News

As we while away the warm – even hot – summer months in the Grand Duchy, it’s on many people’s minds that winter is on its way. And that means we go back to burning gas. While official sources show that Luxembourg doesn’t import much Russian gas, we all pay the going market rate.

Forty years ago this week the bull market started in the United States. Not just any bull market, but the biggest bull market ever. Despite the crash of 1987, the dotcom graveyard, the attacks of 11 September 2001, the Great Financial Crisis and the Covid pandemic, this bull market continued to rise, fuelled by structurally falling interest rates, higher valuations and sharply rising profits.

The Dow Jones bottomed forty years ago on 12 August 1982 at 777 points, the same level as in January 1964. 

Luxembourg-based steelmaker ArcelorMittal, the world’s second-largest, on Thursday posted higher-than-expected earnings thanks to rising prices but warned that it sees risks in inflation, the ongoing war in Ukraine and the effects of the Covid-19 pandemic in China.

The company posted EBITDA earnings of 5.16 billion dollars in the second quarter, up from 5.05 billion in the period a year earlier. Analysts polled by Reuters had expected earnings of 5.09 billion.

Swing pricing “has become common market practice” in the Luxembourg fund sector to manage liquidity at times of volatility in the market, according to a recent industry survey by the Association of Luxembourg Fund Industry.

While closing the door on a seven-year era of negative interest rates with a larger than anticipated rate hike, the European Central Bank on Thursday committed itself to a more assertive defence of cohesion between the 19 economies that use the euro. President Christine Lagarde described the move as “a rather historical moment”. 

Financial markets expect a further increase of 140 basis points in European Central Bank interest rates by the end of the year, suggesting a steady path of increases of half a percent per six-weekly meeting. Worsening economic conditions in the coming months could however lead to an early shortening of the tightening cycle. It is balancing on a thin rope, investors and strategists tell Investment Officer.

A European screening exercise of prospectus approvals that involved Luxembourg’s financial supervisor CSSF has concluded that EU regulators need to be more efficient in their assessments and that more clarity needs to be provided on the use of  “additional criteria” that national supervisors apply.

Social responsibility, sustainability, ESG and SRI are more than buzzwords for the world’s leading pension funds. While some still question the current classifications, taxonomies and regulatory timelines, many of these major institutional investors see it as a way to provide stewardship, being a long-term stakeholder in society. “So are we going to be good ancestors? Or not?”

Barely seven of the first 35 companies in the US S&P 500 index to release their second-quarter results subsequently have raised their earnings per share forecast for the third quarter. Are earnings expectations and analysts still too optimistic?

Some 77 percent of those companies saw their Q3 2022 expectations revised downwards. The average estimated change is -3.0 percent, according to The Earnings Scout. 

Ratings agency Fitch Ratings has affirmed  its assessment of Luxembourg’s government debt with a ‘AAA’ rating and a stable outlook.