Raphael Stevens

French voters head to the polls on Sunday to cast their ballots in the final round of a close presidential race between incumbent President Emmanuel Macron and rival Marine Le Pen.
Centrist Macron was seen taking the lead against his far-right opponent in the final day of campaigning, taking a 57.5% lead over Le Pen’s 42.5%.
But the outcome is still unclear, according to top banks, which have predicted potential market upset should Le Pen win.

As French voters head to the polls Sunday, Wall Street is forecasting market upset if far-right candidate Marine Le Pen proves victorious.
Timothy A. Clary | Afp | Getty Images

French voters head to the polls on Sunday to cast their ballots in the final round of a close presidential race between incumbent Emmanuel Macron and rival Marine Le Pen.
Centrist Macron was seen taking the lead against his far-right opponent Friday as the pair face a rerun of their 2017 tete-a-tete.

In the final day of campaigning ahead of this weekend’s second-round vote, polls showed Macron with a 57.5% lead over Le Pen’s 42.5%.
But with the election coming at a time of renewed economic and political pressure, both domestically and within Europe at large, the outcome is far from certain, according to Wall Street.
Here’s a look at some major banks’ predictions:

Goldman Sachs

Goldman Sachs has put its weight behind opinion polls, citing 90% odds of a Macron win.
Should the incumbent succeed, investors can expect continuity within markets — even as Macron seeks to revive his reformist agenda. Such reforms are already largely embedded in current market forecasts, the bank said in a research note Thursday.

Should Le Pen win, however, markets could be in for a shock amid rising uncertainty around France’s domestic and EU policy.
Under France’s electoral system, presidential powers are largely dictated by parliament. The ultimate victor’s ability to govern will therefore be determined by legislative elections in June, and with little parliamentary popularity, Le Pen could face an institutional impasse.
That could significantly hurt investor confidence, said Goldman, adding that its markets team would look for a significant widening of sovereign spreads in the case of a Le Pen win.

Citigroup

While Citigroup’s base case is also for a Macron win, its probability is less clear cut at just 65%.
Indeed, the Wall Street bank said the chance of a Le Pen victory is now “considerably more likely than in 2017,” amid risks of low voter turnout and reluctance among leftist voters to back Macron.
That could present downside risks for stock markets, with French banks likely to face the biggest hit.
“A surprise victory by Le Pen, and associated rise in bonds spreads, would likely put downside pressure to the overall French equity market performance,” it said in a note Tuesday.
The euro, meanwhile, would come under pressure from a Le Pen win, likely declining to 1.065 against the dollar, the bank said. A Macron victory, on the other hand, would provide “mild upside.”

Societe Generale

For Societe Generale, the ultimate outcome is similarly unclear, and a Le Pen victory “cannot be ruled out.”
“The race is very close and uncertainty remains high. We still see complacency around this election, and a Le Pen victory would lead to sharp repricing,” the French bank said Tuesday.
Again, equity markets — especially euro zone banks and Italian stocks, which are both sensitive to EU integration — would be among the hardest hit by a Le Pen victory.
The bank also previously named some 37 French stocks with market caps above 1 billion euros which could come under particular pressure from political risks surrounding social unrest, asset nationalization and EU policy. Those include Air France-KLM, Accor and Renault.
In the debt markets, meanwhile, the spread between French and German 10-year bonds could jump to 90 basis points before ultimately settling in the 60-90 basis points range, if Le Pen were to win. If Macron were reelected spreads would likely remain around current levels at 45-50 basis points, it said.

‘A lot at stake’

Economists elsewhere agreed that the ultimate outcome could mark a decisive turning point in French politics.
“A victory for either of them would take France on a completely different political, economic, European, and geopolitical trajectory,” ING Economics said Thursday.
While a Macron win would likely lead to further EU integration, a Le Pen win would be “unfavorable to the cohesion of Europe” at a time when it faces renewed pressure from adversaries in Russia.
“As France has always been one of the driving forces of European integration, the election of a euroskeptic French president would be a rude awakening for the European Union. Not to mention the fact that Le Pen has also been more skeptical of the European sanctions against Russia,” it said in a note.
Among Le Pen’s priorities are withdrawing France from the integrated command of NATO and seeking rapprochement with Moscow — a clear divergence from the EU’s wider stance.
“This leap into the unknown would probably lead to an adverse financial markets reaction and a very uncertain economic trajectory, weighing on the growth prospects for the coming years,” said ING.
Meantime, the pair’s conflicting views on domestic policy could have major implications for business and foreign investment, according to Berenberg Economics.
“A lot is at stake for France and the EU,” the economists noted Friday.

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American Eagle wants to master a business function that became critical for retailers during the Covid-19 pandemic: the supply chain.
In the past year, American Eagle has acquired two supply chain businesses in order to build out a logistics platform that others companies — even its rivals in the apparel industry — can utilize, too.
It’s a bet that American Eagle can lead the industry into a new territory of vertical logistics and dilute costs.

Shekar Natarajan is chief supply chain officer of American Eagle Outfitters. He joined the retailer in 2018.
Source: Julie Stapen Photography

American Eagle wants to be more like Amazon.
Not to get in the business of selling everything from shoes to pet food to toilet paper. But to master a business function that became critical for retailers during the Covid-19 pandemic: the supply chain.

That’s where Shekar Natarajan, American Eagle Outfitter’s chief supply chain officer, comes into the picture. Since he joined the apparel retailer roughly three-and-a-half years ago, the company has acquired two supply chain businesses for hundreds of millions of dollars and began swiftly building out a logistics platform that others companies — even its rivals in the apparel industry — can utilize, too.
It’s a bet that American Eagle can lead the industry into a new territory of vertical logistics and dilute costs. Its peers will either emulate the model and play catchup, or lean on American Eagle long term.
American Eagle’s goal, according to Natarajan, is to “Uber-ize” the global supply chain, thereby making it a shared service for retailers. His belief is that brands that compete for shoppers in clothing, makeup or home goods shouldn’t also be competing over things like quicker delivery windows and cardboard boxes.
Instead, if enough businesses work together and pool resources, a conglomerate of retailers could be shipping out just as many packages daily as Seattle-based e-commerce behemoth Amazon, and hopefully at a profit, Natarajan explained in a recent sit-down interview.
He calls American Eagle’s communal supply chain platform the ultimate “frenemy network.”

“The only way that you could actually have Amazon-like scale, Amazon-like costs and Amazon-like capabilities — you have to share,” said Natarajan. “Collectively, we can have the same [package] volume as Walmart. … And that way, companies are only competing on what they do best, which is the product, marketing and customer experience.”

Arrows pointing outwards

American Eagle created a graphic to visualize how small- to mid-size retailers stack up to e-commerce behemoths Amazon and Walmart.
Source: American Eagle

The coronavirus pandemic accelerated an existing opportunity for American Eagle, which reported record revenue of $5 billion in fiscal 2021, up 33% from the prior year. As sales ballooned, so did e-commerce revenue. American Eagle’s digital sales represented 36% of total transactions by the end of 2021, compared with 29% two years earlier.
That means shipping more packages to customers, handing them fewer shopping bags at the cash register, and shifting inventories around to meet newfound demand on the internet.
At the same time, backlogs and shortages have snarled the global supply chain due to labor constraints, temporary factory shutdowns and skyrocketing costs to manufacture and transport goods — to name just a few obstacles.
American Eagle isn’t immune to these challenges. As a result, under Chief Executive Jay Schottenstein, the company fast-tracked its vision to create a streamlined model that can offer retail partners help on everything from ensuring orders with multiple items are packaged together, to speeding up home deliveries.
“This strategy was laid out pre-pandemic,” Natarajan said. “We just accelerated the entire journey by almost four years.”

‘This is truly unique’

In May of 2021, American Eagle acquired AirTerra, a Seattle-based parcel shipping start-up, for an undisclosed amount.
Six months later, it announced it would be paying $350 million to purchase Quiet Logistics, which operates a handful of distribution centers around the United States to help fulfill shipments for brands including menswear retailer Mack Weldon, athletic apparel start-up Outdoor Voices and bedding maker Boll & Branch.
Those companies, along with a handful of others, remain clients of the Quiet Platform, now the internal logistics branch of American Eagle. The division is run by Natarajan and a small-but-growing team that stays at arm’s length from the core retail division. It recently added Saks Off Fifth, the off-price department store, to its roster of customers.
According to Natarajan, retailers sign multi-year deals to be part of the Quiet Platform. He declined to comment on the financial arrangements.
CEO Schottenstein said on an American Eagle earnings conference call in early March that the company’s two acquisitions were already translating into cost savings, cementing a new “growth platform” for American Eagle.
The efforts aren’t going unnoticed on Wall Street, either.
“For the many retailers that are investing in their supply chain, acquiring upstream like this is not that common,” said Corey Tarlowe, an equity analyst at Jefferies. “This is truly unique.”
Tarlowe said the investments should help American Eagle over time to improve its inventory management, mitigate risk for markdowns and ultimately boost profit margins. The greater economics of scale the company can achieve, the better, he said.
To be sure, investors are waiting to see more proof points, and it shows in the stock’s performance in recent months, which is lagging the broader industry.
American Eagle shares are down roughly 60% since news of its AirTerra deal first surfaced in late August. Year to date, the retailer’s stock is down about 33%, compared with the S&P 500 Retail ETF’s loss of about 16% in the same period.

‘Not a level playing field’

Prior to joining American Eagle, Natarajan had stints at major consumer-facing businesses including Pepsi Co., the Walt Disney Company, Walmart and Target — oftentimes within the supply chain division.
Those experiences offered him clearer perspective on the competitive advantages that some of the biggest retailers in the industry have, he said, but also the disadvantages for so-called midsized retailers that do less than $40 billion or so in sales each year. At $5 billion in annual sales, American Eagle fits the bill.
“I was always worried about what was going to happen to retailers in the middle,” he said. “Because it’s not a level playing field.”

Arrows pointing outwards

American Eagle’s chief supply chain officer, Shekar Natarajan, wants to create a logistics network that is better for the end consumer.
Source: American Eagle

And so rather than creating a network solely for American Eagle’s benefit, he worked with Schottenstein to create a business that, should it grow big enough, could stack up against Amazon’s logistics arm, or at least offer brands another option.
“The reality is none of us own our supply chain,” Natarajan said. “We manufacture goods in factories that are shared right across retail. We move them in ships that are shared across businesses.
“But shared capabilities — whether they’re technology capabilities, fulfillment capabilities or transportation capabilities — are the future of this industry.”
American Eagle’s Chief Operating Officer Michael Rempell said the apparel retailer — including its intimates- and swim-centric Aerie business — is already more effectively managing inventories and labor, thanks to its Quiet logistics business.
“Not only are we shipping less packages and it’s costing us less … but [orders] are getting to customers 30% faster than they were before,” he said in an interview. “We see it as a tremendous business opportunity,” for both American Eagle and for the Quiet Platform as a standalone business, Rempell added.
Bryan Eshelman, a managing director in the retail practice at global consulting firm AlixPartners, said he can see the logic behind American Eagle’s unique approach.
Retailers that attempted to build out supply chain capabilities on their own in the thick of the Covid pandemic saw those efforts “come back to bite them,” he said, in large part because it’s so costly to go it alone: “There needs to be a better solution.”
American Eagle clearly made investments that were “bigger than its own needs,” Eshelman said. But that will likely put the retailer in a stronger position in the future, particularly as supply chain disruptions persist, he said.
American Eagle won’t be vying with other retailers over space for its goods on trucks and planes. It’ll be pitching its own operations to its rivals.
American Eagle has projected its logistics business to contribute around 5 to 6 points to the mid-teens revenue growth rate it’s calling for in fiscal 2022. It also expects its supply chain business to break even on profitability this year.
In the coming months, Natarajan is focused on onboarding more businesses. The Quiet Platform counts about 50 customers today but Natarajan hopes to grow that base closer to 250, he said.
“I’m essentially trying to create Amazon-like capabilities and cost advantages, without being Amazon,” he said.

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Fully vaccinated travelers will no longer need to take Covid tests before departing for Singapore. On-arrival tests have been waived since April 1.
Social gatherings will no longer be limited to 10 people, people will not need to keep 1 meter apart and fully vaccinated travelers will not need to take Covid tests before departure.
Separate rules for unvaccinated people will mostly be removed, with some exceptions.

Singapore is set to ease most Covid measures from April 26, authorities said.
Lauryn Ishak | Bloomberg | Getty Images

SINGAPORE — Singapore is set to remove nearly all virus safety measures from Tuesday as the city-state seeks to return to pre-Covid living, authorities announced on Friday.
There will be no more social distancing or limits to the number of people at social gatherings.

Fully vaccinated travelers will no longer need to take Covid tests before departing for Singapore. On-arrival tests have been waived since April 1.
“Things continue to look up for us. Our social resilience is strong and now we are in a comfortable position. We can therefore afford to take further steps to restore pre Covid-19 normalcy,” said Ong Ye Kung, Singapore’s health minister.
“However, given the risk over the horizon, we should not declare a Freedom Day until the pandemic is truly over. Instead, we will step down but not dismantle our measures completely,” he added.
From April 26, social gatherings will no longer be limited to 10 people, all workers can return to their workplaces, and most larger events spaces can be used at 100% of their capacity. Contact tracing will also largely be stopped.

Today’s announcement [marks] a significant milestone in our journey. I would like to encourage everyone to remain vigilant as the situation can change quickly.

Gan Kim Yong
Singapore Minister for Trade and Industry

People will not need to keep 1 meter apart.

Masks will still be required in nearly all indoor settings. An exception will be made for people at their workplaces if they are not physically interacting and not in customer-facing areas.
“Today’s announcement [marks] a significant milestone in our journey. I would like to encourage everyone to remain vigilant as the situation can change quickly,” said Minister for Trade and Industry Gan Kim Yong.
“The government will also continue to monitor both the local and global situation closely so that we can respond quickly to any development,” he said.
Separate rules for unvaccinated people will mostly be removed, with some exceptions.
Those who are not vaccinated will still not be allowed to dine in, or participate in events with more than 500 people. Neither can they visit nightlife establishments where dancing is involved.
That said, food and beverage outlets won’t be required to check the vaccination statuses of customers, the health ministry said in a press release.
Currently, people who are unvaccinated are not allowed to visit malls, attractions or even enter their workplaces.

Singapore’s Covid situation

Singapore reported 3,420 cases of Covid-19 on Thursday, with infections continuing to fall from a record 26,032 infections on Feb. 22.
Most people infected in Singapore have mild or no symptoms.
The Southeast Asian country eased some Covid measures at the end of March. In mid-April, nightlife businesses such as clubs and karaoke establishments were allowed to reopen after about two years.

Around 92% of the population has completed the primary vaccination series as of Thursday, while 73% has received boosters.
The government also announced Friday that those who are 12 years and above who have recovered from Covid will now need to receive boosters within nine months of their last dose to maintain their vaccinated status.
Second boosters will also be allowed for those between 60- and 79-years-old on a voluntary basis, though it is only recommended for those who are 80 and above.

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Situated 35 to 60 kilometers off Taiwan’s west coast, the scale of Changhua 1 & 2a is considerable.
Orsted describes it as “Taiwan’s biggest offshore wind farm” and it will have a capacity of approximately 900 megawatts.
According to Orsted, the facility will eventually generate enough power to meet the needs of 1 million households in Taiwan.

An offshore wind turbine in waters off Taiwan. Taiwan’s Ministry of Economic Affairs says it’s targeting 20% renewable energy generation by the middle of this decade.
Billy H.C. Kwok | Bloomberg | Getty Images

A large-scale offshore wind farm in waters off the coast of Taiwan has produced its first power, with those involved in the project describing the news as a “major milestone.”
In a statement Thursday, Danish energy firm Orsted said the first power at the Greater Changhua 1 & 2a facility was delivered on schedule following the installation of its initial set of wind turbines.

Electricity, it said, had been “transferred to Orsted’s onshore substations via array cables, offshore substations, and export cables. The renewable energy was fed into the national grid via Taipower’s substation.” Taipower is a state-owned utility.
Situated 35 to 60 kilometers off Taiwan’s west coast, the scale of Changhua 1 & 2a is considerable, with Orsted describing it as “Taiwan’s biggest offshore wind farm.”
It will have a capacity of approximately 900 megawatts and use 111 turbines from Siemens Gamesa Renewable Energy. Capacity refers to the maximum amount of electricity installations can produce, not what they’re necessarily generating.
It’s hoped that construction of the project will wrap up this year. According to Orsted, the facility will eventually generate enough power to meet the needs of 1 million households in Taiwan.

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“Delivering the first power as scheduled is a major milestone for both Orsted and Taiwan,” Christy Wang, who is general manager of Orsted Taiwan, said. “This has not been an easy task, especially with the COVID-19 pandemic challenges during the past two years,” Wang later added.

Thursday’s announcement represents a step forward for Taiwan’s offshore wind sector but a report from the Global Wind Energy Council, published in April, highlighted how things have not all been plain sailing.
“Taiwan should have commissioned more than 1 GW [gigawatt] of offshore wind capacity from three projects last year based on the project COD [commercial operation date] plans, but only the 109 MW Changhua demonstration came online in the end,” the Global Wind Report for 2022 said. The delay, the GWEC added, had been “primarily caused by COVID-19 related disruption.”
In Asia, the GWEC’s report puts Taiwan second only to China in terms of planned offshore wind installations in the near to mid-term.
According to the trade association, China is slated to add 39 GW of offshore wind over the next five years, with Taiwan set to install 6.6 GW. Vietnam, South Korea and Japan are seen as adding 2.2, 1.7 and 1 GW respectively.

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Taiwan’s Ministry of Economic Affairs says it’s targeting 20% renewable energy generation by the middle of this decade.
“The goal for PV [photovoltaic] installation has been set at 20GW by 2025, while offshore wind power is expected to exceed 5.7GW,” it says. Solar photovoltaic refers to a way of directly converting sunlight into electricity. Authorities in Taiwan also want natural gas to account for 50% of power generation in 2025.
Shifting Taiwan’s generation mix to one where renewables have a larger role represents a big task. Citing data from the Ministry of Economic Affairs, Taiwan’s Bureau of Foreign Trade says 44.69% of total power generation in 2021 came from coal firing.
Natural gas’ share amounted to 36.77%, with nuclear responsible for 9.63% and renewables 5.94%. Fuel oil and pumped-storage hydroelectricity contributed 1.87% and 1.10%. More