Thursday, 13 May 2021 - The Eurozone economy is set to rebound more strongly from the coronavirus pandemic slump for the next two years than previously projected. That’s according to a Wednesday 12th, 2021 report by the EU economic commissioner, Gentiloni, (Brussels). Based on previous projections in February by economic forecasters, the average EU growth rate (including the 19 nations that use the Euro currency) was anticipated at 3.8% for the remainder of this year and next year. However, the success of vaccinations in the Euro area has surpassed expectations, which has subsequently seen the European Commission revise the GDP projections upwards from 3.8% to 4.3% this year and 4.4% for 2022. While the Commission acknowledged that the recovery rate would differ from one country to another, they pointed to an anticipated swift economic upturn that would be driven by an increase in business investment, private consumption, and the increasing demand for Eurozone exports from the equally strengthening world economy, even as vaccination rates soar and infections rates drop. Further, the commission reiterated that the EU’s borrowing limits from International Monetary Fund should be suspended for the projected period to avoid jeopardizing the path to economic recovery. Regaining The Status Quo The World's largest lender of last resort, IMF, had earlier predicted the Eurozone to rebound the fastest than Asia, the US, and Africa, but the US looks to be ahead in the path to recovery. Nevertheless, this forecast by the EU economic commissioner harmonizes with the 4.4% expected GDP growth announced in April by the IMF. Further, this forecast implies that the economies of Eurozone member states should return to pre-pandemic levels by the end of the 2022 fiscal year. In the report, the commission projected that the UK would recover much slower than say, Germany (Q4 2021), Spain (Q4 2022), Italy (Q4 2022), and France (Q1 2022). Germany is expected to gain full economic recovery the fastest, seeing as to how it was arguably the least impacted by the pandemic of all the Eurozone’s most industrialized economies. Inflation and Other Projected Bounce Back Indicators The EU government's borrowing during the pandemic has negatively impacted their finances, which has increased the region's aggregate public debt from 100% of the GDP in 2020 to 103% of GDP in 2021. But the suspension of borrowing limits for the 2022 fiscal year is anticipated to help Eurozone economies rebound faster. Moreover, the market expectation, which has been at all-time lows since the eve of the pandemic, is expected to surpass estimates. The knock-on effect on the GDP growth will be driven by inflation that should accelerate to 1.7% this year and further be constrained closer to equilibrium at 1.3% in 2022. This, coupled with the anticipated increase in household consumption and private investment, would boost the Eurozone GDP via higher interest rates. What’s Next? Overall, the economic spillovers, as analysed by the European Commission and the European Central Bank, are expected to boost the Eurozone GDP by 0.3% in 2021 and 0.2% in 2022. However, the damage on the GDP had the pandemic never struck cannot be quashed entirely. (Editor: Richard Oyamo)

Monday, 21 April 2021 Balearia, one of the largest ferry operators in Spain, has officially unveiled its pioneering, fast, Liquified Natural Gas (LNG)-powered vessel Eleanor Roosevelt. The maiden presentation was done today in the ports of Ibiza, Denia, and Palma. This comes a fortnight after the vessel’s official unveiling was put on hold May 1 due to logistical concerns. The event officially threw down with voyages to three ports and included jubilant group visits to the new ferry. According to executive reports, the shipping company used $106.2 million in capital spending towards the construction of this vessel – said to be the longest, fastest, and fast-LNG powered ferry in the world. The ferry measures 124 meters long, 29 meters wide, has 500 meters of car and truck lines and can carry over 1100 passengers on board. Eleanor Roosevelt isn’t the first LNG-powered vessel to be constructed by the shipping company. It is the seventh in line, but the project began in 2018 and was co-financed by the European Commission to create the world’s largest LNG-powered ferry. LNG-New Dawn for Clean Maritime Energy It is not long ago that LNG was termed as fuel for the future. Fast forward to today, it has outgrown expectations and has grown popular as a marine fuel. Research shows that Liquified Natural Gas reduces emissions of Nitrogen Oxides by 89%. Additionally, LNG reduces carbon dioxide emissions by 30% compared to diesel-powered vessels. And in recognition of the viability of LNG as a marine fuel, most shipping companies have projects underway to construct LNG-powered maritime vessels. Curbing Emissions As already stated, LNG reduces emissions of nitrogenous components to the atmosphere to a larger extent. A recent research note has underlined its viability as a maritime fuel. And each year, Eleanor Roosevelt is estimated to minimize carbon dioxide emissions that’s equivalent to planting 30,000 trees or emissions from 9000 mid-size cars. Considering its viability, LNG is also an attractive proposition and could be offered competitively with regards to the prices of other heavy fuels. What is more compelling though is its commercial viability especially in Europe and the United States. And compared to other low Sulphur fuels, its Sulphur oxide (OX) emissions are almost negligible. What’s Next for Balearia? The shipping company further reports that Eleanor Roosevelt will boast speed, minimal emissions, a particularly flexible cargo-carrying capacity, cars, and other hazardous cargo that is otherwise not permitted on conventional ferries. Moreover, the ferry’s cargo system consists of fully automated loading and unloading systems that are also powered by LNG. Beyond Balearia, major shipping companies have also taken up the construction of LNG-powered vessels, while others are still in planning and development stages. It is further anticipated that with the commercial viability of LNG as a maritime fuel, its competitive prices, and the huge environmental offset, maritime regulations will be amended to speed up the achievement of net-zero emissions. And LNG is favored as an efficient maritime fuel to power vessels towards the achievement of this goal come 2050.

Japan’s corporate debt, which is the debt level to the Gross Domestic Product (GDP) is at its peak since 1990. On the backdrop of this report from Capital Economics May 16, it is projected that defaults could surge, impacting heavily on small banks and regional financial institutions. The Pandemic Effects The corporate debt in Japan has been rising over the years, with highs of over 200% being sustained, but the swift downturn as a result of the coronavirus pandemic has contributed to negative consequences to multiple sectors of the economy, which are struggling. The latest financial stability report of the Bank of Japan suggested that companies in sectors such as food, service, accommodation, and transport are at high risk of defaulting. Worse still, the probability is expected to rise sharply over the coming years. The Covid-19 pandemic single-handedly contributed to a 9% annualized rise on debt securities and loans from non-financial institutions in Q4 of 2020. Sources at Capital Economics further indicate that loans from banks incurred 0.3% losses on existing assets in the same period. And what economic analysts are worried about most is, to what extent are the firms in struggling sectors of the economy going to be able to repay the borrowed money? Profit Margins for Japanese Banks in Focus A comparative analysis on an international scale shows that Japanese banks have one of the lowest profit margins, as stipulated by the country’s lending regulations. This consequently implies that, by international standards, they have quite a limited ability to deal with the rising defaults on loans. Marcel at Capital Economics notes that during the peak of the pandemic, most companies obtained loans that were government or publicly backed by lenders as credit guarantors. The concern going forward is what will befall such companies when such government-backed public transfers come to an end this fiscal year. In context, the public transfers to struggling companies accumulated to Y14 trillion (about $123.5 billion) in the fiscal year that ended in March. And based on records from the Bank of Japan, this figure amounts to 3% of the Gross Domestic Product. What Sectors Are Hit Most? According to Capital Economics, Q4 of 2020 saw food and, transport and accommodation sectors slump by an annualized 15%. This represented a steeper drop compared to 5% as was recorded in other sectors. This means that despite the reprieve of the anticipated post-pandemic boom, the aforementioned sectors would remain in trouble, seeing as to how far the country (and the globe) is from achieving normalcy. The overall implication is that struggling firms will resort to piling up more debt to survive the effects of the worst recession in decades. But with alarm bells being sounded on the increased probability of corporate defaulting, chances are firms will struggle to obtain funding and some will eventually fail to cope with the situation. However, Marcel points to this hypothetical scenario as long as businesses remain shut and sales stay low. In which case, firms might be able to paper over the cracks, but not for much longer.

U.S. stocks closed lower on Tuesday as rising commodity prices and labor shortages fed fears that near-term price spikes could translate into longer-term inflation ahead of two inflation updates this week. Conway G. Gittens has more on the market action. Inflation jitters ahead of consumer price and producer price data later in the week knocked Wall Street off its feet on Tuesday. The Dow tumbled 473 points. The S&P 500 was down 36 points. The Nasdaq lost 12 points. Inflation fears, particularly wage inflation, were set off by a record number of job openings in March. Employers sought to fill more than 8.1 million jobs at a time when there are still millions of Americans who are unemployed. The data added fuel to a debate as to whether high unemployment benefits are preventing millions of Americans from returning to work - resulting in a labor shortage. Investors fear employers are going to have to offer bigger paychecks to fill open positions. And that's not the only inflation risk out there to spook investors, says O'Neil Global Advisors Chief Investment Officer Randy Watts. "In addition, commodities are up a great deal. And then finally this week, what with the cyber attack in the pipeline shutdown, you look at gasoline, that's up 50 percent in some areas year to date. And so I think there's a lot of things that are percolating right now that are leading to higher inflation. All of this results in pressure on price-earnings multiples for stocks." Shares of Boeing finished lower. Boeing continues to struggle with the revival of the 737 MAX. Last month it only delivered four of its best-selling aircraft. It's had to halt deliveries due to an electrical problem that re-grounded part of the fleet. It was only a few months ago that it even got the green light to fly again after two deadly crashes caused a worldwide safety ban. And...A shake-up is coming to L Brands. The retail company will split into two publicly-traded entities: Bath & Body Works and Victoria's Secret. The split is expected to be finalized in August.

Report produced by Yahaira Jacquez The Dow Jones Industrial Average ended at a record high on Wednesday, driven higher by energy and other economically sensitive sectors, while the Nasdaq closed in red as megacap growth stocks slipped. The Dow ended at a record high on Wednesday after Treasury Secretary Janet Yellen said she saw no inflation problem brewing, walking back comments from a day earlier that rate increases may be needed to stop the economy from overheating. The Dow average rose nearly 100 points to a new high while the S&P was nearly flat and the tech-heavy Nasdaq fell another roughly 0.4% after a sharp decline in the previous session. Eric Diton, president of The Wealth Alliance, says growth stocks will continue to feel the pressure. "Big tech is cooling. They came out with unbelievable earnings, those stocks normally would've been up 20-30%. Google's up but most of big tech is coming down. Value is coming back with a vengeance and the pricier stocks are coming back to earth." Peloton - the exercise equipment maker whose stock soared during lockdowns - dropped, hitting a seven-month low after it announced it would recall its treadmills amid reports of multiple injuries and the death of a child in an accident. Meanwhile -- Hollywood star Jessica Alba's Honest Company, which sells baby and beauty products, shined on Wall Street Wednesday as it made its market debut on the Nasdaq. Shares of the company, co-founded by Alba in 2011, ended the day up more than 40 percent than the IPO price. Reporting after the bell, Uber said ride-hail bookings were flat from the previous quarter but reported sustained growth in its food-delivery business. That growth helped the company more than triple its revenue from last year in its delivery segment.

By Elizabeth Culliford and Steve Holland (Reuters) -Former President Donald Trump on Tuesday launched a space on his website where he can post messages that can be shared by others to Twitter and Facebook, sites where he remains banned. The move comes a day before a decision from Facebook Inc's oversight board on whether to uphold Trump's indefinite suspension from the platform. Trump was barred from a slew of social media platforms following the deadly Jan. 6 storming of the U.S. Capitol by his supporters. Trump's senior adviser, Jason Miller, said in a tweet that this collection of posts was not the social media platform that Trump has plans to launch. "We'll have additional information coming on that front in the very near future," he tweeted. The site, which was first reported by Fox News, is dubbed "From the Desk of Donald J. Trump" and contains posts from Trump that can be shared and liked. A source familiar with the matter said it was built by Campaign Nucleus, the digital services company created by Trump's former campaign manager Brad Parscale. Posts on the site repeated Trump's false claim that he lost the 2020 election because of widespread voter fraud and denigrated fellow Republicans who have been critical of him like Senator Mitt Romney and Representative Liz Cheney. Twitter Inc and Facebook have both removed content posted from other accounts that they said tried to circumvent their bans on Trump. The companies did not immediately respond to requests for comment on how they would treat posts shared from the new space. Twitter, which Trump used heavily and where he had 88 million followers, has said its ban on him is permanent, even if he runs for office again. Alphabet Inc's YouTube has said it will restore Trump's channel when it decides the risk of violence has decreased. (Reporting by Elizabeth Culliford; Additional reporting by Steve Holland in Washington; Editing by Peter Cooney)

U.S. economy is heading for a 'reinflation' period: Barry Knapp Barry Knapp, managing partner at Ironsides Macroeconomics, joined "Squawk Box" on Tuesday to discuss what he's watching in the markets right now.

According to the weekly report by the shipbroker Allied Shipbroking, ship owners are significantly contracting more bulkers in the newbuilding market. This is confirmed by the report from Allied Shipbroking stating that the newbuilding market has seen a few dry bulks transactions. However, there are some interesting trends behind the transactions. For instance, the week has witnessed the order of 5+5 Kamsarmaxes by Nisshin Shipping, although many buyers had no interest in it for years. Although the freight rates have shown positive changes for the past few months, buyers are still afraid to place their orders. However, the newbuilding market is expected to see more buyers as the persistent earnings keep growing. This is contrary to the tanker market where the freight levels keep trimming buyers’ interests. This does not mean that the sector will completely diminish as many still believe the tanker market will bounce back later in the year. Of course, there have been a few orders seen in the past week, with interest being shared among the crude oil and petroleum products sectors. Shipbroker Banchero Costa said that Euronav ordered 2+1 VLCC (approximately 300,000) from Hyundai Samho in the tanker market, to be delivered between the end of 2022 and 1Q 2023. Moreover, Sonangol exercised an option for two more Suezmaxes (160k dwt) each costing $61 million. This is after placing two orders earlier. C of Enesel in China has further ordered two and one optional Aframax Tanker from SWS to be delivered in 2023, costing $52 million each. C. of Avin has also placed an optional order of the third Suezmax containing ammonia at Newtimes Shipyard to be delivered in the second quarter of 2023. On the other hand, C. of CGM ordered six plus six optional 13,000 TEU container vessels from Jiangnan and Hudong Zhonghua suppliers, each costing between $140 and $145 million. This marks to be the busiest week for the tanker market, where buyers can increase the vessel capacity to 15,000 TEU while bunker LNG tanks can be fitted on the deck for dual fuel. All the vessels are expected to be delivered from 2024. C. of Briese Scifffahrts ordered for four 1,900 TEU feeders from Huangpu Wenchong to be delivered in 2023. Additionally, in the dry market, Japanese Nisshin Kaiun ordered five plus five optional Kamsarmaxes from Jiangsu Hantong costing $27 million each to be delivered in June 2022. Allied Shipbroking added that the dry bulk transactions in the S&P market were quieter for the past week considering the current situation. However, the buyers' interest in different types of vessels remains stable and is likely to rise keeping the S&P volumes higher. Not forgetting it has also been a fruitful week for the tankers with notable activities. The expectations From this data, it is quite evident that both the tanker and newbuilding markets will experience a drastic increase in transactions for the coming weeks. This is because the market has seen overall buying interest in all shipping sectors, with the current momentum suggesting there will be sustained transactions ahead. (Editor: Richard Oyamo)

The current pandemic has tied many people in their homes; no social gatherings, no vacations, and limited numbers working in the offices. However, the bright side of the pandemic is that it has impacted the growth of the social network as people are now holding virtual meetings using their smartphones and laptops to interact with their colleagues. At least the economy is moving since many business people have now learned how to conduct their transactions through different social platforms. While all these seem to be a mere portion of a moving economy, various social media companies are smiling their ways to the banks with the increased number of users. Talking about Facebook, the statement made by Mark Zuckerberg, the Facebook CEO, on Wednesday, shows that Facebook had a fruitful first quarter of 2021 after connecting millions of people and businesses. This is after recording 2.85 billion monthly active users (MAUs), which is a 10% increase compared to the same month last year. The daily active users have also hit an average of 1.88 billion, which is an 8% increase. Facebook has also recorded a revenue of $26.1 billion in the first quarter of 2021, which marks an increase of 48% compared to the same period last year. The net income has also doubled from $4.9 billion in March 2020 to $9.5 billion this year. What could be the secret behind these increments? According to the CEO, the company has aggressively invested in new and meaningful opportunities over years and is determined to expand its roots to areas like augmented and virtual reality, commerce, and the content creation sectors. This has seen its shares exceeding seven percent in extended trading and 1.2 percent in closed-up trading. Averagely, the annual family daily active people (DAP) increased by 15% to 2.72 billion in March 2021 while the family monthly active people (MAP) rose to 3.45 billion. The company now has 60,654 employees, which is an annual increase of 26%. On its statement, Facebook records a growing advertising revenue in the first quarter of 2021, influenced by a 30% annual increase in the average price per ad and a 12% increase in ads delivered. Furthermore, it expects the revenue growth to remain stable or accelerate in the second quarter of 2021, which should be higher than what was recorded in the second quarter of 2020. The total annual expenses are also on the verge of increasing to the range of $70-73 billion from the estimated $68-73 billion range. (Editor: Richard Oyamo)

After a gruesome year of lockdowns, re-openings, and further lockdowns, finally, there is light at the end of the tunnel. The last few months, which have seen the impact of the Coronavirus pandemic being the most severe, economic forecasters had predicted the worst – mainly from fears the pandemic could cause permanent damage to the economy. These fears were valid though. Federal and local state governments – and pretty much the whole country – had to introduce more restrictions to curtail the spread of the virus, meaning fewer outdoor activities. Restaurants and other businesses were forced to minimize outdoor operations. While all that was psychologically frustrating, the onset of winter months came with new variants of Covid-19 that, according to the CDC, were classed as being more contagious than the original stand of SARS-CoV-2. All these factors, coupled with the decreasing pool of consumer savings, threatened to weigh negatively on the economy. Early January saw the mass rollout of vaccinations that averaged 400,000 doses daily. Mid-February saw an accelerated vaccine supply to a daily rate of 1.5 million does, with sights set on resumption of the economy – notwithstanding the peak infection rates in several states. But the baseline was, could we be possibly looking at a silver lining? The light at the end of the tunnel is finally here. Based on April 29, 2021, economic news release report, the US economy grew by an annual figure of 6.4% in Q1 of 2021, which was an increase from the 4.3% expansion of Q4 of 2020. That is positive news for traders and marketers, seeing as how huge the economic contraction was for last year. This is welcome news, but the economic bottom line scenario, nonetheless, is that forecasters assume some form of permanent damage on the GDP based on where it would have been had the coronavirus pandemic never struck. But How Did We Get Here in The First Place? Reopening efforts, coupled with mass vaccinations, revaccinations, increased exports, and the government's strategic response to the pandemic, reversed the declining personal consumption expenditure (PCE) and the residential fixed investment. And while the market expectations had estimated a Q1 2021 growth at 6.1%, this has been surpassed. The post-pandemic economic boom anticipates a spike in consumer expenditure that is to peak in the summer and fall. This is anticipated to increase the GDP through higher interest rates and pressures resulting from inflation. As such, the GDP will further be constrained to a period of slow economic growth, which is then expected to move the economy towards equilibrium (normal), hence attain a lower level that assumes a scenario had the pandemic not struck. (Editor: Richard Oyamo)