S&P 500 Moves To Session Lows After Hawkish Comments From Fed Officials

Key Insights

  • Protests in China raised worries about additional supply chain disruptions. 
  • Hawkish comments from Fed’s Williams and Bullard put more pressure on S&P 500 and NASDAQ Composite. 
  • A move below 3960 will push S&P 500 towards the support at 3920.

Fed Speakers And Protests In China Hurt Market Sentiment

S&P 500 settled below the 4000 level as traders reacted to protests in China and hawkish comments from Fed officials.

China was shaken by protests after 10 people died in a fire in the Xinjiang province. Protesters believed that victims of the fire did not get timely help due to anti-coronavirus measures.

Markets fear that China’s zero-COVID policy and protests will put more pressure on the country’s economy and lead to additional supply chain issues. These fears pushed WTI oil towards yearly lows, although oil markets managed to rebound amid rumors about a potential production cut from OPEC+ on December 4.

Fed speakers put additional pressure on market sentiment. Fed’s Williams said that inflation remained too high and that unemployment rate may grow up to 5% at the end of 2023. He noted that Fed should continue to raise rates.

Williams has also said that the Fed may start to bring down interest rates in 2024, which was too hawkish for the market that hopes that Fed would start cutting rates in the second half of 2023.

Meanwhile, Fed’s Bullard said that markets were underestimating chances of higher interest rates. He noted that the rates should be raised to at least 5%.

Today’s pullback was led by tech stocks, which are sensitive to the changes in the market’s appetite for risk. Apple, Microsoft, and Meta were down by about 2% in today’s trading session.

S&P 500 Heads Towards The Support Level At 3960

S&P 500

S&P 500 is currently moving towards the support level at 3960. A move below this level will open the way to the test of the support at 3920. In case S&P 500 declines below 3920, it will head towards the next support at the 50 EMA at 3885.

On the upside, the previous support at 4000 will serve as the first resistance level for S&P 500. If S&P 500 manages to settle back above this level, it will head towards the next resistance level at 4015. A move above the resistance at 4015 will push S&P 500 towards the resistance at 4040.

For a look at all of today’s economic events, check out our economic calendar.

Exclusive-Microsoft likely to offer EU concessions soon in Activision deal -sources

By Foo Yun Chee

BRUSSELS (Reuters) -Microsoft is likely to offer remedies to EU antitrust regulators in the coming weeks to stave off formal objections to its $69 billion bid for “Call of Duty” maker Activision Blizzard, people familiar with the matter said.

The U.S. software giant and Xbox maker announced the deal in January to help it compete better with leaders Tencent and Sony.

It has since then faced regulatory headwinds in the European Union, Britain and in the United States, with Sony criticising the deal and even calling for a regulatory veto.

The deadline for the European Commission, which is investigating the deal, to set out a formal list of competition concerns known as a statement of objection is in January. Offering remedies before such a document is issued could shorten the regulatory process.

“Ultimately, such a move could secure an early clearance with the European Commission and subsequently be used by the parties before other antitrust agencies,” said Stephane Dionnet, a partner at law firm McDermott Will & Emery.

“However, it remains to be seen whether the active complainants will validate such concessions (in particular in terms of scope) and if behavioural remedies will also be accepted by the CMA and the FTC,” he said, referring to the UK and U.S. antitrust agencies.

Microsoft’s remedy would consist mainly of a 10-year licensing deal to Playstation owner Sony, another person with direct knowledge said.

Activision shares were up 2% after the Reuters story was published.

The EU competition watchdog, which is scheduled to decide on the deal by April 11, and Sony declined to comment.

Microsoft said it was working with the Commission to address valid marketplace concerns.

“Sony, as the industry leader, says it is worried about Call of Duty, but we’ve said we are committed to making the same game available on the same day on both Xbox and PlayStation. We want people to have more access to games, not less,” a Microsoft spokesperson said.

The deal has been cleared unconditionally in Brazil, Saudi Arabia and Serbia.

(Reporting by Foo Yun Chee; Editing by Jan Harvey, Lisa Shumaker and David Evans)

Musk says Apple mostly stopped advertising on Twitter

(Reuters) -Elon Musk said on Monday that Apple Inc has mostly stopped advertising on Twitter, the most high-profile company to pull ads from the social media platform over concerns about content moderation policies under its new owner.

The move aligns the iPhone maker with a rising list of firms from General Mills Inc to luxury automaker Audi of America that have stopped or paused advertising on Twitter since the billionaire’s $44 billion buyout last month.

“Apple has mostly stopped advertising on Twitter. Do they hate free speech in America?,” Musk said in a tweet. He later tagged Apple Chief Executive Officer Tim Cook’s Twitter account in another tweet, asking “what’s going on here?”

Musk said “yes” in response to a user question on whether Apple was threatening Twitter’s presence in the App Store or making moderation demands.

Apple did not immediately respond to a request for comment.

The world’s most valuable firm spent an estimated $131,600 on Twitter ads between Nov. 10 and Nov. 16, down from $220,800 between Oct. 16 and Oct. 22, the week before Musk closed the Twitter deal, according to ad measurement firm Pathmatics.

Musk, a self-described free speech absolutist, had said earlier this month that Twitter had seen a “massive” drop in revenue and blamed activist groups for pressuring advertisers. Ad sales account for about 90% of Twitter’s revenue.

The platform has in the past few days reinstated the account of former U.S. President Donald Trump, as well as comedian Kathy Griffin and U.S. House Representative Marjorie Taylor Greene.

The Trump reinstatement prompted a coalition of civil rights activists to say last week that they were urging Twitter’s advertisers to issue statements about pulling their ads off the platform.

At a presentation for advertisers in May, some ad agencies and brands were already skeptical on concerns that Musk would scale back content moderation and security protection on the platform.

(Reporting by Tiyashi Datta in Bengaluru and Sheila Dang in Dallas; Editing by Shounak Dasgupta and Sriraj Kalluvila)

Venezuelan political talks set to enter challenging phase -opposition delegate

CARACAS (Reuters) – Talks between the Venezuelan government and the country’s opposition, which resumed over the weekend, are set to enter a crucial stage, the head of dialogue for Venezuela’s opposition said on Monday, as the political rivals seek to end a prolonged economic crisis.

“Now is when negotiations get tough,” Gerardo Blyde, who leads the team of negotiators for Venezuela’s opposition, said in an interview with local radio station Circuitos Exitos.

The talks are ongoing but do not have a fixed schedule as yet. The discussions are held in Mexico City and are mediated by Norway.

The opposition will seek to meet with the Venezuelan government again before the end of the year to discuss human rights, political prisoners and other topics including “electoral conditions,” Blyde said.

Delegates for President Nicolas Maduro and the opposition met in Mexico City Saturday to resume formal talks after a hiatus of more than a year.

The parties signed a “social agreement,” asking the United Nations to manage the Venezuelan money currently frozen in international accounts in a fund to be used for aid purposes, reportedly totaling some $3 billion.

The agreement “is not the solution,” however, said Blyde, describing it as a “palliative” step.

The $3 billion is not enough to meet Venezuela’s needs, he said, adding that once the fund is created, the plan is to dole out the cash in phases, taking around three years.

A date has not been set to create the fund, which will be used to make improvements to the electric grid, hospitals and schools in the nation where around half live in poverty.

Blyde also said the administration of U.S. President Joe Biden had been key in getting the Venezuelan government back to the table by easing some Washington-imposed sanctions.

U.S. oil company Chevron Corp also received an expanded license on Saturday, allowing it to resume oil production in the South American country and bring Venezuelan crude to the United States.

The decision gives broader freedom to Chevron, the last large U.S. oil producer operating in Venezuela, though it restricts the company from paying royalties in the country.

(Reporting by Vivian Sequera and Mayela Armas in Caracas; Writing by Kylie Madry; Editing by Matthew Lewis)

Crypto lender BlockFi files for Chapter 11

(Reuters) – U.S. cryptocurrency lender BlockFi said on Monday it had filed for Chapter 11 bankruptcy protection along with eight affiliates in a New Jersey court, the latest casualty since FTX’s collapse earlier this month triggered instability in the crypto market.

In a court filing, New Jersey-based BlockFi said it owes money to more than 100,000 creditors. It listed crypto exchange FTX as its second-largest creditor, with $275 million owed on a loan extended earlier this year.

COMMENTS:

MARTHA REYES-HULME, HEAD OF RESEARCH, BEQUANT, LONDON

“The BlockFi bankruptcy is a sad chapter in the short history of our industry that has forced participants to be more mindful of risk management, counterparty risk, and governance. Our clients have always used diversification to minimize exchange risk but now we are seeing many pull back in the short term and seek better solutions, especially around custody, to protect their assets. We are working closely with them. Ultimately it will be better for everyone. We are still seeing interest to onboard, even in these difficult times, which is reassuring as well as interest from mainstream institutions that attended our conference last week.”

MONSUR HUSSAIN, SENIOR DIRECTOR, FITCH RATINGS, LONDON

“BlockFi’s Chapter 11 restructuring underscores significant asset contagion risks associated with the crypto ecosystem, and, potentially, deficient risk management processes. Restructuring processes can be notoriously lengthy – Mt Gox’s creditors are only getting closer to being paid eight years after the operation failed.”

MARK CONNORS, 3iQ DIGITAL ASSET MANAGEMENT, TORONTO

“During a period of unwinding and consolidation, which is where we are, leveraged strategies are more at risk. We’re trying to separate the wheat from the chaff here, and I don’t think many people were surprised by the BlockFi filing… BlockFi received a $250mm loan in Q2, from FTX – likely in self interest to help keep overleveraged Alameda afloat.  So, today’s action was not unexpected.”

“Institutional investment is stalled right now in the wake of this. The first assessment will be, what failed? We believe it’s the unregulated centralized entities. So institutions are going to go back and say, did we invest in the wrong people in the VC stage? I think that’s going to be a big yes. Does this mean that bitcoin and Ethereum, the two main protocols that account for 60-odd percent of the digital asset space are flawed? There’s no institutional investor who can say those protocols failed, or do not hold the same promise they did before the FTX failure. So there are institutions that remain interested, but regulators need to define the state of play for institutions to follow.”

“There are (crypto) lending models that make sense. The decentralized finance models used proper collateralization and they’re intact. Some centralized models did not. I think you’re seeing the models with the weak lungs fail first. If a company gives you 18% yield, you better know really well where that yield is coming from.”

“FTX US, is I think the second largest creditor in BlockFi. But the question is, was that denominated in the FTT token or was it cash? In other bankruptcies, you’d have hard assets or U.S. dollars … we don’t know if they loaned (FTT) to BlockFi but we’re asking that questions for good reason.”

CONOR RYDER, RESEARCH ANALYST, KAIKO, DUBLIN

“The BlockFi filing is the latest in a string of contagion events after FTX, and arguably continued fallout from Celsius/Three Arrows Capital last summer. It was yet another example of neglected risk management when prices were going up, as crypto winter hit those that took on the most counterparty risk are getting exposed.”

“From a customer standpoint it serves as another reminder to be skeptical of any crypto yield products on offer, particularly those that sound too good to be true. That should be the biggest red flag now that a company is taking on added risk with your assets.”

(Compiled by the Global Finance & Markets Breaking News team)

Apple, energy shares drag Wall St lower amid China COVID protests

By Ankika Biswas and Shreyashi Sanyal

(Reuters) -Wall Street’s main indexes fell on Monday as protests in major Chinese cities against strict COVID-19 policies sparked concerns over economic growth and dragged commodity-linked shares lower, while Apple slid on worries about a hit to iPhone production.

Shares of the tech giant fell 2% and weighed the most on the benchmark S&P 500 index, as growing worker unrest at the world’s biggest iPhone factory in China fanned fears of a deeper hit to the already constrained production of higher-end models.

Rare protests in major Chinese cities over the weekend against the country’s strict zero-COVID curbs have hit growth expectations in the world’s second-largest economy.

“If these protests continue, it could disrupt supply chains and the reopenings, a glimpse of which we saw earlier this year,” said Brian Klimke, director of investment research at Cetera Financial Group.

“It will continue to weigh on investors’ minds going forward.”

The S&P 500 energy index and the materials index slid 1.7% and 1.4%, respectively, making them the biggest sectoral decliners as oil and metal prices dropped on China news. [O/R][MET/L]

U.S.-listed shares of Chinese companies such as Bilibili Inc, Alibaba Group Holding Ltd, JD.com Inc, Baidu Inc and Nio Inc, however, eked out gains, rising between 1% and 2.2%.

“Those that are buying might be trying to pick up some ball games on stocks that have been way beaten down or maybe they think that this is going to force the (Chinese) party’s hand into relaxing some of the restrictions,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield.

At 12:29 p.m. ET, the Dow Jones Industrial Average was down 270.56 points, or 0.79%, at 34,076.47, the S&P 500 was down 35.13 points, or 0.87%, at 3,990.99, and the Nasdaq Composite was down 87.55 points, or 0.78%, at 11,138.80.

A 1.2% rise in shares of Amazon.com limited the downside, after an industry report estimated spending during Cyber Monday, the biggest U.S. online shopping day, to rise as much as $11.6 billion, encouraged by some of the biggest discounts and deals to attract inflation-wary consumers.

Trading in other growth stocks, including Microsoft Corp, Meta Platforms Inc, Nvidia Corp, Netflix Inc and Tesla Inc, were mixed.

Among other stocks, Biogen Inc fell 3.9% following a report of death during a clinical study of its experimental Alzheimer’s drug.

Shares of cryptocurrency and blockchain-related companies, including Coinbase Global Inc, Riot Blockchain Inc and Marathon Digital Holdings Inc, were down about 2.5% each following lender BlockFi’s bankruptcy filing, the latest casualty since FTX’s collapse earlier this month.

For the week, investors will keep a close watch on nonfarm payrolls for November, the second estimate for third-quarter gross domestic product and consumer confidence this month.

Declining issues outnumbered advancers for a 2.47-to-1 ratio on the NYSE and for a 1.95-to-1 ratio on the Nasdaq.

The S&P index recorded 11 new 52-week highs and two new lows, while the Nasdaq recorded 74 new highs and 102 new lows.

(Reporting by Ankika Biswas and Shreyashi Sanyal in Bengaluru; Editing by Shounak Dasgupta and Anil D’Silva)

UK Cyber Monday transactions up 5% vs 2021 – Barclaycard Payments

LONDON (Reuters) – The volume of payments made in Britain on so-called Cyber Monday was up 5.0% compared to the same point in 2021, data from Barclaycard Payments showed.

“Despite a challenging economic backdrop, shoppers have made the most of the discounts on offer, with today’s data following an encouraging Black Friday and strong weekend both online and in-store,” its head Marc Pettican said.

Barclaycard Payments, which says it processes nearly 1 pound ($1.20) in every 3 pounds spent on credit and debit cards in the UK, said Black Friday payment transactions were up 3.59% year-on-year.

(Reporting by James Davey; Editing by Jan Harvey)

Crypto lender BlockFi files for bankruptcy in New Jersey

By Hannah Lang, Niket Nishant and Manya Saini

(Reuters) -Major cryptocurrency lender BlockFi has filed for Chapter 11 bankruptcy protection along with eight affiliates, it said on Monday, the latest crypto casualty to follow the spectacular collapse of the FTX exchange earlier this month.

The filing in a New Jersey court comes as crypto prices plummet, with bitcoin down more than 70% from a 2021 peak.

New Jersey-based BlockFi had links with FTX, which filed for protection in the United States earlier in November after traders pulled $6 billion from the platform in three days and rival exchange Binance abandoned a rescue deal.

In a court filing on Monday, BlockFi listed FTX as its second-largest creditor, with $275 million owed on a loan extended earlier this year. It said it owes money to more than 100,000 creditors.

Under a deal signed with FTX in July BlockFi was to receive a $400 million revolving credit facility while FTX got an option to buy it for up to $240 million.

BlockFi’s bankruptcy filing also comes after two of BlockFi’s largest competitors, Celsius Network and Voyager Digital, filed for bankruptcy in July citing extreme market conditions that had resulted in losses at both companies.

Crypto lenders, the de facto banks of the crypto world, boomed during the pandemic, attracting retail customers with double-digit rates in return for their cryptocurrency deposits. On the flip side, institutional investors such as hedge funds looking to make leveraged bets paid higher rates to borrow the funds from the lenders, who profited from the difference.

Crypto lenders are not required to hold capital or liquidity buffers like traditional lenders and some found themselves exposed when a shortage of collateral forced them – and their customers – to shoulder large losses.

CREDITOR LIST

BlockFi’s largest creditor is Ankura Trust, a company that represents creditors in stressed situations, and is owed $729 million. Valar Ventures, a Peter Thiel-linked venture capital fund, owns 19% of BlockFi equity shares.

BlockFi also listed the U.S. Securities and Exchange Commission as one of its largest creditors, with a $30 million claim. In February, a subsidiary of BlockFi agreed to pay $100 million to the SEC and 32 states to settle charges in connection with a retail crypto lending product the company offered to nearly 600,000 investors.

In a blog post, BlockFi said it its Chapter 11 cases will enable the company to stabilize its business and maximize value for all stakeholders.

“Acting in the best interest of our clients is our top priority and continues to guide our path forward,” BlockFi said.

BlockFi had earlier paused withdrawals from its platform and acknowledged it had “significant exposure” to FTX and its associated entities, including “obligations owed to us by Alameda, assets held at FTX.com, and undrawn amounts from our credit line with FTX.US”

In its bankruptcy filing, BlockFi said it had hired Kirkland & Ellis and Haynes & Boone as bankruptcy counsel and Berkeley Research Group as a financial advisor.

At the end of June, a third of BlockFi’s $1.8 billion outstanding loans were unsecured, according to the company.

(Reporting by Hannah Lang in Washington, Niket Nishant and Manya Saini in Bengaluru and Elizabeth Howcroft in London; additional reporting by Dietrich Knauth, Editing by Megan Davies, Shinjini Ganguli and Conor Humphries)

Poland’s CD Projekt third-quarter profit soars thanks to Cyberpunk boost

(Reuters) -Polish video game maker CD Projekt’s third-quarter net profit jumped more than 500%, topping expectations, helped by sales of its flagship Cyberpunk 2077 game.

Interest in the game was spurred by the Cyberpunk: Edgerunners anime series which premiered on Netflix in September, and the release of an update to the game, the company said.

“The popularity of the series and the positive reception of the 1.6 update to Cyberpunk 2077, released a week earlier, had a measurable impact on the game’s sales,” CD Projekt Chief Executive Adam Kicinski said in a statement.

Net profit came in 98.7 million zlotys ($21.94 million), compared to the 88 million zlotys expected by analysts.

The studio also behind The Witcher franchise reported revenue of 245.5 million zlotys, up 70% and above expectations of 239 million zlotys.

The third quarter was the best so far this year for sales of Cyberpunk 2077, CD Projekt’s Chief Financial Officer Piotr Nielubowicz said, without giving a specific number.

The company said in September it had sold 20 million copies of the game so far, compared to more than 13.7 million it earlier said it had sold in its debut year.

($1 = 4.4981 zlotys)

(Reporting by Anna Pruchnicka; Editing by Jan Harvey)

Banco BPM’s board to discuss non-life insurance partnership on Tuesday – sources

MILAN (Reuters) – The board of Italy’s third-largest bank Banco BPM will meet on Tuesday over a non-life insurance partnership which is pitting French bank Credit Agricole against insurer AXA, two sources said on Monday.

The two French companies are the main contenders for the deal. The sources said Banco BPM may decide on Tuesday a bidder to continue discussions on an exclusive basis.

(Reporting by Andrea Mandala and Valentina Za, editing by Cristina Carlevaro)

Elliott-backed Gardant clinches bad loan venture with Italy’s BPER

By Valentina Za

MILAN (Reuters) -Italy’s BPER Banca on Monday said it had agreed a partnership with loan manager Gardant, which will team up with state-owned peer AMCO to help the bank offload up to 2.5 billion euros ($2.6 billion) in bad debts.

BPER was the only major Italian bank to still have full control of its debt recovery operations, which comprise staff dedicated to recouping problem loans and the technology they use.

The accord values the business at 150 million euros. Gardant, controlled by U.S. investment fund Elliott Management Corporation will acquire 70% of the unit, with BPER retaining 30%.

The Gardant-AMCO duo trumped rival bids by Sweden’s Intrum, Davidson Kempner-owned Prelios and Softbank-backed doValue.

Reuters in May was first to report that Gardant had teamed up with AMCO in the hard fought deal for BPER’s division.

Banks normally offload the recovery units at a profit which they use to offset the hit from simultaneous bad loan disposals.

BPER is shedding up to 2.5 billion euros in bad debts as part of the Gardant-AMCO deal.

It said the disposals would have no significant impact on its financial accounts and would cut problem debts to as low as 2.5% of total loans, from 4.2% in September.

By the end of the year, BPER will sell a first 1.5 billion euro bad loan portfolio to AMCO, which is able to bid higher than privately-owned rivals in tenders thanks to lower funding costs.

Under a 10-year management accord, the new Gardant-controlled joint venture will handle part of BPER’s existing bad loans, including some of those which it is selling.

It will also get 90% of all new defaulted loans and 50% of new ‘unlikely-to-pay’ loans – which are not yet in default.

Gardant had struck a similar deal with Banco BPM four years ago.

“Our partnership with Banco BPM has been a great success,” Gardant CEO Mirko Briozzo said.

“This deal brings our assets under management (AUM) to around 42 billion euros, turning us into a leading industry player in terms of volumes and collections,” he added.

Gardant had 19.9 billion euros in AUM at the end of 2021, according to a report by consultancy PwC, compared with market leader doValue’s 75.9 billion euros.

Briozzo said a task force would work in the next few months to get the partnership off the ground and ensure it can soon run at full steam.

Italy became Europe’s biggest market for soured bank loans after its lenders shed almost 200 billion euros in bad debts since a 2015 peak.

KPMG worked with BPER on the deal. Rothschild & Co was Gardant’s financial adviser. ($1 = 0.9538 euros)

(Reporting by Valentina Za and Andrea Mandala; Editing by Agnieszka Flak, Philippa Fletcher and Conor Humphries)

Shell to buy Danish firm Nature Energy for nearly $2 billion

(Reuters) – Shell said on Monday it would acquire Danish biogas producer Nature Energy for nearly $2 billion, as it looks to boost its low-carbon business amid growing interest in biogas.

Reuters had reported last month Shell was among a number of companies joining a second bidding round to acquire the Denmark-based company.

Nature Energy, which operates 12 biogas plants in Denmark and one in France and has others in the pipeline, confirmed the deal in a separate statement.

(Reporting by Muhammed Husain in Bengaluru; Editing by Shailesh Kuber)

China’s COVID protests weigh on European shares; Airbus tumbles

By Sruthi Shankar and Devik Jain

(Reuters) -Europe’s STOXX 600 index fell on Monday, in line with a rout in global markets on economic jitters due to rare protests in China against stringent COVID-19 curbs, while shares of Airbus slid 5.7% on a report the planemaker may delay some jet deliveries.

The pan-European index closed 0.7% lower, slipping from last week’s peak which was the highest in more than three months. [MKTS/GLOB]

Police stopped and searched people at the sites of weekend protests in Shanghai and Beijing, after crowds there and in other Chinese cities demonstrated against stringent COVID-19 measures disrupting lives three years into the pandemic.

China posted record-high COVID-19 infections on Monday, raising worries about the management of the country’s zero-COVID policy and its impact on the world’s second-largest economy.

“A widening of infections could add to supply chain interruptions, with China’s problems spilling into global markets,” Mark Haefele, chief investment officer at UBS Global Wealth Management wrote in a note to clients.

“Social discontent related to zero-COVID adds to execution and implementation risks for the government. We do not expect economic or market headwinds in China to abate significantly over the coming months.”

European oil stocks dipped 1.4% as crude prices fell on worries about the outlook for the world’s biggest crude importer, while China-exposed automakers and luxury, also slipped.

The benchmark STOXX 600 notched its sixth consecutive weekly gain on Friday, marking a recovery of about 15% from its September lows on hopes that the Federal Reserve will shift to smaller interest rate hike amid signs of cooling U.S. economy.

U.S. jobs data later this week might shift expectations around the Fed’s policy move in December, with traders currently anticipating a 50-basis-point rate hike.

Preliminary reading of euro zone inflation for November is due on Wednesday, with the numbers expected to show a slight cooling from the record levels hit in October.

European Central Bank chief Christine Lagarde said inflation has not peaked and it risks turning out even higher than currently expected, hinting at a series of interest rate hikes ahead.

Credit Suisse’s shares dropped 4.2% to log a record closing low, while the cost of insuring its debt against default rose as the Swiss bank struggled to win over rattled investors following an exodus of client cash and with more litigation on the horizon.

Brenntag SE tumbled 9.7% after the German chemicals distributor said it held preliminary discussions for a potential acquisition with U.S. rival Univar Solutions Inc.

Airbus slid 5.7% after Reuters reported the planemaker may delay planned delivery dates of some medium-haul aircraft in 2023 even as it races to meet delivery targets for 2022 in the face of supply chain and labour problems.

(Reporting by Sruthi Shankar and Devik Jain in Bengaluru; Editing by Uttaresh.V, Sherry Jacob-Phillips and David Gregori)

US Foods names Flitman CEO

(Reuters) – US Foods Holding Corp on Monday named Dave Flitman as its chief executive officer, months after the food distributor’s top boss stepped down following a settlement with activist investor Sachem Head Capital Management.

Flitman, 58, who will also join the board at US Foods, was most recently the CEO at U.S. building products supplier Builders FirstSource Inc. He has also headed Performance Food Group Co’s food service division from 2015 to 2018.

Former US Foods CEO Pietro Satriano exited in May the same day the company settled one of the most high-profile corporate fights this year by appointing three new independent directors to its board as agreed with Sachem Head.

The activist investor had been pushing for changes at Rosemont, Illinois-based US Foods, which has struggled to boost profit margins amid inflation and supply chain disruptions, saying the company’s performance was unsatisfactory.

Sachem Head did not immediately respond to a Reuters request for comment.

(Reporting by Deborah Sophia in Bengaluru; Editing by Shinjini Ganguli)

Italy seeks fresh options for TIM as bid for network seen fading

By Elvira Pollina and Giuseppe Fonte

MILAN/ROME (Reuters) -Italy’s new government is seeking fresh options for the future of former phone monopoly Telecom Italia as a planned bid for its landline grid by state investor CDP due by Wednesday is seen as unlikely to materialise.

Championed by the previous government of Mario Draghi, the multi-billion-euro preliminary bid is part of a broader project to combine TIM’s network assets with those of smaller rival Open Fiber to create a unified broadband champion under CDP’s control.

Due by this Wednesday, Nov. 30, an offer would also be central to TIM CEO Pietro Labriola’s plan to split the struggling phone group into several units and cut its 25 billion euro ($26 billion) debt.

But key officials in Giorgia Meloni’s right-wing government have expressed strong reservations about CDP’s plans for TIM, making a non-binding bid from the state lender for the network unlikely, three sources told Reuters.

Top government officials are expected to meet later on Monday to discuss plans for TIM, among other issues.

CDP has not yet called a board meeting to sign off any offer ahead of this week’s deadline, another person familiar with the matter said.

Marking a break with the past, Meloni on Friday entrusted the government’s broadband strategy to Cabinet Undersecretary Alessio Butti, who has openly criticised CDP’s plans for TIM.

Butti has called instead on Treasury-owned CDP to take over cash-bleeding TIM, whose shares are trading close to record lows, in full to then sell its service operations, including its Brazil-listed unit.

Economy Minister Giancarlo Giorgetti last week reiterated that the government wants to win control of TIM’s network which is deemed of strategic interest, adding such a goal can be reached in “several ways”.

Giorgetti also warned that Butti’s plans for TIM needs to be extensively discussed within the government.

UNION TALKS

The government did not provide any clarification on whether CDP will bid for TIM’s network by the deadline, the head of Italy’s biggest union CGIL said after a meeting with Meloni’s head of staff on Monday.

“We called for a quick decision, even in the event the government wants to change plans which were drafted so far,” Maurizio Landini told reporters,

Analysts say designing a new setup for any TIM-Open Fiber deal would require at least a year, exposing TIM to fresh uncertainty over its future at a time when rising rates increase the drain on the group’s cash flow from interest payments.

“How the government intends to reach its stated objective to have a (single) telecommunications grid in public hands remains unclear,” Intesa Sanpaolo wrote in a research note.

“The timing to find a path starts to narrow considering that TIM’s available liquidity covers debt maturities until mid-2024 and debt refinancing looks tougher than in the past.”

TIM ended 1.2% down on Monday after falling as much as 4% in early trades. ($1 = 0.9549 euros)

(Reporting by Elvira Pollina and Giuseppe Fonte; writing by Valentina Za;Editing by Keith Weir)

Carlyle raises more than $3 billion to invest in European tech

By Emma-Victoria Farr

FRANKFURT (Reuters) – U.S. buyout firm Carlyle Group has raised more than three billion euros ($3.12 billion) for a pan-European technology fund that is taking advantage of “pockets of life” in the economy, the co-heads of Carlyle Europe Technology Partners told Reuters.

Focused on lower mid-market and growth technology companies across Europe, the fund, called CETP V, has exceeded its 2.5 billion euro target in less than a year of fundraising, more than doubling the size of the previous fund CETP IV.

With an average investment horizon of five years, it is targeting areas such as cybersecurity, digital transformation and cleantech, as well as software applications for financial services, healthcare and infrastructure, Michael Wand and Vladimir Lasocki said.

Lasocki said there were opportunities in less impacted private markets, despite the plunge in tech valuations and a broad tech selloff in public markets following the pandemic and crisis caused by the Ukraine war.

Carlyle aims to invest in approximately 20-30 companies through the new fund and in most cases will buy a majority stake.

It will, however, reserve about 15% of the fund for growth equity transactions, Wand and Lasocki said.

The fund will write equity cheques of up to 250 million euros, resulting in deals from between 100 million euros and 500 million euros in enterprise value, they said.

Targeting B2B technology businesses in Europe, Carlyle will support portfolio firms with plans to become more international, for example breaking into the U.S. market.

It will also work with the companies to upgrade management teams and accelerate growth via M&A transactions, the co-heads said.

The fund already has two investments – Euro Techno Com Group (ETC) a value-added distributor of telecoms equipment which it sold to Cinven in June, rolling on a minority stake into its new fund, and digital marketing agency Incubeta, which it acquired earlier this month.

(This story has been refiled to remove the repeated word in the final paragraph)

($1 = 0.9625 euros)

(Reporting by Emma-Victoria Farr, editing by Barbara Lewis)

Oil stocks drag FTSE 100 lower as China’s COVID protests shake markets

By Shashwat Chauhan and Shristi Achar A

(Reuters) -UK’s FTSE 100 closed lower on Monday, with commodity-linked stocks weighing heavy on the index, as global markets watched the rare protests in China against strict COVID-19 restrictions, leaving its economic outlook uncertain.

The blue-chip FTSE 100 fell 0.2%, following two weekly gains that lifted the index to its highest levels in more than two months. The more domestically focused FTSE 250 midcaps index dropped 1.3%.

Energy stocks were the biggest drags on the FTSE 100, with oil majors BP and Shell down 1% and 0.3%, respectively. Banks and Insurers were the second biggest sectoral losers.

Commodity prices dipped on worries about demand from top consumer China where protests against COVID restrictions flared up. China’s zero-COVID policy has already slowed the economy and pressured global growth, but failed to stem the rise in infections. [O/R] [MET/L]

“It’s a very hard thing to price, even the markets are not used to seeing demonstrations in China,” said Chris Beauchamp, chief market analyst at IG Group.

“It looks quite serious, worries about how that will affect the government’s reopening strategy and what kind of response you will get from Beijing, that’s definitely causing a bit of caution.”

Real estate stocks lost more than 1%. A survey showed British property market activity stalled in October and house price growth slowed to its lowest quarterly level since February 2020 due to a disastrous “mini-budget” and a cost-of-living crisis.

“Consumer sensitive stocks have had a tremendous run from their lows in October amid hopes for the central bank’s slow down on interest rates,” said Russ Mould, investment director at AJ Bell.

“But the ongoing difficulties that consumers face may be that they are pausing a little bit for breath as well.”

British retailers fell 1%. With the worsening cost-of-living crisis, focus will now be on Cyber Monday sales after data showed Black Friday shopper numbers across Britain rose 3.7% year-on-year, albeit still down 21.3% on pre-pandemic levels.

Among individual stocks, BT Group PLC slid 2.4% after the broadband and mobile operator announced a special pay rise reflecting the rising cost of living.

Persimmon dropped 3.7% as brokerage UBS downgraded the homebuilder’s stock to “sell” from “neutral”.

(Reporting by Shashwat Chauhan and Shristi Achar A in Bengaluru; Editing by Savio D’Souza and Marguerita Choy)

Yahoo to buy minority stake in Taboola in digital ad push

(Reuters) – Yahoo Inc will buy nearly 25% of Taboola.com Ltd and become its largest shareholder in a deal allowing the online advertising company to exhibit paid content on the web portal’s many sites.

The 30-year contract, announced on Monday, marks a big bet by internet pioneer Yahoo on digital advertising at a time when industry giants from Alphabet-owned Google to Meta Platforms Inc are struggling with an inflation-driven downturn in ad spending.

The Yahoo-Taboola partnership is expected to generate $1 billion in annual revenue, but the companies did not provide any other financial details. Yahoo will also get a seat on Taboola’s board.

Yahoo, owned by private equity firm Apollo Global Management since a $5 billion buyout last year, has over the years been overtaken by Google and Facebook, but it still has nearly 900 million monthly active users thanks to a collection of sites such as Yahoo Finance, Yahoo Sports and TechCrunch.

Taboola, whose shares rose 60% on the news, pushes links to articles paid by advertisers – known as native advertising – on many websites such as CNBC and NBC News.

The deal will hand Taboola exclusive rights to sell native ads on Yahoo’s sites.

The advertising firm said it expects the agreement to add to its revenue, operating earnings and free cash flow. In its latest earnings, Taboola posted a drop in quarterly revenue and also lowered its annual forecast because of a weak ad market.

The deal, which has been approved by the companies’ boards, is expected to close in the first quarter of 2023. Taboola plans to host a meeting on Dec. 30 to seek shareholders’ approval.

Taboola, which went public through an about $2.6 billion blank-check merger in 2021, has lost 75% of its market value this year, as of last close.

(Reporting by Yuvraj Malik in Bengaluru; Editing by Sherry Jacob-Phillips and Devika Syamnath)

Investors hope Beijing will lift COVID curbs faster as protests douse markets

By Karin Strohecker and Dhara Ranasinghe

LONDON (Reuters) – Rare protests rippling across China over Beijing’s zero-COVID-19 policy may have unleashed a fresh wave of political uncertainty but could also hasten the reopening of the world’s number two economy, foreign investors said on Monday.

China’s stocks on Monday suffered their worst day in a month and its currency also took a tumble, while global stocks came under pressure and oil prices slumped as much as 3% as protesters made a show of civil disobedience unprecedented since leader Xi Jinping assumed power a decade ago.

“Protests are a concern in the short-term,” Seema Shah, chief strategist at $500 billion asset manager Principal Global Investors told Reuters, adding that latest events supported the view that winds were changing.

“While we have been cautious, there is an important shift going on with the COVID reopening.”

China’s markets have had a challenging year, suffering from a mix of political risk aversion in the wake of Russia’s invasion of Ukraine in February as well as worries over its economic growth given stringent COVID curbs and the fallout from its property sector woes.

Chinese bond portfolios have posted outflows every month since Russia invaded Ukraine in February, totaling $105.1 billion over nine months, according to data from the Institute of International Finance (IIF). Chinese stock portfolios lost $7.6 billion in October alone, the most since March.

DEMOGRAPHICS

However, hopes that Beijing could ease some of its harsh COVID restrictions had recently lifted markets off their lows in a year that has seen domestic blue chips and the Hong Kong index tumble more than 20% year-to-date.

“The latest events will reinforce the case for reopening,” said Vincent Mortier, group chief investment officer at Amundi, Europe’s largest asset manager.

The economic pain linked to COVID had started to become a political issue in China, given the impact on youth unemployment in big cities, and adding to pressure on Beijing, which was keen on “avoiding some social unrest”, said Mortier.

Demographics have been a major pressure point for China, which has seen youth unemployment hit a record high of around 20% in July.

If protests were to continue, this would add to the risk premium, said Sean Taylor, chief investment officer for Asia-Pacific at DWS Group.

The 833 billion euro asset manager expects that Chinese stocks could see a 15-20% rally once China exits zero-COVID, though markets could be “quite challenging” until then.

Richard Tang, equity research analyst for Asia at Julius Baer, said offshore investors were more worried about recent events than their onshore peers, potentially lifting onshore equity markets.

“We believe this divergence in view will drive an outperformance in A shares over H shares,” Tang said.

Tang predicted that if there was no major escalation in the situation, investors would soon shift focus back onto the ruling Communist Party’s Central Economic Working Conference in December, which sets the economic agenda for the parliament session, and could confirm a COVID ‘policy pivot’.

Others were more cautious. Social discontent stemming from the zero-COVID policy added to risks in executing and implementing government policies, said Mark Haefele, global wealth management CIO at UBS in Zurich.

“We do not expect economic or market headwinds in China to abate significantly over the coming months,” Haefele said in a note to clients.

“As a result, we remain neutral on Chinese equities. We also view China’s sluggish recovery as a risk for the global economy and markets.”

(Reporting by Karin Strohecker and Dhara Ranasinghe in London, Summer Zhen in Hong Kong; Editing by Gareth Jones)

Banker with cancer claims $5 million from NatWest over dismissal

By Kirstin Ridley

LONDON (Reuters) -A senior banker is suing NatWest for around 4.3 million pounds ($5.2 million) after a London judge ruled that she was discriminated against and unfairly dismissed days after cancer surgery.

Adeline Willis, who had worked at NatWest for more than six years, partially won her case in February after a judge concluded that making her redundant from her 160,000 pound a year job in 2020, eight months after a bowel cancer diagnosis, was “tainted with discrimination”.

Cancer is listed as a disability under the UK Equality Act 2010, protecting sufferers from discrimination.

Lawyers for NatWest and the 44-year-old risk and compliance officer clashed on Monday at the Central London Employment Tribunal over document disclosures relating to her income since she left the bank.

Willis has increased her claim after NatWest’s “high handed manner” in its response to the latest proceedings, a document filed with the court showed. The case is unusual because most employment claims are settled out of court.

Paul Gilroy, a lawyer for Willis, told a hearing listed for two days that NatWest wanted to call four witnesses to “attack” Willis’s evidence, including challenging the impact of finding out she had been dismissed by text message when in hospital.

“We have turned up here effectively under false pretences. There’s not a cat in hell’s chance of dealing with this case in two days,” Gilroy said.

Charles Crow, a lawyer for NatWest, conceded Willis’s team could have been told earlier how many experts the bank was now calling. But both sides should have realised that a two-day hearing would not be enough to deal with disagreements, he said.

“We recognise the extremely difficult personal circumstances in this case and that there were things the bank did not get right,” a NatWest spokesperson said.

“NatWest remains committed to building an inclusive culture and ensuring this cannot happen again.”

The case continues.

($1 = 0.8267 pounds)

(Reporting by Kirstin Ridley; Editing by Alexander Smith and David Evans)