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U.S. stock options traders see smooth sailing as Fed taper looms

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October 22, 2021

By Saqib Iqbal Ahmed

NEW YORK (Reuters) – Options traders are showing little fear that U.S stocks will turn volatile in coming weeks, even as the Federal Reserve appears set to announce an unwind of the easy money policies that helped equities double from last year’s lows.

The Cboe Volatility Index, known as Wall Street’s fear gauge, recently stood at 15.52 after closing at a post-pandemic low of 15.01 on Thursday.

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The S&P 500 Index was down 0.2% on Friday, a day after closing at a record high. Though many investors have worried over how stocks will react when the Fed begins to taper its $120 billion in monthly government bond purchases, the so-far sanguine trading in the options market suggests that market participants are not rushing to buy insurance against volatility over the next few weeks.

The Fed has suggested it will likely announce a taper at the conclusion of its next policy meeting on Nov 3.

“It definitively points towards investors being more comfortable with the Fed,” said Chris Murphy, equity derivative strategist at Susquehanna International Group.

“The Fed has done a really good job telegraphing all their moves, making everyone comfortable with what’s going to happen,” Murphy said.

That is not to say things couldn’t change as investors get more details on the Fed’s plans to withdraw monetary support and eventually raise rates.

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The VIX briefly spiked to a four-day high of 16.39 on Friday after Fed Chairman Jerome Powell said that the U.S. central bank is “on track” to begin reducing its purchases of assets, and noted that he expects inflation to abate next year as pressures from COVID fade.

VIX futures expiring in coming months have been slower to pull back relative to the spot VIX, signaling a fair bit of anxiety about how stocks will perform in coming months, analysts said.

(Reporting by Saqib Iqbal Ahmed; Editing by Ira Iosebashvili)

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Canada’s Shopify records Black Friday sales up 21%

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November 27, 2021

(Reuters) – Canadian e-commerce company Shopify Inc recorded worldwide sales of nearly $2.9 billion on Black Friday, an increase of about 21% in comparison to last year, the company said Saturday.

New York, London and Los Angeles were among the top-selling cities, the company said, while apparel and accessories was the top-selling product category.

Shopify also said it funded 23,000+ tonnes of carbon removal to counteract emissions from the delivery of every order placed on its platform on Black Friday.

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(Reporting by Aakriti Bhalla in Bengaluru; Editing by Nick Zieminski)

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Xiaomi to open car plant in Beijing with annual output of 300,000 vehicles – Beijing govt

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November 27, 2021

SHANGHAI (Reuters) – Chinese smartphone giant Xiaomi Corp will build a plant that can produce 300,000 vehicles annually in Beijing for its electric vehicle unit, authorities in the capital said on Saturday.

The plant will be constructed in two phases and Xiaomi will also built its auto unit’s headquarters, sales and research offices in the Beijing Economic and Technological Development Zone, the government-backed economic development agency Beijing E-Town said on its official WeChat account.

Beijing E-Town said it anticipated the plant reaching mass production in 2024, a goal announced by Xiaomi’s Chief Executive Lei Jun in October.

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In March, Xiaomi said it would commit to investing $10 billion in a new electric car division over 10 years. The company completed the business registration of its EV unit in late August.

The company has been opening thousands of stores to spur domestic sales growth for its smartphone business but eventually intends to use these shops as a channel for its plans to sell electric vehicles.

(Reporting by Brenda Goh; Editing by William Mallard)

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Eni sells Snam 49.9% stake in Algeria gas pipelines for 385 million euros

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November 27, 2021

MILAN (Reuters) -Italian energy group Eni has agreed to sell gas group Snam 49.9% of its stake in strategic pipelines carrying Algerian gas into Italy for 385 million euros ($436 million), the two companies said on Saturday.

The pipelines will be jointly controlled by the two companies, they said in a joint statement.

Italy imports more than 90% of its overall gas needs and Algerian gas currently accounts for around 30% of flows.

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“This transaction allows us to free up new resources to be used on our energy transition path,” Eni Chief Executive Claudio Descalzi said.

Eni is working on spinning off a series of oil and gas operations into new joint ventures to help reduce debt and fund its shift to low-carbon energy.

Snam, which owns a 20% stake in the TAP pipeline that carries Azeri gas into Italy, makes most of its money from managing Italy’s gas transport grid.

It has pledged to spend more on new green business lines such as hydrogen and, like other gas grid operators in Europe, is upgrading its gas network to be hydrogen ready.

“In the future, North Africa could also become a hub for producing solar energy and green hydrogen,” Snam CEO Marco Alvera said.

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The pipeline companies involved in the deal posted net income of around 90 million euros in 2020.

($1 = 0.8836 euros)

(Reporting by Stephen Jewkes, editing by Giselda Vagnoni)

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