Stocks Fall, Oil Leaps As Ukraine Crisis Deepens
Kanebridge News
    HOUSE MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $1,599,192 (-0.51%)       Melbourne $986,501 (-0.24%)       Brisbane $938,846 (+0.04%)       Adelaide $864,470 (+0.79%)       Perth $822,991 (-0.13%)       Hobart $755,620 (-0.26%)       Darwin $665,693 (-0.13%)       Canberra $994,740 (+0.67%)       National $1,027,820 (-0.13%)                UNIT MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $746,448 (+0.19%)       Melbourne $495,247 (+0.53%)       Brisbane $534,081 (+1.16%)       Adelaide $409,697 (-2.19%)       Perth $437,258 (+0.97%)       Hobart $531,961 (+0.68%)       Darwin $367,399 (0%)       Canberra $499,766 (0%)       National $525,746 (+0.31%)                HOUSES FOR SALE AND WEEKLY CHANGE     Sydney 10,586 (+169)       Melbourne 15,093 (+456)       Brisbane 7,795 (+246)       Adelaide 2,488 (+77)       Perth 6,274 (+65)       Hobart 1,315 (+13)       Darwin 255 (+4)       Canberra 1,037 (+17)       National 44,843 (+1,047)                UNITS FOR SALE AND WEEKLY CHANGE     Sydney 8,675 (+47)       Melbourne 7,961 (+171)       Brisbane 1,636 (+24)       Adelaide 462 (+20)       Perth 1,749 (+2)       Hobart 206 (+4)       Darwin 384 (+2)       Canberra 914 (+19)       National 21,987 (+289)                HOUSE MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $770 (-$10)       Melbourne $590 (-$5)       Brisbane $620 ($0)       Adelaide $595 (-$5)       Perth $650 ($0)       Hobart $550 ($0)       Darwin $700 ($0)       Canberra $700 ($0)       National $654 (-$3)                UNIT MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $730 (+$10)       Melbourne $580 ($0)       Brisbane $620 ($0)       Adelaide $470 ($0)       Perth $600 ($0)       Hobart $460 (-$10)       Darwin $550 ($0)       Canberra $560 (-$5)       National $583 (+$1)                HOUSES FOR RENT AND WEEKLY CHANGE     Sydney 5,253 (-65)       Melbourne 5,429 (+1)       Brisbane 3,933 (-4)       Adelaide 1,178 (+17)       Perth 1,685 ($0)       Hobart 393 (+25)       Darwin 144 (+6)       Canberra 575 (-22)       National 18,590 (-42)                UNITS FOR RENT AND WEEKLY CHANGE     Sydney 6,894 (-176)       Melbourne 4,572 (-79)       Brisbane 1,991 (+1)       Adelaide 377 (+6)       Perth 590 (+3)       Hobart 152 (+6)       Darwin 266 (+10)       Canberra 525 (+8)       National 15,367 (-221)                HOUSE ANNUAL GROSS YIELDS AND TREND         Sydney 2.50% (↓)       Melbourne 3.11% (↓)       Brisbane 3.43% (↓)       Adelaide 3.58% (↓)     Perth 4.11% (↑)      Hobart 3.78% (↑)      Darwin 5.47% (↑)        Canberra 3.66% (↓)       National 3.31% (↓)            UNIT ANNUAL GROSS YIELDS AND TREND       Sydney 5.09% (↑)        Melbourne 6.09% (↓)       Brisbane 6.04% (↓)     Adelaide 5.97% (↑)        Perth 7.14% (↓)       Hobart 4.50% (↓)       Darwin 7.78% (↓)       Canberra 5.83% (↓)       National 5.76% (↓)            HOUSE RENTAL VACANCY RATES AND TREND       Sydney 0.7% (↑)      Melbourne 0.8% (↑)      Brisbane 0.4% (↑)      Adelaide 0.4% (↑)      Perth 1.2% (↑)      Hobart 0.6% (↑)      Darwin 1.1% (↑)      Canberra 0.7% (↑)      National 0.7% (↑)             UNIT RENTAL VACANCY RATES AND TREND       Sydney 0.9% (↑)      Melbourne 1.4% (↑)      Brisbane 0.7% (↑)      Adelaide 0.3% (↑)      Perth 0.4% (↑)      Hobart 1.5% (↑)      Darwin 0.8% (↑)      Canberra 1.3% (↑)        National 0.9% (↓)            AVERAGE DAYS TO SELL HOUSES AND TREND         Sydney 28.7 (↓)       Melbourne 30.7 (↓)       Brisbane 31.0 (↓)       Adelaide 25.4 (↓)       Perth 34.0 (↓)       Hobart 34.8 (↓)       Darwin 35.1 (↓)       Canberra 28.5 (↓)       National 31.0 (↓)            AVERAGE DAYS TO SELL UNITS AND TREND         Sydney 25.8 (↓)       Melbourne 30.2 (↓)       Brisbane 27.6 (↓)       Adelaide 21.8 (↓)       Perth 37.8 (↓)       Hobart 25.2 (↓)       Darwin 24.8 (↓)       Canberra 41.1 (↓)       National 29.3 (↓)           
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Stocks Fall, Oil Leaps As Ukraine Crisis Deepens

Russian ruble plunges to record low before recovering moderately.

By GUNJAN BANERJI
Tue, Mar 1, 2022 3:54pmGrey Clock 4 min

The crisis in Ukraine continued to stoke turbulence across global markets, helping send the S&P 500 lower for a second straight month and Russian markets plunging.

Major U.S. indexes swung for much of the trading session before finishing mixed. The S&P 500 lost 10.71 points, or 0.2%, to 4373.94 on Monday. The Dow Jones Industrial Average fell 166.15 points, or 0.5%, to 33892.60. The tech-heavy Nasdaq Composite Index turned higher, adding 56.77 points, or 0.4%, to 13751.40.

The S&P 500 and Nasdaq have lost 8.2% and 12%, respectively, over the past two months, each posting their worst such stretch since March 2020.

For much of February, investors were preoccupied with high inflation and the Federal Reserve’s coming interest rate hikes. This sent Treasury yields above 2% for the first time since mid-2019 and triggered a rush to bearish bets on stocks. Toward the end of the month, geopolitical concerns quickly came to the forefront as Russia invaded Ukraine, sending markets around the globe spiraling.

Monday’s trading continued a turbulent period after Russia’s invasion of Ukraine. Stock futures slid more than 2% Sunday evening and kicked off the week with declines before clawing back some of the losses.

Investors dumped Russian bonds and the ruble was on track for a record low against the dollar. Market-data services showed limited price updates Monday, suggesting few transactions were taking place. Russian sovereign debt sold off heavily, with the yield on a dollar-denominated note maturing in five years surging to 25% in trading, from 9% Friday.

“There is very little liquidity and consequently you get this gapping in the price and you’re not getting any real reflection of where the ruble would be,” said Jane Foley, head of foreign-exchange strategy at Rabobank.

An exchange-traded fund tracking Russian companies, the VanEck Russia ETF, lost $4.75, or 30%, to $10.85. Russia’s RTS index lost around a third of its value in February, its worst monthly performance since October 2008.

Russia’s central bank opted for an emergency interest-rate hike to combat a collapse in the ruble, more than doubling its benchmark rate to 20%, hours after imposing other restrictions on markets. It also temporarily banned brokers from handling sales of securities by nonresidents and kept the Moscow Stock Exchange closed Monday. It will remain closed Tuesday.

Investors turned to safer assets, sending the yield on the 10-year Treasury note down to 1.836%, from 1.984% Friday as bond prices rose. Gold prices edged higher, capping the best month since May 2021.

Though the past week has been marked by big swings, U.S. markets have remained relatively insulated from the turmoil spreading through Russian markets.

Major indexes had staged a rally in recent sessions, highlighting the importance that many investors placed on the Federal Reserve’s moves. Investors have rapidly shifted bets on the situation in Europe and how it might affect plans by the central bank to raise interest rates, with some now forecasting a smaller rate increase in March. That has helped lift stocks at times, including on Monday, when the Nasdaq eked out a gain for the third consecutive session.

“It will give the Fed a little bit more leeway to be patient,” said David Sadkin, a partner at Bel Air Investment Advisors.

Some analysts say geopolitical crises typically don’t have prolonged impacts on U.S. stocks and that they expected the recent volatility to pass. Stocks have typically declined around 6% to 8% after a geopolitical event before retracing those losses in another three weeks, Deutsche Bank strategists said in a note to clients.

And among S&P 500 companies, only 1% of revenues stem from Russia and Ukraine, according to FactSet.

“To date we have not decided that we’re going to make any changes based on what is happening in Ukraine,” said Mark Stoeckle, chief executive officer of Adams Funds.

Major indexes were volatile in trading throughout the session on the last day of the month, briefly edging into the green before collapsing again. Some investors have lately used intraday volatility to step in and buy stocks.

“This generally doesn’t impact our view of the U.S. markets,” said Mike Bailey, director of research at FBB Capital Partners, of the conflict. Mr. Bailey added that his firm had picked up shares of companies like Nvidia recently, which had been bruised this year.

Still, companies domestically and abroad faced mammoth swings. Defence stocks rallied, with U.S.-based Northrop Grumman jumping $32.47, or 7.9%, to $442.14, a record. It was one of the best performers in the S&P 500.

London-listed shares of Russian companies plunged, with Sberbank, the country’s largest lender, down 74%.

“There’s an enormous amount of volatility and nervousness,” said Fahad Kamal, chief investment officer at Kleinwort Hambros. “The risk of miscalculation or something getting out of hand has increased.”

Oil prices rose, with front-month Brent futures gaining more than 10% this month to $100.99 a barrel, notching the largest three-month percentage gain since January 2021. Brent prices last week surged to about $100 a barrel for the first time since 2014 as investors calculated how the invasion could snarl the movement of resources in the region.

Over the weekend the U.S., European Union, Canada and the U.K. said they intended to cut off some Russian banks from the Swift network, a global payment system that connects international banks and facilitates cross-border financial transfers. The U.S. said it would sanction Russia’s central bank, a move to stop the bank from deploying its more than $600 billion in reserves to aid the Russian economy.

Meanwhile, President Vladimir Putin ordered Russia’s nuclear-deterrence forces to be put on alert. The move would put Russia’s network of nuclear missiles into a state in which it could be used if necessary.

Bitcoin prices rose 11% to $41,650.25 Monday, the largest one-day gain since May.

European banks declined, with the Euro Stoxx banking subindex down 5.7%. BNP Paribas fell 7.5% and Société Générale shares dropped 9.9%.

“With Swift, there will be problems processing payments. That creates credit risk, not only for European banks with affiliates in Russia but more broadly, those with clients in Russia,” said Sebastien Galy, a macro strategist at Nordea Asset Management.

The pan-continental Stoxx Europe 600 also recouped some losses, closing down 0.1%. It finished lower for a second consecutive month, its worst two-month decline since April 2020.

In Asia-Pacific, stock markets were mixed, with major benchmarks gaining or losing less than 1%.



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Why Prices of the World’s Most Expensive Handbags Keep Rising

Designers are charging more for their most recognisable bags to maintain the appearance of exclusivity as the industry balloons

By CAROL RYAN
Tue, Mar 5, 2024 3 min

The price of a basic Hermès Birkin handbag has jumped $1,000. This first-world problem for fashionistas is a sign that luxury brands are playing harder to get with their most sought-after products.

Hermès recently raised the cost of a basic Birkin 25-centimeter handbag in its U.S. stores by 10% to $11,400 before sales tax, according to data from luxury handbag forum PurseBop. Rarer Birkins made with exotic skins such as crocodile have jumped more than 20%. The Paris brand says it only increases prices to offset higher manufacturing costs, but this year’s increase is its largest in at least a decade.

The brand may feel under pressure to defend its reputation as the maker of the world’s most expensive handbags. The “Birkin premium”—the price difference between the Hermès bag and its closest competitor , the Chanel Classic Flap in medium—shrank from 70% in 2019 to 2% last year, according to PurseBop founder Monika Arora. Privately owned Chanel has jacked up the price of its most popular handbag by 75% since before the pandemic.

Eye-watering price increases on luxury brands’ benchmark products are a wider trend. Prada ’s Galleria bag will set shoppers back a cool $4,600—85% more than in 2019, according to the Wayback Machine internet archive. Christian Dior ’s Lady Dior bag and the Louis Vuitton Neverfull are both 45% more expensive, PurseBop data show.

With the U.S. consumer-price index up a fifth since 2019, luxury brands do need to offset higher wage and materials costs. But the inflation-beating increases are also a way to manage the challenge presented by their own success: how to maintain an aura of exclusivity at the same time as strong sales.

Luxury brands have grown enormously in recent years, helped by the Covid-19 lockdowns, when consumers had fewer outlets for spending. LVMH ’s fashion and leather goods division alone has almost doubled in size since 2019, with €42.2 billion in sales last year, equivalent to $45.8 billion at current exchange rates. Gucci, Chanel and Hermès all make more than $10 billion in sales a year. One way to avoid overexposure is to sell fewer items at much higher prices.

Many aspirational shoppers can no longer afford the handbags, but luxury brands can’t risk alienating them altogether. This may explain why labels such as Hermès and Prada have launched makeup lines and Gucci’s owner Kering is pushing deeper into eyewear. These cheaper categories can be a kind of consolation prize. They can also be sold in the tens of millions without saturating the market.

“Cosmetics are invisible—unless you catch someone applying lipstick and see the logo, you can’t tell the brand,” says Luca Solca, luxury analyst at Bernstein.

Most of the luxury industry’s growth in 2024 will come from price increases. Sales are expected to rise by 7% this year, according to Bernstein estimates, even as brands only sell 1% to 2% more stuff.

Limiting volume growth this way only works if a brand is so popular that shoppers won’t balk at climbing prices and defect to another label. Some companies may have pushed prices beyond what consumers think they are worth. Sales of Prada’s handbags rose a meagre 1% in its last quarter and the group’s cheaper sister label Miu Miu is growing faster.

Ramping up prices can invite unflattering comparisons. At more than $2,000, Burberry ’s small Lola bag is around 40% more expensive today than it was a few years ago. Luxury shoppers may decide that tried and tested styles such as Louis Vuitton’s Neverfull bag, which is now a little cheaper than the Burberry bag, are a better buy—especially as Louis Vuitton bags hold their value better in the resale market.

Aggressive price increases can also drive shoppers to secondhand websites. If a barely used Prada Galleria bag in excellent condition can be picked up for $1,500 on luxury resale website The Real Real, it is less appealing to pay three times that amount for the bag brand new.

The strategy won’t help everyone, but for the best luxury brands, stretching the price spectrum can keep the risks of growth in check.

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