Tag: gains

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Business

HBO Max Positive factors Traction in a Crowded Area

HBO Max Gains Traction in a Crowded Field

AT&T added 2.7 million new customers to HBO and HBO Max in the first quarter. This is a boost for the company’s new streaming endeavors in an increasingly crowded area.

The company’s WarnerMedia division, which also includes HBO, had sales of $ 8.5 billion for the period. This is a 9.8 percent increase over the previous year, when theater and advertising revenues fell during the pandemic. Under the direction of Jason Kilar, WarnerMedia also owns the cable networks CNN and Turner and the film studios Warner Bros.

HBO is the cornerstone of AT & T’s media strategy, and the company sees HBO Max as a way to deter its cellular customers from fleeing and is offering the streaming platform to its phone customers at a discount.

In its report for the first quarter of the year, AT&T stopped disclosing the number of active HBO Max users, thereby masking how many people are actually tuned to the new streaming service.

AT & T had a total of 44.1 million subscribers to HBO and HBO Max in the USA at the end of March, an increase of 2.7 million compared to the previous quarter. Before it stopped breaking out of HBO Max subscriptions in December, there were 41.5 million subscribers as of December: 17.1 million for the streaming service, 20 million for HBO over cable and the rest of hotels or other offerings.

HBO Max most likely made the profit for the quarter, which is remarkable given the competitiveness of the streaming universe. HBO Max is also the most expensive of the major streaming platforms at $ 15 a month. Netflix, which posted profits on Tuesday, continues to lead the way with 67 million customers in the US and nearly 208 million total.

Netflix’s dominance has declined, also due to new entrants in the market like HBO Max and Disney +. Netflix added four million new subscribers in the quarter, a little over 400,000 in the US.

Netflix has attributed the comparatively slow growth to the slowdown in production when Hollywood studios largely stopped producing shows and films during the pandemic. The company anticipated a more successful second half of the year as recurring favorites and highly anticipated films become available.

HBO Max most likely received a boost from an unorthodox strategy championed by Mr. Kilar: sibling Warner Bros. plans to release their entire line of 2021 films on HBO Max the same day they are due to hit theaters. The announcement rumbled across Hollywood, disgruntled agents and filmmakers who had lost important bonuses and commissions by shorting out the old theatrical release schedule.

Mr Kilar said the company will likely return to a more traditional sales plan next year. For the remainder of 2021, he’s betting on the film, which includes the recent releases of “Zack Snyder’s Justice League” and “Godzilla vs. Kong,” as well as the Friday premiere of “Mortal Kombat” to drive people to HBO max.

The company is also planning a global expansion of HBO Max starting June, as well as a lower-cost version of the service that will include commercials. The company has approximately 19.7 million overseas HBO customers whom it plans to convert into HBO Max subscribers.

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Politics

Biden to suggest capital features tax hike to fund training, youngster care: reviews

Biden to propose capital gains tax hike to fund education, child care: reports

U.S. President Joe Biden will address jobs and the economy at the White House in Washington on April 7, 2021.

Kevin Lamarque | Reuters

President Joe Biden will seek to raise taxes on millionaire investors to fund education and other spending priorities as part of the government’s efforts to overtake the U.S. economy.

As part of the plan, Biden will seek to increase the capital gains tax from 20% to 39.6% for those Americans who earn more than $ 1 million, according to several outlets including Bloomberg News and The New York Times.

Capital Gains Tax is especially important to Wall Street as it dictates how much a portion of a stock sale is collected by the federal government. The White House declined to comment.

Stocks gave way on the news of the plan, with the S&P 500 index falling 1% as of 2:14 p.m. after rising 0.2% earlier. The Dow Jones Industrial Average and the Nasdaq Composite both fell by a similar amount.

The proposal would fulfill Biden’s election promise that America’s richest households must contribute more than a percentage of their income. This plan would bring the tax rate on investment income and the highest individual income tax rate close to par, currently 37%.

CNBC policy

Read more about CNBC’s political coverage:

According to reports, the president is expected to officially release the proposal next week to fund spending on the upcoming American family plan, which is expected to be around $ 1 trillion.

The American Families Plan is expected to include measures to help U.S. workers learn new skills, expand childcare subsidies, and make tuition fees free for everyone at community college.

This proposal would be separate from the $ 2.3 trillion infrastructure package known as the American Jobs Plan, which would be funded by increasing the corporate tax rate to 28%. The White House and Democratic lawmakers passed a $ 1.9 trillion aid package to Covid-19 in March.

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World News

S&P 500 provides up acquire and declines in sudden transfer on Biden capital positive factors tax report

S&P 500 gives up gain and declines in sudden move on Biden capital gains tax report

US stocks quickly fell to session lows Thursday after reports that President Joe Biden is expected to propose much higher capital gains taxes for the rich.

The S&P 500 erased previous gains and fell 0.9%. The Dow Jones Industrial Average fell 330 points to its daily low, while the Nasdaq Composite was down 0.8%.

Bloomberg News reported Thursday afternoon that Biden is planning a capital gains tax hike of up to 43.4% for wealthy Americans. The proposal would increase the capital gains rate for those earning $ 1 million or more from the current 20% to 39.6%, Bloomberg News said, citing people familiar with the matter.

“Biden’s proposal effectively doubles the capital income tax rate for $ 1 million income recipients,” said Jack Ablin, founding partner and CIO of Cresset Capital Management. “That’s a significant cost increase for long-term investors. Expect a sale this year if investors think the proposal may become law next year.”

Growth stocks, which could come under selling pressure due to higher capital gains taxes, saw Tesla and Amazon decline on Thursday. The iShares S&P 500 Growth ETF fell 0.5%, more than its counterpart in value.

“The markets are heavily focused on a small number of growth names,” said Mark Yusko, CEO and CIO of Morgan Creek Capital Management. “These stocks have made the bulk of the gains over the past few years and many investors have made significant gains at current prices. Fears of a higher capital gain rate could motivate these names to sell and trigger a market correction. So some investors will attempt this one.” To use potential. ” Movement by selling or hedging by short selling. “

Before the news hit, key averages traded a little higher as investors scoured corporate earnings and economic data.

Southwest Airlines’ shares rose 1.7% after the airline announced that vacation bookings would continue to rise and “breakeven” by June. Southwest also posted a less than expected loss in the first quarter.

Dow Inc. fell more than 4% even after the chemical company beat earnings and sales estimates for the first quarter. The stock is still up more than 10% through 2021.

Investors also digested a better than expected weekly jobless claims reading. The Department of Labor said Thursday that initial unemployment insurance claims totaled 547,000, down from the Dow Jones estimate of 603,000.

So far, companies have largely exceeded Wall Street’s expectations this earnings season, but strong first quarter results are not allowing the market to climb higher after record highs rose near multi-year highs.

“The string of strong positive EPS surprises is likely to continue, but the increased valuations are now ubiquitous. Sentiment is overly optimistic. A possible corporate tax change is an overhang,” said Maneesh Deshpande, head of equity derivatives strategy at Barclays in one Note.

Even so, the company raised its year-end S&P 500 target to 4,400, which would translate into a 6% profit from here. Barclays warned that an uptrend beyond target is unlikely.

On Thursday, the Republican Party tabled its counter offer to Biden’s $ 2 trillion infrastructure plan. The senators proposed a $ 568 billion framework that includes funding for bridges, airports, roads and reservoirs. Tax increases are not included.

American Airlines erased previous earnings and went negative even after the company announced that cash flow was positive at the end of the quarter with no debt payments.

Shares rose on Wednesday to see a two-day decline as companies tied to the reopening of the economy led the way up. The Dow and S&P 500 are less than 1% off regaining their record highs last Friday amid ongoing optimism about the pace of the economic recovery.

– CNBC’s Maggie Fitzgerald contributed to the coverage.

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Business

Unemployment Claims Up a Bit; Manufacturing Features

Unemployment Claims Up a Bit; Manufacturing Gains

A year after they shot up for the first time, unemployment claims could finally return to earth.

More than 714,000 people applied for state unemployment benefits last week, the Ministry of Labor said on Thursday. That was a little more than the week before, but still below the lowest weekly totals since the pandemic began.

In addition, 237,000 people applied for Pandemic Unemployment Assistance, a federal program that covers people who are not eligible for government benefit programs. That number has also decreased.

Unemployment claims are still high in historical comparison and are well above the norm before the pandemic, when around 200,000 people applied for benefits every week. Applications have only improved gradually – even after the recent declines, the weekly number is slightly lower than last autumn. In total, some 18 million people receive unemployment benefits, many through programs that extend benefits beyond the 26 weeks offered in most states.

However, economists are optimistic that further improvements are imminent as vaccine rollouts accelerate and more states lift restrictions on doing business. Fewer companies are laying off workers and hiring has increased, meaning people who lose their jobs are more likely to find new ones quickly.

“We were finally able to see that the number of unemployment claims was falling because enough jobs were created to make up for the layoffs,” said Julia Pollak, labor economist at the ZipRecruiter construction site.

There are other signs that the economic recovery is picking up momentum. The Institute of Supply Management announced Thursday that its production index, a closely watched measure of the industrial economy, hit its highest level since 1983 in March. The report’s employment index also rose sharply, a sign that manufacturers are likely to be more hiring to meet rising demand.

Economists will get a more complete, if less timely, picture of the labor market on Friday when the Department of Labor releases data on recruitment and unemployment in March. Forecasters polled by FactSet expect the report to show US employers created more than 600,000 jobs in the last month, most since October.

Even better numbers are probably ahead of us. The March data was collected earlier this month, before most states expanded access to vaccines and before most Americans received $ 1,400 checks from the federal government under the newly passed relief package. Those forces should translate into even faster job growth in April, said Jay Bryson, Wells Fargo’s chief economist.

“If you can’t get a barn burner in March, you will likely get one in April,” he said.

Like last year, the biggest risk to the economy is the coronavirus itself. Virus cases are picking up again in large parts of the country as states have begun to relax restrictions. If that uptrend turns into a full blown new wave of infections, it could force some states to reverse course, which could slow the recovery, Bryson warned.

But few economists expect a repeat of last winter, when a jump in Covid-19 cases reversed the recovery. More than a quarter of adults in the United States have received at least one dose of a coronavirus vaccine, and more than two million people are vaccinated every day. This should allow economic activity to continue to recover.

Nevertheless, Ms. Pollak warned that the labor market would not return to normal overnight. Even as many companies resume normal operations, others are finding that the pandemic has permanently disrupted their business model.

“There are still a lot of business closings and layoffs pending,” she said. “The effects of this pandemic are still affecting this economy.”

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Business

Biden Good points Two Key Financial Advisers

Biden Gains Two Key Economic Advisers

WASHINGTON – The Senate on Tuesday confirmed two key members of President Biden’s economic team, heading Gina Raimondo, a former Rhode Island governor and former venture capitalist, as next Secretary of Commerce and Cecilia Rouse, a Princeton University economist, a chairman of the Board of Economic Advisers of the White House.

Dr. Rouse becomes the first black business council chairman in its 75-year history. It was adopted with 95 votes to 4.

Ms. Raimondo was confirmed 84-15. Hours later, she resigned as governor of Rhode Island. Ms. Raimondo, a moderate Democrat with a background in the financial industry, is expected to use her private and public sector experience to oversee an extensive bureaucracy responsible for both promoting and regulating American business .

Under Ms. Raimondo, the Commerce Department is likely to play a pivotal role in several of Mr. Biden’s policy efforts, including boosting the American economy, building rural broadband and other infrastructures, and leading American technology competition with China. The department also conducts the census and monitors American fisheries, weather surveillance, telecommunications standards, and the collection of economic data, among other things.

Senator Maria Cantwell, Democrat of Washington, said she believed Ms. Raimondo’s experience in the private sector would help her attract new investments and create jobs in the United States and that they “are counting on Governor Raimondo to help us with our export economy. ”

Ms. Cantwell also said she believed Ms. Raimondo would be a departure from Wilbur Ross, President Donald J. Trump’s trade secretary. “I think he and the president spent a lot more time shaking hands with the global community than they were looking at guidelines that would really help the markets and help us get our products in the door,” said they.

A graduate of Yale and Oxford, Ms. Raimondo was a founding associate at Village Ventures, a Bain Capital-backed investment firm. She co-founded her own venture capital firm, Point Judith Capital, before being elected treasurer and then governor of Rhode Island.

As the state’s first female governor, she was known for adopting a centrist agenda that included training programs, fewer regulations, and reduced taxes for businesses. She also led a restructuring of the state pension programs, clashing with the unions in the process.

Ms. Raimondo was criticized by some Republicans in her January nomination hearing for refusing to maintain certain restrictions on exports that could be sent to Chinese telecommunications company Huawei, which many American lawmakers see as a threat to nationals security.

Senator Ted Cruz, Republican of Texas, spoke in the Senate Tuesday of these statements and urged his colleagues to vote against Ms. Raimondo. “There has been a rush to accept the worst elements of the Chinese Communist Party in the Biden government. And that includes Governor Raimondo, ”he said.

Under Mr Trump, the Commerce Department played an oversized role in trade policy, imposing tariffs on imported aluminum and steel for national security reasons, investigating additional tariffs on automobiles, and imposing various restrictions on technology exports to China.

Ms. Raimondo and other Biden administrators have not clarified whether they will maintain these restrictions and stated that they will first conduct a full review of their impact.

Dr. Rouse is the dean of the Princeton School of Public and International Affairs and a former councilor under President Barack Obama. Her academic research has focused on education, discrimination, and the forces holding back some people in the American economy. In her confirmation hearing, she received praise from Republicans and Democrats alike. The senators unanimously voted to send their nomination from the banking committee to the entire Senate.

She will take up her post amid an economic and health crisis caused by the coronavirus pandemic and in the dwindling days of Congressional debate over a $ 1.9 trillion economic aid package that Mr Biden has made his first major legislative priority.

In interviews and her hearing certificates, Dr. However, Rouse made it clear that she sees a larger number of priorities as the Council Chair: overhauling the inner workings of the federal government to promote race and gender equality in the economy.

“As troubling as this pandemic and economic consequences have been,” she said in her hearing, “it is also an opportunity to rebuild the economy better than before – to make it work for everyone by increasing job availability and leaving the company becomes.” Nobody is prone to falling through the cracks. “

One of their initiatives will be to examine the way the government collects and reports economic data to break it down by race, gender, and other demographic variables, and to improve the government’s ability to target economic policy to historical helping disadvantaged groups.

“We want to develop guidelines that are economically effective,” said Dr. Rouse in an interview earlier this year. When asked how she would rate its effectiveness, she replied, “We keep an eye on this ball and ask ourselves each time we look at a policy: What is the racial and ethnic impact?”

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Business

Finest Purchase (BBY) earnings This fall 2021 beat projections, however gross sales features sluggish

Best Buy (BBY) earnings Q4 2021 beat projections, but sales gains slow

Customers wait outside a Best Buy store in downtown Toronto, Ontario on November 23, 2020 to collect their online orders.

Geoff Robbins | AFP | Getty Images

Best Buy’s fourth quarter earnings surpassed Wall Street’s expectations on Thursday, but lagged behind sales as sales growth slowed compared to previous months of the pandemic.

The retailer said its sales are likely to slow even further. CFO Matt Bilunas said sales in the same store are projected to drop from 2% to 1% this year. The forecast assumes customers will resume or accelerate their spending in areas like travel and dining in the second half of the year, he said.

Shares fell more than 7% on the news early Thursday.

The company reported for the fiscal quarter ended January 30, versus Wall Street’s expectations, based on an analyst survey by Refinitiv:

  • Earnings per share: $ 3.48 adjusted versus $ 3.45 expected
  • Revenue: $ 16.94 billion versus $ 17.23 billion expected

Best Buy’s net income rose from $ 745 million, or $ 2.84 per share last year, to $ 816 million, or $ 3.10 per share.

Excluding items, the company earned $ 3.48 per share, above what Refinitiv polled analysts expected to earn $ 3.45 per share.

Net sales rose to $ 16.94 billion from $ 15.2 billion a year ago, but fell short of estimates of $ 17.23 billion.

Sales on the Internet and in stores that have been open for at least 14 months rose 12.6%, below the 14.7% growth forecast by analysts, according to StreetAccount. This is a sharp drop from the 23% growth rate in the third quarter.

Although still strong, the pace of online sales growth also slowed in the US. It grew 89.3% from 174% in the third quarter and 242% in the second quarter.

The retailer benefited from the stay-at-home restrictions that spurred purchases of equipment such as computer monitors for the home office, headphones and laptops for remote children to attend school, and kitchen appliances to make it easier to cook meals.

However, the rapid adoption of technology has rocked the way people shop. Instead of walking around the store, more customers have browsed the website, sent purchases home, or retrieved them in the company’s parking lot.

Best Buy estimates that online sales will account for around 40% of total domestic sales in the coming year.

This had an impact on Best Buy’s workforce. Corie Barry, CEO of Best Buy, said the company started with 123,000 employees last fiscal year and ended the year with around 102,000 – a decrease of around 21,000, or 17%. She said most of the reduced headcount came from attrition. Earlier this month, she said the company laid off about 5,000 employees, most of whom were full-time employees.

She said the company is determined to retrain and retrain employees as it makes organizational changes geared towards e-commerce. For example, some stores are testing a design that reduces the size of the retail space and takes up more space to fulfill online orders.

“Like many retailers, we believe that much of what we’ve seen over the past year will be permanent,” she said. “Our people and branches will always be at the heart of our strategy. We are just looking at how we can best use our team and physical assets to meet customer expectations and needs.”

Best Buy plans to spend $ 750 million to $ 850 million on investments and buy back at least $ 2 billion in shares. The board of directors approved an increase in the quarterly dividend by 27% to 70 cents per share.

At the close of trading on Wednesday, Best Buy shares were up nearly 33% last year. The company’s market value is $ 29.38 billion.

Read the Best Buy press release here.

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Business

Biden Seizes on Weak Job Good points to Name for Fast Stimulus Motion

Biden Seizes on Weak Job Gains to Call for Quick Stimulus Action

Others, like Texas Republican Michael C. Burgess, have emphasized the nation’s growing debt. Mr Burgess argued that Mr Biden’s plan would “add nearly $ 2 trillion to the deficit” before listing a number of complaints about the package, including the fact that it will send money to states he accuses of having poorly managed their budgets.

The main argument Republicans have made against the effort so far is that by failing to find Republican support, Mr Biden is cutting off his own campaign call to bring people together across party lines.

“After all the talk about unity,” said Senator Charles E. Grassley of Iowa, the Republican chief on the Finance Committee, “President Biden and the Democrats have taken the partisan route straight out of the gate.”

Mr. Biden and his staff opposed this criticism, claiming that “unity” refers to bringing together the voting public, not members of Congress.

“The president went on to unite the country and come up with ideas that would help address the crisis we are facing,” said Jen Psaki, White House press secretary, citing polls showing both parties’ support for demonstrate the plan by both parties. “He did not promise to unite the Democratic and Republican parties in one party in Washington.”

“This package is largely supported by the American public,” said Psaki. “That’s what people want. They want to see it’s over. They want those checks to get into the communities. They want these funds to go to schools. They want more money to distribute vaccines. “

Still, Mr Biden took the chance that Republicans would come aboard and allowed the possibility that his plans could be changed slightly to appease the moderates in both parties. This included recognition for advocating a restriction on who receives the $ 1,400 direct payments included in the proposal to ensure that those who earn more than $ 300,000 do not benefit. He did not specify what threshold he would accept to start the checks expiring, but made it clear that the starting amount would not change.

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Business

Silver Rises With Hype It’s the Subsequent GameStop, however a Backlash Mutes Positive factors

Silver Rises With Hype It’s the Next GameStop, but a Backlash Mutes Gains

After the frenzied price swings of companies like GameStop and AMC Entertainment caught the financial world last week, everyone wondered what the internet investor army would be targeting next.

The answer seemed to be silver, at least for a moment.

Over the weekend, the precious metal saw a surge in interest and a surge in online chatter about the chances of generating a price surge that caught the world’s attention last week.

On Monday, the price of silver rose as much as 11.5 percent in early trading – to its highest level in eight years – but gravity soon prevailed and pulled it back as efforts attracted the users of the influential Wall Street Bets forum Collecting from Reddit just failed.

By mid-morning silver had given up some of its early gains, and by 3 p.m. it was trading at $ 29.418 an ounce, up 9 percent. That was still the highest level since the beginning of 2013.

At Wall Street Bets, where users have largely endorsed GameStop and put pressure on hedge funds, some users turned down the nascent online silver crusade to rob the GameStop rally of its momentum.

Some posters referred to it as a trap set by hedge funds losing money with the rise of GameStop, and urged their fellow traders to turn their attention to companies that had trimmed shares in the video game retailer.

GameStop versus Wall Street

Let us understand you

    • Stocks of GameStop, the video game retailer, have risen because amateur investors starting at Reddit have bet heavily on the company’s stock.
    • The wave gained momentum when large hedge funds short-sold GameStop stock – essentially betting against the company’s success.
    • Sudden demand pushed the stock price from less than $ 20 in December to around $ 300 on Monday. At least on paper.
    • It’s not just GameStop. Amateur investors have supported other companies that many large investors have shunned, such as AMC and BlackBerry.
    • This bubble around GameStop forced large investors to raise funds to cover their losses or to shed shares in other companies.

A private investor, Randi Mailloux of Westfield, Massachusetts, said she believed Wall Street firms were behind the silver push. As a self-described Wall Street Bets lurker, she said that large hedge funds are “trying to get people to lose interest in GameStop, sell their stocks and move on to something else.”

Just as regulators have been closely monitoring activity in GameStop and other stocks, the Commodity Futures Trading Commission said it was keeping an eye on silver. Acting chairman Rostin Behnam said the commission is coordinating with other regulators and the commodity exchanges to “address potential threats to the integrity of the silver derivatives markets and continue to monitor those markets for fraud and manipulation”.

The surge in trading of some stocks – including GameStop, AMC, and BlackBerry – over the past week has rocked Wall Street, forcing popular trading platforms like Robinhood to curb trading. Rising prices hit hedge fund short sellers and generally unsettled the markets, putting the S&P 500 in the red for January.

Skepticism about the recent online silver hype isn’t the only reason GameStop’s remarkable run may be unlikely to repeat, however.

The silver market is different from that for beleaguered companies that have caught the attention of day traders who have been buoyed by memes on Reddit. These stocks have been targeted by hedge funds that are betting on falling prices. By pushing them higher instead, traders “pushed” the short companies, forcing them to buy the stocks.

The price of silver, on the other hand, had risen before the latest interest. It rose nearly 50 percent last year, and some institutional investors expected silver to outperform gold this year.

Silver is a much larger market, so it is more difficult for a relatively small group of traders to influence. And then there is a logistical hurdle in commodity trading: private investors who want to drive the silver price up would have to pick up the metal instead of buying shares in online accounts or buying options contracts.

The silver market has had restrictions on excessively speculative behavior since the early 1980s after Nelson and William Hunt – brothers who were heirs to an oil fortune – failed to corner it. They amassed roughly half of the world’s tradable silver supply before the move imploded on March 27, 1980 after market regulators intervened and restricted further purchases. The metal fell from a recent high of $ 50.35 to $ 10.80 an ounce, costing the Hunts an estimated $ 1 billion in losses.

But the online skepticism that greeted the rally on Monday didn’t help.

“It’s sketchy,” said Ms. Mailloux. “Somebody wrote a story about silver when the Wall Street Bets guys wanted to do this short push.”

However, the increased online interest had a noticeable effect. The shares in companies that mine silver rose. Fresnillo closed 9 percent but also well below its highest point of the day and Polymetal International rose 5 percent. Both were among the UK’s biggest winners on the FTSE 100 index. On the New York Stock Exchange, Silvercorp Metals rose 15 percent and Fortuna Silver Mines rose 12 percent.

Retail websites for buying silver coins and bars said they were seeing high demand and there would be delays in shipping orders.

The iShares Silver Trust, a large BlackRock publicly traded product that tracks the metal, reported a record net inflow of $ 944 million on Friday, requiring the purchase of 34 million ounces of silver.

Retail purchases increased prices more than analysts expected.

“The frenzy of retail buying has pushed silver prices up again for the time being,” JPMorgan Chase analysts wrote on Monday.

Some traders said it was difficult to keep up with demand.

Moneymetals.com announced that it was not taking new orders for most of its silver products on Monday, and it was also restricting some gold purchases. Another trader, APMEX, said it saw a surge in new customers over the weekend.

“We have made strategic decisions to source additional metal and block any metal we find in the market,” said Ken Lewis, CEO of APMEX, in a statement posted on the company’s website. “We anticipate that premiums will go up and up quickly as we see a significant increase in our costs if we can even locate the metal.”

Gillian Friedman contributed to the coverage.

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World News

Biden’s greatest course for actual Mideast good points is to spend money on Trump’s Abraham Accords

Biden’s best course for real Mideast gains is to invest in Trump’s Abraham Accords

Imagine President-elect Biden faced with two doors that represent the Middle East dilemma he is facing. What he chooses will color his administration and have a historical impact on the most booby-trapped region of the world.

One door is marked “Return to Obama’s Iran Nuclear Deal”.

The other is called “Build On Trump’s Abraham Accord”.

The literature is littered with confusing two-door parables and allegories, from Jesus’ Sermon on the Mount, where the choice is between the wider or the narrower and more difficult road, to Frank R. Stockton’s 1882 short story, “The Lady, or the Tiger?” where two soundproof doors lay in front of the king’s daughter’s lover.

As with most of these stories, there are dangers in every path.

Democratic party politics and election promises suggest that President-elect Biden is swiftly moving towards a return to the nuclear deal known as the JCPOA, a signature achievement for the man who selected him as vice president. President Trump pulled out of the deal in May 2018 after calling it “the worst deal ever”.

The smarter way would be to slowly, carefully, and fearfully move towards the door of Iran and see how much has changed in the Middle East in the four years since President Obama’s departure.

The Obama deal, never blessed by Congressional votes, failed to address Iran’s regional misconduct or its development of ballistic missiles and advanced arms supplies that left negotiators for a later day.

But it is precisely these Iranian advances that were shown in the Iranian cruise missile and drone strikes on Saudi oil fields in September 2019 and the ballistic missile strikes on US military positions in Iraq on January 8, 2020 in response to the drone attack that killed the Iranian General Qasem Solemani five days earlier.

Furthermore, in the run-up to its June elections, today’s Iran is unlikely to revert to its earlier deal, in which hardliners are determined to further marginalize so-called moderates. After the Iranian leaders accumulate more enriched uranium and install more advanced centrifuges than JCPOA allows, they won’t be giving up those gains so easily.

As much as they want the economic sanctions against them to be relaxed, the Iranian hardliners also want more: compensation for everything they have lost economically in the last four years due to renewed US sanctions. What is unspoken is that they have more time each day to develop their nuclear capabilities, either as leverage for future talks or to make the outbreak of their nuclear weapons inevitable.

The November 27 assassination of the country’s best nuclear scientist in Iran, who blamed Israel and the US for the country, has further fueled tensions and requires some response. In a sign of the hardening mood in Iran, the government only today executed the dissident Iranian journalist Ruhollah Zam.

So there is no easy way to get good business. President Biden is unlikely to provide the quick relief and compensation Iran has requested. Iran is unlikely to revert to the constraints of the deal unless it gets what it wants, and until then it will not address issues outside of the existing deal that have become more pressing.

That leaves door number two.

This is the one that President-elect Biden should go through once he takes office. President-elect Biden himself has pointed out that this could be the only foreign policy achievement by Trump he wants to build on.

President-elect Biden praised the campaign deals before they were signed by leaders from Bahrain, Israel and the United Arab Emirates in the White House in September. Morocco joined the US-brokered deal with Israel this week after Sudan did so in October.

As Axios reported this week, President-elect Biden could capitalize on this Arab-Israeli dynamic of the agreements, but he would do it differently from Trump.

“He wants to use this dynamic to reflect a positive dynamic in the Israeli-Palestinian agreement,” said Dan Shapiro, the former US ambassador to Israel under Obama.

Most important is Saudi Arabia. Conventional wisdom has it that President-elect Biden, who has announced that he will reassess relations with Riyadh, will create greater distance and focus on remaining human rights abuses in Saudi Arabia.

But here, too, Riyadh has a voice.

Should King Abdullah and Crown Prince Mohammed Bin Salman act to release the high profile women’s rights activists who remain in prison, they should fix relations with Qatar to end a three-year confrontation through continued Kuwaiti moderation, and should they further liberalize relations with Israel the atmosphere will improve significantly.

The October 2018 assassination of journalist Jamal Khashoggi by Saudi government agents remains a toxic barrier, but Riyadh has the potential to dramatically change that context.

Just as the UAE used its agreement with Israel to stop Israel’s annexation of the West Bank, a Saudi deal to include the agreements under a Biden government could be linked to the two-state solution with the Palestinians.

There is a bigger reason for President-elect Biden to choose door number two, and that is the foundation for institutional and strategic change in the Middle East.

The neglected seventh paragraph of the Abrahamic Convention states: “The contracting parties are ready to join forces with the United States to develop and initiate a ‘Strategic Agenda for the Middle East’ to promote regional diplomacy, to develop trade, stability and other collaborations. ”

Add Egypt and Jordan, countries that already have peace deals with Israel, and there is a chance of a modernist, moderate coalition of countries in the Middle East that focuses on future opportunities rather than settling old points.

On this basis, one could promote the kind of economic and security institutions and integration that unleash European potential after World War II. To date, these institutions have not achieved the “Europe whole and free” that was President George HW Bush’s dream, and Russia and others stayed outside.

However, no one could argue that Europe would have been better off without partial solutions.

There is also an urgent need to provide an alternative strategic future offered by Iran, Turkey, Russia and China. Better still, if this strategic change goes hand in hand with an expansion of individual freedoms, an improvement in opportunities for young people and women and a reduction in interreligious tensions.

The more these changes bring personal and economic opportunities in the region, the more the Iranian people will want to benefit from them.

Back to the two-door position of President-elect Biden, the best way to improve his chances of finding a lasting Iranian solution could be through the back door of the Abraham Agreement.

Frederick Kempe is a best-selling author, award-winning journalist, and President and CEO of the Atlantic Council, one of the United States’ most influential think tanks on global affairs. He worked for the Wall Street Journal for more than 25 years as a foreign correspondent, assistant editor-in-chief and senior editor for the European edition of the newspaper. His latest book – “Berlin 1961: Kennedy, Khrushchev, and the Most Dangerous Place on Earth” – was a New York Times best seller and has been published in more than a dozen languages. Follow him on Twitter @FredKempe and subscribe here to Inflection Points, his view every Saturday of the top stories and trends of the past week.

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