ReportWire

Tag: Government policy

  • Intuit braces for negative FTC ruling on free tax prep advertising, vows appeal

    Intuit braces for negative FTC ruling on free tax prep advertising, vows appeal

    [ad_1]

    More than a year ago, the Federal Trade Commission sued Intuit Inc., the maker of TurboTax, for allegedly tricking people into thinking they could file their income taxes for free with the tax-preparation giant.

    Now, an administrative judge inside the agency has ruled against Intuit — and the company said in a Friday afternoon SEC filing that it’s going to keep fighting the case, even if that means incurring “significant costs.”

    “We expect to appeal this decision to the FTC Commissioners and, if necessary, then to a federal court of appeals. We intend to continue to defend our position on the merits of this case,” the company said in its 10-K filing.

    “There is no monetary penalty, and Intuit expects no significant impact to its business,” Intuit spokesman Rick Heineman said in a statement. The company will appeal “this groundless and seemingly predetermined decision by the FTC to rule in its own favor,” he said.

    Intuit already reached a $141 million settlement with state attorneys general about the allegations of deceptive advertising. The company says it has been clear and upfront with customers about costs. It did not admit liability in the settlement.

    The FTC could not be immediately reached for comment Friday afternoon.

    In March 2022, the regulator sued Intuit in federal court to immediately stop commercials that repeated “free” over and over. Intuit pulled some of the advertising and after filing season ended, a San Francisco federal judge said the FTC bid for emergency halts didn’t need to happen under the circumstances.

    FTC lawyers also lodged an internal administrative complaint. “Intuit widely disseminated ads on television, on the radio, and online that gave consumers the impression that they could use TurboTax for free, even though two-thirds of taxpayers don’t qualify for Intuit’s free TurboTax offerings,” they wrote in administrative complaint proceedings.

    The ongoing legal fight is happening while the broader fight over of free tax preparation is heating up. The Internal Revenue Service is planning to test its own pilot program in the upcoming filing season where taxpayers can file their taxes directly with the IRS instead of through tax preparation companies or individual preparers.

    TurboTax and the tax software industry oppose the proposed IRS direct file system. So do Congressional Republicans.

    One sticking point in the looming government shutdown is how much money the IRS should be getting in its budget. The House appropriations bill would forbid the IRS from using any money to build the direct file system.

    Intuit Inc.
    INTU,
    +1.44%

    shares closed 1.4% higher Friday, at $549.60, and the disclosure didn’t seem to be having much effect on the shares in after-hours trading. Shares are up 41% year to date, while the Dow Jones Industrial Average
    DJIA
    is up 5% and the S&P 500
    SPX
    is up 17.6%.

    [ad_2]

    Source link

  • China ETFs book best day in a month after PBOC vows to support weak yuan with forex reserve ratio cut

    China ETFs book best day in a month after PBOC vows to support weak yuan with forex reserve ratio cut

    [ad_1]

    U.S. exchange-traded funds that invest in Chinese stocks notched their best day in a month after China ramped up its efforts to support the country’s flagging currency as investors’ concerns over the economic weakness persist.

    The People’s Bank of China said Friday it will lower the amount of foreign-exchange deposits financial institutions are required to hold for the first time in 2023, a move seen as a bid to shore up the Chinese yuan, which has tumbled this year as the world’s second largest economy has faltered due to a property-market downturn, sluggish domestic consumption, and the ballooning local government debt pile. 

    The Invesco Golden Dragon China ETF
    PGJ,
    which tracks the American depositary shares of companies based in China, rose 3% on Friday, while the KraneShares CSI China Internet ETF
    KWEB,
    which offers exposure to Chinese software and information technology stocks, gained 3.5%. The iShares MSCI China ETF
    MCHI
    advanced nearly 2.2% and the SPDR S&P China ETF
    GXC
    surged 2%, according to FactSet data.

    The iShares MSCI China ETF and the KraneShares CSI China Internet ETF booked their biggest daily percentage advance since August 3, according to FactSet data.

    China’s central bank will cut the foreign-exchange reserve requirement ratio to 4% from 6% beginning Sept. 15. The move is expected to increase the supply of foreign currencies available in local markets, making the Chinese yuan more appealing for domestic investors.

    See: China’s central bank to cut FX reserve ratio

    Based on about $822 billion foreign-exchange deposits in July, the 200-basis-point cut in the reserve requirement ratio could release about $16 billion, which will improve the supply of the U.S. dollar onshore, and could move spot USDCNY lower, said strategists at Citigroup led by Johanna Chua, chief Asia economist.

    “In a broader picture, this can be also seen as part the current round of accelerated policy rollout which works more directly on asset markets. If the accelerated pace [of policy rollout] continues, it may help stabilize sentiment to some extent and prevent outsized bearish moves on China risk assets including the RMB FX,” they wrote in a Friday note.

    The onshore yuan
    USDCNY,

    weakened around 1.7% against the dollar in August, extending its losses for the year to nearly 5%, according to FactSet data. The offshore yuan
    USDCNH,
    -0.03%

    was trading at 7.27 per dollar Friday afternoon.

    See: Chinese Property Stocks Gain on Stimulus Measures

    Friday’s change to reserve requirement ratio came a day after Chinese authorities announced that homebuyers’ minimum down payment will be reduced to 20% for first-time home purchases, and 30% for second-home purchases nationwide, according to a joint statement from the People’s Bank of China and National Administration of Financial Regulation late Thursday.

    Currently, homebuyers in largest cities such as Beijing and Shanghai have a 30% down payment ratio for first homes, and 40% or more for second homes.

    Separately, big banks, such as Industrial & Commercial Bank of China
    601398,
    -1.08%

    and Bank of China
    601988,
    -1.07%
    ,
    have said they would cut their one-year yuan deposit rate by 10 basis points to 1.55% and their two-year yuan deposit rate by 20 basis points to 1.85%. The banks also plan to cut mortgage rates to boost consumption and aid the troubled property sector.

    The broader U.S. stock market finished mostly higher on Friday as traders weighed the latest jobs report to conclude the final trading day before the Labor Day holiday weekend. The S&P 500
    SPX
    was up 0.2%, while the Dow Jones Industrial Average
    DJIA
    advanced 0.3% but the Nasdaq Composite
    COMP
    ended nearly flat.

    [ad_2]

    Source link

  • Private equity, hedge funds sue SEC over new disclosure rules

    Private equity, hedge funds sue SEC over new disclosure rules

    [ad_1]

    A consortium of groups representing the private funds industry filed a lawsuit against the Securities and Exchange Commission Friday in an attempt to block new rules that would require private equity and hedge funds to disclose quarterly performance, fees and expenses.

    The rules, adopted last week, would also ban so-called side letters, or agreements between a fund and specific investors that give them preferential treatment, unless those arrangements are made available to all investors.

    Read more: SEC votes to require private equity and hedge funds to disclose performance and fees

    “The SEC has overstepped its statutory authority and core legislative mandate, leaving us no choice but to litigate,” said Bryan Corbett, president and CEO of the Managed Funds Association, one of the litigants in the suit.

    “The Private Fund Adviser rule will harm investors, fund managers, and markets by increasing costs, undermining competition, and reducing investment opportunities for pensions, foundations, and endowments,” he added.

    The MFA was joined by several other industry groups in filing the lawsuit, including  the National Association of Private Fund Managers, National Venture Capital Association, American Investment Council,  Alternative Investment Management Association and the Loan Syndications & Trading Association.

    An SEC spokesperson told MarketWatch that “the Commission undertakes rulemaking consistent with its authorities and laws governing the administrative process, and we will vigorously defend the challenged rule in court.”

    SEC Chair Gary Gensler argued in recent speeches and statements that the new rules are necessary to protect investors, including the pension funds and endowments that have increasingly turned to alternative investments in recent years to boost returns.

    He said in a May speech that private funds are of growing importance to the U.S. economy, noting that advisers report that they now manage $25 trillion in assets — up from $1 trillion in 1998 — surpassing the size of the U.S. banking sector.

    “The private fund industry plays an important role in each sector of the capital markets,” he said.

    “It also plays an important role for investors, such as retirement funds and endowments,” he added. “Standing behind those entities are a diverse array of teachers, firefighters, municipal workers, students, and professors.”

    [ad_2]

    Source link

  • Robinhood buys back shares from the U.S. Marshal Service, originally owned by FTX founder Sam Bankman-Fried

    Robinhood buys back shares from the U.S. Marshal Service, originally owned by FTX founder Sam Bankman-Fried

    [ad_1]

    Shares of Robinhood Markets Inc.
    HOOD,
    +2.62%

    galloped 2.6% higher Friday, after the trading app disclosed that it bought back 55.3 million of its shares from the U.S. Marshal Service. The company said it paid $605.7 million for the shares, which represents 6.1% of the company’s market capitalization of $9.93 billion at Thursday’s close. The shares were originally acquired through Emergent Fidelity Technologies Ltd. by Sam Bankman-Fried, founder of failed cryptocurrency exchange FTX that collapsed last year. The shares were seized and transferred to the custody of the U.S. Robinhood’s stock has rallied 20.7% over the past three months through Thursday, while the S&P 500
    SPX,
    +0.24%

    has gained 6.8%.

    [ad_2]

    Source link

  • Foxconn’s Terry Gou will seek Taiwan presidency as an independent, but he’ll need signatures to run

    Foxconn’s Terry Gou will seek Taiwan presidency as an independent, but he’ll need signatures to run

    [ad_1]

    TAIPEI, Taiwan — Terry Gou, who founded Apple supplier Foxconn, said Monday he will run as an independent candidate in Taiwan‘s presidential election, ending months of speculation.

    At a news conference, Gou criticized the governing Democratic Progressive Party, saying its policies have “brought Taiwan into the risk of war” with China, which claims the self-ruled island democracy as part of its territory.

    “I will definitely not allow Taiwan to become the next Ukraine,” he added.

    He said Taiwan also needs new approaches on the economy and other matters at home. “Domestically, the national policy direction is filled with all sorts of mistakes. There’s no way to solve the difficulties of Taiwanese industry and people’s livelihoods,” he said.

    Gou’s Foxconn, formally known as Hon Hai Precision Industry Co., is a major supplier to Apple and has many factories in China that manufacture iPhones.

    Ideologically, Gou is most in line with the Kuomingtang, the opposition party that is friendly to China. The party holds that Taiwan and China are part of one country, called the Republic of China. The Kuomingtang ruled over China in the early half of the 20th century before they lost a civil war to the Communist Party. They retreated to Taiwan in 1949, where they vowed to one day retake the republic.

    Gou has long had presidential aspirations. He lost in the Kuomingtang primary in 2019 and tried again this year, but the party selected New Taipei City Mayor Hou Yu-ih as its candidate. Back in May, Gou said on his Facebook page that he would support Hou’s candidacy.

    Experts say Gou is unlikely to become a frontrunner.

    Gou’s speech emphasized unity because he has received criticism that he was splitting the vote, Hsiao Hsu-Tsen, a former deputy secretary-general of the presidential office who often comments on Taiwanese politics. This decision to run — “It’s a demonstration of his political power.”

    Since he is running without the backing of a major political party, Gou must gather public signatures to qualify for the ballot.

    That is a high barrier to meet, as it requires 1.5% of the voting population in Taiwan, which is about 290,000 signatures, said Yeh-lih Wang, a professor of politics at National Taiwan University.

    The other candidates for the Jan. 13 election are former Taipei city mayor Ko Wen-je of the Taiwan People’s Party and current Vice President Lai Ching-te of the ruling DPP. Incumbent President Tsai Ing-wen is serving her second term in office and cannot seek another.

    Currently, Lai is the front-runner, with Ko and Hou trailing in various polls.

    Gou meanwhile has never garnered more than 20% of support in polls that pit him against the other three, said Wang, the political science professor.

    “He always thought that he could be the one who would unite the opposition,” though that’s unlikely, Wang said.

    Gou said he felt he has something to contribute on the issues that matter to Taiwan’s people.

    “I have not seen substantive discussions of policy recently, especially on the topics of cross straits relations (with China), economic development or international relations,” he said.

    Gou said he would work for Taiwanese society’s unity because unity was critical to Taiwan’s future.

    ___

    Find more of AP’s Asia-Pacific coverage at https://apnews.com/hub/asia-pacific

    [ad_2]

    Source link

  • Top US and Chinese commerce officials express support for better trade conditions

    Top US and Chinese commerce officials express support for better trade conditions

    [ad_1]

    BEIJING — Commerce Secretary Gina Raimondo and her Chinese counterpart expressed support for improving trade conditions as Raimondo on Monday began a visit to Beijing aimed at improving chilly relations.

    Raimondo joined American officials including Treasury Secretary Janet Yellen in July who have visited China in the past three months. They expressed optimism about improving communication but have announced no progress on technology, security, human rights and other disputes that have plunged relations to their lowest level in decades.

    For its part, Chinese leader Xi Jinping’s government wants to revive foreign investor interest in China as it tries to reverse a deepening economic slump.

    Beijing is ready to work together to “foster a more favorable policy environment for stronger cooperation” and “bolster bilateral trade and investment,” Commerce Minister Wang Wentao told Raimondo. Wang gave no details of possible initiatives.

    Raimondo said the two sides are working on establishing “new information exchanges” for “more consistent engagement.”

    “It is profoundly important that we have a stable economic relationship,” she said. “I believe that we can make progress if we are direct, open and practical.”

    Beijing broke off dialogue with Washington on military, climate and other issues in August 2022 in retaliation for a visit to Taiwan by then-Speaker Nancy Pelosi of the House of Representatives. The mainland’s ruling Communist Party claims the self-ruled island democracy as part of its territory and objects to foreign governments having contact with it.

    The state press has given positive coverage to the American visits to Beijing, but China has given no indication it might change trade, strategic, market access and other policies that irk Washington and its Asian neighbors.

    Raimondo told reporters before leaving Washington she was looking for “actionable, concrete steps” to move forward in commercial relations but gave no details. She said she was realistic that the ”challenges are significant.”

    The visits take place under an agreement made by Xi and President Joe Biden during a meeting last November in Indonesia.

    In June, Secretary of State Antony Blinken met with Xi for 30 minutes during a visit that was postponed from February after a Chinese surveillance balloon entered U.S. airspace. The Chinese leader called on Washington to change policies on Taiwan and other issues and rebuffed a request to resume military-to-military cooperation.

    Last week, on the day Raimondo’s visit to Beijing was announced, Washington removed 27 Chinese companies from a blacklist that limits access to U.S. technology.

    The decision ”may have helped grease the wheels for Raimondo’s trip,” said Anna Ashton and Kylie Milliken of Eurasia Group in a report.

    It suggests Washington “is making modest but measurable progress with Beijing in re-establishing limited government-to-government communication,” Ashton and Milliken wrote. ”Raimondo’s visit could produce additional progress.”

    A key Chinese complaint is limits on access to processor chips and other U.S. technology that threaten to hamper the Communist Party’s ambition to develop artificial intelligence and other industries, which the U.S. has imposed on security grounds. The restrictions crippled the smartphone business of Huawei Technologies Ltd., China’s first global tech brand. Washington also has persuaded the Netherlands and Japan to join it in blocking Chinese access to tools for manufacturing advanced chips.

    “In matters of national security, there is no room to compromise,” but most U.S.-Chinese trade “does not involve national security concerns,” Raimondo told Wang. “I’m committed to promoting trade and investment in those areas that are in our mutual best interest.”

    Raimondo defended the Biden administration’s “de-risking” strategy of trying to increase domestic U.S. production of semiconductors and other high-tech goods and to create additional sources of supply to reduce chances of disruption. Beijing has criticized that as an attempt to isolate China and hamper its development.

    “It is not intended to hinder China’s economic progress. We believe a strong Chinese economy is a good thing,” Raimondo told Wang. “We seek healthy competition with China. A growing Chinese economy that plays by the rules is in both of our interests.”

    Wang visited Washington in May. The U.S. government invited Foreign Minister Wang Yi to Washington, but plans for that have not been announced.

    Raimondo also was due to meet China’s No. 2 leader, Premier Li Qiang, and other officials.

    The Biden administration also has taken steps that are likely to rankle Beijing.

    In June, Biden added 59 Chinese companies including military contractors and semiconductor manufacturers to a list of entities Americans are prohibited from investing in.

    Last week, Washington approved a $500 million arms sale to Taiwan including infrared tracking systems for advanced F-16 fighter jets.

    [ad_2]

    Source link

  • Top US and Chinese commerce officials express support for better trade conditions

    Top US and Chinese commerce officials express support for better trade conditions

    [ad_1]

    U.S. Commerce Secretary Gina Raimondo and her Chinese counterpart have expressed support for improving trade conditions as Raimondo begins a visit to Beijing as part of U.S. efforts to improve chilly relations

    ByJOE McDONALD AP Business Writer

    August 27, 2023, 11:14 PM

    U.S. Commerce Secretary Gina Raimondo, right, speaks during a meeting with her Chinese counterpart Wang Wentao, unseen, at the Ministry of Commerce in Beijing, Monday, Aug. 28, 2023. (AP Photo/Andy Wong, Pool)

    The Associated Press

    BEIJING — U.S. Commerce Secretary Gina Raimondo and her Chinese counterpart expressed support Monday for improving trade conditions as Raimondo began a visit to Beijing as part of U.S. efforts to improve chilly relations.

    Raimondo follows other American officials, including Treasury Secretary Janet Yellen in July, who have visited China in the past three months. They expressed optimism about improving communication but have announced no progress on disputes over technology, security, human rights and other issues that have plunged relations to their lowest level in decades.

    For its part, Chinese leader Xi Jinping’s government wants to revive foreign investor interest in China as it tries to reverse a deepening economic slump.

    Beijing is ready to work together to “foster a more favorable policy environment for stronger cooperation” between U.S. and Chinese businesses and “bolster bilateral trade and investment,” Commerce Minister Wang Wentao told Raimondo. Wang gave no details of possible initiatives.

    Raimondo said the two sides are working on establishing “new information exchanges” for “more consistent engagement.”

    “It is profoundly important that we have a stable economic relationship,” she said. “I believe that we can make progress if we are direct, open and practical.”

    Beijing broke off dialogue with Washington on military, climate and other issues in August 2022 in retaliation for a visit to Taiwan by then-Speaker Nancy Pelosi of the House of Representatives. The mainland’s ruling Communist Party claims the self-ruled island democracy as part of its territory and objects to foreign governments having contact with it.

    The state press has given positive coverage to the American visits to Beijing, but China has given no indication it might change trade, strategic, market access and other policies that irk Washington and its Asian neighbors.

    A key Chinese complaint is limits on access to processor chips and other U.S. technology on security grounds that threaten to hamper China’s development of smartphone, artificial intelligence and other industries.

    Wang visited Washington in May. The U.S. government has also invited Foreign Minister Wang Yi to Washington, but plans for that have not been announced.

    Raimondo also was due to meet with China’s No. 2 leader, Premier Li Qiang, and other officials during her two-day visit to Beijing and Shanghai.

    [ad_2]

    Source link

  • Global inflation pressures could become harder to manage in coming years, research suggests

    Global inflation pressures could become harder to manage in coming years, research suggests

    [ad_1]

    JACKSON HOLE, Wyoming — Rising trade barriers. Aging populations. A broad transition from carbon-spewing fossil fuels to renewable energy.

    The prevalence of such trends across the world could intensify global inflation pressures in the coming years and make it harder for the Federal Reserve and other central banks to meet their inflation targets.

    That concern was a theme sounded in several high-profile speeches and economic studies presented Friday and Saturday at the Fed’s annual conference of central bankers in Jackson Hole, Wyoming.

    For decades, the global economy had been moving toward greater integration, with goods flowing more freely between the United States and its trading partners. Lower-wage production overseas allowed Americans to enjoy inexpensive goods and kept inflation low, though at the expense of many U.S. manufacturing jobs.

    Since the pandemic, though, that trend has shown signs of reversing. Multinational corporations have been shifting their supply chains away from China. They are seeking instead to produce more items — particularly semiconductors, crucial for the production of autos and electronic goods — in the United States, with the encouragement of massive subsidies by the Biden administration.

    At the same time, large-scale investments in renewable energies could prove disruptive, at least temporarily, by increasing government borrowing and demand for raw materials, thereby heightening inflation. Much of the world’s population is aging, and older people are less likely to keep working. Those trends could act as supply shocks, similar to the shortages of goods and labor that accelerated inflation during the rebound from the pandemic recession.

    “The new environment sets the stage for larger relative price shocks than we saw before the pandemic,” Christine Lagarde, president of the European Central Bank, said in a speech Friday. “If we face both higher investment needs and greater supply constraints, we are likely to see stronger price pressures in markets like commodities — especially for the metals and minerals that are crucial for green technologies.”

    This would complicate the work of the ECB, the Fed and other central banks whose mandates are to keep price increases in check. Nearly all central banks are still struggling to curb the high inflation that intensified starting in early 2021 and has only partly subsided.

    “We are living in this world in which we could expect to have more and maybe bigger supply shocks,” Pierre-Olivier Gourinchas, chief economist at the International Monetary Fund, said in an interview. “All of these things tend to make it harder to produce stuff and make it more costly. And that is definitely the configuration that central banks dislike the most.”

    The shifting patterns in global trade patterns sparked the most attention during Saturday’s discussions at the Jackson Hole conference. A paper presented by Laura Alfaro, an economist at Harvard Business School, found that after decades of growth, China’s share of U.S. imports fell 5% from 2017 to 2022. Her research attributed the decline to tariffs imposed by the United States and the efforts of large U.S. companies to find other sources of goods and parts after China’s pandemic shutdowns disrupted its output.

    Those imports came largely from such other countries as Vietnam, Mexico and Taiwan, which have better relations with the United States than does China — a trend known as “friendshoring.”

    Despite all the changes, U.S. imports reached an all-time high in 2022, suggesting that overall trade has remained high.

    “We are not deglobalizing yet,” Alfaro said. “We are seeing a looming ‘Great Reallocation’ ” as trade patterns shift.

    She noted that there are also tentative signs of “reshoring” — the return of some production to the United States. Alfaro said the United States is importing more parts and unfinished goods than it did before the pandemic, evidence that more final assembly is occurring domestically. And the decline of U.S. manufacturing jobs, she said, appears to have bottomed out.

    Yet Alfaro cautioned that these changes bring downsides as well: In the past five years, the cost of goods from Vietnam has increased about 10% and from Mexico about 3%, adding to inflationary pressures.

    In addition, she said, China has boosted its investment in factories in Vietnam and Mexico. Moreover, other countries that ship goods to the United States also import parts from China. Those developments suggest that the United States hasn’t necessarily reduced its economic ties with China.

    At the same time, some global trends could work in the other direction and cool inflation in the coming years. One such factor is weakening growth in China, the world’s second-largest economy after the United States. With its economy struggling, China will buy less oil, minerals and other commodities, a trend that should put downward pressure on the global costs of those goods.

    Kazuo Ueda, governor of the Bank of Japan, said during a discussion Saturday that while China’s sputtering growth is “disappointing,” it stems mainly from rising defaults in its bloated property sector, rather than changes to trade patterns.

    Ueda also criticized the increased use of subsidies to support domestic manufacturing, as the United States had done in the past two years.

    “The widespread use of industrial policy globally could just lead to inefficient factories,” Ueda said, because they wouldn’t necessarily be located in the most cost-effective sites.

    And Ngozi Okonjo-Iweala, director-general of the World Trade Organization, defended globalization and also denounced rising subsidies and trade barriers. Global trade, she asserted, often restrains inflation and has helped significantly reduce poverty.

    “Predictable trade,” she said, “is a source of disinflationary pressure, reduced market volatility and increased economic activity. …Economic fragmentation would be painful.”

    [ad_2]

    Source link

  • Global inflation pressures could become harder to manage in coming years, research suggests

    Global inflation pressures could become harder to manage in coming years, research suggests

    [ad_1]

    JACKSON HOLE, Wyoming — Rising trade barriers. Aging populations. A broad transition from carbon-spewing fossil fuels to renewable energy.

    The prevalence of such trends across the world could intensify global inflation pressures in the coming years and make it harder for the Federal Reserve and other central banks to meet their inflation targets.

    That concern was a theme sounded in several high-profile speeches and economic studies presented Friday and Saturday at the Fed’s annual conference of central bankers in Jackson Hole, Wyoming.

    For decades, the global economy had been moving toward greater integration, with goods flowing more freely between the United States and its trading partners. Lower-wage production overseas allowed Americans to enjoy inexpensive goods and kept inflation low, though at the expense of many U.S. manufacturing jobs.

    Since the pandemic, though, that trend has shown signs of reversing. Multinational corporations have been shifting their supply chains away from China. They are seeking instead to produce more items — particularly semiconductors, crucial for the production of autos and electronic goods — in the United States, with the encouragement of massive subsidies by the Biden administration.

    At the same time, large-scale investments in renewable energies could prove disruptive, at least temporarily, by increasing government borrowing and demand for raw materials, thereby heightening inflation. Much of the world’s population is aging, and older people are less likely to keep working. Those trends could act as supply shocks, similar to the shortages of goods and labor that accelerated inflation during the rebound from the pandemic recession.

    “The new environment sets the stage for larger relative price shocks than we saw before the pandemic,” Christine Lagarde, president of the European Central Bank, said in a speech Friday. “If we face both higher investment needs and greater supply constraints, we are likely to see stronger price pressures in markets like commodities — especially for the metals and minerals that are crucial for green technologies.”

    This would complicate the work of the ECB, the Fed and other central banks whose mandates are to keep price increases in check. Nearly all central banks are still struggling to curb the high inflation that intensified starting in early 2021 and has only partly subsided.

    “We are living in this world in which we could expect to have more and maybe bigger supply shocks,” Pierre-Olivier Gourinchas, chief economist at the International Monetary Fund, said in an interview. “All of these things tend to make it harder to produce stuff and make it more costly. And that is definitely the configuration that central banks dislike the most.”

    The shifting patterns in global trade patterns sparked the most attention during Saturday’s discussions at the Jackson Hole conference. A paper presented by Laura Alfaro, an economist at Harvard Business School, found that after decades of growth, China’s share of U.S. imports fell 5% from 2017 to 2022. Her research attributed the decline to tariffs imposed by the United States and the efforts of large U.S. companies to find other sources of goods and parts after China’s pandemic shutdowns disrupted its output.

    Those imports came largely from such other countries as Vietnam, Mexico and Taiwan, which have better relations with the United States than does China — a trend known as “friendshoring.”

    Despite all the changes, U.S. imports reached an all-time high in 2022, suggesting that overall trade has remained high.

    “We are not deglobalizing yet,” Alfaro said. “We are seeing a looming ‘Great Reallocation’ ” as trade patterns shift.

    She noted that there are also tentative signs of “reshoring” — the return of some production to the United States. Alfaro said the United States is importing more parts and unfinished goods than it did before the pandemic, evidence that more final assembly is occurring domestically. And the decline of U.S. manufacturing jobs, she said, appears to have bottomed out.

    Yet Alfaro cautioned that these changes bring downsides as well: In the past five years, the cost of goods from Vietnam has increased about 10% and from Mexico about 3%, adding to inflationary pressures.

    In addition, she said, China has boosted its investment in factories in Vietnam and Mexico. Moreover, other countries that ship goods to the United States also import parts from China. Those developments suggest that the United States hasn’t necessarily reduced its economic ties with China.

    At the same time, some global trends could work in the other direction and cool inflation in the coming years. One such factor is weakening growth in China, the world’s second-largest economy after the United States. With its economy struggling, China will buy less oil, minerals and other commodities, a trend that should put downward pressure on the global costs of those goods.

    Kazuo Ueda, governor of the Bank of Japan, said during a discussion Saturday that while China’s sputtering growth is “disappointing,” it stems mainly from rising defaults in its bloated property sector, rather than changes to trade patterns.

    Ueda also criticized the increased use of subsidies to support domestic manufacturing, as the United States had done in the past two years.

    “The widespread use of industrial policy globally could just lead to inefficient factories,” Ueda said, because they wouldn’t necessarily be located in the most cost-effective sites.

    And Ngozi Okonjo-Iweala, director-general of the World Trade Organization, defended globalization and also denounced rising subsidies and trade barriers. Global trade, she asserted, often restrains inflation and has helped significantly reduce poverty.

    “Predictable trade,” she said, “is a source of disinflationary pressure, reduced market volatility and increased economic activity. …Economic fragmentation would be painful.”

    [ad_2]

    Source link

  • How the stock market’s performance under Biden is worse than under Obama or Trump — in one chart

    How the stock market’s performance under Biden is worse than under Obama or Trump — in one chart

    [ad_1]

    U.S. stocks so far haven’t fared as well under President Joe Biden as they did in Donald Trump’s single term or in either of Barack Obama’s two terms.

    The research team at Wilshire Indexes is pointing that out this month with the chart below, which features the FT Wilshire 5000
    XX:W5000FLT,
    an index that aims to reflect the performance of the total U.S. stock market.

    U.S. stocks haven’t performed as well in Biden’s current term as they did under Obama or Trump.


    Wilshire Indexes

    Biden and his allies could be worried about how stocks
    SPX
    are doing, and it’s possible his administration will try to help the market somehow in 2024, according to Philip Lawlor, managing director of market research at Wilshire Indexes.

    “With the 2024 election in sight, the disparity in cumulative equity return generated so far under the Biden administration compared to the superior return trajectory delivered by the Trump and Obama presidencies could cause some concern,” Lawlor wrote. “Electoral cycle logic points to the Biden administration doing its utmost to ensure that the gap closes next year.”

    Biden officially launched his re-election campaign in April, and the Democratic incumbent and his cabinet officials have traveled around the U.S. in recent months to talk up their economic policies, including measures such as the Inflation Reduction Act

    When asked about the stock market’s struggles earlier this year, one White House official told MarketWatch that the administration wants to see “strong performance,” but he also noted that roughly half of Americans don’t hold stocks and highlighted other economic indicators.

    “The markets are going to go up and down. The main measure that the president has about the state of the economy is, how are middle-class families doing?” said Bharat Ramamurti, deputy director of the White House’s National Economic Council.

    “Do they have good-paying jobs that allow them to support themselves and their families? Are they seeing their wages go up? Do they feel like they have good opportunities to advance in their career, good opportunities to switch jobs and make more money? Or live in a better neighborhood, or whatever the case may be? By those metrics, we think that the economy is doing very, very well.”

    Republican presidential hopefuls made their economic pitches at a debate on Wednesday night in Milwaukee, with Florida Gov. Ron DeSantis, who is currently running second in GOP primary polls, saying the country “must reverse ‘Bidenomics’ so that middle-class families have a chance to succeed again.” Trump, the current frontrunner in the 2024 primary, skipped the debate and instead released an interview just before the event kicked off.

    Betting markets tracked by RealClearPolitics give Biden a 35% chance of winning the 2024 presidential election, while Trump is at 27% and DeSantis is at 6%.

    Stocks
    DJIA

    COMP
    were higher in choppy trading Friday after Federal Reserve Chair Jerome Powell warned that the central bank may need to raise interest rates even higher to temper a strong U.S. economy and quell inflation, while assuring investors that the Fed would proceed cautiously.

    From MarketWatch’s archives (Dec. 31, 2022): U.S. stocks log their worst year since 2008, crushed by Fed’s rate hikes

    [ad_2]

    Source link

  • New coronavirus variant has experts on alert and WHO is urging countries to step up COVID surveillance

    New coronavirus variant has experts on alert and WHO is urging countries to step up COVID surveillance

    [ad_1]

    A new variant of the SARS-CoV-2 coronavirus has put epidemiologists around the world on alert, and the World Health Organization is asking countries to sustain early warning, surveillance and reporting systems as it works to evaluate the current COVID-19 risk level.

    The BA.2.86 variant, which was first detected in Israel, was designated a new variant under monitoring by the WHO on Aug. 17, after the agency received nine sequences from five countries — three in the WHO’s European Region, one in the African Region and one in the Region of the Americas.

    The variant has more than 30 mutations in the spike protein compared with the XBB variants that are currently dominant in the U.S. and around the world, namely XBB.1.16 and EG.5, which has been dubbed Eris, following the Greek-alphabet designation used for other variants.

    The WHO made EG.5 a variant of interest, or VOI, earlier this month, which is an upgrade from the designation of variant under monitoring, or VUM.

    But BA.2.86 is worrying experts because there is too little data to assess its potential impact.

    “It is crucial to sustain early warning, surveillance and reporting, variant
    tracking, early clinical care provision, administration of vaccine boosters to high-risk groups, improvements in ventilation, and regular communication,” the agency said in its latest weekly update.

    That update, which reviews the state of the virus for the 28-day period through Aug. 20, contains no data from the WHO’s Region of the Americas, as reports for the period were incomplete. That’s a worry that the WHO has consistently warned about as countries pull back on their monitoring of the illness as they seek to put the pandemic behind them.

    The WHO officially declared the emergency phase of the pandemic to be over on May 5 but emphasized that COVID remains a major threat. Many countries have dismantled much of their systems of oversight and greatly reduced testing and data measurement.

    See also: New ‘Eris’ COVID variant is dominant in the U.S., but a shortage of data is making it hard to track

    The U.S. Centers for Disease Control and Prevention offered an update this week on BA.2.86 — which it said has been detected in Denmark, South Africa, Israel, the U.S. and the U.K. — and said the multiple locations are a sign of international transmission. The CDC acknowledged the surveillance challenge.

    “Notably, the amount of genomic sequencing of SARS-CoV-2 globally has declined substantially from previous years, meaning more variants may emerge and spread undetected for longer periods of time,” the U.S. agency said in its update.

    The CDC also noted a current increase in hospitalizations in the U.S., although it said that’s not likely driven by the BA.2.86 variant.

    “It is too soon to know whether this variant might cause more severe illness compared with previous variants,” said the CDC.

    Perhaps the bigger issue is whether the new variant has greater escape from existing immunity from vaccines and previous infections, compared with other recent variants.

    “One analysis of mutations suggests the difference may be as large as or greater than that between BA.2 and XBB.1.5, which circulated nearly a year apart,” the CDC said. “However, virus samples are not yet broadly available for more reliable laboratory testing of antibodies, and it is too soon to know the real-world impacts on immunity.”

    Americans gearing up for what’s expected to be an annual COVID vaccine booster this fall can be confident those vaccines will be designed to protect against all subvariants of XBB, including Eris, the agency said.

    The CDC said it’s likely that antibodies built up in the population through infection, vaccination or both will provide protection against BA.2.86. However, it said, “this is an area of ongoing scientific investigation.”

    Eric Topol, the chair of innovative medicine at Scripps Research in La Jolla, Calif., said the ability to neutralize the virus depends on the levels of neutralizing antibodies, and those are bound to be lower against BA.2.86 than earlier variants that people have been exposed to or immunized against.

    “Also to note, the burden of new mutations for BA.2.86 is not confined to the spike and is seen broadly across other components of the virus,” he wrote in commentary this week. “If BA.2.86 takes off, it will be a real test of how good our T-cell response can rev up to meet the challenge.”

    Meanwhile, the CDC’s weekly projections for where Eris and other variants are circulating continue to be hampered by a shortage of data. In early August, the CDC said it would unable to  publish its “Nowcast” projections because it did not have enough sequences to update the estimates.

    “Because Nowcast is modeled data, we need a certain number of sequences to accurately predict proportions in the present,” CDC representative Kathleen Conley told MarketWatch at the time.

    The agency had received data from just three U.S. regions. In its most recent weekly update for the week through Aug. 19, it also got data from just three regions.

    Separately, the CDC reported a 21.6% increase in U.S. hospitalizations for COVID in the week through Aug. 12. Deaths rose 21.4% in the week through Aug. 19.

    [ad_2]

    Source link

  • 3M charged with violating Foreign Corrupt Practices Act in China, pays $6.6M settlement

    3M charged with violating Foreign Corrupt Practices Act in China, pays $6.6M settlement

    [ad_1]

    3M Co.
    MMM,
    +0.46%

    agreed to pay disgorgement plus prejudgment interest totaling $4.58 million and a $2 million civil penalty for charges that it violated the books and records and internal controls provisions of the Foreign Corrupt Practices Act (FCPA) in its business activities in China, the Securities and Exchange Commission said Friday. The SEC’s order found that 3M’s Chinese subsidiary paid about $1 million for at least 24 trips for Chinese government officials that included tourism activities as part of efforts to persuade them to buy 3M products, from at least 2014 to 2017. Without admitting or denying the findings, 3M agreed to cease and desist from future violations.  3M stock was up by 0.1% on Friday, while the S&P 500
    SPX,
    +0.67%

    rose fractionally.

    [ad_2]

    Source link

  • China Rolls Out New Mortgage Rules to Boost Home Sales, Xinhua Says

    China Rolls Out New Mortgage Rules to Boost Home Sales, Xinhua Says

    [ad_1]

    Chinese regulators eased the nation’s mortgage requirements to let more home buyers enjoy favorable mortgage conditions that were previously limited to first-time home purchasers, the state-run Xinhua News Agency said on Friday.

    China’s central bank, the Ministry of Housing and Urban-Rural Development and the National Financial Regulatory Administration jointly eased the requirements for home buyers who have already purchased homes to boost property sales as the real-estate slump continued, according to Xinhua.

    Home buyers who don’t have family members with houses registered under their names can enjoy favorable terms that were previously limited to people buying their first homes, according to Xinhua.

    First-home buyers are normally given cheaper mortgage rates than other buyers who have at least one apartment. First-home buyers are also required to make smaller down payments, as low as 20% of the total property value.

    Write to Singapore editors at singaporeeditors@dowjones.com

    [ad_2]

    Source link

  • Trump surrenders, is booked in Georgia election-interference case

    Trump surrenders, is booked in Georgia election-interference case

    [ad_1]

    Former President Donald Trump turned himself in at Georgia’s Fulton County jail on Thursday evening, with this latest move in his numerous legal fights standing out in part because it’s expected to yield a mug shot.

    See: Donald Trump’s mug shot could become ‘the most famous in the world’

    Trump’s private plane landed in Atlanta around 7 p.m. Eastern, and a motorcade took him directly to the Fulton County jail in Atlanta. After about 20 minutes of processing inside the jail, the motorcade then took him back to his plane for his return to New Jersey.

    Trump made a brief statement before boarding his plane, calling his indictment a “travesty of justice.”

    Fulton County’s booking system recorded Trump as having “blonde or strawberry” hair, a height of 6-foot-3 and weighing 215 pounds.

    Former President Donald Trump poses for his booking photo at the Fulton County Jail on Thursday.


    Fulton County Sheriff’s Office via Getty Images

    Trump was quickly released on a $200,000 bond and will now wait until an arraignment next month to enter pleas in this election-interference case. Fulton County District Attorney Fani Willis is seeking an Oct. 23 trial date for Trump and the other 18 defendants in the case, but Trump is opposing that start date.

    Earlier in the day, Trump replaced his lead counsel, Drew Findling, with veteran criminal attorney  Steven Sadow, who is known for defending a number of prominent rappers in high-profile criminal cases. The New York Times reported Trump used a commercial bail bondsman, Charles Shaw of Foster Bail Bonds, to post his bond, and paid him a $20,000 fee, or 10% of his bail amount.

    The former president was indicted last week by a grand jury in Fulton County over his efforts to overturn Georgia’s results in the 2020 presidential election, which he lost to Democrat Joe Biden. He faces 13 criminal counts, including racketeering, filing false documents, conspiracy to commit forgery and solicitation of violation of oath by a public officer.

    Thursday’s proceedings in Atlanta mark the fourth time that the 45th president has surrendered this year following an indictment.

    Trump, the frontrunner in the undefined, also is dealing with a Manhattan case over hush-money payments, a Miami case over classified documents and a Washington, D.C., case over his efforts to overturn the 2020 election, including his role in the Jan. 6, 2021, attack on the U.S. Capitol.

    He has denied wrongdoing and argued all of the cases are politically motivated. Many Republican voters have agreed with his take and rallied around Trump in the past few months, leaving him with 55.4% support in primary polls, according to a RealClearPolitics moving average of surveys as of Thursday.

    See: Trump calls his four indictments ‘nonsense’ during Tucker Carlson interview airing opposite the GOP debate

    The Fulton County prosecutor’s case was spurred in part by a recording of a Jan. 2, 2021, phone call between Trump and Georgia Secretary of State Brad Raffensperger in which Trump said Raffensperger, a Republican, should “find 11,780 votes,” or enough to erase Biden’s edge in the state.

    In a post on his Truth Social platform Thursday afternoonu, Trump reiterated his assertion that the phone call was “perfect,” and he repeated his criticisms of Willis, describing her as a “Radical Left, Lowlife District Attorney.”

    Willis, a Democrat, has set a Friday deadline for defendants to turn themselves, and Trump associates Rudy Giuliani and Mark Meadows are among the high-profile individuals who have met that deadline.

    Now read: Trump would have to wait years if he were to be pardoned in Georgia case — with no president or governor able to deliver

    [ad_2]

    Source link

  • Stock market today: Asian shares are mixed ahead of Fed Chair speech and Nvidia earnings

    Stock market today: Asian shares are mixed ahead of Fed Chair speech and Nvidia earnings

    [ad_1]

    TOKYO — Asian markets were trading mixed Wednesday ahead of Fed Chair Jerome Powell’s highly anticipated speech later in the week.

    Japan’s benchmark Nikkei 225 added 0.5% to finish at 32,010.26. Australia’s S&P/ASX 200 gained 0.4% to 7,148.40. South Korea’s Kospi slipped 0.5% to 2,503.28. Hong Kong’s Hang Seng gained 0.4% to 17,861.58, while the Shanghai Composite dropped 1.0% to 3,090.68.

    Powell is set to speak Friday at an event in Jackson Hole, Wyoming, the site of several major policy announcements by the Fed. The Fed has already hiked its main interest rate to the highest level since 2001 in hopes of grinding high inflation down to a 2% target. High rates work by slowing the entire economy bluntly and hurting prices for investments.

    Inflation has come down considerably from its peak above 9% in summer 2022, but economists say getting the last percentage point of improvement may be the most difficult.

    The hope among traders is that Powell would indicate the Fed is done hiking interest rates for this cycle and that it could begin cutting them next year. But strong reports on the economy recently have hurt such hopes. A solid job market and spending by U.S. households could be feeding more fuel into pressures that push upward on inflation.

    Robert Carnell, ING’s head of research for the Asia-Pacific region, noted attention is also on what the People’s Bank of China might do next on monetary policy. Earlier this month, the central bank unexpectedly cut a key interest rate in a sign of growing official urgency about shoring up economic growth.

    “The tug of war between markets and the PBoC will remain a focus in Asia today,” he said.

    Analysts say trading in Asia remains subdued as investors are also waiting for U.S. chipmaker Nvidia’s earnings report later in the day. Nvidia, one of Wall Street’s most influential stocks, swung from an early gain to a loss of 2.8% Tuesday.

    Nvidia has been at the center of Wall Street’s frenzy around artificial-intelligence technology, which investors believe will create immense profits for companies. Nvidia’s stock has already more than tripled this year, and it likely faces a high a bar to justify the huge move.

    Analysts expect Nvidia to say on Wednesday that its revenue swelled by nearly $4.5 billion to $11.19 billion during the spring from a year earlier.

    Wall Street finished mostly lower, with the S&P 500 slipping 0.3% to 4,387.55 to give back some of its rare August gain from a day before, which was powered by Big Tech stocks. The Dow Jones Industrial Average fell 0.5% to 34,288.83, and the Nasdaq composite edged up 0.1% to 13,505.87.

    In the bond market, the 10-year Treasury yield ticked down to 4.32% from 4.34%. It’s the center of the bond market and helps set rates for mortgages and other important loans.

    The two-year Treasury yield, which moves more on expectations for the Federal Reserve, rose to 5.04% from 5.00%.

    In energy trading, U.S. benchmark crude fell 37 cents to $80.35 a barrel. Brent crude, the international standard, stood unchanged at $84.03 a barrel.

    In currency trading, the U.S. dollar edged down to 145.63 Japanese yen from 145.85 yen. The euro cost $1.0859, up from $1.0848.

    ___

    AP Business Writer Stan Choe contributed from New York.

    [ad_2]

    Source link

  • Stock market today: Asian shares are mixed ahead of Fed Chair speech and Nvidia earnings

    Stock market today: Asian shares are mixed ahead of Fed Chair speech and Nvidia earnings

    [ad_1]

    TOKYO — Asian markets were trading mixed Wednesday ahead of Fed Chair Jerome Powell’s highly anticipated speech later in the week.

    Japan’s benchmark Nikkei 225 added 0.5% to finish at 32,010.26. Australia’s S&P/ASX 200 gained 0.4% to 7,148.40. South Korea’s Kospi slipped 0.5% to 2,503.28. Hong Kong’s Hang Seng gained 0.4% to 17,861.58, while the Shanghai Composite dropped 1.0% to 3,090.68.

    Powell is set to speak Friday at an event in Jackson Hole, Wyoming, the site of several major policy announcements by the Fed. The Fed has already hiked its main interest rate to the highest level since 2001 in hopes of grinding high inflation down to a 2% target. High rates work by slowing the entire economy bluntly and hurting prices for investments.

    Inflation has come down considerably from its peak above 9% in summer 2022, but economists say getting the last percentage point of improvement may be the most difficult.

    The hope among traders is that Powell would indicate the Fed is done hiking interest rates for this cycle and that it could begin cutting them next year. But strong reports on the economy recently have hurt such hopes. A solid job market and spending by U.S. households could be feeding more fuel into pressures that push upward on inflation.

    Robert Carnell, ING’s head of research for the Asia-Pacific region, noted attention is also on what the People’s Bank of China might do next on monetary policy. Earlier this month, the central bank unexpectedly cut a key interest rate in a sign of growing official urgency about shoring up economic growth.

    “The tug of war between markets and the PBoC will remain a focus in Asia today,” he said.

    Analysts say trading in Asia remains subdued as investors are also waiting for U.S. chipmaker Nvidia’s earnings report later in the day. Nvidia, one of Wall Street’s most influential stocks, swung from an early gain to a loss of 2.8% Tuesday.

    Nvidia has been at the center of Wall Street’s frenzy around artificial-intelligence technology, which investors believe will create immense profits for companies. Nvidia’s stock has already more than tripled this year, and it likely faces a high a bar to justify the huge move.

    Analysts expect Nvidia to say on Wednesday that its revenue swelled by nearly $4.5 billion to $11.19 billion during the spring from a year earlier.

    Wall Street finished mostly lower, with the S&P 500 slipping 0.3% to 4,387.55 to give back some of its rare August gain from a day before, which was powered by Big Tech stocks. The Dow Jones Industrial Average fell 0.5% to 34,288.83, and the Nasdaq composite edged up 0.1% to 13,505.87.

    In the bond market, the 10-year Treasury yield ticked down to 4.32% from 4.34%. It’s the center of the bond market and helps set rates for mortgages and other important loans.

    The two-year Treasury yield, which moves more on expectations for the Federal Reserve, rose to 5.04% from 5.00%.

    In energy trading, U.S. benchmark crude fell 37 cents to $80.35 a barrel. Brent crude, the international standard, stood unchanged at $84.03 a barrel.

    In currency trading, the U.S. dollar edged down to 145.63 Japanese yen from 145.85 yen. The euro cost $1.0859, up from $1.0848.

    ___

    AP Business Writer Stan Choe contributed from New York.

    [ad_2]

    Source link

  • US tightens some offshore oil rig safety rules that had been loosened under Trump

    US tightens some offshore oil rig safety rules that had been loosened under Trump

    [ad_1]

    NEW ORLEANS — The Biden administration on Tuesday finalized tighter rules for complex devices meant to prevent catastrophic blowouts on offshore oil and gas drilling rigs, reversing some Trump administration policies and returning to a more stringent regulatory stance adopted after the 2010 Deepwater Horizon disaster.

    Failure of blowout preventer equipment was a major cause of the April 2010 disaster that killed 11 workers and resulted in an estimated 130 million gallons of crude oil spewing into the Gulf of Mexico over 87 days.

    Tougher offshore safety rules had been adopted in 2016 but were revised in 2019 under then-President Donald Trump. The oil industry welcomed that move, but it was followed by an ongoing lawsuit filed by environmental organizations.

    The new rules from the Interior Department’s Bureau of Safety and Environmental Enforcement address conditions and well pressures under which the automatic well control devices operate. They require that remotely operated underwater vehicles be capable of opening and closing key components of blowout preventers. They also include mandates and time limits for investigating failures and providing data on blowouts to regulators.

    It’s a revision but not a complete reversal of the Trump-era changes. For instance, BSEE is maintaining an expansion of the interval between required blowout preventer inspections from 14 to 21 days.

    Miyoko Sakashita, of the Center for Biological Diversity, one of the plaintiffs in the lawsuit challenging the Trump administration revisions, said the new rules would likely resolve the lawsuit, which has been delayed several times since President Joe Biden took office.

    “Importantly, the rule requires that those testing and reporting on blowout preventers be certified and meet federal standards. It also requires that blow-out preventer failure reports be sent to BSEE,” Sakashita said in an email exchange.

    But, she said, the changes don’t go far enough.

    “This new rule at least puts an end to industry self-policing, but that’s too low of a bar,” Sakashita said. “We can all see from this summer’s heat waves, wildfires, and severe storms that we’re in a climate crisis. Biden needs to declare a climate emergency and end offshore drilling.”

    An official with the American Petroleum Institute criticized the latest regulatory changes.

    “Regulatory clarity is critical for ensuring compliance and establishing safe operations, but this rule continues the rampant politicization of the rulemaking process and represents another policy swing from administration to administration, resulting in a policy that fails to meaningfully improve the safety of workers or protect the environment,” Holly Hopkins, an API vice president, said in an emailed statement.

    [ad_2]

    Source link

  • U.S. banks and regional lenders slide across the board as S&P is latest to downgrade ratings

    U.S. banks and regional lenders slide across the board as S&P is latest to downgrade ratings

    [ad_1]

    U.S. banks and regional banks fell across the board on Tuesday, after S&P Global Ratings downgraded five smaller players after a review of risk related to funding, liquidity and asset quality with a focus on office commercial real estate.

    Adding to the gloom, Republic First Bancorp. Inc.’s stock
    FRBK,
    -41.90%

    tanked by 39%, after Nasdaq told the company that its stock would be delisted on Wednesday, after it failed to file its annual report in time.

    S&P’s move comes just days after Fitch Ratings analyst Christopher Wolfe reduced his operating environment score for U.S. banks to aa- from aa due to the unknown path of interest rate hikes and regulatory changes facing the sector.

    And Moody’s Investors Service just two weeks ago upset investors when it downgraded some lenders and said it was reviewing ratings on bigger banks, including Bank of New York Mellon
    BK,
    -1.71%
    ,
    State Street
    STT,
    -1.59%

    and Northern Trust
    NTRS,
    -1.73%
    .

    For more, see: Bank asset quality, weaker profits spark Moody’s reviews and downgrades as it weighs potential 2024 recession

    The S&P 500 Financials Sector has fallen for seven consecutive days, and is on pace for its longest losing streak since April 7, 2022, when it also fell for seven straight trading days.

    Individual bank names are also performing poorly, with Goldman Sachs Group Inc.
    GS,
    -0.94%

    and Citigroup Inc.
    C,
    -1.68%

    down for 10 of the past 11 days and Charles Schwab Corp.
    SCHW,
    -4.84%

    down 11 straight days.

    Goldman alone has fallen for seven straight days for a total loss of 6.3%. It’s the longest losing streak since Feb. 28, 2020, when it also fell for seven straight days as the pandemic was taking hold.

    The KBW Nasdaq Regional Banking Index
    KBWR
    is down for 11 straight days. and the KBW Nasdaq Bank Index
    BKX
    is down for seven straight days.

    S&P downgraded Associated Banc. Corp. 
    ASB,
    -4.20%
    ,
     Comerica Inc.
    CMA,
    -3.82%
    ,
     KeyCorp
    KEY,
    -3.58%
    ,
     UMB Financial Corp. 
    UMBF,
    -2.42%

    % and Valley National Bancorp. 
    VLY,
    -4.19%

    by one notch and said the outlook on all five is stable.

    Read also: More challenges await U.S. banks but analysts think the worst may be over for the year

    The rating agency affirmed ratings on Zions Bancorp
    ZION,
    -4.17%

     and maintained a negative outlook, meaning it could downgrade them again in the near-term. And it affirmed ratings and a stable outlook on Synovus Financial Corp. 
    SNV,
    -3.37%

     and Truist Financial Corp. 
    TFC,
    -1.36%

     “We reviewed these 10 banks because we identified them as having potential risks in multiple areas that could make them less resilient than similarly rated peers ,” S&P said in a statement.

    “For instance, some that have seen greater deterioration in funding—-as indicated by sharply higher costs or substantial dependence on wholesale funding and brokered deposits—-may also have below-peer profitability, high unrealized losses on their assets, or meaningful exposure to CRE.”

    The steep rise in interest rates orchestrated by the Federal Reserve over the past year has raised deposit costs as banks are now competing for savers seeking higher returns and that’s forced some to pay up on deposits and discourage their clients from heading to other institutions and instruments.

    The sector has been skittish this year following the collapse of Silicon Valley Bank and other lenders that led to a run on deposits at a number of regional lenders.

    However, S&P said about 90% of the banks it rates have stable outlooks and just 10% have negative ones. None have positive outlooks.

    The widespread stable outlooks shows that stability in the U.S. banking sector has improved significantly in recent months.

    S&P is expecting FDIC-backed banks in aggregate to earn a relatively healthy ROE of about 11% in 2023.

    KeyCorp. and Comerica both fell more than 3% on the news. Of the two, KeyCorp. has more outstanding debt and its 10-year bonds widened by about 5 to 10 basis points, according to data solutions provider BondCliq Media Services.

    As the following chart shows, the bonds have seen better selling on Wednesday with buyers emerging around midmorning.


    KeyBank net customer flow (intraday). Source: BondCliQ Media Services

    The next chart shows customer flow over the last 10 days.


    Most active KeyBank issues with net customer flow (last 10 days). Source: BondCliQ Media Services

    The next chart shows the outstanding debt of the downgraded banks, with KeyCorp. clearly the leader with almost $16 billion of bonds.


    Outstanding S&P downgraded banks debt USD by maturity bucket. Source: BondCliQ Media Services

    Don’t miss: Capital One confirms roughly $900 million sale of office loans as property sector wobbles

    [ad_2]

    Source link

  • Microsoft proposes Ubisoft license to win U.K. approval for Activision Blizzard buyout

    Microsoft proposes Ubisoft license to win U.K. approval for Activision Blizzard buyout

    [ad_1]

    Microsoft will change the terms of its Activision Blizzard buyout offer in a new effort to win approval from the U.K. competition regulator.

    The regulator, the Competition and Markets Authority, said Microsoft
    MSFT,
    +1.71%

    will now license Activision’s global cloud streaming to Ubisoft Entertainment, for any game available now or in the next 15 years. Ubisoft, in its own release, highlighted the ability to stream the popular Call of Duty franchise.

    Financial terms were not released, but the regulator said Ubisoft will make a one-off payment and also agree a market-based wholesale pricing mechanism.

    The license will be exclusive except in the European economic area. Ubisoft would have the ability to require Microsoft to provide versions of games on operating systems other than Windows, such as Linux.

    Ubisoft shares
    UBI,
    +5.80%

    jumped nearly 5% in opening Paris trade.

    The regulator now says it’s inviting comments on the structure of the new offer. “This is not a green light. We will carefully and objectively assess the details of the restructured deal and its impact on competition, including in light of third-party comments,” said the regulator’s CEO, Sarah Cardell.

    Microsoft last year agreed to buy Activision Blizzard for $68.7 billion, or $95 per share. Activision stock
    ATVI,
    +0.28%

    closed Monday at $90.72.

    In a blog post, Microsoft Vice Chair Brad Smith said it anticipates the CMA review processes can be completed before the 90-day extension in its acquisition agreement with Activision Blizzard expires on Oct.18. He also said the deal with Ubisoft was carefully structured not to interfere with an existing deal struck with European regulators.

    [ad_2]

    Source link

  • A Republican lawsuit threatens a Biden immigration policy thousands have used to come to the US

    A Republican lawsuit threatens a Biden immigration policy thousands have used to come to the US

    [ad_1]

    WASHINGTON — Valerie Laveus remembers when she first heard about an immigration program designed to allow people to come to the U.S. from four countries, including her native Haiti.

    “I said, ‘Whoa! This seems like it would work well for bringing my nephew and my brother into the country,’” said the Florida teacher, who received a WhatsApp message in January and verified with an immigration lawyer that the program was real.

    After years of trying to get a green card, her brother arrived with her nephew in early August, ready to start a new life. They are two of the roughly 181,000 people who have entered the U.S. under the humanitarian parole program since President Joe Biden launched the initiative.

    But 21 Republican-leaning states threaten to end the program through a lawsuit to determine its legality, which is set to be heard in a Texas court beginning Thursday, with a decision coming later.

    If the Biden administration loses, it would undercut a broader policy seeking to encourage migrants to use the administration’s preferred pathways into the U.S. or face stiff consequences. The administration has said it had to act in the absence of congressional action to overhaul the nation’s immigration system.

    But much of the administration’s strategy is just one lawsuit away from collapse.

    In the Texas trial, Republican states are expected to argue the Biden administration is basically usurping the power of Congress by allowing up to 360,000 people annually into the U.S. from Cuba, Haiti, Nicaragua and Venezuela under the humanitarian parole program. They say the program is an overreach of a parole power meant to be used on a case-by-case basis for urgent humanitarian reasons or significant public benefit.

    The administration argues it has the power to use humanitarian parole in this way and credits the initiative with drastically reducing illegal border crossings by immigrants from those four countries. Program applicants must pass background checks and have a financial sponsor in the U.S. who vouches for them. If approved, they must fly into a U.S. airport instead of crossing at the southern border. They can then stay in the U.S. for two years and get a work permit.

    Immigrant rights groups successfully petitioned to join the legal proceedings on behalf of Laveus and six other people who are sponsoring migrants. Esther Sung, an attorney for Justice Action Center, said the groups want to show the real people who have volunteered to be sponsors and how ending the program would affect them.

    Blas Nuñez-Neto, assistant secretary for border and immigration policy with the U.S. Department of Homeland Security, said in a recent conference call that the government is worried about the upcoming trial and will appeal if the administration loses.

    The case is scheduled to be heard by Judge Drew Tipton in Victoria, Texas, a Donald Trump appointee who has ruled against the Biden administration on who to prioritize for deportation. The federal government pushed unsuccessfully to have the humanitarian parole case transferred from Tipton’s courtroom after suggesting the Republican states filed in Victoria because they were seeking a favorable judge.

    The U.S. used its humanitarian parole powers to grant entry to tens of thousands of Ukrainians when Russia invaded, but the Republican states’ lawsuit does not challenge that decision.

    Just about anyone can be a sponsor provided they fill out the paperwork. Many, like Laveus, are sponsoring relatives who have no other way to come to the U.S.

    Laveus said her brother was approved for a green card a few years ago, but the immigration system’s quotas meant his arrival was estimated to be delayed another six years. In the meantime, she supported relatives from afar as they tried to survive in a country plagued by economic instability and largely controlled by gangs.

    A former opposition political leader and human rights activist from Nicaragua, who was jailed in his homeland for his activities, was sponsored by his brother, a U.S. citizen living in El Paso, Texas. The man, who wanted his identity withheld to protect his family in Nicaragua, came to the U.S. in July and plans to work in construction.

    “I wanted to take this opportunity to save my life,” he said in Spanish.

    Members of churches, synagogues and mosques have joined to sponsor people they don’t know out of religious belief to help others.

    Eric Sype is sponsoring a member of a family he stayed with when he lived and worked in Nicaragua as a college student in 2014. Sype is one of seven sponsors represented by immigrants rights groups in the legal challenge.

    The person he is sponsoring plans to work in the U.S. for two years, then return to Nicaragua to be with his wife and two children. Sype said his friend will stay in Sype’s childhood home in Washington state, where a cousin has offered him a job at an orchard growing pears, cherries and apples.

    Sype said he had no hesitation about sponsoring the man, whom he said is part of his “chosen family.” Sype has spent major holidays including Christmas with the family in Nicaragua and they talk or message weekly.

    “I just can’t really imagine how this program is doing anything but benefiting folks, bringing people back together,” he said.

    The Biden administration’s program appears to be one of the largest single uses of the humanitarian parole authority, but it is certainly not the only administration to use it.

    The authority has been used repeatedly in large and small ways including providing entry to Vietnamese, Cambodians and Laotians in the late 1970s, Iraqi Kurds who helped the U.S. in the 1990s Gulf War and Cubans fleeing their country at various times, according to data from the Cato Institute.

    The Biden administration started the program for Venezuelans in October 2022 and added Cubans, Haitians and Nicaraguans in January.

    Still, some who are generally supportive of the program have concerns. Critics say the need to have a financial sponsor essentially favors more affluent, well-connected migrants, while also fearing the program could be used to exploit migrants.

    Muriel Sáenz, who helps immigrants through Nicaraguans Around the World, a Texas-based group, said it can be difficult to find sponsors for migrants who don’t already have family ties in the U.S. She encourages U.S. citizens to sponsor people they don’t know, which can be a harder sell.

    “It is too much responsibility,” Sáenz said. “Legally you are adopting people for two years.”

    ___

    Salomon reported from Miami.

    [ad_2]

    Source link