Aurelia Butler

WASHINGTON (Reuters) -The U.S. Senate narrowly averted a partial government shutdown on Friday, as the chamber approved spending legislation for several government agencies just hours before current funding was due to expire.By a bipartisan vote of 75-22, the Senate approved a $467.5 billion spending package that will fund agriculture, transportation, housing, energy, veterans and other programs through the end of the fiscal year on Sept. 30. The package now heads to Democratic President Joe Biden to sign into law.Funding for those programs was due to expire at midnight.The vote partially resolves a bitter, months-long battle over government spending that at one point left the Republican-controlled House of Representatives leaderless for three weeks.”To folks who worry that divided government means nothing ever gets done, this bipartisan package says otherwise,” Senate Democratic Leader Chuck Schumer said ahead of the vote.The package easily passed the Republican-controlled House of Representatives earlier this week. But action in the Senate was delayed as some conservative Republicans pressed for votes on immigration and other topics. They all failed.Congress must still work out a deal on a much larger package of spending bills, covering the military, homeland security, health care and other services. Funding for those programs expires on March 22.Taken together, the two packages would cost $1.66 trillion. Far-right Republicans had pushed for deeper spending cuts to tame a $34.5 trillion national debt. All these measures were supposed to have been enacted into law by last Oct. 1, the start of the 2024 fiscal year. While Congress rarely meets that deadline, the debate this year has been unusually chaotic. Congress so far has had to approve four temporary funding bills to keep agency operations limping along at their previous year’s levels. The spending bills include $241.3 million in earmarks – local projects secured by individual lawmakers – requested by Democratic Senator Dianne Feinstein. She died on September 29, 2023, two days before the start of the fiscal year. More

(Reuters) -OpenAI Chief Executive Sam Altman will return to the ChatGPT-maker’s board along with three new directors, the world’s most prominent artificial intelligence company said on Friday.An investigation by law firm WilmerHale into the events surrounding the November firing of Altman also has concluded, and the company has created new governance rules and strengthened its conflict of interest policy. The board also said it unanimously backed Altman’s leadership.Employees, investors and OpenAI’s biggest financial backer, Microsoft (NASDAQ:MSFT), had expressed shock over Altman’s ouster, which was reversed within days.The company on Friday said it was appointing new directors including Altman, Sue Desmond-Hellmann, a former CEO of the Bill and Melinda Gates Foundation, Nicole Seligman, a former president of Sony (NYSE:SONY) Entertainment, and Fidji Simo, CEO of Instacart (NASDAQ:CART).They will join current board members Adam D’Angelo, the CEO of Quora, former U.S. Treasury Secretary Larry Summers and Chairman Bret Taylor, former co-CEO of Salesforce (NYSE:CRM).The investigation by WilmerHale found that Altman’s dismissal was not the result of concerns related to OpenAI’s finances, product safety or other issues.”Instead it was a consequence of a breakdown in the relationship and loss of trust between the prior Board and Mr. Altman,” OpenAI said, describing the law firm’s findings.”WilmerHale found that the prior Board believed at the time that its actions would mitigate internal management challenges and did not anticipate that its actions would destabilize the Company,” OpenAI said in a blogpost.”WilmerHale found that the prior Board acted within its broad discretion to terminate Mr. Altman, but also found that his conduct did not mandate removal,” it added.CONFLICT OF INTERESTOpenAI said it was adopting new corporate governance guidelines and creating a whistleblower hotline. The startup, whose CEO has been a prolific investor in other companies, also said it was strengthening its conflict of interest policy.The board gave few details about those improvements.The board’s lack of detail for its surprise November decision fueled speculation about potential misconduct by Altman, which he and the company have denied, and about supposed existential risks from the technology that OpenAI is building.Altman’s return as CEO about four days after his firing came after nearly all of OpenAI’s employees threatened to depart unless the board restored Altman and resigned.His return led to discussions about how OpenAI would be governed, and the company announced a reconstituted board that did not include Altman and was helmed by Taylor. More

WASHINGTON (Reuters) – U.S. job growth accelerated in February, but that likely masks underlying softening labor market conditions as the unemployment rate increased to a two-year high of 3.9%.The Labor Department’s closely watched employment report on Friday also showed wages rising moderately last month. The jump in the unemployment rate after holding at 3.7% for three straight months reflected a further decline in household employment. The mixed report boosted the odds of the Federal Reserve cutting interest rates by June. The labor market continues to support the economy, which is outperforming its global pears, even as momentum is ebbing.”Despite the solid nonfarm payroll gain, the details from this jobs report are far weaker,” said Scott Anderson, chief U.S. economist at BMO Capital Markets in San Francisco. “Labor market rebalancing is underway as advertised by the Fed, opening the door for a soft-landing for the economy and an initial rate cut around the middle of the year.” Nonfarm payrolls increased by 275,000 jobs last month, the survey of establishments showed. The economy created 167,000 fewer jobs in December and January than previously estimated. Economists polled by Reuters had forecast 200,000 jobs added in February, with estimates ranging from 125,000 to 286,000. Payrolls are more than double the roughly 100,000 jobs needed per month to keep up with growth in the working age population.The smaller household survey from which the unemployment rate is derived showed household employment declining by 184,000 jobs last month. Applying the methodology used for nonfarm payrolls, household employment decreased by 271,000 jobs, marking the third straight monthly decline.That left some economists anticipating that February payrolls could be revised lower when the Labor Department’s Bureau of Labor Statistics publishes March’s employment report. Solid payrolls suggest the labor market remains strong, while the weak household survey implied layoffs were rising.There has been a rash of high-profile layoffs, though employers are generally holding on to their workers after struggling to find labor during the COVID-19 pandemic. “Our main concern is the widening divide between what the establishment nonfarm payroll data is telling us and what the household survey of employment is conveying,” said Richard de Chazal, macro analyst at William Blair in London. “The labor market on the whole is still tight, but the household survey is very clearly telling us that momentum is waning.”Financial markets saw an 80% chance of a first rate cut by June, up from 75% before the report was released. Since March 2022, the U.S. central bank has raised its policy rate by 525 basis points to the current 5.25%-5.50% range. Fed Chair Jerome Powell told lawmakers this week that rate cuts would “likely be appropriate” later this year, but emphasized they “really will depend on the path of the economy.” Stocks on Wall Street were trading higher. The dollar fell against a basket of currencies. U.S. Treasury prices were mixed.BROAD JOB GAINSAcyclical sectors such as government and healthcare, which are still rebuilding headcount that was reduced during the pandemic, led employment gains last month. Nonetheless the breadth of job gains continued to broaden, with 62.6% of industries reporting an increase.Healthcare payrolls rose by 67,000, driven by hiring in ambulatory healthcare services as well as at hospitals, nursing and residential care facilities. Government employment increased by 52,000, with gains in both local and federal governments.Restaurants and bars added 42,000 jobs. Social assistance payrolls increased by 24,000 jobs, while employment in the transportation and warehousing sector rose by 20,000, amid a rebound in hiring for couriers and messengers, after shedding 70,000 jobs over the last three months.Construction payrolls increased by 23,000 jobs, likely supported by mild temperatures. There were also gains in retail employment. Professional and business services payrolls rose modestly as temporary help services hiring, seen as a harbinger for future hiring, declined for the 22nd consecutive month.Some economists viewed the persistent decline in temporary help jobs and the 4,000 drop in manufacturing payrolls as signs the labor market was slowing.Average hourly earnings edged up 0.1% last month after gaining 0.5% in January. That lowered the year-on-year increase in wages to a still-high 4.3% in February from 4.4% in January.Despite temperatures warming up after January’s freeze, the average workweek rose modestly to 34.3 hours from 34.2 hours. Total aggregate hours worked rebounded 0.4%, reversing January’s drop. Economists expected growth in worker productivity to slow to around a 1.0% annualized rate this quarter following solid gains since the second quarter of 2023. That would jeopardize expectations of a mid-year rate cut.”One key risk is that the reduction in productivity gains results in an increase in unit labor costs, which then feeds through to higher price mark-ups,” said Brian Bethune, an economics professor at Boston College. The rise in the unemployment rate to the highest level since January 2022 also reflected 150,000 people joining the labor force. Other details of the household survey were upbeat. Fewer people were experiencing long bouts of unemployment in February.The prime age labor force participation rate, or the proportion of working-age Americans who have a job or are looking for one, rose to 83.5% from 83.3% in January. The participation rate for women in the 25-54 age group jumped to 77.7% from 77.4% in the prior month. The prime-age employment-to-population ratio, viewed as a measure of an economy’s ability to create employment, climbed to 80.7% from 80.6% in January.”For those worried about signs of unwelcome heat in the market after the past few months, this report is a welcome cooling breeze,” said Nick Bunker, economic research director for North America at Indeed Hiring Lab. “And if you’re concerned about a labor market on unsteady ground, you shouldn’t be too frightened.” More

(Reuters) -Microsoft said on Friday that hackers linked to Russia’s foreign intelligence were trying again to break into its systems, using data stolen from corporate emails in January to gain new access to the tech giant whose products are widely used across the U.S. national security establishment. The disclosure alarmed some analysts who cited concerns about safety of systems and services at Microsoft (NASDAQ:MSFT), one of the world’s largest software makers which provides digital services and infrastructure to the U.S. government.Analysts have expressed worries about national security risks. Microsoft has said a Russian state-sponsored group called Midnight Blizzard, or Nobelium, is behind the intrusions.The Russian embassy in Washington did not immediately respond to a request for comment on Microsoft’s statement, and has also not responded to Microsoft’s previous statements about Midnight Blizzard activity.Microsoft disclosed the breach in January, saying the hackers had tried breaking into corporate email accounts including those of senior company leaders as well as cybersecurity, legal, and other functions. “In recent weeks, we have seen evidence that Midnight Blizzard is using information initially exfiltrated from our corporate email systems to gain, or attempt to gain, unauthorized access,” the tech firm said in a new blog.Given Microsoft’s vast customer network, it is not surprising it is being targeted, said Jerome Segura, principal threat researcher at the cybersecurity firm Malwarebytes’ Threatdown Labs. He added it was unnerving that the attack was still underway despite Microsoft’s efforts to thwart access. “That one of the largest software vendors is itself kind of learning things as they go is a little bit scary,” Segura said. “You don’t have the reassurance that if you’re a customer, that there isn’t something bigger going on.”The attacks are also a testament to how aggressive the hackers are, he added. Among the data the hackers stole was access to source code repositories and internal systems, Microsoft said. The company owns GitHub, a public repository of software code for various applications, said Malwarebytes’ Segura. “This is the kind of thing that we’re really worried about,” Segura said. “The attacker would want to use (Microsoft’s) secrets to get into production environments, and then compromise software and put backdoors and things like that.”Previously, Microsoft said the hackers had broken into staff emails by using a dormant account through a “password spray” attack — using the same password on multiple accounts until they break into one. Such attacks increased as much as tenfold in Midnight Blizzard’s latest attempts, compared the January breach, Microsoft said in its blog.”This seems like it’s something very targeted, and if (the hackers) are that deep inside Microsoft, and Microsoft hasn’t been able to get them out in two months, then there’s a huge concern,” said Adam Meyers, a senior vice president at the cybersecurity firm Crowdstrike, who tracks nation-state hacking.’SECRETS OF DIFFERENT TYPES’Midnight Blizzard is known to target governments, diplomatic entities, and non-governmental organizations, according to various analysts who track the group. In its January statement Microsoft said Midnight Blizzard was probably targeting it because the company has done robust research unraveling the hacking group’s operations. Microsoft’s threat intelligence team has been investigating and sharing research on Nobelium since at least 2021, when the group was found to be behind the SolarWinds (NYSE:SWI) cyberattack that compromised a raft of U.S. government agencies. The persistent attempts to breach Microsoft are a sign of “sustained, significant commitment of the threat actor’s resources, coordination, and focus,” the company said on Friday.”It is apparent that Midnight Blizzard is attempting to use secrets of different types it has found,” it added.”Some of these secrets were shared between customers and Microsoft in email, and as we discover them in our exfiltrated email, we have been and are reaching out to these customers to assist them in taking mitigating measures.” Microsoft did not name affected customers. More

NEW YORK (Reuters) – Investors fixated on earnings and monetary policy are starting to factor in another variable that could sway markets this year: the 2024 U.S. presidential election.In his State of the Union address on Thursday, U.S. President Joe Biden proposed raising corporate taxes, whereas his opponent, Republican candidate Donald Trump, signed a 2017 law that slashed taxes on companies and the wealthy. Biden also boasted of U.S. economic progress under his tenure.It is difficult to gauge how asset prices could be swayed by these proposals and whatever else the presidential candidates may put on the table in coming months. The winner is likely to face a narrowly divided Congress that would make it difficult to push through legislative changes.That has not stopped some strategists from assessing how the political outlook could coalesce with other factors that have been driving markets. These include excitement over the business potential of artificial intelligence and shifting expectations of how soon the Federal Reserve might ease monetary policy. The S&P 500 index is up about 7.4% year-to-date and stands near a record high.”You get a sense (investors) … have a lot on their plates right now, and politics is starting to come into that,” said Paul Christopher, head of global market strategy at Wells Fargo Investment Institute. “Even though everyone knows the candidates, it’s going to be a pretty close race so it’s very difficult to predict the outcome.”Opinion polls show Biden, 81, and Trump, 77, closely matched. While the U.S. economy is performing better than most high-income countries, Americans overall give Trump better marks in polls for economic issues.Biden on Thursday proposed to increase to 21% a 15% corporate minimum tax on companies reporting over $1 billion in profit that he won as part of 2022 clean energy legislation. He also promised to renew his “billionaire tax” proposal, which would impose a 25% minimum tax on income for Americans with assets of more than $100 million.However, “it’s going to be difficult for any tax policy proposal to pass by either side because it’s going to come down to party lines,” said Larry Tentarelli, chief technical strategist for Blue Chip Daily Trend Report.Regardless of the election outcome, fiscal policy will likely be among the first items that the next administration tackles, Wells Fargo analysts wrote.A Republican sweep would likely mean that the 2017 tax cuts would be extended at the cost of higher inflation, while a Democratic sweep would lead to higher taxes on higher-income households and corporations, the firm noted. ELECTION YEAR TRENDSThe S&P 500 has notched an average gain of 15.5% in years that a president has sought re-election, CFRA data going back to the end of World War II showed. That compares to an overall average annual return of 12.8% in that period. At the same time, election years come with their share of volatility. Analysts at BofA Global Research noted earlier this month that, in previous election years, the Cboe Volatility Index has risen by an average of 25% from the second quarter to November.Volatility tends to fall after election day with uncertainty removed, the firm said. The bank recently increased its target on the S&P 500 to 5,400, from 5000.October futures on the Cboe Volatility Index – which encompass options contracts that extend until the middle of the following month – were recently trading some 2.6 points higher than the September futures, suggesting investor wariness regarding election-related market swings.Historical trends may favor Biden as well. Since the emergence of Super Tuesday in 1976, year-to-date gains in the S&P 500 ahead of the primary have coincided with the president’s political party winning the election 80% of the time, LPL Financial (NASDAQ:LPLA) data showed.The firm noted, however, that the S&P 500 has lately been rising along with Trump’s standing in national polls.”This economy is doing well – and we will see whether Biden gets credit for it,” said Jeff Buchbinder, chief equity strategist for LPL Financial.EYES ON CPIThe market also had to digest plenty of near-term economic data to gauge the Fed’s monetary policy trajectory. U.S. job growth accelerated in February, Labor Department data showed Friday, but a rise in the unemployment rate and moderation in wage gains kept on the table an anticipated rate cut in June.Investors are also awaiting U.S. consumer price data on March 12 for further clarity on whether inflation has eased enough for policymakers to lower borrowing costs in coming months.”Continued normalization in wages coupled with a weak CPI print next week could increase the FOMC’s confidence that inflation is on track to returning to target, potentially moving forward the prospects of rate cuts,” wrote Jeff Schulze, head of economic and market strategy at ClearBridge Investments. More

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Thousands of students have been protesting peacefully for weeks against the reform that they say will devalue degrees from public universities, but anger boiled over just as Prime Minister Kyriakos Mitsotakis urged lawmakers to vote the bill through. “We are scared that … if we do manage to graduate we’ll never be able to get a job anywhere,” said Stratos Katselis, 25. “No young person today can make any kind of plan for the future. All we see are dead ends.” Mitsotakis, who won a second term in June last year, said the law will help reverse an exodus of tens of thousands of Greek students to universities abroad, a drag on an economy still recovering from a decade-long financial crisis.The bill will also help align Greece with the rest of the European Union and boost competition in higher education, he said.The bill is likely to be approved as the conservative government controls 158 lawmakers in the 300-seat legislature. “Parliament is not only called to vote on a pivotal bill but to approve a radical and courageous education reform for growth and social justice,” Mitsotakis said. “It will finally allow non-state, non-profitable institutions to operate in our country.”Students, with support from some teachers and university staff, are not convinced. One group broke away from the demonstration and threw petrol bombs at police who dispersed them with tear gas, Reuters witnesses and a police official said.The bill is part of the government’s reform agenda that also includes a same sex marriage law that was passed last month. Greece spends 3%-4% of its annual economic output on education, below the EU average. But Mitsotakis said the bill stipulated increased funding for state universities. More

WASHINGTON (Reuters) -President Joe Biden’s proposed tax credits for certain home buyers and sellers could help boost the nation’s housing supply and make homes more affordable, U.S. Treasury Secretary Janet Yellen said on Friday, a day after the president unveiled the proposal in his annual State of the Union speech.Yellen said in an interview on MSNBC that Biden’s top economic priority was helping Americans deal with higher prices and major living expenses, including the high cost of housing.The White House said the proposed credit would provide middle-class first-time homebuyers with an annual tax credit of $5,000 a year for two years — the equivalent of cutting interest rates by more than 1.5 percentage points on the median-priced home.To encourage more homeowners to sell their “starter homes” to these buyers, Biden is proposing a one-year, $10,000 tax credit, which would apply to homes below their area’s median home price. Many of these buyers are locked into low mortgage rates, and the credit is aimed at offsetting higher mortgage costs for a “trade-up” or downsized home.According to a White House fact sheet, the credits will aid some 3.5 million first-time homebuyers and 3 million sellers. Based on credit rates, that would cost some $65 billion over two years.Asked on MSNBC whether the credits could overheat the economy, Yellen said Biden wanted to make sure that middle-class families could afford to buy homes.”He’s also proposing steps to expand the supply of housing,” Yellen said. “And I believe they would be very helpful: investing in refurbishment of properties, expanding the low-income housing tax credit that will be helpful to Americans deal(ing) with the shortage of affordable housing.”But these credits would need approval by Congress, which is struggling to approve this year’s government funding amid Republican demands for spending cuts. Passage in an election year is extremely unlikely, but a major revamp of the tax code is expected in 2025, when the Republican-passed individual tax cuts expire.Biden’s inclusion of the housing tax credit proposals in his address, along with a pledge to use other tools to encourage the development or renovation of over 2 million homes to close a housing supply gap, underscores the importance of housing affordability on the minds of voters.”The lack of affordable housing supply is hurting the middle class and depriving first-generation and first-time homebuyers of the financial security that homeownership and the American Dream provide,” National Association of Realtors President Kevin Sears said in a statement.He added that the group was “grateful” that Biden was willing to explore new tax measures to help deal with a shortfall of 5.5 million affordable housing units in the U.S.In his fiscal 2025 budget on Monday, Biden will also call for an expansion of the Low Income Housing Tax Credit and a $20 billion competitive grant fund to support development of affordable multifamily rental units, the White House said. Moody’s (NYSE:MCO) economist Nick Luettke said in a research note that tax incentives to encourage more renters to jump into home ownership would free up apartment units, easing price pressure on that market. More