Economy

Renault (EPA:RENA) would transfer a 28% stake it owns in Nissan to a trust and would be left with a 15% stake, equivalent to what Nissan owns in the French automaker, the Nikkei said.Renault, which currently owns 43% of Nissan, would give up voting rights tied to the transferred shares, the newspaper added.A Renault spokesperson declined to comment. A Nissan spokesperson did not immediately respond to a request for comment. Ongoing talks between Renault and Nissan about their alliance could prompt the biggest reset in the tie-up since the 2018 arrest of longtime executive Carlos Ghosn, but it still has to be confirmed how they play out.People with knowledge of the talks have said that Renault’s stake in Nissan could be reduced to 15%. More

Federal Reserve Governor Christopher Waller said Wednesday he’s open to reducing the level of interest rate increases to half a percentage point in December.
“But I won’t be making a judgment about that until I see more data,” he said at a speech in Phoenix, where he also vowed not to be “head-faked” by an encouraging inflation report last week.

Federal Reserve Governor Christopher Waller said Wednesday he’s open to reducing the level of interest rate increases soon, so long as the economic data cooperates.
The rate-setting Federal Open Market Committee is set to meet Dec. 13-14. Market expectations are running high that policymakers will approve another rate hike, but this time opting for a 0.5 percentage point, or 50 basis point, move. That would come after approving four consecutive 0.75 percentage point increases.

“Looking toward the FOMC’s December meeting, the data of the past few weeks have made me more comfortable considering stepping down to a 50-basis-point hike,” Waller said in prepared remarks for an event in Phoenix. “But I won’t be making a judgment about that until I see more data, including the next PCE inflation report and the next jobs report.” A basis point equals 0.01 percentage point.

Christopher Waller testifies before the Senate Banking, Housing and Urban Affairs Committee during a hearing on their nomination to be member-designate on the Federal Reserve Board of Governors on February 13, 2020 in Washington, DC.
Sarah Silbiger | Getty Images

The next PCE inflation report is due on Dec. 1.
Investors have grown optimistic that a lower-than-expected increase in October’s consumer price index reading is indicative that inflation is cooling. Headline CPI increased 0.4% for the month and 7.7% from a year ago, while the core reading excluding food and energy rose 0.3% and 6.3%, respectively. All the readings were lower than market estimates.
The Fed favors the core personal consumption expenditures prices measurement, which rose 0.5% in September and 5.1% from a year ago, as a gauge of rising prices.

Waller said he’ll be watching the data closely as he remains suspect that the October CPI readings confirmed a new trend. As a governor, he is an automatic voter on the FOMC.

“Though welcome news, we must be cautious about reading too much into one inflation report. I don’t know how sustained this deceleration in consumer prices will be,” he said. “I cannot emphasize enough that one report does not make a trend. It is way too early to conclude that inflation is headed sustainably down.”
In making his assessment, Waller said he will be looking at three principal data points apart from the broad inflation readings: core goods prices, housing and non-housing services. He said he’s seeing encouraging signs on all three fronts but will need to see more and vowed not to be “head-faked by one report.”
“Like many others, I hope this [CPI] report is the beginning of a meaningful and persistent decline in inflation. But policymakers cannot act based on hope,” he said.
Earlier in the day, San Francisco Fed President Mary Daly told CNBC that she expects at least another percentage point of rate increases ahead. The Fed’s benchmark rate currently sits in a targeted range between 3.75% and 4%.

WATCH LIVEWATCH IN THE APP More

(Reuters) -Amazon.com Inc on Wednesday said it has laid off some employees in its devices group as a person familiar with the company said it still targeted around 10,000 job cuts, including in its retail division and human resources.The announcement, Amazon (NASDAQ:AMZN)’s first since media outlets including Reuters reported its layoff plans on Monday, heralded a dramatic shift for a company known for its job creation and added shape to the latest dismissals befalling the technology sector.Amazon executive Dave Limp in a blog post said the company had decided to consolidate teams in its devices unit, which popularized speakers that consumers command through speech. It notified the employees it cut on Tuesday.”We continue to face an unusual and uncertain macroeconomic environment,” he said. “In light of this, we’ve been working over the last few months to further prioritize what matters most to our customers and the business.”Plans, still in flux, to eliminate around 10,000 roles through reductions in more units would amount to about a 3% cut in Amazon’s roughly 300,000-person corporate workforce. The company has offered voluntary buyouts to some human-resources staff, the source familiar with Amazon’s job-cut plans said.For years, the online retailer aimed to make Alexa, the voice assistant that powers gadgets it sells, ubiquitous and present to place any shopping order, even though it was unclear how widely users have embraced it for more complex tasks than checking the news or weather.A project inspired by a talking computer in science fiction show Star Trek, Alexa had garnered headcount that grew to 10,000 people by 2019.At the time, Amazon touted sales of more than 100 million Alexa devices, a figure it has not since refreshed publicly. Founder Jeff Bezos later said the company often sold Alexa devices at a discount and sometimes below cost.While Amazon has toiled to encode intelligent answers to any question Alexa might expect from users, Alphabet (NASDAQ:GOOGL) Inc’s Google and Microsoft (NASDAQ:MSFT) Corp-backed OpenAI have had breakthroughs in chatbots that could respond like a human without any hand holding.Dozens of individuals posted on the professional networking site LinkedIn to say Amazon had laid them off, among them people who claimed to work on privacy for Alexa and software for the company’s cloud gaming service Luna.Following the layoff news, shares pared losses and closed down about 2%.ABOUT-FACEThe news follows Facebook (NASDAQ:META)’s parent Meta Platforms Inc announcement last week to eliminate 11,000 jobs, on top of layoffs at Twitter Inc (NYSE:TWTR), Microsoft, Snap Inc (NYSE:SNAP) and others.For Amazon, the cuts sharply contrast with efforts months ago to double its base pay ceiling to compete more aggressively for talent.In September last year it had marketed 55,000 corporate roles globally during a career fair, an increase dwarfed only by hiring in Amazon’s fulfillment centers. In short order, the online bookseller that Bezos envisioned on a road trip not 30 years before had become America’s second-largest private employer, with more than 1.5 million workers including warehouse staff.The turn has been abrupt. The retailer is now responding to sales that could rise as little as 2% this holiday season, compared with a 38% increase two years ago. Amazon’s chief financial officer told reporters last month that consumers had tighter budgets in the face of inflation and higher fuel costs.Its cloud-computing division, a profit engine for the company, likewise has increased revenue more slowly quarter after quarter in the past year, when adjusted for foreign exchange.Andy Jassy, who ascended to the role of CEO in 2021, has focused on cutting costs and stemming Amazon’s 43% share-price drop this year to date.Under his tenure Amazon announced the end of its virtual healthcare service for employers and pruning of its much-hyped autonomous sidewalk delivery program. It froze incremental corporate hiring as well. More

NEW YORK (Reuters) – A Federal Reserve tool that provides liquidity in times of stress could be strengthened if it were open to more participants and integrated into how regulators assessed financial market firms’ liquidity positions, participants at a New York Fed event said on Wednesday.Speaking at a conference on Treasury market issues, the panelists – Harvard University’s Jeremy Stein, Yale University’s Andrew Metrick and Goldman Sachs (NYSE:GS) executive Beth Hammack – were taking stock of a central bank facility launched last summer.The Fed’s Standing Repo Facility allows eligible firms, who are mainly large banks, to quickly convert their Treasuries into short-term cash loans. The facility was designed to provide a safety valve for times where liquidity runs short in bond markets. Since its launch, the tool has gone essentially unused and has not been tested in crises. But many experts and market participants say its existence should help if trouble arrives.They reckon it would save the Fed from having to intervene in financial markets, as it did in the closing months of 2019 when bank reserves ran low and the spring of 2020 when markets seized up at the start of the coronavirus pandemic. Focus has gravitated to the Standing Repo Facility given the market fragility as major central banks around the world have pursued aggressive rate increases to lower the highest levels of inflation in four decades. That has stressed liquidity in markets, most notably in the U.S. Treasury bond market, which serves as the backbone of the world’s credit system. Liquidity stresses have raised fears of broader dysfunction, especially should some sort of shock develop. But observers believe the Treasury market might be okay in the face of the trouble in part because the Standing Repo Facility will help ensure liquidity is there for those who need it. But that does not mean the facility cannot be strengthened. Stein, who was once a Fed governor, called the repo facility a “good thing” but thinks it was a missed opportunity to not make it more broad based and open to more potential participants. More participants might reduce the chance the Fed will have to intervene. One reason why many in markets worry about Fed interventions is the Bank of England’s recent experience. There, the central bank was forced to buy bonds to stem a market crisis and that action muddled the BoE’s broader effort to withdraw stimulus from the market. Meanwhile, Hammack said one other way the Standing Repo Facility could be made strong is for bank regulators to take it on board when assessing financial firms’ overall liquidity positions. More

Performance of the reform program was “broadly satisfactory” and “the economy should rebound in 2023 with a strong pickup in growth to 8.3% on the back of a temporary boost from oil and gas production and absent further escalation of the war in Ukraine,” Edward Gemayel, leader of the IMF mission to Senegal, said in a statement.He added that delays in payments of a cash transfer scheme for the poorest households should be addressed urgently, and that it is important for authorities to “convincingly commit” to start phasing out energy subsidies in 2023 and unwind them by 2025. More

The UK government has opted to block the sale of Newport Wafer Fab to Chinese-owned Nexperia on national security grounds after months of wrangling that has left the biggest British chipmaker in limbo.Nexperia, which is owned by China’s Wingtech Technology, will have to divest 86 per cent of the company, leaving it with the 14 per cent stake it held before launching a takeover in 2021, according to a final order released by the government on Wednesday.Kwasi Kwarteng, then the business secretary, announced in May that he was “calling in” the acquisition of Newport under the National Security and Investment Act, new powers under which the government is able to limit or block transactions involving strategic national assets. Nexperia, which became Newport Wafer Fab’s second-biggest shareholder in 2019, launched a takeover of the chipmaker two years later, when the Welsh company was struggling to pay its debts and faced potential bankruptcy. The plant has since sold its wares exclusively to Nexperia, stoking fears of tech transfer from the UK to China.“We’re shocked with the decision. The staff are also shocked,” said Toni Versluijs, UK head of Nexperia. “We will keep on fighting. We believe [the decision] is intrinsically wrong. We will appeal it. We intend to overturn it.”The British chip manufacturer has become a touchstone in the global battle for chips, some of the most complex and crucial components in all modern technology. As countries around the world seek to shore up domestic chip supply chains, the sale of one of Britain’s only strategic semiconductor assets to a Chinese company faced a severe backlash from British politicians, industry executives and foreign powers.A decision on whether the transaction would be unwound has been delayed multiple times since May, as the government has gone through three administrations.“None of the three secretary of states from the past three months has been willing to even speak to us, and then a decision comes from the ivory tower,” said Versluijs. “We have presented far-reaching remedies for the security risk. This isn’t levelling up, it’s levelling down.”

The government determined that there was a risk to national security stemming from the “potential reintroduction of compound semiconductor activities to the Newport site”, referring to the fact that Nexperia sits in the middle of a high-tech semiconductor cluster in that part of Wales to which China could gain access.Nexperia disputed those grounds, saying it had addressed the government’s concerns by offering remedies that ruled out any future compound semiconductor development or activity at the Newport Wafer site. The decision also found that the site could facilitate Nexperia’s “access to technological expertise” that could prevent other chip manufacturers in the cluster from being “engaged in future projects relevant to national security”.Peter Lu, who leads legal firm Baker & McKenzie’s China practice in the UK, said: “The subsequent effect this will have on Chinese investment will be significant: investors (in particular, SOEs) will seriously look to re-evaluate their short and long-term strategies with the UK as a commercial partner. “As the objective of the NSI Act has always been to impose the least intrusive remedy to alleviate national security concerns, a simple reduction in the overall shareholding would be a far more realistic — and conducive — remedy.”In September, the Financial Times reported that the previous owner of the semiconductor manufacturer, Drew Nelson, was looking to buy back the company, which employs about 450 people in the Welsh city of Newport.Nelson owned Newport Wafer Fab until 2021 and oversaw its sale to Netherlands-based Nexperia for a reported £63mn. He teamed up with private equity group Palladian Investment Partners to bid for the company, according to two people briefed on the matter.Under the terms of the 2021 sale, Nelson was offered first refusal to buy back the company if its assets were made available again, the people said. Additional reporting by Yuan Yang More

Genesis Trading has halted withdrawals at its lending unit as the crypto financial services group blamed the “unprecedented market turmoil” sparked by the collapse of Sam Bankman-Fried’s FTX. Genesis, which plays a key role in digital asset fixed income markets, said its decision to suspend redemptions and new loan originations followed “abnormal withdrawal requests which have exceeded our current liquidity”. The troubles at Genesis are the latest sign that the failure of Bankman-Fried’s FTX crypto exchange and Alameda Research, his trading firm, is sending shockwaves across the crypto industry. On Wednesday, the US House of Representatives financial services committee announced a hearing into the collapse of FTX and its impact on the crypto market. New York-based Genesis allows clients to lend out their coins in exchange for yields of as much as 10 per cent, while also providing similar services for groups including exchanges operator Gemini, which is run by twins Tyler and Cameron Winklevoss. Genesis also lends digital coins to institutions such as hedge funds and family offices.Listen in: On this episode of our Behind the Money podcast, asset management correspondent Josh Oliver explains what caused FTX’s collapse, and markets editor Katie Martin tells us what it says about the future of crypto. Five more stories in the news1. Ukraine and allies at odds over missile that exploded in Poland Ukraine and its western allies are in disagreement over who launched a missile that exploded in Poland, with Nato, Warsaw and the US saying the weapon was likely fired by Kyiv’s air defence forces during a Russian attack. President Volodymyr Zelenskyy said he had “no doubt” the missile that killed two people was not Ukrainian.2. China is co-opting UK assets, warns MI5 chief The Chinese are playing a “long game” seeking to co-opt and influence not just MPs but people much earlier in their careers in public life, in what the head of Britain’s domestic security agency said was part of a “game-changing strategic challenge” he highlighted during his annual threat assessment.3. Schwarzman says he won’t support Trump’s 2024 bid Blackstone founder Stephen Schwarzman has said he will not support Donald Trump’s bid to reclaim the US presidency, marking a significant defection by a top Republican party donor who defended him in 2020 as the then-president baselessly claimed that the election had been stolen.Related read: As Trump announced his third presidential bid from a gilded ballroom at Mar-a-Lago, there were notable absences from former supporters.

Donald Trump announced his third presidential bid from a gilded ballroom at Mar-a-Lago with former first lady Melania Trump at his side © AP

4. Tencent to ‘distribute’ $22bn Meituan stake The Chinese tech group yesterday said it would “distribute” the majority of its $22bn stake in Meituan, a food delivery company, in dividend, as it works to reduce its holdings in the country’s technology sector. Tencent’s quarterly revenue fell for a second quarter, underscoring the toll of Beijing’s bruising regulatory crackdown on the country’s internet sector.5. UK inflation accelerates to 11.1% UK inflation hit its highest level for 41 years in October. The Office for National Statistics said the rise from 10.1 per cent in September was on the back of rising energy and food prices. The surprisingly high rise presents a difficult backdrop for chancellor Jeremy Hunt’s upcoming Autumn Statement.The day aheadAlibaba earnings Jack Ma’s ecommerce group will release third-quarter results today, days after it said that its annual Singles Day performance was “in line” with last year, implying an end to years of rapid growth.Japan inflation figures Consumer price index data for October is set to be released today. Use our personal inflation calculator to determine how price rises are affecting you. Autumn Statement Chancellor Jeremy Hunt is set to unveil his financial statement, which he has repeatedly said will be “eye-wateringly” difficult as he attempts to plug a “fiscal hole” in the public finances.Join the FT at our Commodities Asia Summit in Singapore on November 23 for discussion from industry leaders including Singapore’s Minister of Trade and Industry. You can also follow along online. Register here for your in person or digital pass.What else we’re reading and listening to Frosty UK-China relations are here to stay In many ways, the cancelled meeting between Rishi Sunak and Xi Jinping sum up Sunak’s challenge in China policy: he wants to take the UK back to an earlier, less confrontational era of UK-China relations. But events and forces outside his control mean that he is going to struggle, writes Stephen Bush in his Inside Politics newsletter. How not to fire people A firing spree is under way at nearly 800 technology companies, with Amazon and Facebook owner Meta leading the pack. Brooke Masters argues that the poor handling of these job cuts could shape the sector’s culture for years to come.Central banks are right to act decisively It is the duty of the state to ensure that its money has a predictable value. Central banks are entrusted with this task. Recently, they have been failing badly, writes Martin Wolf, and it is a necessity and an obligation to rectify this failure.How the battlefield will shift after Russia’s Kherson retreat After Russia’s forced retreat from the southern Ukrainian city of Kherson last week, both sides are calculating their next moves. Russia is likely to renew its focus on the east following its pullback in the south, analysts say. The shift would echo the Kremlin’s strategy after its forces retreated from Kyiv in the spring.China intervention offers glimmer of hope to property sector Although it falls well short of a bailout, the government’s new package — in an environment where the economy has also struggled under zero-Covid restrictions — has had an immediate impact on sentiment. “I think this is a turning point for the market,” said Michelle Lam, greater China economist at Société Générale.BooksRupert Murdoch has used his media empire to acquire unrivalled political influence on three continents, so the question of who will inherit that power — and what they might do with it — still matters. In that regard Paddy Manning’s unauthorised biography The Successor is as well timed as it is cannily titled, says US business editor Andrew Edgecliffe-Johnson.

Rupert Murdoch and his son Lachlan at an event in New York in 2015 © New York Times/Redux/eyevine More

LONDON (Reuters) – Britain’s banks are proactively helping customers hit by the cost of living crisis, but implementing a new “consumer duty” on time could exclude vulnerable consumers from help, banking industry body UK Finance said on Wednesday.Consumers are grappling with inflation at a 41-year high of more than 11%, higher energy and food prices, and more Bank of England interest rate rises anticipated.UK Finance chief executive David Postings said portfolios of lenders have so far stood up to current economic stresses.”Arrears and impairments are around normal levels but it is clear there is mounting strain as interest rates continue to rise,” Postings told UK Finance’s annual dinner.Banks will have a repossession moratorium over the holiday period, Postings said.But he saw a “real worry” over the rollout of the Financial Conduct Authority’s tougher “consumer duty” on financial firms to ensure good outcomes for customers.The FCA has said the rules will start to apply to new and existing products from July 31, 2023, but this timetable is “extremely tight, maybe too tight”, Postings said.”Faced with a lack of clarity over the definition of ‘good outcomes’ and the real risk of challenge down the line I worry that firms will take a low-risk approach, withdrawing products and/or tightening the sales criteria,” Postings said.This would effectively exclude those who might need greatest financial support, he added.FCA chief executive Nikhil Rathi said in a speech at the dinner that he knew banks have concerns but there would be no extension.”Thanks to your co-operation and hard work, we hope that we have overcome the biggest stumbling blocks in the design and implementation,” Rathi said, adding the watchdog would check that no consumers are excluded.”Firms seem to be on track so we see no need for those deadlines to move again,” Rathi said.It is more critical than ever that borrowers and savers are offered fair and competitive rates, Rathi added.UK Finance chair Bob Wigley said he anticipated that finance minister Jeremy Hunt’s fiscal statement on Thursday would help restore Britain’s “traditional reputation for sound management of public finances” after turmoil in UK bond markets in September.”I hope that he will also recognise the importance of this partnership our sector offers. That means recognising the excessive rates of aggregate taxes on banks in London compared with other global financial centres, particularly Amsterdam, Frankfurt, Dublin and New York,” Wigley said.Banks hope Hunt will announce a cut in the tax surcharge on their profits. More