Wells Fargo Says to Buy US Stocks and Cut EM After Strong Rally
Investors should reduce their holdings of emerging market equities and buy US stocks instead, according to Wells Fargo & Co.
While shares in up-and-coming economies have outperformed the S&P 500 benchmark index this year, emerging market outperformance is typically correlated with a weak dollar, Austin Pickle, an investment strategist, wrote a note dated May 19. He forecasted a stronger greenback while flagging the risk of China-US tensions.
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CNBC
an hour ago
- CNBC
Boeing Dreamliner crash, military escalations darken mood at Paris Air Show
Kelly Ortberg's first Paris Air Show as Boeing CEO was set to be relatively upbeat. Under his leadership that began in August, the company has made strides in ramping up production of its bestselling 737 Max jets, increasing cash-generating deliveries of new planes, and indicating that it's turning a corner from a series of manufacturing and safety crises and years of lost ground to rival Airbus. Shares are up more than 13% this year, outpacing the S&P 500. But after an Air India flight crashed on Thursday, marking the first fatal air disaster of a Boeing Dreamliner, Ortberg canceled plans to go to the massive air show that begins on Sunday. The trade event is a big draw for the industry and is held every other year, alternating with the Farnborough Air Show in the U.K. Boeing, Airbus and other aerospace giants host champagne-flowing parties, hold flashy deal-signing ceremonies with executives flanked by model planes, and show off their new aircraft with extreme maneuvers for spectators below. "As our industry prepares to start the Paris Air Show, Stephanie and I have both canceled plans to attend so we can be with our team, and focus on our customer and the investigation," Ortberg said in a note to employees late Thursday, referring to Boeing Commercial Airplanes CEO Stephanie Pope. All but one of the 242 people aboard Air India Flight 171 were killed when the more than 11-year-old Boeing 787-8 Dreamliner that was headed for London on a sweltering day crashed into a medical student dining hall seconds after takeoff from Ahmedabad in western India. The sole survivor was an India-born British national in seat 11A. The cause of the crash is unknown and will take weeks or months to determine. Questions focus on how the plane so quickly and evenly lost altitude, appearing to glide into a fireball crash. Cockpit voice and data recorders, known as "black boxes," will provide key information. "It is important that we do not speculate about the accident and let the investigators do their work," Ortberg wrote. The plane's engine maker, GE Aerospace, said it will postpone an investor day scheduled for Tuesday. The crash isn't the only outside factor changing the gathering in Paris. Shortly before the Paris Air Show was set to begin, Israel launched overnight missile strikes on Iran. Hours later, Iran launched drones toward Israeli territory. Airlines canceled flights, with jets in the air diverting or returning to their destinations, while hundreds of others skirted the airspace. The escalating tensions will make military budgets and spending an even bigger focus for the air show, but they also raise concerns about how conflicts and geopolitical tensions could impact demand for commercial air travel. Despite the crash and other external concerns, Boeing, Airbus and Embraer are expected to lock in hundreds of airplane orders. Wait times for popular new aircraft models already stretch into the next decade with demand still strong. Boeing forecast on Saturday that the world will need 43,600 commercial airplanes over the next two decades, with emerging markets driving growth. It expects those markets will account for more than half of the world's fleet in 2044, up from a 40% share last year. Some of the order signings could come from previously undisclosed customers, though there are many new orders on the line, aviation analysts say. Ongoing issues, such as a lack of trained workers, have delayed deliveries of new planes, while on-again, off-again tariffs have raised concerns about more expensive aircraft and components. Pricing has also firmed up. A new Airbus A321neo was going for $65 million as of the end of April, up from $58 million at the start of 2023, while a new Boeing 737 Max 8 cost about $55.5 million in April, compared with $50.25 million in early 2023, according to Ishka an aviation data and advisory firm. With aircraft still in short supply, lease rates are also going up for older planes for airlines that prefer not to make multimillion-dollar aircraft purchases up front or that might need them for shorter time periods. A 12-year-old Boeing 737 costs $241,000 a month to rent as of the end of April, up nearly 42% from two years earlier, and an Airbus A320 of the same age was $239,000 a month, a 50% gain, according to IBA Insight, another aviation data firm. U.K.-based IBA predicted manufacturers could see between 700 and 800 commercial aircraft orders during the Paris show, a tally that includes firm orders, options, and looser commitments like purchase intention letters and memoranda of understanding. Customers could include Ethiopian Airlines and Polish carrier Lot, as well as Vietnam Airlines, AirAsia, Royal Air Maroc, Etihad and Saudi carrier Riyadh, said Ishka. "A large deal from China is inevitable sometime, for replacement if not growth reasons," Ishka said in a note last week. Air India, which Ishka had previously listed as a potential customer, was no longer expected to buy new planes given last week's tragedy. Airplane customers are going bigger as international travel continues to bring in money. "It used to be all about single-aisle orders," said Richard Aboulafia, managing director at aerospace consulting firm AeroDynamic Advisory. Now, "everyone is booking these monster twin-aisle orders for international traffic." He said major international airlines like Turkish Airlines, Gulf carriers and others have expanded in recent years, competing for more global travelers, "slicing the pizza into smaller pieces." Since orders are placed years in advance, Aboulafia said he doesn't expect a big impact on demand because of the crash, though some might be held back during the show. "It's a terrible tragedy. It doesn't make anyone's lives easier," he said. "I just don't think given what we know now it has anything to do with the design or the build of the airplane. It sure doesn't look like it."
Washington Post
an hour ago
- Washington Post
Taiwan adds China's Huawei and SMIC to export control list
TAIPEI, Taiwan — Taiwan's Commerce Ministry has added Chinese chipmakers Huawei Technologies and Semiconductor Manufacturing International Corp (SMIC) to its export control list, as trade and technology frictions between the self-ruled island, China and the United States increase. Inclusion on the 'strategic high-tech commodities' list means Taiwanese companies will need to obtain export permits before selling goods to the respective companies. Other entities on the list include organizations such as the Taliban and al-Qaeda, as well as other companies in China, Iran and elsewhere. The export control entities list was last updated on Sunday. Neither Huawei nor SMIC initially commented on their inclusion. Huawei and SMIC have both been sanctioned by the U.S. The two companies are producing China's most advanced homegrown artificial intelligence chips in an effort to compete with U.S.-based Nvidia and supply Chinese tech firms with the much-needed chips amid export curbs. Taiwan is home the world's largest chipmaker, Taiwan Semiconductor Manufacturing Co. (TSMC), a major supplier for Nvidia. Last November, the U.S. ordered TSMC to halt supplies of certain advanced chips to Chinese customers as part of broader efforts to restrict China's access to cutting-edge technologies. China claims self-ruled Taiwan as its own territory, to be annexed by force if necessary. The U.S. is Taiwan's biggest unofficial ally and arms seller.
Yahoo
an hour ago
- Yahoo
Hong Kong startup targets lithium battery waste with AI-powered recycling system
Lithium battery waste is piling up, and a Hong Kong-based startup is showing the world how to clean it up smartly. Achelous Pure Metals has developed a portable, eco-friendly recycling system designed to process used lithium-ion batteries right in urban centers, according to a report on SCMP. The five-year-old company has built a robot-assisted pilot line that can sort, shred, and filter materials from non-electric vehicle (EV) batteries. The process includes vacuum and heat treatment to safely extract hazardous substances like epoxy adhesives and fluorine gases. Another pilot system, which uses nanoparticle-based separation, helps isolate and refine critical metals like lithium, cobalt, and nickel from the so-called 'black mass'—a powdery residue left after crushing batteries. The firm's goal is to bring scalable and movable recycling to cities, starting with Hong Kong and eventually expanding across Southeast Asia. 'Our goal is to tackle the growing problem of discarded lithium-ion batteries by bringing scalable, movable, eco-friendly recycling to urban centres starting in Hong Kong, with plans to expand to [Southeast] Asia,' Alan Wong Yuk-chun, co-founder and technical director of the startup told SCMP. While the startup has deployed its technology at a client facility in Jiangsu province that can process up to 10,000 tonnes of battery waste annually, it's facing hurd+6les. A surge in China's recycling capacity has led to a scramble for black mass, while the prices of end products have been falling rapidly. 'Our client's factory has to compete for black mass at higher and higher prices, while the prices of end-products like lithium carbonate keep falling amid oversupply,' said Shawn Cheng, the company's co-founder and R&D director. Battery-grade lithium carbonate, once dubbed 'white gold,' dropped nearly 90 percent in price—from 568,000 yuan in November 2022 to just 60,600 yuan per tonne in May 2024, according to Daiwa Capital Markets. Global lithium oversupply is expected to peak by 2027 before swinging into a deficit early next decade, forecasts UK-based consultancy Wood Mackenzie. In response, the Hong Kong Science and Technology Park-based startup is pivoting. It's building out its Hong Kong operation and helping companies across Southeast Asia establish 'micro-factories' that can turn discarded batteries into black mass for export to China. The company is also in talks with local firms to recycle lithium batteries from security transceivers, and exploring opportunities in Malaysia and Singapore for e-waste recovery. 'We want to help [our] partners meet their future recycled content obligations and set up a system to keep track of the materials' footprint for compliance,' Cheng said. The world is staring at a mounting e-waste crisis. In 2022 alone, about 62 million tonnes of electronic waste were generated globally—enough to circle the planet in bumper-to-bumper tractor-trailers, according to a 2024 UN report. That figure is projected to hit 82 million tonnes by 2030, with metals such as copper, gold, and iron making up nearly half the total, valued at an estimated $91 billion. Yet just 22 percent of this waste was properly collected and recycled in 2022, and that figure is expected to drop even further by the decade's end. The UN attributes this to ballooning consumption, limited repair options, shorter product lifespans, and inadequate recycling infrastructure. In response, governments are tightening the screws. New EU regulations mandate lithium recovery rates of 50 percent by 2027 and 80 percent by 2031, with recovery targets for metals like cobalt, copper, and nickel climbing as high as 95 percent.
