May 29, 2017

Lackluster Start on Wall Street

Stocks drifted lower on Friday, after closing at fresh record highs a day earlier, as rosy results from JPMorgan and Wells Fargo were offset by a profit warning from United Parcel Service.

In afternoon trading the Standard Poor’s 500-stock index was 0.1 percent lower, the Dow Jones industrial average lost 0.2 percent and the Nasdaq composite was flat.

The S.P. 500 and the Dow closed at record highs on Thursday, after the Federal Reserve chairman, Ben S. Bernanke, said the Fed would keep monetary policy loose for some time to lower the unemployment rate.

JPMorgan Chase, the largest American bank by assets, advanced 0.3 percent after reporting a 31 percent jump in quarterly profit as trading revenue rebounded.

Shares of Wells Fargo, the country’s largest mortgage lender, climbed 2 percent the company reported a higher-than-expected 19 percent rise in quarterly profit.

But United Parcel Service, the world’s No. 1 package delivery company, dropped 5.7 percent. It estimated second-quarter profit would be below analysts’ expectations because of overcapacity in the world freight market. Rival FedEx lost ground too, shedding 2.3 percent.

“Wells Fargo and JPMorgan have come in with better than expected numbers. U.P.S. is probably not a surprise given ongoing downward revisions in guidance,” said Fred Dickson, chief market strategist, D.A. Davidson Company in Lake Oswego, Ore. “We’ll go a little bit higher, consolidate gains, maybe take a little profit going into the weekend and investors are going to sit back and wait for the tidal wave of earnings next week.”

In Europe, markets were higher though the morning but lost steam in the afternoon, with the FTSEurofirst 300 index closing down 0.1 percent. Investors in Asia turned cautious after China’s finance minister doused hopes of fresh stimulus after he said sub-7 percent growth was acceptable for Beijing; the Shanghai composite closed 1.6 percent lower.

Data showed the seasonally adjusted Producer Price Index increased 0.8 percent last month, the Department of Labor said, above expectations calling for a 0.5 percent increase. Excluding volatile food and energy costs, core producer prices, rose 0.2 percent last month, versus expectations for a rise of 0.1 percent.

The benchmark S. P. index has risen 3.8 percent over the last six sessions. That was its longest winning streak since early March, when the index climbed for seven sessions on positive data, hopes for rosy results and signals from the Fed that it would continue to backstop the economy.

U.S.-listed shares of Infosys jumped 7.3 percent after reporting quarterly results and maintaining its revenue growth forecast.

Article source: http://www.nytimes.com/2013/07/13/business/daily-stock-market-activity.html?partner=rss&emc=rss

China’s Banking Leaders Seek to Calm Concerns Over Lending

The regulators and bank chairmen said during a rare joint news conference that they were managing the industry prudently and that effective measures had been taken to limit risk even as lending expands briskly.

“The risks are within control,” Shang Fulin, the chairman of the China Banking Regulatory Commission, said on two separate occasions.

Loans have been climbing steeply as a share of the economy for four years, prompting foreign bank analysts to question the sustainability of an economic model based on ever more debt invested in a wide range of industries that are already facing overcapacity.

Chinese households and businesses have also begun shunning the very low, regulated interest rates offered by the giant state banks in favor of more speculative financial products. The central bank has been helping commercial banks sustain extremely heavy lending this autumn by pumping record sums of money into the financial system.

Commercial banks have also shifted toward a heavy emphasis on one-year loans to corporate borrowers instead of multiyear loans, even for construction projects that may take years to complete. The one-year loans make bank loan portfolios appear less risky on paper, but their use in financing multiyear projects means that it might be almost impossible to actually collect the money after one year, because that would prevent the project from being completed.

Chinese banks have spread their loans across a wide range of sectors, like autos, steel and solar panels, to limit risk, Mr. Shang said. Nonperforming loans represent a smaller percentage of assets at Chinese banks than is typical for large banks around the world.

Foreign analysts have warned that borrowers in many industrial sectors have used bank loans to speculate in real estate, so that the banking sector may have an unintentionally large exposure to the country’s real estate market.

Foreign analysts have also been skeptical of the low proportion of nonperforming loans. They say that a torrent of loans issued in 2009 and 2010 to bail the country out of the global financial crisis has not had time to produce a lot of bad loans. They also suggest that a renewed burst of lending this autumn is helping troubled borrowers, at the risk of racking up even larger debt on which they may default later.

The rapid increase in corporate lending has helped pull the economy out of a downturn that occurred over the spring and summer, but it has also increased debt burdens considerably in the corporate sector.

“We need reform-inducing productivity growth, not more leverage, in 2013,” said a research note on Saturday from Stephen Green, the China economist in the Hong Kong office of Standard Chartered.

The joint news conference was not held because of any imminent concerns about the Chinese financial system, but was arranged by the spokesmen for the 18th Party Congress after domestic and foreign journalists submitted a flood of requests in the last week for interviews with the country’s banking sector leaders.

Zhou Xiaochuan, the governor of China’s central bank, the People’s Bank of China, briefly acknowledged on Sunday night that the rise of a less-regulated “shadow banking” system would result in risks being transferred from banks to other entities in China. But he said that most nonbanks engaged in lending were subject in various ways to government regulation.

Mr. Zhou made several comments about less-regulated financial activities in other countries that could be construed as criticisms of the United States and Europe after the global financial crisis, although he was careful not to identify specific countries.

In China, he said, “It is not like what is happening in some other countries, whose nonbank sectors are out of control.”

Mr. Shang said he wanted Chinese banks to offer a more diverse array of financial products, although such a move might lead to the need for greater risk controls and credit assessment procedures.

Wang Hongzhang, the chairman of the China Construction Bank, which is one of the Big Four, said at the joint news conference that his bank had too many of its assets in loans and that it was looking for ways to expand in trusts, insurance, leasing, precious metals and international operations.

The other Big Four institutions are the Bank of China, the Industrial and Commercial Bank of China and the Agricultural Bank of China. Charlene Chu, a China banks analyst at Fitch Ratings, said later in a telephone interview that the shift by Chinese banks toward one-year loans could have some advantages.

“That has to do with the banks becoming more conservative,” she said. “It allows them to reassess borrowers and decide if they want to cut them off.”

Patrick Zuo contributed research.

Article source: http://www.nytimes.com/2012/11/12/business/global/chinas-banking-leaders-seek-to-calm-concerns-over-revived-growth.html?partner=rss&emc=rss

Wheels: For Marchionne and Winterkorn, a Parisian Showdown Is Averted

A dispute at the highest levels of the principal lobbying group for Europe’s automotive industry was resolved with a handshake on Friday, as Sergio Marchionne, the chief executive of Fiat and Chrysler, met with Martin Winterkorn, chief executive of Volkswagen, on the convention floor at the Paris motor show.

Sergio Marchionne, on Thursday in Paris.Corentin Fohlen for The International Herald Tribune Sergio Marchionne, on Thursday in Paris.

Mr. Marchionne, the head of the European Automobile Manufacturers’ Association, was criticized by Volkswagen executives for comments made to The New York Times in July, in which the Fiat chief took issue with deep discounts offered by the German brand in Europe. Mr. Marchionne and other executives accused VW of creating a market climate in which frenzied price-cutting jeopardized margins. The Fiat chief characterized the environment as a “bloodbath.”

Martin Winterkorn, on Wednesday at the preview event for the VW Group.Eric Piermont/Agence France-Presse — Getty Images Martin Winterkorn, on Wednesday at the preview event for the VW Group.

Fiat, PSA Peugeot Citroën, Ford Motor and the Opel and Vauxhall divisions of General Motors project significant losses in Europe for the year as they try to address overcapacity at their plants.

In July, Volkswagen said it was prepared to leave the lobbying group, saying Mr. Marchionne was not qualified to lead it. As Automotive News reported on Thursday, Mr. Marchionne issued a challenge to VW that sounded as if it was lifted from Hopalong Cassidy:

“If Volkswagen, through its chief executive, thinks that it needs to do something, tell them to show up tomorrow morning at 7 o’clock at our stand,” Mr. Marchionne told reporters.

Automotive News and Bloomberg reported that on Friday morning in Paris, having adjourned from a meeting of the lobbying group held at the Fiat stand, the two executives met and shook hands, saying the dispute was resolved.

“We’ve cleared it,” Mr. Marchionne said of the spat in a video interview after he and Mr. Winterkorn acknowledged they remained “good friends.”

Article source: http://wheels.blogs.nytimes.com/2012/09/28/for-marchionne-and-winterkorn-a-parisian-showdown-is-averted/?partner=rss&emc=rss

European Union Proposes Overhaul of Fisheries Policy

But environmentalists said that the plan did not address the overcapacity of the bloated European fleet.

Maria Damanaki, the European Union’s commissioner for maritime affairs and fisheries, said in Brussels that the changes were needed because scientific models suggested that only eight of 136 fish stocks in European Union waters would be at sustainable levels in 2022 if no action were taken.

The aim is to secure both fish stocks and fishermen’s livelihood for the future while putting an end to overfishing and depletion of fish stocks, she said.

“If we don’t make structural changes to the way we do business now,” she said, “we will lose one fish stock after the other. I want to break this vicious circle.”

Ms. Damanaki said the introduction of tradable fishing rights, which would be imposed at the national rather than the European Union level, would put responsibility for safeguarding fish stocks with the industry and help reduce overcapacity.

But scientists and conservationists were skeptical that privatizing fish stocks was the solution.

“It’s absolutely not clear how they intend to allocate the rights in the first place,” said Markus Knigge, a fisheries policy adviser to the Pew Environment Group. “What you want is for the most ecologically sustainable fisheries to end up with the rights.”

“The fear is that they won’t even say you have to take environmental and social factors into consideration,” Mr. Knigge added, “but rather just hand over the rights to those who have been overfishing.”

Europeche, an organization of national European fishing organizations, has noted that “opinions are divided on the appropriateness of using transferable fishing rights,” with small-scale coastal fisheries fearing that large fishing companies will crowd them out.

The proposal Wednesday was notable for what it did not contain: any measure to directly reduce the overcapacity in the European fleet.

A previous report to the European Commission had identified the mismatch between fleet and fish as the most important issue to be addressed.

“Trading around fishing quotas won’t stop overfishing, especially without a clear pathway to bring the fleet size in line with how much fish is left in the sea,” Saskia Richartz, a fisheries policy adviser at Greenpeace, said in a statement.

Critics of Europe’s fisheries policy say that much of the problem comes from the subsidies the industry receives, well over 1 billion euros (about $1.39 billion) a year, according to Fishsubsidy.org, with Spain’s fleet alone getting about half.

They say the subsidies — in the form of tax breaks on diesel fuel and aid for building, modernizing and scrapping vessels — results in too many boats to chase too few fish, and leaves the industry dependent on public largess.

Another measure proposed on Wednesday would eliminate rules requiring the discarding of bycatch, or valuable species taken incidentally. The move to end the wasteful practice was welcomed by both the fishing industry and conservationists, who hope it will result in the use of more selective techniques to catch the target fish.

The bycatch issue has recently become the subject of a television campaign led by Hugh Fearnley-Whittingstall, a British celebrity chef, who has collected nearly 700,000 signatures of support for ending the current practice.

Opponents claim that current European Union rules lead to as much as 50 percent of the entire catch being dumped backed into the ocean — dead — because fishing operators are not allowed to land species for which they have already met their quotas.

Conservationists welcomed a proposal that all fish stocks are “to be brought to sustainable levels by 2015,” in line with the bloc’s international commitments. But skepticism remains there as well because fishing decisions in Europe tend to be made on political rather than scientific grounds, and many national governments lack the will to enforce regulations.

The proposal, part of a once-a-decade review of the bloc’s Common Fisheries Policy, may require a year or more of negotiation and consultation before being adopted.

The European Commission strongly backs the measures, officials say, and the final rules are expected to be largely in line with the current plan.

Article source: http://feeds.nytimes.com/click.phdo?i=35eb137c2688326a57189fc4cb5d1d15

E.U. Proposes Overhaul of Fisheries Policy

PARIS — European Union officials on Wednesday proposed a major overhaul of the bloc’s fisheries policy, including the creation of a market in fishing rights. But environmentalists criticized the plan for not addressing the most vital issue: the overcapacity of the bloated European fleet.

Maria Damanaki, the European Union’s commissioner for maritime affairs and fisheries, said in Brussels that the changes were needed because scientific models suggested that only 8 out of 136 fish stocks in E.U. waters would be at sustainable levels in 2022 if no action were taken.

“If we don’t make structural changes to the way we do business now,” she said, “we will lose one fish stock after the other. I want to break this vicious circle.”

Ms. Damanaki said the introduction of tradable fishing rights, which would be imposed at the national, rather than E.U. level, would put responsibility for safeguarding fish stocks with the industry and help reduce overcapacity.

The privatization of fish stocks is meant to address the so-called tragedy of the commons, the idea that a publicly held resource will be overexploited because all the users have an incentive to maximize its use in the short term, even if the long-term cost is the total destruction of the resource.

But scientists and conservationists were skeptical that privatizing fish stocks was the solution.

“It’s absolutely not clear how they intend to allocate the rights in the first place,” said Markus Knigge, a fisheries policy adviser to the Pew Environment Group. “What you want is for the most ecologically sustainable fisheries to end up with the rights.”

“The fear is that they won’t even say you have to take environmental and social factors into consideration,” Mr. Knigge added, “but rather just hand over the rights to those who have been overfishing.”

Europeche, an organization of national European fishing organizations, itself has noted that “opinions are divided on the appropriateness of using transferable fishing rights,” with small-scale coastal fisheries fearing that large fishing companies would crowd them out.

The proposal Wednesday was notable for what it did not contain: any measure to directly reduce the overcapacity in the European fleet. A previous report to the European Commission had identified the mismatch between fleet and fish as the most important issue to be addressed.

“Trading around fishing quotas won’t stop overfishing, especially without a clear pathway to bring the fleet size in line with how much fish is left in the sea,” Saskia Richartz, a fisheries policy adviser at Greenpeace, said in a statement.

Critics of Europe’s fisheries policy say that much of the problem comes from the subsidies the industry receives, well over €1 billion a year, according to Fishsubsidy.org, with Spain’s fleet alone getting about half. They say the subsidies — in the form of tax breaks on diesel fuel and aid for building, modernizing and scrapping vessels — results in too many boats to chase too few fish, and leaves the industry dependent on public largess.

Another measure proposed on Wednesday would eliminate rules requiring the discarding of bycatch, or valuable species taken incidentally. The move to end the wasteful practice was welcomed by both the fishing industry and conservationists, who hope it will result in the use of more selective techniques to catch the target fish.

The bycatch issue has recently become the subject of a high-profile television campaign led by Hugh Fearnley-Whittingstall, a British celebrity chef, who has collected nearly 700,000 signatures of support for ending the current practice.

Opponents claim that current E.U. rules lead to as much as 50 percent of the entire catch being dumped backed into the ocean — dead — because fishing operators are not allowed to land species for which they have already met their quotas.

Conservationists welcomed a proposal that all fish stocks are “to be brought to sustainable levels by 2015,” in line with the Union’s international commitments. But skepticism remains there as well because fishing decisions in Europe tend to be made on political, rather than scientific, grounds, and many national governments lack the will to enforce regulations.

The proposal, part of a once-a-decade review of the bloc’s Common Fisheries Policy, may require a year or more of negotiation and consultation before being adopted. But the European Commission strongly backs the measures, officials say, and the final rules are expected to be largely in line with the current plan.

Article source: http://www.nytimes.com/2011/07/14/business/global/eu-proposes-overhaul-of-fisheries-policy.html?partner=rss&emc=rss