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Thursday, 18 November 2021

Inflation weighs on stocks as Goldman CEO warns on rate hikes

US stocks fell again yesterday as investors fretted over how central banks will react to rising inflation. The S&P 500 slipped 0.3% and the Dow closed 0.6% in the red as solid retail earnings failed to offset concerns about rising interest rates in the coming months.

This came on the same day as Goldman Sachs CEO David Solomon warned about the implications of rising interest rates on the markets. “If interest rates move up, that in of itself will take some of the exuberance out of certain markets,” he told Bloomberg.

Crypto VC Paradigm One just became the industry’s largest-ever fund after raising a whopping USD 2.5 bn from investors. Backed by Coinbase co-founder Fred Ehrsam and former Sequoia Capital partner Matt Huang, the three-year-old VC is targeting investments in the “next generation of crypto companies and protocols,” Bloomberg reports. The fund has raised almost double what they initially targeted from investors after the group’s first fund, which launched in 2018 with USD 400 mn, reported an annual rate of return upwards of 200% in 1H2021, according to the FT.

But some gold-rush skepticism remains: Twitter, for one, isn’t biting. Investing the group’s assets in crypto “doesn’t make sense right now,” CFO Ned Segal told the WSJ. Volatility in digital currencies was the primary reason for the company’s aversion to the asset class, he explained, echoing the concerns of a number of executives at large public companies requesting US regulators write specific rules on how to treat cryptocurrency assets.

El Erian isn’t bullish on BTC, either: Allianz Chief Economist Mohamed El Erian wants “speculators” to drop out of the BTC race before he considers buying in again, after selling his BTC holdings a few months before its record-breaking rally began in mid-September, he told CNBC.

The notoriously volatile currencies are a “very disruptive force” but they are not going to become global currencies, the markets sage said. Nevertheless, their importance requires preemptive regulatory discussions if they are to avoid regulatory headwinds like those currently facing Internet giants Google, Amazon and Facebook, he added.




+0.4% (YTD: +5.6%)



Buy 15.66

Sell 15.76



Buy 15.66

Sell 15.76


Interest rates CBE

8.25% deposit

9.25% lending




+0.05% (YTD: +36.2%)




-0.2% (YTD: +65.3%)




-0.8% (YTD: +30.9%)


S&P 500


-0.3% (YTD: +24.8%)


FTSE 100


-0.4% (YTD: +12.9%)


Brent crude

USD 80.21



Natural gas (Nymex)

USD 4.82




USD 1,870




USD 60,091

-0.8% (as of midnight)


The EGX30 rose 0.4% at yesterday’s close on turnover of EGP 810 mn (45.1% below the 90-day average). Local investors were net sellers. The index is up 5.6% YTD.

In the green: Heliopolis Housing (+3.7%), Egypt Kuwait Holding-EGP (+2.5%) and AMOC (+2.5%).

In the red: Rameda (-5.8%), Aspire Capital (-3.7%) and Raya Holding (-2.3%).

Stocks are sliding in Asia this morning as nerves over rising interest rates and economic growth continue to hold sway. Things aren’t looking much better in Europe and the US, where the markets are expected to open in the red later today.

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