Crypto bank Silvergate Capital conducted significant due diligence on FTX
Crypto bank Silvergate Capital says it conducted significant due diligence on FTX and its related entities including Alameda Research, both during the onboarding process and through ongoing monitoring, in accordance with its risk management policies.
The firm also says it operates in accordance with the Bank Secrecy Act and the USA PATRIOT Act and has a track record of closing accounts that are used for purposes outside of the expected use.
“It has been a very difficult few weeks for the digital asset industry, as we have all come to terms with the apparent misuse of customer assets and other lapses of judgment by FTX and Alameda Research,” Silvergate said.
The provider of innovative financial infrastructure solutions to the digital asset industry previously said it has no outstanding loans to nor investments in FTX, and FTX is not a custodian for Silvergate’s bitcoin-collateralized SEN Leverage loans.
Tesla cuts output plan for Shanghai plant for Dec — sources
Tesla plans to cut December output of the Model Y at its Shanghai plant by more than 20% from the previous month, two people with knowledge of electric vehicle maker’s production plan said on Monday.
The planned production cut comes after Tesla reported record sales in China for November.
The output reduction was first reported by Bloomberg, which said the move was a reflection of sluggish demand.
Reuters was not able to determine the reason for the planned reduction in output at the Shanghai factory, Tesla’s largest production hub.
A Tesla representative did not initially respond to a Reuters request for comment.
PepsiCo slashing hundreds of workers — report
PepsiCo is reported laying off headquarter workers, The Wall Street Journal reports.
A person familiar with the matter told the Journal that hundreds of jobs are being cut in the head office of the North American snacks and beverages divisions.
Employees in Purchase, N.Y., Chicago, Ill. and Plano, Tex. are said to be impacted.
The Journal suggests the layoffs indicate that companies outside of technology are beginning to look at cost control.
Hertz to pay $168M in bogus theft settlement
Hertz says it will pay approximately $168 million by the end of the year to settle the majority of the lawsuits brought against the rental car company by some of its customers who were wrongly accused of stealing cars they had rented.
n April Hertz CEO Stephen Scherr, who took over the role in February, said that he was working to fix a glitch in the company’s systems that led to the incidents.
Hertz Global Holdings Inc. said Monday that the settlement of 364 pending claims related to vehicle theft reporting would bring resolution to more than 95% of the pending theft reporting claims.
“As I have said since joining Hertz earlier this year, my intention is to lead a company that puts the customer first. In resolving these claims, we are holding ourselves to that objective,” Scherr said in a statement.
Hertz anticipates recovering a “meaningful portion” of the settlement amount from its insurance carriers. The Estero, Florida-based company doesn’t expect the resolution of the claims to have a material impact on its capital allocation plans for the balance of the year or for 2023.
Stocks slide on rate hike uncertainty
Selling momentum kicked in for U.S. stocks on Monday with all three of the major U.S. averages closing with losses after a string of better-than-expected economic reports on factory orders and ISM services which raised concerns the Federal Reserve will remain aggressive on interest rate hikes. In commodities, oil reversed gains falling 3.8% to $76.93 per barrel.
Stocks in for another rough year in 2023 — BofA
The S&P 500 may fall 20% in 2023, warn Bank of America analysts.
The S&P has already plummeted about 16% this year as investors weigh concerns about stubbornly high inflation, steeper interest rate hikes and the likelihood of an economic downturn next year.
“Average and median SPX declines associated with recessions are 32.5% and 27.1%, respectively, and lasted 13.1 and 14.9 months, respectively,” they wrote. “This equates to SPX 3,500 to SPX 3,240 in February to April 2023, which aligns with the SPX peak to trough declines associated with the cross of the 12-month MA below the 24-month MA on the SPX.”
FX swap debt a $80T ‘blind spot’ global regulator says
Pension funds and other ‘non-bank’ financial firms have more than $80 trillion of hidden, off-balance sheet dollar debt in FX swaps, the Bank for International Settlements (BIS) said.
The BIS, dubbed the central bank to the world’s central banks, also said in its latest quarterly report that 2022’s market upheaval had largely been navigated without major issues.
Its main warning concerned what it described as the FX swap debt “blind spot” that risked leaving policymakers in a “fog”.
The $80 trillion-plus “hidden” debt estimate exceeds the stocks of dollar Treasury bills, repo and commercial paper combined, the BIS said. It has grown from just over $55 trillion a decade ago, while the churn of FX swap deals was almost $5 trillion a day in April, two thirds of daily global FX turnover.
For both non-U.S. banks and non-U.S. ‘non-banks’ such as pension funds, dollar obligations from FX swaps are now double their on-balance sheet dollar debt, it estimated.
The report also focused on findings from the recent BIS global FX market survey, which estimated that $2.2 trillion worth of currency trades are at risk of failing to settle on any given day due to issues between counterparties, potentially undermining financial stability.
The amount at risk represents about one third of total deliverable FX turnover and is up from $1.9 trillion from three years earlier when the last FX survey was carried out.
FX trading also continues to shift away from multilateral trading platforms towards “less visible” venues hindering policymakers “from appropriately monitoring FX markets,” it said.
GM’s BrightDrop signs first customer in Canada, unveils country’s first large EV factory
The first electric delivery trucks rolled off production lines at BrightDrop’s new factory in Canada on Monday, when the upstart unit of General Motors Co also announced DHL Express Canada as its first customer outside the United States.
GM spent seven months transforming its 2 million-square-foot CAMI Assembly plant in Ingersoll, Ontario, into Canada’s first large-scale electric vehicle (EV) factory for BrightDrop Zevo delivery trucks. Before the switch, the site manufactured the gasoline-powered Chevy Equinox.
BrightDrop’s relationship with GM gives it manufacturing and financial heft that several of its rival EV startups lack, experts said.
BrightDrop launched in 2021 and is forecast to reap its first $1 billion in sales next year, said Katz, who added that it took Tesla Inc TSLA.O a decade to hit the same milestone.
BrightDrop already has delivered 150 electric trucks to package carrier FedEx Corp. Its other U.S. customers include retailer Walmart Inc and communications provider Verizon Communications Inc.
Nike cuts ties with Brooklyn Nets’ Kyrie Irving — report
Nike Inc has cut ties with Kyrie Irving, a month after suspending its relationship with the Brooklyn Nets star in the aftermath of his promotion of an anti-Semitic documentary, The Athletic reported on Monday.
Irving faced heavy criticism after he posted a link to the 2018 documentary film on Twitter in late October and later defending the post. The seven-time All Star has since deleted the post and apologized.
Nike did not immediately respond to a request for comment on The Athletic’s report. Irving could not be immediately reached for comment.
The sportswear giant in November canceled its next Irving-branded shoe release. Several media outlets have reported the sneaker deal to be worth $11 million, but Reuters could not confirm that.Irving returned to play for The Nets last month, ending a team-imposed eight-game suspension.
SpaceX introduces secured satellite network for government entities
Elon Musk’s SpaceX is launching a national security version of its satellite network, the private space company’s website said.
Starshield will leverages SpaceX’s Starlink technology and launch capability to support national security efforts. While Starlink is designed for consumer and commercial use, Starshield is designed for government use, with an initial focus on three areas:
• Earth observation: Starshield launches satellites with sensing payloads and delivers processed data directly to the user.
• Communications : Starshield provides assured global communications to government users with Starshield user equipment.
• Hosted payloads: Starshield builds satellite buses to support the most demanding customer payload missions.
Slack CEO Butterfield to depart next month — report
Workplace messaging platform Slack’s Chief Executive Officer Stewart Butterfield plans to leave the company in January, the Business Insider reported on Monday.
Lidiane Jones will take over as CEO, Insider reported, citing an internal memo.
Salesforce Inc, which acquired Slack last year, did not immediately respond to a Reuters’ request for comment.
Verve Therapeutics receives FDA follow-up letter about clinical hold on gene editing treatment
Verve Therapeutics has received a letter from the Food and Drug Administration outlining information required to resolve the clinical hold on its U.S. clinical trial evaluating VERVE-101 in patients with heterozygous familial hypercholesterolemia, a prevalent and potentially life-threatening subtype of atherosclerotic cardiovascular disease.
The FDA also requested available clinical data from the ongoing heart-1 trial.
The company intends to submit a response as expeditiously as possible.
Verve continues to enroll patients in the heart-1 clinical trial in New Zealand and the United Kingdom and plans to report initial safety and pharmacodynamic data from the dose-escalation portion of the heart-1 trial in the second half of 2023.
VERVE-101, is designed to be a single-course in vivo liver gene editing treatment. The company plans to develop VERVE-101 initially for patients with HeFH. Individuals with FH may harbor one mutant allele and are thereby heterozygous for the disease.
Oil up 3% on OPEC+ output plans and price cap on Russian crude
Oil prices rose 3% on Monday after OPEC+ nations held their output targets steady ahead of a European Union ban and the start of a G7 price cap on Russian crude.
At the same time, in a positive sign for fuel demand in the world’s top oil importer, more Chinese cities eased COVID-19 curbs over the weekend.
Brent crude futures were up $2.53, or 3%, at $88.10 a barrel by 1330 GMT. WTI crude futures gained $2.40, or 3%, to $82.38.
The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, together called OPEC+, agreed on Sunday to stick to their October plan to cut output by 2 million barrels per day (bpd) from November through 2023.
North Face owner VF Corp announces CEO retirement, lowers outlook
VF Corporation chair and CEO Steve Rendle is retiring. He’ll be replaced on an interim basis by lead independent director Benno Dorer, the company said.
The owner of brands including Vans, The North Face, Timberland, and Dickies also revised its fiscal 2023 outlook to reflect the impact of weaker than anticipated consumer demand across its categories, primarily in North America.
Lower demand has resulted in greater than expected promotional activity as well as order cancellations in the wholesale channel.
VF now expects total revenue growth in the second half of FY23 to be modestly lower than previously outlined, with revenue for the full year expected to increase 3% to 4% in constant dollars (excluding the impact of translating foreign currencies into U.S. dollars), compared to the previous guidance of up 5% to 6% in constant dollars.
Vodafone CEO to leave after frustrating four years for shareholders
Nick Read will step down as Vodafone chief executive by the end of the year, ending a four-year tenure during which the British telecom group’s share price has nearly halved.
Vodafone’s shares, which have fallen 45% since Read took over in October 2018, are trading just off two-decade lows.
“Investors will be hoping that a change at the top at Vodafone might inject a new longer-term lease of life in the company’s share price. Although any change of Chief Executive is unsettling, the restructuring strategy Nick Read headed up, hasn’t yet reaped rewards,” said Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown.
Once one of the biggest mobile operators in the world, Vodafone has been selling assets to focus on Europe and Africa, but the deals have not arrested its stock’s decline.
Vodafone’s board was unhappy with Read’s lack of progress in delivering growth and has tasked his interim replacement, finance director Margherita Della Valle, with accelerating “the execution of the company’s strategy to improve operational performance and deliver shareholder value”.
The company warned on profit last month as energy costs soared, an already poor performance in its biggest market Germany worsened, and intense competition in Spain and Italy showed no sign of easing.
“His successor will need some bright ideas about how to differentiate the company when consumers are so super-sensitive to price in the mobile market,” Hargreaves said.
Reuters contributed to this report.
FTX’s Sam Bankman-Fried latest
Sam Bankman-Fried, the embattled former CEO of FTX, continues speaking out.
Futures at a glance
U.S. stock futures are lower on Monday as investors await data on services sector activity and factory orders.
Dow Jones Industrial Average futures fell 169 points, or 0.49%, while S&P 500 futures and Nasdaq Composite futures fell 0.59% and 0.51%, respectively.
In commodities, West Texas Intermediate crude futures rose 2.7% to $82.14 a barrel on Monday, while gold slipped to $1,809.40 an ounce.
On the economic front , the Institute for Supply Management will release its non-manufacturing PMI for November at 10 a.m. The gauge of services sector activity is expected to slip for the third straight month to 53.3.
Also at 10, the Commerce Department is expected to say factory orders rose 0.7% in October from the prior month.
Bitcoin, Ethereum, Dogecoin all higher early Monday morning
Cryptocurrency prices edged higher early Monday with Bitcoin, Ethereum and Dogecoin all showing gains.
At approximately 4:45 a.m. ET, Bitcoin was trading at nearly $17,319 (+1.05%), or higher by $180.
For the week, Bitcoin was trading higher by nearly 4.25%. For the month, the cryptocurrency was lower by nearly 19%.
Ethereum was trading at approximately $1,296 (+1.12%), or higher by more than $14.30.
For the week, Ethereum was trading higher by nearly 7.3%. For the month, it was trading lower by approximately 22%.
Dogecoin was trading at $0.10757 (+3.02%), or higher by approximately $0.00318.
For the week, Dogecoin was higher by more than 5.35%. For the month, the crypto was higher by lower by nearly 17.25%.