US-China trade hopes leave Asian markets mixed - CNN

A spokesman for China's Ministry of Commerce told reporters Thursday afternoon that US and Chinese negotiators have discussed rolling back tariffs, saying the rollbacks could happen even before a "phase one" trade deal is signed.

The comments lifted Wall Street to record highs. But the rally didn't carry over to Asia.

Japan's Nikkei (N225) was up 0.3%, while China's Shanghai Composite (SHCOMP) fell 0.1%. Hong Kong's Hang Seng Index (HSI) fell 0.6% and South Korea's Kospi Index (KOSPI) dipped 0.3%.

China's remarks raised hopes — yet again — that China and the United States are inching toward a resolution to the 18-month-long trade war.

President Donald Trump first announced last month that the countries had reached a "phase one" agreement on trade, though that pact has yet to be finalized. Trump hinted that he and his Chinese counterpart Xi Jinping would sign that preliminary agreement at an economic summit in Chile this month, but the summit was canceled because of an ongoing political crisis and violent protests in the planned host country.

The two sides are now reportedly looking into a new location for a signing ceremony, but the Ministry of Commerce spokesman said there is no news on that at the moment.

India's economic woes, meanwhile, are not going away anytime soon, according to Moody's. The credit rating agency downgraded its outlook for India from "stable" to "negative," saying the government of Prime Minister Narendra Modi needs to urgently pull growth up from its six-year low of 5%.

"Financial stress among rural households, weak job creation, and a credit crunch among non-bank financial institutions have increased the probability of a more entrenched slowdown," Moody's said.

The Indian Finance Ministry responded to the downgrade on Friday, saying recent reforms to boost the economy would spur more investment.

"The fundamentals of the economy remain quite robust," the ministry said in a statement. "India continues to offer strong prospects of growth in the near and medium term."

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https://www.cnn.com/2019/11/07/investing/asian-market-latest/index.html

2019-11-08 06:31:00Z
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Sterling falls after Bank of England split on interest rate cut - CNBC

Bank of England

Justin Tallis | AFP | Getty Images

The Bank of England (BOE) held interest rates steady on Thursday, opting not to adjust borrowing costs in the world's fifth-largest economy ahead of a snap election.

With 35 days to go before Britons head to the ballot box, the BOE's nine-member Monetary Policy Committee (MPC), led by Mark Carney, voted to hold interest rates at 0.75%.

Seven policymakers, including Carney, voted in favor of leaving interest rates unchanged, but Jonathan Haskel and Michael Saunders surprised financial markets by voting for a quarter-point rate cut.

Sterling traded at $1.2808 at around 1:30 p.m. London time, falling over 0.3%.

"With the risk of a no-deal Brexit falling recently, we expect the uncertainty facing households and businesses to fall. We also expect global growth to recover gradually," the BOE said in its Monetary Policy Report.

The central bank suggested these developments would help growth in the U.K., but conceded if that does not happen then it "may need to lower interest rates to support U.K. growth and ensure that we return inflation to our 2% target sustainably."

Saunders and Haskel said their vote for an interest rate cut was driven by reduced job vacancies and downside risks from the global economy and Brexit.

Other members of the MPC suggested a willingness to cut rates over the coming months, if necessary, but did not vote in favor of lower borrowing costs in November because the U.K. economy had performed largely in line with expectations from three months ago.

"This is a clear shift in the Bank's policy balance from the earlier neutral-hawkish position, which will likely set the tone for the Bank's signaling, and likely growing divergence on the MPC, following Governor Carney's departure in early 2020," Lena Komileva, chief economist at G+Economics, said in a research note. 

Brexit uncertainty

Much has changed in British politics since the MPC last voted to leave interest rates unchanged in mid-September.

Prime Minister Boris Johnson ultimately failed to rush his Brexit deal through Parliament, prompting the Conservative Party leader to request a Brexit extension and call a snap vote for December 12.

The EU agreed to push back the Brexit deadline until the end of January, with an earlier departure possible should U.K. lawmakers ratify their divorce deal.

Economists believe the BOE will cut interest rates at some point next year, amid a slowing economy and Brexit uncertainty.

Ahead of the central bank's split vote, market expectations for a quarter-point rate cut by the end of 2020 stood at 55%, according to the CME BOE Watch Tool. Shortly after Thursday's surprise announcement, expectations jumped up to 80%. 

A long-running U.S.-China trade war and a global economic downturn have prompted the Federal Reserve and European Central Bank to cut interest rates in recent months, but, so far, the BOE has resisted following suit.

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https://www.cnbc.com/2019/11/07/bank-of-england-holds-interest-rates-ahead-of-snap-election.html

2019-11-07 12:45:29Z
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Two BOE Members Unexpectedly Vote for Rate Cut as Outlook Sours - Bloomberg

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1. Two BOE Members Unexpectedly Vote for Rate Cut as Outlook Sours  Bloomberg
2. Sterling falls after Bank of England split on interest rate cut  CNBC
3. British Pound Forecast: GBP/USD, EUR/GBP Eye BoE, UK Election  DailyFX
4. Dollar slips as U.S.-China trade talks hit snags, pound eyes BoE  Reuters
5. Bank split on rates as it warns Brexit deal would hit growth  BBC News
6. View full coverage on Google News

https://www.bloomberg.com/news/articles/2019-11-07/two-boe-members-unexpectedly-vote-for-rate-cut-as-outlook-sours

2019-11-07 12:00:00Z
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More than 2 million pounds of chicken products recalled in eight states - CNN

Arkansas-based Simmons Prepared Foods, Inc. recalled the items produced from October 21 through November 4 this year. They are 2,071,397 pounds of poultry products, including ready to cook chicken whole legs, boneless skinless chicken, halal chicken leg quarters and chicken tenderloins, the US Department of Agriculture's Food Safety and Inspection Service said Wednesday.

The products subject to recall have an establishment number "P-1949," "P- 486" or "P-5837" inside the USDA mark of inspection, and were shipped to Alabama, Arizona, Arkansas, California, Georgia, Minnesota, Oklahoma and Pennsylvania.

Those who've purchased the products are urged to throw them away or return them to the store.

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https://www.cnn.com/2019/11/07/health/chicken-products-recall/index.html

2019-11-07 11:50:00Z
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EU cuts growth forecasts for the euro zone on global trade tensions - CNBC

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The EU slashed its growth forecasts for the euro zone Thursday, saying global trade tensions are set to weigh on the region and limit economic expansion.

The warning from the EU's executive arm, the European Commission, comes at time when the European Central Bank (ECB) has started a new round of stimulus to prop up fragile growth.

"The fact that growth is no longer expected to rebound meaningfully in the next two years is a major shift compared to previous forecasts and is based on the assessment that many features of the global slowdown will be persistent," the European Commission said Thursday in its Autumn Economic Forecasts report.

"Most importantly, the surge in trade tensions and record-high uncertainty about trade policies is likely to have inflicted lasting damage to world trade," the Commission added.

Uncertainties surrounding trade include: The future relationship between the U.K. and the EU as both need to establish new trading rules post-Brexit; new consumer preferences in the car industry and volatility in U.S.-China trade.

As a result, the Commission slashed its economic forecasts for the euro zone in 2019 and 2020. The 19-member region is now set to grow at a pace of 1.1% this year and 1.2% in 2020. In its previous forecasts, out in May, the European Commission had estimated a 1.2% growth rate for the euro zone in 2019 and 1.5% for 2020.

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2019-11-07 10:00:41Z
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Alphabet investigates handling of harassment claims - BBC News

Google's parent company Alphabet is investigating how executives handled sexual harassment and misconduct charges.

It follows shareholder lawsuits filed earlier this year over the way Google allegedly dealt with misconduct claims.

The firm's board has formed a "special committee" to consider shareholder claims over past workplace misconduct.

Alphabet is also working with a law firm on the probe, which it launched earlier this year.

The way Google handled the incidents prompted demonstrations by staff and led to thousands walking out of their offices in co-ordinated protests in late 2018.

At that time, Google boss Sundar Pichai apologised for the way it had acted in the past over allegations of inappropriate behaviour and promised improvements.

"In early 2019, Alphabet's board of directors formed a special litigation committee to consider claims made by shareholders in various lawsuits relating to past workplace conduct," a spokesperson for the company said.

In January, it emerged that Alphabet was facing legal action over the way it allegedly handled sexual misconduct claims against two senior managers.

Two lawsuits have been filed by long-term shareholders which accuse the company's board of being involved in attempts to cover up the claims.

Both legal claims want Alphabet to do a better job of uncovering and responding to misconduct.

The legal action is believed to have been prompted by the way that Google handled misconduct allegations made against former Android boss Andy Rubin and former search head Amit Singhal.

Both men are believed to have received large payoffs after being investigated over the claims. Neither now works for Google.

Mr Rubin and Mr Singhal deny the allegations.

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2019-11-07 07:58:29Z
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'I shut my eyes,' SoftBank CEO Masayoshi Son says after losing more than $4.7 billion on WeWork - Business Insider

SoftBank CEO Masayoshi SonKim Kyung-Hoon/Reuters

• SoftBank lost at least $4.7 billion by investing in WeWork after the shared-workspace group's IPO collapsed and its valuation plunged from $47 billion in January to below $10 billion.
• "My own investment judgment was really bad. I regret it in many ways," CEO Masayoshi Son said at a news conference, according to the Wall Street Journal. 
• SoftBank reduced its overall valuation of WeWork to $7.8 billion.
• Watch SoftBank trade live.

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SoftBank lost at least $4.7 billion by investing in WeWork after the shared-workspace group's IPO collapsed and its valuation plunged from $47 billion in January to below $10 billion.

In an earnings filing on Wednesday, the Japanese conglomerate slashed its estimated valuation of the embattled startup to $7.8 billion as of the end of September.

The WeWork writedown fueled an $8.9 billion operating loss at SoftBank's Vision Fund and Delta Fund in the second quarter — a sharp swing from their $3.6 billion profit in the same period last year. The upshot was an overall operating loss of $6.5 billion.

'I regret it'

SoftBank CEO Masayoshi Son shouldered the blame for the weak results, according to the Wall Street Journal. "My own investment judgment was really bad. I regret it in many ways," he said at a news conference.

Son also admitted to overlooking the controversial behavior of WeWork cofounder and former CEO Adam Neumann, who leased properties to his company, charged it nearly $6 million for the "We" trademark, and raised $700 million by selling and borrowing against company stock.

"I shut my eyes to a lot of his negative aspects," Son said, according to the Journal.

SoftBank agreed a $9.5 billion rescue package with WeWork last month in exchange for an 80% stake in the ailing business. The deal includes $1.5 billion in warrants, up to $3 billion in stock purchases, and $5 billion in debt financing. The company didn't assess the financial impact of the funding agreement in its latest earnings.

SoftBank has invested a total of $10.3 billion in WeWork, comprising $6 billion from a wholly owned subsidiary and $4.3 billion from its Vision Fund. It cut the estimated value of the subsidiary's stake by $4.7 billion to $1.3 billion, and more than halved the value of the Vision Fund's investment to $2.1 billion.

Son told colleagues "we created a monster" in WeWork by investing billions only to end up bailing it out, the Financial Times reported.

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2019-11-06 12:18:41Z
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