—— Germany Expects Stagflation in 2024; DirecTV to Merge with Dish; Quant Funds Face Margin Calls as Chinese Stocks Jump; Kamala Raises $55mn in Two California Fundraisers; GIP to Raise $3bn for New Infrastructure Fund; Dollar Drops for 3 Straight Months; Jerome Powell Gives Hawkish Speech
1. Germany Expects Stagflation in 2024
Germany’s government is set to revise its forecast for the country’s economy, now predicting no growth for Europe’s largest economy this year, according to sources familiar with the situation.
Officials in Berlin are expected to lower their 2024 growth estimate to, at best, stagnation, down from the previously projected 0.3%, said the sources, who wished to remain anonymous as the projections are still confidential.
If this forecast holds, it would mark another difficult year for an economy burdened by a weakened industrial sector, the loss of gas supplies following the Ukraine invasion, sluggish demand from China, and challenges in transitioning to electric vehicle production.
The anticipated lack of growth is seen as a tacit acknowledgment of defeat by the coalition government and a setback for Chancellor Olaf Scholz, who has not overseen economic expansion for two consecutive quarters since taking office in December 2021.
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2. DirecTV to Merge with Dish
DirecTV and Dish have reached an agreement to merge, forming the largest pay-TV provider in the US.
As part of the deal, DirecTV will acquire Dish from its parent company, EchoStar Corp., for a nominal sum of $1, while assuming approximately $9.75 billion of Dish’s debt, according to a statement released on Monday, confirming earlier reports by Bloomberg News.
The merger is dependent on Dish’s bondholders agreeing to reduce the principal amount of the company’s debt by at least $1.568 billion, as outlined in the statement.
DirecTV is owned by AT&T Inc. and its joint venture partner TPG Inc. As part of this transaction, TPG will purchase the remaining 70% stake in DirecTV, which it doesn’t already own, from AT&T for $7.6 billion in cash.
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3. Quant Funds Face Margin Calls as Chinese Stocks Jump
China’s largest stock market rally in over a decade has intensified pressure on the country’s quantitative hedge funds.
Funds that short index futures as part of their market-neutral strategies faced additional margin calls as the stock surge continued on Monday, according to sources familiar with the situation. While the scale of the margin requests was generally smaller than on Friday—when an exchange glitch made it more difficult for funds to access cash—these challenges persisted, said the sources, who requested anonymity due to the private nature of the information.
Some fund managers have informally reached out to regulators, seeking more time to meet the margin demands, highlighting the intense pressure they are under. Many were able to meet the initial margin calls before extended deadlines to avoid forced liquidations.
Market-neutral strategies, which involve taking long positions in individual stocks while shorting stock index futures, typically saw a 3% to 5% drawdown last week, the sources noted. These declines mark a setback for quantitative funds that are still recovering from a market downturn in February.
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4. Kamala Raises $55mn in Two California Fundraisers
Kamala Harris raised approximately $55 million at high-profile fundraising events in California over the weekend, boosting her financial edge over Republican rival Donald Trump, according to a source familiar with the matter.
On Sunday, a fundraiser at the JW Marriott in downtown Los Angeles brought in around $28 million, while an event held Saturday at San Francisco’s Palace of Fine Arts raised about $27 million, said the source, who asked to remain anonymous due to the private nature of the information.
The Los Angeles fundraiser featured performances by Alanis Morissette and Halle Bailey, with notable attendees including celebrities like Sterling K. Brown, Demi Lovato, and Stevie Wonder, as well as business moguls such as Jeffrey Katzenberg, the co-chair of Harris’s campaign.
After enjoying appetizers like samosas and mini lobster rolls, Harris encouraged attendees to mobilize their networks to support her in the upcoming November election.
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5. GIP to Raise $3bn for New Infrastructure Fund
Global Infrastructure Partners (GIP) is aiming to raise $3 billion for a new infrastructure debt fund, according to sources familiar with the situation.
This new fund will be the third installment in GIP’s Capital Solutions infrastructure debt strategy, which targets higher returns by investing in riskier assets compared to other credit strategies that focus on senior instruments, the sources said, requesting anonymity due to the private nature of the matter.
In December 2020, GIP closed its second Capital Solutions fund at $1.4 billion. That fund primarily makes debt and non-common equity investments in midstream energy, power, renewable energy, and transportation assets across OECD countries.
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6. Dollar Drops for 3 Straight Months
The dollar’s longest monthly losing streak in 20 months is raising concerns among currency traders, following the Federal Reserve’s initiation of its interest-rate cutting cycle.
The Bloomberg Dollar Spot Index has fallen by about 1% in September, marking its third consecutive month of decline and the longest weakening stretch since January 2023. According to the latest data from the Commodity Futures Trading Commission, speculative traders are positioning for further drops.
Sentiment remains “bearish,” says Skylar Montgomery Koning, a foreign-exchange strategist at Barclays, who believes that traders have already factored in the effects of lower US borrowing costs. “There are a lot of moving parts,” Koning added.
Since late June, the dollar index has declined around 3.8%, driven by growing confidence that the Federal Reserve would soon begin cutting rates. Approximately 0.4% of this drop has occurred in the days following the Fed’s larger-than-expected half-point rate cut.
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7. Jerome Powell Gives Hawkish Speech
Warren Buffett’s Berkshire Hathaway Inc. has sold an additional $863 million worth of Bank of America Corp. stock, bringing its stake closer to the 10% regulatory threshold.
After the latest disposals, made over three trading days through Tuesday, Berkshire now holds a 10.5% stake in the second-largest U.S. bank, according to a regulatory filing. As long as the stake remains above 10%, Berkshire is required to disclose its trades within a few days.
Buffett, 94, started reducing the sizable investment in mid-July. Despite months of sales, Berkshire’s remaining stake in Bank of America is still valued at $32.1 billion, based on Tuesday’s closing price, making it the largest shareholder in the bank.
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本文内容来自《Financial Times》、《Bloomberg》，以及《The Real Deal》等多家财经新闻媒体。