News updates from March 27: Yen hits 34-year low; Nobel winner Daniel Kahneman dies

Joe Lieberman, the former Democratic candidate for vice-president in 2000 who had left the party and was backing a third-party bid for the White House this year, has died aged 82.

The former senator from Connecticut died suddenly from complications from a fall, his family said in a statement on Wednesday. “Senator Lieberman’s love of God, his family, and America endured throughout his life in the public interest,” they said.

Lieberman, who embodied the increasingly lonely centre in US politics, was most recently the founding chair of No Labels, a bipartisan group aiming to launch a presidential ticket to challenge Joe Biden and Donald Trump in this year’s election. But the group had yet to find candidates for the campaign.

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A top Federal Reserve official has said “disappointing” inflation data means the US central bank should “push back” the timing of interest rate cuts.  

Christopher Waller, a Fed governor and one of the most influential US rate-setters, on Wednesday said: “We made a lot of headway in reducing inflation in the past year or so, although the readings in the past two months have been disappointing.” 

It was, he said, “appropriate to reduce the overall number of rate cuts or push them further into the future” in response to the latest inflation figures. 

On timing, he said “in the absence of an unexpected and material deterioration in the economy”, he would need to see “at least a couple months of better inflation data” before he had enough confidence that inflation could sustainably hit the Fed’s 2 per cent goal. 

Discover Financial’s chief executive has resigned just weeks after the credit card company reached an agreement to be sold to rival Capital One.

Michael Rhodes, who only joined Discover in December, is headed to Ally Financial, where he will be CEO of the financial services company, which has long specialised in auto loans.

Rhodes joined Discover after its previous CEO left in the wake of an accounting scandal in which the company had for years overcharged some merchants. Rhodes was brought in to turn around the company, which in February then agreed to be sold.

Ally, which got its start as the financing arm of carmaker General Motors, has been without a permanent CEO since late last year, when Jeffrey Brown announced he was leaving the lender to become the head of auto dealership group Hendrick.

More than 90 per cent of S&P 500 stocks closed higher, as a broad rally in late trading lifted the benchmark index to its first record high in almost a week.

Gains for stocks accelerated in the final hour of trading to leave the S&P 500 up 0.9 per cent on Wednesday. As well as the high proportion of index constituents advancing, all sectors rose, with utilities and real estate groups finishing as the top performers.

The tech-heavy Nasdaq Composite advanced 0.5 per cent, closing just shy of a record it set last week. The small-cap focused Russell 2000 added 2.1 per cent.

Amazon has committed a further $2.75bn to artificial intelligence start-up Anthropic, strengthening its ties to the company as Big Tech’s race to dominate the booming AI sector intensifies.

The deal is Amazon’s largest ever venture investment and brings its total commitment to Anthropic to $4bn. The partnership is one of a number struck between AI start-ups and technology giants over the past year, as Google, Microsoft, Amazon and others bet that strength in generative AI will be their biggest competitive edge for years to come.

Amazon invested an initial $1.25bn in September last year, and had reserved the right to increase that total to $4bn before the end of March.

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Trafigura is set to pay $126mn and plead guilty to bribery charges brought by US prosecutors, according to two people familiar with the matter. 

The global commodities trader will on Thursday submit its plea in a Miami federal court. The charges are linked to misconduct in Brazil. 

The US Department of Justice and Trafigura declined to comment. 

The company in December revealed for the first time that it had made a provision of $127mn in its 2023 accounts to resolve a probe by the DoJ over past “improper payments” in Brazil. Switzerland’s federal prosecutor last year also charged Trafigura with bribing foreign officials in Angola.

Israeli Prime Minister Benjamin Netanyahu has agreed to send senior officials to Washington to discuss its planned Rafah operation, several days after he canceled their original trip.

After the US abstained and allowed a UN Security Council resolution calling for an immediate ceasefire, Netanyahu decided not to send members of the war cabinet and close confidants Ron Dermer and Tzachi Hanegbi to Washington for talks to hear the Biden administration’s concerns about the Rafah operation.

“His office has agreed to reschedule that meeting which would be dedicated to Rafah, which is a good thing,” White House press secretary Karine Jean-Pierre said Wednesday.

US stocks climbed, with a broad rally in equities helping keep the market on course to end a multisession losing streak.

The benchmark S&P 500 was up 0.3 per cent on Wednesday afternoon, with about 84 per cent of the index’s constituents trading higher. Utilities and real estate groups were the best performers, while technology was the only sector in negative territory.

The tech-heavy Nasdaq Composite was slightly higher. The small-cap Russell 2000 added 1.4 per cent.

Treasuries rallied across maturities. The yield on the two-year note fell 0.03 percentage points to 4.57 per cent, and fell 0.04 percentage points on the 10-year bond to 4.19 per cent.

Disney and the state of Florida have settled a lawsuit over the governance of the company’s Orlando theme parks spawned by last year’s takeover of the district’s board by Ron DeSantis, the state’s governor. 

The settlement resolves one of the major legal fights that followed DeSantis’ move to end the company’s 50-year-old right to in effect run its own government around Walt Disney World amid a dispute over the state’s so-called “Don’t Say Gay” law.  

Jeff Vahle, president of Walt Disney World Resort, said the company was “pleased to put an end to all litigation pending in state court in Florida”.

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Carmakers are preparing for months of lower sales as they reroute shipments away from Baltimore following the collapse of the Francis Scott Key Bridge, while insurers have warned of multibillion-dollar claims stemming from the disaster.

Manufacturers are diverting deliveries and exports to other sites after the closure of Baltimore’s port, which is the largest car-handling terminal in the US and used by almost every major manufacturer.

But they expect other bottlenecks to force delays at ports including Charleston, New Jersey and New York because of increased traffic and a potential shortage of dockside vehicle handlers.

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Mexico’s peso is at its strongest level against the dollar since 2015, as tight monetary policy and investment opportunities help to boost the currency.

The peso last year strengthened to its highest level in five years against the dollar and has continued to climb this year, reaching 16.51 pesos per dollar on Wednesday.

The Mexican currency has surpassed its Latin American peers, even after it cut rates last week as inflation has moderated well below its peak. 

High interest rates have helped to strengthen the peso, which outgoing president Andrés Manuel López Obrador has touted as a sign of economic success ahead of a presidential election in June. His Moreno party has backed frontrunner Claudia Sheinbaum to compete against rival Xóchitl Gálvez.

European equities rose on Wednesday, pulled higher by strong gains for utilities and consumer groups. 

The region-wide Stoxx Europe 600 was 0.1 per cent higher on the day. Germany’s Dax climbed 0.5 per cent, France’s Cac 40 gained 0.3 per cent, and London’s FTSE 100 was flat.

H&M, the world’s second-largest clothing retailer, was the best performer on the Stoxx Europe 600, with shares up 15.2 per cent after the group reported rising operating profits in the first quarter, signalling it is on track to increase profitability in 2024.

Daniel Kahneman, the Nobel-winning psychologist who helped debunk the notion that people make rational economic decisions, has died. He was 90.

Kahneman rose to prominence in 2002 after he was awarded a share of that year’s Sveriges Riksbank Prize in Economic Sciences for his work on “integrating insights from psychological research into economic science”.

His research details how people make decisions that tend not to involve a great deal of analysis, instead preferring to choose on the basis of instinct. His experiments in the field of cognitive psychology undermined the concept of homo economicus, a theory that has often been relied upon to form the basis of academic models but is seldom seen in the wilds of reality. 

His death was confirmed by Princeton University, where he had worked since 1993.

Formula One owner Liberty Media is in exclusive talks to buy the company that owns MotoGP for more than €4bn, in a deal that would unite the elite car and motorcycle racing series, according to people familiar with the matter.

Liberty, which is chaired by telecoms and entertainment billionaire John Malone, is poised to agree the takeover of Dorna Sports after seeing off a rival bid from TKO, the sports and entertainment group run by Hollywood powerbroker Ari Emanuel, the people said.

Qatar Sports Investments, the state-backed group that owns French football club Paris Saint-Germain, had also expressed interest in Dorna and held talks with its owner, Bridgepoint, the private equity firm.

Additional reporting by Josh Noble and Arash Massoudi in London

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Bain Capital has promoted one of its top dealmakers in Asia to co-managing partner, the highest position at the asset manager, as the broader buyout industry grapples with succession planning.

According to a letter to clients seen by the Financial Times, the $180bn investment shop co-founded by US senator Mitt Romney has promoted David Gross to lead the business alongside John Connaughton.

Gross, 53, will start as co-managing partner on April 1, succeeding Jonathan Lavine.

The appointment comes as some of the pioneers of the $4tn private equity industry plot succession plans beyond their founders, or even second and third generations of leadership.

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Carnival Cruise Line lifted its profit expectations for the fiscal year as higher prices and strong demand boosted earnings, but warned that the Baltimore bridge collapse would cause a $10mn hit to profits.  

The company said it expected adjusted earnings per share to be 98 cents, up from previous expectations of 93 cents but below analysts’ expectations of $1. Carnival said it expected the bridge collapse in Baltimore, which acts as a key cruise terminal, to have an estimated impact of about $10mn on both adjusted ebitda and net income for the full year. 

It reported adjusted ebitda in the first quarter of $871mn, surpassing analysts’ estimates of $840mn. 

Shares fell 3.29 per cent in early trading in New York. 

Donald Trump’s social media business jumped a further 22 per cent in early trading on Wednesday, after rising 16 per cent on its stock market debut in the previous session.

Shares in Trump Media & Technology Group, the company behind Truth Social, were trading at above $70 shortly after the opening bell in New York.

US stocks broadly opened higher. Wall Street’s benchmark S&P 500 was 0.6 per cent higher in early trading, while the tech-heavy Nasdaq Composite gained 0.3 per cent.

Shares in Donald Trump’s social media business were poised on Wednesday to surge a further 20 per cent at the open of trading in New York, having risen 16 per cent on debut the day before.

Trump Media & Technology Group, the company behind the former president’s Truth Social platform, closed at $57.99 on Tuesday after completing its merger with a shell company that was already listed.

Trading under ticker symbol DJT - Trump’s initials - the company is listed on Nasdaq. Trump holds almost three-fifths of the stock, netting him billions in profits on paper.

Fedspeak: Federal Reserve board governor Christopher Waller will deliver remarks about the economic outlook to the Economic Club of New York. 

Carnival: Carnival Cruise Line will report earnings before the bell and is expected to report an increase in revenue on strong bookings. Analysts polled by Reuters estimate that it will report a $221.3mn net loss in the three months to February, which would be a smaller loss than in the year-ago quarter.

Moderna: The pharmaceutical group will hold its annual investor day, when shareholders will be keen to learn more about how it plans to grow its business beyond the Covid-19 pandemic. The company has several vaccines in the pipeline and its second-ever product, a vaccine against respiratory syncytial virus, is awaiting FDA approval.

The yen rebounded from a 34-year low on Wednesday after Japan’s three main monetary authorities held an emergency meeting to discuss the currency’s extended weakness.

The currency touched ¥151.94 to the US dollar earlier in the day, its weakest level since 1990, raising the risk of market intervention from Japanese authorities. It later strengthened to ¥151.05 on news of the emergency meeting between the Bank of Japan, the finance ministry and the Financial Services Agency.

In a briefing after the meeting, the country’s top currency official, Masato Kanda, said authorities would “take appropriate action against excessive moves without ruling out any options”.

Kanda’s comments are the latest in a series of such verbal warnings.

Tom Hayes has failed in his attempt to overturn his conviction for rigging the Libor rate as the Court of Appeal in London upheld the guilty verdict handed to the former UBS and Citigroup trader nine years ago.

Hayes served five-and-a-half years in prison after being convicted by a jury in 2015. He was one of nine individuals successfully prosecuted by the UK’s Serious Fraud Office for rigging benchmark rates.

A central part of Hayes’s appeal case was that a 2022 judgment in the US had overturned the convictions of two former Deutsche Bank traders, Matthew Connolly and Gavin Black, for their part in an alleged Libor rigging scheme, and led to all charges against Hayes in the US being dropped.

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The Bank of England is probing how badly funding for UK businesses would be hit by the reversal of a long-running private equity boom, officials said, as they escalated warnings about leverage, transparency and valuations in private markets.

The BoE’s financial policy committee, which monitors risks to financial stability and develops policies to offset them, said the risk environment “remains challenging” and the likelihood of a “sharp correction” in some markets had increased since December as prices rise despite a cloudy outlook.  

“Finance for riskier corporates could be particularly vulnerable to a significant deterioration in investor risk sentiment,” officials wrote, as they vowed to carry out further work on the interconnections between private equity firms, facing higher borrowing costs, and the UK companies that depend on them for funding.

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The number of raw sewage discharges into rivers and seas last year increased by more than half over the previous 12 months, the Environment Agency said.

The duration of the spills more than doubled to 3.6mn hours, the regulator said.

The increases are partly due to more monitoring of the 14,318 storm overflow pipes, which release untreated sewage and storm water into coastal waters and rivers when it rains.

Last year was the first in which all the overflow pipes were monitored. The number monitored rose from 13,313 in 2022 and 12,092 in 2020.

The sixth wettest year since records began in 1836 also contributed to the outflows, the EA said.

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Five of Germany’s top economic institutes have slashed their growth forecasts for Europe’s largest economy this year to 0.1 per cent, down from their 1.3 per cent forecast six months ago.

The institutes warned that domestic demand had risen less than expected, while exports were falling despite a pick-up in global economic activity, in part due to a loss of competitiveness for energy-intensive goods due to high gas and electricity prices.

Germany’s economy shrank 0.3 per cent in both the fourth quarter and over the whole of 2023, making it the world’s worst performing major economy last year. The institutes still expect growth to rise next year to 1.4 per cent, slightly below their previous forecast of 1.5 per cent.

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Big share price moves in Europe today include Swedish software company Fortnox, UK paper and packaging group DS Smith and British healthcare equipment maker Diploma:

• Fortnox: Shares in the Swedish software group slid 10 per cent in morning trade after reports drew attention to short-selling activity surrounding its stock. 

• DS Smith: Shares in the UK-based packaging supplier advanced 7.5 per cent a day after it confirmed it was in talks with International Paper over a possible $7.2bn all-stock offer. 

• Diploma: Shares in the UK-based healthcare equipment producer surged 12 per cent on Wednesday after it struck a deal to acquire Peerless for £236mn.

European stocks held steady in early trading on Wednesday as investors await consumer and economic confidence data for the region.

The region-wide Stoxx Europe 600 edged up 0.1 per cent shortly after the opening bell. France’s Cac 40 was flat, Germany’s Dax gained 0.1 per cent, and London’s FTSE 100 fell 0.1 per cent.

Contracts tracking Wall Street’s benchmark S&P 500 and the tech-heavy Nasdaq Composite were 0.3 per cent higher ahead of the New York trading session.

Data on EU consumer confidence and economic sentiment is due to be released later this morning.

Shares in fast-fashion retailer H&M jumped more than 13 per cent in early trading after the company reported rising operating profits in its first quarter, signalling that it is on track to increase profitability this year.

In its first set of quarterly results since Daniel Ervér took over as chief executive last month, the Swedish company reported net sales in the three months to the end of February of SKr5.4bn ($509mn), with an increase in gross profit of 7 per cent to SKr2.76bn.

The company — which has struggled to compete against lower-cost rivals as well as Inditex’s higher-end chain Zara — aims to raise its operating profit margin to 10 per cent this year, up from 6.2 per cent last year. 

This post has been corrected since publication to show that operating profits rose in the first quarter, not sales

Spanish inflation has risen back up to 3.2 per cent in March, rebounding from 2.9 per cent in February as energy prices accelerated.

The pick-up in inflation on an EU harmonised basis was caused by a higher annual increase in electricity and fuel prices, according to data released by the Spanish statistics office on Wednesday.

Core inflation, which strips out energy and fresh food prices to give a better picture of underlying price pressures, slowed from 3.5 per cent in February to 3.3 per cent in March.

The figures, coming ahead of inflation data from other EU countries later this week and eurozone numbers next week, could unsettle investors who are betting that the European Central Bank will start cutting interest rates in June.

Asos, Boohoo and George at Asda have signed agreements with the UK’s competition watchdog, promising to only use accurate and clear environmental claims following an investigation by the regulator into possible greenwashing.

The Competition and Markets Authority opened an investigation into the fashion retailers in 2022 after finding that the language they used in environmental claims was vague and misleading.

The three companies will have to provide the CMA with regular updates on how they are complying with the new commitments on, for example, their use of imagery and statements about the materials they use.

The CMA also issued an open letter to fashion retailers, asking them to adhere to its Green Claims code.

Martin Sorrell’s digital advertising agency S4 Capital said “challenging global macroeconomic conditions” and “fears of recession” made clients less likely to commit to projects in 2023, as it posted a sharp drop in profits for the year.

The group on Wednesday said that earnings before interest, tax depreciation and amortisation dropped 25 per cent to £93.7mn after a 2 per cent fall in net revenue.

S4 Capital said “despite the possibility of interest rate reductions later in 2024”, it expected a broadly similar overall level of operational ebitda and a fall in like-for-like net revenue next year.

Ithaca has been granted a four-week exclusivity period to bid for the UK upstream assets of Italian major Eni, in what would be a major deal among North Sea oil and gas producers.

The London-listed company, which has a market capitalisation of about £1.5bn, said the proposed deal would include “substantially all” of Eni’s UK upstream assets but would exclude Eni’s carbon capture and Irish Sea assets.

Eni was expected to hold between 38 per cent and 39 per cent of the enlarged Ithaca after the deal’s completion.

Ithaca also reported a sharp fall in net income of $215.6mn for 2023, down from $1.03bn.

London-listed Endeavour Mining has unearthed two further “deliberately disguised” payments totalling $15mn made to the same third party that received a $5.9mn payment that resulted in chief executive Sébastien de Montessus being fired this year.

The FTSE 100 group said it found the additional payments during an investigation after it fired the Frenchman in January for “serious misconduct”. It did not discover the ultimate beneficiary of the third-party company, based in an offshore entity in the United Arab Emirates.

“The investigation revealed strong evidence that Mr de Montessus abused his position as CEO . . . through repeated and deliberate false representations and concealment of information,” Endeavour said.

De Montessus has acknowledged that he should have told the board about the $5.9mn payment instruction but has denied wrongdoing.

Share prices in Hong Kong and mainland China fell as foreign investors exited positions in Chinese stocks.

China’s benchmark CSI 300 dropped 0.8 per cent as foreign investors sold Chinese equities worth Rmb9bn ($1.2bn) on Wednesday, according to data from the Hong Kong Stock Connect.

Hong Kong’s Hang Seng index also registered declines, falling 1.2 per cent.

The slide comes despite official data on Wednesday showing industrial profits rose more than 10 per cent year on year in January and February.

Japanese equities led gains in the region, partly as a result of a weak yen, which helps boost exporters’ profits.

UBS has agreed to sell $8bn worth of senior secured financing facilities to private capital group Apollo, as it winds down non-core businesses linked to its purchase of Credit Suisse last year.

Apollo originally entered into an agreement with Credit Suisse to purchase its securitised products division, in 2022 in a deal that included a related investment management contract. Wednesday’s deal concludes that arrangement.

“This mutually beneficial agreement aligns with UBS’s strategy of winding down and simplifying its non-core and legacy portfolio and with Apollo’s continued momentum in growing [securitised products business] Atlas as a standalone origination platform,” said the companies in a statement.

UK events: The government launches an auction round for renewable power projects estimated to be worth more than £1bn. GMB union members at Amazon in Birmingham begin a two-day strike.

Central banks: The Bank of England’s Financial Policy Committee releases its March summary and report on risks to financial stability. Sweden’s central bank announces its latest monetary policy decision.

Economic indicators: The UK’s Resolution Foundation publishes its labour market outlook, while the EU releases its March consumer confidence figures.

Corporate updates: Investors will be watching Swedish fast-fashion retailer H&M’s quarterly results for signs it is on track to hit its target operating margin of 10 per cent, up from 6.2 per cent in 2023. Martin Sorrell’s advertising agency S4 Capital publishes full-year results.

Japan’s stock market was the only major Asian bourse to register gains in early trading on Wednesday, with the country’s currency further weakening against the dollar.

The country’s benchmark Topix climbed 0.8 per cent and the yen weakened 0.19 per cent against the dollar to ¥151.8185, despite recent remarks from officials implying the currency should be stronger.

Hong Kong’s Hang Seng index shed 0.2 per cent and mainland China’s CSI 300 lost 0.4 per cent, despite official data showing industrial profits rose more than 10 per cent year on year in January-February.

China’s industrial profits jumped at the start of this year, with foreign-owned and private groups reporting the largest increases.

Industrial profits rose by 10.2 per cent year on year for January-February, data from the National Bureau of Statistics showed on Wednesday.

Profits at foreign-owned business surged 31.2 per cent and climbed 12.7 per cent at private companies. State-owned enterprises saw profits edge up just 0.5 per cent.

The large increase is likely to be due in part to a low base from the same period last year, when China was managing an exit wave of Covid cases.

The rise follows industrial production data for January and February that showed a boost in activity to start the year.

Events: Myanmar’s military, which took power in 2021, marks Armed Forces Day with a parade in the capital Naypyitaw as the country’s civil war drags on. Thailand’s parliament begins debate on the country’s proposed same-sex marriage legislation. The Bangkok Motor Show begins. New Zealand’s government issues a budget policy statement.

Economic indicators: February data for China’s industrial profits and Macau’s hotel occupancy rate are released. South Korea publishes the results of its business survey for April. Australian inflation data for February is due.

Corporate results: The Industrial and Commercial Bank of China and China Life Insurance announce earnings.

US stocks ended Tuesday slightly lower, changing directions in the last hour of trading in the second session of a holiday-shortened week.

The blue-chip S&P 500 fell 0.3 per cent, while the tech-heavy Nasdaq dipped 0.4 per cent.

The drop on Tuesday was unlikely to represent a longer-term trend for stocks, analysts said, as both indices have been on the rise since the Federal Reserve meeting last week.

At that meeting, officials kept interest rate cut forecasts steady, even as they wagered inflation would run hotter than previous forecasts. 

Thursday will be the last trading day of the quarter, ahead of which traders often rebalance portfolios. 

Donald Trump has been banned from making disparaging statements about potential witnesses, jurors or prosecutors in his upcoming “hush money” trial, after a judge ruled the former US president’s posts could torpedo the case.

The order came just hours after Trump attacked Juan Merchan, the Manhattan judge overseeing the case, in a social media post, calling him “a true and certified Trump Hater who suffers from a very serious case of Trump Derangement Syndrome”, and implying his daughter was a Democratic operative.

In his decision, Merchan said he had pored over statements made by Trump about the various cases he is facing, and found them to be “threatening, inflammatory [and] denigrating”.

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A Chinese state-owned company has dropped its bid to build trains for Bulgarian railways just six weeks after the EU announced an investigation into alleged subsidies it had received.

CRRC Qingdao Sifang Locomotive, a subsidiary of CRRC, the world’s largest train manufacturer, pulled out after Brussels used a new anti-subsidy law for the first time.

The company had bid €610mn for the contract for 20 electric trains, half that of Spain’s Talgo.

“Our single market is open for firms that are truly competitive and play fair,” said internal market commissioner Thierry Breton.

The US Supreme Court’s apparent scepticism towards restricting access to the abortion pill could limit the potential damage for Republicans in the November election as they face a voter backlash over the party’s stance on reproductive rights.

Abortion has been a huge political vulnerability for Republicans ever since the Supreme Court in the summer of 2022 overturned Roe vs Wade, which had enshrined the constitutional right to the procedure, just months ahead of the midterm elections.

Democrats have used preserving access to abortion to rally voters in states across the US, and the issue is expected to be one of Donald Trump’s weak points in the presidential election. 

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