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Asia shares flat, holidays help blunt U.S. tech retreat By Reuters

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Asia shares flat, holidays help blunt U.S. tech retreat By Reuters



© Reuters. FILE PHOTO: A man walks past a stock quotation board at a brokerage in Tokyo, Japan February 26, 2021. REUTERS/Kim Kyung-Hoon

By Wayne Cole

SYDNEY (Reuters) – Asian shares risked falling for a fourth straight session on Wednesday as sentiment took a knock from a selloff in large cap Wall Street tech darlings, combined with talk of rising U.S. interest rates.

Holidays in Japan, China and South Korea limited the early reaction, leaving MSCI’s broadest index of Asia-Pacific shares outside Japan dithering either side of flat.

was shut, but futures traded down at 28,735 compared to the last cash close of 28,812.

Nasdaq futures steadied after a sharp pullback overnight, while inched up 0.1%.

The Nasdaq had dropped 1.9% on Tuesday as some big tech names ran into profit-taking, including Microsoft Corp (NASDAQ:), Alphabet (NASDAQ:) Inc, Apple Inc (NASDAQ:) and Amazon.com Inc (NASDAQ:).

Stretched valuations were tested when U.S. Treasury Secretary Janet Yellen said rate hikes may be needed to stop the economy overheating.

She later waked back the comments, but it reminded investors that rates would have to rise at some point in the future.

“Moderate inflation and a slow moving Fed would continue to be supportive, but inflation and a reactive Fed may prove to be a negative for valuations,” said Tapas Strickland, a director of economics at NAB.

“Either way yields and equities are likely to be in a dance as much better than expected economic data continues to challenge central banks’ rates guidance.”

One such challenge looms on Friday when U.S. payrolls data are forecast to show a hefty rise of 978,000, while some estimates go as high as 2.1 million.

So far, Federal Reserve Chair Jerome Powell has argued the labour market is still far short of where it needs to be to start talking of tapering asset buying.

Minneapolis Fed Bank President Neel Kashkari, a notable dove, on Tuesday said it may take a few years for the economy to get back to full employment.

The Fed’s dogged patience allowed yields on U.S. 10-year notes to ease back to 1.59%, from last week’s top of 1.69%, though the market has struggled to break below 1.53%.

Just the mention of higher U.S. rates was enough to help the dollar recoup a little of its recent losses.

The euro dropped back to $1.2015 and threatened to breach important chart support in the $1.1995/1.2000 area. A break would open the way to a retracement target at $1.1923.

The dollar was a shade firmer on the yen at 109.36, but faces resistance at 109.61. Against a basket of currencies, the dollar edged up to 91.282 and away from a recent two-month low of 90.422.

The New Zealand dollar blipped higher to $0.7160 when local jobs data proved strong than expected.

In commodity markets, palladium soared to a record high on worries over short supplies of the metal used in emissions controlling devices in automobiles.

Gold was left lagging at $1,776 an ounce.

Oil prices climbed to seven-week peaks as more countries opened their borders to travellers, improving the demand outlook for petrol and jet fuel.

added 57 cents to $69.49 a barrel, near its highest since mid-March, while rose 52 cents to $66.23 per barrel.





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Worst-paying blue chip employers bolstered CEO pay in pandemic, report says By Reuters

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Worst-paying blue chip employers bolstered CEO pay in pandemic, report says By Reuters



© Reuters. FILE PHOTO: A delivery staff member wearing a protective mask enters a KFC fast food outlet after a delivery, amid concerns about the spread of the coronavirus disease (COVID-19), in Colombo, Sri Lanka, July 9, 2020. REUTERS/Dinuka Liyanawatt

By Jessica DiNapoli

NEW YORK (Reuters) – More than half of 100 companies with the lowest median employee wages in the boosted CEO pay by changing the rules for assessing executive performance during the COVID-19 pandemic, according to a report by a left-leaning policy group published on Tuesday.

The report from the Institute for Policy Studies found that 51 of these 100 companies, including beverage and snack maker Coca-Cola (NYSE:) Co, cruise ship operator Carnival (NYSE:) Corp and fast food corporation Yum Brands Inc, reduced median worker pay by 2% to $28,187 on average in 2020 compared to 2019, even as the median compensation for their CEOs rose 29% to $15.3 million.

The findings offer ammunition to investors opposing executive compensation hikes in non-binding votes held at the annual shareholder meetings of companies. More companies are facing shareholder backlash against their CEO pay this year than last, Reuters has reported.

The companies studied in the report bolstered executive compensation by lowering performance targets, giving retention bonuses and swapping out stock awards linked to financial results with time-based share grants, the report found.

A Carnival spokesman said in an email that CEO Arnold Donald received no cash bonus in 2020 and his total compensation in last year was down 29% versus 2019.

A Coke spokesperson referred comment to the company’s proxy statement, which notes that roughly 1,000 employees received special share awards, in addition to executives.

“We can’t rely on corporate boards to fix the problem of excessive CEO compensation,” Sarah Anderson, a co-author of the report, said in an interview. Anderson suggested in the report that companies with the highest CEO-to-average worker pay ratios should be taxed more.

The CEO-to-average worker pay ratio for the 51 companies in the report was 830-to-1.

The Yum Brands board authorized discretionary adjustments to bonus programs resulting in a $1.4 million bonus for CEO David Gibbs he otherwise would not have received, according to a securities filing. He also received a one-time stock award of $882,127, for a total 2020 compensation of $14.6 million, according to the filing.

The company’s board said the compensation boost was appropriate given that Gibbs and other executives helped stabilize the business and positioned it for success coming out of the pandemic.

In a prepared statement, Yum Brands said Gibbs gave up his base salary and used it to help fund one-time $1,000 bonuses for nearly 1,200 restaurant general managers. The company also awarded special bonuses to team members in company-owned restaurants globally.

Yum Brands identified a part-time worker at its fast food chicken chain KFC as its median employee, with a total compensation of $11,377, in the filing.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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U.S. Fed should require banks to hold more cash for climate risks -think tank By Reuters

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U.S. Fed should require banks to hold more cash for climate risks -think tank By Reuters



© Reuters. FILE PHOTO: Federal Reserve Board building is pictured in Washington, U.S., March 19, 2019. REUTERS/Leah Millis

By Pete Schroeder

WASHINGTON (Reuters) – The U.S. Federal Reserve should force banks to hold more cash to guard against potential losses due to climate change and possible steps to fight it, one of Washington’s top liberal think tanks said on Tuesday.

The plan https://www.americanprogress.org/?p=498976, published by the Center for American Progress and seen first by Reuters, is likely to inform a looming debate about exactly how far bank regulators should go in policing climate change as the Biden administration looks to tackle the issue on all fronts.

The paper argues that the Fed could move quickly to bolster banks’ capital cushions by establishing several new safeguards, including a new capital surcharge directly tied to how much pollution banks directly finance and heightened stress tests of big banks that incorporate climate risks.

Several of the changes are likely to be strongly opposed by Wall Street, and the Fed itself has taken a much more deliberate approach to climate than sought by progressive Democrats.

After lagging European counterparts on climate change under the Trump administration, the Fed has ramped up efforts in recent months, including devoting new staff specifically to exploring how climate change could impact the economy and the financial system.

“It is increasingly clear that climate change could have important implications for the Federal Reserve in carrying out its responsibilities,” said Fed Governor Lael Brainard in a March speech.

But the Fed has yet to adopt any new policies in response to climate change, a move the paper argues the regulator can ill afford.

“It would be quite easy for financial regulators to spend the next decade collecting more data, researching the issue…avoiding any actual steps to safeguard the financial system from these risks,” the paper stated. “The potential damage to the financial system is too great for regulators to wait.”

Instead, the group argues the Fed should move quickly, directing banks to hold more capital if they are exposed to more heavily polluting industries, arguing they could lose value as the world moves toward cleaner industries.

It adds the Fed should go farther with the largest banks, imposing a new capital surcharge directly tied to how much carbon they finance with their activities.

The report also called on the Fed to create a new exercise to test banks’ resilience to climate change over the long term, as well as integrate near-term climate risk into the existing annual stress test of bank finances.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Exclusive: Foxconn iPhone India output drops 50% amid COVID surge-sources By Reuters

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Exclusive: Foxconn iPhone India output drops 50% amid COVID surge-sources By Reuters



© Reuters. FILE PHOTO: The Apple Inc logo is shown outside the company’s 2016 Worldwide Developers Conference in San Francisco, California, U.S. June 13, 2016. REUTERS/Stephen Lam

TAIPEI (Reuters) – Production of the Apple (NASDAQ:) iPhone 12 at a Foxconn factory in India has slumped by more than 50% because workers infected with COVID-19 have had to leave their posts, two sources told Reuters.

The Foxconn facility in the southern state of Tamil Nadu produces iPhones specifically for India, the world’s No.2 smartphone market.

Tamil Nadu is one of the worst hit states in the second coronavirus wave engulfing India. Officials imposed a full lockdown in the state from Monday, closing public transport and shuttering shops, to try slow surging infections.

More than 100 Foxconn employees in the state have tested positive for COVID-19 and the company has enforced a no-entry ban at its factory in the capital of Chennai until late May, one of the sources said.

“Employees are only allowed to leave but not to enter the facility since yesterday,” the person said. “Only a small part of output is being kept.”

More than 50% of the plant’s capacity had been cut, both sources said, declining to be named as they were not authorised to speak to the media.

They did not specify the plant’s capacity and it was unclear how many workers were at the facility, which provides dormitory accommodation for employees.

Taipei-based Foxconn, the world’s largest contract electronics maker and a major supplier to Apple, said a small number of employees at one of its facilities in India tested positive for COVID-19 and the company was providing them with support, including medical assistance.

“Foxconn places the health and safety of our employees as our highest priority and that is why we have been working closely with local government and public health authorities in India to address the challenges that we and all companies are facing in dealing with the COVID-19 crisis,” it said in a statement to Reuters. 

Foxconn declined to comment on factory output or specific staffing levels. Apple did not immediately respond to a request for comment.

India has benefited from Apple’s move to shift some areas of production from China to other markets as it navigates a trade war between Washington and Beijing, with Apple announcing in March it had started the assembly of the iPhone 12 in India.

While Apple’s share of the budget phone-dominated India market is small, CEO Tim Cook said in January that India business doubled in the December quarter compared to the previous year, helped by an online store launch.

Foxconn similarly said strong smartphone sales contributed to a stronger-than-expected performance in the fourth quarter amid the work-from-home trend.

Market research firm Canalys said that growth in India extended through the first quarter, with Apple shipping more than a million iPhones. Demand for the iPhone 12 was supported by local assembly and attractive finance offers, Canalys said.

COVID-19 CRISIS

However, the outlook has been dimmed by the coronavirus crisis engulfing India, where COVID-19 cases and deaths have surged at a record pace in recent weeks. The country has recorded around 22.66 million infections and more than 246,000 deaths, with experts saying the true figures could be far higher.

Foxconn is not the only producer affected. Nokia (NYSE:) and Chinese smartphone maker OPPO last year suspended production at factories in India after workers tested positive for COVID-19.

Taipei-based tech research firm TrendForce on Monday trimmed its global smartphone production growth forecast to 8.5% from 9.4%, citing the coronavirus impact in India on major vendors including Samsung (KS:) and Apple.

“Smartphone brands are therefore expected to closely monitor their inventories of whole devices and adjust their subsequent production plans accordingly,” TrendForce said in a report, adding it could revise the forecast lower still if the outbreak continues to hit local production and sales in the second quarter.





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