International
Stocks stumble to end ‘miserable’ 2022
| By AFP | Roland Jackson |
Stock markets wrapped up their worst performances in years on Friday before heading into 2023 under recession fears following Russia’s invasion of Ukraine, high inflation and rising interest rates.
Both US and European indices closed their final sessions of the year in the red.
For the year, Frankfurt was down more than 12 percent and Paris lost 9.5 percent for their worst performances since 2018. London, however, was up 0.9 percent in 2022 as the energy sector was buoyed by soaring energy prices.
Wall Street saw its worst annual drop since 2008, with the S&P 500 index down around 20 percent and the tech-heavy Nasdaq losing about 30 percent for the year.
Equities were slammed as the US Federal Reserve, European Central Bank and Bank of England aggressively lifted interest rates in a bid to tackle rampant consumer price rises. The move carries the risk of sparking recession as higher borrowing costs slow economic activity.
US tech companies were hit particularly hard as they are usually boosted by lower interest rates.
The MCSI World Equity Index has lost almost a fifth in its worst annual performance since 2008, when markets were ravaged by the global financial crisis.
Asia-Pacific markets finished their last sessions mostly in the green on Friday.
But for the year, Hong Kong tanked 15.5 percent and Shanghai dived 15.1 percent in the biggest annual slumps since 2011 and 2018, respectively.
Covid spiked once more in China in December, after Beijing relaxed its strict curbs in the face of rare public outcry. The surge has also prompted worries about the impact on stretched global supply chains.
Tokyo plunged 9.4 percent in the first annual fall since 2018 but the Bank of Japan maintained its ultra-easy monetary policy, in contrast with other central banks, to help its fragile economy.
‘Pitiful end to miserable year’
“It’s shaping up to be a pitiful end to a miserable year in stock markets,” OANDA trading platform analyst Craig Erlam told AFP.
He said 2022 had “brought an end to an era” of low interest rates that fueled tech and crypto booms.
“That’s been replaced with soaring inflation and interest rates, immense economic uncertainty and the reshaping of energy markets in the aftermath of the Russian invasion of Ukraine,” Erlam added.
In commodities, oil prices rallied in 2022 with Brent gaining about 10 percent and the West Texas Intermediate adding around seven percent.
However, they remain significantly below peaks struck in March on supply woes after key producer Russia invaded its neighbor, sending natural gas prices also spiking.
Britain and other major economies now face the likely prospect of grim recessions next year, as consumers and businesses battle rampant inflation and rising rates after years of ultra-low borrowing costs.
“The most important take of the year is: the era of easy money ended, and ended for good,” noted SwissQuote analyst Ipek Ozkardeskaya.
“And given that there is still plenty of cheap central bank liquidity waiting to be pulled back, the situation may not get better before it gets worse,” she said.
“Recession, inflation, stagflation will likely dominate headlines next year.”
London was down 0.8 percent and Frankfurt shed 1.1 percent in half-day sessions ahead of the New Year holiday. Paris closed 1.5 percent lower.
On Wall Street, the Dow ended 0.2 percent lower while the tech-heavy Nasdaq shed 0.1 percent.
“It would appear that people have checked out for the year — and have settled back into holiday mode for New Year celebrations,” Erlam said.
Key figures around 2145 GMT
New York – Dow: DOWN 0.2 percent at 33,147.25 (close)
New York – S&P 500: DOWN 0.3 percent at 3,839.50 (close)
New York – Nasdaq: DOWN 0.1 percent at 10,466.48 (close)
London – FTSE 100: DOWN 0.8 percent at 7,451.74 (close)
Frankfurt – DAX: DOWN 1.1 percent at 13,923.59 (close)
Paris – CAC 40: DOWN 1.5 percent at 6,473.76 (close)
EURO STOXX 50: DOWN 1.5 percent at 3,793.62 (close)
Tokyo – Nikkei 225: FLAT at 26,094.50 (close)
Hong Kong – Hang Seng Index: UP 0.2 percent at 19,781.41 (close)
Shanghai – Composite: UP 0.5 percent at 3,089.26 (close)
Euro/dollar: UP at $1.0704 from $1.0667 on Thursday
Pound/dollar: UP at $1.2094 from $1.2062
Euro/pound: UP at 88.47 pence from 88.40 pence
Dollar/yen: DOWN at 131.11 yen from 132.96 yen
West Texas Intermediate: UP 2.4 percent at $80.26 per barrel
Brent North Sea crude: UP 2.9 percent at $85.91
International
Paraguay summons Brazilian ambassador over Itaipú espionage scandal
Paraguay summoned the Brazilian ambassador in Asunción on Tuesday to demand “explanations” and called its own representative in Brasília for consultations following Brazil’s acknowledgment of an espionage operation. The Brazilian government, led by President Luiz Inácio Lula da Silva, attributed the operation to the previous administration.
The surveillance effort aimed to uncover Paraguay’s position in now-suspended negotiations with Brazil regarding the pricing of electricity from the binational Itaipú hydroelectric plant, according to reports in the Brazilian press.
The Brazilian government “categorically denied any involvement in the intelligence operation,” stating in a Foreign Ministry communiqué on Monday that the espionage was carried out under former President Jair Bolsonaro’s administration (2019-2023).
“The operation was authorized by the previous government in June 2022 and was annulled by the interim director of the (state intelligence agency) ABIN on March 27, 2023, as soon as the current administration became aware of it,” Brazil’s government asserted.
Paraguay’s Foreign Minister Rubén Ramírez announced that Brazilian Ambassador José Antonio Marcondes de Carvalho was summoned “to provide detailed explanations” regarding the operation. Additionally, Paraguay recalled its diplomatic representative in Brasília “to report on aspects related to the intelligence activity conducted by Brazil regarding Paraguay’s government affairs.”
International
Elon Musk to step down as government advisor, per Trump insiders
President Donald Trump has informed his inner circle that Elon Musk will be stepping down from his role as a government advisor, according to a report by Politico today.
Citing three individuals close to Trump, Politico states that the president is pleased with Musk’s leadership at the Department of Government Efficiency (DOGE), where he has implemented significant budget cuts. However, both have agreed that it is time for Musk to return to his businesses and support Trump from a different position outside the government.
A senior administration official told Politico that Musk will likely maintain an informal advisory role and continue to be an occasional visitor to the White House. Another source warned that anyone thinking Musk will completely disappear from Trump’s circle is “deluding themselves.”
According to the sources, this transition is expected to coincide with the end of Musk’s tenure as a “special government employee,” a temporary status that exempts him from certain ethics and conflict-of-interest regulations. This 130-day period is set to expire in late May or early June.
International
Milei vows to make Argentina so strong that Falkland Islanders “choose” to join
Argentine President Javier Milei reaffirmed his country’s claim over the Falkland Islands (known as the Islas Malvinas in Argentina) and praised the role of the nation’s armed forces during a ceremony marking the “Veterans and Fallen Soldiers of the Malvinas War Day,” commemorating 43 years since the 1982 conflict with the United Kingdom.
Argentina continues to assert sovereignty over the islands, arguing that Britain unlawfully seized them in 1833.
“If sovereignty over the Malvinas is the issue, we have always made it clear that the most important vote is the one cast with one’s feet. We hope that one day, the Malvinas residents will choose to vote with their feet and join us,” Milei stated.
“That is why we aim to become a global power—so much so that they would prefer to be Argentine, making deterrence or persuasion unnecessary. This is why we have embarked on a path of liberation, working to make Argentina the freest country in the world and once again the nation with the highest GDP per capita on the planet,” he added.
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