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Sigma Designs, Inc.
Microsoft announced its latest Windows 10 preview build today, and, while that is a pretty routine affair these days, the company also used today's announcement to launch the beta version of a new news consumption experience that anybody on a Windows 10 device can try out today. The Microsoft News Bar aggregates news from the 4,500 publishers in the Microsoft News network and then displays those as a semi-persistent bar on any side of your screen. Windows 10 has long featured the Microsoft News app, which is more of a full-featured news reading experience (though I admit I always forget it even exists).
(Bloomberg) -- Anthony Fauci, the top U.S. infectious-disease expert, said the final death toll from the virus may be lower than earlier estimated. As fatalities now slow in parts of Europe, they are still accelerating in the U.S., which is on track to overtake Italy.Stocks rallied after the Federal Reserve took steps to provide as much as $2.3 trillion in additional aid, even as Americans applied for jobless benefits in huge numbers again. Morgan Stanley Chief Executive Officer James Gorman said he had coronavirus and has recovered.Spain reported fewer virus-related deaths and is poised to extend a nationwide lockdown. Curbs are also likely to remain in Britain, where Prime Minister Boris Johnson continues to improve in intensive care. Tighter measures in Germany probably won’t be necessary, Chancellor Angela Merkel said.Key Developments:Global cases top 1.5 million; deaths pass 89,900: Johns HopkinsSpain, Italy to extend lockdowns amid persistent rise in casesCostly CT scans filling virus testing void for U.S. doctorsUBS, Credit Suisse will split payouts for 2019 into two installmentsSouth Korea’s CDC says virus may “reactivate” in cured patientsAfrica Has Chance to Contain Outbreak: WHO (10:40 a.m. NY)Much of the African continent still has a chance to contain the coronavirus pandemic, the World Health Organization said at its weekly Africa briefing. While a few African countries are experiencing a rapid increase in local transmissions, more than 30 nations can still prevent a larger outbreak by testing, contact tracing and isolating patients, the WHO said. Merkel Says Tighter Measures Likely Unnecessary (9:56 a.m. NY)Tighter measures to contain the coronavirus in Germany probably won’t be necessary as the slowing spread of the disease gives grounds for “cautious hope,” Merkel told reporters in Berlin on Thursday after a cabinet meeting.GE Sees Cash Flow Keeping Pace Despite Hit to Earnings (9:28 a.m. NY)General Electric Co. said its first-quarter cash flow will be in line with expectations even as the outbreak brings profit “materially below” its prior projection. GE withdrew its forecast for the full year.Canada’s Curve May Be Flattening (9:17 a.m. NY)Three weeks after the governments of Canada’s three most populous provinces told their 28.4 million residents to stay home, the measures appear to be working. The provinces, which have three-quarters of Canada’s people, have recorded just 1.2 deaths from Covid-19 per 100,000 residents. That compares with 32 for New York, 10 for Michigan and 6 for Washington.Canada’s coronavirus case count has been increasing slower than most countries, said Theresa Tam, the nation’s chief public health officer. The number doubles every three to five days. The government expects between 22,580 to 31,850 cases by April 16, which could mean 500 to 700 total deaths, Tam said.Morgan Stanley’s CEO Says He Had Virus, Now Recovered (9:10 a.m. NY)Gorman told staff he contracted coronavirus and has since recovered. He had flu-like symptoms last month and tested positive, he said in a message to the bank’s employees. Gorman was never hospitalized, self-isolated in his home and has been cleared by his doctor.Fed Announces Plan for Muni, Business Aid; Jobless Claims (8:43 a.m. NY)The steps announced include starting programs to aid small and mid-sized businesses, as well as state and local governments.A total of 6.61 million Americans filed jobless claims in the week ended April 4, according to Labor Department figures released Thursday. That exceeded a median forecast of 5.5 million.Deaths in Sweden Increase Amid Relatively Relaxed Stance (8:41 a.m. NY)Sweden reported 106 more virus-related deaths on Thursday, taking the total to 793, on par with the daily gains reported in the past week. The Nordic country is under scrutiny as it continues to experiment with a laxer policy response compared with the rest of Europe. Restaurants, shopping centers and primary schools all remain open in Scandinavia’s biggest economy. Deaths in Sweden continue to outpace its Nordic neighbors, which implemented stricter measures to curb the spread early on, and are now discussing how to lift them.U.S. Virus Fatalities Looking More Like 60,000, Fauci Says (8:10 a.m. NY)“I believe we are going to see a downturn” and projections look “more like the 60,000 than the 100,000 to 200,000,” National Institutes of Allergy and Infectious Diseases chief Anthony Fauci said in response to an NBC interview question about virus fatality models. Fauci said he thinks the U.S. is starting to see a flattening of the curve in New York. “I don’t want to jump the gun on that but I think that is the case,” he said.Pfizer to Develop Vaccine by Year-End (8 a.m. NY)Pfizer and BioNTech said they will jointly develop a vaccine for Covid-19, potentially supplying millions of doses by the end of 2020. The two companies plan to jointly conduct the first clinical trials as early as the end of April, assuming regulatory clearance. Clinical trials for the vaccine candidates will initially be in the U.S. and Europe across multiple sites.Earlier, IBio jumped 25% in pre-market trading after reaching an agreement with the Infectious Disease Research Institute to support development of a vaccine for Covid-19. And Biohaven Pharmaceutical Holding got an FDA “may proceed” letter to begin a Phase 2 trial of intranasal vazegepant to treat lung inflammation after COVID-19 infection.U.K. PM Johnson Continues to Improve (7:58 a.m. NY)“The prime minister had a good night and continues to improve in intensive care in St Thomas’ Hospital,” Boris Johnson’s spokesman James Slack told reporters. Johnson is “receiving standard oxygen treatment,” Slack said. U.K. officials are drawing up plans to extend the lockdown and Foreign Secretary Dominic Raab will chair a meeting of the government’s emergency committee at 3:30 p.m.World Hunger Could Double (7:56 a.m. NY)The number of people going hungry around the world could double in just a few months as the pandemic wreaks havoc on food supplies and hurts incomes, according to a group of major food companies, industry bodies and academics. The number of those suffering from chronic hunger may surge from about 800 million.Charity group Oxfam had earlier warned the economic hit from coronavirus threatens to put more than half a billion people into poverty unless countries take action to cushion the blow.Netherlands Reports Slowest Hospital Intake (7:50 a.m. NY)The Netherlands recorded 237 new hospital intakes, a 3% increase and marking the lowest daily gain since the outbreak began. Confirmed cases rose 6% to 21,762, while fatalities advanced 7% to a total of 2,396.London Delays Pollution Controls for Trucks (7:40 a.m. NY)London delayed the start of stricter pollution controls for trucks in the capital, because the pandemic has put too much pressure on supply chains. New minimum standards for freight are due to come into force in October with fines of as much as 550 pounds ($683) per day. Enforcement will be delayed for at least four months, Transport for London said. It’s already suspended other pollution and congestion charges for cars and van, to ensure deliveries can take place and for key workers to travel.Irish Unemployment Soars (7:20 a.m. NY)Irish unemployment may have risen to its highest level since 1988, in the latest sign of the impact of the coronavirus on the economy. Unemployment rose to 16.5% last month if it is adjusted to include people receiving government support because of the coronavirus crisis, the Central Statistics Office said in a statement. The adjusted rate “should be considered as the upper bound for the true rate of unemployment,” it said.U.S. Poised to Pass Italy With Deadliest Outbreak (7:07 a.m. NY)The U.S. is on track for a grim milestone in the coming days -- passing Italy as the world’s epicenter of Covid-19 mortality. Deaths from the virus were at about 14,800 in the U.S. as of Thursday morning and still accelerating, while Italy had more than 17,600 fatalities and the pace was beginning to slow, according to data compiled by Bloomberg. The U.S. has logged about 2,000 deaths each of the past two days, while in Italy, the number has hovered around 550 daily deaths.German Study Finds Virus in 15% of Hard-Hit Town (6 a.m. NY)The coronavirus probably infected 15% of people in Gangelt, a small town in the hard-hit rural German region of Heinsberg, researchers said in preliminary results after using antibody tests to sample a random portion of the population. On that basis, the case mortality rate in the town so far would be 0.37%, less than one-fifth of the mortality rate based on confirmed positive tests in Germany as a whole, the researchers said.The difference is because the antibody test picked up mild cases of the virus that had previously gone unnoticed. The researchers didn’t disclose how many lab-confirmed cases of the virus had previously been found in the 12,500-person town. In the Heinsberg region as a whole, less than 1% of the population has tested positive for the virus, and 44 patients have died, according to the Robert Koch Institute.Infections and Deaths in Spain Slow (6 a.m. NY)Spain reported fewer coronavirus deaths and new cases on Thursday in Europe’s second-most deadly outbreak of the disease. There were 5,756 new infections in the 24 hours through Thursday, pushing the total above 150,000, according to Health Ministry data. The death toll rose by 683 to 15,238, a smaller gain than Wednesday’s 757.Iran also reported a decline in cases and fatalities. The health ministry reported 1,634 new cases, down from 1,997, and 117 deaths, down from 121. That brings the country’s total to 66,220 cases and 4,110 fatalities.India Steps Up Stringent Lockdown Measures (5:54 p.m. HK)India has further tightened lockdown measures and enhanced surveillance at hundreds of areas designated as virus hotspots, as Prime Minister Narendra Modi described the epidemic as a “social emergency.” Authorities have sealed settlements, lanes and apartment complexes in the financial capital Mumbai, as well as in Delhi and the neighboring state of Uttar Pradesh, allowing in only medical services, surveillance workers and those delivering food and other essential items.Botswana Quarantines Lawmakers (5:35 p.m. HK)Botswana is placing its entire cabinet and members of parliament in quarantine after a health worker screening lawmakers for coronavirus was found to be infected. All lawmakers, as well as President Mokgweetsi Masisi, will go into quarantine on Thursday.KLM, Philips Set Up China Airlink (5:20 p.m. HK)Air France-KLM will start a temporary airlink to China with support from Royal Philips NV and the Dutch government to increase the transport capacity of medical equipment and other supplies between China, Europe, and the U.S. KLM will temporarily return two Boeing 747s which it phased out last month to operate five weekly flights to Beijing and Shanghai from its base at Amsterdam Schiphol.The first flight is set to take of on April 13, and add to the “skeleton operation” Air France-KLM announced earlier today, which includes regular cargo flights to destinations around the world, including the U.S. The operations are expected to remain in place for six to eight weeks.Indonesia Reports Highest One-Day Virus Deaths (5:10 p.m. HK)Indonesia reported the largest number of deaths in a single day since the outbreak and new confirmed cases continued to climb in the world’s fourth-most populous nation. The death toll jumped to 280 with 40 more fatalities reported in the past 24 hours, while the number of new cases surged by 337, the highest since the country reported its first case in early March, taking total infections to 3,293.Italian Cabinet Meets (4:45 p.m. HK)Italian Prime Minister Giuseppe Conte was set to hold a cabinet meeting at 11 a.m. in Rome. La Stampa reported earlier that the government plans to extend its lockdown by two weeks as scientists warn Conte that it’s too early to relax confinement measures,. The government will approve a decree on Friday to extend the closures beyond the current April 13 expiration date, the newspaper said.Conte told BBC the country may start easing the lockdown by the end of the month. If scientists confirm that Italy can start a gradual return to activity, “we might begin to relax some measures by the end of this month,” he said. Italian steelmakers are in talks with the government to restart at reduced capacity in the coming weeks.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
To stay connected amid the coronavirus-induced lockdown, people across the world are relying heavily on the Internet, which brightens up prospects for cloud players.
(Bloomberg) -- Turkey is preparing to take new steps to alleviate the damage to its labor market from restrictions imposed during the coronavirus outbreak, offering relief to workers that was immediately criticized as insufficient.The government will ban layoffs for three months and provide a daily stipend of almost 40 liras ($5.8) to people who aren’t eligible for unemployment benefits and lost their jobs after March 15, NTV reported Wednesday, citing a draft law proposal by the ruling AK Party. The proposal grants President Recep Tayyip Erdogan the right to extend the ban by up to six months, NTV said.Keeping unemployment in check is among the urgent challenges facing an economy Morgan Stanley says is the most heavily affected by the pandemic across countries in central and eastern Europe, the Middle East and North Africa. The non-farm jobless rate was 15.8% in the three months to January, according to the latest official data.The package of support soon came under withering attack. Arzu Cerkezoglu, head of the labor confederation DISK, described it as a “freakish unpaid-leave policy.”Commenting on Twitter, Cerkezoglu said the monthly payment to workers who will be sent on unpaid leave under the proposal would amount to 1,177 liras, almost a quarter of what they could get under the government’s short-term employment allowance program. “Workers should be paid at least the minimum wage,” she said.Turkey reported 87 new coronavirus fatalities Wednesday, bringing the death toll from the outbreak to 812, Health Minister Fahrettin Koca said on Twitter.The number of confirmed cases rose 12.1% from Tuesday to 38,226. Turkey screened 24,900 people over the past 24 hours with 4,117 testing positive for the virus, the minister said.Surge in Turkey’s New Coronavirus Cases a Concern, WHO SaysBelow are highlights of data compiled by Bloomberg on the outbreak in Turkey:Total cases rose 12.1% on Wednesday, compared to an all-time low of 11.6% on MondayThe percentage of people who tested positive during screening was 16.5% on WednesdayThe number of total tests administered during the first 30 days of the outbreak reached 247,768. The daily number will reach 30,000 from next week, Koca saidPolicy makers have gradually increased restrictions on people’s mobility since the first case was confirmed March 10. The government has announced a lockdown for young and elderly people, suspended air transportation and limited movement in and out of more than 30 cities, including Istanbul and the capital, Ankara.Erdogan unveiled a 100-billion-lira package to mitigate the economic fallout, including cheaper credit and tax deferrals for businesses. Morgan Stanley now sees Turkey’s gross domestic product contracting 3.6% this year, followed by a gain of 5% in 2021.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Morgan Stanley chief executive James Gorman was diagnosed with coronavirus last month but has since been given the all clear, staff were told on Thursday morning. The 61-year-old, who has run Morgan Stanley for a decade, announced his illness and recovery around the eighth minute of a 10-minute video posted on the bank’s intranet early Thursday. A Morgan Stanley spokesman said the firm had considered making his illness public sooner, but decided it was not material to the bank’s operations since his symptoms were not severe and he was able to continue with his duties throughout.
(Bloomberg) -- Senator Kelly Loeffler said Wednesday she and her husband are liquidating their investment portfolio following criticism of their sales and purchases of millions of dollars worth of stocks amid the coronavirus outbreak.The Georgia Republican, who is running to keep her Senate seat in a Nov. 3 nonpartisan primary, announced in a Wall Street Journal opinion-page article that the couple’s stock holdings will be converted to mutual funds and exchange-traded funds to be controlled by third-party advisers.She and her husband, Jeffrey Sprecher, the chief executive of Intercontinental Exchange, parent company of the New York Stock Exchange, have a net worth estimated at more than $500 million.“While the American people are enduring the impact of Covid-19, I have become a top target of baseless attacks from political adversaries and the media,” wrote Loeffler in the article headlined “I Never Traded on Confidential Coronavirus Information.”In an effort to move on past “these distractions,” said Loeffler, she and her husband’s holdings would be converted.Loeffler was appointed in December by Georgia Governor Brian Kemp to finish the term of Republican Senator Johnny Isakson, who retired.Loeffler has been criticized about her sales and purchases of stocks following government briefings to Congress on the virus. She and her husband sold $46,027 worth of stock in an online travel company in the day leading up to President Donald Trump’s announcement of a ban on most European travel to the U.S. They had purchased that stock just days earlier.Some stock sales by another senator, Richard Burr, a North Carolina Republican, have prompted a government inquiry.In a press release Wednesday, Loeffler’s Senate campaign said her investments are managed by third-party money-managing advisers at Morgan Stanley, Goldman Sachs, Sepio Capital, and Wells Fargo. Loeffler had previously refused to identify her advisers.“These professionals buy, sell and option stocks on behalf of Senator Loeffler and her husband,” the campaign release stated. “Neither Senator Loeffler nor her husband directed trading in these accounts.”Primary ChallengersLoeffler is also quoted as saying she and her husband put the arrangement in place to insulate themselves “from these sorts of unfounded accusations.”She faces several challengers in Georgia’s Nov. 3 primary for her Senate seat from Representative Doug Collins, a fellow Republican, as well as three Democrats, a Libertarian and an independent.If no candidate gets more than 50% of the vote, the top two will be in a runoff likely in January.Collins has raised the controversy over Loeffler’s stock trades in his campaign. His campaign spokesman Dan McLagan said in an email Wednesday regarding her move, “This is essentially a guilty plea, and Georgians who just saw their retirement plans crater while she profited are not going to agree to the plea deal.”“Same advisers, different funds and no blind trust? We’re not buying it,” McLagan said.Helen Kalla, a spokeswoman for the Democratic Senatorial Campaign Committee, said in a statement, “Nothing can undo the damage that’s already been done with voters who have no reason to trust anything she says or does in public office.”(Adds Democratic group’s statement in last paragraph; an earlier version corrected ‘billion’ to ‘million’ in third paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- With millions of people around the world stuck in their home offices to help contain the coronavirus outbreak, companies that specialize in remote-working products are becoming a hot spot.For that reason, Direxion is planning to start a new “work-from-home” exchange-traded fund that tracks industries such as cloud technologies, remote communications and cyber security, according to a filing to the Securities and Exchange Commission. The ETF will trade under the ticker WFH.Thematic funds, which seek to capture trends that are easily explained to retail investors, have struggled in a crowded ETF marketplace. However, Direxion’s remote-work offering is likely to resonate with traders given the recent popularity of those companies, according to CFRA Research’s Todd Rosenbluth.“This ETF combines some popular, well-established thematic strategies focused on cloud computing and cyber security with remote learning and document management that are all the more pressing, given Covid-19 concerns are likely to remain,” said Rosenbluth, CFRA’s director of ETF research.Read more: Cloud Computing Seen as Tech Haven Amid Pandemic UncertaintyCloud-computing companies have been a clear beneficiary of the stay-at-home and social distancing measures to help combat the spread of the virus. Shares of Microsoft Corp. soared last week after the company said its cloud services usage spiked by 775%.Still, some analysts aren’t convinced about the positive trend for the industry. While WFH’s narrative is “compelling,” the valuations of the tracked companies likely reflect the market’s enthusiasm for this theme, according to Morningstar Inc.’s Ben Johnson.“This too shall pass and investors have already bid up the shares of a lot of these stocks,” said Johnson, Morningstar’s co-head of passive strategy research.Other issuers have sought to capitalize on the work-from-home boost. The Wedbush ETFMG Global Cloud Technology ETF, which tracks global small and mid-cap companies involved in cloud infrastructure and technology, began trading this week.Unlike the majority of Direxion’s products, WFH won’t use leverage to amplify returns. The new offering is consistent with Direxion’s focus on broadening its thematic offerings to “buy-and-hold” investors, head of ETF product David Mazza wrote in an email. The firm launched three non-leveraged ETFs in February as part of that strategy.“While leveraged ETFs remain part of their lineup, they have expanded beyond the nice and highly tactical short-term oriented products,” Rosenbluth said.(Adds tout. An earlier version of this story corrected Microsoft’s share price.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Outside of Saudi Arabia and Russia, most oil producers are racing to deal with the historic oil price collapse by cutting back spending and in some cases production. But Mexico’s national oil company is acting like the crash never happened.Petroleos Mexicanos aims to nearly double drilling to 423 wells this year and accelerate development of 15 recent discoveries, even though experts say many are unprofitable at current prices. It hasn’t announced changes to the production goal it set out in its five-year business plan of 1.87 million barrels a day, an 11% rise compared to last year, or investment in exploration and production of 270 billion pesos ($11.1 billion).Meanwhile, the global oil and gas industry is expected to slash $100 billion in exploration and production spending in a 17% drop on year, according to consultancy Rystad Energy AS. Brazil’s Petroleo Brasileiro SA and Colombia’s Ecopetrol SA have both slashed capital spending, and Petrobras went as far as shutting in 200,000 barrels a day of unprofitable production in a country with little storage capacity.“If that is the path you want to go down in this environment, you will most certainly burn cash,” said Ruaraidh Montgomery, research director from oil consultancy Welligence. “Petrobras is genuinely run as independent entity that is there to generate profits, but with Pemex, the government’s priority is production growth.”While refineries across the globe are cutting runs amid slumping fuel consumption, Saudi Arabia and Russia are unleashing millions of barrels of excess crude in a battle over market share. Against this backdrop, global benchmark Brent crude posted its worst quarter in history.Mexico is part of OPEC+ that is meeting Thursday to attempt to stabilize the oil market but the country has not offered to reduce production as part of the effort.Pemex’s cavalier approach to the oil crisis matches President Andres Manuel Lopez Obrador’s handling of the global pandemic. He spent weeks downplaying the health risks of the coronavirus and was slow to deploy containment measures out of fear for the economy. And he has shown no signs of abandoning a turnaround strategy for the cash-strapped national oil company.While Pemex announced cost control measures before the oil market cratered, analysts say they aren’t enough. Pemex will have a negative cash flow this year of $20 billion if Mexican oil trades at $30 a barrel, according to Anne Milne, a strategist at Bank of America. Investors fear that Moody’s Corp. could downgrade Pemex’s bonds to junk after Fitch Ratings Inc. cut Pemex bonds even deeper into junk earlier this month, and S&P Global Inc. also cut its rating in March. On Sunday, Lopez Obrador said he’d cut Pemex’s tax burden by an extra 65 billion pesos ($2.7 billion), although it wasn’t immediately clear if this is a new measure. The relief won’t be enough to prevent the company from using its revolving credit facilities and increasing debt in 2020, Moody’s said in a statement. Mexico is expected to make a profit on its annual oil-price hedge, the largest of its kind, which for 2020 managed to obtain a price of $49 a barrel and typically covers between 200 million and 300 million barrels. Pemex’s hedge is much smaller, at just over 85 million barrels for 2020.The bulk of government funds allocated to Pemex have been for the construction of an $8 billion refinery in Lopez Obrador’s home state of Tabasco, even as global fuel demand wanes and other projects around the world go on hold. Even before the 2020 economic crisis, the refinery was widely panned as unprofitable and politically motivated. And outside of Mexico’s two largest offshore fields, profitability is questionable.“A lot of new discoveries are not necessarily in the money in the super-low price environment,” said Schreiner Parker, the vice president for Latin America at Rystad. “We’ll continue to see a decline in Mexico’s production.”A Different ApproachPetrobras, Latin America’s biggest producer, was quick to adjust its business plan and shore up lines of credit as soon as prices crashed in March. It was the first global oil major to announce cuts to unprofitable projects. Petrobras took additional cost control measures on Wednesday, announcing an early retirement program where it expects 3,800 staff cuts and 7.6 billion reais ($1.5 billion) in savings through 2025.“They are preparing to survive at $25 a barrel,” said Jorge Camargo, the head of the energy and infrastructure group at the Brazilian Center for International Relations, a think tank in Rio de Janeiro. “Brazil is better off” than other Latin producers, he said.Mexico took an opposite path under Lopez Obrador, who halted an opening of the oil industry that was easing Pemex’s spending burden. Even before the crisis, Pemex’s finances were so bad it had already built arrears with suppliers, putting any expansion plans in doubt. It also trailed the offshore oil industry in adopting virus containment measures.He wants to give Pemex greater control over Mexico’s oil territory and has suspended competitive auctions. He aims to revitalize national output that has fallen for 15 consecutive years and reduce Mexico’s dependence on imported fuels, as well as chip away at Pemex’s debt of more than $100 billion, the highest of any oil major.More than half of the Mexican driller’s production is unprofitable at $30 a barrel, noted Welligence’s Montgomery. What Pemex should do is focus on cost control, become more efficient, and protect its balance sheet by not spending money on growth for growth’s sake, he added. “You can only keep funding your operations through debt for so long, the worst is yet to come.”(Adds Moodys comment in ninth paragraph and additional measures by Petrobras in 13th)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Bank of America (BAC) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.
Morgan Stanley (MS) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.
(Bloomberg) -- U.S. banks, facing criticism for prioritizing existing customers over new ones who are seeking coronavirus rescue loans, put the blame on federal rules meant to catch terrorists and money launderers.The lenders, who have been getting beaten up by small businesses and lawmakers alike, have urged a little-known agency charged with monitoring suspicious financial transactions for relief from the stringent regulations. But their requests have gone unheeded for now.The issue is just one of a number of problems that have surfaced during the rollout of the $350 billion Small Business Administration lending program that began last week. If left unresolved it could cause a major logjam in the effort, which the Trump administration has demanded move quickly to get cash to hundreds of thousands of companies teetering on the edge of closure.“Small businesses and policy makers should understand that a primary reason most banks will be extending these loans only to existing customers is because the anti-money laundering process is so onerous and time-consuming,” said Greg Baer, president of the Bank Policy Institute, a Washington-based trade group for lenders that has been working closely with the Treasury Department and SBA. “Banks large and small have urgently sought relief from these requirements from day one, to no avail.”Bad RecipeTo underscore its point, the industry estimates that even the initial steps of processing a new borrower’s application can add as much as two hours of work. And then verifying that the customer’s information is legitimate can take a month or longer. Bankers say it’s hardly a recipe for rapidly getting rescue funds out the door.For borrowers, there’s a risk that much of the billions -- available on a first-come, first-served basis -- will be gone by the time their requests go through. President Donald Trump said Tuesday that “we will be running out of money very quickly” and that he has asked Congress to add another $250 billion by the end of the week.The target of banks’ ire is the Financial Crimes Enforcement Network, or FinCEN. Tensions between the industry and the agency aren’t new, as lenders have long lobbied Congress to roll back some of its rules, many of which were put in place after the Sept. 11, 2001, terrorist attacks. Coronavirus is giving firms a fresh opening to argue that FinCEN should be reined in.A FinCEN spokesman pointed to a statement on the agency’s website that says it is “committed to promoting the success” of the new stimulus law, “including the need to facilitate expeditious disbursal” of funds. FinCEN plans to issue additional guidance as the law is rolled out and questions arise, the statement added.Still KinksThe SBA loan program, a crucial aspect of the government’s response to the virus-fueled crisis, is still a work in progress. Treasury issued guidelines for participating banks only last Thursday, the night before they were slated to begin processing loans. That in turn caused a number of banks, including some of the biggest like Wells Fargo & Co., to say they couldn’t immediately participate.One major bank that did, Bank of America Corp., drew public scorn for saying it was first processing applications from existing clients. It was even sued over the decision last week.In a Tuesday call between Trump and bank leaders, Bank of America Chief Executive Officer Brian Moynihan said his firm is “prioritizing our work to make sure we serve the clients who have a relationship with us.”“That is keeping us plenty busy but we’re hear to continue to support this effort,” Moynihan added.A Bank of America spokesman declined to comment on the lawsuit filed against the company. He said the lender has received some 250,000 applications seeking $40 billion, as of Tuesday evening.Lawmakers AngrySome members of Congress have also expressed frustration over who’s getting funds. Senator Marco Rubio, a Florida Republican, has flagged reports that banks were only lending to customers who had a credit card or had previously taken out a loan. Maryland lawmakers, including Democratic Senator Chris Van Hollen, urged Treasury in a Tuesday letter to insist that applicants not be required to have existing relationships with banks.Bankers said they had repeatedly warned the Trump administration that money-laundering rules would lead to problems with the so-called Paycheck Protection Program. Still, some firms said they were surprised that FinCEN has been so unresponsive to their concerns because it resides within Treasury, which has been the epicenter of the government rescue effort. Treasury Secretary Steven Mnuchin, they said, has been very willing to cut red tape and address issues lenders have had that could slow down payouts.A Treasury spokesman didn’t respond to a request for comment.FinCEN RulesFinCEN regulations impose tough know-your-customer requirements that force banks to be able to verify clients’ identities. For people, that often entails providing information like a driver’s license and Social Security number.The process is more complex for businesses. Banks must check the identity of each person who owns more than 25% of the company, as well as any person that has control of its operations. That involves getting corporate documents as well as the standard information for individuals.The industry says obtaining these details can add between 40 minutes and 120 minutes to the application intake process. And, depending on the complexity of the business’s ownership, it can require up to 30 more days for verification.Adding to the problems: both banks and small business customers are now working remotely because of the virus. Often, applications with smaller clients are done in person at branch offices.Banks’ RequestTo speed things up, the banks have asked FinCEN to let them collect the customer information and verify it after the loan application is processed. That would allow lenders to significantly cut the delays facing borrowers who don’t already have documents on file with a bank.Though FinCEN hasn’t granted the request, it did provide some relief in another area. The agency issued guidance stipulating that banks providing the SBA loans don’t need to re-verify existing clients. Still, that doesn’t help with new customers.Though analysts say there could be a significant amount of fraud in the SBA lending program, especially since banks aren’t required to vet a borrowers’ small business credentials, few think the loans will used to finance terrorism -- a prime target of FinCen’s rules.Delaying ReliefAaron Klein, a fellow at the Brookings Institution in Washington who worked at Treasury in the aftermath of the 2008 financial crisis, said well-intentioned regulations shouldn’t stand in the way of companies getting cash quickly.“Delaying emergency relief to America’s small businesses in order to check for money laundering is counter to the spirit of the law and the well being of the nation,” he said.(Updates with comment from Bank of America’s Moynihan in 11th paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The Zacks Analyst Blog Highlights: DHT, Summit Therapeutics, Sharps Compliance, Frontline and Kala Pharmaceuticals
(Bloomberg) -- The judge overseeing PG&E Corp.’s bankruptcy refused to sanction a contentious request from lawyers who wanted to advise wildfire victims to withhold voting on the utility’s reorganization plan until they resolve concerns over a $13.5 billion settlement.U.S. Bankruptcy Judge Dennis Montali said in an order late Tuesday that the request to send a court-approved letter to victims is “not appropriate” and that hundreds, if not thousands, have already voted on the settlement.“It is beyond doubt that confusion will reign if the court permits the proposed letter to go out, leaving countless fire victims confused even more than they might be now,” Montali wrote.The judge didn’t forbid lawyers from sending a letter advising victims not to vote yet. But if they do so it’s “without this court’s approval or disapproval,” he wrote.The attorneys, who represent a committee designated to speak for wildfire victims in the bankruptcy, have been pushing for PG&E to guarantee the value of the half of the settlement to be paid through stock. Otherwise, they contend, the deal’s value will shrink as a result of the market downturn caused by the coronavirus pandemic.The committee didn’t immediately return a request for comment.The effort to ask victims to withhold their votes until negotiations with PG&E are finished has opened a rift between lawyers. While attorneys for the committee want to argue for a better deal from PG&E, lawyers for thousands of other victims have said they support the deal that’s already on the table.The upheaval comes as PG&E is pushing to gain approval of its reorganization plan by June 30 so it can take advantage of a state wildfire fund that would provide financial assistance for any future wildfire claims. The California utility giant filed for Chapter 11 more than a year ago after its equipment was linked to some of the worst fires in state history, resulting in an estimated $30 billion in liabilities.Read More: PG&E Victims Lawyers’ Squabble Could Slow Bankruptcy ExitPG&E opposed asking fire victims to hold off on voting. A lawyer for the power company said in a hearing Tuesday that the proposed letter was misleading and the effort was a “blatant” attempt to renegotiate a deal they had already signed.PG&E initially reached the $13.5 billion settlement with victims in December. The company has also negotiated multi-billion dollar settlements with insurance claim holders, local government agencies and bondholders. California Governor Gavin Newsom dropped his opposition to the company’s reorganization plan last month after PG&E agreed to put itself up for sale if it stumbles in its effort to exit bankruptcy.The company’s shares rose 7.4% to $9.20 at 10:10 a.m. in New York.(Adds judge’s quote in third paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.