Russia is expected to grow faster than all advanced economies this year

Russia is expected to grow faster than all advanced economies this year

This article is about Russia's expected growth in the next year and how the International Monetary Fund predicts that it will be the fastest to grow in the coming calendar year. The growth is expected to be 3.2% in 2024 and would be greater than all other larger economies including the United States. This forecast is surprising to Western nations who had hoped to isolate the Russian economy after invading Ukraine in 2022. The article then discusses the self-sufficiency of Russia and how expanded during the war. From a political standpoint, the International Monetary Fund touches on the predicted impacts of the war with Ukraine and affects the political and social standing of Putin as he promises Russians to raise their living standards. Similar to what we discussed in class, Putin plans to raise living standards by spending money on education, healthcare, and public infrastructure which we learned are effective ways of raising the standard of living of a country.

Link: https://www.cnbc.com/2024/04/17/russia-forecast-to-grow-faster-than-advanced-economies-in-2024-imf.html

How to Plan for a Recession

The idea of experiencing a recession in the future is something that most Americans are used to, especially after everything that has happened in the last four years. This article dives into how to combat such economic downturns so that readers can understand what can be done to escape the negative effects that go along with recessions. The first way to handle the decrease in money supply would be putting your extra cash in a high interest insurance account. Securing an emergency fund, will help with keeping the value of your savings high and reducing the likelihood of needing to borrow because of its liquidity. It is important to note that living within you means during good economic stability will help reduce the need to borrow when food and gas prices rise in economic downturns. The article suggests that trying to live off of one payroll instead of two for married couples is a good habit that will help reduce spending and increase savings for emergencies. Diversifying your income streams was another suggestion which can help increase job security by having multiple places that one can put their extra time into for pay. Next is investing, and just like any good financial advisor this article preaches about investing in the long run and diversifying your portfolio. Diversifying helps with managing risk within the market, making sure you do not invest in one particular section of the economy mitigates the risk of completely loosing everything if that section collapses. They also emphasized the importance of investing for the long run, saying that you haven’t lost the money until you sell, so it is important to be aware that panic is what often leads to even worse situations. When prices are down it is almost like they are on sale, so in some situations it can be beneficial to take advantage of that if you have the means. As long as you are not invested in one place, this will help mitigate any major losses seen throughout the entire economy. As someone who plans to be a part of the workforce in the next two years, I thought this article was helpful in outlining some of the priorities I should be setting for myself. 

7 Ways to Recession-Proof Your Life

U.S. economy will see ‘more things break’ in 2025 if rates stay high, strategist says

 

In this article, it explains how traditional monetary policy is broken in the sense that it takes longer for the economy to see real effects. Another problem that was mentioned is if interest rates stay high into 2025 there could be major problems as many people and companies will be refinancing around that time causing them to feel the effects of high interest rates which on analysis suggested could cause large problems.

https://www.cnbc.com/2024/04/16/us-economy-will-see-more-things-break-in-2025-if-rates-stay-high-strategist.html

US March's Retail Sales Rise Much More Than Expected

Retail sales surge 0.7% in March as Americans seem unfazed by higher prices with jobs plentiful

March paints a picture of resilience in consumer spending, surpassing economists' expectations despite ongoing inflationary pressures. Retail sales increased by 0.7% in March, nearly double the forecasted rate, following a 0.9% rise in February. Even after excluding gas prices, which have been climbing, retail sales still showed a solid increase of 0.6%. While retail sales provide insight into consumer spending, they don't cover services like travel and hotel stays. However, the restaurant category saw a modest uptick of 0.4%.

Retail sales figures aren't adjusted for inflation, which rose by 0.4% from February to March. Despite this, retailers still saw solid gains in sales, indicating genuine consumer demand. Inflation remains a concern, driven by factors like higher gas prices, rents, and auto insurance. That as well the strong retail sales report will likely delay a cut by the Federal Reserve to interest rates that many had anticipated at the next meeting. Andrew Hunter, deputy chief U.S. economist at Capital Economics, doesn't think any rate cut will happen until September. 

Consumer behavior remains robust in spending due to reduced optimism about economic prospects, high living costs, and borrowing expenses. Consumers are becoming more selective in their purchasing decisions, focusing on value and essentials.

Unraveling Market Responses Amid Geopolitical Tensions: A Closer Look at Recent Financial Movements

In a week marked by significant geopolitical events, financial markets have responded with a mixture of anticipation and caution. The recent airstrike by Iran on Israeli soil has not only heightened tensions in the Middle East but also sent ripples through global financial systems, underscoring the intricate relationship between geopolitical stability and economic predictability.

The Immediate Impact on Oil and Gold

The attack, which targeted Israeli military facilities, spurred a notable shift in commodity markets. Oil prices, which had peaked on Friday in response to rising hostilities, saw a dip with Brent crude falling below $90 a barrel and US WTI crude dropping by 1% to $84.50. This fluctuation reflects the market's nervousness about potential disruptions in oil supply, a critical concern given the Middle East's pivotal role in global oil production.

Conversely, gold, a traditional safe haven in times of uncertainty, saw its price increase. Spot gold rose by 0.3% to $2,349 per ounce, nearing its all-time high, driven by investors' flight to safety amid escalating fears of further conflict.

Global Stock Market Reactions

The stock markets have exhibited mixed responses. Europe’s Stoxx 600 index modestly increased, while major indices like Germany’s DAX and France’s CAC 40 also saw gains. However, the FTSE 100 in London declined slightly by 0.4%. In Asia, the Hong Kong Hang Seng Index and Japan's Nikkei 225 both experienced declines, whereas the Shanghai Composite Index in China bucked the trend with a rise of 1.3%.

This divergence highlights the global nature of financial markets and their varying sensitivity to geopolitical events. Markets closer to the epicenter of the conflict showed more pronounced negative reactions, whereas others seemed to benefit from reallocations within the global investment landscape.

The Role of International Bodies

The International Energy Agency (IEA) has remarked on the increased volatility in oil markets, emphasizing the importance of oil security in the current climate. The agency's insights are a stark reminder of the broader implications of regional conflicts on global economic stability.

Strategic Moves by Nations and Corporations

In the wake of these developments, Israel's government has been deliberative in its response, with strategic meetings to decide the next course of action. Meanwhile, the U.S. has opted for a cautious stance, choosing not to engage directly in military retaliation, which has offered some reassurance to the markets, as indicated by a modest uptick in U.S. stock futures.

Looking Ahead

As investors and analysts watch these unfolding events, the key takeaway is the interconnectedness of global markets and geopolitical stability. The immediate future of the markets will heavily depend on the progression of this conflict and the strategic decisions made by key global players.

In these volatile times, investors are advised to stay informed and consider hedging risks by diversifying their investment portfolios, not only across different financial instruments but also geographically. As history has shown, turbulence is often short-lived, but the lessons learned about the resilience of global markets can provide valuable insights for future strategies.

This dynamic scenario serves as a critical case study for both economic and political analysts, as it combines elements of international relations, market psychology, and strategic economic planning, illustrating just how globally intertwined our modern world has become.


Source - https://www.cnn.com/2024/04/14/markets/asian-markets-gold-oil-iran-attack-israel-intl-hnk/index.html