| | After Coup, Burkina Faso Loses Key Trade Access to US | | Burkina Faso, one of Africa’s poorest countries, has been removed from the U.S. African Growth and Opportunity Act (AGOA) due to its two military coups last year. On Sunday, the U.S. Trade Representative’s office announced that the Biden administration was “deeply concerned by the unconstitutional change” caused by the coups and ended the country’s access to AGOA, a program that grants sub-Saharan African countries duty-free trade with the U.S. on certain conditions, such as removing trade and investment barriers. On Sept. 30, 2022, Burkina Faso’s Captain Ibrahim Traoré deposed Paul-Henri Damiba, another military leader, just eight months after the latter had led his own coup. According to Reuters, militants in the country with ties to al-Qaeda as well as the Islamic State group have killed thousands of civilians in what is a growing humanitarian crisis that has displaced nearly 2 million people. In 2020, Burkina Faso sold $9.5 million of goods to the U.S., mostly cotton and cashews, while gas and petroleum products made up much of the $273 million of U.S. exports to Burkina Faso. (Source: Reuters, ITA) |
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| | | | | | | | 1 | Tech Firms Collectively Lose $3.17 Trillion in Market Value | | The five technology firms with the highest returns over 10 years — Facebook (now Meta Platforms Inc.), Amazon, Apple, Netflix and Google (owned by Alphabet Inc.), known collectively as FAANG — lost $3.17 trillion in value last year. Facebook lost $602 billion in market capitalization; Amazon, $834 billion; Apple, $835 billion; Netflix, $136 billion; and Google, $772 billion. Even after these losses, however, FAANG stocks collectively are weighted at 13% of the entire S&P 500 index, according to The Wall Street Journal, which means they have a substantial influence on that market’s overall performance. (Sources: Companiesmarketcap, The Wall Street Journal) |
| | 2 | Brazil’s New President Promises Inclusion as Economy Slows | | Inaugurated on Sunday, Brazil’s former and now current President Luiz Inácio Lula da Silva (commonly referred to as Lula) promised economic inclusion and prosperity for his divided country. That’s a tall order. His inauguration comes amid enormous economic challenges including food insecurity, inflation, the degradation of the Amazon rainforest, poverty and inequality. Left-leaning Lula only narrowly defeated his right-wing predecessor, Jair Bolsonaro, and markets are waiting to see how he will fund social initiatives he promised in last year’s elections, at a time when the nation’s budget is stretched thin. “Public banks, particularly the BNDES, as well as companies that lead growth and innovation, such as Petrobras, will have a key role in this new cycle,” said Lula in a speech on Sunday. “The wheel of economy will spin again, and popular consumption will have a central role in that process,” he told the inaugural crowd. (Source: Bloomberg) |
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| | | | | | | Taliban-Controlled Afghanistan Turns to US Adversaries | | Afghanistan’s Taliban-controlled government seeks trade and investment opportunities with China, Iran and Russia as it faces growing isolation over its controversial policies, specifically regarding women. Since taking over Afghanistan after the U.S. withdrawal in 2021, the government has limited women’s rights with restrictions that include an indefinite ban on women attending university or working at NGOs. The resulting international isolation appears to be affecting the country’s economy and creating a humanitarian problem, which has led the government to seek opportunities with China, Iran and Russia. “We will start a national self-sufficiency programme, we will encourage all government administrations to use domestic products, we will also try to encourage people through mosques to support our domestic products,” acting Afghan commerce minister Haji Nooruddin Azizi told Reuters. “We will support any item which can help us for self-sufficiency.” He added that China, Iran and Russia were interested in trade and investment possibilities, including industrial parks, thermal plants and its more than $1 trillion mining industry. (Source: Reuters) |
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| | | | | | | | | | 1 | Relief for European Gas Prices? | | Warm weather in Europe is expected to reduce demand for gas in the coming weeks and could make the commodity cheaper. According to Bloomberg on Monday, the gas futures market briefly fell to its lowest level since before the Russian invasion of Ukraine. This development comes as weather forecasts over the next fortnight show above seasonal norms for most of the EU region, which could help EU nations avoid tapping gas reserves. Germany and France were among the countries most affected by the spike in gas prices caused by the Russian war in Ukraine. To date, the European bloc has largely replaced Russian supply with liquefied natural gas. (Source: Bloomberg) |
| | 2 | Sweden Sees Sharp Drop in Home Prices | | The Swedish state-owned financial institution, SBAB Bank AB, has recorded a 17% drop in housing prices compared to last spring, and expects further decline as a result of interest rate increases intended to attack inflation. In Sweden, the inflation rate hit a 30-year high of 11.5% in November. Rising interest rates are typically associated with falling home prices, as demand for homes softens when the cost of borrowing increases. “Our forecast has been that housing prices will fall by roughly 20% in Sweden as a whole solely as a result of the rise in interest rates. We are clearly starting to approach those levels now,” the bank said, in a statement on Monday. It now appears possible that the decline will exceed 20%. Housing prices fell 2.4% in December alone, while apartment and villa prices fell 1.5% and 2.9%, respectively. (Sources: SBAB Bank, Bloomberg) |
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