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.
U.S. auto sales in 2022 are down 8% to 13.7 million, data from research firm Wards Intelligence show.
This is the worst figure since 2011, writes The Wall Street Journal. Sales exceeded the 17 million car mark for five consecutive years before the COVID-19 pandemic began in 2020.
A number of auto executives were encouraged by the relatively strong fourth-quarter sales volume amid an improving parts supply situation. Now, however, some experts fear there could be demand problems amid rising interest rates and high inflation putting negative pressure on potential buyers.
“Things are going to get a lot tougher in 2023,” said Hyundai U.S. head Randy Parker, referring to rising interest rates. His company reported a slight decline in sales last year.
“At the beginning of last year, the industry as a whole was planning to sell more than 16 million vehicles,” notes Toyota Motor’s North American sales director Jack Hollis. But companies quickly retracted their projections as companies were forced to suspend or reduce production because of shortages of parts, and primarily chips.
“It’s not the end of the world,” Hollis believes. He said there are early signs that parts shortages and rising raw material prices are easing. Many automakers reported improved sales near the end of last year as chip supplies began to improve.
Toyota’s Hollis predicts that 15 million cars will be sold in the U.S. in 2023. Edmunds analysts estimate the figure will be 14.8 million.
Nissan Motor’s sales fell about 25 percent last year, but declined only 2 percent in the fourth quarter amid increased availability of semiconductors. “The situation has definitely gotten better,” said Judy Wheeler, who oversees Nissan’s U.S. sales.
Electric cars in the country accounted for about 6 percent of the market in 2022, up from about 3 percent a year earlier, according to J.D. Power.
That included Tesla increasing production of electric cars by 47% to 1.37 million in 2022. The company’s deliveries rose 40% to 1.31 million.
As reported, General Motors regained leadership in the U.S. market last year, overtaking Japan’s Toyota in sales.
GM sales rose 3% to 2,274,088,000 vehicles. Sales of electric cars jumped 58% to 39,179,000, the company said.
Toyota sold 2 million 108,458,000 vehicles in the U.S. last year, 10% less than in 2021. At the same time, sales of cars with electric motors, including hybrids, decreased 14% to 504,016 thousand, according to the automaker.
In 2021, Toyota for the first time became the sales leader in the U.S. market, surpassing GM, which has retained the first position since 1931.
A new package of U.S. military aid to Ukraine, including Bradley BMPs, will be announced Friday, Pentagon spokesman Patrick Ryder said.
“I can confirm that the announcement of the next batch of military aid to Ukraine is expected on Friday. As outlined by the White House, that assistance will include deliveries of Bradley combat vehicles,” he told reporters.
The Associated Press earlier reported citing U.S. officials that the U.S. will send Ukraine a new package of military aid worth $2.85 billion, which for the first time will include several dozen unified tracked Bradley platforms. This delivery will be the largest in a series of military equipment packages that the Pentagon has allocated to Kiev.
In addition to the Bradley, Ukraine will also receive HMMWV military cargo vans, MRAP armored wheeled vehicles with enhanced mine protection, as well as a large shipment of missiles and other munitions.
Reuters reported that the U.S. will supply about 50 Bradley infantry fighting vehicles to Ukriane.
Politico quoted its sources as saying that the United States for the first time will supply Ukraine with Sea Sparrow anti-aircraft missiles, ground-launched radar-guided missiles designed to intercept aircraft or cruise missiles.
The publication notes that only Taiwan has the land-based version of the Sea Sparrow in service. The US Navy and close allies use the ship-based version.
The U.S. will finance the purchase of $53 million worth of power grid equipment to restore Ukraine’s energy system, CNN reported, citing a U.S. State Department report.
“This supply package will include distribution transformers, circuit breakers, arresters, disconnectors, vehicles and other key equipment,” the report specifies.
The funds will be in addition to the $55 million already provided for emergency support of the country’s energy sector.
