Biden Will Tap Jerome Powell for New Term as Fed Chairman
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President Biden said he will nominate Federal Reserve Chairman Jerome Powell to a second term leading the central bank, opting for continuity in U.S. economic policy despite pushback from some Democrats who wanted someone tougher on bank regulations and climate change. Mr. Biden said he will also nominate Fed governor Lael Brainard as vice chair of the central bank's board of governors. Prominent liberals like Sen. Elizabeth Warren (D., Mass.) had warned the president against picking Mr. Powell, and progressive groups mounted a last-ditch campaign to pressure the president to tap Ms. Brainard for the top job. The announcement caps months of behind-the-scenes deliberations by Mr. Biden and his senior aides over one of the world's most important economic policy posts at a time of high inflation and intraparty divisions.
The Swiss stock market ended trading on Monday with slight losses. The SMI lost 0.3 per cent to 12,511 points. Among the 20 SMI stocks, there were 11 price losers and 9 price winners. 36.87 (previously: 50.65) million shares were traded. Julius Baer was under pressure with a minus of 4.8 per cent. UBS rose 0.9 per cent. The bank has found a successor for the chairman of the board of directors Axel Weber, who will leave next year. The well-performing cyclicals showed a mixed trend. While ABB gained another 0.8 per cent, Geberit (-2.8 per cent) took profits. The stocks have gained 38 and 36 per cent respectively in the current year. Also running in different directions were big pharma stocks Novartis (+0.2%) and Roche (-0.9%). Luxury goods stocks were sought after. Richemont rose by 1 per cent and Swatch by 0.4 per cent.
European equity markets ended Monday's session in mixed order. Investors remained attentive to the evolution of the health situation in Europe and were not surprised by the announcement of the decision of the president of the United States, Joe Biden, to reappoint Jerome Powell at the head of the American Federal Reserve (Fed). The Stoxx Europe 600 index fell 0.1% to 485.5 points. In Paris, the CAC 40 and the SBF 120 lost 0.1% each. In Frankfurt, the DAX 40 was down 0.3%, while the FTSE 100 in London gained 0.4%. Ericsson AB agreed to buy cloud-communications provider Vonage Holdings Corp. , for $6.2 billion, in deal that the Swedish telecom-equipment maker said will expand its wireless enterprise business and broaden its global offerings. Ericsson, in what would be its biggest deal ever, agreed to pay $21 a share in cash for Vonage, representing a 28% premium to Friday’s closing share price. The purchase, which Holmdel, N.J.-based Vonage’s board has approved, will be financed through Ericsson’s existing cash resources. The deal is the latest in a flurry of acquisitions in the cloud-communications software market. Vonage and a handful of competitors occupy a niche in the industry. Deutsche Bank AG said it picked Alexander Wynaendts, an outsider with experience in insurance and banking, to be its next chairman. Mr. Wynaendts, a 61-year-old Dutchman, was the chief executive officer of Dutch insurer Aegon NV for 12 years through 2020. He began his career at lender ABN Amro NV, where he spent 13 years in private and investment banking in Amsterdam and London, Deutsche Bank said in a statement Friday.
The S&P 500 pared gains and finished lower after news that President Biden would nominate Jerome Powell for a second term as chairman of the Federal Reserve, paving the way for the continuation of the current policy framework. The decision, revealed before the stock market opened, ended a guessing game over who would lead the Fed during a period in which the central bank is expected to unwind coronavirus-era stimulus measures. The Fed this month approved plans to scale back its bond-buying program, and elevated inflation has prompted market participants to expect higher interest rates next year. The S&P 500 slipped 0.3%, while the Dow Jones Industrial Average advanced less than 0.1%. The tech-heavy Nasdaq Composite Index lost 1.3%. Stocks have benefited from stimulus the Fed, under Mr. Powell, has lavished on the economy since the early days of the pandemic. Mr. Powell's nomination "keeps monetary policy relatively stable and takes one of the potential catalysts for disruption off the table," said Jason Pride, chief investment officer of private wealth at Glenmede. The company behind brands such as Brooks Brothers, Eddie Bauer and Sports Illustrated magazine plans to delay its initial public offering after getting a big new investment from two private-equity firms. Authentic Brands Group LLC, which develops and licenses its brands to retail operators, said Monday it sold stakes to CVC Capital Partners and HPS Investment Partners in a deal that values the company at $12.7 billion including debt. The investment will deliver roughly $3.5 billion of fresh capital for Authentic Brands, with the largest piece of it coming from CVC, according to people familiar with the matter.
The Asian stock exchanges failed to establish a uniform trend in late trading on Tuesday. The action is between friendly prices in Australia and lighter ones in Hong Kong. There is no trading in Japan due to a public holiday.
Yields on the US bond market rose massively, with the ten-year yield shooting up by almost 8 basis points. Most recently, they had been under pressure due to the new Corona restrictions in some countries.
Citi raises the Richemont target to CHF 161 (143) – Buy
Citi lowers the Julius Baer target to CHF 74 (75) – Buy
UBS lowers the Holcim target to CHF 60 (61) – Buy
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