November 6th – The BESA Times


Image Source: Bloomberg L.P

Forty-Third Edition - Monday, 6th

Every week, a complete snapshot of what happened around the world in the past seven days

 

President Nicolás Maduro has called for a restructuring of Venezuela’s $89bn of debt. In a televised address on Thursday he said that the state oil company PDVSA would make more than $1.1bn debt payment on a bond due in 2017 and restructure its residual obligations with banks and investors. Francisco Rodriguez of Torino Capital said the announcement is a sign of the government’s intent to offer a take-it or leave-it offer to bondholders, although they will have little incentive to take part to the operation due to the country’s high default risk. Some analysts saw this move as an admission that the country is reaching the limits of its ability to keep paying its debt obligations given economic stresses and international sanctions. Moreover, some around Maduro are allegedly attempting to convince him to stop paying interests in the country’s debt altogether, citing the country’s current extreme economic conditions which see people starving every day.


The US unemployment rate is at its lowest level since 2000. Partly because of hurricane-induced reconstructions projects, the country’s unemployment rate has now reached 4.1%. These figures contradict last month’s expectations that the economy would start losing jobs for the first time since 2010. The unexpected improvement was also caused from a rise in hiring by bars and restaurants, which added an 89,000 jobs. Despite a September slowdown due to the Hurricane, it now appears the US in continuing its strong performance.


For the first time since 2007, the Bank of England has raised its interest rates. Despite weak levels of business investment, the Banks aid that growth should come as firms are benefiting from the weaker sterling and the global economy picks up pace. Higher contribution to GDP growth from exporters could also help offset falls in consumer spending and investment. The rate remains however at historically low levels and some saw in the move nothing but a reversal of the rate cut that had taken place immediately after last year’s referendum. The country is also facing an inflation rate of 2.9%, well above the Bank’s 2% target.

 

What to remember of last week's news?

Spanish judges have issued a European arrest warrant for former Catalan President Carles Puigdemont a day after eight other former Catalan government ministers were jailed in Spain. Mr. Puidgemont meanwhile flew to Belgium with the remaining part of his cabinet and failed to appear before a Spanish judge on Thursday. He said he would agree to go back to Spain only if he was guaranteed a “fair trial”. Charges moved against him are sedition, rebellion, misuse of funds and abuse of authority and contempt. The Belgian prosecutor Eric Ban der Sypt, who received the arrest warrants for Pugdemont and the others, said he would consider them and hand them over to an investigating judge.


President Donald Trump has publicly urged Saudi Aramco to list in the New York Stock Exchange. He said in a speech on Sunday “I want them to strongly consider the New York Stock Exchange or Nasdaq”. Saudi Aramco’s IPO is gaining a lot of attention with many politicians and businessmen fighting it to take place in their countries. The operation is believed to be the biggest IPO in history with an expected market value of hundreds of billions of dollars. So far, the London Stock Exchange has been tipped as the most likely winner.

 

Our Homemade Article

Explaining the unusually low U.S inflation rate by Gabriel Nagy

 

Understand in pictures

A woman watches Mount Sinabung erupting in North Sumatra, just under 2,000 miles from Mount Agung in Bali (Photograph: Ivan Damanik/AFP/Getty Images)

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Did you know?

Apple’s $1000 iPhone X was released on Friday. Shares rose by 2.72% in mid-day trading. This has increased Apple’s market capitalization to around $900 billion, making it an all-time high for the company. Some analysts are predicting that if this upbeat in earnings and sales continues, we could see apple becoming a trillion-dollar company in the next months. The company’s commitment to spending tens of billions of dollars on research and development each year on cars, glasses, medical devices and more indicated Steve Jobs innovative thinking is still present within Apple.

 

What to expect for next week

In its third quarter of 2017, Tesla has delivered just 222 of its Model 3 cars. The Model’s low success is increasingly becoming a thorny issue as there is a waiting list of 400,000 people who have already purchased the $1000 Model 3. The initial intention to produce 5000 cars a week by January 2018 has already been delayed to March of the same year. In the 3rd quarter, the company announced a loss of over $600 million. Despite the bad news, the stock price did not fall as much as many expected. This shows the strong belief investors still have in Tesla for now but Elon Musk should hope they will not run out of patience.

 

WRITTEN BY RUGGERO CALAMAI

PLEASE DIRECT ANY INQUIRY TO AS.BESA@UNIBOCCONI.IT

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#DonaldTrump #UnitedStates #Europe #BankofEngland #InterestRates #Debt #Catalonia #Apple

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