 6%, while Meta forecast first-quarter revenue below market estimates, but pledged to cut costs, lifting its shares by 2%.Tesla's (TSLA.O) fourth-quarter profit margin missed expectations, yet its shares rose 4.3%.Apple (AAPL.O) reports results later…

Futures for Canada's main stock index rose on Thursday, supported by gains in metal prices, while investors digested earnings from some of the big tech megacaps on Wall Street.March futures on the S&P/TSX index were up 0.64% at 6.19 a.m. ET (1119 GMT).U.S. stock index futures also advanced on Thursday.In commodities, gold prices edged higher on Thursday due to a softer dollar, while copper and aluminum prices also increased.But oil prices , slipped for a second consecutive day after U.S. crude stockpiles rose more than anticipated.Earnings reports from some of the so-called "Magnificent Seven" megacap tech stocks were released after the bell on Wednesday.Microsoft (MSFT.O) beat quarterly revenue estimates, while Tesla's (TSLA.O) fourth-quarter profit margin missed expectations. Meta (META.O) forecast first-quarter revenue below market estimates.The Toronto Stock Exchange's S&P/TSX composite index reached a seven-week high on Wednesday, buoyed by the U.S. Federal Reserve's indication of robust economic activity and the Bank of Canada's interest rate cut to support the domestic economy amidst expected U.S. trade tariffs.U.S. President Donald Trump's nominee for Commerce Secretary, Howard Lutnick, stated on Wednesday that Canada and Mexico could avoid upcoming U.S. tariffs by swiftly closing their borders to fentanyl.Canada's Foreign Minister Melanie Joly, who is…

Some of the world's smallest economies, especially in Africa, could be at increased risk of being unable to pay their debts in the medium term, even as developing nations have emerged from a series of sovereign defaults, financial adviser Lazard said.The pandemic, the Ukraine war, and domestic strife have led governments, including Argentina, Ecuador, Ethiopia, Ghana, Sri Lanka and Zambia, to default since 2020.Investors do not expect more sovereign defaults in 2025, but credit metrics for smaller and riskier countries, known as frontier markets, point to a structural weakening, especially for governments in Africa, Thomas Lambert, of Lazard's sovereign advisory team, said.The U.S. Federal Reserve decided to hold its benchmark interest rate - the basis for global borrowing rates - on Wednesday. Markets expect it to be steady until June as Donald Trump's second administration has left the policy backdrop extremely uncertain.Lambert said the refinancing profile for the most fragile nations was modest this year, but that could change between 2026-28 when larger repayments will be due."So it is plausible that in these years a new cycle could start again,” Lambert, one of the authors of the Lazard paper published this week on the subject, told Reuters.High U.S. rates add…

Most major stock markets in the Gulf rose in early trade on Thursday ahead of corporate earnings announcement, although the Saudi index bucked the trend to trade lower.Dubai's main share index (.DFMGI) added 0.2%, helped by a 1.1% rise in blue-chip developer Emaar Properties (EMAR.DU).Elsewhere, Dubai Financial Market (DFM.DU) added 0.7%, ahead of its results.In Abu Dhabi, the index (.FTFADGI) was up 0.1%, with Abu Dhabi Commercial Bank (ADCB) (ADCB.AD) rising 2.4%, on course to extend gains for a third consecutive session.On Monday, ADCB reported a higher fourth-quarter net profit of 2.57 billion dirhams ($699.78 million), along with annual dividend of 0.59 dirhams.Additionally, the bank projected doubling of net profits to 20 billion dirhams within five years.The Qatari benchmark (.QSI) edged 0.1% higher, supported by a 2.5% increase in Mesaieed Petrochemical Holding Company (MPHC.QA) as the firm is slated to report its 2024 earnings.Saudi Arabia's benchmark index (.TASI) fell 0.1%, hit by a 0.8% fall in Al Rajhi Bank.In the previous session, the lender advanced 4.7%, after the lender reported an 18.7% surge in its net profit to 19.72 billion riyals ($5.26 billion) for 2024. Also, Al Rajhi proposed a second-half cash dividend of 1.46 riyal per share, up from…

Dissatisfaction with housing in Australia reached an all-time high last year, ranking among the worst in the world, according to a survey published on Thursday, an issue that is expected to dominate a general election due by May.Over three-quarters of Australians surveyed by pollsters Gallup were dissatisfied with the availability of affordable housing in 2024, compared to a median of 50% in the Organisation for Economic Cooperation and Development (OECD).“Australians are uniquely dissatisfied with housing compared with residents of other high-income countries,” survey co-authors Benedict Vigers and Madeleine Ambort said.Gallup surveyed around 140,000 people in 140 countries, including 1,000 Australians, on whether they were satisfied with the availability of “good, affordable housing” where they lived.The findings placed Australia second only to Turkey for housing dissatisfaction in the OECD, despite citizens being satisfied with other community basics such as healthcare (71%), schools (66%) and public transport (61%).Aside from Turkey in 2024, only Gabon in 2014 has seen greater dissatisfaction over housing than Australia in the past 10 years.Gallup said underinvestment in housing and high immigration levels had created one of the world’s most expensive markets, further exacerbated in recent years by pandemic-related construction delays.Between 2002 and 2024, housing prices surged to…

Mexico's economy likely contracted from October to December, marking the first quarterly decrease in more than three years, a Reuters poll showed on Wednesday.The median forecast from 11 analysts estimated a 0.2% decline in gross domestic product from the third quarter to the fourth quarter (MXGDQP=ECI), using seasonally adjusted figures.If the results are in line with estimates, it would be the first quarter-on-quarter contraction for Latin America's No. 2 economy since it logged a 0.9% shrinkage in the third quarter of 2021.On an annual basis, Mexico's GDP was seen growing 1.2% (MXGDYP=ECI), moderating from the 1.6% year-on-year growth registered in the third quarter.The INEGI national statistics institute is set to release its fourth-quarter GDP data on Thursday.Source: Reuters.com

Most Gulf stock markets ended lower on Wednesday as disappointing corporate earnings dampened investor sentiment, although the Saudi index rose on strong gains by Al Rajhi Bank.Dubai's main share index (.DFMGI) declined 0.9%, weighed down by a 9.3% plunge in top lender Emirates NBD (ENBD) (ENBD.DU), posting the index's biggest intraday fall in nearly five years.ENBD reported fourth-quarter net profit of 4 billion dirhams ($1.09 billion), marginally lower than a year earlier. The lender also missed analysts' estimates.The Abu Dhabi index (.FTFADGI) lost 0.3%, with Alpha Dhabi Holding (ALPHADHABI.AD) retreating 3.5%, after the firm acquired a controlling stake of 73.73% in the National Corporation for Tourism and Hotels (NCTH) through a strategic investment.As part of the deal, assets from ADHH and Murban Energy Limited were sold to NCTH in exchange for shares.Saudi Arabia's benchmark index (.TASI), however, gained 0.2%, helped by a 4.7% jump in Al Rajhi Bank (1120.SE), after the lender reported an 18.7% surge in its net profit to 19.72 billion riyals ($5.26 billion) for 2024.In a separate filing, Al Rajhi Bank - which saw its biggest intraday gain in about 4 months - also proposed a second-half cash dividend of 1.46 riyal per share, up from 1.15…