Wall Street ended its second losing week in a row on Friday on a sell-off in tech stocks and ahead of next week’s Federal Reserve policy meeting.
The S&P 500 fell 0.6 per cent to drop below 5,120, while the tech-heavy Nasdaq 100 fell more than 1 per cent. The Dow Jones Industrial Average was down 0.5 per cent.
Technology stocks pulled down the market. Software maker Adobe slumped 13.7 per cent after giving investors a weak revenue forecast. Microsoft fell 2.1 per cent and Broadcom lost 2.1 per cent.
Communication services stocks also pulled the market lower. Meta Platforms fell 1.6 per cent and Google parent Alphabet fell 1.3 per cent.
“Uncertainty about the future of the US central bank’s policy has prompted investors to lower their expectations for a June interest rate cut,” said Rania Gule, market analyst at XS.com.
“Given that readings of both US consumer and producer price indices show a pickup in stubborn inflation, Federal Reserve policymakers will be likely to refrain from easing monetary policy during next week’s meeting.
“The next Fed meeting is scheduled for March 19 and 20, with market focus expected to be significant, potentially constraining price movements during the beginning of next week.”
The latest pullback for stocks came as investors reviewed reports showing that inflation, although cooling, remains stubborn.
A report from the University of Michigan showed that consumer sentiment fell unexpectedly in March.
Inflation remains the big concern for Wall Street amid hopes for the Federal Reserve to start cutting interest rates.
The Fed sharply raised interest rates starting in 2022 to tame inflation back to its 2 per cent target. Inflation at the consumer level was as high as 9.1 per cent in 2022.
A report on consumer prices this week showed inflation remains stubborn, ticking up to 3.2 per cent in February from 3.1 per cent in January.
Another report on prices at the wholesale level also showed inflation remains hotter than Wall Street expected.
US producer price inflation jumped to 0.6 per cent on a monthly basis in February, and to 1.6 per cent on a yearly basis.
A rally for stocks that started in October has stalled in March as investors try to determine the path ahead for inflation, the Fed and the economy.
Fed officials will give their latest forecasts for where they see interest rates heading this year on March 20.
The central bank is widely expected to hold rates steady at its policy meeting next week, but investors will be watching the central bank's economic projections, including its interest rate forecast.
Officials last released quarterly forecasts in December, anticipating three quarter-point cuts in 2024, and they’re set to release an update of those projections on March 20.
Traders are still leaning towards a rate cut in June, according to data from CME Group.
Markets are pricing in a 59.2 per cent chance for a rate cut of at least 25 basis points (bps) by the Fed in June, down from 59.5 per cent in the prior session and 73.3 per cent a week ago, according to CME's FedWatch Tool.
We will walk into next week’s FOMC meeting with a hawkish tilt knowing that it’s always better for the Fed not to act too early than to be forced to make a U-turn on the way
Ipek Ozkardeskaya,
senior analyst, Swissquote Bank
Lower rates would relieve pressure on the economy and financial system.
“All eyes are on next week’s Federal Open Market Committee meeting. The Fed will update its dot plot having seen a two-month jump in inflation, robust jobs data, a relatively strong gross domestic print and healthy earnings,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
“There is a chance that we see the median forecast show no more than two rate cuts pencilled in by the Fed members for the year – instead of three plotted at December’s dot plot. We will walk into next week’s FOMC meeting with a hawkish tilt knowing that it’s always better for the Fed not to act too early than to be forced to make a U-turn on the way.”
Meanwhile, bond yields edged higher. The yield on the 10-year Treasury rose to 4.31 per cent from 4.29 per cent late Thursday.
The yield on the two-year Treasury, which typically moves in step with interest rate expectations, rose 4.73 per cent from 4.69 per cent.
The dollar rose and was on track for its strongest week since mid-January.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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Important questions to consider
1. Where on the plane does my pet travel?
There are different types of travel available for pets:
- Manifest cargo
- Excess luggage in the hold
- Excess luggage in the cabin
Each option is safe. The feasibility of each option is based on the size and breed of your pet, the airline they are traveling on and country they are travelling to.
2. What is the difference between my pet traveling as manifest cargo or as excess luggage?
If traveling as manifest cargo, your pet is traveling in the front hold of the plane and can travel with or without you being on the same plane. The cost of your pets travel is based on volumetric weight, in other words, the size of their travel crate.
If traveling as excess luggage, your pet will be in the rear hold of the plane and must be traveling under the ticket of a human passenger. The cost of your pets travel is based on the actual (combined) weight of your pet in their crate.
3. What happens when my pet arrives in the country they are traveling to?
As soon as the flight arrives, your pet will be taken from the plane straight to the airport terminal.
If your pet is traveling as excess luggage, they will taken to the oversized luggage area in the arrival hall. Once you clear passport control, you will be able to collect them at the same time as your normal luggage. As you exit the airport via the ‘something to declare’ customs channel you will be asked to present your pets travel paperwork to the customs official and / or the vet on duty.
If your pet is traveling as manifest cargo, they will be taken to the Animal Reception Centre. There, their documentation will be reviewed by the staff of the ARC to ensure all is in order. At the same time, relevant customs formalities will be completed by staff based at the arriving airport.
4. How long does the travel paperwork and other travel preparations take?
This depends entirely on the location that your pet is traveling to. Your pet relocation compnay will provide you with an accurate timeline of how long the relevant preparations will take and at what point in the process the various steps must be taken.
In some cases they can get your pet ‘travel ready’ in a few days. In others it can be up to six months or more.
5. What vaccinations does my pet need to travel?
Regardless of where your pet is traveling, they will need certain vaccinations. The exact vaccinations they need are entirely dependent on the location they are traveling to. The one vaccination that is mandatory for every country your pet may travel to is a rabies vaccination.
Other vaccinations may also be necessary. These will be advised to you as relevant. In every situation, it is essential to keep your vaccinations current and to not miss a due date, even by one day. To do so could severely hinder your pets travel plans.
Source: Pawsome Pets UAE
