Weekly Market Update - 25 July 2022

Debt Clock Ticking For Evergrande Group

The clock is ticking for the world’s most indebted developer, whose liquidity woes sparked a broader debt crisis in China’s property industry. China Evergrande Group previously said it was on track to deliver a preliminary restructuring plan by the end of July. That leaves mere days for the builder with about $300 billion of liabilities, just as a shakeup stirs fresh uncertainties. Chief Executive Officer Xia Haijun was forced to resign amid a company probe and Chief Financial Officer Pan Darong was also made to step down. Siu Shawn, who takes over as CEO, said that the firm has reached “basic consensus” on debt restructuring principles with multiple major global creditors.

Source: Bloomberg

Stocks Look Set To Be Tested By Global Slowdown

Stocks look set to be tested this week by concerns about a global slowdown as cooling expectations for peak interest rates bolster sovereign bonds. The Fed policy decision, along with earnings from the likes of Google’s Alphabet and technology titan Apple, will help to clarify the outlook for a one-month-old stock rebound from this year’s bruising bear market in equities. Treasury Secretary Janet Yellen said she doesn’t see any sign the US is in a broad recession. But former Treasury Secretary Lawrence Summers argued that a soft landing is highly unlikely.

Source: Bloomberg

Italy’s Prime Minister Resigns

Mario Draghi resigned as Italy’s prime minister, a move that raises the prospect of snap elections as soon as early October. Investors reacted by driving domestic bond yields sharply higher, while stocks fell. Meanwhile, the European Central Bank is set to announce its policy decision later today, likely raising interest rates for the first time in 11 years.

Source: Bloomberg