ReportWire

Tag: Economy

  • OPEC and Russia slash oil production in bid to boost prices

    OPEC and Russia slash oil production in bid to boost prices

    [ad_1]

    The OPEC+ alliance of oil-exporting countries on Wednesday decided to sharply cut production to support sagging oil prices, a move that could deal the struggling global economy another blow and raise politically sensitive pump prices for U.S. drivers just ahead of key national elections.

    Energy ministers meeting at the Vienna headquarters of the OPEC oil cartel cut production by 2 million barrels per day starting in November at their first face-to-face meeting since the start of the COVID-19 pandemic.

    Besides a token trim in oil production last month, the major cut is an abrupt turnaround from months of restoring deep cuts made during the depths of the pandemic and could help alliance member Russia weather a looming European ban on oil imports.

    In a statement, OPEC+ said the decision was based on the “uncertainty that surrounds the global economic and oil market outlooks.”

    The impact of the production cut on oil prices — and thus the price of gasoline made from crude — will be limited somewhat because OPEC+ members are already unable to meet the quotas set by the group.

    The alliance also said it was renewing its cooperation between members of the OPEC cartel and non-members, the most significant of which is Russia. The deal was to expire at year’s end.

    Receding oil prices

    The decision comes as oil trades well below its summer peaks because of fears that major global economies such as the U.S. or Europe will sink into recession due to high inflation, rising interest rates meant to curb rising consumer prices, and uncertainty over Russia’s war against in Ukraine.

    The fall in oil prices has been a boon to U.S. drivers, who saw lower gasoline prices at the pump before costs recently started ticking up, and for President Biden as his Democratic Party gears up for congressional elections next month. Nationwide, the average price for a gallon of regular gas is $3.83, down a June peak of $5.02, according to AAA, although fuel costs have edged up in recent weeks. 

    “An average cut of 2 million barrels a day should push gasoline prices higher, but not at a pace that would bring back prices to the $5 a gallon that led to the Biden administration draining supplies from the Strategic Petroleum Reserve,” Quincy Krosby, chief global strategist for LPL Financial, said in an email.

    White House press secretary Karine Jean-Pierre told reporters Tuesday that the U.S. would not extend releases from its strategic reserve to increase global supplies.

    Biden has tried to receive credit for falling gas prices, with administration officials highlighting a late March announcement that a million barrels a day would be released from the strategic reserve for six months. High inflation is a fundamental drag on Biden’s approval and has dampened Democrats’ chances in the midterm elections.

    Oil supply could face further cutbacks in coming months when a European ban on most Russian imports takes effect in December. A separate move by the U.S. and other members of the Group of Seven wealthy democracies to impose a price cap on Russian oil could reduce supply if Russia retaliates by refusing to ship to countries and companies that observe the cap.

    New sanctions on Russia

    The EU agreed Wednesday on new sanctions that are expected to include a price cap on Russian oil.

    Russia “will need to find new buyers for its oil when the EU embargo comes into force in early December and will presumably have to make further price concessions to do so,” analysts at Commerzbank wrote in a note. “Higher prices beforehand — boosted by production cuts elsewhere — would therefore doubtless be very welcome.”

    Dwindling prospects for a diplomatic deal to limit Iran’s nuclear program have also lowered prospects for a return of as much as 1.5 million barrels a day in Iranian oil to the market if sanctions are removed.

    Oil prices surged this summer as markets worried about the loss of Russian supplies from sanctions over the war in Ukraine, but they slipped as fears about recessions in major economies and China’s COVID-19 restrictions weighed on demand for crude.

    International benchmark Brent has sagged as low as $84 in recent days after spending most of the summer months over $100 per barrel.

    At its last meeting in September, OPEC+ reduced the amount of oil it produces by 100,000 barrels a day in October. That token cut didn’t do much to boost lower oil prices, but it put markets on notice that the group was willing to act if prices kept falling.

    [ad_2]

    Source link

  • Spain, Germany discuss energy crisis before EU summit

    Spain, Germany discuss energy crisis before EU summit

    [ad_1]

    MADRID — The leaders of Spain and Germany held talks in Spain Wednesday, two days before both participate in an European Union summit to discuss Europe’s energy crisis derived from Russia’s invasion of Ukraine.

    Spanish Prime Minister Pedro Sánchez hosted German Chancellor Olaf Scholz in the northwestern city of A Coruña. The two center-left leaders were accompanied by 15 ministers from their governments.

    The EU summit in Prague on Friday will likely include discussions on Germany’s plan to subsidize gas prices for its consumers and businesses, a move that has raised questions from France and Italy.

    Sánchez said that he “empathizes” with Germany due to its pressing need to find alternatives to Russian gas and oil, while adding that the EU should find common solutions. Both Sánchez and Scholz support reforming the EU’s energy market.

    “The consequences of the war in Ukraine impact us all, but clearly it has a greater impact on the countries with a higher dependency on Russian carbon-based fuels … so we empathize with the situation that Germany is in,” Sánchez said. “(And) Germany is Europe’s leading economy, so it is in all our interests that Germany does well.”

    Scholz, meanwhile, reiterated his support for Spain’s push to build another, larger pipeline with France that could pump natural gas, and potentially green hydrogen, northwards to the rest of Europe. That plan, however, has received zero support from French president Emmanuel Macron.

    Scholz said that they did not discuss Germany’s suggested European anti-missile defense shield as some local media had anticipated.

    On Thursday, leaders of over 40 EU and non-EU countries will meet in Prague to launch a “European Political Community” championed by Macron and aimed at boosting security and prosperity across the continent. The next day the leaders of the 27 EU members will gather to talk about energy and the war in Ukraine.

    [ad_2]

    Source link

  • U.S. starts fiscal year with record $31 trillion in debt, approaching debt ceiling

    U.S. starts fiscal year with record $31 trillion in debt, approaching debt ceiling

    [ad_1]

    The nation’s gross national debt has exceeded $31 trillion, according to a U.S. Treasury report released Tuesday that logs America’s daily finances.

    Nearing the statutory ceiling of roughly $31.4 trillion — an artificial cap Congress placed on the U.S. government’s ability to borrow — the debt numbers are hitting an already tenuous economy facing the highest inflation in 40 years, rising interest rates and a strong U.S. dollar.

    Even as President Joe Biden has touted his administration’s deficit reduction efforts this year and recently signed the so-called Inflation Reduction Act, which attempts to tame high price increases caused by a variety of economic factors, economists say the latest debt numbers are a reason for concern.

    Owen Zidar, a Princeton economist, said rising interest rates will exacerbate the nation’s growing debt issues and make the debt itself more costly. The Federal Reserve has raised rates several times this year in an effort to combat inflation.

    Zidar said the debt “should encourage us to consider some tax policies that almost passed through the legislative process but didn’t get enough support,” like imposing higher taxes on the wealthy and closing the carried interest loophole, which allows money managers to treat their income as capital gains.

    “I think the point here is if you weren’t worried before about the debt before, you should be — and if you were worried before, you should be even more worried,” Zidar said.


    Food bank demand spikes amid inflation

    02:37

    The Congressional Budget Office earlier this year released a report on America’s debt load, warning in its 30-year outlook that, if unaddressed, the debt will soon spiral upward to new highs that could ultimately imperil the U.S. economy. If unchecked, investors could lose confidence in the U.S. government’s ability repay its debt, which would result in a spike in interest rates and rising inflation, the CBO warned.

    And as interest rates rise — as they are now under the Federal Reserve’s regime of rate hikes — the U.S. will be forced to spend “substantially” more on interest payments, the CBO added. That could weaken the fiscal position of the U.S., it noted.

    “Addicted to debt”

    In its August Mid-Session Review, the administration forecasted that this year’s budget deficit will be nearly $400 billion lower than it estimated back in March, due in part to stronger than expected revenues, reduced spending and an economy that has recovered all the jobs lost during the multiyear pandemic.

    In full, this year’s deficit will decline by $1.7 trillion, representing the single largest decline in the federal deficit in American history, the Office of Management and Budget said in August.

    Maya MacGuineas, president of the Committee for a Responsible Federal Budget said in an emailed statement Tuesday, “This is a new record no one should be proud of.”

    “In the past 18 months, we’ve witnessed inflation rise to a 40-year high, interest rates climbing in part to combat this inflation, and several budget-busting pieces of legislation and executive actions,” MacGuineas said. “We are addicted to debt.”

    A representative from the Treasury Department was not immediately available for comment.

    Sung Won Sohn, an economics professor at Loyola Marymount University, said “it took this nation 200 years to pile up its first trillion dollars in national debt, and since the pandemic we have been adding at the rate of 1 trillion nearly every quarter.”

    Predicting high inflation for the “foreseeable future,” he said, “when you increase government spending and money supply, you will pay the price later.”

    [ad_2]

    Source link

  • UK’s Truss promises Tories her ‘disruption’ agenda will pay off

    UK’s Truss promises Tories her ‘disruption’ agenda will pay off

    [ad_1]

    UK Prime Minister Liz Truss has pledged to ride out the turmoil unleashed by her tax-cutting agenda, saying the “disruption” will pay off in a wealthier, more efficient Britain.

    Truss on Wednesday closed a tumultuous Conservative Party conference in the central English city of Birmingham with a speech intended to revive the spirits of delegates, saying, “I am ready to make the hard choices.”

    Many in her party are in a glum mood after a four-day gathering that saw policy U-turns from the government, dire opinion polls and open rebellion from lawmakers who fear the party is doomed to lose the next national election under Truss, who took office just a month ago after winning a party leadership vote.

    Truss promised to stick with her plan to reshape Britain’s economy through tax cuts and deregulation in a bid to end years of sluggish growth.

    She said cutting taxes was “the right thing to do, morally and economically” and accused her opponents of being “anti-growth”.

    After taking the stage to the strains of the 1990s hit “Moving on Up”, Truss acknowledged that “these are stormy days” for a country still mourning the death of Queen Elizabeth II and rocked by Russia’s invasion of Ukraine.

    Truss shrugged off a brief protest by two Greenpeace activists who unfurled a banner in the hall reading, “Who voted for this?” They were escorted out of the hall to boos from the audience.

    “Whenever there is change, there is disruption,” Truss said. “Not everyone will be in favour, but everyone will benefit from the result – a growing economy and a better future. That is what we have: a clear plan to deliver.”

    Political, financial pressure

    That plan already has many critics inside the Conservative Party. Truss’ first big policy, a stimulus package that includes 45 billion pounds ($50bn) in tax cuts to be paid for by government borrowing, alarmed financial markets when it was announced September 23.

    The pound plunged to a record low against the US dollar, and the Bank of England was forced to intervene to prop up the bond market and stop a wider economic crisis.

    Under political and financial pressure, the government on Monday scrapped the most unpopular part of its budget package, a tax cut on earnings above 150,000 pounds ($167,000) a year.

    That will save about 2 billion pounds ($2.2bn), a small share of the government’s 45 billion-pound tax-cutting plan. Most economists say deep public spending cuts will be needed to pay for the rest.

    The government said it will publish a fiscal plan with full costs outlined alongside an economic forecast from the independent Office for Budget Responsibility on November 23.

    Truss defended the chaotic rollout of her economic measures, saying that in extraordinary times, “it would have been wrong not to have proceeded rapidly with our energy and tax plan.”

    Truss argues that her policies will bring economic growth, higher wages and eventually more tax revenue for the government to spend.

    Critics say the plans do little to help millions of people who are struggling right now with a higher cost of living fueled by soaring energy prices.

    Truss insists she is committed to supporting the most vulnerable people, pointing to a cap on energy prices that took effect on Saturday.

    But she has refused to promise that benefits and state pensions will increase in line with inflation, which has been the practice for years.

    That has alarmed some Conservative lawmakers, who say it amounts to penalising the poor while giving tax cuts to the better-off. Several said during the conference that they would not vote for the measure.

    Public backlash

    Former Prime Minister Gordon Brown from the Labour Party said cutting benefits would provoke a huge public backlash.

    “There will be a national uprising if this goes ahead because it is nothing to do with making the growth policies of the government work,” he told the BBC. “It is simply making the poor pay the price.”

    In her speech, Truss depicted Britain’s economic challenges as part of the global crisis unleashed by Russia’s invasion of Ukraine as she promised to “stand by our Ukrainian friends, however long it takes”.

    “The scale of the challenge is immense,” she said. “War in Europe for the first time in a generation. A more uncertain world in the aftermath of COVID. And a global economic crisis. That is why in Britain we need to do things differently.”

    In a dig at her critics, Truss said that as a woman and graduate of a public high school – in a party dominated by privately educated men – “I know how it feels to have your potential dismissed by those who think they know better.”

    [ad_2]

    Source link

  • Global CEOs expect impending recession to be ‘short and sharp,’ poll shows

    Global CEOs expect impending recession to be ‘short and sharp,’ poll shows

    [ad_1]

    In Singapore, nearly 90% of Singapore CEOs have embarked on or are planning a hiring freeze over the next six months, KPMG says.

    Roslan Rahman | Afp | Getty Images

    Global CEOs are anticipating a recession in the next 12 months, according to a new survey by professional services firm KPMG, which said more than half of the business leaders polled expect the slowdown to be “mild and short.”

    A majority of the 1,300 chief executives polled by KPMG between July and August warned, however, that increased disruptions — such as a recession — could make it difficult for their businesses to rebound from the pandemic. 

    That said, the CEOs expressed more optimistim compared to the start of the year, and said there would be growth prospects in the next three years.

    “CEOs worldwide are displaying greater confidence, grit and tenacity in riding out the short-term economic impacts to their businesses as seen in their rising confidence in the global economy and their optimism over a three-year horizon,” said KPMG Singapore managing partner, Ong Pang Thye. 

    “We are also seeing many positioning for long-term growth, such as in Singapore where about 80% of CEOs have indicated that their corporate purpose will have the greatest impact in building customer relationships over the next three years.”

    Globally, CEOs are also viewing mergers, acquisitions and innovation favorably, but many are concerned that dealmakers are “taking a much sharper pencil to the numbers and focus on value creation to unlock and track deal value,” the KPMG report said.

    Across the globe, aside from recessions and the economic impact of rising interest rates, CEOs are also worried about pandemic fatigue, KPMG said. 

    On top of immediate challenges such as a recession, business leaders say they remain under pressure to meet their broader social responsibilities in the face of public scrutiny on their corporate purpose and environmental, social and governance (ESG) accountabilities. 

    Asia business leaders’ outlook

    In Asia-Pacific, fewer CEOs are expecting a recession. Of those surveyed, 63% saw a recession happening in the next year compared with 86% globally. 

    But they are also less optimistic about growth in the next three years compared with their global peers. 

    Globally and in Asia-Pacific, about 20% say they will not expand hiring in the next three years and will keep their headcount or reduce it further. 

    UN projects 2.2% global GDP growth for 2023, pushing world economy into recession

    In Singapore, nearly 90% of the CEOs surveyed either embarked on a hiring freeze, or were planning to do so over the next six months, KPMG said. 

    Almost all of them were taking or planning diversifications in their supply chains. 

    But over the next three years, almost all Singapore CEOs surveyed said they would increase their headcount by up to 10%. 

    “Nearly a third of Singapore CEOs say their top operational priority over the next three years will be to strengthen their employee value proposition to attract and retain the necessary talent,” the survey showed. 

    Changes in global corporate tax rules are at the front of mind for Singapore’s business leaders. Many have developed a better grasp of the new global tax rules even though those have been delayed to 2024, KPMG says.

    Singapore is part of a global framework for the reform of international tax rules which backs a global minimum effective corporate tax of 15%. The new agreement is aimed at stopping companies from shifting profits to low-tax havens.

    [ad_2]

    Source link

  • Inflation is crimping many Americans’ holiday travel plans

    Inflation is crimping many Americans’ holiday travel plans

    [ad_1]

    Inflation could dash some of the holiday cheer for many Americans who plan on traveling for the season.

    Surging gas, airfare and hotel costs are making travelers especially budget-conscious, according to a new survey from Bankrate. Americans said they plan to travel shorter distances, spend fewer days out of town and engage in fewer activities that cost money. More people are also planning to drive to their destination instead of flying, while others are planning to use credit card points to book trips, the personal finance site found. 

    Travel costs are up sharply compared to last year. Lodging away from home, which includes hotel stays, was up 4% in August from a year ago, according to the Consumer Price Index. Gasoline rose 26% during that same period, and airline fares jumped 28%, inflation data shows. 

    The days between November 24 and January 1 are the busiest times for domestic travel. The price of plane tickets and hotel stays during the holidays are expected to continue growing, with airfares reaching some of their highest points in the past five years, according to travel booking app Hopper. 


    How to maximize your hotel stay

    03:05

    Domestic flights on Christmas Day are roughly $435 on average for a round-trip fare, up 55% from last year, while Thanksgiving airfare prices are about $281 round-trip, a 25% increase from last year, Hopper’s data shows. The average hotel stay over the Thanksgiving holiday will be $189 per night, up 13% from last year, and $218 a night during Christmas, up 32% from last year.

    Holiday travel also proved a challenge earlier this year, particularly around Memorial Day, when passengers experienced thousands of canceled or delayed flights. The cancellations stemmed from a combination of bad weather, staffing shortages and TSA and airlines over-scheduling some flights. 

    “Hopefully this holiday season won’t be as messy, but I suspect there will be more travel disruptions due to weather, high demand, lingering staff and equipment shortages,” Bankrate senior industry analyst Ted Rossman said. 

    Khristopher J. Brooks

    Khristopher J. Brooks is a reporter for CBS MoneyWatch covering business, consumer and financial stories that range from economic inequality and housing issues to bankruptcies and the business of sports.

    [ad_2]

    Source link

  • US starts fiscal year with record $31 trillion in debt

    US starts fiscal year with record $31 trillion in debt

    [ad_1]

    WASHINGTON — The nation’s gross national debt has surpassed $31 trillion, according to a U.S. Treasury report released Tuesday that logs America’s daily finances.

    Edging closer to the statutory ceiling of roughly $31.4 trillion — an artificial cap Congress placed on the U.S. government’s ability to borrow — the debt numbers hit an already tenuous economy facing high inflation, rising interest rates and a strong U.S. dollar.

    And while President Joe Biden has touted his administration’s deficit reduction efforts this year and recently signed the so-called Inflation Reduction Act, which attempts to tame 40-year high price increases caused by a variety of economic factors, economists say the latest debt numbers are a cause for concern.

    Owen Zidar, a Princeton economist, said rising interest rates will exacerbate the nation’s growing debt issues and make the debt itself more costly. The Federal Reserve has raised rates several times this year in an effort to combat inflation.

    Zidar said the debt “should encourage us to consider some tax policies that almost passed through the legislative process but didn’t get enough support,” like imposing higher taxes on the wealthy and closing the carried interest loophole, which allows money managers to treat their income as capital gains.

    “I think the point here is if you weren’t worried before about the debt before, you should be — and if you were worried before, you should be even more worried,” Zidar said.

    The Congressional Budget Office earlier this year released a report on America’s debt load, warning in its 30-year outlook that, if unaddressed, the debt will soon spiral upward to new highs that could ultimately imperil the U.S. economy.

    In its August Mid-Session Review, the administration forecasted that this year’s budget deficit will be nearly $400 billion lower than it estimated back in March, due in part to stronger than expected revenues, reduced spending, and an economy that has recovered all the jobs lost during the multi-year pandemic.

    In full, this year’s deficit will decline by $1.7 trillion, representing the single largest decline in the federal deficit in American history, the Office of Management and Budget said in August.

    Maya MacGuineas, president of the Committee for a Responsible Federal Budget said in an emailed statement Tuesday, “This is a new record no one should be proud of.”

    “In the past 18 months, we’ve witnessed inflation rise to a 40-year high, interest rates climbing in part to combat this inflation, and several budget-busting pieces of legislation and executive actions,” MacGuineas said. “We are addicted to debt.”

    A representative from the Treasury Department was not immediately available for comment.

    Sung Won Sohn, an economics professor at Loyola Marymount University, said “it took this nation 200 years to pile up its first trillion dollars in national debt, and since the pandemic we have been adding at the rate of 1 trillion nearly every quarter.”

    Predicting high inflation for the “foreseeable future,” he said, “when you increase government spending and money supply, you will pay the price later.”

    [ad_2]

    Source link

  • Depositors storm 4 Lebanese banks, demanding their own money

    Depositors storm 4 Lebanese banks, demanding their own money

    [ad_1]

    BEIRUT — Lebanese depositors, including a retired police officer, stormed at least four banks in the cash-strapped country Tuesday after banks ended a weeklong closure and partially reopened.

    As the tiny Mediterranean nation’s crippling economic crisis continues to worsen, a growing number of Lebanese depositors have opted to break into banks and forcefully withdraw their trapped savings. Lebanon’s cash-strapped banks have imposed informal limits on cash withdrawals. The break-ins reflect growing public anger toward the banks and the authorities who have struggled to reform the country’s corrupt and battered economy.

    Three-quarters of the population has plunged into poverty in an economic crisis that the World Bank describes as one of the worst in over a century. Meanwhile, the Lebanese pound has lost 90% of its value against the dollar, making it difficult for millions across the country to cope with skyrocketing prices.

    Ali al-Sahli, a retired officer who served in Lebanon’s Internal Security Forces, raided a BLC Bank branch in the eastern town of Chtaura, demanding $24,000 in trapped savings to transfer to his son, who owes rent and tuition fees in Ukraine.

    “Count the money, before one of you dies,” al-Sahli said in a video he recorded with one hand while waving a gun in the other.

    According to Depositors’ Outcry, a protest group, al-Sahli said he had offered to sell his kidney to fund his son’s expenses after the bank for months blocked him from transferring money. With his son owing months of rent and tuition, the retired officer reached out to the protest group for help.

    In the video he filmed on his cellphone, al-Sahli waved a handgun, threatening to shoot, if bank employees didn’t oblige. Employees struggled to calm him down, as protesters from the depositors group and bystanders watched from outside.

    Al-Sahli was unable to retrieve any of his money, and security forces arrested him.

    In the southern city of Tyre, Ali Hodroj broke into a Byblos Bank branch, demanding about $40,000 of his trapped savings to pay outstanding loans. He held a handgun and fired a warning shot, as security forces encircled the area. Hodroj retrieved about $9,000 in Lebanese pounds, following negotiations, with the head of a depositors advocacy group mediating.

    Hassan Moghnieh, head of the Association of Depositors in Lebanon, told The Associated Press that Hodroj’s family retrieved the money before he turned himself in to police outside the branch.

    In Hazmieh near the Lebanese capital, former Lebanese Ambassador to Turkey Georges Siam entered an Intercontinental Bank of Lebanon demanding some of his locked savings. The branch staff shuttered its doors while Siam continued to negotiate with management.

    And in the northern city of Tripoli, workers from the Qadisha Electricity Co. broke into a local First National Bank branch protesting banks deducting fees from their delayed salary payments. The Lebanese Army arrived at the site in Tripoli and patrolled the area.

    Some depositors’ protest groups, including the Depositors’ Outcry, have supported the break-ins and vowed to continue doing so.

    “We’re sending a message to the banks that their security measures won’t stop the depositors, because these depositors are all struggling,” Depositors’ Outcry media coordinator Moussa Agassi told the AP. “We’re trying to tell the bank owners to try to find a solution, and beefing up security measures isn’t going to keep them safe.”

    The general public has commended the angry depositors, some even hailing them as heroes, most notably Sally Hafez, who stormed a Beirut bank branch with a fake pistol and gasoline canister to take some $13,000 to fund her 23- year-old sister’s cancer treatment. Siam was among those who praised her. “We need more of that,” he said in a tweet last month. “The lady is a hero. God bless her.”

    The banks, however, have condemned the heists, and urged the Lebanese government to provide security personnel.

    The Association of Banks in Lebanon in a statement Tuesday said the government is primarily responsible for the financial crisis, and that the banks have been unjust targets. The banks in the statement urged the government to swiftly enact reforms and reach an agreement with The International Monetary Fund for a bailout program.

    The ABL in late September shuttered for one week after at least seven depositors stormed into branches and forcefully took their trapped savings that month, citing security concerns. The banks last week partially reopened a handful of branches, only welcoming commercial clients with appointments into their premises.

    Lebanon meanwhile has been struggling to restructure its financial sector and economy to reach an agreement with The International Monetary Fund for a bailout. The IMF has criticized Lebanese officials for their slow progress.

    [ad_2]

    Source link

  • U.S. economy, labor market still rebounding from pandemic

    U.S. economy, labor market still rebounding from pandemic

    [ad_1]

    U.S. economy, labor market still rebounding from pandemic – CBS News


    Watch CBS News



    The U.S. economy and labor market are still rebounding from the COVID-19 pandemic. Several workplace trends, such as working from home, still remain prevalent. Aki Ito, senior correspondent for Business Insider, joined CBS News to discuss.

    Be the first to know

    Get browser notifications for breaking news, live events, and exclusive reporting.


    [ad_2]

    Source link

  • Report: Amazon freezes hiring on corporate retail division

    Report: Amazon freezes hiring on corporate retail division

    [ad_1]

    NEW YORK — Amazon is implementing a hiring freeze on the corporate side of its retail business for the rest of the year, according to a New York Times report, becoming the latest company to pause hiring plans amid growing concerns about an economic downturn.

    Citing an internal announcement, The New York Times reported Tuesday that the company informed recruiters all open job postings for such roles will close, and new openings will be available next year. The internal email also recommended phone interviews and other recruiting efforts be canceled, according to the report, which said some roles — such as field positions — will be exempt.

    In an email, Amazon spokesperson Brad Glasser said the company has a “significant number” of open roles. Glasser declined to say if Amazon was implementing the hiring freeze.

    “We have many different businesses at various stages of evolution, and we expect to keep adjusting our hiring strategies in each of these businesses at various junctures,” Glasser said in a statement.

    The Seattle-based tech and retail giant is one of several companies attempting to curb costs by implementing a personnel freeze. Meta, which owns Facebook and Instagram, is reportedly planning to reduce its own headcount amid fears over what the economy might look like in the coming months.

    Overall, hiring has generally remained strong. But hikes on interest rates by the Federal Reserve and other central banks, designed to reduce high inflation, raise the likelihood of a downturn.

    For Amazon, its retail business has been sluggish in the past few months as Americans shifted away from the pandemic-induced spike in online shopping. During the last two quarters, the company reported some of its slowest rates of revenue growth in nearly two decades. Aiming to cut costs, it’s been subletting its warehouses, canceling some projects or delaying construction on others.

    In July, the company said it was able to reduce its headcount on the warehouse side, which had been overstaffed, through attrition. It also said the broader economy was expected to shape its hiring plans moving forward.

    [ad_2]

    Source link

  • Is Tesla seeing a slowdown in demand?

    Is Tesla seeing a slowdown in demand?

    [ad_1]

    As recently as July, Tesla Chief Executive Elon Musk said the electric-car maker did not have a problem with customer demand, simply a problem making and shipping all the Model Ys and Model 3s consumers were ready to buy.

    That may no longer be true.

    Analysts see early signs of caution for the world’s most valuable car maker, including for its increasingly premium pricing, at a time when the global economy is slowing and expectations for global auto sales are being dialed back.

    Tesla has navigated supply-chain challenges better than most of its rivals and analysts expect it to post strong growth through next year as it expands output, but there are also indications it is being forced to respond to a tougher market.

    The most immediate concern: Tesla made more than 22,000 more electric vehicles (EVs) than it delivered to customers in the third quarter, data released this week showed. That is the first time it has had to finance that many cars in inventory.

    For most of the past three years, Tesla has been selling more EVs in a quarter than it can produce. The one notable exception was in early 2020, when the COVID-19 pandemic disrupted deliveries.

    While Tesla’s numbers remain low, building inventory has historically been a down-cycle indicator for automakers, forcing markdowns in past recessions of the kind Tesla has not yet faced.

    Tesla blamed transport issues for a delivery total that fell short of Wall Street expectations.

    If Tesla needs to hold more inventory in coming quarters to smooth deliveries and avoid the end-of-quarter rush that has been its norm, that would add to the $1.2bn in undelivered cars it held at the end of the second quarter.

    Analysts believe Tesla still has more demand than it can supply, the bedrock assumption behind its aggressive expansion plan over the next year as it ramps up production at factories in Shanghai, Berlin and Austin, Texas.

    Morgan Stanley analyst Adam Jonas said he believed Tesla did not face an immediate demand problem, but added a caution on pricing and Tesla’s ability to buck the economic cycle.

    “It would be unreasonable to assume that there is: (a) a limit to how much Tesla can continue to increase prices without demand suffering and (b) that the company was not exposed to decelerating macroeconomic growth,” he said in a research note.

    Tesla chief Musk has acknowledged that ‘demand falls off a cliff’ when prices shoot up [File: Bloomberg]

    Prices at ’embarrassing levels’

    Tesla’s average vehicle transaction price jumped 31 percent to $69,831 in August, compared with $53,132 at the start of 2021, according to the Kelley Blue Book. That outpaced industry-wide price hikes on new cars of 18 percent to $48,301 during the same period.

    The waiting time Tesla customers face between order and delivery has also been dropping in both the United States and China, Tesla’s largest markets. In China, that lag, one indicator of the supply-demand balance, has been cut four times since August to a minimum of a week for delivery.

    And Tesla, which has resisted marketing and incentives, offered Chinese buyers a rebate of 8,000 yuan ($1,124) if they took delivery before the end of September.

    Musk himself in July said Tesla prices were hitting “embarrassing levels” and that “demand falls off a cliff” when prices are rising to “some arbitrarily high level”.

    As Tesla pushes its own capacity expansion, it is running into a wave of new EV competition, especially in China from the likes of BYD, Nio and XPeng.

    A Tesla output plan reported last week by Reuters, before the third quarter delivery announcement, showed the automaker’s detailed plan to run and source its factories to hit output growth of 50 percent this year and next, a target just beyond the most bullish outside forecasts.

    The question of whether and how Tesla sees the supply-demand balance shifting will be central for investors when the company reports quarterly results on October 19.

    Evolving economic risks

    Musk has offered an evolving view on economic risks. In June, he told Tesla staff he had a “super bad feeling” about the economy, a reason he cited to pause hiring at the time. In August, he told investors he expected a “mild recession” that could last up to 18 months.

    Guidehouse Insights analyst Sam Abuelsamid said Tesla needed to get higher production from its newer factories in Austin and Berlin. Musk had earlier compared the start of production in those plants to “gigantic money furnaces.”

    “Tesla could end up running into some financial challenges in the third and fourth quarters (of 2023), if those factories continue to be underutilised,” Abuelsamid said.

    Fitch Solutions, which provides research on country risk and industries, said on Tuesday that it expected global auto sales to drop 5.4 percent in 2022, before bouncing back only partly in 2023.

    [ad_2]

    Source link

  • US job openings sink amid higher rates and slower growth

    US job openings sink amid higher rates and slower growth

    [ad_1]

    WASHINGTON — The number of available jobs in the U.S. plummeted in August compared with July, a sign that businesses may pull back further on hiring and potentially cool chronically high inflation.

    There were 10.1 million advertised jobs on the last day of August, the government said Tuesday, down a huge 10% from 11.2 million openings in July. In March, job openings had hit a record of nearly 11.9 million.

    Layoffs ticked up in August but remained at a historically low level. And slightly more people quit their jobs.

    The sharp drop in job openings will be welcomed by the Federal Reserve. Fed officials have cited the high level of openings as a sign of strong labor demand that has compelled employers to steadily raise pay to attract and keep workers.

    Smaller pay raises, if sustained, should ease inflationary pressures. In their effort to combat the worst inflation in 40 years, the central bank has raised its key short-term interest rate to a range of 3% to 3.25%, up sharply from nearly zero as recently as March.

    Chair Jerome Powell and other Fed officials hope that their interest rate hikes — the fastest in roughly four decades — will cause employers to pull back on their efforts to hire more people. Fewer job openings, in turn, could reduce the pressure on companies to raise pay to attract and keep workers.

    Tuesday’s figures arrive the same week that a key report on jobs and the unemployment rate is set to be released Friday. Economists forecast that it will show that employers added 250,000 jobs in September and that the unemployment rate remained 3.7% for a second straight month.

    [ad_2]

    Source link

  • U.K. government drops plan to cut income tax for high earners

    U.K. government drops plan to cut income tax for high earners

    [ad_1]

    U.K. government drops plan to cut income tax for high earners – CBS News


    Watch CBS News



    The U.K. government is abandoning a plan to cut income taxes for the wealthy. The move was wildly unpopular, and even sent the value of the pound tumbling when it was first announced last month. John Quelch, dean of the Miami Herbert Business School at the University of Miami, joined CBS News’ John Dickerson for his analysis.

    Be the first to know

    Get browser notifications for breaking news, live events, and exclusive reporting.


    [ad_2]

    Source link

  • UK’s Truss vows to listen as she reels from policy U-turns

    UK’s Truss vows to listen as she reels from policy U-turns

    [ad_1]

    BIRMINGHAM, England — British Prime Minister Liz Truss has insisted she is leading “a listening government” that learns from its mistakes, as she tries to restore her shaky authority and reassure financial markets spooked by her government’s see-sawing economic pledges.

    Truss told the BBC in an interview broadcast Tuesday that she and her ministers were determined to “reflect on how we could have done things better.”

    “Is everything the government (has) done absolutely perfect? No it’s not,” she said. “I fully acknowledge that. And we have learned from the feedback we’ve received.”

    That “feedback” has been dramatic: Truss’ four weeks in office have seen the pound plunge to record lows against the dollar, the Bank of England take emergency action and the opposition Labour Party surge to record highs against her Conservatives in opinion polls.

    Now Truss also faces a battle with her party over her economic plans, with some lawmakers warning they will oppose any attempt to slash welfare benefits to help pay for lower taxes.

    Truss is on a mission to reshape Britain’s economy through tax cuts and deregulation in a bid to end years of sluggish growth. But she is trying to ride out a series of U-turns over her first big policy: a stimulus package that includes 45 billion pounds ($50 billion) in tax cuts, to be paid for by government borrowing. Its announcement on Sept 23 sent the pound tumbling to a record low against the dollar and increased the cost of government borrowing.

    The Bank of England was forced to intervene to prop up the bond market and stop a wider economic crisis. Fears that the bank will soon hike interest rates caused mortgage lenders to withdraw their cheapest deals, causing turmoil for homebuyers.

    Under political and financial pressure, the government on Monday scrapped the most unpopular part of its budget package, a tax cut on earnings above 150,000 pounds ($167,000) a year.

    Treasury chief Kwasi Kwarteng has also promised to publish a fully costed fiscal plan, alongside an economic forecast from the independent Office for Budget Responsibility. Initially that was due to come Nov. 23, but mounting pressure means it’s likely to arrive weeks sooner.

    What Kwarteng on Monday called the “hullabaloo” over the government’s plans has cast a shadow over the Conservatives’ annual conference in the central England city of Birmingham, where many delegates express fears that the party, in power since 2010, is headed for defeat in the next election.

    The party has a commanding majority in Parliament but is fractious after three years of scandal under former Prime Minister Boris Johnson, followed by a divisive leadership contest between Truss and former Treasury chief Rishi Sunak. Sunak warned during his losing campaign that Truss’ plan to fund tax cuts through borrowing would undermine both the government’s economic credibility and the nation’s finances.

    Truss says her policies will bring economic growth, higher wages and eventually more tax revenue for the government to spend. But critics say the plans do little to help millions of people who are struggling right now with a cost-of-living crisis fueled by soaring energy prices.

    Truss said she was “very committed to supporting the most vulnerable,” pointing to a cap on energy prices that took effect Oct. 1.

    However, she refused to promise benefits and state pensions would increase in line with inflation, which has been the practice for years.

    “We are going to have to make decisions about how we bring down debt as a proportion of GDP in the medium term,” Truss said. “We have to be fiscally responsible.”

    Conservative lawmakers — including government ministers — warned Truss that they would oppose a real-terms cut in welfare benefits.

    “I have always supported, whether it’s pensions, whether it’s our welfare system, keeping pace with inflation. It makes sense to do so,” said Penny Mordaunt, the leader of the House of Commons.

    “That’s what I voted for before and so have a lot of my colleagues,” Mordaunt told Times Radio.

    [ad_2]

    Source link

  • US manufacturing falls to lowest level since May 2020

    US manufacturing falls to lowest level since May 2020

    [ad_1]

    US manufacturing activity grew at its slowest pace in almost two and a half years last month, according to the Institute for Supply Management.

    United States manufacturing activity grew at its slowest pace in nearly two and a half years in September as new orders contracted while interest rates were aggressively hiked to cool demand and tame inflation.

    The Institute for Supply Management (ISM) said on Monday that its manufacturing purchasing managers’ index or PMI dropped to 50.9 in September, the lowest reading since May 2020, from 52.8 in August.

    A reading above 50 indicates expansion in manufacturing, which accounts for 11.9 percent of the US economy. Economists polled by Reuters news agency had forecast the index slipping to 52.3.

    Some of the slowdown in manufacturing reflects the rotation of spending from goods to services. Government data last Friday showed spending on long-lasting manufactured goods barely rose in August, while outlays on services picked up.

    The US Federal Reserve has since March hiked its policy rate from near zero to the current range of 3 percent to 3.25 percent, and last month signalled more large increases were on the way this year.

    The higher borrowing costs are undercutting spending on big-ticket items such as household appliances and furniture, which are typically bought on credit.

    The ISM survey’s forward-looking new orders subindex fell to 47.1 last month, also the lowest reading since May 2020, from 51.3 in August. It was the third time this year that the index has contracted. Order backlogs are also being whittled down. While that pointed to a further slowdown in manufacturing, it was also a function of easing bottlenecks in the supply chain.

    The ISM’s measure of supplier deliveries fell to 52.4 from 55.1 in August. A reading above 50 percent indicates slower deliveries to factories.

    With supply chains loosening, inflation pressures at the factory gate continued to subside.

    A measure of prices paid by manufacturers dropped to 51.7, the lowest reading since June 2020, from 52.5 in August. The continued slowdown is being driven by retreating commodity prices. Annual consumer and producer inflation decelerated in August, raising hope that prices had peaked.

    The ISM survey’s measure of factory employment dropped to 48.7 from a five-month high of 54.2 in August. It was the fourth time this year that the index has contracted. The index has been a poor predictor of manufacturing payrolls in the government’s closely watched employment report. Those have consistently grown despite the gyrations in the ISM employment gauge.

    Though job growth is slowing, demand for workers remains strong. There were 11.2 million unfilled jobs across the US economy at the end of July, with two job openings for every unemployed worker.

    [ad_2]

    Source link

  • Stocks making the biggest moves midday: Peloton, Tesla, Viasat, Wells Fargo, Box and more

    Stocks making the biggest moves midday: Peloton, Tesla, Viasat, Wells Fargo, Box and more

    [ad_1]

    A Tesla electric vehicle at a supercharger station in Hawthorne, California, on Aug. 9, 2022.

    Patrick T. Fallon | AFP | Getty Images

    Check out the companies making the biggest moves midday Monday:

    Credit Suisse — Shares of Credit Suisse rose 1.7%, reversing an earlier slump that sent the stock to a record low, after the bank over the weekend made a series of calls to calm investor fears about its financial health. In addition, the cost to insure the bank’s debt against default jumped to a new high.

    Tesla — Tesla shares dropped 8.2% after the electric vehicle maker said it delivered 343,000 vehicles in the third quarter, less than analysts expected. However, Wall Street analysts were divided over the report.

    Peloton — Peloton shares rose more than 6% after the exercise-equipment company announced it will put bikes in all 5,400 Hilton-branded hotels in the U.S. Peloton is trying to engineer a turnaround and also said last week that its bikes, treadmills and other hardware would be sold in Dick’s Sporting Goods locations.

    Roblox — Shares of the gaming platform fell slightly after MoffettNathanson initiated coverage with an underperform rating. The Wall Street firm said it’s too soon to tell whether Roblox will ever meet its metaverse ambitions.

    Viasat — Viasat jumped 28% on Monday after striking a deal with L3Harris to sell its tactical data links business. The deal is for just under $2 billion, the companies announced. Viasat said it would use the cash to reduce its leverage and increase liquidity.

    Wells Fargo – Wells Fargo’s stock gained 3% after Goldman Sachs upgraded the bank to a buy rating from neutral and said investors are underappreciating its potential.

    Livent — The lithium company dropped about half a percent after Bank of America downgraded the stock to underperform from neutral, citing “limited upside.”

    DocuSign — DocuSign dropped slid 2.4% after being downgraded by Morgan Stanley to underweight from equal weight, citing pricing pressure.

    Myovant Sciences — The biopharmaceutical company jumped 36% after it rejected a bid by Sumitovant Biopharma, its largest shareholder, to buy the shares it doesn’t already own for $22.75 per share. Myovant, which said the offer significantly undervalues the company, said it is open to considering any improved proposal.

    Box — Box’s stock rallied 7% after Morgan Stanley boosted its price target, implying the cloud storage company could surge 39% from Friday’s close. The firm also upgraded the stock to overweight from equal weight, citing solid macro positioning, strong execution and a more favorable competitive landscape.

    Freshpet — Shares of Freshpet rose 7.6% after Barron’s reported the pet-food maker has hired bankers to explore a potential sale.

    LogicBio Therapeutics — Shares of the clinical-stage genetic company skyrocketed more than 644% after it announced it was being acquired by AstraZeneca for $2.07 per share. That price tag is a whopping 666% increase from LogicBio’s closing price of 27 cents per share.

    InterDigital — InterDigital’s stock rallied 16% after the research and development company raised its guidance for third-quarter 2022 total revenue a range of $112 million to $115 million, up from $96 million to $100 million.

    Fluor Corp. — Fluor rose more than 5% in midday trading. The company announced Monday it was awarded two reimbursable engineering, procurement and construction management contracts by BASF for work in China.

    Stanley Black & Decker — The tool maker’s stock jumped more than 4% after The Wall Street Journal reported that the company has eliminated about 1,000 jobs in an effort to cut about $200 million in costs.

    Energy stocks — Oil prices jumped, pushing energy stocks higher. Marathon Oil rallied 8%. APA Corp. and Devon Energy gained about 7% each. Diamondback Energy, Halliburton and ConocoPhillips were all up more than 6%.

    — CNBC’s Alex Harring, Samantha Subin, Carmen Reinicke, Yun Li, Tanaya Macheel and Jesse Pound contributed reporting.

    [ad_2]

    Source link

  • After years of EU scrutiny, Greece promises balanced budget

    After years of EU scrutiny, Greece promises balanced budget

    [ad_1]

    ATHENS, Greece — Greece has promised to return to a budget surplus in 2023, submitting its first spending blueprint in 12 years that is not under the direct scrutiny of European bailout lenders.

    Finance Ministry officials said Monday that Greece was planning to return to a primary surplus — the annual balance before debt servicing costs — of 0.7% of gross domestic product in 2023 from a primary deficit of 1.7% of GDP this year.

    Achieving a balanced budget was a key demand from lenders during three successive international bailouts between 2010 and 2018 funded by European Union institutions and the International Monetary Fund. A so-called enhanced surveillance monitoring program of Greek public finances by European lenders expired earlier this year.

    Deficit rules in the 19 countries that use the euro currency were suspended in 2020 due to the COVID-19 pandemic, but budgets remain under pressure due to high energy costs and additional defense spending — both related to the war in Ukraine.

    “The 2023 budget is being prepared under conditions of extremely high uncertainty, regarding geopolitical developments at a global level,” Finance Minister Christos Staikouras said.

    Budget forecasts, he said, are subject to change due to “geopolitical challenges” including the war in Ukraine, supply of natural gas to Europe, energy and fuel prices more broadly and European monetary policy.

    The European Commission, the EU’s executive arm, wants to reform fiscal rules, making them more growth friendly, before they are due to be fully implemented again in 2024.

    Under budget figures submitted to Greece’s parliament Monday, growth is expected to be 2.1% next year, and debt-to-GDP reduced further to 161.6%, from over 200% in 2020.

    The growth forecast for 2022 was revised upward to 5.3%, thanks in large part to a better-than-expected tourism season this year.

    Staikouras said the budget provided for a 1 billion euro ($978 million) cash reserve — above planned support for businesses and households to cope with energy bills — to address potential additional price increases.

    [ad_2]

    Source link

  • UK scraps tax cut for wealthy that sparked market turmoil

    UK scraps tax cut for wealthy that sparked market turmoil

    [ad_1]

    BIRMINGHAM, England — The British government has dropped plans to cut income tax for top earners, part of a package of unfunded cuts that sparked turmoil on financial markets and sent the pound to record lows.

    In a dramatic about-face, Treasury chief Kwasi Kwarteng said Monday that he would abandon plans to scrap the top 45% rate of income tax paid on earnings above 150,000 pounds ($167,000) a year.

    “We get it, and we have listened,” he said in a statement. He said “it is clear that the abolition of the 45p tax rate has become a distraction from our overriding mission to tackle the challenges facing our country.”

    The U-turn came after a growing number of lawmakers from the governing Conservative Party turned on government tax plans announced 10 days ago.

    It also came hours after the Conservatives released advance extracts of a speech Kwarteng is due to give later Monday at the party’s annual conference in the central England city of Birmingham. He had been due to say: “We must stay the course. I am confident our plan is the right one.”

    Prime Minister Liz Truss defended the measures on Sunday, but said she could have “done a better job laying the ground” for the announcements.

    Truss took office less than a month ago, promising to radically reshape Britain’s economy to end years of sluggish growth. But the government’s Sept. 23 announcement of a stimulus package that includes 45 billion pounds ($50 billion) in tax cuts, to be paid for by government borrowing, sent the pound tumbling to a record low against the dollar.

    The Bank of England was forced to intervene to prop up the bond market, and fears that the bank will soon hike interest rates caused mortgage lenders to withdraw their cheapest deals, causing turmoil for homebuyers.

    The cuts were unpopular, even among Conservatives. Reducing taxes for top earners and scrapping a cap on bankers’ bonuses while millions face a cost-of-living crisis driven by soaring energy bills was widely seen as politically toxic.

    Truss and Kwarteng insist that their plan will deliver a growing economy and eventually bring in more tax revenue, offsetting the cost of borrowing to fund the current cuts. But they also have signaled that public spending will need to be slashed.

    Kwarteng said the government was sticking to its other tax policies, including a cut next year in the basic rate of income tax and a reversal of a corporation tax hike planned by the previous government.

    The pound rose after Kwarteng’s announcement to around $1.12 — about the value it held before the Sept. 23 budget announcements.

    [ad_2]

    Source link

  • Business sentiments cool as cheap yen, costs weigh on Japan

    Business sentiments cool as cheap yen, costs weigh on Japan

    [ad_1]

    TOKYO — Business sentiment among large manufacturers worsened for the third straight quarter, a Bank of Japan survey showed Monday, as the nation grappled with rising costs, the dropping value of the yen and restrictions on economic activity over the coronavirus pandemic.

    The headline measure for the “tankan,” measuring sentiment among large manufacturers, was plus 8, down from plus 9 the previous quarter.

    The tankan measures corporate sentiment by subtracting the number of companies saying business conditions are negative from those responding they are positive.

    Worries are growing about how the Bank of Japan hasn’t gone along with other central banks in tightening interest rates to curb growing inflation. Japan has been trying to fight deflation in recent years and has kept interest rates at near zero.

    The nose-diving yen is also a concern, although a cheap yen has in the past been lauded as helping the nation’s big exporters like Toyota Motor Corp., by raising the value of overseas earnings.

    The rising costs of imports, including energy as well as food, is hurting Japan, when the U.S. dollar is now trading at nearly 145 yen, when it used to be at 130-yen levels just a few months ago. A year ago, the dollar cost 111 yen.

    Sentiment among large nonmanufacturers improved to 14 from 13, according to the latest tankan.

    The world’s third-largest economy has struggled for decades to keep growth going. But the stagnation has worsened the last two years because of reduced travel and supply shortages caused by the pandemic.

    The war in Ukraine has added to the problems for a resource-poor nation that imports almost all its oil.

    The return of individual visa-free travel later this month is certain to work to boost incoming tourists.

    The pandemic had squelched overseas tourism, which had sustained economic activity in recent years.

    ———

    Yuri Kageyama is on Twitter https://twitter.com/yurikageyama

    [ad_2]

    Source link

  • Bolsonaro, Lula appear headed for runoff in Brazil race

    Bolsonaro, Lula appear headed for runoff in Brazil race

    [ad_1]

    RIO DE JANEIRO — Brazil’s top two presidential candidates were neck-and-neck late Sunday in a highly polarized election that could determine if the country returns a leftist to the helm of the world’s fourth-largest democracy or keeps the far-right incumbent in office for another four years.

    The race pits incumbent President Jair Bolsonaro against his political nemesis, leftist former President Luiz Inácio Lula da Silva. There are nine other candidates, but their support pales to that for Bolsonaro and da Silva.

    With 91.6% of votes counted, da Silva had 47.3%, ahead of Bolsonaro with 44.2%, according to the electoral authority.

    It appears increasingly likely neither of the top two candidates will receive more than 50% of the valid votes, which exclude spoiled and blank ballots, which would mean a second round vote will be scheduled for Oct. 30.

    “We will most likely have a second round,” said Nara Pavão, who teaches political science at the Federal University of Pernambuco. “The probability of ending the election now (in the first round) is too small.”

    Recent opinion polls had given da Silva a commanding lead — the last Datafolha survey published Saturday found a 50% to 36% advantage for da Silva among those who intended to vote. It interviewed 12,800 people, with a margin of error of 2 percentage points.

    The election wound up being far tighter than anticipated, both in the presidential contest and those for governorships and congressional seats.

    “The far-right has shown great resilience in the presidential and in the state races,” said Carlos Melo, a political science professor at Insper University in Sao Paulo.

    “It is too soon to go too deep, but this election shows Bolsonaro’s victory in 2018 was not a hiccup,” he added.

    Bolsonaro outperformed in Brazil’s southeast region, which includes populous Sao Paulo, Rio de Janeiro and Minas Gerais states, according to Rafael Cortez, who oversees political risk at consultancy Tendencias Consultoria.

    “The polls didn’t capture that growth,” Cortez said.

    Bolsonaro’s administration has been marked by incendiary speech, his testing of democratic institutions, his widely criticized handling of the COVID-19 pandemic and the worst deforestation in the Amazon rainforest in 15 years.

    But he has built a devoted base by defending conservative values, rebuffing political correctness and presenting himself as protecting the nation from leftist policies that he says infringe on personal liberties and produce economic turmoil.

    While voting earlier Sunday, Marley Melo, a 53-year-old trader in capital Brasilia, sported the yellow of the Brazilian flag, which Bolsonaro and his supporters have coopted for demonstrations. Melo said he is once again voting for Bolsonaro, who met his expectations, and he doesn’t believe the surveys that show him trailing.

    “Polls can be manipulated. They all belong to companies with interests,” he said.

    A slow economic recovery has yet to reach the poor, with 33 million Brazilians going hungry despite higher welfare payments. Like several of its Latin American neighbors coping with high inflation and a vast number of people excluded from formal employment, Brazil is considering a shift to the political left.

    Bolsonaro has repeatedly questioned the reliability not just of opinion polls, but also of Brazil’s electronic voting machines. Analysts fear he has laid the groundwork to reject results.

    At one point, Bolsonaro claimed to possess evidence of fraud, but never presented any, even after the electoral authority set a deadline to do so. He said as recently as Sept. 18 that if he doesn’t win in the first round, something must be “abnormal.”

    Da Silva, 76, was once a metalworker who rose from poverty to the presidency and is credited with building an extensive social welfare program during his 2003-2010 tenure that helped lift tens of millions into the middle class.

    But he is also remembered for his administration’s involvement in vast corruption scandals that entangled politicians and business executives.

    Da Silva’s own convictions for corruption and money laundering led to 19 months imprisonment, sidelining him from the 2018 presidential race that polls indicated he had been leading against Bolsonaro. The Supreme Court later annulled da Silva’s convictions on grounds that the judge was biased and colluded with prosecutors.

    Social worker Nadja Oliveira, 59, said she voted for da Silva and even attended his rallies, but since 2018 votes for Bolsonaro.

    “Unfortunately the Workers’ Party disappointed us. It promised to be different,” she said in Brasilia.

    Others, like Marialva Pereira, are more forgiving. She said she would vote for the former president for the first time since 2002.

    “I didn’t like the scandals in his first administration, never voted for the Workers’ Party again. Now I will, because I think he was unjustly jailed and because Bolsonaro is such a bad president that it makes everyone else look better,” said Pereira, 47.

    Speaking after casting his ballot in Sao Bernardo do Campo, the manufacturing hub in Sao Paulo state where he was a union leader, da Silva recalled that four years ago he was imprisoned and unable to vote.

    Bolsonaro grew up in a lower-middle-class family before joining the army. He turned to politics after being forced out of the military for openly pushing to raise servicemen’s pay. During his seven terms as a fringe lawmaker in Congress’ lower house, he regularly expressed nostalgia for the country’s two-decade military dictatorship.

    His overtures to the armed forces have raised concern that his possible rejection of election results could be backed by top brass.

    On Saturday, Bolsonaro shared social media posts by right-leaning foreign politicians, including former U.S. President Donald Trump, who called on Brazilians to vote for him. Israel’s former Prime Minister Benjamin Netanyahu expressed gratitude for stronger bilateral relations and Hungarian Prime Minister Viktor Orbán also praised him.

    After voting Sunday morning, Bolsonaro told journalists that “clean elections must be respected” and that the first round would be decisive. Asked if he would respect results, he gave a thumbs up and walked away.

    Leda Wasem, 68, had no doubt Bolsonaro will not just be reelected. Wearing a jersey of the national soccer squad at a polling place in downtown Curitiba, the real estate agent said an eventual da Silva victory could have only one explanation: fraud.

    “I wouldn’t believe it. Where I work, where I go every day, I don’t see a single person who supports Lula,” she said.

    ———

    Savarese reported from Sao Bernardo do Campo. AP writers Daniel Politi and Carla Bridi reported from Curitiba and Brasilia.

    [ad_2]

    Source link