Economy

NEW YORK (Reuters) -A federal judge on Tuesday rejected Pfizer (NYSE:PFE)’s bid to recoup about $75.2 million left over from a U.S. Securities and Exchange Commission insider trading settlement with billionaire Steven A. Cohen’s former hedge fund SAC Capital Management.U.S. District Judge Victor Marrero in Manhattan said Wyeth, a drugmaker Pfizer bought in 2009, did not qualify as a victim of the securities violations underlying the SEC case, and therefore was not entitled to the funds.Marrero directed that the money be paid to the U.S. Treasury, which the SEC had requested.Pfizer and its lawyers did not immediately respond to requests for comment.The dispute stemmed from a $602 million civil settlement tied to trading in Wyeth and drugmaker Elan by Mathew Martoma, who worked at an SAC unit and was later convicted, based on a neurologist’s tips about a 2008 Alzheimer’s drug trial.SAC pleaded guilty to fraud in 2013 and paid $1.8 billion in settlements with the SEC and other authorities.The SEC had $75.2 million left over after compensating Wyeth and Elan investors for their losses. Pfizer said it deserved that money because the neurologist, Sidney Gilman, breached a fiduciary duty to Wyeth, where he was a consultant.But the judge said the reputational harm that Wyeth suffered from the scandal did not mean it also suffered financial harm.”The court certainly agrees that corporations whose secrets are misappropriated for insider trading purposes are generally victims of wrongdoing,” he wrote. “But Pfizer has failed to allege how the insider trading scheme and Wyeth’s subsequent reputational harm qualifies as pecuniary harm for purposes of distributing the disgorged funds.”Marrero added that a $7 billion decline in Wyeth’s market value following the drug trial had nothing to do with the insider trading scheme, which became public three years later.Cohen was not criminally charged, but accepted a two-year ban on managing outside money to end an SEC probe into his supervision of Martoma.He changed SAC Capital’s name to Point72 Asset Management in 2014, and stopped trading for that fund in September. Cohen is worth $21.3 billion according to Forbes magazine.The case is SEC v CR Intrinsic Investors LLC et al, U.S. District Court, Southern District of New York, No. 12-08466. More

The one-year loan prime rate (LPR) was kept at 3.1%, and the five-year LPR was unchanged at 3.6%.In a Reuters survey of 28 market participants conducted this week, all respondents expected the rates to stay unchanged.Most new and outstanding loans in China are based on the one-year LPR, while the five-year rate influences the pricing of mortgages. More

The PBOC kept its one-year LPR at 3.10% after cutting it by 25 basis points in October. The five-year LPR, which determines mortgage rates, was left at 3.60% after a 25 bps cut in the prior month.The LPR is determined by the PBOC based on considerations from 18 designated commercial banks, and is used as a benchmark for lending rates in the country.Analysts had widely expected the LPR to remain unchanged this month, with Beijing seen awaiting more clarity on what a second Donald Trump presidency will entail for Sino-U.S. trade before unlocking more economic support.China rolled out a slew of aggressive stimulus measures since late September to support growth. But the country held off on outlining more targeted fiscal measures, amid caution over increased trade tariffs under Trump, who has vowed to impose a 60% import tariff on all Chinese goods.The PBOC was also seen as having limited space to cut interest rates further, especially as the Chinese yuan was battered following Trump’s election. The central bank had steadily cut the LPR further into record-low territory over the past two years to support growth.But monetary measures have so far provided limited support to the Chinese economy, which is still struggling with persistent deflation and a property market slump. More

The company priced an offering of $2.65 billion aggregate principal amount of U.S. dollar-denominated notes and RMB 17 billion ($2.35 billion) worth of offshore yuan-denominated notes. The offering of the dollar notes is expected to close on Nov. 26, while that of the yuan notes will close on Nov. 28, subject to conditions, the company said in a statement. Reuters had earlier reported that the U.S. dollar tranche would consist of 5-1/2-year, 10-1/2-year and 30-year bonds, citing a term sheet. The report said Alibaba was also working on 3-1/2-year, 5-year, 10-year and 20-year offshore yuan tranche. Alibaba intends to use the net proceeds from the offering of the notes for general corporate purposes, including repayment of offshore debt and share repurchases.($1 = 7.2385 Chinese yuan renminbi) More

TOKYO (Reuters) – Japan’s exports rebounded in October, led by a pickup in chip equipment demand in China, data showed on Wednesday, suggesting that solid global demand was underpinning the country’s still fragile economic recovery.The data comes as Japanese businesses are weighing the impact of new and potentially hefty tariffs promised by U.S. President-elect Donald Trump that could upend international trade. Total (EPA:TTEF) exports rose 3.1% year-on-year in October, the data showed, more than a median market forecast for a 2.2%% increase and following a 1.7% drop in September.Exports to China rose 1.5% in October from a year earlier, while those to the United States, Japan’s largest export destination, were down 6.2%, the data showed.Imports grew 0.4% in October from a year earlier, compared with market forecasts for a 0.3% decease.That resulted in a trade deficit of 461.2 billion yen ($2.98 billion) in October, compared with the forecast of a deficit of 360.4 billion yen.While the October data was solid, Japanese exports could face pressure from potential U.S. tariffs, a key element of Trump’s pitch to voters.A proposed 10% tariff on all U.S. imports could push down Japan’s gross domestic product by 0.13%, and another 0.12% if a potential 60% levy on Chinese-made products triggers retaliatory tariffs from China, according to estimates by Shunsuke Kobayashi, chief economist at Mizuho (NYSE:MFG) Securities.Japan is seeing growing signs of a recovery in domestic demand. Last week’s GDP data for the July-September quarter showed a stronger-than-expected pickup in private consumption backed by rising wages.Bank of Japan Governor Kazuo Ueda said on Monday that the economy was progressing towards sustained wages-driven inflation, leaving open the chance of another interest rate hike as early as next month.($1 = 154.6700 yen) More

LONDON (Reuters) – Britain’s official labour market statistics may be failing to count almost 1 million people who are in work, complicating the Bank of England’s task of deciding how quickly to cut interest rates, a think tank said on Wednesday.The Resolution Foundation said the official methodology – which is being overhauled – might also be overestimating the number of workers who have dropped out of the jobs market.The BoE has cut rates by half a percentage point since August, less than the European Central Bank and the U.S. Federal Reserve, largely because of its worries about inflation pressures in the job market.”Official statistics have misrepresented what has happened in the UK labour market since the pandemic, and left policymakers in the dark by painting an overly pessimistic picture of our labour market,” Adam Corlett, principal economist at the Resolution Foundation, said.The Office for National Statistics, like agencies in other countries, has struggled to get responses to its surveys since the COVID pandemic. BoE Governor Andrew Bailey has lamented the state of the official data, saying last week it was “a substantial problem”.The Resolution Foundation said the ONS appeared to be underestimating growth in the number of people in work since 2019 by 930,000. The think tank used data from the tax office, self-employment figures and new population data to make its estimate which closely tracked official employment numbers until 2020. Since then it has diverged sharply.Corlett said the employment rate, using the foundation’s approach, probably rose to its pre-pandemic peak in 2023 before edging down in 2024 to broadly the same level as in 2019. The official data suggests the employment rate is lower than it was in 2019, which is at odds with high vacancy rates and strong wage growth, he said.Prime Minister Keir Starmer is aiming to get the employment rate up to 80%, up from the official estimate of 74.8% now.”The government faces a significant challenge in aiming to raise employment, even if the rate is higher than previously thought,” Corlett said. “But crafting good policy is made harder still if the UK does not have reliable employment statistics.” More

WASHINGTON (Reuters) -U.S. President-elect Donald Trump said on Tuesday he will nominate Wall Street CEO Howard Lutnick to lead his trade and tariff strategy as head of the Commerce Department, the agency that has become the U.S. weapon of choice against China’s tech sector.Lutnick, the head of brokerage firm Cantor Fitzgerald, will also have “additional direct responsibility” for the U.S. Trade Representative’s office, Trump said in a statement.Trump’s transition team did not respond to requests for clarity on Lutnick’s responsibilities, including whether he would also serve as U.S. Trade Representative, traditionally the top U.S. trade policy job.The USTR reports directly to the president and different committees in Congress handle oversight for the two agencies.With the appointments, Trump taps a long-time friend who backs the Republican’s vision to bring manufacturing jobs back to the U.S. and promote the adoption of cryptocurrency.Lutnick also runs brokerage BGC Group and is chairman of Newmark Group (NASDAQ:NMRK), a commercial real estate services firm, and FMX, a platform owned by some of Wall Street’s biggest banks and traders. Shares of BGC fell 2.6%.Lutnick’s appointment was a setback to two other Trump supporters who had vied for the Commerce job, former small business administrator Linda McMahon and ex-USTR Robert Lighthizer.CNN reported that McMahon, who along with Lutnick co-chaired Trump’s transition team, is expected to be named education secretary, heading a department that Trump proposed abolishing during his campaign.Lighthizer, who also had been considered an early candidate for Treasury secretary, could not be reached for comment.TRADE WEAPONS    The Commerce Department oversees a sprawling array of functions with nearly 47,000 employees, from the U.S. Census Bureau to weather forecasting, ocean navigation and investment promotion.Its trade-related functions have grown in importance in recent years. They include authority over export controls on sensitive U.S. technologies, which have put it at the center of trade conflicts with China, as well as investigating anti-dumping and anti-subsidy cases that often result in punitive tariffs to protect domestic industries.Trump used Commerce’s authority over the “Section 232” national security trade statute to underpin his 2018 tariffs on steel and aluminum and may invoke it again to impose broad global tariffs on imports, trade experts say.To rebuild the U.S. manufacturing base, Trump has vowed to impose new tariffs of at least 60% on Chinese imports and 10%-20% on goods from elsewhere – moves that economists say would upend global trade flows and raise costs.Fearing Beijing could weaponize American technology to strengthen its military, both the Trump and Biden administrations have used Commerce Department authorities aggressively to impose regulations to halt the flow of U.S. and foreign technology to China – with a special emphasis on semiconductors and the equipment used to make them.Over the past two years, the U.S. has issued sweeping export controls on advanced chips and chipmaking equipment to China, which has limited its access to cutting-edge chips for artificial intelligence and equipment needed to produce the next generation of semiconductors.TARIFF BACKERUnlike other members of Trump’s inner circle, Lutnick does not speak about China often. He is a big proponent of tariffs, especially aimed at China. According to the New York Times (NYSE:NYT), the investment banker said in a podcast interview last month: “Don’t tax our people. Make money instead. Put tariffs on China and make $400 billion.”Cantor Fitzgerald, with offices in Hong Kong, underwrote Chinese biotech firm Adlai Nortye’s Nasdaq initial public offering last year. It was the first Chinese listing since Beijing implemented new rules requiring companies in China to obtain a special filing before going public overseas.The next commerce secretary will enforce a range of rules put in place to hamper China’s development of artificial intelligence and keep some of its biggest tech firms, including Huawei Technologies and Semiconductor Manufacturing International, several steps behind their global competition in key technologies.As co-chair of Trump’s transition team, Lutnick had been seen for weeks as a possible candidate for a position in the Trump administration, including Treasury secretary.  A native of New York City’s Long Island suburbs with a background in trading and real estate, Lutnick has been one of Trump’s top Wall Street advocates, hosting fundraisers and touting his policies in the media. More

Measures of underlying inflation – the trimmed mean and weighted median – watched closely by the Reserve Bank of Australia were unaffected by the errors, the Australian Bureau of Statistics said. In a media release on its website, the ABS said it had made an error in estimating the effect of government subsidies for child care, which took effect in July 2023. As a result, in the September quarter CPI report the published child care index was 5.8%, or 9.5 index points, higher than it should have been at 163.0. Annual growth in care costs should have been 10.7%, rather than 12.1%.Child care makes up only 0.9% of the CPI basket, so the error meant the level of the overall CPI was just 0.04% higher in the quarter than it should have been.The series will be corrected in the October monthly CPI due out on Nov. 27 but will make no difference to the already published quarterly inflation rate, the ABS said.It noted the CPI was widely used for indexation purposes and revisions could create uncertainty and confusion. More