ReportWire

Tag: Group of 7

  • CNBC Daily Open: Debt ceiling detours

    CNBC Daily Open: Debt ceiling detours

    President Joe Biden delivers a brief update of the ongoing negotiations over the debt limit in the Roosevelt Room at the White House on May 17, 2023 in Washington, DC.

    Chip Somodevilla | Getty Images News | Getty Images

    This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    The good news: Biden will meet McCarthy in person later today to discuss the debt ceiling, after a pause in negotiations over the weekend. The bad: There’s no telling how the talks will proceed.

    What you need to know today

    • U.S. stocks slipped Friday as investors worried about delays to a deal on the debt ceiling, contrary to their optimism earlier in the week. Asia-Pacific markets opened the week higher. China’s Shanghai Composite inched up 0.1% as shares of Chinese chipmakers rose after the country barred operators of key infrastructure from buying products from U.S.-based chip competitor Micron.
    • PRO Analysts think stocks can rise even higher in the second half of the year — if three conditions are met. Economic data coming out this week, including May’s PMI Composite, minutes of the Fed meeting and GDP figures, will make it clearer if markets can rally.

    The bottom line

    The Writers Guild of America may be on strike now, but we don’t lack gripping drama — in the form of the U.S. debt ceiling negotiations.

    It’s a good thing markets were closed over the weekend, or they’d probably have fallen on McCarthy’s comments that talks couldn’t resume until Biden returns to the country. Investors were already spooked on Friday after their optimism evaporated when Republican negotiators walked out of the discussion. The S&P 500 slid 0.14%, the Dow Jones Industrial Average lost 0.33% and the Nasdaq Composite fell 0.24%.

    To be sure, those weren’t big drops, suggesting investors thought Washington would eventually reach a deal — as it always has in the past. Fed Chair Powell’s comments that rates might not need to be high also cheered investors. The CBOE Volatility Index, which measures investors’ expectations of where the S&P will move in the next 30 days, traded at 16.8 Friday. That’s pretty near its 52-week low, indicating stability and calm.

    Indeed, the major indexes had a good week. The S&P added 1.65% and the Nasdaq rose 3% for the week — their best performance since March.

    Still, that was before McCarthy cranked up the rhetoric on debt ceiling negotiations. The good news is that Biden will meet McCarthy in person later today. The bad: There’s no telling how talks will proceed.

    Detours and divisiveness are perhaps inevitable when it comes to White House negotiations across the political spectrum. We can only have faith that the U.S. won’t plunge its own economy, and the financial world, into chaos. That’s a scenario that belongs on television, not the real world.

    Subscribe here to get this report sent directly to your inbox each morning before markets open.

    Source link

  • CNBC Daily Open: Debt ceiling detours and divisiveness

    CNBC Daily Open: Debt ceiling detours and divisiveness

    US President Joe Biden walks on the South Lawn of the White House before boarding Marine One in Washington, DC, US, on Wednesday, May 17, 2023.

    Al Drago | Bloomberg | Getty Images

    This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    The good news: Biden will meet McCarthy in person later today to discuss the debt ceiling, after a pause in negotiations over the weekend. The bad: There’s no telling how the talks will proceed.

    What you need to know today

    • The G-7 summit wrapped up Sunday. During the three-day event, the group announced new sanctions on Russia, outlined a shared approach toward China and called for peace in the Taiwan Strait.
    • Morgan Stanley CEO James Gorman said he plans to resign from his position by the end of the year. Taking over his role as CEO will be one of three internal candidates. Still, investors were disappointed: The bank’s shares dropped 2.66%.
    • PRO Analysts think stocks can rise even higher in the second half of the year — if three conditions are met. Economic data coming out this week, including May’s PMI Composite, minutes of the Fed meeting and GDP figures, will make it clearer if markets can rally.

    The bottom line

    The Writers Guild of America may be on strike now, but we don’t lack gripping drama — in the form of the U.S. debt ceiling negotiations.

    It’s a good thing markets were closed over the weekend, or they’d probably have fallen on McCarthy’s comments that talks couldn’t resume until Biden returns to the country. Investors were already spooked on Friday after their optimism evaporated when Republican negotiators walked out of the discussion. The S&P 500 slid 0.14%, the Dow Jones Industrial Average lost 0.33% and the Nasdaq Composite fell 0.24%.

    To be sure, those weren’t big drops, suggesting investors thought Washington would eventually reach a deal — as it always has in the past. Fed Chair Powell’s comments that rates might not need to be high also cheered investors. The CBOE Volatility Index, which measures investors’ expectations of where the S&P will move in the next 30 days, traded at 16.8 Friday. That’s pretty near its 52-week low, indicating stability and calm.

    Indeed, the major indexes had a good week. The S&P added 1.65% and the Nasdaq rose 3% for the week — their best performance since March.

    Still, that was before McCarthy cranked up the rhetoric on debt ceiling negotiations. The good news is that Biden will meet McCarthy in person later today. The bad: There’s no telling how talks will proceed.

    Detours and divisiveness are perhaps inevitable when it comes to White House negotiations across the political spectrum. We can only have faith that the U.S. won’t plunge its own economy, and the financial world, into chaos. That’s a scenario that belongs on television, not the real world.

    Subscribe here to get this report sent directly to your inbox each morning before markets open.

    Source link

  • How Biden’s wartime visit to Kyiv came together

    How Biden’s wartime visit to Kyiv came together

    US President Joe Biden walks with Ukrainian President Volodymyr Zelenskyy during an unannounced visit in Kyiv on Feb. 20, 2023.

    Evan Vucci | AFP | Getty Images

    President Joe Biden’s decision to make a risky wartime visit to Kyiv took root after a similarly clandestine mission just two months ago — when Ukrainian President Volodymyr Zelenskyy came to Washington and addressed a joint meeting of Congress, according to two sources familiar with the matter.

    Senior members of Biden’s national security team who helped arrange the travel at the end of last year were heartened — and pleasantly surprised — by how powerful and positive the reaction to Zelenskyy’s trip seemed to be among the American people, said the sources, who, like others in this article, were granted anonymity to discuss internal planning. It was Zelenskyy’s first travel outside Ukraine since the start of the war.

    Hoping to sustain momentum for efforts to keep the fragile Western alliance together in support of Ukraine, the officials began discussions about using the anniversary of Russia’s invasion to make a similarly bold gesture.

    Publicly, the planning would play out in the trip officials formally announced 10 days ago — that Biden would make a second trip to Poland, Ukraine’s neighbor, to meet with its president and other NATO allies who have most to lose from any weakening of Western resolve.

    But privately, among a small universe of senior officials, the thinking was that this might be the moment to realize a long-held hope among some officials for an even more potent demonstration of U.S. solidarity: having Biden visit Ukraine.

    “Discussions about possibly going have been underway for months and really accelerated in recent weeks,” a senior administration official said.

    Officials across the government had long made it clear that it was nearly impossible to guarantee Biden’s safety heading into a war zone in which the U.S. is not an active partner.

    Other leaders of NATO and the G-7 group of major industrial nations, senior members of Congress and the secretaries of defense and state had all made the long, secretive journey to Kyiv. First lady Jill Biden made a surprise Mother’s Day visit to western Ukraine, spending two hours in the border town of Uzhhorod to meet first lady Olena Zelenska. 

    But the level of security needed for the president of the U.S. had long been considered incompatible. Even until the end, discussions about security measures were “intense,” as another official put it. They even included a call to Russian officials hours before Biden departed for “deconfliction” purposes, national security adviser Jake Sullivan would later tell reporters. 

    “[It] required a security, operational and logistical effort from professionals across the U.S. government to take what was an inherently risky undertaking and make it a manageable level of risk,” Sullivan told reporters after Biden left Kyiv on Monday afternoon local time. “But, of course, there was still risk and is still risk in an endeavor like this.”

    Biden spent about five hours in the capital, meeting with Zelenskyy and other Ukrainian officials. The two leaders visited St. Michael’s Golden-Domed Monastery and then walked to the nearby Wall of Remembrance, which honors those who have died in the war.

    Sullivan and his deputy, Jon Finer, said that while planning involved officials from across the government, it was a very closely held among every agency involved.

    At a White House news briefing Friday, National Security Council spokesperson John Kirby flatly denied that Biden would detour to Ukraine on his Poland trip. 

    Typically, it would be Sullivan who briefed reporters ahead of a Biden foreign trip, but he did not this time so he would not be in the position of misleading reporters, two sources familiar with the matter said.

    As planning reached the late stages, aides to Vice President Kamala Harris were told that her itinerary for the Munich Security Conference needed to be trimmed to ensure that she returned to U.S. soil by Saturday night. They were not given a reason, only that it was “nonnegotiable,” according another administration officials.

    On Sunday, the White House released a public schedule that had Biden scheduled to depart for Poland late Monday — well after he had already quietly left Washington.

    Instead, a handful of officials gathered at the White House before dawn, along with others in Europe, to track his journey every step of the way, two officials said.

    Sullivan was among the small number of staff members who traveled with Biden on Monday; others who were due to travel to Poland will still travel, without Biden, as scheduled Monday night. 

    White House officials did not immediately provide additional details of the precautions taken to minimize the security risks. But one obvious hurdle was how to provide security without committing U.S. air assets in the region.

    Ukraine can lose this war — but Russia can't win, Eurasia Group CEO says

    Biden took a 10-hour train ride from the Polish border into Kyiv. A source familiar with the matter said that while Biden could have gone to other locations in Ukraine that would have been easier to reach, he chose Kyiv to highlight that the capital is still standing after Ukraine’s forces proved to Russian President Vladimir Putin that the country would be more different to topple than anticipated.

    For Jill Biden’s visit to Ukraine in May, military aircraft tracked her motorcade as it made its way from a Slovakian airport up to the border but did not follow along as she drove across Ukraine’s border. The first lady’s trip was made public only as she prepared to cross back into Slovakia hours later.

    When Joe Biden, then the vice president, last traveled into a war zone, a trip to Baghdad and Erbil, Iraq, in April 2016, his arrival was disclosed after he had safely arrived in the Green Zone, with subsequent movements covered by the traveling media pool.

    Biden noted that Monday’s trip was his eighth to Ukraine, and his first words after he stepped off the train were, “It’s good to be back in Kyiv,” according to the media pool.

    Biden last visited the country in his final days as vice president.

    This time, he “was very focused on making sure that he made the most of his time on the ground, which he knew was going to be limited,” Sullivan said.

    Source link

  • OPEC+ oil producers face uncertainty over Russian sanctions

    OPEC+ oil producers face uncertainty over Russian sanctions

    FRANKFURT, Germany — The Saudi-led OPEC oil cartel and allied producing countries, including Russia, are expected to decide how much oil to supply to the global economy amid weakening demand in China and uncertainty about the impact of new Western sanctions against Russia that could take significant amounts of oil off the market.

    The 23-country OPEC+ alliance are scheduled to meet Sunday, a day ahead of the planned start of two measures aimed at hitting Moscow’s oil earnings in response to its war in Ukraine. Those are a European Union boycott of most Russian oil and a $60-per-barrel price cap on Russian exports imposed by the EU and Group of Seven democracies.

    Russia rejected the price cap approved Friday and threatened to stop supplying the nations that endorsed it.

    Oil has been trading lower on fears that coronavirus outbreaks and China’s strict zero-COVID restrictions would reduce demand for fuel in one of the world’s major economies. Concerns about recessions in the U.S. and Europe also raise the prospect of lower demand for gasoline and other fuel made from crude.

    That uncertainty is the reason OPEC+ gave in October for a slashing production by 2 million barrels per day starting in November, which some saw as a possible move to help Russia weather the European embargo. The impact had some limitations because OPEC+ countries already can’t meet their quotas.

    With the global economy slowing, oil prices have been falling since summertime highs, with international benchmark Brent closing Friday at $85.42 per barrel, down from $98 a month ago. That has eased gasoline prices for drivers in the U.S. and around the world.

    On the other side, the price cap and EU boycott could take an unknown amount of Russian oil off the global market, tightening supply and driving up prices. To prevent a sudden loss of Russian crude, the price cap allows shipping and insurance companies to transport Russian oil to non-Western nations at or below that threshold. Most of the globe’s tanker fleet is covered by insurers in the G-7 or EU.

    Russia would likely try to evade the cap by organizing its own insurance and using the world’s shadowy fleet of off-the-books tankers, as Iran and Venezuela have done, but that would be costly and cumbersome, analysts say.

    Facing those uncertainties for the global oil market, OPEC oil ministers led by Saudi Arabia could leave production levels unchanged or cut output again to keep prices from declining further. Low prices mean less revenue for governments of producing nations.

    “We feel that the meeting will be fairly short, and the alliance will stick to the current output targets,” said Gary Peach, oil markets analyst with Energy Intelligence. Standing pat makes sense “all the more so because oil is at $87 per barrel (earlier Friday), which is a good price for everybody. … Of course, $98 is better, but right now I think they see the market as adequately priced, adequately supplied and there’s no reason to rock the boat.”

    Analysts at Clearview Energy Partners, on the other hand, expect OPEC+ to announce a production cut of 1 million barrels per day. Some members are underproducing, so that would more likely amount to a production cut of roughly 580,000 barrels per day.

    A cut of that magnitude wouldn’t cause a problem with global supplies, even when taking into consideration the EU ban on Russian oil, which is expected to pull another 1 million barrels off the market, said Jacques Rousseau, managing director at Clearview Energy Partners. Oil use declines in the winter, in part because fewer people are driving.

    But the G-7 price cap could prompt Russia to retaliate and take more oil off the market. The Saudis are “likely to share the Kremlin’s interest in quashing the G-7’s rising buyers’ cartel,” said Kevin Book, another managing director at Clearview.

    The cap of $60 a barrel is near the current price of Russian oil, meaning Moscow could continue to sell while rejecting the cap in principle.

    “If Russia ends up taking off more oil than about a million barrels per day, then the world becomes short on oil, and there would need to be an offset somewhere, whether that’s from OPEC or not,” Rousseau said. “That’s going to be the key factor — is to figure out how much Russian oil is really leaving the market.”

    ———

    Bussewitz reported from New York.

    Source link

  • OPEC+ oil producers face uncertainty over Russian sanctions

    OPEC+ oil producers face uncertainty over Russian sanctions

    FRANKFURT, Germany — The Saudi-led OPEC oil cartel and allied producing countries, including Russia, are expected to decide how much oil to supply to the global economy amid weakening demand in China and uncertainty about the impact of new Western sanctions against Russia that could take significant amounts of oil off the market.

    The 23-country OPEC+ alliance are scheduled to meet Sunday, a day ahead of the planned start of two measures aimed at hitting Moscow’s oil earnings in response to its war in Ukraine. Those are a European Union boycott of most Russian oil and a $60-per-barrel price cap on Russian exports imposed by the EU and Group of Seven democracies.

    Russia rejected the price cap approved Friday and threatened to stop supplying the nations that endorsed it.

    Oil has been trading lower on fears that coronavirus outbreaks and China’s strict zero-COVID restrictions would reduce demand for fuel in one of the world’s major economies. Concerns about recessions in the U.S. and Europe also raise the prospect of lower demand for gasoline and other fuel made from crude.

    That uncertainty is the reason OPEC+ gave in October for a slashing production by 2 million barrels per day starting in November, which some saw as a possible move to help Russia weather the European embargo. The impact had some limitations because OPEC+ countries already can’t meet their quotas.

    With the global economy slowing, oil prices have been falling since summertime highs, with international benchmark Brent closing Friday at $85.42 per barrel, down from $98 a month ago. That has eased gasoline prices for drivers in the U.S. and around the world.

    On the other side, the price cap and EU boycott could take an unknown amount of Russian oil off the global market, tightening supply and driving up prices. To prevent a sudden loss of Russian crude, the price cap allows shipping and insurance companies to transport Russian oil to non-Western nations at or below that threshold. Most of the globe’s tanker fleet is covered by insurers in the G-7 or EU.

    Russia would likely try to evade the cap by organizing its own insurance and using the world’s shadowy fleet of off-the-books tankers, as Iran and Venezuela have done, but that would be costly and cumbersome, analysts say.

    Facing those uncertainties for the global oil market, OPEC oil ministers led by Saudi Arabia could leave production levels unchanged or cut output again to keep prices from declining further. Low prices mean less revenue for governments of producing nations.

    “We feel that the meeting will be fairly short, and the alliance will stick to the current output targets,” said Gary Peach, oil markets analyst with Energy Intelligence. Standing pat makes sense “all the more so because oil is at $87 per barrel (earlier Friday), which is a good price for everybody. … Of course, $98 is better, but right now I think they see the market as adequately priced, adequately supplied and there’s no reason to rock the boat.”

    Analysts at Clearview Energy Partners, on the other hand, expect OPEC+ to announce a production cut of 1 million barrels per day. Some members are underproducing, so that would more likely amount to a production cut of roughly 580,000 barrels per day.

    A cut of that magnitude wouldn’t cause a problem with global supplies, even when taking into consideration the EU ban on Russian oil, which is expected to pull another 1 million barrels off the market, said Jacques Rousseau, managing director at Clearview Energy Partners. Oil use declines in the winter, in part because fewer people are driving.

    But the G-7 price cap could prompt Russia to retaliate and take more oil off the market. The Saudis are “likely to share the Kremlin’s interest in quashing the G-7’s rising buyers’ cartel,” said Kevin Book, another managing director at Clearview.

    The cap of $60 a barrel is near the current price of Russian oil, meaning Moscow could continue to sell while rejecting the cap in principle.

    “If Russia ends up taking off more oil than about a million barrels per day, then the world becomes short on oil, and there would need to be an offset somewhere, whether that’s from OPEC or not,” Rousseau said. “That’s going to be the key factor — is to figure out how much Russian oil is really leaving the market.”

    ———

    Bussewitz reported from New York.

    Source link

  • Biden calls ’emergency’ meeting with G7, NATO leaders after Poland says ‘Russian-made’ missile killed two in country

    Biden calls ’emergency’ meeting with G7, NATO leaders after Poland says ‘Russian-made’ missile killed two in country

    Biden calls ’emergency’ meeting with G7, NATO leaders after Poland says ‘Russian-made’ missile killed two in country

    Source link