Global Finance Summary: June 19

Global Finance Summary: June 19 | Insurance Business America

World stocks rally following Fed announcement…. US stock market expected to start higher…. Could Argentina be about to default on its $1.3 billion bond debt payment? …. Russian oil boss hits back at US sanctions…. And Rolls Royce to return $1.7 billion to investors….

World Stocks Boosted by Fed’s Relative Optimism
World stocks rose on Thursday following the Fed’s much anticipated announcement yesterday. Asian markets gained, with Japan’s Nikkei hitting its highest mark since January. Europe is also up so far and the US stock market is expected to start higher this morning.  The dollar fell yesterday. There was a mix of news from the Fed; the bad was a slower than expected growth for the economy this year; down to as low as 2.1 per cent rather than the 2.9 per cent that was originally predicted. The good news is optimism that things are headed in the right direction and that, although slower, key indicators including consumer spending and employment are set to continue growth. The predictions for 2015 and 2016 are unchanged and the Fed is now planning a wind-down of its stimulus package. Read the full story.

Argentina to Default on Bonds Debt?
Argentina’s finance ministry says it can’t afford to make a payment of $1.3 billion to the ‘holdouts’ that refused to restructure debt on bonds, a situation that has been debated for twelve years.  After the US Supreme Court refused to hear Argentina’s appeal against a New York court ruling that the creditors should be paid along with those who have agreed restructuring, Argentina has threatened to default on the payments. Read the full story.

Bargain Oil Could Mean A High Price for Iraq
A tanker containing oil of disputed ownership is currently in the Mediterranean and being touted at a bargain price. While the price of oil continues to stay at around a nine-month high, this tanker load is offered at half price. The shipment was pumped by the Kurdistan region of Iraq, which is semi autonomous, and experts believe that if this oil is sold, it will boost the region’s push for total independence. The Iraqi government in Baghdad claims rights to all oil revenue from the country. Read the full story.

Russian Oil Boss Says Us Sanctions Make ‘No Sense’
The chief executive of Russian oil giant Rosneft says that the US sanctions against him ‘do not make any sense’. Although international sanctions have not been imposed against Rosneft, the US government has blocked Igor Sechin’s US assets and banned US citizens from doing business with him. Sechin claims that he is not involved in any political decisions, although he is close to President Putin and was a former Soviet Intelligence Officer. Rosneft is seventy per cent owned by the Russian government. Read the full story.

Rolls Royce in $1.7bn Share Buy Back
British aero-engine manufacturer Rolls Royce has announced that it is to back $1.7 billion of its shares. Investors were rattled by a profit warning in January and the cancellation of an order of 70 airbuses by UAE earlier this month, but the company says it is on course to return to growth next year. It is not planning any acquisitions, hence the share purchase. Experts say this is good news for investors as it signals tight capital discipline by the company. Read the full story.