Day: September 7, 2023

The S&P 500 and Nasdaq futures fell on Thursday over concerns about sticky inflation, while investors awaited comments from key Federal Reserve officials later in the day to gauge the U.S. interest rate path.

Wall Street’s three major stock indexes closed lower on Wednesday with the Nasdaq’s 1% loss leading declines after stronger-than-expected services sector data fueled concerns that persistent inflation could lead to interest rates staying higher for longer.

Apple (AAPL.O) dropped 2.8% in premarket trading on a report that China was seeking to broaden iPhone ban to state firms and agencies, a day after losses in its shares weighed down all three major indexes.

Other major growth stocks Tesla (TSLA.O) and Nvidia (NVDA.O) lost 1.6% and 1.9%, respectively.

Further denting sentiment, data showed China’s exports and imports fell in August, with sagging overseas demand and weak consumer spending hitting businesses in the world’s second-largest economy.

Shares of U.S.-listed Chinese firms including PDD Holdings (PDD.O), JD.com , Baidu and Alibaba fell between 2% and 2.9%.

“The twin worries of China’s slowdown and the prospect of higher interest rates in the U.S. are proving hard to shift, spreading fresh unease among investors,” Susannah Streeter, head of money and markets at Hargreaves Lansdown said in a note.

“Lacklustre trading is set to be the order of the day given there is so little to pin more optimistic hopes on right now.”

Investors await comments from at least six Fed speakers, including policy voting members Philadelphia Fed President Patrick Harker, Vice Chair and New York Fed President John Williams, due to speak later in the day.

Traders’ bets on the Fed leaving interest rates unchanged in September stood at 93%, while their odds for a pause in the November meeting were at 51.8%, down from nearly 59% a week ago, according to the CME Group’s FedWatch Tool.

Investors also await initial jobless claims numbers for the week ended Sept. 2, due at 8:30 a.m. ET, as they parse through economic data for any indications of slowing inflation.

At 7:05 a.m. ET, Dow e-minis were up 9 points, or 0.03%, S&P 500 e-minis were down 13 points, or 0.29%, and Nasdaq 100 e-minis were down 94.75 points, or 0.62%.

Helping keep the pressure off Dow futures, shares of McDonald’s (MCD.N) rose 1% premarket after Wells Fargo upgraded its rating on the stock to “overweight” from “equal weight.”

Automation software firm UiPath (PATH.N) added 5.2% on an upbeat annual revenue forecast after it topped estimates for second-quarter results.

GameStop (GME.N) climbed 4.8% after the videogame retailer beat Wall Street estimates for quarterly revenue and posted a smaller-than-expected loss.

U.S. Secretary of State Antony Blinken visited a Ukrainian border guard site on the outskirts of Kyiv Thursday as he opened the final day of an unannounced two-day visit.

The tour included presenting four U.S.-provided mine-resistant ambush-protected vehicles that are part of a group of 190 of the vehicles to be delivered in coming months.

Blinken also met with a Ukrainian team working to clear unexploded Russian ordnance at a farm where corn was grown for export.

“What’s hard to get our minds around is that one third of Ukrainian territory has mines or unexploded ordnance on it,” Blinken said.  

“Your work is having a profound impact on the lives of Ukrainians and on people around the world,” he said, noting Ukraine’s importance to global food supply.

Blinken Wednesday announced $1 billion in new U.S. aid for Ukraine, with $175 million in security aid that includes additional air defense equipment, artillery munitions, anti-tank weapons including depleted uranium rounds for previously committed Abrams tanks, and other equipment.

Asked whether he is concerned about sustaining support for that level of U.S. aid among American citizens and lawmakers, Blinken was optimistic.

“I was last here almost exactly a year ago,” he said. “And in that time, in the year since I was last here, Ukraine has taken back more than 50% of the territory that Russia has seized from it since February 2022. In the current counteroffensive, we are seeing real progress over the last few weeks.”

Ukrainian Foreign Affairs Minister Dmytro Kuleba said what is being decided in this war is not just about Ukraine, but about what the world is going to look like after the war is over. If Russia wins, other autocrats will be empowered to invade their neighbors, he said, asking, ‘If the West cannot win this war, what war can they win?”

However, on Capitol Hill, one Republican senator expressed concerns to VOA, saying he would like to see a definitive strategy from the Biden administration for Ukraine to win the war.

“I’d like to see an announcement coming from all the NATO members saying that they are willing to step up. … I just got back from a trip to Europe, and we encouraged our NATO allies to actually step up their game, and I would like to see that happen,” Senator Bill Hagerty of Tennessee, a member of the Foreign Relations Committee, said.

The United States is the largest donor of military aid to Ukraine in total dollars. Other countries, including Denmark, Estonia, Latvia, Lithuania, Poland, Slovakia, Norway, Finland, the Netherlands, the United Kingdom and the Czech Republic, are making larger financial contributions to Ukraine relative to the size of their own economies, according to the Kiel Institute for the World Economy in Germany.

Some information in this report was provided by VOA congressional correspondent Katherine Gypson.

The deputy leader of Sudan’s paramilitary Rapid Support Forces (RSF) Abdelrahim Dagalo said on Thursday that sanctions imposed on him by the United States were “unfair”.

The United States targeted Dagalo over human rights abuses, the U.S. ambassador to the United Nations announced during a trip to Chad’s border with Sudan, where hundreds of thousands of refugees have fled ongoing violence in Sudan, on Wednesday.

War broke out in Sudan on April 15 – four years after a popular uprising ousted President Omar al-Bashir. Tensions between the army (SAF) and RSF, which jointly staged a coup in 2021, erupted into fighting over a plan to integrate their forces as part of a transition to civilian rule.

Late on Wednesday, Sudan’s military ruler General Abdel Fattah al-Burhan issued a constitutional decree ordering the dissolution of the RSF.

In comments to Sky News Arabia, Dagalo said Burhan did not have the legitimacy to do so.

“Now we have stores of weapons and supplies belonging to the armed forces (…) that could last us 20 years,” he added.

The United Nations says that since April, some 380,000 refugees – mostly women and children – have fled the conflict to Chad. Hundreds of thousands more have escaped to Central African Republic, Egypt, Ethiopia and South Sudan.

A Russian combat unit deployed from Russia’s autonomous republic of Bashkiria to fight in Ukraine is using two horses to transport weapons and equipment to inaccessible front-line positions.

Earth has sweltered through its hottest Northern Hemisphere summer ever measured, with a record warm August capping a season of brutal and deadly temperatures, according to the World Meteorological Organization.

Last month was not only the hottest August scientists ever recorded by far with modern equipment, it was also the second hottest month measured, behind only July 2023, WMO and the European climate service Copernicus announced Wednesday.

August was about 1.5 degrees Celsius warmer than pre-industrial averages. That is the threshold that the world is trying not to pass, though scientists are more concerned about rises in temperatures over decades, not merely a blip over a month’s time.

The world’s oceans — more than 70% of the Earth’s surface — were the hottest ever recorded, nearly 21 C, and have set high temperature marks for three consecutive months, the WMO and Copernicus said.

“The dog days of summer are not just barking, they are biting,” United Nations Secretary-General Antonio Guterres said in a statement. “Climate breakdown has begun.”

So far, 2023 is the second hottest year on record, behind 2016, according to Copernicus.

Scientists blame ever warming human-caused climate change from the burning of coal, oil and natural gas with an extra push from a natural El Nino, which is a temporary warming of parts of the Pacific Ocean that changes weather worldwide. Usually an El Nino, which started earlier this year, adds extra heat to global temperatures but more so in its second year.

Climatologist Andrew Weaver said the numbers announced by WMO and Copernicus come as no surprise, bemoaning how governments have not appeared to take the issue of global warming seriously enough. He expressed concern that the public will just forget the issue when temperatures fall again.

“It’s time for global leaders to start telling the truth,” said Weaver, a professor at the School of Earth and Ocean Sciences at the University of Victoria in Canada. “We will not limit warming to 1.5 C; we will not limit warming to 2.0 C. It’s all hands on deck now to prevent 3.0 C global warming — a level of warming that will wreak havoc worldwide.”

Copernicus, a division of the European Union’s space program, has records going back to 1940, but in the United Kingdom and the United States, global records go back to the mid-1800s and those weather and science agencies are expected to soon report that the summer was a record-breaker.

“What we are observing, not only new extremes but the persistence of these record-breaking conditions, and the impacts these have on both people and planet, are a clear consequence of the warming of the climate system,” Copernicus Climate Change Service Director Carlo Buontempo said.

Scientists have used tree rings, ice cores and other proxies to estimate that temperatures are now warmer than they have been in about 120,000 years. The world has been warmer before, but that was before human civilization, seas were much higher and the poles were not icy.

So far, daily September temperatures are higher than what has been recorded before for this time of year, according to the University of Maine’s Climate Reanalyzer.

While the world’s air and oceans were setting records for heat, Antarctica continued to set records for low amounts of sea ice, the WMO said.

“Antarctic sea ice extent was literally off the charts, and the global sea surface temperature was once again at a new record,” WMO’s secretary-general, Petteri Taalas, said in a statement released to the media. “It is worth noting that this is happening BEFORE we see the full warming impact of the El Nino event, which typically plays out in the second year after it develops.”

A strong El Nino coincided with the all-time high temperatures in 2016. The U.N. weather agency earlier this year rolled out predictions that suggest Earth would within the next five years have a year that averages 1.5 degrees Celsius warmer than in the mid-19th century. Each year at or near 1.5 matters.

It also predicted 98% chance of breaking the 2016 record between now and 2027.

The new readings on high global temperatures came as WMO released Wednesday its latest bulletin on air quality and climate, noting that extreme heat, compounded by wildfires and desert dust, has had a measurable impact on air quality, human health and the environment.

WMO scientific adviser Lorenzo Labrador lamented the deteriorating air quality around the globe and cited “record-breaking wildfire season” in many parts of the world, including western Canada and Europe.

“If heat waves increase as a result of El Nino, we may probably expect a further degradation in air quality as a whole,” he said. 

A Chinese-financed high-speed rail project is set for a showcase trial run Friday — coinciding with this week’s ASEAN summit with Chinese Premier Li Qiang in attendance — unless a series of setbacks that have plagued the project force another delay.

Scheduled to begin commercial traffic on Oct. 1, the 141-kilometer railway will connect the capital, Jakarta, to the city of Bandung, cutting the journey from three hours to about 40 minutes. The trains will be powered by electricity with no direct carbon emissions expected during operations.

When completed, it will be the first of its kind in Southeast Asia, marking a milestone in the country’s quest to accelerate infrastructure development. However, the project has been postponed several times since 2019, and there are fears of another delay.

The project, part of China’s global Belt and Road Initiative, broke ground in 2016 with an initial completion date set for the second half of 2019. However, land procurement issues, the COVID-19 pandemic and ballooning costs caused repeated delays.

The most recent holdup pushed the date of the trial run from Aug. 18 to early September. PT KCIC, the consortium of Indonesian and Chinese state firms that funded the project, explained that more time was needed to ensure the safety and comfort of passengers.

Experts say the repeated setbacks reflect a lack of preparations for the project, which was a priority for Indonesian President Joko Widodo.

Muhammad Zulfikar Rakhmat, director of China-Indonesia studies at the Center of Economic and Law Studies, said several factors were involved.

“The first one is the feasibility study. Was done for only five months, and then the preparation was not good enough. That’s why, during construction, there are so many problems, especially when it comes to land use,” he said.

Further delays were caused by an accident involving construction workers and problems in securing local government permits, Rakhmat said.

“And then another reason why it has been delayed, it’s because there are so many products, so many components, that need to be exported from China to Indonesia. And then, it has actually been delayed due to the COVID-19” pandemic, he said.

Rakhmat said the delays, coupled with damage to the environment, have left some Indonesian opposition members dissatisfied with the project.

“Of course, there are some politicians that have been very critical of the construction, especially the Chinese involvement in it. And many of the people have been questioning the Jokowi government, why it has been delayed,” he said.

Widodo is popularly known as Jokowi.

Teuku Rezasyah, an international relations analyst at Padjadjaran University, told Reuters that any further delay “will only become ammunition for the opposition to attack.”

He added that any more setbacks would taint China’s reputation for being able to develop and deliver big projects in the region.

The project is also criticized for its $1.2 billion cost overrun, which has brought the total cost to $7.3 billion, higher than the $6.2 billion proposed by Japan, the other bidder on the project.

PT KCIC received a $4.55 billion loan from the government-owned China Development Bank, but the cost overrun forced the Indonesian government to use state funds to see the railway completed. In April, Indonesia sought an additional $560 million loan from the bank, Reuters reported quoting a senior minister.

At the same time, China expressed a willingness to lower the interest rate from 4% to 3.4% but did not approach the 2% lending rate proposed by the Indonesian side. Japan had offered a 0.1% interest rate in 2014.

Aleksius Jemadu, a professor of international politics at the University of Pelita Harapan, said Beijing and Jakarta should find ways to establish a mutual trust mechanism and actively resolve the issues that have emerged. But he believes it is too early to say whether the project can be judged as successful.

Rakhmat said it is unfair to say that Jokowi made a mistake choosing China for the project because it is unclear what would have happened if Japan had been selected. What is certain, he said, is that Jokowi’s decision was rushed, and the final outcome may affect future cooperation between the two countries.

“This is something that I think the government needs to learn from, something that we need to be careful of for the future when it comes to partnering with China,” Rakhmat said.

Rezasyah said some Indonesians are beginning to compare the quality of Chinese infrastructure with that from the European Union or Japan, potentially leading future Indonesian governments to look beyond China for major projects.

Nevertheless, some young Indonesians have high expectations for the railway.

Rizqita Cahyani Mulia, a student at President University in Indonesia, told VOA she has a parent who works in the construction field, and she thinks it is normal for construction projects to be delayed repeatedly, especially in Indonesia.

“I heard that some people don’t agree with this railway and that Indonesia is in huge debt because of the construction of this railway,” she said. “If they operate it, at least they could get some money to pay for the debt.

“Yes. I still trust Chinese technology/infrastructure. I believe that Chinese infrastructure technology is advanced and safe. As long as it is not more expensive than the flight ticket, I think it is still pretty worth it. [So] yes, I want to try it,” she said.

Jessica Catherine Tawaluyan, another student at President University, said it would be a mistake to underestimate China’s infrastructure, “especially when it comes to trains, because they are very experienced in this regard. … Hopefully this marks something incredible in our infrastructure history.”

Australia and China have made progress in returning to “unimpeded trade” and progress should continue, Australian Prime Minister Anthony Albanese said on Thursday as he met Chinese Premier Li Qiang at a regional summit in Indonesia.

“The progress we have made in resuming unimpeded trade is good for both countries and we want to see that progress continue,” Albanese said in his opening comments at the meeting.

Australia’s views will not always align with China’s, “but we understand dialogue is absolutely critical,” he said.

Li said he welcomed Albanese to visit China this year, and Albanese said he would. 

“I look forward to visiting China later this year to mark the 50th anniversary of Prime Minister Whitlam’s historic visit,” Albanese said in a statement after the meeting, referring to the first visit to communist China by an Australian leader, then prime minister Gough Whitlam, in 1973.

The confirmation of the Beijing visit, the first by an Australian leader to its biggest trading partner since 2016, is a significant step in stabilizing ties.

Diplomatic exchanges froze in 2020 as China placed curbs on a dozen Australian exports in response to Australia’s call for an investigation into the origins of the COVID-19 pandemic.

Tension has eased since Australia elected a Labor government in 2022, and China recently lifted tariffs on Australian barley exports, although Australia wants curbs on other exports, including wine and lobster, lifted.

Iron ore sales to China are Australia’s biggest export earner, and Treasurer Jim Chalmers on Wednesday said a slowdown in China would add to pressure on Australia’s economy.

“Premier Li was positive about China’s economic outlook,” Albanese told reporters after the meeting.

Albanese said he raised human rights cases including two detained Australian journalists, Cheng Lei and Yang Hengjun, telling reporters he had said Australians “want to see Cheng Lei reunited with her children.”

The discussion was focused on how all countries have an interest in a “peaceful, secure and prosperous region,” he added.

Albanese will next travel to the Philippines, making the first bilateral visit by an Australian leader in 20 years, amid renewed tension between the Philippines and China in the South China Sea.

He told reporters the Philippines “is a critical nation for Australia’s interest,” noting strong defense ties.

Australia last month held military exercises near the South China Sea with the Philippines and has said it planned joint navy patrols.

Three round-the-world sailors reached land safely Thursday after sharks nearly sank their catamaran in the Coral Sea.

Both of the inflatable hulls on their 9-meter boat were damaged in several attacks by what were thought to be cookiecutter sharks — a small species not considered dangerous to people. Aerial photos of the men’s rescue showed major damage to the boat, which was nearly submerged and a front section of one hull was completely missing.

The Australian Maritime Safety Authority coordinated the rescue of the two Russian and one French sailor after they activated an emergency beacon early Wednesday 835 kilometers southeast of the Queensland state city of Cairns. The three were rescued by a Panama-flagged freight ship, which landed them at Mooloolaba Harbor on the Sunshine Coast north of the Queensland capital Brisbane on Thursday, the authority said.

Rescued sailor Stanislav Beryozkin said he suspected the sharks mistook his boat for a whale.

He said the crew had prepared for sharks, but not for such numbers. “There were many. Maybe 20, maybe 30, maybe more,” Beryozkin told Seven News television.

They had used double-layered material to protect the inflatable hulls. “But some of them jump and bite above the double material,” he said.

Beryozkin, Evgeny Kovalevsky and Frenchman Vincent Thomas Garate had left St. Petersburg, Russia, on July 1, 2021, and had been sailing from Vanuatu to Cairns when they got into trouble.

Cookie cutter sharks grow to between 42 centimeters and 56 centimeters long and are named for the circular holes they bite in prey.

Joe Zeller, duty manager at the maritime agency’s Canberra response center, said the emergency beacon saved the sailors’ lives.

“The emergency beacon absolutely saved their life. It enabled the Rescue Coordination Center to identify the precise location and tailor the most appropriate and quickest response to rescue them,” Zeller told Australia Broadcasting Corp.

In a rant on Telegram, the Russian embassy in the US said Washington was “deeply indifferent to both the present of Ukraine and the future of the republic.”

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