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Stock futures slide after Fitch’s U.S. downgrade sours the market mood 2023-08-02 - U.S. stock futures stumbled Wednesday after markets were rattled by a downgrade to the U.S. government’s credit rating. On Tuesday, the Dow Jones Industrial Average rose 71 points, or 0.2%, to 35631, the S&P 500 declined 12 points, or 0.27%, to 4577, and the Nasdaq Composite dropped 62 points, or 0.43%, to 14284. What’s driving markets Equity-index futures are succumbing to a broad risk off tone across markets after rating agency Fitch downgraded the U.S.’s credit rating from AAA to AA+, citing “expected fiscal deterioration” and an “erosion of governance”. Fitch’s move follows a similar downgrade by S&P more than a decade ago. The U.S. Treasury market acts as a global benchmark upon which many financial products are based and so uncertainty about its stability can cause anxiety for investors. The news found a stock market arguably vulnerable to unwelcome surprises, with the S&P 500 having already gained 19.2% this year and the tech-heavy Nasdaq Composite up 36.5%. The CBOE VIX Index , an option-based gauge of expected S&P 500 volatility, jumped 16% to 16.2, its highest in nearly four weeks. Traditional perceived havens saw demand, with the Japanese yen USDJPY gaining 0.7%, gold GC00 nudging up to $1,950 an ounce, and benchmark German government bond yields moving lower. U.S. 10-year Treasury yields were little changed at 4.03%. However, most analysts did not see the downgrade causing the stock market much long term damage. “While debt downgrades seldom, if ever, have long legs, investors may pause and let the dust settle before re-entering risk markets. However, within this super market-friendly environment of stable growth and a Fed close to the end of its hiking cycle creating fertile ground for stock gains, its unlikely risk sentiment will wander too far off the soft landing path,” said Stephen Innes, managing partner of SPI Asset Management. Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said “the market remains sensitive as the final throes of earnings season rumble on, but 82% of S&P 500 companies that have reported results so far have surprised to the upside, offering a bit of a sentiment buffer.” Earnings results due Wednesday include CVS Health CVS, Humana HUM and Carlyle Group CG before the opening bell, followed after the close by PayPal PYPL, Shopify SHOP and Qualcomm QCOM. U.S. economic updates set for release on Wednesday include the ADP employment report at 8:15 a.m. Eastern.
Didn’t win the Mega Millions jackpot? You can get a free Krispy Kreme doughnut. 2023-08-02 - Dough not despair if you didn’t become a billionaire overnight. Tuesday night’s Mega Millions jackpot hit a cool $1.1 billion — only the eighth time in history that a U.S. lottery prize has passed a billion bucks. And while winning the grand prize was a long shot, at least this Krispy Kreme promotion is a sure bet. The coffee and doughnut chain joined lottery fever this week by announcing it will give a free doughnut to anyone showing their lottery ticket on Tuesday, Aug. 1 (Mega Millions drawing day) and Wednesday, Aug. 2. It doesn’t even have to be a Mega Millions ticket; the press release says that guests can present a losing ticket (or hey, a winning one if you want) from any lottery to snag one free original glazed doughnut. The cap is one free goodie per guest while supplies last. “This week, we want [our customers] all to win some ‘dough,’” the company said. It’s certainly not the first time Krispy Kreme DNUT, -0.71% has given away free glazed doughnuts; In fact, these kinds of promotions are baked into their publicity playbook, whether it’s celebrating National Doughnut Day or St. Patrick’s Day. Perhaps the most buzzed-about giveaway was when Krispy Kreme tried to help encourage people to get their COVID-19 vaccines in 2021 by offering anyone showing a vaccination card one free doughnut every day for the rest of the year. More lottery buzz on MarketWatch: Hoping to win Mega Millions? This woman hit a $112 million Mega Millions jackpot. You just won the Mega Millions $1.1 billion jackpot — what should you do next?
BOJ to continue easing until sustainable inflation is achieved, official says 2023-08-02 - Bank of Japan Deputy Gov. Shinichi Uchida said Wednesday that the central bank would maintain an easy policy stance despite its recent decision to make its yield curve control more flexible. “The bank’s decision to conduct yield curve control with greater flexibility aims at patiently continuing with monetary easing,” Uchida said in a speech. “We do not have an exit from monetary easing in mind.”
‘You’re too honest’: Donald Trump’s alleged Jan. 6 conspiracies, explained 2023-08-02 - Once is an accident, twice is a coincidence and three times is a conspiracy. Former President Donald Trump is accused by federal prosecutors of engaging in three major conspiracies ahead of the Jan. 6, 2021, Capitol riot to subvert the process of counting and certifying the vote before Congress in his bid to hold on to power despite having lost the 2020 election. While spreading lies about how votes had been illegally cast, tampered with or miscounted in order to build mistrust among the public about the election’s outcome, special counsel Jack Smith says Trump and a group of six unnamed lawyers and advisers plotted to illegally meddle with the very basis of how presidential elections have been run in the U.S since its founding. A four-count indictment unsealed in federal court in Washington on Tuesday alleges that the group worked unrelentingly to tamper with how several states counted their ballots and the process by which states sent electors to Washington to finalize their vote. The indictment also accused Trump of pressuring the Justice Department and Vice President Mike Pence to intervene even though they had no standing to do so. “Each of theses conspiracies — which built upon the widespread mistrust the defendant was creating through pervasive and destabilizing about election fraud — targeted a bedrock function of the United States federal government: the nation’s process of collecting, counting, and certifying the results of the presidential election,” the indictment read. Trump has dismissed the charges as being purely politicized. “The lawlessness of these persecutions of President Trump and his supporters is reminiscent of Nazi Germany in the 1930s, the former Soviet Union, and other authoritarian, dictatorial regimes,” a statement released by his campaign read. “President Trump has always followed the law and the constitution, with advice from many highly accomplished attorneys.” The charges allege three acts of conspiracy and one of obstructing an official proceeding. Here are the main legal arguments Smith makes against the former president: ‘We have lots of theories’ Prosecutors say that starting almost immediately after the election on Nov. 3, 2020, Trump began a campaign to get officials in key states like Arizona, Nevada, New Mexico, Pennsylvania, Michigan, Wisconsin and Georgia to overturn the election results. Trump pressured state officials to throw the vote out based on allegations ranging from dead people voting to non-citizens casting ballots, and from voting machines being tampered to ballot-box stuffing, despite there being no evidence any of it had occurred. “We don’t have evidence, but we have lots of theories,” one of Trump’s co-conspirators allegedly told the speaker of the house of Arizona, a Trump-backer, when asked what proof they had about electoral malfeasance. When officials in the states refused to go along with Trump’s request to decertify the results, the president continued to publicly trumpet false claims about voter fraud and attack local officials as “terrible people” who were in on the fraud, the indictment said. Smith said that Trump continued to make the claims despite having been told repeatedly by numerous people in multiple agencies — many of them his own supporters — that there was no truth to it and having lost case after case in court. “When our research and campaign team can’t back up any of the claims made by our Elite Strike Force Legal Team, you can see why we’re 0-32 on our cases,” one senior campaign advisor said, according to the indictment. “It’s tough to own any of this when it’s all just conspiracy s*** beamed down from the mothership.” Smith argues that this effort amounted to using deceit to subvert the election’s result, which is against the law. Phony electors One key component of the conspiracy case against Trump revolves around efforts to create a competing slate of electors from each challenged state. As part of the presidential electoral process, every state sends electors to Washington to deliver the vote to congress. It’s a mostly ceremonial procedure, but Trump’s legal team is accused of hatching a plot to send a second group of electors who backed Trump from several states in order to create confusion in Congress and force legislators in Washington to have to debate the election’s outcome. No matter that the second slate of electors hadn’t been approved by officials in the states they purported to represent and were not authorized in any way, the indictment says. The effort was so patently bogus that Trump’s team even referred to the group as “phony electors” in their own correspondence, the indictment stated. In the indictment, Smith said the effort amounted to a conspiracy to commit fraud. ‘You’re too honest’ A third leg of the conspiracy allegedly involved pressuring officials at the Justice Department and Pence to intervene in the election even though they had no standing to do so. The indictment says Trump and his co-conspirators repeatedly communicated with then acting attorney general Jeffrey Rosen and insisted that he declare ahead of the Jan. 6 certification of the election by Congress that there had been evidence of fraud. When Rosen said he would not do that because there was no such evidence, Trump allegedly threatened to replace him with one of the unnamed co-conspirators included in the indictment. At one point, a deputy White House counsel told the co-conspirator that “there is no world, there is no option in which you do not leave the White House,” and warned that there would be “riots in the streets” if Trump attempted to remain in office, to which the co-conspirator allegedly said: “That’s why there is an Insurrection Act.” For weeks ahead of the Jan. 6 certification hearing in Congress, Trump and his cohorts pressured Pence to refuse to certify the vote tally, a purely ceremonial task the vice president has presided over since the country’s founding. Pence steadfastly refused to do so, saying his legal team had told him there was no constitutional basis for the vice president to be able to overturn an election at the last minute. In a phone call less than a week before Jan. 6, Trump allegedly berated Pence and told him, “You’re too honest.” When a senior White House advisor told one of the unnamed co-conspirators that if Pence tried to overturn the election it would lead to violence in the streets, the co-conspirator allegedly said that there had been times in the country’s history where violence was necessary to protect the Republic, the indictment said. In the days and hours leading up to the Jan. 6 riot, Trump posted several messages on Twitter stating that Pence had the authority to overturn the election and continuing to pressure him to do so. Exploiting the chaos On Jan. 6, after Pence issued a statement saying he did not have the authority to not certify the vote, protests outside Congress turned violent, with hundreds of rioters clashing with police and storming the building, delaying the proceedings. During the standoff, some of Trump’s co-conspirators tried to reach members of Congress and the Senate to convince them to further delay the certifying process in order to buy Trump more time to convince state legislatures to nullify the already-approved votes, the indictment says. Later that afternoon, Trump tweeted: “See, this is what happens when they try to steal an election. These people are angry. These people are really angry about it. This is what happens.”
Kim Jong Un's Mouthpiece Calls US Human Rights Envoy A 'Wicked Woman' And 'Political Housemaid' Tasked By Biden 2023-08-02 - Kim Jong Un’s North Korea on Wednesday hurled misogynistic insults at Washington’s special envoy appointed to monitor the country’s human rights issues. What Happened: North Korea’s official Korean Central News Agency (KCNA) referred to Julie Turner, the newly confirmed special envoy, as a “wicked woman” and a “political housemaid” tasked by President Joe Biden with unjustified criticism of North Korea’s human rights record. Kim’s isolated nation also warned of potential security consequences should Washington continue to highlight human rights abuses within the nation. See Also: Kim Jong Un Attends Military Parade To Show Off North Korea’s Latest Drone Technology, Banned Missiles Turner’s confirmation by the U.S. Senate occurred on Jul. 27, following her previous role as the director of East Asia and the Pacific at the State Department. "Turner should know that she was chosen as a political housemaid and scapegoat for the ‘human rights' plots to pressure the DPRK, a poor policy set forth by the Biden administration driven into a scrape in the DPRK-U.S. nuclear confrontation." Why It Matters: North Korea’s response to Turner’s appointment underscores the ongoing tension between the U.S. and North Korea over human rights and nuclear weapons issues. North Korea said the U.S. attention to Pyongyang’s human rights abuses could result in “severe security issues,” pointing to potential escalations in an already strained relationship. Meanwhile, Kim is bolstering ties with Russia and China, an effort likely intended to break diplomatic isolation and form a united front against the U.S.. Read Next: North Korean Leader Kim Jong Un Displays New Aircraft Resembling US Military Drones Photo by Alexander Khitrov on Shutterstock
Weak iPhone Demand Could Lead To Apple's Largest Q3 Revenue Drop Since 2016 - Apple (NASDAQ:AAPL) 2023-08-02 - iPhone sales are slowing down in the US and South America and flat in China as people wait for the iPhone 15 series to launch in September this year. This could lead to the largest Q3 (September quarter) revenue drop for Apple Inc. AAPL since 2016. What Happened: A combination of a weak economy and people holding back their purchases for the iPhone 15 series could lead to the largest fall in September quarter revenue for Apple since 2016, reported Reuters. See Also: iPhone 15 vs iPhone 14: 6 Changes That Will Make The iPhone 15 A Notable Upgrade The September quarter is crucial for Apple since it has traditionally launched new iPhones in September, with some exceptions like the iPhone 12 and iPhone SE series. This usually leads to people waiting for the new iPhone every year in the September quarter. However, this year is expected to be worse, with inflation weighing heavily on people's buying decisions. Deloitte's financial well-being index edged lower in June, reflecting the somber mood. Most of the decline in Apple's topline in the September quarter is expected to come from the Americas – the region is expected to see a 6% revenue decline. More specifically, iPhone revenue is expected to decline by 2% overall compared to a 3% increase last year and a 1.5% increase in the previous quarter. iPhone 15 Series – Here's What To Look Out For The iPhone 15 series is expected to feature some important hardware and design upgrades. However, Apple is also reportedly planning to hike the iPhone 15 Pro and Pro Max prices by $100 each. Here's what we know about the iPhone 15 series so far: Titanium Body: Apple could borrow the titanium body design from the Apple Watch Ultra and use it on the iPhone 15 Pro and Pro Max, complete with a brushed finish. USB Type-C Port: Apple is reportedly planning to switch the much-anticipated USB Type-C port with the iPhone 15 series. While this is in response to European Union regulation, it will make it easier to find a charger since most other smartphones sold over the last few years have the same port. Stacked Battery Technology: Apple is said to use stacked battery technology borrowed from electric vehicles. This will help Apple maintain the same size as the iPhone 14 models while increasing battery capacity by up to 20%. Periscope Camera: Apple is rumored to include a periscope camera in its flagship, significantly improving its zooming capabilities. Programmable Action Button: Apple is expected to replace the iconic mute switch with a programmable Action button in the iPhone 15 series. Users will be able to program the button for nine actions, including flashlight, ring/silent or do not disturb modes, low power mode, and more. Dynamic Island On All iPhone 15 Models: After debuting Dynamic Island on the ‘Pro' models, Apple is now expected to bring it to the non-Pro models as well. Check out more of Benzinga's Consumer Tech coverage by following this link. Read Next: More Jobs At Risk At Google As Its Assistant Gets A ‘Supercharged’ AI Upgrade
Starbucks, Phillips 66 And 3 Stocks To Watch Heading Into Wednesday - McKesson (NYSE:MCK), Pinterest (NYSE:PINS) 2023-08-02 - With U.S. stock futures trading lower this morning on Wednesday, some of the stocks that may grab investor focus today are as follows: Check out our premarket coverage here Read This Next: Top 5 Consumer Stocks That Could Sink Your Portfolio In Q3
How McDonald's Apple Pie, McFlurrrys, And More Fit Into Mark Zuckerberg's 4K-Calorie Diet? - Meta Platforms (NASDAQ:META) 2023-08-02 - Meta Platforms Inc. META CEO Mark Zuckerberg’s quest for peak physical performance includes a heavy diet that embraces unexpected indulgences like McDonald’s apple pies, McFlurrys, and more. What Happened: Zuckerberg has taken his commitment to a new level by incorporating mixed martial arts or MMA and jiu-jitsu sessions three to four times a week, along with strength and conditioning work and mobility training. Such a demanding workout regimen requires ample energy, leading him to adopt a high-calorie diet. See Also: Marc Andreessen Calls Elon Musk And Mark Zuckerberg’ Role Models’ for Children, Defending Controversial Support For MMA In a recent Threads post, Zuckerberg revealed that his new fitness regime demands a staggering 4,000 calories daily to sustain his rigorous workout routine. He also shared his McDonald’s order which included 20 nuggets, a quarter pounder, large fries, Oreo McFlurry, Apple Pie, and some side cheeseburgers for later. Why It’s Important: While this might raise eyebrows among health-conscious individuals, high-calorie diets are not uncommon among elite athletes. Renowned Olympic swimmer Michael Phelps once famously mentioned consuming 10,000 calories daily to fuel his demanding training schedule. While Zuckerberg may not be an Olympic swimmer, his transformation from a tech guru to a physically fit individual has been remarkable. In fact, he has also drawn the attention of Elon Musk, who proposed to have a “cage match” with him. The idea of these two tech titans facing off in the MMA ring or a similar sporting event captured the public’s imagination. Although, Zuckerberg reportedly said that such a fight may not happen. Image source – Shutterstock Check out more of Benzinga’s Consumer Tech coverage by following this link. Read Next: Why Mark Zuckerberg Doesn’t Want You To See His Kids On Instagram: A Warning To Parents
Trump Reportedly Conceded Biden's 2020 Win To Top Military Advisor Ahead Of Jan. 6 Riots: 'We're Going To Give That To The Next Guy' 2023-08-02 - Former President Donald Trump reportedly conceded his loss in the 2020 election in a private meeting with Gen. Mark Milley, stating that a national security issue would be left for “the next guy,” according to an indictment by special counsel Jack Smith. What Happened: In the days leading up to Jan. 6, Trump acknowledged to Milley and another unnamed advisor that his time in office was coming to an end, Business Insider reported. “Yeah, you’re right, it’s too late for us,” Trump said. “We’re going to give that to the next guy.” See Also: Donald Trump Asks After Yet Another Indictment: “Why Didn’t They Bring This Ridiculous Case 2.5 Years Ago?” This meeting is a significant part of Smith’s indictment of Trump for his actions before and during the Capitol riot. Milley had counseled Trump against taking action, citing the proximity of Inauguration Day, which was only 17 days away. Why It Matters: Milley and Trump have been in frequent conflict. The top-ranking military officer in the country expressed concern about a potential “Reichstag moment” during Trump’s last days in office. This revelation adds to the growing body of evidence suggesting that Trump was aware he lost the election while simultaneously promoting a widespread campaign to overturn its results. This is the third time Trump faces criminal charges, a first for any U.S. President. The charges include conspiracy to defraud the United States, two counts of Tampering with a witness, victim, or informant, and conspiracy against the rights of citizens. Read Next: McCarthy, Ramaswamy Defend Trump After Third Indictment; Mike Pence Says Anyone Who Puts Himself Above The Law Is Unfit For Office Photo via Shutterstock
Yum! Brands Likely To Post Higher Q2 Earnings; Here's A Look At Recent Price Target Changes By The Most Accurate Analysts - Yum Brands (NYSE:YUM) 2023-08-02 - Yum! Brands, Inc. YUM is expected to report its second quarter financial results, before the opening bell on Aug. 2, 2023. Analysts expect the company to post quarterly earnings at $1.24 per share, up from a year-ago earnings of $1.05 per share. The company’s revenue might come in at $1.75 billion. Yum! Brands shares fell 1% to close at $136.36 on Tuesday. Benzinga readers can access the latest analyst ratings on the Analyst Stock Ratings page. Readers can sort by stock ticker, company name, analyst firm, rating change or other variables. Let’s have a look at how Benzinga’s most-accurate analysts have rated the company in the recent period. Read This Next: Top 5 Consumer Stocks That Could Sink Your Portfolio In Q3
Instagram Testing Breakthrough Feature To Detect And Label AI-Made Posts, Leak Shows 2023-08-02 - Instagram is reportedly planning a significant update to keep up with the rapid advancements of AI. This update aims to differentiate between posts produced by generative AI and those crafted by humans. What happened: Popular developer Alessandro Paluzzi has spotted a new Instagram feature in the form of a transparent label that will be affixed to AI-generated content, ensuring users are informed about the nature of the posts they encounter. See Also: After Elon Musk Abandons The Twitter Brand, Four Entities File Applications To Scoop It Up As depicted in Paluzzi’s Twitter screenshot, the label clearly identifies a photo as “generated by Meta AI” and further emphasizes that AI content is consistently marked for easy identification. Although the extent of the test is still shrouded in mystery, we’ll keep tracking if Meta gives an official response regarding this development. Instagram isn’t alone in exploring the potential of generative AI, as other tech giants like Google and Microsoft have also ventured into this realm, producing their own AI capabilities. Meta, in particular, recently revealed its innovative Llama 2 AI model, created in collaboration with Microsoft, empowering developers to build chatbots and image generators through an open-source approach. The move to introduce this label aligns perfectly with Meta’s recent demonstrations of generative AI tools for its consumer apps, such as WhatsApp, Messenger, and Instagram. These include AI chatbots, AI stickers, and photo-editing tools for Instagram Stories, showcasing their commitment to harnessing the potential of AI. Why is this important: As generative AI garners more attention and investment due to the growing demand for AI chatbots, the authenticity and reliability concerns of content on social media are critical. The new label could be a step towards alleviating some of these apprehensions, allowing Instagram users to make informed decisions about the authenticity of the content they come across on the platform. It will also help identify morphed human photographs, solving many problems. Check out more of Benzinga's Consumer Tech coverage by following this link. Read Next: More Jobs At Risk At Google As Its Assistant Gets A ‘Supercharged’ AI Upgrade Photo by rafapress on Shutterstock
China's capital Beijing battered by heaviest rainfall in 140 years 2023-08-02 - Massive rescue and relief efforts are underway in response to typhoon-induced torrential rains in Beijing. China's capital Beijing has been pummeled by the heaviest rainfall in 140 years, leaving at least 20 dead. According to the Chinese authorities, the city recorded 744.8mm (29.3 inches) of rainfall between Saturday to Wednesday — marking the highest since 1891, based on data from the Beijing Meteorological Bureau. China has been buffeted by heavy storms as Typhoon Doksuri swept north after slamming southern Chinese provinces. Doksuri made landfall in China's Xiamen and Quanzhou on Monday morning, and caused "severe flooding in Beijing," according to a report by the NASA Earth Observatory. The massive storm damaged infrastructure, forcing tens of thousands to flee for safety. The typhoon was one of the worst storms to hit northern China in years, and the torrential rain in Beijing has killed at least 20 people as of Tuesday.
AMD considers making a specific A.I. chip for China to comply with export controls 2023-08-02 - AMD Chair and CEO Lisa Su speaks at the AMD Keynote address during the Consumer Electronics Show (CES) on January 4, 2023 in Las Vegas, Nevada. AMD said it sees an opportunity to develop an artificial intelligence chip specifically for the Chinese market to comply with U.S. export curbs, in a move that would follow rivals Nvidia and Intel . Lisa Su, CEO of AMD, said on an earnings call late Tuesday that China is an "important" market and that the semiconductor giant wants to be fully compliant with U.S. export controls. "As we think about certainly the accelerator market, our plan is to of course be fully compliant with U.S. export controls but we do believe there's an opportunity to develop products for our customer set in China that is looking for AI solutions and we'll continue to work in that direction," Su said. Accelerator chips are the kind of semiconductors required to train huge amounts of data for artificial intelligence applications.
Singapore's prime minister pledges 'zero tolerance' after recent wave of political scandals 2023-08-02 - A general view of the Central Business District and the Merlion, illuminated with a projection during the iLight Marina Bay on March 29, 2018 in Singapore. Singapore's prime minister Lee Hsien Loong vowed Wednesday to uphold "zero tolerance" toward any wrongdoing by government officials. His comments came after a wave of political scandals rocked the Southeast Asian nation in recent weeks, tarnishing the pristine image that underpins its standing as a global financial center. "The founding generation built up Singapore and entrusted it to our generation in good shape," Lee said in a parliamentary address Wednesday. "It is incumbent on us to protect and uphold this system, to keep it incorruptible and clean, and maintain high standards of propriety." Transport Minister S. Iswaran was arrested last month, alongside property tycoon Ong Beng Seng, in relation to a probe by Singapore's anti-graft agency, marking the first time in nearly four decades a cabinet official has been involved in corruption. Days later, the former House Speaker Tan Chuan-Jin resigned after failing to end an extra-marital affair with Cheng Li Hui, a female member of parliament from the ruling People's Action Party. These incidents were preceded by an investigation into two other cabinet ministers about their rentals of state-owned colonial bungalows, which eventually exonerated Law and Home Affairs Minister K. Shanmugam and Foreign Affairs Minister Vivian Balakrishnan of any wrongdoing. Lee said actions taken after these scandals showed two aspects of how his PAP government works. "One, when there is a suspicion or allegation of wrongdoing in the discharge of official duties, especially possible corruption, there is zero tolerance," he said in the first parliamentary session after these events,. "Two, when people slip in their personal lives, the PAP will look at the facts of each case carefully, and deal with the matter as humanely and sensitively as possible, according to the principles the Party has established," Lee added.
HSBC CEO on Farage-Coutts spat: 'We do not exit clients based on their lawful personal views' 2023-08-02 - HSBC's U.K. headquarters are seen at the Canary Wharf financial district of London on July 31, 2018. Tolga Akmen | AFP | Getty Images LONDON — HSBC CEO Noel Quinn said Tuesday that the lender would not "exit a client based on their lawful personal views," after Coutts' termination of Brexit figurehead Nigel Farage's account sparked a banking scandal in the U.K. Internal documents obtained by Trump ally Farage revealed that Coutts — a high-end private bank and wealth manager requiring clients to hold a minimum of £1 million ($1.29 million) in investments or borrowing, or £3 million in savings — had opted to cut ties with him once his mortgage was paid off in July, as his account was "below commercial criteria." But the dossier also extensively cited Farage's history of controversial views as part of the reason why he was deemed too commercially risky to remain a client, with the bank's client analysis noting that he is "considered by many to be a disingenuous grifter," and that "at worst, he is seen as xenophobic and racist." At the time that he was given notice of the bank's "exit plan" for his account, Farage was offered an alternative account with high street bank and Coutts' parent company NatWest Group — but he declined. Although refusing to discuss details of other banks and their clients, HSBC boss Quinn told CNBC on Tuesday that "our policy is not to de-bank or exit a client based on their lawful personal views." watch now "Our primary responsibility is to try to help customers get access to banking and to open up an opportunity for them, whether that's the homeless in the U.K. where we've taken on a significant number of new bank accounts for the homeless in the U.K. and for those that have suffered from human rights abuses," Quinn said. "We also have a responsibility as an institution to look at any areas of financial crime compliance or we have an obligation to collect information on KYC (Know Your Customer), so we have those competing obligations but to reiterate, as a policy we do not exit clients based on their lawful personal views." The closure of Farage's account triggered a heated debate in the U.K. and rocked the domestic banking industry. NatWest CEO Alison Rose was forced to resign, after she admitted discussing details of Farage's Coutts account with a BBC reporter in the wake of his allegations. Coutts CEO Peter Flavel also subsequently stepped down amid the fallout and public pressure, with Prime Minister Rishi Sunak and other government ministers falling in line behind the former Brexit Party and UKIP leader. Jonathan Bachman | Getty Images
U.S. House committee flags MSCI, BlackRock for China investments 2023-08-02 - A bank employee count China’s renminbi (RMB) or yuan notes next to U.S. dollar notes at a Kasikornbank in Bangkok, Thailand, January 26, 2023. BEIJING — U.S. investments in around 50 blacklisted Chinese companies have drawn the attention of the U.S. House of Representatives Select Committee on the Chinese Communist Party. The committee on Tuesday announced it sent separate letters to MSCI and BlackRock asking for more information about the firms' facilitation of U.S. investments into those Chinese companies. The Chinese companies were blacklisted over claims of supporting China's military or alleged human rights abuses, the committee said. It noted the initial review did not include one of the largest blacklists, the U.S. Department of Commerce's Entity List. "The true scale is likely much larger," the letters said. MSCI said in a statement it is reviewing the request for information, and that it doesn't "facilitate" investments in any country. "MSCI indexes measure the performance of equity markets available to international investors, and comply with all applicable US laws," the indexing giant said. BlackRock did not immediately respond to a CNBC request for comment. Here's the full list of names, which are primarily state-owned companies:
'Long way to go': Bank of Japan douses hopes that policy tweak marks the end of easy policy 2023-08-02 - watch now The Bank of Japan has pushed back on speculation its recent policy adjustment marked the start of a tightening cycle. Deputy Governor Shinichi Ichida on Wednesday reiterated the central bank's flexible threshold for tolerance on long-term bond yields is merely a necessary modification to sustain its ultra-easy monetary policy position. On Friday, the BOJ unexpectedly loosened its yield curve control, a move some market watchers said marked the start of the end of the Japanese central bank's ultra-easy monetary policy position. The so-called YCC is a policy tool used to target longer term interest rates. Needless to say, we do not have an exit from monetary easing in mind. Shinichi Ichida Deputy governor, Bank of Japan "The Bank's decision to conduct yield curve control with greater flexibility aims at patiently continuing with monetary easing while nimbly responding to both upside and downside risks under extremely high uncertainties for economic activity and prices at home and abroad," Ichida said in prepared comments for a public address in Chiba prefecture. "Needless to say, we do not have an exit from monetary easing in mind," he added. Speculation about such an exit emerged after the BOJ's surprise decision to offer to "flexibly" purchase 10-year Japanese government bonds at 1% yield through fixed-rate operations. The central bank, however, stuck to its existing plan to allow yields to fluctuate in the range of around plus and minus 0.5 percentage points from its 0% target level. Stock Chart Icon Stock chart icon On Wednesday, Japan's 10-year bond yield hit yet another fresh nine-year high at about 0.63% after the BOJ left its purchase offer amounts unchanged from last month in its fixed-rate operations. The BOJ's yield curve control is part of its ultra-easy monetary policy, which also includes keeping short-term interest rates at -0.1%. It is aimed at reflating growth in the world's third-largest economy and sustainably achieve its 2% inflation target after years of deflation. On Wednesday, Ichida said there is "still a long way to go" before Japan's central bank would even consider raising short-term interest rates from its current -0.1% to 0%. Every policy has its positive effects, but it also always comes with costs. There is no free lunch for any policy. Shinichi Ichida Deputy governor, Bank of Japan Ichida said the BOJ needs to maintain ultra-easy monetary policy and keep interest rates low to "carefully nurture" nascent signs of change seen in firms' wage- and price-setting behavior. He added it was difficult to change the cautious attitudes "so deeply entrenched" among firms even after Japan's economy achieved a situation where it was no longer in deflation. The central bank has been under pressure to tighten its monetary policy since inflation has consistently exceeded its 2% target for 15 straight months, while wages are finally starting to increase after years of stagnation. watch now This position pits the BOJ squarely against the global wave of tightening monetary policy in the last 12 months, as inflation spiked following the resumption of economic activity as the world emerged from the pandemic. "Every policy has its positive effects, but it also always comes with costs. There is no free lunch for any policy," Ichida said. "When inflation expectations rise, not only the easing effects but also the side effects strengthen. It is necessary to strike an optimum balance between the two."
Bank of England's next move divides economists as data paints a mixed picture 2023-08-02 - Andrew Bailey, Governor of the Bank of England, attends the Bank of England Monetary Policy Report Press Conference, at the Bank of England, London, Britain, February 2, 2023. Pool | Reuters LONDON — Market expectations are split over the Bank of England's next monetary policy move on Wednesday, as policymakers near a tipping point in their fight against inflation. As of Tuesday morning, the market was pricing around a 62% chance that the Monetary Policy Committee will opt for a 25 basis point hike to interest rates and take the main Bank rate to 5.25%, according to Refinitiv data. The other 38% of market participants expect a second consecutive 50 basis point hike, after the central bank surprised markets with a bumper increase in June. U.K. inflation looks to be abating, but is still running considerably hotter than in other advanced economies and well above the Bank's 2% target. Headline consumer price inflation slid to 7.9% in June from 8.7% in May, while core inflation — which excludes volatile energy, food, alcohol and tobacco prices — stayed sticky at an annualized 6.9%, but retreated from the 31-year high of 7.1% of May. Data from the British Retail Consortium on Tuesday also showed annual shop price inflation cooled from 8.4% in June to 7.6% in July, and fell for the first time in two years in month-on-month terms, indicating that the country may be through the worst of its prolonged cost-of-living crisis. watch now The British economy has proven surprisingly resilient, despite a run of 13 consecutive rate hikes from the Bank of England. The U.K. GDP flatlined in the three months to the end of May, but Britain is no longer projected to fall into recession. Goldman Sachs noted over the weekend that the MPC will be watching three indicators of inflationary persistence to determine how much additional monetary policy tightening is needed — slack in the labor market, wage growth and services inflation. "Following a very strong April labour market report in the run-up to the June meeting, jobs activity softened notably in May. Wage growth, however, has remained very firm with private sector regular pay rising further to 7.7%," Goldman's European economists James Moberly, Ibrahim Quadri and Jari Stehn highlighted. "While core inflation surprised to the downside in June, services inflation momentum remains strong. BoE officials have provided little guidance on how they assess the incoming data since the June meeting." Given the limited read on how the MPC has received the latest two months of economic data, Goldman said this week's meeting is a "close call," but that the 25 basis point move is more likely than another half-point hike. The Wall Street giant expects an 8-1 split vote, with the one dissenting opinion in favor of keeping rates unchanged. watch now "The overall dataset, while firm, is more mixed going into the August meeting than it was in the run-up to the June meeting, when data on the labour market, wage growth, and services inflation had all been surprising to the upside," the economists said. "Furthermore, this week's developments — including the weak flash PMI, non-committal messaging from the Fed and ECB, and receding market pricing for the August meeting — would support the case for a 25bp increase." Both the U.S. Federal Reserve and the European Central Bank implemented quarter-point hikes last week and struck cautious tones. They highlighted that inflation is heading in the right direction but retains a hawkish tilt as it remains above target. MPC happy to 'front-load' tightening The initial PMI (purchasing managers' index) readings for July indicated that the slowing economic momentum in the second quarter had continued into the third — especially in the services sector, where the Bank of England's aggressive rate hikes finally appear to squeeze demand. Consumer confidence also fell sharply in July, and the latest figures put unemployment at 4% — above the Bank of England's May forecast — with vacancies continuing to decline. The labor market remains very tight despite some loosening, and observers still marginally favor another big hike on Thursday. Barclays believes a half-point increase is in the cards, as wages and core inflation stay high, meaning more "resolute action" is a chance for the beleaguered MPC to "enhance credibility." "We expect an 8-1 vote split (for +50bp vs hold), unchanged forward guidance, and for the forecasts to explicitly incorporate greater inflationary persistence," Barclays economists Abbas Khan, Mariano Cena and Silvia Ardagna concluded in a research note Friday. This was echoed by BNP Paribas European economists Matthew Swannell and Paul Hollingsworth, who said that the MPC will be willing to "front-load" tightening, based on Governor Andrew Bailey's comments at the Sintra central bank conference. watch now
Leaders of striking Hollywood writers union to talk with studios about resuming negotiations 2023-08-02 - Los Angeles — Union leaders told striking Hollywood writers Tuesday night that they plan to meet with representatives of studios to discuss restarting negotiations after the first official communication between the two sides since the writers' walkout began three months ago. The Writers Guild of America sent an email to members saying the head of the Alliance of Motion Picture and Television Producers, which represents major studios, streaming services and production companies in negotiations, requested a meeting on Friday to discuss the resumption of contract talks. "We'll be back in communication with you sometime after the meeting with further information," the email read. "As we've said before, be wary of rumors. Whenever there is important news to share, you will hear it directly from us." It wasn't immediately known whether a similar overture was made to union leaders for Hollywood actors, who have been on strike since July 14. SAG-AFTRA and WGA picketers walk outside Netflix studios on August 1, 2023, in Los Angeles. Richard Shotwell / Invision / AP This is the first time two major Hollywood unions have been on strike at the same time since 1960, when Ronald Reagan was the actors' guild's president. Asked about the prospect of talks with either guild, a spokesperson for the AMPTP only said in an email that, "We remain committed to finding a path to mutually beneficial deals with both Unions." An Associated Press email to a representative of the Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA), which represents striking film and television actors, wasn't immediately returned. The AMPTP represents Hollywood studios including Paramount, Discovery-Warner, NBC Universal, Sony, Netflix, Amazon, Apple and Disney. Talks between screenwriters and their employers collapsed on May 1, and the first of the two walkouts that have frozen production in Hollywood began a day later. Issues include pay rates amid inflation, the use of smaller writing staffs for shorter seasons of television shows, and control over artificial intelligence in the screenwriting process. "I had hoped that we would already have had some kind of conversations with the industry by now," SAG-AFTRA Executive Director Duncan Crabtree-Ireland told The Associated Press earlier Tuesday, before the email was sent to writers. "Obviously, that hasn't happened yet, but I'm optimistic." Picketers have marched outside major studios and network offices in Los Angeles, Chicago and New York. Editor's note: Paramount+ and CBS News and Stations are part of Paramount Global, one of the companies affected by the strike. Some CBS News staff are WGA and SAG-AFTRA members but work under different contracts than the writers and actors who are on strike.
Fitch downgrades U.S. debt, citing political "deterioration" 2023-08-02 - Fitch Ratings has downgraded U.S. credit from the highest rating, citing the nation's growing debt and its eroding political stability. "In Fitch's view, there has been a steady deterioration in standards of governance over the last 20 years, including on fiscal and debt matters," the ratings agency said Tuesday. "The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management." The ratings agency also cited the U.S.' "complex budgeting process" and its lack of a medium-term financial planning, relative to its peers, in explaining the downgrade to AA+, from the U.S.' previous AAA level. These factors, combined with the fiscal shocks from the pandemic, new spending and tax cuts, have brought the debt to 113% of the national economic output, well above pre-pandemic levels. Treasury Secretary Janet Yellen decried the new rating, calling it "arbitrary and based on outdated data." "Fitch's decision does not change what Americans, investors and people all around the world already know: that Treasury securities remain the world's preeminent safe and liquid asset, and that the American economy is fundamentally strong," she said in a statement that touted the U.S.' economic recovery from the coronavirus recession and the administration's plans to reduce the budget deficit. Reduced credit ratings could lead the U.S. to pay higher interest rates on Treasury notes, bills and bonds, according to the Associated Press. "We strongly disagree with this decision," White House press secretary Karine Jean-Pierre said in a statement. "The ratings model used by Fitch declined under President Trump and then improved under President Biden, and it defies reality to downgrade the United States at a moment when President Biden has delivered the strongest recovery of any major economy in the world." The U.S. last faced a debt downgrade in 2011, when Standard & Poor's cut the nation's rating one notch after prolonged wrangling in Congress brought the U.S. close to default. Despite the downgrade, Fitch noted several positives the U.S. has going for it, including "its large, advanced, well-diversified and high-income economy, supported by a dynamic business environment" and the U.S. dollar's status as the world's reserve currency, "which gives the government extraordinary financing flexibility," the ratings firm said.