From a political perspective, there is concern that Iran and Hezbollah will join the war with Hamas.
On the economic front, capital markets are showing greater willingness toward U.S. oil and gas. Despite the perception of a robust economy in the United States, stocks of consumer-related companies are seeing a decline in value on the stock market. At the same time, concerns about global debt are increasing. In the case of Spain, the growth projection for the current year has been revised upwards.
In the business world, Goldman Sachs is looking to exit consumer financing.
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Policy
- Concern in Washington has risen sharply over the possibility that Israel’s adversaries may try to expand the conflict with Hamas by opening new fronts. US officials have made it clear that they are not seeking a military conflict with Iran, but they are explicitly deploying military forces with the purpose of deterring Tehran, maintaining the option of using them in the event of a provocation. In turn, President Biden said that a new Israeli occupation of Gaza would be “a big mistake,” comments that came at a time when Israel is expected to launch a forceful ground invasion into the Palestinian enclave.
Economy
- Smaller companies in the US oil and gas sector have struggled to obtain financing in recent years, after an earlier wave of debt- and equity-fueled overexpansion in the 2010s, resulting in large losses for many. investors. However, they are now attracting outside investment again after years of being shunned by financial markets, thanks to higher energy prices and stronger balance sheets that are helping them attract investors.
- More than 24 stocks in the consumer and discretionary sectors of the S&P 500 index hit their lowest levels in a year in October. These include retailers such as Dollar General and Target, food companies such as Kraft Heinz and Conagra Brands, and consumer products companies such as Clorox and Colgate-Palmolive. Even though the U.S. economy appears to be performing overall, companies across the retail spectrum have suggested that consumers are starting to be more cautious with their purchases.
- Record debts, high interest rates, the costs of climate change, health and pension spending as populations age, and divided politics are stoking fears of a crisis in the financial markets of major developed economies. More than 80% of the $10 trillion increase in global debt in the first half of the year, reaching a record $307 trillion, came from developed economies, according to the Institute of International Finance.
- The Government of Spain revises its growth projection for this year upwards to 2.4%, but reduces next year’s to 2%. In the Budget Plan the government calculates a deficit of 3.9% of GDP this year and 3% next year. On the other hand, debt will decrease to 106.3% in 2024, which represents an improvement compared to previous forecasts.
Business
- Some top executives at Goldman Sachs want to exit what’s left of consumer finance, specifically the Apple Credit Card and other Apple products, as well as the General Motors Credit Card, although no decision has been made yet. about. If Goldman manages to abandon all of those products, this will effectively mark the closure of Goldman’s consumer lending experiment. On Tuesday, when Goldman reports earnings, a big question will be how quickly the pullback is proceeding.
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