By Dawn Chmielewski

LOS ANGELES (Reuters) – Jay Gilberg bought a five-bedroom, 4,800-square-foot (446-sq-meter) home in the Los Angeles neighborhood of Pacific Palisades in June to merge two households, bringing his two daughters, his girlfriend, and her teenager together under one roof in what he described as “a very happy home.”

Six months later, that home is gone, one of an estimated 5,000 damaged or destroyed in the Palisades Fire. As he and his real estate agent began searching for a temporary home large enough to accommodate a family of five, they encountered another shock — a sudden spike in rental prices.

One Beverly Hills rental home that had been listed for $14,000 a month suddenly increased by $4,000 overnight — a nearly 29% price hike that the listing agent told Gilberg’s realtor reflected “supply and demand.”

“There are really good people who are compassionate, sympathetic, empathetic, and they want to do something to help,” Gilberg said of the disaster and its aftermath. “And then there are others who … smell an opportunity to profit, and that’s what I encountered.”

Throughout the region, thousands of people like Gilberg, who have been displaced by the wildfires, are encountering sticker shock.

The Los Angeles Tenants Union, a volunteer group that advocates for affordable housing, identified more than 500 property listings where the monthly rental fee abruptly jumped — in some cases, more than doubling.

California Governor Gavin Newsom signed an executive order on Sunday that seeks to curb predatory pricing on essential consumer goods and services, including housing. The order makes it illegal to hike prices by more than 10% above the rates charged immediately before the emergency declaration.

“Though it’s illegal, we know many landlords will try to profit off people’s desperation and get away with it anyway,” said Tony Carfello, an organizer with the Tenants Union, adding that even a 10% increase in rent can be “an impossibility, both for people who lost everything and for the rest of tenants in the city who were already struggling to get by.”

‘EXPLOITED, VICTIMIZED’

California Attorney General Rob Bonta said his office had received hundreds of reports of price gouging and had opened multiple investigations.

“This is just unimaginable conduct during this time when people need the exact opposite of being preyed on, exploited, victimized. They need support and healing and help,” Bonta said on Thursday at a news conference.

He urged the public to send in screenshots, text messages, e-mails or any other evidence to help prosecutors build a case.

Gilberg’s real estate agent, Lori Goldsmith, criticized the gouging, saying she walked away from one longtime client who sought to capitalize on other people’s misfortune.

“It is so wrong,” Goldsmith said. “These people have lost every memory. These people with small children have lost their favorite lovies that they went to sleep with every night that made them feel like they had a security blanket wrapped around them.”

County Supervisor Lindsey Horvath, whose district includes the entirety of the Palisades Fire, said she takes the issue of price gouging on rents and housing “very seriously.”

“People are suffering and they need the security of knowing that we are going to protect them from anyone who would prey on them in a moment like this,” Horvath told Reuters outside a FEMA disaster recovery center in Los Angeles on Wednesday.

Those displaced by the wildfires are struggling.

Renee Weitzer, an 87-year-old Holocaust survivor, lost the Sunset Mesa home she shared with her 88-year-old husband, Ed. They escaped the approaching wildfire with their medication, some important papers, their dog and a single change of clothing, thinking they would quickly return home.

Instead, they have spent more than a week living out of a hotel room, trying to find a home to rent. The competition with other renters has been fierce, she said. The Weitzers offered to pay $14,000 a month rent for a home listed at $8,000 — with a year’s rental payments upfront — but still lost out.

“We’ve lost every house,” said Renee Weitzer. “And not only that, when you have to apply with the application, you have to pay for your credit check.”

The Weitzers plan to move into a nephew’s single-bedroom apartment in West Hollywood on Friday, while they work through the insurance claim process and decide their next move.

“It’s gonna take a while,” Weitzer said. “Whether we could ever rebuild, it’s questionable at our age, because it’s gonna take years to be able to do this right …. I don’t think we’ll be able to rebuild.”

Investing.com — Hungarian Prime Minister Viktor Orban has called on the European Union to end its sanctions against Russia. His call comes as the incoming U.S. administration under Donald Trump is expected to herald a “new era” starting next week.

Orban expressed his views on state radio on Friday, suggesting that it’s time to discard the sanctions and establish a sanctions-free relationship with Russia, although he acknowledged that this might take some time.

The EU has imposed 15 rounds of sanctions on Russia in response to its full-scale invasion of Ukraine. These sanctions need to be renewed every six months. The next renewal, which requires a unanimous decision among the 27 member states, is due by the end of January. This is 11 days after Trump is set to be inaugurated.

Last month, Orban surprised other EU leaders at a summit in Brussels by stating he was not prepared to proceed with an extension of the sanctions, as reported on December 19. During the radio interview, however, Orban did not confirm if he would veto the extensions.

The Hungarian leader also suggested that the EU might need a “couple of months” to change its stance on Russian sanctions. He stated that the bloc “should be in the phase of getting sober,” but instead, it is doubling down on sanctions.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Investing.com — UK traders are now leaning towards the possibility of three interest rate cuts from the Bank of England this year, following disappointing retail sales data which strengthens the argument for a more assertive easing to uplift the faltering economic growth.

Government bonds, or Gilts, saw a rise, with the 10-year yield dropping six basis points to 4.62%. This denotes a decline of over 20 basis points this week.

The pound also experienced a decline, falling as much as 0.6% to $1.2161 after the data was released, approaching its lowest level since November 2023. Earlier this week, traders were only fully pricing in one rate cut.

UK retail sales experienced an unexpected drop during last month’s key Christmas period, dealing another blow to the economy and shaking already fragile investor confidence. This report came after data earlier this week revealed that inflation growth was slower than anticipated.

The beleaguered UK government is predicted to face difficulty in regaining investor confidence, as per the latest Bloomberg Markets Live Pulse survey. This survey suggests that gilts and the pound are likely to continue their recent downward trend.

Following a downturn in the UK markets at the start of 2025 due to increasing concerns over debt and inflation, 51% of 250 market participants surveyed this week anticipate the pound to fall to between $1.20 and $1.15 by the end of June. This could potentially take the currency to its weakest level in over two years.

In addition, 70% of respondents predict that the 10-year gilt yield will rise above 5% this year. This is an increase from around 4.7% on Thursday, but it aligns with expectations for US yields.

This survey paints a grim picture for UK Chancellor of the Exchequer Rachel Reeves, as gilt yields have surged to their highest in more than a quarter-century, stocks have fallen, and the pound has plummeted.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Investing.com — President-elect Donald Trump will begin his term with aggressive trade measures, BCA Research said, potentially announcing a 10% global tariff or targeted tariffs of up to 25% on Canada, Mexico, and 10% on China within his first week.

“Tariffs will be the big news on Day One, or Week One, and we expect President Trump to come out swinging,” the firm said in a Thursday report.

“We expect it to be aggressive because now is his greatest period of political capital and leverage over other countries. The US job market is strong, global manufacturing is weak, and the midterm election is 22 months away,” it added.

BCA anticipates that these tariffs will cause immediate price increases, disrupt global manufacturing, and potentially lead to a deflationary pullback in the longer term.

Simultaneously, Trump’s tax cuts—estimated at $4.2 trillion over a decade—are expected to inflate the budget deficit and drive inflationary pressures, keeping Treasury yields elevated. BCA highlights a 52 basis point rise in 10-year Treasury yields since the election, underscoring expectations of budget deficit expansion under Republican leadership.

In turn, this will likely keep rates higher for longer and the dollar strong, BCA said in its report.

The greenback has rallied 7% since its trough last year, with BCA strategists recommending staying long on the currency until tariff announcements are fully priced. However, the firm cautions that “if the tariffs disappoint expectations, then the dollar will fall,” and any retracement could follow once initial market reactions stabilize.

Oil markets have also responded strongly, with Brent crude rising 7% since the election and 17% since its 2024 low. This rally aligns with ongoing geopolitical tensions, particularly between Israel and Iran, which BCA believes are likely to escalate.

Furthermore, Trump’s enforcement of new sanctions on Russia and China, including controls on semiconductor exports, may additionally bolster energy prices.

Equities, however, are expected to face near-term volatility. The combination of rising Treasury yields and uncertainty over Trump’s tariff strategy may weigh on markets, particularly as supply chain disruptions take hold.

BCA advises positioning for heightened volatility while favoring defensive sectors like aerospace and defense.

It also recommends maintaining a long position in US small-cap stocks over their global counterparts.

FRANKFURT (Reuters) – The euro zone’s current account surplus narrowed in November on a drop in the services surplus and lower primary income, which includes items like wages and dividend payments, European Central Bank data showed on Friday.

The combined current account surplus of the 20 nations sharing the euro narrowed to 26.98 billion euros ($27.8 billion)in November from 30.17 billion a month earlier based on calendar and seasonally adjusted data, while it fell to 34.62 billion euros from 36.32 billion according to unadjusted figures.

In the 12 months to November, the surplus grew to 2.7% of the bloc’s GDP from 1.5% in the preceding 12 months as both the goods and services surplus rose sharply.

($1 = 0.9710 euros)

Investing.com — Malaysia’s economy experienced softer growth in the third quarter, and it is projected that the upcoming year will see fairly subdued growth due to the impact of a tight fiscal policy on demand.

As per the preliminary estimate released today, the GDP growth decreased to 4.8% year-on-year in the fourth quarter, down from 5.3% in the previous quarter. The consensus had predicted a growth of 5.2%.

“We think GDP growth should ease to 4.8% this year, from 5.1% last year. But with inflation set to rise on the back of subsidy cuts, we think the central bank will keep interest rates unchanged for the foreseeable future (including at its scheduled meeting next week),” Capital Economics analysts said in a note.

The preliminary estimate is based on data from the first two months of the quarter. Although these figures could still undergo significant revisions, the advanced estimate has historically been a reliable indicator of the final number.

A detailed breakdown of the expenditure side will not be available for a few more weeks. However, the production breakdown revealed that the economy was primarily propelled by strong growth in the services sector.

On the other hand, growth in the manufacturing and construction sectors slowed, while agricultural output decreased.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Investing.com — Yields on United Kingdom (TADAWUL:4280)’s government bonds, also known as gilts, have seen a decrease, following an anticipation of further interest-rate cuts by the Bank of England. This expectation is rooted in the weaker-than-expected retail sales data.

In December, retail sales saw a contraction of 0.3% on a month-to-month basis. This figure was weaker than the 0.0% consensus forecast by economists in a Wall Street Journal poll.

Following the release of this information, the 10-year gilt yield and the 30-year gilt yield both dropped to a 10-day low, according to Tradeweb data. The 10-year gilt yield was last down by 3 basis points at 4.639%, and the 30-year gilt yield decreased around 2 basis points to 5.204%.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

(Reuters) – European shares advanced in broad-based gains on Friday as government bond yields continued to ease, keeping the STOXX 600 on track for its fourth straight weekly gain.

The pan-European STOXX 600 was up 0.4% as of 0815 GMT, on track for a more than 1.5% jump for the week.

Construction and materials stocks rose 0.8%, amongst the top STOXX sub-sectors, while utilities added 0.7%.

Yields across European government bonds eased, with the yield on the 10-year bund last at 2.494%, down for the third straight day.

UK’s FTSE 100 outperformed its continental peers, gaining 0.8% after British retail sales fell unexpectedly in December, adding to a run of downbeat economic indicators that are likely to further boost expectations for a Bank of England interest rate cut next month.

Glencore (OTC:GLNCY) gained 1.9%, while Rio Tinto (NYSE:RIO)’s London-listed shares were up 1.2%. Glencore approached Rio Tinto late last year about combining the two big copper producers but the discussions are no longer active, Reuters reported.

Investing.com – US stock futures edge higher prior to the final trading day of the week on Wall Street, with traders pouring through recent economic data, corporate earnings, and possible policy shifts during the incoming Trump administration. State Street (NYSE:STT) and Citizens Financial (NYSE:CFG) Group are due to report their quarterly returns, while Nintendo shares slip after the video game giant unveils the latest version of its Switch console. Elsewhere, China’s economic growth matches a target previously laid out by government officials.

1. Futures higher

US stock futures pointed higher on Friday as investors assessed a week of key economic indicators and corporate earnings and looked ahead to the inauguration of President-elect Donald Trump next week.

By 03:37 ET (08:37 GMT), the Dow futures contract had added 77 points or 0.2%, S&P 500 futures had gained 10 points or 0.2%, and Nasdaq 100 futures had inched up by 33 points or 0.2%.

The main averages ended lower on Thursday, retreating somewhat from a jump in the preceding session, with sentiment impacted by data showing an increase in consumer spending activity and a labor market on solid ground. The numbers, along with worries around President-elect Trump’s sweeping import tariff plans, bolstered the case for the Federal Reserve to bring down interest rates at a slower pace this year.

However, traders still took note of comments from Fed Governor Christopher Waller, who told CNBC that the Fed may reduce borrowing costs sooner rather than later because price pressures are likely to continue to ease.

US government bond yields ticked lower, extending a decline sparked earlier in the week by a cooler-than-anticipated core inflation reading. Yields typically move inversely to prices.

2. State Street, Citizens Financial Group to report

Wall Street earnings on Friday will feature State Street (NYSE:STT) and Citizens Financial Group (NYSE:CFG), following a week of crucial bank earnings that have been boosted by a wave of dealmaking.

Spurred on by signs of a resilient US economy, Fed rate drawdowns and hopes for a looser regulatory environment under the incoming Trump administration, some of the largest lenders in the US have reported robust quarterly returns.

On Thursday, Morgan Stanley (NYSE:MS) unveiled an uptick in earnings in the fourth quarter, while Bank of America’s income for the period topped estimates. The figures came after major industry players like JPMorgan Chase (NYSE:JPM) and Goldman Sachs posted solid numbers on Wednesday.

Analysts at Vital Knowledge noted that some bank stocks witnessed a round of profit-taking by investors on Thursday, “not so much because earnings […] were bad, but instead due to the fact Wednesday’s results, which were so strong, raised the bar for everyone.”

3. Nintendo shares slide after Switch (NYSE:SWCH) 2 announcement

Shares of Japanese video gaming titan Nintendo fell on Friday as investors appeared to be little enthused by the long-awaited reveal of the successor to its Switch console.

Nintendo unveiled the Switch 2 in a two-minute video on Thursday, but offered few details on specifications, stating that more will be announced in April.

The video showed that the Switch 2 will sport the same portable-home console hybrid form factor as its predecessor, with what appeared to be a bigger screen, magnetically-attached controllers and slight tweaks to its overall design.

But few surprises were yielded beyond what a barrage of leaks and insider comments had already noted about the product.

The Switch is one of Nintendo’s best-selling consoles, having sold nearly 150 million units since its release in 2017, driven in large part by the company’s strong library of first-party games. However, sluggish sales of the aging console have weighed on Nintendo’s earnings in recent quarters, with the firm also cutting its annual profit and sales forecasts.

4. China’s annual economic growth meets government target

China’s economy grew more than expected in the fourth quarter of 2024, official data showed on Friday, allowing the country to meet Beijing’s annual growth target.

Gross domestic product grew 5.4% year-on-year in the three months to December, more than expectations of 5% and picking up sharply from the 4.6% seen in the prior quarter. GDP expanded by 1.6% quarter-on-quarter, in line with expectations.

This pushed annual GDP up to 5%, according to figures from the National Bureau of Statistics, matching the Chinese government’s growth target of around 5%. Analysts had anticipated a reading of 4.9%.

Friday’s figures came after a bout of recent stimulus measures from Beijing, aimed largely at supporting local manufacturing, curbing state government debt, and boosting an ailing property market. Officials are now expected to dole out even more aggressive stimulus in the face of possible trade tensions with the US as President-elect Trump returns to the White House.

5. Oil rises

Oil prices rose Friday, heading towards a fourth consecutive weekly gain, with the latest US sanctions on the Russian crude trade continuing to offer support.

By 03:38 ET, the US crude futures (WTI) gained 0.7% to $78.36 a barrel, while the Brent contract rose 0.5% to $81.67 a barrel. Both contracts have gained roughly 3% so far this week.

The Biden administration last week announced widening sanctions targeting Russian oil producers and tankers, leading some observers to predict possible supply disruptions and price increases.

By Naomi Rovnick, Nell Mackenzie and Yoruk Bahceli

LONDON (Reuters) – Investors who had been enjoying a brief rebound in long-suffering UK markets are hunkering down for a stretch of losses as ructions in the pound, government bonds and stocks feed on each other and put Britain at risk of a wave of hedge fund attacks.

As global borrowing costs rise in a trend led by the U.S. Treasury market, the UK’s high-debt, low-growth economy that just months ago appeared to be shrugging off years of post-Brexit gloom is now viewed as vulnerable to capital flight.

Traders now expect months of volatility for the pound, which ended 2024 as the top-performing major currency against the dollar due to optimism that the Labour Party’s landslide July election win marked the end of years of political instability. 

That is creating a negative feedback loop by sapping interest in UK stocks that now face fresh currency risks, and casting doubt over Bank of England interest rate cuts, threatening already stagnant economic growth as the nation’s debt burden rises.

There are signs that the pain will be sustained. Options trading data and evidence from hedge fund industry insiders and securities dealing desks point to speculators having piled into bets against the pound and UK gilts.

“I don’t think it’s going to end quickly,” Brandywine Global fixed income portfolio manager Jack McIntyre said of the UK rout, noting that investors remain scarred by memories of the 2022 gilts and sterling crisis sparked by former Prime Minister Liz Truss’ mini-budget. 

The U.S.-based asset manager said he had taken on exposure to UK gilts on the basis that these assets would benefit from rate cuts, but hedged this with contracts that profit if sterling, now 2.5% lower versus the dollar this month, keeps falling. 

BUYERS’ STRIKE 

Just months ago, UK markets were shining as a beacon of stability amid political chaos in France and seemed poised to recover from a long period of government turmoil, currency volatility and being shunned by overseas investors. 

January’s market moves were “refocusing the minds of many around the world on Britain, its economic and its financial condition,” said Mario Monti, the economist who was tapped in 2011 to lead Italy as it faced financial implosion. 

Long-term UK borrowing costs have touched 27-year highs and the domestically focused FTSE 250 share index is down almost 6% since August. A gauge of buying protection against sterling volatility is near its highest since March 2023. 

“The UK is more vulnerable to a buyers’ strike post-Brexit because it is a less core holding for many global investors and it has a less obvious growth story,” U.S. investment bank Evercore ISI vice-chairman Krishna Guha said by email.

Bank of America this week warned of “a significant worsening of the situation that could lead to disorderly moves in gilts (and) sterling, in turn souring growth sentiment and impacting equities negatively.” 

‘WEAKEST LINK’

Surging debt costs have hampered finance minister Rachel Reeves’ plan to revive growth via public investment, while sterling’s drop has put the BoE in a bind in case rate cuts fuel more currency weakness, raising import cost inflation. 

“As a low-growth economy with relatively high interest rates, the UK is sailing very close to the wind,” UBS investment bank head of G10 FX strategy Shahab Jalinoos said. 

“In a world of rising interest rates, it’s trading like the weakest link.” 

Political sentiment is febrile again too, as polls indicate a popularity surge for Brexit campaigner Nigel Farage’s Reform Party, while Labour leader Keir Starmer’s ratings plummet. 

“The political instability that we thought we were done with when the (July) election happened is back,” Janus Henderson European equities manager Tom Lemaigre said. 

He expected renewed sterling volatility that might deter foreign investment into UK stocks exposed to currency risk. 

HEDGE FUNDS CIRCLE 

“Hedge funds are now selling sterling and selling gilts,” Artemis Fund Management portfolio manager Liam O’Donnell said.

“It’s active money, active short selling coming into the market,” he added, referring to the practice of borrowing securities in the hope of selling them and then buying them back more cheaply.

Brokers are charging fees of up to 30 basis points (0.3%) for lending gilts to speculators, almost double the 10-year average, reflecting heightened demand from short sellers, data from S&P Global Market Intelligence showed.

Trend-following hedge funds called CTAs are mostly betting against the pound and UK gilts, JPMorgan said in a client note.

The UK’s lagging growth had lured “a subset” of hedge funds into short-selling sterling, Franklin Templeton Investment Solutions senior research analyst Tom Finnerty said.

Nevertheless, some view the selling wave as an opportunity. 

“I think pessimism is now extreme,” said Mario Unali, head of investment advisory at hedge fund investor Kairos. 

He was looking at taking on UK exposure in the next few months, he said.