Quiver Quantitative – Amidst concerns about the Israel-Hamas war and its potential ramifications on the global economy, Saudi Arabia aims to solidify its position as a prime investment destination. Yasir Al-Rumayyan, leading Saudi Arabia’s $760 billion sovereign wealth fund, showcased the nation’s remarkable economic achievements during the Future Investment Initiative summit in Riyadh. Touting the strongest economic growth among the G20 nations in 2022, Al-Rumayyan expressed unwavering optimism about the future. Despite this upbeat tone, Wall Street magnates, including the CEOs of BlackRock (NYSE:), Bridgewater, and Citigroup (NYSE:), expressed reservations about the ongoing geopolitical tensions and their implications for global economic stability.
Global financial titans, including David Solomon of Goldman Sachs (NYSE:), Jamie Dimon of JPMorgan (NYSE:), Larry Fink of BlackRock, Steve Schwarzman of Blackstone (NYSE:), Jane Fraser of Citigroup, and Ray Dalio of Bridgewater Associates, were present at the event. While Al-Rumayyan conveyed an optimistic outlook, a contrasting sentiment of caution and pessimism about the global economy’s future emerged from some attendees. Ray Dalio highlighted concerns about conflicts, disorder, and burgeoning public debt. Simultaneously, Larry Fink emphasized the severe consequences stemming from the Israel-Hamas war, ranging from economic contractions to diminished global hope.
The Future Investment Initiative, colloquially termed “Davos in the Desert,” was hosted at the opulent Ritz Carlton hotel in Riyadh, drawing an estimated crowd of 6,000. Notably, this year marked the first instance where attendees were charged an entrance fee, ranging from $10,000 to $15,000. The event saw no significant cancellations, even amidst concerns about regional travel. Fueled by robust oil revenues, nations like Saudi Arabia and the UAE are becoming pivotal sources of global capital, especially given the challenges presented by rising interest rates, the aftermath of the COVID-19 pandemic, and ongoing wars.
Nevertheless, the escalating conflict between Hamas and Israel has fueled apprehensions about potential destabilization in the broader region. This tension is evidenced by foreign investors divesting approximately $4 billion in Saudi stocks since the war’s commencement. While the conflict has led some investors to be wary, others remain resolute in capitalizing on Saudi Arabia’s ambitious economic transformation, encapsulated in the Vision 2030 initiative. Despite the geopolitical tensions, Saudi Arabia continues to emphasize its commitment to change, renewable energy endeavors, and the significance of artificial intelligence.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
