US travel companies are hoping the "workcation" could provide a solution to the country's notoriously low rate of employee holiday time. Before the pandemic, US workers typically took just 17.4 vacation days, while nearly half of those with paid time off didn't use all of it, according to Pew Research Center. Workcations allow workers to spend more time away from the office than their allotment of vacation days might otherwise allow, but work inevitably creeps into the leisure time. Despite this, a Deloitte survey found that one in four US travellers planned to work during their vacation.
Market concerns over the debt ceiling standoff in the US are fading amid signs of progress in resolving the issue; analysts say that high inflation is a greater risk to investors than the remote risk of a US default; however, they add that high public debt remains a challenge for the largest economy in the world. US President Joe Biden plans to visit Australia instead of involving himself in addressing the debt crisis. Economists estimate default odds at around 1-10%, with catastrophic implications if it occurs, while markets would freak out, causing US bond yields to rise markedly.
Wall Street’s strong week ran out of steam on Friday as concerns over the US government’s ongoing efforts to avoid a default on its debt mounted. The S&P 500 lost 0.1%, the Dow Jones was down 0.3% while the Nasdaq fell 2%. Despite Friday’s blip, the S&P 500 gained 1.6%, breaking out of a pattern in which the index failed to rise or fall by 1% for six straight weeks. Optimism earlier in the week that Washington could avoid a crippling default helped the market. Concerns rose again on Friday after a leading negotiator for House Speaker Kevin McCarthy suggested the talks aimed at averting a default be paused, causing the S&P 500 to slide from modest midday gains to modest losses. Investors also took comments from Federal Reserve Chair Jerome Powell to suggest his committee may leave interest rates unchanged next month.
Indian stock futures are set for a quiet start today as geopolitical events continue to weigh down global markets. Wall Street fell off last week following an impasse in US debt ceiling negotiations which has caused some analysts to speculate that a default could lead to a spike in interest rates. Meanwhile, India's foreign institutional investors (FIIs) ended their 16-session buying streak on 21 May by selling INR 1.13bn ($13.8m) of shares, though analysts are expecting the Nifty benchmark to consolidate in the 18,050-18,450 range.
Shares in Chinese memory chipmaking-related companies, including gigadevice semiconductors, ingenic semiconductor and shenzhen kaifa technology, have risen by between 3% and 8% after China placed a ban on products made by Micron Technology, citing a failure in network security tests. China's cyberspace regulator confirmed it would bar operators of key infrastructure from purchasing from Micron.
Potentia walks away from offer for Australia's Tyro Payments
Reuters
23-05-22 00:42
Shares in Australian payments company Tyro Payments fell by nearly 20% today after it announced that a buyout proposal had been withdrawn. Private equity firm Potentia Capital had offered A$1.60 per share, valuing the firm at A$875m ($594m), after first offering a price of A$1.27. Despite granting the company due diligence in January, Tyro said both offers undervalued it. Potentia said it had engaged with Tyro over commercial terms.
Shares in Samsung Electronics and SK Hynix rose in morning trading in South Korea following the announcement from China that Micron Technology had failed a security review. China's cyberspace regulator announced on Sunday that products made by Micron had failed its network security review, meaning operators of key infrastructure would be banned from buying the products. China began reviewing Micron's products in March after a series of export controls on chipmaking technology to China were imposed by the US. Neither Samsung Electronics nor SK Hynix commented on the wider market's gains.
China's Cyberspace Administration has banned US semiconductor company Micron in its technology battle with the United States. The state cyber agency claimed that Micron's components posed significant security risks to China's critical information infrastructure supply chain, thereby affecting national security. The US Commerce Department responded by saying that there was no basis in fact for Beijing's claim and that it would continue to try to limit industry disruptions with its allies. Micron has yet to identify the products that have been barred. China has previously blacklisted US technology companies, cut off the flow of processors and barred Americans from helping the Chinese chip industry.
Billionaire investor Carl Icahn has reportedly lost $9bn since the financial crisis due to short positions that relied on market collapse. The failed trades led investor advisory service Hindenburg Research to suggest that Icahn Enterprises was overvalued. Shares in the company fell by 30% as a result of the accusations. Icahn, who was one of the earliest investors to push for activist strategies, has admitted to error, telling reporters that the strategies he previously recommended did not reflect today's circumstances. Hedge funds are also betting against Greek bonds before this weekend's election, while Amundi asset managers is shifting toward Chinese investments in anticipation of a subdued US economy.
China has warned operators of key infrastructure against buying US-based Micron Technology's goods, claiming cybersecurity risks were identified in the products and could affect national security. The move comes amid escalating tensions over semiconductor trade between China and the US, and follows a month-long Chinese investigation into the US's largest memory-chip maker. Shares for Micron's most significant industry rivals, Samsung Electronics and SK Hynix, increased in Seoul, while Chinese chip stocks, including Semiconductor Manufacturing International Corp. and Hua Hong Semiconductor, rose more than 3% in Hong Kong. Analysts suggest the decision will have a small impact on Micron, as most of its memory chips sold in China are used in consumer electronics rather than data centres and cloud computing.
Laurie Cox AO, a founding father of the Australian Securities Exchange (ASX), has died aged 84. Cox became director of the Melbourne Stock Exchange in 1982. He then became the first ever director of the ASX in 1987 when the six independent state-based stock exchanges merged. He was chairman of the ASX from 1989 to 1994. Cox became executive director of Macquarie Group Limited when it listed on the local bourse in 1996. He served 13 years on the board and six years in a senior executive capacity before retiring in 2009. Cox became active in the healthcare space, eventually taking a chance on an experimental nuclear treatment that changed the way metastatic prostate cancer is managed. He founded the Australian Prostate Cancer Research Centre in 2011. Cox was made an officer of the Order of Australia (AO) in 1996 in recognition of service to business and commerce.
Mizuho Financial Group has agreed to acquire US investment bank Greenhill & Co for $15 per share, in a deal worth $550m. The sale will help the Japanese bank expand its financial business in the US. Greenhill went public almost 30 years ago and was a pioneer in the boutique M&A arena. However, shares in the firm have struggled amid stiff competition from larger rivals in recent years. Greenhill will be housed within Mizuho's existing banking division and led by the current head of banking for the Americas, Michal Katz.
Activist investors are submitting record numbers of shareholder proposals for Japanese companies as Tokyo Stock Exchange pushes for better valuations. The number of proposals submitted for this year’s shareholder meetings has risen 60% from last year. Investors including Aya Murakami and Oasis Management’s Seth Fischer say the Tokyo Stock Exchange’s campaign to improve valuations is serving as a tailwind for their own efforts. Bourse operator Japan Exchange Group announced in January that it will urge companies that trade below book value to release plans to boost share pricing. The Topix index, Japan’s benchmark equity index, is at its highest since 1990.
Lauren Sanchez, reported to be engaged to Amazon founder Jeff Bezos, gave her first solo interview since their relationship became public in 2019. The Emmy-award-winning journalist confirmed that keeping their relationship private had required a great adjustment, which she had to think about “all the time”, and that since dating the third-richest man in the world, she had learned to exercise more discretion. The couple have a shared love of flying, working out, flying together and weekly pancake making. Sanchez said that being a mother was her most important job.
Australia's Treasury Wine Estates has warned of challenging market conditions and lower demand for commercial-grade wine due to inflation squeezing demand and increasing packaging costs, particularly in Australia and the UK. Shares in the company fell by almost 8% in response to the news, while the Treasury also announced it was reviewing its supply chain in Australia and considering divesting selected assets. Despite the negative news, the winemaker expects a rise in fiscal 2023 earnings before interest, tax, SGARA and material items to between AUD580m ($393.4m) and AUD590m ($400.2m).
Hong Kong's Hang Seng China Enterprises Index fell by 2.9% as investors sold off shares ahead of a long weekend. The index is on course for its worst week since March, falling more than 18% from this year's high. The weakness in Hong Kong's stocks is primarily due to concerns about the US debt ceiling, said Hayman Chiu, an analyst at Cinda International Holdings. The intensifying selloff of Chinese stocks reflects investors' lack of confidence in the market and comes amid a weaker yuan and persistent fears over growth and geopolitics.
Illumina, the gene-sequencing giant, is set to vote on whether to back the company’s current directors or candidates nominated by the billionaire Carl Icahn. The vote on Thursday is significant because of a number of factors, including a takeover worth $7bn for Grail, a cancer detection company. Icahn has criticized Illumina’s effort to close the acquisition, despite European antitrust authorities’ decision to block the deal, and opposition from the F.T.C. It has even won some support from shareholder advisory firms. The contest alongside the new Universal Proxy, a new S.E.C rule where shareholders can vote for board candidates from different slates, which could reshape American corporate governance. This fight is a major test for big-ticket M.&A on both sides of the Atlantic. Illumina has dismissed the European objection, arguing that Grail has no revenue or operations in Europe. The billionaire is also battling Hindenburg Research, which has argued that Mr. Icahn’s publicly traded investment vehicle is overvalued and funds its dividends by selling new shares.
Most actively traded companies on the Toronto Stock Exchange
The Toronto Star
23-05-25 21:15
Four out of Canada's five big banks posted Q2 earnings that missed expectations as they set aside more money for bad loans and struggled to contain rising costs. However, CIBC was the lone outlier, with results that came in better than analysts had expected. TD posted lower profits, while RBC's profits slid to $3.65bn from $4.25bn a year ago. Meanwhile, Freedom Mobile will offer a C$50 ($41) plan that includes unlimited calls, texts and 40GB of data usable in the US nationwide following its acquisition by Quebecor Inc.’s Videotron.
Latitude Group is forecasting its half-year loss could be up to AUD105m ($79m) following a cyber attack that exposed the personal details of 7.9 million people. The company also explained it was forced to reduce or stop for a time the opening of new accounts and had to shut down its collections area since the GDPR attack. Latitude shares fell by 7%. The company will likely scrap its interim dividend due to the forecast statutory loss.
US auto insurers have been reported to be losing money on underwriting policies, and prices of coverage are rising. As the availability of cars on the market plummets and prices for vehicles rise, used-car insurance costs have increased dramatically. Auto-insurance losses were part of the reason Fitch Ratings downgraded Allstate's credit to BBB from A-, auto-policy underwriting being the insurer's biggest line of business by premiums collected. Allstate also sold $600mn in preferred shares earlier this month with a 7.375-per-cent yield, a relatively wide spread to Treasuries. That suggests management is comfortable at a lower rating. The pressures on auto-insurance profitability have been caused mostly by unexpected severity rather than frequency, which means insurers are paying out on car accident policies less often, but these incidents' average cost efficiency are higher.
Progressive’s biggest first-quarter increases in severity came in the “bodily injury” and “property damage” categories, according to its Q1 10-Q filing. Victims of car wrecks and their lawyers have become more aggressive, and they possibly even made a big push in the first quarter. Wrecks get rarer but worse for no discernible reason. Executives at both Allstate and Progressive have talked at length about raising prices. The metric used to evaluate profitability of auto underwriters shows that Allstate continued to lose money on its auto underwriting in the first quarter, while Progressive just barely eked out a profit.
Auto prices and high demand have played a large part in the long-term trend of higher auto-insurance costs. The Manheim Used-Vehicle Index shows that used-car prices were 8% higher in 2022, on average, than they were the year before, though prices have more or less stabilised since December. Not only are replacements for totaled vehicles pricier, but repairs are also more expensive and included in this figure, as the cost of car parts and services rose last year, according to BLS data.
