Aurelia Butler

WASHINGTON (Reuters) – The Federal Trade Commission said it would appeal a decision issued on Thursday by the agency’s chief administrative judge in favor of Illumina Inc (NASDAQ:ILMN)’s $7.1 billion acquisition of cancer detection test maker Grail Inc.Judge D. Michael Chappell ruled the acquisition will not hurt competition, in a blow to the agency, which was challenging the deal. The ruling has not yet been made public.Under FTC rules, the decision is subject to review by the full Federal Trade Commission. The FTC staff filed a notice Friday https://www.ftc.gov/system/files/ftc_gov/pdf/D09401CCNoticeofAppeal.pdf appealing the decision. Illumina shares closed down 2.3% on Friday.Increasing competition has been a mandate of the Biden administration, and the director of the FTC’s Bureau of Competition, Holly Vedova, had said on Thursday the agency was considering challenging the judge’s ruling.The FTC filed a lawsuit in March 2021 to stop Illumina’s deal to buy its former subsidiary Grail, arguing it would slow innovation for tests designed to detect multiple kinds of cancer. The vote to sue was unanimous.The FTC has said Illumina is the dominant provider of DNA sequencing for multi-cancer early detection tests, which Grail uses to make a blood test to detect cancers.The deal would mean Illumina would have no incentive to provide the DNA sequencing to Grail’s rivals, or would have an incentive to try to raise their costs, the FTC had argued.But the judge “rejected the FTC’s position that the deal would adversely affect competition in a putative market for multi-cancer early detection tests,” Illumina said on Thursday.Reuters reported in July that Illumina’s acquisition of Grail will likely be blocked by EU antitrust regulators because of concerns about concessions offered by the U.S. life sciences firm.Illumina closed the deal in August 2021 but said it would hold Grail as a separate company with regard to the EU review.]The FTC in May 2021 dismissed its federal court lawsuit, preferring to go ahead with the administrative proceeding, arguing the federal court case was no longer needed since the European Commission was investigating. More

(Reuters) -Private equity firm Oak Street Real Estate Capital LLC has made an offer to acquire as much as $2 billion of property from Kohl’s Corp (NYSE:KSS) and have the U.S. retailer lease back its stores, according to people familiar with the matter.Oak Street’s interest offers Kohl’s another chance to cut a deal after negotiations to sell itself to Franchise Group (NASDAQ:FRG) Inc, owner of the Vitamin Shoppe, for almost $8 billion fell through in July over the department store operator’s deteriorating business prospects. Oak Street had sought to help finance Franchise Group’s bid. Oak Street has now offered between $1.5 billion and $2 billion to buy real estate from Kohl’s and the two sides have met in the last few days to discuss a possible deal, the sources said. There is no certainty that negotiations will continue and that a deal will be reached, the sources added.It was not clear how many of Kohl’s 1,100 stores would be involved in any deal with Oak Street.Oak Street representatives declined to comment, while a Kohl’s spokesperson could not be reached for comment.Kohl’s shares jumped 9% on the news in New York on Friday to $31.04, giving the company a market capitalization of almost $4 billion. The stock had tumbled nearly 43% since January.Kohl’s said in July after the deal negotiations with Franchise Group fell through that it was looking at ways to monetize its real estate. Sale-leasebacks turn retailers from landlords into tenants in their stores, allowing them to cash out on the equity of the real estate they have accumulated. They also saddle them with lease obligations.Oak Street has completed such deals with several retailers, including Bed Bath & Beyond Inc (NASDAQ:BBBY) and Big Lots (NYSE:BIG) Inc.Kohl’s reported last month that its latest quarterly earnings tumbled on lower sales, forcing management to cut guidance for the year. Blaming high inflation for causing shoppers to pull back, Kohl’s reported a 63% drop in net income for the quarter that ended on July 30. The company also said sales could drop by 5% to 6% this year after having previously said that sales might be flat or rise slightly. More

Crude markets are zeroed in on oil producing group OPEC’s latest meeting, while a new leader in Britain confronts a barrage of economic challenges.Here is a look at the week ahead in markets from Dhara Ranasinghe, Tommy Wilkes and Vincent Flasseur in London, Kevin Buckland in Tokyo, Lewis Krauskopf and Ira Iosebashvili in New York and Riddhima Talwani in New Delhi. 1/FRONT-LOADING    The European Central Bank appears set to deliver a second, (big) interest-rate hike on Thursday – front-loading policy tightening before economic conditions deteriorate further.     With record-high inflation fast approaching double digits a key question is whether the ECB will go for a 50-basis-point hike, as it did in July, or opt for a supersized 75-bps move.    Some (such as Goldman Sachs (NYSE:GS)) expect the latter after the latest inflation data, while some ECB officials believe a 75-bps move should be at least discussed.     Board member Isabel Schnabel warns that central banks risk losing public trust and must act forcefully to curb inflation, even if that drags their economies into a recession. Graphic: ECB set for a second big rate hike – https://graphics.reuters.com/EUROZONE-MARKETS/ECB/gdpzyxrmwvw/chart.png 2/CRUDE OUTCOMESVolatile oil markets could see another shake-up stemming from Monday’s meeting of the Organization of the Petroleum Exporting Countries and allies including Russia.The OPEC+ gathering is in focus after Saudi Arabia recently raised the possibility of production cuts.Surging energy costs this year have plagued global economies as Russia’s invasion of Ukraine exacerbated supply concerns. Oil prices moderated over the summer amid some uncertainty over fuel demand, with central banks raising interest rates to squash inflation.Benchmark Brent was recently in retreat to around $93 a barrel after breaching $105 on Monday. Graphic: Crude oil prices turn more volatile – https://graphics.reuters.com/GLOBAL-MARKETS/THEMES/egpbkrngqvq/chart.png 3/TO-DO LIST FOR NEW PM     Britain’s new prime minister is set to be announced on Monday after a nearly two-month-long contest to succeed Boris Johnson as the leader of the ruling Conservative Party.    Liz Truss, the foreign minister, is expected to win after a campaign full of promises to slash taxes to kickstart economic growth. Her rival, ex-finance minister Rishi Sunak, has accused her of making unfunded policy pledges that will stoke inflation and threaten Britain’s public finances.       Whoever is crowned leader will face one of the most daunting economic backdrops in decades. The Bank of England is hiking interest rates rapidly to tame surging inflation, just as the economy is tipped to slide into a recession that the BoE forecasts will last until 2024.    Along with issues including addressing soaring energy bills, the new prime minister will want to calm financial markets. British government bonds suffered their worst month in August since records began, and the pound recently dropped to a 2-1/2 year low as investors dumped UK assets, fearful the country is in a worse position than elsewhere. Graphic: UK government bonds selloff – https://graphics.reuters.com/GLOBAL-MARKETS/THEMES/byprjgobxpe/chart.png 4/RAMPING UP RATES    The Reserve Bank of Australia is set to deliver another 50-basis-point rate hike on Tuesday, as it scrambles to contain the highest inflation in more than two decades.    It has raised rates every month since May, but RBA policymakers, analysts and investors all agree that the most aggressive tightening since the early ’90s leaves much to be done.    The central bank got badly wrong-footed at the outset: Governor Philip Lowe had said early on that borrowing costs would not need to rise until 2024.    The race to raise rates has not done much to buoy the Aussie dollar, which has been bumping along near a six-week low versus a resurgent greenback.Canada’s central bank, meanwhile, is widely expected to deliver another big rate hike on Wednesday. Graphic: The race to raise rates – https://graphics.reuters.com/GLOBAL-MARKETS/THEMES/akpezbgwmvr/chart.png 5/SERVICES STRENGTHInvestors gauging the Federal Reserve’s interest rate path for the months ahead get another morsel of economic data on Tuesday, when the Institute for Supply Management (ISM) reports the results of its monthly services sector survey.U.S. stocks weakened in the days following the hawkish message from Fed Chair Jerome Powell at August’s Jackson Hole conference, which left little doubt the central bank was determined to go all out in its fight against inflation.Yet upcoming economic indicators starting with the ISM index could shape views of the rate trajectory, with signs of continued strength bolstering the case for the Fed to continue going full throttle.The U.S. services industry unexpectedly picked up in July, adding to a panoply of data showing the economy was humming along despite several big rate hikes. Analysts polled by Reuters expect a reading of 54.8 for August. Graphic: Service sector’s optimistic outlook – https://graphics.reuters.com/GLOBAL-MARKETS/THEMES/movanenwzpa/chart.png More

Fang Xinghai, vice chairman of the China Securities Regulatory Commission (CSRC), also told a forum that China would expand mutual access between mainland and Hong Kong, and would support the city’s role as a global listing venue. The agreement between China and the United States, announced on Friday last week, will allow U.S. regulators to vet accounting firms in mainland China and Hong Kong, potentially ending a long-running dispute that threatened to banish more than 200 Chinese companies from U.S. exchanges.Previously, China had been reluctant to grant such access, citing national security concerns.”We will implement well the Sino-U.S. cooperative agreement on cross-border audit supervision, and will continue to strengthen communication with overseas institutional investors,” Fang said.Under U.S. law, Chinese companies not compliant with U.S. audit rules will be prohibited from trading on U.S. exchanges by 2024. U.S. regulators have selected e-commerce majors Alibaba (NYSE:BABA) Group Holding Ltd and JD (NASDAQ:JD).com Inc, among U.S.-listed Chinese companies, for audit inspection starting this month under the agreement, sources told Reuters.Meanwhile, legal experts and China watchers warn the two sides could still clash over how the accord is interpreted and implemented.”My instinct is that now that China indicated that they want to avoid a mass delisting, that things will work out in the end,” said Drew Bernstein, co-chairman of Marcum Asia CPAs LLP.”But expect some bumps in the road and barrels of midnight oil being burned before they get there.”MUTUAL ACCESS Fang said the CSRC would work with Hong Kong financial regulators to expand the China-Hong Kong Stock Connect scheme, by including more eligible stocks.”That will help Hong Kong attract more companies elsewhere to come to list in Hong Kong,” Fang said.Already, a growing number of U.S.-listed Chinese firms have conducted secondary or primary listings in Hong Kong, to mitigate the impact of possible delistings in the U.S.Fang also said that China is studying to set up a yuan-denominated securities trading counter under the southbound leg of Stock Connect, which targets mainland investors.In addition, China supported the issuance of Chinese government bond futures in Hong Kong, he said. Hong Kong Chief Executive John Lee hailed the measures as “significant milestones”, saying in a statement they would attract more listings in Hong Kong and provide risk-management tools for bond investors. Hong Kong’s Financial Secretary Paul Chan said in the same statement the measures would consolidate Hong Kong’s status as an international financial centre and a global hub for offshore yuan. More

NEW YORK (Reuters) – A rally in world stocks flagged on Friday, while the U.S. dollar retreated from a 24-year high on the yen, after data that showed the U.S. labor market is starting to loosen failed to allay investor fears about aggressive interest rate hikes from the Federal Reserve.News that Russia has scrapped a Saturday deadline to resume flows via a major gas supply route to Germany, deepening Europe’s difficulties in securing winter fuel, further soured sentiment in the United States ahead of the long Labor Day weekend.Data showed on Friday that U.S. employers hired more workers than expected in August, but moderate wage growth and a rise in the unemployment rate to 3.7% suggested there could be less pressure on the Federal Reserve to deliver a third 75-basis-point interest rate hike this month.This initially cheered investors and helped the S&P 500 index zoom up over 1%. But the gains reversed into losses over the day, hounded by concerns that a 75-basis-point rate hike was still in the cards. The S&P 500 and the Dow Jones Industrial Average lost 1.1% each, and the Nasdaq Composite dropped 1.3%.Softer data is seen as alleviating the need for the Fed to raise rates to aggressively curb inflation, moves which the market worries could bring on a recession.Indeed, some analysts said the latest jobs data kept alive the debate about whether the Fed will raise interest rates by 50 basis points later this month, or 75 basis points.”We continue to expect the Fed to hike by 50bp in September and November. This report contained enough good news for the Fed,” analysts at Bank of America (NYSE:BAC) said in a note to clients.But hawkish remarks from Secretary of Treasury Janet Yellen on Friday after the jobs data, where she was quoted as saying that U.S. inflation remained too high and that it is the Fed’s job to bring it down, dampened the initial euphoria.Still, European stocks rallied 2% off Thursday’s six-week lows, while Britain’s FTSE jumped 1.9%.Rallying stock markets helped the MSCI world equity index climb 0.5%. For the week, however, it is headed for a 2.7% drop, which would mark its third straight week of losses.Fresh lockdowns in China had earlier fueled concerns about global growth, and high energy costs as a result of the war in Ukraine are weighing on Europe.”The market is laser-focused on how aggressive the Fed is going to be with its hiking cycle,” said Giles Coghlan, chief currency analyst at HYCM, adding that expectations for higher rates have solidified since a speech last week by Fed Chair Jerome Powell at the Jackson Hole central banking conference.The markets are worried about “China slowing, euro zone recession and a hawkish Fed,” he said.Equity funds recorded the fourth largest weekly outflow of 2022, while bond funds saw investors pull out money for a second straight week, BofA said in a note.In Europe, fears of a recession are increasing, with a survey showing on Thursday that manufacturing activity across the euro zone declined again last month, as consumers feeling the pinch from a deepening cost of living crisis cut spending.The dollar, a beneficiary of rising interest rates, hit a fresh 24-year high against the yen at 140.80, triggering a warning by Japan’s Finance Minister Shunichi Suzuki of “appropriate” action to curb the volatility. By midday in New York, the yen had pulled back to 140.18.The dollar index, which measures its performance against a basket of six currencies, was flat at 109.58, after hitting a 20-year high in the previous session.A pause in the dollar’s ascent helped the euro to bounce 0.1% to $0.99575.In bond markets, the yield on benchmark U.S. two-year notes fell to 3.3955%, after hitting a 14-year high of 3.5510% on Thursday.The yield on U.S. 10-year bonds fell to 3.1950%.German 10-year bond yields hovered at 1.520%, near recent two-month highs, as expectations grow of a 75 bps hike next week from the European Central Bank.”Almost half the euro zone is suffering inflation of over 10%, the pressure on the ECB is mounting,” said Martin Moryson, European economist at DWS. GRAPHIC-Developed markets interest rates (https://graphics.reuters.com/GLOBAL-MARKETS/RATES/jnvwemywzvw/G10widget1.1.gif) MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.6%, heading for its worst weekly performance since mid-June with a tumble of 3.6%.Japan’s Nikkei was steady and Chinese blue chips dropped 0.5%.The southwestern Chinese metropolis of Chengdu on Thursday announced a lockdown of its 21.2 million residents, while the technology hub of Shenzhen also rolled out new social distancing rules as more Chinese cities tried to battle recurring COVID-19 outbreaks.”We maintain the view that China will keep its zero-COVID policy until March 2023, when the (leadership) reshuffle is fully completed, but we now expect a slower pace of easing of the zero-COVID policy after March 2023,” analysts at Nomura said.Oil prices recovered much of their recent losses on expectations that OPEC+ will discuss output cuts at a meeting on Sept. 5, though concern over China’s COVID-19 curbs and weak global growth continued to limit gains. [O/R]Brent crude futures rose 1% to $93.3 a barrel while U.S. West Texas Intermediate (WTI) crude futures were up by 0.6% at $87.14 a barrel. A softer dollar boosted spot gold, which rose 0.9% to $1,710.00 per ounce. [GOL/] More