SYDNEY — Asian shares extended losses on Thursday as troubles at U.S. lender First Republic Bank continued to unnerve investors amid concerns that growth in the world’s biggest economy could very well surprise to the downside.
MSCI’s broadest index of Asia-Pacific shares outside Japan were 0.3% lower on Thursday, while Japan’s Nikkei lost 0.4%. China’s blue chips were flat, but Hong Kong’s Hang Seng Index slid 0.3%.
Nomura shares fell more than 7% early on Thursday after Japan’s biggest brokerage posted a sharp fall in quarterly net profit after worries about a global banking crisis roiled markets and hit its investment banking business.
Overnight, in a brutal sell-off, First Republic Bank’s market value briefly sank as much as 41% to about $888 million, under $1 billion for the first time, a far cry from its peak of more than $40 billion in November 2021.
Investors are waiting to see whether it can find buyers for assets and engineer a turnaround after CNBC reported that U.S. government officials are currently unwilling to intervene.
“It is a case of the incredible shrinking bank. Until, in the end, it likely just simply ceases to exist.”
Overnight, Nasdaq notched a 0.5% gain on tech, while the S&P 500 and the Dow were pulled lower by weakness in economically sensitive sectors, hinting at mounting recession jitters.
Data showed that new orders for key U.S.-manufactured capital goods fell more than expected in March, suggesting that business spending on equipment was likely a drag on economic growth in the first quarter.
The Atlanta Federal Reserve’s GDPNow, which tracks how incoming data influences estimated gross domestic product (GDP) for the current quarter, showed that the estimate for growth is now at an annualized 1.1%, sharply down from 2.5% just a week ago.
Fed funds futures are pricing in a chance of about 80% that the Federal Reserve will hike interest rates by 25 basis points (bps) at its May meeting next week, while factoring in expected rate cuts of 45 bps by the end of the year.
In the currency markets, moves were largely muted. The euro was hovering close to its highest level in over a year at $1.104, benefiting from bets that the economic outlook for Europe could be on the upside after Germany raised its economic forecast for growth this year.
U.S. Treasuries were steady, with the two-year yields holding at 3.9345%, and ten-years at 3.4391%. One-month Treasury yields tumbled ahead of a possible Washington vote on the U.S. debt ceiling.
Oil recovered some ground on Thursday after tumbling almost 4% on recession fears. U.S. crude futures edged up 0.3% to $74.5 per barrel, while Brent crude futures rose 0.5% to $78.09 per barrel.
Gold was flat at $1,990.04 per ounce.
(Reporting by Stella Qiu; Editing by Kenneth Maxwell)
OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
The Canadian Press. All rights reserved.
OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.
In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.
The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.
Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.
In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.
It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.
This report by The Canadian Press was first published Oct 16, 2024.
The Canadian Press. All rights reserved.
OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.
The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.
The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.
Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.
Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.
Overall manufacturing sales in constant dollars fell 0.8 per cent in August.
This report by The Canadian Press was first published Oct. 16, 2024.
The Canadian Press. All rights reserved.
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