Lloyds Bank CEO António Horta-Osório to step down in 2021 By Reuters


© Reuters. Antonio Horta-Osorio CEO of Lloyds Banking Group leaves Downing Street in London

(Reuters) – Lloyds Banking Group (L:) Chief Executive António Horta-Osório will step down next year after spending a decade at the helm, the lender said on Monday as it appointed industry veteran Robin Budenberg as its new chairman.

Horta-Osório said he would step down from Britain’s biggest domestic bank by June of next year and was leaving with “mixed emotions”.

After joining in 2011, Horta-Osório led the turnaround at the bank in the aftermath of its government rescue in the 2007-09 financial crisis, with the lender returning fully to private hands in 2017.

Budenberg built his career in investment banking at SG Warburg and UBS, including advising the government on its bailout of British banks including Lloyds in the crisis.

He later led the government’s UK Financial Investments and was a chairman of property developer The Crown Estate.

Budenberg will join the Lloyds board on Oct. 1 and take over as chairman in early 2021.

Horta-Osorio said: “I have been honoured to play my part in the transformation of large parts of our business. I know that when I leave the group next year, it has the strategic, operational and management strength to build further on its leading market position”.

(This story corrects spelling of Budenberg in second and third reference.)

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





Original source link

To avoid a step backwards this summer, Congress must renew enhanced unemployment benefits


The early indicators from the reopening of the U.S. economy are showing positive signs of recovery, but this momentum may be short-lived if the government doesn’t take measures to counter a potential economic dip this summer. If the goal is to facilitate a smoother transition back to work, the government will have to consider extending enhanced unemployment benefits past the current deadline on July 31, if the state of the labor market warrants it.

Economic data from May has been greeted with optimism in the market and across the economy. Unemployment is down. Housing starts are up. Retail sales and consumer sentiment are improving.

The aforementioned figures are good signs, but they belie the likelihood of a longer U-shaped recovery, rather than the brisk V-shaped recovery many had hoped for.

Also read:The extra $600 Americans get in weekly unemployment benefits ends next month — how lawmakers are proposing to replace it

This means there is still ample uncertainty in the short term. May and June will probably register some more positive numbers, but we must pay special attention to August when the current $600 a week in federal extended unemployment benefits is set to expire. There are presently about 30 million Americans on continued jobless claims, and if the majority of those have not found stable work before August, this could create a consumer spending shock, as many rely on the extended benefits to maintain current spending levels.

As we near July 31, a close eye will be on how far the jobless claims fall, and if they do not fall fast enough that would put pressure on the federal government to intervene with extended benefits and corporate incentives.

Related:After months of ‘heartbreaking’ demand, food banks say they’re bracing for August when unemployed Americans stop getting the extra $600

The most recent employment report from the U.S. Bureau of Labor Statistics exceeded expectations, with unemployment dropping to 13.3%, but this figure paints an incomplete picture. The pandemic caused a precipitous job loss, which begs the question, what portion of jobs lost were permanent losses? How many of them can be recovered? The truth is, no one knows precisely what the answer to that question is.

Add to that the fact that the federal government issued a historic $2 trillion dollar stimulus for individuals and businesses, a financial injection so outsize that it could serve to obscure the current economic picture, delaying some consequences caused by the pandemic and its attendant economic shutdown. The trajectory of PPP loan disbursement has been extended, but the eventual cessation of those benefits, and the anticipation of such, could give some businesses pause to rehire. When those workers attempt to re-enter the workforce, what will the result be? Will they be rehired, and if so, will they be hired at equal or limited utilization?

The pandemic has likely caused a disruption to the U.S. economy so large that a gap in the jobs market will remain for the foreseeable future.

Follow the recovery from the coronavirus with MarketWatch’s data tracker,

Consider how drastically businesses have pivoted, restructuring their operations to cope with the new pressures and cater to changing consumer behaviors. Many of these pivots will linger, and have a trickle-down effect on the configuration of the American workforce. There may be less demand for workers at movie theaters but more demand for grocery delivery drivers, for example.

Also read:White House ‘very seriously considering’ another stimulus bill — here’s how the CARES Act has reduced poverty rates

Pandemic aside, labor markets have historically taken years to recover from severe economic events such as this one. It’s fair to say that a persistent disruption to the labor market has been caused. How acute and prolonged that disruption will be remains to be seen.

How, then, might the government respond if workers struggle to re-enter the labor market? The federal government must closely monitor the situation, but only extending unemployment benefits, of course, is not a long-term solution.

Extending unemployment benefits might be necessary to stave off a sharp dip in the economy but the primary focus will need to be on how to create opportunities for citizens to reallocate their labor to different fields and industries that are better poised for growth in a post-pandemic economy. . It may be necessary for the federal government to incentivize companies to train workers who are ill-prepared for this new environment. It may take new ambitious approaches to contend with the unique pressures exerted by the coronavirus.

Thoughtful public-private partnerships to promote skills training are likely to be better antidotes than simply extending unemployment benefits indefinitely.

The U.S. economy has improved, but these initial figures could be misleading and should be taken with a grain of salt. A recovery could very well be underway, one whose momentum would surely gather steam in 2021, but even as we proceed with cautious optimism, parts of the economy hang perilously tied to temporary stimulus, and both the government and businesses need to stay keenly aware of these risks to the recovery over the next few months.



Original source link

Peggy Noonan says Trump ‘cannot’ lead in a crisis — and calls on Biden to step up



‘[Trump] hasn’t been equal to the multiple crises. Good news or bad, he rarely makes any situation better. And everyone kind of knows.’

That was The Wall Street Journal’s conservative columnist Peggy Noonan, writing about President Trump’s challenging week — not to mention the multiple crises including the pandemic, the economy and the protests that have shaken the nation to its core this year.

The Pulitzer Prize–winning author and a former speech writer for President Ronald Reagan outlined the recent setbacks the 45th commander-in-chief in her Thursday column titled “The Week It Went South for Trump,” Those issues, she writes, include the low turnout at his rally in Tulsa, Okla., and presumptive Democratic presidential nominee Joe Biden pulling well ahead of him in the polls.

Key Words:Grassley wants Trump to hear what the Wall Street Journal editorial board has to say

A Siena College/New York Times poll published on Wednesday found Biden pulling ahead of Trump 50% to 36%. This comes a week after a Fox News poll that had Biden leading 50% to 38%.

The writer concludes her column by imploring Biden to step up and prove his leadership chops. “We had wondered if Mr. Trump can lead in a crisis. He cannot,” she wrote. “Can Mr. Biden?

Her column was trending on Twitter
TWTR,
-7.39%

on Friday, sparking chatter on both sides of the aisle, as well as drawing criticism.

This spurred plenty of heated reactions online, including supporters sharing choice quotes. “He’s done. Peggy Noonan nailed it,” tweeted one self-identified “Never Trumper.”

Still others, like former CNN anchor Soledad O’Brien, questioned Noonan’s knowledge of Trump’s base, and suggested that she was glossing over the racism running through the president’s fans that approve of moves such as calling COVID-19 “Kung flu” or “the China virus.”

And other critics reminded Noonan that she slammed 2016 presidential candidate Hillary Clinton for “divisive and embittering language” over the “deplorables” remark, yet the author has taken a similar tone in this column.

“Funny, parts of your column seem lifted,” wrote a woman tweeting under the name Samantha Sanderson. “I remember when Hillary said it so much better than you did and you criticized her for it.”

Read the Noonan column in full at WSJ.com.





Original source link

Hong Kong activist investor David Webb to step back for health reasons By Reuters


© Reuters. Activist shareholder David Webb poses in Hong Kong

By Alun John

HONG KONG (Reuters) – Hong Kong activist investor David Webb has said he will step back from posting his widely read critiques of companies and the city’s government after being diagnosed with prostate cancer.

Webb, a former investment banker, has since 1998 published influential opinion pieces covering economic and corporate governance, finance, regulatory and political issues in Hong Kong on “Webb-site.com.”

His pieces are read widely by regulators, investors, bankers and lawyers in Hong Kong.

In 2017, he mapped a complex web of cross-shareholdings between Hong Kong-listed companies in a report entitled “The Enigma Network: 50 stocks not to own”.

Just months later, 40 of the stocks were at the heart of a market crash which erased $6 billion in market capitalisation from Hong Kong’s junior board.

In Monday’s post, Webb said that his life expectancy had been reduced, and that he needed to reprioritise after the diagnosis.

“I will have to be more economical with my time, but I will continue to write and speak out on the big issues where I feel it can make a difference, so don’t count me out yet,” he said.

Webb has sent more than 1,000 letters to bourse operator Hong Kong Exchanges & Clearing Ltd (HK:) and the city’s markets watchdog, the Securities and Futures Commission, on topics from company disclosure lapses to trading rules, he estimated in a 2019 interview with Bloomberg.

Webb has also recently proposed changes to the ways Hong Kong lawmakers are elected by “functional constituencies” representing narrow special interest, typically commercial, groups.

For 10 years he published a widely-read “Christmas Pick”, recommending one stock with good corporate governance, but stopped in 2009 saying that while the stocks had outperformed Hong Kong’s benchmark Hang Seng Index () by 552.8% over the period, it had become a distraction to his “main goal of raising the standards of Hong Kong’s corporate and economic governance”.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





Original source link

Europe’s stock-market rally is leaving the U.S. behind as ECB and governments step up, analysts say


The tide may finally be turning for European stocks, thanks in part to the aggressive tactics of the European Central Bank and long-awaited follow-through on the fiscal side of the equation from eurozone governments, analysts say.

European equities have significantly underperformed their U.S. counterparts, including long-suffering small caps, over much of the past five years, defying repeated calls for a change in fortune. Europe’s stocks, however, could soon fulfil their promise as the ECB continues to hold down government bond yields and as European governments coalesce around plans for a fiscal boost, wrote analysts at Pavilion Global Markets, a Montreal-based macro research firm, in a Wednesday note.

“The choice between taking near-certain losses on negative-yielding debt or the attractive risk premiums on European stocks doesn’t seem to be much of a choice,” they wrote. “Investors are rotating out of bunds and into stocks.”

European equities have continued to outperform this week, with the pan-European Stoxx 600 Europe index
SXXP,
+2.54%

up 5.3% through Wednesday in euro terms and around 6.4% in dollar terms, versus a rise of 2.6% for the S&P 500
SPX,
+1.36%
.

The yield on Germany’s 10-year government bond
TMBMKDE-10Y,
-0.351%

, known as the bund, stood at -0.356% on Wednesday.

But it isn’t just about investors dumping negative-yielding European government bonds. Yields, while still negative, have lifted off of earlier lows in part due to a more optimistic economic outlook, the analysts noted. Instead, in a world “where central bank largesse seems certain, even if the strike price on their equity/credit puts is not, investors have little choice but to move into riskier assets,” they said.

Jens Nordvig, founder of Exante Data, noted via Twitter, that the outperformance since May 23, when German Chancellor Angela Merkel and French President Emmanuel Macron announced an agreement on a proposed €500 billion ($561.8 billion) European recovery fund — a plan that was upsized by the European Commission into a €750 billion proposal — “is starting to add up.”

Negotiations lie ahead on the recovery fund, but the move toward action on the fiscal side, led by Germany, marks an important shift. With fiscal policy makers finally responding to pleas for action, analysts expect the ECB on Thursday to take further steps of its own. In fact, since the recovery fund would mainly be effective in 2021, there remains pressure on the ECB to expand its €750 billion Pandemic Emergency Purchase Program. Analysts expect that to happen when the Governing Council meets Thursday. If not, markets might be disappointed.

See: The ECB has plenty of capacity in its pandemic program — markets will be disappointed if it doesn’t act on Thursday

Meanwhile, the Pavilion analysts argued that the equity risk premium — in this case measured as the expected earnings yield (the inverse of the price/earnings ratio) minus the risk-free rate (the yield on the 10-year Treasury note for U.S. stocks, the bund for European stocks) — favors European stocks over U.S. equities, particularly small caps, as measured by the Russell 2000
RUT,
+2.38%

, which has enjoyed a resurgence of its own in recent sessions.

While Europe has plenty of problems, there’s a relative-value opportunity in going long European stocks and short U.S. small caps, they said.

See:Small caps have led since April, but could be headed for a ‘summer setback,’ analyst warns

The Russell is up 4.4% in the week to date. But the Pavilion analysts argued that the Russell remains weighed with highly indebted “zombie” companies that are likely to be a drag on performance. Meanwhile, the outlook for “risk sentiment” in Europe appears, for the first time in a long time, more upbeat in Europe than across the Atlantic.

“The U.S is oscillating between social distancing and rioting, while President Trump is upping the rhetoric against China, and facing an election schedule that makes working across the political aisle more difficult,” they said. “In contrast, Europe is emerging from the COVID-19 lockdown, and, oddly, there is growing broad political support for more fiscal spending, which should help put a floor under economic conditions.”



Original source link