On Wednesday, Jerome Powell stated that a gradual tapering of emergency pandemic monetary policy will start in November. This will be a gradual process and will end sometime in mid-2022. Chair Powell also stated that he did not expect the Fed to increase interest rates until after the process of tapering is complete.
In other important figures, the Fed sees US GDP growth of 3.8% in 2022 and 2.5% in 2023. Inflation for the 12 months ending in July was 4.2%
Markets Spooked by China Evergrande Group’s Debt Crisis
China Evergrande (3333.HK, EGRNF, EGRNY), the most indebted real estate company in the world, spooked the global markets on Monday. Most Asian markets were closed on Monday due to a holiday. However, Hong Kong was open and selling in Hong Kong ignited a global selloff that saw the S&P 500 trade down as much as 2.8% on trading in the US on Monday.
On September 14, the company issued a letter to its investors that it may not be able to fulfill its obligations. On Thursday, the Chinese government told the company to focus on avoiding a near term default on its debt, completing property projects and repaying individual investors.
Robinhood (HOOD) is Testing a Crypto Wallet Feature
After the market closed on Monday, news broke that Robinhood would start testing a crypto wallet feature that would allow users to transfer crypto to and from their Robinhood wallets to other wallets. This news sent the stock higher in trading on Tuesday and Wednesday. $HOOD was up over 20% from Monday's close in the two trading sessions after the news broke.
Royal Dutch Shell (RDS.A/RDS.B) sells Permian Shale assets to Conoco Philips (COP)
Shell has sold average in the Permian Basin for $9.5 million dollars. The Permian Basin is the most prolific share play in the entire world, and the deal is expected to add nearly 200,000 barrels of oil equivalent a day. In conjunction with Conoco Phillips also announced a 7% dividend increase. In May, Royal Dutch Shell was ordered by a Judge in a Dutch court to slash its carbon emissions by 45% by 2030.
The United Kingdom is in the news this week as Bloomberg reported that the United Kingdom is exploring joining the USMCA agreement with Canada, Mexico, and the United States. The United Kingdom is exploring global trade deals after it exited the European Union. Last week, the Prime Minister for the United Kingdom stated that he did not believe the UK and the US would be able to negotiate a free trade pact before the 2024 general election. The United Kingdom could join the pact if the other three existing members accept the new member.
End of the Pandemic Around the Corner?
In an interview with Swiss newspaper Neue Zuercher Zeitung, the CEO of Moderna stated that he believes the pandemic will be over in a year.
In the interview, Moderna (MRNA) CEO Stéphane Bancel stated, “If you look at the industry-wide expansion of production capacities over the past six months, enough doses should be available by the middle of next year so that everyone on this earth can be vaccinated. Boosters should also be possible to the extent required."
If true, this is welcome news because this week the United States passed a grim milestone -- the number of deceased in the Covid pandemic surpassed that of the Spanish Flu that lasted from 1918-1920.
About the Writer
My name is Allen Spence and I have been working in the retail brokerage industry for over 16 years. I joined Alpaca in March of 2021 as a Brokerage Operations Consultant. Before joining Alpaca I have worked in a retail branch environment, call center for active traders, and spent over seven and a half years as the team lead on an equity trading desk for a large regional broker dealer. I’m excited to be at Alpaca helping bring the markets to investors worldwide. I live in Florida and enjoy traveling and spending time with my family.
Alpaca is a globally distributed financial technology company that is democratizing global access to financial markets starting with our API-first stock brokerage. Alpaca offers commission-free stock trading via API, a suite of developer APIs for brokerages, advisors, and startups, as well as a market data API.
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