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OPEC+ extends oil-production cuts, signaling no rush to restore lost volume 2024-03-03 20:59:00+00:00 - OPEC+, made up of the Organization of the Petroleum Exporting Countries and its allies, including Russia, will extend voluntary production cuts into the second quarter, Saudi Arabia’s official press agency said Sunday. The move was widely anticipated and signals that the producers are in no rush to restore lost volume to the market amid uncertainty over the outlook for demand, analysts said. Citing an Energy Ministry source, the Saudi press agency said Saudi Arabia would extend its voluntary production cut of 1 million barrels a day, which was implemented in July 2023, until the end of the second quarter in coordination with some OPEC+ participating countries. That 1 million-barrels-a-day cut is in addition to a cut of 500,000 barrels a day previously announced by Saudi Arabia that runs until the end of this year. The announcement “does not come as a surprise. However, the decision sends a message of cohesion and confirms that the group in not in a hurry to return supply volumes, supporting the view that when this finally happens, it will be gradual (we expect in 3Q, as demand gets seasonally stronger),” said Giacomo Romeo, an analyst at Jefferies, in a note. An extension beyond the second quarter, however, remains much more uncertain, Romeo said, and will put the focus on the next meeting of OPEC+ officials in early June. The decision extends cuts implemented by OPEC+ in late November. Oil prices have subsequently risen, but remain well below 2023 highs set in the fall. Even the Israel-Hamas conflict and the threat that it could spread to threaten oil supplies from the Middle East has failed to push crude back toward those highs.
February job report and Powell’s visit to Capitol Hill are on investors’ radar this week 2024-03-03 20:36:00+00:00 - It is a crucial week for economists and investors as key economic data will be released, along with two days of testimony from Fed Chairman Jerome Powell before Congress. Fed officials have been singing from the same songbook over the past few weeks, stressing patience about potential interest-rate cuts. Fed Gov. Christopher Waller, summed it up best when he recently asked “what’s the rush?” Powell may not have appreciated that question. He is going to spend two days this week with lawmakers on Capitol Hill, many of whom are more than likely to have an answer prepared for Waller’s question. Remember, Senate Democrats already wanted the first rate cut in January, saying that the Fed’s tight monetary policy was damaging the housing market. Talk of patience might not be welcomed. Democrats are eager for the Fed to cut rates and potentially give the economy a jolt going into the November elections. Republicans will likely stress the need for the Fed to stay the course to combat still-high inflation. It is a political year and the Fed’s actions will be seen in that light, no matter how often it swears to be apolitical. February job report Friday at 8:30 a.m. Eastern Economists expect the labor market to cool after two “fiery” job gains the past two months, said Douglas Porter, chief economist at BMO Capital Markets. In December and January, the economy added an average of 268,000 net new jobs per month. Economists surveyed by the Wall Street Journal expect the economy to add 210,000 jobs in February. The unemployment rate is expected to remain steady at 3.7%., nearly as low as it has been in 50 years. Average hourly wages are expected to moderate to a 0.2% gain from the strong 0.6% rise in the prior month. “Even though we believe job growth will cool in February, we still see a number of signs that the labor market remains strong, Feroli of JPMorgan said. Q1 GDP tracking estimate Data not officially released until end of April Economists are ratcheting up their forecasts for first-quarter gross domestic product based on recent data. Michael Feroli, chief U.S. economist at JP Morgan Chase, said he raised his estimate to a 2.25% rate in the January-March quarter, from his prior forecast of 1.7%. Aichi Amemiya, senior economist for the U.S. at Nomura Securities, said he’s raised his tracking estimate to 2.2% from 2.1%. The Atlanta Fed’s GDPNow estimate is 2.1%, down from 3% previously. The government revised its estimate for fourth quarter growth to 3.2% from 3.3% previously. The official first-quarter GDP data won’t be released until April 25. So the economy “is still in the soft landing zone,” said Scott Anderson, chief U.S. economist at BMO.
Judge’s Ruling Sets Back Law Meant to Fight Money Laundering 2024-03-03 20:13:24+00:00 - In a blow to government efforts to combat money laundering, a federal court has ruled that the Treasury Department cannot require some small businesses to report personal details about their owners. Under a section of a 2020 law that took effect Jan. 1, small businesses must share details about their so-called beneficial owners, individuals who hold financial stakes in a company or have significant power over their business decisions. The law, the Corporate Transparency Act, passed with bipartisan support in Congress and was intended to help the Treasury Department’s financial-crimes division identify money launderers who hide behind shell corporations. But in a ruling issued late Friday, Judge Liles C. Burke of the U.S. District Court in Huntsville, Ala., sided with critics of the law. They argue that asking a company’s owners to present personal data — names, addresses and copies of their identification documents — was a case of congressional overreach, however well intended. “Congress sometimes enacts smart laws that violate the Constitution,” Judge Burke wrote in a 53-page filing. “This case, which concerns the constitutionality of the Corporate Transparency Act, illustrates that principle.”
Lawyers who got Elon Musk’s pay package voided seek $5.6 billion in Tesla stock 2024-03-03 20:08:00+00:00 - DOVER, Del. — The lawyers who successfully argued that a massive pay package for Tesla CEO Elon Musk was illegal and should be voided have asked the presiding judge to award them company stock worth $5.6 billion as legal fees. The attorneys, who represented Tesla TSLA, +0.38% shareholders in the case decided in January, made the request of the Delaware judge in court papers filed Friday. The amount would apparently be far and away the largest such award, if approved. Lawyers in class-action suits stemming from the collapse of Enron got a record $688 million in legal fees in 2008. “We are ‘prepared to eat our cooking,’” the Tesla plaintiff attorneys wrote in the court filing, arguing the sum is justified because they worked purely on a contingency basis for more than five years. If they lost they would have gotten nothing. The benefit to Tesla “was massive,” they said. The requested award represents 11% of the Tesla stock — worth some $55 billion — that Musk was seeking in the compensation package, which Judge Kathaleen St. Jude McCormick ruled illegal in January. Not only does the request take nothing from the electric car company’s balance sheet, it is also tax deductible, the attorneys argued. They are also seeking $1.1 million in expenses. In her ruling, Judge McCormick accepted the shareholder lawyers’ argument that Musk personally dictated the landmark 2018 pay package in sham negotiations with directors who were not independent. It would have nearly doubled Musk’s stake in Tesla. He currently holds 13%.
CNBC Daily Open: U.S. manufacturing drag continues 2024-03-03 20:03:00+00:00 - Workers assemble printed circuit boards at the Intervala manufacturing facility in Mount Pleasant, Pennsylvania, US, on Tuesday, Jan. 30, 2024. The US Census Bureau is scheduled to release factory orders figures on February 2. This report is from today's CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here . Wall Street hits new high U.S. stocks wrapped up Friday's session on a strong note. The Nasdaq Composite rose to an all-time high, crossing its 2021 record, soaring over 1%.The S&P 500 also closed at a fresh high, adding 0.80% to close above the 5,100 level for the first time. The blue-chip Dow rose around 91 points. China key meetings in focus China is set to hold its annual parliamentary meetings this week that will be closely watched by investors for signals on economic stimulus. An ailing property sector and sluggish growth has raised questions on whether Beijing will step in with large-scale support. So far, policymakers have been relatively reserved on that front. OPEC+ extends oil cuts OPEC+ producers together with Saudi Arabia and Russia will extend their voluntary crude supply cuts until the end of the second quarter. U.S. crude oil futures touched $80 a barrel for the first time since November, pointing to a tightening market ahead of the OPEC+ decision. U.S. debt rising U.S. national debt is growing at a faster pace in recent months, rising about $1 trillion nearly every 100 days. It permanently crossed over to $34 trillion on Jan. 4, after briefly breaching the mark on Dec. 29, based on data from the U.S. Department of the Treasury. [PRO] The 'Fantastic Four' Hedge fund manager Dan Niles prefers the so-called "Fantastic Four" stocks, thanks to their earnings potential in 2024. He recommended Nvidia, Meta , Microsoft and Amazo n because of their booming AI businesses. "Those names are being driven by earnings," Niles told CNBC last week.
Trader Joe’s chicken soup dumplings recalled for possibly containing permanent marker plastic 2024-03-03 19:43:20+00:00 - NEW YORK (AP) — More than 61,000 pounds of steamed chicken soup dumplings sold at Trader Joe’s are being recalled for possibly containing hard plastic, U.S. regulators announced Saturday. The Agriculture Department’s Food Safety and Inspection Service noted that the now-recalled dumplings, which are produced by the California-based CJ Foods Manufacturing Beaumont Corp., may be contaminated with foreign materials — “specifically hard plastic from a permanent marker pen.” The recall arrives after consumers reported finding hard plastic in the Trader Joe’s-branded products, FSIS said. To date, no related illnesses or injures have been reported. FSIS urged consumers to check their freezers. The 6-ounce “Trader Joe’s Steamed Chicken Soup Dumplings” under recall were produced on Dec. 7, 2023 — and can be identified by their side box labels with lot codes 03.07.25.C1-1 and 03.07.25.C1-2. In an online notice about the recall, Trader Joe’s asked consumers to throw the impacted dumplings away or return them to any store location for a full refund. A spokesperson for CJ Foods Manufacturing Beaumont Corp. told The Associated Press that the company was investigating the issue, which happened during the manufacturing process. In an emailed statement, the food maker added that “customer safety remains our No. 1 priority.” Foreign object contamination is one of the the top reasons for food recalls in the U.S. today. Beyond plastic, metal fragments, bits of bugs and more “extraneous” materials have prompted recalls by making their way into packaged goods.
Researchers just discovered a massive 'jacuzzi bubbling with almost pure hydrogen' — a lucrative source of clean energy 2024-03-03 19:33:14+00:00 - A team of researchers recently discovered a massive reservoir of hydrogen in a mine in Albania. Its concentrations of hydrogen are so high that it has caused explosions and killed miners. The reservoir could be a potential source of clean hydrogen energy. NEW LOOK Sign up to get the inside scoop on today’s biggest stories in markets, tech, and business — delivered daily. Read preview Thanks for signing up! Access your favorite topics in a personalized feed while you're on the go. download the app Email address Sign up By clicking “Sign Up”, you accept our Terms of Service and Privacy Policy . You can opt-out at any time. Advertisement Hydrogen is becoming a favorable alternative to fossil fuels because it doesn't release carbon into the environment when burned. The downside is that generating it has long been an energy-intensive business that emits greenhouse gasses that warm the planet. But recently, a team of researchers uncovered a massive reservoir of hydrogen buried in a mine in Albania that could serve as a source of clean, hydrogen energy . This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. Have an account? Log in .
‘Dune: Part Two’ Draws Large Audiences 2024-03-03 19:19:18+00:00 - “Dune: Part Two” and its A-list cast jump-started moviegoing in North America after a dismal start to the year. The science-fiction sequel sold an estimated $81.5 million in tickets in the United States and Canada from Thursday night to Sunday, the biggest opening for a Hollywood film since “Barbie” in July. (Taylor Swift’s concert documentary arrived to $93 million in October.) “Dune: Part Two,” directed by Denis Villeneuve, collected an additional $97 million overseas. IMAX screenings were especially strong. Legendary Entertainment and Warner Bros. spent $190 million to produce “Dune: Part Two,” not including a megawatt marketing campaign that found Zendaya, Timothée Chalamet, Austin Butler, Anya-Taylor Joy, Javier Bardem, Josh Brolin and Florence Pugh trotting red carpets in Mexico City, London and New York. The movie had originally been scheduled for November, but Legendary pushed back the release date because of the actors’ strike: Without the buzzy young cast promoting the movie — Zendaya’s bottom-baring robot suit at the London premiere arrived on the internet as a sonic boom — Legendary feared that “Part Two” would not turn out audiences in big enough numbers to warrant the high budget. Sci-fi fans were likely to come one way or another. But Legendary also needed to sell the film’s more delicate story — a boy becoming a man, a guy falling in love — which would be more difficult without cast interviews.
OPEC to Extend Oil Production Cuts Through June 2024-03-03 19:17:31+00:00 - Saudi Arabia, the de facto leader of the Organization of the Petroleum Exporting Countries, said Sunday that it would extend cuts in oil production through June, noting that it was acting “in coordination with some” other states. Saudi allies including Kuwait and the United Arab Emirates said Sunday that they would also continue their reductions. The decision to keep output cuts in place was expected and appears intended to bolster what might otherwise be weak oil prices. Some analysts forecast that the supply of oil will exceed demand in the first half of this year. Without continued cuts, prices might sink. Saudi Arabia described the move as “precautionary.” Holding back oil production has “the aim of supporting the stability and balance of oil markets,” the kingdom said in a statement carried by the official Saudi Press Agency. The Saudis said that the one million barrels a day that they began cutting in July “will be returned gradually, subject to market conditions.”
Ohio Fines CVS $1.5 Million Over Safety and Staffing Issues 2024-03-03 19:17:09+00:00 - CVS Health, the nation’s largest pharmacy chain with more than 9,000 locations, has been fined more than $1.5 million by Ohio regulators over problems connected to understaffing and patient safety, officials said. The fines are part of a settlement of 27 cases involving various safety concerns that were uncovered during a series of inspections of 22 pharmacies between 2020 and 2023, the State of Ohio Board of Pharmacy said in a statement on Thursday. The board said that it found, among other things, improper drug security, errors dispensing drugs, prescription delays, lack of general cleanliness, understaffing and failure to report losses of controlled substances. The settlement comes as pharmacies nationwide have been plagued by labor issues. In November, some pharmacy workers called in sick or walked off the job to call attention to what they say is inadequate staffing and growing work demands.
Why Caitlin Clark passing Pete Maravich in points on Fox is so huge 2024-03-03 19:01:17+00:00 - College basketball star Caitlin Clark of the Iowa Hawkeyes became the all-time leading scorer for both women and men in NCAA Division I history Sunday afternoon when she made a single free throw to end the second quarter against Ohio State. With that ice cold bucket, she has passed the mark of 3,667 points that LSU’s Pete Maravich set in 1970, two years before the passage of Title IX. Clark’s innate showmanship and ability to amuse is one of the reasons she’s the most recognizable person in college athletics. Clark’s innate showmanship and ability to amuse (and sometimes frustrate) crowds of thousands, as Maravich himself did, is one of the reasons she’s the most recognizable person in college athletics. When Clark broke Kelsey Plum’s NCAA women’s college basketball record of 3,527 points on Feb. 15, the Iowa superstar said she did it the only way she could. She received a pass from teammate Gabbie Marshall, dribbled once, crossed over her defender, and launched a three from the sponsor’s logo at Carver-Hawkeye Arena. “You all knew I was going to shoot a logo three for the record, c’mon now,” she told reporters after the game. On Wednesday, Clark broke the 3,649-point record that Lynette Woodard set in 1981 while playing for Kansas, which then belonged to the Association for Intercollegiate Athletics for Women (AIAW). To break that record, Clark couldn’t help but fire off another crafty trey. She dribbled twice as she came off a screen, stepped back and fired. The ball swished. Clark’s latest record-breaking moment is a reminder of what records signal. Washington Post sports columnist Sally Jenkins recently wrote that a record is a “symbolic message” that holds “potential, history and memory, all in one.” The sharpshooter from Iowa has ushered in a new era of women’s college basketball. Droves of fans line up like she’s Beyoncé or Taylor Swift every time the Hawkeyes are in town, the television ratings for the sport are up, and tickets for the Sunday-afternoon game where she broke Maravich’s record were the most expensive in women’s basketball history. Tickets for the Sunday-afternoon game when she broke Maravich’s record were the most expensive in women’s basketball history. Clark should be remembered as a driving force who brought the general public to a sport that has years and years of undertold stories. When Clark broke Woodard’s record Wednesday night, she and her coach, Lisa Bluder, reminded reporters of who Woodard is and that her record of 3,649 points has wrongly been othered and minimized by the NCAA. “At a school like Iowa that has been so rich in AIAW history, I just want to make sure we acknowledge Lynette’s accomplishments in the game of basketball,” Bluder said. The records set in the AIAW, the governing body for women’s college sports prior to 1982, aren’t included in the NCAA’s account of collegiate sports history. Those records have been in a separate section outside of what are designated as Division I, II and III records. (Pearl Moore, who played at Division II school Francis Marion between 1975 and 1979 scored 4,061 total points.) Clark is a generational talent playing at a time when people across the country and all over the world are better able to witness her greatness. Many of Clark’s games have been appointment viewing on national television. She has played college basketball in an era with a grassroots movement that has demanded that more women’s sports be put on television and that coverage be substantive. She’s played during a time when T-shirts were made and media companies were established to promote more women’s sports coverage. That can’t be said of the women who came before her. Women like Woodard, Cheryl Miller, Sheryl Swoopes, Chamique Holdsclaw, Sue Bird, Diana Taurasi, Candace Parker, Maya Moore, Breanna Stewart and A’ja Wilson. “I think it just speaks to the foundation that these players have laid for us to have opportunities to be able to play in environments like this and in front of crowds like this,” Clark said about Woodard. “So I wouldn’t have the opportunity to be able to do what I’m doing every single night if it wasn’t for people like her, and obviously there are so many great players across the board.” When Plum was closing in on what was then the NCAA Division I women’s college basketball record, there wasn’t nearly as much media coverage. Contrary to what some people may believe, Clark isn’t saving women’s basketball. Without all who came before her, she might not be in the position she’s in right now. What is that position exactly? It’s one that has brought many of the forgotten stories of the sport out of the woodwork, including stories about Woodard and Moore. Back in 2017 when Plum was closing in on what was then the NCAA Division I women’s college basketball record, there wasn’t nearly as much media coverage. Nor did we read stories about Woodard and Moore. But what will happen to this level of momentum for the sport when Clark reaches the next level? That’s when the “potential” that Jenkins addresses comes into the picture. On Thursday afternoon, Clark announced on X that when the NCAA championship tournament is over, she’ll declare for the WNBA draft. (The NCAA granted players who played during the 2019-20 season an extra year of eligibility because of the pandemic. So Clark could have chosen to stay at Iowa another season.) The consensus among pro talent evaluators is that Clark will make an excellent WNBA player. But how soon? It took years for Plum and Sabrina Ionescu (who holds the record for the most college triple-doubles of all time with 26) to reach elite status in the WNBA. Plum, the 2017 No. 1 overall draft pick, began her WNBA career on the bench. Ionescu, the 2020 No. 1 overall draft pick, began her pro career rehabbing from a season-ending injury she sustained three games into her WNBA career. Ionescu is a three-point shooting champion and Plum is a two-time WNBA champion and the 2022 WNBA All-Star Game MVP. Will Clark be ready for the WNBA’s speed and physicality? How will she adjust to having grown adults, not college kids, guarding her? How will she adjust to not being the No. 1 scoring option at all times? Will the droves of fans follow her to the WNBA, likely to the Indiana Fever, the team with the No. 1 overall pick in April’s draft? Will the droves of fans follow her to the WNBA, likely to the Indiana Fever, the team with the No. 1 overall pick in April’s draft? The league has struggled to bring fans of players like Plum, Ionescu, Wilson, Stewart and South Carolina great Aliyah Boston over from the NCAA. WNBA Commissioner Cathy Engelbert stepped into her role just before the 2020 season, the season when the Covid pandemic hit and Ionescu was drafted. She referred to that 2020 bubble season during last month’s NBA All-Star weekend in Indianapolis when asked about capturing more fans of women’s college basketball. “We still have some work to do and now we have this huge opportunity because they’re already coming in with all those followerships,” Engelbert told The Next, the women’s basketball outlet I work for. “And I would say Sabrina was one of the first ones because at Oregon and what she accomplished, and the unfortunate thing was then the pandemic hit as we were drafting her.” To make sure history doesn’t repeat for Clark, the WNBA will look to have its feet on the ground during the NCAA tournament, when Clark will be playing her final college basketball games. The WNBA’s Chief Marketing Officer Phil Cook said that the league will be marketing itself more alongside the women’s NCAA March Madness tournament this year, because that’s where “the basketball universe is.” “We’re going to start our annual advertising campaign during the tournament,” Cook told the Indy Star. “It’s our Super Bowl, so to speak.” Following Clark’s Thursday announcement that she’ll enter the WNBA draft this April, Vivid Seats, a ticket exchange and resale company, reported that the average ticket price to watch the Indiana Fever had more than doubled, leaping from $60 to $140. It looks like the Clark effect won’t end in Iowa, but rather is just beginning.
Chinese leaders to hold annual 'Two Sessions' meeting as debate about bazooka-like stimulus swirls 2024-03-03 18:04:00+00:00 - A Chinese flag flutters on top of the Great Hall of the People ahead of the opening ceremony of the Belt and Road Forum (BRF), to mark 10th anniversary of the Belt and Road Initiative, in Beijing, China October 18, 2023. Edgar Su | Reuters BEIJING — China is set this week to kick off its annual parliamentary meetings, which investors are watching closely for signals on economic stimulus. The country's gross domestic product grew by 5.2% in 2023, but overall recovery from the Covid-19 pandemic was slower than many had expected. A prolonged slump in the massive real estate market and falling global demand for Chinese exports have contributed to low levels of consumer and business sentiment. That's all led to questions over whether Beijing will step in with large-scale support. So far, authorities have been relatively reserved. Beijing signaled in December that any new policy support would be "appropriate," said Wang Jun, chief economist at Huatai Asset Management, adding "there's no way" that stimulus would be as large as it was in 2008. That's according to a CNBC translation of his Mandarin-language remarks. China's economic policy is typically set at an annual meeting in December by leaders within the ruling Communist Party of China. The meetings this month, known as the "Two Sessions," are at the government, instead of party, level and typically release more details on policy plans, such as the GDP target for the year. watch now Wang said he is watching for comments on authorities' plans for the real estate sector, capital markets and local government finances. Back in 2008, when the world was reeling from the financial crisis, China unleashed a massive stimulus package to sustain growth with greater demand. While the economy rebounded, the measures drew criticism for a resulting surge in local government debt. Beijing in recent years has emphasized the need to stem financial risks and clamped down on real estate developers' high reliance on debt for growth, an issue tied to local government finances. This time around, China's monetary policy also faces constraints on how far it can deviate from the U.S. Federal Reserve's interest rate path. GDP and other economic targets The Chinese People's Political Consultative Conference, an advisory body, is set to kick off its annual meeting on Monday. The following day the National People's Congress legislature is due to begin its meeting. Tuesday is also when the country's premier is expected to share the year's targets for GDP, employment and other economic indicators in what's called the "Government Work Report." "The target will likely remain relatively high," said Bank of China's chief researcher Zong Liang, noting GDP grew by 5.2% last year. That's according to a CNBC translation of his Mandarin-language remarks. He expects the target for the fiscal deficit will be around 3.5% and that monetary policy will also be relatively loose. China in October made a rare announcement that it was raising the fiscal deficit to 3.8%, from 3%. "We expect the on-budget deficit – which excludes special bonds, policy bank bonds, and local government financing vehicle (LGFV) debt – to be set at 3.0%-3.5% of GDP, narrowing from last year's 3.8% of GDP," Louise Loo, lead economist at Oxford Economics, said in a report Thursday. "We expect a modest step-up in the local government special bonds (LGSB) quota, to RMB4.0tn from RMB3.8tn last year," Loo said. "Authorities may also finally put pen to paper on the reported RMB1tn in planned central government special bonds (CGSBs), reflecting the increasing role of central coffers amid a continued debt cleanup process among local government entities this year." "On balance, the additional fiscal impulse this year, assuming a bazooka-like fiscal package is not forthcoming, is unlikely to be particularly large." Watching for comments on real estate and tech The Two Sessions is also a period for releasing the budget and for delegates to discuss needed policy changes and plans. “Speeches by top policymakers will be key to watch, including interviews of key ministers, such as Minister of Industry and Information Technology, Minister of Science and Technology, and Minister of Housing and Urban-Rural Development. These key ministers will discuss various policies in more detail," Goldman Sachs analysts said in a report. watch now During the parliamentary meetings, Chinese officials will likely also discuss plans to bolster tech and innovation, in line with a recent high-level call to bolster "new productive forces." China's foreign minister and premier typically hold press conferences during the parliamentary meetings, which generally end in mid-March. The advisory body is set to conclude its annual meeting on Sunday, March 10, according to an official announcement. The National People's Congress typically ends one day later, but no date has been confirmed yet. Bank of China's Zong expects that policymakers will send signals on opening up borders or other business opportunities to foreigners, as well as improving the environment for non-state-owned enterprises. However, specific implementation details are typically left to individual ministries to announce, following high-level directives from Beijing. Any direct support for consumption is unlikely, but broader moves to improve the social safety net would be of note. "On the demand side, the delayed Third Plenum [of the Chinese Communist Party's Central Committee] (originally set for December) suggests that longer term demand policies – including on fiscal, tax, and pensions reforms – may still be in initial stages of discussion, but could still warrant a mention here," Loo said. The macro context This year's Two Sessions follow regular leadership reshuffles that have strengthened the ruling Communist Party of China's control of the government. watch now
Jim Cramer: Why a successful Reddit IPO would be bad news for this bull market 2024-03-03 17:46:00+00:00 - There's nothing like a moribund IPO market to create a pleasant backdrop for a bull run. We've had some small biotech deals and the usual SPAC junk. But nothing big, seemingly for ages. Until Reddit. Its initial public offering — which will probably come at a $7 billion valuation and an odd price tag of $31 to $34 a share — requires people to buy shares in a social media company that has never made money. It's been around for 19 years and it still hasn't produced anything but adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization), an alternative measure of financial performance that I will not recognize because it has lost money for too many of us. Reddit did post $804 million in revenue for 2023, a sizable 20% growth from the previous year. This will get some institutions interested in participating in the upcoming IPO and hopefully keep some of its larger investors, including the mercurial Sam Altman, CEO of OpenAI; Conde Nast parent Advance Magazine Publishers, a still thriving mostly print entity; and Tencent (go figure). Hot on the heels of the Reddit deal is the expiration of the IPO lockup period for Arm Holdings on March 12. Company insiders have been prohibited from selling shares of the British chipmaker since it went public in September, and I have no idea if there will be sellers of any size. Who knows with a company that sports a long-standing partnership with Nvidia ? But things loom when it comes to these matters. Reddit is a confusing deal. Employees will be able to sell stock on the deal, and some will sell given how long they have been around. It makes too much sense not to sell. But there could likely be buyers, perhaps the memesters, remnants of the GameStop era, and the options trading folk at Robinhood (another divine mystery). I do know this: If Reddit rallies, there will be others to follow. If it doesn't, we could see a continuation of the lack of share supply, which is a function of endless buybacks that drive down the natural supply. You have to realize how important supply and demand can be to any market. Supply after the initial 60 to 90 days breeds a level of faux confidence and lack of rigor for all participants waiting for a ready source, usually chumps, to do some buying. I thought it might occur after the successful Arm deal, but like so many nascent attempts to revive the IPO market there was nothing worth following up with until the Reddit deal. I shudder to compare the two. Arm is an amazing company with first-class seasoned leadership and superior engineering. It's run by Rene Haas, who could rival or beat most CEOs in tech, about as high a compliment as I can bestow. I have yet to find anyone who doesn't love him. Maybe Reddit could be more like Instacart , which went public in September. The grocery delivery company said it made $2.5 billion in revenue in 2022, and $242 million in profit for the first half of 2023. Ads are incredibly lucrative and were responsible for $406 million in sales and a third of that profit. I kind of like the ad model. It works incredibly well for Amazon , Walmart and DoorDash . Maybe it will work for Reddit. Steve Huffman, Reddit's well-compensated CEO — he made $193 million in 2023, according to the S-1 filing — isn't as loved. While a co-founder of the company, he left it for six years before returning as chief executive. In some ways, Reddit reminds me of the old Etsy , which was initially run to the benefit of the community, but then came to be an actual business and remains one now. Reddit has to follow a similar path. This will be difficult given the fractious and at times unruly readership of more than 70 million people. It seems more of a message board than a business. However, the proliferation of ads in the last year, no doubt in preparation for the IPO, has been duly noted by a community that seems a tad communistic for my taste. Let's see. There is an amorphous plan to reward monitors and Redditors with some stock. But if this deal is anything like one I did at TheStreet.com in 1999, I wouldn't be so sure. At the time, I tried mightily to get stock for employees and readers but was dismissed by the bankers and the Securities and Exchange Commission. I may sound skeptical about this IPO, but that's because its success relies on how tightly Morgan Stanley conducts the deal. It needs to produce a nice pop but not a huge one or it will open at its high, trade a little higher midday, and then begin the sickening slide lower that is reserved for money-losing companies — adjusted EBITDA, or otherwise. Those who want the bull to continue must root against this deal and bet that it fails to hold the opening. That will keep other companies at bay. But those who are pinning the hopes for a return of a vibrant IPO market on this deal have to rely on Morgan Stanley to be deft in its dish out. And that's something that I am not sure it is capable of given the rusty nature of the market. Why does this placement matter so much? Because there are a ton of AI-related companies that need liquidity and there is no better time than the present to cash in if Reddit "works." As shareholders of Morgan Stanley , we need this one to work or a lot of whatever faith is left in the bank will dissipate. Its performance in the last six months has been horrendous, due to desultory management. My bile shows because I hate losing money. The sustenance of this market comes from many different directions. We have some thriving healthcare, transportation, and industrial markets. The latter is built on endless buybacks coupled with infrastructure orders from various governments, but it's nothing like the Nvidia-led tech bull market. We don't want that rally to broaden simply because there is not enough money around. Investors, after all, can still earn 5% on the sidelines. Boy is that 5% a tricky godsend, given you could have made so much more by owning a basket of tech stocks. Without lots of new stock coming to the tape, the entire equity market feels like a sliver IPO, where only some of it trades. As long as that stays the case we know there is kind of a put underneath all stocks. We lose it, though, through six to seven weeks of actual sliver IPOs that generate mindless pops via engineered opening prices that favor the buyers or the sellers depending upon the clout of the CEO who runs the company. Most CEOs get taken to the cleaners because they have never brought deals public and are beholden to bankers who want to reward the Fidelitys of the world. (Fidelity is a shareholder of Reddit, but I don't know how that will cut with allocations.) No one ever admits that they have been one-hour Martinized for fear of revealing themselves as bumpkins. But having brought a company public with TheStreet.com, I was astounded at how shabbily I was treated, and I was pretty informed on the process, having done a ton of syndicate work at Goldman Sachs and having run a hedge fund. The lords of finance are a potent force when it comes to this end of commerce. I go into some detail about this process only because we are coming out of earnings and they were surprisingly good to those who hadn't done much homework. These folks love to opine or are addicted to Fed speak and don't care one whit about anything other than aggregate earnings. I often think that these opiners like their status because it allows them both to do only a modicum of homework (they disdain getting their hands dirty with the nitty-gritty) while not having to select or discuss any individual stocks. Why were most people shocked at the earnings in aggregate? It is mostly because of the shallowness of the "beat and raise" formula for estimating how a company has done. If you create nothing but bogus estimates that can easily be beaten — with the help of management in offline discussions after earning calls — you are going to engineer upside surprises. That is, unless management is incompetent in producing 90 days' worth of planned results, usually with more than a month already under the belt. The backdrop is benign because of unemployment and inflation. The sheer number of jobs created in this economy is breathtaking. The ability to raise prices is formidable. The addition of a shadow economy of 8 to 10 million immigrants, legal or otherwise, is a positive for both sales — bolstered by desperate city and state governments — and earnings, boosted by employers joyously ignoring the rules about hiring these people, no doubt spurred by a lack of ICE enforcement. Sometimes I wish I didn't know so much of this but I learned my lessons by owning a couple of restaurants and watching enforcement for fear of investigation because of my admittedly high profile. Those who looked the other way were able to get away with minimum wages. The rest of us trawled everywhere for $ 21-an-hour dishwashers. If you were doing okay, or if you were a dabbler, it didn't hurt the bottom line all that much. Otherwise, it sunk you because of the narrow profit margins of all but the most successful entities. Everything works when you have robust employment. We know now that housing can stay ridiculously hot given how intelligent the builders are and how much of the new home market is sought after by people who don't need to work at the office every day and want to flee the cities for better public schools — a sadly universal problem. Autos stay strong because of the importance of private transit versus spotty public transit, not made up for by Uber or Lyft . Retail can keep succeeding, led by Walmart, Amazon, and Costco , three beauties with obviously terrific stocks. Travel and leisure rely on those who have excess savings and bountiful credit. These all go away, of course, when job creation diminishes. But only a handful of companies have committed to efficiency and only Bed Bath and Rite Aid have filed bankruptcy, with the former doing an unusual liquidation. In that environment, it's hard not to do well both in earnings and in stock prices. Tech? All I can say is this moment marks the conversion of the non-believers into believers, an enjoyable kicking-and-screaming process for those of us who have been captivated by the wonders of generative AI for years now. AI might as well stand for "astounding income" for those companies that know how to use it, led by Microsoft , Meta Platforms , and Amazon . This brings me back to the IPO market. Other than getting a too-hot employment number this Friday (and lots of attendant authentic Fed speak gibberish about when the central bank will cut rates) there's not much that can derail the bull. We aren't overbought, we have nothing in the way of earnings that can be shocking. Do we still care about Target 's numbers? And we have an election year where the sitting president can always find something to please a portion of the electorate, like the profligate, albeit pleasing, way that that student loans are forgiven. You can see the populist juices flowing from members of both parties in the down ticket, too. All of it matters. Much of it flows to savings. Some of it flows to stocks. A goodly amount seems to go into crypto with no sellers in sight. But if Reddit works, that will toss the window wide open between now and the summer, and the brokers need it. There's plenty of M & A out there, but the Federal Trade Commission will be sure to make one last stand for fear of a change at the White House in November. Under these circumstances, the atmosphere can only be described as benign. That's enough to continue the improbable rally that has gone on since the November Fed pivot, the last time the Fed mattered despite the chatter otherwise. I like to say "enjoy" it because when things are bad they are very bad. They aren't. Enjoy it. (See here for a full list of the stocks in Jim Cramer's Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED. POLAND - 2023/07/26: In this photo illustration a Reddit logo seen displayed on a smartphone. 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Vice President Harris calls for cease-fire in Gaza during speech at Bloody Sunday anniversary 2024-03-03 17:11:00+00:00 - U.S. Vice President Kamala Harris, front center, other participants walk over the Edmund Pettus Bridge during an event marking the 57th anniversary of the 1965 Bloody Sunday civil rights march in Selma, Alabama, U.S., on Sunday, March 6, 2022. Vice President Kamala Harris called for a cease-fire in Gaza Sunday while commemorating the anniversary of Bloody Sunday, the day law enforcement officers attacked Civil Rights activists crossing the Edmund Pettus Bridge in Selma, Alabama. Harris gave an 18-minute speech at a gathering on the bridge to recognize the 59th anniversary of Bloody Sunday. On March 7, 1965, officers beat 600 demonstrators with billy clubs and sprayed them with tear gas during a march across the bridge in support of voting rights. Before honoring activists like Amelia Boynton and John Lewis, Harris acknowledged the ongoing humanitarian crisis in Gaza in the wake of the Israel-Hamas war. Harris condemned Hamas while also calling on the Israeli government to increase assistance in Gaza. On Saturday, the United States military completed its first airdrop of humanitarian aid in Gaza after authorization from President Joe Biden last week. Harris also acknowledged negotiations for a cease-fire in the region and said she and Biden are "unwavering in our commitment to Israel's security." "Given the immense scale of suffering in Gaza, there must be an immediate cease-fire for at least the next six weeks, which is currently on the table," Harris said. Echoing the remarks Biden made last week, Harris said the U.S. will continue providing aid to Gaza via airdrops and a potential route by sea. "People in Gaza are starving, the conditions are inhumane and our common humanity compels us to act," Harris said. She also honored the work of Civil Rights activists and drew comparisons between their fight for freedom and modern threats to freedom, like gun violence and voting rights. "The challenges we currently face are not unlike the challenges faced by those 600 brave souls 59 years ago," Harris said.
Congress unveils first six budget bills as government shutdown clock ticks 2024-03-03 17:01:00+00:00 - Senate Majority Leader Charles Schumer, D-N.Y., left, and Speaker of the House Mike Johnson, R-La., attend a Menorah lighting to celebrate the eight-day festival of Hanukkah, in the U.S. Capitol on Tuesday, December 12, 2023. Congressional lawmakers on Sunday released the details of the first six budget bills needed to keep government agencies funded before they run out of money and a partial government shutdown takes effect this coming weekend. The 1,050-page appropriations package has funding for six major areas of government that encompass military and veterans affairs departments, agriculture, commerce, energy and water, transportation, housing and more. Funding for those departments was due to expire last Friday, March 1, but congressional leaders struck a deal on Wednesday to extend those deadlines by a week and avert a partial government shutdown. It was the fourth such funding extension this fiscal year, as Congress has struggled to settle on a long-term budget plan. This partial budget deal is a step forward in the push to secure a permanent budget plan for the rest of the fiscal year, which started Oct. 1. But these six funding bills are just half the battle. The other six appropriations bills that keep the rest of the government funded are due to expire on March 22, giving Capitol Hill just over two weeks to negotiate the other half of the government's spending plan. Still, leaders on both sides of the aisle are touting the first half of funding package as a win, though for different reasons. Democrats are trumpeting the continued full funding of a special food assistance program for women, infants and children. They also secured wins on rent assistance and pay for infrastructure employees like air traffic controllers and railway inspectors. "Throughout the negotiations, Democrats fought hard to protect against cuts to housing and nutrition programs, and keep out harmful provisions that would further restrict access to women's health, or roll back the progress we've made to fight climate change," Senate Majority Leader Chuck Schumer, D-N.Y., said in a Sunday statement. Meanwhile, Republicans are trumpeting victories on veterans' gun ownership and funding cuts to government agencies like the Environmental Protection Agency, the Federal Bureau of Investigation and the Bureau of Alcohol, Tobacco, Firearms and Explosives. "House Republicans secured key conservative policy victories, rejected left-wing proposals, and imposed sharp cuts to agencies and programs critical to President Biden's agenda," House Speaker Mike Johnson, R-La., said in a statement on Sunday. The funding package now heads to the House for a vote where it will likely face opposition from the House Freedom Caucus, a coalition of Republican hardliners that have relentlessly opposed budget compromises over the past fiscal year. "The clock is now ticking until government funding runs out this Friday. Between now and the end of the week, the House must quickly pass and send the Senate this bipartisan package," Schumer said Sunday. "Once again, it will only be bipartisanship that gets us across the finish line."
Stock rally, rate-cut forecasts face test from Powell testimony and jobs report 2024-03-03 16:57:00+00:00 - A four-month-long U.S. stock market rally, partly fueled by investors’ expectations for interest rate cuts in 2024 by the Federal Reserve, faces a test posed by pair of big events in the week ahead. The first is Federal Reserve Chairman Jerome Powell’s semiannual testimony to Congress on Wednesday and Thursday, followed by Friday’s official jobs report for February. Of the two, the nonfarm payrolls data has the potential to move markets more, given what it could signal about the risk that inflation may keep running hot if job gains come in above the 190,000 consensus expectation, according to analysts and investors. “Inflation has bottomed out, but is still above the Fed’s objective and it seems like more labor-market weakness is going to be needed,” said John Luke Tyner, a portfolio manager at Alabama-based Aptus Capital Advisors, which manages $5.5 billion in assets. “The headlines we’ve been seeing on technology-related layoffs are missing the mark because there’s a resurgence of employment and wage growth in Middle America.” January’s data proves the point. The month of February began with the release of January nonfarm payrolls, which showed 353,000 jobs created and a sharp 0.6% rise in average hourly earnings for all employees, despite the highest interest rates in more than two decades. Then came a round of inflation data. Consumer- and producer-price readings were both above expectations for January, followed by last Thursday’s release of the Fed’s preferred inflation measure, known as the PCE, which showed the monthly pace of underlying price gains rising at the fastest pace in almost a year. Meanwhile, personal income grew at a monthly rate of 1% in January. Fed-funds futures traders have since pared back their expectations for as many as six or seven quarter-percentage point rate cuts by December, and moved closer in line with the three reductions that the Fed signaled would likely be appropriate. However, this has still been enough to hand the Dow Jones Industrial Average DJIA and S&P 500 SPX their best start to a year since 2019, and fueled a four-month rally in all three major indexes. For the week, the S&P 500 rose 1% and the Nasdaq Composite gained 1.7%, but the Dow Jones slipped 0.1%, based on FactSet data. Broadly speaking, Powell is expected to stick to his script by emphasizing the need for greater confidence that inflation is falling toward the Fed’s 2% objective, before policymakers can cut the fed-funds rate target from its current range of 5.25% to 5.5%, analysts said. He’s seen as loath to say anything just yet that could move markets or rate expectations. “Powell needs to avoid doing what he did in November and December, which was to juice the market with a very bullish message suggesting that policymakers might be done with hiking rates and that the next moves would be rate cuts,” Tyner said via phone. “The Fed needs to remain unified about the need to be patient, with no rush to cut rates, and about being data dependent, with the current data pointing toward not cutting until later this year.” Read: No Fed rate cuts in 2024, Wall Street economist warns investors Aptus Capital’s strategies rely on the use of options overlays to improve results, and the firm is “well-positioned” to capture both upside and downside moves in the market because of a “disciplined approach on hedges in both directions,” the portfolio manager said. Others see some possibility that Powell’s testimony to the House Financial Services Committee and Senate Banking Committee produces one of two non-base-case results: He could either push back on expectations around the timing or extent of Fed rate cuts this year, or, on the flip side, hint at the need for maintenance rate cuts because of prospects for softer inflation and economic readings going forward. The rates market is the mechanism by which financial markets would likely react one way or another to Powell’s testimony and Friday’s nonfarm payrolls report — specifically with trading in fed-funds futures and Secured Overnight Financing Rate futures. Any reaction in the futures market would simultaneously impact longer-term Treasurys and risk assets, according to Mike Sanders, head of fixed income at Wisconsin-based Madison Investments, which manages $23 billion in assets. Fed officials are not likely to have enough confidence that they’ve won the battle against inflation by June, raising the question of whether markets are overestimating policymakers’ ability to start cutting rates by that month, Sanders said via phone. “Fed officials are more or less committed to cutting rates when appropriate, but are concerned that if they cut too soon they’ll have sticky inflation,” he said. “The services side continues to be higher than the Fed wants, with much of the disinflation coming from the goods side,” Sanders said. Inflation dynamics are “still not in balance from the Fed’s perspective, and the services side has to be concerning to policymakers, especially in the face of the personal-income growth we’ve seen. It’s going to be status quo until the Fed knows whether the higher inflation prints seen in January were a one-off or if this continues.’’ Analysts said they are particularly worried about supercore inflation, a measure of core services that excludes housing, which is still running at levels which suggest that the services side of the U.S. economy is firing on all cylinders. No major U.S. data is scheduled for release on Monday. Tuesday brings January factory orders and ISM service sector activity figures for February. On Wednesday, data releases include ADP’s private-sector employment report, January readings on wholesale inventories and job openings, and the Fed’s Beige Book report. San Francisco Fed President Mary Daly is also set to speak that day. Thursday’s data batch includes weekly initial jobless benefit claims, a revision on fourth-quarter productivity, the U.S. trade balance, and consumer-credit figures. Cleveland Fed President Loretta Mester is also scheduled to make an appearance. Friday brings an appearance by New York Fed President John Williams and final consumer-sentiment data for February.
UK ministers look to install highly paid boss to spearhead rail reform plan 2024-03-03 16:25:00+00:00 - Ministers are trying to install a highly paid rail industry figure in the Department for Transport to entrench plans to create Great British Railways (GBR) before the general election. The DfT could break Whitehall’s pay structure to create the senior post, in an attempt to accelerate changes for a new public body managing the country’s rail transport – although the Treasury is reluctant to sanction another DfT salary beyond normal pay grades. It comes as rail fares in England and Wales rose by 4.9% on Sunday, which ministers said was “striking a balance”, with the railway still requiring large public subsidy. Labour said it meant fares had risen by 66% since 2010, almost twice as fast as wages. A new director general overseeing the integrated railway would sit above current rail mandarins, to mirror the setup of the Conservatives’ planned GBR – a move that could slow or hinder Labour’s own eventual overhaul plans, some fear. Transport ministers and GBR transition team leaders are backing a reorganisation that could recruit an industry figure earning well above the department’s permanent secretary. The DfT declined to comment on what it called an individual human resources matter. A government source said the department was continually adapting its structures to support the delivery of rail services, including the rail reform plan. Progress in setting up GBR has foundered in the past on the division between the DfT and the Treasury over the powers of a semi-autonomous body. The changes aim to align “track and train” within the industry, by bringing together Network Rail, which manages the infrastructure, in an integrated rail body that would also oversee train operations and possibly award contracts. A draft rail reform bill was published last month, which the rail minister, Huw Merriman, said he believed could still become law, despite the apparent lack of legislative time before an election. Labour has yet to outline its own policy, bar a promise to take train operations into public ownership as contracts expire. Although some fear ministers are trying to entrench changes that could stymie a new government, Labour has also spoken of establishing a unifying body and a source suggested a DfT restructure could fit with its eventual plans. The DfT proposals could yet be blocked by the Treasury, which has sought to control escalating rail spending. The cost of setting up GBR alone has risen from £205m to a forecast £381m. skip past newsletter promotion Sign up to Business Today Free daily newsletter Get set for the working day – we'll point you to all the business news and analysis you need every morning Enter your email address Sign up Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy . We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. after newsletter promotion The highest-paid senior officials on the public payroll have long come from rail, with the list currently headed by Andrew Haines, the leader of the Great British Railways transition team and boss of Network Rail, earning £589,000 according to government figures published in July 2023. The DfT also has form in directly employing within the department an official on an extraordinary salary. Peter Wilkinson, the managing director of passenger services, who was permanently hired to improve rail franchising in 2014, earns £265,000. Candidates in the frame for the new post could be drawn from the senior managerial ranks of Network Rail, all earning about £330,000, such as Alex Hynes, who is already running Scotland’s railway as a more integrated system. The DfT did not confirm or deny moves, but a government source said it would ensure value for money for the taxpayer.
How hospitals are fighting to keep their former doctors from seeing patients 2024-03-03 15:00:00+00:00 - David Lankford, an Indiana pediatrician who specializes in treating critically ill children, says he decided to leave his job at Lutheran Hospital in Fort Wayne after it laid off a group of pediatricians, causing the number of patients he was seeing to increase more than fourfold. But when Lankford took a job last year at nearby Parkview Health, his new employer was threatened with a lawsuit by his former employer, who alleged he had violated a noncompete clause in his contract, according to court records. Now, he’s months into a legal battle over whether he can continue taking care of patients in Fort Wayne. “There is a shortage of physicians who do the subspecialty work that I do in Fort Wayne,” said Lankford in a written response to questions. “I believe many critically ill children and their families would have to travel significant distances at significant hardship to get access to care.” Lankford is among a handful of doctors who are fighting back in court against the increasing prevalence of noncompete agreements, which often prevent a doctor from seeing patients for one to two years within a geographic region if they are fired or quit their job. While employers say the agreements are necessary to protect the investment they make in recruiting, marketing and supporting their doctors, physicians argue the provisions can harm patients by restricting access to care and risk discouraging doctors from speaking out about unsafe or unethical conditions. “We have seen these noncompetes increase exponentially over the last several years, and it really goes against the very ethos of medicine,” said Omar Atiq, president of the American College of Physicians. “It takes awhile for physicians to start really knowing their patient, not just the disease for which they come but the patient themselves, and to just sever that relationship is a big blow.” Once viewed as a restriction reserved for high-level executives or workers with access to trade secrets, noncompete agreements have become pervasive across a range of industries, from health care to fast food chains, limiting the employment opportunities of more than 30 million workers, according to the Federal Trade Commission. President Joe Biden pledged in his State of the Union address in 2023 to ban noncompetes across the economy, and the FTC is on track to make a final decision about a proposed ban early this year, said a Biden administration official. Among doctors, the agreements have become standard practice in many areas, with one survey by researchers at Ohio State University finding nearly half of primary care physicians in group practices and more than a third of physicians employed at hospitals or free-standing clinics were bound by a noncompete agreement. The prevalence of noncompete agreements has increased as more doctors are now employed by hospitals or large health systems, which have been steadily buying up group medical practices, said Atiq. For patients, the practice can result in an abrupt disruption of care with no explanation of where their doctor has gone or why, said Atiq. Doctors often have nonsolicitation clauses tied into the noncompete agreements, preventing them from letting patients know where they are relocating to. The American Hospital Association, which represents the country’s for-profit hospitals, has opposed the proposed ban by the Biden administration. Chad Golder, general counsel for the AHA, said its members primarily use noncompete agreements for their doctors and senior executives, not lower-skilled workers who have less bargaining power when negotiating an employment agreement, and that the restrictions are needed, in part, to protect the financial investment hospitals make in recruiting, relocating, marketing and training their doctors. “We think they are important for protecting investments that hospitals make to recruit doctors and senior executives,” said Golder. “Imagine you’re a rural hospital out in the country and you spend a lot of money to bring on a new physician, to get them integrated into the community, to train them, and they leave after a short period of time after you’ve made all this investment to get them out there.” Golder said that deterring doctors from leaving their employer can also benefit patients by maintaining continuity of care across a single health system. When doctors change jobs it can require patients to have to transfer their medical records and in some instances have to coordinate care between doctors at multiple hospitals, he said. But critics, including two of the largest physician groups — the American Medical Association and the American College of Physicians — say the agreements can contribute to physician shortages, sever doctor-patient relationships, and deter doctors from speaking out for fear of being fired and unable to work elsewhere in the community. ‘It’s really bleak here’ In Savannah, Georgia, HCA Healthcare-owned Memorial Health University Medical Center threatened one of its former OB-GYNs with a lawsuit last year when the doctor went to work at a nearby clinic focused on treating low-income women, according to a letter the physician shared with NBC News. Several months prior, the physician had their contract terminated without cause by Memorial, but the noncompete remained in place. Under the doctor’s noncompete agreement, they were unable to work as an OB-GYN within a 25-mile radius of Memorial for one year following the end of their contract. The doctor has since left their job at the clinic, where they were treating mostly uninsured women, and is planning a move out of the area. The doctor asked that their name not be published for fear it could harm their future job prospects. Memorial said in a statement that noncompete agreements help protect the significant costs the hospital makes in recruiting a physician, paying for moving costs, and other expenses that come with setting up a physician’s practice, like hiring staff and leasing space. The hospital said its noncompete agreements don’t prevent physicians from setting up a private practice. In Georgia, noncompete agreements have been contributing to a shortage of OB-GYNs across the state, where some women have to wait months to get routine care, said Kate Boyenga, executive director of the Georgia Obstetrics and Gynecology Society. She said her organization has begun looking into whether there is any state legislative action that could limit the scope of noncompete agreements for OB-GYNs to help address the shortages. “When women don’t have access to that care, when it is exacerbated by having to travel far distances, having to take off work to go to prenatal appointments, having to secure child care and having to have adequate transportation, they’re not going to get the care as much as they should, and that’s what’s going to lead to complications,” said Boyenga. Jessica Swanson is one of those patients who has struggled to get OB-GYN care in Savannah even though she has private insurance and has worked for more than a decade as a reproductive health educator and is a trained birth doula. When Swanson was about four months pregnant with her second child in 2022, she began looking to switch to another OB-GYN in Savannah after seeing numerous “red flags” with her current doctor, she said. But after calling every OB-GYN practice in the area, she was either told they weren’t taking new patients or they didn’t return her calls. When she began having complications later during her pregnancy, she had to show up at the emergency room, where the doctor on call performed a cesarean section. “I should have had a choice in my provider. It was an incredibly frustrating experience,” said Swanson. “I just think about how much I brought into that situation — my level of education, my connections, my ability to navigate health care, really good insurance — and I still could not navigate myself to adequate health care.” Even after giving birth, she still wasn’t able to find an OB-GYN to treat her when she developed mastitis, a painful inflammation of the breast tissue caused by breastfeeding, and instead had to go to an urgent care clinic. “It was just a really bad experience overall, and I feel really let down by the larger medical community here,” Swanson said. “It’s really bleak here.” Two cardiologists from another HCA-owned health system, Mission Health Community in North Carolina, said they were also threatened with legal action over a noncompete clause in their contract when they left to work for Pardee Hospital. The doctors, Marian Taylor and Lillia LaPlace, sued Mission to have the noncompete agreements thrown out. The case was dismissed in March, and Taylor and LaPlace are currently working for Pardee. A lawyer for Taylor and LaPlace declined to comment on the case, and the doctors didn’t respond to a request for comment. Mission Health also didn’t respond to a request for comment. In Indiana, Lankford had signed a noncompete agreement when he started working at Lutheran Hospital in 2018 as a pediatric critical care intensivist. Under the agreement, he was prohibited from practicing any form of medicine within 30 miles of Lutheran for one year following his last day of employment there. When Lankford signed the noncompete agreement, he said he thought about the implications it could have, but didn’t think he had an option to negotiate over the provision. “I had thought about it, but had experiences which led me to think that the hospitals which could employ me were not interested in negotiating noncompetes or employment contracts individually,” he said. Lankford’s lawyers have argued that the agreement should be invalidated because Lutheran changed the terms of Lankford’s contract when in 2022 it fired a group of pediatricians at the hospital, leaving Lankford and his remaining colleague responsible for seeing all pediatric patients across the hospital, not just those in the intensive care unit where he was assigned. The move significantly increased his workload without additional compensation, according to court records. “I felt that my former employer breached my contract. I believe I gave them many opportunities to fix the problem over a span of several months,” said Lankford. “In my opinion, they did nothing to fix the problem. I felt that if they weren’t going to honor my contract, I shouldn’t be bound by the noncompete in the contract that they refused to honor.” Lutheran said in court filings that it did require Lankford to begin seeing general pediatric patients throughout the hospital, not just in the intensive care unit. But it denied that the change in Lankford’s job duties was a breach of contract and argued that his new duties were within the scope of his training and employment agreement. In a countersuit filed against Lankford and Parkview by Lutheran, the hospital alleges that it was Lankford who had breached his contract by leaving his position and violating the noncompete agreement. Lutheran says it offered Lankford the opportunity to buy out the noncompete provision for an undisclosed amount. Lutheran alleges that as a result of Lankford’s actions, it has suffered a loss of business and goodwill in the community along with costs associated with recruiting Lankford and having to replace him. It is seeking compensatory and punitive damages along with attorney’s fees and other related costs. A spokesperson for Lutheran declined to comment. In August, Lankford won a preliminary injunction making the noncompete agreement unenforceable and allowing him to see patients at Parkview, at least temporarily. But the injunction is only preliminary and the legal battle could stretch on for months longer, even beyond when Lankford’s noncompete agreement expires, said Kathleen DeLaney, a lawyer for Lankford who has represented numerous doctors bound by noncompete agreements. For Lankford, he says he felt he had no other option but to take his case to court after he was unable to keep working at his new employer. “It was very hard to have to stop working, to have fits and starts with a new job, and to be distracted from my professional career by the legal dispute. But I know that it was the right thing to do for my patients, my community and my family,” said Lankford. Battle over burn patients In Ohio, Anjay Khandelwal, a surgeon, had to take his case all the way to the state’s Supreme Court before winning the right to treat pediatric burn patients at Akron Children’s Hospital after being sued by his former employer. Khandelwal started working at MetroHealth in Cleveland in 2013 and signed a noncompete agreement restricting him from providing similar medical or professional services within a 35-mile radius for two years following his last day of work at MetroHealth, according to legal filings. But in 2020, Khandelwal resigned from his job and accepted a position as the director of the burn center at Akron Children’s Hospital, the only other burn center in the noncompete radius. After learning about his new position, MetroHealth sued Khandelwal and Akron Children’s, arguing in court filings that it had invested significantly in hiring and recruiting Khandelwal and developing his connections and visibility in the region. It also argued Khandelwal had access to confidential trade secrets, like pricing data and strategic plans. Khandelwal denied the allegation in court and argued that patients’ access to burn care in the region could be jeopardized if he wasn’t able to practice surgery for two years. The court ruled partly in favor of Khandelwal, saying he could begin working as a burn surgeon at Akron Children’s, but wasn’t able to start working as the center’s director for a year after leaving MetroHealth. The ruling was upheld by the Ohio Supreme Court in 2022 and Khandelwal is now working as the director of the burn institute at Akron Children’s Hospital. Khandelwal and Akron Children’s didn’t respond to requests for comment. MetroHealth declined to comment. Despite some victories for physicians, it is still relatively rare for doctors to challenge their noncompete agreements in court because of the financial and reputational consequences, said Atiq. Instead, doctors often quietly move to a new city if they want to leave their job or are fired, uprooting their families and leaving their patients behind, but avoiding the risk of a lawsuit. “Why would a person who is in their 30s with one or two small children, being the main breadwinner for the family, jeopardize that? What’s easier for that person is to just leave and go somewhere else,” said Atiq. “Inherently, it is wrong.”
Dow companies made bigger-than-normal adjustments to profits in Q4 2024-03-03 14:57:00+00:00 - When public companies tell the world how much money they made over a quarter, they have to follow accounting guidelines intended to keep those financial figures honest and consistent. However, for better or worse, alongside the profit figures that comply with those standards, many companies also report more forgiving, “adjusted” versions of those figures. Those adjustments are intended to show what a company’s bottom line might have looked like if those standards — and the financial impact related to any number of issues like taxes, litigation, layoffs, the impact from the war in Ukraine, changes in the value of currencies or cannabis plants or whatever else — essentially didn’t apply. In the fourth quarter, among the 30 companies in the Dow Jones Industrial Average, the gap between those two types of profit was far wider than normal, according to a FactSet analysis published Thursday. That analysis found that the median difference between per-share profit reported based on generally accepted accounting principles, or GAAP, and the adjusted kind — non-GAAP — stood at 31%. That’s far above the norm for that difference — 11.7% — based on five-year averages. It’s also the fourth biggest difference between GAAP and non-GAAP earnings per share for Dow companies since FactSet began tracking it in 2016. And the last time that spread surpassed 31% was during the second half of 2020, when the pandemic upended the economy. The biggest such differences in the most recent quarter could be found in companies like drugstore chain Walgreens Boots Alliance Inc. WBA, at 925%. The company, in its earnings release, cited “challenging retail market trends in the U.S. and a 21 percentage point headwind from a higher tax rate.” The spread for chemical and materials giant Dow Inc. DOW was 386.7%, as it digested the effects of restructuring, litigation, pension settlements the devaluation of Argentina’s peso and other matters. Companies like Verizon Communications Inc. VZ, Merck & Co. MRK, Salesforce Inc. CRM and Johnson & Johnson JNJ rounded out the top 10. The adjustments that companies make to their profit figures — which tend to take more priority among the Wall Street analysts whose commentary can drive stock action — have long been a matter of debate among executives and investors. Many companies say those adjustments allow them to express their profit in a purer form that factors out the impact of “once-in-a-lifetime” events and random noise. But many others say the practice gives company leadership too much leeway to say what does and doesn’t count when calculating profits. “Supporters of the practice argue that it provides the market with a more accurate picture of earnings from the day-to-day operations of companies, as items that companies deem to be one-time events or nonoperating in nature are typically excluded from the non-GAAP (earnings per share) numbers,” FactSet Senior Earnings Analyst John Butters said in the report on Thursday. “Critics of the practice argue that there is no industry standard definition of non-GAAP EPS, and companies can take advantage of the lack of standards to exclude items that (more often than not) have a negative impact on earnings to boost non-GAAP EPS,” he continued. This week in earnings While fourth-quarter earnings season is largely in the books, the week ahead will feature more retailers, led by Target Corp., Costco Wholesale Corp. COST and Kroger Co. Taken together, the results will show us how much room higher-priced groceries have left for shoppers to buy clothing or anything else. Elsewhere, clothing chain Gap Inc. GPS reports results, as it tries to restore cultural relevance to its namesake stores, improve marketing at Old Navy and make Banana Republic a more “premium” destination. Bargain retailers Ross Stores Inc. ROST and Burlington Stores Inc. BURL also report, after rival TJX Cos.’ results were better than expected on holiday-season enthusiasm. Nordstrom Inc. JWN also reports, albeit after warning of “softening” consumer spending ahead of the holidays. Foot Locker Inc. FL will also release its earnings, after Nike Inc. cut its sales outlook. Elsewhere in retail and clothing, Abercrombie & Fitch ANF, Victoria’s Secret & Co. VSCO, Big Lots Inc. BIG and American Eagle Outfitters Inc. AEO report. Outside of retail, results are due from Broadcom Inc. AVGO, Marvell Technology Inc. MRVL and DocuSign Inc. DOCU The number to watch Target sales: Target TGT, which reports on Tuesday, has spent the past two years as something of gauge for how much people are buying things they want — like clothing, or TVs or laptops or furniture — as opposed to the things they need. Unlike rival Walmart Inc., those kinds of products make up a bigger share of Target’s business than groceries, and Target has remained cautious on its expectations for consumer demand. “Expect sales to remain challenged in 4Q,” BofA analysts said in a note on Friday, and adding that they were bracing for “continued soft discretionary trends,” even as declines in customer traffic show signs of getting better. Price increases for food and drinks haven’t been as aggressive recently. That’ll be a relief for customers. But it won’t help Target’s sales. The call to put on your calendar Kroger: Grocery-chain Kroger KR reports results on Thursday. Those results will arrive after the Federal Trade Commission sued to block the merger deal between the company and Albertsons Cos. ACI, saying it would further push grocery prices higher. Kroger’s earnings call will offer more detail about where grocery prices and consumer demand stand, and potentially shed more like on how executives are thinking about growing regulatory pushback.
Nikki Haley says she’s no longer bound by RNC pledge to endorse Trump if he wins 2024-03-03 14:02:00+00:00 - Former U.N. Ambassador Nikki Haley no longer feels bound by a pledge made to the Republican National Committee that she would support the GOP presidential nominee, she said in an interview that aired Sunday. Asked by NBC News’ “Meet the Press” moderator Kristen Welker, “So you’re no longer bound by that pledge?” Haley responded that she was not obligated to endorse former President Donald Trump if he becomes the Republican nominee. “No, I think I’ll make what decision I want to make, but that’s not something I’m thinking about,” she said, noting that “if you talk about an endorsement, you’re talking about a loss. I don’t think like that.” She added, “When you’re in a race, you don’t think about losing. You think about continuing to go forward.” Pressed further about whether voters who will head to the polls in the GOP presidential primary on Tuesday deserve to know where she stands on endorsing Trump, Haley continued to dodge the question, saying, “When you all ask Donald Trump if he would support me, then I will talk about that. But right now, my focus is, ‘How do we touch as many voters? How do we win?’” The statement is an apparent shift from her previous attitude toward a potential endorsement. Asked in July whether she would support Trump if he wins, Haley told Fox News, “I would support him because I’m not going to have a President Kamala Harris,” referring to the fact that Vice President Kamala Harris would become president if anything were to happen to President Joe Biden in a second term. In order to participate in primary debates hosted by the Republican National Committee last fall, every candidate signed a pledge to support the eventual Republican nominee. Haley signed that pledge. But in her “Meet the Press” interview, she blasted the RNC, saying, “The RNC is not the same RNC” and that “now it’s Trump’s” RNC. “I mean, at the time of the debate, we had to take it to where, ‘Would you support the nominee,’ and in order to get on that debate stage, you said, ‘Yes,’” Haley said. The RNC is still chaired by Ronna McDaniel, who was chair at the time of the debates, but Trump has endorsed Michael Whatley, the North Carolina GOP chair, and Lara Trump, his daughter-in-law, to take over as chair and co-chair of the group. Haley has sharpened her rhetoric toward Trump in recent weeks, attacking him as “unhinged” and “more diminished than he was.” A potential endorsement of Trump is not the only issue Haley has offered seemingly conflicting viewpoints on. In the same interview with “Meet the Press,” Haley at first wouldn’t commit to endorsing federal protections for fertility treatments like in vitro fertilization. “What I support is that we make sure that every parent has the right to have those fertility processes. I had my two children through fertility. I want every parent who wants that blessing to be able to have that. And government shouldn’t do anything to stop it,” Haley said. She added, “I think the conversation of what happens with those embryos has to be between the parents and the physicians, period. We don’t need to go and create a bunch of laws for something when we don’t have a problem.” Minutes later, pressed again about whether there should be federal protections for IVF, Haley said there should be. “Yes, to make sure that IVF is there to make sure that parents have it, all of that,” she said. Asked why abortion shouldn’t be a decision made by people and their doctors, Haley argued that the issue should be decided at the state level. “What I’ve said is this should be in the hands of the people for the people to decide. They should decide whether their states are going to be pro-life or pro-choice. They should decide whether their states are going to be IVF or not IVF,” she said. “I personally think we want as many fertility options for people as they can. That’s my opinion.” “But other states may decide something different. Alabama was going in one direction,” she said, alluding to the recent ruling by the Alabama Supreme Court that embryos are people. “I don’t think that’s the direction you want to go, the same way I don’t think that the conversations that people have been having on abortion are good conversations.” Her remarks come after the Alabama Supreme Court last month decided that embryos are people, making access to IVF uncertain in that state. Just days later, Alabama’s House and Senate passed Republican-proposed bills intended to protect IVF. Last week, Sen. Cindy Hyde-Smith, R-Miss., blocked legislation that would have created federal protections for IVF nationwide, calling the measure “vast overreach.”