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☆ America’s credit rating could get downgraded even if a default is avoided, Fitch Ratings warns
▼ + stars: | 2023-03-06 | by ( Matt Egan | ) edition.cnn.com time to read: +5 min

New York CNN —Every few years, Washington plays a dangerous game of chicken over whether to raise the debt ceiling or default on US debt. Even if a default is avoided this time, the frequent nature of these political showdowns could cause America’s credit rating to get downgraded, Fitch Ratings told CNN on Monday. Those already look messy and were at the heart of the unprecedented credit ratings downgrade by S&P Global Ratings in 2011. Goldman Sachs told CNN in late January that a full-blown debt ceiling crisis could spark a recession. That’s why Fitch does not have the United States on watch for a downgrade, at least not yet.

Hong Kong CNN —China has set an official economic growth target of “around 5%” for 2023, as it seeks to revive the world’s second largest economy after a year of tepid growth because of pandemic measures. The new figure was released Sunday alongside the opening of the annual gathering of the National People’s Congress (NPC), the country’s rubber-stamp legislature, in a government work report. Chinese Premier Li Keqiang speaks during the opening session of China's National People's Congress (NPC) at the Great Hall of the People in Beijing, Sunday, March 5. Ng Han Guan/APMoody’s Investors Service has since raised its China growth forecast to 5% for both 2023 and 2024, up from 4% previously, citing a stronger than expected rebound in the short term. Global growth will likely slow from 3.4% in 2022 to 2.9% in 2023.

☆ China's factories just had their best month in 11 years
▼ + stars: | 2023-03-01 | by ( Laura He | ) edition.cnn.com time to read: +2 min

Hong Kong CNN —China’s factory activity has expanded at the fastest pace in more than a decade, as the world’s second largest economy staged what economists are calling a “very rapid” rebound after reopening from zero-Covid. In January, the reading was 50.1, a sharp increase from the month before, as disruptions caused by the abrupt end of pandemic restrictions was starting to fade. The official non-manufacturing PMI for February, which includes the construction and services industries, recorded its best level in two years, figures from the NBS showed. Also Wednesday, the Caixin/Markit manufacturing PMI, a private gauge of the country’s factory activity, jumped to 51.6 in February from 49.2 in January. The latest data is “exceptionally strong,” confirming a “very rapid rebound” in China’s economic activity, Julian Evans-Pritchard, head of China economics at Capital Economics, wrote in a research note.

☆ Rolling EU debt would boost investment and markets
▼ + stars: | 2023-02-21 | by ( Rebecca Christie | ) www.reuters.com time to read: +8 min

From 2009 to 2019, the EU sold just 78 billion euros’ worth of debt into global capital markets. As of January 2023, outstanding issuance stood at 344 billion euros, including more than 275 billion euros sold since 2020. EU debt is in the hands of more than 1,000 investors from more than 70 different countries, according to the bloc’s investor relations team. Contrary to what proponents of Teutonic austerity claim, more EU debt would be safer EU debt. EU debt is rated AAA by Moody’s, Fitch, Scope and DBRS.

☆ More Auto Payments Are Late, Exposing Cracks in Consumer Credit
▼ + stars: | 2023-02-18 | by ( Ben Eisen | Gina Heeb | ) www.wsj.com time to read: 1 min

A shortage of vehicles during the pandemic sent car prices soaring, and many borrowers took out large loans to buy them. The U.S. economy is on a steady footing and the unemployment rate is superlow. Yet a rising number of Americans are falling behind on their car payments. Some 9.3% of auto loans extended to people with low credit scores were 30 or more days behind on payments at the end of last year, the highest share since 2010, according to an analysis by Moody’s Analytics.

☆ Fintech threat to big banks fizzled in 2022 as rates rose - report
▼ + stars: | 2023-02-15 | by ( Hannah Lang | ) www.reuters.com time to read: +2 min

Feb 15 (Reuters) - The competitive threat of financial technology companies to big banks diminished over the past year as rising interest rates constricted funding, a new report from Moody's Investor Service found. The report cited figures from CB Insights that showed global fintech funding fell 46% from 2021 to 2022. Banks have long recognized that technology could disrupt business models and allow technology conglomerates to enter banking, Moodys said. Fintech companies often face more regulatory obstacles than banks and may have encountered new requirements in certain jurisdictions in recent years, according to Moody’s. But although the current macroeconomic environment may pose challenges to fintech companies, the sector still has the potential to increase financial inclusion and lower costs to consumers, the report found.

☆ Kazuo Ueda nominated to lead Japan's central bank in possible move away from ultra-easy policy
▼ + stars: | 2023-02-14 | by ( Laura He | ) edition.cnn.com time to read: +5 min

Hong Kong CNN —The Japanese government has nominated Kazuo Ueda to lead its central bank, in a surprise move that could pave the way for the country to wind down its ultra-loose monetary policy. Accommodative is a term used to describe monetary policy that adjusts to adverse market conditions and usually involves keeping interest rates low to spur growth and employment. As part of that program, the central bank targeted some short-term interest rates at an ultra-dovish minus 0.1% and aimed for 10-year government bond yields around 0%. But as prices rose and interest rates elsewhere went up, pressure has grown on the BOJ to wind down YCC. But Kuroda later dismissed a near-term exit from his ultra-loose monetary policy.

☆ Inflation has gone supercore
▼ + stars: | 2023-02-13 | by ( Christine Romans | ) edition.cnn.com time to read: +4 min

The new favorite: supercore inflation. Supercore inflation refers to prices that rise when workers get paid more for their services. “Supercore inflation was a strong 6.4% on a year-over-year basis through December 2022, but it is moderating,” said Mark Zandi, Moody’s chief economist. For the three months through December, supercore inflation is up only 2.4% annualized, and just 0.9% annualized in the month of December. “Supercore inflation is still way too hot, but it has begun to cool off, and all signs point to it and overall inflation getting back to something more comfortable over the coming 12-18 months,” Zandi told CNN.

☆ Gautam Adani will be playing defense for a while after mauling by Hindenburg
▼ + stars: | 2023-02-10 | by ( Diksha Madhok | ) edition.cnn.com time to read: +6 min

The sprawling Adani Group, which he founded over 30 years ago, has established interests in industries ranging from logistics to mining. “We view this as validation of our findings on offshore stock parking by Adani,” Hindenburg founder Nate Anderson said on Twitter. In its report, Hindenburg had alleged that “offshore shells and funds tied to the Adani Group comprise many of the largest ‘public’ holders of Adani stock.”An Adani Group spokesperson declined to comment. Meanwhile, Norway’s sovereign wealth fund, said Thursday it has “for all practical purposes…fully divested,” from the Adani companies. The loans were backed by shares in Adani Ports, Adani Green Energy and Adani Transmission.

Finance chiefs are coming into the year grappling with a variety of challenges, from rising interest rates and inflation to managing labor disruptions, pricing and inventory. Newsletter Sign-up WSJ | CFO Journal The Morning Ledger provides daily news and insights on corporate finance from the CFO Journal team. “But…there’s more and more of a belief that any kind of downturn will be short and shallow, frankly. Some finance chiefs, meanwhile, are finding opportunities to expand in the volatile economy. You can’t take everything that your vendors are sending you.”Labor woes persistHiring, however, remains a challenge for finance chiefs.

☆ Bigger utilities to benefit most from Biden's clean-energy funds
▼ + stars: | 2023-02-07 | by ( Laila Kearney | ) www.reuters.com time to read: +3 min

The Biden administration's $430 billion Inflation Reduction Act devotes billions of dollars for tax credits and direct payments for solar, wind, battery and other energy sources to move electric power supplies from fossil fuels. Regulated utilities including Duke Energy Corp (DUK.N) and Dominion Energy Inc (D.N) begin reporting fourth-quarter results this week and analysts expect them to lay out plans for capitalizing on the IRA. NextEra, the biggest U.S. generator of renewable energy, has a backlog of 16,500 megawatts of renewables projects. The parent of Florida Power and Light has added 25% to that backlog in the last year, executives have said. Solar projects in sunny states in the south and southwest and wind projects in the Midwest are among the best situated to collect IRA dollars, she said.

☆ Adani crisis: Billionaire scrambles to reassure creditors as market rout enters third week
▼ + stars: | 2023-02-06 | by ( Diksha Madhok | ) edition.cnn.com time to read: +6 min

The loans were backed by shares in Adani Ports, Adani Green Energy and Adani Transmission, which have collapsed in value. While the Adani Group has vehemently denied the allegation made by Hindenburg Resarch as “baseless” and “malicious,” investors remain unconvinced. Adani companies will be reporting quarterly results this week. Moody’s said Friday that the plunge in the shares of Adani companies was likely to reduce the group’s ability to raise capital. Another agency, S&P, cut the outlook for its ratings on two companies, Adani Ports and Adani Electricity, to negative from stable, citing the risk of higher funding costs or reduced access to capital.

☆ It's time to chill with al the recession talk
▼ + stars: | 2023-02-06 | by ( Allison Morrow | ) edition.cnn.com time to read: +8 min

New York CNN —In 2021, a bunch of economists and policy makers underestimated the inflation that was taking root around the world. In 2022, as inflation hit 40-year-highs and the Fed ramped up interest rates, many of those commentators went full-on gloomy — predicting a recession was all but inevitable. And that makes it hard, if not impossible, to imagine a recession anytime soon. “Any concern the economy is in recession or close to a recession should be completely dashed by these numbers,” Moody’s Analytics chief economist Mark Zandi told CNN on Friday. “The economy is further away from recession than ever,” wrote Christopher Rupkey, chief economist at Fwdbonds.

☆ Gautam Adani lost half his wealth in a flash. Here’s what happened
▼ + stars: | 2023-02-04 | by ( Julia Horowitz | ) edition.cnn.com time to read: +6 min

While the Adani Group has condemned the report as “baseless” and “malicious,” investor questions about its claims linger, and the fallout is growing. Gautam Adani is a 60-year-old tycoon who founded the Adani Group more than 30 years ago. The firm said it had taken a short position in Adani Group companies, meaning it would benefit from a drop in their value. Stocks of most Adani Group companies slumped again on Friday. Indian banks that hold Adani Group assets could also be affected if the value of those holdings continues to drop.

Last month, he called on companies to hike pay at a level above inflation, with some already heeding the call. Last month, Japan recorded its biggest drop in earnings, once inflation is taken into account, in nearly a decade. A changing job marketExperts say Japan’s wages have also suffered because it lags in another metric: its productivity rate. Hideya Tokiyoshi, a teacher in Japan, told CNN he had barely seen his salary go up over the last 30 years. “If some of the biggest companies in Japan raise wages, many other firms will follow,” if only to stay competitive, said Yamaguchi.

☆ 3 key takeaways from the jaw-dropping January jobs report
▼ + stars: | 2023-02-03 | by ( Allison Morrow | ) edition.cnn.com time to read: +4 min

Earlier this week, the consensus estimate among economists was that the US economy likely added about 185,000 jobs in January. But the economy had other ideas, adding more than half a million jobs in January. Here are three key things to take away from Friday’s jobs report. The report shocked Wall Street economistsThe headlines that came at 8:30 am ET Friday left economists stunned: America added 517,000 jobs last month. Much of that speculation centered on the Federal Reserve’s monetary tightening, which aimed to wring inflation from the economy.

☆ Amazon creates bazaar for U.S. banking wannabes
▼ + stars: | 2023-01-24 | by ( Jeffrey Goldfarb | ) www.reuters.com time to read: +3 min

The e-commerce goliath recently added to its growing pile of debt with an $8 billion loan. After first tapping the market’s biggest bookrunners, Amazon enlisted Canada’s TD Securities to shop the lesser-traveled byways around Wall Street for the follow-up deal. It’s easy to understand why the wannabes would jump at the chance to work with Amazon. Others such as BBVA, which offloaded its American subsidiary but kept its broker-dealer business, are keen to expand in U.S. investment banking. For Amazon, spreading the wealth is a chance to trial new banking relationships before potentially hiring them for more complicated matters.

☆ Here’s what will happen to the economy as the debt ceiling drama deepens
▼ + stars: | 2023-01-22 | by ( Alicia Wallace | ) edition.cnn.com time to read: +8 min

Minneapolis CNN —After the United States hit its debt ceiling on Thursday, the Treasury Department is now undertaking “extraordinary measures” to keep paying the government’s bills. And Americans — many people — would lose their jobs and certainly their borrowing costs would rise.”Dire warnings of debt ceiling trouble aren’t new. “2011 was the first time in a long time that we came close to a debt ceiling breach,” he said. “I think you would be hard pressed to say [the debt ceiling debacle] was a positive thing,” he said. Considering the potential consequences in the United States and abroad, Sheiner believes the debt ceiling will be lifted or suspended — eventually.

The lessors took a hit of almost $10 billion when Russia barred airlines from returning planes hit by Western sanctions to their owners in the West. This has turned the spotlight on other risky markets, most prominently China and Taiwan, where some fear future conflict could cause a similar seizure on a much larger scale. When discussing the Russia losses, most executives speaking at the conference, also touched on China risks. Several executives said the loss of aircraft to Russia would simply feed into risk management models and encourage lessors to be careful about spreading their exposure rather than withdrawing from markets altogether. "Lessors aren't going to be able to abandon higher risk areas because that is what they do," he added.

☆ Premarket stocks: The world has a major debt problem. Is a reset coming?
▼ + stars: | 2023-01-17 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +7 min

That number is about 349% of global gross domestic product, and the equivalent of $37,500 of debt for every single person in the world. “Rising interest rates and slowing economies are making the debt burden heavier,” they write. What it means: Higher interest rates are already hurting governments and corporations with low-credit ratings. Rising interest rates also impact stock prices — the Federal Reserve’s hikes in 2022 contributed to a nearly 20% decline in the S&P 500. What comes next: There is no easy way out of a global debt crisis, write Chan and Dimitrijevic.

☆ Americans are spending an extra $371 a month because of inflation
▼ + stars: | 2023-01-14 | by ( Matt Egan | ) edition.cnn.com time to read: +1 min

New York CNN —From rent and groceries to utilities, families are paying a lot more every month as they try to keep up with inflation. And while inflation has cooled in recent months, the typical household spent $371 more on good and services in December than a year ago, according to Moody’s Analytics. At the inflation peak last June, the typical family spent an additional $502 per month compared with the year before, according to Moody’s. Families are spending an estimated $82.60 more per month on shelter and $72.01 more on food, Moody’s said. Some of the pain from inflation is being mitigated by a significant shift in recent months: Wages are finally growing at a faster pace than inflation.

☆ Tough road ahead for U.S. fintech lenders as default risk rises
▼ + stars: | 2023-01-13 | by ( Matt Tracy | ) www.reuters.com time to read: +2 min

During the pandemic, many fintech startups emerged as lenders to borrowers with imperfect credit. Using artificial intelligence, their screening tools were more likely to recommend these loan requests than traditional lenders'. The lenders' ABS were among bonds that raised $36 billion in 2021 and 2022 by pooling consumer and marketplace loans, according to FinSight data. The losses on subprime loans that are assumed to be uncollectible debt or charge-offs rose on average by some 20% by the third quarter of 2022 from 2019 levels, said Moody's. But the lenders' securities have not lost investor appeal as yet, said Theresa O’Neill, ABS strategist at BofA Securities.

☆ Cargill CFO Resigns as Company Reshuffles Leadership
▼ + stars: | 2023-01-10 | by ( Kristin Broughton | ) www.wsj.com time to read: +3 min

Cargill Inc. said its chief financial officer, Jamie Miller, is stepping down for another opportunity as the agricultural giant reshuffles its executive leadership. Ms. Miller will leave Cargill on Jan. 13, the Minneapolis-based company said on Monday. Jamie Miller, chief financial officer of Cargill, is set to leave the company on Jan. 13. Photo: CargillCargill has begun an external and internal search for Ms. Miller’s successor, according to a spokeswoman. The spokeswoman said Ms. Miller is leaving Cargill for a job on the East Coast and to be closer to family.

It’s the start of a class known as high-intensity interval training, a combination of treadmill and weight-lifting, at the boutique fitness studio Barry’s. The brothers and Rondeau, who now serves as Planet Fitness’ chief executive, hit upon a concept. Planet Fitness’ tag, “judgement free zone” is true to form. Part of the appeal is its $10 a month basic membership fee – which hasn’t changed – that Planet Fitness primarily collects through electronic funds transfers. Still, with solid and regular profits and a reasonable amount of debt, Planet Fitness has staying power, even if shareholders lose their shirts while its valuation comes in line.

☆ How to be a better investor in 2023
▼ + stars: | 2023-01-05 | by ( Jeanne Sahadi | ) edition.cnn.com time to read: +5 min

New York CNN —If you’re planning to invest your hard-earned money in stocks, bonds and other assets this year, let humility be your guide. In response, stocks and bonds, which typically don’t move in the same direction, moved down in tandem in 2022, with both ending the year deep in the red. Ignore the noiseWhether 2023 is great or awful for stocks — or, more likely, both at different times — that shouldn’t sway your investing decisions. Given recession concerns, Wilson noted that value stocks, which represent companies with strong fundamentals but are considered underpriced, tend to perform better during economic downturns. For those with a long time horizon and a high tolerance for risk, Wilson suggests looking for buying opportunities among stocks that have been hammered.

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