International

Stocks stumble to end ‘miserable’ 2022

| By AFP | Roland Jackson |

Stock markets wrapped up their worst performances in years on Friday before heading into 2023 under recession fears following Russia’s invasion of Ukraine, high inflation and rising interest rates.

Both US and European indices closed their final sessions of the year in the red.

For the year, Frankfurt was down more than 12 percent and Paris lost 9.5 percent for their worst performances since 2018. London, however, was up 0.9 percent in 2022 as the energy sector was buoyed by soaring energy prices.

Wall Street saw its worst annual drop since 2008, with the S&P 500 index down around 20 percent and the tech-heavy Nasdaq losing about 30 percent for the year.

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Equities were slammed as the US Federal Reserve, European Central Bank and Bank of England aggressively lifted interest rates in a bid to tackle rampant consumer price rises. The move carries the risk of sparking recession as higher borrowing costs slow economic activity.

US tech companies were hit particularly hard as they are usually boosted by lower interest rates.

The MCSI World Equity Index has lost almost a fifth in its worst annual performance since 2008, when markets were ravaged by the global financial crisis.

Asia-Pacific markets finished their last sessions mostly in the green on Friday.

But for the year, Hong Kong tanked 15.5 percent and Shanghai dived 15.1 percent in the biggest annual slumps since 2011 and 2018, respectively.

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Covid spiked once more in China in December, after Beijing relaxed its strict curbs in the face of rare public outcry. The surge has also prompted worries about the impact on stretched global supply chains.

Tokyo plunged 9.4 percent in the first annual fall since 2018 but the Bank of Japan maintained its ultra-easy monetary policy, in contrast with other central banks, to help its fragile economy.

‘Pitiful end to miserable year’

“It’s shaping up to be a pitiful end to a miserable year in stock markets,” OANDA trading platform analyst Craig Erlam told AFP.

He said 2022 had “brought an end to an era” of low interest rates that fueled tech and crypto booms.

“That’s been replaced with soaring inflation and interest rates, immense economic uncertainty and the reshaping of energy markets in the aftermath of the Russian invasion of Ukraine,” Erlam added.

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In commodities, oil prices rallied in 2022 with Brent gaining about 10 percent and the West Texas Intermediate adding around seven percent.

However, they remain significantly below peaks struck in March on supply woes after key producer Russia invaded its neighbor, sending natural gas prices also spiking.

Britain and other major economies now face the likely prospect of grim recessions next year, as consumers and businesses battle rampant inflation and rising rates after years of ultra-low borrowing costs.

“The most important take of the year is: the era of easy money ended, and ended for good,” noted SwissQuote analyst Ipek Ozkardeskaya.

“And given that there is still plenty of cheap central bank liquidity waiting to be pulled back, the situation may not get better before it gets worse,” she said.

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“Recession, inflation, stagflation will likely dominate headlines next year.”

London was down 0.8 percent and Frankfurt shed 1.1 percent in half-day sessions ahead of the New Year holiday. Paris closed 1.5 percent lower.

On Wall Street, the Dow ended 0.2 percent lower while the tech-heavy Nasdaq shed 0.1 percent.

“It would appear that people have checked out for the year — and have settled back into holiday mode for New Year celebrations,” Erlam said.

Key figures around 2145 GMT

New York – Dow: DOWN 0.2 percent at 33,147.25 (close)

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New York – S&P 500: DOWN 0.3 percent at 3,839.50 (close)

New York – Nasdaq: DOWN 0.1 percent at 10,466.48 (close)

London – FTSE 100: DOWN 0.8 percent at 7,451.74 (close)

Frankfurt – DAX: DOWN 1.1 percent at 13,923.59 (close)

Paris – CAC 40: DOWN 1.5 percent at 6,473.76 (close)

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EURO STOXX 50: DOWN 1.5 percent at 3,793.62 (close)

Tokyo – Nikkei 225: FLAT at 26,094.50 (close)

Hong Kong – Hang Seng Index: UP 0.2 percent at 19,781.41 (close)

Shanghai – Composite: UP 0.5 percent at 3,089.26 (close)

Euro/dollar: UP at $1.0704 from $1.0667 on Thursday

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Pound/dollar: UP at $1.2094 from $1.2062

Euro/pound: UP at 88.47 pence from 88.40 pence

Dollar/yen: DOWN at 131.11 yen from 132.96 yen

West Texas Intermediate: UP 2.4 percent at $80.26 per barrel

Brent North Sea crude: UP 2.9 percent at $85.91

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International

EU Faces Migration Crisis After 60,000 Migrants Arrive in Spain’s Ceuta Enclave

The arrival of around 60,000 migrants from Morocco to Spain’s Ceuta enclave triggered a major European Union crisis on Friday, after Madrid described the situation as an “attack” on its territorial integrity.

At least 34 people died while attempting to reach the Spanish territory, according to local authorities.

Hundreds of migrants had begun arriving in Ceuta earlier in the week, either by swimming across the border or climbing security fences. Most of those who entered were young men and teenagers.

However, the situation escalated dramatically early Thursday morning, when the number of arrivals surged within a few hours, reaching nearly 60,000 people. According to the Spanish government, the vast majority of them — around 48,000 migrants — had returned to Morocco by Friday evening.

The episode represents one of the most serious migration crises faced by the autonomous city of Ceuta, which has a population of around 84,000 residents, in recent years.

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Several European countries responded strongly to the crisis, with Italy announcing the temporary suspension of the Schengen free movement agreement with Spain, a measure supported by Finland and Denmark.

“The temporary suspension of Schengen with Spain is a necessary decision to protect the security of our citizens and defend Europe’s borders,” Italian Foreign Minister Antonio Tajani said in a post on X.

Italy’s Interior Ministry confirmed that the country had tightened controls on maritime and air entry points from Spain, but clarified that the measure would not affect Spanish or European citizens traveling to Italy.

The additional checks will specifically target non-European citizens arriving from Spain, according to the ministry.

The measure will remain in effect for one month starting Saturday, authorities said.

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Spain’s Foreign Minister José Manuel Albares responded to the Italian announcement through a statement on X, as European governments continued discussions over the consequences of the migration crisis.

International

Chuck Schumer Unveils Proposal to Strengthen Oversight of the U.S. Presidency

U.S. Senate Democratic Leader Chuck Schumer on Thursday announced legislation to establish a federal anti-corruption office aimed at strengthening oversight of the executive branch and preventing future presidents from using the White House for personal financial gain.

Schumer said the proposal was prompted by what he described as President Donald Trump’s misuse of the presidencyto benefit his family’s business interests.

“In just 18 months, the Trump family has made more than $4 billion by exploiting the influence of the presidency,” Schumer alleged.

The New York senator also argued that the alleged corruption has had direct economic consequences for American households.

“The same corrupt practices Trump is using to pocket billions of dollars are also forcing Americans to pay, on average, $3,100 more each year because of the rising cost of living,” he said.

The legislation was introduced alongside Democratic Senators Alex Padilla, Jeff Merkley, and Andy Kim.

According to Schumer, the bill has two primary objectives: “First, to return money to the American people. Second, to ensure that no one can ever steal from them again.”

He added that the proposal would create legal mechanisms allowing citizens to seek the recovery of funds allegedly obtained through government corruption.

“The fact that Trump stole money from the American people does not make it his. Americans deserve to get that money back,” Schumer said.

Under the proposed legislation, any U.S. citizen—as well as state attorneys general acting on behalf of their residents—would be authorized to file civil lawsuits to recover funds allegedly acquired through corrupt practices by public officials.

“Our bill would empower any individual, including a state attorney general acting on behalf of the people of that state, to bring legal action to recover money stolen from the public through government corruption,” Schumer said.

The measure is expected to face debate in Congress, where Republicans and Democrats remain deeply divided over executive accountability and the scope of presidential powers.

International

Trump Administration Urges Latin America to Increase Defense Spending Against Organized Crime

The administration of U.S. President Donald Trump on Wednesday urged Latin American countries to increase investment in defense and security to strengthen the fight against organized crime and drug trafficking networks.

The appeal was made by Elbridge Colby, the U.S. Under Secretary of Defense for Policy, in an article published by Americas Quarterly. Colby argued that governments across the region should assume greater responsibility for protecting their territories from transnational criminal organizations.

“It is essential that our neighbors in the region invest more in their own defense and security. There is no reason why any country, especially those facing significant narco-terrorist threats, should spend so little on defense,” Colby wrote.

The Pentagon official described it as “absurd” that some Latin American nations allocate less than 1% of their Gross Domestic Product (GDP) to defense, although he did not identify the countries. He contrasted that with NATO members in Europe, many of which are increasing defense expenditures to 3.5% of GDP, with an additional 1.5% devoted to security-related investments.

Colby, who participated earlier this month in the Conference of Defense Ministers of the Americas in Cusco, Peru, said there is “a historic opportunity” for the United States and its regional partners to strengthen cooperation against drug trafficking and other transnational threats.

He also defended the proposed Shield of the Americas, a military partnership promoted by the Trump administration to combat organized crime and supported by several conservative governments in the region. The initiative does not include Brazil or Mexico.

In addition, Colby said the administration’s security strategy includes an updated interpretation of the Monroe Doctrine, the long-standing U.S. foreign policy principle that historically viewed Latin America as part of Washington’s sphere of influence.

“Of course, we recognize that the Monroe Doctrine is controversial in many circles. But it is also frequently misunderstood,” he said.

According to Colby, the United States is not seeking “exploitation, subordination or dependence,” but rather a region characterized by greater prosperity, stability and security.

He also stated that Washington is prepared to use “all available resources,” including the U.S. Armed Forces, to combat drug trafficking and irregular migration. Colby highlighted ongoing counternarcotics operations in the Caribbean, despite criticism from human rights organizations that have questioned some missions over allegations of extrajudicial killings in international waters.