How did Powell’s 8-minute speech affect the economy?
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World Market News: We’re talking Zoom, the Fed chair’s speech, and U.S. government bond yields
This week, Jerome Powell, the Fed’s chairman, delivered his much-awaited speech and did not give any clues regarding what the Fed might do at its next policy meeting, which is supposed to be held in September. However, officials are expected to approve either a 50- or 75-basis-point rate increase.
The aftermath
As a reaction to that speech, an index of global stock markets fell sharply, with U.S. stocks falling 3% while short-term U.S. Treasury yields rose on Friday.
In a nutshell, the bank's chairman said the Fed must continue to raise interest rates to stop inflation from becoming a permanent aspect of the US economy.
During his speech of just eight minutes, Powell’s words contributed to the slashing of fortunes of US billionaires' by $78 billion, as per Bloomberg.
Bill Gates and Warren Buffett's wealth declined by $2.2 billion and $2.7 billion, respectively, while Sergey Brin’s fortune fell below $100 billion, as per? Bloomberg.
Some Zoom news!
?This week, investors were rather let down by their favorite video call platform, Zoom, whose shares dropped after the company reported disappointing quarterly results, although the enterprise business remains healthy with 27% year-over-year growth.
?U.S. government-bond yields are at it, again
?U.S. government bond yields have shown a paramount rebound this month, showing the positive attitude that has been prevalent among investors about the near-term economic outlook. However, bond prices have decreased!
?Source: The Wall Street Journal
?Arab Market News: Qatari investments reach Egypt!
?Talks between Egypt’s Sovereign Fund and Qatar Investment Authority, which has been ranked 9th globally with assets amounting to 295 million, resulted in the latter acquiring stakes in Egyptian companies focusing on Fintech and renewable energy projects.
?It is said that Egypt will witness the first investments over the course of the next few weeks!
?More on the Egyptian Front!
?It was reported that the Saudi Sovereign Fund is set to acquire a stake in Misr Aluminum within the next few weeks by pumping about $215 million into the company’s capital increase.
?In addition, the Emirati Sovereign Fund is also discussing acquiring a 10 to 15% stake in Abu Qir Fertilisers.
?The GCC banking sector reports net profits!
?The GCC banking sector's net profits are now at a record level of $11.1 billion in the second quarter of 2022, registering a quarter-on-quarter growth of 1.9 percent and a year-on-year growth of 31.9 percent.
?The increase is believed to be due to higher revenues being reported for the sector, which were accompanied by a slight drop in provisions during the quarter.
?Source: Times of Oman
?Weird Financial Facts: The cost of printing money bills will shock you!
?There’s no doubt regarding the value of money to most people. To many of us, its value lies in transforming our lives. As a result, printing money should cost more than a few nickels or dimes! However, despite its inherent value, printing bills is inexpensive!
?The cost of printing bills depends on the denomination, of course, but no bill costs more than $1 to print. Take this, for example, a $100 bill costs only 15.4 cents per note! Shocking, right?
Source: Investopedia
?Things to look out for: The Eurozone and promising aspects!
?Eurozone troubles
?After JP Morgan announced that Europe's energy import costs have quadrupled recently while simultaneously posing more challenges for the European Central Bank, the bank is expecting a severe recession for Europe by the end of 2022 as rising natural gas prices and higher interest rates don’t carry much positive news for the continent.
?What do you think, investors? Do you think JP Morgan’s expectations will check out?
The dollar
On another note, the dollar erased early losses to turn positive against a collection of currencies.
?Tiktok!
?Yes, investors. You heard that one correctly!
?Even though the stocks of TikTok’s parent company, ByteDance, are not publicly traded, its impressive rise is in stark contrast to its competitors. Note that shares of Meta have tumbled more than 50% this year, and Snap has seen a 76% decline.
?Still interested in TikTok shares even though the company hasn’t gone public yet? There might be a chance after all!
?Since it’s not possible to directly buy shares as a retail investor, you can invest in TikTok by buying shares in private equity companies.
?TikTok shares are, in fact, owned by private equity firms: Softbank, KKR, Coatue, General Atlantic, Hillhouse, Sequoia Capital, and Source Code Capital.
?Hence, you can buy those shares now until TikTok makes up its mind on whether it’s planning to go public.
?Source: Financial Times