월스트리트저널 읽기 - U.S. Consumers, China Property Bonds, Rolls-Royc etc.

WEDNESDAY, OCTOBER 18, 2023

 

◈ U.S. Consumers Show Their Resilience (회복력을 보여주는 미국 소비자들)

 

 

Interest rates are high, inflation remains elevated and pandemic savings are dwindling. Yet the American consumer is on a spending binge.

 

The strong display of consumer resilience persisted in the latest retail-sales report, which on Tuesday showed spending at stores, online and at restaurants rose a stronger-than expected 0.7% in September from a month earlier.

 

Treasury yields jumped toward the year’s highs after the spending report added to evidence of strong economic growth that could keep interest rates elevated for longer.

 

“That’s only going to drive mortgage rates higher, personal loan rates higher, car loan rates higher, credit card borrowing rates higher,” said James Knightley, chief international economist at ING. “And it makes it all the more likely that those headwinds for the household sector are going to intensify.”

 

Stronger consumer spending, if sustained, could complicate deliberations at coming Federal Reserve meetings as officials consider whether they are finished raising interest rates. The Fed has lifted its benchmark short-term rate rapidly since March 2022 to combat inflation, most recently in July to a 22-year high.

 

◈ China Property Bonds Are Burning Investors (중국 부동산 채권이 투자자들을 불태우고 있다)

 

 

China’s property market meltdown created a multibillion- dollar opportunity for distressed- debt investors. It hasn’t paid off.

 

The country’s real-estate sector is reeling from a years-long slowdown that has put strains on the economy, sparked widespread protests and triggered defaults on around $81 billion of Chinese developers’ international bonds between 2021 and 2022, according to figures from S& P Global Ratings.

 

The wave of defaults in the sector proved irresistible to many distressed-debt funds. These funds buy the bonds or loans of struggling companies, often at a price well below face value, and negotiate with the companies to work out a debt restructuring plan. They flooded into the market two years ago, including buying many of the outstanding bonds of developers China Ever-grande Group, KWG Group and China Aoyuan Group, according to a Hong Kong-based trader.

 

◈ Rolls-Royce Cutting Up to 2,500 Jobs (롤스로이스, 최대 2,500명 감원)

 

 

Rolls-Royce Holdings is set to cut 2,000-2,500 jobs worldwide as part of a transformation program and strategy review.

 

The U.K.-based aircraft engine manufacturer, which outlined the review plan in January, said Tuesday that the new structure will create a more agile business better able to serve customers, deliver cost efficiencies, and help it improve its capabilities in areas such as procurement and supply-chain management.

 

“This is another step on our multiyear transformation journey to build a high performing, competitive, resilient and growing Rolls-Royce,” Chief Ex-ecutive Tufan Erginbilgic said.

 

◈ Developer Bets $1 Billion on Cold Storage (개발자, 콜드 스토리지에 10억 달러 투자)

 

 

Related, the well-known investor in office towers and apartment buildings, is wagering $1 billion on a niche real-estate sector often associated with frozen pizzas, steaks and yogurt.

 

An affiliate of the New York-based firm is launching a business called RealCold , a network of cold storage distribution facilities that aims to benefit from the rise in online grocery shopping and America’s evolving eating habits.

 

RealCold plans to break ground later this year on its first two cold storage locations, in Lockhart, Texas and Lakeland, Fla. The warehouses of more than 300,000 square feet will be able to stock food at temperatures ranging from minus 20 degrees to 55 degrees Fahrenheit, storing everything from ice cream to lettuce.

 

The cold storage sector has long been a specialized corner in the $20 trillion commercial real-estate industry. But it is gaining traction with big property investors like Related and others, who believe that changes in the supply chain and the growing number of consumers who want more local food and diverse brands will boost this business.

 

◈ Bond Yiedls Hit Highest Level Since 2007 (채권수익률 2007년 이후 최고치 기록)

 

 

Government bond yields hit decade-plus highs after another hot economic-data release fueled concerns that interest rates could remain elevated for longer.

 

The latest retail-sales report showed spending online, at stores and in restaurants rose a stronger-t h a n - e x pected 0.7% in September from a month earlier. Treasury yields jumped afterward, with the benchmark 10-year bond yield rising to 4.846% from 4.709% Monday. It was the highest closing level since July 2007.

 

Stocks wavered between gains and losses, before closing little changed. The S& P 500 fell less than a 10th of a percent, while the Dow Jones Industrial Average added less than a 10th of a percent. The Nasdaq Composite was 0.3% lower.

 

Higher bond yields are pushing up borrowing costs for companies, individuals and home buyers. But U.S. consumers are still on a spending binge that has helped sustain the economy.

 

오늘도 경제신문으로 세상을 봅니다.

 

2023.10.18 - [경제신문 읽기] - 월스트리트저널 읽기 - Home Sales, AI, ChatGPT etc.

월스트리트저널 읽기 - Home Sales, AI, ChatGPT etc.