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TODAYS NEWS TOPICS
MICROSOFT AND AMAZON FORGE $1 BILLION CLOUD PATNEERSHIP
BANK OF AMARICA REPORTS $131.6 BILLIONS UNREALISE LOSSES BUT STAYS RESULTANT
CHINA DRAWS Q3 ECONOMIC GROWTH AND PROPERTY SECTOR CHALLENGES
OILPRICES RISESS 2% ON US STOCKS DRAW AND MIDDLE EAST TENSIONS
FACTS
MEME
BUSINESS
MICROSOFT AND AMAZON FORGE $1 BILLION CLOUD PATNEERSHIP
Microsoft is gearing up for a big deal with Amazon, according to a report from Insider. In this exciting development, Amazon is set to become a customer for Microsoft's 365 cloud productivity tools, with the deal valued at over $1 billion. This partnership is planned to span more than five years, during which Amazon has committed to acquiring over one million Microsoft 365 licenses.
Microsoft's shares saw a nearly 1% increase in extended trading after this news broke. However, both companies have remained tight-lipped about the matter, with Microsoft declining to comment, and Amazon yet to respond to requests for comment.
The transition is expected to kick off in early November. Currently, Amazon uses a localized, on-premises version of Microsoft's Office products, but this new collaboration will bring their operations into the cloud.
It's a significant move, and we'll be eagerly watching how this partnership unfolds.
FINANCE
BANK OF AMARICA REPORTS $131.6 BILLIONS UNREALISE LOSSES BUT STAYS RESULTANT
Bank of America, a prominent U.S. bank, has reported unrealized losses of $131.6 billion on securities in the third quarter, which increased from the second quarter. However, the bank is confident that these losses won't result in actual long-term financial setbacks.
Unrealized losses have been in the spotlight since March when Silicon Valley Bank faced a sharp loss from selling a portfolio, which contributed to its downfall and created industry turmoil akin to the 2008 financial crisis.
But analysts believe that Bank of Am higher capital. erica is unlikely to sell these securities at a loss dmer due to its strong liquidity from consueposits and Holding these securities until maturity also allows the bank to avoid mark-to-market losses.
It's important to note that these unrealized losses are primarily on government-guaranteed securities. Bank of America's CFO, Alastair Borthwick, stated that since they are holding these securities to maturity, they anticipate zero losses over time.
In the third quarter, Bank of America reported early $106 billion in paper losses, but it remains in a strong financial position.
The bank had approximately $603 billion in held-to-maturity securities, down from $614 billion in the second quarter. However, these low-yielding assets have limited the bank's ability to generate higher profits by investing in assets with greater returns.
U.S. banks, including JPMorgan Chase and Citigroup, are also grappling with unrealized losses in their securities portfolios. Moody's estimates that U.S. banks could be facing at least $650 billion in unrealized losses, a 15% increase from the second quarter.
While these unrealized losses are a concern from an economic standpoint, they don't necessarily impact the banks' financial stability. The losses are considered "paper losses" and only become a problem if the banks choose to sell these securities.
In the world of banking, it's common to hold onto investments until they mature, which minimizes the impact of market price fluctuations.
So, despite the headlines, the banks are well-positioned to weather these unrealized losses, and they remain financially sound.
Source: Reuters
ECONOMY
CHINA DRAWS Q3 ECONOMIC GROWTH AND PROPERTY SECTOR CHALLENGES
China's economy picked up speed in the third quarter, surprising on the upside. GDP grew 4.9% year-on-year, beating expectations and signaling that recent policy measures are helping the recovery.
Quarterly GDP growth accelerated to 1.3% in Q3, up from 0.5% in the previous quarter.
Analysts suggest the stimulus measures are starting to show results, boosting retail sales, industrial production, and employment.
The Chinese government's goal of around 5% growth for 2023 seems achievable, reducing the need for further stimulus this year.
However, the property sector remains a concern as it accounts for a significant portion of economic output. Property investment has fallen, and some major developers are facing financial challenges.
While China's recovery looks promising, the property sector's troubles and global economic uncertainties remain areas to watch.
International banks have upgraded their growth forecasts, indicating confidence in China's economic prospects.
The International Monetary Fund has downgraded its 2023 and 2024 growth forecasts for China, citing the property sector's slowdown as a potential risk.
Despite some challenges, the Chinese economy appears to be on the path to recovery, supported by government measures.
ECONOMY
OILPRICES RISESS 2% ON US STOCKS DRAW AND MIDDLE EAST TENSIONS
Oil prices surged about 2% to a two-week high due to a substantial U.S. crude stock draw. Tensions in the Middle East, including Iran's call for an oil embargo on Israel, added to the pressure.
Brent crude increased to $91.36 a barrel, while U.S. WTI crude reached $88.11, the highest since early October.
The U.S. Energy Information Administration reported a significant 4.5-million-barrel reduction in crude stockpiles, far exceeding expectations.
Concerns about escalating Middle East conflicts, including the Gaza City hospital incident, fueled market volatility.
Jordan canceled a summit with U.S. President Biden amid these tensions, and Iran urged an oil embargo on Israel.
OPEC, however, is not planning immediate action in response to Iran's request.
FACTS
The American business magazine Forbes produces a global list of known U.S. dollar billionaires every year and updates an internet version of this list in real time. The American oil magnate John D. Rockefeller became the world's first confirmed U.S. dollar billionaire in 1916.
MEME
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