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☆ Moody’s puts six US banks on watch for potential downgrade
▼ + stars: | 2023-03-14 | by ( Matt Egan | ) edition.cnn.com time to read: 1 min

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☆ Banking turmoil could help euro doves cry victory
▼ + stars: | 2023-03-14 | by ( Francesco Guerrera | ) www.reuters.com time to read: +3 min

That’s the annual growth in euro zone inflation recorded in February, and it sits well above the ECB’s 2% target. The demise of Silicon Valley Bank and Signature Bank (SBNY.O) was partly due to rising interest rates and sparked fears of a global banking rout. Investors are evenly split between those expecting a 25 basis point hike and those backing a 50 basis point raise on Thursday, according to probabilities derived from market prices by Refinitiv. As for GDP, the central bank in December forecasted a rebound in growth from 0.5% this year to 1.9% in 2024. Reuters Graphics Reuters GraphicsFollow @guerreraf72 on TwitterCONTEXT NEWSThe European Central Bank announces its interest rate decision and new economic forecasts on March 16.

☆ Takeaways from America’s second-largest bank failure
▼ + stars: | 2023-03-11 | by ( Ramishah Maruf | ) edition.cnn.com time to read: +7 min

New York CNN —Silicon Valley Bank’s 48-hour collapse led to the second-largest failure of a financial institution in US history. Its stunning, and seemingly rapid, fall is the largest shutdown of a US bank since Washington Mutual in 2008. “That’s because its depositors were withdrawing their money so fast that the bank was insolvent, and an intraday closure was unavoidable due to a classic bank run.”High interest rates led to its demiseTo combat rampant inflation, the central bank has been aggressively raising interest rates since 2022. When interest rates were near historical lows, the banks bought up on long-dated, seemingly low-risk Treasuries. Faced with these higher interest rates, loss of IPOs and a funding drought, SVB’s clients began pulling money out of the bank.

☆ Takeaways from the February jobs report
▼ + stars: | 2023-03-11 | by ( Alicia Wallace | ) edition.cnn.com time to read: +9 min

Minneapolis CNN —February’s jobs report had a little something for everyone. In February, the construction industry added 24,000 jobs, marking 12 consecutive months of employment growth. Friday’s report showed that “a modicum of slack crept back into the jobs market,” wrote Wells Fargo economists Sarah House and Michael Pugliese. However, Friday’s jobs report likely won’t spur a more dovish turn from the Fed, said Sean Snaith, an economist and director of the University of Central Florida’s Institute for Economic Forecasting. “We didn’t go from a four-alarm fire to a five-alarm fire with this data report, but the inflation flames aren’t out either,” he wrote in a note Friday.

New York CNN —This week, the go-to bank for US tech startups came rapidly unglued, leaving its high-powered customers and investors in limbo. Silicon Valley Bank, facing a sudden bank run and capital crisis, collapsed Friday morning and was taken over by federal regulators. Founded in 1983, SVB specialized in banking for tech startups. At the same time, venture capital began drying up, forcing startups to draw down funds held by SVB. By Friday morning, trading in SVB shares was halted and it had abandoned efforts to quickly raise capital or find a buyer.

☆ Silicon Valley Bank scrambles to reassure clients after 60% stock wipe-out
▼ + stars: | 2023-03-09 | by ( ) edition.cnn.com time to read: +5 min

SVB Financial Group scrambled on Thursday to reassure its venture capital clients their money was safe after a capital raise led to its stock collapsing 60% and contributed to wiping out over $80 billion in value from bank shares. SVB, which does business as Silicon Valley Bank, launched a $1.75 billion share sale on Wednesday to shore up its balance sheet. Investors in SVB’s stock fretted over whether the capital raise would be sufficient given the deteriorating fortunes of many technology startups that the bank serves. The company’s stock collapsed to its lowest level since 2016, and after the market closed shares slid another 26% in extended trade. However, the Information publication reported the bank told four clients that transfers could be delayed.

☆ Debt default would be ‘catastrophic’ event that could kill millions of American jobs, Moody’s warns
▼ + stars: | 2023-03-07 | by ( Matt Egan | ) edition.cnn.com time to read: +3 min

New York CNN —A breach of the US debt ceiling risks sparking a 2008-style economic catastrophe that wipes out millions of jobs and sets America back for generations, Moody’s Analytics warned on Tuesday. “A default would be a catastrophic blow to the already fragile economy,” Zandi said in prepared remarks to be delivered during a Senate subcommittee hearing on Tuesday. Citing concerns about America’s mountain of debt, Republicans have called for steep cuts to federal spending in exchange for raising the debt ceiling. Given the enormous stakes, Moody’s Analytics urged lawmakers to avoid playing chicken with US debt. “Lawmakers should put an end to the wrangling over the debt limit and increase it with no strings attached so future generations can enjoy the same benefits,” Zandi said in his prepared remarks.

☆ 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.

☆ 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.

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.

☆ 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.

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