Tag: Regulation/Government Policy

Carlsberg CEO says the Putin regime stole brewery operations in Russia

“There is no way around the fact that they have stolen our business in Russia, and we are not going to help them make that look legitimate.”

That’s new Carlsberg CEO Jacob Aarup-Anderson, according to a Reuters account of a journalist call on Tuesday, after Russian President Vladimir Putin this summer ordered the seizure of Carlsberg’s stake in its Baltika subsidiary. Earlier this month, Carlsberg ended license agreements that allow for its beers to be produced in the country.

According to the presidential decree, Carlsberg retains title to the shares in Baltika Breweries but no longer has any control or influence over the company.

From the archive (March 2022): Carlsberg and Heineken both say they will exit the Russian market

Carlsberg reported a 3% decline in organic volume growth, as a 6.3% slide in Central and Eastern Europe and a 5.2% decline in Western Europe was partly offset by a 1.5% rise in Asia.

The brewer said two-thirds of the volume decline was due to bad weather and another one-third to consumer sentiment.

Organic revenue, however, rose by 5.8%, on price hikes. It kept its operating-profit guidance for the year unchanged at 4% to 7% growth, and launched a new stock-buyback program valued at 1 billion Danish crowns.

Carlsberg said comparisons in the fourth quarter will be positive in China, in light of the year-ago lockdown, but the weak macro environment in Southeast Asia will continue to impact markets.

Carlsberg shares
CARL.B,
-0.83%
were steady on Tuesday but have dropped 8% this year.

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October 31, 2023
WSJ News Exclusive | Hedge Fund Two Sigma Is Hit by Trading Scandal

A researcher at Two Sigma Investments adjusted the hedge fund’s investing models without authorization, the firm has told clients, leading to losses in some funds, big gains in others and fresh regulatory scrutiny.

The researcher, Jian Wu, a senior vice president at New York-based Two Sigma, was trying to boost his compensation, Two Sigma has told clients, without identifying Wu. He made changes over the past year that resulted in a total of $620 million in unexpected gains and losses, according to people close to the matter and investor letters. Two Sigma has placed Wu on administrative leave.

Copyright ©2023 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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October 29, 2023
Louisiana Rep. Mike Johnson nominated for speaker by House Republicans

House Republicans on Tuesday night voted for Rep. Mike Johnson to become their latest nominee for speaker of the U.S. House of Representatives, with the Louisiana congressman’s selection capping a tumultuous day in which Rep. Tom Emmer was briefly the nominee.

Johnson, vice chair of the House Republican Conference, picked up support in two rounds of voting and drew a majority votes in a third ballot, topping the number of votes cast for Rep. Byron Donalds of Florida. That’s according to posts on social media by Rep. Elise Stefanik of New York, who as chair of the conference is the No. 4 House Republican.

The GOP-run House wasn’t due to hold a floor vote on the speaker position on Tuesday night, but the chamber could do that Wednesday.

Analysts have been warning that the long process of picking a new speaker is preventing the Republican-run House from addressing crucial matters, such as supporting Israel and passing a budget to avoid a government shutdown next month that could rattle markets
SPX.

It has been three weeks since the historic ouster of former Speaker Kevin McCarthy, a California Republican.

The selection of Johnson marks the the fourth time that House GOP lawmakers have picked a speaker nominee this month. Emmer of Minnesota, the No. 3 House Republican, was nominated around mid-day Tuesday, beating out Johnson, but bowed out about four hours later after some colleagues and former President Donald Trump refused to support him.

Rep. Jim Jordan of Ohio secured the nomination on Oct. 13, but was dropped as the nominee last Friday as GOP opposition to him grew over three rounds of voting on the House floor. House Majority Leader Steve Scalise, a Louisiana Republican, was tapped for the post on Oct. 11 but ended his speaker bid a day later due to opposition from fellow Republicans.

McCarthy on Tuesday floated a plan that would reinstall him as speaker and set up Jordan as the assistant speaker, according to an NBC News report citing unnamed sources.

In the third ballot on Tuesday night, Johnson scored 128 votes, Donalds got 29 votes, and 44 lawmakers backed people who weren’t on the ballot, according to multiple published reports. Most of those Republicans supported McCarthy, while one supported Jordan.

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October 24, 2023
States sue Meta over alleged harm to children on Facebook, Instagram

A group of 41 attorneys general from dozens of states are filing lawsuits claiming Meta Platforms Inc. built addictive features in its Facebook and Instagram services that harm children.

The lawsuits in federal and state courts allege Meta
META,
-0.47%
knowingly marketed its products to users under the age of 13, who are barred from the platform by both Meta’s policies and federal law. The states are seeking to force Meta to change product features that they say pose dangers to young users.

The lawsuit, filed Tuesday in federal court in Northern California, claims Meta, “has harnessed powerful and unprecedented technologies to entice, engage, and ultimately ensnare youth and teens.” Meta has “profoundly altered the psychological and social realities of a generation of young Americans,” the suit also said.

The lawsuit also accuses Meta of violating the law by collecting data on users under 13 without parental consent. California Attorney General Rob Bonta said the suit was the result of a multiyear investigation.

Meta said it was “disappointed” with the legal action.

“We share the attorneys general’s commitment to providing teens with safe, positive experiences online, and have already introduced over 30 tools to support teens and their families,” a Meta spokesman said in an email. “We’re disappointed that instead of working productively with companies across the industry, the attorneys general have chosen this path.”

Meta’s stock was flat in late-afternoon trading Tuesday.

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October 24, 2023
Pfizer gets FDA green light for new shot that can streamline teenagers’ vaccinations

Pfizer Inc.
PFE,
-1.73%
said Friday that the U.S. Food and Drug Administration has approved the first five-in-one vaccine designed to protect teenagers and young adults against meningococcal disease.

The new Pfizer shot, Penbraya, protects against the five most common subgroups of meningococcal disease, a rare but serious and potentially fatal illness that most often affects babies and teenagers.

Penbraya “has the potential to protect more adolescents and young adults from this severe and unpredictable disease by providing the broadest meningococcal coverage in the fewest shots,” Annaliesa Anderson, Pfizer senior vice president and head of vaccine research and development, said in a statement.

The U.S. Centers for Disease Control and Prevention currently recommends that all 11- to 12-year-olds get a meningococcal vaccine protecting against four of the subgroups — A, C, W and Y — and get a booster dose of the same vaccine type at age 16. Teenagers and young adults age 16 to 23 may also get a meningococcal B vaccine, the CDC says, particularly if they’re at increased risk due to other health conditions.

The complex vaccination schedule has weighed on uptake of the meningococcal shots, and the COVID-19 pandemic may have compounded the problem, as many families missed routine appointments when vaccinations were due, researchers say. Among teenagers who were born in 2008 — who were due for their routine adolescent vaccinations as the pandemic was raging in 2020 — uptake of meningococcal and other recommended vaccines declined, according to CDC research. Only about 60% of the 17-year-olds surveyed by the CDC last year had received both recommended doses of the ACWY vaccine, and fewer than 30% had received at least one dose of the meningococcal B vaccine.

The new Pfizer shot combines components of a meningococcal group B vaccine and an ACWY vaccine.

A CDC immunization advisory committee is set to meet Oct. 25 to discuss recommendations for the use of Penbraya in teenagers and young adults, Pfizer said.

The green light for Penbraya gives Pfizer the edge in its race with GSK
GSK,
+0.54%,
which is also working on a five-in-one meningococcal shot. GSK earlier this year released positive late-stage clinical-trial results for that vaccine.

The FDA approval of Pfizer’s shot caps a rocky week for the pharmaceutical giant, which late last Friday cut $9 billion from its full-year revenue guidance due to reduced COVID sales expectations and announced a cost-cutting program designed to deliver savings of at least $3.5 billion. Pfizer executives said on a call with analysts Monday that development of combination respiratory vaccines, such as those that provide COVID and flu protection in one shot, remains a focus for the company, in part because they can help boost vaccine uptake.

Pfizer shares were down 1.7% Friday and have dropped 40% in the year to date, while the S&P 500
SPX
has gained 10%.

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October 20, 2023
Jim Jordan dropped as speaker nominee by House Republicans, who plan for new pick next week

House Republicans voted Friday in a secret ballot against keeping Rep. Jim Jordan as their nominee for speaker, and they planned to determine a new nominee next week.

The Ohio congressman had been facing resistance in his bid to become speaker, with the number of fellow Republicans voting against him rising to 25 in a third round of voting Friday on the House floor, up from 22 in a prior ballot.

House GOP lawmakers were expected to meet Monday evening for a new forum for speaker candidates. Rep. Kevin Hern of Oklahoma said in a post on X that he was running for the job, and Rep. Jack Bergman of Michigan has indicated he’ll seek the post as well.

The GOP opposition to Jordan stemmed from a range of concerns, including that his speakership could lead to cuts in defense
ITA
spending, as well as the view that he didn’t provide enough support for the speaker bid of House Majority Leader Steve Scalise, a Louisiana Republican. Jordan’s Republican opponents also said they’ve faced death threats for their stance, with Rep. Drew Ferguson of Georgia saying Thursday that the House GOP “does not need a bully as the Speaker.”

Analysts have been warning that the process of picking a new speaker is preventing the Republican-run House from addressing crucial matters, such as supporting Israel and passing a budget to avoid a government shutdown next month that could rattle markets. It has been 17 days since the historic ouster of former Speaker Kevin McCarthy, a California Republican.

Related: Israel, Ukraine aid could run up against House dysfunction, making for ‘tragedy,’ analyst says

And see: Biden seeks $14 billion for Israel, $61 billion for Ukraine in request to Congress

With the House looking rudderless for more than two weeks, the chamber’s temporary speaker, GOP Rep. Patrick McHenry of North Carolina, has faced calls to take on the job more permanently. But a measure that would have McHenry serve in the post until January stalled on Thursday afternoon due to objections from a number of Republicans, even as Jordan offered his support for it.

U.S. stocks
SPX

DJIA

COMP
were losing ground Friday, as rising bond yields
BX:TMUBMUSD10Y
and geopolitical tensions continue to take a toll.

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October 20, 2023
Jim Jordan dropped as speaker nominee by House Republicans, who plan for new pick next week

House Republicans voted Friday in a secret ballot against keeping Rep. Jim Jordan as their nominee for speaker, and they planned to determine a new nominee next week.

The Ohio congressman had been facing resistance in his bid to become speaker, with the number of fellow Republicans voting against him rising to 25 in a third round of voting Friday on the House floor, up from 22 in a prior ballot.

House…

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October 20, 2023
House speaker election: Jim Jordan loses in third ballot as Republican opposition grows again

Rep. Jim Jordan continued to face resistance Friday in his bid to become the next speaker of the U.S. House of Representatives, with the number of fellow Republicans voting against the Ohio congressman rising to 25 in a third ballot, up from 22 in the prior ballot.

House GOP lawmakers were slated to hold a meeting around 1 p.m. Eastern Friday, and there were expectations they would vote on whether Jordan should continue to be their nominee for speaker.

Jordan hasn’t sounded like he’s close to throwing in the towel, as he indicated at a news conference before the third round of voting that he planned to keep pushing.

“There’s been multiple rounds of votes for speaker before,” he said during the news conference, referring to how former Speaker Kevin McCarthy needed 15 ballots to secure the job in January.

“Our plan this weekend is to get a speaker elected to the House of Representatives as soon as possible so we can help the American people,” he also said.

Jordan — an ally of former President Donald Trump and co-founder of the hardline House Freedom Caucus — had 22 GOP lawmakers vote against him in a second ballot on Wednesday. On Tuesday, 20 fellow Republicans backed other candidates in an initial round of voting.

Jordan needs a simple majority of House lawmakers to back him in order to become speaker of the narrowly divided chamber, which has 221 Republicans and 212 Democrats, with two vacancies. That would have been 215 votes in the third ballot as there were some absences Friday.

All 210 Democrats present Friday voted for their nominee, House Minority Leader Hakeem Jeffries, while 194 Republicans backed Jordan and 25 GOP lawmakers supported other candidates.

Analysts have been warning that the process of picking a new speaker is preventing the Republican-run House from addressing crucial matters, such as supporting Israel and passing a budget to avoid a government shutdown next month that could rattle markets.

Related: Israel, Ukraine aid could run up against House dysfunction, making for ‘tragedy,’ analyst says

And see: Biden seeks $14 billion for Israel, $61 billion for Ukraine in request to Congress

With the House looking rudderless for more than two weeks, the chamber’s temporary speaker, GOP Rep. Patrick McHenry of North Carolina, has drawn calls to take on the job more permanently. But a measure that would have McHenry serve in the post until January stalled on Thursday afternoon due to objections from a number of Republicans, even as Jordan offered his support for it.

“This resolution is really dangerous. We need to have a NORMAL election for speaker. @Jim_Jordan, I respect you but it is a massive mistake to back this,” GOP Rep. Anna Paulina Luna of Florida said Thursday in a post on X as the measure lost momentum.

Given the GOP opposition, the McHenry option would require some Democratic support. Jeffries, a New York Democrat, has continued to signal openness to it.

“Conversations hopefully will intensify today, perhaps continue throughout the weekend, and get us to a place where we can reopen the House no later than Monday of next week,” Jeffries told reporters on Friday after the third ballot.

The GOP opposition to Jordan stems from a range of concerns, including that his speakership could lead to cuts in defense
ITA
spending, as well as the view that he didn’t provide enough support for the speaker bid of House Majority Leader Steve Scalise. Jordan’s Republican opponents also have said they’ve faced death threats for their stance, with Rep. Drew Ferguson of Georgia saying Thursday that the House GOP “does not need a bully as the Speaker.”

Republican Rep. Matt Gaetz of Florida, who led the drive to oust McCarthy from his post more than two weeks ago, said he and the other GOP lawmakers who opposed McCarthy have made an offer to their colleagues who aren’t supporting Jordan, in an effort to get them to switch their votes.

“The eight of us have said that we are willing to accept censure, sanction, suspension, removal from the Republican conference,” Gaetz told reporters after the third ballot, adding that the group will continue to vote with Republicans.

Another Jordan supporter, GOP Rep. Bob Good of Virginia, said the Ohioan should stick with his bid, noting McCarthy went through many rounds.

“We believe if we keep voting Jim Jordan will be elected speaker,” Good told reporters.

U.S. stocks
SPX

DJIA

COMP
were losing ground Friday, as rising bond yields
BX:TMUBMUSD10Y
and geopolitical tensions continue to take a toll.

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October 20, 2023
‘Nobody in their right mind would do it.’ Nvidia CEO Jensen Huang says he wouldn’t start a company if he had a do-over.

“ ‘You have to get yourself to believe that it’s not that hard, because it’s way harder than you think. If I go taking all of my knowledge now and I go back, and I said, I’m going to endure that whole journey again, I think it’s too much. It is just too much.’ ”

— Nvidia CEO Jensen Huang

That was one of the world’s most visionary tech-sector leaders, Nvidia
NVDA,
-1.86%
CEO Jensen Huang, who explained that building Nvidia was “a million times harder than I expected it to be” as he theorized that “nobody in their right mind would do it” if they were aware of the true personal toll.

The Taiwan-born 60-year-old, whose family relocated to Thailand and then the U.S. in his youth and is said to have co-founded Nvidia in 1993 following a meeting at a Denny’s restaurant in San Jose, Calif., after stints at AMD
AMD,
-0.49%
and LSI Logic, wouldn’t start his own company today, he said, if he were 30 years old.

The tech titan, however, posited in a recent interview with the podcast Acquired that a “superpower” among entrepreneurs is the ability to trick themselves into believing “it’s not that hard.”

Huang said that his biggest fear remains, as it has been since Nvidia’s early days, is failing to facilitate success among workers. “I’m afraid of the same things today that I was in the very beginning of this company, which is letting the employees down.”

Huang, who according to FactSet owns a 3.5% stake in Nvidia (market cap: $1.04 trillion), explained in the podcast interview that workers joining a company end up believing in its vision and taking on its aspirations as their own.

“You have a lot of people who joined your company because they believe in your hopes and dreams, and they’ve adopted it as their hopes and dreams,” Huang said. “You want to be right for them. You want to be successful for them. You want them to be able to build a great life. … The greatest fear is that you let them down.”

In explaining how he persevered, despite doubts and challenges, in building Nvidia into the company it is today, Huang credited a “support network” of people who never gave up on him during the three-decade journey.

He explained that the experience of leading Nvidia during those periods when its share price has been in seeming free fall was almost “too much to endure,” after the company was first listed on public markets in 1999. “It’s embarrassing no matter how you think about it.”

His comments come as Nvidia’s share price has, again, been in retreat, losing ground following a major 245% surge over the previous 12 months.

More recently, the Santa Clara–based company’s stock was hit by the Biden administration’s decision to introduce tougher controls on the export of semiconductors to China.

Read: One semiconductor company is expected to grow sales nearly as quickly as Nvidia through 2025

Looking ahead, Huang said developments in artificial intelligence now pose an “enormous” opportunity for companies like Nvidia. “The market opportunity has grown by probably a thousand times,” he said.

He said AI will “create more jobs” in the near term, but he also warned that the creation of those jobs doesn’t mean certain other jobs will not be lost to automation. “If you become more productive and the company becomes more profitable, usually they hire more people to expand into new areas,” Huang said.

“Now, obviously, net generation of jobs doesn’t guarantee that any one human doesn’t get fired. That’s obviously true. It’s more likely that someone will lose a job to someone else, some other human that uses an AI,” he added.

He advised people to “learn how to use AI” as he argued that “jobs will change.”

As to Nvidia itself, Huang explained, the company — in a reflection of the products it sells — is structured like a “computing stack.”

He said “Nvidia’s not built like a military” with a top-down command and control system. Instead, Huang said, the company is organized like a “neural network” with a decentralized structure, reflecting a belief that “your organization should be the architecture of the machinery of building the product.”

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October 20, 2023
Ardelyx wins long battle for FDA approval of kidney-disease treatment

Ardelyx Inc.
ARDX,
-0.58%
on Tuesday won its long fight for U.S. regulatory approval of a treatment designed to help patients with chronic kidney disease.

The biopharma company said late Tuesday that the U.S. Food and Drug Administration approved tenapanor, marketed under the brand name Xphozah, for control of serum phosphorus in patients with chronic kidney disease on dialysis. A high level of phosphorus in the blood is often a sign of kidney damage and can lead to weak bones, joint pain, cardiovascular problems and other issues.

The approval concludes an extraordinary comeback for Xphozah. Ardelyx’s application for approval of the treatment was previously rejected by the FDA in July 2021, when the agency said the drug’s effect was “small and of unclear clinical significance.” To preserve cash, Ardelyx a few months later said it would cut its workforce by 65%, but it also pursued multiple appeals of the agency’s decision. An FDA advisory committee voted last November that the benefits of Xphozah outweigh its risks. The agency late last year ultimately granted Ardelyx’s appeal, and the company resubmitted its Xphozah application to the FDA in April.

More than 550,000 people in the U.S. have chronic kidney disease and are on maintenance dialysis. The vast majority of them have high phosphorus levels, also called hyperphosphatemia, according to Ardelyx.

High phosphorus levels “must be taken care of in these patients, and the current therapies are mostly insufficient in doing so,” Ardelyx CEO Mike Raab told MarketWatch.

Chronic kidney disease patients with high phosphorus levels have traditionally been treated with phosphate binders that can soak up phosphorus from food during digestion, but that approach can require patients to swallow a large number of pills. The Xphozah treatment requires two pills a day, “each the size of a Tic Tac,” Raab said.

The FDA approved Xphozah as add-on therapy in patients who can’t tolerate or have an inadequate response to phosphate binders, Ardelyx said in a release.

Xphozah, which will be Ardelyx’s second U.S. product launch, should be available sometime in November, Raab said.

Ardelyx will present updated data on Xphozah for hyperphosphatemia at an American Society of Nephrology meeting in early November, the company said in a release Monday.

Ardelyx shares jumped in late September after Japanese regulators approved tenapanor for hyperphosphatemia in adults with chronic kidney disease on dialysis.

Ardelyx shares fell 0.6% on Tuesday and have gained 21% in the year to date, while the S&P 500
SPX
has gained 13.9%.

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October 17, 2023
House speaker election: Jim Jordan isn’t a lock for the post before vote this afternoon

It wasn’t clear Tuesday if Rep. Jim Jordan would be successful in his push to become the next speaker of the U.S. House of Representatives, with a floor vote drawing near and the Ohio Republican needing the support of a majority of the chamber.

The narrowly divided chamber is expected to vote in the early afternoon to select a speaker, with the move coming after former Speaker Kevin McCarthy was ousted two weeks ago and after No. 2 House Republican Steve Scalise ended his bid for the post last Thursday.

An ally of former President Donald Trump who secured his party’s nomination for the role on Friday, Jordan needs to have 217 votes in his favor, so he can only afford to have four fellow Republicans vote against him as no Democrats are expected to support him. The House has 221 Republicans and 212 Democrats, with two vacancies.

While Jordan racked up significant endorsements Monday, more than four House Republicans are on record as being against him and others are leaning toward “no” votes, as shown in the chart below that comes from a CNN producer.

McCarthy needed 15 rounds of voting in January to secure the speakership. The California congressman repeatedly saw around 20 fellow Republicans vote against him before finally prevailing.

There are “plenty of reasons to think” House Judiciary Committee Chairman Jordan will “be able to grind it out once people are on record,” but the situation is still “unsettled,” said Liam Donovan, a former GOP operative who is now a principal at law and lobbying firm Bracewell, in a post on X.

One possible key is whether support for Jordan declines or not in a second round of voting, according to Matt Glassman, a senior fellow at Georgetown University’s Government Affairs Institute. He made that point in his post below.

Analysts have been discussing whether a Jordan speakership could mean a greater likelihood of a government shutdown that weighs on markets
SPX
in mid-November, when funding is due to run out from last month’s continuing resolution, or CR.

“Jordan voted against the CR a few weeks ago and has opposed most government spending bills in the past, so some people think he would be comfortable with a government shutdown next month. That view has some merit, however, as speaker, Jordan would be responsible for helping vulnerable House Republicans who represent competitive districts,” said Brian Gardner, Stifel’s chief Washington policy strategist, in a note.

“His new role could put Mr. Jordan in the position of having to make compromises with Democrats — new territory for him. The more likely outcome is that, if elected speaker, Jordan will support an extension of the CR.”

U.S. stocks
DJIA

COMP
were advancing Tuesday, helped by encouraging earnings from big banks. Investors also are weighing rising geopolitical risks and better-than expected retail sales.

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October 17, 2023
House speaker election: Jim Jordan racks up endorsements before vote at noon Tuesday

Rep. Jim Jordan made progress Monday in his push to become the next speaker of the House of Representatives, winning endorsements from some fellow Republicans who just last week had refused to back him.

The narrowly divided chamber of Congress is expected to vote around noon Eastern Tuesday to select a speaker, with the move coming after former Speaker Kevin McCarthy was ousted two weeks ago and after No. 2 House Republican Steve Scalise ended his bid for the post last week.

GOP Rep. Ann Wagner of Missouri, who previously said a Jordan speakership was a non-starter for her, switched her stance on Monday. She said in a post on X that her colleague from Ohio “has allayed my concerns about keeping the government open with conservative funding, the need for strong border security, our need for consistent international support in times of war and unrest … as well as the need for stronger protections against the scourge of human trafficking and child exploitation.”

Similarly, GOP Rep. Mike Rogers of Alabama, who chairs the House Armed Services Committee, announced in a post on X that he was backing Jordan after saying last week that there was nothing that Jordan could do to win his support. Rogers pointed to an accord on an annual Pentagon bill, the National Defense Authorization Act, saying he and Jordan had “agreed on the need for Congress to pass a strong NDAA, appropriations to fund our government’s vital functions, and other important legislation like the Farm Bill.”

Republican Rep. Vern Buchanan of Florida offered his support for Jordan as well on Monday, though he noted that he’s “deeply frustrated by the way this process has played out.” Another endorsement came from GOP Rep. Ken Calvert of California, who chairs the House Appropriations Committee’s defense subpanel.

Jordan — who has been endorsed by former President Donald Trump — sent a letter to his colleagues in which he called for coming together after a chaotic two weeks, saying: “It is time we unite to get back to work on behalf of the American people.” The congressman, a co-founder of the hardline House Freedom Caucus and chairman of the House Judiciary Committee, also told CNN that he was confident about Tuesday’s vote, saying: “I feel good about it.”

Analysts have been warning that the process of finding a replacement for McCarthy is preventing the House from addressing crucial matters, such as avoiding a government shutdown next month and supporting Israel in its war against Hamas.

House Republicans made Jordan their nominee for speaker on Friday, but he drew just 124 votes while 81 lawmakers backed another candidate for speaker, GOP Rep. Austin Scott of Georgia. In another round of voting on Friday, Jordan still had 55 colleagues voting against him, but he now appears to be flipping some of them to his side.

One betting market, Smarkets, was giving Jordan a 33% chance of becoming speaker.

Spending cuts and shutdown coming?

Having Jordan as speaker could mean a 1% cut in defense
ITA
and non-defense spending, noted Philip Wallach, senior fellow at the American Enterprise Institute, a conservative think tank. That’s because this year’s debt-limit deal includes a provision that calls for such reductions if there aren’t bipartisan agreements on a dozen funding bills before Jan. 1 and instead a reliance on short-term measures known as continuing resolutions, or CRs.

“It is now clear,” Wallach said during an AEI event on Monday, that Jordan’s “plan is to have us live off continuing resolutions and implement this 1% cut.”

“That’s a concrete thing where he could say, ‘Well, we’re moving in the right direction. We’ve taken a hard stand,’” the AEI expert added.

The CEO of one financial advisory firm also sees standoffs in the future.

“We expect the next U.S. speaker will be less inclined to make deals than McCarthy; in many ways it makes more sense for them, politically, not to be a deal-maker in the current environment,” said deVere Group’s Nigel Green in a statement.

“We believe that a U.S. government shutdown is now more likely with a new speaker of the House, and this has the potential to create a domino effect in global financial markets
SPX.
”

BTIG analysts Isaac Boltansky and Isabel Bandoroff said the speaker drama suggests that next year’s election will also be full of twists and turns.

“We have followed every twist and turn of the speakership race, and there is only one takeaway we can share with absolute certainty: This confirms that the 2024 election cycle will be exhausting, volatile, and just downright weird from beginning to end,” they wrote in a note.

U.S. stocks
DJIA

COMP
closed higher Monday, as investors looked ahead to earnings season and unwound the flight-to-safety trades seen last week on fears the Israel-Hamas war could escalate into a wider conflict.

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October 16, 2023

Microsoft’s Activision Deal Gets Green Light From UK Regulator

By Kim Mackrael

Microsoft’s acquisition of videogame company Activision Blizzard won approval from U.K. competition authorities, clearing a path for the companies to close the $75 billion deal after a lengthy struggle with regulators.

The U.K.’s Competition and Markets Authority said Friday that the proposed deal no longer poses a major threat to competition in cloud gaming. The shift comes after Microsoft offered to restructure the deal by forfeiting cloud-streaming rights for “Call of Duty” and other popular Activision franchises in much of the world.

-Sarah E. Needleman contributed to this article

Write to Kim Mackrael at Kim.mackrael@wsj.com

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October 12, 2023

‘Banks fail. It’s OK,’ says former FDIC chair Sheila Bair.

Higher interest rates may be painful in the short term, but banks, savers and the financial ecosystem will be better off in the long run, said Sheila Bair, former chair of the Federal Deposit Insurance Corp.

“When money is free, you squander it,” Bair said in an interview with MarketWatch. “It’s like anything. If it doesn’t cost you anything, you’re going to value it less. And we’ve had free money for quite some time now.”

Bair, who led the FDIC from 2006 to 2011, caused a stir recently in criticizing “moonshots,” the crypto industry and “useless innovations” like Bored Ape NFTs, which proliferated because of speculation and near-zero interest rates.

Her main message has been that the path to higher rates, while potentially “tricky,” ultimately will lead to a more stable financial system, where “truly promising innovations will attract capital” and where savers can actually save.

Former FDIC Chair Sheila Bair was dubbed “the little guy’s protector in chief” by Time Magazine in the wake of the subprime mortgage crisis.

Bair sat down for an interview with Barron’s Live, MarketWatch edition, to talk about the ripple effects of higher rates, what could trigger another financial crisis and why more regional banks sitting on unrealized losses could fail in the wake of Silicon Valley Bank’s collapse in March.

“We probably will have more bank failures,” Bair said. “But you know what? Banks fail. It’s OK. The system goes on. It’s important for people to understand that households stay below the insured deposit caps.”

The FDIC insures bank deposits up to $250,000 per account. It also has overseen 565 bank failures since 2001.

“I know borrowing costs are going up, but your rewards for saving it are going up too,” she said. “I think that’s a very good thing.”

However, Bair isn’t focused only on money traps and pitfalls for grown-ups. She also has two new picture books coming out that aim to explain big financial themes to young readers, including where easy-money ways, speculation and inflation come from.

“One thing that I’ve learned from the kids is to not ask them what a loan is, because when I did that, a little hand when up, and she said: ‘That’s when you’re by yourself,’” Bair said.

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October 11, 2023
Family Dollar recalls dozens of P&G, J&J, Colgate products in 23 states due to incorrect temperature storage

Family Dollar voluntarily recalled dozens of over-the-counter drugs, products and medical devices sold at its stores because they had been stored at improper temperatures, according to the Food and Drug Administration late Tuesday.

On the FDA’s website, the regulator said products affected by the recall were stored “outside of labeled temperature requirements by Family Dollar and inadvertently shipped to certain stores on or around June 1, 2023 through September 21, 2023.”

Brands affected by the recall include Procter & Gamble’s
PG,
+0.99%
Crest, Vicks and Pepto Bismol; Colgate
CL,
+0.26%
; Johnson & Johnson Inc.’s
JNJ,
-0.11%
Tylenol and Listerine; and Bayer’s
BAYN,
+3.04%
Aleve, according to a list provided by the FDA.

The items were sold at stores in Alabama, Arkansas, Arizona, California, Colorado, Florida, Georgia, Idaho, Kansas, Louisiana, Mississippi, Montana, North Dakota, Nebraska, New Mexico, Nevada, Oklahoma, Oregon, South Dakota, Texas, Utah, Washington and Wyoming, between June 1 and Oct. 4, the FDA said.

Family Dollar was acquired by Dollar Tree Inc.
DLTR,
+3.26%
in a deal that closed in July 2015.

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October 10, 2023
Exxon-Pioneer merger: Here’s why FTC’s Khan may shy from a fight with the ‘800 pound gorilla.’

Exxon Mobil Corp.
XOM,
-1.67%
is reportedly nearing a deal to buy energy-exploration company Pioneer Natural Resources Co.
PXD,
+10.45%
for $60 billion, a combination that could shake up Texas’ storied and oil-rich Permian Basin.

It’s also bound to attract attention from the Biden Administration’s antitrust enforcers, including Federal Trade Commission Chair Lina Khan, given the paramount political importance of oil and gasoline prices.

“You can be sure that the FTC will give this acquisition a serious look,” Stephen Calkins, former general counsel at the FTC told MarketWatch, adding that the agency has long paid special attention to the oil and gas industry at the behest of Congress, which has long been sensitive to anything that may increase prices at the pump.

Read more: Exxon near $60 billion deal to buy shale driller Pioneer Natural Resources

The high cost of living after several years of historic inflation is one of President Joe Biden’s most important political vulnerabilities ahead of the 2024 election. A recent poll by Investors Business Daily showed only 24% of voters approve of his economic record.

The president has campaigned on gasoline prices specifically, telling an audience in Maryland last month, “I’m going to get those gas prices down again, I promise you.”

But any decision to challenge a merger must be based on the facts of the market in question and whether it would present a threat to competition that could lead to higher prices for consumers or other adverse effects.

Frederick Lawrence, director and energy analyst at Capital Alpha Partners told MarketWatch that there is much greater competition in the market for oil exploration and production, where Pioneer is a major player, than in other segments of the industry including gasoline stations, pipeline operators or refining.

Independent oil companies produce roughly 85% of natural gas and 65% of oil in the U.S., he said, and that fact will make it difficult for the Exxon acquisition to meaningfully reduce competition in oil exploration.

“People just think about big oil and they forget that there’s a very healthy independent community out there competing,” he said. “That said, this is Exxon Mobil we’re talking about, the 800 pound gorilla of the upstream oil value chain, so it’s important to acknowledge they’ll get more scrutiny.”

See also: Why gasoline prices are set to fall even as oil marches toward $100 a barrel

Investors should be prepared for the deal to take longer to consummate than a similar acquisition in another industry, Lawrence added, pointing to a recent deal between private equity firm Quantum and natural-gas producer EQT that was slowed because of additional information requests from the FTC.

The deal was ultimately consummated in August, nearly a year after it was announced.

Former FTC official Calkins said that investors should also be prepared for the FTC to get creative as it studies the deal, noting that Biden administration antitrust enforcers “have been receptive to unusual theories of competitive harm” and will study the impact of the merger on downstream businesses, like refiners and gasoline retailers.

The agency will also scour the deal for “any part of the business where there’s an anticompetitive story,” Calkins said, noting that large complex mergers often involve the transfer of a more obscure but valuable asset that could illegally boost an acquiring company’s market power.

Meanwhile, the FTC also has to contend with an already heavy workload, with ongoing cases against well-resourced companies like Amazon.com Inc.
AMZN,
+1.59%

“The FTC right now is doing a lot of litigating,” Calkins said. “There is a resources question of whether they have the ideal number of staff with the right skill set to add to their already full plate.”

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October 6, 2023
Treasury yields are climbing: ‘There’s never really been such an attractive opportunity for fixed-income investments’

While stocks get clobbered by rising bond yields, financial experts say everyday investors can roll with the punches by increasing their exposure to longer-term Treasurys and other fixed income — so long as they understand what they are doing.

Yield — and more of it — has been a great-sounding idea for more people ever since the Federal Reserve started increasing its benchmark interest rate in March 2022.

High-yield savings accounts, certificates of deposit and money market-mutual funds have all become alluring ways to reap rewards for parking cash. It’s easy to find these products with rates in the 4% and 5% range.

Treasury bills, which come due within a year, have also been a yield-producing place to put cash. Yields on T-bills
BX:TMUBMUSD06M
of varying length are over 5%, up from roughly 4.5% around the start of the year.

“High-yield savings accounts, certificates of deposit and money market-mutual funds have all become alluring ways to reap rewards for parking cash. ”

Yet yields have been inducing anxiety lately. For well over a month, the speedy ascent of yields for longer-term Treasury debt and a bond market sell-off have been knocking the stock market for a loop.

Still, some financial experts say there’s nothing wrong with buying longer-term Treasurys for the person who wants to keep putting their cash to work. Of course, they need to understand the risks and rewards for bonds when interest rates rise and fall.

Also see: As Treasury yields rise, Wall Street wonders what the Fed will do next. Where should you park your extra cash?

“Moving from cash to fixed income is the right move right now,” said wealth adviser Marisa Bradbury, managing director of the Florida offices for Sigma Investment Counselors. “You can definitely lock in some decent rates we haven’t seen in a long time.”

“Before, fixed income was so much a principal protection piece of the portfolio. Now you can actually earn a decent income on it too,” she said.

“The upside to what’s happened is for savers,” said Matt Sommer, head of specialist consulting group at Janus Henderson Investors. “There’s never really been such an attractive opportunity for fixed income investments as there is now.”

To be sure, there was a time when Treasury yields where far above their current mark. In the early to mid-1980s, the yields on the 10-year Treasury note and 30-year Treasury bond exceeded 10%. Of course, Sommer and other financial planners are focused on the present and the future because that’s what financial planning is all about. Here’s what they are thinking:

The ‘barbell’ approach

When clients building their nest egg want to go all in on T-bills, Sommer is instead advising they use a “barbell” approach that adds a mix of longer-term Treasurys and fixed income too.

“This is exactly the time investors shouldn’t hibernate on the short end of the [yield] curve,” said Richard Steinberg, chief market strategist and a principal at The Colony Group, a wealth advisory firm. He’s also advising clients to extend their duration on their Treasury and fixed income investments.

Yields climbed again Friday morning after the stronger than expected September jobs report. The yield on the two-year Treasury note
BX:TMUBMUSD02Y
rose to almost 5.1%, up from 5.023% Thursday afternoon and up from 4.26% a year ago.

The yield on the ten-year Treasury note
BX:TMUBMUSD10Y
climbed to 4.86%, up from 4.715% Thursday afternoon, and up from 3.82% a year ago. The yield on the 30-year bond
BX:TMUBMUSD30Y
reached 5.01%, up from 4.88% on Thursday and up from 3.78% a year ago – heading Friday morning for the highest level since August 2007.

Bond yield and price always move in different directions. When interest rates rise, bond prices decrease and bond yields increase. When rates fall, prices increase and yields decrease. That’s where the note of caution comes in.

Brace for losses if the Fed keeps increasing interest rates, said David Sekera, chief U.S. market strategist at Morningstar, the investment research firm.

For now, it may be a good time for bond portfolios to beef up the long side. “Part of what we are seeing in the stock market is a reallocation out of stocks and into fixed income,” he said.

Related: Why rising Treasury yields are upsetting financial markets

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October 6, 2023
GM stock sinks to 3-year low after report that faulty air-bag parts may lead to massive recall

General Motors Co.’s stock ended at its lowest in three years on Thursday following a news report saying that the carmaker may face a massive recall in connection with defective air-bag inflators.

The Wall Street Journal reported Thursday that at least 20 million GM
GM,
-2.35%
vehicles are built with the potentially dangerous air-bag part, made by auto supplier ARC Automotive of Tennessee.

GM stock fell 2.4% to close at $30.31, its lowest since Sept. 30, 2020, when it closed at $29.59. The stock has been down for five straight sessions, and off more than 8% in the period.

The report, citing people familiar with the matter, said that GM would be among the “most exposed” automaker to the recall, which involves 52 million inflators made by ARC.

At least two people have been killed and several others injured after the inflators exploded with too much force during a crash, sending shrapnel flying, the report said.

The National Highway Traffic Safety Administration has not yet released how many vehicles would be in the recall, or the specific models that would be affected, it said.

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October 5, 2023
Social Security Administration to review overpayments, may claw back payments

The Social Security Administration said Wednesday it would review its overpayment procedures and policies, and may claw back any overpayments found.

During the 2022 fiscal year, the agency recovered $4.7 billion of overpayments, according to a report by the SSA’s Office of the Inspector General.

While payment accuracy rates are high, overpayments do happen given the number of people the agency serves, the number of changes in their circumstances and the complexity of the programs, the SSA said.

“Despite our high accuracy rates, I am putting together a team to review our overpayment policies and procedures to further improve how we serve our customers,” said Kilolo Kijakazi, acting commissioner of Social Security.

“There is misinformation in the media claiming that the Social Security Administration is attempting to collect $21 billion. This figure was derived from the total amount of overpayments that have occurred over the history of the programs,” the SSA said in a statement.

The announcement comes the week before Social Security’s cost-of-living adjustment, or COLA, is expected to be released.

The 2024 COLA for Social Security is expected to rise about 3.2%, according to estimates from the Senior Citizens League, a pro-senior think tank. That’s compared with an 8.7% increase for 2023, which was the highest COLA in more than 40 years amid high inflation.

Social Security is an important benefit for most Americans. Half of the population age 65 or older live in households that receive at least 50% of their family income from Social Security benefits, according to SSA data, and about 25% of senior households rely on Social Security benefits for at least 90% of their income.

“The government’s got to fix this,” Sen. Sherrod Brown, the Ohio Democrat who chairs a Senate panel that oversees Social Security, recently told KFF Health News on the subject of overpayments. Meanwhile, Rep. Mike Carey of Ohio, the No. 2 Republican on a House panel that oversees Social Security, has called for a congressional hearing to review the problem, according to the KFF Health News report.

Social Security pays $1.4 trillion in benefits to more than 71 million people each year. Only around 0.5% of Social Security payments are overpayments, the SSA said.

“For the Supplemental Security Income (SSI) program, overpayments also represent a small percentage of payments — about 8% — but are higher due to the complexity in administering statutory income and resource limits and asset evaluations,” the agency said in the announcement.

If a person doesn’t agree that they’ve been overpaid, or believes the amount is incorrect, they can appeal. If they believe they shouldn’t have to pay the money back, they can request that the agency waive collection of the overpayment. There’s no time limit for filing a waiver.

The SSA said it is required by law to adjust benefits or recover debts when overpayments occur. The law allows Social Security to waive recovery in some cases.

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October 5, 2023

Tag: Regulation/Government Policy

Spending cuts and shutdown coming?

The ‘barbell’ approach