FILE PHOTO: A sign for BlackRock Inc hangs above their building in New York U.S., July 16, 2018. REUTERS/Lucas Jackson/File Photo
LONDON (Reuters) – BlackRock (BLK.N), the world’s biggest asset manager, has appointed two executives to oversee Continental Europe for the first time as part of its efforts to expand in the region, a memo to staff on Wednesday seen by Reuters showed.
Over the last two years, BlackRock had accelerated its investment in the region as a “strategic priority” and now ran more than $1 trillion, “making us the largest independent asset manager on the Continent,” its head of Europe, the Middle East and Africa, Rachel Lord, said in the memo.
With “an ambitious strategy for growth” in the region, Lord said it needed “dedicated leadership” and so had appointed two country heads, Stephane Lapiquonne and Christian Hyldahl, to jointly lead the company’s efforts.
Reporting by Simon Jessop; editing by Sinead Cruise
A HNA Group emblem is seen on the constructing of HNA Plaza in Beijing, China February 9, 2018. REUTERS/Jason Lee
SHANGHAI (Reuters) – China’s indebted HNA Group has appointed its chairman’s son as president as a part of enterprise restructuring on the finance-to-aviation conglomerate, Chinese language monetary journal Caixin reported on its web site on Saturday.
Chen Xiaofeng, son of HNA Chairman Chen Feng, has been appointed president of the group, changing Zhang Ling, in accordance with Caixin.
HNA’s official web site named Chen Xiaofeng as president, in addition to a member of the board. Chen, a graduate of the College of Washington, can be chairman and CEO of HNA’s North American unit, in accordance with the web site.
Chen Feng has been HNA’s sole chairman after Wang Jian, the group’s co-chairman, died throughout a enterprise journey in France in July, 2018.
Since final 12 months, HNA has been ramping up gross sales of its property to stave off an intensifying money crunch as Beijing curbs abroad enlargement by personal corporations. By way of asset disposals, HNA is paring again an empire that when unfold from Deutsche Financial institution (DBKGn.DE) to Hilton Worldwide (HLT.N).
LONDON (Reuters) – Large variations in the best way oil corporations report their efforts to cut back carbon emissions make it troublesome to evaluate the danger of holding their shares because the world shifts away from fossil fuels, senior fund managers say.
FILE PHOTO: Oil pump jacks work at sundown close to Midland, Texas, U.S., August 21, 2019. REUTERS/Jessica Lutz/Recordsdata
Traders have poured cash into so-called sustainable funds, which take note of corporations’ environmental, social, authorized and different requirements, and funds are below strain from their clients and authorities to make these requirements sturdy.
Fund managers are additionally making use of environmental, social and governance (ESG) standards extra extensively in conventional investments to assist them decide how corporations will fare over the long run.
There’s a rising realization that some corporations’ income will shrink quicker than others as governments prioritize low-carbon vitality to satisfy the U.N.-backed Paris settlement’s objective of slicing emissions to “web zero” by the top of the century.
However oil and fuel corporations are among the many largest dividend payers, and main funds are reluctant to divest from them, arguing that by staying in they’re in a greater place to strain corporations to enhance.
“Do buyers have the information that we want? No, I don’t assume we’ve got the information that we want in any respect,” mentioned Nick Stansbury, funding strategist at British insurer Authorized & Common’s funding administration unit, Britain’s largest asset supervisor with round $1.three trillion below administration.
“Disclosure just isn’t essentially so we will search to vary the numbers, however so we will begin understanding and pricing the dangers,” Stansbury mentioned.
“A THOUSAND WAYS TO PARIS”
There are a lot of voluntary initiatives and frameworks to unify carbon accounting and goal setting; some overlap however none have been universally adopted. Additional tasks exist for different greenhouse gases reminiscent of methane.
The Greenhouse Fuel Protocol is one such set of requirements, established by non-governmental organizations and industrial teams within the 1990s.
Corporations can report their progress according to these requirements by way of non-profit CDP, previously often called the Carbon Disclosure Challenge, which then ranks them. Norway’s Equinor comes first in its listing of 24 oil main corporations, however not all of them report in yearly.
(GRAPHIC: Huge oil rating by the CDP – right here)
There’s additionally the Job Drive on Local weather associated Monetary Disclosures (TCFD), created by the G20’s Monetary Stability Board, in addition to business our bodies, in-house fashions at oil companies and banks and third-party verifiers and consultants.
“There are a thousand methods to Paris,” London-based BP’s Chief Govt Bob Dudley mentioned at a Chatham Home occasion earlier this yr referring to the 2015 accord aiming to maintain world warming properly beneath 2 levels.
BP Finance Chief Brian Gilvary advised Reuters BP would welcome extra consistency inside the sector to indicate what oil corporations are doing about emissions and that an business physique, the Oil and Fuel Local weather Initiative (OGCI), was discussing carbon accounting.
A plethora of third celebration ESG verifier corporations had been rising with various methods of measuring ESG metrics, he mentioned, including that some such companies would say to an oil firm, “We consider your rating is that this, and, by the best way, in case you spend $50,000 we’ll present you how one can enhance that rating.”
UBS, with $831 billion of invested property, has $2 billion in its Local weather Conscious passive fairness technique, which is partly primarily based on an organization’s emissions reporting.
In that technique “we tilt in the direction of corporations which are higher acting on a spread of local weather metrics and away from corporations that don’t carry out so properly on this respect,” Francis Condon, govt director for sustainable investing, mentioned.
“We don’t need to be accused of greenwashing or falling for it,” he mentioned, including that UBS commonly inspired corporations to organize for the local weather transition.
Utilizing a broad measure, world sustainable funding reached $30.1 trillion the world over’s 5 main markets on the finish of 2018, in keeping with the World Sustainable Funding Assessment. This equates to between 1 / 4 and half of all property below administration, as a consequence of various estimates of that determine.
Condon mentioned most buyers had been nonetheless extra centered on returns than wider sustainability standards however had been changing into involved that corporations could expose them to potential future climate-related monetary losses.
“There’s a very restricted urge for food for giving up efficiency for increased ESG. The query is extra: is administration taking over dangers it will possibly’t handle?”
To attempt to reply that query, the world’s largest monetary service suppliers are investing in corporations which offer ESG-related information.
This yr alone, Moody’s purchased Vigeo Eiris and 4 Twenty Seven, MSCI purchased Carbon Delta and the London Inventory Trade purchased Past Scores. S&P acquired Trucost in 2016.
Impartial local weather threat advisors Engaged Monitoring say they attracted two-thirds of their purchasers previously yr. All six corporations present information, assessments and consulting on the local weather publicity of corporations or bonds.
HOW TO COUNT
A central difficulty, mentioned at European oil majors’ shareholder conferences this yr, is how they cope with the emissions attributable to the merchandise they promote, reminiscent of gasoline or kerosene, that are often called Scope three emissions.
(GRAPHIC: Oil Majors’ Carbon emissions – right here)
Such emissions are usually round six occasions bigger than the mixed emissions from oil corporations’ direct operations and energy provide, also referred to as Scope 1 and a couple of emissions, in keeping with Reuters calculations.
Even when an organization publishes Scope three information, there are 15 completely different classes primarily based on the Greenhouse Fuel Protocol. These embrace use of bought merchandise reminiscent of gasoline alongside secondary elements reminiscent of enterprise journey or worker commuting.
Constantine Pretenteris at Engaged Monitoring mentioned some corporations achieved a excessive rating for comprehensiveness by disclosing information for a lot of the Scope three classes, however omitted the important thing ones, reminiscent of emissions from use of their gasoline.
“We’d like to see a basic commonplace which makes comparisons straightforward,” Sven Reinke of Moody’s mentioned. “It doesn’t totally exist as of late.”
RELATIVE OR ABSOLUTE
The vast majority of climate-related targets are primarily based on depth measures, which suggests absolute emissions can rise with rising manufacturing, even when the headline depth metric falls.
Complete recorded Scope three emissions from the world’s high public oil corporations are nonetheless rising, largely as a consequence of rising oil and fuel output, in keeping with Reuters calculations primarily based on information carried on Refinitiv’s Eikon platform and firm web sites.
They confirmed mixed Scope three emissions recorded by BP, Royal Dutch Shell, Exxon Mobil, ConocoPhillips’, Chevron, Eni, Complete, Equinor and Repsol rose round 1.6% over 2018, after a 1% related rise the earlier yr.
Particular person figures differ in keeping with the metrics an organization chooses to incorporate. Conoco mentioned its Scope three emissions had fallen 5%, whereas the opposite corporations’ particular person recorded Scope three emissions both rose or stayed roughly the identical.
Requested for remark, BP and Chevron pointed to absolute targets associated to their very own operations. Complete pointed to progress it had made in the direction of decreasing emissions depth per unit produced. Shell and Repsol referred to their short-term intensity-based targets and Equinor mentioned it couldn’t take accountability for emissions it doesn’t management.
U.S. agency Exxon didn’t reply to a request for remark. Eni had no fast remark.
Prime oil corporations have boosted funding in renewable vitality and low-carbon know-how lately, notably in Europe, however a lot larger sums are nonetheless going into growing oil and fuel.
“We can not change the patterns of consumption world wide – we can not make individuals fly much less. We are able to cut back the carbon depth of the merchandise we promote,” Shell Chief Govt Ben van Beurden mentioned in June.
Mark Lewis from BNP Paribas and a member of TCFD, mentioned total cuts had been what would depend ultimately. Repsol is at present the one main oil firm to have set absolute discount targets for all its output.
“The Paris Settlement is all a few carbon price range and that’s an absolute quantity. It’s not an depth quantity,” Lewis mentioned. “The environment works by way of absolutes not depth.”
Within the meantime, some buyers are avoiding oil corporations which others say needs to be supported for going additional than a lot of their friends.
London-based funding administration agency Sarasin & Companions mentioned in June it was promoting down its stake in Shell as a result of its spending plans had been out of synch with worldwide local weather targets.
Requested for remark, Shell pointed to feedback from representatives of the pension funds of the Church of England and Britain’s authorities Surroundings company, which praised the corporate’s transparency and mentioned others ought to comply with its lead.
(Reuters) – U.S. job progress elevated reasonably in September, with the unemployment fee dropping to close a 50-year low of three.5%, which might assuage monetary market issues that the slowing economic system was on the point of a recession amid lingering commerce tensions.
KEY POINTS:
* Sept nonfarm payrolls +136,000 (consensus +145,000) vs Aug +168,000 (prev +130,000), July +166,000 (prev +159,000)
* Sept labor pressure participation fee 63.2 pct vs Aug 63.2 pct (prev 63.2 pct)
* Sept jobless fee 3.5 pct (consensus 3.7 pct) vs Aug 3.7 pct (prev 3.7 pct)
* Common hourly earnings all non-public employees unchanged (cons +0.Three pct) vs Aug +0.four pct (prev +0.four pct)
* Sept U-6 underemployment fee 6.9 pct vs Aug 7.2 pct (prev 7.2 pct)
* Sept non-public sector jobs +114,000 (cons +133,000), vs Aug +122,000 (prev +96,000)
* Authorities jobs +22,000 vs Aug +46,000 (prev +34,000)
MARKET REACTION:
STOCKS: S&P e-mini futures ESv1 flip barely larger and have been final up 0.18%, pointing to flat to barely larger open
BONDS: Treasury yields rose barely; 2- 12 months US2YT=RR at 1.4237% and 10-year US10YT=RR at 1.5477%
FOREX: The greenback index .DXY reversed slight losses and was about 0.05% larger
COMMENTS:
SHAWN SNYDER, HEAD OF INVESTMENT STRATEGY, CITI PERSONAL WEALTH MANAGEMENT, NEW YORK
“Anytime you see the unemployment fee fall Wall Avenue goes to suppose it’s good.”
“Traders are on excessive alert for indicators of a recession … It doesn’t affirm the story. Optimistic payroll shouldn’t be in line with a recession.”
“It’s type of a goldilocks report. It’s not sturdy sufficient to maneuver the Federal reserve away from chopping charges on the finish of October however it’s not weak sufficient to make you involved concerning the labor market or the patron.”
SHAUN OSBORNE, CHIEF FX STRATEGIST, SCOTIABANK, TORONTO:
“The quantity got here simply shy of expectations, however provided that market expectations have shifted after the ADP and ISM numbers, individuals have been bracing for one thing worse than this. So that is within the ballpark of what’s acceptable. Wage progress is a bit gentle, however unemployment dropped. In a broad sense, this was not that dangerous. It most likely provides the greenback a little bit of respiratory room after a little bit of a tough experience the final three or 4 days.”
JOSEPH SROKA, CHIEF INVESTMENT OFFICER, NOVAPOINT, ATLANTA
“The quantity got here up mild relative to consensus, however not too dangerous on the non-public information. However the fruits of the weak ISM information and the payrolls report is rising the percentages in traders mindset that the Fed has extra incentive to think about one other rate of interest discount on the subsequent assembly.”
“The economic system has been going by a low degree of deceleration during the last couple of months and whenever you take them in mixture some is trade-related and a few is time-related, which means you possibly can’t develop infinitely. The Fed’s been proactive on adjusting rates of interest earlier than we noticed the info like this month’s ISM. So possibly the problem that some modest fee adjustment from the Fed is sufficient to preserve the economic system from a deeper decline and lengthen growth, albeit at a slower tempo.”
SAMEER SAMANA, SENIOR GLOBAL MARKET STRATEGIST, WELLS FARGO INVESTMENT INSTITUTE, ST. LOUIS
“Headline job progress, non-public payrolls, and manufacturing payrolls, and wage progress all got here in weaker than anticipated and suggests some softening within the labor market.
“This information most likely reinforces the case that the U.S. is now starting to really feel the results of the continuing international slowdown and doubtless strengthens the case for extra fee cuts, if the Fed chooses to go down that path.”
TOM PORCELLI, CHIEF U.S. ECONOMIST, RBC CAPITAL MARKETS, NEW YORK
“If individuals have been genuinely on the sting of the dialog about whether or not or not we’re slipping into recession or not, that is the sort of quantity that ought to pressure them to take a step again from that view. I by no means essentially thought that individuals must be holding that view, however I’m merely highlighting a market actuality. I believe that there was, from the market perspective, an actual threat that we have been slipping into recession. This isn’t a recessionary sort of quantity. This was a superbly sound report in most methods, not in each method. The one factor that I don’t like is that common hourly earnings have been flat. However however, the unemployment fee improved once more, we’re 3.5% on the unemployment report. This isn’t a dynamic that occurs with nice regularity in the USA, traditionally talking. The labor backdrop is definitely in actually fine condition, regardless of quite a lot of the noise that we proceed to listen to about these fears. This report throws quite a lot of chilly water on that.”
“I believe the Fed is locked stepping into October, virtually no end result was going to alter that. Whether or not the quantity was worse than anticipated and even fairly a bit higher than anticipated, I believe the Fed was going to go. The doves on the committee are clearly in management as a result of they’re the voters proper now.
KATHY JONES, CHIEF FIXED INCOME STRATEGIST, SCHWAB CENTER FOR FINANCIAL RESEARCH, NEW YORK
“I believe that the general image confirms the mild slowdown within the economic system that’s already priced into the bond market. However the lack of wage achieve, I believe, is a little bit of a shock. You’ll suppose that given the low degree of the unemployment fee, wages can be ticking up, however truly common hourly earnings have been down a bit. That may very well be a fluke, however they did peak in February…That raises quite a lot of questions – what’s the composition of jobs which can be being added? Is it that we’re pulling in quite a lot of people who’ve been on the margins and subsequently are extra low-wage jobs being added?”
“All in all, it’s not most likely a giant mover for the bond market, however it does go away the probability of a Fed fee minimize on the desk – maybe in October, maybe they’ll determine upon it in December and get extra information.”
“It’s fairly in line with what we noticed with the PMIs, the ISMs… The ISM was fairly gentle. The drop within the manufacturing payrolls was a affirmation of softness in there. We noticed a little bit of a drop in mining as properly, which isn’t stunning. Building, gentle. Total a gentle report, however that was anticipated.”
JOHN VELIS, GLOBAL MACRO STRATEGIST, BNY MELLON, NEW YORK
“Going into it and contemplating what we noticed with the 2 ISM surveys, it might have been so much worse. It’s most likely good for the market and never as dire as many individuals anticipated. It doesn’t imply that the economic system and the roles market are falling off a cliff. Then again, it’s not sturdy sufficient that it’s going to take out this extra Fed easing that has been priced into the curve the previous few days.”
DOUG DUNCAN, CHIEF ECONOMIST, FANNIE MAE, WASHINGTON
“The revisions being up is a optimistic as a result of sometimes when the employment market is slowing the revisions of prior months are down, and that has been the case for about 5 months. So, the truth that the revisions are up this time recommend that there’s not a precipitous slowing in unemployment. The truth that wage charges are holding is nice information, it’s help for the patron.
“There’s not a warning of a major slowdown within the economic system from these information. Our view is that with a purpose to keep the extent of unemployment steady we have to add someplace between 100,000 and 120,000 jobs a month, so this definitely matches that. It doesn’t recommend a major slowing in exercise at this level.
“I’d be stunned if there was a major response (from the market) in both course. What it does do is spotlight the variations of opinion on the Fed board about whether or not the economic system is slowing precipitously or not and also you had a number of dissents from the final fee minimize, that doesn’t assist make clear for them whether or not their disagreements are merited or not.”
JJ KINAHAN, CHIEF MARKET STRATEGIST, TD AMERITRADE, CHICAGO
“There’s a lot to love, particularly given the revisions that occurred. Retail shedding as many roles because it did once more, I don’t suppose it’s a huge shock. We proceed to see that pattern, everyone seems to be making an attempt to determine it out, so to talk, and once more the world they misplaced them in being primarily in clothes.
“Manufacturing could also be somewhat bit regarding, down 2,000 jobs not an enormous factor total. It’s a must to bear in mind this didn’t embrace the GM strike due to timing. In order that one will present up within the subsequent report, however it’s nice that we received a 45,000 revision larger between July and August and that is among the issues individuals actually favored about this. The 2 areas which have been unbelievable being healthcare and enterprise to enterprise providers are simply stud sectors. Each single month these two sectors present up and we simply proceed to see that. The opposite factor that was vital was transportation and warehousing, so once more, areas that take items from one place to a different, up 16,000 jobs. Most of this was an actual optimistic for the economic system regardless of a few of the different numbers we’re seeing.
“We’ve had such a string of dangerous information, that something that exhibits the economic system is doing higher than maybe individuals have been speaking about is properly acquired. I don’t suppose it clarifies the image any which method (for the Fed). It’s another piece of grey thrown into the image.”
Americas Economics and Markets Desk; +1-646 223-6300
(Reuters) – Japan’s SoftBank Group Corp (9984.T), the largest investor in WeWork proprietor The We Firm, is exploring methods to exchange Adam Neumann as chief government of the U.S. office-sharing start-up, 4 folks aware of the matter mentioned on Sunday.
FILE PHOTO: Adam Neumann, CEO of WeWork, speaks to visitors throughout the TechCrunch Disrupt occasion in Manhattan, in New York Metropolis, NY, U.S. Might 15, 2017. REUTERS/Eduardo Munoz -/File Photograph
The uncommon showdown between SoftBank and considered one of its largest investments comes after We Firm postponed its preliminary public providing (IPO) final week, following pushback from perspective traders, not simply over its widening losses, but additionally over Neumann’s unusually agency grip on the corporate.
This was a blow for SoftBank, which hoped for We Firm’s IPO to bolster its income because it seeks to woo traders for its second $108 billion Imaginative and prescient Fund. It invested in We Firm at a $47 billion valuation in January, but inventory market investor skepticism led to the startup contemplating a possible valuation within the IPO earlier this month of as little as $10 billion, Reuters reported.
Administrators on We Firm’s seven-member board which are aligned with SoftBank are deliberating learn how to exchange Neumann as CEO, the sources mentioned. Benchmark Capital, one other huge investor in We Firm, would additionally like Neumann to step apart, one of many sources mentioned.
No problem to Neumann has but been tabled, the sources mentioned. A We Firm board assembly to debate Neumann’s future might be held as early as this week, one other of the sources mentioned.
One possibility that SoftBank is contemplating is asking Neumann to develop into interim CEO whereas a headhunting agency is employed to search out an exterior alternative, the primary supply mentioned.
The sources requested to not be recognized as a result of the matter is confidential. We Firm and SoftBank declined to remark, whereas Neumann and Benchmark Capital couldn’t be instantly reached for remark. The Wall Avenue Journal first reported on SoftBank exploring methods to exchange Neumann as CEO.
As co-founder of the We Firm, Neumann holds particular voting shares that allow him to dismiss dissident board administrators and shoot down any problem to his authority. Nonetheless, SoftBank may select to not again We Firm’s IPO or present it with extra funding. It has already funded the cash-burning start-up to the tune of $10 billion, and was discussing committing one other $1 billion to the IPO.
We Firm mentioned final week it’s aiming to develop into a publicly traded firm by the tip of the 12 months.
In an indication of the deteriorating relations between SoftBank and WeWork, Neumann didn’t take part in a gathering of executives of corporations backed by SoftBank that occurred in Pasadena, California, final week and was organized by SoftBank CEO Masayoshi Son, based on two folks aware of the matter.
Reporting by Anirban Sen in Bengaluru and Joshua Franklin in New York; Extra reporting by Greg Roumeliotis in new York and Rishika Chatterjee in Bengaluru; Modifying by Sonya Hepinstall and Daniel Wallis
WASHINGTON/DUBAI (Reuters) – U.S. President Donald Trump stated on Monday stated it appeared like Iran was behind assaults on oil vegetation in Saudi Arabia however burdened he didn’t need to go to struggle, because the assaults despatched oil costs hovering and raised fears of a brand new Center East battle.
Iran has rejected U.S. fees it was behind the strikes on Saturday that broken the world’s largest crude-processing plant and triggered the biggest soar in crude costs in many years.
Relations between the US and Iran have deteriorated since Trump pulled out of the Iran nuclear accord final yr and reimposed sanctions over Tehran’s nuclear and ballistic applications. Washington additionally needs to stress Tehran to finish its assist of regional proxy forces, together with in Yemen the place Saudi forces have been preventing Iran-backed Houthis for 4 years.
America was nonetheless investigating if Iran was behind the Saudi strikes, Trump stated, however “it’s definitely trying that manner at this second.”
Trump, who has spent a lot of his presidency making an attempt to disentangle the US from wars he inherited, made clear, nonetheless, he was not going to hurry into a brand new battle on behalf of Saudi Arabia.
“I’m any person that would love to not have struggle,” Trump stated.
A number of U.S. Cupboard members, together with Secretary of State Mike Pompeo and Vitality Secretary Rick Perry, have blamed Tehran for the strikes. Pompeo and others will journey to Saudi Arabia quickly, Trump stated.
A day after saying the US was “locked and loaded” to reply to the incident, Trump stated on Monday there was “no rush” to take action.
“We’ve got a whole lot of choices however I’m not taking a look at choices proper now. We need to discover definitively who did this,” he stated.
Iranian President Hassan Rouhani stated the strikes had been carried out by “Yemeni folks” retaliating for assaults by a Saudi-led navy coalition in a struggle with the Houthi motion.
“Yemeni persons are exercising their professional proper of protection,” Rouhani instructed reporters throughout a go to to Ankara.
Iranian Overseas Ministry spokesman Abbas Mousavi referred to as the allegations “unacceptable and completely baseless.”
The assaults lower 5% of world crude oil manufacturing.
Oil costs surged by as a lot as 19% after the incidents however later got here off their peaks. The intraday soar was the most important for the reason that 1990-91 Gulf disaster over Iraq’s invasion of Kuwait.
The market eased from its peak after Trump stated he would launch U.S. emergency provides and producers stated there have been sufficient shares saved up worldwide to make up for the shortfall. Costs had been round 12% larger by afternoon in the US.
SAUDI SUSPICIONS
Saudi Arabia stated the assaults had been carried out with Iranian weapons, including that it was able to responding forcefully and urging U.N. consultants to assist examine the raid.
Crown Prince Mohammed bin Salman stated Iranian threats weren’t solely directed towards the dominion however towards the Center East and the world.
Whereas the prince didn’t immediately accuse Tehran, a Overseas Ministry assertion reported him as calling on the worldwide group to sentence whoever was behind the strike.
“The dominion is able to defending its land and folks and responding forcefully to these assaults,” the assertion added.
Saudi Arabia and Iran have been enemies for many years and are preventing quite a lot of proxy wars.
Trump stated he had not made commitments to guard the Saudis.
A satellite tv for pc picture displaying injury to grease/gasoline Saudi Aramco infrastructure at Khurais, in Saudi Arabia on this handout image launched by the usGovernment September 15, 2019. U.S. Authorities/DigitalGlobe/Handout through REUTERS
“No, I haven’t promised Saudis that. We’ve got to sit down down with the Saudis and work one thing out,” he stated. “That was an assault on Saudi Arabia, and that wasn’t an assault on us. However we would definitely assist them.”
Two sources briefed on state oil firm Saudi Aramco’s operations instructed Reuters it’d take months for Saudi oil manufacturing to return to regular. Earlier estimates had advised it may take weeks.
Saudi Arabia stated it will be capable to meet oil clients’ demand from its ample storage, though some deliveries had been disrupted. At the very least 11 supertankers had been ready to load oil cargoes from Saudi ports, ship monitoring information confirmed on Monday.
RISING TENSIONS
Stress within the oil-producing Gulf area has dramatically escalated this yr after Trump imposed extreme U.S. sanctions on Iran geared toward halting its oil exports altogether.
For months, Iranian officers have issued veiled threats, saying that if Tehran is blocked from exporting oil, different international locations will be unable to take action both. However Iran has denied a task in particular assaults, together with bombings of tankers within the Gulf and former strikes claimed by the Houthis.
U.S. allies in Europe oppose Trump’s “most stress” technique, arguing that it gives no clear mechanism to resolve points, making a danger the enemies may stumble into struggle.
Trump has stated his aim is to drive Iran to barter a more durable settlement and has left open the opportunity of talks with Rouhani at an upcoming U.N. assembly. Iran says there may be no talks till Washington lifts sanctions.
U.N. Yemen envoy Martin Griffiths instructed the U.N. Safety Council on Monday it was “not fully clear” who was behind the strike however he stated it had elevated the possibilities of a regional battle.
However the U.S. ambassador to the world physique, Kelly Craft, stated rising info on the assaults “signifies that duty lies with Iran” and that there isn’t any proof the assault got here from Yemen.
Iran’s Yemeni allies have promised extra strikes to return. Houthi navy spokesman Yahya Sarea stated the group carried out Saturday’s predawn assault with drones, together with some powered by jet engines.
“We guarantee the Saudi regime that our lengthy arm can attain anyplace we select and on the time of our selecting,” Sarea tweeted. “We warn firms and foreigners towards being close to the vegetation that we struck as a result of they’re nonetheless in our sights.”
Slideshow (11 Pictures)
U.S. officers say they consider that the assaults got here from the wrong way, presumably from Iran itself reasonably than Yemen, and will have concerned cruise missiles. Wherever the assaults had been launched, nonetheless, they consider Iran is guilty.
The assaults have raised questions on how the dominion, one of many world’s high spenders on weaponry, a lot of it equipped by U.S. firms, was unable to guard oil vegetation from assault.
Sensing a business opening, President Vladimir Putin stated Russia was prepared to assist Saudi Arabia by offering Russian-made air protection techniques to guard Saudi infrastructure.
Russia and China stated it was unsuitable to leap to conclusions about who was guilty for the assault on Saudi Arabia.
Reporting by Steve Holland in Washington and Rania El Gamal in Dubai; Writing by William Maclean, Mike Collett-White and Doina Chiacu; Modifying by Alistair Bell and Peter Cooney
PARIS/FRANKFURT (Reuters) – Time is running out for European car makers, which have waited until the last minute to try to meet ambitious EU emissions targets and face billions in fines if they fail to comply.
FILE PHOTO: A model of an electric Mini car is pictured at the booth of Siemens at the Hanover trade fair, in Hanover, Germany March 31, 2019. REUTERS/Fabian Bimmer/File Photo
Manufacturers from PSA Group (PEUP.PA) to Volkswagen (VOWG_p.DE) will use this week’s Frankfurt auto show to reveal the new models and strategies they hope can slash carbon dioxide emissions within months.
But it is a challenge fraught with danger, as the cost of pushing pricey technology on unconvinced consumers could hammer profits in an industry already suffering a downturn in sales.
“You have cars that cost an extra 10,000 euros to build, fleet-emissions targets requiring a certain sales volume and consumers who may or may not want them,” said one PSA executive.
“All the ingredients are there for a powerful explosive.”
By next year, CO2 must be cut to 95 grams per kilometer for 95% of cars from the current 120.5g average – a figure that has risen of late as consumers spurn fuel-efficient diesels and embrace SUVs. All new cars in the EU must be compliant in 2021.
Another 37.5% cut in carbon dioxide fumes is required between 2021 and 2030 in addition to the 40% cut in emissions between 2007 and 2021.
The timing could hardly be worse, with the world’s main auto markets in decline and the sector braced for a chaotic British exit from the European Union as well as a protracted U.S-China trade war.
The industry has long since given up pushing for the goals to be relaxed – a political impossibility underlined by a resurgent climate protest movement that has added the Frankfurt show to its target list.
Volkswagen’s chief executive, Herbert Diess, said the regulatory crunch and growing support for green causes proves that his company’s 80 billion euros ($88 billion) bet on becoming the world’s largest manufacturer of electric cars is right.
“Even Toyota and some other competitors, which were slow to bring EV’s, they are now also betting on electric. So we are right,” Diess said.
New electric cars wheeled out at the show on Tuesday include PSA Group’s Opel Corsa-e mini and the ID.3 compact from Volkswagen. The German car maker is also making hybrid power standard-issue in its Golf bestseller.
The show is also seized upon by activist groups. Greenpeace on Tuesday inflated a 1,400 cubic meter black balloon emblazoned with the word CO2 from the outsize exhaust pipes of a monster truck to protest the car industry’s reliance on combustion engines.
Fiat Chrysler (FCHA.MI), which lacks adequate green technology, has agreed to pay Tesla (TSLA.O) hundreds of millions of euros to pool emissions scores with its electric cars and escape penalties.
CRUNCH TIME
For years, image-conscious mass automakers have placed electrified models at the center of their show stands but near the margins of their commercial offerings. Only now will they be forced to sell them in large numbers, challenging profitability.
To meet the targets, sales of electric cars would need to triple to 6% of the market by 2021, and rechargeable hybrids surge fivefold to a 5% market share, German engineering firm FEV Consulting estimates.
Fines of 95 euros ($105) per car, per excess gram of CO2 quickly add up to hundreds of millions of euros.
“Market acceptance of a lot of this tech and exactly what people are willing to pay remains very, very unclear,” said Max Warburton, an analyst at brokerage Sanford C. Bernstein, who predicts that car makers will lean on heavily discounted sales to fleet customers and even their own employees.
Rather than incur fines that could total 25 billion euros in 2021 if current lineups were left unchanged, car makers are engaged in a huge product overhaul likely to wipe more than half that amount from combined profits, Bernstein projects.
Many electrified offerings are arriving just in time – or in many cases too late – for deliveries to begin in January, when less efficient models will also become more scarce.
Hard on the heels of VW’s electric ID.3, the Golf 8 to be unveiled next month heralds a mass deployment of 48-volt hybrid technology at the very heart of Europe’s auto market.
Such mild hybrids add less cost, starting at 500 euros per car, but bring more modest emissions cuts than plug-in hybrids or pure electrics costing an extra 5,000-10,000 euros, by comparison with an equivalent gasoline model.
MODEL CULL
French car makers face a bigger hit to margins than German rivals, analysts say, because they lack significant U.S. and Chinese earnings to soften the blow.
Renault (RENA.PA), reliant on its aging Zoe electric car, is rushing to add hybrid versions of its Clio and Captur subcompacts now expected in the second quarter of 2020.
PSA is counting on pricier plug-ins and electric versions of its DS3, Peugeot 208 and Opel Corsa to claim 7% of its total sales.
Industry executives expect the cull to be replicated by other car makers, hitting European automotive jobs already threatened by the shift to electrification.
“During the year we’re likely to see models dropped and some layoffs,” said Georgeric Legros, Paris-based director at consulting firm AlixPartners.
NEW YORK (Reuters) – It looks like something has to give in global markets.
Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., April 18, 2019. REUTERS/Brendan McDermid
Stocks and bonds around the world have rallied atypically together since the start of the year, rewarding investors both bullish and bearish on the direction of global growth.
The main catalyst for the gains was the Federal Reserve’s surprise decision in early January to pause its tightening policy, after four interest rate increases in 2018 raised fears it was being too aggressive as the economy cooled and inflation remained minimal. Those fears helped send global markets into a tailspin in December.
Yet with the U.S. benchmark S&P 500 near a record level and corporate junk bonds notching new highs, the question stock and bond investors are asking is whether the Fed’s next move will be a rate cut that further propels risk assets or a rate hike that cuts into the stock market’s momentum.
A move by the Fed on interest rates or a communication misstep by the central bank would likely end either the rally in the stock market or in investment-grade bonds by the end of the year, restoring the traditional give-and-take between risk and safety, investors say.
“The Fed is between a rock and a hard place,” said Kathleen Gaffney, a portfolio manager at Eaton Vance Management in Boston. “They can’t go lower because there are signs that inflation is rising and they can’t go higher because of global political uncertainty. It leaves the market on pause.”
The U.S. central bank has said it will soon stop letting bonds bought during its “quantitative easing” period following the financial crisis roll off its balance sheet, which also helped push yields on safe havens like Treasuries lower and acted as a tailwind for riskier assets.
Gaffney said the Fed will likely have to raise rates again because of rising wages and other forms of inflation by the end of the year, adding that such a move will “pierce” the high valuations in both the stocks and bond markets.
TWIN RALLY
The rolling four-month percentage change in the price of the S&P 500 and the 10-Year Treasury note have both been positive for three straight months, according to a Reuters analysis. That is the longest such streak since a five-month run that ended in August 2017, it showed.
In that same 2017 period, the S&P 500 gained and 10-year Treasury yields fell as the market digested conflicting economic reports during the first year of the Trump administration, before the Federal Reserve in September began quantitative tightening that resulted in bond yields rising as the S&P 500 continued to rally.
Since January equity markets around the world have made up much of the ground they lost during a wrenching fourth quarter of 2018 that sent the U.S. stock market to the brink of a bear market.
The S&P 500 and Europe’s STOXX 600 are up almost 16% year to date, while stock indexes in China are up nearly 30%.
The ICE Merrill Lynch U.S. high yield index is up 8.6% year to date while the Merrill Lynch World sovereign bond index is up almost 1.5%.
A rally in benchmark 10-year Treasury notes, usually seen as a safe haven, undercuts the picture of a “risk on” market. Their yields have slid from 2.69% at the start of the year to as low as 2.34% in late March.
“At this point in the cycle, equity investors are trying to take any incremental news positively while fixed income investors are not,” said Jen Robertson, a portfolio manager at Wells Fargo Asset Management in London. “It’s quite delicate at the moment and any negative news out of first quarter earnings could impact this sharp bounce.”
Further uncertainty due to the economic impact of the UK leaving the European Union, which has now been pushed back to Oct. 31, or a deterioration in U.S.-China trade talks could be a “shock to the system” and derail both stocks and bonds, she said.
The spread between U.S. three-month bills and 10-year notes turned negative for the first time since 2007 in March, a bearish sign as a yield curve inversion has signaled an upcoming economic recession in the past.
The move initially boosted stock prices as investors predicted it would hem the Fed in from future interest rate hikes. But equities could fall soon if recession fears continue to grow, said Hiroaki Hayashi, managing director of Fukoku Capital Management in Tokyo.
“If you look at the past experiences, share prices have often rallied six to nine months after the yield curve initially inverted before entering a major correction. I believe we are exactly at such a phase now.”
Despite outsized gains this year, financial markets have not indicated investors have faith that the global economy can grow without historically low interest rates a decade after the end of the Great Recession, said Anwiti Bahuguna, head of multi-asset strategy at Columbia Threadneedle Investments.
“The bull market we’ve had for the past 10 years is essentially because of really low interest rates,” Bahuguna said.
“I don’t think that equilibrium will last much longer,” she added, saying rising inflation and low unemployment could soon test global markets’ ability to cope with tighter monetary policy.
Additional reporting by Hideyuki Sano in Tokyo and Terence Gabriel in New York.; Editing by Alden Bentley and Tom Brown
(Reuters) – Citigroup Inc reported a better-than-expected quarterly profit on Monday, boosted by a surge in investment banking revenue and lower expenses.
FILE PHOTO: The Citigroup Inc (Citi) logo is seen at the SIBOS banking and financial conference in Toronto, Ontario, Canada, Oct. 19, 2017. REUTERS/Chris Helgren/File Photo
Investment banking revenue rose 20 percent to $1.4 billion, as strong growth in advisory and investment-grade debt underwriting more than offset a drop in equity underwriting.
Bond trading rose 1 percent in sharp contrast to Goldman Sachs and JPMorgan, both of which reported declines.
But a 24 percent drop in equities trading pressured Citi’s overall revenue, which fell 2 percent to $18.58 billion and came in slightly below analysts’ estimates.
Revenue from consumer banking, the bank’s largest business, was flat at $8.5 billion, due to weakness in Asia.
Earlier this year, the bank said it would earn $2 billion more in revenue from lending activities than it did in 2018.
Total loans at the third-largest U.S. bank by assets rose 3 percent to $682.3 billion, while deposits grew 5 percent to $1.03 trillion, excluding foreign exchange fluctuations.
Citi’s net interest margin, a closely watched metric, expanded 8 basis points to 2.72 percent in the quarter, while total operating expenses fell 3 percent to $10.58 billion
Net income rose to $4.71 billion, or $1.87 per share, for the first quarter ended March 31 from $4.62 billion, or $1.68 per share, a year earlier.
Analysts were looking for a profit of $1.80 per share, according to IBES data from Refinitiv.
Shares of the company were up 1.2 percent in trading before the bell.
Reporting by Imani Moise in New York and Sidharth Cavale in Bengaluru; Editing by Anil D’Silva
