World Street | China’s gold rush, bull run in BoA Nov poll, bonus trouble, and US crude record

borrowing costs double their levels from just two years ago.

(Don’t) Gimme Red

European, American and Japanese automakers and suppliers have stepped up efforts to make electric vehicle motors with little to zero rare earth content - an area dominated by China. Market leader Tesla has said it would cut rare earths from its next-generation EVs. Others like General Motors, Jaguar Land Rover (JLR) and major suppliers like BorgWarner are researching, or have developed, motors with low- to zero rare earth content.

Peak Hopes

Investors are deploying their cash piles in bonds and equities on a growing conviction that big central banks are done with raising rates, according to a Bank of America monthly poll. In November, fund managers had the biggest bet on rising bond prices since 2009, with 75 percent of the investors surveyed predicting that the Fed won’t hike rates any more, up from 60 percent in the previous month, reports FT.

Rates are pinching

With borrowing costs double their levels from just two years ago, many small businesses in the US are pulling back, another sign of how higher interest rates are cooling the economy, reports WSJ. Some entrepreneurs are deferring their purchase of equipment and dragging their feet on expansion, while others are going slow on hiring, or giving a second thought on borrowing, or stepping on the gas on timely payment collection.

Aluminium

Aluminum prices remain trapped within a sideways trend established back in July, reports Agmetalminer.com. Despite relatively flat aluminum prices throughout the second half of the year, global aluminum premiums appear bearish, suggesting oversupply amid ongoing demand challenges.

Crude oil

The US is on track to set an annual oil production record in 2023, with October logging the highest output till date, reports Oilprice.com. The average for the past four weeks — covering nearly the whole of October — was 13.2 million barrels a day. The surge in production comes despite the joe Biden administration’s green energy push.

Gold

China’s hoard of gold is way above publicly available official data, reports Kitco.com, quoting Dominic Frisby, founder of FlyingFrisby.com. “China’s gold holdings are probably 10 times what they say they are. But the country's motto is ‘we must not shine too bright’," Frisby said. China’s central bank bought 23 tonnes of gold in October, the 12th consecutive month of buying the yellow metal.

Bonus troubles

Not all is hunky dory on Wall Street. Bonuses for investment bankers advising companies on mergers and acquisitions are expected to drop by 15- 25 percent over the last year, reports Reuters. "With the financial markets and overall economy struggling through the year, most business segments remain under pressure to keep compensation costs down, " said Alan Johnson of Johnson Associates.

China

China injected the largest lump of cash in nearly seven years into the banking system with one-year policy loans, as funding demand will rise to bolster economic growth, reports Bloomberg. The People’s Bank of China offered 1.45 trillion yuan ($200 billion) of cash through its medium-term lending facility — 600 billion yuan more than the amount coming due in November.

The hard truth

Former US President Donald Trump's social media platform Truth Social has lost $73 million since its launch in early 2022, reports Reuters. The app intended to "stand up to Big Tech" companies such as Twitter and Facebook that previously banned Trump, posted a loss of $50 million, with net sales of just $1.4 million. It lost $23 million in the first half of this year, with net sales at a measly $2.3 million.