Month: June 2017

World leaders must make ‘hard choices’ or the next 30 years will be painful: Jack Ma

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

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Alibaba founder Jack Ma spent 800 hours traveling around the world last year and plans to increase that to 1,000 in 2017, evangelizing his burgeoning e-commerce platform, globalization and artificial intelligence.

The billionaire Chinese businessman sat down with CNBC this week at the Gateway ’17 conference in Detroit for a wide-ranging interview on those topics and others. Here are the highlights:

Shrinking giants

The world’s biggest public companies — like Apple, Alphabet and Amazon — have become so dominant that some critics have said they border on monopolies.

But Ma said the power of the giant company is on the decline as more small businesses get exposure with the internet.

“Large scale was the model,” Ma said. “Personalized, custom-made is the future.”

In a meeting with then President-elect Donald Trump in January, Ma said Alibaba plans to support 1 million American jobs over the next five years, mostly by facilitating sales from small businesses.

“The way to figure out the job creation, one of the best ways, is to help small business to sell their local products across the board,” Ma said. “And we have to prepare now. Because the next 30 years is going to be painful.”

Trade and globalization

The clash of economic and political systems has caused tension between the U.S. and China.

“We can no longer have massive trade deficits and job losses,” Trump tweeted ahead of his meeting with Chinese President Xi Jinping this year. “American companies must be prepared to look at other alternatives.”

But Ma told CNBC he believes that more “made-in-America” goods — a priority during Trump’s campaign— could be perfect for China’s swelling middle class. Ma pointed to a sale over the weekend when Alibaba sold 2 million American-made tubes of lipstick within 15 minutes.

Artificial intelligence

Ma said the emerging opportunities — and risks — from artificial intelligence and globalization are two of the topics that keep him on the road.

“This is why I’m traveling, talking to all the government and state leaders and telling them move fast. If they do not move fast, there’s going to be trouble,” Ma said. “So when we see something is coming, we have to prepare now. My belief is that you have to repair the roof while it is still functioning.”

There could be benefits from artificial intelligence, Ma said, as people are freed to work less and travel more.

“I think in the next 30 years, people only work four hours a day and maybe four days a week,” Ma said. “My grandfather worked 16 hours a day in the farmland and [thought he was] very busy. We work eight hours, five days a week and think we are very busy.”

He added that if people today are able to visit 30 places, in three decades it will be 300 places.

Still, Ma said the rich and poor — the workers and the bosses — will be increasingly defined by data and automation unless governments show more willingness to make “hard choices.”

“The first technology revolution caused World War I,” he said. “The second technology revolution caused World War II. This is the third technology revolution.”

With machine learning and artificial intelligence eliminating jobs, “the third technology revolution may cause the Third World War,” he said.

Ma, a teacher by training, also said world leaders should pay attention to the education system to avoid the pain that could come with automation.

“I don’t think we should make machines like humans,” Ma said. “We should make sure the machine can do things that human beings cannot do.”

Ma said machines will never get the wisdom and experience that comes with being human.

“Humans will win,” he said.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

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

George Clooney just sold his tequila business for up to $1 billion

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

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George Clooney is selling his tequila company Casamigos to Diageo for as much as USD 1 billion, a source familiar with the situation told CNBC.

“If you asked us four years ago if we had a billion dollar company, I don’t think we would have said yes,” Clooney told CNBC via email. “This reflects Diageo’s belief in our company and our belief in Diageo. But we’re not going anywhere. We’ll still be very much a part of Casamigos. Starting with a shot tonight. Maybe two.”

Diageo said it will initially pay USD 700 million, with the potential for another USD 300 million based on the tequila’s performance over 10 years. The transaction is expected to close during the second half of 2017.

Diageo doesn’t expect the deal to add to its earnings until its fourth year. In the first three years, the brand will not have any impact on earnings

Clooney, Rande Gerber and Michael Meldman, who own Casamigos together, are expected to stay with the company after its acquisition.

Gerber founded nightlife companies Midnight Oil and the Gerber Group and Meldman is a real estate tycoon.

Casamigos, which loosely translates to “house of friends,” started as a private collection of tequilas meant just for Gerber and Clooney’s friends and family. However, in 2013, the team brought the label public when they had to get licensed to continue making the tequila.

“It immediately took off,” Gerber told CNBC back in November. “Right now, we’re the fastest growing ultra-premium tequila in the country.”

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

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

These are the 25 most expensive cities for expats, according to HR firm Mercer

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

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Ever wondered how much bang you would get for your buck if you upped sticks and moved to the other side of the world?

An annual cost of living survey from human resources firm Mercer takes a look at which cities are the most expensive for the expat community and just how far your money will get you.

1. Luanda, Angola
Luanda, Angola’s port capital situated on the west coast of southern Africa, usurped Hong Kong’s leading position this year to become the world’s most expensive city. But it is often cited as one of the most expensive cities in the world.

Having battled through a long civil war, which destroyed much of the country’s infrastructure, Angola only gained independence relatively recently, in 2002, and has since struggled to reestablish its position as a major exporter.

As a result, around half the country live in poverty while the more affluent citizens pay inflated prices for imported goods and security. Expats can expect to be set back $6,065.67 per month to rent a two bedroom unfurnished apartment of international standards.

2. Hong Kong
Hong Kong regularly emerges as the most expensive city in Asia – and indeed the world – though it was pipped to the top spot this year.

Its currency is pegged to the U.S. dollar, which continues to drive up the cost of housing and amenities. Expect to pay around $7.88 for a cup of coffee.

3. Tokyo, Japan
Japan’s capital rose from fifth to third place this year as the value of the yen has continued to appreciate.

4. Zurich, Switzerland
Zurich, a global center for banking and finance, is the most-costly city in Europe and fourth most pricey in the world.

5. Singapore
Prices in Singapore appear to have fallen slightly this year relative to other countries. It drops down from fourth place in 2016 to fifth in 2017.

6. Seoul, South Korea
Seoul, South Korea’s capital, has raced through the ranks this year to become the sixth most expensive city for expats. In 2016, it was in just 15th place.

7. Geneva, Switzerland
Geneva is the second most expensive Swiss city and one of the world’s 10 most expensive.

8. Shanghai, China
Shanghai, along with other Chinese cities, slipped in the rankings this year as the yuan weakened against the U.S. dollar.

9. New York City, U.S.
New York is the U.S.’s most expensive city and, this year, one of the 10 most expensive in the world. Expect to pay $5,058 per month to rent an unfurnished two bedroom flat.

10. Bern, Switzerland
Emerging as one of the world’s 10 most expensive cities this year is Switzerland’s Bern.

11. Beijing, China
China’s capital Beijing slipped from 10th place this year, though you can still expect to pay $6.62 for a coffee.

12. Tianjin, China
Tianjin, a major port city in northeastern China, has grown significantly over the past year and so too have living costs. In 2016, it ranked in 30th place.

13. Shenzhen, China
Shenzen, situated next to the border of Hong Kong, has held fairly steady as one of China’s priciest cities, though it dropped down one space this year to be replaced by Tianjin.

14. Moscow, Russia
Moscow, renowned for its elaborate architecture, is Russia’s most expensive city. Here, a two bedroom unfurnished apartment will cost you $4,4249, though 1 kilogram of white sliced toast is among the cheapest in the ranking, at $3.38.

15. Victoria, Seychelles
Victoria, the Seychelles’ capital, has remained consistently expensive over recent years, rising just two places since 2016.

16. N’Djamena, Chad
Life in N’Dhjamena, Chad, is expensive for expats, where average incomes are low and access to Western goods are limited and expensive.

17. Tel Aviv, Israel
Israel’s Tel Aviv is the Middle East’s most expensive country for expats, having jumped two spots since last year.

18. Kinshasa, Democratic Republic of the Congo
Life in the politically troubled Democratic Republic of the Congo is hard. For expats wanting to move there, it is costly too, with security a considerable expense.

19. Guangzhou, China
Guangzhou, a port city in the northwest of Hong Kong is the cheapest of five major cities in China – though it remains within the world’s 20 most expensive.

20. Dubai, United Arab Emirates
Dubai, renowned for its modern architecture and brilliant beaches, is a top destination for expats looking to combine business opportunities with varied attractions.

21. Osaka, Japan
Osaka is one of Japan’s thriving commercial centers and continues to offer an appealing – if expensive – home for expats.

22. San Francisco, US
Life in San Francisco is expensive. With its proximity to the coast and California’s wine regions, it unsurprisingly ranks among the top 10 percent of the 200+ countries studied in Mercer’s annual list.

23. Abu Dhabi, United Arab Emirates
The capital of the UAE, Abu Dhabi has undergone serious growth and investment over recent years and, as such, there is a price tag to match as expats look to enjoy its glamorous attractions.

24. Los Angeles, US
The third most expensive U.S. city to appear in this year’s list, life in L.A. requires a pay packet of almost celebrity proportions. Rental of a two bedroom unfurnished flat could set you back $4,040.

25. Sydney, Australia
Sydney often ranks among the most expensive cities in the world, coming in at 25th out of a total of 209. Beating both Melbourne and Brisbane, you can expect to pay $100.68 for a pair of jeans.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

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

Saudi Arabia relieves crown prince, replaces him with Mohammad Bin Salman, says state news agency

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

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Saudi Arabia has relieved Muhammad bin Nayef from his role as crown prince, replacing him with Mohammad bin Salman, according to a royal decree published by state news agency SPA.

Bin Salman, 31, has been his country’s defense minister and deputy crown prince, and was recently credited with a “huge success” for President Donald Trump’s recent decision to stop in Saudi Arabia.

Saudi Arabia’s King Salman called for a public pledging of allegiance in Mecca on Wednesday to the new crown prince, Saudi-owned channel al-Arabiya said on Wednesday.

The young prince has taken a central role in Saudi Arabia’s efforts to build its economy beyond the oil industry. He holds primary responsibility for the kingdom’s military and energy sector.

In March, Bin Salman met Trump in the White House, and agreed that Iran represents a regional security threat.

In May, the then-deputy crown prince said his radical economic reforms were succeeding in protecting the kingdom against low oil prices, and he promised massive investments in coming years to help diversify the economy beyond oil.

Experts have said that Bin Salman is different than other Saudi leaders in that he had been educated in the kingdom — he wears traditional dress and is popular with young Saudis.

“They see in Mohammad bin Salman someone of their own generation moving up the ladder very quickly. He has a certain degree of popularity. He’s also grated a lot of people in the family who see him as abrasive, inexperienced, undisciplined, impulsive,” Bruce Riedel, director of the intelligence project at Brookings and former CIA national intelligence officer for the Middle East, told CNBC in 2016.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

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

Stocks in Asia decline after fall in oil; MSCI says yes to China A-shares

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

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Asian bourses traded mostly lower on Wednesday following MSCI’s decision to add mainland Chinese stocks to its emerging markets index gradually and as oil prices slipped around 2 percent overnight.

The Nikkei 225 declined 0.26 percent and the Kospi fell 0.71 percent.

Australia’s benchmark S&P/ASX 200 index tumbled 1.33 percent, dragged lower by its energy and materials sub-indexes which were down 2.25 percent and 2.03 percent respectively.

Markets in greater China were mixed following MSCI’s decision to include A-shares.

The Hang Seng Index fell 0.93 percent, but mainland markets made modest gains. The Shanghai Composite rose 0.18 percent and the Shenzhen Composite edged higher by 0.12 percent.

MSCI said Tuesday it planned on adding China A-shares to its benchmark MSCI Emerging Markets Index. The index giant said it will add 222 China A Large Cap stocks in a phased manner beginning next year.

The review is the fourth straight year MSCI has considered adding the mainland-traded stocks.

Inclusion in the MSCI will provide “only a modest boost” to capital market reforms in China, especially in the areas of shareholder rights and debt market reform, but is unlikely to be a breakthrough, the Eurasia Group said in a statement.

“Regardless of the MSCI decision, Chinese equity markets still suffer from serious institutional shortcomings as well as heavy political influence,” said Michael Hirson and Christopher Beddor from Eurasia Group.

The MSCI decision was overshadowed by the fall in oil prices to seven-month lows following news of an increase in production from Libya and Nigeria. Prices of US West Texas Intermediate were in bear territory after falling more than 20 percent from recent peaks overnight.

Brent crude was off by 0.04 percent at USD 46 and US WTI crude gained 0.05 percent to trade at USD 43.53.

In Australia, energy stocks traded in the red given the fall in oil prices, with oil and gas producer Santos declining 2.85 percent. Major banking stocks were also under pressure, with National Australia Bank declining 2.14 percent and ANZ down by 1.96 percent.

The dollar traded at 97.739 against a basket of rival currencies, after trading as high as 97.871 in the previous session. Against the yen, the dollar traded at 111.35, off a high of 111.50 seen earlier.

The British pound, which traded as low as USD 1.2617 overnight, last traded at USD 1.2622. Pound sterling fell to a two-month low after Bank of England Governor Mark Carney said the central bank would not be raising interest rates anytime soon due to uncertainty surrounding Brexit.

Markets are also parsing through mixed signals from Fed speak overnight. Chicago Fed President Charles Evans told CNBC on Tuesday the central bank could wait until the end of the year before making a decision on increasing interest rates further.

Boston Fed President Eric Rosengren, however, sounded more hawkish at a conference on Tuesday, where he said low interest rates meant that policy would be “less capable of offsetting negative shocks.” Rosengren is not a voting member of the FOMC this year.

The Bank of Japan’s minutes for its June meeting reflected that the central bank said the level of government bonds it purchases could fluctuate but this was unlikely to affect guidance, Reuters said. The minutes also showed the BOJ remained cautious on the 2 percent inflation target.

Major indexes on Wall Street closed lower as energy stocks were pressured by the fall in oil.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

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

Asian stocks gain as dollar strengthens on Fed officials’ comments

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

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Asian indexes trekked higher in early Tuesday trade as the dollar strengthened following comments from Federal Reserve officials over future interest rate hikes stateside.

The Nikkei 225 gained 0.86 percent and South Korea’s benchmark Kospi index rose 0.45 percent in early trade.

Down Under, the S&P/ASX 200 traded 0.05 percent higher.

With inflation soft despite a 16-year low in the US unemployment rate, the Federal Reserve should move only slowly to raise interest rates and trim its bond portfolio, Chicago Fed President Charles Evans said Monday.

The comments from Evans follow remarks on Monday by New York Fed President William Dudley who said inflation should rise as the labor market improved, which would allow the Federal Reserve to proceed with plans to tighten monetary policy. The dollar strengthened and US Treasury yields rose following the news.

The dollar gained against a basket of rival currencies to trade as high as 97.615 overnight. The dollar index last traded at 97.597. Meanwhile, the yen traded 111.72 to the dollar, its lowest level in around three weeks.

Meanwhile, the ratings downgrade of Australia’s banks, including the big four, by Moody’s Investor Services overnight is not expected to affect their funding costs, Reuters quoted Deutsche Bank analysts as saying. The Moody’s downgrade of the banks from AA2 to AA3 aligns with S&P’s existing AA- rating, said National Australia Bank Currency Strategist Rodrigo Catril in a morning note.

Shares of Australian banks were mixed in early trade. ANZ edged lower by 0.18 percent and National Australia Bank traded 0.1 percent down, but Commonwealth Bank of Australia climbed 0.22 percent.

The Australian dollar, which initially sold off on the news, traded near overnight lows at $0.7591 at 8:05 a.m. HK/SIN.

Singapore-listed commodity trade Noble Group announced it would be deferring payment on $400 million in Perpetual Capital Securities as it focuses on liquidity.

In energy news, oil prices gained slightly after tumbling to a seven-month low overnight. Brent crude rose 0.19 percent to trade at usd 47 a barrel and US West Texas Intermediate crude gained 0.18 percent to trade at usd 44.28.

Over in Europe, Brexit negotiations began on Monday between the UK and the European Union, with the UK’s Brexit Secretary saying he hoped for a “strong and special partnership.” Few headlines materialized from the talks.

Economic data expected later in the day includes the Reserve Bank of Australia’s minutes due at 9:30 a.m. HK/SIN. The RBA had held cash rates steady earlier this month due to weak growth.

Hong Kong CPI and jobless data for the month of May will be due at 4:30 p.m.

On Wall Street, stocks closed higher on the back of big name tech stocks strengthening.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

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

Asian markets trade higher as markets await political developments in Europe

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

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Asian bourses traded in the green on Monday as markets geared up ahead of Brexit negotiations between the UK and the European Union, and as French President Emmanuel Macron’s party won a parliamentary majority at the weekend.

A report said a van reportedly drove into a crowd of people in the Finsbury Park Area of London and that police reported a number of casualties and one person had been arrested. “Enquiries continue,” the metropolitan police wrote in a notice on the incident.

Japan’s benchmark Nikkei 225 index gained 0.59 percent and South Korea’s Kospi edged higher by 0.55 percent.

Down Under, the S&P/ASX 200 rose 0.53 percent, on strength from its utilities and financials sub-indexes.

Markets in greater China were in the green, with Hong Kong’s Hang Seng Index gaining 0.56 percent. On the mainland, the Shanghai Composite added 0.22 percent and the Shenzhen Composite rose 0.273 percent.

This followed the release of new home prices in China for May, which reflected that prices rose 10.4 percent on year compared to the 10.7 percent rise seen in April, Reuters said.

South Korean tech stocks trended higher. Shares of Samsung Electronics were up by 1.45 percent and SK Hynix soared by 2.81 percent.

Nomura had maintained its “Buy” call on SK Hynix and raised its target price from 60,500 won a stock to 100,000 won a stock in a note from last Friday. This was due to the reduced risk of an oversupply in the memory market and better prospects for a Toshiba deal to be completed, said CW Chung, a research analyst at Nomura.

Shares of Singapore-listed commodity trader Noble Group soared 9.23 percent after Reuters reported that its creditors had extended a critical repayment deadline by four months.

Against the yen, the dollar fetched as high as 110.93 following the release of Japan trade data for the month of May, slightly higher than levels around 110.88 seen earlier. Dollar/yen last traded at 111.02.

Commonwealth Bank of Australia Currency Strategist Joseph Capurso told CNBC he saw further downside to dollar/yen in the coming months, heading to 108 yen to the dollar, driven by Japan’s current account surplus.

Latest government data showed exports from Japan rose 14.9 percent on year compared to the 16.1 percent rise projected by a Reuters poll. Japan’s trade balance, however, registered a deficit of 203.4 billion yen (USD 1.83 billion) compared to the 76 billion yen surplus expected.

The dollar was firmer at 97.177 against a basket of rival currencies compared to levels around 97.115 seen in the previous session. The Australian dollar gained for a second straight session to trade at USD 0.7625 compared to the USD 0.75 handle seen last week.

The euro was slightly softer at USD 1.1196, while the British pound mostly flat at USD 1.2767, continuing to trade around the USD 1.27 handle seen through the last week. This comes ahead of scheduled talks between negotiations between the European Union and the UK regarding Brexit arrangements.

Meanwhile, oil prices trended lower. Brent crude declined 0.44 percent to trade at USD 47.16 a barrel and US crude shed 0.47 percent to trade at USD 44.53.

Hong Kong GDP for the first quarter is expected later in the day at 4:30 p.m. HK/SIN.

Stateside, markets closed mixed on the back of weaker-than-expected housing starts and consumer confidence data. Investors also digested news that Amazon would be buying supermarket chain Whole Foods.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

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

Bank of Japan keeps monetary policy steady

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

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The Bank of Japan held monetary policy steady in its June board review, pledging to keep asset purchases around the current target of 80 trillion yen ($727 million) and sounding more upbeat on the economy, according to a release on Friday at the end of a two-day meeting.

“Private consumption has increased resilience against a background of steady improvement in the employment and income situation,” the BOJ said in a statement.

At its May meeting, the Bank of Japan raised its economic forecasts and kept policy steady, as was widely expected.Later on Friday, Bank of Japan Governor Haruhiko Kuroda will hold a press conference at 0630 GMT to discuss the deliberations of the central bank board.

The BOJ raised its economic assessment. It increased its real gross domestic product (GDP) growth forecast for the 2017-18 fiscal year to 1.6 percent from the 1.5 percent projected in January. But it lowered its core consumer price index (CPI) growth forecast to 1.4 percent from 1.5 percent in the same period.

The central bank has been pursuing a yield-curve control policy, introduced at its late-September meeting. The BOJ had set its target yield for the benchmark 10-year Japanese government bond at around zero percent, and it has been willing to intervene to keep the benchmark yield in line with its target.

The BOJ has taken essentially a “whatever it takes” stance on boosting inflation, saying it would maintain an easy stance until inflation exceeded its target of 2 percent “in a stable manner.”

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

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

Special counsel Mueller investigating Trump for possible obstruction of justice: Washington Post

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

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Special counsel Robert Mueller’s investigation of Russian interference in the 2016 election has widened, The Washington Post reported, citing officials.

The probe now seeks to determine whether President Donald Trump attempted to obstruct justice, officials told the Post.

A spokesman for Trump’s lawyer told NBC: “The FBI leak of information regarding the President is outrageous, inexcusable and illegal.”

People familiar with the matter told the Post that the obstruction of justice probe started in the wake of Trump’s firing of former FBI Director James Comey.

Mueller’s team will interview Dan Coats, director of national intelligence, Mike Rogers, head of the National Security Agency, and Richard Ledgett, former deputy director of the NSA, the Post reported, citing five people briefed on the interview requests.

Read the full report in The Washington Post.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

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

Asian markets turn cautious after Fed raises interest rates

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

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Asian equities turned cautious on Thursday after the US Federal Reserve raised interest rates for the second time this year, as was widely expected by markets.

Despite inflation coming in below the Fed’s target, the central bank said it would raise the benchmark interest rate by 25 basis points. The Fed also provided greater detail about how it would unwind its massive balance sheet.

The Nikkei 225 edged lower by 0.6 percent while the Kospi gave up earlier gains to decline 0.75 percent.

Australia’s S&P/ASX 200 tumbled 1.13 percent, driven by weakness in its materials and energy sub-indexes, which were down 2.3 percent and 2.31 percent respectively. Major banking and mining stocks traded in the red.

Markets in greater China were mixed, with the Hang Seng Index falling 0.91 percent in early trade. On the mainland, the Shanghai Composite edged higher by 0.03 percent and the Shenzhen Composite was up by 0.227 percent.

Markets regarded the Fed’s increase in interest rates as a dovish hike. The Fed’s characterization of the state of the economy as “slightly softer” and details regarding the unwind in the balance sheet likely took pressure off the central bank to tighten further, ANZ economist Giulia Lavinia Specchia said in a note.

Going forward, markets appeared doubtful that the Fed will stick to its forecast of three rate hikes this year.

“Traders clearly doubt the inflation outlook espoused by the Fed … With little traction evident in wages or inflation, the markets are expressing skepticism about an ongoing recovery,” CMC Markets Chief Market Strategist Michael McCarthy said.

Former Federal Reserve Governor Robert Heller told CNBC that he saw one more rate hike on the cards this year.

“I think the Federal Reserve will do one (more) hike and that is just because they want to go slow and try to avoid anything that might upset the markets, not that I think the markets wouldn’t be able to take a stronger increase and a faster pace of normalization,” Heller said, adding that he would like to see long-term rates around 3 percent.

Over in Japan, shares of Toshiba remained under pressure as some of Western Digital’s SanDisk subsidiaries sought injunctive relief against it. Western Digital said it had “no choice” but to pursue legal action as Toshiba continued to “circumvent” contractual rights related to its memory joint ventures. CNBC has reached out to Toshiba for comment.

The Japanese conglomerate is also unlikely to meet the deadline for filing its annual financial statement, Nikkei reported. Shares of the company were down 2.68 percent.

Oil prices fell to a seven-month low overnight due to a build in U.S. gasoline stocks. Brent crude was lower by 0.04 percent at USD 46.98 a barrel and US crude was off by 0.18 percent at USD 44.65.

The dollar index, which tracks the dollar against a basket of major currencies, continued to trade below the 97 handle. The dollar index traded at 96.858 at 9:35 a.m. HK/SIN. Against the yen, the dollar was mostly flat, trading at 109.52 compared to levels around 109.59 seen in the previous session.

Down Under, jobs data for May beat expectations, with 42,000 new jobs created compared to the 10,000 expected. The Australian dollar jumped as high as $0.7625 following the news, compared to levels around USD 0.7587 seen earlier.

In New Zealand, first quarter GDP rose 0.5 percent, missing an expected gain of 0.7 percent on quarter, and at an annual pace of 2.5 percent, below the 2.7 percent gain seen. The kiwi fell 0.29 percent to 0.7248 against the dollar after the data.

Economic data expected through the course of the trading session includes the Reserve Bank of Australia’s bulletin at 9:30 a.m. HK/SIN and China foreign direct investment numbers for the month of May at 3:00 p.m.

In central bank news, the Bank of Japan begins a two-day meeting today. The Bank of England will make its rate decision at 7:00 p.m. HK/SIN.

On Wall Street, stocks closed mixed after the Fed’s announcement, with the Dow Jones industrial average gaining 0.22 percent or 46.09 points to close at 21,374.56.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

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