2024-11-15 10:33

Powell's chair term ends May 2026, board post ends Jan 2028 No Fed chief has stayed after leader role in over 70 years Comment comes amid concerns about Fed independence under Trump Nov 14 (Reuters) - Federal Reserve Chair Jerome Powell on Thursday declined to say whether he would remain at the U.S. central bank as a board member after his term as chief expires in May 2026. Powell, asked at an event in Dallas whether he would consider being the first Fed chair in more than seven decades to remain on the Fed board after no longer serving as its leader, said only that he is committed to serving out his term as chair. "I'll certainly serve to the end ... of my chair term," Powell said. "And that's really all I've decided, and all I'm thinking about." Powell's term as a Board of Governors member expires in January 2028. The last former Fed chair to continue serving beyond their term as its leader was Marriner Eccles, who ceased being the Fed's leader in January 1948, but continued on the board until July 1951. The question follows a suggestion by one individual under consideration for a leading economic role in Donald Trump's incoming administration that the next president nominate and the Senate confirm a successor to Powell long before the current central bank chief's term expires. The idea, floated last month by Scott Bessent, whom Trump is considering for Treasury secretary, would be to weaken Powell's authority for the remainder of his tenure while an already-approved successor advocated in the wings for monetary policy more palatable to Trump. “You could do the earliest Fed nomination and create a shadow Fed chair,” Bessent told Barron’s. “And based on the concept of forward guidance, no one is really going to care what Jerome Powell has to say anymore.” Bessent later told the Wall Street Journal he no longer thought the idea was worth pursuing. Nonetheless, Trump's propensity for flouting norms and his open criticism of Powell, whom he appointed chair during his first term as president, has the Fed-watching world on high alert for more challenges to the U.S. central bank's independence , opens new tab after Trump becomes president for a second time in January. Presidents typically do not wait for the current chair's term to expire before nominating a successor or renominating the incumbent, but the window is normally on the order of three to four months, a period largely consumed by the Senate confirmation process and not one that would allow the nominee to usurp authority from a current Fed chief. Trump, for instance, nominated Powell, then a Fed governor, to take over as chair from Janet Yellen in November 2017, about three months before her term as chair was due to expire. President Joe Biden did the same in renominating Powell in November 2021. The next Fed vacancy available for Trump to fill is the board seat held by Adriana Kugler, who was appointed by Biden and started at the Fed in September 2023. Her seat expires in January 2026. On Thursday, she devoted a substantial portion of a speech she delivered in Uruguay to the subject of Fed independence. "It has been widely recognized - and is a finding of economic research - that central bank independence is fundamental to achieving good policy and good economic outcomes," Kugler said. Asked about Kugler's remarks at the beginning of his event in Dallas, Powell echoed her sentiment, adding that Fed independence is widely embraced by both parties in Congress. Sign up here. https://www.reuters.com/markets/us/feds-powell-declines-say-if-he-would-remain-after-chair-term-expires-2024-11-14/

2024-11-15 10:29

LAHORE, Nov 15 (Reuters) - Pakistan's Punjab province declared a health emergency due to toxic smog on Friday, banning construction, shutting schools for another week and moving universities online, while hundreds of thousands of Muslims prayed for rain and forgiveness. The faithful gathered at over 600 government-run mosques in the province for "Namaz-e-Istisqa", a voluntary prayer for rain often offered in times of calamities, said Talha Mahmood, spokesman for the provincial Religious Affairs department. "Today, we prayed for rain to decrease smog, though it is caused by humans' own mistakes," said Muhammad Ejaz, 48, who led prayers at a mosque in the sprawling provincial capital Lahore, adding the prayer aimed at seeking God's forgiveness for people's sins. The province, Pakistan's most populous, grapples every winter with smog, but air pollution has worsened in recent years, as a result of cold air trapping dust, low-grade diesel fumes and smoke from illegal stubble burning on fields. Sajid Bashir, spokesman for the provincial Environment Department, attributed this year's severe pollution to a lack of rain in September and October. "Last year, rain spells reduced particulate matter; this year, we're still waiting," he said on Friday. Lahore has topped Swiss group IQAir readings as the world's most polluted city, for most of the week. Punjab Senior Minister Marriyum Aurangzeb, announcing smog-reduction measures at a press conference, said the government had ordered the closure of construction, brick kilns, and furnace-based plants in Lahore and the city of Multan. She said there would be a complete three-day lockdown from next Friday if the situation does not improve. Last week the province ordered schools to close until Nov. 17, and on Friday the shift to online learning was extended for another week. Colleges and universities will also shut down, moving to virtual classes. Authorities have already banned entry to parks, zoos, playgrounds and other public spaces. Other parts of South Asia are also dealing with high levels of pollution and Punjab blames neighbouring India for contributing to its hazardous air quality. New Delhi, the world's most polluted capital, has banned non-essential construction, moved children to virtual classrooms and asked residents to avoid using coal and wood from Friday. Sign up here. https://www.reuters.com/world/asia-pacific/pakistans-punjab-shuts-construction-schools-lockdown-looms-fight-smog-2024-11-15/

2024-11-15 10:29

SEOUL, Nov 15 (Reuters) - Samsung Electronics (005930.KS) , opens new tab has decided to buy back shares worth 10 trillion won ($7.17 billion) over a one-year period to boost shareholder value, after shares plunged to more than four-year lows earlier in the week. It is the first time Samsung Electronics has decided to buy back shares since 2017. Of the total, three trillion won worth of shares, or 50.14 million common shares and 6.91 million preferred shares, will be repurchased in the next three months and cancelled, Samsung said after the market closed on Friday. The board of directors will decide on ways to enhance shareholder value, including when and how to use the remaining seven trillion in the repurchase programme, it said in a statement. In the short term, the decision would likely help Samsung’s share performance, but the company needs concrete business plans to better support its share performance, analysts said. The world’s top memory chip maker last month apologised for a disappointing quarterly profit, as it lagged rivals in supplying artificial intelligence chips to Nvidia. Samsung was the worst performing stock among major global chipmakers, also hurt by President-elect Donald Trump’s threat to levy tariffs on imports that would hit demand for electronics products. “It is a reflection that Samsung feels a sense of crisis due to the sharp stock drops,” said Park Ju-gun, head of corporate analysis firm Leaders Index. Park said the share buyback may intend to bolster depressed stock prices for Samsung shareholders including Chairman Jay Y. Lee’s family members, who have put up some of their Samsung stocks as collateral to help pay inheritance taxes, as recent plunges threaten to trigger a margin call - a request for more collateral from banks for Lee’s mother and his two sisters. Shares of Samsung Electronics rose 7.2% on Friday, their biggest daily jump since March 2020 and rebounding from their lowest level since mid-June 2020. They were still down 32% year-to-date. ($1 = 1,395.3100 won) Sign up here. https://www.reuters.com/technology/samsung-electronics-plans-72-bln-buyback-boost-shareholder-value-2024-11-15/

2024-11-15 10:18

Philippines' Marcos warns of storm surges in coastal communities Man-yi forecast to make landfall on Saturday evening Philippines dealing with sixth storm in a month MANILA, Nov 15 (Reuters) - Philippines President Ferdinand Marcos Jr directed authorities on Friday to stock up on food and other supplies in advance as Typhoon Man-yi threatened to hit the capital region. Marcos warned of potential storm surges that meteorologists estimate could reach up to 3 meters (3.2 yards) and told residents to seek safe shelter ahead of heavy rain in eastern provinces and Metro Manila over the weekend. Man-yi, locally known as Pepito, is the sixth tropical cyclone to enter the typhoon-battered Philippines in a month. "We have to do a little extra here. We are already in bad shape because of the saturation, the damage done to infrastructure, homes and other infrastructure," Marcos told a situation briefing. "Watch out for the storm surge and continue what you are doing on the relief goods." The National Capital Region (NCR), a dense urban sprawl of 16 cities and home to more than 13 million people, is at risk of flooding from heavy to intense rains starting on Sunday at noon, data from the state weather agency showed. "NCR is in greatest danger here," Interior Secretary Juanito Victor Remulla told the briefing. "NCR is very vulnerable to flooding again." Man-yi gained strength overnight in the western Pacific, with sustained winds of up to 150 km per hour (93.2 mph) and gusts of up to 185 kph. It is forecast to make landfall in the eastern Catanduanes province between Saturday evening and Sunday morning. Another typhoon, Usagi, weakened sharply on Friday after bearing down on the Philippines' northern towns, blowing away houses in its path before heading towards Taiwan. No casualties have yet been reported from Usagi but thousands of families living in vulnerable communities have fled ahead of its arrival. Rueli Rapsing, head of the Cagayan disaster relief office, said town officials are still checking the extent of the damage from the storm. "There were more homes that were partially or totally blown after Marce (Typhoon Yinxing). Currently, we're moving around assessing the damage," Rapsing said on Friday. Mandatory evacuations of vulnerable residents in coastal towns in Typhoon Man-yi's path will begin on Friday, the interior ministry said. In October, Tropical Storm Trami and Typhoon Kong-rey brought heavy flooding and triggered landslides, killing 162 people with 22 still missing, according to government data. Four storms churned in the western Pacific ocean at the same time this month, the first time it has happened since records began in 1951, the Japan Meteorological Agency said. About 20 tropical storms strike the Philippines each year on average, bringing heavy rains, strong winds and deadly landslides. In 2013, Typhoon Haiyan, one of the strongest typhoons ever recorded slammed the central city of Tacloban, killing more than 6,300 people. Storms have become stronger, drawing energy from warmer waters, while rising sea levels are also making low-lying coastlines more vulnerable. Sign up here. https://www.reuters.com/world/asia-pacific/philippines-braces-typhoon-man-yi-usagi-weakens-2024-11-15/

2024-11-15 09:40

Investors stepping back into biggest Trump trade losers LGIM fund manager says buying European autos, Mexican peso Asset managers also warming to China, Brazil, UK LONDON, Nov 15 (Reuters) - Big global investors are exiting popular trades that bet on U.S. President-elect Donald Trump’s tax and tariff policies boosting Wall Street and wreaking damage abroad and swooping in on some of the Nov. 5 election's biggest market victims. After U.S. stocks and the dollar bounced on Trump's growth agenda and trade war fears pressured Chinese, European and emerging market assets, money managers are hunting for bargains in places where pessimism may have gone too far. "The thesis that Trump is good for the U.S. and bad for the rest of the world is a very common narrative," said John Roe, head of multi-asset funds at Legal & General Investment Management, which manages 1.2 trillion pounds ($1.52 trillion) of investments. He said this had convinced him to buy non-U.S. assets that may have been excessively sold - like European car-makers (.SXAP) , opens new tab and the Mexican peso - and close pre-election positions that profited from sterling and Chinese tech stocks falling. European auto stocks touched their lowest in almost two years on Wednesday while the Mexican peso has fallen more than 2.5% versus the dollar this month and sterling is down some 5% against the greenback since end-September . Shaniel Ramjee, a multi-asset co-head at Pictet Asset Management, which runs 254 billion Swiss francs ($285.43 billion) of client funds, said he had increased holdings of Chinese stocks and Brazilian bonds since the election. "There will be a really good opportunity in assets that have weakened ahead of and after the election, we see a lot of value," he said. Investors are now questioning the popular market view that Trump will aggressively pursue policies that exacerbate U.S. inflation and derail Federal Reserve rate cuts, given voter anger about living costs and consumer price rises. TOO FAR? Since the eve of the election, U.S. stocks (.SPX) , opens new tab have risen more than 4% while European equities (.STOXX) , opens new tab have fallen about 1% and emerging market shares (.MSCIEF) , opens new tab are at two-month lows. "The news flow (for non-U.S. markets) is so negative right now that any kind of good news could move things quickly," Morningstar European equity strategist Michael Field said. The euro, down about 3% since Trump's win, hit a one-year low of $1.052 this week and 10-year U.S. Treasury yields jumped 14 basis points (bps) to 4.47%, as traders bet on higher U.S. interest rates and inflation. Europe is mired in pessimism, exacerbated by the collapse of Germany's government and fears for exporters, with Volkswagen shares trading at about 3.3 times forecast earnings and European chemical producers (.SX4P) , opens new tab down 11% since late September. Most investors surveyed by Bank of America last week had an underweight stance on Europe, meaning they expected the region's markets to trail the United States and Asia. But Edmond de Rothschild Asset Management chief investment officer Benjamin Melman said he would keep his European exposure at market-neutral levels instead of joining the selling. "That is brave in this environment," he said, while noting that European Central Bank rate cuts could stimulate bank lending and business activity. He had also bought Chinese equities since the U.S. election, he said. INFLATION NATION? Barclays economists said while Trump's threatened 60% import tax would shave two percentage points off Chinese economic growth, the tariffs would likely be much lower and implemented gradually. Pictet's Ramjee said investors were too focused on Trump's proposed import taxes and underestimated the political risk of tariffs increasing consumer prices. "I think Trump will be very focused on making sure he doesn't cause an inflation spike," he said. Ramjee said he had backed out of U.S. Treasuries before the election but would buy again if yields, which move inversely to prices, kept rising. Craig Inches, head of rates and cash at Royal London Asset Management, which runs almost 170 billion pounds, said he had taken profits on a pre-election bond trade that benefited from U.S. inflation expectations rising. UK government bonds, prices of which have declined alongside Treasuries, now looked "exceedingly cheap", Inches said. Marlborough CIO Sheldon MacDonald expected Trump's tax and spend agenda to boost U.S. growth and global trade, limiting blows to overseas nations from tariffs. "What's good for the U.S. tends to be good for the rest of the world," he said, adding that because Wall Street stocks were expensive he favoured Britain's exporter-heavy FTSE 100 (.FTSE) , opens new tab, which has fallen about 1.3% since Nov. 5. ($1 = 0.7881 pounds) Sign up here. https://www.reuters.com/markets/us/investors-circle-trump-trades-global-market-victims-2024-11-15/

2024-11-15 08:55

Nov 15 (Reuters) - Chip behemoth Nvidia is reporting quarterly results and global PMI data is rolling in as markets continue to digest the fallout from Donald Trump's U.S. presidential election win, with bitcoin and the euro taking centre-stage. Here's a look at the week ahead for markets from Rae Wee in Singapore, Ira Iosebashvili in New York, Sam Indyk, Naomi Rovnick and Amanda Cooper in London. 1/CHIP, CHIP, HURRAY The U.S. earnings season is coming to a close with third quarter results from chipmaker Nvidia (NVDA.O) , opens new tab, a bellwether for the artificial intelligence craze that has boosted stocks this year. Nvidia's chips are seen as the gold standard in the AI-space and its shares are up nearly 200% this year, a gain that saw it dethrone Apple as the world's most valuable company in October. The chipmaker's hefty weighting in the S&P 500 has helped drive the index to record highs in 2024. But Nvidia's blistering multi-year run has also raised the bar for earnings outperformance - a slip-up could fuel worries that the market's AI hopes have outstripped reality. Analysts see Nvidia increasing third-quarter revenue by over 80% to $32.9 billion when it reports its results on Nov. 20, LSEG data showed earlier this month. 2/ A $100,000 QUESTION Trump's win has unleashed a stampede of crypto bulls intent on driving bitcoin to the moon. The price has risen 30% since the Nov. 5 election day and, having topped $90,000 for the first time on record , is showing no signs of stopping. The entire crypto market has surpassed $3 trillion for the first time on record. Bitcoin and co are worth about as much as Elon Musk's Tesla (TSLA.O) , opens new tab, Facebook parent Meta (META.O) , opens new tab and Warren Buffett's Berkshire Hathaway put together. The promise of light-touch U.S. regulation means investors can't get enough of bitcoin right now. Flows into exchange-traded funds have rocketed in recent days. LSEG data shows the largest ETFs tracked by Reuters took in a net $3.5 billion in the week to Nov. 14, the most since March 15. There seems to be little standing in the way a six-figure bitcoin price tag. 3/A QUESTION OF PARITY Threats of Trump tariffs are heightening fears about the weak euro area economy and the common currency has been flailing. But how low could it go? At around $1.054 , the euro has slumped about 5% from more than one-year highs in September. Some analysts now expect it to fall to parity with the dollar. The last ZEW Institute survey showed German investor confidence is gloomy while traders see a one in five chance the European Central Bank will cut rates by 50 basis points next month. Breakdown German GDP data due out on Nov 22 might give more hints. Look out for silver linings, though. A weaker euro boosts exporters and faster rate cuts could juice up bank lending and business activity. 4/ AT YOUR SERVICE Friday's preliminary survey data on business activity will sketch a picture of the global economy before Trump returns to the White House in January. PMIs from Europe and the U.S. will likely confirm that global manufacturing activity remains stuck in a downturn, while the services sector soldiers ahead. Each country is facing its own unique uncertainties. Germany's flagging economy is on the cusp of new elections, Britain's employers are bracing for a rise in social security contributions expected to hit hiring and costs. But it's Trump's re-election that is dominating the outlook. The survey could give early indications on how U.S. companies are responding to the threat of Trump's proposed import tariffs - possibly boosting inventories before tariffs kick in - a data point that will be closely watched by markets going forward. 5/ THE RUPIAH CONUNDRUM Indonesia's central bank will decide on interest rates on Wednesday and it is a toss up whether the policy makers will ease rates or stand pat. Slowing inflation, disappointing growth and the Fed's recent rate cut cement the case for further easing. But the weakening rupiah , currently languishing near three-month lows and down more than 4% from this year's peak, is putting a spanner in the works for a central bank whose main mandate is to maintain currency stability, even though much of that might be driven by the strong dollar. Elsewhere in emerging markets, rate decisions in Turkey and South Africa are due on Thursday. South African policymakers are expected to deliver a 25 basis point cut at their final meeting of the year. Upward revisions to inflation forecasts in Turkey make chances of any near-term easing unlikely. Sign up here. https://www.reuters.com/business/take-five/global-markets-themes-graphic-2024-11-15/