Finance
Uncertainty about rate cuts leaves stock market vulnerable to sharp swings | Finance & Commerce
NEW YORK — For more than a year, the U.S. stock market went in mostly one direction, up, and in mostly one manner, quietly. A bonanza around artificial-intelligence technology helped drive Big Tech stocks higher, while other areas of the market held up amid rising hopes for coming cuts to interest rates by the Federal Reserve.
Last month the S&P 500 suffered its worst one-day loss since 2022. A measure of fear among investors in U.S. stocks also hit 19.4, its highest level since a blip above 21 in April, the last time waves caused a ripple in the placid market’s surface. It averaged 15.9 from the start of 2023 until July.
Some of the turbulence came on fears that profit reports for Big Tech stocks won’t be able to clear the immensely high expectations set for them after their prices surged so high.
It also was a result of a stock market finally shifting to a “show me” phase, now that cuts to interest rates seem imminent, according to Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management.
Instead of rising simply on hopes that the Fed will cut its main interest rate from the highest level in two decades, stocks will now move based in part on the pace and size of those potential cuts. The nearly unanimous expectation among traders is that the Fed will begin cutting in September.
If the Fed’s rate-cutting campaign proves slower or less deep than traders expect, investors could be disappointed. The risk for that is high, given forecasts by many traders that the Fed will cut its main interest rate by 1.50 percentage points over the next year. That’s much faster than the quarterly cuts to rates that Goldman Sachs economist David Mericle was predicting recently, for example.
The Fed has been holding its federal funds rate at a range of 5.25% to 5.50% for roughly a year.
Inflation could prove more resistant to dropping back to the Federal Reserve’s 2% target than many investors expect, which could force the Fed to cut rates more slowly. Only a few months ago several discouraging reports on inflation raised doubts about whether any cuts to rates would arrive in 2024.
Central banks around the world are also making moves, such as the Bank of Japan’s upward bias on rates while other central banks going the opposite way. That’s not to mention possible swings for the market that could arise because of the upcoming U.S. election.
“Bouts of volatility like we’ve seen are a defining feature of the new macro and market regime, we think,” say Jean Boivin and other strategists at BlackRock Investment Institute.
Rep. Phillips says Hall-Long lied about conducting ‘audit’
But the ranks of critics have grown and include two women in the state House of Representatives.
State Reps. Sophie Phillips and Madinah Wilson-Anton, both Democrats from Bear who have not been supporters of Hall-Long’s candidacy, called on her to withdraw from the race.
Such strident statements from Democrat lawmakers about a high-ranking party member whose gubernatorial bid is supported by Democrat House Speaker Valerie Longhurst are basically unheard of in Delaware.
Phillips told WHYY News that she was appalled by the state report’s findings.
“I was honestly shocked. I didn’t know any of that to be true,” Phillips said. “As an elected official, I need to be able to trust the executive branch and especially someone who’s going to be in charge of running a $6 billion budget. So yes, just utter shock. I don’t think she is the right person to run in a general election against the Republicans either.”
House Minority Leader Mike Ramone of Pike Creek and former Rehoboth Beach police officer Jerry Price are facing off in the Republican gubernatorial primary. The primary winners will face off in the Nov. 5 general election.
Phillips, who is in her first two-year term, said she was infuriated by what the state report concluded about what last fall Hall-Long had called an “audit” of her campaign finances by Summit CPA Group of Middletown.
Hall-Long had never released the audit, despite calls by her primary opponents and government transparency groups to do so. Hall-Long instead announced in November that, while her handpicked accounting firm found “errors’’ in the finance reports, “no wrongdoings or violations were found.”
The state report countered that Summit CPA Group and its principal, Karen Remick, “did not appear to seek audit evidence beyond the Longs’ representation that certain credit card charges were campaign related, and further accepted purported 2016 charges as campaign related with no documentation the charges had occurred.”
The report also said Remick would not cooperate with the state’s review, which began in January. Dana Long was interviewed but not the lieutenant governor. The report didn’t specify why not, and neither Albence’s office nor Hall-Long would say why she did not speak with former FBI boss Lampinski.
Phillips said it’s now clear that Hall-Long’s statements about the Summit CPA Group over the last nine months “turned out to be a lie.”
Wilson-Anton, elected in 2020, said Hall-Long’s actions are disqualifying.
“This is not the behavior of someone who is fit to run for office, let alone fit to lead our state as governor,’’ said Wilson-Anton, who nevertheless expressed some affection for Hall-Long.
“She is a sweet lady. I honestly believe she means well,” Wilson-Anton said. “But that’s not enough. We need our governor to be competent and visionary, and that means they can’t put untrustworthy people in positions of power and public trust, especially when they have a history of violating that public trust and abusing their power.”
Dana Long had been arrested for stealing Republican campaign signs near Middletown during his wife’s 2014 race for state Senate. She won that election by 267 votes out of 12,193 cast, won the race for lieutenant governor in 2016, and was re-elected in 2020.
Finance
Mitsubishi Heavy Industries, Ltd. Global Website | MHI Revises Green/Transition Finance Framework and Issues The Third Series of MHI Transition Bonds
Tokyo, August 2, 2024 – Mitsubishi Heavy Industries, Ltd. (MHI) submitted a revised shelf registration statement to the Director-General of the Kanto Local Finance Bureau today in preparation for its planned issuance of transition bonds via public offering in the Japanese bond market.
MHI was selected as a model example for the “2021 Climate Transition Finance Model Projects” being supported by the Ministry of Economy, Trade and Industry (METI) in March 2022, and issued its first transition bonds in September 2022. This will be our third issuance of transition bonds.
MHI also revised its Green/Transition Finance Framework to apply various latest principles and guidelines, reflect plans such as MHI’s 2024 Medium-Term Business Plan, and add uses of proceeds (solar power, biogas production, nuclear energy systems, synthetic fuel such as sustainable aviation fuel (SAF)). MHI’s bonds are issued according to this framework.
The Mitsubishi Heavy Industries Group has defined two growth areas: “Energy Transition”, which aims to decarbonize the energy supply side, and “Smart Infrastructure”, which targets to realize the decarbonization, and promote the energy efficiency, manpower saving in the energy demand side. As part of the financing necessary for focusing on businesses in these areas, and promote decarbonization, electrification and intelligence in its existing businesses, MHI is utilizing sustainable finance such as transition bonds and green bonds.
By issuing the bonds, MHI will promote its energy transition initiatives and contribute to realizing a Carbon Neutral society.
Outline of the Issuance
| Bond name (expected) | Mitsubishi Heavy Industries, Ltd. 44th Series Unsecured Bond (with inter-bond pari passu clause) (The 3rd Series of Mitsubishi Heavy Industries Transition Bonds) |
|---|---|
| Maturity (expected) | 5 years |
| Issue amount (expected) | JPY 10 billion |
| Issue timing (expected) | Late August 2024 |
| Use of proceeds (expected) | New investments and refinancing of existing investments relating to eligible businesses or projects (decarbonize existing infrastructure, build hydrogen solutions ecosystem, build a CO2 solutions ecosystem) |
| Lead managers | Nomura Securities Co., Ltd. Mizuho Securities Co., Ltd. SMBC Nikko Securities Inc. Daiwa Securities Co., Ltd. Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. BofA Securities Japan Co., Ltd. |
Outline of the Green/Transition Finance Framework
| Evaluation of the transition bond’s suitability | MHI receives second-party opinions from a second-party institution, DNV Business Assurance Japan K.K., on compatibility with the following principles, guidelines, etc.
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|---|---|---|
| Use of proceeds (green projects) |
Eligible businesses and/or projects | Eligibility Criteria (bold text indicates new projects) |
| Renewable Energy |
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| Clean Energy |
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| Use of proceeds (transition projects) |
Eligible businesses and/or projects | Eligibility Criteria (bold text indicates new projects) |
| Decarbonize existing infrastructure |
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| Build a hydrogen solutions ecosystem |
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| Build a CO2 solutions ecosystem |
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Relevant SDGs
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As part of the company’s Advancing Black Pathways Fellowship Program, the internship included opportunities to build teamwork, problem-solving and professional development skills through a tailored curriculum focused on financial services exposure and education. Following a successful summer, Staggs-Burgess was invited back for another internship the following year, this time as a global private bank summer analyst.
“After completing my Fellowship, I returned for a summer internship to the Private Bank on the same team and then was given an opportunity to place full-time into Asset Management on the Equities desk,” Staggs-Burgess recalls.
One of the first calls he made after accepting the offer was to Ryan. “I said to MaryEllen ‘We got it. I’m finally where I want to be.’ She held my hand through this entire process — but let me do what I needed to do.”
That balance of guidance and independence is what Staggs-Burgess considers a sweet spot for success — and something he shares with other students, particularly in his role as a career colleague in the career development center.
“My advice for students is to blaze their own path; do the work but seek out people who will point you to resources to help you get there,” says Staggs-Burgess, who has helped students with résumés, cover letters and interview tips — and says that giving back to people is something he enjoys. “I’ve been successful, but every decision I had to make, I had people who were supporting me. Create the right circle and run with the right people.”
Staggs-Burgess shares that he’s met some of his closest friends working out at the gym in the Dana Center and through his involvement with Bentley Mankind Movement, a Multicultural Center affinity group for men of color on campus. “If you follow things that interest you, you’ll meet the people who are right for you. I’m big on giving your energy and time to people who are going to make you better. Building your network and building equity with people is going to take you far — as long as you keep working hard.”
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