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Ukraine’s best hope may be a faltering Russian economy
Russian gas giant Gazprom has been a money-making machine for the past two decades, enriching many of its members and helping to keep Vladimir Putin’s government afloat. But that race ended, with Gazprom recently announced that it lost US$6.9 billion in 2023mainly because of Russia’s war in Ukraine and sanctions that hurt Gazprom’s sales.
Like Gazprom, the entire Russian economy is beginning to collapse under the double pressure of enormous wartime spending and withering sanctions. Since invading Ukraine in February 2022, Russia held up better than many Westerners expected or expected. This was mainly due to the central bank’s skillful management of the economy and robust oil and gas revenues.
But U.S.-led sanctions, however imperfect, are slowly strangling Russia’s economy, and the Biden administration suggests more are to come. Russia’s war production may be peaking now, with possibly severe equipment shortages looming in 2025 and beyond.
“The Soviet Union was a war machine and it lost strength,” Fiona Hill, a Russia expert at the Brookings Institution, said at an event. May 28 Brookings Conference. “This will also end up having considerable consequences. Putin wants us all to think he cannot be defeated. He knows it can be. And he is genuinely concerned at this particular time.”
The biggest news about Russia’s war in Ukraine this year was the poor conditions of Ukrainian frontline troopsthat went unarmed, overcome, and slowly losing territory. A six-month delay in vital U.S. military aid, combined with manpower shortages and other problems, allowed Russia to exploit weaknesses, attack Ukrainian infrastructure with bombs and missiles, and threaten Kharkiv, the second-largest city in Ukraine.
But Russia is also on borrowed time, and the real test may be whether its economy can hold out long enough to exhaust Ukrainians and their sometimes weird allies.
On the surface, Russia’s economy looks good, with the International Monetary Fund GDP growth forecast of 3.2% this year. This is better than the 2.7% GDP growth forecast for the United States.
But some analysts think the GDP outlook masks so many underlying problems that it is almost meaningless. Putin “still has some ability to finance the war, but it is running out very quickly,” said Vladimir Milov, a Russian economist who led some reforms in the late 1990s and has since left Russia, said in a recent podcast for the UK’s Royal United Services Institute. “The signs that sanctions are working are there, but in reality it takes longer. Putin’s economy is a big beast. It takes time to strangle.
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Among Russia’s problems: its national wealth fund, a pool of reserves that Putin uses to finance the war, has fallen from $113 billion before the war to about $56 billion now. Not all of the $56 billion is liquid and Russia needs to keep some cash on hand for a genuine emergency.
“Their reserves are running out quickly,” said Agathe Demarais of the European Council on Foreign Relations at the May 28 Brookings event. Gazprom’s losses, she said, “will be a problem for replenishing reserves. We are talking about really big numbers. I don’t think there is an easy way out for Russia.”
Analysts think Gazprom will continue to lose money until at least 2025, particularly as European countries that used to be the company’s biggest customers have moved away from Russian energy. The easiest way to transport gas is by pipeline, and although other countries buy Russian gas, they are not connected by pipes.
Oil is easier to transport, and oil revenues continue to provide Russia with desperately needed cash. However, it is also more expensive for Russia to ship oil to Asian buyers who have replaced European ones, causing another crisis.
Russian President Vladimir Putin attends a meeting with Orenburg Region Governor Denis Pasler at the Kremlin in Moscow, Russia, Wednesday, May 29, 2024. (Alexander Kazakov, Sputnik, Kremlin Pool Photo via AP) (ASSOCIATED PRESS)
However, sanctions have weakened the value of the ruble and increased the cost of goods, especially imports. Russia’s central bank tried to compensate for these problems by raising interest rates, with short-term rates currently set at 16%.
However, difficulties persist. Russia’s official inflation rate is an uncomfortable 7.8%, and Russian research firm Romir reports that global price levels for common consumer goods have nearly doubled since the 2022 invasion. Vegetables, for example , skyrocketed in price due to sanctions imposed on Western supplies of seeds, fertilizers and other basic products of agricultural production.
To fill some holes, Putin is planning tax increases on corporations and the rich, but this can backfire. Foreign investment in Russia has plummeted and most companies are unable to repay loans at double-digit interest rates. Therefore, the only source of investment is the companies’ own profits, of which the new taxes will further undermine, discouraging investment. The entire cycle is a recipe for a collapse in production, similar to what caused the dissolution of the USSR in the late 1980s.
China is helping in several ways, selling Russia many of the products that Western sanctions seek to limit. But China is exploiting Russia’s weakness more than helping it regain its economic position, according to a report. recent article Milov wrote for the Wilfried Martens Center for European Studies in Brussels.
Chinese suppliers are raising prices on cars, electronics, industrial products and almost everything Russia needs, in some cases charging even more than the American and European suppliers they are replacing. This is contributing to Russian inflation.
When purchasing Russian oil and gas, China demands discounts ranging between 20% and 50% on the market price. At the same time, there is almost no new Chinese investment in Russia or any sign that China is taking long-term economic risks for Russia’s sake.
“Russia is learning the hard way that China is not interested in being a donor to Russia,” says the Milov report. “China is only economically interested in Russia as a supplier of cheap raw materials at considerable discounts, as a market for Chinese finished products sold at premium prices, and is not interested in investing to see Russia emerge as a competitor in international manufactured goods markets. . ”
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Sanctions were never intended to unilaterally end Russia’s barbarism in Ukraine, and no one thinks they will now. What they intend to do is increase the price Russia pays for invading a peaceful neighbor and perhaps contribute to an outcome that looks like a victory for Ukraine.
Ukraine is not close to winning and much depends on future events, starting with this year’s US presidential elections. If Donald Trump wins, it is likely to ease pressure on Putin, whom he has publicly admired, possibly opening the door to a Russian victory. If Biden wins, however, a more aggressive effort to defeat Putin will be possible.
The Biden administration gave Ukraine increasingly sophisticated weapons and has now changed its policy to allow Ukraine to use some of them for attack military targets inside Russiawhich has been taboo until now.
Congress recently passed a law that allows the US government to seize about $6 billion in Russian assets in the United States and turn them over to Ukraine. The Biden administration is trying to persuade European nations to do the same with up to $300 billion in Russian assets parked there.
Another big step Biden could take would be to lower the price cap on Russian oil sales – currently at $60 per barrel – and better enforce it. Russia has found several ways to escape the limit and has sold oil at higher prices when market conditions allow. Biden, for his part, has been reluctant to impose any sanctions on Russia that could increase prices in global markets and, especially during an election year, in domestic markets.
That could change if Biden wins a second term, which would definitely be a disappointment for Putin, who is hoping for friendlier governments in Washington and other capitals. If he does not run for re-election, Biden will have more freedom to make the decisions he deems necessary, even if they are not popular. There could be many more of them before Russia’s war in Ukraine ends.
Rick Newman is a senior columnist for Yahoo Finance. Follow him on Twitter at @rickjnewman.
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RENO, Nev., August 1, 2024–(BUSINESS THREAD)–Modiv Industrial, Inc. (“Modiv” or the “Company”) (NYSE:MDV), the only public REIT focused exclusively on the acquisition of industrial real estate properties, today announced that it will release second quarter 2024 financial results for the quarter ended June 30, 2024 before the market opens on Tuesday, August 6, 2024. Management will host a conference call the same day at 7:30 a.m. Pacific Time (10:30 a.m. Eastern Time) to discuss the results.
Live conference call: 1-877-407-0789 or 1-201-689-8562 at 7:30 a.m. Pacific Time Tuesday, August 6.
Internet broadcast: To listen to the webcast, live or archived, use this link https://callme.viavid.com/viavid/?callme=true&passcode=13740174&h=true&info=company&r=true&B=6 or visit the investor relations page of the Modiv website at www.modiv.com.
About Modiv Industrial
Modiv Industrial, Inc. is an internally managed REIT focused on single-tenant net-leased industrial manufacturing real estate. The company actively acquires critical industrial manufacturing properties with long-term leases to tenants that fuel the national economy and strengthen the nation’s supply chains. For more information, visit: www.modiv.com.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240731628803/en/
Contacts
Investor Inquiries:
management@modiv.com
Volta Finance Limited
Volta Finance Limited (VTA/VTAS)
Notification of transactions by directors, persons exercising managerial functions
responsibilities and people closely associated with them
NOT FOR DISCLOSURE, DISTRIBUTION OR PUBLICATION, IN WHOLE OR IN PART, IN THE UNITED STATES
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Guernsey, 1 August 2024
Pursuant to announcements made on 5 April 2019 and 26 June 2020 relating to changes to the payment of directors’ fees, Volta Finance Limited (the “Company” or “Volta”) purchased 3,380 no par value ordinary shares of the Company (“Ordinary Shares”) at an average price of €5.2 per share.
Each director receives 30% of his or her director’s fee for any year in the form of shares, which he or she is required to hold for a period of not less than one year from the respective date of issue.
The shares will be issued to the Directors, who for the purposes of Regulation (EU) No 596/2014 on Market Abuse (“March“) are “people who exercise managerial responsibilities” (a “PDMR“).
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Dagmar Kershaw, Chairman and MDMR for purposes of MAR, has acquired an additional 1,040 Common Shares in the Company. Following the settlement of this transaction, Ms. Kershaw will have an interest in 12,838 Common Shares, representing 0.03% of the Company’s issued shares;
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Stephen Le Page, a Director and a PDMR for MAR purposes, has acquired an additional 728 Ordinary Shares in the Company. Following the settlement of this transaction, Mr. Le Page will have an interest in 50,562 Ordinary Shares, representing 0.14% of the issued shares of the Company;
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Yedau Ogoundele, Director and a PDMR for the purposes of MAR has acquired an additional 728 Ordinary Shares in the Company. Following the settlement of this transaction, Ms. Ogoundele will have an interest in 6,862 Ordinary Shares, representing 0.02% of the issued shares of the Company; and
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Joanne Peacegood, Director and PDMR for MAR purposes has acquired an additional 884 Ordinary Shares in the Company. Following the settlement of this transaction, Ms. Peacegood will have an interest in 3,505 Ordinary Shares, representing 0.01% of the issued shares of the Company;
The notifications below, made in accordance with the requirements of the MAR, provide further details in relation to the above transactions:
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a) Dagmar Kershaw |
b) Stephen LePage |
c) Yedau Ogoundele |
e) Joanne Pazgood |
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Director |
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Initial notification |
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Volta Finance Limited |
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b. LAW |
2138004N6QDNAZ2V3W80 |
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a. Description of the financial instrument, type of instrument |
Ordinary actions |
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b. Identification code |
GG00B1GHHH78 |
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c. Nature of the transaction |
Acquisition and Allocation of Common Shares in Relation to Partial Payment of Directors’ Fees for the Quarter Ended July 31, 2024 |
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€5.2 per share |
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Total: 3380 |
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August 1, 2024 |
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At the Market – London |
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CONTACTS
For the investment manager
AXA Investment Managers Paris
Francois Touati
francois.touati@axa-im.com
+33 (0) 1 44 45 80 22
Olivier Pons
Olivier.pons@axa-im.com
+33 (0) 1 44 45 87 30
Company Secretary and Administrator
BNP Paribas SA, Guernsey branch
guernsey.bp2s.volta.cosec@bnpparibas.com
+44 (0) 1481 750 853
Corporate Broker
Cavendish Securities plc
Andre Worn Out
Daniel Balabanoff
+44 (0) 20 7397 8900
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ABOUT VOLTA FINANCE LIMITED
Volta Finance Limited is incorporated in Guernsey under the Companies (Guernsey) Law, 2008 (as amended) and listed on Euronext Amsterdam and the Main Market of the London Stock Exchange for listed securities. Volta’s home member state for the purposes of the EU Transparency Directive is the Netherlands. As such, Volta is subject to the regulation and supervision of the AFM, which is the regulator of the financial markets in the Netherlands.
Volta’s investment objectives are to preserve its capital throughout the credit cycle and to provide a stable income stream to its shareholders through dividends that it expects to distribute quarterly. The company currently seeks to achieve its investment objectives by seeking exposure predominantly to CLOs and similar asset classes. A more diversified investment strategy in structured finance assets may be pursued opportunistically. The company has appointed AXA Investment Managers Paris, an investment management firm with a division specializing in structured credit, to manage the investment portfolio of all of its assets.
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ABOUT AXA INVESTMENT MANAGERS
AXA Investment Managers (AXA IM) is a multi-specialist asset management firm within the AXA Group, a global leader in financial protection and wealth management. AXA IM is one of the largest European-based asset managers with 2,700 professionals and €844 billion in assets under management at the end of December 2023.
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This press release is issued by AXA Investment Managers Paris (“AXA IM”) in its capacity as alternative investment fund manager (within the meaning of Directive 2011/61/EU, the “AIFM Directive”) of Volta Finance Limited (“Volta Finance”), the portfolio of which is managed by AXA IM.
This press release is for information only and does not constitute an invitation or inducement to purchase shares of Volta Finance. Its circulation may be prohibited in certain jurisdictions and no recipient may circulate copies of this document in violation of such limitations or restrictions. This document is not an offer to sell the securities referred to herein in the United States or to persons who are “U.S. persons” for purposes of Regulation S under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or otherwise in circumstances where such an offering would be restricted by applicable law. Such securities may not be sold in the United States absent registration or an exemption from registration under the Securities Act. Volta Finance does not intend to register any part of the offering of such securities in the United States or to conduct a public offering of such securities in the United States.
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This communication is being distributed to, and is directed only at, (i) persons who are outside the United Kingdom or (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (iii) high net worth companies and other persons to whom it may lawfully be communicated falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”). The securities referred to herein are available only to, and any invitation, offer or agreement to subscribe for, purchase or otherwise acquire such securities will be made only to, relevant persons. Any person who is not a relevant person should not act on or rely on this document or any of its contents. Past performance should not be relied upon as a guide to future performance.
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This press release contains statements that are, or may be deemed to be, “forward-looking statements”. These forward-looking statements can be identified by the use of forward-looking terminology, including the words “believes”, “anticipates”, “expects”, “intends”, “is/are expected”, “may”, “will” or “should”. They include statements about the level of the dividend, the current market environment and its impact on the long-term return on Volta Finance’s investments. By their nature, forward-looking statements involve risks and uncertainties and readers are cautioned that such forward-looking statements are not guarantees of future performance. Actual results, portfolio composition and performance of Volta Finance may differ materially from the impression created by the forward-looking statements. AXA IM undertakes no obligation to publicly update or revise forward-looking statements.
Any target information is based on certain assumptions as to future events that may not materialize. Due to the uncertainty surrounding these future events, targets are not intended to be and should not be considered to be profits or earnings or any other type of forecast. There can be no assurance that any of these targets will be achieved. Furthermore, no assurance can be given that the investment objective will be achieved.
Figures provided which relate to past months or years and past performance cannot be considered as a guide to future performance or construed as a reliable indicator as to future performance. Throughout this review, the citation of specific trades or strategies is intended to illustrate some of Volta Finance’s investment methodologies and philosophies as implemented by AXA IM. The historical success or AXA IM’s belief in the future success of any such trade or strategy is not indicative of, and has no bearing on, future results.
The valuation of financial assets may vary significantly from the prices that AXA IM could obtain if it sought to liquidate the positions on Volta Finance’s behalf due to market conditions and the general economic environment. Such valuations do not constitute a fairness or similar opinion and should not be relied upon as such.
Publisher: AXA INVESTMENT MANAGERS PARIS, a company incorporated under the laws of France, with registered office at Tour Majunga, 6, Place de la Pyramide – 92800 Puteaux. AXA IMP is authorized by Autorité des Marchés Financiers under registration number GP92008 as an alternative investment fund manager within the meaning of the AIFM Directive.
*****
Litter (AAPL) is set to report its fiscal third-quarter earnings after the market closes on Thursday, and unlike the rest of its tech peers, the main story won’t be about the rise of AI.
Instead, analysts and investors will be keeping a close eye on iPhone sales in China and whether Apple has managed to stem the tide of users switching to domestic rivals including Huawei.
For the quarter, analysts expect Apple to report earnings per share (EPS) of $1.35 on revenue of $84.4 billion, according to estimates compiled by Bloomberg. Apple saw EPS of $1.26 on revenue of $81.7 billion in the same period last year.
Apple shares are up about 18.6% year to date despite a rocky start to the year, thanks in part to the impact of the company’s Worldwide Developer Conference (WWDC) in May, where showed off its Apple Intelligence software.
But the big question on investors’ minds is whether iPhone sales have risen or fallen in China. Apple has struggled with slowing phone sales in the region, with the company noting an 8% decline in sales in the second quarter as local rivals including Huawei and Xiaomi gain market share.
Apple CEO Tim Cook delivers remarks at the start of the Apple Worldwide Developers Conference (WWDC). (Photo by Justin Sullivan/Getty Images) (Justin Sullivan via Getty Images)
And while some analysts, such as JPMorgan’s Samik Chatterjee, believe sales in Greater China, which includes mainland China, Hong Kong, Singapore and Taiwan, rose in the third quarter, others, including David Vogt of UBS Global Research, say sales likely fell about 6%.
Analysts surveyed by Bloomberg say Apple will report revenue of $15.2 billion in Greater China, down 3.1% from the same quarter last year, when Apple reported revenue of $15.7 billion in China. Overall iPhone sales are expected to reach $38.9 billion, down 1.8% year over year from the $39.6 billion Apple saw in the third quarter of 2023.
But Apple is expected to make up for those declines in other areas, including Services and iPad sales. Services revenue is expected to reach $23.9 billion in the quarter, up from $21.2 billion in the third quarter of 2023, while iPad sales are expected to reach $6.6 billion, up from the $5.7 billion the segment brought in in the same period last year. Those iPad sales projections come after Apple launched its latest iPad models this year, including a new iPad Pro lineup powered by the company’s M4 chip.
Mac revenue is also expected to grow modestly in the quarter, versus a 7.3% decline last year. Sales of wearables, which include the Apple Watch and AirPods, however, are expected to decline 5.9% year over year.
In addition to Apple’s revenue numbers, analysts and investors will be listening closely for any commentary on the company’s software launches. Apple Intelligence beta for developers earlier this week.
The story continues
The software, which is powered by Apple’s generative AI technology, is expected to arrive on iPhones, iPads and Macs later this fall, though according to Bloomberg’s Marc GurmanIt won’t arrive alongside the new iPhone in September. Instead, it’s expected to arrive on Apple devices sometime in October.
Analysts are divided on the potential impact of Apple Intelligence on iPhone sales next year, with some saying the software will kick off a new iPhone sales supercycle and others offering more pessimistic expectations about the technology’s effect on Apple’s profits.
It’s important to note that Apple Intelligence is only compatible with the iPhone 15 Pro and newer phones, ensuring that all users desperate to get their hands on the tech will have to upgrade to a newer, more powerful phone as soon as it is available.
Either way, if Apple wants to make Apple Intelligence a success, it will need to ensure it has the features that will make customers excited to take advantage of the offering.
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Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley.
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The number of Americans filing for unemployment benefits hit its highest level in a year last week, even as the job market remains surprisingly healthy in an era of high interest rates.
Jobless claims for the week ending July 27 rose 14,000 to 249,000 from 235,000 the previous week, the Labor Department said Thursday. It’s the highest number since the first week of August last year and the 10th straight week that claims have been above 220,000. Before that period, claims had remained below that level in all but three weeks this year.
Weekly jobless claims are widely considered representative of layoffs, and while they have been slightly higher in recent months, they remain at historically healthy levels.
Strong consumer demand and a resilient labor market helped avert a recession that many economists predicted during the Federal Reserve’s prolonged wave of rate hikes that began in March 2022.
As inflation continues to declinethe Fed’s goal of a soft landing — reducing inflation without causing a recession and mass layoffs — appears to be within reach.
On Wednesday, the Fed left your reference rate aloneBut officials have strongly suggested a cut could come in September if the data stays on its recent trajectory. And recent labor market data suggests some weakening.
The unemployment rate rose to 4.1% in June, despite the fact that American employers added 206,000 jobs. U.S. job openings also fell slightly last month. Add that to the rise in layoffs, and the Fed could be poised to cut interest rates next month, as most analysts expect.
The four-week average of claims, which smooths out some of the weekly ups and downs, rose by 2,500 to 238,000.
The total number of Americans receiving unemployment benefits in the week of July 20 jumped by 33,000 to 1.88 million. The four-week average for continuing claims rose to 1,857,000, the highest since December 2021.
Continuing claims have been rising in recent months, suggesting that some Americans receiving unemployment benefits are finding it harder to get jobs.
There have been job cuts across a range of sectors this year, from agricultural manufacturing Deerefor media such as CNNIt is in another place.
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