Author: Reuters

Airlines inspecting Boeing 737 engines after fatal Southwest incident

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Some major customers of Boeing Co’s popular 737 jets including Korean Air Lines Co Ltd said on Wednesday they were inspecting engines of the type that blew apart mid-air on a fatal Southwest Airlines Co flight on Tuesday.

European regulators this month began requiring an inspection by early next year, and a person familiar with the matter said US regulators were near a similar rule, which affects a number of 737s in operation globally.

Southwest Flight 1380 made an emergency landing in Philadelphia on Tuesday after an engine ripped apart mid-air, shattering a window on the 737 and nearly sucking a passenger through. One of 144 passengers died.

The actions by regulators show that there has been some concern, albeit non-urgent, about the engine, a workhorse of the global civil aviation fleet that has logged more than 350 million hours of safe travel but was also being examined after a 2016 accident.

The CFM56-7B engine type involved in the Southwest incident was produced by a joint venture of U.S. firm General Electric Co and France’s Safran SA called CFM International. It is one of the most common engines, paired with the world’s most-sold plane, the Boeing 737.

Southwest said it is speeding up inspections of all related engines out of extra caution, which it expects to complete within 30 days.

An early review of the failed Southwest engine found apparent metal fatigue where a fan blade had broken off, Robert Sumwalt, chairman of the U.S. National Transportation Safety Board (NTSB), told reporters on Tuesday.

“We are very concerned” about metal fatigue, Sumwalt said. “There needs to be proper inspection mechanisms in place to check for this before there’s a catastrophic event.”

Korean Air said on Wednesday it had not yet been prompted by its regulators for a check but it planned to inspect engines used on its entire 737 fleet by November following the Southwest incident.

About 20% to 30% of its 35 Boeing 737 jets use the same type of fan blade as the one on the Southwest jet, a Korean Air official said.

A Japan Airlines Co Ltd spokesman said two 737 jets in its fleet had engines with affected fan blades and inspections were due to be completed by the end of the day on Wednesday.

In August 2016, a Southwest flight made a safe emergency landing in Pensacola, Florida, after a fan blade separated from the same type of engine, and debris ripped a foot-long hole above the left wing. Investigators found signs of metal fatigue.

The 2016 incident prompted the US Federal Aviation Administration (FAA) to propose ultrasonic inspections of similar fan blades and their replacement should they fail the test.

Sumwalt said the NTSB will review whether the engines involved in Tuesday’s incident might have been subject to the directive, which is not yet finalised.

The FAA proposal estimated that checks would require two hours of labour per inspection.

Not all airlines operating 737s are affected.

Australia’s Qantas Airways Ltd, a large 737 operator, said its engines were of a slightly different model than those targeted for inspection.

Spokespeople for several other major airlines operating 737s could not be reached immediately for comment.

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Gold slips as dollar steadies on positive US data

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Gold prices slipped early Wednesday while the dollar held its gains on the back of upbeat March US housing starts and industrial production figures.

FUNDAMENTALS

* Spot gold fell 0.2 percent to $1,344.20 per ounce at 0107 GMT, while US gold futures for June delivery dipped 0.2 percent to $1,347.50 per ounce.

* The dollar index, which measures the greenback against a basket of currencies, was little changed at 89.556, after gaining 0.1 percent overnight.

* The index touched a three-week low of 89.229 on Tuesday before pulling back on stronger-than-expected March US housing starts and steady industrial production figures.

* Housing starts rose 1.9 percent to a seasonally adjusted annual rate of 1.319 million units, the Commerce Department said on Tuesday. Economists polled by Reuters had forecast housing starts rising to a pace of 1.262 million units last month.

* In a separate report on Tuesday, the Federal Reserve said industrial production rose 0.5 percent in March after jumping 1.0 percent in February.

* San Francisco Federal Reserve Bank President John Williams on Tuesday said he expects US inflation to rise to the US central bank’s 2-percent goal this year and stay at or above that goal for “another couple of years,” even as the Fed continues to raise interest rates.

* President Donald Trump said on Tuesday the United States was engaged in direct talks at “extremely high levels” with North Korea to try to set up a summit between him and its leader, Kim Jong Un.

* Syria’s U.N. ambassador said a United Nations security team travelled to the Syrian town of Douma ahead of a planned visit by global chemical weapons experts on Wednesday to look into a suspected poison gas attack that sparked a US-led retaliatory strike.

* The International Monetary Fund warned on Tuesday that rising US-China trade restrictions threaten to damage a steady global growth picture, but there was still time for the world’s two largest economies to step back from the brink.

* Polyus said on Tuesday that the inclusion on a US sanctions list of a member of the family that controls Russia’s biggest gold producer would not lead to changes in the way the company conducted its business.

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Trump’s intelligence chief had secret meeting with North Korean leader

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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US Secretary of State nominee and CIA Director Mike Pompeo made a secret visit to North Korea over the Easter weekend and met with North Korean leader Kim Jong Un, a senior US official said on Tuesday.

Pompeo’s conversations fuelled President Donald Trump’s belief that productive negotiations were possible with North Korea, but far from guaranteed, according to the official briefed on the trip, who spoke on condition of anonymity.

Trump said earlier on Tuesday the United States was engaged in direct talks at “extremely high levels” with North Korea to try to set up a summit between him and its leader, Kim Jong Un.

Trump sowed some confusion by suggesting he had been speaking to Kim directly, but later clarified by saying: “Let’s leave it a little bit short of the highest level.”

Spokeswoman Sarah Sanders added: “The president said the administration has had talks at the highest levels and added that they were not with him directly.”

Asked about Pompeo, she said: “The administration does not comment on the CIA director’s travel.”

Pompeo’s trip made him the most senior US official to visit North Korea since then-intelligence chief James Clapper in 2014.

The president’s comments came as he and Japanese Prime Minister Shinzo Abe opened two days of talks at the president’s Mar-a-Lago retreat in Palm Beach, Florida.

Reflecting the closeness of their ties, the meetings included a walk around the carefully manicured grounds of the beachfront club and dinner on the patio with their wives. A round of golf was planned for Wednesday.

Trump said he believed there was a lot of goodwill in the diplomatic push with North Korea, but added it was possible the summit – first proposed in March and which the president said could take place in late May or early June – may not happen.

Efforts to arrange an unprecedented meeting between the US and North Korean leaders have helped ease tensions over Pyongyang’s development of nuclear missiles capable of hitting the United States. Kim has agreed to discuss denuclearization, according to US and South Korean officials.

“We have had direct talks at very high levels – extremely high levels – with North Korea. I really believe there’s a lot of goodwill; a lot of good things are happening.” Trump told reporters.

“As I always say, we’ll see what happens, because ultimately it’s the end result that matters, not the fact that we’re thinking about having a meeting or having a meeting.”

MEETING SITE?

Contacts between the two side in recent weeks have involved US intelligence and State Department officials, a US official told Reuters this month.

Trump, who has exchanged bellicose threats with Kim in the past year, said US officials were looking at five locations for a meeting with Kim. Asked if any of those were in the United States, Trump replied: “No.”

A US official said sites in Southeast Asia and Europe were among those under discussion. Kim has rarely left North Korea.

Speculation has centred on a range of sites including Pyongyang, the demilitarized zone between the Koreas, Stockholm, Geneva and Mongolia.

Talks between Trump and Abe are largely focused on the prospective summit with Kim as Japan seeks a US commitment that any denuclearization deal the president seals with Kim will include not just long-range missiles but those that could be aimed at Japan.

“For the North Korean issue, I’d like to underscore the importance of achieving the complete, verifiable, and irreversible denuclearization, as well as the abandonment of missile programs of North Korea,” Abe told Trump.

Abe also obtained an agreement from Trump to bring up the issue of Japanese nationals abducted by North Korea, a highly emotive issue for the Japanese.

‘IT’S POSSIBLE THINGS WON’T GO WELL’

Trump stressed that the two sides in this week’s talks were unified.

“Japan and ourselves are locked, and we are very unified on the subject of North Korea,” he said.

Trump said it was possible that diplomatic efforts to arrange a Kim summit would fall short and if it does not happen, the United States and its allies would maintain pressure on Pyongyang through sanctions.

“It’s possible things won’t go well and we won’t have the meetings and we’ll just continue to go on this very strong path we have taken,” he said.

Trump also backed efforts between South Korea and the North aimed at ending a state of war that has existed between the two countries since 1953.

“They do have my blessing to discuss the end of the war. People don’t realise the Korean War has not ended. It’s going on right now. And they are discussing an end to the war. Subject to a deal, they have my blessing and they do have my blessing to discuss that,” he said.

TRADE AGENDA

Trump and Abe could use a successful summit to give themselves a political boost at home. Trump has been hounded by controversies linked to an investigation into alleged Russian meddling in the 2016 US election, and Abe is struggling with declining popularity because of scandals over suspected cronyism.

Trump has forged close ties with Abe during his 15 months in power and the two have bonded over rounds of golf during Abe’s last visit to Florida more than a year ago and Trump’s visit to Tokyo last November.

Japan fears Trump will try to link vital security matters with touchy trade topics. Tokyo is eager to avoid being pushed into talks on a two-way free trade agreement aimed not only at market access but at currency policies, something South Korea recently accepted when it renegotiated a trade deal with the United States.

Another irritant on trade is that Japan has not been given an exemption to tariffs on steel and aluminium exports to the United States, unlike the European Union, Canada and Mexico.

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Goldman outpaces peers in debt underwriting, bond trading

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Goldman Sachs Group Inc on Tuesday reported a year-on-year jump in debt underwriting revenue after working on financing for big M&A deals that some peers missed out on.

Analysts have feared slower corporate issuance could weigh on Wall Street debt underwriting and also crimp credit trading as companies adjust for higher interest rates and the US tax code overhaul.

Debt underwriting revenues slumped from a year earlier at other US banks that reported first-quarter results.

At Morgan Stanley, which reports on Wednesday, fixed-income underwriting revenue could fall 11 percent from the year-ago quarter, analysts at Keefe, Bruyette & Woods said in a report earlier this month.

Goldman’s debt capital markets (DCM) business fell from a record fourth quarter but notched its second-best result with $797 million in revenue.

“It’s really M&A as the driver for demand, for the issuance, and you’ve seen the results flow through into revenues,” said Goldman finance chief R. Martin Chavez on a call with analysts.

He highlighted Goldman’s role in CVS Health Corp’s $40 billion bond issuance to help fund its acquisition of health insurer Aetna Inc.

The bank also said credit trading, which can be supported by issuance, was a factor behind its 23 percent rebound in fixed income, currency and commodities (FICC) revenue.

A rebound in commodities and currencies trading during an uptick in broad market volatility also helped the improvement from a weak year-ago period.

Structured trading in particular boosted the credit business year on year, Goldman said. Peers had called out credit as an area of weakness in first-quarter FICC trading.

Bank of America Corp Chief Financial Officer Paul Donofrio told reporters on Monday that FICC income for credit products in particular fell from a year earlier because the bank did not see as much DCM activity.

JPMorgan Chase & Co on Friday said lower client activity in credit and rates weighed on fixed-income trading.

On a call with analysts, JPMorgan CFO Marianne Lake said the bank missed out on some “larger fee events,” and its pipeline for equities underwriting was likely stronger than for DCM given rising interest rates.

New issues for corporate investment-grade debt fell in the first quarter for the first time in four years to $343.23 billion, according to Thomson Reuters IFR data. That was the lowest outright value since 2014.

Shares in Goldman were trading lower Tuesday afternoon, with some analysts citing concerns about the volatile nature of its core businesses.

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Oil prices edge up on lower US crude inventories, global supply risks

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Oil prices edged up on Wednesday, lifted by a reported fall in US crude inventories and by the ongoing risk of supply disruptions.

Brent crude oil futures were at $71.90 per barrel at 0117 GMT, up 32 cents, or 0.5 percent, from their last close.

US West Texas Intermediate (WTI) crude futures were up 33 cents, or 0.5 percent, at $66.85 a barrel.

In the United States, crude inventories fell by 1 million barrels last week, to 428 million barrels, according to a weekly report by the American Petroleum Institute (API) on Tuesday.

Official weekly US data will be published by the Energy Information Administration (EIA) on Wednesday.

Outside the United States, oil markets have been receiving general support due to a sense that there were high risks of supply disruptions, including a potentially spreading conflict in the Middle East, renewed US sanctions against Iran and falling output as a result of political and economic crisis in Venezuela.

“Oil prices are holding near three-year highs (reached earlier in April) for the time being, and with inventories back in line with normal levels, the supply glut of the last few years appears to be over,” said William O’Loughlin, investment analyst at Australia’s Rivkin Securities.

Beyond voluntary supply restriction aimed at propping up prices led by the producer cartel of the Organization of the Petroleum Exporting Countries (OPEC) since 2017, O’Loughlin said falling output in Venezuela due to its political and economic turmoil was supporting prices.

“OPEC production is currently lower than expected as a result of large declines in Venezuelan output caused by a deterioration in the economic situation there,” he said.

Dutch bank ING said in a note to clients that Brent had risen back above $70 per barrel in April “due to geopolitical risks along with some fundamentally bullish developments in the market”.

The bank therefore raised its average 2018 price forecast for Brent to $66.50 a barrel from $60.25. ING raised its 2018 WTI forecast to $62.50 per barrel from $57.75.

For next year, however, ING expects lower prices due to rising US crude output, which has jumped by a quarter since mid-2016 to over 10.5 million barrels per day (bpd).

The structure of the Brent and WTI forward price curve also points to a tighter market in 2018.

The premium for June 2018 over June 2019 prices for Brent and WTI is $5.5 and $6 per barrel, respectively, a market structure known as backwardation in which it is attractive for producers and traders to sell crude immediately instead of keeping it in storage for later sale.

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Asia shares edge up with Wall Street, wary on China

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asian shares crept ahead on Wednesday after Wall Street took heart from upbeat corporate earnings, though nagging concerns about trade barriers and the global growth outlook kept currencies and bonds subdued.

Dealers were anxious to see if a surprise policy move by the China’s central bank late on Tuesday might help soothe Shanghai markets after a couple of days of sharp losses.

The PBOC will reduce the cash banks hold as reserves in a move that frees up lending for small firms but falls short of a broad monetary easing.

The Shanghai index hit a near one-year low on Tuesday after the United States banned American companies from selling components to Chinese telecom equipment maker ZTE Corp.

MSCI’s broadest index of Asia-Pacific shares outside Japan edged up 0.2 percent in early trade, though that follows four straight sessions of losses.

Japan’s Nikkei added 0.6 percent, with investors waiting for any developments on trade as Japanese Prime Minister Shinzo Abe meets President Donald Trump at his Mar-a-Lago resort.

E-Mini futures for the S&P 500 gained 0.1 percent after robust earnings from Netflix , Goldman Sachs and healthcare companies fuelled optimism about what is expected to be the strongest earnings season in seven years.

The Dow ended Tuesday up 0.88 percent, while the S&P 500 rose 1.06 percent and the Nasdaq 1.78 percent.

Yet there were signs of caution in the latest BofA Merrill Lynch survey of fund mangers which found investors squirreling more funds away into cash, while cutting their equity allocation to an 18-month low.

The outlook for the global economy also darkened with just a net 5 percent expecting stronger growth in the next 12 months – the lowest since the United Kingdom voted to leave the EU in June 2016.

While the IMF on Tuesday left its global growth forecasts unchanged for 2018 and 2019, it judged medium-term risks were to the downside – citing financial vulnerabilities, geopolitical strains and tariffs.

“The global narrative has quickly shifted from synchronous global growth, upgraded growth and glimmers of inflation in early 2018 to a focus on tariffs and protectionist rhetoric,” said Robert Rennie, head of financial markets strategy at Westpac.

“We ultimately believe that we will see a negotiated solution, but there is still a long way to go and further bouts of volatility and headline risk seem assured.”

Worries about the longevity of the US economic expansion were one reason the Treasury curve was at its flattest in a decade and why some interest-rate curves were starting to price in rate cuts for 2020.

The air of uncertainty was keeping currencies within well-worn ranges. The dollar hovered at 107.01 yen, having spent all of Tuesday in a half-a-yen band.

The euro was stuck at $1.2370, after topping out at $1.2413 overnight, while the dollar index was a fraction lower at 89.495 .

In commodity markets, gold was little changed at $1,346.32 an ounce.

Oil prices firmed with Brent crude futures up 17 cents to $71.75 a barrel, while US crude rose 33 cents to $66.85 a barrel.

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Starbucks to close 8,000 US stores for racial tolerance training

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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 Starbucks Corp will close 8,000 company-owned US cafes for the afternoon on May 29 so 175,000 employees can undergo racial tolerance training in response to protests and calls for boycotts after the arrest of two black men waiting in a Philadelphia store.

The company said in the Tuesday announcement that it will also provide training materials for non-company workers at the roughly 6,000 licensed Starbucks cafes that will remain open in locations such as grocery stores and airports.

The announcement from world’s biggest coffee company comes as it tries to cool tensions after the Philadelphia incident last week sparked accusations of racial profiling at the chain, which is the subject of a boycott campaign on social media.

The controversy is the biggest public relations test yet for new Starbucks Chief Executive Kevin Johnson, who already was fighting to boost traffic to Starbucks amid competition from coffee sellers ranging from hipster cafes to fast-food chains and convenience stores.

“While this is not limited to Starbucks, we’re committed to being a part of the solution,” said Johnson, a former technology executive who took the helm about a year ago.

Even if the threatened boycott does not materialize, the 8,000 temporary store closures will almost certainly have an impact on sales. Starbucks did not say how many hours the stores would be shuttered on May 29, but the afternoon is the slowest time for Starbucks‘ business.

Starbucks is one of the most high-profile and beloved brands in the world and its long-time CEO Howard Schultz was not one to shy away from difficult conversations over thorny issues such as gay marriage, gun control and Congressional gridlock.

However US race relations have proven more challenging, even for a company that touts its diverse workforce — minorities account for 18 percent of Starbucks executives with the title of senior vice president or higher and 43 percent of employees overall.

For example, the company’s 2015 “Race Together” campaign to foster a conversation on the topic following the high-profile police shootings of several unarmed black men stirred an intense social media backlash.

Johnson has apologised for the “reprehensible” arrests of the two men in Philadelphia on Thursday and took personal responsibility for the incident, which was captured in a customer video that was shared widely.

Starbucks attorneys said Johnson and the men, who were released without charges, have “engaged in constructive discussions about this issue as well as what is happening in communities across the country.”

The manager, whose call to Philadelphia police led to the men’s arrests, is no longer working for Starbucks.

Philadelphia’s police commissioner defended the arrests, saying his officers had to act after Starbucks employees told them the pair were trespassing.

“It’s good that Starbucks is giving all staff race trainings on May 29. But let’s not lose sight of the real problem which is police accountability,” Tiffany Dena Loftin, director of the youth and college division at NAACP, told Reuters

Shares in Starbucks closed up 0.7 percent at $59.83 on Tuesday and are relatively unchanged in the week since the arrests.

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Global Markets: US, European shares climb but China tumbles on trade worries

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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US and European shares climbed on Tuesday, lifted by data, corporate results and a return to riskier investments, while many Asian equity markets were weighed down by China amid mixed economic reports and lingering trade fears.

Strong US earnings from Netflix, Goldman Sachs and healthcare companies boosted stock prices on Wall Street and optimism about what is expected to be the strongest earnings season in seven years.

Companies on the benchmark S&P 500 stock index are expected to report an 18.6% jump in first-quarter profit on average, according to Thomson Reuters data.

The Dow Jones Industrial Average rose 255.24 points, or 1.04%, to 24,828.28, the S&P 500 gained 28.48 points, or 1.06%, to 2,706.32 and the Nasdaq Composite added 115.92 points, or 1.62%, to 7,272.20.

MSCI’s gauge of stocks across the globe gained 0.74%.

European shares advanced, with the pan-European FTSEurofirst 300 index rising 0.91% and poised to close higher.

Germany’s Deutsche Boerse DAX index was last up 1.58%, despite fears of a trade war with the United States and the current tension in Syria pushing German investor morale to its lowest level in more than five years in April.

“This (German data) has been a solid leading indicator in the past to a downturn,” said Saxo Bank’s head of FX strategy John Hardy.

In China, stocks in Shanghai closed near a one-year low, after a US move to ban American companies from selling components to Chinese telecom equipment maker ZTE Corp hurt tech stocks.

Beijing then said it would slap a hefty temporary tariff on US sorghum imports, which sent grain futures prices jumping.

Also weighing on the region was data showing March industrial output in China missed expectations and first-quarter fixed-asset investment growth slowed. However, China’s economy grew 6.8% in the first quarter of 2018 from a year earlier, unchanged from the previous quarter.

The country’s March retail sales also jumped over 10%, the strongest pace in four months.

MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.36 percent lower, while Japan’s Nikkei rose 0.06%.

The euro fell slightly after rising above $1.24 to a three-week high on the Chinese data, ebbing Syria retaliation fears and overall renewed risk sentiment.

“There’s been a general weakness in the dollar and risk sentiment seems to be reviving somewhat. That is supporting the euro but also sterling and Asian currencies,” said Alvin Tan, FX strategist at Societe Generale.

The dollar index rose 0.19%, with the euro down 0.25% to $1.2347.

Sterling was last at $1.4304, down 0.22% on the day, after hitting nearly $1.438, its highest since British voters decided in June 2016 to exit the European Union.

US sanctions on major Russian producer Rusal drove aluminium prices to almost $2,500 a tonne, their highest since mid 2011, before profit-taking reversed it all. Rusal accounts for 6-7% of global aluminium supply.

Oil prices steadied as investors took profit on last week’s rally and amid concern over the potential for supply disruptions.

US crude fell 0.32% to $66.01 per barrel and Brent was last at $71.20, down 0.31% on the day.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

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IMF keeps global forecasts steady; projects India growth at 7.4% for FY19

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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India’s gross domestic product (GDP ) is expected to grow at 7.4% for FY19, International Monetary Fund (IMF) said in its report.

Global growth will keep a steady pace this year and next, buoyed by stronger trade and US fiscal stimulus that will fade by the early 2020s, while increased tariffs could damage market confidence and output, the IMF said on Tuesday.

The IMF, in its latest World Economic Outlook, kept its 2018 and 2019 global growth forecasts unchanged at 3.9 percent for both years after upgrades in January.

The projections were released as thousands of global finance officials were gathering in Washington for the IMF and World Bank spring meetings this week.

The IMF said it raised its US growth forecast by 0.2 percentage point for both years, to 2.9 percent for 2018 and 2.7 percent for 2019. It said lower US corporate income tax rates and accelerated investments due to a temporary tax break would boost U.S. growth through 2020, but these effects would then reverse quickly, causing a slowdown.

ALSO READ: World Bank forecasts 7.3% growth for India this year

“Global growth is projected to soften beyond the next couple of years,” the IMF said in the report, adding that advanced economies would be “held back by aging populations and lackluster productivity.”

The Trump administration has maintained that Republican tax cuts passed last year would allow the United States to maintain sustained gross domestic product growth above 3 percent for years and defy forecasts that U.S. budget deficits will balloon over the coming decade.

For now, the IMF said increased export demand was contributing to slight growth forecast upgrades for the euro area and Britain for 2018, while the IMF kept its forecasts unchanged for Japan, China, India, Russia and Mexico.

Forecasts were cut slightly for Canada, the Middle East and North African countries, as well as a number of low-income developing countries.

The IMF said prospects for developing economies to grow per-capita incomes face difficult prospects over the next five years, especially in commodity-exporting countries in the Middle East, sub-Saharan Africa, Latin America and the Caribbean.

Risks to the global growth forecasts were broadly balanced for the next few quarters, with the potential for stronger business profits to increase hiring and investments that could boost productivity, the IMF said.

But trade tensions, such as the United States and China’s recent dueling tariff announcements, could take a direct toll on trade and economic activity and also cause financial market turmoil that would tighten financial conditions and hurt confidence.

“An increase in tariffs and nontariff trade barriers could harm market sentiment, disrupt global supply chains, and slow the spread of new technologies, reducing global productivity and investment,” the IMF said. “Greater protectionism would also lower consumer welfare by making tradable consumer goods more expensive.”

Research from 2016, the IMF said, showed that tariffs or other barriers that led to a 10 percent increase in import prices in all countries would lower global output and consumption by about 1.75 percent after five years and close to 2 percent in the long term. Global trade would fall 15 percent after five years and 16 percent in the long run under such a scenario, it said.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow