Latest news with #tradeTensions
Free Malaysia Today
13 hours ago
- Business
- Free Malaysia Today
Norway's central bank announces surprise rate cut
Norges Bank lowered its policy rate by a quarter point to 4.25% and said it could make another cut this year. (Reuters pic) OSLO : Norway's central bank announced a surprise interest rate cut today, citing economic uncertainty linked to trade tensions and escalating conflicts. Norges Bank lowered its policy rate by a quarter point to 4.25% and said it could make another cut this year 'if the economy evolves broadly as currently projected'. The bank had kept its rate unchanged since December 2023 after hiking them in efforts to tame inflation. Analysts had expected the bank to keep its rate unchanged until September. Norges Bank governor Ida Wolden Bache said inflation had declined since its March monetary policy meeting. 'The inflation outlook for the coming year indicates lower inflation than previously expected,' she said. 'A cautious normalisation of the policy rate will pave the way for inflation to return to target without restricting the economy more than necessary.' Core inflation – which excludes volatile energy prices – slowed to 2.8% in May. While it is cooling, inflation remains above the central bank's 2% target. The rate cut comes as financial markets worry about the economic impact of US President Donald Trump's tariffs and the conflict between Israel and Iran. 'The uncertainty surrounding the outlook is greater than normal,' Norges Bank said in a statement. 'An escalation of conflicts between countries and uncertainty about future trade policies may result in renewed financial market turbulence and could impact both Norwegian and international growth prospects,' it said. 'If the economy takes a different path than currently envisaged, the policy rate path may also differ from that implied by the forecast,' the bank added.
Free Malaysia Today
13 hours ago
- Business
- Free Malaysia Today
Global investment decline may worsen due to tariffs, warns UN trade agency
UNCTAD secretary-general Rebeca Grynspan said investment that has a real impact on jobs and infrastructure is going down. (EPA Images pic) GENEVA : Global foreign direct investment (FDI) fell for the second consecutive year in 2024, with fears this year could be even worse as trade tensions rock investor confidence, the UN agency for trade and development said in a report published today. FDI transactions, which do not include several European conduit economies, declined by 11%, indicating a significant reduction in actual productive investment activity, according to the UN Conference on Trade and Development (UNCTAD). Geopolitical tensions and trade fragmentation contributed to lower investment last year as they created uncertainty, which UNCTAD secretary-general Rebeca Grynspan described as a 'poison' for investor confidence. 'We are even more worried about the picture in 2025…we already feel that investment is halted…tariffs are affecting growth,' Grynspan told Reuters, with short-term risk management being prioritised over long-term investment. UNCTAD said its outlook for international investment in 2025 was negative due to trade tensions. Early data for the first quarter of 2025 shows record low deal and project activity. When several European conduit economies – which act as intermediary hubs where investments temporarily pass through before reaching their final destinations – are included, the data showed that FDI increased by 4% to US$1.5 trillion. However, UNCTAD noted that this figure masks the reality that much of this investment is merely passing through these jurisdictions and was not productive. 'We see a very worrying tendency…Investment that has a real impact on jobs and infrastructure is going down,' she said. Developed economies suffered a sharp drop in investment, with a 58% decrease in Europe. North America, however, observed a 23% increase in FDI, led by the US, while countries in Southeast Asia reached the second-highest level of FDI on record with a 10% rise, representing US$225 billion. Though capital inflows in developing countries were broadly stable, UNCTAD observed that capital was not being injected into crucial job-creating sectors such as infrastructure, energy and technology.
Yahoo
a day ago
- Business
- Yahoo
4 ETF Areas to Win Amid Slowing Retail Sales in May
Consumer spending declined notably in May. Retail sales fell by 0.9%, exceeding the expected 0.6% drop projected by Dow Jones economists, as quoted on CNBC. This decline follows a modest 0.1% dip in April and came amid heightened uncertainty regarding economic conditions and trade tensions. When excluding auto sales, retail figures still disappointed with a 0.3% decline, compared to the anticipated 0.1% increase. However, a more focused measure, which strips out volatile categories like autos, gas, and building materials, showed a 0.4% gain. This metric is closely watched by economists because it feeds into GDP calculations. Spending peaked in March as consumers rushed to make purchases ahead of anticipated tariff enactments from President Donald Trump's April 'liberation day' announcement. But by May, shoppers grew cautious, especially with big-ticket items. Below we highlight a few areas and the related ETFs & stocks that may benefit handsomely from the retail sales. Nonstore retailers (e.g., online sales) saw a 0.9% sequential increase and 8.3% yearly gain. ProShares Online Retail ETF ONLN –The ProShares Online Retail Index is a specialized retail index that tracks retailers principally selling online or through other non-store channels. The fund charges 58 bps in fees. AMZN – is one of the largest e-commerce providers, with sprawling operations in North America, now spreading across the globe. The fund has a Zacks Rank #3 (Hold). Sales gained 0.8% sequentially in May and 3.7% year over year. SPDR S&P Retail ETF XRT – The fund gives exposure to US retail stocks. Apparel retail takes about 21% of the fund. The fund charges 35 bps in fees. Urban Outfitters URBN – The Zacks Rank #1 company is a lifestyle specialty retailer that offers fashion apparel and accessories, footwear, home décor and gifts products. Sales for Miscellaneous Store Retailers rose 2.9% sequentially and 7.5% year over year. VanEck Retail ETF RTH – The underlying MVIS US Listed Retail 25 Index tracks the overall performance of companies involved in retail distribution, wholesalers, on-line, direct mail and TV retailers, multi-line retailers, specialty retailers and food and other staples retailers. The fund charges 35 bps in fees. Five Below FIVE – The Zacks Rank #2 company is a specialty value chain retailer that provides a wide range of premium quality and trendy merchandise for $5 or below. The company mainly targets teenagers or pre-teen shoppers for its products which include certain brands and licensed merchandise. Sales for Furniture & Home Furnishing Stores increased 1.2% sequentially and 8.8% year over year. iShares U.S. Consumer Focused ETF IEDI – The fund gives exposure to U.S. companies with a focus on U.S. consumer spending and consumer goods. The fund charges 18 bps in fees. Home Depot HD – The Zacks Rank #3 company is the world's largest home improvement specialty retailer. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Inc. (AMZN) : Free Stock Analysis Report The Home Depot, Inc. (HD) : Free Stock Analysis Report Urban Outfitters, Inc. (URBN) : Free Stock Analysis Report Five Below, Inc. (FIVE) : Free Stock Analysis Report SPDR S&P Retail ETF (XRT): ETF Research Reports VanEck Retail ETF (RTH): ETF Research Reports iShares U.S. Consumer Focused ETF (IEDI): ETF Research Reports ProShares Online Retail ETF (ONLN): ETF Research Reports This article originally published on Zacks Investment Research ( Zacks Investment Research
CTV News
a day ago
- Business
- CTV News
Global investment decline may worsen due to tariffs, UN trade agency warns
GENEVA -- Global foreign direct investment fell for the second consecutive year in 2024, with fears this year could be even worse as trade tensions rock investor confidence, the United Nations agency for trade and development said in a report published on Thursday. Foreign Direct Investment transactions, which do not include several European conduit economies, declined by 11%, indicating a significant reduction in actual productive investment activity, according to UNCTAD. Geopolitical tensions and trade fragmentation contributed to lower investment last year as they created uncertainty, which UNCTAD Secretary-General Rebeca Grynspan described as a 'poison' for investor confidence. 'We are even more worried about the picture in already feel that investment is are affecting growth,' Grynspan told Reuters, with short-term risk management being prioritized over long-term investment. UNCTAD said its outlook for international investment in 2025 was negative due to trade tensions. Early data for the first quarter of 2025 shows record low deal and project activity. When several European conduit economies - which act as intermediary hubs where investments temporarily pass through before reaching their final destinations - are included, the data showed that FDI increased by 4% to US$1.5 trillion. However, UNCTAD noted that this figure masks the reality that much of this investment is merely passing through these jurisdictions and was not productive. 'We see a very worrying that has a real impact on jobs and infrastructure is going down,' she said. Developed economies suffered a sharp drop in investment, with a 58% decrease in Europe. North America, however, observed a 23% increase in FDI, led by the U.S., while countries in Southeast Asia reached the second-highest level of FDI on record with a 10% rise, representing $225 billion. Though capital inflows in developing countries were broadly stable, UNCTAD observed that capital was not being injected into crucial job-creating sectors such as infrastructure, energy and technology. Reporting by Olivia Le Poidevin, editing by Ed Osmond, Reuters
Arab News
a day ago
- Business
- Arab News
Global FDI set to drop again this year after 11% fall in 2024: UNCTAD
RIYADH: Global foreign direct investment is set to fall again in 2025 thanks to high investor uncertainty prompted by trade tensions, according to a UN analysis. In its latest report, the UN Conference on Trade and Development revealed that FDI dropped 11 percent to $1.5 trillion in 2024, marking a second year of decline. While FDI flows were up 4 percent, this figure was inflated by volatile flows through conduit economies. Ongoing trade tensions have lead to downward revisions of most indicators, including FDI prospects, capital formation, and exports of goods and services, as well as financial market volatility, and investor sentiment. The views of UNCTAD align with a recent report released by the World Bank, which said that FDI flows into developing economies dropped to $435 billion in 2023, the lowest level since 2005, as rising trade barriers, geopolitical tensions, and growing fragmentation curbed cross-border investment. The World Bank added that FDI into advanced economies also dropped, sinking to $336 billion in 2023, the weakest level since 1996. Commenting on the latest report, Antonio Guterres, secretary-general of the UN, said: 'At a time when the world should be deepening cooperation and expanding opportunity, we are seeing the opposite. 'Barriers are rising. Globalization is retreating. And the consequences for sustainable development are profound.' He added: 'Infrastructure investment is slowing. Industrial investment is under strain. And developing countries – those most in need – are being left behind. 'Rising trade tensions, policy uncertainty and geopolitical divisions risk making the investment environment even worse.' The analysis revealed that inward FDI inflows in Saudi Arabia totaled $15.73 billion in 2024, representing a 31 percent decline from the previous year. The Kingdom's outflows in 2024 were $22.04 billion, marking a year-on-year rise of 27.1 percent. Geographically, FDI value in Europe stood at $182 billion last year, representing a decline of 58 percent compared to 2023. North America attracted FDI worth $343 billion, a 23 percent increase year on year. Africa's FDI flows rose by 75 percent year on year, reaching $97 billion in 2024, while FDI flows in developing Asia stood at $605 billion, marking a 3 percent decline. In Latin America and the Caribbean, FDI flows stood at $164 billion, representing a 12 percent drop compared to the previous year. 'Among developed countries, a sharp fall in inflows in Europe contrasted sharply with rising investment in North America. FDI flows to developing countries were flat, despite sizeable increases in Africa and in South-East Asia,' said the report Earlier this month, global credit rating agency S&P Global said FDI inflows into Gulf Cooperation Council countries are expected to slow in 2025 due to rising investor uncertainty. The outlook reflects shifting US trade policies, lower oil prices, and a more gradual rollout of economic diversification projects in the region. S&P Global also forecast a net negative impact on global FDI in the near term, driven by the indirect effects of US tariffs, a weaker oil price outlook, and declining global investor confidence. According to UNCTAD, international project finance also continued its slump in 2024, registering a 26 percent decline in value compared to the previous year. 'The global economy continues to grapple with a complex set of challenges: mounting debt, persistent underperformance in GDP (gross domestic product) growth, geopolitical tensions, and structural shifts in trade and investment flows,' said Rebeca Grynspan, secretary-general of UNCTAD. She added: 'Global foreign direct investment contracted for the second consecutive year. International project finance, critical for large-scale infrastructure and development, registered the steepest decline, falling by 26 percent.' International project finance makes up a higher share of FDI in the least developed countries, which are therefore proportionally more affected by the downturn. According to the analysis, the number of greenfield projects announced in industrial sectors increased by 3 percent year on year. However, their value fell by 5 percent to $1.3 trillion, still the second-highest on record. The value of cross-border mergers and acquisitions, which mostly affect FDI flows in developed countries, increased by 14 percent to $443 billion, still well below the average of the last decade. 'While there has been some weakness in overall M&A markets, the share of cross-border deals in the total is declining, with domestic deals and near-market acquisitions becoming more important in the face of growing policy risks and regulatory scrutiny,' said UNCTAD. The report highlighted that the digital economy is the only sector to have seen growth in 2024, witnessing a 17 percent increase in project numbers and a doubling of initiative values. 'The digital economy is expanding at an annual rate of 10 to 12 percent, outpacing global GDP growth and accounting for a rising share of value creation worldwide,' said Grynspan. She added: 'Yet this growth is not equally distributed. Despite more than $500 billion in greenfield investment in the digital economy into developing countries over the past five years, this investment is heavily concentrated in a few countries.' The UNCTAD secretary-general further said that several structurally weak and vulnerable economies remain marginalized, constrained by inadequate technical infrastructure, limited digital skills, and policy and regulatory uncertainty. According to the report, investments aimed at achieving sustainable development goals also faced hurdles in 2024, as projects in renewable energy declined by 12 percent and those in critical minerals fell by almost 50 percent. 'What is most alarming, however, is the continued deterioration of investment flows into key sectors aligned with the Sustainable Development Goals,' said Grynspan. She added: 'This trend comes at a time when the world can least afford to fall short. Reversing this negative trend in Goals investment will demand not only more capital — both public and private — but also deeper alignment of investment flows with long-term sustainability goals.'
