Tesla Inc CEO Elon Musk said on Monday that the U.S. Congress should not approve the Biden administration’s bill to boost subsidies for electric vehicles (EVs), saying the proposal would worsen the country’s budget deficit.
The billionaire entrepreneur is escalating criticism about the administration and Democrats for a proposal to give union-made, U.S.-built electric vehicles an additional $4,500 tax incentive. Tesla and foreign automakers do not have unions at their U.S. factories.
“Honestly, it might be better if the bill doesn’t pass,” Musk said at the WSJ CEO Council Summit.
“I’m literally saying get rid of all subsidies,” he said, adding that the government should I think just try to get out of the way and not impede progress.”
He also reiterated opposition to a proposal by Democrats to tax billionaires. “It does not make sense to take the job of capital allocation away from people who have demonstrated great skill … and give it to, you know, an entity that has demonstrated very poor skill in capital allocation, which is the government.”
Musk also said his brain-chip startup, Neuralink hopes to begin human trials next year pending approval of the U.S. Food and Drug Administration. “I think we have a chance with Neuralink of being able to restore full body functionality to someone who has a spinal cord injury.”
(Reporting by Hyunjoo Jin; Editing by Sandra Maler)
Twitter shareholders sue Elon Musk, alleging his antics have deflated stock price – CBC News
Twitter shareholders have filed a lawsuit accusing Elon Musk of engaging in “unlawful conduct” aimed at sowing doubt about his bid to buy the social media company.
The lawsuit filed late Wednesday in the U.S. District Court for the Northern District of California claims the billionaire Tesla CEO has sought to drive down Twitter’s stock price because he wants to walk away from the deal or negotiate a substantially lower purchase price.
San Francisco-based Twitter is also named as a defendant in the lawsuit, which seeks class action status as well as compensation for damages.
A representative for Musk did not immediately respond to a message for comment on Thursday. Twitter declined to comment.
‘Take it or leave it’ offer
Musk last month offered to buy Twitter for $44 billion US, but later said the deal can’t go forward until the company provides information about how many accounts on the platform are spam or bots.
The lawsuit notes, however, that Musk waived due diligence for his “take it or leave it” offer to buy Twitter. That means he waived his right to look at the company’s non-public finances.
WATCH | Twitter deal ‘temporarily on hold,’ Musk says:
In addition, the problem of bots and fake accounts on Twitter is nothing new. The company paid $809.5 million last year to settle claims it was overstating its growth rate and monthly user figures. Twitter has also disclosed its bot estimates to the Securities and Exchange Commission for years, while also cautioning that its estimate might be too low.
To fund some of the acquisition, Musk has been selling Tesla stock and shares in the electric carmaker have lost nearly a third of their value since the deal was announced on April 25.
In response to the plunging value of Tesla’s shares, the Twitter shareholders’ lawsuit claims Musk has been denigrating Twitter, violating both the non-disparagement and non-disclosure clauses of his contract with the company.
“In doing so, Musk hoped to drive down Twitter’s stock price and then use that as a pretext to attempt to re-negotiate the buyout,” according to the lawsuit.
Twitter’s shares closed Thursday at $39.54, 27 per cent below Musk’s $54.20 offer price.
High profile saga
Before announcing his bid to buy Twitter, Musk disclosed in early April that he had bought a nine per cent stake in the company. But the lawsuit says Musk did not disclose the stake within the timeframe required by the Securities and Exchange Commission.
And the lawsuit says his eventual disclosure of the stake to the SEC was “false and misleading” because he used a form meant for “passive investors” — which Musk at the time was not, because he had been offered a position on Twitter’s board and was interested in buying the company.
Musk benefited by more than $156 million US from his failure to disclose his increased stake on time, since Twitter’s stock price could have been higher had investors known Musk was increasing his holdings, the lawsuit claims.
“By delaying his disclosure of his stake in Twitter, Musk engaged in market manipulation and bought Twitter stock at an artificially low price,” the lawsuit says.
Stocks notch their best week since November 2020 – BNN
Stocks continued to rebound from a steep rout that drove the market down for seven straight weeks, with rebalancing from institutional investors potentially lifting equities at the end of the month.
The S&P 500 wiped out its May losses and posted its biggest weekly gain since November 2020. Global stock funds saw their largest inflows in 10 weeks, led by US shares, according to a Bank of America Corp.’s note citing EPFR data. The Nasdaq 100 outpaced major benchmarks, with Apple Inc. and Tesla Inc. up more than four per cent. Dell Technologies Inc. surged as revenue topped estimates. The dollar fell, while Treasuries fluctuated. US markets will be closed Monday for a holiday.
Volatility gripped markets this year on fears that hawkish central banks will tip the economy into a recession, with analysts remaining split on whether equities have found a bottom. Morgan Stanley and Bank of America recently said there may be more losses to come, while BlackRock Investment Institute cut developed-market shares to neutral. Meantime, Citigroup Inc. strategists recommended stepping back into stocks, particularly in Europe and emerging markets, on their appealing valuations.
“It is fair at this point to start doing some bargain-hunting,” Lori Calvasina, head of US equity strategy at RBC Capital Markets, told Bloomberg Television. “If you can get people more comfortable in the fundamental narrative going forward, I think that stocks are cheap enough to buy. Are valuations a reason to buy on their own? No, not yet.”
After a major outperformance versus growth shares this year, value stocks are starting to lose their appeal as bond yields peak and the economic recovery grinds to a halt, strategists at Credit Suisse Group AG and Bank of America warned. Value companies have been largely shielded from this year’s market selloff as investors turned to cheaper equities in search of shelter amid fears of rising rates.
US consumer sentiment deteriorated further in late May to a fresh decade low as escalating concerns over inflation dimmed the outlook for the economy. A separate report showed inflation-adjusted consumer spending rose in April by the most in three months, indicating households were holding up in the face of persistent price pressures by dipping into savings.
Some of the main moves in markets:
- The S&P 500 rose 2.5 per cent as of 4 p.m. New York time
- The Nasdaq 100 rose 3.3 per cent
- The Dow Jones Industrial Average rose 1.8 per cent
- The MSCI World index rose 2.2 per cent
- The Bloomberg Dollar Spot Index fell 0.3 per cent
- The euro was little changed at US$1.0733
- The British pound rose 0.2 per cent to US$1.2631
- The Japanese yen was unchanged at 127.12 per dollar
- The yield on 10-year Treasuries declined one basis point to 2.74 per cent
- Germany’s 10-year yield declined four basis points to 0.96 per cent
- Britain’s 10-year yield declined five basis points to 1.92 per cent
- West Texas Intermediate crude rose 0.9 per cent to US$115.14 a barrel
- Gold futures rose 0.2 per cent to US$1,857.10 an ounce
Canada's big banks grapple with rising expenses as inflation climbs – The Globe and Mail
Canada’s big banks are battling to keep a lid on rising costs that could eat into profits as they face pressure to keep growing revenue in the midst of mounting economic unease over the impact of inflation and rising interest rates.
On Friday, National Bank of Canada wrapped up a solid second-quarter earnings season for the country’s major banks with an 11-per-cent increase in profit, year over year. The Montreal-based bank’s revenue was up 9 per cent for the quarter ended April 30, with higher loan balances and fees as consumers and businesses spend and borrow more.
But the bank’s expenses were up 8 per cent as it hired staff, increased salaries and invested in technology.
Surging expenses leave banks with little margin for error if revenue growth slows. Though banks have churned out higher profits through most of the COVID-19 pandemic, and fared better than many companies in other sectors, they are not immune to the high inflation driving up prices.
Expenses spiked by 13 per cent at Canadian Imperial Bank of Commerce in the quarter, compared with a year earlier, and by 5 per cent at Toronto-Dominion Bank, which included a 9-per-cent increase in costs in its Canadian retail banking unit.
Salaries are a major force pushing up expenses, as tight labour markets that have kept many consumers financially stable also create intense competition for talent. Investments by banks in technology to improve customer experiences and automate routine tasks, as well as resurgent travel and marketing spending as economies reopen, have also made it harder to restrain spending.
The impact from inflation “is fairly broad,” Hratch Panossian, CIBC’s chief financial officer, said in an interview. “You’re seeing impacts across various categories across the bank,” and the recent pressure that has put on the bank’s costs has “been a little bit higher than what we expected.”
The fight to retain employees is adding hundreds of millions of dollars to banks’ expenses, and the pressure is felt everywhere, from executive and technology roles to staff in branches, call centres and back offices.
In mid-April, TD announced it will give most of its non-executive employees a 3-per-cent pay raise in July, and RBC soon followed suit, boosting base pay for low-salaried staff. Last week, Bank of Montreal matched those raises, promising a 3-per-cent pay increase for certain salary tiers, according to CFO Tayfun Tuzun.
For TD, the base salary increases will cost an extra $290-million a year, CFO Kelvin Tran said Thursday.
“Salaries and benefits will go up, inflation is high. There are certain expenses that will go up naturally because of what’s happening around us,” said Raj Viswanathan, CFO of Bank of Nova Scotia, which reported a 3-per-cent rise in second-quarter costs. He predicted those costs will increase more rapidly in the coming quarters, “but we have a number of levers that we use in this bank” to control them.
Mr. Panossian said CIBC has “paced” some of its planned investments, “so we’ve already been reacting and we have the ability to react through the rest of the year.”
For now, loan balances are increasing at healthy rates even as demand for mortgages is expected to cool, credit-card spending is picking up, commercial lending is strong and central bank interest-rate increases are boosting profit margins on loans. “That is a good combination to be able to absorb this,” Ebrahim Poonawala, an analyst at Bank of America Securities Inc., said in an interview.
But if the economy falls into a downturn, as economists increasingly fear it could, “I don’t think … these banks have a lot of levers to pull in terms of absolute cost cuts,” Mr. Poonawala said.
“These are like giant ships. … None of this happens overnight,” he said. “When you’re doing these across-the-board [salary] increases, there is very little room to flex lower on expenses.”
On a call with analysts on Friday, National Bank CFO Marie Chantal Gingras said cost increases are “tied to our business growth.” But she said the bank is looking for areas to cut back as it has raised salaries to keep pace in “a highly competitive environment” and has boosted spending in an array of areas that include automation, cybersecurity and regulatory compliance.
“The team constantly works on identifying and realizing efficiencies in our expense base, especially in an inflationary context,” she said.
National Bank earned $893-million, or $2.55 a share, in the second quarter. That compared to $801-million, or $2.25 a share, in the same period last year. On average, analysts were expecting earnings of $2.27 a share, according to Refinitiv.
The bank raised its quarterly dividend by 5 cents, or 6 per cent, to 92 cents a share.
Profits rose across the banking sector in the fiscal second quarter, with four of six major banks beating analysts’ expectations by comfortable margins.
Royal Bank of Canada had the most success at containing costs in the quarter, reporting an increase of just 1 per cent, year over year. Yet the bank’s salaries rose 7 per cent from a year earlier, “representing nearly 40 per cent of the increase in our more controllable costs,” CFO Nadine Ahn said. Higher professional fees and technology costs accounted for another 30 per cent of increases, and marketing and travel for 20 per cent, she said.
One reason RBC was able to rein in second-quarter costs was the weaker performance of its capital markets division, where revenue fell 14 per cent from high levels last year. That provides a “natural, built-in hedge” because it means the bank is doling out less bonus pay to traders and investment bankers, chief executive officer Dave McKay said.
For the past two years, soaring capital markets revenues were “a big boon for positive operating leverage,” which is the industry term for revenue outpacing expenses, Mr. Poonawala said. But as frenzied activity in trading, IPOs and equity issuances has fallen off this year – with quarterly profit from capital markets falling 26 per cent at RBC and 20 per cent at BMO, for example – “you see that pain,” he said.
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.
Kamloops ranch that refused vaccinated guest but kept their deposit now says they'll issue $3.2K refund – CBC.ca
PimEyes: An alarmingly accurate face search engine that anyone can use – Business Standard
Pound Fights for Reprieve as Economy Flails: UK Weatherwatch – Financial Post
Silver investment demand jumped 12% in 2019
Europe kicks off vaccination programs | All media content | DW | 27.12.2020 – Deutsche Welle
Global Media Markets, 2015-2020, 2020-2025F, 2030F – TV and Radio Broadcasting, Film and Music, Information Services, Web Content, Search Portals And Social Media, Print Media, & Cable – GlobeNewswire
Business21 hours ago
Why Is It Difficult to Get Hired During the Supposed ‘Great Resignation’?
News19 hours ago
Police encounter people with pellet guns 'with regularity across Canada,' criminologist says – CBC.ca
News18 hours ago
Team Canada players raised 'concerns' about match with Iran before it was cancelled: Canada Soccer – CBC News
News18 hours ago
The Hypocrisy that is America (Gun Law)
News17 hours ago
Senegal: 11 newborn babies die in mysterious inferno
News16 hours ago
Would Poilievre fund a Fox News Canada? | Canada's National Observer: News & Analysis – Canada's National Observer
News17 hours ago
Oklahoma Governor signs Bill into law that prohibits abortion
Business19 hours ago
Price of natural gas could climb higher still after cresting multi-year highs – CBC.ca