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Gulf Today
11 hours ago
- Business
- Gulf Today
Oil drops, stocks climb as Trump delays Iran move
Oil prices retreated on Friday while US and European stock markets gained ground as concerns over a war escalation in Iran eased. International crude benchmark contract Brent dropped more than two per cent, weighing on the share prices of energy majors, after US President Donald Trump said Thursday that he would decide whether to join Israel's strikes on Iran within the next two weeks. Traders said it suggested Trump preferred negotiations to end the fighting, as top European diplomats met Iran's Foreign Minister Abbas Araghchi in Geneva on Friday to discuss a "diplomatic solution" to end the war. US indices opened slightly higher on Friday, though analysts said volumes were likely to be lacklustre with many traders taking a four-day weekend after Thursday's Juneteenth holiday. European stock markets were up in afternoon deals while Asian equity indices closed out the week mixed. "News that president Trump would delay any decision on joining Israel's attacks against Iran has boosted the market mood," said Kathleen Brooks, an analyst at trading firm XTB. "Brent crude has dropped... as traders price out the worst-case scenario for geopolitics," she said. Crude futures had soared and global equities slumped in recent sessions as the Israel-Iran conflict showed no signs of easing, with investors pricing in the risk of tighter oil supplies that would likely weigh on economic growth. "While the immediate prospect of a US intervention in Iran may have diminished, the fact this is reportedly a two-week hiatus means it will remain a live issue for the markets going into next week," said Dan Coatsworth, an investment analyst at AJ Bell. "A meeting of European ministers with their Iranian counterparts to try and formulate a deal today could be crucial." While the Middle East crisis continues to absorb most of the news, Trump's trade war remains a major obstacle for investors as the end of a 90-day pause on his April 2 tariff blitz approaches. "While the worst of the tariffs have been paused, we suspect it won't be until those deadlines approach that new agreements may be finalised," said David Sekera, chief US market strategist at Morningstar. "Until then, as news emerges regarding the progress and substance of trade negotiations, these headlines could have an outsize positive or negative impact on markets," he said. In Europe, Eutelsat shares soared 27 per cent on the Paris stock exchange after the French government said it would lead a 1.35 billion euros ($1.5 billion) in the European satellite operator. French President Emmanuel Macron urged a "speedy reconquest" for Europe in the space sector in the face of growing American competition, in a speech at the Paris Air Show. Agence France-Presse
Yahoo
13 hours ago
- Business
- Yahoo
£10,000 invested in 2020 could now be a passive income of…
Earning a passive income in the stock market is a proven strategy for achieving financial freedom. And those who leveraged the chaos of the pandemic have only supercharged their gains. At the time, the UK's flagship index paid out as much as 7% during the height of Covid-19. And while dividend cuts were prevalent that year, shareholder payouts eventually stabilised at an average of 4%. According to AJ Bell, the total dividends paid by FTSE 100 companies in 2020 reached just over £60bn. Since then, payouts have been on an upward journey, heading towards £83bn by the end of 2025. If that forecast is accurate, it means UK large-cap dividends have grown by 38% in the last five years. And the 4% dividend yield from June 2020 will soon be closer to 5.5%. Assuming investors have been reinvesting all their dividends until now and factoring capital gains, that £10,000 initial investment is now worth £17,300. And at a 5.5% yield, this index strategy would be generating a passive income of £952. That's pretty good. But for some stock pickers, the income stream's even more substantial. By carefully constructing a custom portfolio, investors can reap significantly greater rewards compared to just relying on index funds. There's no denying this investing strategy is a far riskier approach to building wealth. But those who used it to buy shares of Diploma (LSE:DPLM) are understandably laughing right now. The industrial distribution business has expanded its market-cap by over 150% since June 2020. And during the same period, dividends have been hiked by an average of 24% a year. So while its initial 1.4% yield didn't look all that impressive compared to its parent index, this payout's now closer to 4.1% on an original cost basis. Reinvesting dividends along the way paired with the group's robust capital gains means that an initial £10,000 investment is now worth a staggering £25,480. And at a 4.1% yield, that's a passive income of £1,045, which is set to grow potentially even higher and faster in the future. A big driver of Diploma's recent success stems from management's ability to navigate through hostile market environments as well as position the business to thrive when a recovery comes along. That's translated into some impressive free cash flow generation courtesy of the rebound in aerospace and defence. And management continues to execute this strategy today, with an anticipated recovery of the European life sciences sector on the horizon. However, the company's also been relying heavily on bolt-on acquisitions in addition to organic growth. And as a consequence, debt levels have been rising. Acquisitions, even small ones, can cause significant headaches if the integration process doesn't go smoothly. Even if everything's hunky dory, a cyclical downturn in an end-market can lead to a worse-than-expected performance, resulting in potentially significant risk. And since acquisitions are a key pillar in Diploma's growth strategy, that's something shareholders and prospective investors must consider carefully moving forward. Despite already delivering solid gains, Diploma still has plenty to offer, even for new investors today. At least, that's what I think. So despite the risks, the passive income potential of this business is worth closer inspection. The post £10,000 invested in 2020 could now be a passive income of… appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has recommended Diploma Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
a day ago
- Business
- Yahoo
Wall St futures edge lower as Middle East war enters second week
(Reuters) -Wall Street stock index futures edged lower on Friday as investors assessed comments on U.S. military involvement in the Middle East conflict, and Federal Reserve Chair Jerome Powell's warning on rising inflation ahead. As the fatal aerial war between Israel and Iran approached its second week, the White House said on Thursday President Donald Trump will decide in the next two weeks whether the U.S. will get involved on Israel's side. "While the immediate prospect of a U.S. intervention in Iran may have diminished, the fact this is reportedly a two-week hiatus means it will remain a live issue for the markets going into next week," Dan Coatsworth, investment analyst at AJ Bell, said in an email. The oil price volatility triggered by the Middle East conflict has also added on to concerns around tariff-based price pressures in the United States. The Fed, expected to balance the risk of slowing growth and higher inflation, kept interest rates unchanged on Wednesday, in line with market expectations. Policymakers, however, cautioned about inflation picking up pace over the summer as the economic effects of steep import tariffs kick in. Money market moves show traders are pricing in about 47 basis points of rate cuts by the end of 2025, with a 59% chance of a 25-bps rate cut in September, according to CME Group's FedWatch tool. At 05:37 a.m. ET, Dow E-minis were down 105 points, or 0.25%, S&P 500 E-minis were down 16.75 points, or 0.28%, and Nasdaq 100 E-minis were down 67.5 points, or 0.31% The S&P 500 and the Nasdaq are set for weekly gains, while the blue-chip Dow is on track for mild weekly declines. Crypto stocks rose in premarket trade as bitcoin prices soared nearly 2%. Coinbase Global was up 1.8%, and Strategy gained 1.1%. Shares of Tesla gained 1.2% among megacap stocks. Supermarket operator Kroger Co gained nearly 1% ahead of quarterly results due before the opening bell. Stablecoin issuer Circle extended gains from its previous session, with shares last up 12.6%. Wall Street's strong gains last month, primarily driven by a softening in Trump's trade stance and strength in corporate earnings, had pushed the benchmark S&P 500 index close to its record peaks before the ongoing conflict in the Middle East made investors risk-averse. The S&P 500 index stood nearly 3% below its record level, and the tech-heavy Nasdaq remained 3.3% lower. Philadelphia Fed business outlook data for June is scheduled at 08:30 a.m. ET.
Reuters
a day ago
- Business
- Reuters
Wall St futures edge lower as Middle East war enters second week
June 20 (Reuters) - Wall Street stock index futures edged lower on Friday as investors assessed comments on U.S. military involvement in the Middle East conflict, and Federal Reserve Chair Jerome Powell's warning on rising inflation ahead. As the fatal aerial war between Israel and Iran approached its second week, the White House said on Thursday President Donald Trump will decide in the next two weeks whether the U.S. will get involved on Israel's side. "While the immediate prospect of a U.S. intervention in Iran may have diminished, the fact this is reportedly a two-week hiatus means it will remain a live issue for the markets going into next week," Dan Coatsworth, investment analyst at AJ Bell, said in an email. The oil price volatility triggered by the Middle East conflict has also added on to concerns around tariff-based price pressures in the United States. The Fed, expected to balance the risk of slowing growth and higher inflation, kept interest rates unchanged on Wednesday, in line with market expectations. Policymakers, however, cautioned about inflation picking up pace over the summer as the economic effects of steep import tariffs kick in. Money market moves show traders are pricing in about 47 basis points of rate cuts by the end of 2025, with a 59% chance of a 25-bps rate cut in September, according to CME Group's FedWatch tool. At 05:37 a.m. ET, Dow E-minis were down 105 points, or 0.25%, S&P 500 E-minis were down 16.75 points, or 0.28%, and Nasdaq 100 E-minis were down 67.5 points, or 0.31% The S&P 500 (.SPX), opens new tab and the Nasdaq (.IXIC), opens new tab are set for weekly gains, while the blue-chip Dow (.DJI), opens new tab is on track for mild weekly declines. Crypto stocks rose in premarket trade as bitcoin prices soared nearly 2%. Coinbase Global (COIN.O), opens new tab was up 1.8%, and Strategy (MSTR.O), opens new tab gained 1.1%. Shares of Tesla (TSLA.O), opens new tab gained 1.2% among megacap stocks. Supermarket operator Kroger Co (KR.N), opens new tab gained nearly 1% ahead of quarterly results due before the opening bell. Stablecoin issuer Circle (CRCL.N), opens new tab extended gains from its previous session, with shares last up 12.6%. Wall Street's strong gains last month, primarily driven by a softening in Trump's trade stance and strength in corporate earnings, had pushed the benchmark S&P 500 index close to its record peaks before the ongoing conflict in the Middle East made investors risk-averse. The S&P 500 index stood nearly 3% below its record level, and the tech-heavy Nasdaq remained 3.3% lower. Philadelphia Fed business outlook data for June is scheduled at 08:30 a.m. ET.
New Straits Times
2 days ago
- Business
- New Straits Times
Stocks drop, oil gains as Mideast unrest fuels inflation fears
LONDON: Stock markets mostly fell while oil prices rose as the Israel-Iran conflict added to fears over a renewed spike in inflation that could dent economic growth in major countries. Investors had already taken a cautious stance after the US Federal Reserve kept its interest rates unchanged and warned Wednesday that President Donald Trump's trade war could reignite inflation and dampen economic growth. "Equity markets were in the red across Europe and most of Asia," noted Russ Mould, investment director at AJ Bell, adding that investors were "spooked" by the escalating Israel-Iran conflict. "Oil prices have shot up in recent days and any disruptions to Middle East supplies could put them even higher and stoke inflation," he said. After gaining more than one per cent in Asian trading hours, crude futures fell back but remained higher compared with levels on Wednesday. As fears grow of direct US participation in the strikes on Iran, analysts said there was a risk that Tehran could shut the Strait of Hormuz, a key shipping lane through which an estimated fifth of global oil supply flows. "We don't see it as a likely scenario at this time, but... I think everybody should be watching," American Petroleum Institute president Mike Sommers told Bloomberg. The concerns over potential supply constraints boosted share prices of major energy companies Thursday. French oil and gas giant TotalEnergies topped the Paris CAC 40 blue-chip index, closing with a gain of 2.1 per cent, while British energy group BP advanced 1.4 per cent in London. US stock and bond markets are closed Thursday for the Juneteenth holiday, which commemorates the end of slavery in the United States in 1865. In Europe, several central banks took interest rate decisions on Thursday, warning that the risk of slowing growth was rising even as inflation slows. The Swiss National Bank cut rates by a quarter point to zero per cent, a move aimed at taming the Swiss franc, a haven that has soared against the dollar since Trump launched his tariff onslaught in April. For many investors that raised the prospect of a return to negative interest rates in Switzerland, to lower the franc but also encourage investment and spending to avert an economic slump. Despite the rate cut, the franc rose slightly against the dollar after the rate cut. "There are also significant downside risks to inflation from trade tensions as well as heightened geopolitical uncertainty, which could push up the value of the franc further," said Adrian Prettejohn, an economist at Capital Economics. Norway's central bank meanwhile made an unexpected cut to its benchmark rate, saying economic uncertainty was "greater than normal" because of escalating conflicts and trade tensions. And as widely expected, the Bank of England held its benchmark rate steady at 4.25 per cent but its governor Andrew Bailey indicated that further cuts were coming as the UK economy slows. "Interest rates remain on a gradual downward path," Bailey said, adding that "the world is highly unpredictable". The dollar traded mixed against main rivals Thursday after the Fed kept rates unchanged for a fourth consecutive meeting despite Trump's pressure on the central bank to lower borrowing costs. It cut its 2025 forecast for US economic growth and raised inflation and unemployment expectations, in its first updated projections since Trump unveiled in April his levies on imports. Fed chief Jerome Powell called the economy "still solid" but warned that "increases in tariffs this year are likely to push up prices and weigh on economic activity". Hong Kong led stock market losses in Asia, closing down two per cent, while Tokyo shed one per cent. Bangkok retreated as a political crisis involving Thailand's Prime Minister Paetongtarn Shinawatra put her government on the brink of collapse.
