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☆ Moody’s sends a warning to America: Your last AAA credit rating is at risk
▼ + stars: | 2023-11-10 | by ( Jason Moon | Elisabeth Buchwald | ) edition.cnn.com time to read: +4 min

New York CNN —The United States is one step closer to losing its last perfect credit rating after Moody’s Investors Service changed the outlook of the nation’s debt to negative on Friday after markets closed. These effects would likely be even more painful if Moody’s does eventually downgrade the US debt. The nation’s diminished fiscal strength, undone by extreme partisanship in Washington, was a key driver of the action, according to a statement from Moody’s. Standard and Poor’s downgraded the United States for the first time in 2011, following the debt ceiling standoff then. In August, Fitch Ratings knocked America’s credit rating down after the most recent debt ceiling debate.

Persons: America’s, Wally Adeyemo, “, Moody’s, Poor’s, Kevin McCarthy, Mike Johnson, Johnson, Karine Jean, Pierre Organizations: New, New York CNN, Moody’s Investors Service, United, AAA, Fitch, House Press, Republican, Treasury Locations: New York, United States, Washington, Moody’s, ”, American

Gloom over worse-than-expected export data offset any positive momentum from an upgrade to China's growth forecast by the International Monetary Fund. It raised its GDP growth forecast for 2023 to 5.4% from 5% but forecast that growth will slow next year. Earlier in the summer, a swift rise in Treasury yields sent the stock market reeling. High rates and yields hurt stock prices, slow the economy and raise the pressure on the entire financial system. In currency trading, the U.S. dollar edged up to 150.69 Japanese yen from 150.37 yen.

Persons: Joe Biden, Xi Jinping, Janet Yellen, Korea’s Kospi, Australia's, TripAdvisor Organizations: TOKYO, Economic Cooperation, White, Treasury, APEC, International Monetary Fund, Nikkei, Moody’s, Service, Big Tech, Dow Jones, Nasdaq, Emerson, Federal, Federal Reserve, New York Mercantile Exchange, Brent, U.S Locations: China, U.S, Asia, San Francisco, Shanghai, Japan, Israel

A woman dressed up as a starving medical student. One woman dressed up as a medical student, holding a begging bowl in her hands. A woman dressed up as a liberal arts student hungry for egg fried rice. Greg Baker/Pool/ReutersTo address these challenges, President Xi Jinping hosted a key financial policy meeting this week to reiterate the need to resolve financial risks in the economy. “Hidden economic and financial risks are still widespread,” the readout said.

Persons: Hong Kong CNN —, ”, Zhou, Xiao Pan, Yan Ziqi, “, Xi Jinping, Greg Baker, Xi Organizations: Hong Kong CNN, CNN, Global, Stock, Huaan Securities, Service, National People's, of, People, Reuters, Communist Party, Ministry of State Security Locations: China, Hong Kong, China’s, Shanghai, Weibo, Douyin, “, Beijing

☆ Can America afford two wars? Here’s what the bond market thinks
▼ + stars: | 2023-10-29 | by ( Elisabeth Buchwald | ) edition.cnn.com time to read: +5 min

New York CNN —If you want to aggravate the US bond market, just remind traders how high the nation’s budget deficit is. The latest tally from the Treasury Department for the fiscal year that ended September 30 put the deficit at $1.7 trillion. All else being equal, that tends to push bond prices down, which causes yields to go higher. That suggests there are other factors that may be outweighing the effects of the war that are driving yields higher, said Snyderman. Also, since the debt ceiling was suspended in June, the Treasury has been issuing more bonds to fund government spending, pushing bond prices down.

Persons: it’s, Joe, That’s, shrugged, Lisa Shalett, Janet Yellen, Rachel Snyderman, Biden, ” Snyderman, John Lynch, Israel doesn’t Organizations: New, New York CNN, Treasury Department, Treasury, Morgan Stanley Wealth Management, Bloomberg, Center, CNN, , Congressional, Federal Reserve, Hamas, Fitch, Moody’s, Service, Comerica Wealth Management Locations: New York, Israel, Ukraine, Gaza, United States

DETROIT (AP) — General Motors and Jeep maker Stellantis are meeting with United Auto Workers bargainers Thursday to see if they can reach a contract agreement that mirrors a deal signed with crosstown rival Ford. Nearly 17,000 striking workers at Ford left the picket lines when the agreement was announced Wednesday night and will return to work shortly. About 57,000 Ford workers still have to vote on the tentative pact. It wasn't clear what Ford agreed to in terms of battery factories. Ford had announced plans to build two battery factories in Kentucky, one in Tennessee and another in Michigan, but the Michigan plant is now on hold.

Persons: Shawn Fain, Wheaton, “ Fain, ” Wheaton, it's, Ford, haven’t Organizations: DETROIT, —, Motors, United Auto Workers, Ford, GM, Cornell University, Chevrolet, UAW, Workers, Toyota, Moody’s Investor Service Locations: Fort Wayne , Indiana, Flint , Michigan, Arlington , Texas, Kentucky, Tennessee, Michigan

☆ Inside Poland Spring’s Hidden Attack on Water Rules It Didn’t Like
▼ + stars: | 2023-10-24 | by ( Hiroko Tabuchi | ) www.nytimes.com time to read: +14 min

The BlueTriton bottling plant in Poland Spring, Maine, this month. Water Clashes NationwideBlueTriton finds itself pitted against local water boards, environmentalists and other groups across the country. Aquifers Water bottling facility BlueTriton facility Aquifers Water bottling facility BlueTriton facility Aquifers Water bottling facility BlueTriton facility Water bottling facility Aquifers BlueTriton facility Water bottling facility Aquifers BlueTriton facility Water bottling facility Aquifers BlueTriton facility Sources: U.S. Geological Survey; Continental U.S. aquifer map data from GebreEgziabher, Jasechko and Perrone, Nature Communications (2022) Mira Rojanasakul/The New York TimesIn California, BlueTriton has publicly criticized and vowed to fight a cease-and-desist order issued by the state’s water board to stop diverting millions of gallons of water from a spring in San Bernardino County. Poland Spring water was first packaged as a local elixir in the mid-1800s. The original Poland Spring water source.

Persons: BlueTriton, ”, Elizabeth M, Frazier, haven’t, Christopher Kessler, Bottlers, Ms, Frazier didn’t, Anthony Moffa, Mark Lawrence, Lawrence, Mira Rojanasakul, State Legislature’s, Margaret M, “, John Mullaney, Roger Crouse, Cheryl Dieter, Metropoulos, Nestlé, John McGowan, Natalie DiPentino, DiPentino, Poland Spring, BlueTriton’s Organizations: The New York Times, Times, Democratic, Energy, Utilities, Technology, Maine State House, ”, Industries, University of Maine School of Law ., Democrat, Water, . Geological Survey, Continental, Nature Communications, New York Times, State, Poland, U.S, Geological, Water Science, Industry, Maine Water Utilities Association, United States Geological Survey, Rock Capital Partners, Metropoulos, Moody’s Investors Service Locations: Maine, Poland, Poland Spring , Maine, South Portland, Michigan, Colorado, Augusta, In Colorado, Arkansas, United States, Continental U.S, GebreEgziabher, California, San Bernardino County, In Michigan, Lincoln, Lincoln , Maine, New York, BlueTriton’s Poland, Chaffee County , Colorado

☆ Codelco says reassessing mine costs, will maintain capex
▼ + stars: | 2023-10-06 | by ( Pratima Desai | Julian Luk | ) www.reuters.com time to read: +2 min

LONDON (Reuters) - Chile’s Codelco, the world’s largest copper producer, is reassessing the cost structure at its mine projects, its chairman said on Friday, given recent overruns. FILE PHOTO: The logo of Codelco, the world's largest copper producer, is seen at their headquarters in downtown Santiago, Chile March 29, 2018. The company, which has some of the highest input costs for miners in Chile, said in July direct production costs during the first six months of the year jumped 41.3% to hit about $2.12 per pound, from $1.506 the year before. In response, Codelco said it had a solid financial position and broad access to financial markets. The South American country has the world’s largest lithium reserves.

Persons: Codelco, Ivan Alvarado, Maximo Pacheco, Pacheco, ” Pacheco, Alejandro Rivera, Rivera’s, Rodrigues, Blaine J, Maximo Pacheco’s Organizations: REUTERS, Reuters, London Metal Exchange, for Copper, Mining Studies, Moody’s Investor Services Locations: Santiago, Chile, London, China

☆ McCarthy’s ouster could hurt the US economy
▼ + stars: | 2023-10-03 | by ( Elisabeth Buchwald | ) edition.cnn.com time to read: +4 min

Squabbles on the Hill have consequences, and the latest may lead to another credit downgrade that could seriously damage the US economy. Then over the weekend the government narrowly avoided a shutdown thanks to a deal Republican Rep. Kevin McCarthy forged with Democrats. The back storyThe first time US debt was downgraded by another major credit rating agency, S&P, came in 2011. A Moody’s downgrade could cause yields on Treasury notes to spike even higher, underscoring the increased risks associated with holding US debt. That would add to the pressures the US economy is facing and it could even raise the likelihood of a recession.

Persons: CNN Business ’, Kevin McCarthy, Matt Gaetz, McCarthy, Fitch, Moody’s, ” Moody’s, “, Dow Organizations: CNN Business, New York CNN, Washington, Republican, Florida Rep, Moody’s Investors Service, AAA, AA, US Treasury, Nasdaq Locations: New York

☆ Analysis: A messy government shutdown is the last thing the economy needs
▼ + stars: | 2023-09-28 | by ( Matt Egan | ) edition.cnn.com time to read: +5 min

Against this precarious backdrop, Washington is on the verge of a messy shutdown of the federal government. A shutdown probably won’t wreck the economy, especially if it’s short. And if it a shutdown lasts long enough, it could, along with these other headwinds, do some real damage. The US Travel Association estimates the domestic travel economy would lose as much as $140 million a day from a government shutdown. “Uncertainty regarding federal operations will likely persist for the next few months.”Given all the other obstacles facing the economy, chaos in Washington is the last thing the economy needs.

Persons: New York CNN —, ”, Greg Valliere, Joe Brusuelas, Goldman Sachs, —, Uncle Sam, Mark Zandi, don’t, ” Zandi, AGF’s, “, ” Moody’s Organizations: New, New York CNN, UAW, Big Three, Federal, Federal Reserve, AGF Investments, RSM, American Federation of Government Employees, TSA, US Travel Association, Companies, Moody’s, AAA, Goldman Locations: New York, Washington, United States

☆ US consumer spending was weaker in the second quarter than previously estimated
▼ + stars: | 2023-09-28 | by ( Bryan Mena | ) edition.cnn.com time to read: +3 min

However, consumer spending, America’s economic engine, was revised much lower, to a 0.8% annualized rate, according to data released Thursday. Spending in the second quarter grew at its weakest pace since the first quarter of 2022, when it was flat. Consumer spending accounts for about 70% of economic output. The second quarter stretches from April through June, but the Commerce Department releases consumer spending figures on a monthly basis. In July, consumer spending jumped a robust 0.8%, the strongest monthly gain since January, as shoppers spent on concerts, films, toys and recreational equipment.

Persons: ”, Claire Li, Gregory Daco Organizations: DC CNN, Commerce, Commerce Department, Moody’s Investors, Moody’s Investors Service Locations: Washington, EY

☆ Moody’s: Government shutdown could hurt America’s top credit rating
▼ + stars: | 2023-09-25 | by ( Alicia Wallace | ) edition.cnn.com time to read: +3 min

Minneapolis CNN —The United States’ credit rating could come under pressure if the government shuts down, Moody’s Investors Service cautioned Monday. A shutdown would be “credit negative” for the US sovereign, according to a Moody’s note. Moody’s is the only one of the three major credit rating agencies to assign the United States an outstanding rating of AAA. Standard and Poor’s downgraded the United States in 2011, following the debt ceiling standoff then. In August, Fitch Ratings knocked America’s credit rating down to AA+ after the most recent debt ceiling debate.

Persons: “, ” Moody’s, Poor’s, Moody’s, It’s, Donald Trump’s, —, Betsy Klein, Matt Egan Organizations: Minneapolis CNN, United, Moody’s, AAA, Fitch, Congressional, US Travel Association, Federal Reserve, Labor Statistics Locations: Minneapolis, United States

☆ Home affordability is the worst it has been since 1984
▼ + stars: | 2023-08-24 | by ( Anna Bahney | ) edition.cnn.com time to read: +5 min

Washington, DC CNN —Buying a house requires a much bigger slice of people’s income now — making this the most unaffordable housing market since 1984, by one measure. The number of cost-burdened renters increased by 1.2 million, to a record 21.6 million households, between 2019 and 2021. In all, 40.6 million households were housing-cost burdened in 2021, including 20.3 million who were severely burdened. Affordability picture remains grim this yearHopeful house hunters continued to face challenging affordability conditions in July as rising mortgage rates and historically low housing inventory pushed prices higher, said Edward Seiler, the Mortgage Bankers Association’s associate vice president for housing economics. “Unfortunately, given today’s lack of inventory and affordability levels, it may take years before home affordability returns to more ‘normal’ levels,” he said.

Persons: Black Knight, Knight, “, ”, Andy Walden, Edward Seiler, Seiler, Joel Kan, Walden, ” It’s Organizations: DC CNN, Federal Reserve, Black, Joint Center for Housing Studies of Harvard University, Mortgage, Moody’s Investors Service Locations: Washington

New York CNN —The stock market has boomed this year, and one big reason is a company without much name recognition — unless you’re a hard core video gamer. Nvidia (NVDA) has surged 222% this year, including a 3% bump Thursday following super impressive earnings. But Nvidia is by far the most sought-after AI stock. Revenue went from $6.7 billion in the second quarter last year to $13.5 billion this year. The results were even stronger than the $11.2 billion in revenue that Wall Street analysts expected.

Persons: it’s, Jacob Bourne, Raj Joshi Organizations: New, New York CNN, Nvidia, Meta, Nasdaq, Revenue, Wall, Federal Reserve, ”, Intelligence, Moody’s Investors Service Locations: New York, Santa Clara , California

☆ Macy’s sounds the alarm on credit card delinquencies
▼ + stars: | 2023-08-23 | by ( Matt Egan | ) edition.cnn.com time to read: +2 min

This situation is hurting Macy’s business, driving down credit card revenue by 36% year over year and contributing to a quarterly loss, he said. Citing worsening consumer leverage metrics, Macy’s is bracing for a further increase in “bad debt” in its credit card portfolio. “I think the credit card revenue is an indication of some of the pressures that we’re actually seeing on the consumer,” Mitchell said. Consumer credit card debt topped $1 trillion during the second quarter for the first time on record, according to the New York Federal Reserve. More concerningly, new credit card and auto loan delinquencies have now surpassed pre-Covid levels, according to Moody’s Investors Service.

Persons: New York CNN —, ” Adrian Mitchell, Macy’s, ” Mitchell, ” Macy’s, Locker Organizations: New, New York CNN, Citibank, Consumer, New York Federal Reserve, Moody’s Investors Service, Credit Locations: New York, Wells

☆ What's gone wrong with China's economy
▼ + stars: | 2023-08-21 | by ( Laura He | ) edition.cnn.com time to read: +8 min

It’s a far cry from global financial meltdown of 2008, when China launched the largest stimulus package in the world and was the first major economy to emerge from the crisis. It’s also a reversal from the early days of the pandemic, when China was the only major developed economy to dodge a recession. Property woesChina’s economy has been in doldrums since April, when momentum from a strong start to the year faded. While Evergrade is still undergoing a debt restructuring, troubles at Country Garden raised fresh concerns about the Chinese economy. Beijing has so far unveiled a steady incremental drip of measures to boost the economy, including interest rate cuts and other moves to help the property market and consumer businesses.

Persons: rekindling, Ying Tang, Morgan Stanley, Xi Jinping, It’s, what’s, Evergrande, Evergrade, ”, Julian Evans, Pritchard, Evans Organizations: Hong Kong CNN, UBS, Nomura, Barclays, Garden, Zhongrong Trust, CNN, Capital Economics, “, People’s Bank of China, National Health Commission, Moody’s Investors Service Locations: Hong Kong, China, Shanghai, It’s, doldrums, Beijing, United States, Europe

☆ Gabon Joins Blue Bond Wave With $500 Million Debt Refinancing
▼ + stars: | 2023-08-15 | by ( Will Horner | ) www.wsj.com time to read: +6 min

Gabon completed mainland Africa’s first-ever “debt-for-nature swap” Tuesday, refinancing $500 million of its debt and earmarking $163 million in savings for marine conservation, the latest in a burgeoning list of “blue bond” deals. In their place, Gabon issued a $500 million blue bond which matures in 2038. The coupon on the new blue bond was priced at 6.097%, lower than the coupons on the repaid bonds which were between 6.625%-7%. TNC says its blue bond deals have provided $400 million toward conservation efforts. Bank of America, which served as sole initial purchaser, structuring agent and bookrunner on the Gabon deal, declined to reveal its transaction fees.

Persons: Gabon’s, Bond, ”, Ali Bongo Ondimba, TNC wasn’t, Scott Nathan, TNC, Will Horner Organizations: —, Sustainable Business, Moody’s Investors Service, U.S . International Development Finance Corporation, Conservancy, Greenpeace, Bank of America Locations: Gabon, Africa, U.S, Belize, Seychelles, Barbados, Ecuador, Galápagos, william.horner

☆ China's Country Garden stock plummets to record low, trading of onshore bonds suspended amid debt restructuring talks
▼ + stars: | 2023-08-14 | by ( Laura He | ) edition.cnn.com time to read: +4 min

The Shanghai Country Garden Center pictured on August 9. Country Garden acknowledged last Thursday that it was facing a temporary “liquidity pressure” due to deteriorating sales and a difficult refinancing environment. Troubled giantCountry Garden is the latest major Chinese developer to run into trouble as the country’s property industry grapples with a historic downturn. The crisis at Country Garden is likely to spill over to the property industry and financial markets, analysts from Moody’s Investors Service said Friday. So far, Country Garden hasn’t yet defaulted on any debt.

Persons: hasn’t, CICC, Aly Song, “, ” Organizations: Hong Kong CNN, Garden, CNN, Shanghai Country Garden, Reuters, Country Garden, Longfor, China Resources, ., . China Overseas Land, Investment, Evergrande, Moody’s Investors Locations: Hong Kong, Shanghai, China, . China

☆ The rate of Americans failing to pay credit cards and car loans climbs above pre-Covid levels
▼ + stars: | 2023-08-10 | by ( Matt Egan | ) edition.cnn.com time to read: +2 min

New credit card and auto loan delinquencies have now surpassed pre-Covid levels, according to a Wednesday report issued by Moody’s Investors Service. This metric is now ahead of where it was in the second quarter of 2019, before the Covid-19 pandemic rocked the economy. The rate of new auto loan delinquencies is also on the rise, hitting 7.3% in the second quarter, compared with 6.9% in the first quarter. Auto loan and credit card delinquencies remain well below Great Recession levels. The good news from the Moody’s report is that fewer Americans are falling behind on their mortgage payments.

Persons: New York CNN —, That’s, Moody’s Organizations: New, New York CNN, Moody’s Investors Service, New York Federal Reserve, Auto Locations: New York

☆ AI is being held up by a shortage of powerful chips
▼ + stars: | 2023-08-06 | by ( Brian Fung | ) edition.cnn.com time to read: +6 min

CNN —The crushing demand for AI has also revealed the limits of the global supply chain for powerful chips used to develop and field AI models. The latest sign of a potentially extended shortage in AI chips came in Microsoft’s annual report recently. In its May earnings call, Nvidia said it had “procured substantially higher supply for the second half of the year” to meet the rising demand for AI chips. AMD, meanwhile, said Tuesday it expects to unveil its answer to Nvidia’s AI GPUs closer to the end of the year. The chip shortage is expected to ease as more manufacturing comes online and as competitors to Nvidia also expand their offerings.

Persons: Microsoft’s, Sam Altman, Samuel Altman, OpenAI, Win McNamee, ” Altman, Raj Joshi, could’ve, ” Joshi, “, Joshi, ”, Lisa Su, we’ve, Sid Sheth, Biden, can’t, ” Sheth, Sheth Organizations: CNN, Microsoft, Privacy, Technology, Moody’s Investors Service, Nvidia, Intel, AMD Locations: Microsoft’s, Washington ,

CNN —There may not be any lasting major negative ramifications from the surprise US credit rating downgrade by Fitch this week — not for the economy, not for consumers and not for the government’s ability to borrow. Normally, when your credit score as a consumer falls — or your credit rating as a country — there are negative consequences. Here’s why the United States is unlikely to see that kind of impact from the Fitch downgrade. The downgrade wasn’t a huge dropFitch cut its US credit rating to AA+ from what had been a sterling AAA rating. “Fitch’s credit rating is an expression of the probability of a default.

Persons: You’re, Fitch, “, brinkmanship, Marc Goldwein, you’re, ”, Mark Zandi, Yellen, Jamie Dutta, Dutta, ” George Mateyo, ” Mateyo, ” José Torres, Torres, it’s, ” Torres, Uncle Sam, CRFB, – CNN’s Krystal Hur, Allison Morrow Organizations: CNN, Fitch, AAA, Committee, U.S . Treasury, Moody’s, AA, “, Vantage, Key Private Bank, Federal Reserve, Interactive Brokers, Moody’s Investors Service, Treasury, Congressional, Social Security Locations: United States, States, corporates, United

☆ Fitch downgrades US long-term credit rating to AA+ from AAA
▼ + stars: | 2023-08-01 | by ( Elisabeth Buchwald | ) edition.cnn.com time to read: +4 min

“I strongly disagree with Fitch Ratings’ decision,” said Treasury Secretary Janet Yellen in a statement on Tuesday. The last time the US debt was downgraded by another major credit rating agency, S&P, came in 2011. Until 2011, US debt had carried a perfect credit rating since Moody’s Investors Service first assigned the United States a AAA rating in 1917. The country’s new Fitch rating puts it on par with Austria and Finland but below Switzerland and Germany. S&P has maintained its AA+ rating on the US after the 2011 downgrade while Moody’s has kept its AAA rating.

Persons: CNN — Fitch, “, Fitch, ” Fitch, Biden, ”, Janet Yellen, Karine Jean, Pierre, —, Chuck Schumer, Spokespeople, Kevin McCarthy, Moody’s, Larry Summers Organizations: CNN, AAA, Biden, Fitch, AA, Republican, Republicans, Moody’s Investors Service, Dow Jones, Nasdaq, Twitter Locations: United States, Austria, Finland, Switzerland, Germany

☆ Moody’s warns Israel faces ‘significant risk’ of political and social tensions that will harm its economy, security
▼ + stars: | 2023-07-25 | by ( Matt Egan | ) edition.cnn.com time to read: +3 min

New York CNN —The controversial overhaul of Israel’s judicial system risks plunging the country into further turmoil that will hurt its economy and security, Moody’s Investors Service warned on Tuesday. “There is a significant risk that political and social tensions over the issue will continue, with negative consequences for Israel’s economy and security situation,” the credit ratings firm wrote in a report. “Although domestic and geopolitical tensions have traditionally not had a major or lasting impact on Israel’s economy, a serious escalation of tensions with the Palestinians could endanger improved relations” between Israel and regional powers, Moody’s said. In response to the Moody’s report, Israeli Prime Minister Benjamin Netanyahu issued a statement defending the resilience of the country’s economy. “This is a momentary reaction, when the dust settles it will become clear that Israel’s economy is very strong,” Netanyahu and Finance Minister Bezalel Smotrich said in a joint statement.

Persons: Moody’s, ”, “, ” Moody’s, Benjamin Netanyahu, ” Netanyahu, Bezalel Smotrich Organizations: New, New York CNN, Moody’s Investors, Tel, Finance, Nasdaq Locations: New York, Tel Aviv, Israel

☆ AT&T, Verizon stocks pare back losses after hitting decades lows on toxic lead cable investigation
▼ + stars: | 2023-07-18 | by ( Krystal Hur | ) edition.cnn.com time to read: +3 min

That prompted a flurry of downgrades from analysts that in turn helped spur a steep sell-off in telecom stocks. Since the investigation’s publication, AT&T shares have tumbled roughly 14%, Verizon fell 10% and Frontier Communications slid 33%. AT&T shares on Tuesday fell to $13.45, its lowest closing price since 1993. Verizon shares fell 7.5% to $31.46 on Monday to their lowest closing level since 2010 before paring back their losses slightly on Tuesday. Lawmakers have demanded action to further investigate the network of toxic lead cables in the wake of the release.

Persons: JPMorgan Chase, Edward Jones, David Heger, paring, Akin, ” Neil Mack, Democratic Sen, Edward Markey, Jonathan Spalter, ” Markey, USTelecom Organizations: CNN —, Verizon, AT, Bell, Frontier Communications, JPMorgan, CNN, Moody’s Investors Service, Lawmakers, Democratic Locations: United States, U.S

☆ American companies are draining their cash at the dumbest possible time
▼ + stars: | 2023-06-28 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +7 min

New York CNN —Companies are sitting on a lot less cash than they were last year, largely because they’re spending it on share buybacks and corporate dividends. What’s happening: A new report from Moody’s Investors Service finds that nonfinancial companies’ corporate cash declined 12% last year to $2 trillion. But debt was flat year over year, meaning that companies didn’t use much of their cash reserves to pay down outstanding loans. Now that it’s more expensive to borrow, companies in the US should reconsider the amount of money they’re spending on buybacks, he added. Preventing companies from repurchasing their own shares, they argue, would free corporate cash to invest in growth and raise wages instead.

Persons: Emile El Nems, ”, Ben Lofthouse, Janus Henderson, ” El Nems, Joe Biden, buybacks, “, Brian Moynihan, Moynihan, CNN’s Poppy Harlow, Nathaniel Meyersohn, That’s Organizations: CNN Business, Bell, New York CNN — Companies, Moody’s Investors Service, Moody’s, Federal Reserve, Bank of America, Corporations, ”, CNN, Commerce Department, UBS Locations: New York, buybacks

☆ Fed Chair Powell is heading to Capitol Hill. Here’s what to expect
▼ + stars: | 2023-06-21 | by ( Bryan Mena | ) edition.cnn.com time to read: +4 min

Washington, DC CNN —Federal Reserve Chair Jerome Powell testifies before congressional lawmakers this week, starting Wednesday morning with the House Financial Services Committee — just one week after the central bank paused its most aggressive rate-hiking campaign in decades. Indeed, just days after the decision, two Fed officials called for more increases, citing persistent inflationary pressures. Powell will try to quell Democrats’ concerns over the Fed inducing more job losses than necessary and reassure Republicans that the central bank remains committed to fighting inflation. Financial markets see a roughly 77% chance the Fed will hike rates by another quarter point in July, according to the CME FedWatch Tool. The Fed has already published Powell’s semiannual report to Congress, which includes mostly what Powell and the post-meeting statement communicated earlier this month.

Persons: Jerome Powell, “ Powell’s, ”, José Torres, “ Powell, Christopher Waller, Thomas Barkin, Biden, Brendan Boyle, Powell, Mike Pence, Madhavi Bokil Organizations: DC CNN — Federal, House Financial, Fed, Interactive Brokers, Richmond Fed, ”, Pennsylvania Democrat, Republicans, US, Moody’s Investors, Moody’s Investors Service Locations: Washington, Pennsylvania

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