2024-03-19 18:00

NEW YORK, March 19 (Reuters) - The founding family behind Nordstrom Inc (JWN.N) , opens new tab is seeking to take the U.S. department store operator private, six years after a similar attempt proved unsuccessful, people familiar with the matter said on Tuesday. The deal deliberations come as Nordstrom and other U.S. retailers grapple with consumers curbing their discretionary spending following a bout of inflation and high interest rates. Macy's Inc (M.N) , opens new tab, another department store operator, has also become a takeover target. Nordstrom has asked investment banks Morgan Stanley (MS.N) , opens new tab and Centerview Partners to reach out to private equity firms and gauge their interest for a potential deal, the sources said. There is no certainty that an agreement will be reached, the sources added, asking not to be identified because the matter is confidential. Nordstrom and Morgan Stanley declined to comment. A Centerview spokesperson did not immediately respond to a request for comment. Nordstrom shares rose 12% to $19.22 on the news on Tuesday, giving the company a market value of $3.2 billion. The company also has debt net of cash of about $2.3 billion. Nordstrom has more than 350 stores as well as e-commerce operations. Chief Executive Erik Nordstrom and other members of the Nordstrom family collectively own about a 30% stake in the Seattle-based company. Nordstrom formed a special board committee in 2017 to consider a bid by the family to go private and explored a deal with several private equity firms, including Leonard Green. The special committee in 2018 turned down an $8.4-billion offer as inadequate. Earlier this month, Nordstrom forecast annual results largely below Wall Street expectations as price-conscious consumers weigh on revenue. One bright spot has been Nordstrom Rack, its discount chain, that has been adding stores. Investment firms Arkhouse Management and Brigade Capital have been seeking to take Macy's private for $6.6 billion and have also mounted a challenge to its board. Macy's has so far rebuffed these firms' overtures, but the two sides remain in talks. Ryan Cohen, the billionaire investor and chief executive of video game retailer GameStop Corp (GME.N) , opens new tab, revealed last year he had amassed a 4.2% stake in Nordstrom but did not press on with plans for a board challenge. Get U.S. personal finance tips and insight straight to your inbox with the Reuters On the Money newsletter. Sign up here. https://www.reuters.com/markets/deals/nordstroms-founding-family-new-bid-take-us-retailer-private-sources-say-2024-03-19/

2024-03-19 16:52

Kazaks says markets reflect ECB projections Moving at forecast meetings 'more straightforward' Will take 'some time' to reach neutral rate FRANKFURT, March 19 (Reuters) - European Central Bank policymaker Martins Kazaks said on Tuesday he was "comfortable" with investor bets on three interest rate cuts by the central bank by the end of the year. Many ECB policymakers have expressed support for a first reduction in borrowing costs from their current record highs, most likely in June, with the debate now focused on how many more cuts would follow. Money markets are pencilling in three cuts by December with some chance of a fourth, which would lower the 4% rate the ECB pays on bank deposits to 3.25% or 3.0%. Kazaks, who in the past resisted speculation about imminent rate reduction, told Reuters this time market pricing was in line with the ECB's own economic projections, which see inflation closing in on its 2% target by end of the year. "If I take a look at the current market pricing, for the last month or so, I'm quite comfortable with that," the Latvian governor said in an interview on Tuesday. Kazaks, however, cautioned his words should not be taken as a commitment, or "forward guidance" in central bank parlance. "I will not provide forward guidance saying there will be three cuts because we’ll take a look at each meeting," he said. The ECB will hold policy meetings on April 11, June 6, July 18, Sept 12, Oct 17 and Dec 12. Kazaks said moving at meetings at which new forecasts are published -- that is in June, September and December -- was "more straightforward", echoing his Dutch colleague Klaas Knot. By contrast, Greek central bank governor Yannis Stournaras said two cuts before the ECB's summer break in August seemed reasonable, followed by two more by the end of the year. Kazaks stressed there was a difference between cutting rates three or four times but, with the policy rate now at 4%, there was still a long way to go before the ECB's policy was no longer restrictive. "Even if we start reducing the rate it's going to take some time before we get the neutral rate," he said. "By reducing the rate we only reduce the tightness of monetary policy, but it will remain restrictive." The Reuters Daily Briefing newsletter provides all the news you need to start your day. Sign up here. https://www.reuters.com/markets/rates-bonds/ecbs-kazaks-comfortable-with-market-bets-three-rate-cuts-this-year-2024-03-19/

2024-03-19 15:44

Single-family housing starts surge 11.6% in February Single-family building permits increase 1.0% Completions soar 20.2%; houses under construction up 0.3% WASHINGTON, March 19 (Reuters) - U.S. single-family homebuilding rebounded sharply in February, hitting the highest level in nearly two years, boosted by mild temperatures and a persistent shortage of previously owned houses on the market. Despite the hurdle created for many first-time buyers by higher mortgage rates, builders are cutting prices and offering other incentives to increase sales. They are also reducing the size of the homes being built to manage higher material costs. The report from the Commerce Department on Tuesday also showed permits for the future construction of single-family housing units rose to more than a 1-1/2-year high last month. With mortgage rates gradually trending lower on expectations the Federal Reserve will start cutting interest rates by June, homebuilding could contribute to economic growth this year. "Single-family starts could remain strong in the next couple of months as builders continue to see demand for new builds despite the headwinds facing buyers," said Daniel Vielhaber, an economist at Nationwide. "Rate incentives from builders continue to help buyers afford homes on the new side of the market." Single-family housing starts, which account for the bulk of homebuilding, surged 11.6% to a seasonally adjusted annual rate of 1.129 million units last month, the Commerce Department's Census Bureau said. That was the highest level since April 2022. Data for January was revised up to show single-family starts falling to a rate of 1.012 million units instead of the previously reported 1.004 million units. Though the housing market has been pummeled by aggressive rate hikes from the U.S. central bank as it battles inflation, homebuilding has been supported by an acute housing shortage, with most homeowners locked into lower mortgage rates. Recent government data showed there were 757,000 housing units for sale in the fourth quarter, well below the 1.145 million units before the COVID-19 pandemic. A survey from the National Association of Home Builders on Monday showed confidence among single-family home builders rose to an eight-month high in March amid optimism about sales now and over the coming six months. Fed officials were expected to leave the central bank's policy rate unchanged in the current 5.25%-5.50% range at the end of a two-day meeting on Wednesday, having raised it by 525 basis points since March 2022. The average rate on the popular 30-year fixed-rate mortgage has retreated in recent weeks after flirting with the 7% level in late February, according to data from mortgage finance agency Freddie Mac. Single-family homebuilding jumped 40.2% in the Midwest and increased 16.6% in the densely populated South. It accelerated 16.4% in the Northeast, but declined 15.4% in the West. Starts for housing projects with five units or more advanced 8.6% to a rate of 377,000 units. Overall housing starts increased 10.7% to a rate of 1.521 million units in February. Economists polled by Reuters had forecast starts would rebound to a rate 1.425 million units. Single-family building permits rose 1.0% to a rate of 1.031 million units in February, the highest level since May 2022. Multi-family building permits rose 2.4% to a rate of 429,000 units. Building permits as a whole climbed 1.9% to a rate of 1.518 million units. Homebuilding activity this year is expected to be concentrated in the single-family housing segment amid a huge backlog of multi-family units under construction. Residential investment rebounded in the second half of 2023 after contracting for nine straight quarters, the longest such stretch since the housing market collapse in 2006. It has been a drag on gross domestic product for two straight years. "Housing construction is likely to add modestly to economic growth in the months ahead as builders look forward to the Fed rate cuts that policymakers are forecasting for later this year," said Christopher Rupkey, chief economist at FWDBONDS. "Housing construction has likely turned the corner in this economic cycle and will cease to be a drag on the overall economy." A minority of economists believe the Fed will not cut rates this year, especially if inflation remains elevated. Stocks on Wall Street mostly were trading lower. The dollar gained versus a basket of currencies. Prices of U.S. Treasuries rose. MORE COMPLETIONS The number of houses approved for construction that were yet to be started increased 0.4% to 270,000 units in February. The single-family homebuilding backlog fell 1.4% to 141,000 units. The completions rate for that housing segment surged 20.2% to 1.072 million units, the highest level since November 2022. Overall housing completions soared 19.7% to a rate of 1.729 million units, the highest level since January 2007. That is goods news for supply, which is keeping house prices high and contributing to rental inflation. Realtors estimate that housing starts and completion rates need to be in a range of 1.5 million to 1.6 million units per month over time to bridge the inventory gap. The number of housing units under construction slipped 0.5% to a rate of 1.666 million units. The inventory of single-family housing under construction rose 0.3% to a rate of 683,000 units. The stock of multi-family housing under construction dropped 1.0% to 966,000 units. Multi-family housing inventory under construction hit a record 1.001 million units in July 2023. An increased supply of apartments will slow growth in rental prices, the major driver of inflation. "More multi-family units should continue to weigh on rental inflation, which is decelerating but still elevated," said Nancy Vanden Houten, U.S. lead economist at Oxford Economics. Get a look at the day ahead in U.S. and global markets with the Morning Bid U.S. newsletter. Sign up here. https://www.reuters.com/markets/us/us-single-family-housing-starts-soar-february-2024-03-19/

2024-03-19 15:38

NEW YORK, March 19 (Reuters) - Wall Street's cash bonuses fell 2% to an average $176,500 last year as financial firms took a more cautious approach to compensation, according to an estimate by New York State Comptroller Thomas DiNapoli. The lower payouts came even as industry profits climbed 1.8% in 2023. "Wall Street's average cash bonuses dipped slightly from last year, with continued market volatility and more people joining the securities workforce," DiNapoli said in a statement. The industry's bonus pool stood at $33.8 billion for 2023, broadly in line with 2022. In 2021, it surged to a record $42.7 billion as capital markets and dealmaking boomed. The state and city have already budgeted for lower tax revenue from financial workers, DiNapoli said. The securities industry accounts for about 27% of annual state tax collections and 7% for New York City. The industry employed 198,500 people in 2023, up from 191,600 the prior year, the report showed. The increase in headcount came as major U.S. banks cut more than 23,000 jobs worldwide. Although some firms reduced their staffing, employees who were laid off did not leave the workforce and were hired by other companies, DiNapoli said in a call with reporters. "So far this year, the markets have been pretty positive, and we hope that will continue," he added. About 1 in 11 jobs in New York City is either directly or indirectly associated with the sector, the comptroller's report showed. Get a look at the day ahead in U.S. and global markets with the Morning Bid U.S. newsletter. Sign up here. https://www.reuters.com/markets/us/wall-street-bonuses-fell-2-2023-new-york-comptroller-says-2024-03-19/

2024-03-19 15:29

Retail driving crypto surge, institutions joining -GS exec Goldman "looking at" crypto firm bankruptcy claims Crypto prices rally so far in 2024, bitcoin at record high LONDON, March 19 (Reuters) - The recent surge in cryptocurrency prices has been driven by retail investors, but institutions are starting to join in, Goldman Sachs' (GS.N) , opens new tab head of digital assets Mathew McDermott said on Tuesday. Bitcoin, the biggest cryptocurrency, hit an all-time high of $73,794 last week and has gained 50% so far this year, pulling other crypto prices along with it. "The price action ... has still been driven by retails primarily. But it's the institutions that we’ve started to see come in," McDermott said, speaking at the Digital Asset Summit (DAS) conference in London. "You really see now the appetite is transformed." Goldman Sachs launched a crypto trading desk in 2021 and is continuing to build on it, McDermott said. "Last year was tough but just coming through to this year we've seen a big sea-change not only in terms of the types of clients but also in terms of volumes," he said. No one knows for sure what is driving bitcoin's latest gains, although analysts point to billions of dollars that have flowed into U.S. spot bitcoin ETFs which launched this year. McDermott said that the ETFs prompted a "psychological shift". The bitcoin rally has cooled slightly in recent days, along with other riskier assets, after a series of U.S. data releases that suggested the Federal Reserve may not cut interest rates this year as much as previously expected. BANKRUPTCY CLAIMS Cryptocurrencies surged during 2020 and 2021, when ultra-low interest rates helped drive speculative investment. The pandemic-era boom was followed by a sharp plunge in 2022, when a string of bankruptcies and failures at the biggest crypto firms, including FTX, wiped $2 trillion off the crypto market and left millions of investors out of pocket. McDermott also said the bank had been "looking at the bankruptcy claims and some of the other investing opportunities," without giving further details. Regulators have long warned that bitcoin is a high-risk asset, with limited real-world use cases. The Goldman executive said there was "a certain component of leverage in the system" currently but not the same "hyperbole" as during 2021 and 2022. Various banks, including Goldman Sachs, have expressed an interest in crypto's underlying blockchain technology, saying it could be used to trade assets other than cryptocurrencies. There have been pilot projects to issue blockchain-based versions of traditional financial assets, such as bonds, but there is no routine issuance or liquid secondary market. "I do think over time we’ll start to see more asset classes get tokenised and actually get some scale – but maybe that’s one or two years down the line," McDermott said. The Technology Roundup newsletter brings the latest news and trends straight to your inbox. Sign up here. https://www.reuters.com/technology/goldman-sachs-digital-asset-head-says-crypto-rally-driven-by-retail-investors-2024-03-19/

2024-03-19 14:19

March 19 (Reuters) - Shares in MicroStrategy (MSTR.O) , opens new tab were down 13% on Tuesday as bitcoin fell after the company announced it had completed a $603.75 million convertible debt offering - its second in a week - to raise money to buy bitcoin. The deal, used by the company to raise money to buy bitcoin, follows an $800 million convertible offer , opens new tab that it announced it had completed just a week before. The company, which also said on Tuesday that it bought 9,245 bitcoins for $623 million between March 11 and March 18, saw its shares tumble as low as $12,750, which was their lowest level since March 7. Bitcoin was last down 5.9% at $63,424 . The latest sale was of 0.875% convertible senior notes due 2031 and convertible into cash or shares of MicroStrategy’s class A common stock, or a combination of both. Before Sept. 15, 2030, the notes would only be convertible after certain events and during certain periods, according to MicroStrategy. The conversion rate, which is subject to adjustment, is initially 0.4297 MicroStrategy shares per $1,000 principal amount of notes, or the equivalent to a conversion price of approximately $2,327.21 per share, according to the company. MicroStrategy said this represents a premium of about 40% over the volume weighted average price of its shares on March 14, 2024, which was $1,662.1999. MicroStrategy shares were still up more than 100% year to date. The Technology Roundup newsletter brings the latest news and trends straight to your inbox. Sign up here. https://www.reuters.com/technology/microstrategy-shares-fall-13-after-convertible-deal-bitcoin-purchases-2024-03-19/