The U.S. authorities on Monday may announce the allocation of another package of military aid to Kyiv, this time in the amount of $2.6 billion, according to Western media, citing U.S. officials.
The package, among other things, will include various types of ammunition, anti-tank weapons, air surveillance radar, equipment for crossing water barriers, recovery vehicles, and missiles for NASAMS air defense systems.
The reports note that work on this military assistance in the United States has not yet been completed, and therefore changes may occur in the list of transferred weapons.
The U.S. economy will enter recession in the coming months, Jeff Gundlach, head of investment company DoubleLine Capital, said on CNBC.
According to Gundlach, only a rise in unemployment is needed for a recession to begin under current conditions. The Federal Reserve (Fed) will need to take “very decisive” action, he believes, and expects the regulator to lower interest rates this year.
Since March 3, the two-year U.S. Treasury yield has fallen about 100 basis points to 4.078%. Until it recovers, the Fed won’t raise rates, Gundlach believes.
The Fed has been tightening monetary policy throughout the year. As Bloomberg notes, this forces investors to reallocate capital in favor of cash and instruments with yields higher than deposit rates, including Treasury bills and units of money market funds.
The number of homes under construction in the U.S. in February rose 9.8 percent from the previous month to 1.45 million at an annualized rate, a five-month high, according to the country’s Commerce Department.
According to the revised data, the number of new buildings in January was 1.321 million, rather than the 1.309 million previously announced. Despite the revision, the January figure was the lowest since June 2020.
Experts had predicted an increase in the number of new buildings in February to 1.31 million from the previously announced January level, according to Trading Economics.
The number of new buildings was down 18.4 percent from February 2022.
The number of new home construction permits issued in the U.S. in February increased 13.8% to 1.524 million on an annualized basis from 1.339 million a month earlier. Analysts’ consensus forecast suggested that the number of permits in February would be 1.34 million.
Construction of single-family homes rose 1.1% last month, to 830,000. Permits for such homes rose 7.6%, to 777,000.
In the case of apartment buildings (including apartments and condominiums), a more volatile market segment, there was a 24.1% increase, to 608,000. The number of permits for construction of apartment buildings increased 21.1%, to 747,000.
International rating agency Moody’s Investors Service has changed its outlook for the U.S. banking system to “negative” from “stable,” the agency said in a statement.
The decision follows “a rapidly deteriorating operating environment” following the bankruptcies of Silicon Valley Bank, Signature Bank and Silvergate Bank.
“Although the Treasury Department, the Fed and the Federal Deposit Insurance Corporation have announced that all SVB and Signature Bank depositors will receive full compensation, the rapid and significant decline in depositor and investor confidence underscores the asset-liability management risks among U.S. banks, which are exacerbated by rising interest rates,” the press release said.
The United States has provided more than $46 billion in security, economic and humanitarian aid to Ukraine since the Russian invasion began and will continue to provide the economic assistance that makes Ukraine’s resistance possible by supporting the home front: funding critical public services and helping the government work, U.S. Treasury Secretary Janet Yellen said.
“In the coming months, we expect to provide about $10 billion in additional economic support to Ukraine,” she reiterated at a news conference Thursday in Bangalore, India, of earlier U.S. commitments.
The secretary recalled U.S. President Joseph Biden’s words about supporting Ukraine in its struggle for as long as it takes and thanked allies for stepping up their direct assistance.
“And we think it is critical that the IMF move quickly to a fully funded program for Ukraine, as it has promised,” Yellen said.
“We very much want the IMF to come to an agreement on lending to Ukraine. The managing director (of the Fund) has made it clear that she should agree on a full program by the end of March,” the secretary added.
She stressed that continued and reliable support for Ukraine would be a major topic of discussion during her visit to India, where she is attending the G20 finance ministers’ meeting.
Yellen recalled that since the early days of the war, the U.S. has worked with a multilateral coalition of more than 30 countries to impose serious economic costs on Russia for its brutal attack.
“Our twin goals are to degrade Russia’s military-industrial complex and reduce the revenue it can use to finance its war,” she said, pointing out that Russia’s economy has become increasingly isolated, with nearly a million Russians leaving the country last year.
Responding to questions, the U.S. Treasury chief said a joint communiqué from G20 finance ministers was still under discussion. “Of course, we would like to see a sharp condemnation of the impact that the war has had on Ukraine and on global economic prospects. It is one of the most significant factors reducing growth and causing very negative side effects, especially for low-income countries,” Yellen stressed.
As reported, Ukraine hopes that the IMF Monitoring Program will be replaced by the Extended Funding Facility program as early as the second quarter of 2023, which can partially cover the gap in covering the $38 billion deficit of the state budget-2023, which is now about $10 billion. Kiev expects that the U.S. will provide $10 billion in grant aid by September, and the EU – EUR18 billion of preferential credit support during the year.
Futures quotes on U.S. stock indices are rising on positive corporate news.
U.S. economic data released Thursday showed a less-than-expected slowdown in U.S. GDP growth in the fourth quarter of last year.
GDP rose 2.9 percent on an annualized basis, up from 3.2 percent in the third quarter, preliminary data from the nation’s Commerce Department showed. The consensus analyst forecast cited by Trading Economics suggested economic growth weakened to 2.6 percent.
Experts believe that signals of deterioration in the U.S. economy may prompt the Federal Reserve (Fed) to further slow the pace of base interest rate increases. The first Federal Open Market Committee (FOMC) meeting of the year will be held next week.
The U.S. Central Bank raised the rate by 50 basis points (bps) in December after increasing it by 75 bps at the end of the previous four meetings.
Tesla’s stock price jumped 8.4% in premarket trading on Thursday. The U.S. maker of electric cars recorded record net income for the fourth quarter of 2022 and significantly increased revenue.
The company also said that a group of banks opened it a $5 billion five-year revolving line of credit. The size of the line of credit may be increased by up to $2 billion.
The securities of Chevron Corp. went up 3.5%. One of the largest U.S. oil producers approved a new share buyback program worth up to $75 billion. The new program starts on April 1 and will be one of the largest in the U.S. corporate sector.
American Airlines Group shares gained 1.3%. The airline increased revenue 1.4 times in the fourth quarter of 2022, to an October-December record, thanks to a rebound in airline demand and prices. Its adjusted earnings were the highest since the third quarter of pre-Victorian 2019.
Southwest Airlines Co.’s stock price was down 2.4 percent. The air carrier ended the fourth quarter with a loss and its revenue missed forecasts.
The value of the March E-mini futures on the S&P 500 Index was up 0.38 percent at 4,047.25 points by 3:50 p.m. Thursday. The value of the March E-mini futures on the Dow Jones index had risen 0.1 percent to 3,3856 points by that time. The Nasdaq 100 index futures for March rose 0.76% to 11963 points.
