Day: September 27, 2023

Russia Wednesday accused the United States and Britain of helping Ukraine carry out an attack last week against the headquarters Russian Black Sea fleet in Russia-occupied Crimea.

Russian Foreign Ministry spokeswoman Maria Zakharova said at a briefing that the attack was “planned in advance using Western intelligence means, NATO satellite assets, and reconnaissance planes.”

Zakharova also said U.S. and British intelligence helped coordinate the missile strike.

While the U.S. and other Western partners have provided military equipment and training to Ukraine, U.S. officials have previously denied playing a direct role in Ukraine’s defense against the Russian invasion.

When Russia accused the United States of being involved in a May drone attack on the Kremlin, White House National Security Council spokesperson John Kirby called the claim “ludicrous.”

A television channel run by Russia’s Defense Ministry broadcast undated video Wednesday showing Adm. Viktor Sokolov, the leader of Russia’s Black Sea fleet, saying the fleet was performing successfully.

It was the second consecutive day in which video of Sokolov appeared on Russian television, following a Ukrainian claim that he was killed in the Crimea missile strike.

Some information for this report was provided by The Associated Press, Agence France-Presse and Reuters.

U.S. stock index futures rebounded on Wednesday as easing Treasury yields boosted megacaps, while investors awaited developments on a U.S. funding bill and inflation data this week to gauge the outlook for the Federal Reserve’s monetary policy.

A pullback in the 10-year Treasury yields provided some relief to megacap growth stocks including Apple (AAPL.O), Microsoft (MSFT.O), Tesla (TSLA.O) and Alphabet (GOOGL.O), up between 0.4% and 0.6%, in premarket trading.

Amazon.com (AMZN.O) edged 0.2% higher after Tuesday’s sell-off following the U.S. Federal Trade Commission’s antitrust lawsuit against the online retailer.

At 7:10 a.m. ET, Dow e-minis were up 92 points, or 0.27%, S&P 500 e-minis were up 15.75 points, or 0.37%, and Nasdaq 100 e-minis were up 51.75 points, or 0.35%.

All the three major stock indexes closed over 1% lower on Tuesday as 10-year Treasury yields held their multi-year highs, with investors wrestling with prospects for a long period of high interest rates and an economic fallout.

“Despite the possibilities of a market recovery as window dressing in the last days of the quarter is likely to occur, the near-term outlook remains weak,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

However, markets are bracing for some more volatility, with policymakers projecting elevated rates until the end of 2024, boosting Treasury yields, which are sensitive to interest rate expectations and seen as risk-free due to government backing.

The S&P 500 (.SPX) and the Nasdaq (.IXIC) are set for their worst monthly showing so far this year, while all the three indexes including the Dow (.DJI) are eyeing their first quarterly decline in 2023.

Meanwhile, data also showed declines in China’s industrial profits were easing on the back of policy support, while the central bank also vowed to bolster economic recovery.

Investors also looked forward to durable good data for August, due at 8:30 a.m. ET, and second-quarter GDP and monthly personal consumption expenditures price index later in the week, with Federal Reserve Chair Jerome Powell’s remarks also on tap.

Traders’ bets on the benchmark rate remaining unchanged in November and December stood around 80% and 64%, respectively, according to CME’s FedWatch tool. Meanwhile, a 25-basis-point rate cut is being priced in as early as March, growing to over 34% in June and July.

On the political front, the U.S. Senate on Tuesday took a step forward on a bipartisan bill to stop a government shutdown on Sunday, while the House sought to push ahead with a Republican-backed measure. The current partisan gridlock has begun to darken Wall Street’s view of U.S. government credit.

Among single stocks, Rivian Automotive (RIVN.O) gained 1.1% on plans to use subscription models for monetizing various features in cars.

Costco (COST.O) dipped 2% even though the wholesale retailer reported better-than-expected fourth-quarter results, with analysts pinning the fall on broader market concerns.

The strike by Hollywood screenwriters ended after their union said its members could return to work on Wednesday while guild members vote to ratify the agreement.

Is the strike over?

Yes, the Writers Guild of America leadership voted to end the strike on Wednesday after nearly five months on picket lines. Guild members will have until Oct. 9 to cast votes for the proposed agreement.

What caused the strike and what were the demands?

Writers began the strike on May 2, demanding higher royalties, mandatory staffing of TV writing rooms and safeguards to their jobs from the use of artificial intelligence.

Another demand was for residual payments when a show becomes a hit. Writers said they have suffered financially during the streaming TV boom in part due to shorter seasons and smaller residual payments.

Details on the new three-year contract suggest that studios have given in to several demands, including pay raises, increased health and pension benefits and AI safeguards.

When will TV shows and movies return?

The strike’s end means daytime and late-night talk shows can return to the air.

Late-night talk shows such as “Jimmy Kimmel Live” and “The Tonight Show with Jimmy Fallon” could be among the first to be back.

But for everything else, it could take longer as the actors and performers’ union is still on strike. Their demands are similar to that of writers, including higher wages and protection against AI use.

The Screen Actors’ Guild (SAG) is considerably larger than the WGA with 160,000 film and television actors, stunt performers and other media professionals.

Analysts said studios will try to move negotiations quickly with the SAG-AFTRA, but it could still take more than a month for an agreement to be ratified.

That means viewers will have wait more for the latest seasons of top shows like Billions, Stranger Things and Abbott Elementary.

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Britain’s first official supervised drug consumption room was approved on Wednesday, seeking to reduce infectious diseases and overdoses in Scotland which suffers from the highest level of drug-related deaths in Europe.

Following similar projects in Europe, Canada and Australia, Glasgow City Council, which runs the largest city in Scotland, approved plans for the facility that will allow people to legally take illicit drugs under the supervision of trained professionals and will provide them with clean equipment.

While opponents of these facilities say they end up as a magnet for drug abuse, supporters say they reduce overdose deaths caused by increasingly potent street drugs, decrease public injecting and connect people to treatment services.

Allan Casey, a local politician in Glasgow who is responsible for addiction services, said research shows that no one has ever died from an overdose in a supervised drug consumption room, while it will reduce the problem of public drug use that often means that used syringes are left on the streets or in parks.

“What we have been doing clearly has not been working thus far,” he told Reuters. “We need to move to an approach where this is a public health issue and not a criminal justice one.”

This follows years of disagreement about whether a facility would be legal. The British government, which sets national drug policy in England, Scotland, Wales and Northern Ireland, does not support the plans, but the idea was approved after Scotland’s senior law officer said users would not be prosecuted for possessing drugs while at the facility.

Scotland’s drug deaths remain three times higher on a per capita basis than anywhere else in Europe, despite the country recording its largest fall in fatalities in 2022.

Last year, Scotland had 248 drug deaths per million people aged between 15 and 65, compared with 79 in Finland, the second-worst country in Europe, according to the European Monitoring Centre for Drugs and Drug Addiction.

Scotland has been dealing with a drug crisis for decades and its government wants to take a new approach to helping its residents with drug-addiction issues. However, officials say it has been hindered by Britain’s drug laws.

Scotland announced in July plans to decriminalise the possession of all drugs for personal use but said the British government in London is opposed to those plans.

As long as your Chabad rabbis (your money changers) claim that ziz iz NOT – NOT!!! what happened to the Jews, you can sleep soundly.

 

The chairman of China Evergrande Group (3333.HK) has been placed under police surveillance, Bloomberg News reported on Wednesday, raising more doubts about the embattled developer’s future as it grapples with mounting prospects of liquidation.

Citing people with knowledge of the matter, the report said Hui Ka Yan, who founded Evergrande in 1996 in the southern city of Guangzhou, was taken away by police earlier this month and is being monitored at a designated location.

Evergrande is the world’s most indebted property developer and has been at the centre of an unprecedented liquidity crisis in China’s property sector, which accounts for roughly a quarter of the world’s second-largest economy.

It was not clear why Hui was placed under residential surveillance, Bloomberg News said, adding the move was a type of police action that falls short of formal detention or arrest and does not mean Hui will be charged with a crime.

Reuters could not immediately verify the report. Evergrande, the police department in Guangdong province, whose capital is Guangzhou, and the public security ministry did not immediately respond to requests for comment.

A person close to Evergrande said Hui had stopped contacting staff over the past few days, while an industry source said he had become totally inaccessible. Both of them declined to be identified as they were not authorised to speak to the media.

The reported action against Hui comes after police in southern China said earlier this month that they have detained some staff at Evergrande’s wealth management unit, which raised funds from individual investors by selling investment products.

Once China’s top-selling developer, Evergrande’s financial crisis became public in 2021 and since then it and a string of its peers have defaulted on their offshore debt obligations amid slowing home sales and fewer new avenues for fundraising.

Adding to its woes, Evergrande’s offshore debt restructuring plan, the key to its survival amid a stifling cash crunch, looks set to falter and the prospects of the firm being liquidated are gathering momentum.

The company is “very likely to fail on debt restructuring, and with negative equity Evergrande may go into bankruptcy, which includes bankruptcy reorganisation and bankruptcy liquidation,” UOB Kay Hian wrote in a research note on Wednesday.

As the developer’s already sold but unfinished apartments will pose a risk to “social stability”, there is a good chance that Evergrande will likely seek bankruptcy reorganisation, said the brokerage.

Reuters reported on Tuesday that a major Evergrande offshore creditor group was planning to join a liquidation court petition filed against the developer if it does not submit a new debt revamp plan by the end of October.

That plan comes after the company rattled markets on Sunday with its announcement that it could not issue new bonds as part of its debt restructuring plan because of a regulatory investigation into its main Chinese unit, Hengda Real Estate.

Hengda, in a separate filing on Monday, said that it had failed to pay the principal and interest on a 4 billion yuan ($547 million) bond due by a Sept. 25 deadline.

Shares in Evergrande sank as much as 18% in afternoon trading in Hong Kong on Wednesday, while an index tracking Hong Kong-listed mainland developers (.HSMPI) 0.3% lower.

Evergrande grew rapidly through a land-buying spree backed by loans and by selling apartments quickly at low margins. But with its overall liabilities ballooning to more than $300 billion it came under pressure as the property market weakened.

The structure of Evergrande and the way the business operated under Hui came under scrutiny as the property empire began to unravel amid growing pressure to meet repayment obligations and finish apartment construction.

Investors are also focused on problems at another major Chinese developer, Country Garden (2007.HK), which is facing a new bond coupon repayment deadline on Wednesday.

The $40 million coupon, with a 30-day grace period, is tied to an 8%, $1 billion dollar bond that matures in January and is the latest payment challenge facing Country Garden, as the developer strives to avoid default.

The country’s No.1 private developer, whose financial woes worsened the property sector outlook and prompted Beijing to unveil a raft of support measures in the last few weeks, scrambled to successfully dodge defaults this month.

Offshore creditors widely expect Country Garden to delay the coupon payment due by Wednesday, while making use of the grace period to come up with plans to restructure all of its offshore debt.

A Country Garden spokesperson declined to comment.

“The fall of industry stalwarts in China’s property space has been alarming, to say the least,” said Fiona Kwok, Asian Fixed Income portfolio manager, First Sentier Investors.

“Until Chinese regulators come through with stimulus significant enough to inject optimism into the property market and increase property sales, default risk remains high among private and mixed ownership developers.”

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