Morning Bid: Credit risk is alive and well

Global equities are being weighed down this morning by weakness in U.S. bank stocks. Concerns are mounting about looming credit risks, following negative announcements from two regional banks and recent auto bankruptcies.

Meanwhile, gold remains on track for its best week in 17 years, rising above $4,300 per ounce early on Friday. ROI editor-at-large Mike Dolan asks whether gold’s epic rise may be the bubble investors should be worried about.

The dollar index is moving in the opposite direction. The greenback is set to record its biggest weekly slump in almost three months, weighed down by expectations of more Federal Reserve easing. However, ROI markets columnist Jamie McGeever argues that the dollar bull case may be more compelling than you think.

In global news, tensions between Washington DC and Beijing have been back in the headlines following a spat over export controls on rare earth minerals. ROI Asia Commodities Columnist Clyde Russell argues that China risks overplaying its hand with curbs on metals and minerals vital to the global energy transition.

In energy markets, oil prices look set to fall for the week as the market continues to face forecasts of a supply glut in the coming year. However, ROI Energy Columnist Ron Bousso points out that uncertainty over the whereabouts of almost 1.5 million barrels per day of crude oil is throwing this projection into doubt.

The oil market is also reacting to the surprise announcement that President Donald Trump and Russian President Valdimir Putin have agreed to hold another summit on the war in Ukraine, this time in Budapest.

While a quick resolution to this multi-year conflict remains unlikely, the recent strikes by Ukraine and Russia on each other’s energy infrastructure may mark a new stage in the war. Ron Bousso argues that this should be a wakeup call to Europe about vulnerabilities in its own energy systems.

On the renewables side, ROI Energy Transition Columnist Gavin Maguire highlighted seven potentially “magnificent” clean energy stocks that have been on a tear this year despite the Trump administration’s rollback of clean energy policies.

I’d love to hear from you, so please reach out to me at anna.szymanski@thomsonreuters.com, opens new tab ., opens new tab

CLYDE RUSSELL, ROI Asia Commodities and Energy Columnist: The choice between gold and digital assets is usually seen as binary: physical gold for those who want something tangible that’s not fiat currency and Bitcoin for those who see digital assets as the future. However, the World Gold Council has just done a report on the future of digital gold, opens new tab, and while, the authors are obviously acting in the interests of their members, the piece does raise some interesting issues.

MIKE DOLAN, ROI Financial Markets Editor-at-Large: A major OECD report this week examined how social connections – the frequency and quality of interactions between people – play a critical role in broader policy goals in health, financial well-being, employment, education and civic engagement., opens new tab

RON BOUSSO, ROI Energy Columnist: When it comes to energy, nothing is bigger than the sun – at least in our universe. So the idea that Chinese scientists are developing an artificial sun, opens new tab is quite fascinating. This article from the Chinese Academy of Sciences is worth a read.

GAVIN MAGUIRE, ROI Global Energy Transition Columnist: The 10th edition of McKinsey’s Global Energy Perspective contains wide-ranging deep dives into key factors expected to impact global energy markets over the coming years., opens new tab

ANDY HOME, ROI Metals Columnist: This fascinating Reuters analysis explains how critical mineral companies are stepping up their lobbying game in Washington, DC.

JAMIE MCGEEVER, ROI Markets Columnist: Questions about the valuations of AI companies are hanging over the global economy, with the word “bubble” popping up ever more frequently. In the latest episode of Reuters Econ World, my colleague Mike Dolan and host Carmel Crimmins delve into this debate and consider whether bubbles are always a bad thing.

ANNA SZYMANSKI, ROI Editor-in-Charge: Reuters World News is now a vodcast! Here’s all the day’s headlines in 10 minutes., opens new tab

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