Mon. Dec 6th, 2021

Signs of reviving US economy send shares to new highs

Wall Street shares are pushing further and further into unknown territory as new data and corporate finance show that the economy and corporate America are still recovering from the depths of the coronavirus crisis.

The S&P 500 has generated returns so far this year, including dividends of 27 percent, as the blue chip index has set record highs in more than 60 trading days, according to Goldman Sachs data.

Last week alone, U.S. markets rose 2 percent, the best performance since June. Companies that collapsed during the pandemic, such as airlines, airlines and casinos, have made progress following Pfizer’s announcement Friday that its antiviral pill has successfully reduced Covid-19 hospitalization rates by 90 percent.

Evidence that the U.S. economy is pulling itself out of the pandemic-induced downturn has further boosted sentiment, with the latest monthly job report showing an increase in job growth in almost all sectors after several months of more faint profits. More than 500,000 jobs were created in October, and the unemployment rate fell to 4.6 percent in a move that exceeded economists’ expectations.

Read more about US markets here.

What to watch in Asia today

Data: Singapore releases its current account and trade figures, Malaysia releases data on its foreign exchange reserves and Taiwan publishes its trade balance.

Earnings: Earnings released today include Japanese investment group SoftBank. The company reported a net profit of ¥ 761.51 billion ($ 6.9 billion) in its June quarter. It was 39 percent lower than a year earlier, when it benefited from the merger of U.S. service providers Sprint and T-Mobile, but ahead of analysts’ forecasts of a net loss of ¥ 11.8b.

APEC: Asia-Pacific Ministerial Economic Cooperation Summit begins. Although officially hosted by New Zealand, the event will be held entirely online

China: The Central Committee of the Chinese Communist Party meets in Beijing to set China’s agenda at their sixth plenary session. The meeting will pave the way for President Xi Jinping to secure an unprecedented third term at the party’s 20th congress next year.

French prosecutors investigate Sanjeev Gupta’s business empire

French authorities have opened an investigation into Sanjeev Gupta’s business empire, deepening the challenge facing the British metal magnate, once considered the “savior of steel”.

The Paris prosecutor’s office told the Financial Times that it was investigating Gupta’s French operations on allegations of “misappropriation of corporate assets” and “money laundering”.

France is home to several key assets in the GFG alliance, the collection of plants and smelters that Gupta amassed during a multi-billion-dollar acquisition funded by Greensill Capital. Greensill’s collapse in March plunged GFG into a crisis, prompting investigations into Germany and the British Office for serious fraud.

Prosecutors in Paris said they launched their investigation in July after suspicious activities were reported by public officials. They declined to provide details of the investigation.

GFG said it was “not aware of such an investigation and refuted any suggestion of infringement in its French operations”.

Read more about the investigation here.

Musk urged to sell 10% of Tesla stake after holding Twitter poll

Elon Musk asked Twitter users over the weekend to decide whether to sell more than $ 20 billion of his Tesla shares and pay taxes – and the online crowd responded with a resounding “yes”.

Musk’s apparent willingness to pay in a tenth of its shares and enter into a tax bill of more than $ 4 billion, based on the will of the Twitter sphere, follows a proposal in the US that billionaires pay taxes on their unrealized capital gains. He warned last month that any new tax would one day be extended to the middle classes, tweeting: “Eventually they run out of other people’s money and then they come for you,” he tweeted.

Leaving it to the crowd to decide if he should do his first large-scale sale of Tesla shares was the kind of trick that delighted Musk’s fans and made him the business leader most followed on Twitter, with 62.7 million followers, while his many critics.

“Whether the world’s richest man pays taxes at all or not should not depend on the results of a Twitter poll,” said Ron Wyden, the Democratic chairman of the Senate Finance Committee, before the outcome of the mood was known. Wyden has proposed a new tax on billionaires’ unrealized capital gains that will hit the 700 richest people in America.

Read more about Elon Musk here.

Activist investor Third Point buys stake in Cartier owner Richemont

The activist hedge fund Third Point has an interest in the Swiss luxury group Richemont, which owns the watch and jewelry brands Cartier and Van Cleef & Arpels, according to people familiar with the matter.

U.S.-based fund Artisan Partners, which has been a Richemont shareholder for many years and owns a 1.2 percent stake, also pressured the group to improve its performance, according to one of the people.

Third Point did not return requests for comment, while Artisan could not be immediately reached for comment. Richemont, who will report his half-year results on Friday, declined to comment.

An activist campaign at Richemont will face powerful chairman Johann Rupert, who has long determined a strategy and elected managers for the 26 homes belonging to the group. Although the South African businessman owns only 9.1 percent of the capital, he controls 50 percent of the voting rights under a dual-class share structure.

Critics argue that Richemont did not keep up with competitors during a decade-long boom for the luxury industry driven largely by Chinese consumers. Its market capitalization has risen by 79 percent over the past five years, while that of LVMH and Hermes has roughly quadrupled.

Read more about the Richemont takeover here.

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