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Citigroup Inc staff in the United States who have not been vaccinated against COVID-19 by Jan. 14 will be placed on unpaid leave and fired at the end of the month unless they are granted an exemption, according to a company memo seen by Reuters on Friday.
The U.S. bank announced its plan to impose new vaccination rules in October and now becomes the first major Wall Street institution to follow through with a strict vaccine mandate.
Its move comes as the financial industry grapples with how to bring workers back to offices safely and get back to business as usual at a time when the highly infectious Omicron coronavirus variant is spreading like wildfire.
Other major Wall Street banks, including Goldman Sachs & Co,, Morgan Stanley and JPMorgan Chase & Co, have told some unvaccinated employees to work from home, but none has yet gone as far as sacking staff.
While Citigroup is the first Wall Street bank to enforce a vaccine mandate, a handful of other major U.S. companies have introduced “no-jab, no-job” policies, including Google and United Airlines, with varying degrees of stringency.
More than 90% of Citigroup employees have complied with the mandate so far and that figure is rising rapidly, according to a source familiar with the matter, adding that the timing of the vaccination mandate would be different for branch staff.
When it announced its policy, Citigroup also said it would assess exemptions on religious or medical grounds, or any other accommodation by state or local law, on a case-by-case basis.
The bank said then it was complying with the policy of U.S. President Joe Biden’s administration requiring all workers supporting government contracts to be fully vaccinated, as the government was a “large and important” client.
“You are welcome to apply for other roles at Citi in the future as long as you are compliant with Citi’s vaccination policy,” the bank said in the memo. “If you are not vaccinated, we urge you to get vaccinated as soon as possible.”
Vaccination has become a divisive issue in the United States, as it has in many countries around the world, with some people fiercely opposed and many Republicans critical of mandates imposed by governments and businesses.
The U.S. Supreme Court was hearing arguments on Friday over requests by Republican state officials and business groups to block a Biden mandate for firms with more than 100 workers that requires employees be vaccinated or tested weekly.
Columbia Business School professor Adam Galinsky, who advises companies on their return-to-office strategies, said many companies initially welcomed the White House’s vaccine mandate because it took the matter out of their hands.
“However, companies are recognizing that the Biden mandate may not hold up at the conservative Supreme Court,” he said. “If it doesn’t hold then they are going to have the decision put back in their hands and they will have to do something.”
Many financial firms have pushed back their return-to-office plans and are encouraging staff to get vaccinated and boosted, but have so far avoided vaccine mandates for legal reasons.
“This is going to be a challenging and complex policy to implement,” said Chase Hattaway, a partner at law firm RumbergerKirk, noting the bank has to navigate federal anti-discrimination and other state laws.
“Citi will have to tailor its policy to state legislation, and in many cases, cities and municipalities will have different regulations as well, that may require even further carve-outs,” Hattaway said.
Jacqueline Voronov, partner at law firm Hall Booth Smith, said, however, that courts have been upholding the right of private employers to mandate vaccines.
“A private employer is allowed to mandate its own policy. And if Citi wants to have a mandatory vaccination policy, they can do that,” she said, provided the bank offers medical exemptions.
An increasing number of U.S. companies have been using vaccine requirements to protect employees and avoid operations being disrupted by mass staff absences.
United Airlines Chief Executive Officer Scott Kirby said last month the carrier fired 200 of its 67,000 employees for failure to comply with its mandate.
Many hospitals have fired staff for failing to comply with mandates, which have been imposed on the healthcare industry in more than 20 states.
While some companies such as Tyson Foods Inc have gotten more than 96% of its employees to take a vaccine, those in construction and retail have resisted vaccine mandates over fears of staff resistance amid a very tight labor market.
(Additional reporting Niket Nishant in Bengaluru, Tom Hals and Elizabeth Dilts; Writing by Michelle Price and David Clarke; Editing by Amy Caren Daniel, Nick Zieminski, Jonathan Oatis and Diane Craft)
HONG KONG, Jan 25 (Reuters) – Asian shares and U.S. futures tumbled on Tuesday after a tumultuous Wall Street session, with investors nervous about the situation in Ukraine and eyeing the U.S. Federal Reserve amid worries about a move to tighter monetary policy globally.
NATO said on Monday it was putting forces on standby and reinforcing eastern Europe with more ships and fighter jets, in what Russia denounced as Western “hysteria” in response to its build-up of troops on the Ukraine border. read more
There were sharp declines around the region. Hong Kong (.HSI) lost 1.64% and Korea’s KOSPI (.KS11) fell 1.67%. The Australian benchmark (.AXJO) tumbled 2.73% to hit an eight-month low, hurt also by a high inflation print Tuesday morning that stoked fears of approaching rate hikes Down Under. AZN0236PW
Asian markets were being dragged lower by concerns about faster U.S. rate hikes, mounting tensions over Ukraine, rising inflation and higher oil prices, said Carlos Casanova, senior economist at UBP.
“But on the upside, valuations are becoming more attractive and earnings growth are still robust for some sectors. So I think we will see a tug of war in the market for this week,” he said.
U.S. futures also fell in Asian hours, Nasdaq futures (.NQc1) shed 1.2% and S&P500 futures lost 0.95%, after U.S. stock markets had recovered strongly late in the session to close higher, recouping steep losses made early in the day, as bargain-seeking investors snapped up shares.
Keeping traders on their toes, the Federal Reserve will begin its two-day meeting later on Tuesday, with investors starting to speculate that there is a small possibility that they will announce a surprise rate hike.
Investors are also anxiously looking out for any hints about the timing and pace of rate hikes expected later this year. Money markets are priced for a first rate hike in March, with three more quarter-point increases by year-end.
However, U.S. benchmark Treasuries were sitting out some of the speculation. Yields on benchmark 10 year notes were at 1.76%, steady on the day, having finished a choppy day of trading Monday near where they started.
Singapore’s central bank also tightened monetary policy on Tuesday in an out-of-cycle move. read more
Market nerves sent the dollar higher against most peers. The dollar index was at 95.922, hovering near a two-week high, having gained 0.29% overnight. FRX
The Aussie dollar gained briefly after the high inflation print, but failed to hold on to its gains and the risk friendly currency was still hovering near the one-month low hit the day before.
Oil prices were also elevated, further worrying stock investors. U.S. crude rose 0.5% to $83.73 per barrel and Brent crude was at $86.83, up 0.65%.
Gold held on to its recent gains as investors sought safety. The spot price was at $1,841 an ounce, flat on the day but near last week’s two-month high of $1,847.7.
Reporting by Selena Li, Xie Yu and Alun John; editing by Richard Pullin
Our Standards: The Thomson Reuters Trust Principles.
European markets dropped sharply on Monday as concerns about military tension between Russia and Ukraine and interest rate rises prompted sell-offs.
In London, the FTSE 100 fell more than 2.6%, while exchanges in Germany and France slid nearly 4%.
But shares in the US staged a rebound and closed in positive territory despite falling more than 2% earlier.
The swings came ahead of a meeting of the US central bank and amid warnings of a potential invasion in Ukraine.
Nato on Monday said it was putting forces on standby, after Russia deployed some 100,000 troops and heavy armour at the Ukrainian border. On Sunday, the situation prompted the US, the UK and Australia to order diplomats’ families to leave Kyiv.
“Ukraine clearly is a concern that’s weighing on the markets today,” said Darren Schuringa, chief executive officer of investment adviser ASYMmetric ETFs.
“This will continue to weigh on the markets for the foreseeable future until there’s some type of resolution and more clarity as to what the outcome looks like.”
Concerns about inflation, Covid and other issues have led to three weeks of consecutive declines on US markets.
The tech-heavy Nasdaq has fallen more than 10% from its previous high – a drop considered a market “correction” – and the broad-based S&P 500 is flirting with a similar decline.
Meanwhile, the price of Bitcoin, which hit a high of $69,000 in November, has almost halved since, dropping below $35,000 on Monday, before recovering ground to more than $36,000.
Monday saw moments of torrid selling piling onto January’s losses, with the Dow down more than 1,000 points – nearly 3% – at one point.
But the index, which includes many of America’s biggest companies, closed nearly 0.3% higher.
The Nasdaq reversed a more than 3% drop to end 0.6% higher, while the S&P 500 finished 0.3% up.
The swings come as investors wait for action by the US central bank, which has said it expects to respond to soaring US inflation by raising interest rates this year.
Such moves typically depress stock prices by making other kinds of investments more attractive.
Investors have also been also selling shares as they try to position themselves ahead of a wave of reports from companies about their end-of-year performance.
Last week, Netflix, one of the biggest names to share results so far, disappointed analysts with its forecast for the upcoming months, prompting shares to plunge more than 20%.
The declines were seen as a possible warning about other firms.
Walt Disney, which has been focusing on its streaming strategy to compete with Netflix, was among the biggest initial losers on the Dow on Monday, down more than 4% at one point, while Tesla, which reports this week, fell more than 6%.
Shares in both firms later recovered, with Disney ending flat and Tesla down about 1.5%.
Stock markets plunged into the red before recovering to finish the day in positive territory on Monday, as fears over war in Ukraine and higher interest rates in the U.S. and Canada took investors on a wild ride.
Early in the afternoon, the Dow was off by more than 1,000 points, or about three per cent, and the tech-heavy Nasdaq was faring even worse as investors worried about the prospect of war in Ukraine.
“What really sparked the sell-off today is the fact that we seem to be marching inexorably towards a full-scale invasion of Ukraine by Russia,” Dennis Mitchell, CEO of Toronto-based investment firm Starlight Capital, said in an interview.
Canadian shares were not exempt from the sell-off, as the benchmark Canadian index was on track for its worst day in months, down more than 600 points, or three per cent at one point.
In the afternoon, however, the market changed direction and investors started buying up shares. All three major U.S. stock groupings, the Dow Jones Industrial Average, the S&P 500 and the Nasdaq, finished the day in positive territory.
“The selling that you’re seeing today is usually a good indication that this is a good buying moment,” Mitchell said.
After falling nearly three per cent by midday, the TSX mounted a comeback of its own in the afternoon but fell short of reversing its losses, and closed the day down 50 points to 20,571.
Dianne Swonk, chief economist with Grant Thornton, said the pandemic has been a time of unprecedented volatility for almost two solid years now, and that can sometimes result in wild swings for stock prices.
“This is giving us a lot of turbulence out there,” she said in an interview, “and the problem is it it ups the uncertainty at a time when uncertainty is already high.”
Prior to Monday’s trading, the major event of the week was slated to be the Bank of Canada’s interest rate decision on Wednesday. Expectations are growing that central banks will soon have to raise their interest rates to keep a lid on inflation, which has run up to the highest level we’ve seen in decades lately.
All things being equal, higher interest rates are bad news for stocks because they raise the cost of borrowing. That gives companies and investors less of an incentive to borrow to invest.
Currently, the market is pricing in about a 60 per cent chance of a rate hike in Canada as soon as this week. If one doesn’t come this time around, it’s a near certainty to happen next time the bank meets in March, according to trading in investments known as swaps.
Swonk said some of the uncertainty comes from figuring out how central banks are going to try to find the right balance between keeping a lid on inflation but also not harming the economy that is still being hit by Omicron.
“They don’t want to put the flame out on the economy, but they certainly want to cool it off a bit,” Swonk said. “That’s left many people unsure of how fast rates will go up.”
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