this is a test
By Anna Irrera and Tom Wilson
LONDON (Reuters) – Bitcoin seems so flighty, some might argue you may as well consult a crystal ball, read the runes or stare at the stars to divine the direction of the capricious cryptocurrency.
Enter Maren Altman, bitcoin investor and astrologer.
The New Yorker has been following the movements of celestial objects to predict bitcoin price fluctuations since last summer. And while many people might mock her methods, she has built up a 1 million-strong social-media following on TikTok.
Last week, the 22-year-old told her followers to watch for a price correction on Jan. 11.
Why? Saturn was going to cross Mercury.
Lo and behold, bitcoin fell as much as 21% on that day, before recovering most of its losses, slamming the brakes on a meteoric rally that saw it double from early December to a record $42,000 last week.
“I am never going to tell someone to buy this or that,” said Altman. “I can predict price trajectories but do not claim to be a financial adviser aware of someone’s specific circumstances, and therefore never give buy or sell advice.”
For the uninitiated, Mercury represents bitcoin’s price data and Saturn is a restricting indicator.
While many people might give Altman’s analysis as much credence as any fortune-telling, she is among a growing cohort of young TikTok influencers who began posting content on cryptocurrencies as prices rallied in 2020.
They’re jumping on the bandwagon for bitcoin, whose mysterious movements even baffle many financial analysts, who say cryptocurrencies lack the fundamental data points used to assess traditional assets.
“I’m a bit of a cynic when it comes to bitcoin projections,” said Craig Erlam, an analyst at forex broker OANDA. “I think it’s just a selection of people clutching at straws, trying to justify any reasons to be bullish.”
Bitcoin has jumped over five-fold since the start of 2020, prompting investment banks to predict more future gains. Citigroup said bitcoin could hit $318,000, while JPMorgan Chase & Co tipped it to reach $146,000.
So what do the stars have in store for the world’s favourite cryptocurrency?
“I see some favourable indicators at the end of the month and especially February and early March,” said Altman, whose readings of bitcoin’s astrology charts are based on the date for the coin’s genesis block, the equivalent of its birthday.
“However getting into mid-March, I see a big correction. Mid-April is also really less optimistic. May is bullish.”
(Reporting by Anna Irrera and Tom Wilson; Editing by Pravin Char)
By Andy Sullivan and David Shepardson
WASHINGTON (Reuters) – Republicans in the U.S. Congress faced growing blowback on Monday from businesses that said they would cut off campaign contributions to those who voted last week to challenge President-elect Joe Biden’s victory.
The announcements by Amazon.com Inc, General Electric Co, Dow Inc, AT&T Inc, Comcast Corp, Verizon Communications Inc, American Express Co, Airbnb Inc, Cisco Systems Inc, Best Buy Co Inc and Mastercard Inc, among others, threaten to throttle fundraising resources for Republicans who will soon be out of power in the White House and both chambers of Congress.
AT&T and Comcast, for example, are among the biggest corporate donors in Washington.
Greeting-card giant Hallmark Company Ltd said it had asked senators Josh Hawley and Roger Marshall to return its contributions. Representatives for the two Republicans, who both objected to Biden’s certification, did not immediately respond to requests for comment.
The announcements are a sign that some corporate donors, which typically spread their money widely around Capitol Hill, are re-assessing their strategy after supporters of President Donald Trump attacked the Capitol last week in an effort to prevent Congress from formalizing Biden’s victory.
It is unclear whether their decisions will have a lasting impact. Fundraising activity is currently at a post-election lull in Washington, giving businesses and trade groups some time to figure out their approach.
Few companies have gone as far as Dow Inc, which said it would withhold donations for the Republican lawmakers’ entire terms in office – up to six years for those in the Senate. Others said they would withhold donations temporarily, or suspend giving to Republicans and Democrats alike.
GE’s suspension will last through the end of 2022 and then the employee board that oversees its political action committee will consider requests for support for those lawmakers who opposed certification “on a case-by-case basis.”
At least five people died in last week’s attack, which also forced lawmakers into hiding for several hours.
When they reconvened, 147 Republicans in the House of Representatives and the Senate voted to challenge Biden’s victory in Pennsylvania or Arizona, even though both states already formally certified the results and election officials say there were no significant problems with the vote.
Those voting yes included the top two House Republicans, Kevin McCarthy and Steve Scalise, and Senator Rick Scott, who as incoming head of the National Republican Senatorial Committee will head efforts to win back the Senate in the 2022 elections. All of their jobs require extensive fundraising. McCarthy and Scalise’s offices did not respond to a request for comment. Representatives for Scott declined to comment.
Amazon said it would discuss concerns “directly with those members we have previously supported” before deciding whether to resume contributions.
CUT OFF FOR HOW LONG?
The sheer extent of the Republican opposition will make it difficult for businesses to simply cut off those who voted against certifying Biden’s victory, said a senior Republican business strategist, speaking on condition of anonymity. Roughly two-thirds of all House Republicans, including seasoned legislators and vocal Trump partisans, supported the challenge.
Business groups will be watching closely over the coming weeks to see whether those Republicans make gestures to re-establish a sense of normalcy, such as attending Biden’s inauguration, the strategist said.
“Each of those people are going to be scrutinized,” the strategist said. “Are they all going into the bucket of ‘no contributions’? I would be shocked if they all get put in.”
A growing list of companies, including
Copper giant Freeport-McMoRan Inc, Ford Motor Co, Microsoft Corp, American Airlines, Alphabet Inc’s Google, Facebook Inc, Goldman Sachs, BP Plc, Smithfield Foods Inc and Union Pacific Corp said they would temporarily suspend donations to Democrats and Republicans alike.
Late Monday, Northrop Grumman became the first major defense contractor to temporarily halt all donations. “We are pausing political action committee giving and evaluating the way forward,” a spokesman said.
Trade associations, among the biggest donors in Washington, are moving more slowly.
The National Association of Beer Wholesalers, the National Association of Auto Dealers, and the American Bankers Association said they would re-assess their contribution strategy. Other top donors, including the National Association of Homebuilders and the National Association of Realtors, said they have yet to make a decision.
Several analysts said the boycott may not be permanent, as the need for access on Capitol Hill might ultimately outweigh the risk of being seen as an underwriter of those who weaken U.S. democracy.
“It’s very easy to suspend campaign contributions two months after an election. The question is whether these policies will remain in effect,” said Stanford University law professor Nathaniel Persily.
(Reporting by Andy Sullivan and David Shepardson in Washington; Additional reporting by Jessica DiNapoli, Karen Freifeld, Ross Kerber, Linda So, Tom Polansek, Diane Bartz, Matthew Scuffham, Paresh Dave, Mike Stone, Jessica Resnick-Ault, Ernest Scheyder, Brad Heath and Nandita Bose; Editing by Andrea Ricci, Matthew Lewis and Raju Gopalakrishnan)
By Leigh Thomas, Gwénaëlle Barzic and Allison Lampert
PARIS/MONTREAL (Reuters) – France on Thursday took a tough line against any takeover of retailer Carrefour by a foreign company, dealing a major blow to a near $20 billion bid approach by Canada’s Alimentation Couche-Tard.
French Finance Minister Bruno Le Maire told Reuters that the government wanted to preserve the country’s food security and sovereignty.
“Having Carrefour being bought by a foreign company would be a major difficulty for all of us,” Le Maire said in an interview at the Reuters Next conference.
“Food security is at the core of the strategic challenges of all developed nations”, he said.
The economy minister of the Canadian province of Quebec, where Couche-Tard is based, spoke about the benefits of the transaction as it appeared on shaky grounds.
Pierre Fitzgibbon told reporters on Thursday that his government is in contact with France’s Elysee Palace “as we speak to promote the fact that Couche-Tard could be a good owner, as Alstom became a good owner of Bombardier Transport.”
French giant Alstom SA nabbed Montreal-based Bombardier’s rail division to create the world’s second-largest train maker.
Canada’s trade minister, Mary Ng, had no immediate comment.
Along with other retailers, Carrefour, with roughly a fifth of France’s groceries market, played a major role in ensuring smooth food supplies as the COVID-19 pandemic hit.
But convenience-store operator Alimentation Couche-Tard’s 20 euros per share offer for Carrefour – continental Europe’s largest retailer – also raises other political considerations, as the group is one of France’s biggest employers.
Carrefour shares fell 2.5% on Thursday as the French government underscored its opposition to a deal, with Labour Minister Elisabeth Borne also saying she was against it.
Couche-Tard shares were down 2.7%, adding to Wednesday’s 10% slide.
Morningstar analyst Ioannis Pontikis said the market was probably pricing in the low likelihood of the deal going through.
Couche-Tard’s approach also raised eyebrows with analysts as they saw little potential for cost savings. The group is focused on gas stations in North America and has little geographical overlap with Carrefour.
But this could be a plus in terms of preserving jobs, while a takeover could be interesting for Carrefour if it provided financial firepower for investments in areas like e-commerce.
Traditional retailers including Carrefour are trying to reinvent themselves to fight off rising competition from the likes of Amazon.
A source close to Carrefour said the group had been surprised by Le Maire’s immediate and vocal opposition to the deal.
“We are surprised by this reaction as we are at a very preliminary stage”, the source told Reuters.
Another source with knowledge of the matter said it was too early to say the deal would not go through.
The French government spoke out in 2005 to protect French big business amid rumors that Danone might receive a takeover bid from PepsiCo Inc.
The country has since tightened takeover rules to protect French companies deemed strategic, including under the presidency of Emmanuel Macron, who will face a presidential election in 2022.
During the pandemic, Macron has ramped up calls to protect French sovereignty in areas such as health care and industry, although the former investment banker has tried to strike a balance with a business-friendly approach.
Couche-Tard made a non-binding offer on Wednesday for the French grocery group, largely in cash.
A source familiar with the discussions told Reuters that 20 euros per share was not enough but was a starting point for discussions. Initial contact between the two companies came at the end of last year and Couche-Tard sent its first letter in early January, the source said.
Carrefour acknowledged Couche-Tard’s approach to discuss a combination on Wednesday.
(Reporting by Leigh Thomas, Dominique Vidalon, Gwenaelle Barzic, Matthieu Protard, Sarah White, Keith Weir, Allison Lampert and Jeff Lewis; editing by John Stonestreet, Jane Merriman and Jonathan Oatis)
By Mike Stone, Alexandra Alper and David Brunnstrom
WASHINGTON (Reuters) – The Trump administration took another swipe at China and its biggest firms on Thursday, imposing sanctions on officials and companies for alleged misdeeds in the South China Sea and imposing an investment ban on nine more firms.
The moves come just days before Trump steps down and President-elect Joe Biden takes office.
Executives of state-owned enterprises, officials of the Chinese Communist Party and military, along with oil giant CNOOC face new restrictions for allegedly using coercion against states with rival claims in the South China Sea.
Senior U.S. officials told reporters on Thursday the new CNOOC restrictions would not apply to crude, refined fuels and liquid natural gas and do not apply to existing joint ventures with CNOOC that do not operate in the South China Sea.
Nine Chinese firms were added to the Pentagon’s list of companies with alleged ties to the Chinese military, including planemaker Comac and phone maker Xiaomi Corp.
Those companies will be subject to a new U.S. investment ban which forces American investors to divest holdings of the blacklisted firms by Nov. 11, 2021.
Chinese foreign ministry spokesman Zhao Lijian said in Beijing on Friday that China firmly opposed the new sanctions. “This action is against the trend of the times and is against its self-touted market competition and international economic trade rules,” he said.
In a statement later on Friday, China’s Ministry of Commerce said the United States was using “all kinds of excuses” to suppress Chinese companies and urged Washington to correct its wrongdoings.
The Biden transition team did not immediately respond to a request for comment.
Shares in Xiaomi closed down 10% on Friday, against a 0.4% drop in the Hang Seng index, while CNOOC listed arm CNOOC Ltd fell 1.1%.
CHINA SAYS U.S. EXPLOITING STATE POWER
The United States has long opposed China’s territorial claims in the South China Sea, a potentially resource-rich area that is also a trade route. Washington accuses Beijing of intimidating states such as Vietnam and the Philippines that have rival claims there.
China accuses Washington of trying to destabilize the region by sending warships and planes to the South China Sea.
“The United States stands with Southeast Asian claimant states seeking to defend their sovereign rights and interests, consistent with international law,” Secretary of State Mike Pompeo said in announcing the sanctions.
Pompeo said Washington was imposing visa restrictions on executives of Chinese state-owned enterprises and officials of the Chinese Communist Party and navy.
The sanctions were directed against those “responsible for, or complicit in, either the large-scale reclamation, construction, or militarization of disputed outposts in the South China Sea, or use of coercion against Southeast Asian claimants to inhibit their access to offshore resources.”
CNOOC ‘INTIMIDATES CHINA’S NEIGHBORS’
The Commerce Department accused CNOOC of harassing and threatening offshore oil and gas exploration and extraction in the South China Sea to drive up the political risk for its rivals, including Vietnam.
Commerce Secretary Wilbur Ross said CNOOC acted as “a bully for the People’s Liberation Army to intimidate China’s neighbors” and the Chinese military “continues to benefit from government civil-military fusion policies for malign purposes.”
Ross’s department added CNOOC to an “Entity List” that requires firms to be granted a special license before they can receive exports of high-tech items from U.S. suppliers.
Chen Weidong, the Beijing-based founder of independent consultancy DFS Energy, said CNOOC had very limited exposure to U.S. expertise.
The company “may still need some components and equipment like logging tools from the U.S. but that is not hard to replace and China may need to catch up in manufacturing by itself,” Chen said.
A second oil executive close to CNOOC said the offshore giant has increasingly turned to private local companies for services and the blacklist also could benefit engineering and equipment providers in Europe.
Chinese aviation firm Skyrizon was added to a Military End-User (MEU) List over its ability to develop military products including aircraft engines, restricting its access to U.S. exports.
Aside from Comac and Xiaomi, the Pentagon added Advanced Micro-Fabrication Equipment Inc (AMEC), Luokung Technology Corp, Beijing Zhongguancun Development Investment Center, GOWIN Semiconductor Corp, Grand China Air Co Ltd, Global Tone Communication Technology Co Ltd and China National Aviation Holding Co Ltd to the list.
AMEC said it had no ties to China’s military and the measures will have “no substantial impact on operations and production”.
Xiaomi said the company “is not owned, controlled or affiliated with the Chinese military” and it would take an appropriate course of action following the order.
China’s last week published new rules for countering laws and restrictions imposed by foreign countries.
The Trump administration has pulled some punches against Beijing in its final days as the Treasury Department has eased hardline policies sought by other U.S. agencies.
On Wednesday, it scrapped plans to blacklist Chinese tech giants Alibaba, Tencent and Baidu, amid pushback from Treasury Secretary Steven Mnuchin, who is seen as more dovish on China, sources said.
On Thursday, Treasury also issued a general license exempting U.S. securities exchanges from the investment ban for transactions with newly blacklisted Chinese companies.
(Reporting by David Shepardson, Alexandra Alper, Lisa Lambert, David Brunnstrom and Mike Stone in Washington; Additional Reporting by Brenda Goh and Josh Horwitz in Shanghai, Tom Westbrook and Chen Aizhu in Singapore; Cate Cadell in Beijing and Tom Daly; Editing by Chris Sanders, Howard Goller and Lincoln Feast.)
By Jeff Mason and Jarrett Renshaw
WILMINGTON, Del. (Reuters) – President-elect Joe Biden outlined a $1.9 trillion stimulus package proposal on Thursday, saying bold investment was needed to jump-start the economy and accelerate the distribution of vaccines to bring the coronavirus under control.
Biden campaigned last year on a promise to take the pandemic more seriously than President Donald Trump, and the package aims to put that pledge into action with an influx of resources for the COVID-19 response and economic recovery.
“A crisis of deep human suffering is in plain sight, and there’s no time to waste,” Biden said in prime-time remarks from Delaware. “We have to act and we have to act now.”
The aid package includes $415 billion to bolster the response to the virus and the rollout of COVID-19 vaccines, some $1 trillion in direct relief to households, and roughly $440 billion for small businesses and communities particularly hard hit by the pandemic.
Stimulus payment checks would be issued for $1,400 – on top of the $600 checks delivered by the last congressional stimulus legislation. Supplemental unemployment insurance would also increase to $400 a week from $300 a week now and would be extended to September.
Biden’s plan is meant to kick off his time in office with a large bill that sets his short-term agenda into motion quickly: helping the economy and getting a handle on a virus that has killed more than 385,000 people in the United States as of Thursday.
It also provides a sharp contrast with Trump, who spent the last months of his administration seeking to undermine Biden’s election victory rather than focusing on additional coronavirus relief. Trump, who leaves office on Wednesday, did support $2,000 payments to Americans, however.
Many Republicans in Congress balked at the price tag for such payments.
Biden will face similar hurdles with his proposals, which come on the heels of a $900 billion aid package Congress passed in December.
But he will be helped by the fact that his fellow Democrats will control both the House and the Senate. Chuck Schumer, who is about to lead a narrow Democratic majority in the U.S. Senate, and House Speaker Nancy Pelosi said on Thursday that Biden’s package was “the right approach” and pledged to begin working on legislation.
The incoming president will seek to pass the legislation even as his predecessor faces an impeachment trial.
The Democratic-led House of Representatives voted to impeach Trump on Wednesday, making him the first president in U.S. history to be impeached twice. Ten of his fellow Republicans joined Democrats to charge him with inciting an insurrection in last week’s deadly rampage at the Capitol.
The impeachment proceedings threaten to hang over the beginning of Biden’s term, and Biden has encouraged lawmakers to handle the trial while also moving forward with his agenda.
Transition officials said Biden’s plan will be a rescue package that will be followed up with another recovery package in the coming weeks.
The plan would extend moratoriums on foreclosures and evictions until September and include funding for rental and utility assistance.
The president-elect also called on Congress to increase the minimum wage to $15 an hour, and the package will include assistance to fight hunger.
“I know what I just described does not come cheaply, but failure to do so will cost us dearly,” Biden said, adding that economists, financial institutions and Wall Street banks supported the need for stimulus.
“If we invest now – boldly, smartly, with unwavering focus on American workers and families – we will strengthen our economy, reduce inequality and put our nation’s long-term finances on the most sustainable course.”
The coronavirus relief-related funds will go toward a national vaccine program, testing, investments for workers to do vaccine outreach and contact tracing, and money for states.
“The vaccines offer so much hope … but the vaccine rollout in the United States has been a dismal failure thus far,” Biden said, adding that on Friday he would set out his plan to vaccinate 100 million Americans in 100 days after taking office.
“This will be one of the most challenging operations efforts we’ve ever undertaken as a nation. We’ll have to move heaven and earth to get more people vaccinated.”
Pandemic-related shutdowns and restrictions have cost millions of U.S. jobs. The Biden plan – if enacted – would buy more time for the economy to bridge the period until the distribution of vaccines allows for a wider resumption of economic activity.
U.S. equity index futures were little changed after Biden’s speech, details of which emerged during Thursday’s trading session.
“It’s one piece in the overall puzzle,” said Jake Dollarhide, chief executive at Longbow Asset Management in Tulsa, Oklahoma. “It bridges the gap to getting restaurant workers, airline workers and other employees back to work.”
(Reporting by Jeff Mason in Wilmington, Delaware, and Jarrett Renshaw in Philadelphia and Noel Randewich in San Francisco; Additional reporting by Trevor Hunnicutt, Dan Burns and Simon Lewis; Editing by Colleen Jenkins and Daniel Wallis)
By David Randall
NEW YORK (Reuters) – A proposed $1.9 trillion coronavirus relief stimulus package from President-elect Joe Biden may prove a double-edged sword for investors, sustaining optimism for further economic revival while raising worries over how the United States will pay for it all.
The stimulus package, unveiled by Biden on Thursday, has been widely anticipated by Wall Street and has helped lift the broad S&P 500 index nearly 3% in the week since Democratic challengers won both of Georgia’s U.S. Senate seats, giving Democrats full control of Congress.
Yet those moves have been mirrored by a slide in Treasuries, due in part to expectations that the government will need to fund the spending with more debt issuance, pushing yields of benchmark 10-year notes to their highest levels since early March and nudging borrowing costs throughout the economy higher. Bond yields move inversely to prices.
“Right now markets are celebrating the additional stimulus and see it as a stronger bridge to a fully reopened economy,” said Jeff Buchbinder, equity strategist for LPL Financial.
“On the other side of it there’s the chance that markets will have to pay for this in the form of sharply higher interest rates or tax hikes that could cap equity valuations,” he said.
Stock valuations are already concerning some investors, who worry that earnings will have to be exceptionally strong in the coming year to justify the lofty multiples. The S&P 500 is trading at 22.3 times forward earnings estimates, near its all-time high of 24.4 from March 2000, according to FactSet.
The S&P 500 dipped nearly 0.4% on Thursday, and is up approximately 1.1% since the start of January. The year’s rally has been led largely by cyclical stocks that benefit from a stimulus package, including banks, which are up over 10% for the year to date.
Meanwhile, last year’s winners such as the technology sector are down nearly 1% over the same time. Rising yields threaten to weigh on the companies with longer-duration cash flows such as tech and growth shares.
SLOW VACCINE ROLLOUT
Biden’s plan to stimulate the economy through a rescue package comes at a time when a surge in coronavirus cases is forcing companies and investors to pare back their estimates for how soon the pandemic will end.
Initial unemployment claims rose to 965,000 last week, the Labor Department said on Thursday, their highest levels since August and well above the 795,000 anticipated by economists polled by Reuters. Overall, job losses in December fell for the first time in eight months.
Rising bond yields, meanwhile, are spurring concerns of looming inflation once the economy begins to recover. Federal Reserve Chairman Jerome Powell said in a speech on Thursday he does not expect the central bank to begin trimming its monthly bond purchases “too early.”
“Now is not the time to be talking about exit,” he said.
Biden’s expected stimulus plan is “in line with what the market expected,” and will likely be followed by additional packages focused on infrastructure spending and other priorities, said Randy Frederick, vice president of trading and derivatives, Schwab Center for Financial Research.
The underwhelming pace of coronavirus immunizations in the United States is delaying economic reopening and increasing the need for more stimulus measures, though corporations and investors will likely face higher tax rates later in the year as a result of the extra spending, Frederick said.
“The vaccine rollout has been slower than expected just about everywhere,” he said.
Esty Dwek, head of global market strategy at Natixis Investment Managers, said she expects the equity market to stumble later this year as investors start to price in the possibility of higher corporate and individual tax rates that the new administration may push through.
“There’s a necessity today that overrides the long-term concern,” she said. “There is a worry about inflation coming but I don’t see it happening soon.”
(Reporting by David Randall in New York; Editing by Ira Iosebashvili, Matthew Lewis and Cynthia Osterman)
By Ann Saphir
(Reuters) – U.S. President-elect Joe Biden’s proposal to pour $1.9 trillion into a hobbled economy could lay the foundation for a surge in jobs and spending that many economists say is needed to avoid long-term damage from a record-breaking pandemic recession.
Analysts had already begun marking up their forecasts for economic growth this year after last week’s elections in Georgia delivered control of both houses of Congress to Democrats.
Many, though, had penciled in smaller packages, more along the lines of the $892 billion stimulus passed in December.
Spending big on vaccine rollout, testing, and to shore up state and local governments on the frontlines of those efforts could help bring a swifter end to the country’s healthcare crisis, which remains at the root of the economic crisis.
The incoming Democratic administration’s proposed package provides targeted aid that economists say delivers the most effective economic boost, including an increase to the current extra weekly benefit to the unemployed, to $400 from $300.
It would also direct $170 billion toward reopening schools, the closure of which in many parts of the country has forced millions of workers, particularly women, to leave their jobs.
And it would put an extra $1,400 into the hands of most Americans – money that can be spent on rent or food for those who need it, or saved for a splurge on travel or dining out later in the year once wider vaccine distribution allows everyday life to get back closer to normal.
The new spending comes at a critical time for the world’s largest economy. A winter resurgence of COVID-19 sent a partially recovered labor market into reverse last month as employers shed 140,000 jobs, especially low-income positions in restaurants, bars and other high-touch service industries.
All told the new package, which must still be voted on by Congress, would bring to $5.2 trillion the total fiscal stimulus delivered to the U.S. economy since the crisis began, equivalent to about a quarter of U.S. annual economic output.
That is enough of a boost for the economy to recoup all its decline from the COVID-19 recession by the third quarter of this year, Moody’s economist Ryan Sweet estimates. But, he adds, “the recovery in the labor market will take longer.”
(GRAPHIC: The jobs hole facing Biden – https://graphics.reuters.com/USA-ECONOMY/JOBS/xlbpgygrnpq/chart.png)
The Biden plan will be welcomed at the Federal Reserve, where some officials had been concerned late last year about a diminishing fiscal response to the crisis. In his final days as president, Republican Donald Trump has devoted most of his energy to a failed effort to contest the results of the November election and had not engaged extensively on the smaller relief package that passed just before year end.
Earlier Thursday Fed Chair Jerome Powell noted that early and forceful government spending had helped save the economy from a much more dire fate.
And it was clear that the Fed would not respond to additional government spending as it did to the tax cuts under Trump, by slowly tightening monetary policy.
“Now is not the time to be talking about exit,” Powell said, referring to the Fed’s super-easy monetary policy that includes a massive bond-buying program and interest rates expected to stay near zero for years.
Back then, the economy was years into what would prove to be a record-long expansion, and with the labor market on the upswing, the extra stimulus was seen as potentially overheating the economy.
Not so now, with 10.7 million and rising out of work and an unemployment rate of 6.7%, nearly twice the pre-pandemic level.
The Fed has pledged to keep interest rates at their current near-zero level until inflation reaches and is on track to exceed 2%, and the economy hits full employment.
The massive added stimulus in the face of a quiescent Fed raises the specter for some that an economic boom later this year could push up prices uncomfortably or supercharge asset prices.
“I don’t know that we completely understand all the impacts of shoving this much money into the economy when a significant portion of the economy is still constrained from the pandemic,” said University of Oregon economics professor Tim Duy.
(Reporting by Howard Schneider and Ann Saphir; Editing by Daniel Wallis)
By Mike Spector
NEW YORK (Reuters) – General Electric Co accused a Siemens Energy AG subsidiary of using stolen trade secrets to rig bids for lucrative contracts supplying gas turbines to public utilities, and cover up improper business gains totaling more than $1 billion, according to a lawsuit filed on Thursday.
GE sued the rival company, Siemens Energy Inc, in a U.S. district court in Virginia, alleging the theft traces back to May 2019, when the industrial conglomerates bid to provide gas turbine equipment and servicing to Dominion Energy Inc. Dominion is a Virginia power utility that provides electricity to about 4 million customers on the east coast.
The suit comes in the wake of Siemens AG spinning off its energy business to create Siemens Energy. GE alleges that Siemens Energy used trade secrets improperly received from a Dominion employee in part to win contracts that would boost the price of its separate listing that took place in September.
Siemens identified the receipt of GE’s trade secrets “through its own robust compliance processes,” a spokesman said. Following an internal investigation, Siemens “implemented extensive remedial measures in response,” the spokesman added, such as “swift and appropriate discipline of the involved employees, including separation from the company.”
A Dominion representative did not immediately respond to a request for comment.
“This story is a negative for sentiment on Siemens Energy, which has recently been among the sector’s best performers,” Citi analysts said in a note.
Shares in Siemens Energy were down 6.5%.
In the course of GE’s bid for business with Dominion, the lawsuit alleges, a senior Dominion employee started sending to a Siemens account manager confidential business information GE had submitted. The information also included Dominion’s analysis of all bids, giving Siemens a “blueprint” to win contracts worth up to $340 million with the utility for the business, known as the Peakers Project, GE alleged.
The recipient of GE’s trade secrets at Siemens passed the information to colleagues that included those preparing the Dominion bid, which they used to help win the business, the lawsuit said.
The Dominion employee, no longer employed there, passed the information to the Siemens manager at least half a dozen times, in some instances forwarding it from his personal email address to that of the Siemens manager’s wife, the lawsuit said. The employee on the receiving end remains at Siemens, the lawsuit said.
In a bid package, GE had provided Dominion with technical specifications for four gas turbine models, pricing for different combinations of the equipment and details on how the company would service and maintain it, the lawsuit claims. Gas turbines are combustion engines that convert natural gas to energy powering generators that supply electricity to large residential and business developments.
Siemens only alerted GE to improperly receiving the trade secrets 16 months later, in September, through what GE described as a “nothing to see here, folks” letter minimizing the infraction, the lawsuit alleged.
The alert came after Siemens completed its own internal investigation and Dominion finished its own inquiry, the lawsuit claims. Dominion alerted GE to the alleged malfeasance before Siemens did, the lawsuit said. GE asked a judge to halt Siemens from using the allegedly stolen material and pay damages totaling hundreds of millions of dollars or more.
Siemens Energy, in its listing prospectus dated Sept. 7, 2020, said it had “identified a business area that received, during a bidding process, confidential competitor and customer information, which may have negative consequences for us.”
A spokesman for Siemens Energy declined to comment on the identity of the competitor.
The litigation is the latest legal battle involving the corporate rivals, which have squared off in lawsuits over patent infringement as recently as last year.
The alleged theft has put GE at a disadvantage competing for upcoming contracts worth at least $120 million apiece, the lawsuit claims. GE and Siemens are competing on another Dominion bid due Jan. 19, adding urgency to resolving the theft allegations, the lawsuit said.
Since first improperly receiving the information in May 2019, Siemens has won eight other gas turbine bids over GE’s competing proposals valued at more than $1 billion, the lawsuit alleges.
In most of those proposals, GE bid some of the same gas turbine models from the Dominion project, and in one case equipment with similar specifications, the lawsuit said.
According to GE, the Siemens employee receiving the trade secrets passed them to numerous colleagues, some of whom played key roles in preparing other gas turbine bids. GE lost the Dominion bid to Siemens in July 2019 without explanation, the lawsuit alleges, and Siemens employees continued to disseminate and use GE trade secrets to tailor at least two additional gas turbine proposals.
Siemens has also “steadfastly refused” to assure GE that documents containing the trade secrets have been destroyed, the lawsuit claims.
The Siemens spokesman said the company has removed GE’s confidential information from all its internal systems and restricted employees who received the trade secrets from working on similar bids or proposals and reassigned employees to other parts of its business.
(Reporting by Mike Spector; Additional reporting by Christoph Steitz in Frankfurt; Editing by Edward Tobin)
By Subrat Patnaik
(Reuters) – Airbnb Chief Executive Officer Brian Chesky on Thursday predicted travel would permanently change due to the pandemic with people seeking out thousands of smaller cities and spending more time visiting friends and family.
Traditional tourism and sightseeing at top global destinations would be significantly reduced by travelers who will drive to smaller communities and fly less for business meetings.
Travelers are “yearning for what was taken away from them,” Chesky said at the Reuters Next conference in an interview with Jonathan Weber, Reuters global technology editor. “They’re not yearning to see Times Square. What they are yearning to do is to see their friends and their families they have not seen in a long time.”
The startup was hit by the COVID-19 pandemic in early 2020 and its business dropped by 80% in a little over eight weeks.
However, as lockdowns eased, more travelers opted to book homes instead of hotels, helping Airbnb post a surprise profit for the third quarter. The San Francisco-based firm gained from increased interest in renting homes away from major cities.
The home rental firm went public in a blockbuster initial public offering in December, its shares more than doubling in their stock market debut. Shares of Airbnb rose as much as 10% to record high of $187.42 on Thursday.
WILL NOT FACILITATE VIOLENCE
The rental platform has been canceling home-sharing reservations in the Washington D.C. area for President-elect Joe Biden’s inauguration’s next Wednesday after law enforcement warned of a threat from armed militias.
Chesky recalled the white supremacist rally in Charlottesville, Virginia and said that he did not want the platform facilitating people traveling to commit violence in communities.
Airbnb made the decision of after consulting local and federal officials and after a number of hosts worried about potential attacks sought to cancel bookings.
However, major hotel chains including Hilton Worldwide Holdings Inc and Marriott International have said they planned to uphold existing reservations.
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(Reporting by Subrat Patnaik in Bengaluru; Editing by Lisa Shumaker)