Economy

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(Reuters) – PayPal (NASDAQ:PYPL)’s forecast of flat growth in adjusted profit for the current year overshadowed its market-beating earnings report, sending shares of the payments giant down 7% in extended trading. On a post-earnings call, newly appointed CEO Alex Chriss laid out a strategic plan to turn the company leaner in its pursuit of driving profitable growth and ease pressure on its shares, which was one of the worst performers on the Nasdaq 100 Index in 2023. “We want to be clear eye in terms of the potential near-term benefits from our initiatives, which is why our 2024 guidance includes minimal contribution from the innovations we recently announced,” Chriss said.”It will take time for some of our initiatives to scale and move the needle,” he added. The company expects adjusted earnings per share of $5.10 for 2024, unchanged from a year earlier. It did not provide an outlook for revenue and operating margin for the full year. PayPal said the profit forecast reflects adjustments of roughly $1.8 billion, including estimated stock-based compensation expense and related payroll taxes, alongside a restructuring charge of roughly $120 million.That eclipsed the firm’s upbeat fourth-quarter earnings report, which sailed past Wall Street estimates on the back of a strong holiday shopping season.PayPal posted a fourth-quarter adjusted profit of $1.48 a share for the three months ended Dec 31. Analysts on average had expected $1.36 per share, according to LSEG data. Revenue rose 9% to $8 billion in the quarter, on a currency-neutral basis, also beating expectations of $7.87 billion. “RESET BUTTON”Analysts at Jefferies said the company had hit the “reset button” with its full-year profit forecast but added the fourth-quarter results were solid.PayPal’s stock struggled last year on fears that the entry of Apple (NASDAQ:AAPL) and Alphabet (NASDAQ:GOOGL)’s Google could take away a big chunk of its mainstay business.Last week, PayPal announced plans to cut about 2,500 jobs, or 9% of its global workforce, as it streamlines its operations. “2024 is going to be a transition year, focused on execution to position the business for long-term success,” Chriss said. Meanwhile, analysts have focused on PayPal’s margins, which have underwhelmed investors in recent quarters. The company’s unbranded businesses, including payments processing, have shown strong growth, helping offset weakness in its branded business such as Venmo, which faces intense competition.Adjusted operating margin came in at 23.3% in the fourth quarter, expanding 39 basis points, from a year earlier. More

Investment income across the insurance sector has been lifted by the robust performance of fixed-income securities, which are delivering steady and strong returns during a high interest rate environment. Meanwhile, firming bets on a soft landing for the U.S. economy drove a rally across major Wall Street indexes at the end of 2023 helping investment portfolios.The McKinney, Texas-based company said quarterly net investment income rose 6% to $271.61 million compared to the year-ago quarter.Net operating income was at $2.80 per diluted share in the three months ending Dec. 31, compared with $2.55 last year. More

“I have come to Nigeria to have conversations, discussions over the coming days on the ambitious plans that are being put in place for economic recovery,” World Bank managing director for operations Anna Bjerde told reporters.Wednesday’s meeting came after World Bank president Ajay Banga met President Bola Tinubu last October in Nigeria.Tinubu inherited an economy that is struggling with high debt levels, low revenue collections, widespread insecurity, including a long-running insurgency in the northeast and kidnappings for ransom in the northwest.Tinubu started Nigeria’s boldest reforms in decades, removing a popular fuel subsidy last May and scrapping some foreign exchange controls, but this has pushed up inflation to its highest levels in nearly three decades.Bjerde did not provide details of specific requests from Nigeria but said the visit was also an opportunity for her to take stock of the bank’s programmes in Africa’s most populous nation.Finance Minister Wale Edun said Nigeria was looking for support in the area of power, social sector and the macroeconomy. More

The U.S. mortgage market has been hit by a slowdown over the past 12 months as high interest rates keep borrowers on the sidelines. Equifax’s mainstay units rely on customers seeking credit information to check their loan eligibility. The company’s 2024 revenue forecast between $5.67 billion and $5.77 billion came in below the mid-point Wall Street expectations of $5.74 billion, according to LSEG data. Shares of the company fell 3.3% in extended trading. The guidance for the year reflects an expectation of an over 16% decline in 2024 U.S. mortgage credit inquiries, with the first half of the year expected to be weaker versus the second half, the company said. Equifax also expects current-quarter revenue between $1.38 billion and $1.4 billion, below analysts’ expectations of $1.41 billion, according to LSEG data. In the fourth quarter, the company’s revenue rose 11% to $1.33 billion, beating estimates of $1.31 billion. Adjusted profit came in at $1.81 per share in the three months ended Dec. 31, compared with Wall Street expectations of $1.75 per share. More

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(Reuters) – A look at the day ahead in Asian markets.The relief rally in Chinese stocks continues as the country prepares for the New Year holiday, but before markets shut down the latest inflation figures on Thursday will show whether the economy is any closer to escaping the clutches of deflation.Consensus forecasts point to mixed signals – year-on-year consumer price deflation is expected to have intensified in January but month-over-month prices rose at the fastest pace in a year, while annual producer price deflation stayed strong.China’s battle with deflation is symptomatic of the economy’s patchy rebound from the pandemic, imploding property sector, high debt and leverage across the economy, and slumping asset markets. A 6% slump in U.S.-listed shares of China’s Alibaba (NYSE:BABA) on Wednesday after the company missed analysts’ estimates for third-quarter revenue, could sour sentiment at the market open on Thursday.If China’s inflation figures show price pressures are still skewed to the downside, concern that China might export its deflation to the rest of the world is bound to rise. That would complicate the job of policymakers at the U.S. Federal Reserve and other central banks, and would muddy the waters for investors. Right now though, the party across large swathes of global stock markets shows no sign of winding down any time soon. The MSCI world index hit a two-year high on Wednesday and has only fallen twice in the last 15 sessions; the S&P 500 hit a record high and is nudging 5000 points; the MSCI index of developed market stocks also hit a record high. Although the broad steer from three Fed officials on Wednesday was to lean against the 120 basis points of rate cuts this year priced into rates futures markets, bond yields and the dollar edged lower after a 10-year U.S. bond auction.The U.S. Treasury sold $42 billion of debt at auction – one of the biggest 10-year sales on record – at a yield below the prevailing level at the time of bidding, and demand was strong.The Reserve Bank of India, meanwhile, delivers its latest interest rate decision on Thursday. The RBI is expected to hold its repo rate steady at 6.50% – untouched in a year and likely to stay there until the second half of this year.Money market pricing points to the first and only rate cut this year coming in August or October, making the RBI one of the least dovish of any central bank. This helps explain why the rupee is one of the few currencies to have risen against the U.S. dollar this year, even if it has been less than 0.5%.But it is coming from a low base, a record low base, after trading as low as 83.50 per dollar late last year.Here are key developments that could provide more direction to markets on Thursday: – China consumer, producer price inflation (January)- India interest rate decision – Japan trade, current account (December) (By Jamie McGeever) More

WASHINGTON (Reuters) – The U.S. government on Wednesday strengthened air quality standards for soot for the first time in over a decade, predicting $46 billion in health benefits while industry groups warned the move would harm some local economies.The Environmental Protection Agency lowered the allowable concentration of particulate matter smaller than 2.5 microns, or PM 2.5, to 9 micrograms per cubic meter (µg/m3) on average per year, from the current 12 µg/m3 in place since 2012. In its proposal last year, it also considered a lower and higher limit.Soot, or fine particulate matter, comes from sources ranging from power plants to construction sites, to vehicle tailpipes and industrial smokestacks. It affects several sectors from electricity and petrochemical production to oil and gas refining. It causes lung and heart damage and has been found to disproportionately affect low-income communities, according to the EPA.The rule “really does represent what the Biden-Harris administration is all about: healthy people equals a healthy economy,” EPA Administrator Michael Regan told reporters on Tuesday, adding that since 2000, PM 2.5 has decreased while the economy grew.The EPA said it will go through a process over the next two years designating which areas already meet the standard and which do not but it projects that in 2032, 99% of counties will have PM levels that meet the new standards. After EPA decides which areas are out of attainment, affected states would need to submit plans for how to get them to meet the standard.According to a map shared by the EPA, only 52 counties would not meet the annual standard by 2032. Nearly half of them are in California.Industry groups, which have been urging the EPA to set a less stringent standard, slammed the proposal and warned it would slow down environmental permitting and implementation of the administration’s Inflation Reduction Act, which has spurred a domestic clean energy manufacturing boom.The U.S. Chamber of Commerce projected that as many as 569 counties would be out of compliance, arguing that non-industrial sources like wildfires are a major source of soot. Marty Durbin, Senior Vice President for Policy at the Chamber, said the process for claiming these exemptions “is time-consuming and difficult for states to manage.”Regan told reporters that the EPA has streamlined the process to make it easier for states to apply for exclusions to the standard in the event of wildfires.Environmental and public health groups praised the move to tighten the standards, though some groups had hoped the EPA would set the limit even lower, as recommended by the EPA’s scientific advisory committee.”Strengthening the annual particle pollution standard will make an important difference, especially for communities near a pollution source like a power plant or a busy road,” said Harold Wimmer, President of the American Lung Association, but “it is disappointing that EPA did not follow the strong science-based recommendations.” (This story has been refiled to say counties, not countries, in paragraph 5) More